foreignpolicy--2020-08-28--Moon Faces a Bigger Political Threat Than Kim Jong Un: Real Estate Prices

Moon Jae-in has been through a lot in his three and a half years as South Korea ’ s president : defused a potential war in 2017 , brokered three meetings between Donald Trump and Kim Jong Un in 2018 and 2019 , and led one of the most successful responses in the world against the coronavirus pandemic in 2020 .
But this time , his team may have finally met its match : Seoul ’ s real estate market .
Real estate is a sensitive political issue everywhere , but in Seoul it ’ s explosive .
South Korea @ @ @ @ @ @ @ estate to an unusual degree because there are few other options .
The country ’ s domestic stock market is good but not great : The chaebol conglomerates are vastly overrepresented in the overall market ( as of March , Samsung Electronics alone represented nearly 34 percent of the entire KOSPI market cap ) , making it difficult to have stable and diversified investments .
Persistent corporate governance issues plaguing the chaebol sometimes lead to share price manipulation , undermining the confidence of public investors in the system .
While investing abroad , @ @ @ @ @ @ @ , is increasingly becoming more popular , the unfamiliarity as well as the foreign exchange rate fluctuation make the returns difficult to anticipate .
In contrast , real estate is intuitive : It is visible , it can not disappear , and its value doesn ’ t go to zero as stocks can .
The formula for a winning investment in real estate—centrally located , accessible to public transit—seems clear enough , especially in a country where half of the population lives in one metropolitan area .
South Korea ’ s investors also @ @ @ @ @ @ @ s prime real estate when the Korean economy began growing explosively in the 1980s .
In 1977 , a 1,000-square-foot condominium in Apgujeong-dong , located in the heart of Gangnam , was approximately $ 14,000 ; in 2020 , the same condo is worth over $ 2 million , a tidy return of 14,286 percent , or 330 percent in annualized return over 43 years .
As a result , over 85 percent of South Korea ’ s household wealth in 2019 was in nonfinancial assets ( which were mostly real estate ) @ @ @ @ @ @ @ of household wealth in the United States as of 2016 was in nonfinancial assets .
The same figure for Japan was 43 percent as of 2015 , as American and Japanese households tended to hold their wealth in the form of financial assets ( such as stocks and bonds ) rather than real estate .
South Korea ’ s unique jeonse rental system makes the investment into real estate even easier .
For the uninitiated , the jeonse system may seem absurd : For the duration of the lease ( typically for two @ @ @ @ @ @ @ a massive deposit with the landlord , usually around 70 percent of the value of the home .
The tenant makes no other payment to the landlord , who returns the entire deposit at the end of the lease .
In essence , the landlord is borrowing money from the tenant at no interest .
Instead of collecting a monthly rent , the landlord makes money by investing the borrowed deposit for the duration of the lease .
This unusual system is a byproduct of South Korea ’ s period of rapid growth @ @ @ @ @ @ @ when a reliable credit check was impossible , tenants could not be counted on to make regular payments , and the ludicrously high return on capital in South Korea ’ s booming economy—the typical interest rate for a one-year certificate of deposit in the 1960s was well over 20 percent—could compensate the landlord for simply holding on to a sum of money .
To this day , jeonse is the dominant form of real estate lease : In June , 71 percent of all lease transactions in Seoul were jeonse .
As South @ @ @ @ @ @ @ down to earth as its economy matured , clever investors devised a new way to generate return from the jeonse deposit : reinvest into real estate .
For example , an aspiring landlord could buy a condo worth $ 500,000 with only $ 150,000 ( i.e.
, 30 percent of the price ) by lining up a jeonse renter first , who puts down $ 350,000 in deposit .
Two years later , at the end of the lease , the landlord could sell the condo for $ 600,000 ( a reasonable rate @ @ @ @ @ @ @ housing market ) , pay back the tenant ’ s $ 350,000 deposit , and make a profit of $ 100,000—a return of 66 percent over two years for the initial capital investment of $ 150,000 .
In a practice that came to be known as “ gap investment , ” enterprising landlords would run this process for multiple homes : same example but leverage the $ 350,000 deposit with another jeonse renter to buy a second condo worth $ 1.16 million and then realize the appreciation for the more expensive condo also @ @ @ @ @ @ @ “ gap ” between the price of the home and the jeonse deposit , which is typically 30 percent but can fluctuate between 10 and 40 percent . )
In recent years , aggressive investors ran this scheme with hundreds of homes , creating an incredibly dangerous and entirely unregulated financial ecosystem .
As soon as there was a downturn in the real estate market , a landlord ’ s bankruptcy could wipe out hundreds of people ’ s jeonse deposits , which often represented their life savings .
In June 2019 , @ @ @ @ @ @ @ went bankrupt after having purchased 280 houses in Seoul ’ s Gangseo district in a gap investment scheme , destroying the life savings of his tenants .
Even when the system is working as intended , there is a strong incentive to push housing prices ever upward in order to prevent a jeonse wipeout .
The cheap money made available through central banks ’ response to COVID-19 has only worsened this trend .
With a glut of liquidity created by unusually low interest rates , money flows into assets and drives up asset @ @ @ @ @ @ @ this increase is reflected in the stock market , which continues to climb despite the economic devastation of the pandemic .
But in South Korea , where the investment asset of choice is real estate , the housing market is rising like mad .
Since 2017 , the average home price in Seoul has increased by 50 percent , the fastest pace in the world .
Even a modest 1,000-square-foot condo in a middle-class neighborhood—say , Eunpyeong district on the northern edge of Seoul—could easily fetch over $ 1 million .
This increase @ @ @ @ @ @ @ bubble in the United States because the surge in housing prices is pushing young , first-time job holders out of Seoul , forcing them to commute for hours on crowded public transit to reach their jobs downtown .
In order to afford the inflated jeonse deposit that climbed along with housing prices , young people often have to take out a loan , an additional burden on top of their student loan debt .
The Moon administration has proposed an all-available-options plan to curb this rise .
In July , the ruling Democratic @ @ @ @ @ @ @ laws in a procedural blitzkrieg , aided by its giant majority position earned from the April parliamentary election .
The revisions raise the taxes for nonresidential real estate investors .
The top bracket for property taxes for those owning multiple homes was raised from 3.2 percent to 6 percent , real estate gains earned by corporations ( as opposed to natural persons ) will be taxed for an additional 20 percent , and the top bracket for gift taxes was raised from 62 percent to 72 percent , to prevent wealthier older people @ @ @ @ @ @ @ to invest in real estate in their names .
The revisions also restrained gap investment and put a clamp on excess liquidity entering the real estate market by restricting loans made to people who buy a house without intending to live in it .
The revisions also protect renters by giving renters an automatic option to extend the lease , which the landlord can decline only for certain enumerated causes .
Rent increases on extending a lease can not exceed 5 percent .
All leases are to be reported to and recorded with @ @ @ @ @ @ @ of creating an automatic lien over the house for the tenant who made the large jeonse deposit .
The Moon administration and the Democratic Party are also addressing the long-term supply and demand issue for Seoul ’ s real estate .
This month , the Ministry of Economy and Finance announced a plan to supply up to 260,000 homes in and around Seoul by raising the height restriction in condo buildings from 35 stories to 50 stories , raising the maximum floor area ratio from 300 percent to 500 percent , and earmarking @ @ @ @ @ @ @ subsidized housing for newlyweds and those without a home .
The Democratic Party revived the idea of relocating the capital to Sejong in the center of South Korea by moving the National Assembly and a portion of the presidential Blue House , reducing the burden on Seoul itself .
To divert the flow of cash away from real estate , the Democratic Party is proposing the “ New Deal Fund , ” where people can invest in major government projects such as 5G and self-driving cars .
But Moon faces massive political fallout @ @ @ @ @ @ @ greatest challenge the administration has yet faced at home .
Because so much of Korean household wealth is tied to real estate , attempting to lower the real estate price is a “ third rail ” issue , equivalent to threatening to reduce the balance of older people ’ s 401 ( k ) accounts or pension funds in the United States .
The real estate issue also strikes at the heart of Moon ’ s base : urban white-collar workers who are split into those who are building their net worth through @ @ @ @ @ @ @ locked out of the housing market because of the soaring house prices .
South Korea ’ s conservatives—reliable guardians of landlord interests—boycotted the legislature vote to revise the laws , leaving only the Democrats at the National Assembly to pass the revisions .
Several high-ranking Blue House officials resigned after charges of hypocrisy that they owned multiple homes and acted as landlords .
( They were mocked online for having chosen their houses over their jobs . )
In a hot mic moment , Democratic Party assembly member Jin Seong-jun was caught saying @ @ @ @ @ @ @ fall ” after having debated on television in favor of the government policy .
Moon ’ s sky-high approval rating of 71 percent in early May , earned thanks to his successful response to the coronavirus pandemic , dipped to 39 percent in Gallup Korea ’ s weekly poll , the lowest of his presidency in the survey .
Yet early returns seem to indicate that the Moon administration ’ s full-court press against rising housing prices is working .
The rate of increase in the housing price began to slow in August @ @ @ @ @ @ @ no increase in the past several weeks .
The total asset under management for private equity funds investing in real estate also decreased , as the new taxes are especially punitive against real estate owned by corporations .
With the Seoul mayor by-election coming up in April 2021 , the real estate issue may well make or break the remainder of Moon ’ s term .

