North Koreans paying bribes to survive: U.N. report

North Koreans are forced to pay bribes to officials to survive in their isolated country where corruption is "endemic" and repression rife, the U.N. human rights office said on Tuesday in a report that Pyongyang dismissed as politically motivated.

By Stephanie Nebehay

GENEVA (Reuters) – North Koreans are forced to pay bribes to officials to survive in their isolated country where corruption is “endemic” and repression rife, the U.N. human rights office said on Tuesday in a report that Pyongyang dismissed as politically motivated.

The report said officials extorted money from a population struggling to make ends meet, threatening them with detention and prosecution – particularly those working in the informal economy.

The Democratic People’s Republic of Korea (DPRK), the formal name for North Korea, rejected the report, saying it was “politically motivated for sinister purposes”.

“Such reports are nothing more than fabrication … as they are always based on the so-called testimonies of ‘defectors’ who provide fabricated information to earn their living or are compelled to do so under duress or enticement,” its Geneva mission said in a statement to Reuters.

North Korea blames the dire humanitarian situation on U.N. sanctions imposed for its nuclear and ballistic missile programs since 2006. But the report said that the military receives priority funding amid “economic mismanagement”.

“I am concerned that the constant focus on the nuclear issue continues to divert attention from the terrible state of human rights for many millions of North Koreans,” Michelle Bachelet, U.N. High Commissioner for Human Rights, said in a statement.

“The rights to food, health, shelter, work, freedom of movement and liberty are universal and inalienable, but in North Korea they depend primarily on the ability of individuals to bribe State officials,” she said.

Four in 10 North Koreans, or 10.1 million people, are chronically short of food and further cuts to already minimal rations are expected after the worst harvest in a decade, a U.N. assessment said earlier this month.

“The threat of arrest, detention and prosecution provide State officials with a powerful means of extorting money from a population struggling to survive,” the U.N. rights office report said.

CASH OR CIGARETTES

Bribery is “an everyday feature of people’s struggle to make ends meet”, said the report, entitled “The price is rights”. It denounced what it called a “vicious cycle of deprivation, corruption and repression”.

It is based on 214 interviews with North Korean “escapees”, mainly from the northeastern provinces of Ryanggang and North Hamgyong, bordering China. They were the first to be cut from the public distribution system that collapsed in 1994, leading to a famine estimated to have killed up to 1 million, it said.

“As my father still had to work at a state firm that could no longer afford giving rations, we survived by selling taffy and liquor my mom made,” Ju Chan-yang, a 29-year-old defector, told a news conference hosted by the U.N. rights office in Seoul on Tuesday.

Ju, who defected to the South in 2011, said she also made a living by selling banned South Korean and U.S. products in the underground economy. Sometimes she had to bribe authorities.

“If you get caught and don’t have bribes to pay, you could get executed, just like my relatives,” she said.

Many North Koreans pay bribes of cash or cigarettes not to have to report to state-assigned jobs where they receive no salary, thus allowing them to earn income in rudimentary markets, the report said.

Others bribe border guards to cross into China, where women are vulnerable to trafficking into forced marriages or the sex trade, it added.

“North Korea is a society where all of its members are involved in corruption because they’re forced to do illegal acts only to survive,” said Lee Han-byeol, who came to the South in 2001 and now runs a group that helps defectors.

Bachelet urged North Korean authorities to stop prosecuting people for engaging in legitimate market activity and to allow them freedom of movement within the country and abroad. China should not forcibly repatriate North Koreans, she added.

The United States called on North Korea this month to “dismantle all political prison camps” and release all political prisoners, who it said numbered between 80,000 and 120,000. North Korea denies the existence of such camps.

(Reporting by Stephanie Nebehay; Additional reporting by Hyonhee Shin in SEOUL; Editing by Hugh Lawson, Andrew Heavens and Darren Schuettler)

Brazil’s grief turns to anger as death toll from Vale disaster hits 60

Members of a rescue team search for victims after a tailings dam owned by Brazilian mining company Vale SA collapsed, in Brumadinho, Brazil January 28, 2019. REUTERS/Adriano Machado

By Gram Slattery

BRUMADINHO, Brazil (Reuters) – Grief over the hundreds of Brazilians feared killed in last week’s mining disaster has quickly hardened into anger as victims’ families and politicians say iron ore miner Vale SA and regulators have learned nothing from the recent past.

By Monday, firefighters in the state of Minas Gerais had confirmed 60 people dead in Friday’s disaster, in which a tailings dam broke sending a torrent of sludge into the miner’s offices and the town of Brumadinho. Nearly 300 other people are unaccounted for, and officials said it was unlikely that any would be found alive.

A member of a rescue team is sprayed with water to remove mud, upon returning from a rescue mission, after a tailings dam owned by Brazilian mining company Vale SA collapsed, in Brumadinho, Brazil January 28, 2019. REUTERS/Washington Alves

A member of a rescue team is sprayed with water to remove mud, upon returning from a rescue mission, after a tailings dam owned by Brazilian mining company Vale SA collapsed, in Brumadinho, Brazil January 28, 2019. REUTERS/Washington Alves

Shares of Vale, the world’s largest iron ore and nickel producer, plummeted 21.5 percent in Monday trading on the Sao Paulo stock exchange, erasing $16 billion

in market cap.

Brazil’s top prosecutor, Raquel Dodge, said the company should be held strongly responsible and criminally prosecuted. Executives could also be personally held responsible, she said.

Brazil’s Vice President Hamilton Mourao, who is acting president since Monday morning when Jair Bolsonaro underwent surgery, also said the government needs to punish those responsible for the dam disaster.

