Daily Archives: June 2, 2021

Surge in cases douses hopes of economic recovery this year – The Straits Times

Posted: June 2, 2021 at 5:57 am

Forced into a two-week lockdown which Prime Minister Muhyiddin Yassin had just days earlier said would be catastrophic for the economy, Malaysia's hopes of a swift return to pre-pandemic GDP levels this year have evaporated.

The head of its Covid-19 response has also put paid to any notion of a swift exit from the shutdown, warning that it could be the final quarter of the year before a rampant surge in infections is under control.

Most analysts have lowered their growth projections to below the official 6 per cent to 7.5 per cent forecast, with even state-linked Affin Hwang Investment reducing its estimate by a whopping 2 percentage points to 4 per cent.

Despite 17 economic sectors being allowed to operate with 60 per cent staff during phase one of the lockdown, the investment house said in a report yesterday that it estimated daily losses to be up to RM2 billion (S$641 million).

A looser four-week phase two would ensue if case numbers drop, before a phase three similar to last month's soft-touch movement control order (MCO) returns.

But Director-General of Health Noor Hisham Abdullah said on Sunday that with aggressive new variants spreading across the country, a "strategy of combining public health measures and increasing vaccination rates... may be able to flatten the curve in three to four months".

Finance Minister Tengku Zafrul Tengku Abdul Aziz said yesterday that there would be a downward revision of the gross domestic product, but "it is still relatively early so we are calculating the impact" of the lockdown and much would depend on the "success of the vaccination programme".

"That's our exit strategy. We are putting as much of our resources as possible to get as high a number of people vaccinated in the next couple of months," he told reporters, adding that densely populated economic centres such as the Klang Valley should reach herd immunity by October.

But Malaysia has fully vaccinated only 3.5 per cent of its population against Covid-19 so far, and has yet to average even half of the 250,000 doses it must administer daily to hit its 80 per cent inoculation target.

The premier had said on May 23 that the government was avoiding a lockdown to avert economic collapse. But his hand was forced after three weeks of the MCO - barring inter-district travel and social activities but leaving economic sectors largely untouched - failed to suppress Malaysia's worst coronavirus wave. Death and infection numbers kept rising to new records.

In May alone, more than 1,200 people succumbed to the disease, nearly half the total since the pandemic began, while more than 160,000 were infected, which is 29 per cent of cases to date.

When the first MCO was imposed in March last year, strict stay-home directives saw GDP bleed RM2.4 billion a day, and the government eventually spent RM55 billion across the year to ease the fallout. Malaysia's economy shrank 5.6 per cent last year - its worst decline since the 1998 Asian financial crisis.

But while unveiling a RM40 billion aid package on Monday night, hours before the lockdown took effect, Tan Sri Muhyiddin admitted that "the government has limited fiscal space to spend at this moment" which resulted in the "Pemerkasa Plus" involving a meagre RM5 billion of actual spending from state coffers.

Barclays regional economist Brian Tan noted the "very limited fiscal injection... amounts to less than half of the previous RM11 billion... announced in March to support the economic recovery following MCO 2.0".

Key initiatives in Pemerkasa Plus may not last long enough to help smaller firms and Malaysia's poorest weather the storm.

The RM1.5 billion in wage subsidies will benefit an estimated 2.5 million workers for a month, while RM2.1 billion in cash handouts range from RM500 to each of the poorest families, to just RM100 for each household with a monthly income between RM2,501 and RM5,000.

Small and medium-sized enterprises (SMEs) and the poorest 40 per cent of the population can choose between a three-month loan moratorium, or reducing instalments by half for six months.

SME Association president Michale Kang had previously said four in 10 members had planned to cut jobs or suspend operations without loan moratoriums and subsidies for wages and rent.

Malaysians have already flooded social media with accounts of forced unpaid leave or salary cuts, with some pointing out they have yet to find new jobs after being fired or closing their businesses last year.

But Socio-Economic Research Centre chief Lee Heng Guie believes the impact of the lockdown will not be so severe - potentially up to 0.7 per cent of GDP - as booming industries such as export-focused manufacturing and retail are still allowed to operate.

"Business enterprises have accumulated RM24.1 billion during the period between February 2020 and March 2021 for their cash flow needs. Many soft loans, funds and credit facilities established last year for SMEs and businesses are not fully utilised and would continue this year," he told The Straits Times, adding that financial institutions have also rolled out targeted assistance to debtors.

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Surge in cases douses hopes of economic recovery this year - The Straits Times

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Some theoretical and practical issues on socialism and the path towards socialism in Vietnam – Nhan Dan Online

Posted: at 5:56 am

Socialism and the path to socialism in Vietnam is a truly fundamental theoretical and practical topic of great importance. It covers a broad array of diverse and complex issues under various approaches, and requires both painstaking and serious investigation, and a deep and scientific stocktaking of practice. Within the scope of this writing, I would like to touch upon some aspects from Vietnam's practical perspective. I would only focus on answering the following questions: What is socialism? Why did Vietnam choose the socialist path? How to gradually build socialism in Vietnam? How significant have the Doi Moi (Renewal) and the building of socialism been in Vietnam over the past years? And what are the issues facing this process?

As we are well aware that socialism is usually understood in three aspects: socialism as a doctrine, socialism as a movement, and socialism as a polity. Each aspect has different manifestations, depending on the world outlook and development level in a specific historical period. The socialism as referred to in this writing is a scientific socialism, based on Marxism - Leninism in the world today. How, then, shall we define socialism and chart the course towards socialism, in a manner suitable to the particular condition and characteristics in Vietnam?

Previously, while the Soviet Union and its constellation of socialist countries existed in the world, the question of advancing towards socialism in Vietnam seemed beyond doubt and implicitly validated. However, after the collapse of the socialist model in the Soviet Union and many other Eastern European countries and the decline of the world revolution, the advancement towards socialism was once again put into question and became the topic for every discussion, even drawing heated debate.

Anti-communism and political opportunists rejoiced, and seized that opportunity to spread misinformation and subvert the movement. Within the revolutionary rank, there are also those who wallowed in pessimism and faltered. Some began to doubt the correctness and science of socialism, and blamed the dissolution of the Soviet Union on the errors of Marxism-Leninism and the choice of socialism as the way forward.

From this premise, they believe we have chosen the wrong way and must march on another path. Some echoed the hostile arguments, disparaged and criticized socialism, and indulged in one-sided praise of capitalism. Some even claimed repentance for having had faith in Marxism-Leninism and socialism. But is this the truth? Is it true that capitalism today, including those long-standing capitalist countries, are still growing well? Has Vietnam chosen the wrong way?

We concur that capitalism has never been more global as it is today, and has achieved immense accomplishments, especially in liberating and developing the productive capacity and advancing science and technology. Many developed capitalist countries, building on their advanced economic foundation and also thanks to the struggle of the working class and working people, have made adjustments and set up considerable social welfare schemes that are more progressive than before. Since the mid-1970s, and particularly after the dissolution of the Soviet Union, international capitalism spared no effort to adjust itself and promoted neo-liberalism at the global scale in order to adapt to new conditions. For this reason, it is still able to grow further. Yet capitalism still cannot address its innate and fundamental contradictions. Crises continue to break out. Most notably, in 2008 and 2009 we witnessed a financial crisis and economic recession starting in the United States. It then rapidly spread to other centres of capitalism and affected nearly every country in the world. Capitalist states and governments in the West injected huge amounts of money into their system to save transnational corporations, industrial, financial and banking complexes, and security markets, but they only gained limited success. And today we witness a multi-faceted health, social, political and economic crisis unfolding under the impacts of the COVID-19 pandemic and the Fourth Industrial Revolution. An economy in recession has unmasked social injustice within capitalist societies. The living standard of the majority of working people is falling dramatically while unemployment rises. The rich-poor gap grows larger, exacerbating antagonism and conflict among ethnicities. Instances of bad development and anti-development paradoxes have spilled over from the economic and financial domain into social life, igniting social conflicts. In many places, economic incidents became political ones, where waves of demonstrations and strikes would shake the entire regime. Reality has shown us that the free market of capitalism itself cannot help solve these problems, and in many cases even causes serious harm to poor countries and deepens the conflict between global labour and global capital. This reality also rips apart economic theories or development models that have long been considered as in vogue. They were praised by bourgeois politicians and viewed as optimal and sensible by bourgeois experts.

