Maxed Out
NEED TO KNOW
Maxed Out
LAOS
A UNICEF official recently toured Laos to see the devastation wrought by extreme floods.
“Classrooms filled with mud, books and learning materials irreparably damaged, computers and furniture ruined. The dormitories, once a haven for students, were no longer habitable,” the United Nations children’s agency official wrote. “Many children not only lost their places of learning but also their homes, (which were) either partially or completely destroyed.”
In this dire situation, Laos needs help that often comes in the form of loans. The borrowed money helps the country rebuild, a process that helps people start over while jumpstarting the economy and creating productive infrastructure.
But Laotians are already seeing their purchasing power fade as their country labors under soaring inflation – 31 percent last year – a weak currency, and high debt burdens – particularly those owed to China, according to Nikkei Asia. Unprecedented protests against the one-party rule of the left-wing Lao People’s Party last year were the result, noted World Politics Review.
Laos’ debt amounts to $13.8 billion, or 108 percent of gross domestic product, with China owning half of the $10.5 billion debt owed to external creditors, reported Bloomberg.
The irony is that the debt was supposed to have paid for infrastructure that would fast-track the Southeast Asian country’s development, the Australian Broadcasting Corporation explained. Critics argued that spending big on hydroelectric dams rather than taking a more balanced approach to their investments – on poverty alleviation, for example – would have averted much of the trouble that the country is facing today.
Such kinds of infrastructure were often featured in China’s global Belt and Road Initiative, a massive spending campaign designed to create highways, rail lines, ports, and other nodes that could carry African and Middle Eastern commodities to China and Chinese goods to Europe and elsewhere, Deutsche Welle added.
It was also a program designed to leave countries deeply indebted to China in order to give the Asian power a diplomatic advantage over the US and other Western countries.
Regardless, now the Laotian government has few options. The state has cut back on workers to curb spending, seemingly a good idea until it results in state-owned industries and sectors working at far less than full capacity for the economy, the Diplomat noted. The business community appears reluctant to help, too. They don’t keep their reserves in the local currency, the kip, preferring the Thai baht or the US dollar instead.
Laotian leaders and others have floated the idea of debt cancellation, but that approach carries pitfalls, argued the East Asia Forum. Instead, it advocates for international organizations to help Laos structure its debts and fiscal policy so that it can pay back the funds while growing and increasing the capacity of the state to act in the interests of the people.
That’s easier said than done, of course.
As a result, hundreds of thousands of Laotians have emigrated to Thailand, China and other Asian countries. One 19-year-old, recent high school graduate from Luang Prabang city told VOA he could make about $560 a month in South Korea, more than twice what he could make in Laos. He said his brothers, all with bachelor’s degrees, are barely making $375 a month and had advised him to skip college and find a job abroad.
The government, recognizing the importance of the $426 million in remittances annually accrued from these workers abroad, has stepped up efforts to further enable this emigration – despite labor shortages at home.
In July, Lao Prime Minister Sonexay Siphandone announced plans to promote employment opportunities internationally by decentralizing job placement centers, modernizing job search services – especially for foreign jobs – and promoting self-employment.
Meanwhile, the Laos’ Ministry of Energy and Mines said earlier this year that almost half of the state-owned mining companies have failed to meet industry standards or their contractual obligations, wrote Radio Free Asia. It added that would need to hire at least another 700 people by next year just to be functional. But the state can’t afford it.
THE WORLD, BRIEFLY
The Empire Bites Back
FRANCE
Far-right National Rally (RN) party leader Marine Le Pen and party members party appeared before a court Monday in a case involving the misuse of millions of dollars of European Union funds, one that could derail her bid for the presidency in two years, the Wall Street Journal reported.
French prosecutors accused Le Pen and the party of misappropriating around $7.8 million in funds earmarked for European Parliament assistants between 2004 and 2017. Instead, Le Pen used the money to pay party staffers and officials across France.