In a tweet, Brazilian Senator Renan Calheiros asked Justice Minister Sergio Moro “how many people should die before federal police charges Vale management before key evidence disappears.” Moro is a previous judge in charge of Brazil’s largest-ever corruption probe.

Israeli military personnel arrive to help search for victims of a collapsed tailings dam owned by Brazilian mining company Vale SA, at Confins airport in Belo Horizonte, Brazil January 27, 2019. REUTERS/Washington Alves

Israeli military personnel arrive to help search for victims of a collapsed tailings dam owned by Brazilian mining company Vale SA, at Confins airport in Belo Horizonte, Brazil January 27, 2019. REUTERS/Washington Alves

One of Vale’s lawyers, Sergio Bermudes, told newspaper Folha de S. Paulo that the executives should not leave the company and that Calheiros was trying to profit politically from the tragedy.

Vale Chief Executive Fabio Schvartsman said during a visit to Brumadinho on Sunday that facilities there were built to code and equipment had shown the dam was stable two weeks earlier.

The disaster at the Corrego do Feijao mine occurred less than four years after a dam collapsed at a nearby mine run by Samarco Mineracao SA, a joint venture by Vale and BHP Billiton, killing 19 and filling a major river with toxic sludge.

While the 2015 Samarco disaster dumped about five times more mining waste, Friday’s dam break was far deadlier, as the wall of mud hit Vale’s local offices, including a crowded cafeteria, and tore through a populated area downhill.

“The cafeteria was in a risky area,” Renato Simao de Oliveiras, 32, said while searching for his twin brother, a Vale employee, at an emergency response station.

“Just to save money, even if it meant losing the little guy… These businessmen, they only think about themselves.”

As search efforts continued on Monday, firefighters laid down wood planks to cross a sea of sludge that is hundreds of meters wide in places, to reach a bus in search of bodies inside. Villagers discovered the bus as they tried to rescue a nearby cow stuck in the mud.

A rescue helicopter flies after a tailings dam owned by Brazilian mining company Vale SA collapsed, in Brumadinho, Brazil January 27, 2019. REUTERS/Adriano Machado

A rescue helicopter flies after a tailings dam owned by Brazilian mining company Vale SA collapsed, in Brumadinho, Brazil January 27, 2019. REUTERS/Adriano Machado

Longtime resident Ademir Rogerio cried as he surveyed the mud where Vale’s facilities once stood on the edge of town.

“The world is over for us,” he said. “Vale is the top mining company in the world. If this could happen here, imagine what would happen if it were a smaller miner.”

Nestor José de Mury said he lost his nephew and coworkers in the mud.

“I’ve never seen anything like it, it killed everyone,” he said.

SAFETY DEBATE

The board of Vale, which has raised its dividends over the last year, suspended all shareholder payouts and executive bonuses late on Sunday, as the disaster put its corporate strategy under scrutiny.

“I’m not a mining technician. I followed the technicians’ advice and you see what happened. It didn’t work,” Vale CEO Schvartsman said in a TV interview. “We are 100 percent within all the standards, and that didn’t do it.”

Many wondered if the state of Minas Gerais, named for the mining industry that has shaped its landscape for centuries, should have higher standards.

“There are safe ways of mining,” said Joao Vitor Xavier, head of the mining and energy commission in the state assembly. “It’s just that it diminishes profit margins, so they prefer to do things the cheaper way – and put lives at risk.”

Reaction to the disaster could threaten the plans of Brazil’s newly inaugurated president to relax restrictions on the mining industry, including proposals to open up indigenous reservations and large swaths of the Amazon jungle for mining.

Mines and Energy Minister Bento Albuquerque proposed in an interview late on Sunday with newspaper O Estado de S. Paulo that the law should be changed to assign responsibility in cases such as Brumadinho to the people responsible for certifying the safety of mining dams.

“Current law does not prevent disasters like the one we saw on Brumadinho”, he said. “The model for verifying the state of mining dams will have to be reconsidered. The model isn’t good.”

The ministry did not immediately respond to questions about the interview.

German auditor TUV SUD said on Saturday it inspected the dam in September and found all to be in order.

(Reporting by Gram Slattery; Additional reporting by Tatiana Bautzer; Editing by Frances Kerry and Marguerita Choy)

Facing new sanctions, Iranians vent anger at rich and powerful

FILE PHOTO: Iranian rials, U.S. dollars and Iraqi dinars are seen at a currency exchange shopÊin Basra, Iraq November 3, 2018. Picture taken November 3, 2018. REUTERS/Essam al-Sudani

By Babak Dehghanpisheh

GENEVA (Reuters) – More Iranians are using social media to vent anger at what they see as the corruption and extravagance of a privileged few, while the majority struggles to get by in an economy facing tighter U.S. sanctions.

The country has been hit by a wave of protests during the last year, some of them violent, but as economic pressures rise, people are increasingly pointing fingers at the rich and powerful, including clerics, diplomats, officials and their families.

One person channeling that resentment is Seyed Mahdi Sadrossadati, a relatively obscure cleric who has amassed 256,000 followers on his Instagram account with a series of scathing posts aimed at children of the elite.

In one recent post, he blasted the “luxury life” of a Revolutionary Guards commander and his son, who posted a selfie online in front of a tiger lying on the balcony of a mansion.

Openly criticizing a well-known member of the powerful military unit that answers to Supreme Leader Ayatollah Ali Khamenei is in itself an unusual act of defiance.

“A house tiger? What’s going on?” Sadrossadati wrote. “And this from a 25-year-old youth who could not gain such wealth. People are having serious difficulty getting diapers for their child.”

The Iranian rial currency has hit 149,000 to the U.S. dollar on the black market used for most transactions, down from around 43,000 at the start of 2018, as U.S. President Donald Trump vowed to pull out of the nuclear deal between Tehran and world powers aimed at curbing its nuclear program.

