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Read more from the original source: Japan Boosts Africa Aid Pledge
Article Excerpt
BY BRIAN SPEGELE IN BEIJING AND THOMAS CATAN IN WASHINGTON
China signaled a possible softening on a key point of contention with the U.S. ahead of a meeting between the two countries’ presidents, suggesting it might be willing to join U.S.-led talks to strike an Asia-Pacific free-trade agreement.
Critics in China, including in the official press and academics in policy circles, have long viewed talks for what is known as the Trans-Pacific Partnership with suspicion, seeing it as one more way for Washington to seek to contain China’s influence by forming tighter bonds with its neighbors.
But this past week a spokesman for China’s Ministry of Commerce said that China …
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Original post: China Signals Softening on Trade
Alexandria, Va.
‘Iran is a country with a government that was elected.” So declared Secretary of State John Kerry on a visit to France in February. His statement echoed an earlier one by Defense Secretary Chuck Hagel, who during his Senate confirmation hearings in January pronounced the Iranian government “elected” and “legitimate.”
In the coming days, count on Western media to reinforce that view of Iranian democracy with coverage of the run-up to the June 14 presidential election. The horse-race aspect of the reporting is already in the air. There was breathless news on May 21 about the disqualification of dozens of presidential hopefuls, including the reformist standard-bearer, former President Akbar Hashemi Rafsanjani. This week, attention turned to the improving fortunes of one candidate, Saeed Jalili, a hard-liner with a pronounced hostility to the West. Could a reformer still win? With President Mahmoud Ahmadinejad stepping down after two four-year terms, would a Jalili victory mean even more trouble for America and its allies than his predecessor?
Mojtaba Vahedi is here to say: None of it matters.
“What is happening now is not an election but a form of theater and the candidates should really be called actors,” he says from his home in exile in Northern Virginia. “The regime couldn’t care less who the people prefer.”
Exiled critics of the Iranian regime aren’t hard to find in the West, but Mr. Vahedi, who is 49, brings a unique perspective to his condemnation of the country’s rulers: He was at the heart of the reform movement that began to gain traction in Iran a decade ago. And he was a trusted adviser and strategist for the moderate cleric Mehdi Karroubi, who co-led the popular opposition movement that in 2009 represented perhaps the best hope Iran has ever had of steering away from tyranny and extremism.
Witnessing what happened to Mr. Karroubi and to the reform movement in the 2000s prompted Mr. Vahedi to flee the country in 2009. Once safely clear of Iran, he became one of the Islamic Republic’s most vocal critics, no longer a believer in democratic change from inside the regime. The mullah-dominated government, he now believes, must be overthrown.
We sit for an interview in Mr. Vahedi’s study in suburban Washington, where Dan Brown thrillers and self-help books vie for shelf space with hefty volumes of Islamic philosophy and jurisprudence. He serves scalding tea, pastries and roasted almonds. Yet these hallmarks of Persian hospitality don’t diminish the strangeness of our encounter: Here is a former official of a regime that in my Tehran childhood I thought omnipotent—now enjoying a modest and relatively anonymous slice of the American dream.
Zina Saunders
Mr. Vahedi observes events in Iran from a frustratingly long distance, but he often appears on Persian-language media, such as the Voice of America’s Persian service, denouncing Iran’s clerical regime. He also derides his former allies in the Iranian establishment reform movement. The reformists, he says, cling to the notion that the past decade’s massive increase in repression was the work of President Ahmadinejad.
They delude themselves, Mr. Vahedi says, because the problem is far deeper than one man. “Anyone who thinks Ahmadinejad was behind the electoral rigging of recent years, or the brutality and the killing, is a fool.” Dictatorship in Iran is “structural,” Mr. Vahedi says. “The structure makes everyone obey one man, Supreme Leader Ali Khamenei, and the leader isn’t accountable to anyone.”
So why does Mr. Khamenei, the paramount leader, even bother with the charade of popular elections? “Khamanei is looking for a fall guy who at the same time has no real power—someone with no serious responsibility but who’s nevertheless accountable for every failure.”
Chief among the country’s ills are the mounting international isolation and economic hardship that have been caused by the regime’s pursuit of nuclear weapons. Yet those in Western capitals who dream of rapprochement with a post-Ahmadinejad Islamic Republic should think twice, Mr. Vahedi warns. No matter who is designated the winner of the June 14 vote, the new president will have little to say about nuclear policy. But if the office is claimed by Mr. Jalili, the combative Iranian nuclear negotiator would be a most agreeable deputy for the Supreme Leader. “Jalili has zero independent will,” Mr. Vahedi says. “Whatever policy change he ushers in the nuclear arena would solely reflect Khamenei’s wishes.”
And the nuclear program is certain to continue apace: “Khamenei won’t permit a solution to the nuclear issue. Having invested eight years of repression to prevent any sort of change, what has Khamenei to lose? Do you think now he’s suddenly going to say, ‘OK, I’m going to improve my reputation and change my ways?’ “
If Mr. Khamenei’s speech last month before an audience of Iranian women was any indication, the answer is no. “The European race is an uncivilized race,” the leader told the black-veiled figures seated beneath him. “They may have a nice, polished exterior but at heart, the Europeans are still savages.”
Mr. Vahedi’s journey from loyalist to antiregime polemicist isn’t uncommon among members of the generation that brought the mullahs to power. Like many another lapsed Islamist, he has the dejected appearance of a man who looks on his life’s project and sees a catastrophe staring back.
Mojtaba Vahedi was born in 1964 to a pious household in the holy city of Qom but grew up mostly in Tehran. As a teenager he along with his family joined the 1979 Islamic revolution that toppled the shah. Then in 1982, a middle-aged cleric and rising parliamentarian, impressed by his ambition and zeal, recruited the 18-year-old Mr. Vahedi to join his staff.
That cleric was Mehdi Karroubi, a kindly looking and charismatic figure who would go on to serve as Iran’s parliamentary speaker during a brief period of reform in the early 2000s and who would emerge as the more outspoken of the two main opposition candidates in the stolen 2009 presidential election. From the time he graduated from high school until less that a year ago, Mr. Vahedi served on-and-off as Mr. Karroubi’s aide, spokesman and chief of staff while editing a Karroubi-aligned reformist newspaper.
Mr. Karroubi, he recalls, was one of the first Iranian politicians to openly confront the Islamic Revolutionary Guard Corps—the engine of the regime’s repressive apparatus—over its attempts to wrest control of the civilian economy. To be sure, the cleric was nothing if not a loyalist during the mullahs’ first decade in power. In 1988 he went out of his way to defend the summary execution of some 3,000 leftists.
But by the time Mr. Karroubi took the reins in parliament in 2000, he had moved to the reformist fold. “He received five families of political prisoners every day,” Mr. Vahedi says. “You couldn’t call him a liberal but he had a reasonable mind-set.” Mr. Karroubi attacked arbitrary sentences handed down by the judiciary; he also sharply criticized the powerful unelected legislators of the Guardian Council, even threatening to veto its budget.
In 2005, Mr. Karroubi contested the presidency on a reformist platform. When Mr. Ahmadinejad was declared the winner, Mr. Karroubi accused the revolutionary guards, the basij paramilitia and, most dangerously, Mr. Khamenei’s son and heir-apparent, Mojtaba, of vote-rigging in at least three provinces, where the total number of votes cast outstripped the number of residents. The supreme leader denounced Mr. Karroubi, who responded by writing an open letter of protest addressed directly to Mr. Khamenei.
“I wrote that letter,” Mr. Vahedi says with obvious pride. “It was extremely risky. We went into a basement away from prying ears, argued over the substance of the letter, and then I drafted it. I sent the office janitor, an illiterate, to have it printed. I knew Iranian newspapers couldn’t carry it, so I hand-delivered it to the BBC.”
When Mr. Karroubi launched a second presidential campaign in 2009, Mr. Vahedi once again joined his team. But two days before the polls opened, Mr. Vahedi flew to Dubai. He left Iran, he says, because he foresaw the vote-rigging that returned Mr. Ahmadinejad to power as well as the vicious crackdown that would soon answer the country’s postelection uprising.
Sensing danger in Dubai, he next flew to London two weeks later, in late June 2009. As the violence in Iran’s streets intensified, Mr. Vahedi kept editing and writing for his newspaper from abroad. “But then they realized I wasn’t coming back,” he recalls, “and one night Ahmadinejad’s press minister took to state TV and claimed, ‘There’s a newspaper editor who’s lived in England for seven months, and we know that he receives instructions every day from the Mossad and the CIA.’ There were three nights of consecutive programming showing my face and denouncing me as a spy.”