Moon Jae-in has been through a lot in his three and a half years as South Korea’s president: defused a potential war in 2017, brokered three meetings between Donald Trump and Kim Jong Un in 2018 and 2019, and led one of the most successful responses in the world against the coronavirus pandemic in 2020. But this time, his team may have finally met its match: Seoul’s real estate market.
Moon Jae-in has been through a lot in his three and a half years as South Korea’s president: defused a potential war in 2017, brokered three meetings between Donald Trump and Kim Jong Un in 2018 and 2019, and led one of the most successful responses in the world against the coronavirus pandemic in 2020. But this time, his team may have finally met its match: Seoul’s real estate market.
Real estate is a sensitive political issue everywhere, but in Seoul it’s explosive. South Korea’s wealth has flowed into real estate to an unusual degree because there are few other options. The country’s domestic stock market is good but not great: The chaebol conglomerates are vastly overrepresented in the overall market (as of March, Samsung Electronics alone represented nearly 34 percent of the entire KOSPI market cap), making it difficult to have stable and diversified investments. Persistent corporate governance issues plaguing the chaebol sometimes lead to share price manipulation, undermining the confidence of public investors in the system. While investing abroad, especially into the red-hot U.S. stock market, is increasingly becoming more popular, the unfamiliarity as well as the foreign exchange rate fluctuation make the returns difficult to anticipate.
In contrast, real estate is intuitive: It is visible, it cannot disappear, and its value doesn’t go to zero as stocks can. The formula for a winning investment in real estate—centrally located, accessible to public transit—seems clear enough, especially in a country where half of the population lives in one metropolitan area. South Korea’s investors also remember the legendary returns from Seoul’s prime real estate when the Korean economy began growing explosively in the 1980s. In 1977, a 1,000-square-foot condominium in Apgujeong-dong, located in the heart of Gangnam, was approximately $14,000; in 2020, the same condo is worth over $2 million, a tidy return of 14,286 percent, or 330 percent in annualized return over 43 years. As a result, over 85 percent of South Korea’s household wealth in 2019 was in nonfinancial assets (which were mostly real estate); in contrast, just 35 percent of household wealth in the United States as of 2016 was in nonfinancial assets. The same figure for Japan was 43 percent as of 2015, as American and Japanese households tended to hold their wealth in the form of financial assets (such as stocks and bonds) rather than real estate.
South Korea’s unique jeonse rental system makes the investment into real estate even easier. For the uninitiated, the jeonse system may seem absurd: For the duration of the lease (typically for two years), the tenant puts down a massive deposit with the landlord, usually around 70 percent of the value of the home. The tenant makes no other payment to the landlord, who returns the entire deposit at the end of the lease. In essence, the landlord is borrowing money from the tenant at no interest. Instead of collecting a monthly rent, the landlord makes money by investing the borrowed deposit for the duration of the lease. This unusual system is a byproduct of South Korea’s period of rapid growth, a jury-rigged response to the times when a reliable credit check was impossible, tenants could not be counted on to make regular payments, and the ludicrously high return on capital in South Korea’s booming economy—the typical interest rate for a one-year certificate of deposit in the 1960s was well over 20 percent—could compensate the landlord for simply holding on to a sum of money. To this day, jeonse is the dominant form of real estate lease: In June, 71 percent of all lease transactions in Seoul were jeonse.
As South Korea’s bank interest rates came down to earth as its economy matured, clever investors devised a new way to generate return from the jeonse deposit: reinvest into real estate. For example, an aspiring landlord could buy a condo worth $500,000 with only $150,000 (i.e., 30 percent of the price) by lining up a jeonse renter first, who puts down $350,000 in deposit. Two years later, at the end of the lease, the landlord could sell the condo for $600,000 (a reasonable rate of appreciation in Seoul’s booming housing market), pay back the tenant’s $350,000 deposit, and make a profit of $100,000—a return of 66 percent over two years for the initial capital investment of $150,000. In a practice that came to be known as “gap investment,” enterprising landlords would run this process for multiple homes: same example but leverage the $350,000 deposit with another jeonse renter to buy a second condo worth $1.16 million and then realize the appreciation for the more expensive condo also. (The investment arbitrage is the “gap” between the price of the home and the jeonse deposit, which is typically 30 percent but can fluctuate between 10 and 40 percent.) In recent years, aggressive investors ran this scheme with hundreds of homes, creating an incredibly dangerous and entirely unregulated financial ecosystem. As soon as there was a downturn in the real estate market, a landlord’s bankruptcy could wipe out hundreds of people’s jeonse deposits, which often represented their life savings. In June 2019, for example, a real estate investor went bankrupt after having purchased 280 houses in Seoul’s Gangseo district in a gap investment scheme, destroying the life savings of his tenants. Even when the system is working as intended, there is a strong incentive to push housing prices ever upward in order to prevent a jeonse wipeout.
The cheap money made available through central banks’ response to COVID-19 has only worsened this trend. With a glut of liquidity created by unusually low interest rates, money flows into assets and drives up asset prices. In the United States, this increase is reflected in the stock market, which continues to climb despite the economic devastation of the pandemic. But in South Korea, where the investment asset of choice is real estate, the housing market is rising like mad. Since 2017, the average home price in Seoul has increased by 50 percent, the fastest pace in the world. Even a modest 1,000-square-foot condo in a middle-class neighborhood—say, Eunpyeong district on the northern edge of Seoul—could easily fetch over $1 million. This increase is more pernicious than the stock market bubble in the United States because the surge in housing prices is pushing young, first-time job holders out of Seoul, forcing them to commute for hours on crowded public transit to reach their jobs downtown. In order to afford the inflated jeonse deposit that climbed along with housing prices, young people often have to take out a loan, an additional burden on top of their student loan debt.
The Moon administration has proposed an all-available-options plan to curb this rise. In July, the ruling Democratic Party passed a host of real estate-related laws in a procedural blitzkrieg, aided by its giant majority position earned from the April parliamentary election. The revisions raise the taxes for nonresidential real estate investors. The top bracket for property taxes for those owning multiple homes was raised from 3.2 percent to 6 percent, real estate gains earned by corporations (as opposed to natural persons) will be taxed for an additional 20 percent, and the top bracket for gift taxes was raised from 62 percent to 72 percent, to prevent wealthier older people from giving money to their young children to invest in real estate in their names. The revisions also restrained gap investment and put a clamp on excess liquidity entering the real estate market by restricting loans made to people who buy a house without intending to live in it. The revisions also protect renters by giving renters an automatic option to extend the lease, which the landlord can decline only for certain enumerated causes. Rent increases on extending a lease cannot exceed 5 percent. All leases are to be reported to and recorded with the government, which has the effect of creating an automatic lien over the house for the tenant who made the large jeonse deposit.
The Moon administration and the Democratic Party are also addressing the long-term supply and demand issue for Seoul’s real estate. This month, the Ministry of Economy and Finance announced a plan to supply up to 260,000 homes in and around Seoul by raising the height restriction in condo buildings from 35 stories to 50 stories, raising the maximum floor area ratio from 300 percent to 500 percent, and earmarking a portion of the increased capacity for subsidized housing for newlyweds and those without a home. The Democratic Party revived the idea of relocating the capital to Sejong in the center of South Korea by moving the National Assembly and a portion of the presidential Blue House, reducing the burden on Seoul itself. To divert the flow of cash away from real estate, the Democratic Party is proposing the “New Deal Fund,” where people can invest in major government projects such as 5G and self-driving cars.
But Moon faces massive political fallout from these measures, making this the greatest challenge the administration has yet faced at home. Because so much of Korean household wealth is tied to real estate, attempting to lower the real estate price is a “third rail” issue, equivalent to threatening to reduce the balance of older people’s 401(k) accounts or pension funds in the United States. The real estate issue also strikes at the heart of Moon’s base: urban white-collar workers who are split into those who are building their net worth through real estate investment and those who are locked out of the housing market because of the soaring house prices. South Korea’s conservatives—reliable guardians of landlord interests—boycotted the legislature vote to revise the laws, leaving only the Democrats at the National Assembly to pass the revisions. Several high-ranking Blue House officials resigned after charges of hypocrisy that they owned multiple homes and acted as landlords. (They were mocked online for having chosen their houses over their jobs.) In a hot mic moment, Democratic Party assembly member Jin Seong-jun was caught saying “house prices are not going to fall” after having debated on television in favor of the government policy. Moon’s sky-high approval rating of 71 percent in early May, earned thanks to his successful response to the coronavirus pandemic, dipped to 39 percent in Gallup Korea’s weekly poll, the lowest of his presidency in the survey.
Yet early returns seem to indicate that the Moon administration’s full-court press against rising housing prices is working. The rate of increase in the housing price began to slow in August, with hot areas like Gangnam reporting no increase in the past several weeks. The total asset under management for private equity funds investing in real estate also decreased, as the new taxes are especially punitive against real estate owned by corporations. With the Seoul mayor by-election coming up in April 2021, the real estate issue may well make or break the remainder of Moon’s term.