That has sent living costs sharply higher and made imports less accessible, while the threat of financial punishment from the United States has prompted many foreign companies to pull out of Iran or stay away.

The situation could get worse, as additional sanctions come into force this week.

“SULTAN OF COINS”

Wary of growing frustration over the relative wealth of a few among the population of 81 million, Khamenei has approved the establishment of special courts focused on financial crimes.

The courts have handed out at least seven death sentences since they were set up in August, and some of the trials have been broadcast live on television.

Among those sentenced to death was Vahid Mazloumin, dubbed the “sultan of coins” by local media, a trader accused of manipulating the currency market and who was allegedly caught with two tons of gold coins, according to the Iranian Students’ News Agency (ISNA).

The tough sentences have not been enough to quell frustration, however, with high profile officials and clerics in the firing line.

“Because the economic situation is deteriorating, people are looking for someone to blame and in this way get revenge from the leaders and officials of the country,” said Saeed Leylaz, a Tehran-based economist and political analyst.

Washington is likely to welcome signs of pressure on Iran’s political and religious establishment, as it hopes that by squeezing the economy it can force Tehran to curb its nuclear program and row back on military and political expansion in the Middle East.

Public anger among Iranians has been building for some time.

Demonstrations over economic hardships began late last year, spreading to more than 80 cities and towns and resulting in at least 25 deaths.

CLERICS

In addition to his written contributions, Sadrossadati has posted videos of debates between himself and some of those he has criticized.

In one, he confronted Mehdi Mazaheri, the son of a former central bank governor who was criticized online after a photograph appeared showing him wearing a large gold watch.

In a heated exchange, Sadrossadati shouted: “How did you get rich? How much money did you start out with and how much money do you have now? How many loans have you taken?”

Mazaheri, barely able to get in a reply, said he would be willing to share documents about his finances.

Children of more than a dozen other officials have been criticized online and are often referred to as “aghazadeh” – literally “noble-born” in Farsi but also a derogatory term used to describe their perceived extravagance.

High-profile clerics have also been targeted.

Mohammad Naghi Lotfi, who held the prestigious position of leading Friday prayers at a mosque in Ilam, west Iran, resigned in October after he was criticized on social media for being photographed stepping out of a luxury sports utility vehicle.

Facebook posts labeled Lotfi a hypocrite for highlighting ways that ordinary Iranians could get through the economic crisis during his speeches. The outcry was a major factor in his decision to resign from a post he had held for 18 years.

“The hype that was presented against me in this position … made me resign, lest in the creation of this hype the position of the Supreme Leader of the Islamic Revolution be damaged,” Lotfi told state media after stepping down.

“The issue of the vehicle … was all lies that they created in cyberspace,” he added.

He was one of at least four clerics in charge of Friday prayers who have resigned in the last year after being accused on social media of profligacy or financial impropriety.

(Editing by Mike Collett-White)

Archbishop who called on Pope to resign says corruption reaches the top

Archbishop Carlo Maria Vigano reads during the episcopal ordination of Auxiliary Bishops James Massa and Witold Mroziewski, in Brooklyn, New York, U.S., July 20, 2015. Picture taken July 20, 2015. REUTERS/Gregory A. Shemitz

By Philip Pullella

VATICAN CITY (Reuters) – The archbishop who sparked a crisis in the Catholic Church by calling on Pope Francis to resign has denied he was motivated by personal vendetta and said he sought to show that corruption had reached the top levels of the Church hierarchy.

Archbishop Carlo Maria Vigano has gone into hiding since conservative media published an 11-page statement in which he alleged the pope knew for years about sexual misconduct by an American cardinal and did nothing about it.

Vigano has been communicating through Aldo Maria Valli, an Italian television journalist who Vigano consulted several times before releasing his statement last Sunday when the pope was in Ireland.

Italian media has reported he was upset because he was never made a cardinal by former Pope Benedict or because Francis blocked his further advancement in the Church.

“I have never had feelings of vendetta and rancor in all these years,” he was quoted as telling Valli, who has been publishing statements from Vigano in his blog.

“I spoke out because corruption has reached the top levels of Church hierarchy,” said Vigano, a former Vatican ambassador to Washington.

The Vatican had no comment on the new accusations by Vigano.

In his statement, Vigano accused a long list of current and past Vatican and U.S. Church officials of covering up the case of Cardinal Theodore McCarrick, who resigned last month in disgrace.

One of the people he attacks in the statement is Cardinal Tarciscio Bertone, who was secretary of state under former Pope Benedict.

Italian media reports have said Vigano was upset because Bertone had blocked any possibility of him becoming a cardinal.

In his comments published on Valli’s blog, Vigano says he himself gave up the possibility of becoming a cardinal “for the good of the Church”.

Vigano did not include any supporting documents in his remarkably blunt statement in which he said cover-ups in the Church were making it look like “a conspiracy of silence not so dissimilar from the one that prevails in the mafia”.

On his flight home from Ireland on Sunday, Francis told reporters he would “not say one word” about the accusations.

“Read the document carefully and judge it for yourselves,” he said.

Francis’ supporters say the statement contains holes and contradictions and note that Vigano prepared it with help from two journalists who have been critical of Francis, citing this as evidence that it forms part of an ideological anti-Francis strategy. The journalists deny this.

(Reporting By Philip Pullella; Editing by Richard Balmforth)

Iran bans 1,300 imports as protesters, police clash over currency weakness

FILE PHOTO: A woman looks at exchange rates by the window of a currency exchange shop in Tehran's business district, Iran January 7, 2012. REUTERS/Raheb Homavandi /File Photo

By Andrew Torchia

DUBAI (Reuters) – Iran is banning imports of over 1,300 products, preparing its economy to resist threatened U.S. sanctions, amid rare public protests against the plunge of its currency to record lows.