The economic and financial crises are accompanied by the energy and food crises, the exhaustion of natural resources and the degradation of the environment and ecosystem. These are posing monumental challenges to the existence and development of mankind. They are the consequences of a process of economic and social development that crowned profit as its supreme end, that esteemed the possession of wealth and consumption of material as the yardstick of civilization, and that upholds individual interest as the pillar of society. Such are the core characteristics of the capitalist mode of production and consumption. The ongoing crises once again prove the economic, social and ecological unsustainability of capitalism. According to many scientists, the present crises are impossible to be fully resolved within the framework of a capitalist regime.

Recent social protest movements flaring up in many developed capitalist countries have further exposed the truth about the nature of capitalist polities. In fact, democratic institutions in the mould of freedom and democracy that the West spares no effort to promote and impose upon the world at large not at all guarantee that power shall truly be of the people, by the people and for the people - what democracy means at its core. This system of power still belongs mainly to the wealthy few and serves the interest of large capitalist cartels. A tiny minority, even just about 1% of the population, possesses the vast majority of wealth and means of production, controls three quarter of financial and knowledge resources and the mainstream mass media, and accordingly dominates the entire society. This is the root cause of the 99% versus 1% movement in the United States in early 2011, which has since spread like wildfire into other capitalist countries. The claim of equal rights detached from equal opportunities to exercise these rights led to democracy in name only - emptiness and without substance. In political life, once the power of money dominates, the power of the people shall be overpowered. This is why in developed capitalist countries, free and democratic elections, as they claim, may change governments, but may not change the ruling power. Behind the multi-party system in fact remains the dictatorship of capitalist cartels.

We need a society in which development is truly for humans, not for exploitation and dehumanization for the sake of profit. We need economic development accompanied by social progress and equality, not an increase in the gap between the rich and the poor or greater social inequity. We need a society of compassion, solidarity and mutual assistance towards progressive and humanistic values, not unfair competition where the weak are meat, and the strong do eat to satisfy the selfish interest of a few individuals and cliques. We need sustainable development in harmony with nature to secure a clean living environment for present and future generations, instead of unlimited exploitation and possession of resources, unrestrained consumption and destruction of the environment. And we need a political system where power truly belongs to the people, is enforced by the people and serve the people, not merely in the interest of the wealthy few. Such beautiful ideals are the true values of socialism, arent they? And, are they also the goal and the path that President Ho Chi Minh and our Party and people had chosen, the path upon which we persevere, arent they?

As we all know, the Vietnamese people have undergone a long, arduous and sacrifice-filled revolutionary struggle against colonialist and imperialist domination and invasion in order to defend the sacred national independence and sovereignty and for the freedom and happiness of our people, in the spirit of Nothing is more precious than independence and freedom.

National independence associated with socialism is the fundamental guideline of Vietnam's revolution and at the same time the quintessence in the theoretical legacy of President Ho Chi Minh. Through his wealth of practical experience, combined with the revolutionary and scientific theories of Marxism-Leninism, Ho Chi Minh came to a profound conclusion that only socialism and communism may fully answer the question of national independence and bring about freedom, wellbeing and happiness to everyone and every nation.

Since its inception and throughout its revolutionary struggle, the Communist Party of Vietnam has always asserted that socialism is the goal and ideal of the Communist Party and people of Vietnam, and that advancing towards socialism is an objective demand of and the inevitable course of Vietnamese revolution. In 1930, in its Political Platform, the Communist Party of Vietnam stated its line of action: to carry out a peoples national democratic revolution under the leadership of the working class and advance towards socialism, bypassing the stage of capitalism. In the late 20th century, while a large part of the socialist realism in the world collapsed, the bloc of socialist states ceased to exist and the socialist movement entered a period of crisis, decline and hardship, the Communist Party of Vietnam continued to hold that "Our Party and people are determined to build Vietnam on the path towards socialism on the basis of Marxism- Leninism and Ho Chi Minh thought. At the 11th National Congress of the Communist Party (January 2011), in the Platform for National construction in the period of transition to socialism (amended and further developed in 2011), once again we affirmed that "Advancing to socialism is the aspiration of our people and the correct choice of the Communist Party of Vietnam and President Ho Chi Minh, and is in line with the development trajectory of history".

However, What is socialism, and how shall we advance to socialism? That is the question we are always pondering, deliberating, investigating and weighing, in order to gradually improve our guideline and viewpoint, and organize for their implementation, so as to both observe the general law and satisfy the particular conditions in Vietnam.

During the years of Doi Moi, based on the review of praxis and study of theory, the Communist Party of Vietnam has been gradually reaching a more complete and profound understanding of socialism and the transition into socialism. We have in stages addressed simplistic ideas we held previously, such as homogenizing the end goal of socialism with the task currently at hand, one-sidedly stressing production relations and equal distribution without fully realizing the need to develop the productive force in the transition period, not recognizing the existence of other economic sectors, putting the market economy in the same basket as capitalism, and viewing the rule-of-law state as the same as a bourgeois state, just to name a few.

As of today, while there remain areas for further study, we have established an overarching understanding: The socialist society that the Vietnamese people are making all efforts to build is a society where the people are well-off, the nation is strong and the people are owners, a society characterized by democracy, equality and civilization. It possesses a highly developed economy on the basis of a modern productive force and suitable and progressive production relations. It enjoys an advanced culture imbued with national identity. Its people are entitled to wellbeing, freedom and happiness and are blessed with opportunities for comprehensive development. Ethnic groups in the Vietnamese community are equal, united, respectful and supportive of each other to grow together. It has a rule-of-law socialist state of the people, by the people and for the people under the leadership of the Communist Party. And it maintains friendship and cooperation with all countries in the world.

To achieve this goal, we must step up industrialization and modernization in conjunction with the development of a knowledge-based economy. We must also develop a socialist-oriented market economy, build an advanced culture imbued with national identity, boost human resource development, improve the people's living standards, and exercise social progress and equality. We must safeguard national defense and security, public order and security. We must implement the foreign policy of independence, self-reliance, multilateralization and diversification for peace, friendship, cooperation and development, and actively engage in international integration. We must build a socialist democracy, harness the will and power of all-nation unity in combination with the power of our time. We must build the socialist rule-of-law state of the people, by the people and for the people. We must build an untarnished, strong Party and polity in every respect.

The further our Party delves into practical guidance, the more we realize that the transition to socialism is a long-term and immensely challenging and complex task, for it must bring about profound, qualitative changes across all fields of social life. Vietnam embarked on its journey to socialism from its starting point as an underdeveloped agricultural country, bypassing the stage capitalism and with a very limited productive force. The country was further weakened by decades of wars resulting in severe devastation, and by the constant subversive attempts of hostile forces. These factors have hinder Vietnams path to socialism. As such it unavoidably requires a protracted transition that involves various stages and forms of socio-economic organization, with a struggle between the old and the new. To say that Vietnam bypasses the stage of capitalism, I mean the country bypasses a regime of oppression, inequality and capitalist exploitation, and bypasses harmful practices and political institutions and arrangements unsuitable in a socialist system. It does not mean that we must reject the accomplishments and values of civilization that mankind has achieved throughout the development of capitalism. Naturally, these achievements must be selectively absorbed via the lens of science and development.

The concept of developing a socialist-oriented market economy is a particularly fundamental and creative theoretical breakthrough of our Party. It is an important theoretical achievement gleaned through 35 years of implementing the Doi Moi, stemming from Vietnams praxis and selective absorption of experiences around the world. Our understanding is that, a socialist-oriented market economy is a modern market economy well integrated with the world. It is an economy that operates fully and cohesively in line with the laws of a market economy. It is regulated by a rule-of-law socialist state under the leadership of the Communist Party of Vietnam. It upholds a socialist orientation towards the goals of an affluent people, prosperous nation, democratic, equitable and advanced society. It is a new form of market economy in the history of this economic model. It is a mode of economic organization that abides by the laws of the market economy, but is also built on and guided by the principles and nature of socialism. This is reflected in all three aspects, namely ownership, organization and governance, and distribution. This is not a capitalist market economy, and has yet to become a full-fledged socialist market economy (since our country is still undergoing the transition period).

