Corona Daily 273: China’s Debt Trap Diplomacy

Ricardo, a Mexican friend, once told me the story of how he managed to get his house cheaply. In the 1990s, with a well-paying job, he had taken a long-term mortgage from the bank. Then Mexico had a major financial crisis. The Peso went down by nearly 50%. Ricardo decided it didn’t make any sense to keep on paying the mortgage. He went to the lending bank with the house keys. Can’t pay any more, please take over my house, he said. He expected the banker to be pleased.

Instead the banker started begging him not to do so. He had more than 2000 customers coming to him with their house keys. What should the bank do with so many houses? Our business is money, not real estate, the banker said. Ricardo negotiated, and got the house for 20% of the original cost. The bank wrote off 80% of the debt, rather than confiscating the collateral.

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Belt and Road Initiative (BRI) is China’s major vehicle to literally make inroads into several geographies. This spectacularly grandiose infrastructure and investment project covers more than 68 countries, benefits 4.5 billion people. “Belt” are land routes including roads and rail network. “Road” are sea routes. The ambitious project due to finish in 2049, will nostalgically reproduce the historic silk road routes that connected China to the west. BRI will facilitate the seamless movement of goods and people across the vast geography of Asia, Africa and Europe. USA is welcome too but has not joined. China, as the sponsor of the project, plans the investment and lends money.

The project is not smooth sailing. For example, the China-Pakistan economic corridor will cut the transport time from China to the Middle East from 12 days to merely 36 hours. But the route goes through the disputed Kashmir region, Taliban territory and Baloch insurgents.

The stated objective of BRI is smooth international trade. Centuries ago, the East India Company was also formed to trade in the Indian Ocean region. That company ended up creating the world’s largest empire.

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The trillions of dollars that China is investing abroad could have been used to make China’s own citizens wealthier. This is the hallmark of Communist dictatorships. In order to conquer the world, they are willing to keep their own people poor. When Soviets were queuing for rations of bread and meat, their nation was busy throwing unconscionable amounts of money to propagate communism abroad.

The Chinese people, particularly in pandemic times, have started expressing their displeasure about China lending so much money abroad.

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Chinese companies with Chinese money planned to build a cross-country rail line in Malaysia, a truly showcase project. Last year, Malaysia’s new prime minister called it unfairly expensive, and threatened to cancel it. After negotiations, China brought down the loan from $16 billion to $11 billion. This was an acknowledgement of corruption, whereby the local leaders are bribed to trigger over-invoicing.

Since March, countries, one after another, have started throwing up their hands. There is simply no money to pay the principal or the interest. Laos has handed over to China its national electric grid. China can send Laos into darkness if it wishes. Pakistan has allowed China to run its Gwadar port for the next forty years.

But most of China’s borrowers are in such bad economic shape that there is a danger of the moneylending business boomeranging on the lender. If the pandemic continues for another year, China may be similar to the Mexican banker described at the beginning of this article. When the cash inflows dry up, and the local Chinese start protesting, capturing and managing physical assets in different parts of the world is not easy.

China’s so-called “Debt-trap diplomacy” along with its Belt and Road initiative are in serious danger in pandemic times.

Ravi 

Corona Daily 274: Shylock Demands His Pound of Flesh

In August, the Chinese Premier Li Keqiang met with officials from Thailand, Laos, Vietnam and Cambodia and offered them Chinese vaccines.

Cambodia’s PM Hun Sen said his country highly appreciates the efforts of their friend China. Earlier the Philippines President Duterte had beseeched China for vaccines. China’s foreign ministry had confirmed it would give Philippines priority access. Latin American and Caribbean nations will get $1 billion in loans for coronavirus medicines. Sinovac Biotech, a Beijing vaccine maker, is running a vaccine trial on 4200 health workers in Dhaka. The Chinese company will provide 110,000 free vaccine doses to Bangladesh. Pakistan will not touch any vaccine other than a Chinese vaccine.

“There will certainly be no strings attached.” Said Ruan Zongze, VP of the China Institute of International studies. “It is for a global public good.”