Police patrolled Tehran’s Grand Bazaar on Monday as security forces struggled to restore normality after clashes with protesters angered by the rial’s collapse, which is disrupting business by driving up the cost of imports, witnesses said.

Traders from the bazaar, whose merchants supported Iran’s 1979 Islamic revolution, told Reuters by telephone that most shops remained closed.

“Police have dispersed the protectors. We are all angry with the economic situation. We cannot continue our businesses like this. But we are not against the regime,” said a merchant in the bazaar, who asked not to be identified.

Industries and trade minister Mohammad Shariatmadari slapped the import ban on 1,339 goods that could instead be produced within the country, Iran’s Financial Tribune newspaper reported on Monday, quoting an official document.

Prohibited imports include home appliances, textile products, footwear and leather products, as well as furniture, healthcare products and some machinery, the Tehran Times said.

The order suggests the U.S. sanctions threat is pushing Tehran back toward running a “resistance economy” designed to conserve foreign exchange reserves and become as self-sufficient as possible in many products.

The rial is under heavy pressure from the U.S. sanctions threat. It sank as low as 90,000 against the dollar in the unofficial market on Monday from 87,000 on Sunday and around 75,500 last Thursday, according to foreign exchange website Bonbast.com. At the end of last year, it stood at 42,890.

After U.S. President Donald Trump decided to withdraw from world powers’ deal with Iran on its nuclear program, some U.S. sanctions are to be reimposed in August and some in November.

This may cut Iran’s hard currency earnings from oil exports, and the prospect is triggering a panicked flight of Iranians’ savings from the rial into dollars.

Hundreds of merchants gathered in front of parliament in Tehran on Monday to protest at the rial’s fall, witnesses said.

In the Grand Bazaar, hundreds staged a similar protest, videos posted on social media showed. A larger, sustained series of protests could put pressure on President Hassan Rouhani, who has already been harshly criticized by hardliners for his economic record.

Ali Fazeli, the head of Iran’s Chamber of Guilds, a business association, told the semi-official Tasnim news agency later on Monday: “Business is as usual in the Grand Bazaar.”

State TV quoted Tehran’s deputy governor Abdolazim Rezaie as saying “no one has been arrested in the Tehran protests”, adding that all the shops will be open on Tuesday.

On Sunday, merchants at Tehran’s mobile phone shopping centers Aladdin and Charsou shut their shops to protest against the rial’s slide, Fars news agency reported.

RESISTANCE ECONOMY

Iran eased its “resistance economy” policy after many international sanctions were lifted in January 2016 under the nuclear deal. Rouhani announced plans to boost Iran’s foreign trade and give foreign companies a bigger role in its economy.

With Iran now aiming to close its markets to many foreign products and the government intervening to support locally owned companies, those goals look more distant.

Mehrdad Emadi, an Iranian economist who heads energy risk analysis at London’s Betamatrix consultancy, said the sanctions threat was strengthening interests in the Iranian government that favored tighter state control of the economy.

“In the coming months we will see much more intervention in the economy by the government, a centrally imposed style of management by dictat,” he said.

One result is likely to be a shift of influence over Iran’s non-oil foreign trade from the private sector, along with a strong presence by the government’s Revolutionary Guards, to near-complete dominance by the Guards, he added.

Emadi and other Iranian economists noted that Iran had imposed import bans during the previous sanctions era before 2016 with only limited success.

Many foreign goods continued to enter the country at higher prices as a result of corruption and smuggling, benefiting business interests with the close official ties needed to arrange the shipments.

The government is justifying its latest clampdown on imports by citing economic security. The Tehran Times quoted Mohammad Reza Pourebrahimi, head of parliament’s economic committee, as saying the ban would prevent an outflow of $10 billion of foreign currency.

The International Monetary Fund estimated in March that the government held $112 billion of foreign assets and reserves, and that Iran was running a current account surplus. These figures suggested Iran might withstand the sanctions without an external payments crisis.

But as U.S. pressure constricts Iran’s access to the international banking system, its ability to deploy some of those resources may have suffered. Indian government sources told Reuters last week that New Delhi was looking to revive a rupee trade mechanism to settle part of its oil payments to Iran, fearing foreign channels to pay Tehran might close.

Concern about the rial’s vulnerability is prompting ordinary Iranians to pour money into non-cash assets. Tehran real estate prices have climbed and Iran’s stock market has jumped 17 percent since the end of May to a record high. Prices of gold coins have also risen sharply, local media reported.

(Editing by William Maclean)

Why Yemen is at war?

A pro-Houthi police trooper stands past a patrol vehicle in the Red Sea port city of Hodeidah, Yemen June 14, 2018. REUTERS/Abduljabbar Zeyad

By Angus McDowall

BEIRUT (Reuters) – The battle for the western Yemeni port of Hodeidah could be an important milestone in the three-year civil war. But analysts say the conflict is so complex that even a decisive outcome there might not bring peace.

Why is Yemen so divided?

Yemen’s internal splits have festered for years. North and south Yemen united into a single state in 1990, but separatists in the south tried to secede from the pro-union north in 1994.

Their forces were swiftly beaten, and more power and resources flowed to the northern capital of Sanaa, angering many southerners.

Former president Ali Abdullah Saleh had ruled north Yemen since 1978 and the unified state after 1990. But he alienated many Yemenis. His relatives controlled core parts of the army and economy, and critics said corruption was rife.

