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THE WRAP-UP: 13 July 2021

Joshua and Hugh’s fortnightly chat about news from around the world is here! Join us as we discuss:

  • Why Lebanon is facing a 'social explosion'.

  • The dramatic arrest of former South African President Jacob Zuma.

  • A plan to turn Ukraine into a mercenary hub.

  • Controversy as France tries to fight climate change via its constitution.

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Topic #1 - Lebanon’s Social Explosion.

Audio “Lebanon days away from “social explosion” says PM*

Hugh: Joshua those were the words of Lebanon’s caretaker Prime Minister Hassan Diab who just a week ago spoke before a gathering of international diplomats.Now as I’m sure you could tell, Diab is sounding the alarm bells in the international community. And that’s because he’s seeking global support to bail Lebanon out of what the World Bank has called one of the worst economic crises in modern history.

Josh: Yeah, a “social explosion”. I would say that’s probably the strongest warning a Prime Minister could issue. Why is the situation so tense?

Hugh: Well, Lebanon is facing an economic crisis of nearly unprecedented proportions. In recent months that’s seen tens of thousands of skilled workers leave the country as food and fuel prices skyrocket. Just in the last few days, pharmacies have gone on strike due to critical medicine shortages, while major power stations are now experiencing outages due to a severe fuel deficit.

The financial strain is actually so serious that there has even been talk of the Lebanese Army collapsing simply out of a sheer lack of resourcing. And of course, tragically, these issues are having a terrible impact on the Lebanese people themselves.

Josh: How tragic. What is at the root of this crisis?

Hugh: Yeah, answering that question is going to require a quick dive into the Lebanese economy. You see, Lebanon has always been a net importer, which means that the country buys more from the world than it sells back. And this has meant that every year, more money leaves Lebanon than gets put back in.

That imbalance is the first major issue with the Lebanese economy. However, the country’s political stability had historically allowed for a strong Lebanese banking sector. So up until recently, Lebanese banks were able to at least keep the balance by encouraging foreign investment, thereby ensuring that money was still being brought back into the economy.

But, with the arrival of over a million refugees following the Syrian Civil War, huge financial strain was placed on the Lebanese Government, and this revealed the second problem with the country’s economy. Due to Lebanon’s unique system of government, which we’ve explored in a previous Wrap-Up episode, different religious groups control different parts of the state. And so government spending in Lebanon is often very corrupt, inefficient and excessive.

This meant that the arrival of refugees pushed the government’s finances over the edge, generating a crisis of confidence in the Lebanese currency. And then, as things were spiralling, Covid-19 hit, shutting down the Lebanese economy at a critical junction.

Josh: And what happened from there?

Hugh: Well at this point the Lebanese banking sector began to face some massive difficulties. Both the government and the national economy were now underperforming, reducing the attractiveness of Lebanese currency. And this meant that it became more expensive to import vital goods into the country, while at the same time the Lebanese economy became less attractive to foreign investors.

So all of a sudden, Lebanon had a negative feedback loop, where huge amounts of money were leaving the country as it simultaneously became more expensive to buy basic goods from abroad. This is when the famous Lebanese protests really kicked into gear, however, the country still hadn’t seen the worst of the situation, because as we all remember in August of 2020, this happened…

The Beirut explosion knocked the country’s most important port out of action. You see Josh, prior to the blast, Beirut handled 70% of the nation’s imports, and so with the explosion, basic goods became even more expensive while people’s wages remained stagnant.

But with the controversy of the explosion creating a huge public backlash, Prime Minister Diab resigned, although he’s still in office because almost a year later, Lebanon’s multi-religious, corrupt political elite is yet to form a new government. And this is the heart of the problem.

Without a government, Lebanon can’t reform its economy or access an IMF bailout. So in a sense, it’s sliding off a cliff and it can’t even reach out for help.

Josh: So essentially we’re waiting on Lebanon’s feuding political factions to come to an agreement while the country collapses all around them?

Hugh: Exactly right. And in the meantime, those within the Lebanese population with qualifications or connections are leaving the country for safety. And as we’ve already heard, basic public services such as electricity, health and garbage collection are falling apart. That’s why the caretaker Prime Minister is warning of a social explosion.

It’s likely that the only path forward is a three-way solution created by the political elite, the Lebanese population and international institutions in which foreign creditors and corrupt officials are both given the certainty they need to unite and come up with an exit strategy ASAP. But until then, Lebanon will remain in dire straits.