On hearing that, an academic from Indonesia said: “Should we be suspicious or grateful? Probably both.”

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Moneylenders. Pawnbrokers. Usurers. Loan Sharks.  

We know the character of Shylock who lends money to Antonio. They agree to keep Antonio’s pound of flesh as security. When Antonio is bankrupt and unable to return the loan, Shylock demands his pound of flesh, as agreed.

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China has been lending big money to Sri Lanka. During the 2015 Sri Lanka elections, China financed Mahinda Rajapaksa’s election campaign through a Chinese port construction company. The secret payments were confirmed by documents and checks in a government investigation. Over the years, Sri Lankan debt grew beyond what Sri Lanka could repay. The China Development Bank, generously, widened a credit line by $700 million, lowered the interest rate, and delayed the payment timeline by two years. Anyway, a loan is usually given against a collateral.

In 2017, Sri Lanka couldn’t bear the pressure any more. After months of negotiations, the Sri Lankan government officially handed over the strategic port of Hambantota and 15,000 acres of land around it to China on a 99-year lease.

Tajikistan owed China $2.9 billion. It handed over 1158 sq km territory to China to reduce the debt to $1.2 billion. Other nations in a similar debt trap are Pakistan, Madagascar, Mongolia, Maldives, Kyrgyzstan, Montenegro, Iraq, Ethiopia and Laos.

Modern Shylock manages to get his pound of flesh.

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China’s role in international trade is well known. It is difficult to find a house without a single ‘made in China’ product. What is less known is China’s role in global finance.

The Paris Club is a group of creditors which coordinates their activities in relation to debtor countries. China is not part of it. It has no disclosure requirements. It can lend to countries with nobody except the borrower knowing the terms and conditions of lending. That gives rise to many hidden debts. The Chinese state is the sole lending body. It is not governed by any market forces. At least 50% of China’s lending to developing countries is not reported to IMF or the World Bank. Between 2000 and 2017, China’s total lending to foreign countries rose from less than $500 billion to more than $5 trillion, or from 1% to 6% of the global GDP. That makes Beijing a bigger lender than either IMF or the World Bank. China’s lending involves higher interest rates and shorter maturities, forcing the debtors to get the loans refinanced often.

Djibouti’s debts to China are now higher than 80% of its annual economic output, Ethiopia’s is 20% and Kyrgyzstan’s 40%. All these countries will administer the Chinese vaccines to their populations, irrespective of their effectiveness.

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Imperialists can subjugate nations through guns or lending. China is very successful with the latter. More on that tomorrow.

Ravi 

Corona Daily 275: Measuring the Height of Mount Everest

To promote the “2020 Visit Nepal” campaign, 108 sculptures were built around Nepal. The chosen mascot was the Yeti, the mythical creature from Himalayan folklore. Within weeks of the national lockdown in March, the 2020 Visit Nepal campaign was cancelled. Airports were shut. Nepal has eight out of the world’s tallest 14 mountains. Mountaineers and hikers were prohibited from climbing any of them.

By May, people in Kathmandu began to see the Everest summit clearly for the first time. All these years, pollution had hidden it.

There was only one delegation that went to the top of Everest in May 2020 - a large official Chinese delegation. What was it doing there?

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Everest’s official height of 8848 meters is mentioned in travel books. In 1956, it was measured by the Survey of India. Over the last couple of decades, China and Nepal have been arguing about the height. China measures it up to the top rock, whereas Nepal measures it up to the top snow point. The difference is 4 meters. China uses the Yellow sea, while Nepal uses the Bay of Bengal to identify the sea level.

In October 2019, XI Jinping made a state visit to Nepal. In Kathmandu; China and Nepal excitedly announced a co-operation project of remeasuring Everest and jointly announcing the findings. Nepal completed its fieldwork in January. Once the pandemic started, China announced in May it would like to take advantage of the unexpected free time to measure the height.