A socialist-oriented market economy encompasses multiple forms of ownership and multiple economic sectors. Economic sectors operating in compliance with the law are important components of the economy. They are equal under the law in the interest of long-term development, cooperation and healthy competition. In this system, the state economy plays a key role; the collective economy is constantly consolidated and developed; the private sector is an important engine of the economy; the FDI sector is encouraged to develop consistently with the socio-economic development strategies and plans. Distribution relations must ensure fairness and create momentum for growth. Distribution is to be conducted primarily based on labor outcomes, economic efficiency, and capital and resource contributions. It should also be implemented via the system of social security and welfare. The state regulates the economy via the law, strategies, plans, policies and material resources so as to provide orientation to, regulate and stimulate socio-economic development.

A fundamental characteristic and important feature of the socialist orientation in the Vietnams market economy is the combination of economics and society, the coordination of economic and social policies. It also ensures that economic growth would be accompanied by social progress and equality in every stage, every policy, and throughout the development process. This means that we shall not wait until the economy has reached a high level of development to begin exercising social progress and equality. We also shall certainly not sacrifice social progress and equality in pursuit of mere economic growth. On the contrary, every economic policy should target the goal of social development, and every social policy should seek to promote economic growth. Encouraging people to enrich themselves legally should go hand in hand with promoting sustainable eradication of hunger and poverty reduction, and taking care of the disadvantaged and those who have rendered great service to the nation. This is a matter of principle to ensure a healthy, sustainable and socialist-oriented development.

We consider culture as a spiritual foundation of the society, an internal strength, an engine for national development and defense. We regard the holistic development of culture in harmony with economic growth, social progress and equality as a fundamental guideline underlying the construction of socialism in Vietnam. The culture that we are building is one of progress, rich in national identity. It is a culture of unity in diversity, on the basis of progressive and humanistic values. Marxism - Leninism and Ho Chi Minh Thoughts play a primary role in the spiritual life of the society. We seek to build upon and advance the wholesome traditional values of all ethnicities within our country, and learn from the cultural achievements and quintessence of humanity at large. We strive to build an advanced and healthy society for the true interests and dignity of the people that fosters an increasingly higher level of knowledge, morality, physical fitness, lifestyle and aesthetics. We place the people at the heart of our development strategies. Cultural and human development are both the target and the momentum of Doi Moi. Cultivation of education - training and science - technology constitute our top national policy. Environmental protection is an existential issue and a criterion for sustainable development. The building of happy and progressive families produces a concrete foundation for the society, and the upholding of gender equality is the norm for progress and civilization.

A socialist society is one that strives toward progressive and humanistic values, based on the harmony between the common interests of the entire society and legitimate interests of the people. This is qualitatively different from other societies characterized by competition to acquire exclusive interest between individuals and groups. Therefore, it requires and is also able to cultivate social consensus rather than social opposition and antagonism. In a socialist political system, the relationship between the Party, State and people is a relationship between entities unified in their goals and interests. Every Party guideline, every government policy, law and action, aims to serve the interest and happiness of the people. The political model and its overall mode of operation involves the leadership of the Party, the management by the State, and the mastery by the people. Democracy is the nature of the socialist regime. It is both the goal and engine for the construction of socialism. Building a socialist democracy that ensures the real power belongs to the people is an ultimate and long-term mandate of Vietnams revolution. We aim to unceasingly promote democracy and build a law-governed socialist state that is truly of the people, for the people and by the people, on the basis of the alliance between workers, farmers and intellectuals under the leadership of the Communist Party of Vietnam. The State represents the peoples right to mastery, and organizes the implementation of the Partys guidelines. There are mechanisms in place to allow the people to exercise their right to direct mastery and democratic representative in all areas of society, and take part in the governance of society. We are aware that a law-governed socialist state, by nature, is different from a rule-of-law capitalist state. Legislative power under a capitalist regime is essentially an instrument to protect and serve the interests of the bourgeois class. By contrast, the rule of law under socialism is a tool to reflect and exercise the peoples right to mastery, to ensure and protect the interests of the majority of the people. Through the enforcement of the law, the State would secure conditions for the people to truly be the subject of political power, and exercise sole state power to address all actions that violate the interests of the Fatherland and the people. We, at the same time, consider the great national unity to be a source of strength and a decisive factor for the lasting victory of Vietnams revolution. Equality and unity among our ethnic groups and religions are constantly promoted.

Being deeply aware of the Communist Partys leadership is a factor that decides the success of the Doi Moi and ensures our countrys development in line with the socialist path, we pay special attention to party building and rectification. This task is critical to the survival of the Party and the socialist system. The Communist Party of Vietnam is the vanguard of the Vietnamese working class. The founding, existence and development of the Party aim to serve the interest of the working class, the working people, and the entire nation. As the Party takes the helms and leads the nation, it is recognized by the whole people as their vanguard, and is accordingly the vanguard of both the working class and the mass of working people and the entire Vietnamese nation. This is not meant to downplay the class nature of the Party, but rather to reflect a deeper and more complete understanding of this class nature, for the interest of the working class is aligned with that of the mass of working people and the entire nation. Our Party perseveres with Marxism - Leninism and Ho Chi Minh Thoughts as the foundation and lodestar for the revolution, and holds democratic centralism as the fundamental organizing principle. The Party asserts its leadership through its platforms, strategies, and major guidelines and policies. In practice, these are translated into information dissemination, persuasion, mobilization, organization, inspection, oversight. The Party also leads with Party members role models and holds the unified leadership of personnel work. As it understands that the risks to the ruling party are corruption, bureaucracy and degradation, particularly in a market economy, the Communist Party of Vietnam requires regular self-improvement and self-rectification, and deems it necessary to constantly combat opportunism, individualism, corruption, bureaucracy, extravagance and moral degradation within the Party and the entire political system.

The Doi Moi, including the development of the socialist-oriented market economy, has truly brought about enormous and positive changes to our country over the past 35 years.

Prior to the Doi Moi (in 1986), Vietnam used to be a poor and war-torn country, with devastated human lives, infrastructure, and environment. For instance, to date, millions of people fall victim to grave diseases, and hundreds of thousands of children are born with birth defects and disabilities due to Agent Orange/dioxin used by the US Army during wartime. According to experts, it would take another 100 years or more for Vietnam to fully remove the remaining post-war unexploded ordnance (UXOs). After the war, the US and the Western imposed economic sanctions on Vietnam for nearly 20 years. That period also saw complex developments in the region and the world, to our detriment. There was a severe shortage of food and essential goods, and our people lived in great hardships, with three quarters of the population living under the poverty line.

Thanks to the Doi Moi, our economy has begun to thrive, enjoying a relatively high growth rate over the course of 35 years at around 7% per year. Our GDP is continually expanding, reaching US$342.7 billion in 2020 and becomes the 4th largest economy in ASEAN. Per-capita income has increased seventeen-fold to US$3,512. Vietnam successfully graduated from low-income status in 2008. From a country faced with constant food shortages, at present, Vietnam not only is able to ensure food security, but also has become a leading exporter of rice and various other agricultural products in the world. Our industries are flourishing, the shares of industry and services in our GDP are constantly increasing, and today account for 85% of total GDP. Our foreign trade turnover is growing dramatically, exceeding US$540 billion in 2020, in which exports reached over US$280 billion. Our foreign exchange reserves jumped to US$100 billion in 2020. Foreign direct investment is also rapidly expanding, with a total registered capital of nearly US$395 billion by late 2020. With regard to our economic structure in terms of ownership, the state sector accounts for 27% of Vietnams total GDP, the collective economy for 4%, the household economy for 30%, the domestic private sector for 10%, and the FDI sector for 20%.