foreignpolicy--2020-08-28--Unloved But Successful, Shinzo Abe Takes His Bow

A pensive Shinzo Abe announced his resignation as the prime minister of Japan on Friday , ending an unprecedented run that produced some solid gains in the world ’ s third-largest economy , an unlikely bonding with U.S. President Donald Trump , and the building of a stronger defense force in the face of an increasingly powerful and assertive China .
While most leaders would tout their accomplishments , a somber and sometimes emotional Abe instead spoke about what had been left undone .
“ I apologize to the people from the bottom of my heart for having to leave @ @ @ @ @ @ @ many policies are still halfway toward realization , ” he said .
His sudden announcement , a surprise to even those close to the prime minister , creates an uncertain future for a country stranded between the rising animosity of its alliance partner the United States and its biggest trading partner , China .
“ Abe certainly leaves a big hole .
Domestically , his stability-oriented populism currently has no follower .
Internationally , the art of simultaneously improving and balancing relations with China and the U.S. can hardly be copied , ” @ @ @ @ @ @ @ for Fujitsu , the Japanese IT group .
Yet despite his longevity in office—his over seven-year stint as prime minister was the longest ever—Abe was not a particularly popular figure in Japan .
Critics said that he was a closet nationalist who never really accepted Japan ’ s multitude of apologies over World War II , and polls showed that the main reason for his sustained popularity was the lack of another candidate .
That problem still lingers : Who comes next ?
Abe ’ s departure was sudden , brought on by @ @ @ @ @ @ @ s measures to counter the coronavirus and , more immediately , by his own health issues as his ulcerative colitis returned .
The condition had cut short Abe ’ s first term as well from 2006 to 2007 , when he was one of a string of short-term leaders in what looked like a permanent revolving door for Japanese prime ministers .
His return in 2012 to become Japan ’ s longest-serving prime minister ever was made possible by new medication that kept his condition under control , but Abe said at his @ @ @ @ @ @ @ he worked virtually every day through the spring and summer on how to handle the COVID-19 outbreak .
The public showed little regard for his diligence , however .
Recent polls showed that 58 percent of those surveyed were dissatisfied with the government ’ s program , which appeared to lurch between nonmandatory lockdowns and efforts more recently to actively encourage travel within Japan to help the rural economies badly hit by the economic downturn .
It is easy to see this as ingratitude given the fact that Japan has been spared the @ @ @ @ @ @ @ among the earliest countries to be hit by the virus , including a shipboard outbreak that received global media attention with 712 passengers falling ill and 13 deaths , numbers that would barely be noticed in today ’ s tallies around the world .
To date , there have been 1,226 fatalities attributed to COVID-19 in the country , a deaths per capita rate that is just 1.8 percent of the U.S. level .
Severe lockdowns have been avoided , and while there has been a strong downturn , the jobless rate remains @ @ @ @ @ @ @ figures , the general feeling has been that the low numbers are due to commonsense Japanese behavior such as mask-wearing and social distancing , rather than government actions .
The coronavirus has also cost Tokyo its hosting of the Olympics this year , officially delayed till 2021—a blow for a prime minister who had thrown himself into the games ’ organization .
In a bid to answer this criticism , Abe spent much of his news conference talking about the government ’ s progress in fighting COVID-19 .
Noting a government road map @ @ @ @ @ @ @ again spike , he said that Japan could achieve the twin goals of keeping the virus in check while allowing the economy to again start growing .
On the economy , Abe can also point to real achievements—if not all he promised .
When Abe came to power in 2012 , Japan ’ s economy had been lurching along for more than 20 years since the collapse of the high growth of the bubble economy in 1990 and seemed to have no prospects for any improvements .
Even as economic growth slumped , @ @ @ @ @ @ @ in what financial analysts called a “ safe haven ” effect .
This in turn worsened the prospects for overseas trade , a core part of the country ’ s industrial base , especially in autos .
Abe exuded confidence that he could turn things around , announcing that his economic policies would break from the incrementalism that had meant a slow pace of change unable to keep pace with a faster-changing global economy .
His “ Abenomics ” policy proved to be a moderate success , bringing back growth and helping to @ @ @ @ @ @ @ a long-term drag on the economy .
The most successful area was in monetary policy , thanks to a newly appointed head of the Bank of Japan , Haruhiko Kuroda , who launched a massive injection of money into the economy , ignoring conventional economic theory that such a move would eventually lead to uncontrollable inflation .
Kuroda was ahead of his time , presaging the era of negative interest rates that came to the eurozone and the announcement this week by the U.S. Federal Reserve that it would put growth ahead of @ @ @ @ @ @ @ program were less successful .
Government regulatory reforms have proceeded but without any great fanfare and with little visible enthusiasm from Abe in recent years .
But a clear Abe victory was in his careful handling of the U.S. presidential election of 2016 , hedging any bets on a Hillary Clinton presidency with preelection outreach to Donald Trump .
It of course proved to be a prescient move , and Abe was the first world leader to meet the president-elect that November , bringing with him an expensive golf club as a gift @ @ @ @ @ @ @ driver , while made in Japan , was produced by a Chinese-owned company , demonstrating the economic challenges facing both Japan and the United States . )
Abe made regular visits to see Trump , with golf not surprisingly an important method of bonding .
Abe was always deferential and polite , even though Trump often declined to return the favor .
“ I ’ ll talk to Prime Minister Abe of Japan and others—great guy , friend of mine—and there will be a little smile on their face .
And the smile @ @ @ @ @ @ @ believe we ’ ve been able to take advantage of the United States for so long.
’ So those days are over , ” Trump said in 2018 .
Abe , realizing bigger goals were at stake , would refuse to take the bait .
In an “ America first ” world , Abe ’ s biggest success came in the area of international trade .
Japan had long been known as a protectionist country and , like China today , had traditionally promoted its exports while taking various measures to ensure the @ @ @ @ @ @ @ Abe , however , threw the gates wide open , even in the area of agriculture , traditionally one of the most protected areas , as exemplified by the 788 percent tariff on imported rice .
Just when the United States turned its back on the Trans-Pacific Partnership , arguably Trump ’ s biggest failure in relation to containing China , it was Abe who , against all odds , managed to salvage the agreement .
With an absence of U.S. leadership , Abe managed to bring together the other countries , creating @ @ @ @ @ @ @ beyond the traditional realm of trade tariffs to encompass such areas as intellectual property rights , the rights of workers , and the environment .
He didn ’ t stop there , moving to finalize a seemingly endless set of negotiations with the European Union to create the largest free trade pact in the world .
One of Abe ’ s biggest disappointments had been a failure to revise Japan ’ s postwar constitution , in which the country renounces the use of force to settle international disputes and bans any army or @ @ @ @ @ @ @ from creating a so-called Self-Defense Force that is considered one of the most powerful military forces in the world .
Like many of his predecessors , Abe wanted to shed the restrictions of the constitution , which had been drafted by American experts during the occupation following World War II .
Despite its foreign origins , the document has never been amended .
This suits a Japanese populace that still remembers the militarism that led to a brutal prewar regime , but it has long offended the conservatives within the ruling party who @ @ @ @ @ @ @ “ normal country.
” At the same time , Abe pushed up military-related spending and expanded the role of the Self-Defense Forces .
With Abe ’ s departure , the attention shifts , of course , to his successor .
Given the dominant role of his Liberal Democratic Party , the decision will come from their selection of a new party leader .
It will be the party factions , not the voters , who determine the country ’ s next leader .
The likely candidates represent a group of plutocrats in the @ @ @ @ @ @ @ may well return Japan to the revolving door of nameless faces ruling in brief succession .
The country may end up looking back with nostalgia at a leader few loved but who was able to show the world a Japan that was a model of reasonability at a time of global dysfunction .

A pensive Shinzo Abe announced his resignation as the prime minister of Japan on Friday, ending an unprecedented run that produced some solid gains in the world’s third-largest economy, an unlikely bonding with U.S. President Donald Trump, and the building of a stronger defense force in the face of an increasingly powerful and assertive China.
A pensive Shinzo Abe announced his resignation as the prime minister of Japan on Friday, ending an unprecedented run that produced some solid gains in the world’s third-largest economy, an unlikely bonding with U.S. President Donald Trump, and the building of a stronger defense force in the face of an increasingly powerful and assertive China.
While most leaders would tout their accomplishments, a somber and sometimes emotional Abe instead spoke about what had been left undone. “I apologize to the people from the bottom of my heart for having to leave the job amid the coronavirus pandemic while many policies are still halfway toward realization,” he said.
His sudden announcement, a surprise to even those close to the prime minister, creates an uncertain future for a country stranded between the rising animosity of its alliance partner the United States and its biggest trading partner, China. “Abe certainly leaves a big hole. Domestically, his stability-oriented populism currently has no follower. Internationally, the art of simultaneously improving and balancing relations with China and the U.S. can hardly be copied,” said Martin Schulz, the chief economist for Fujitsu, the Japanese IT group.
Yet despite his longevity in office—his over seven-year stint as prime minister was the longest ever—Abe was not a particularly popular figure in Japan. Critics said that he was a closet nationalist who never really accepted Japan’s multitude of apologies over World War II, and polls showed that the main reason for his sustained popularity was the lack of another candidate. That problem still lingers: Who comes next?
Abe’s departure was sudden, brought on by weakening public support for the government’s measures to counter the coronavirus and, more immediately, by his own health issues as his ulcerative colitis returned. The condition had cut short Abe’s first term as well from 2006 to 2007, when he was one of a string of short-term leaders in what looked like a permanent revolving door for Japanese prime ministers.
His return in 2012 to become Japan’s longest-serving prime minister ever was made possible by new medication that kept his condition under control, but Abe said at his news conference that the problems returned as he worked virtually every day through the spring and summer on how to handle the COVID-19 outbreak. The public showed little regard for his diligence, however. Recent polls showed that 58 percent of those surveyed were dissatisfied with the government’s program, which appeared to lurch between nonmandatory lockdowns and efforts more recently to actively encourage travel within Japan to help the rural economies badly hit by the economic downturn.
It is easy to see this as ingratitude given the fact that Japan has been spared the worst of the outbreak. Japan was among the earliest countries to be hit by the virus, including a shipboard outbreak that received global media attention with 712 passengers falling ill and 13 deaths, numbers that would barely be noticed in today’s tallies around the world. To date, there have been 1,226 fatalities attributed to COVID-19 in the country, a deaths per capita rate that is just 1.8 percent of the U.S. level. Severe lockdowns have been avoided, and while there has been a strong downturn, the jobless rate remains under 3 percent. Despite these positive figures, the general feeling has been that the low numbers are due to commonsense Japanese behavior such as mask-wearing and social distancing, rather than government actions. The coronavirus has also cost Tokyo its hosting of the Olympics this year, officially delayed till 2021—a blow for a prime minister who had thrown himself into the games’ organization.
In a bid to answer this criticism, Abe spent much of his news conference talking about the government’s progress in fighting COVID-19. Noting a government road map for the fall, when cases could again spike, he said that Japan could achieve the twin goals of keeping the virus in check while allowing the economy to again start growing.
On the economy, Abe can also point to real achievements—if not all he promised. When Abe came to power in 2012, Japan’s economy had been lurching along for more than 20 years since the collapse of the high growth of the bubble economy in 1990 and seemed to have no prospects for any improvements. Even as economic growth slumped, the Japanese yen had soared in value in what financial analysts called a “safe haven” effect. This in turn worsened the prospects for overseas trade, a core part of the country’s industrial base, especially in autos. Abe exuded confidence that he could turn things around, announcing that his economic policies would break from the incrementalism that had meant a slow pace of change unable to keep pace with a faster-changing global economy.
His “Abenomics” policy proved to be a moderate success, bringing back growth and helping to end the deflationary spiral that had been a long-term drag on the economy. The most successful area was in monetary policy, thanks to a newly appointed head of the Bank of Japan, Haruhiko Kuroda, who launched a massive injection of money into the economy, ignoring conventional economic theory that such a move would eventually lead to uncontrollable inflation. Kuroda was ahead of his time, presaging the era of negative interest rates that came to the eurozone and the announcement this week by the U.S. Federal Reserve that it would put growth ahead of inflationary concerns. Other elements of the program were less successful. Government regulatory reforms have proceeded but without any great fanfare and with little visible enthusiasm from Abe in recent years.
But a clear Abe victory was in his careful handling of the U.S. presidential election of 2016, hedging any bets on a Hillary Clinton presidency with preelection outreach to Donald Trump. It of course proved to be a prescient move, and Abe was the first world leader to meet the president-elect that November, bringing with him an expensive golf club as a gift. (It turned out that the driver, while made in Japan, was produced by a Chinese-owned company, demonstrating the economic challenges facing both Japan and the United States.) Abe made regular visits to see Trump, with golf not surprisingly an important method of bonding. Abe was always deferential and polite, even though Trump often declined to return the favor. “I’ll talk to Prime Minister Abe of Japan and others—great guy, friend of mine—and there will be a little smile on their face. And the smile is, ‘I can’t believe we’ve been able to take advantage of the United States for so long.’ So those days are over,” Trump said in 2018. Abe, realizing bigger goals were at stake, would refuse to take the bait.
In an “America first” world, Abe’s biggest success came in the area of international trade. Japan had long been known as a protectionist country and, like China today, had traditionally promoted its exports while taking various measures to ensure the success of domestic brands at home. Abe, however, threw the gates wide open, even in the area of agriculture, traditionally one of the most protected areas, as exemplified by the 788 percent tariff on imported rice.
Just when the United States turned its back on the Trans-Pacific Partnership, arguably Trump’s biggest failure in relation to containing China, it was Abe who, against all odds, managed to salvage the agreement. With an absence of U.S. leadership, Abe managed to bring together the other countries, creating an 11-nation free trade zone that goes beyond the traditional realm of trade tariffs to encompass such areas as intellectual property rights, the rights of workers, and the environment. He didn’t stop there, moving to finalize a seemingly endless set of negotiations with the European Union to create the largest free trade pact in the world.
One of Abe’s biggest disappointments had been a failure to revise Japan’s postwar constitution, in which the country renounces the use of force to settle international disputes and bans any army or navy. That has not stopped Japan from creating a so-called Self-Defense Force that is considered one of the most powerful military forces in the world. Like many of his predecessors, Abe wanted to shed the restrictions of the constitution, which had been drafted by American experts during the occupation following World War II. Despite its foreign origins, the document has never been amended. This suits a Japanese populace that still remembers the militarism that led to a brutal prewar regime, but it has long offended the conservatives within the ruling party who seek Japan’s return to a “normal country.” At the same time, Abe pushed up military-related spending and expanded the role of the Self-Defense Forces.
With Abe’s departure, the attention shifts, of course, to his successor. Given the dominant role of his Liberal Democratic Party, the decision will come from their selection of a new party leader. It will be the party factions, not the voters, who determine the country’s next leader. The likely candidates represent a group of plutocrats in the upper echelons of the party, which may well return Japan to the revolving door of nameless faces ruling in brief succession. The country may end up looking back with nostalgia at a leader few loved but who was able to show the world a Japan that was a model of reasonability at a time of global dysfunction.