A strong Chinese surveying team of fifty-six reached the summit and conducted their own measurements. They used Beidou, the Chinese GPS. A Chinese plane carrying precision gravity survey equipment hovered over the mountain, during the delegation’s climb. In Mount Everest’s history, May 2020 is believed to be the only time when there were exclusively Chinese people on the peak.

In September, Yang Yuanxi, a member of the Chinese Academy of Science, described the importance of the project: “A precise measurement of Everest was a demonstration of China’s technological development. It is a symbol of the country’s sovereignty, and carries huge international impact and societal recognition. The precision of this measuring mission will be better than any previous mission.”

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In the past seven months, more than a million Nepali people, including Sherpas, cooks, tourist guides, porters, pilots have become unemployed. Some plant barley, or graze yaks for survival, but the majority face a deep financial crisis. One shop owner selling jackets, tents, hiking boots and survival equipment said he had not seen a single customer since March. He merely keeps the shop open to avoid going insane.

In 2019, remittances from abroad were $9 billon, mainly from the Gulf. Nepal exports security guards and maids who in total remit 30% GDP of Nepal. Since March, remittances stopped. Nepali workers returned home. Their families were forced to take their children out of private schools.

For a population of 30 million, Nepal has 2600 ICU beds and 930 ventilators in total. All of them are currently in use. Yesterday, a record 30 people died of Covid-19.

At the bottom of the tallest mountain lies one of the poorest nations.

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Last year, some 90% of foreign direct investment in Nepal came from China. During the state visit, Xi promised $ 500 million in financial aid. This doesn’t include the massive Chinese investment in Nepali infrastructure projects on new airports, railways and hydropower plants.

Common Nepalese get upset about Chinese claiming co-ownership of mount Everest. As you may have guessed, a Chinese delegation measuring the height is a geopolitical show. Three or four meters make no difference, but establishing Chinese hegemony is critical. Photos of a Chinese delegation monopolizing Mount Everest symbolizes that power.

After the pandemic crushes the poor nation’s economy, Nepal has little choice. When the Chinese announce the precise height of Everest this month, Nepal will happily accept that measurement.

Ravi 

Corona Daily 276: Goddess of the Sky

The official name of Mount Everest is Sagarmatha (Goddess of the Sky), but hardly anyone uses it. It was named by Andrew Waugh, the Surveyor General of India, after his predecessor, George Everest. Everest, in fact, was not in favour of this naming, believing it was important to use local names.

Since the time Tenzing Sherpa and Edmund Hillary reached the 29,029 feet (8848 meters) summit in 1953, the climb has become one of the most aspirational, superhuman, daredevil challenges.

Most climbers prefer the South side approach (Nepal) rather than the North (Tibet). From Kathmandu, Nepal’s capital bustling with foreigners, mountaineers take a short flight to Lukla, then trek about 10 days to reach the Everest base camp at 17,500 feet. In spring, they spend a few weeks there to acclimatize to the altitude, go on day treks, rest, hydrate, and start for the summit in May.

An equally great challenge is arranging finances. A permit for Everest costs $11000. But that’s not all. A foreign mountaineer needs to spend $60000-$70000 if he dreams of making the ascent. Other than the permit, you pay the wages of the Sherpa guides, porters, kitchen staff, transport, hotels and food.

Nepal is one of the poorest countries, the average wage is $3 a day. Everest is a key source of income. Considering the treacherous climb, there should be some criteria for age, fitness and experience. However, the Nepal government hands over permits to anyone who pays. Dubious adventure companies take untrained climbers. 2019 was a boom year for Nepal. It earned $ 2 billion from tourism. A million Nepalese including pilots, porters, Sherpas and cooks were employed in tourism. It was also the deadliest season when at least 11 deaths were reported in May 2019.

Out of the nearly 5000 people who reached the top since 1953, more than 300 have perished. 200 of those bodies are still scattered on Everest. The subzero temperatures preserve the bodies for years. The body of George Mallory, an English mountaineer, who disappeared in 1924, was found in 1999. Morbid as it may sound, several well-known bodies now serve as milestones. (One corpse is called Green Boots). This is because getting the frozen bodies back is a greater challenge. I recommend an extraordinarily poignant NYT story “Deliverance from 27000 feet” that describes the Sherpa attempt to bring back the body of an Indian climber several months after his death.