In the far north, some of the Zaydi sect of Shi’ite Islam also chafed. Zaydis had ruled northern Yemen until the 1962 revolution, but their heartland was now impoverished. In the late 1990s, some Zaydis formed the Houthi group, which fought Yemen’s army and grew friendly with Iran.

Though allied to Saleh, the Muslim Brotherhood and other Sunni Islamists were also gaining strength, particularly under General Ali Mohsen al-Ahmar, who built a power base in the army.

Taking advantage of factional rivalries, jihadist fugitives set up al Qaeda in the Arabian Peninsula (AQAP), one of the group’s most powerful wings, and began staging attacks.

How did ‘Arab Spring’ protests lead to war?

When mass protests broke out in 2011, some of Saleh’s former allies turned on him. The army split between units loyal to Saleh and those who followed Ahmar. Separatists rallied in the south. The Houthis seized more areas. AQAP attacks increased.

After a year of crisis, including a bombing that nearly killed Saleh, Yemen’s Gulf neighbors persuaded him to step down, but he stayed in Yemen.

Deputy president Abd-Rabbu Mansour Hadi was elected in 2012 to a two-year term to oversee a democratic transition. A “National Dialogue” meeting of all Yemen’s opposing groups began hashing out a new constitution.

But despite the dialogue, things were falling apart.

Hadi was widely seen as weak and his administration corrupt. Saleh’s allies in the army and government undermined the transition. AQAP set up a mini-state and hit Sanaa with ever bloodier bombings.

In 2014, the Houthis seized Sanaa with help from army units loyal to Saleh, forcing Hadi to share power. When the National Dialogue proposed a federal constitution, both Houthis and southern separatists rejected it for blunting their new-found sway.

The Houthis arrested Hadi in early 2015, but he escaped and fled to Aden. The Houthis pursued him, battling loyalists of the transitional government.

Days later, Saudi Arabia entered the war on Hadi’s side, backed by a coalition of Arab allies, to prevent Iran from gaining influence via the Houthis on its border and to preserve the Gulf-brokered transition.

They plucked Hadi from Aden and took him to Riyadh, notionally preserving his internationally recognized government and the democratic transition plan.

Why was there deadlock for so long?

The crisis was now a war between two unstable coalitions.

The Houthis and Saleh were old enemies jointly ruling the populous highlands and Red Sea coast.

Hadi had no personal power base, but became a nominal figurehead for southern separatists, tribes in the northeast, Sunni Islamists and army remnants loyal to Ahmar.

Internal rivalries even emerged in the coalition set up by Saudi Arabia to back Hadi. Riyadh and its main ally, the United Arab Emirates, differed over local allies and tactics.

The Houthis and Saleh’s forces were driven from Aden and its environs in south Yemen, and from central Marib and the desert area to its east in 2015. Years of military stalemate followed.

The Houthis held most of the easily defended highlands. They also held the flat Red Sea coast and its port of Hodeidah – the last entry point for supplying northern Yemen.

The coalition kept up intense air strikes, aiming to split the Houthis and Saleh. They imposed a partial blockade to stop Iran arming the Houthis, something it denies doing. But despite this pressure, U.N.-backed talks went nowhere.

How have internal divisions played out?

Then, last year Saleh finally abandoned his Houthi allies, hoping to cut a deal and regain power for his family. But he was killed fleeing Sanaa in December, 2017.

His loyalists turned on the Houthis, helping the advance toward Hodeidah that culminated in this week’s assault.

Divisions widened on the other side too. The UAE supported separatists in the south who sometimes clashed with fighters backed by Saudi Arabia.

In the north, the Saudis brought in Ahmar to command forces around Marib – a red flag for the UAE because of his connection to the Muslim Brotherhood, its biggest bugbear.

Meanwhile, the death toll from air strikes and the near famine aggravated by the partial blockade prompted international outrage, making it harder for Gulf states’ key Western allies to maintain military aid.

If the Hodeidah fighting lasts long, causing big coalition casualties and an outcry over a humanitarian catastrophe, the Houthis may hope the advance will fail.

If the Houthis are driven out and lose all ability to keep supply lines open, they might lose the war. But there is no guarantee the victors could put aside their own divisions and build a real peace.

(Reporting By Angus McDowall; Editing by Mike Collett-White)

Mexico swinging against the establishment as presidential campaign starts

FILE PHOTO: Mexico's President Enrique Pena Nieto is pictured during the 80th anniversary of the expropriation of Mexico's oil industry in Mexico City, Mexico March 16, 2018. REUTERS/Edgard Garrido

By Frank Jack Daniel

MEXICO CITY (Reuters) – Mexicans tired of graft and chaotic violence look set to reject the party that has governed the country for most of the past century, embracing a global anti-establishment mood by favoring a leftist dissenter in a presidential election.

Campaigning formally starts on Friday for the July 1 election and major opinion polls show Andres Manuel Lopez Obrador with a large lead, with the mainstream opposition challenger second and the ruling party candidate far behind.

Mexico suffered its worst murder toll on record last year as organized crime ran rampant smuggling drugs, fuel and people, while corruption scandals battered the credibility of President Enrique Pena Nieto’s Institutional Revolutionary Party (PRI).

Those issues rather than the economy are topping Mexicans’ concerns going into the campaign, but the outcome could mark a shift away from decades of gradual economic liberalization.

While Lopez Obrador now embraces the North American Free Trade Agreement and has softened his opposition to existing private investment in the energy sector, he has flagged a more cautious approach to further opening up the economy.

His popularity has been fanned by U.S. President Donald Trump’s tough policies on trade and immigration and insults that have angered Mexicans. His government could seek to row back bilateral cooperation that has gathered pace under Pena Nieto.

“The people want a change, that’s why our adversaries are getting really nervous,” Lopez Obrador said last week.