foreignpolicy--2020-08-28--Why COVID-19 Is Ravaging Iran Again

Why COVID-19 Is Ravaging Iran Again

Why COVID-19 Is Ravaging Iran Again COVID-19 could not have arrived in Iran at a worse time .
Within weeks of confirming its first case , infections exploded , briefly turning the country into the epicenter of the world ’ s coronavirus outbreak at a time when its economy was already reeling from U.S. sanctions .
Iran ’ s first official cases of the new coronavirus were announced on Feb. 19 : two deaths in the holy city of Qom .
Alarm bells should have gone off immediately .
The cases were discovered as deaths , not active infections , @ @ @ @ @ @ @ these individuals before they became severely ill and died .
Moreover , the virus had a gateway to spread worldwide , as Qom is a hub for international religious tourism .
Rather than reacting swiftly , government officials advised Iranians simply not to visit the city .
State-run news outlets still instructed Iranians to turn out and vote in elections .
And within two weeks , Iran had reported the highest number of deaths from the virus outside of China .
By early May , the government had controlled the virus , albeit @ @ @ @ @ @ @ which dropped by 15 percent .
So , President Hassan Rouhani prematurely reopened the economy .
This move would usher in Iran ’ s second wave of infections in June , bringing new cases per day to over 3,000 , according to the official news agency , IRNA .
As of Aug. 27 , Iran has confirmed a total of 367,000 cases of the coronavirus and over 21,000 deaths .
The virus has spread from Iran to neighboring countries—including Iraq , Afghanistan , Lebanon , the United Arab Emirates , and other Gulf @ @ @ @ @ @ @ countries as the United Kingdom , Canada , and the United States .
Days after the virus was confirmed to have arrived in Iran , Supreme Leader Ali Khamenei called reports of the virus “ negative propaganda ” from foreign media , rather than addressing the health threat .
While the virus spread from Qom , Deputy Health Minister Iraj Harirchi dismissed quarantining as a “ Stone Age ” measure , a day before himself testing positive for the coronavirus .
Later , on March 11 , Iran ’ s minister of health @ @ @ @ @ @ @ the national COVID-19 task force—symbolizing the government ’ s politicization of its coronavirus response .
The second factor exacerbating Iran ’ s outbreak was inconsistent reporting on the spread of the virus .
Early in Iran ’ s outbreak , health care workers and journalists reported government suppression of information related to the coronavirus .
On March 3 , a nurse at Alborz Hospital in Karaj said , “ We have been instructed not to report the number of casualties , and only the Ministry of Health should share this with us.
” @ @ @ @ @ @ @ and anonymous reports , including one provided to the Committee to Protect Journalists by an Iran-based reporter on March 17 .
“ Both the judiciary and the Rouhani administration told Iranian journalists working inside the country not to cover the death toll caused by the coronavirus , ” the journalist said .
Indeed , Iran ’ s proclivity for censorship undermined the transparency needed for swift containment of the coronavirus .
A World Health Organization ( WHO ) technical support mission to Iran identified another , more innocuous , problem : “ The @ @ @ @ @ @ @ data , ” said Rick Brennan , the emergency director for the region .
Iran , like many other countries early in the outbreak , needed to test more people in order to report more robust numbers .
Third , Iran ’ s parliamentary election , on Feb. 21 , was slated to take place only days after the country confirmed its first case of the coronavirus—and officials continued encouraging Iranians to go vote .
Public trust in the regime had declined in January after Iran mistakenly shot down a Ukrainian passenger plane @ @ @ @ @ @ @ passengers , and then attempted to conceal its role in the incident .
Given the government ’ s vested interest in driving up voter turnout despite public distrust , it appears to have downplayed the threat posed by the coronavirus .
During the pandemic , state-run media outlets such as Tasnim , linked to Iran ’ s hard-liners , have published messaging on the coronavirus being a U.S. bioweapon or propaganda Fourth , the media landscape in Iran is largely restricted to publishing the government ’ s official narrative , as most outlets @ @ @ @ @ @ @ The role of a free and independent press during a pandemic is critically important : it helps keep people informed , holds governments accountable , and circulates evidence-based methods for individuals to prevent infection .
During the pandemic , state-run media outlets such as Tasnim , linked to Iran ’ s hard-liners , have instead published messaging on the coronavirus being a U.S. bioweapon or propaganda to deter voters from parliamentary elections .
Meanwhile , independent reporting by Iranian journalists and social media users about the coronavirus has resulted in detention or censorship @ @ @ @ @ @ @ Many Iranians appear to source their news from foreign news outlets or social media when they are able to access them .
The danger of overreliance on the latter , of course , is that social media can be a vector for misinformation .
For instance , a prominent ayatollah , Abbas Tabrizian , posts home remedies for COVID-19 on a popular messaging platform called Telegram .
He advises readers to “ eat lots of apples and onions ” and to “ drench cotton wool in violet oil before bedtime and insert into @ @ @ @ @ @ @ rose , while essential medicines , which are difficult to import due to U.S. sanctions , remain scarce and costly .
Fifth , U.S. sanctions against Iran have pushed the country into an even deeper economic crisis , and further sanctions during the pandemic forced Iran into choosing between economic preservation and public health .
Solvency was prioritized when Iran ’ s government-affiliated airline continued flying to and from China , Iran ’ s top oil customer and thus economic lifeline ; when the Rouhani administration lifted economic lockdowns , spurring Iran ’ @ @ @ @ @ @ @ was reluctant to halt cross-border trade .
In 2019 , the International Monetary Fund reported that Iran ’ s economy was contracting by 9.5 percent ( up from 4.8 percent in 2018 ) .
This year , the country ’ s economy was finally predicted to stabilize with zero shrinkage .
This is because Iran had diversified its exports from oil ( slammed by U.S. sanctions ) to manufactured goods , which it sends across the Middle East and to China , Russia , and Europe .
Given Iran ’ s outsized reliance @ @ @ @ @ @ @ sanctions , the regime was understandably reluctant to halt trade across its borders and risk offending China .
Finally , U.S. sanctions also have the impact of blocking Iran ’ s access to the international financial system .
In October 2019 , Human Rights Watch released a report detailing the outsized impact of sanctions on receipt of humanitarian aid in Iran , especially to health care goods and essential medicines .
Despite the U.S. government building exemptions into its sanctions regime , companies and banks often over-comply with regulations because they are broad @ @ @ @ @ @ @ hostile anti-Iran rhetoric from Washington .
By maintaining its sanctions regime , the Trump administration has deprived Iran of access to critical medical resources in its moment of utmost need .
From the ground , WHO regional emergency director Brennan reported visiting new health centers in March where everything—bedsheets , oxygen masks , personal protective equipment—had been made locally .
Brennan suggested that the locally produced equipment may have been substandard and exposed medical workers to risk of infection .
The Trump administration ’ s continued use of economic sanctions is callously harmful @ @ @ @ @ @ @ above Iranian lives .
Iran ’ s response to the first wave of the coronavirus in early 2020 illustrates how the politicization of health care , both domestically and internationally , unnecessarily endangers human lives .
Moreover , Iran ’ s second wave of infection mirrors the first in five of six causes : It was incited by poor government leadership that prioritized reopening , exacerbated by deliberate suppression of COVID-19 death numbers , worsened by media disinformation campaigns from Tehran , and enabled by fresh U.S. sanctions on Iran ’ s economy @ @ @ @ @ @ @ .
In the face of the continued coronavirus crisis , Iran ’ s government may continue to blame the United States for its sanctions regime .
Similarly , the United States may continue to blame Iran ’ s government for poor leadership .
But to do so would be to allow both countries ’ politicking to distract from the real toll : Iranian lives .