Topic #2 - South Africa’s Ex-President Arrested.

Josh: What you can hear are the sounds of people gathered outside the home of former South African President Jacob Zuma last Wednesday. They were cheering as Zuma’s motorcade of 9 cars left his driveway and quickly sped off down the main road. This was no ordinary trip for Zuma.  He was being driven 170km to South Africa’s state-of-the-art Estcourt Prison -- to serve a 15 month jail sentence.

That sentence was imposed by South Africa’s highest court - the Constitutional Court. It ordered that Zuma should be imprisoned for failing to answer questions put to him by a corruption inquiry. And this was a really significant moment for South Africa.  Television stations aired live footage of his motorcade entering the jail.

And it certainly made me wonder: how does an anti-apartheid freedom fighter, who served two terms as President -- end up in prison?

Hugh: Let’s rewind a bit.  Can you tell us a little bit about Zuma and how he became president in the first place?

Sure -- Zuma was a central figure in campaigning for racial equality and opposing the South African apartheid regime during the 1960’s and 70’s. That saw him jailed for 10 years on Robben Island, alongside Nelson Mandela, and exiled from the country on his release.

When the apartheid regime finally collapsed in the 1990’s, Zuma returned to South Africa. He rapidly rising through the country’s political ranks, eventually becoming Deputy President -- the second highest position in the country. And that’s where things started to go off track: In 2001, while he was still Deputy President, Zuma was charged with corruption in relation to a $2 billion dollar arms deal.

The case was eventually dropped, but that didn’t stop the allegations. He was charged with corruption again in 2005, and then with rape. While he wasn’t convicted of either charge, he was fired from his role as Deputy President. You’d think that would kill his political career -- but it didn’t.

Instead, Zuma decided to run for President.  He ran a really popular campaign -- promising to reduce poverty and inequality. He was famously charismatic -- his campaign theme song was called ‘Bring me my machine gun’ -- and he would regularly break into song at events.

In the end, he won the 2009 election and went on to serve two terms as President.

Hugh: And how did his presidency unfold?

Josh: Well, despite his promise to improve living conditions for South Africans, under his watch, the economy went stagnant and unemployment increased. Just like when he was Deputy President, he was accused of extensive corruption.

It’s alleged Zuma stole tens of billions of dollars of government funds and that he allowed a family of Indian businessmen to control the government. In fact, he gave them so much influence that these businessmen reportedly controlled three government ministries, South Africa's tax department, the communications agency, the state broadcaster, the national airline and the country’s energy agency, which provides electricity to 95% of South Africans.

So we’re not talking about ordinary, run-of-the-mill corruption here. In the end, the allegations became too much for his own party, and they forced Zuma to step down in 2018.

Hugh: And the corruption inquiry that Zuma refused to attend -- I gather it was investigating those allegations?

Josh:  Yep, it was.  The inquiry has been running for 3 years and has interviewed nearly 300 witnesses. Earlier this year, it summoned Zuma to answer questions about Presidency, but he refused. The Commission referred the matter to the Constitutional Court, which ordered Zuma to answer the questions. But Zuma again refused and verbally attacked the judges:

All of this was pretty serious: a former president was arguing the nation’s highest court had no power over him. It’s fair to say this didn’t go down well with the Constitutional Court -- here’s the Acting Chief Justice:

It ruled Zuma was guilty of contempt of court and sentenced him to 15 months in jail.

Hugh: And what was the reaction among South Africans?

Josh: Well, Zuma is very polarising in South Africa, so some people were happy and others were very angry. Hundreds of his supporters -- armed with guns and spears -- gathered outside his home, forming a human shield to prevent police from arresting him.

After some tense negotiations, Zuma voluntarily surrendered, but only 40 minutes before the deadline imposed by the Court. He’s not going quietly though. He’s asked the Constitutional Court to reconsider the sentence -- and their ruling is expected Tuesday morning, Australian time. So keep an eye on the news today. But, given his past few appeals have failed, I think it’s unlikely he’ll be released.

Hugh: So with Zuma in jail, presumably for a while, what does this mean for South Africa more broadly?

Josh: Well, the fact a former President has been jailed is really symbolic. It’s shown that the legal system is capable of holding powerful politicians to account -- which is something it’s historically struggled to do. The case is also really important for South Africa’s current President: Cyril Ramaposa.