With that virtual death sentence, Mr. Vahedi escaped to the U.S. in February 2010. It was here that Mr. Vahedi finally broke with the reformists. “I saw the reformists getting ready for the 2013 elections,” he says. “We’d seen the cheating in the last election, and nothing had changed—there’s no change in the regime’s behavior. . . . Reforms mean nothing if one man can hand them down from above and the same man can take them away.”
It was a message meant for Mr. Vahedi’s longtime mentor, too: “Then I said goodbye to my teacher, Karroubi. I had to part ways so I could say what I ultimately came to understand: that Iran’s salvation depends on the total destruction of this regime.” It’s that last conclusion that the establishment reformists still can’t abide, even as their candidates—including Mr. Karroubi—remain under house arrest and their supporters are beaten, jailed and executed.
As long as religion casts a shadow in politics, the people won’t be free,” say Mr. Vahedi, who counts himself a religious man. “Religion put to political use is a most corrosive thing. We don’t have a religious government in Iran—it’s a government that abuses religion. . . . Whenever they need it, they take advantage of the people’s pious feelings and attachments.”
What are the chances of another popular explosion of anger and resistance toward the regime after the June 14 election like that seen in 2009? Unlikely, says Mr. Vahedi. He isn’t given to optimism about a country where “there’s been a total breakdown in the Iranian concept of trust—beginning with the families, in small towns, in the big cities. The people lie to each other. The regime lies to them. They lie to the regime.”
How long can this state of affairs last? Mr. Vahedi sighs and yet sounds optimistic despite himself: “No regime can survive on repression alone.”
Mr. Ahmari is an assistant books editor at the Journal.
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Continued here: In Asia, Hagel Presses Beijing on Cyberspying
Article Excerpt
BY EMRE PEKER AND JOE PARKINSON
ISTANBUL—Turkish police repeatedly fired tear gas at thousands of protesters around Istanbul’s main square on Friday, as four days of increasingly heavy-handed attempts to shutter a small protest to save a downtown park evolved into a broader demonstration against the government of Prime Minister Recep Tayyip Erdogan.
The clashes marked Istanbul’s fiercest antigovernment protests for years, and sparked smaller copycat rallies in other cities across Turkey. As midnight approached in Istanbul, battalions of riot police continued to fire water cannon and tear gas at thousands who swarmed into the city’s landmark Taksim Square.
The day of increasingly angry confrontation between …
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Visit link: Turkish Protest Grows to Rare Clash
Alexandria, Va.
‘Iran is a country with a government that was elected.” So declared Secretary of State John Kerry on a visit to France in February. His statement echoed an earlier one by Defense Secretary Chuck Hagel, who during his Senate confirmation hearings in January pronounced the Iranian government “elected” and “legitimate.”
In the coming days, count on Western media to reinforce that view of Iranian democracy with coverage of the run-up to the June 14 presidential election. The horse-race aspect of the reporting is already in the air. There was breathless news on May 21 about the disqualification of dozens of presidential hopefuls, including the reformist standard-bearer, former President Akbar Hashemi Rafsanjani. This week, attention turned to the improving fortunes of one candidate, Saeed Jalili, a hard-liner with a pronounced hostility to the West. Could a reformer still win? With President Mahmoud Ahmadinejad stepping down after two four-year terms, would a Jalili victory mean even more trouble for America and its allies than his predecessor?
Mojtaba Vahedi is here to say: None of it matters.
“What is happening now is not an election but a form of theater and the candidates should really be called actors,” he says from his home in exile in Northern Virginia. “The regime couldn’t care less who the people prefer.”
Exiled critics of the Iranian regime aren’t hard to find in the West, but Mr. Vahedi, who is 49, brings a unique perspective to his condemnation of the country’s rulers: He was at the heart of the reform movement that began to gain traction in Iran a decade ago. And he was a trusted adviser and strategist for the moderate cleric Mehdi Karroubi, who co-led the popular opposition movement that in 2009 represented perhaps the best hope Iran has ever had of steering away from tyranny and extremism.
Witnessing what happened to Mr. Karroubi and to the reform movement in the 2000s prompted Mr. Vahedi to flee the country in 2009. Once safely clear of Iran, he became one of the Islamic Republic’s most vocal critics, no longer a believer in democratic change from inside the regime. The mullah-dominated government, he now believes, must be overthrown.
We sit for an interview in Mr. Vahedi’s study in suburban Washington, where Dan Brown thrillers and self-help books vie for shelf space with hefty volumes of Islamic philosophy and jurisprudence. He serves scalding tea, pastries and roasted almonds. Yet these hallmarks of Persian hospitality don’t diminish the strangeness of our encounter: Here is a former official of a regime that in my Tehran childhood I thought omnipotent—now enjoying a modest and relatively anonymous slice of the American dream.
Zina Saunders
Mr. Vahedi observes events in Iran from a frustratingly long distance, but he often appears on Persian-language media, such as the Voice of America’s Persian service, denouncing Iran’s clerical regime. He also derides his former allies in the Iranian establishment reform movement. The reformists, he says, cling to the notion that the past decade’s massive increase in repression was the work of President Ahmadinejad.
They delude themselves, Mr. Vahedi says, because the problem is far deeper than one man. “Anyone who thinks Ahmadinejad was behind the electoral rigging of recent years, or the brutality and the killing, is a fool.” Dictatorship in Iran is “structural,” Mr. Vahedi says. “The structure makes everyone obey one man, Supreme Leader Ali Khamenei, and the leader isn’t accountable to anyone.”
So why does Mr. Khamenei, the paramount leader, even bother with the charade of popular elections? “Khamanei is looking for a fall guy who at the same time has no real power—someone with no serious responsibility but who’s nevertheless accountable for every failure.”
Chief among the country’s ills are the mounting international isolation and economic hardship that have been caused by the regime’s pursuit of nuclear weapons. Yet those in Western capitals who dream of rapprochement with a post-Ahmadinejad Islamic Republic should think twice, Mr. Vahedi warns. No matter who is designated the winner of the June 14 vote, the new president will have little to say about nuclear policy. But if the office is claimed by Mr. Jalili, the combative Iranian nuclear negotiator would be a most agreeable deputy for the Supreme Leader. “Jalili has zero independent will,” Mr. Vahedi says. “Whatever policy change he ushers in the nuclear arena would solely reflect Khamenei’s wishes.”
And the nuclear program is certain to continue apace: “Khamenei won’t permit a solution to the nuclear issue. Having invested eight years of repression to prevent any sort of change, what has Khamenei to lose? Do you think now he’s suddenly going to say, ‘OK, I’m going to improve my reputation and change my ways?’ “
If Mr. Khamenei’s speech last month before an audience of Iranian women was any indication, the answer is no. “The European race is an uncivilized race,” the leader told the black-veiled figures seated beneath him. “They may have a nice, polished exterior but at heart, the Europeans are still savages.”
Mr. Vahedi’s journey from loyalist to antiregime polemicist isn’t uncommon among members of the generation that brought the mullahs to power. Like many another lapsed Islamist, he has the dejected appearance of a man who looks on his life’s project and sees a catastrophe staring back.
Mojtaba Vahedi was born in 1964 to a pious household in the holy city of Qom but grew up mostly in Tehran. As a teenager he along with his family joined the 1979 Islamic revolution that toppled the shah. Then in 1982, a middle-aged cleric and rising parliamentarian, impressed by his ambition and zeal, recruited the 18-year-old Mr. Vahedi to join his staff.
That cleric was Mehdi Karroubi, a kindly looking and charismatic figure who would go on to serve as Iran’s parliamentary speaker during a brief period of reform in the early 2000s and who would emerge as the more outspoken of the two main opposition candidates in the stolen 2009 presidential election. From the time he graduated from high school until less that a year ago, Mr. Vahedi served on-and-off as Mr. Karroubi’s aide, spokesman and chief of staff while editing a Karroubi-aligned reformist newspaper.
Mr. Karroubi, he recalls, was one of the first Iranian politicians to openly confront the Islamic Revolutionary Guard Corps—the engine of the regime’s repressive apparatus—over its attempts to wrest control of the civilian economy. To be sure, the cleric was nothing if not a loyalist during the mullahs’ first decade in power. In 1988 he went out of his way to defend the summary execution of some 3,000 leftists.
But by the time Mr. Karroubi took the reins in parliament in 2000, he had moved to the reformist fold. “He received five families of political prisoners every day,” Mr. Vahedi says. “You couldn’t call him a liberal but he had a reasonable mind-set.” Mr. Karroubi attacked arbitrary sentences handed down by the judiciary; he also sharply criticized the powerful unelected legislators of the Guardian Council, even threatening to veto its budget.
