28/01/2013 Newsnight


28/01/2013

Will most of us retire poor? Plus, why Iceland didn't pay us back for its broke banks, the capture of Timbuktu, and life in the Korean DMZ. With Kirsty Wark.


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Transcript


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How are you going to pay for your old age? Final salary pension also

:00:13.:00:17.

soon be history, savings are getting little return, if you are

:00:17.:00:21.

16 or 60, do you have a plan? Is it to stay at your desk working

:00:21.:00:27.

until you die? After today's news that companies are kiboshing final

:00:27.:00:30.

salary pensions at a record rate, where should people save?

:00:30.:00:33.

The old pension system worked because the value of shares

:00:33.:00:38.

generally went up, and Government bonds generally delivered a decent

:00:38.:00:43.

income. Now, that's no longer true. We are joined by four people who

:00:43.:00:47.

might have some idea how to salvage our old age.

:00:47.:00:53.

Also tonight, remember this? What happened in Iceland is completely

:00:53.:00:55.

unacceptable, I have been in touch with their Prime Minister, I have

:00:55.:01:00.

said this is effectively illegal. Today Britain lost its claim to get

:01:00.:01:05.

�2.2 billion, given by us to depositors in Iceland's bust banks.

:01:05.:01:09.

I will ask their Finance Minister how we can ever trust her.

:01:09.:01:14.

Mali and French forces retake Timbuktu after a year in Islamist

:01:14.:01:18.

hands. Apparently not in time to stop them burning a library housing

:01:18.:01:23.

thousands of ancient manuscripts. Will the French find winning the

:01:23.:01:26.

peace harder than capturing desert towns.

:01:26.:01:30.

Welcome to Korea's demilitarised zone, the most dangerous border in

:01:30.:01:34.

the world, and a nice spot for tourism and children's English

:01:34.:01:44.
:01:44.:01:50.

Good evening, who will look after us when we are old, how should we

:01:50.:01:56.

look after ourselves? Last year 31% of called defined pension benefits

:01:56.:02:00.

pension schemes, where the payout is related to your salary, closed,

:02:00.:02:03.

according to the National Association of Pension Funds today.

:02:03.:02:09.

With interest rates low, returns from bonds very low and the stock

:02:09.:02:14.

market below its peak, most of us are struggling to provide provision.

:02:14.:02:19.

Whether you are middle-aged and wondering about retiring, or young

:02:19.:02:25.

and not worried about saving, is retirement slipping from our grasp.

:02:25.:02:28.

In the golden age of the pension, this is how it used to work, you

:02:28.:02:32.

plodded along, saving some of your wages, and putting them into stocks

:02:32.:02:35.

and shares, that grew in value, like this, the graph of the FTSE.

:02:36.:02:40.

There were ups and down, but never violent. Then things went violently

:02:40.:02:46.

well, and then they went violently haywire. In the process, a lot of

:02:46.:02:51.

people fell out of the system. And now, the golden age is gone.

:02:51.:02:54.

Students bracing themselves for the transition to work will find

:02:54.:03:00.

pension funds largely closed to them. Just 13% still open to new

:03:00.:03:03.

joiners. These were figures released today. On today's figure,

:03:03.:03:06.

a young person leaving university this year, and joining a private

:03:06.:03:10.

company, has, maybe, a one in ten chance of joining that company's

:03:10.:03:15.

pension scheme, and the reasons for that are economic uncertainty, and

:03:15.:03:20.

the certainty of ageing. So this generation will have to

:03:20.:03:26.

save on their own. Challenges for them, challenging for the whole

:03:26.:03:30.

future structure of capitalism. an environment where we are living

:03:30.:03:33.

long e any Government has to deal with that. Occupational pension

:03:33.:03:37.

schemes are in decline as well. The things that we are all faced with,

:03:37.:03:41.

ultimately we have to look at waiting longer for state benefits.

:03:41.:03:45.

We have to look at possibly to working longer, or alternatively we

:03:45.:03:49.

have to look at saving earlier. This month, the Government

:03:49.:03:54.

signalled the introduction of a flat rate state pension, worth

:03:54.:03:57.