The unregulated permit regime has resulted in making the climb more dangerous. One climber described the long chain of climbers pushing and shoving one another to take selfies. Some 20 people standing on a surface the size of two ping-pong tables. Because of the crowding, people wait for hours in line, chest to chest, on an icy, rocky ridge. This climber stepped around the body of a woman who had just died. Climbers complain of theft and heaps of trash on the mountain. Sherpas say some deaths occur because the long lines prevent the climbers from replenishing oxygen supply. The government inspectors found many oxygen cylinders were leaking, exploding or improperly filled in the black market.

Obviously, there are no cops at the top of the mountain to keep an eye.

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Despite the criticism, the Nepali government issued a record number of permits last year. 2020 was declared as the “Visit Nepal Year”. The government had an ambitious plan of doubling the number of tourists to 2 million.

On 12 March 2020, fearing the novel coronavirus, Nepal closed its borders, and all peaks including Mount Everest.

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(To be continued tomorrow.)

Ravi 

Corona Daily 277: The “American” Rule

Today, the American elections are top of mind. Here is a covid-19 related US election story.

As you know, America elects not only a president, but senators, representatives and many others. David Andahl, 55, of Bismarck, North Dakota, was a Republican candidate for the State Legislature. A rancher and a land developer, he was keen to succeed as a politician. He had worked hard, and in a competitive primary election in June, defeated an incumbent republican to qualify for the November election.

His Facebook entry talked about his chairing the county planning commission for sixteen years. He promised to bring the same commitment to the legislature. He would appreciate the voters’ support. On 1 October, David Andahl fell ill with Covid-19. He was hospitalized. His last FB entry was on 4 October. On 5 October he died. His mother later said he was very careful about the virus. She didn’t know where he contracted it from. His funeral took place on 14 October. In his obituary, he was described as a compassionate, generous, ambitious, and inviting soul.

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The Attorney General’s legal advice was sought. What should be done when the Republican party candidate has died?

It was too late, everyone agreed, to change the ballot papers. For early voting, they were already sent with the dead man’s name. One can’t simply change and reprint ballot papers so close to the election.

The attorney general sent a considered opinion. He talked about the “American” Rule upheld by the courts. The ”American” Rule holds that (1) the purpose of an election is to carry out the will of the people (2) votes for a dead candidate represent a choice by qualified voters among the options on the ballot (3) to disregard such votes is to frustrate the popular will and therefore (4) votes for the dead candidates should be counted like any other votes.

In short, David Andahl, though dead, must be on the ballot paper as if nothing has happened, voters may or may not vote for him as if he was alive, and votes for him must be counted as if he was alive.

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The skeptics pointed to the provision in the constitution, which said the candidate must be a North Dakota resident on the election day. The Republicans and Democrats argued whether Andahl ceased to be a resident simply because he ceased to be alive. He was freshly lying in a cemetery in his constituency.

Another faction argued about what “election day” meant. In America, election day was more like election month. Was it when the ballots were sent, was it when the mail-in voting started, or the actual election day?

The debates went on for so long, it was 3 November. David Andahl continued to be the Republican candidate on the ballot.

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Why is it called the ‘American’ rule? To distinguish it from the ‘English’ Rule which American judges have criticized. In England, if a candidate dies any time before declaring the results, the votes given to him are null and void.

In the UK, if a party candidate dies, that election is cancelled, and after a replacement, held after 28 days. If an independent candidate dies, he continues to be on the ballot paper, but votes given to him are ignored. The UK rules also explicitly state that a dead candidate is not allowed to take his/her place in the House of Commons.

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USA managed to declare many winners today, among them was David Andahl, who defeated the democratic opposition handsomely.

As the “American” rule prescribes in such situations, David Andahl was declared as the winner to respect the will of the voters.

The result is a vacancy in the office.