In 2005, Mr. Karroubi contested the presidency on a reformist platform. When Mr. Ahmadinejad was declared the winner, Mr. Karroubi accused the revolutionary guards, the basij paramilitia and, most dangerously, Mr. Khamenei’s son and heir-apparent, Mojtaba, of vote-rigging in at least three provinces, where the total number of votes cast outstripped the number of residents. The supreme leader denounced Mr. Karroubi, who responded by writing an open letter of protest addressed directly to Mr. Khamenei.
“I wrote that letter,” Mr. Vahedi says with obvious pride. “It was extremely risky. We went into a basement away from prying ears, argued over the substance of the letter, and then I drafted it. I sent the office janitor, an illiterate, to have it printed. I knew Iranian newspapers couldn’t carry it, so I hand-delivered it to the BBC.”
When Mr. Karroubi launched a second presidential campaign in 2009, Mr. Vahedi once again joined his team. But two days before the polls opened, Mr. Vahedi flew to Dubai. He left Iran, he says, because he foresaw the vote-rigging that returned Mr. Ahmadinejad to power as well as the vicious crackdown that would soon answer the country’s postelection uprising.
Sensing danger in Dubai, he next flew to London two weeks later, in late June 2009. As the violence in Iran’s streets intensified, Mr. Vahedi kept editing and writing for his newspaper from abroad. “But then they realized I wasn’t coming back,” he recalls, “and one night Ahmadinejad’s press minister took to state TV and claimed, ‘There’s a newspaper editor who’s lived in England for seven months, and we know that he receives instructions every day from the Mossad and the CIA.’ There were three nights of consecutive programming showing my face and denouncing me as a spy.”
With that virtual death sentence, Mr. Vahedi escaped to the U.S. in February 2010. It was here that Mr. Vahedi finally broke with the reformists. “I saw the reformists getting ready for the 2013 elections,” he says. “We’d seen the cheating in the last election, and nothing had changed—there’s no change in the regime’s behavior. . . . Reforms mean nothing if one man can hand them down from above and the same man can take them away.”
It was a message meant for Mr. Vahedi’s longtime mentor, too: “Then I said goodbye to my teacher, Karroubi. I had to part ways so I could say what I ultimately came to understand: that Iran’s salvation depends on the total destruction of this regime.” It’s that last conclusion that the establishment reformists still can’t abide, even as their candidates—including Mr. Karroubi—remain under house arrest and their supporters are beaten, jailed and executed.
As long as religion casts a shadow in politics, the people won’t be free,” say Mr. Vahedi, who counts himself a religious man. “Religion put to political use is a most corrosive thing. We don’t have a religious government in Iran—it’s a government that abuses religion. . . . Whenever they need it, they take advantage of the people’s pious feelings and attachments.”
What are the chances of another popular explosion of anger and resistance toward the regime after the June 14 election like that seen in 2009? Unlikely, says Mr. Vahedi. He isn’t given to optimism about a country where “there’s been a total breakdown in the Iranian concept of trust—beginning with the families, in small towns, in the big cities. The people lie to each other. The regime lies to them. They lie to the regime.”
How long can this state of affairs last? Mr. Vahedi sighs and yet sounds optimistic despite himself: “No regime can survive on repression alone.”
Mr. Ahmari is an assistant books editor at the Journal.
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STRUNG TOGETHER: An employee worked inside a textile factory in Linhai, China, Thursday.
STRUNG TOGETHER: An employee worked inside a textile factory in Linhai, China, Thursday.
Continued
CLUTTERED: Visitors walked around an installation titled ‘Bang,’ composed of 886 three-legged wooden stools, by Chinese artist Ai Weiwei during the 55th International Art Exhibition in Venice on Thursday.
CLUTTERED: Visitors walked around an installation titled ‘Bang,’ composed of 886 three-legged wooden stools, by Chinese artist Ai Weiwei during the 55th International Art Exhibition in Venice on Thursday.
Continued
HELPING HANDS: Indian police carried an injured comrade during a clash with supporters of the Jammu Kashmir Liberation Front, a separatist party, in Srinagar, India, Thursday. The government decided not to allow party chairman Mohammad Yasin Malik to visit an area in the Doda region…
HELPING HANDS: Indian police carried an injured comrade during a clash with supporters of the Jammu Kashmir Liberation Front, a separatist party, in Srinagar, India, Thursday. The government decided not to allow party chairman Mohammad Yasin Malik to visit an area in the Doda region to distribute aid to earthquake victims, local media reported.
Continued
SWEET HEAT: A man took advantage of the hot weather to sunbathe in Sheep’s Meadow in Central Park on Thursday in New York.
SWEET HEAT: A man took advantage of the hot weather to sunbathe in Sheep’s Meadow in Central Park on Thursday in New York.
Continued
IN THE THICK OF IT: A man carried stools at the Grand Palais in Paris Wednesday, two days before the opening of an exhibition. The Grand Palais will be transformed into a giant greenhouse from May 31 to June 3, to celebrate the art of gardening.
IN THE THICK OF IT: A man carried stools at the Grand Palais in Paris Wednesday, two days before the opening of an exhibition. The Grand Palais will be transformed into a giant greenhouse from May 31 to June 3, to celebrate the art of gardening.
Continued
ON CALM WATERS: Workers placed buoys on the sprint canoe/kayak course on foggy Lake Banook in Dartmouth, Nova Scotia, Thursday, as they prepared for the Nova Scotia Canada Games trials to be held over the weekend.
ON CALM WATERS: Workers placed buoys on the sprint canoe/kayak course on foggy Lake Banook in Dartmouth, Nova Scotia, Thursday, as they prepared for the Nova Scotia Canada Games trials to be held over the weekend.
Continued
TRADITIONAL DRESS: Women wearing traditional costumes waited for holy communion on the occasion of the Feast of Corpus Christi in Appenzell, Switzerland, Thursday. Corpus Christi is celebrated on the Thursday after Trinity Sunday.
TRADITIONAL DRESS: Women wearing traditional costumes waited for holy communion on the occasion of the Feast of Corpus Christi in Appenzell, Switzerland, Thursday. Corpus Christi is celebrated on the Thursday after Trinity Sunday.
Continued
PLASTIC PROTECTION: A man draped himself with a plastic cover during a downpour in Manila on Thursday.
PLASTIC PROTECTION: A man draped himself with a plastic cover during a downpour in Manila on Thursday.
Continued
HEADS UP: Dairy sheep stood in a pen in Millau, France, Wednesday.
HEADS UP: Dairy sheep stood in a pen in Millau, France, Wednesday.
Continued
DWARFED: An employee inspected the inside of a cooling tower at a geothermal power station operated by Enel Green Power SpA in Monterotondo Marittimo, Italy, Wednesday.
DWARFED: An employee inspected the inside of a cooling tower at a geothermal power station operated by Enel Green Power SpA in Monterotondo Marittimo, Italy, Wednesday.
Continued
HIT HARD: A resident removed a chair inside his damaged home in Arriaga, Mexico, Thursday. Hurricane Barbara hit Mexico’s southern Pacific coast on Wednesday, flooding roads, toppling trees and killing two men before weakening to a tropical storm as it moved inland.
HIT HARD: A resident removed a chair inside his damaged home in Arriaga, Mexico, Thursday. Hurricane Barbara hit Mexico’s southern Pacific coast on Wednesday, flooding roads, toppling trees and killing two men before weakening to a tropical storm as it moved inland.
Continued
PUBLIC DISPLAY: The body of Indian film director Rituparno Ghosh was carried before cremation in Kolkata, India, Thursday. Mr. Ghosh died Thursday of cardiac arrest at age 49, news reports said.
PUBLIC DISPLAY: The body of Indian film director Rituparno Ghosh was carried before cremation in Kolkata, India, Thursday. Mr. Ghosh died Thursday of cardiac arrest at age 49, news reports said.
Continued
SPREADING VIOLENCE: A man rode a motorcycle near a burned building that housed an orphanage for Muslim children in Lashio, Myanmar, Thursday. Lashio town, near the border with China, is the latest region to fall prey to the country’s spreading sectarian violence.
SPREADING VIOLENCE: A man rode a motorcycle near a burned building that housed an orphanage for Muslim children in Lashio, Myanmar, Thursday. Lashio town, near the border with China, is the latest region to fall prey to the country’s spreading sectarian violence.
Continued
ANIMATED EXPRESSION: People stood on union picket lines at the entrance of a shopping mall during a regional strike called by the main Basque unions in the northern Spanish Basque city of Bilbao on Thursday.
ANIMATED EXPRESSION: People stood on union picket lines at the entrance of a shopping mall during a regional strike called by the main Basque unions in the northern Spanish Basque city of Bilbao on Thursday.