The centrist PRI has ruled Mexico continuously since 1929, except for a 12-year break when Vicente Fox and his successor led the National Action Party (PAN) to power in 2000 and 2006.

Both the PAN and the PRI favored opening the economy to more foreign investment and close ties with the United States.

DEEP-ROOTED CORRUPTION

Variously described as a left-winger, a populist and a nationalist, Lopez Obrador quit the PRI in the 1980s and his subsequent political career included a stint as mayor of Mexico City, one of the world’s largest metropolises. He has been in permanent opposition since first running for president in 2006.

He says only he can clean up deep-rooted corruption in the traditional parties. At the same time, he promises to change the constitution if he wins to end immunity for sitting presidents and hold regular referendums on key issues, including one every two years on whether he should continue his six-year term.

“We Mexicans are now seeing there are definitely two alternatives before us,” Tatiana Clouthier, a senior member of the Lopez Obrador campaign said on Thursday: more of the same, or a government that will spread the wealth more widely.

In second place is former PAN chief Ricardo Anaya, whose coalition includes center-left parties once allied to Lopez Obrador. He has pitched himself as a modern alternative to the unpopular PRI and to Lopez Obrador’s personalized leadership.

For many voters, July 1 will be about rejecting either the corruption of the ruling party, or Lopez Obrador, said Ernesto Ruffo, a PAN senator who in 1989 became the first politician to wrest control of a state government from the PRI.

“This is an election not for, but against,” he said.

Only Anaya, said Ruffo, offered a vision of the future.

The campaign of PRI candidate Jose Antonio Meade, who is not a member of the PRI, admits political parties are deeply mistrusted but says Meade is best placed to capture the mood.

Meade says Lopez Obrador’s jabs at the private sector, much of which the 64-year-old has excoriated as corrupt, will damage investment sentiment.

“When there’s investment there are jobs,” Meade told Mexican radio on Thursday. “When there are jobs we fight poverty.”

(Additional reporting by Dave Graham; Editing by Dave Graham and Paul Tait)

For poor Venezuelans, a box of food may sway vote for Maduro

Osiris (L), daughter of Viviana Colmenares (C), feeds her sister Ornella in a community diner at the slum of Petare in Caracas, Venezuela February 22, 2018. Picture taken February 22, 2018. REUTERS/Marco Bello

By Andreina Aponte and Ana Isabel Martinez

CARACAS (Reuters) – A bag of rice on a hungry family’s kitchen table could be the key to Nicolas Maduro retaining the support of poor Venezuelans in May’s presidential election.

For millions of Venezuelans suffering an unprecedented economic crisis, a monthly handout of a box of heavily-subsidized basic food supplies by Maduro’s unpopular government has offered a tenuous lifeline in their once-prosperous OPEC nation.

The 55-year-old successor to Hugo Chavez introduced the so-called CLAP boxes in 2016 in a signature policy of his rule, continuing the socialist government’s strategy of seeking public support with cash bonuses and other giveaways.

Now, running for re-election on May 20, Maduro says the CLAPs are his “most powerful weapon” to combat an “economic war” being waged by Washington, which brands him a “dictator” and has imposed sanctions.

Mariana, a single mother who lives in the poor hillside neighborhood of Petare in the capital Caracas, says the handouts will decide her vote.

“I and other women I know are going to vote for Maduro because he’s promising to keep giving CLAPs, which at least help fix some problems,” said the 30-year-old cook, who asked not to give her surname for fear of losing the benefit.

“When you earn minimum wage, which doesn’t cover exorbitant prices, the box helps.”

Maduro’s rule since 2013 has coincided with a deep recession caused by a plunge in global oil prices and failed state-led economic policies.

Yet the worse the economy gets, the more dependent some poor Venezuelans become on the state.

Life in the South American country’s poor ‘barrios’ revolves around the CLAP boxes. According to the government, six million families receive the benefit, from a population of around 30 million people.

Venezuelans, many of whom are undernourished, anxiously wait for their monthly delivery, and a thriving black market has sprung up to sell CLAP products.

The government sources almost all the CLAP goods from abroad, especially from Mexico, since Venezuela’s food production has shriveled and currency controls restrict private imports.

Critics, including Maduro’s main challenger for the May 20 vote, Henri Falcon, say the CLAPs are a cynical form of political patronage and are rife with corruption.

Erratic supply and control of distribution by government-affiliated groups have sown resentment among others.

“I can’t count on it. Sometimes it comes, sometimes not,” said Viviana Colmenares, 24, an unemployed mother of six struggling to get by in Petare.

The contents of a CLAP box, a Venezuelan government handout of basic food supplies, is pictured at Viviana Colmenares' house in the slum of Petare in Caracas, Venezuela February 23, 2018. Picture taken February 23, 2018. REUTERS/Marco Bello

The contents of a CLAP box, a Venezuelan government handout of basic food supplies, is pictured at Viviana Colmenares’ house in the slum of Petare in Caracas, Venezuela February 23, 2018. Picture taken February 23, 2018. REUTERS/Marco Bello

“INSTRUMENT OF THE REVOLUTION”

Stamped with the faces of Maduro and Chavez, the CLAP boxes usually contain rice, pasta, grains, cooking oil, powdered milk, canned tuna and other basic goods. Recipients pay 25,000 bolivars per box, or about $0.12 at the black market rate.

That is a godsend in a country where the minimum monthly wage is less than $2 at that rate – and would be swallowed up by two boxes of eggs or a small tin of powdered milk.

Inflation, at more than 4,000 percent annually according to opposition data, is pulverizing household income.

The administration of the CLAP – the Local Supply and Production Committees – does not hide its political motivation.

“The CLAPs are here to stay. They are an instrument of the revolution,” said Freddy Bernal, CLAP chief administrator.