He was elected on a strong anti-corruption stance and faces a leadership contest next year that will determine whether he remains President -- so Ramaposa wants to look like he’s acting on his promises. As for South Africans more broadly, all eyes are on the ongoing Zuma inquiry.  When it hands down its findings, it’ll be a major moment in South Africa’s history.

Topic #3 - Plan to Create a Mercenary Paradise in Ukraine.

Hugh: Since 2014, Russia and Ukraine have been locked in an armed conflict along their shared border. And while foreign powers have largely avoided direct intervention, it’s recently emerged that a major non-state actor has attempted to get involved. And that non-state actor is none other than notorious American mercenary Erik Prince, who is best known for founding private military corporations Blackwater and Frontier Services Group.

Josh: This is already sounding very shady. What was an American mercenary doing in Ukraine?

Well Josh, it’s emerged that Prince visited Ukraine in 2020 with a series of ambitious proposals for the national government in Kyiv. His general idea was to turn the country into a global headquarters for international private military operators. And to achieve this, Prince wanted to rely on Ukraine’s disproportionate military capacity, which has come from years of fighting with Russia, as well as military expertise dating back to Soviet arms manufacturing in the country.

Josh: And what was Prince proposing exactly?

Hugh: Prince had three main proposals in mind. The first was to rely on veterans from the war with Russia to form a new private military corporation. Now, it’s actually quite common for veterans from conflicts in post-Soviet states to fight as mercenaries, but it seems Prince’s proposal would take that phenomenon to the next level.

Another proposal was to build a major munitions factory in the country, turning Ukraine into an even larger supplier of military material. And the third proposal was to consolidate Ukraine’s aviation and aerospace industries in order to create a new firm that could compete with major international players such as Boeing and Airbus. So as you can see, these are some major ideas which could have set a significant precedent when it comes to non-state actors and access to military power.

Josh: So you’re suggesting that he was unsuccessful in getting his proposals over the line?

Hugh: That’s right. It’s worth noting that towards the end of 2020, Prince was making some significant ground in Kyiv. He had a number of influential Ukrainian figures assisting him as he attempted to lobby the Government, and there were several officials within the President’s inner circle ready to lend a sympathetic ear.

But as I’m sure you can appreciate, these kinds of deals require US approval, or at least American apathy. And Prince did have huge ties to the Trump administration, with his sister Betty Devos serving as Trump’s Secretary of Education. What’s more, part of his Ukraine plan would have seen a vital military aircraft supplier essentially bought out before it could come under the ownership of the Chinese Government - so there were definitely shared interests at play. However, with the arrival of the Biden administration, it seems Prince’s dealings in Ukraine have more or less come to an end, with the proposals being trashed.

Josh: Wow. Is this the first time Prince has proposed something like this?

Hugh: Not at all. In fact, Prince has quite the reputation. When he ran a group called Blackwater, his troops provided security for US and Coalition forces in places such as Iraq. But in 2007, several of these forces were involved in the indiscriminate killing of Iraqi civilians, drawing unprecedented attention to the role of mercenaries in the US War on Terror.

That said, Prince has also been involved in places such as Somalia, Libya, South Sudan and the UAE. In the case of the latter, he essentially built a custom army to serve the Crown Prince of Abu Dhabi. But beyond raw military power, he’s also tried his hand at oil and minerals trading in unstable regions across Africa.

More recently, Prince was even alleged to have recruited former spies to participate in an organisation called Project Veritas, which is an initiative led by American conservatives that seeks to covertly monitor the Democrats and media organisations in the hopes of finding dirt to release to the public.

Josh: It certainly seems like Prince is quite prolific and that his Ukrainian proposal is just one of many pet projects. What do you think this all means at a global level?

Hugh: Look, while his Ukraine proposal was knocked back, the fact that it was being seriously considered in both Kyiv and Washington is proof of the influence of mercenaries and other private operators in global politics.

And I know there’s a temptation to say that this is an entirely new phenomenon, but historically speaking, mercenaries and private citizens have had a major impact on global history. European knights often served as mercenaries, as did many Japanese samurai, just to name two examples. But private citizens have also shaped world events. In the early 20th century, American fruit companies literally toppled governments in Central America.

And this just means that instead of flatly denying or despairing at the return of private operators, the international community needs to find ways to regulate and monitor such activities so that we can avoid situations where individuals such as Prince have unrestrained access to national governments.