Vietnam today has a population of over 97 million people across 54 brotherly ethnic groups, 60% of whom residing in rural areas. Economic development has delivered the country from the socio-economic crisis of the 1980s and remarkably improved the peoples living standards. The percentage of poor households falls by 1.5% every year on average, from 58% in 1993 to 5.8% in 2016 by the Government poverty standards, and to less than 3% in 2020 according to the multidimensional poverty index (whose standards are higher than previously). Today, more than 60% of communes have met the standards of new-style rural areas. Most of them enjoy car roads leading into their neighborhood center, national power line coverage, primary and secondary schools, clinics, and telephone services. While we are yet able to provide free education at all levels for all, Vietnam have been focusing its efforts on eradicating illiteracy. We realized universal primary education in 2000 and universal secondary education in 2010. The number of university and college students has increased by 17 times over the last 35 years. Currently, 95% of Vietnamese adults are literate. While we have yet to achieve universal health coverage, we are focusing on enhancing preventive healthcare, epidemic prevention and control, and providing support for disadvantaged persons. Many once-prevalent diseases have been successfully curbed. The poor, children under 6, and the elderly are provided with free health insurance coverage. Children malnutrition and infant mortality have been slashed about three-fold. Average life expectancy has gone up from 62 years in 1990 to 73.7 years in 2020. Thanks to economic progress, we have also been able to take better care of people with significant contributions to the revolution and Vietnamese Heroic Mothers, and tend to the graves of martyrs who sacrificed themselves for the Fatherland. The cultural life has also been significantly enriched with a diverse and growing range of cultural activities. 70% of the population now have internet access and Vietnam is among the worlds fastest-developing IT countries. The United Nations has recognized Vietnam as one of the leading countries in reaching the Millennium Development Goals. In 2019, Vietnams Human Development Index (HDI) value reached 0.704, putting the country in the high human development category. This is a commendable achievement, especially compared to countries at a similar level of development.

Thus, we can say that the implementation of Doi Moi has delivered clear, profound and positive transformations in Vietnam. The economy is booming and the productive force is strengthened. Poverty is rapidly and constantly falling. The peoples living standard is improving and many social issues have been addressed. Political and social stability, defense, and security are well-safeguarded. We enjoy an increasingly broader foreign relations and more extensive international integration. Our national standing and power are growing and the peoples trust in the Partys leadership is bolstered.

In its review of 20 years of Doi Moi, the 10th National Party Congress (2006) noted that the Doi Moi process has garnered immense historic achievements. Indeed, in many respects, the Vietnamese people nowadays enjoy living standards higher than ever before. It is one of the reasons why the Doi Moi initiated and led by the Communist Party of Vietnam receives such support, and is actively implemented by the broad mass of Vietnamese citizenry. The successes of Doi Moi have proved that socialist-oriented development is not only more economically positive, but also capable of better addressing social problems, than is the case in capitalist countries at the same level of economic development. The extraordinary results and accomplishments of Vietnam amidst the COVID-19 pandemic and global recession since early 2020 have been recognized and commended by international friends and peoples, thus illustrating the superiority of the socialist system in our country. Recently, the 13th National Party Congress once again asserted and emphasized that After 35 years of Doi Moi, 30 years of implementing the Platform for national development during the transition to socialism, the theories on Doi Moi, socialism, and the path towards socialism in Vietnam are becoming more complete and gradually translated into reality. We have achieved tremendous and historic progress, and are developing more vigorously and comprehensively compared to the pre-Doi Moi era. With all due modesty, we can say that Never has our country had such fortune, potential, international standing and prestige as it does today. Such progress is the crystallization of the creativity of the entire Party, people and army, and the product of our enduring and constant endeavor over the many past terms of office. It is testimony to the correctness of our path to socialism. It proves that this process is well in line with objective laws, the situation in Vietnam, and the development trajectory of our times. It demonstrates that the Doi Moi guideline set by the Party is correct and innovative. It proves that the leadership of the Party is the foremost element that decides all victories of the revolution in Vietnam. The political platform of the Party continues to be the ideological banner that strengthens our peoples resolve and leads them along the path of comprehensive and holistic Doi Moi. It serves as the foundation for our Party to improve its guideline for the building and defense of our Fatherland, the Socialist State of Vietnam, in the new era. (Documents of the 13th National Party Congress, volume 1, National Political Publishing House, Hanoi, 2021, page 25-26).

Apart from the dominant streak of achievements and positive aspects, there remain considerable drawbacks and limitations, in addition to emerging challenges that we must face in our national development.

Economically, Vietnam's growth quality and competitiveness remain low and not very sustainable. Infrastructure lacks coherence, and the effectiveness and capability of many businesses, including state-owned enterprises, are limited. The environment in many areas suffers from pollution. The administration and regulation of the market still exhibit many shortcomings. Meanwhile, competition is growing increasingly fiercer against the backdrop of globalization and international integration.

Socially, the wealth gap is on the rise, while the quality of education, healthcare and other public services still leaves much to desire. Our culture and social morality shows signs of decline in certain aspects, and crime and social evils continue to see complex developments. Most alarmingly, corruption, extravagance, degradation in political thought, morality and lifestyle can be observed in a portion of cadres and Party members. At the same time, hostile forces are trying all means to intervene, subvert, cause instability and carry out peaceful evolution in order to undermine socialism in Vietnam.

Our Party recognizes that Vietnam is in a transitional period towards socialism. During this transition, socialist elements are taking shape, intertwined and competing against non-socialist elements, including capitalist elements in a number of areas.

This overlap and competition become even more complex and intense against the backdrops of the market economy, openness, and international integration. Apart from achievements and positive developments, there will always be negative aspects and challenges that demand rational consideration and prompt and effective resolution. This is an arduous and grueling struggle that requires a new vision, new resolve, and new drive for innovation. Advancing towards socialism is a period of tirelessly bolstering, augmenting and harnessing socialist elements so that they would become more dominant and superior, and ultimately triumph. Success or failure depends, first and foremost, on the correctness of the Party guideline and its political fortitude, leadership, and combativeness.

Presently, we are continuing to accelerate the transformation of our growth model and economic restructuring with greater focus on quality and sustainability. In this connection, we have identified the following breakthroughs: the synchronous improvement of development institutions, with priority given to the socialist-oriented market economy; the development of human resources, particularly highly-skilled workers; and the development of synchronized and modern infrastructure, economically and socially (Documentation of the XIII Congress, volume 2, pp. 337 - 338).

With regards to social development, we continue to promote sustainable poverty reduction, improve the quality of healthcare, education and other public services, and further enhance peoples cultural life. The entire Party, people and army are making every effort to study and emulate President Ho Chi Minh's thoughts, morality and style with the determination to stem and reverse the degeneration in political ideology, morality, and lifestyles among a portion of cadres and Party members, primarily leadership and managerial cadre at all levels. We shall strive to better implement the principles of Party organization and building, in order to ensure the Party organization and the state apparatus will grow stronger and free from taint, maintain the Party's revolutionary nature and improve its leadership capacity and combativeness.

Both theory and praxis have shown that building socialism means creating a qualitatively new type of society, which is by no means a simple or easy task. This is a grand and innovative endeavor, full of challenges and adversities. It is a self-driven, continuous, long-term and goal-oriented cause that cannot be rushed. Therefore, in addition to charting the correct Party line and policy and ensuring its leadership role, we must actively harness people's creativity, support and active participation. The people shall welcome, support and enthusiastically participate in the implementation of the Party lines since they see that such guidelines are in their interest and live up to their aspirations. The ultimate victory and development is deeply rooted in the strength of the Vietnamese people.

On the other hand, the Partys leadership and stewardship, in shaping the political line and making decisions, should not refer only to the reality of its own country and nation. It must instead also study and learn from the experience of the world and that of the times. In today's globalized world, the development of each nation-state cannot stand alone and separate from the impacts of the world and the times, and those of the context and the dynamics. Therefore, we must actively engage in international integration, implement a foreign policy of independence, self-reliance, peace, cooperation and development, and multilateralization and diversification of international relations, on the basis of respect for the independence, sovereignty and territorial integrity of each other, non-interference in each other's internal affairs, equality and mutual benefit.

And it is of great importance to remain steadfast and firm on the foundation of Marxism - Leninism - the scientific and revolutionary doctrine of the working class and the working people. The scientific and uncompromising revolutionary nature of Marxism-Leninism and Ho Chi Minhs Thought are enduring values that have been pursued and implemented by generations of revolutionaries. This will continue to develop and prove its vitality in the reality of both the revolutionary movement and scientific development. We need to selectively accept and supplement in the spirit of criticism and creativity of the latest ideological and scientific achievements, so that they shall forever be fresh and revitalized, and filled with the breath of our times, thus not falling prey to dogmatism and obsoleteness.