COVID-19 could not have arrived in Iran at a worse time. Within weeks of confirming its first case, infections exploded, briefly turning the country into the epicenter of the world’s coronavirus outbreak at a time when its economy was already reeling from U.S. sanctions.
COVID-19 could not have arrived in Iran at a worse time. Within weeks of confirming its first case, infections exploded, briefly turning the country into the epicenter of the world’s coronavirus outbreak at a time when its economy was already reeling from U.S. sanctions.
Iran’s first official cases of the new coronavirus were announced on Feb. 19: two deaths in the holy city of Qom. Alarm bells should have gone off immediately.
The cases were discovered as deaths, not active infections, meaning the virus had spread unchecked through these individuals before they became severely ill and died. Moreover, the virus had a gateway to spread worldwide, as Qom is a hub for international religious tourism. Rather than reacting swiftly, government officials advised Iranians simply not to visit the city. State-run news outlets still instructed Iranians to turn out and vote in elections. And within two weeks, Iran had reported the highest number of deaths from the virus outside of China.
By early May, the government had controlled the virus, albeit at the expense of national GDP, which dropped by 15 percent. So, President Hassan Rouhani prematurely reopened the economy. This move would usher in Iran’s second wave of infections in June, bringing new cases per day to over 3,000, according to the official news agency, IRNA. As of Aug. 27, Iran has confirmed a total of 367,000 cases of the coronavirus and over 21,000 deaths. The virus has spread from Iran to neighboring countries—including Iraq, Afghanistan, Lebanon, the United Arab Emirates, and other Gulf states, as well as such far-flung countries as the United Kingdom, Canada, and the United States.
Why was Iran’s initial outbreak so devastating in scale, severity, and spread? Our analysis reveals six major factors, both national and international, that exacerbated Iran’s outbreak. The first factor is abysmal government leadership. Iran’s government has been roundly critiqued for politicizing its response to the coronavirus and failing to give decision-making authority to health experts and health care workers.
Days after the virus was confirmed to have arrived in Iran, Supreme Leader Ali Khamenei called reports of the virus “negative propaganda” from foreign media, rather than addressing the health threat. While the virus spread from Qom, Deputy Health Minister Iraj Harirchi dismissed quarantining as a “Stone Age” measure, a day before himself testing positive for the coronavirus. Later, on March 11, Iran’s minister of health was replaced by Rouhani as chair of the national COVID-19 task force—symbolizing the government’s politicization of its coronavirus response.
The second factor exacerbating Iran’s outbreak was inconsistent reporting on the spread of the virus. Early in Iran’s outbreak, health care workers and journalists reported government suppression of information related to the coronavirus. On March 3, a nurse at Alborz Hospital in Karaj said, “We have been instructed not to report the number of casualties, and only the Ministry of Health should share this with us.” This account is consistent across numerous individual and anonymous reports, including one provided to the Committee to Protect Journalists by an Iran-based reporter on March 17.
“Both the judiciary and the Rouhani administration told Iranian journalists working inside the country not to cover the death toll caused by the coronavirus,” the journalist said. Indeed, Iran’s proclivity for censorship undermined the transparency needed for swift containment of the coronavirus. A World Health Organization (WHO) technical support mission to Iran identified another, more innocuous, problem: “The weakest link in their chain is the data,” said Rick Brennan, the emergency director for the region. Iran, like many other countries early in the outbreak, needed to test more people in order to report more robust numbers.
Third, Iran’s parliamentary election, on Feb. 21, was slated to take place only days after the country confirmed its first case of the coronavirus—and officials continued encouraging Iranians to go vote. Public trust in the regime had declined in January after Iran mistakenly shot down a Ukrainian passenger plane near Tehran, accidentally killing all 176 passengers, and then attempted to conceal its role in the incident. Given the government’s vested interest in driving up voter turnout despite public distrust, it appears to have downplayed the threat posed by the coronavirus.
During the pandemic, state-run media outlets such as Tasnim, linked to Iran’s hard-liners, have published messaging on the coronavirus being a U.S. bioweapon or propaganda
Fourth, the media landscape in Iran is largely restricted to publishing the government’s official narrative, as most outlets are either state-run or heavily censored. The role of a free and independent press during a pandemic is critically important: it helps keep people informed, holds governments accountable, and circulates evidence-based methods for individuals to prevent infection.
During the pandemic, state-run media outlets such as Tasnim, linked to Iran’s hard-liners, have instead published messaging on the coronavirus being a U.S. bioweapon or propaganda to deter voters from parliamentary elections. Meanwhile, independent reporting by Iranian journalists and social media users about the coronavirus has resulted in detention or censorship, according to Reporters Without Borders.
Many Iranians appear to source their news from foreign news outlets or social media when they are able to access them. The danger of overreliance on the latter, of course, is that social media can be a vector for misinformation. For instance, a prominent ayatollah, Abbas Tabrizian, posts home remedies for COVID-19 on a popular messaging platform called Telegram. He advises readers to “eat lots of apples and onions” and to “drench cotton wool in violet oil before bedtime and insert into your anus.” Sales of alternative medicines rose, while essential medicines, which are difficult to import due to U.S. sanctions, remain scarce and costly.
Fifth, U.S. sanctions against Iran have pushed the country into an even deeper economic crisis, and further sanctions during the pandemic forced Iran into choosing between economic preservation and public health. Solvency was prioritized when Iran’s government-affiliated airline continued flying to and from China, Iran’s top oil customer and thus economic lifeline; when the Rouhani administration lifted economic lockdowns, spurring Iran’s second wave; and when Tehran was reluctant to halt cross-border trade.
In 2019, the International Monetary Fund reported that Iran’s economy was contracting by 9.5 percent (up from 4.8 percent in 2018). This year, the country’s economy was finally predicted to stabilize with zero shrinkage. This is because Iran had diversified its exports from oil (slammed by U.S. sanctions) to manufactured goods, which it sends across the Middle East and to China, Russia, and Europe. Given Iran’s outsized reliance on exports and economic precarity amid U.S. sanctions, the regime was understandably reluctant to halt trade across its borders and risk offending China.
Finally, U.S. sanctions also have the impact of blocking Iran’s access to the international financial system. In October 2019, Human Rights Watch released a report detailing the outsized impact of sanctions on receipt of humanitarian aid in Iran, especially to health care goods and essential medicines. Despite the U.S. government building exemptions into its sanctions regime, companies and banks often over-comply with regulations because they are broad, complex, and often supported by hostile anti-Iran rhetoric from Washington.
By maintaining its sanctions regime, the Trump administration has deprived Iran of access to critical medical resources in its moment of utmost need. From the ground, WHO regional emergency director Brennan reported visiting new health centers in March where everything—bedsheets, oxygen masks, personal protective equipment—had been made locally. Brennan suggested that the locally produced equipment may have been substandard and exposed medical workers to risk of infection. The Trump administration’s continued use of economic sanctions is callously harmful, unnecessarily prioritizing its own political agenda above Iranian lives.
Iran’s response to the first wave of the coronavirus in early 2020 illustrates how the politicization of health care, both domestically and internationally, unnecessarily endangers human lives. Moreover, Iran’s second wave of infection mirrors the first in five of six causes: It was incited by poor government leadership that prioritized reopening, exacerbated by deliberate suppression of COVID-19 death numbers, worsened by media disinformation campaigns from Tehran, and enabled by fresh U.S. sanctions on Iran’s economy and access to the international financial system.
In the face of the continued coronavirus crisis, Iran’s government may continue to blame the United States for its sanctions regime. Similarly, the United States may continue to blame Iran’s government for poor leadership. But to do so would be to allow both countries’ politicking to distract from the real toll: Iranian lives.


foreignpolicy--2020-08-28--Kashmir’s LGBTQ Community Is Caught Between Conservative Society and Indian Ethnonationalism