Ravi 

Corona Daily 278: Life becomes Spicy

In 2020, it is difficult to find businesses that are truly booming. But the global market for spices has dramatically grown this year.

More meals are now prepared at home. People, even singles, are cooking and baking at home. Spices and herbs make food tastier and often healthier. Young or first-time cooks want to experiment with something more than salt and pepper. Like yoga and aerobics, cooking advice is now available on YouTube from any part of the world. Consumption of spices, seasonings, marinades and rubs has gone up by 50% in some western countries. In one of the world’s largest spice companies in Hunt Valley, Maryland, USA; dry recipe mixes, mustard, hot wing sauce, and barbecue sauces have reached record sales. Buyers are willing to pay a premium for new flavours and ethnic spices.

Much of the increase has been accounted for by breakfast and lunch, two meals eaten out by many working people. Instead of rushing into a standing café or an office canteen, households now have more time. More attention is given to preparing breakfast and lunch. North America and Europe have realized how their meals can be enriched by Indian, Mexican, Italian or Chinese cuisines. (It’s unbearable to eat sandwiches and chips every day in a lockdown). The English talk of Tandoori chicken and Curry as if they were English recipes. Many companies are now selling ready-to-cook spice mixes, offering exotic fusion flavours.

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The global spice market was $13.77 billion in 2019. India is the largest producer, consumer and exporter. Ginger, cinnamon, pepper, cumin, turmeric, cardamom, coriander, cloves, mint, parsley, oregano… who can read this list without salivating? Ayurveda, India’s alternative medicine, talks about the health benefits of spices. Spices are said to have anti-oxidant properties. Cumin is anti-septic and turmeric helps against Alzheimer’s and joint inflammation. These benefits may be real or imagined. But that has become an important issue in virus times. Indians, depending on their WhatsApp groups, consume garlic, hot peppers, boiled ginger, bitter gourd juice, turmeric, neem leaves to boost immunity against the coronavirus.

Asafetida (Hing in Indian languages) has an overwhelming aroma. It is India’s answer to Japanese Umami. Hing is considered good for health as well. India consumes 40% of the world’s hing, and all of it is imported from Afghanistan, Iran, Uzbekistan and Kyrgyzstan.

It took a pandemic for Indians to realise they should start producing it locally. Last month, the first hing saplings were planted in Himachal Pradesh, in the region of the Himalayas.

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The spice market growth could have been higher, but for packaging materials. In America and Europe, consumers buy spices in small plastic bottles. The lead times for jugs, shakers, bags, plastic tubs, glass jars, plastic containers are stretched to two to three months. Corrugated packaging for gift sets is taking even longer. This logistical problem is faced by several industries. USA has too much beer and soda, but is short by 10 million cans.

Maybe this can teach the western shopper to go to a neighbourhood shop and buy spices from large gunny bags, the way it is done in Asia.

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I wondered why the sales of spices have grown so dramatically just because people have started eating in. The logical conclusion is that when we eat out, restaurants and other places don’t use as many spices as we use at home.

In this respect, we should be happy the pandemic will last a couple of years. That will allow Europe and America to cultivate a taste for good and healthy spices. This benefit will outlast the pandemic. Is life worth living without exotic spicy food?

Ravi 

Corona Daily 279: Revenge Porn

Jane and John were madly in love with each other. Jane had a lovely figure. John wanted to photograph her nude. For his eyes only, he said lovingly. Jane agreed. John’s powerful smartphone captured dozens of Jane’s images, from different angles.

A year later they broke-up. Jane refused to answer John’s calls any more. John went to a popular “Revenge Porn” site, uploaded Jane’s naked photos one after another, each photo attached with her complete contact information. Jane began receiving emails, calls, FB requests from strangers, most of them brazenly asking for sex.

When Jane went to the police, the officers said they wouldn’t be able to do anything because her ex had not violated her state’s criminal harassment laws. He had not even secretly photographed her; he had done it with her consent.