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Some theoretical and practical issues on socialism and the path towards socialism in Vietnam - Nhan Dan Online

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Covid-19: ‘No one will be safe until everyone is safe’ – Expat Guide to Switzerland – Expatica Switzerland

Posted: at 5:56 am

As richer nations start to see the end of the tunnel thanks to vaccines, in Asia and Latin America the pandemic is still raging. Swiss Solidarity, the humanitarian arm of the Swiss Broadcasting Corporation (SBC), has launched a new appeal to help those most in need.

With its nearly two billion inhabitants, South Asia currently accounts for half of all known new Covid-19 cases worldwide. More than three new infections are recorded there every second, the United Nations childrens fund UNICEF warned on May 21. Each minute, over three people die from the disease.

The situation is particularly dire in India, which last week registered its highest number of daily deaths since the start of the pandemic. But the alarm is now also sounding in neighbouring Nepal, where the virus is spreading exponentially.

New infections there have shot up from around 150 to over 8,000 a day in a matter of weeks a figure that is surely far below the real one, according to the UN Country Team in Nepal. The health system, more fragile than Indias, is overwhelmed and severely lacking basic medical supplies. Switzerland has just sent 30 tonnes of materials, after a previous shipment to India in early May.

Other very vulnerable countries in the region, such as Bangladesh, Pakistan and Afghanistan, are also at great risk, according to UNICEF.

On the other side of the planet, Latin America is also badly hit. The region has the highest number of confirmed deaths to date. Besides Brazil, where the pandemic has raged out of control for months, the situation has deteriorated sharply in several countries in Central and South America, in particular in Peru, which has one of the worst mortality rates, and in Bolivia, now grappling with its third wave.

In most countries in these regions, fewer than one in ten people have received at least one dose of the coronavirus vaccine. This is nowhere near enough to stem the pandemic.

Fragile infrastructure, poverty and pre-existing political instability raise fears of catastrophic and lasting consequences, warns Ernst Lber, who heads Swiss Solidaritys humanitarian programmes department. This is why the humanitarian foundation, which is linked to SBC (SWI swissinfo.chs parent company), has launched a new appeal for donations.

In many countries, access to medical care was a major problem already before the crisis; today, their health systems are on the brink of collapse. Media outlets have relayed desperate scenes of people in urgent need of oxygen cylinders or being turned away from hospitals. Moreover, those suffering from chronic diseases other than Covid-19, which are widespread in emerging countries, can no longer receive the necessary care.

The spread of new variants of the virus has further complicated matters and exposed the inadequacy of certain government responses, in particular in middle-income countries [like India and Brazil], which in theory stood a better chance of pulling through, says Lber.

The pandemic is also taking a devastating economic toll. In many countries, a large part of the population depends on the informal economy and day labour. Job losses resulting from sanitary restrictions can set off chain reactions that are difficult to reverse later on, Lber cautions.

People lose their entire income and have to sell off assets that they need in order to earn a living or get into debt; children no longer go to school; people who were working in cities have to return to the countryside, thereby helping spread the virus in rural areas where health care is even less accessible.

The Coronavirus International fundraising campaign was launched by Swiss Solidarity in October and has raised over CHF9 million ($10 million). The money has been used to support the projects of 16 non-governmental organisations (NGOs) working locally in 14 countries. We have now almost exhausted these funds, but the problem is still there, Lber says.

Donations to the Coronavirus International fundraising campaign can be made directly online via the Swiss Solidarity website, or to its postal account 10-15000-6 with the reference COVID INT.

As part of the Coronavirus International campaign, Swiss Solidarity is working with 16 NGOs, including Caritas, the Red Cross, Helvetas and Doctors Without Borders.

Projects have so far been supported in 14 countries, mainly in South Asia and Latin America, but also in some countries in the Middle East and Africa. Supplementary aid has moreover been provided to India and Brazil.

The projects follow two main approaches: the first involves direct socio-economic assistance for those most affected by the restrictions (people working in the informal sector, migrants, displaced persons, marginalised groups). The goal here is to cushion the economic shock by forestalling chain reactions and helping people to bounce back, Lber explains.

The other priority is health care and entails support for health services, the provision of medical supplies, awareness campaigns, etc. Just a few dozen francs can already make a difference. According to the NGO Helvetas, a donation of CHF120 can buy hygiene kits for ten people, for instance.

As richer nations start to see the end of the tunnel thanks to the vaccination roll-out, aid organisations are stressing the importance of collective action to fight the pandemic on the one hand because no one will be safe until everyone is safe; but above all out of solidarity. As Lber concludes, we cannot just accept the situation as it is.

Swiss Solidarity started out in 1946 as a radio programme called the Chane du Bonheur, broadcast from Lausanne by French-speaking Swiss public radio (now Radio Tlvision Suisse (RTS) which is a branch of the Swiss Broadcasting Corporation). The initiative quickly spread to Switzerlands German and Italian-speaking regions, where it was called the Glckskette and Catena della Solidariet, respectively.

The programme initially involved regular radio broadcasts aimed at collecting donations for humanitarian causes. In 1983, the Chane du Bonheur was granted legal status as an autonomous foundation, while remaining closely linked to the Swiss public broadcasting sector, as its humanitarian arm. In 2013, it took on the English name Swiss Solidarity. Today, the foundations fundraising appeals are systematically relayed by public media channels.

The donations collected are distributed among 24 humanitarian partner NGOs. The projects supported focus on long-term efforts, such as reconstruction after disasters, in Switzerland and around the world.

Since its creation, Swiss Solidarity has organised over 250 fundraising campaigns and raised over CHF1.8 billion in donations, making it Switzerlands largest humanitarian aid donor.

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Westchester developer files for bankruptcy twice to fight arbitration award – The Real Deal

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John Fareri and Villa BXV (Getty, Facebook/VillaBXV, iStock)

The developer of a Westchester condo project has now filed two bankruptcy petitions in an attempt to avoid paying millions of dollars to his former construction manager.

John Fareri of Fareri Associates, the developer of the 53-unit Villa BXV complex in Bronxville, filed for Chapter 7 bankruptcy in late May on behalf of Gateway Development, an entity that was established to manage construction of the condo complex. Fareri owns a 51 percent stake in Gateway Development, with the remaining share owned by the construction manager, James Carnicelli.

And less than two weeks earlier, Fareri filed a separate Chapter 11 bankruptcy petition on behalf of another entity, Gateway Kensingon, which he created to sponsor the condo complex. Villa BXV was completed in 2017, but the sponsor still owns at least seven units, most of which have been rented.

The bankruptcy filings were prompted by a recent $14.3 million arbitration award that was issued in response to a claim by Carnicelli.

The dispute stems from $6.3 million in tax credits that Fareri received under the state Department of Environmental Conservations brownfield cleanup program for rehabilitating the once-contaminated site that now houses the residential complex.

After Fareri claimed the tax credits in 2018, the state Department of Finance asked for documents to substantiate the claim. His company prepared invoices to show the costs of remediation and condo construction.

But Carnicelli challenged the bills, arguing that they amounted to more than he was paid and that he should receive the difference of millions of dollars. In response, Fareri fired Carnicelli.

Carnicelli then brought the case to the state Supreme Court, requesting arbitration. During that process, Fareri said he was not aware of the gap between the actual costs and the costs spelled out in the invoices. But arbitrators ultimately issued a $14.3 million award, including a $12.7 million payment from Gateway Kensington to Gateway Development. As a 49 percent owner of Gateway Development, Carnicelli would receive more than $6 million.

But with Gateway Kensington petitioning for restructuring under Chapter 11, and Gateway Development seeking to liquidate under Chapter 7, the fate of those millions is now up in the air.

A Fareri Associate spokesperson said in a statement that the Chapter 7 filing aims to move the dispute from the state court to the federal bankruptcy court, which has the experience and expertise to handle complex business matters with the goal of arriving at a favorable resolution. The spokesperson said the filing has no impact on the companys other businesses.

Carnicellis attorney declined to comment, citing pending litigation.