Kashmir ’ s LGBTQ Community Is Caught Between Conservative Society and Indian Ethnonationalism In May , more than a month into India ’ s COVID-19 lockdown , Aijaz Bund started an online fundraising campaign with the help of some friends .
The aim was to collect food and money to aid Kashmir ’ s minuscule transgender population .
Bund managed to raise 200,000 rupees ( $ 2,600 ) .
Although not nearly enough to help all the transgender people of the region , it was a start .
“ The entire Kashmir has been in a state of lockdown for @ @ @ @ @ @ @ been particularly hard on the region ’ s estimated 4,000 transgender people , ” Bund told me in August , “ who are mostly shunned by their families and rely on small gigs like performing at marriages to make a living.
” Before countries across the world were forced into an unprecedented shutdown due to the pandemic , Kashmir had already endured months of a communication blackout and oppressive military presence imposed after New Delhi unilaterally revoked the region ’ s semi-autonomous status in August 2019 .
The decision has severely affected life @ @ @ @ @ @ @ .
Through his campaign , Bund had managed to reach out to 120 transgender people with ration packs and money by July .
He was hoping to provide assistance to another 30 before he was hit by COVID-19 himself .
Sporting a long wavy beard and short trimmed hair , the 30-year-old professor has been fighting for years for justice and equality for LGBTQ people in conservative Kashmir—where sex and sexuality are generally shut behind closed doors .
Bund ’ s activism has garnered him regular trolling and sometimes even death threats .
@ @ @ @ @ @ @ And of late , the fight has become more complicated .
When the Indian government revoked Kashmir ’ s semi-autonomous status last year , it argued that , among other things , the move would emancipate the region ’ s gender and sexual minorities .
In 2018 , the Indian Supreme Court decriminalized homosexuality after a decade-long legal battle , and New Delhi argued that Jammu and Kashmir ’ s semi-autonomy served as an impediment in the application of that landmark decision .
But Bund sees it otherwise and called such a narrative @ @ @ @ @ @ @ to India ’ s unilateral decision to end Kashmir special status.
” In fact , he pointed out , “ the Jammu and Kashmir High Court in 1995 had pronounced that all the decisions taken by the Supreme Court are binding on the entire country , including J & K .
So legally speaking there was no need to abrogate the region ’ s special status.
” And far from protecting LGBTQ people , New Delhi ’ s move caused a lot of harm , Bund says , to all of Kashmiri society—and @ @ @ @ @ @ @ part of that society .
“ The communication blackout imposed by the government , ” meanwhile , “ took away a major support system LGBTQ people rely on here.
” A case in point was a call for a pride march in June in Lal Chowk , Srinagar ’ s city center .
The march was called by the Kashmiri Youth Movement ( KYM ) , which describes itself on its website as a “ student network of Kashmiris born post 1990 ” —a reference to the year armed conflict in the region @ @ @ @ @ @ @ Kashmir—and which has supported the government ’ s revocation of Kashmir ’ s special status .
Bund , for his part , denounced the event as an effort “ to divide the people on the basis of religion and invalidate the experiences of the region ’ s Muslim LGBTQ people.
” KYM , Bund argues , has never worked in Kashmir or spoken out for the rights of LGBTQ people .
“ They were misrepresenting the queer community .
So it is imperative to call them out.
” ( The march wasn ’ @ @ @ @ @ @ @ no explanation was given . )
Dibyesh Anand , a professor of international relations at the University of Westminster , applauds Bund ’ s activism .
“ He calls out societal invisibilization of queer voices in Kashmir while at the same time rejecting the trap of Indian homonationalism ” —that is , the attempt to “ demonize Kashmiris in the name of ‘ saving Kashmiri queers.
’ ” And planned events like KYM ’ s aren ’ t the only element in that attempt , he says .
Last October , five masked @ @ @ @ @ @ @ was part of at SOAS University of London .
The discussion was about New Delhi ’ s revocation of Article 370 of the Indian Constitution , the clause that had guaranteed Kashmir ’ s semi-autonomous status .
The shouting men carried rainbow flags with “ 370 is homophobic ” scribbled across them and left leaflets that read “ Regressive Left , Don ’ t Betray Us.
” Right-wing commentators in India cheered the incident .
Kashmiri commentators , who at the time had little ability to communicate with the outside world , were @ @ @ @ @ @ @ left , Bund ’ s mother washed the cup the woman had used for tea multiple times .
When Bund asked his mother why she did it , he was rebuffed .
That incident had a deep impact on Bund .
“ In that moment , I realized how badly we treat some people based on our own ignorance , ” Bund said .
A few years later , in 2013 , while doing his Ph.D. in social work , Bund started advocating for the rights of transgender people .
He began by @ @ @ @ @ @ @ .
After shooting off letters regularly for a year , he convinced the Department of Social Welfare to formulate a plan to improve the living conditions of Kashmiri transgender people .
“ We had made certain recommendations to the government .
Among them was to provide reservation ” —that is , to set aside seats— “ in jobs and colleges for transgender people , ” Bund said .
But the plan was never implemented due to bureaucratic changes .
Undeterred , Bund went on to form the Sonzal Welfare Trust , a nongovernmental @ @ @ @ @ @ @ LGBTQ community .
“ We wanted to create a platform where LGBTQ people can talk about their own issues , ” Bund said about Sonzal , which means rainbow in the Kashmiri language .
Over the years , the group has grown into a sizable network of doctors , lawyers , and journalists that provides online counseling and psychological aid to LGBTQ people facing mental health issues or abuse .
In late 2017 , Bund also published an ethnographic study of Kashmir ’ s transgender people titled Hijras of Kashmir : A Marginalized @ @ @ @ @ @ @ family didn ’ t know anything about his activism for years .
He thought he could convince the entire world about the importance of his work but not his own family .
Then something unexpected happened .
In 2017 , when Sonzal filed public interest litigation in the High Court of Jammu and Kashmir , Bund ’ s family found out .
But to his surprise , his parents ’ reaction was positive .
“ My mother , who is very religious and prays five times every day , came to my room @ @ @ @ @ @ @ me and told me she was proud of my work.
” Bund said it was one of the happiest moments of his life .
“ That day I realized , sometimes our psychological fears have no physical grounds , ” he added .
But while his family stood by him , even praying on his behalf every time Sonzal had matters appearing in the court , Bund received derogatory messages and death threats on social media .
And as he began to write more openly on the issue of LGBTQ rights in Kashmir @ @ @ @ @ @ @ “ Some people would even message me , ” he said , that “ I could no longer call myself Muslim for my view .
I never let that interfere with my belief .
But it did pain me.
” Bund tried to file a police complaint to make the online bullying stop .
But the police officer assigned to his case dismissed his complaints .
“ He told me , ‘ This is what will happen if you are doing such activities , ’ ” Bund said .
After that incident , @ @ @ @ @ @ @ and bullying on his own—by mentally blocking it out .
“ Somewhere down the line , I realized most of these people are not educated on LGBTQ issues and this was their knee-jerk reaction .
So I decided to focus on my work to educate people , ” Bund said .
Bund doesn ’ t deny that conservative Islam dominates some sections of Kashmiri society , but he says change has been gradually coming .
“ Today , young trans women wear feminine clothes in public .
They visit cafes , ride scooters @ @ @ @ @ @ @ still conceal their sexuality or at least attempt to , ” Bund said .
It ’ s not just the clothing or access to public spaces that is opening up ; the younger generation is also not limiting themselves to traditional jobs such as matchmaking .
“ They are working as makeup artists and fashion designers , ” Bund said .
Although he is highly optimistic , Bund maintains that there is still a long way to go .
“ You can ’ t change the outlook of millions of people by simply @ @ @ @ @ @ @ true , there would be no more stigmatization of queer people in India , ” he said , referring to the continued marginalization of India ’ s LGBTQ community even after the law that criminalized homosexuality was struck down .
Initially , Owais went to Bund and his team for psychological aid .
Owais talked to Bund online for days without fear .
Owais said he was in the eighth grade when he realized he was different from his friends , but he wasn ’ t quite sure about the reason .
“ @ @ @ @ @ @ @ understanding of sexuality , and there was no one I could talk to about it .
I thought I was transgender .
But then , when I got access to the internet in 12th class , I began to learn about myself , ” Owais said .
Owais also struggled with religion in those years .
“ I felt conflicted about praying .
I felt impure somehow , ” he continued .
But as years went on and his knowledge of religion grew , he began to feel more comfortable with the idea @ @ @ @ @ @ @ .
“ I read stories of other Muslim gay people on the internet .
I also got to talk to other queer people , and that really helped , ” he added .
For the most part , Owais says , he is still not out about being gay .
It is only when he is talking to a few friends made on matchmaking apps before last August that he can be himself .
“ I have had discussions with my friends about gender and sexuality .
But to this day , I @ @ @ @ @ @ @ up to them .
Some of them even think it is some psychological disorder .
Other friends are relatively more liberal .
But me coming out to them would still shock them , ” he told me .
The communication gag imposed last year by the Indian government , which continues to date to some extent with a ban on high-speed internet , not only cut off Owais from his friends .
It also meant he no longer could access the mental health experts he needed when he felt depressed .
“ For @ @ @ @ @ @ @ inside my house , and at the same time , I had no one to really express my feelings and emotions .
I tried to read books and do chores to keep myself busy .
But it wasn ’ t at all easy .
I had many sleepless nights .
I tried to assure myself it will be over soon , ” Owais said .
Owais hopes Bund ’ s relentless work will someday change even his friends ’ mindset .
Bund says that , for the real emancipation of sexual and gender @ @ @ @ @ @ @ on creating awareness and educating people .
“ People here don ’ t understand the difference between gender and sexuality .
Even for my own parents , it was difficult , even though we have had these discussions for years now.
” Among his future plans is to hold a congregation of Islamic scholars in Kashmir to speak on LGBTQ rights issues .

