🌍 Goldman Sachs sues Malaysia

Hi there Intriguer. We can finally reveal the long-awaited champion of Alaska’s 10th annual Fat Bear Week: Grazer, a fluffy female who wowed 108,321 voters with her serious salmoning skills.

Today’s briefing is a 4 min read:

• 💸 Why is Goldman Sachs suing Malaysia?

• 🇧🇧 Barbados takes a novel approach to infrastructure.

• ➕ Plus: A Jack-less flag, how the papers are covering this weekend’s Polish election, and some weekend tips for Sydney.

1. 🇯🇵 Japan: Tokyo is moving to strip the Unification Church of its religious corporation status after an investigation into alleged malicious practices. The man who assassinated former Prime Minister Shinzo Abe last year cited the late leader’s links to the controversial organisation as a motive for the shooting.

2. 🇮🇱 Israel: Late breaking: Israel has ordered 1.1 million Palestinians to relocate from northern Gaza to the enclave’s south within 24 hours, ahead of an anticipated ground invasion following the recent Hamas attacks. The UN says it "considers it impossible for such a movement to take place without devastating humanitarian consequences.“

3. 🇮🇳 India: Delhi is set to impose further restrictions on its sugar exports as the weakest monsoon season in five years hits production levels. India is the world’s third-largest exporter of sugar.

4. 🇩🇲 Dominica: An investigation into Dominica’s golden passports scheme has revealed the Caribbean island has granted citizenship to individuals such as an Iranian spymaster and a security official for Muammar Gaddafi. Revenue from the golden passport scheme accounts for nearly half of all government income.

5. 🇹🇳 Tunisia: Tunis has returned €60M in budget assistance to the EU in protest against Brussels reportedly withholding funds it had promised via a migration deal. Last week an EU official challenged Tunisia to return the €60M after President Saied criticised the EU’s support.

 💸 Malaysia | Finance

Goldman Sachs is suing Malaysia

Goldman Sachs has brought a suit against Malaysia in the London Court of International Arbitration. It relates to an earlier settlement with Malaysia regarding the bank’s role in one of history’s largest embezzlement schemes.

This is just the latest in the saga over Malaysia’s 1MDB state fund, through which then-Prime Minister Razak and his associates funnelled $4.5B to buy luxury goods and (funnily enough) even finance The Wolf of Wall Street film.

The full extent of the scam started to emerge in 2015:

• Many countries (like Switzerland and the US) opened probes

• Officials from Malaysia, the UAE and Saudi Arabia were implicated

• Authorities froze hundreds of international bank accounts

• Malaysia accused China of harbouring the scam’s key architect, and

• At least two Goldman Sachs executives have been convicted for their role in the scheme (which earned the bank $600M in fees).

In the fallout, Prime Minister Razak copped a 12-year prison sentence, while Goldman agreed to pay billions to Malaysia to resolve criminal charges. But:

• Malaysia says the bank has failed to recover lost assets as promised, meaning Goldman owes $250M in interim payments, while

• Goldman says Malaysia is failing to take certain assets into account.

Malaysia’s prime minister recently threatened to sue the bank, and met Goldman executives in New York. But with this week’s news, it now seems Goldman has made the first move.

Intrigue's take: This is the story that just keeps on giving. Malaysia actually classified the terms of its initial 2020 settlement with Goldman under the country’s Official Secrets Act. So there’s speculation Malaysia is now considering declassifying that deal in order to defend itself in court.

And this could reveal more intriguing details, like how the bank managed to secure the controversial settlement with Malaysia in the first place.

Also worth noting:

• The 1MDB scandal became public after a cache of 227,000 leaked emails emerged in the media.

• The alleged scam mastermind and international fugitive Jho Low was reportedly photographed in Macau last year.

📰 How newspapers covered…

This weekend’s Polish parliamentary election

🎧 Today on Intrigue Outloud

Israel and Gaza – what happens next?

🇧🇧 Barbados | Climate

Barbados is doubling down on debt-for-nature

Barbados is pursuing a ‘debt-for-nature’ swap worth around $300M to improve the island nation’s water infrastructure, according to Reuters.

As the name suggests, ‘debt-for-nature’ swaps have two aims: conservation and debt management. Here’s one example of how they might work:

• 💰 A lender agrees to forgive some debt, and in return…

• 🌺 The borrower country uses the money it saves to invest in conservation projects.

Why would lenders do this? Often it’s a way to bring a borrower’s debt back onto a more sustainable trajectory, rather than go through a costly restructure. It can also count towards a lender’s environmental commitments.

Intrigue’s take: Barbados pulled off a successful debt-for-nature swap last year to support marine conservation, but this new proposed swap is a bit different with its water infrastructure focus.

So if this new swap goes well, we can imagine it becoming a model for other countries looking to alleviate their own debt burdens and build more (and more sustainable) public infrastructure.

Also worth noting:

• In May, Ecuador closed a record swap worth around $1B, which it plans to use to protect the ocean around the Galapagos Islands.

• A scientist at the World Wildlife Fund came up with the idea for ‘debt-for-nature’ swaps in a short New York Times op-ed in 1984.

➕ Extra Intrigue

Here are some tips if you’re spending this weekend in 🇦🇺 Sydney:

• Views: Stroll from Rose Bay to Watsons Bay (7.4 km) for some breath-taking views over Sydney Harbour, then…

• Food: Take a ferry over to Loulou to give their legendary pastries and bread a try, and…

• Culture: Finish the day at the Art Gallery of New South Wales for a pretty entertaining retrospective on Korean cinema.

Got any weekend tips for folks in your city, anywhere in the world? Just hit reply and send them in! We’ll aim to spotlight a different city each time.

🏁 Flag of the day

The flag of Gibraltar is unique among British overseas territories as the only one without a Union Jack. Instead, it rocks a red castle for the peninsula’s legendary fortifications, and a dangling key for its strategic significance (as the Moorish ‘key to Spain’, and the British ‘key to the Mediterranean’).

Our rating: 9.4/10

🗳️ Quiz time!

Answers: 1-b, 2-b, 3-a.