“It has helped us stop a social explosion and enabled us to win elections and to keep winning them,” he told Reuters, referring to government victories in 2017 local polls.

Sometimes, though, the tactic backfires, as it did when promised free pork failed to arrive over Christmas, prompting street protests.

Maduro’s inability to halt rising hunger has jarred with the experience of many under Chavez, who won the presidency in 1998 and improved Venezuela’s social indicators with oil-fueled welfare policies.

Even though Maduro’s approval rating is only around 26 percent, according to one recent poll, his re-election looks likely as Venezuela’s opposition coalition is boycotting the vote on accusations it is rigged.

His most popular rivals are banned from standing and the election board favors the government.

Former state governor Falcon has broken with the coalition to stand. One survey by pollster Datanalisis in February showed that in a two-way race, he would defeat Maduro by 45.8 percent to 32.2 percent of likely voters.

Falcon’s critics counter that those numbers mean nothing in the face of electoral irregularities that could arbitrarily tip the balance in favor of Maduro.

Several other minor figures have registered for the single-round election, but have little chance of making an impact.

‘CAN’T DEPEND ON THE BOX’

Juan Luis Hernandez, a food specialist at the Central University of Venezuela, estimates the country generates just 44 percent of the basic food supplies it produced in 2008.

Meanwhile, food imports fell 67 percent between the start of 2016 and the end of 2017 as the crisis bit, he said.

Almost two-thirds of Venezuelans surveyed in a university study published in February said they had lost on average 11 kilograms (24 lbs) in body weight last year. Eighty-seven percent were assessed to live in poverty.

The same study found that seven out of 10 Venezuelans had received CLAPs.

“They (the government) don’t care about the food issue, just about getting people something to eat while they get through the elections,” said Susana Raffalli, a consultant with charity Caritas.

Some Venezuelans fear they would be found out should they vote against Maduro and be punished by no longer receiving food bags.

Already handouts are far from guaranteed.

A dozen recipients told Reuters that often they arrived half-full and would only come every few months. Outside of the capital Caracas, delivery was even more sporadic.

“I can’t depend on the box, otherwise I would die from hunger,” said Yuni Perez, a 48-year-old rubbish collector and mother of three.

Perez, who lives in a ramshackle house made from breeze blocks and corrugated steel at the top of Petare, said a CLAP box provided her family with food for a week. Often they would receive one every two months.

When her family is short of food, she hunts for leftovers dumped on the side of Petare’s winding streets. She said she had found several newborn babies discarded in the gutter, which she attributed to mothers unable to face providing food for another child.

Another Petare resident, mother-of-three Yaneidy Guzman said she dropped from 68kg to 48kg last year, despite receiving the CLAP.

“At least for 10 days you don’t have to think about finding food,” the 32-year-old said of the handouts, her cheekbones protruding from her face.

(Additional reporting by Vivian Sequera, Deisy Buitrago in Caracas; Anggy Polanco in San Cristobal; Writing by Angus Berwick; Editing by Andrew Cawthorne, Daniel Flynn and Rosalba O’Brien)

Saudi Arabia says it has seized over $100 billion in corruption purge

A view shows the Ritz-Carlton hotel's entrance gate in the diplomatic quarter of Riyadh, Saudi Arabia, January 30, 2018.

By Stephen Kalin and Katie Paul

RIYADH (Reuters) – Saudi Arabia’s government has arranged to seize more than $100 billion through financial settlements with businessmen and officials detained in its crackdown on corruption, the attorney general said on Tuesday.

The announcement appeared to represent a political victory for Crown Prince Mohammed bin Salman, who launched the purge last November and predicted at the time that it would net about $100 billion in settlements.

Dozens of top officials and businessmen were detained in the crackdown, many of them confined and interrogated at Riyadh’s opulent Ritz-Carlton Hotel.

Well over 100 detainees are believed to have been released.

Billionaire Prince Alwaleed bin Talal, owner of global investor Kingdom Holding, and Waleed al-Ibrahim, who controls influential regional broadcaster MBC, were freed last weekend.

“The estimated value of settlements currently stands at more than 400 billion riyals ($106 billion) represented in various types of assets, including real estate, commercial entities, securities, cash and other assets,” Sheikh Saud Al Mojeb said in a statement.

The huge sum, if it is successfully recovered, would be a big financial boost for the government, which has seen its finances strained by low oil prices. The state budget deficit this year is projected at 195 billion riyals.

In total, the investigation subpoenaed 381 people, some of whom testified or provided evidence, Mojeb said, adding that 56 people had not reached settlements and were still in custody, down from 95 early last week.

The government has generally declined to reveal details of the allegations against detainees or their settlements, making it impossible to be sure how much corruption has been punished or whether the $100 billion figure is realistic.

The only settlement disclosed so far was a deal by senior prince Miteb bin Abdullah to pay more than $1 billion, according to Saudi officials. Miteb was once seen as a leading contender for the throne, so his detention fueled suspicion among foreign diplomats there might be political motives behind the purge.

Although officials said both Prince Alwaleed and Ibrahim reached financial settlements after admitting unspecified “violations”, Prince Alwaleed continued to insist publicly he was innocent, while MBC said Ibrahim had been fully exonerated.

Economy minister Mohammed al-Tuwaijri told CNN this month that most assets seized in the purge were illiquid, such as real estate and structured financial instruments. That suggested the government may not have gained large sums of cash to spend.

In another sign that the investigation was winding down, a Saudi official told Reuters on Tuesday that all detainees had now left the Ritz-Carlton. The hotel, where the cheapest room costs $650 a night, is to reopen to the public in mid-February.