�7,488 a year. To get anything above that, in the future, you will

:03:57.:04:03.

have to save a lot. Just to earn the median wage of �21,000 a year,

:04:03.:04:09.

at the age of 65, your savings would have to be worth �4 10,000,

:04:09.:04:13.

to earn �42,000, the average wage of a train driver, would you need

:04:13.:04:17.

more than a million. The earlier you save the better you get from

:04:17.:04:23.

compound growth over many years, it is easy to focus on what you have

:04:23.:04:25.

to wave save, that can be significant. The sooner you save

:04:25.:04:28.

the better it will be in the long- term. What are you supposed to

:04:29.:04:32.

save? Real wages have fallen in value, and where are you supposed

:04:32.:04:36.

to put your savings? Once that was a no-brainer, the answer was shares,

:04:36.:04:40.

or equities, as they are called. But not for this generation.

:04:40.:04:44.

used to be very much the case that when you looked at the UK equity

:04:44.:04:49.

market, you could think of it as something we held stake in via our

:04:49.:04:53.

pensions. The pensions held huge amounts of blue chip equities, now

:04:53.:04:56.

they don't, they hold overseas equities, hedge funds, and in the

:04:56.:05:00.

main, Government bonds. The UK equity market is no longer really

:05:00.:05:04.

owned by the UK population, that's a big shift.

:05:04.:05:08.

For people in their 40s and 50s, there is a pension crisis of a

:05:08.:05:12.

different type. Today's survey of pension funds found one third of

:05:12.:05:17.

funds have closed contributions for existing members. Plus, the Bank of

:05:17.:05:21.

England's decision to print money has lowered the interest payments

:05:22.:05:25.

on Government bonds, to below inflation. So savers are actually

:05:25.:05:30.

losing money by lending it to the Treasury. In the golden era of

:05:30.:05:35.

company pension, the majority of a pension fund was invested in

:05:35.:05:40.

company shares, and the rest in Government bonds, here and abroad.

:05:40.:05:45.

As late as 2002, 61% of UK pensions were in shares, a third in bonds,

:05:45.:05:50.

and everything else, including in cash, came to 6%. Now that has

:05:50.:05:55.

pension money was in the stock market, 37% was in bonds, but 18%

:05:55.:05:57.

is now in assets deemed to have a better chance of avoiding losses,

:05:57.:06:02.

or wipouts. That is a mixture of gold, derivatives, based on

:06:02.:06:06.

commodities, hedge funds, and property. If you have a final

:06:06.:06:10.

salary pension, you generally have no problems at all, you have a

:06:10.:06:13.

guaranteed pension that will rise with inflation until you die. This

:06:13.:06:17.

is a wonderful thing. If you don't have a final salary pension you

:06:17.:06:25.

bond markets will go and interest rates will go, and what annuity

:06:25.:06:29.

rates will be. You have no choice but to keep saving and saving and

:06:29.:06:36.

The old pension system worked because the value of shares

:06:36.:06:39.

generally went up, and Government bonds generally delivered a decent

:06:39.:06:44.

income. Now, that's no longer true, and it poses big problems, not just

:06:44.:06:51.

for the pension system, but for the very shape of capitalism theself.

:06:51.:06:56.

The caench is forcing people to spend -- the credit crunch is

:06:56.:07:04.

forcing people to spend less and this at some point will have to

:07:04.:07:09.

change. Some feel the collapse of permanent dent in our willingness

:07:09.:07:13.

to spend. When you have doubt about your future income and how

:07:13.:07:18.

on your consumption in your late 40s, early 50s, 60s, that is

:07:18.:07:23.

Uncertainty is a great enemy of economic growth of every kind.

:07:24.:07:30.

it comes to pension, the economics of uncertainty are what define the

:07:30.:07:37.

future. Here we have Otto Thoresen, Adrian

:07:37.:07:45.

Hartshorn, the partner at Mercer director general of Saga, and

:07:45.:07:50.

former Government adviser on Financial Times. We will all shoot

:07:51.:08:00.
:08:01.:08:03.

salary pension of the average wage, �400,000 away in your working life.