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Nonconsensual pornography (NCP) also known as “Revenge Porn” means showing, sending or posting nude or nearly nude photos or videos of someone (usually a female) without her consent. The images may be created consensually, as in Jane’s case. Or secretly or forcibly. The images or videos may be posted by exes like John, or they may be hacked, with the hacker posting stolen images.

This is a relatively new cybercrime. In a 2015 survey, four out of five American adults said they sent or received explicit texts and photos at some point. One in every 25 Americans has been a victim of threats/posts of their nude images without their permission. LGBT people get affected more.

Emma Denny, courageous enough to give her real name, was having sex with her boyfriend, looking away. When she turned around, he was filming her on his phone. The boy, her first love, was a control freak. He dictated the clothes she should wear, and the length of her hair. He sent the video to the school’s football team. The thought of everyone at school seeing her video traumatized Denny. Denny’s mother was devastated her daughter had to go through this. In the lockdown, Denny remained depressed. She would cry, take prescribed medicines, and wouldn’t eat. The trauma, she said, was going to be stuck with her.

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Katie Hill, a Californian Democrat in the House of Representatives, was a headline case. Her compromising photographs with a female colleague were published by RedState, a Conservative website, and the Daily Mail. Katie Hill had to resign and her career was derailed.

The “Nth room” case in South Korea involved blackmailing, cybersex trafficking and spreading sexually exploitative videos. A Korean nicknamed God God used an app called telegram. At least 103 women, including 26 minors were the victims. God God was arrested in May 2020.

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In pandemic times, online dating and cybersex have boomed. In the lockdown period, the pornography industry responded by providing free access to content, a promotion that drew harsh criticism from activists fighting against sexual exploitation.

The use of Tinder and Grindr, dating and intimacy apps, has increased drastically. Bumble has gone up 84% in video calls, and an adult platform OnlyFans reports a 75% increase in subscribers.

Cybersex, even from the safety of your own house, can be unsafe. As people innocently display their bodies online, they risk harassment and sexploitation. The victims can lose their jobs and dignity, with lives and careers ruined. In terms of trauma, this is comparable to sexual assault and stalking. Domestic violence and tech abuse go hand in hand. Abusers or hackers can post photos and videos to social media sites, dating apps or send them to the person’s employer.

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Recognizing the threat of this new cybercrime, in the past six years, 43 American states have introduced Revenge Porn laws. Outside the US, only Germany, UK, Canada, Israel and Australia have passed legislation. Cybercrimes are universal. Other countries need to wake up and pass laws urgently.

Ravi 

Corona Daily 280: Mexico’s National Drink

Hugo Lopez-Gatell is Mexico’s leading epidemiologist, covid strategist and spokesman, Mexico’s Dr Fauci if you like. Mexico is in bad shape; the cases are approaching a million.  In November, it will become the fourth country to cross 100,000 coronavirus deaths.

Dr Lopez-Gatell identified one of the main culprits killing the Mexicans in Covid-19. Coca-Cola.

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He calls fizzy drinks “bottled poison”. Even before the pandemic, annually 40000 Mexicans died from too much Coca-Cola. Coke’s marketing machinery has fooled us to equate the drink with happiness, laments Dr Lopez-Gatell.

Between the USA and Mexico, Mexico won the race to the world’s most obese nation. 75% Mexicans are overweight today, as against 20% in 1996. Mexicans drink 50% more Coke per person than anywhere else in the world. The French drink wine, Mexicans drink Coke.

Every man, woman and child in the southernmost state of Chiapas drinks 2.2 liters of Coca-Cola every day. (821 liters per annum/ compare: USA 100 liters/ global average 25 liters). A study noted 3% babies in Chiapas are given Coca-Cola by their mothers instead of breastfeeding. Four-month olds are seen sucking coke from baby bottles. In San Juan Chamula, a hilly town, Coke is poured over church candles to keep the evil spirits away.

Another survey found that 70% of Mexican children consumed soda for breakfast, and drank sodas at least thrice a day.

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This national addiction can be traced back to 1994 with the signing of NAFTA (North American Free Trade Agreement) between the USA, Mexico and Canada.