Some detainees are believed to have been moved from the hotel to prison after refusing to admit wrongdoing and reach financial settlements; they may stand trial.

Bankers in the Gulf said the secrecy of the crackdown had unsettled the business community and could weigh on the willingness of local and foreign businesses to invest.

“It’s reassuring if this situation is finally at an end, as the process was not clear from the start and at least if it is now ended, that provides some clarity and closure,” said a banker who deals with Saudi Arabia.

But Prince Mohammed appears to have won widespread approval for the purge among ordinary Saudis, partly because the government has said it will use some of the money it seizes to fund social benefits.

“What has happened is great, it will be counted as a win for the government. Whoever the person is, he is being held accountable, whether a royal or a citizen,” said Abdullah al-Otaibi, drinking at a Riyadh coffee shop on Tuesday.

An international financier visiting the region said authorities’ tough approach might ultimately prove effective.

“There are many different ways to fight corruption and not all of them are effective. Ukraine tried to do it by creating institutions, but that hasn’t really worked as that approach doesn’t change behavior,” he said.

“Saudi’s approach stands a better chance of being effective as it’s more direct.”

(Additional reporting by Sarah Dadouch in Riyadh and Tom Arnold in Dubai; Reporting by Andrew Torchia and Angus MacSwan)

Guilt, fines remain hazy as Saudi corruption purge draws to close

Saudi Arabian billionaire Prince Alwaleed bin Talal sits for an interview with Reuters in the office of the suite where he has been detained at the Ritz-Carlton in Riyadh, Saudi Arabia January 27, 2018.

By Stephen Kalin and Reem Shamseddine

RIYADH (Reuters) – Saudi Arabian media magnate Waleed al-Ibrahim was found innocent in an anti-corruption purge, a source at his company said on Monday, part of a wider campaign against graft whose secrecy could hurt the country’s effort to win foreign investment.

Ibrahim, who controls influential regional broadcaster MBC, was one of at least half a dozen top businessmen freed from more than two months of detention at the weekend after being interrogated by officials who said they aimed to recover $100 billion of illicit funds.

The officials said all of the men, who included billionaire global investor Prince Alwaleed bin Talal, had agreed to financial settlements after admitting to unspecified “violations”.

But the allegations against the men and their settlements have been kept secret, leaving the global investment community to wonder what the penalties are for large-scale corruption in Saudi Arabia – and whether detainees were actually guilty.

The mystery is unsettling investors who have closely watched Crown Prince Mohammed bin Salman’s every move since he promised to reform oil superpower Saudi Arabia, surprising citizens who regarded top businessmen and powerful royals as untouchable.

Aside from the crackdown on corruption, those changes are meant to include less dependence on oil, megaprojects to create jobs, and greater transparency and social freedoms.

The decision to release some of the most powerful people in the kingdom comes ahead of a planned trip by Prince Mohammed to the United States and European capitals in February and March, according to diplomats.

He could face awkward questions there about how the purge was conducted. The releases, and what kind of deals may have been struck, could have huge implications for Saudi Arabia’s image in the international investment community.

MBC’s Ibrahim “was fully exonerated and declared innocent of any wrongdoing, no corruption charges, no charges actually whatsoever,” a senior executive at MBC group told Reuters.

In an email to its staff, MBC management said Ibrahim was “fit and well and eager to get back. He has also been totally exonerated and faces no issues going forward.”

MURKINESS

Saudi officials did not respond to requests for information on the cases of Ibrahim and dozens of other officials and businessmen caught by the purge.

Prince Alwaleed, owner of global investor Kingdom Holding, continued to maintain his innocence in an interview with Reuters hours before his release, although an official said he had agreed to an unspecified financial settlement.

On Monday, shares in Kingdom rose back to the level where they were trading when Prince Alwaleed was arrested – a vote of confidence by the market in his future. In the days after his detention, the shares had plunged more than 20 percent, erasing as much as $2.2 billion of his fortune.

Authorities have not disclosed how many people are still detained but Riyadh’s grand Ritz-Carlton hotel, where many detainees were held, is to reopen to the public by mid-February.

Last week, before the latest releases, the attorney general said most detainees had agreed to settlements, 90 were released after charges were dropped, and 95 remained in custody. Some cases will go to trial.

Jason Tuvey, Middle East economist at Capital Economics in London, said the purge had increased uncertainty among potential foreign investors in Saudi Arabia, because it was not clear how they would be treated if they were caught up in corruption allegations.

“The release of Prince Alwaleed bin Talal and a number of other high-profile individuals may ease some concerns, but we still don’t have any details on what sort of agreement they have reached with the authorities. It just adds to the murkiness surrounding the whole process.”

He added that one potential worry for investors was that the purge could one day lead to a backlash against Prince Mohammed, who launched the purge and is leading ambitious reforms.

“Investors will probably need some reassurance on the exact procedures going forward to deal with corruption allegations,” Tuvey said. “But I think political uncertainty will remain a key risk surrounding the Saudi economy for many years to come.”

Prince Mohammed initially said he wanted to conclude the purge quickly. Foreign bankers dealing with Saudi Arabia said he may have been encouraged to do so by concern that the purge could start to affect foreign investment in the country.

Constructing complex, watertight legal cases against detainees may have been more challenging than expected – suggesting the government might find it hard to reach its target of recovering $100 billion of illicit funds, analysts said.

Saudi officials said Ibrahim’s 40 percent stake in MBC would remain unchanged and Prince Alwaleed would stay in control of Kingdom.

But construction giant Saudi Binladin Group said earlier this month that family shareholders might transfer part of their holdings to the state in a settlement with authorities.

(Additional reporting by Alexander Cornwell; Writing by Andrew Torchia; Editing by Michael Georgy, William Maclean)