Topic #4 - France’s climate decision

Audio “Jean Castex réagit à la fin du processus de révision constitutionnelle sur le climat”.

Josh: That was the French Prime Minister, Jean Castex.  And as you could probably tell, he was pretty angry. He was announcing that the French Government was being forced to backtrack on a big climate change commitment.

You see, last year, in order to show how serious he was about reducing emissions, President Emmanuel Macron announced a grand policy. He would amend the constitution to state that the French government would: “guarantee environmental protection and combat climate change.”It’s a pretty big thing to change the constitution -- and it’s fair to say that this was the centrepiece of Macron’s climate reforms.

But, it’s no longer going ahead. You see, in order to change the constitution, both houses of France’s parliament have to agree on the wording. While Macron was able to get the amendment through the Lower House, which his party controls, it was blocked in the Upper House by right-wing parties. They demanded Macron water down the amendment.  He refused and a stalemate was reached.

And that’s why a very angry French PM announced a few days ago that the plan to change the Constitution was officially dead.

Hugh: But I imagine changing the constitution was purely symbolic. It wasn’t going to have any real effect on emissions, was it?

Josh: Yep, you’re right -- it was a largely symbolic move.  But it was an important one.Climate change has been emerging as a key concern among French voters. And Macron has been trying to portray himself as a leader on the issue - both within France, and internationally.

You may remember he visited the US Congress while Trump was president and gave a speech about climate change. In keeping with this climate-conscious image that he’s projecting, Macron has put up some concrete policies to reduce emissions. In May, his party passed an environmental bill through the parliament’s lower house that will:

Require state-funded canteens to serve less meat and more vegetarian meals; Ban short-distance flights if there’s alternative forms of transport that take less than 2.5 hours; Outlaw outdoor gas heaters in cafes; Block the expansion of France’s airports; Phase-out advertising for fossil fuels; and Place limits on plastic packaging.

Hugh: Wow, from an Australian point of view, those reforms seem pretty radical!  How have the French responded?

Josh: For the most part, they argue the reforms don’t go far enough!  Environmentalists and opposition politicians say Macron needs to introduce tougher rules. And it looks like voters agree too. When the legislation was announced, tens of thousands of people gathered around France to protest: And they may have a point.  

The original laws were a lot stronger, but lobbying from business groups has resulted in exemptions and loopholes. France’s High Council on Climate, which advises the government on climate change, has also criticised the measures.  It says that, even if all the changes are made, France will still fall short of its Paris Agreement targets -- which is ironic given the treaty was signed in France’s capital!

Hugh: It sounds like the government is facing mounting pressure to combat climate change.

Josh: Definitely.  Pressure is coming from all sides. For instance, the country’s agriculture sector is demanding the government do more to reduce emissions. You see, France experienced extreme frosts earlier this year that have been directly linked to climate change. The frosts destroyed vineyards and crops across France, resulting in roughly 2 billion euros of damage.

French officials have described it as "probably the greatest agricultural catastrophe of the 21st century." Then there’s pressure from environmental groups, which have organised major protests over the last few months. Finally, there’s pressure from the courts.

In February, a court in Paris ruled that the Government had caused ‘ecological damage’ by failing to reduce greenhouse gas emissions. Then, two weeks ago, another French court ordered Macron’s government to take “all necessary measures” to reduce emissions -- and warned that it may start fining the government for its failure to act. All of this has started to raise questions within France about how committed Macron really is to acting on climate change.

That’s not something that Macron wants. He’s up for re-election next year and both the left-leaning Green Party and far-right National Rally party (led by Marine Le Pen) are emerging as key threats. Interestingly, both of those parties have committed to strong action on climate change -- and they’re arguing Macron is too weak on the issue.

If he can’t convince voters otherwise, then the issue could help bring down Macron’s Presidency.

Hugh: And that marks the end of this episode of The Wrap-Up!  Stay tuned for next week’s In-Depth episode -- Emma will be chatting with Harvard University professor Stephen Walt and the Young Diplomat Society’s very own Anet McClintock about security and climate conflict.

Josh: In the meantime, follow us, Global Questions, on Instagram or check us out on the Young Diplomats Society’s website. You can leave us feedback or suggest an episode topic. Links are in the episode description.

Hugh: We will see you in a fortnight! Bye.

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