The case stems from probes launched by the European Anti-Fraud Office in 2014 and 2015, focusing on the alleged misappropriation of funds by Le Pen for the use of employing her father’s bodyguard and her former sister-in-law as parliamentary assistants, with questionable working hours and roles.
If convicted, she could face up to 10 years in prison, a fine of more than $1 million and a decade-long ban from holding public office.
Le Pen has denied the charges, but the trial – expected to last two months – could tarnish her image and derail her candidacy in the 2027 presidential election.
She said the allegations are part of an effort to discredit the RN after the far-right movement won 142 out of 577 seats in the National Assembly, coming in third behind a left-wing coalition and President Emmanuel Macron’s centrist allies.
While far from a majority, observers said that the outcome puts the RN in a kingmaker position that could influence the newly-formed government of Prime Minister Michel Barnier, according to the Associated Press.
The Barnier administration – dominated by conservatives and centrists – has pledged to reduce illegal immigration, including imposing stricter border controls and restricting state medical assistance for undocumented migrants.
Meanwhile, analysts and officials told Politico that July’s election outcome and the new government have put Macron in a difficult position.
The French president has less influence on policy now while key decisions advance through Barnier’s more independent conservative government.
Navigating a Shadow
MEXICO
Mexico will inaugurate its first female president Tuesday, marking a new chapter for the country but also the end of an era as populist leader Andrés Manuel López Obrador steps down, the Guardian reported.
The former mayor of Mexico City, Claudia Sheinbaum, a close ally of the former president, will also become the country’s first Jewish president. She will face steep challenges in tackling the country’s problems, particularly violence and corruption, commentators said. Meanwhile, many are wondering if she can get out from under the former president’s long shadow, the Associated Press reported.
“López Obrador didn’t just handpick Claudia,” Lila Abed, director of the Mexico Institute at the Wilson Center, told the AP. “He also selected many of the current deputies, senators and governors who are loyal to him, not necessarily to her.”
Meanwhile, López Obrador – widely known as AMLO, and deeply popular, will be missed, added Al Jazeera.
He came to power in 2018 on a platform promising a “fourth transformation” agenda aimed at reshaping Mexico’s economic and political landscape, tackling inequality, corruption and violence.
His administration achieved some notable successes on the socioeconomic front, the Guardian said, such as increasing Mexico’s minimum wage, introducing direct cash transfers to low-income families, and implementing labor reforms that helped reduce poverty.
By 2023, trust in the Mexican government had surged to 61 percent, up from 29 percent when he took office.
AMLO’s popularity translated into his Morena party’s landslide victory in the June 2024 elections, giving it a supermajority in congress. This allows Morena to rewrite the constitution at will, cementing its political dominance until at least 2027.
Still, critics say his presidency was also plagued by ongoing violence and corruption. Mexico recorded more than 30,000 murders in each year of his tenure, ranking the country among the most violent in Latin America.
Critics also complained about the militarization of Mexico’s security forces during his presidency: Although he pledged to return soldiers to their barracks, López Obrador expanded the military’s role in domestic security and used them to implement infrastructure projects.
Last week, Morena passed a constitutional amendment placing the 130,000-member National Guard – created as a civilian security force – under military control, a move that raised concerns about democratic backsliding and human rights abuses, according to Newsweek.
Meanwhile, Sheinbaum has vowed to continue many of her predecessor’s policies but maintained that she is an independent leader with her own priorities, particularly regarding security and migration.
The new leader will face the daunting challenge of addressing the rising violence that plagued Amlo’s tenure while navigating a deeply divided political landscape, Axios noted.
Meanwhile, questions remain about his ongoing influence.
The recent appointment of his son, Andrés López Beltrán, to a key Morena leadership position, prompted speculation that the outgoing president will continue to exert power behind the scenes.
Lame-Duck Wins
AUSTRIA
Austria’s Freedom Party (FPÖ) secured in Sunday’s parliamentary elections the country’s first far-right election victory since its reestablishment as a democracy in 1945, even as it fell short of a majority – a result that could see the FPÖ unable to form a government, the Associated Press reported.