In May, more than a month into India’s COVID-19 lockdown, Aijaz Bund started an online fundraising campaign with the help of some friends. The aim was to collect food and money to aid Kashmir’s minuscule transgender population.
In May, more than a month into India’s COVID-19 lockdown, Aijaz Bund started an online fundraising campaign with the help of some friends. The aim was to collect food and money to aid Kashmir’s minuscule transgender population.
Bund managed to raise 200,000 rupees ($2,600). Although not nearly enough to help all the transgender people of the region, it was a start. “The entire Kashmir has been in a state of lockdown for over a year now. It has been particularly hard on the region’s estimated 4,000 transgender people,” Bund told me in August, “who are mostly shunned by their families and rely on small gigs like performing at marriages to make a living.”
Before countries across the world were forced into an unprecedented shutdown due to the pandemic, Kashmir had already endured months of a communication blackout and oppressive military presence imposed after New Delhi unilaterally revoked the region’s semi-autonomous status in August 2019. The decision has severely affected life for Kashmir’s 8 million residents.
Through his campaign, Bund had managed to reach out to 120 transgender people with ration packs and money by July. He was hoping to provide assistance to another 30 before he was hit by COVID-19 himself.
Sporting a long wavy beard and short trimmed hair, the 30-year-old professor has been fighting for years for justice and equality for LGBTQ people in conservative Kashmir—where sex and sexuality are generally shut behind closed doors. Bund’s activism has garnered him regular trolling and sometimes even death threats. But he has kept at it. And of late, the fight has become more complicated.
When the Indian government revoked Kashmir’s semi-autonomous status last year, it argued that, among other things, the move would emancipate the region’s gender and sexual minorities. In 2018, the Indian Supreme Court decriminalized homosexuality after a decade-long legal battle, and New Delhi argued that Jammu and Kashmir’s semi-autonomy served as an impediment in the application of that landmark decision. But Bund sees it otherwise and called such a narrative as “mere pinkwashing to provide credence to India’s unilateral decision to end Kashmir special status.”
In fact, he pointed out, “the Jammu and Kashmir High Court in 1995 had pronounced that all the decisions taken by the Supreme Court are binding on the entire country, including J&K. So legally speaking there was no need to abrogate the region’s special status.” And far from protecting LGBTQ people, New Delhi’s move caused a lot of harm, Bund says, to all of Kashmiri society—and the region’s LGBTQ community is part of that society. “The communication blackout imposed by the government,” meanwhile, “took away a major support system LGBTQ people rely on here.”
A case in point was a call for a pride march in June in Lal Chowk, Srinagar’s city center. The march was called by the Kashmiri Youth Movement (KYM), which describes itself on its website as a “student network of Kashmiris born post 1990”—a reference to the year armed conflict in the region forced the minority Hindus to migrate from Kashmir—and which has supported the government’s revocation of Kashmir’s special status.
Bund, for his part, denounced the event as an effort “to divide the people on the basis of religion and invalidate the experiences of the region’s Muslim LGBTQ people.” KYM, Bund argues, has never worked in Kashmir or spoken out for the rights of LGBTQ people. “They were misrepresenting the queer community. So it is imperative to call them out.” (The march wasn’t held in the end, and no explanation was given.)
Dibyesh Anand, a professor of international relations at the University of Westminster, applauds Bund’s activism. “He calls out societal invisibilization of queer voices in Kashmir while at the same time rejecting the trap of Indian homonationalism”—that is, the attempt to “demonize Kashmiris in the name of ‘saving Kashmiri queers.’”
And planned events like KYM’s aren’t the only element in that attempt, he says. Last October, five masked men interrupted a panel discussion that he was part of at SOAS University of London. The discussion was about New Delhi’s revocation of Article 370 of the Indian Constitution, the clause that had guaranteed Kashmir’s semi-autonomous status. The shouting men carried rainbow flags with “370 is homophobic” scribbled across them and left leaflets that read “Regressive Left, Don’t Betray Us.” Right-wing commentators in India cheered the incident. Kashmiri commentators, who at the time had little ability to communicate with the outside world, were left in the dark.
In 2008, when Bund’s eldest sister was to get married, a transgender woman came to visit their house. She worked as a matchmaker—a vocation taken up by some of the region’s transgender people to earn a living as well as to gain social acceptance.
After she left, Bund’s mother washed the cup the woman had used for tea multiple times. When Bund asked his mother why she did it, he was rebuffed. That incident had a deep impact on Bund. “In that moment, I realized how badly we treat some people based on our own ignorance,” Bund said.
A few years later, in 2013, while doing his Ph.D. in social work, Bund started advocating for the rights of transgender people. He began by writing to the Jammu and Kashmir government. After shooting off letters regularly for a year, he convinced the Department of Social Welfare to formulate a plan to improve the living conditions of Kashmiri transgender people. “We had made certain recommendations to the government. Among them was to provide reservation”—that is, to set aside seats—“in jobs and colleges for transgender people,” Bund said.
But the plan was never implemented due to bureaucratic changes. Undeterred, Bund went on to form the Sonzal Welfare Trust, a nongovernmental organization, along with members of the LGBTQ community. “We wanted to create a platform where LGBTQ people can talk about their own issues,” Bund said about Sonzal, which means rainbow in the Kashmiri language. Over the years, the group has grown into a sizable network of doctors, lawyers, and journalists that provides online counseling and psychological aid to LGBTQ people facing mental health issues or abuse. In late 2017, Bund also published an ethnographic study of Kashmir’s transgender people titled Hijras of Kashmir: A Marginalized Form of Personhood.
Bund’s family didn’t know anything about his activism for years. He thought he could convince the entire world about the importance of his work but not his own family.
Then something unexpected happened. In 2017, when Sonzal filed public interest litigation in the High Court of Jammu and Kashmir, Bund’s family found out. But to his surprise, his parents’ reaction was positive. “My mother, who is very religious and prays five times every day, came to my room one day. She sat next to me and told me she was proud of my work.” Bund said it was one of the happiest moments of his life. “That day I realized, sometimes our psychological fears have no physical grounds,” he added.
But while his family stood by him, even praying on his behalf every time Sonzal had matters appearing in the court, Bund received derogatory messages and death threats on social media. And as he began to write more openly on the issue of LGBTQ rights in Kashmir, vicious online harassment turned worse.
“Some people would even message me,” he said, that “I could no longer call myself Muslim for my view. I never let that interfere with my belief. But it did pain me.” Bund tried to file a police complaint to make the online bullying stop. But the police officer assigned to his case dismissed his complaints. “He told me, ‘This is what will happen if you are doing such activities,’” Bund said. After that incident, Bund decided to deal with online hate and bullying on his own—by mentally blocking it out. “Somewhere down the line, I realized most of these people are not educated on LGBTQ issues and this was their knee-jerk reaction. So I decided to focus on my work to educate people,” Bund said.
Bund doesn’t deny that conservative Islam dominates some sections of Kashmiri society, but he says change has been gradually coming. “Today, young trans women wear feminine clothes in public. They visit cafes, ride scooters. Unlike the previous generation, who still conceal their sexuality or at least attempt to,” Bund said. It’s not just the clothing or access to public spaces that is opening up; the younger generation is also not limiting themselves to traditional jobs such as matchmaking. “They are working as makeup artists and fashion designers,” Bund said.
Although he is highly optimistic, Bund maintains that there is still a long way to go. “You can’t change the outlook of millions of people by simply changing a law. If that was true, there would be no more stigmatization of queer people in India,” he said, referring to the continued marginalization of India’s LGBTQ community even after the law that criminalized homosexuality was struck down.
Owais, whose name has been changed to protect his identity, is an MBA student from Srinagar who met Bund online in 2018. It was a difficult time for the 23-year-old gay man. Owais had been struggling with depression, and there was no one he could speak to. “I tried to seek the help of experts, but when I opened up to them about my sexuality, they began to judge. It was a very unpleasant experience,” he said.
Initially, Owais went to Bund and his team for psychological aid. Owais talked to Bund online for days without fear. Owais said he was in the eighth grade when he realized he was different from his friends, but he wasn’t quite sure about the reason. “At that age, I had no understanding of sexuality, and there was no one I could talk to about it. I thought I was transgender. But then, when I got access to the internet in 12th class, I began to learn about myself,” Owais said.
Owais also struggled with religion in those years. “I felt conflicted about praying. I felt impure somehow,” he continued. But as years went on and his knowledge of religion grew, he began to feel more comfortable with the idea of being a practicing Muslim gay man. “I read stories of other Muslim gay people on the internet. I also got to talk to other queer people, and that really helped,” he added.
For the most part, Owais says, he is still not out about being gay. It is only when he is talking to a few friends made on matchmaking apps before last August that he can be himself. “I have had discussions with my friends about gender and sexuality. But to this day, I haven’t felt confident to open up to them. Some of them even think it is some psychological disorder. Other friends are relatively more liberal. But me coming out to them would still shock them,” he told me.
The communication gag imposed last year by the Indian government, which continues to date to some extent with a ban on high-speed internet, not only cut off Owais from his friends. It also meant he no longer could access the mental health experts he needed when he felt depressed. “For almost six months, I was trapped inside my house, and at the same time, I had no one to really express my feelings and emotions. I tried to read books and do chores to keep myself busy. But it wasn’t at all easy. I had many sleepless nights. I tried to assure myself it will be over soon,” Owais said.
Owais hopes Bund’s relentless work will someday change even his friends’ mindset.
In the last few weeks, Bund has finally recovered from COVID-19, and although his days are divided between providing online classes to his students and holding therapy sessions, he hopes to resume distributing ration packs to those who need them.
Bund says that, for the real emancipation of sexual and gender minorities, the stress has to be on creating awareness and educating people. “People here don’t understand the difference between gender and sexuality. Even for my own parents, it was difficult, even though we have had these discussions for years now.” Among his future plans is to hold a congregation of Islamic scholars in Kashmir to speak on LGBTQ rights issues.


foreignpolicy--2020-08-28--Turkey’s Plans to Become a Regional Energy Giant Just Got a Boost