Continued
JOYOUS RELIEF: Chicago Blackhawks defenseman Brent Seabrook, center, let out a scream while being mobbed by teammates after scoring an overtime goal to defeat the Detroit Red Wings and win Game 7 of their NHL Western Conference semifinal hockey playoff in Chicago on Wednesday.
JOYOUS RELIEF: Chicago Blackhawks defenseman Brent Seabrook, center, let out a scream while being mobbed by teammates after scoring an overtime goal to defeat the Detroit Red Wings and win Game 7 of their NHL Western Conference semifinal hockey playoff in Chicago on Wednesday.
Continued
Read more: Photos of the Day: May 30
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Read this article: Painting Over a Franco-German Divide
By MATINA STEVIS
Euro-zone governments have coughed up huge sums of money to keep four of their kin afloat since 2010. Most of it has gone toward making sure that private-sector creditors that have lent to Greece, Ireland, Portugal and Cyprus are repaid in full.
This choice has been expensive, and is now becoming increasingly controversial. A discussion has begun about cutting Greece’s debts to its official creditors—meaning euro-zone governments could take losses. Greece, Portugal and Ireland have already gotten extra time and lower interest rates to repay loans to their European peers.
Associated Press
Cypriot students protested their country’s €10 billion bailout package outside the presidential palace in Nicosia in March.
The latest example is the €10 billion ($12.9 billion) bailout of Cyprus. Of the first €2 billion installment, €1.4 billion will go toward repaying a bond issue that comes due on June 3. Conversations with bond investors indicate that much of that was swept up by hedge funds in February and early March, as the country was negotiating the rescue.
These investors paid less than the bonds’ face value and now stand to make gains. In the three-year crisis, hedge funds have learned that, when a government receives a bailout, holding that government’s bonds is usually a profitable bet.
In the case of Greece, which carried out the biggest debt restructuring in history in May 2012, private-sector creditors had been made whole for two years thanks to bailout money. The country, still drawing on a €174.5 billion bailout, is to this day repaying even those investors who refused to participate in its debt restructuring.
Using desperately needed cash for this purpose wasn’t necessarily Greece’s choice. The euro zone and the International Monetary Fund made plain that repaying Greek bond investors was a priority when they insisted that bailout money went to a separate, secure account that first pays holders of Greek government debt. Whatever is left can be used for other public needs, like paying pensions or teachers.
“Except for the belated Greek debt restructuring in 2012, this has been the invariable pattern of euro-zone sovereign-debt management: Taxpayer funds in the form of bailout packages have been used to repay, in full and on time, existing holders of sovereign bonds,” said Lee Buchheit of the law firm Cleary Gottlieb Steen & Hamilton and an authority on sovereign-debt restructuring. He was hired to restructure Greece’s debt and led many high-profile restructurings before that.
Now, at least one member of the “troika” of institutions that have managed the bailouts—the European Commission, the European Central Bank and the IMF—is having a change of heart.
A May IMF report questions whether devoting such huge amounts of public money to keeping private investors happy is a good idea. The fund says that, when a country asking for a bailout looks unlikely to be able to repay all its debt, simply using public money to redeem private-sector debt is a bad way to spend it.
It says it wants to “explore ways to prevent the use of Fund resources to simply bail out private creditors” and suggests countries’ debts should be restructured early on, even before they get a bailout.
Delaying a restructuring, the report says, “will accentuate problems of moral hazard and burden-sharing, particularly if, during this period, the claims of private creditors are replaced by those of the official sector.”
In the IMF’s new view, giving private holders of government debt priority in bailouts may be a poor use for taxpayer funds both in the countries receiving the aid and in those providing it.
The timing of the fund’s intervention is interesting. This quarter, its own loans to Greece start to come due and euro-zone bailout funds will be used to repay the IMF.
At the same time, the IMF is calling on the euro zone to take losses on its rescue funding to Greece—to cut Greece’s still-high debt burden—while maintaining the convention that it is a preferred creditor and therefore exempt from any such exercise.
But exempting itself from losses in the event of what is euphemistically called “official-sector involvement,” or OSI, may not be that easy for the fund. “Now that OSI appears inevitable, the fund will surely be asked to participate,” said Mr. Buchheit. “If the fund refuses, it just means that the full weight of the OSI must fall on European taxpayers. If the fund agrees to participate, its preferred-creditor status will be punctured. Neither is a pleasing prospect.”
Others want to go much further and cut the debt held in private-sector hands before it gets to this stage. Ashoka Mody, a professor at Princeton University who until recently was a senior official at the IMF in charge of its involvement in the Irish bailout, said government debt in other bailout countries should be restructured pre-emptively, in acknowledgment of the fact that it is too large to repay.
The thought is enough to send chills down the spines of bond investors. Incurring billions of losses on bonds—once thought to be among the safest bets in the market and recorded as risk-free in banks’ balance sheets under European accounting rules—would be traumatic. Speaking at an event at Bruegel, a Brussels-based think tank, Mr. Mody admitted to not having an answer to the question of what happens next.
“The day after will be an ugly day,” he said. “But waiting is worse.”
Write to Matina Stevis at matina.stevis@dowjones.com
A version of this article appeared May 30, 2013, on page A9 in the U.S. edition of The Wall Street Journal, with the headline: Euro-Zone Aid Leaves Public Creditors at a Loss.
Read the original post: Euro-Zone Bailouts Leave Public Creditors at a Loss
Article Excerpt
BY KELLY CROW
The Venice Biennale, which opens June 1, has become the Olympics of the contemporary art world, a century-old event in which nations send their most promising artists to exhibit in pavilions and palazzos across the watery city. Instead of medals, artists compete for fame on the global art field.
The stakes are high because Venice—the art world’s first and most prestigious biennial—is where artists come to catapult their careers. In 1930, a little-known American realist painter, Edward Hopper, was invited to hang one of his quiet cityscapes, “Sunday in Main Street,” in the U.S. pavilion. Hopper proved a hit, and …
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Read more here: The Venice Biennale: Venetian Finds
By MARCIN SOBCZYK
VILNIUS, Lithuania—One day last summer, a woman was about to climb into a hammock in the front yard of a suburban house here when a photographer for the Google Inc. Street View service snapped her picture.
The apparently innocuous photograph is now being used as evidence in a tax-evasion case brought by Lithuanian authorities against the undisclosed owners of the home.
Some European countries have been going after Google, complaining that the search giant is invading the privacy of their citizens. But tax inspectors here have turned to the prying eyes of Street View for their own purposes.
Google Street View
A screen grab of Google Street View showing an image taken in July 2012 of a house Lithuania’s tax authority identified as suspicious in its search for tax dodgers.
After Google’s car-borne cameras were driven through the Vilnius area last year, the tax men in this small Baltic nation got busy. They have spent months combing through footage looking for unreported taxable wealth.
“We were very impressed,” said Modestas Kaseliauskas, head of the State Tax Authority. “We realized that we could do more with less and in shorter time.”
More than 100 people have been identified so far after investigators compared Street View images of about 500 properties with state property registries looking for undeclared construction.
Two recent cases netted $130,000 in taxes and penalties after investigators found houses photographed by Google that weren’t on official maps.
Marcin Sobczyk/The Wall Street Journal
Modestas Kaseliauskas, head of Lithuania’s State Tax Inspectorate, in his office in Vilnius, in April 30.
From aerial surveillance to dedicated iPhone apps, cash-strapped governments across Europe are employing increasingly unconventional measures against tax cheats to raise revenue. In some countries, authorities have tried to enlist citizens to help keep watch. Customers in Greece, for instance, are insisting on getting receipts for what they buy.
For Lithuania, which only two decades ago began its transition away from communist central planning and remains one of the poorest countries in the European Union, Street View has been a big help. After the global financial crisis struck in 2008, belt tightening cut the tax authority’s budget by a third. A quarter of its employees were let go, leaving it with fewer resources just as it was being asked to do more.
“We were pressured to increase tax revenue,” said the authority’s Mr. Kaseliauskas.
Street View has let Mr. Kaseliauskas’s team see things it would have otherwise missed. Its images are better—and cheaper—than aerial photos, which authorities complain often aren’t clear enough to be useful.
Sitting in their city office 10 miles away, they were able to detect that, contrary to official records, the house with the hammock existed and that, in one photograph, three cars were parked in the driveway.
An undeclared semidetached house owned by the former board chairman of Bank Snoras, Raimundas Baranauskas, was recently identified using Street View and is estimated by the government to be worth about $260,000. Authorities knew Mr. Baranauskas owned land there, but not buildings. A quick look online led to the discovery of several houses on his land, in a quiet residential street of Vilnius.
Mr. Baranauskas faces extradition from Britain to Lithuania amid an investigation into the collapse of Snoras, which failed in late 2011. Mr. Baranauskas is suspected in Lithuania of property embezzlement, a charge he denies. His extradition case at London’s Westminster Magistrates’ Court is scheduled to proceed in July.
