The World Today for February 21, 2018

NEED TO KNOW

PERU

The Odebrecht Web

Construction projects have ground to a halt in Peru, where a scandal involving the Brazilian contracting giant Odebrecht threatens to cause an economic and political crisis.

The name Odebrecht should ring bells for anyone who has been following the string of corruption cases involving former Brazilian President Luiz Inácio Lula da Silva as well as a host of other Latin American politicians listed recently in the Washington Post.

In Peru, as in many other countries in the region, Odebrecht allegedly paid bribes to companies linked to public officials – including President Pedro Pablo Kuczynski – in exchange for government contracts.

Kuczynski, who has denied accepting bribes, narrowly avoided impeachment in December on charges related to Odebrecht’s payments to his investment firm.

But, as the Economist explained, many Peruvians believe Kuczynski pardoned Alberto Fujimori, a former president who was serving 25 years for human-rights abuses, as part of a deal with one of Fujimori’s sons, a lawmaker, in order to survive the impeachment vote.

Now the opposition is considering another impeachment push, noted Stratfor, the security consultancy, as the president’s popularity ratings have plunged.

The problem for Peru now, however, is whether the political crisis can resolve itself fast enough to avoid an economic calamity.

Finance Minister Claudia Cooper said investments in companies tangled up in the web of corruption charges are equivalent to around 4 percent of Peru’s gross domestic product, reported Reuters.

“Fear is affecting the whole investment process,” Gonzalo Priale, chairman of the National Association for Infrastructure Promotion, a trade group, told Bloomberg. “We need to fight corruption, but keep investing.”

Kuczynski has proposed legislation that would allow companies that cooperate with prosecutors to keep operating, Reuters said. The new law would replace an expiring anti-graft rule that said companies convicted of corruption couldn’t bid on public contracts. The old law discouraged executives from cooperating with authorities.

But it’s not clear if lawmakers would want to give that power to an administration accused of being overly cozy with dishonest businesspeople.

Chinese news service Xinhua reported that Peruvian prosecutors have demanded $1.1 billion in reparations from Oderbrecht for the bribes.

Meanwhile, prosecutors are seeking to extradite from the US another former president, Alejandro Toledo, whom they accuse of taking kickbacks from Odebrecht. Toledo, an anti-Fujimori activist who was president from 2001 to 2006, denies the charges.

The Herald, a Scottish newspaper, recently revealed that nearly $6 million of the money that Toledo allegedly got is said to have been funneled through a shell company based at one of Scotland’s biggest law firms.

The Odebrecht web stretches far, indeed.

WANT TO KNOW

SYRIA

Funny Kind of Peace

The war against the Islamic State is winding to a close. But the fighting in Syria shows signs of escalating.

The forces of Syrian President Bashar al-Assad launched the regime’s most intense bombing campaign in years this week, killing at least 200 people in an assault on a rebel-held suburb of Damascus, the New York Times quoted aid workers as saying. Residents described it as an all-out attack on civilians and infrastructure to force a surrender – in keeping with Assad’s previous uses of barrel bombs and (allegedly) chemical weapons on his people.

Meanwhile, pro-regime troops entered the border town of Afrin to help Kurdish forces battle a Turkish incursion, raising the specter of direct clashes between Syria and Turkey, Bloomberg said.

The new phase of the war also means “greater potential for military engagements between other countries with a stake in the outcome, among them Turkey, Iran and the United States,” the Times noted.

THAILAND

Father Knows Best

A Thai court granted a Japanese tycoon sole custody of 13 children he fathered through surrogacy, ruling he was their biological father and in a sufficiently good financial position to take care of them all.

Businessman Mitsutoki Shigeta was forced to leave the children behind and leave Thailand in 2014 after his multiple surrogacies sparked a “baby factory scandal” and a brief investigation into concerns the babies might be linked to human trafficking, reported Agence France-Presse.

The 13 children, now toddlers, have been under the care of shelters run by Thailand’s Social Development and Human Security Ministry, where representatives of Shigeta have visited periodically to monitor their conditions.

The case stems from before Thailand banned commercial surrogacy in 2015, following a string of controversial incidents. In one instance, a Thai surrogate accused an Australian couple of abandoning their biological child after discovering he had Down’s Syndrome. In another, a man was forced into a yearlong custody battle after his surrogate refused to let him take custody of a baby girl she bore for him.

ITALY

Keeping the Jobs at Home

Think globalization is complicated? A Brazil-based multinational’s decision to shift jobs from Italy to Slovakia has emerged as a hot-button election issue ahead of Italian elections on March 4.

Opposition candidates from the anti-establishment 5-Star Movement and a broad center-right alliance that includes the fiercely eurosceptic Northern League have seized on Brazil-based Embraco’s decision to relocate a refrigerator-compressor factory from northern Italy to Slovakia, Reuters reported.

Meanwhile, Industry Minister Carlo Calenda flew to Brussels to try to persuade the European Union to declare Slovak enticements to Embraco as illegal state aid.

Calenda argued that the emerging economies of Central and Eastern Europe could offer lower operating and labor costs than the bloc’s bigger, Western countries because they receive EU economic aid.

Italy says Slovakia is set to receive 20 billion euros in EU structural funds between 2014 and 2020 to stimulate its economy, financing that allows it to offer lucrative deals for multinationals.

DISCOVERIES

Medical Munchies

Unexpectedly, the Girl Scouts are the newest beneficiaries of loosened restrictions on marijuana sales across the country.

One San Diego-based scout sold more than 300 boxes of beloved Girl Scout cookies in six hours after setting up shop recently outside of a local marijuana dispensary – raking in an estimated $1,500 in sales, according to the New York Times.

Rules governing where scouts can sell their Thin Mints and Samoas have been relaxed in recent years amid changing social dynamics, representatives for the Girl Scouts told the newspaper. Points of sale remain a decision of local organizers, many of whom are open to new ideas.

But the scout’s entrepreneurial spirit isn’t without controversy, Vox reported. After the San Diego dispensary posted an Instagram photo of the girl outside its shop, critics responded with calls of “child endangerment.”

Even so, the unidentified scout wasn’t the first to tap into the lucrative supply stream caused by the munchies: In 2014, one teenage scout sold 117 boxes in a couple hours’ time outside a San Francisco medical marijuana clinic.