:08:03.:08:05.

For most people that seems impossible now? To start with it is

:08:05.:08:09.

important to understand this other factor of the fact we are living

:08:09.:08:13.

longer. Exactly. That is a really important positive aspect of what

:08:13.:08:18.

is happening here. When Lord Turner did his review years ago, he said

:08:18.:08:22.

the answer was partly working longer, partly saving more and

:08:22.:08:29.

partly the state pension and what have to look at that at a package

:08:29.:08:39.
:08:39.:08:45.

are in your 40s or 50s, saving on should blow it, what is the point

:08:45.:08:48.

of living to a poor old age? think if you look at it from the

:08:48.:08:51.

other perspective, I have a 21- year-old son, I'm close to this.

:08:51.:08:58.

The fact is, if you are 20 now p and you are looking out -- and you

:08:58.:09:02.

are looking out 40, 50 years, we shouldn't be depressed over markets

:09:03.:09:10.

to have a belief that with economic growth, and with markets going up,

:09:10.:09:14.

that returns will come through again. I believe with economic

:09:14.:09:18.

growth forecast in the next decade, Gillian Tett, if you are between

:09:18.:09:23.

20-30 you will have to save an awful lot to give you any kind of

:09:23.:09:30.

return when you are 65, 70? If you retire at 65 any more. The good

:09:30.:09:33.

news is we are living longer. That is good. The other piece of good

:09:33.:09:41.

the pensions crisis has been swept under the carpet, because it is a

:09:41.:09:50.

to talk about it. Also, you know, these very, very low bond returns,

:09:50.:09:52.

a real problem, the Government shoves all this money into the

:09:52.:09:56.

economy, depresses interest rates, and so, in a sense, screws people

:09:56.:10:01.

over both ways? I think what the Bank of England hasn't understood

:10:01.:10:05.

is just how much our pensions system is underpinned by long-term

:10:05.:10:09.

Government bond yields. By depressing long-term Government

:10:09.:10:13.

bond yields, the Government has basically devalued everybody's

:10:13.:10:18.

pensions and made it much more pensions. I think we need to get

:10:18.:10:26.

away, in way, from the idea that we need re-think our whole

:10:26.:10:27.

lifestyle. There is a whole new...We Can't guarantee new huge

:10:27.:10:31.

growth in the next ten years or bond yields being better? It is not

:10:31.:10:34.

just about saving. This is about our lives. Pensions are just one

:10:34.:10:40.

aspect of how we are going to live in later life. You can have part-

:10:40.:10:44.

time work. It is so complicated. People don't understand. Is part of

:10:44.:10:48.

the problem branding. I can remember when you are 18 or 20 you

:10:48.:10:56.

hear about the pensions and you challenges as a society we need to

:10:56.:11:06.
:11:06.:11:14.

term. We have seen the changes in just about the Government saying

:11:14.:11:22.

they will increase the state proportion of people drawing the

:11:22.:11:29.

it is more people drawing the state pension? And fewer and fewer people

:11:29.:11:32.

paying taxs to provide those. Before we talk about solutions,

:11:32.:11:37.

back to the insurers, you charge the development of fees over the

:11:38.:11:47.
:11:48.:11:48.

products that we sell into the work place now are historically low.

:11:48.:11:54.

We're talking about 50 basis points a very charge. I'm with Ros on this,

:11:54.:12:00.

about managing your debt, it is going to develop your life, and it

:12:00.:12:10.
:12:10.:12:11.

money from the industry? I think we need to get away from the industry

:12:11.:12:18.

that the industry is going to solve the problem for us. We have to get

:12:18.:12:22.

real about pensions, we haven't done. There is no magic money tree

:12:22.:12:32.
:12:32.:12:37.

that pensions will be daing -- to be more focus on financial

:12:37.:12:39.

literacy. I'm strongly in favour of teaching financial literacy, along

:12:39.:12:43.

with maths at school, right from the get-go. One of the problems

:12:43.:12:47.

about this, which people don't often talk about. As people live

:12:47.:12:51.

for a longer time, it is very tempt to go say everyone should simply

:12:51.:12:56.

work a lot longer, that is wait the country like America. The reality

:12:56.:12:59.

is, the people who live longer and are healthier, tend to be the

:12:59.:13:04.

better off. The people who can do what you are saying, think about

:13:04.:13:14.
:13:14.:13:16.

society. We don't have a culture, salary pension, we don't have a

:13:16.:13:20.