His properties had been seized, but the house didn’t exist on paper. Lithuanian authorities were unable to seize it until the building came up on Street View.
Mr. Baranauskas’s lawyer didn’t return messages seeking comment.
Most people swept up in the dragnet aren’t millionaires. Lithuania is a nation of homeowners, said Giedre Aleknaviciute, analyst at real-estate consultancy Colliers. Authorities say the house with the hammock in suburban Vilnius is worth about $380,000.
Google’s Street View service has been highly controversial around the world and many governments in Europe and beyond have tried to restrict the company’s operations. In Germany, after legislators considered a law that would curb Street View, the company allowed individuals to request that photos of their property be removed from the service before it was launched. Google didn’t respond to requests for comment.
But in Lithuania the government’s use of Google Street View has resonated well, and authorities have been aided by the local populace. “We received even more support than we expected,” said Mr. Kaseliauskas, the chief tax inspector.
The iPhone used by Mr. Kaseliauskas features an application his office designed to allow citizens to notify the authorities of what they think is tax evasion. About 2,600 people sent information to the government last year using the app, which gave the country of three million people 8.8 million litas, or about $3.3 million, in extra revenue.
Write to Marcin Sobczyk at marcin.sobczyk@dowjones.com
Read the original: In Lithuania, the Tax Man Cometh Right After the Google Car Passeth
At a Gap store in New York City, shirts and pants from Vietnam, Indonesia and Bangladesh are selling briskly.
Do customers have qualms about buying clothes made in Bangladesh, where just last month 1,127 garment workers were killed in the collapse of a substandard building? “No,” says a salesman. “They don’t really ask about it.”
Zuma Press
A relative places roses on a fence near the site of the building collapse.
That may be a brutal truth, but it’s good news for Bangladesh. The best thing that could happen in the wake of last month’s tragedy is already taking place: Most global brands, despite an uproar over working conditions and fatal accidents in the country’s factories, are staying put. At least for the moment.
Whether that remains the case depends on what the retailers do next.
It’s a bad bet to believe that consumers will lead much change. They may (or may not) be aware of the death toll in Bangladesh. But don’t expect them to parse responsibility for the accident and decide whether it was the fault of a subcontractor, supplier, intermediary, building inspector, corrupt government or negligent brand.
In the 1990s, Nike was hammered by bad press about labor practices at factories run by its suppliers in Asia. Even during the worst of it, customers didn’t stop buying. “We had significant reputational issues, but we didn’t see that translate to consumer behavior,” says Hannah Jones, Nike’s vice president of sustainable business and innovation. Consumers liked the product—and the price, too.
One poll taken after the building collapse in Bangladesh found that 30% of Americans said that buying clothes made under safe working conditions is very important to them. According to the Huffington Post/YouGov poll, an additional 30% said it’s somewhat important, 16% said not very important, and 12% not at all important. On the other hand, price mattered a lot.
Consumers may not see what economists see: Big brands that source product from low-wage developing countries help those economies grow. The garment industry has been the traditional ticket into that game—the springboard for countries like Taiwan, South Korea and China to move up the value chain. Bangladesh, where four million people are employed in the garment industry, has benefited too. GDP has doubled since 2004. And many of the new jobs in crowded garment factories replaced even lower paying, harsher work on farms.
An OECD study in 2008 noted that multinationals operating in developing economies tended to provide better pay than their local competitors but not necessarily better working conditions. In Bangladesh, factories are run by suppliers who are independent of the global brands.
So what will speed change?
You’re seeing it now. The big retailers sourcing goods from Bangladesh are getting pummeled by groups that shape public opinion—unions, students, non-governmental organizations, academics, and the media among them—all lighting up blogs, Twitter and other public squares.
Nike says pressure from these sorts of players also informed its deliberations in the 1990s. And one other key group: “You can’t understate the impact of being an employee and going to a dinner party and being asked, ‘Why do you work for that company?’” says Ms. Jones. Nike soon overhauled its sourcing rules.
So it is that global retailers with suppliers in Bangladesh are trying to prevent public opinion from reaching a tipping point—one that affects customers and sales. Companies such as Wal-Mart and Gap have promised audits of suppliers or other measures to improve working conditions. (Both companies say they weren’t sourcing clothes from the building that collapsed last month.) European retailers such as Carrefour and H&M have signed agreements to do much the same. Disney is an exception: It has asked its licensees to halt production in Bangladesh. How effectively the companies deliver on their promises remains to be seen.
There’s another costly trip wire that retailers hope to avoid by increasing scrutiny now. “A well-functioning free market is not devoid of laws,” says Matthew Slaughter of the Tuck School of Business. “Part of what could be the market solution here is a change in the rules of the game.”
That, of course, has happened many times to business. Public opinion reaches a high enough volume that lawmakers step in to regulate—whether factory emissions, bribery overseas or, more recently, the purchase of conflict minerals.
Retailers don’t want that. So count on working conditions in at least some of these factories to get better—however slowly.
—Write to John Bussey at john.bussey@wsj.com; follow @johncbussey on Twitter
A version of this article appeared May 30, 2013, on page B1 in the U.S. edition of The Wall Street Journal, with the headline: In Bangladesh, the Slow, Tragic March to a Better Life.
See the article here: In Bangladesh, the Slow, Tragic March to a Better Life
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Follow this link: Business Group Raises U.K. Growth Forecast
By JEYUP S. KWAAK
SEOUL—Laos handed over a group of North Korean refugees to Pyongyang this week and rejected criticism it had endangered their lives, saying South Korea was informed of the detentions but made no attempt to help, an assertion a South Korean official disputed.
European Pressphoto Agency
North Korean defectors and Human rights group activists rallied Wednesday against the Government’s North Korean defectors relief policy.
News of the repatriation of the North Koreans between the ages of 15 and 23 has garnered national attention in South Korea. It’s thought to be the first time Laos—a common transit point for North Koreans fleeing their homeland via China—has handed over defectors to agents from the North.
In previous instances, escapees caught inside Laos were moved to a third country, often Thailand, to be sent to Seoul under an unofficial agreement between Laos and South Korea, a former South Korean diplomat to Laos said.
Human-rights activists working for North Korean defectors say the swift repatriation is unusual, suggesting North Korea has been more assertive in recovering defectors since the dictator Kim Jong Un came to power in late 2011.
Officials from the Southeast Asian nation, where the North Koreans were detained on May 10, said both the North Korean and South Korean embassies in the capital Vientiane were informed but only the North moved to take the group. Laotian officials said the refugees didn’t ask to be sent to South Korea.
South Korea has declined to comment officially on the case, but a senior official challenged the Laotian account on Thursday. “South Korea made constant requests to visit the North Korean refugees, to have them released to us and to protect them from forced extradition,” said the official, speaking on condition of anonymity.
The North Korean defectors are assumed to have been repatriated earlier this week via China, according to the South Korean Foreign Ministry, and will likely face interrogation. Punishment for defectors that have had contact with South Koreans and religious groups is widely considered to be more severe, with punishments including hard labor, prison camp and even execution, according to scholars and human-rights activists.
The refugees were arrested close to the Chinese border together with South Korean guides. They were moved to a detention center in Vientiane days later, Laotian Foreign Ministry officials said.
Because the nine North Koreans and the two South Koreans crossed the Sino-Laotian border without passing an immigration checkpoint, authorities treated them as illegal immigrants, Laotian officials said. Both North and South Korean embassies were notified of the refugees once their identities were revealed, and at the North’s request, the nine were released into its custody, according to the ministry’s account.
Laotian Foreign Ministry officials said that contrary to earlier South Korean reports based on the guides’ testimony, the North Korean refugees didn’t ask to be sent to the South, and the South Korean Embassy didn’t file an official request to visit them. “We expected them to do that [request a visit],” said Khantivong Somlith, an official at the Laotian Embassy in Seoul.
South Korea’s first attempt to discuss the issue with Laos came only on Wednesday when the Vientiane-based ambassador visited the Laotian vice foreign minister—after the nine refugees were escorted out of the country by North Korean agents, the Laotian officials said.
The South Korean guides, a pastor and his wife, accused Laos and North Korea of cutting a deal for the escapees’ repatriation. Speaking to national media, they added that South Korea didn’t intervene quickly or forcefully enough. The guides, who are back in South Korea, couldn’t be reached to comment.
South Korean media and activists have questioned whether this case points to Pyongyang’s influence eclipsing Seoul’s in Vientiane, despite the South being a top aid donor to Laos. North Korea and Laos have maintained relatively close relations as allies since the 1970s, but recently the level of senior-level contact has increased, according to the South Korean government official.