Nafta empowered the USA to flood the Mexican market with sugary drinks and processed foods. A research paper that called the process “McDonaldization” and “Coca-colonization” found that exports to Mexico of high-fructose corn syrup- a high calorie sweetener used in sodas and linked to obesity- went up 863 times.

Free trade has been America’s instrument to accelerate the spread of low-nutrient, highly processed foods and sugary drinks, to drive the obesity epidemic in poor countries of the world.

Curiously, Mexican cuisine is listed by UNESCO as a cultural heritage of humanity.

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Since NAFTA, Mexicans have poor diets. Coca-Cola Mexico employs a million people and accounts for 1.4% of Mexico’s GDP. Coca-Cola is the best distributed brand; it reaches villages where medicines can’t.

Drinking water is a problem. Many places get it once every two or three days. Tap water is so heavily chlorinated, people are scared to drink it. Coca-Cola is cheaper than water and readily available. In 2014, Mexico introduced a soda tax. The soda makers offered enough discount to nullify the tax.

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Sugar-sweetened beverages (SSB) like Coca-Cola cause obesity, diabetes and hypertension – conditions attractive to the coronavirus.

In August, the southern state of Oaxaca banned the sale of junk food and sugary drinks to children under the age of 18. Dr Lopez-Gatell has actively promoted the law on bottled poisons, and hopes to make it national.

In October, the Mexican government introduced oversized warning labels on products containing high amounts of sugar, salt, calories and fats. Coke, Pepsi and Nestle had requested the government to delay the labels until the end of the pandemic.

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The pandemic may persuade the Mexicans to start drinking Aguas Frescas and eating burritos and chimichangas. Mexico may benefit by building a wall to stop toxic sodas and junk food coming from the other side.

Ravi 

Corona Daily 281: This is not a Drill. You are Under Attack.

This week, ransomware hackers started their attacks on American hospitals.

Wiser after the 2016 experience, the USA was worried about hackers attacking the November elections. Trickbot is a computer virus, popular with top class hackers. The attacker can encrypt the files, corrupt or lock the data, stop the functioning of the computers. Then the hacker asks for a ransom to restore access. This can be done to disrupt elections, distort or delay results.

Keeping that in mind, in September, Microsoft started disabling Trickbot servers. To its surprise, Microsoft found the US cyber command doing the same. (The two could have coordinated and made the operation more efficient). Microsoft said more than 90% Trickbot servers were taken offline.

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This was like building a fence so as to prevent a burglar from entering your house. Unfortunately, when you build a fence it hides the burglar on the other side. By disabling the Trickbot servers, the cyber-detectives were no longer able to detect the activity of the hackers. Not known if the hackers behaved like wounded animals, and attacked the hospitals in retaliation. Or they may be simply too desperate. There are limits to how low terrorists or crooks can go. Many hijackers let women and children go before holding men hostage. Reportedly, in March, there was a “gentleman’s agreement” among hackers not to attack hospitals during the pandemic. That promise was broken this week.

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Healthcare hardware like MRI machines, ventilators, microscopes are actually computers. Like our laptops, they come with software that needs to be supported, updated and protected. Inertia makes many hospitals continue with old software. That makes machines vulnerable to hackers’ attacks. Such medical devices are dangerous for the patients. In September, a ransomware attack on a German hospital resulted in the death of a woman seeking emergency treatment.

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As usual, Russian hackers are named as the prime suspects.

Earlier this month, UK confirmed the Russian attempts to disrupt the 2018 winter Olympics as well as the 2020 Tokyo Olympics. The alleged organizer was GRU unit 74455. GRU is Russia’s foreign military intelligence agency. On Monday, 19 October, USA indicted six Russian military intelligence officers for the Olympic plan as well as attacking a Pennsylvania hospital with the “NotPetya” malware. Colloquially known as the “Sandworm team”, the GRU hackers work from “the Tower”, the GRU head office in Moscow.

The US justice department in its 50-page indictment estimated the total worldwide damage by “NotPetya” to be more than $10 billion, inflicted on 300+ victims.