Contact Akiko Matsuda


Westchester developer files for bankruptcy twice to fight arbitration award - The Real Deal

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Alamo Drafthouse Completes Sale: Out Of Bankruptcy And Opening Five New Theaters As Box Office Revives – Deadline

Posted: at 5:56 am

Alamo Drafthouse has emerged from bankruptcy and is opening five new theaters, the chain announced Tuesday as the box office roars back to life.

As the country moves forward following the unprecedented 2020 pandemic and moviegoers are returning to theaters, Alamo Drafthouse Cinema is excited to announce its continued emergence and growth with the announcement of five new theaters opening this year and next, the company said

It closes out its bankruptcy with the completion of the sale to Altamont Capital Partners, funds managed by affiliates of Fortress Investment Group and Alamo Drafthouse founder Tim League. The news follows the circuits biggest box office weekend since the pandemic began, including a stellar return of the Los Angeles theater that saw sold out shows for all films and all showtimes for the entire holiday weekend from Friday to Monday.

Were so thrilled to be reopening theaters across the country and welcoming back audiences for an unparalleled moviegoing experience with films weve been eagerly awaiting for over a year now, said CEO Shelli Taylor.

Were so grateful to our incredible partners at Altamont and Fortress, who are completely aligned with our vision for Alamo Drafthouses growth. Its incredibly exciting to be back on that path so we can bring the Alamo Drafthouse experience to new locations around the country, including our very first locations in Manhattan, St. Louis, and D.C.

ManhattanThe companys highly anticipated first Manhattan location, Alamo Drafthouse Lower Manhattan, is a 14-screen theater in the Financial District at 28 Liberty, and is expected to open this fall. Alamo Drafthouse Lower Manhattan will be the home of The Press Room, a brand-new museum, letterpress print shop, bar, and event space.

A previously announced Staten Island theater is still in development with the Flying Guillotine, a martial arts-inspired bar in partnership with Wu-Tang Clan founder RZA.

Greater Washington, D.C. areaAlamo Drafthouse also announced two new locations from franchise partners Cojeaux Cinemas.

Alamo Drafthouse D.C., the companys first theater to be located in D.C. proper, is a 9-screen theater located at Bryant Street in northeast Washington, D.C. and expected to open in winter, 2021.

Alamo Drafthouse National Landing is a 9-screen theater in the Crystal City neighborhood of Arlington, Virginia,with an opening planned in spring of 2022. Cojeaux Cinemas operates three other Alamo Drafthouse franchises in Virginia.

St. LouisAlamo Drafthouses first theater in St. Louis is located at the upcoming City Foundry STL development in the citys Midtown district, Alamo Drafthouse St. Louis is a 10-screen theater from franchise partner St. Louis Alamo Movies, expected to open in spring of 2022.

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Blurred Immunity: California Cannot Escape Adversary Proceeding on Grounds of Sovereign Immunity – Lexology

Posted: at 5:56 am

In 2018, the liquidating trustee for Venoco, LLC and its affiliated debtors (collectively, the Debtors) commenced an action in the United States Bankruptcy Court for the District of Delaware seeking monetary damages from the State of California and its Lands Commission (collectively, the State) as compensation for the alleged taking of a refinery (the Onshore Facility) that belonged to the Debtors (the Adversary Proceeding). The State moved to dismiss, claiming, among other things, sovereign immunity. The Bankruptcy Court denied the motion to dismiss, and the District Court affirmed the denial. The State appealed to the Third Circuit, and the Third Circuit affirmed.

Writing for a unanimous three-judge panel, Circuit Judge Ambro began by observing that States can generally assert sovereign immunity to shield themselves from lawsuits, but bankruptcy proceedings are one of the exceptions. The Supreme Court held in Central Virginia Community College v. Katz, that, by ratifying the Bankruptcy Clause of the U.S. Constitution, states waived their sovereign immunity defense in proceedings that further a bankruptcy courts exercise of its jurisdiction over property of the debtor and its estate (called in rem jurisdiction).[1] So, the single question before the Court was whether, under Katz, the State could assert a defense of sovereign immunity in the Adversary Proceeding.

Judge Ambro said no. He acknowledged that Katz did not define the range of proceedings that further a bankruptcy courts in rem jurisdiction, but explained that it did tell us bankruptcys three critical functions: [1] the exercise of exclusive jurisdiction over all of the debtors property, [2] the equitable distribution of that property among the debtors creditors, and [3] the ultimate discharge that gives the debtor a fresh start by releasing him, her, or it from further liability for old debts.[2]

Based on this guidance, Judge Ambro concluded that to determine whether a state can assert sovereign immunity in a particular proceeding, courts must ask whether a proceeding directly relates to one or more of these three functions.[3] Here, he concluded that the adversary proceeding furthers at least two of those three critical bankruptcy functions:

[T]he Adversary Proceeding furthers the Bankruptcy Courts exercise of jurisdiction over property of the Debtors and their estates, as it seeks a ruling on rights in the Onshore Facility. [ . . . ] The Adversary Proceeding also furthers the second critical functionfacilitating equitable distribution of the estates assets. The Onshore Facility is a significant asset for Venoco and its creditors. Indeed, the liquidation analysis [included in the Debtors plan] acknowledged the [State] was receiving significant value from the use of the Debtors assets and that the value of the use of those assets [was] being negotiated between the parties. Further, the [State] is a major creditor and filed a proof of claim against Venoco, so the [State has] a stake in how the Trusts assets are liquidated and distributed.[4]

Finally, Judge Ambro was unmoved by the States insistence that sovereign immunity is fundamental to our constitutional design and the exercise of eminent domain power is especially central to their sovereignty.

[B]ankruptcy is a different ball game, and the effect on state sovereignty is not the focus of our analysis. The focus is instead on ensuring that sovereign immunity will not interfere with the bankruptcy courts jurisdiction over the estates property as well as its orderly administration. The driving principle of the Katz decision is that the Bankruptcy Clause has a unique history and is sui generis among Article Is grants of authority, the result being that federal courts could impose on state sovereignty in bankruptcy proceedings.[5]


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Preference Defense In the Wake Of The Pandemic: A Primer – JD Supra

Posted: at 5:56 am

Nothing is more frustrating to a trade creditor holding a large unpaid balance owed by a debtor in bankruptcy than the risk that payments the trade creditor received before the debtor filed bankruptcy may be clawed back by the debtors estate as preference payments. This frustration has been compounded since the onset of the COVID-19 pandemic early last year, during which time vendors have supported struggling customers by agreeing to defer or postpone payments under the terms of their goods or services contracts, even while the vendors themselves may have struggled to stay afloat. Pursuant to section 547(b) of the Bankruptcy Code, a debtor in possession or a trustee can seek to recover certain payments made within 90 days of the bankruptcy filing date, subject to various defenses.

The policy behind the preference statute is to treat creditors equitably and level the playing field by requiring preferred creditors to share their recovery with all other creditors. Paradoxically, however, when the estate recovers preference payments made to a particular creditor, that creditor often will not share in the recovery at all. Pursuant to the absolute priority rule, higher-priority claims, such as secured claims, unpaid chapter 11 administrative expense claims incurred by the debtor (such as professional fees), and other priority claims typically all must be paid in full before unsecured creditors receive any distribution. With increasing frequency, and particularly in retailer bankruptcies, preference recoveries are used to fund chapter 11 administrative expenses and to improve the recoveries of underwater secured lenders rather than to facilitate pro rata distributions to unsecured creditorsnot at all what Congress intended when it enacted the statute. While the preference statute is intended to promote fairness and equity among creditors, the creditor that finds itself defending a preference action is more likely to characterize the action as punishment for continuing to support a financially distressed customer.

So, what should a creditor do when it first receives a preference demand letter? What should it do when it is subsequently sued? What arguments and defenses can the creditor raise in opposition to a preference claim? How should the creditor go about putting this information to use when responding to, defending, and (hopefully) settling the preference claim? This article answers these questions, including by providing a list of action items that a creditor should be mindful of, beginning with the date that a customer files for bankruptcythe petition datethrough the resolution of a preference litigation. Creditors are nearly always far better off spending the time compiling and presenting proof of potential defenses to a preference demand than simply paying the amount demanded.