The last known senior-level contact between the North and the Southeast Asian country was a week ago, when North Korea’s head of parliament met with Soukanh Mahalath, Vientiane mayor and senior ruling party member, in Pyongyang, North Korean state media reported.
More than 25,000 North Koreans have fled their impoverished country and live in South Korea, which gives such arrivals South Korean nationality. Their route of choice has been via China and Southeast Asia, but since Mr. Kim took power, Pyongyang has tightened its borders to prevent defections.
The number of North Koreans escaping to the South tumbled 44% in 2012 from a year earlier, South Korean government figures show. Pyongyang has also increased punishment for repatriated defectors and stepped up efforts to reduce corruption among border guards that accept bribes to let defectors pass, according to activists and recent defectors.
Read more from the original source: Laos Returns Refugees to North Korea
The Benghazi scandal was and is shocking, and the Justice Department assault on the free press, in which dogged reporters are tailed like enemy spies, is shocking. Benghazi is still under investigation and someday someone will write a great book about it. As for the press, Attorney General Eric Holder is on the run, and rightly so. They called it the First Amendment for a reason. But nothing can damage us more as a nation than what is happening at the Internal Revenue Service. Elite opinion in the press and in Washington doesn’t fully understand this. Part of the reason is that it’s not their ox being gored, it’s those messy people out in America with their little patriotic groups.
Those who aren’t deeply distressed about the IRS suffer from a reluctance or inability to make distinctions, and a lack of civic imagination.
An inability to make distinctions: “It’s always been like this.” “Presidents are always siccing the IRS on their enemies.” There’s truth in that. We’ve all heard the stories of the president who picked up the phone and said, “Look into this guy,” Richard Nixon most showily. He got clobbered for it. It was one of the articles of impeachment.
Associated Press
Our government shouldn’t treat them as the enemy.
But this scandal is different and distinctive. The abuse was systemic—from the sheer number of targets and the extent of each targeting we know many workers had to be involved, many higher-ups, multiple offices. It was ideological and partisan—only those presumed to be of one political view were targeted. It has a single unifying pattern: The most vivid abuses took place in the years leading up to the president’s 2012 re-election effort. And in the end several were trying to cover it all up, including the head of the IRS, who lied to Congress about it, and the head of the tax-exempt unit, Lois Lerner, who managed to lie even in her public acknowledgment of impropriety.
It wasn’t a one-off. It wasn’t a president losing his temper with some steel executives. There was no enemies list, unless you consider half the country to be your enemies.
It is considered a bit of a faux pas to point this out, but what we are talking about in part is a Democratic president, a largely Democratic professional administrative class in Washington, and an IRS whose workers belong to a union whose political action committee gave roughly 95% of its political contributions last year to Democrats. Tim Carney had a remarkable piece in the Washington Examiner this week in which he looked for campaign contributions from the IRS Cincinnati office. “In the 2012 election, every donation traceable to this office went to President Obama or liberal Sen. Sherrod Brown.” An IRS employee said in an email to Mr. Carney, “Do you think people willing to sacrifice lucrative private sector careers to work in tax administration . . . are genuinely going to support the party directed by Grover Norquist?” Mr. Carney noted that one of his IRS correspondents had an interesting detail on his social media profile. He belongs to a Facebook group called “Target the Shutdown at the Tea Party States.” It advised the president, during the 2011 debt-ceiling fight: “For instance, shut down air traffic control at airports in Norfolk, Tampa, Nashville.”
Wow. I guess that was target practice.
Daily declarations from the Wall Street Journal columnist.
Here is the thing. The politicization of government employees wouldn’t have worried a lot of us 40, 30 or even 20 years ago. But since then, as a country, we have become, as individuals, less respectful of political differences and even of each other, as everything—all parts of American life—has become more political, more partisan, more divided and more aggressive.
There has got to be some way to break through this, to create new rules for the road in a situation like this.
Because people think the IRS has always, in various past cases, been used as a political tool, they think we’ll glide through this scandal too. We’ll muddle through, we’ll investigate, the IRS will right itself, no biggie.
But when a scandal is systemic, ideological and focused on political ends, it will not just magically end. Agencies such as the IRS are part of what Jonathan Turley this week called a “massive administrative state,” one built with many protections and much autonomy.
If it is not forced to change, it will not.
Which gets us to the part about imagination. What does it mean when half the country—literally half the country—understands that the revenue-gathering arm of its federal government is politically corrupt, sees them as targets, and will shoot at them if they try to raise their heads? That is the kind of thing that can kill a country, letting half its citizens believe that they no longer have full political rights.
Those who think this is just business as usual are ahistorical, and those who think nothing can be done, or nothing serious should be done, are suffering from Cynicism Poisoning.
The House wants to proceed with hearings and an investigation itself, and understandably. One reason is pride. “We are the ones who got the IRS to do the audit,” a congressman said the other night. Another is momentum: An independent counsel would take time and take some air out of the story. But Congress is operating within a lot of political swirls. The IRS certainly doesn’t seem to fear them—haven’t its leaders made that clear in their testimony so far? Congress itself is not highly regarded by the public. Didn’t I say that politely?
Some members have been scared into thinking that tough hearings will constitute “overreach.” But when you spend all your time fearing overreach, you can forget to reach at all. A defensive crouch isn’t a good posture from which to launch a probe. And some members fear that if they pursue and and give time to something that is not an economic issue, it will be used against them. But stopping the revenue-gathering arm of the federal government from operating as a hopelessly politicized and aggressive entity is an economic issue. It has to do with basic American faith in, and compliance with, half of the spending/taxing apparatus of the federal government. How could that not be an economic issue?
There will be more hearings next week, and fair enough. But down the road an independent counsel is going to be needed because the House does not have all the prosecutorial powers an independent counsel would—the powers to empanel a grand jury, grant immunity to potential witnesses, find evidence of criminal wrongdoing, indict.
Another reason to want an independent counsel: There are obviously many good, fair-minded workers in the IRS, people of sterling character. They deserve to be asked about what they were forced to put up with, what they felt they had to bite their tongues about. There may even be a few stories about people who stood up and said: “You know you’re targeting Americans because they hold political views you don’t like, right? You know that’s wrong, right? And I’m not going to do it.”
It would be worth an investigation that breaks open the IRS to find that person, and that moment. You have no idea how much better it would make us feel, how inspiring and comforting, too.
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View original post here: U.N. Report Urges New Poverty Efforts
By CARL BIALIK
Games of the Small States of Europe
Cypriot athletes hold up a banner thanking their hosts and benefactors at the opening ceremony in Luxembourg on May 27.
LUXEMBOURG—When Cyprus’s banks faltered in March, resulting in restructuring that cost depositors billions of dollars, one victim, far down the country’s list of emergency priorities, was its national sports program. And under the circumstances, a spring trip to the 15th Games of the Small States of Europe was out of the question.
Across the continent, as it prepared to host this week’s games, Luxembourg was watching. Officials quickly distanced themselves from the crisis, saying their banks were far more solid. But in a show of solvency and solidarity, Luxembourg also stepped in to help Cyprus. Without talk of bailouts or politics, it decided, for the good of the games, to prop up the Cypriot team—which just happened to be its chief rival.
Luxembourg has never topped the medal table at the quirky, biennial competition open only to European nations with a population under one million people. Instead, at all 14 editions of the games, the nation wedged between France, Belgium and Germany has finished second or third.
“I prefer second place and Cyprus will be No. 1 and coming with a full team, than coming No. 1 and Cyprus is here with 40 or 50 athletes,” said Marc Theisen, vice president of the Luxembourg games’ organizing committee.
The Luxembourg government is providing Cyprus with €100,000 ($129,400), and the national Olympic committee is chipping in another €20,000, according to Olga Piperidou, general director of the Cyprus national Olympic committee and manager of the Cyprus team in Luxembourg. The International Olympic Committee’s Olympic Solidarity program is contributing $150,000, according to IOC spokesman Andrew Mitchell, who said the program also is considering a request from Cyprus for more financial support over the next four years. Piperidou said that the bank restructuring at home had cost the committee some €600,000.
The generosity isn’t lost on the Cypriot athletes. “They want us to be here,” said Panagiotis Trisokkas, captain of Cyprus’s men’s basketball team. “This is the Olympic spirit. Maybe in another country, they would say it is better for us” if Cyprus didn’t come.
The gesture befitted the competition, which officials and athletes say has built friendships between the nine participating countries, with a combined population smaller than Madrid’s. It’s a group with little in common other than smallness: Montenegro, for instance, has one-third the gross domestic product per capita of San Marino and 20 times the population.
But every two years they gather for the small-states games where, unlike the Olympics, medals are plentiful and within reach.