That is part of the problem, that is the air of unreality that has

:13:20.:13:24.

been around for far too long. We expect somebody to provide a

:13:24.:13:28.

pension for. Actually, from now on, and it should have been from quite

:13:28.:13:32.

a while a you are on your own. Tough make a plan. The Government

:13:32.:13:38.

we can argue about the age at which it will start to be paid. But there

:13:38.:13:48.
:13:48.:13:48.

want more than, that and most Is it a mix of trying to buy

:13:48.:13:58.

property, put some gold away? have seen defined benefits scheme,

:13:58.:14:01.

which essentially provide guarantee, we know guarantees cost money.

:14:01.:14:05.

Equitable *Life got into trouble with a load of guarantees in the

:14:05.:14:11.

products, and we know what happened to them. We know that providing

:14:11.:14:19.

Equally defined contribution, which financial education, and really

:14:19.:14:22.

quite sophisticated planning around those, ultimately it won't deliver,

:14:22.:14:25.

because of the uncertainty around them. So we really need to think

:14:25.:14:31.

somewhere in the middle space, around what's commonly being

:14:31.:14:35.

determined as defined ambition. Something with a relatively low

:14:35.:14:40.

level of guarantee. Restricted ambition this is? But some sort of

:14:40.:14:45.

level of top up, which is not guaranteed, that allows people to

:14:45.:14:50.

make some financial decisions. Sorry, you know, interest rates,

:14:50.:14:56.

are they ever going to go up, go up evently but if you want to

:14:56.:15:00.

understand why they may not go up fast. Look at Japan. I fully agree,

:15:00.:15:07.

thing crystal clear, it would be foolhardy to put all your money

:15:07.:15:11.

into Government bonds today. What is going on today is a form of what

:15:11.:15:14.

economists call financial repression, the Government is

:15:14.:15:18.

trying to pay off the national debt by essentially having a stealth tax

:15:18.:15:25.

of them, then you are essentially going to lose money. It is very

:15:25.:15:28.

worrying that the pension fund industry right now is dashing into

:15:28.:15:33.

Government bonds. They are sold as the place to put your money in for

:15:33.:15:38.

safety? They are supposed to be risk-free. And interest-free?

:15:38.:15:43.

tend to draw the broad conclusions from aggregate data. It is not

:15:43.:15:47.

aggregate data, it is a series of different sets of pension

:15:47.:15:50.

arrangements. What should people do? I'm going back to the point I

:15:50.:15:54.

was going to make earlier. It is easy to get tied up in discussing

:15:54.:15:56.

aspects of investment returns, we should look at some of the very

:15:56.:16:01.

positive things that have happened in the last five or ten years. We

:16:01.:16:04.

have had some consistency in pension policy, we have had pretty

:16:04.:16:08.

well consensus across parties about putting the pension reform agenda

:16:08.:16:11.

in. That is a significant step forward. Millions of people are

:16:11.:16:15.

going to be brought into pension saving over the next two to three

:16:15.:16:19.

years. We had the announcement last week about the single-teir state

:16:19.:16:29.
:16:29.:16:30.

want. That is very positive I think. Thank you very much.

:16:30.:16:40.
:16:40.:16:41.

assets under anti-terror laws, bust. He maybe long gone, but the -

:16:41.:16:49.

- he may be long gone, but the to be repaid the money he gave

:16:49.:16:56.

The Treasury is still �2.2 billion out of pocket, but a ruling today

:16:56.:17:06.
:17:06.:17:07.

Are your savings not safe in a foreign bank?

:17:07.:17:13.