Some Necessary Background: Preference Claims and Defenses

The Elements of a Preference ClaimPursuant to section 547(b) of the Bankruptcy Code, a trustee, a debtor in possession, or a successor to the estate such as a liquidating trust can avoid and recover a transfer of property of the debtor as a preference by proving all the following required elements:

The Small Business Reorganization Act of 2019 (SBRA), which became effective on February 19, 2020, amended section 547(b) to require the plaintiff in a preference suit to allege, as part of its burden of proof, that the preference claim is based on reasonable due diligence in the circumstances of the case and takes into account a partys known or reasonably knowable affirmative defenses. This seemingly heightened burden of proof for preference claims has raised numerous questions that will need to be answered by the courts. How much of an additional burden will be placed on a plaintiff to prove a preference claim? What constitutes reasonable due diligence? What is a reasonably knowable affirmative defense? And can the plaintiff in a preference action rely on the debtors records to satisfy these requirements, or must the plaintiff engage in additional diligence? Given the relatively short time this change has been in place, few courts have had occasion to address these questions.

Defenses to a Preference ClaimSection 547(c) of the Bankruptcy Code provides several affirmative defenses that a creditor can assert to reduce or eliminate its preference exposure. These defenses are designed to encourage creditors to continue doing business with and extending credit to financially distressed companies. In the rare case that goes to trial, the creditor bears the burden of proving its defenses.

547(c)(1)Contemporaneous Exchange of Value: The contemporaneous exchange of value defense, set forth in section 547(c)(1), is one such defense. This defense excuses any payment or other transfer that the debtor and creditor had intended as a contemporaneous exchange for new value and that was a substantially contemporaneous exchange. A creditor that provides new goods or services to a debtor in exchange for a substantially contemporaneous payment, such as a cash-on-delivery transaction, replenishes the debtor and should not be subject to preference liability.

547(c)(4)Subsequent New Value: The subsequent new value defense, set forth in section 547(c)(4), is perhaps the most frequently invoked preference defense. The new value cannot be secured by a security interest in the debtors assets that is otherwise unavoidable, and it cannot be paid by an otherwise unavoidable transfer to or for the benefit of the creditor. The subsequent new value defense reduces a creditors preference liability dollar for dollar based on new value provided to the debtorsuch as sale and delivery of goods or provision of services to the debtor on credit termsafter the creditors receipt of an alleged preference payment. The defense is predicated on protecting a creditor from preference risk where the creditor replenished the debtor by continuing to extend credit after receiving a transfer otherwise alleged to be a preference.

The section 547(c)(4) new value defense clearly applies to new value that was unpaid as of the petition date. Several United States Circuit Courts of Appeals (the federal courts immediately below the United States Supreme Court) and other courts have reached conflicting results on the applicability of the new value defense to paid new valuevalue that the creditor provided to the debtor after receiving an alleged preference payment but that the debtor repaid before the petition date. The majority viewfollowed by the Fourth, Fifth, Eighth, Ninth, and, most recently, Eleventh circuits and many lower courtshas applied the new value defense to new value paid by an otherwise avoidable transfer (such as a subsequent preference payment) and unpaid new value. On the other hand, the Seventh Circuit and a minority of other courts have ruled that the new value defense applies only to unpaid new value. A creditors ability to assert paid new value, in addition to unpaid new value, could substantially reduce preference liability but depends on the jurisdiction in which the debtor filed bankruptcy.

In certain instances, new value provided before the petition date might be paid after the petition date pursuant to an order authorizing the debtor to pay critical vendor claims or administrative claims arising under section 503(b)(9) of the Bankruptcy Code. As discussed later in this article, a creditor may have some or all of its prepetition claim paid after the petition date by being deemed a critical vendor during the bankruptcy case. Also, a creditor may be granted an allowed administrative expense claim under section 503(b)(9) of the Bankruptcy Code for the value of goods received by the debtor within 20 days before the petition date (a 503(b)(9) claim). Courts are divided on whether new value that is paid after the petition date pursuant to a critical vendor order or as an allowed 503(b)(9) claim nevertheless can be used to reduce preference liability as subsequent new value. Some courts, including the Third Circuit (whose rulings are binding on the lower federal courts in Delaware, New Jersey, Pennsylvania, and the United States Virgin Islands), have held that such new value may still count toward the new value defense, because new value is determined based on a snapshot as of the petition date. Other courts have denied the application of such new value toward the new value defense, largely under the premise that permitting such new value would permit the creditor to double-dip by reducing its preference exposure based on credit extended before the petition date where such credit was fully paid after the petition. This issue, specifically as it relates to 503(b)(9) claims, is presently on appeal in the Eleventh Circuit.

547(c)(2)Ordinary Course of Business: Another frequently invoked defense is the ordinary course of business defense set forth in section 547(c)(2) of the Bankruptcy Code. The creditor must first prove the alleged preference payment satisfied a debt that the debtor incurred in the ordinary course of business or financial affairs of the debtor and the creditor. A trade creditor that extended credit to the debtor should have little difficulty satisfying this requirement. The creditor must then prove the preference payment was either (A) made in the ordinary course of business or financial affairs of the debtor and the creditor (the subjective test), or (B) made according to ordinary business terms (the objective test). The subjective test requires proof that the alleged preference payments were consistent with the debtors payments to the creditor prior to the preference period. A creditor can prove the objective part of the defense by showing that the alleged preference payments were consistent with the terms and payment practices in the creditors industry, the debtors industry, or some subset of either or both. Needless to say, this defense is fact-intensive, and courts and parties have approached it in a wide variety of ways.

During the COVID-19 pandemic, vendors and customers frequently negotiated extended terms for the payment of invoices. If a customer subsequently filed for bankruptcy protection and sought to recover payments made to the vendor as alleged preferences, the vendorby giving the customer more time to payrisked losing the ordinary course of business defense. To address this seemingly unfair result, Congress, through the Consolidated Appropriations Act of 2020 (CAA), which became effective on December 27, 2020, amended section 547 to create a new, temporary preference exception in new subsection (j), under which covered payment[s] of supplier arrearages[1] may not be avoided as preferences. According to section 547(j)(1)(B), a covered payment of supplier arrearages means a payment of arrearages that is made in connection with an agreement or arrangement made or entered into on and after March 13, 2020 (the generally recognized onset of the COVID-19 pandemic in the United States), between a debtor and a supplier of goods or services to delay or postpone payment of amounts due under an executory contract. The payment of arrearages cannot exceed the amount due under the contract before March 13, 2020, and does not include fees, penalties, or interest in an amount greater than that scheduled to be paid under the contract or which the debtor would owe if the debtor had made all payments on time and in full before March 13, 2020. As with the SBRAs amendment to section 547, this statutory language leaves much unanswered about the scope and application of this new exception that the courts will need to decide. Absent further congressional action, this temporary provision expires on December 27, 2022, but will continue to apply to bankruptcy cases filed before that date.

Critical Vendors: Another defense creditors have asserted with mixed success is the critical vendor defense. Chapter 11 debtors frequently seek and obtain authority to pay the prepetition claims of critical vendors based on the premise that the debtors businesses would be irreparably disrupted and their efforts to maximize value for their estates and creditors would be severely impaired if such vendors refuse to continue extending credit. When defending preference actions, creditors that have been granted critical vendor status have argued that a preference claim against them must fail in light of the fact that the court granted authority for the debtor to pay the creditors prepetition claim, because the plaintiff cannot prove one of the necessary elements of the claimthat the alleged preferential transfer enabled the creditor to receive more than the creditor would have received in a hypothetical chapter 7 bankruptcy liquidation. This argument has had mixed success, largely depending on whether the estate was required to pay the creditors prepetition claim or merely had discretionary authority to do so. Under the latter circumstance, courts tend to uniformly reject the critical vendor defense. Therefore, creditors considering extending credit to a debtor after the petition date in exchange for the payment of prepetition claims pursuant to a critical vendor order in the bankruptcy case should carefully review how the debtors critical vendor program is structured and should consider entering into a trade agreement that requires payment of the prepetition claim if the creditor wishes to minimize the risk of preference liability.

Preference Action ItemsUnsecured trade creditors seeking to analyze and prepare their defenses and respond to a potential or asserted preference claim should be mindful of the action items listed below, beginning even before receiving a preference demand:

ConclusionNotwithstanding Congress recognition of the realities of doing business during the COVID-19 pandemic, and indeed in light of the recent amendments to the Bankruptcy Code concerning preferences, it is absolutely critical for trade creditors to be prepared to address and respond to potential preference claims following a customers bankruptcy filing. The information and action items provided above are a great start for doing so. However, upon receipt of a demand letter or a preference complaint, a trade creditor should consult an attorney to assist in the defense of the claim and to help navigate the choppy and unclear waters underlying preference risk.