Tennis players pick up their own balls. Sheep graze within a few hundred yards of the games’ headquarters and main sporting venue. And the person sitting next to you at an event—where admission is free—is just as likely to be the president of the national basketball federation as an athlete’s parent. Or both.
On this small scale, Cyprus and Luxembourg are superpowers, along with Iceland. Over the games’ history, which dates back to 1985, those three have more than twice the number of total medals and golds as fourth-place Monaco.
But this isn’t the first time that one favorite has helped another. When Cyprus hosted in 2009, the first games after Iceland’s financial crisis began, it offered a hand. And even though Team Iceland was eventually able to pay its own way, Cyprus still made a gesture of solidarity. “They put us up in a little better hotel,” said Liney Halldorsdottir, secretary-general of Iceland’s National Olympic and Sports Association.
Referring to Cyprus at the 2013 edition, Halldorsdottir added, “The games could probably go on without them, but we certainly wouldn’t want that.”
Luxembourg’s gift was practical as well as altruistic. Their games would be deemed less successful without about one-sixth the athletes. And bringing Team Cyprus to Luxembourg cost little compared with the games’ €3 million budget. Also, without Cyprus some events would have been canceled entirely for lack of the minimum number of competitors.
“We were really pushing for Cyprus to participate,” said Henri Pleimling, president of Luxembourg’s basketball federation, noting that the women’s competition would have been scrapped without Cyprus.
Cyprus expressed its gratitude with a banner reading, “Thank you Luxembourg” in English and Greek at the opening ceremonies on Monday. That said, solidarity ends where the playing field begins. Through Wednesday, the hosts had won 38 medals, 13 of them gold. Iceland was second and Cyprus in third, having won 21 medals, including nine gold.
Uncertainty about participation and funding difficulties meant the Cypriot men’s basketball team had no warm-up matches, which they would normally schedule ahead of the games, said head coach Panayiotis Yiannaras.
And even with the funding, some athletes were left behind. Cyprus chose to bring men’s tennis players instead of women’s players, because “The boys have better potential,” said Dean Georgiou, assistant national coach.
The Cyprus Broadcasting Corporation also traveled without a full squad, said Andreas Aristodemou, head of sports for CyBC. The company cut its budget by almost half for games coverage—which was a real draw during the 2009 event in Cyprus—hitching a ride on the plane chartered by the national Olympic committee to make the numbers work. The network is sharing video with its private competitors. “We’re not doing this for the money, because there is no money here,” Aristodemou said.
After the games, challenges abound for Cypriot sports. The national Olympic committee will have to firm up funding for the Mediterranean Games, which are being held in late June in Mersin, Turkey—geographically close to Cyprus yet difficult to reach because of the frayed relations between the countries. “To fly from Cyprus to Turkey, you have to do a minitour of Europe,” Aristodemou said. “It costs maybe €700 per person.”
The financial constraints will only get grimmer in the next few years, according to Cypriot athletes here. Domestic leagues are struggling as television companies seek to cut rights fees and advertising money dries up. Foreign talent is likely to move back overseas.
But for this week at least, Cypriot athletes have been able to enjoy competing with nations their own size, and much smaller. After cheering on his compatriots to a narrow victory over Andorra at the raucous temporary beach-volleyball court on Tuesday, Nikos Kolas, the captain of the men’s indoor-volleyball team, said he didn’t bring any of his worries with him.
“We don’t think about the problems we have there,” Kolas said. “The climate in the Games is like that. You can’t think of any problems while you are here.”
The rest is here: Cyprus Athletics Gets Bailout, Too
The Benghazi scandal was and is shocking, and the Justice Department assault on the free press, in which dogged reporters are tailed like enemy spies, is shocking. Benghazi is still under investigation and someday someone will write a great book about it. As for the press, Attorney General Eric Holder is on the run, and rightly so. They called it the First Amendment for a reason. But nothing can damage us more as a nation than what is happening at the Internal Revenue Service. Elite opinion in the press and in Washington doesn’t fully understand this. Part of the reason is that it’s not their ox being gored, it’s those messy people out in America with their little patriotic groups.
Those who aren’t deeply distressed about the IRS suffer from a reluctance or inability to make distinctions, and a lack of civic imagination.
An inability to make distinctions: “It’s always been like this.” “Presidents are always siccing the IRS on their enemies.” There’s truth in that. We’ve all heard the stories of the president who picked up the phone and said, “Look into this guy,” Richard Nixon most showily. He got clobbered for it. It was one of the articles of impeachment.
Associated Press
Our government shouldn’t treat them as the enemy.
But this scandal is different and distinctive. The abuse was systemic—from the sheer number of targets and the extent of each targeting we know many workers had to be involved, many higher-ups, multiple offices. It was ideological and partisan—only those presumed to be of one political view were targeted. It has a single unifying pattern: The most vivid abuses took place in the years leading up to the president’s 2012 re-election effort. And in the end several were trying to cover it all up, including the head of the IRS, who lied to Congress about it, and the head of the tax-exempt unit, Lois Lerner, who managed to lie even in her public acknowledgment of impropriety.
It wasn’t a one-off. It wasn’t a president losing his temper with some steel executives. There was no enemies list, unless you consider half the country to be your enemies.
It is considered a bit of a faux pas to point this out, but what we are talking about in part is a Democratic president, a largely Democratic professional administrative class in Washington, and an IRS whose workers belong to a union whose political action committee gave roughly 95% of its political contributions last year to Democrats. Tim Carney had a remarkable piece in the Washington Examiner this week in which he looked for campaign contributions from the IRS Cincinnati office. “In the 2012 election, every donation traceable to this office went to President Obama or liberal Sen. Sherrod Brown.” An IRS employee said in an email to Mr. Carney, “Do you think people willing to sacrifice lucrative private sector careers to work in tax administration . . . are genuinely going to support the party directed by Grover Norquist?” Mr. Carney noted that one of his IRS correspondents had an interesting detail on his social media profile. He belongs to a Facebook group called “Target the Shutdown at the Tea Party States.” It advised the president, during the 2011 debt-ceiling fight: “For instance, shut down air traffic control at airports in Norfolk, Tampa, Nashville.”
Wow. I guess that was target practice.
Daily declarations from the Wall Street Journal columnist.
Here is the thing. The politicization of government employees wouldn’t have worried a lot of us 40, 30 or even 20 years ago. But since then, as a country, we have become, as individuals, less respectful of political differences and even of each other, as everything—all parts of American life—has become more political, more partisan, more divided and more aggressive.
There has got to be some way to break through this, to create new rules for the road in a situation like this.
Because people think the IRS has always, in various past cases, been used as a political tool, they think we’ll glide through this scandal too. We’ll muddle through, we’ll investigate, the IRS will right itself, no biggie.
But when a scandal is systemic, ideological and focused on political ends, it will not just magically end. Agencies such as the IRS are part of what Jonathan Turley this week called a “massive administrative state,” one built with many protections and much autonomy.
If it is not forced to change, it will not.
Which gets us to the part about imagination. What does it mean when half the country—literally half the country—understands that the revenue-gathering arm of its federal government is politically corrupt, sees them as targets, and will shoot at them if they try to raise their heads? That is the kind of thing that can kill a country, letting half its citizens believe that they no longer have full political rights.
Those who think this is just business as usual are ahistorical, and those who think nothing can be done, or nothing serious should be done, are suffering from Cynicism Poisoning.
The House wants to proceed with hearings and an investigation itself, and understandably. One reason is pride. “We are the ones who got the IRS to do the audit,” a congressman said the other night. Another is momentum: An independent counsel would take time and take some air out of the story. But Congress is operating within a lot of political swirls. The IRS certainly doesn’t seem to fear them—haven’t its leaders made that clear in their testimony so far? Congress itself is not highly regarded by the public. Didn’t I say that politely?
Some members have been scared into thinking that tough hearings will constitute “overreach.” But when you spend all your time fearing overreach, you can forget to reach at all. A defensive crouch isn’t a good posture from which to launch a probe. And some members fear that if they pursue and and give time to something that is not an economic issue, it will be used against them. But stopping the revenue-gathering arm of the federal government from operating as a hopelessly politicized and aggressive entity is an economic issue. It has to do with basic American faith in, and compliance with, half of the spending/taxing apparatus of the federal government. How could that not be an economic issue?
There will be more hearings next week, and fair enough. But down the road an independent counsel is going to be needed because the House does not have all the prosecutorial powers an independent counsel would—the powers to empanel a grand jury, grant immunity to potential witnesses, find evidence of criminal wrongdoing, indict.