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This week’s affected hospitals have not been named by the US government officially. However, Sonoma valley hospital (California), two hospitals of St Lawrence Health system (New York) and Sky Lakes medical center (Oregon) announced they were crippled by the cyberattacks. Computer systems had to be shut down, ambulances diverted, surgeries delayed and several medical records no longer available.

Hold security, a company that tracks online criminals, reports one hacker saying “we expect panic” in Russian. Reportedly, the ransom rates have gone much higher, in one case more than $5 million in bitcoins. (My article on bitcoins, if you don’t know what it means). Alex Holden, the founder of Hold security said hackers use the traditional Russian formula of charging 10% of a victim’s annual revenue. (In the old days, that percentage was donated to the church.)

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Reports say the hackers plan to attack hundreds of American hospitals, while America is busy with elections and their aftermath. Unless urgent countermeasures are taken, the hospitals will not know which virus to deal with.

Ravi 

Corona Daily 282: Proposition 20 Part II

The “Yes” campaign focuses on the 22 crimes that escaped being classified as “felonies” in the early propositions. Proposition 20 can now fix them, and ensure the perpetrators are given the sentences they deserve. The theft threshold is proposed to be brought down to $250, thereby widening the net to catch felons. The bill allows collection of DNA. Repeat offenders can now be classified as felons. The proposition is devised by the Law enforcement/police authorities, sponsored by retail chains, and supported by the Republican party.

The “No” campaign calls it regressive. Money will be diverted from education and rehabilitation into wasteful prison spending. Making $250 theft a felony would make California the most draconian state in America. Teenagers, blacks, Latinos and the poor will be locked up for years. Not surprisingly, the civil liberties union, league of women voters and the Democratic party is against the proposition.

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As a neutral observer, I will offer my perspective.

What can be wrong in being tough on crime? Should someone stealing your wallet or car go unpunished? Not at all. But the punishment should always be in line with how civililised we are.

Saudi Arabia amputates a thief’s right hand. Highway robbers, if caught and not executed, may get their hands and legs amputated. Why don’t we support such initiatives? Because we would like to be civilized, certainly far more civilized than Saudi Arabia. Sentences must be proportional to the crime. Depending on the circumstances, the criminal must have a possibility of rehabilitation.

If starving or stealing food is the only choice a person has, it may be the government’s crime. Particularly in pandemic times, it is the governments’ responsibility to make sure people don’t have to steal food. If a homeless person is sleeping on the pavement, there is no moral ground to imprison him, simply because the law says it. In England, until 2012, squatting (encroaching and living in a vacant house) was not a crime. If I am not mistaken, even today, a homeless family in England can squat in vacant commercial property, it’s not a crime. Such humane measures go back to the post World War catastrophe. A pandemic may create similar situations.

The state of Seattle is drafting a bill that makes hunger or homelessness a defence, by adding it to the “duress” law. Sometimes, circumstances compel a person to commit a crime. Under the existing laws of California, the person in jail will have a facility to appeal to the parole board for an early release. The parole board listens to each case and decides whether it is worth releasing the prisoner early. Now proposition 20 wants to take this right of appeal away. Felons, irrespective of circumstances and conduct, would languish in overcrowded prisons for years, making their rehabilitation unlikely.

Harsh sentences don’t eliminate crimes. Even in countries that allow capital punishment, rapes and murders don’t stop. A “tough on crime” mentality gradually makes the state a police state. In the name of safety; surveillance, DNA collection, police brutalities become commonplace. Prisons become concentration camps.

If the past bills were badly drafted (allowing 22 felony crimes to escape), the state of California should re-legislate them. What the law enforcement authorities have done is to take that loophole, and bundle it with several other issues such as cancelling parole, collecting DNA. This is not the job of a voter, but of the legislative organ. Hopefully, California will say no to proposition 20. At any time, it is a wrong initiative. More so during a pandemic.

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Ironically, on the same day the American voters will seal the fate of America’s best-known, highest-ranking criminal. His case shows that America’s desire to become ‘tough on crime’ is selective and not equitable.

Ravi