[1] The CAA also added new section 547(j)(2)(A), which provides that a trustee or debtor-in-possession may not avoid a covered payment of rental arrearages. This additional covered payment exception is substantially similar to the covered payment of supplier arrearages exception discussed in this article.[2] It could be argued that the SBRAs new venue threshold applies more narrowly to bankruptcy cases (as opposed to lawsuits) filed on or after February 19, 2020.

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Preference Defense In the Wake Of The Pandemic: A Primer - JD Supra

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Puerto Rico Board Seeks Islands Bankruptcy Exit This Year – Yahoo Finance

Posted: at 5:56 am

(Bloomberg) -- Puerto Ricos financial oversight board is aiming to get the commonwealth out of its record bankruptcy by the end of 2021, a move that is expected to help lift the island out of years of economic decline.

The oversight board, which Congress created in 2016 to fix Puerto Ricos financial crisis, filed a restructuring plan this month to the bankruptcy court to reduce $22 billion of debt. Judge Laura Taylor Swain is set to hear arguments on the restructuring at a July 13 hearing.

We hope that we are on track for Puerto Rico to emerge from bankruptcy, ideally before the end of the year, David Skeel, the boards chairman, said Thursday during a public meeting for the panel.

Puerto Rico has been in bankruptcy, called Title III, for four years as it has suffered hurricanes, earthquakes, political turmoil and the coronavirus pandemic. Leaving bankruptcy will allow the commonwealth to borrow again in the capital markets and help improve economic growth on the island, Skeel said.

Getting out of bankruptcy will move Puerto Rico to where its having access to the capital markets, he said. It will make Puerto Rico attractive and an exciting place, I think, for development.

Puerto Ricos Electric Power Authority is also in bankruptcy. The board anticipates filing to the court a restructuring plan in early 2022, Natalie Jaresko, the boards executive director, said during the meeting.

Prepa, as the power utility is known, is seeking to reduce $9 billion of debt. If Prepa had to pay that full amount of debt, it would cost customers 5 cents to 6 cents per kilowatt hour, according to the utilitys multi-year fiscal plan. Not restructuring debt and implementing changes to the utilitys pension would result in electricity rates of 25.4 cents to 29.6 cents per kilowatt hour.

The board Thursday approved Prepas fiscal plan as well as those for several Puerto Rico entities, including the University of Puerto Rico and the Aqueduct and Sewer Authority. The spending frameworks help to balance budgets and implement expense reductions.

Story continues

Collectively, these fiscal plans provide an ambitious set of reforms that complement the commonwealth fiscal plan and will continue to put Puerto Rico toward long-term economic growth and opportunity, Jaresko said during the meeting.

(Updates with potential timing of Prepa debt plan in the sixth paragraph.)

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The New Cross-Border Arrangement Between Hong Kong and Mainland China on Insolvency and Restructuring Matters A Comparison with Chapter 15 of the…

Posted: at 5:56 am

On May 14, 2021, the Department of Justice of the government of the Hong Kong Special Administrative Region announced that the Secretary for Justice of Hong Kong and the Vice-president of the Supreme Peoples Court (the SPC) had signed the Record of Meeting on Mutual Recognition of and Assistance to Bankruptcy (Insolvency) Proceedings between the Courts of the Mainland and of the Hong Kong Special Administrative Region (the ROM). The ROM concerns the commencement and implementation of the much anticipated cross-border mutual recognition, assistance and cooperation arrangement between Hong Kong and mainland China (the Mainland) in relation to corporate insolvency and restructuring matters (the Cooperation Arrangement).

To give effect to this milestone agreement, on the same day the SPC issued The Supreme Peoples Courts Opinion on Taking Forward a Pilot Measure in relation to the Recognition of and Assistance to Insolvency Proceedings in the Hong Kong Special Administrative Region (the SPC Opinion) and the Hong Kong government issued a Practical Guide setting out the procedure for a Mainland administrators application to the Courts of Hong Kong for recognition and assistance (the Guide).

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The New Cross-Border Arrangement Between Hong Kong and Mainland China on Insolvency and Restructuring Matters A Comparison with Chapter 15 of the...

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From Bankruptcy To Building Her Start-Up, This Chennai-Based Entrepreneur Is Now Coaching Students On… – The Logical Indian

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Deepa Aathreya, a Chennai-based entrepreneur, set up Alt School (formerly known as 'School of Success') to inculcate leadership qualities in children and introduced programmes for holistic development of parents, and teachers. She even holds a Guinness Record for conducting program on child safety. However, Aathreya had to face several ups and downs in order to succeed.

Born as an obese child, Aathreya often found herself being fat-shamed in her childhood. Her academic life started getting impacted but things gradually changed for good. When she was in ninth standard, a teacher motivated her to take charge of her life. Soon after, she participated as a candidate for the school election and won which added to her confidence.

After completing school, Aathreya completed her bachelor's degree in Arts and thereafter pursued an MBA (Master of Business Administration). She then joined an internship and while still in the internship period, she decided to tie the knot. Within nine months after her marriage, their son was born and she had to discontinue her internship.

Aathreya felt bad for passing on the entire financial burden to her husband, but fortunately, she soon received a call from her former employer asking her to plan the birthday party of her son. She took the opportunity and executed it, and this proved to be the turning point.

She started getting requests to conduct summer camps and the business started to flourish. But within a couple of months, life came to a standstill for the family after Aathreya was cheated by a business partner. They had lost her home, car and even had to get their son enrolled out of the school as they could not afford the fees.

She went bankrupt to the extent that survival had become a great challenge for her. "Now it does not affect me but at that point, it seemed like the whole world came to an end. We were angry and also feared how are we going to manage everything. Being an entrepreneur, we had the responsibilities of the people working with us, then there was our own child whom we had to take care of. There was a lot of mixed feelings," Aathreya said to The Logical Indian.

To make ends meet, she started selling balloons at the beach. She used to tell stories to children at the beach and then sold them balloons. Eventually, she became quite popular amongst the children who used to visit the beach just to listen to her stories. Media, too, noticed this and covered her innovative approach to teach life lessons to kids which eventually paved the way for her big start-up.

A school in Madurai, on reading about her, reached out to conduct storytelling sessions in the school. This was when the idea of School of Success (now known as 'Alt School') came to Aathreya.

"When I was called into the school in Madurai and I conducted the storytelling session. Firstly I felt like I thoroughly enjoyed the experience and secondly I realised that it can be a brilliant idea by itself as it does not require much investment and you are your investment initially. At that point in time investment was the biggest barrier, so I thought this could be the right way forward."

School of Success (now known as 'Alt School') is based on "classroom without walls" concept, which targets the multidimensional development of students. She also introduced the concept of "Leadership for kids" where they learn leadership skills by working on social causes. She firmly believes that changes begin with children and therefore started the "Be The Change" movement. Her venture now includes over 2,500 schools where she also conducts parenting and teacher training programmes.

In 2011, Aathreya and her husband met with an accident. After recovering, the entrepreneur said that the experience turned out to be life-changing for her.

"Until 2011, all I was seeking was a materialistic pleasure. Before the accident, if someone would ask me why am I in this business of working with children, I would say earning opportunities. But after my accident when I put my life mission and purpose of what I want to do further, I think that is when a phenomenal and exponential growth happened," she said.

After finding the purpose, her start-up had touched more than a lakh students all over the country. She does not even charge any fixed fees for her courses but accepts whatever amount the schools wish to pay according to their budget.

Emphasising the role of her family, Deepa said, "I always say this 'No place like home, no strength like family'. We had lost everything but our biggest asset is we struck on together with each other as a family even during our toughest times. The family has been a great support, my husband, my son, and my daughter."

Also read: Social Distancing To Beat COVID: These Tribal People Of Wayanad Show How It Is Done

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From Bankruptcy To Building Her Start-Up, This Chennai-Based Entrepreneur Is Now Coaching Students On... - The Logical Indian

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