The World Today for May 13, 2016


After Rousseff, More Turmoil for Brazil?

Brazil’s first woman president abandoned the presidential palace Thursday morning. But the impeachment vote that sent her packing is unlikely to mean more than a temporary lull to the turmoil in Latin America’s largest economy.

Here’s what the suspension – and likely ouster – of left-wing President Dilma Rousseff is likely to bring next.

On the economy, there will be a shift to the right, at least for now.

Vice President Michel Temer will replace Rousseff for at least the next six months. He could serve out the remaining two and a half years of her term in the (likely) event that a two-thirds majority of the Senate votes to make her ouster permanent.

He has already vowed to undertake austerity measures and economic reforms to jumpstart Brazil’s devastated economy, which could include cutting federal pensions and making it easier for businesses to fire workers.

Temer has also tapped “inflation-buster” Henrique Meirelles (a former head of the central bank) to be his finance minister, which investors assume presages deep cuts to government spending. (While Brazil’s once skyrocketing gross domestic product contracted by 3.8% last year, inflation is hovering around 10% and the budget deficit has swelled to 9.7% of GDP, Bloomberg explains in this detailed analysis of the challenges he faces).

But even though most economists seem to agree those are the kind of moves needed to get Brazil on track, there are several reasons why the right turn could prove difficult to execute, following a decade of generous social spending by Rousseff’s Workers’ Party.

An unelected leader, Temer can’t claim a popular mandate for his program, and even if the kind of tough love he proposes does succeed in bolstering the economy, it’s likely to take awhile for the benefits to trickle down to ordinary Brazilians. Meanwhile, Rousseff now has no procedural recourse to use to stop the impeachment process in the Senate, so she is expected to try to apply pressure through street protests – where cuts to social benefits will stoke the public’s ire.

Adding insult to injury, when it comes to corruption, ousting Rousseff won’t really change anything. Worse, some say Sergio Moro’s Eliot Ness-style investigation into the Petrobras scandal and related bribery allegations – which ratcheted up pressure for Rousseff’s impeachment – might even wind up further undermining the rule of law.

That’s because Moro’s theatrical, no holds barred tactics are starting to look like they may be more motivated by politics or a vendetta than a thirst for justice.

Two-thirds of the legislators that just voted to impeach Rousseff face corruption charges of their own – most of which are arguably more serious. Unlike most of the others under the lens, Rousseff is not accused of using her office to amass a personal fortune – though she was on the board of directors at Petrobras during the period covered by the bribery scandal. She’s being impeached because she employed some creative accounting methods to obscure how big the country’s deficit had become during her 2014 presidential campaign.

In contrast, former lower house speaker Eduardo Cunha, who led the impeachment effort and was ordered to step down by the Supreme Court last week, faces charges that he took as much as $40 million in bribes. Both Cunha’s replacement as house speaker and the current Senate leader – who’s also been accused of tax evasion – are also under investigation for taking payoffs.

Moreover, while Temer himself is on the hook for violating campaign finance limits, several of the ministers in his new administration face are also under investigation in connection with Petrobras. But they will now benefit from ministerial privilege restricting how and where they can be investigated.

Add that up, and it does seem that Rousseff’s impeachment has more to do with changing the person holding the reins than enforcing the rules.


Top Hezbollah Commander Killed in Syria

The war in Syria is proving costly for Hezbollah.

The Lebanese group has risen in prominence since it succeeded in forcing Israel to end its 22-year occupation of southern Lebanon in 2000 and fought to a stalemate in the subsequent 2006 war with Israel. But Syria has proved to be dangerous for its top military leaders – at least five of whom have died in the fighting or as the result of assassinations in recent years.

The latest to go down is Mustafa Badreddine, one of four men tried in absentia for the assassination of Lebanon’s former Prime Minister Rafik al-Hariri in 2005. Hezbollah said Badreddine was killed by an explosion near Damascus International Airport that some outlets speculated may have been the result of an Israeli airstrike.

So far, Israel hasn’t issued a statement. But Tel Aviv has authorized at least eight such airstrikes on targets within Syria since the civil war began there five years ago.

Along with the assassination of al-Hariri, Badreddine was involved in nearly all the group’s operations since it was formed in the early 1980s – most of which targeted Israel. He was also designated a terrorist by the U.S. Treasury Department last year. 

Migrants Arriving in Greece Down 90 Percent

Whatever its flaws, the much-criticized European Union deal to send migrants back to Turkey appears to be working.

The number of migrants arriving in Greece dropped 90 percent to just 2,700 people in April, EU border agency Frontex said Friday. Most of them were fleeing Syria, Pakistan, Afghanistan and Iraq.

Under the deal hammered out with Turkey, all migrants who arrive in Greece illegally are sent back to Turkey. In exchange, the EU accepts thousands of Syrian refugees from Turkey directly, as well as provides Turkey with a generous aid package and makes it easier for Turkish nationals to travel within the EU.

Frontex also said that even though a much larger number of refugees – 8,370 – made the more dangerous sea journey to Italy, there was no evidence that significant numbers had shifted from the route via Greece to the route via the Mediterranean. Moreover, that 8,370 in April also represents a 13 percent drop from the March total.

Second Malware Attack on Banks’ Swift System

Remember the typo that saved the central bank of Bangladesh a billion dollars?  Hackers have struck again.

Following an $80 million theft described in this compelling New York Times feature as a digital version of the heist depicted in “Ocean’s Eleven,” thieves have again managed to breach the Swift system used for international money transfers – this time hitting an undisclosed commercial bank.

Details are thin, but the hackers reportedly employed similar methods in the second strike, exhibiting “a deep and sophisticated knowledge of specific operation controls within the targeted banks — knowledge that may have been gained from malicious insiders or cyberattacks, or a combination of both.”

The second attack also dispels the initial optimism that Bangladesh fell victim to the hackers because it used $10 routers and didn’t have an adequate firewall in place. (Still, this Reuters exclusive says not one, not two, but three hacker groups are still lurking in the bank’s system, months after the heist).

Oh, and the virtual Danny Ocean? Chances are he’ll never be caught.


Good News for Delhi, Bad News for India

Smoggy New Delhi has dropped out of the spotlight as the “world’s most polluted city.” But new data issued by the World Health Organization showed four out of ten of the cities with the world’s filthiest – and deadliest – air are still found in India.

Thanks to better measuring and the addition of more cities from around the world, Zabol, in Iran, has jumped to the top spot, and New Delhi has dropped to number 11. Meanwhile, lesser-known Indian industrial hubs Gwalior, Allahabad, Patna and Raipur are all among the 10 worst offenders.

A more disturbing wake-up call comes from the study, however. A whopping 98% of cities in low- and middle-income countries with more than 100,000 residents do not meet WHO air quality guidelines. For high-income countries, that percentage drops to 56%.

Just one more way being poor can kill you.

Fri, 05/13/2016 – 06:02

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