Another reason to want an independent counsel: There are obviously many good, fair-minded workers in the IRS, people of sterling character. They deserve to be asked about what they were forced to put up with, what they felt they had to bite their tongues about. There may even be a few stories about people who stood up and said: “You know you’re targeting Americans because they hold political views you don’t like, right? You know that’s wrong, right? And I’m not going to do it.”
It would be worth an investigation that breaks open the IRS to find that person, and that moment. You have no idea how much better it would make us feel, how inspiring and comforting, too.
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By TE-PING CHEN
HONG KONG—The political scandal and criminal investigation that has accompanied the shutdown of the Hong Kong Mercantile Exchange has created more drama, including a sixth arrest on Thursday, than the small, struggling exchange ever did trading gold and silver futures.
Reuters
Hong Kong Mercantile Exchange Chairman Barry Cheung is under police investigation as part of a probe of the exchange.
The exchange’s closure after two years of trading was a blow to the ambitions of its backers, including a close ally to Hong Kong’s top official and Russian billionaire Oleg Deripaska, whose EN+ Group took a 10% stake in the exchange to help launch it in 2010. They had hoped the HKMEx would capitalize on China’s voracious appetite for commodities, but it failed to survive stiff competition from better-established players in Hong Kong and Shanghai, as well as in the West.
Thursday’s arrest is the latest development in a widening probe that surfaced May 21, when the Hong Kong Securities and Futures Commission said it was investigating suspected “serious” irregularities at the exchange. Police took into custody a 76-year-old man on suspicion of using false instruments.
Of the six people arrested, police have charged three mainland Chinese men with possession of falsified bank statements. No other suspects have been charged. The exchange has said none of the people charged—Dai Linyi, Li Shanrong and Lian Chunyan—were its employees.
The men remained in custody Thursday; it wasn’t clear if they had lawyers. A bail hearing is scheduled for Friday.
HKMEx Chairman and political heavyweight Barry Cheung is under police investigation as part of the probe of the exchange, the police said May 24, days after HKMEx said it was shutting down because it lacked the revenue needed to cover its costs.
Mr. Cheung, who led Hong Kong Chief Executive Leung Chun-ying’s successful election bid last year, has denied any wrongdoing. Tuesday, he declined to comment on the case, saying he chose not to speak while the police investigation is continuing. He has resigned from all his public positions, including his role as an adviser in Mr. Leung’s cabinet, according to the government. Mr. Cheung also resigned from the boards of Hong Kong-based insurer AIA Group Ltd. and Mr. Deripaska’s United Rusal Co., where he was once chairman.
Rusal, Mr. Deripaska and EN+ declined to comment on Mr. Cheung or on the HKMEx. AIA would only confirm that Mr. Cheung had departed from its board. Mr. Leung didn’t respond to a request for comment.
The investigation of Mr. Cheung has dominated media coverage in Hong Kong, and prompted public questioning of the administration by legislators. Lawmakers demanded to know how long the administration knew of the exchange’s difficulties, but the government has declined to comment, citing the investigation.
Bloomberg News
The exchange’s offices in Hong Kong.
Mr. Cheung is the third key member of Mr. Leung’s administration to step down in the face of a public outcry since the leader took office last July. Public approval ratings for Mr. Leung, who has never enjoyed strong relations with the city’s business elite, have fallen. While in other elections the city’s tycoons have rallied around the candidate backed by Beijing, that broad support never emerged for Mr. Leung.
For HKMEx, early hopes that it would get Chinese regulatory approval to trade contracts for fuel oil that could be delivered on the mainland never materialized, dealing a blow to its business plans. Though it was slated to begin operating in 2009, HKMEx struggled to take off, in part because of the global financial crisis and difficulty in assembling shareholders.
Prior to its launch, Mr. Cheung said the exchange would fill a key market niche in Asia by giving local companies and investors the ability to trade during the Asian day, rather than at night, when markets in Europe and the U.S. are open. He cited China’s “insatiable” demand for commodities such as copper and iron as an opportunity for the exchange.
HKMEx’s ambitions suffered a further blow last year, when the Hong Kong stock exchange moved into commodities trading, buying the London Metal Exchange, the world’s biggest trading platform for industrial metals, for US$2.16 billion.
Since it opened in 2011, HKMEx only ever offered two products: futures contracts for gold and silver, denominated in U.S. dollars. Its business lagged relative to its rivals, with turnover between 2011 and 2013 totaling US$120 billion, mostly in gold trades.
By contrast, the Shanghai Futures Exchange, which handles a number of commodities, traded US$653 billion in gold in 2012 alone. On May 18, when HKMEx said that it had stopped trading, it had only 180 outstanding contracts left to settle.
Brokers said this week that HKMEx’s lack of offerings had left them disappointed over the years. “Initially of course, we expected that their contracts would cover various products. But it turns out that was just something like wishful thinking,” said Ben Kwong, chief operating officer at brokerage KGI Asia Ltd., an HKMEx member, adding that his company had only completed a few trades for test purposes.
“Our clients preferred to trade through other platforms that they found more efficient, with more liquidity,” Mr. Kwong said.
The exchange struggled to gain traction in an already crowded field of competitors, including well-established rivals in Chicago and London, as well as counterparts in Singapore, Shanghai and Hong Kong.
“In the region, when you talk about gold or silver, in China they were facing competition with the Shanghai Futures Exchange, and over here, they were facing us,” says Haywood Cheung, president of the century-old Hong Kong-based Chinese Gold & Silver Exchange Society, which daily handles some US$10.3 billion in spot gold trading. It had recently been in talks about forging a partnership with HKMEx.
Write to Te-Ping Chen at te-ping.chen@wsj.com
A version of this article appeared May 30, 2013, on page C3 in the U.S. edition of The Wall Street Journal, with the headline: Inquiry Into Bourse Widens.
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By YUKA HAYASHI
TOKYO—Japan’s military, long constrained by the nation’s postwar pacifist constitution, moved toward gaining the freedom to strike enemy targets abroad if an attack is anticipated.
WSJ Tokyo Bureau Chief Jacob Schlesinger discusses the Nikkei stock selloff early Thursday morning, and explains Japan’s military moving toward the ability to carry out pre-emptive strikes, with North Korea its main focus. Photo: Getty Images.
Tokyo is preparing a new basic defense policy framework under hawkish Prime Minister Shinzo Abe, and recommendations for that framework compiled Thursday by ruling party lawmakers called for building the capability to attack an enemy’s strategic bases for self-defense purposes.
Such a step would allow Japan’s Self-Defense Forces to launch a pre-emptive missile strike at an enemy’s military target when an imminent attack on Japan from that specific site is confirmed, officials for the ruling Liberal Democratic Party said.
Specifically, such a step assumes possible missile attacks from North Korea, which has been stepping up its nuclear and missile threats against targets in Japan and South Korea and U.S. bases in the region.
“We have just gone through a period when people in Japan felt extreme anxiety about national security,” Yasuhide Nakayama, a lawmaker who heads the LDP’s National Defense Division responsible for the recommendations, said in an interview Thursday. In addition to North Korea’s missile program, he cited China’s intrusions into territorial waters around contested East China Sea islands. “We believe we need to rebalance our basic policy.”
The adoption of a first-strike doctrine would mean a significant shift in the responsibility for the SDF, whose role is strictly confined by the constitution to activities construed as “self defense.” Mr. Abe, known for his hawkish foreign policy stances, sees constitutional revision as a top goal of his government—and, short of outright revision, has advocated military policies that would stretch conventional interpretations of postwar constitutional restrictions.
Soon after the LDP returned to power in December after three years in opposition, the government said it would publish by the end of 2013 a new National Defense Program Guideline, the most basic policy statement that determines the course of the nation’s defense strategies for the medium- to long-term, or up to 10 years. While the guideline will eventually be packaged by the defense ministry under the leadership of the prime minister, the ruling party’s recommendations this week carry significant weight. Mr. Abe is eager to revise the guideline even though the current ones are less than two years old, as they were compiled by the previous administration run by a rival party.
Mr. Nakayama said there are three challenges Japan faces as it starts developing a capability for attacking enemy bases abroad. It must make significant investment in research and development for weapons technology, as Japan now has only those designed for more strict self-defense purposes. It needs to clarify legal implications of such a move, including the possibility of adjusting the official interpretation of the constitution. Finally, it must gain the understanding of neighboring Asian nations that are nervous about Japan’s military revival.
“Through diplomatic steps, we need to give careful and thorough explanation that we are talking about attacks strictly for the purpose of self defense,” he said.
Other key LDP’s recommendations for the new guideline include beefing up of cybersecurity, as well as the creation of amphibious forces for island defense within the military that would have similar capabilities to the U.S. Marine Corps.
Write to Yuka Hayashi at yuka.hayashi@wsj.com
Read more: Japan Moves Toward Pre-Emptive Strike Capability