Before the financial crisis Iceland was best known here for its geezer,

:17:13.:17:18.

glaciers and Miss World victories. Then Iceland's banks went bust,

:17:18.:17:26.

taking the country down with it in 2008. The collapse affected 230,000

:17:26.:17:31.

UK deposors, whose savings in savings of �2.2 billion had to be

:17:31.:17:33.

repaid bit Treasury here, which promptly demanded the money back

:17:33.:17:43.

from Reykjavik, roughly half of that sum has been repaid already.

:17:43.:17:46.

Today's European Free Trade Association court ruling, doesn't

:17:46.:17:50.

affect the dozens of British local authorities, which also parked

:17:50.:17:57.

almost �1 billion of council tax payers' money with Iceland savings

:17:57.:18:03.

accounts. It means the Icelandic Government wasn't obliged to recur

:18:03.:18:09.

the debts of privately-owned banks. Bjork k excited about it in a tweet.

:18:09.:18:13.

The implications could be very important for Iceland, Britain and

:18:13.:18:17.

the rest of the EU. This is good news for everybody involved. For

:18:17.:18:22.

Iceland it has been under considerable uncertainty because of

:18:22.:18:28.

it, now it is lifted it can get on rebuilding its economy. This is

:18:28.:18:36.

also a blessing in disguise for the have been obliged to provide

:18:36.:18:42.

Government gauorns for bank deposits d guarantees, for bank

:18:42.:18:49.

times. The then Prime Minister, Gordon Brown, oped a diplomatic

:18:49.:18:53.

wound between London and Reykjavik, when he evoked anti-terror laws to

:18:53.:18:58.

seize all Icelandic financial assets. What happened in Iceland is

:18:58.:19:01.

completely unacceptable. I have been in touch with the Icelandic

:19:01.:19:06.

Prime Minister, I I have said this is illegal action they have taken,

:19:06.:19:11.

we are freezing the asset of Icelandic companies in the UK where

:19:11.:19:17.

against the Icelandic authorities, wherever that is necessary to

:19:17.:19:25.

recover the money. Being lumped in people twice rejected a plan to

:19:25.:19:28.

repay Britain in separate referenda. Four years on and the new UK

:19:28.:19:32.

Government is quite sanguine with today's ruling, which can't be

:19:32.:19:36.

repealed, that is because it has received most of the money back

:19:36.:19:43.

from the bank that used to cone i sap sld save, the message is

:19:43.:19:47.

regulators and legislators weren't doing their job up to the 2008

:19:47.:19:54.

financial crisis but they are now. Five years on and quite a few barn

:19:54.:20:01.

doors have been bolted with regards to financial regulation. Deposited

:20:01.:20:10.

law, but savers will think twice before putting large sums in

:20:11.:20:15.

Icelandic banks. Good evening minister. You still

:20:15.:20:25.
:20:25.:20:29.

this morning, of course we welcome it in Iceland, because it takes a

:20:29.:20:34.

lot of legal uncertainties and puts it aside. It is also very important

:20:34.:20:41.

to state that the estate of the failed bank will continue to pay

:20:41.:20:46.

out priority claims to the depositors and creditors. As they

:20:46.:20:53.

lot of the money has already been paid off? They have been doing that.

:20:53.:20:59.

But it is �2.2 billion left? There are about 50% of the priority

:20:59.:21:05.

claims already paid out. The estate will continue to pay priority

:21:05.:21:07.

claims. It is estimated that the priority claims can't be and will

:21:07.:21:13.

be repaid in full. That is the good news for everybody. I know that the

:21:13.:21:20.

Icelandic people felt very put upon by Gordon Brown when he evoked

:21:20.:21:24.

these anti-terror law, was the British Government wrong to give

:21:24.:21:30.

money back to British depositors in Icelandic banks without knowing if

:21:30.:21:35.

it would get the money back? Like I said, the estate is, it is

:21:35.:21:44.

able to pay back -- the estate will priority claims. How long do you

:21:44.:21:51.

been able to pay out, or the estate has already paid out about 50%, so,

:21:51.:22:01.

estimating that this can happen quite rapidly in the near future.