Turkey ’ s Plans to Become a Regional Energy Giant Just Got a Boost Turkey has never made a secret of its ambitions to become a regional energy power .
Its location between oil and gas producers in the Middle East and the southern Caucasus and consumer countries in the European Union has long been its trump card .
But the recent discovery of a large natural gas field off Turkey ’ s Black Sea shore could prove the real game-changer .
Tuna-1 , as the well is known ( a reference to the Turkish word for the Danube River @ @ @ @ @ @ @ some 320 billion cubic meters of gas .
For perspective , that is around two and a half times the size of the Aphrodite field south of Cyprus , which is the subject of ownership disputes that are one of several triggers for current tensions between Ankara and a Greek-led coalition of Mediterranean countries .
Turkish President Recep Tayyip Erdogan has vowed to make Black Sea gas available for use in 2023 , the 100th anniversary of the Turkish Republic .
If he is right , Turkey will be able to meet close @ @ @ @ @ @ @ for natural gas ( around 45 billion cubic meters in 2019 ) from domestic sources .
That ’ s not a small achievement for a country traditionally dependent on oil and gas imports .
This gas find also dovetails well with the government ’ s campaign to boost domestic manufacturing to upgrade the economy and add to the country ’ s prestige , under the heading “ yerli ve milli ” ( “ local and national ” ) .
Still , industry experts are skeptical .
They point out that this gas field @ @ @ @ @ @ @ s demand for seven years .
And extracting the hydrocarbons is challenging too .
TPAO , the national oil and gas company , will need to partner with a Western firm to accomplish the task .
Last but not least , and especially contrary to upbeat statements by Erdogan and his son-in-law Finance Minister Berat Albayrak , the discovery is nowhere near the silver bullet to kill the problems facing the faltering Turkish economy , which include runaway inflation , a currency that has lost nearly a fifth of its value since the @ @ @ @ @ @ @ growth coupled with large current account deficit , not to mention the hollowing out of key institutions such as the Central Bank .
What is really at stake in all this are Turkey ’ s trade relations , first and foremost with Russia .
Since the 1990s , Gazprom has been the dominant supplier on the Turkish market , providing half of the gas for local consumption .
In fact , since 2005 , when the Blue Stream pipeline between Russia and Turkey came online , Turkey has turned into Russia ’ s @ @ @ @ @ @ @ For the most part , Moscow has always had the upper hand in commercial negotiations with Ankara , whether through setting a pricing formula favorable to Russia or the so-called take-or-pay clauses in long-term contracts , which obliged Turkey to purchase certain volume of gas annually .
Turkey was not even able to capitalize on the Russia-EU spat following the annexation of Crimea and the subsequent cancellation of the South Stream pipeline , which would have taken Russian gas to Europe through other countries , either .
Turkey signed up to TurkStream , @ @ @ @ @ @ @ , but failed to extract significant concessions from the Russian side .
In October 2016 , Erdogan by and large accepted Russian President Vladimir Putin ’ s terms as a price for the two countries ’ reconciliation following clashes between them in Syria .
But now the tide appears to be turning in Turkey ’ s favor .
Since 2018 , BOTAS , a Turkish state-owned utility , as well as several private importers have been buying larger amounts of liquified natural gas from the likes of Algeria , Nigeria , and Qatar @ @ @ @ @ @ @ States , which offer lower prices than Gazprom .
Pipeline gas from Azerbaijan is also picking up the slack .
In turn , Gazprom has seen its share on the Turkish market contracting from 52 percent in 2017 , to 47 percent in 2018 , to just 33 percent in 2019 .
And at the same time , demand in Turkey has been shrinking because of the sluggish economy .
As a result , the Russian pipelines running across the Black Sea—TurkStream and Blue Stream—are operating much below capacity .
The notion that @ @ @ @ @ @ @ to coerce neighbors , popular in the 2000s , is no longer borne out by market realities .
Access to gas deposits in the Black Sea will further enhance Turkey ’ s negotiating position .
The long-term contracts with Gazprom are up for renewal at the end of 2021 ( for TurkStream ) and in 2025 ( for Blue Stream ) .
Deals with Azerbaijan , Nigeria , and Qatar are expiring , too .
Turkish negotiators will be pressing hard on the take-or-pay issue in order to gain flexibility .
Turkey ’ @ @ @ @ @ @ @ Gazprom in fines for Turkish importers failing to meet their annual quotas will be on the table as well .
Having alternative suppliers and being able to tap into their own hydrocarbons , even if they ’ re still trapped at the bottom of the Black Sea , will be Ankara ’ s top bargaining chip .
Turkey ’ s neighbors will be closely watching how it fares in the coming negotiations .
On Aug. 24 , Bulgaria and Greece finalized a deal to set up a joint liquefied natural gas terminal outside @ @ @ @ @ @ @ close to the Greek-Turkish border .
They , too , will try to use their new alternative supplies to squeeze concessions from Russia .
Tuna-1 has regional repercussions as well .
Black Sea nations have been drilling for oil and gas for years , along with energy firms such as Exxon Mobil ( from the United States ) , Total ( France ) , OMV ( Austria ) , and Repsol ( Spain ) .
Romania has long hoped to find gas in its exclusive economic zone , including in the Neptun Deep @ @ @ @ @ @ @ north of the Turkish find .
Bulgaria has been prospecting in the Khan Asparuh offshore field , where Total discovered oil in 2016 .
Many of those projects face technical and logistical challenges .
Low hydrocarbon prices are a disincentive , too .
But if Turkey starts production and investors prove able to recoup their money , the game may change .
The good news is that the Black Sea is more amenable to regional cooperation than the Eastern Mediterranean , where a tangle of competing interests have nearly led to bloodshed .
@ @ @ @ @ @ @ conquest of Crimea being exhibit No .
1—boundaries in the Black Sea are settled , and exclusive economic zones delimited .
In the Mediterranean , meanwhile , Turkey acts as a spoiler , putting a wrench in the works of competitors such as Greece , Egypt , and Israel in order to secure what it considers its fair share of the energy resources .
In the Black Sea , however , it could play a productive role—providing a positive example for neighbors striving to diversify gas supplies .

Turkey has never made a secret of its ambitions to become a regional energy power. Its location between oil and gas producers in the Middle East and the southern Caucasus and consumer countries in the European Union has long been its trump card. But the recent discovery of a large natural gas field off Turkey’s Black Sea shore could prove the real game-changer.
Turkey has never made a secret of its ambitions to become a regional energy power. Its location between oil and gas producers in the Middle East and the southern Caucasus and consumer countries in the European Union has long been its trump card. But the recent discovery of a large natural gas field off Turkey’s Black Sea shore could prove the real game-changer.
Tuna-1, as the well is known (a reference to the Turkish word for the Danube River, not the fish), holds some 320 billion cubic meters of gas. For perspective, that is around two and a half times the size of the Aphrodite field south of Cyprus, which is the subject of ownership disputes that are one of several triggers for current tensions between Ankara and a Greek-led coalition of Mediterranean countries.
Turkish President Recep Tayyip Erdogan has vowed to make Black Sea gas available for use in 2023, the 100th anniversary of the Turkish Republic. If he is right, Turkey will be able to meet close to 7 percent of its annual demand for natural gas (around 45 billion cubic meters in 2019) from domestic sources. That’s not a small achievement for a country traditionally dependent on oil and gas imports. This gas find also dovetails well with the government’s campaign to boost domestic manufacturing to upgrade the economy and add to the country’s prestige, under the heading “yerli ve milli” (“local and national”).
Still, industry experts are skeptical. They point out that this gas field by itself would only meet Turkey’s demand for seven years. And extracting the hydrocarbons is challenging too. TPAO, the national oil and gas company, will need to partner with a Western firm to accomplish the task. Last but not least, and especially contrary to upbeat statements by Erdogan and his son-in-law Finance Minister Berat Albayrak, the discovery is nowhere near the silver bullet to kill the problems facing the faltering Turkish economy, which include runaway inflation, a currency that has lost nearly a fifth of its value since the start of the year, and sluggish growth coupled with large current account deficit, not to mention the hollowing out of key institutions such as the Central Bank.
What is really at stake in all this are Turkey’s trade relations, first and foremost with Russia. Since the 1990s, Gazprom has been the dominant supplier on the Turkish market, providing half of the gas for local consumption. In fact, since 2005, when the Blue Stream pipeline between Russia and Turkey came online, Turkey has turned into Russia’s second-most-significant natural gas customer after Germany.
For the most part, Moscow has always had the upper hand in commercial negotiations with Ankara, whether through setting a pricing formula favorable to Russia or the so-called take-or-pay clauses in long-term contracts, which obliged Turkey to purchase certain volume of gas annually. Turkey was not even able to capitalize on the Russia-EU spat following the annexation of Crimea and the subsequent cancellation of the South Stream pipeline, which would have taken Russian gas to Europe through other countries, either. Turkey signed up to TurkStream, the alternative project across the Black Sea, but failed to extract significant concessions from the Russian side. In October 2016, Erdogan by and large accepted Russian President Vladimir Putin’s terms as a price for the two countries’ reconciliation following clashes between them in Syria.
But now the tide appears to be turning in Turkey’s favor. Since 2018, BOTAS, a Turkish state-owned utility, as well as several private importers have been buying larger amounts of liquified natural gas from the likes of Algeria, Nigeria, and Qatar, as well as from the United States, which offer lower prices than Gazprom. Pipeline gas from Azerbaijan is also picking up the slack.
In turn, Gazprom has seen its share on the Turkish market contracting from 52 percent in 2017, to 47 percent in 2018, to just 33 percent in 2019. And at the same time, demand in Turkey has been shrinking because of the sluggish economy. As a result, the Russian pipelines running across the Black Sea—TurkStream and Blue Stream—are operating much below capacity. The notion that Russia wields an “energy weapon” to coerce neighbors, popular in the 2000s, is no longer borne out by market realities.
Access to gas deposits in the Black Sea will further enhance Turkey’s negotiating position. The long-term contracts with Gazprom are up for renewal at the end of 2021 (for TurkStream) and in 2025 (for Blue Stream). Deals with Azerbaijan, Nigeria, and Qatar are expiring, too. Turkish negotiators will be pressing hard on the take-or-pay issue in order to gain flexibility. Turkey’s debt of $2 billion to Gazprom in fines for Turkish importers failing to meet their annual quotas will be on the table as well. Having alternative suppliers and being able to tap into their own hydrocarbons, even if they’re still trapped at the bottom of the Black Sea, will be Ankara’s top bargaining chip.
Turkey’s neighbors will be closely watching how it fares in the coming negotiations. On Aug. 24, Bulgaria and Greece finalized a deal to set up a joint liquefied natural gas terminal outside the Greek port city of Alexandroupolis, close to the Greek-Turkish border. They, too, will try to use their new alternative supplies to squeeze concessions from Russia.
Tuna-1 has regional repercussions as well. Black Sea nations have been drilling for oil and gas for years, along with energy firms such as Exxon Mobil (from the United States), Total (France), OMV (Austria), and Repsol (Spain). Romania has long hoped to find gas in its exclusive economic zone, including in the Neptun Deep field, some 60 miles to the north of the Turkish find. Bulgaria has been prospecting in the Khan Asparuh offshore field, where Total discovered oil in 2016. Many of those projects face technical and logistical challenges. Low hydrocarbon prices are a disincentive, too. But if Turkey starts production and investors prove able to recoup their money, the game may change.
The good news is that the Black Sea is more amenable to regional cooperation than the Eastern Mediterranean, where a tangle of competing interests have nearly led to bloodshed. Though jurisdiction disputes do exist—Russia’s conquest of Crimea being exhibit No. 1—boundaries in the Black Sea are settled, and exclusive economic zones delimited. In the Mediterranean, meanwhile, Turkey acts as a spoiler, putting a wrench in the works of competitors such as Greece, Egypt, and Israel in order to secure what it considers its fair share of the energy resources. In the Black Sea, however, it could play a productive role—providing a positive example for neighbors striving to diversify gas supplies.