The FPÖ won 29.2 percent of the vote, while the conservative People’s Party (ÖVP) came in second with 26.5 percent. Because the FPÖ failed to win a majority, it will need to form a coalition with another party to form a government, according to the BBC.
However, the leader of the ÖVP, incumbent Chancellor Karl Nehammer, said his party won’t collaborate with the leader of the far-right party, Herbert Kickl, adding that it is “impossible to form a government with someone who adores conspiracy theories.”
It didn’t rule out an alliance with the FPÖ, however. Other Austrian parties have echoed that stance.
Regardless, Kickl, a candidate for chancellor, told his supporters that the party has opened the door to a new era with its first election victory.
Meanwhile, voter turnout was high on Sunday, tallying 74.9 percent.
The party, analysts said, was able to capitalize on voter anger and anxiety over the war in Ukraine, inflation, and immigration in particular. Kickl has promised citizens to build “Fortress Austria” and improve security by strengthening regulations on legal immigration, increasing deportations, and barring asylum seekers from gaining citizenship.
After the results were announced, about 300 people protested the election results outside the parliament building in Vienna, holding signs reading, “Kickl is a Nazi.”
The FPÖ was founded by former Nazis in 1956. Kickl has spoken about becoming “Volkskanzler” (people’s chancellor), the title held by fellow Austrian Adolf Hitler when he ruled Nazi Germany.
Meanwhile, the FPÖ’s victory is just the latest far-right win in Europe. With stagnating economies and rising anti-immigration sentiments, far-right parties have been gaining traction on the continent in the past few years, with significant wins in the Netherlands and Germany recently. Analysts worry that these victories will create divisions in Europe over key issues, such as the Russia-Ukraine war.
The FPÖ has criticized sanctions on Russia and wants to maintain Austrian neutrality.
DISCOVERIES
So Close, So Far
In 2015, archeologists unearthed a surprising set of Neanderthal remains in France’s Rhône Valley – a discovery that’s only now beginning to reveal its secrets.
Nicknamed “Thorin,” after the famous dwarf from J. R. R. Tolkien’s fantasy novel “The Hobbit,” these fossilized remains were recovered from Grotte Mandrin, a rock shelter known for housing both Neanderthals and Homo sapiens at different points in history.
Thorin’s remains, consisting of teeth, jaw fragments, and finger bones, but his DNA has upended previous assumptions about Neanderthal populations in Europe, according to a new study.
Genomic analysis revealed that Thorin belonged to a previously unknown, isolated population of Neanderthals that diverged from other European Neanderthals around 105,000 years ago.
This small, genetically insular group survived in the region for roughly 50,000 years, almost until Neanderthals went extinct around 40,000 years ago.
The kicker was that these two lineages didn’t live too far from each other. Yet, the research team explained they don’t appear to have interacted with each other, noting that Thorin’s lineage remained completely genetically isolated.
“We thus have 50 millennia during which two Neanderthal populations, living about 10 days’ walk from each other, coexisted while completely ignoring each other,” Ludovic Slimak, the archeologist who led the study, said in a statement. “This would be unimaginable for Homo sapiens.”
Thorin’s DNA also shows evidence of inbreeding, with high numbers of identical gene pairs passed down from close relatives. While not ideal for long-term survival, these findings paint a picture of small, close-knit communities that didn’t mingle much with others – a stark contrast to the more socially expansive H. sapiens of the time.
The study’s findings challenge the previous view that Neanderthals were a genetically homogeneous population by the time of their extinction.
This isolation, according to Slimak, may have played a key role in their demise, making them more vulnerable to changes in climate, competition with H. sapiens, and the inability to innovate socially or technologically.
“They were happy in their valley and did not need to move, while Homo sapiens … they wanted to explore, to see what is there after this river, after this mountain,” Slimak told CNN.
Thorin’s remains continue to be slowly excavated, and Grotte Mandrin is likely to yield more surprises as researchers delve further into this mysterious Neanderthal lineage.