:22:01.:22:07.

But this is possible because the Icelandic parliament implemented,

:22:07.:22:16.

in October of 2008, an emergency this can happen now, and that's why

:22:16.:22:23.

we are able to do this. Do you think that foreign investors should

:22:23.:22:30.

deposit money in small countries? When this all happened the banks

:22:30.:22:36.

were nine-times the size of just back off the economies of

:22:36.:22:41.

small countries when they come to make deposits? Well, I think that

:22:41.:22:51.
:22:51.:22:52.

this a sad history, a sad story, very heavy and important learning

:22:52.:22:54.

process for all of us. And all the regulatory framework that the

:22:54.:22:58.

Icelandic Government has been implementing in the past four years

:22:58.:23:04.

has all had the aim of and the goal that this could not happen again.

:23:04.:23:09.

That is very, very important. I think that we were, our regulatory

:23:09.:23:15.

framework was not strong enough, and this is something that we have

:23:15.:23:22.

learned and we have changed. A lot of what you have done to stablise

:23:22.:23:29.

bondholders sink and so forth, you could never have done, had you been

:23:29.:23:37.

within the EU, and yet I understand EU? Well, we have a very, you could

:23:37.:23:41.

say we have a very different situation than many other European

:23:41.:23:46.

countries. We are a very small nation, with our other currency. We

:23:46.:23:51.

are only 230,000 people. It is very difficult to manage the kuorn --

:23:51.:23:55.

320,000 people. It was difficult to manage the currency once the bank

:23:55.:24:00.

fell. We needed capital controls, otherwise things would have gotten

:24:00.:24:05.

a lot, lot worse here in Iceland. I think that we have, the capital

:24:05.:24:12.

controls, and the reasons why they a lot of understanding on that

:24:12.:24:20.

situation. But it is our aim, and the past four years, in

:24:20.:24:24.

strengthening our economy so that we can start lifting the capital

:24:24.:24:34.
:24:34.:24:39.

years. Hopefully we will not have capital controls for very long.

:24:39.:24:48.

we are going to get the money back, but can we trust you? Like I said,

:24:48.:24:58.
:24:58.:25:01.

been paying out to priority claims, and the estate of the failed bank

:25:01.:25:06.

will continue to do so. Even though this ruling was like it was this

:25:06.:25:10.

morning. But I think the main and the best thing about the ruling

:25:10.:25:15.

this morning is that now this uncertainty is out of the way, and

:25:15.:25:21.

we can move on and leave this sad Thank you very much for joining us

:25:21.:25:27.

tonight. The French-led offensive in Mali

:25:27.:25:32.

has succeeded in dislodging Islamist rebels from the northern

:25:32.:25:35.

town and fabled town of Timbuktu. After a year in control they have

:25:35.:25:38.

left many of the holy shrines and monuments smashed to pieces. As

:25:38.:25:42.

they pulled out, they have apparently set fire to a library,

:25:42.:25:46.

the Ahmed Baba Institute, which contains thousands of priceless

:25:46.:25:51.

documents stating back to the 13th sent treatment one of the greatest

:25:51.:25:55.

likeies of Islamic manuscripts in the world. We will talk about that

:25:55.:26:02.

in a moment. First of all from Mali. Can you tell us the latest from

:26:02.:26:10.

Timbuktu? Well, yes. As you say, we understand from malian official

:26:10.:26:15.

was set ablaze four days ago by Islamist rebels, as they began to

:26:16.:26:21.

flee from the town, ahead of the French advance. The institute

:26:21.:26:28.

contains about 20,000 manuscripts, dating from the golden age of

:26:28.:26:33.

Timbuktu as a great centre of Islamic learning, manuscripts about

:26:33.:26:37.

science, learning and history, all housed in this brand-new research

:26:37.:26:41.

institute, funded by the South African Government. Precisely

:26:41.:26:44.

intended to preserve those manuscripts for posterity. They are

:26:45.:26:49.

not the only manuscripts in Tim but tu, there are several hundred

:26:49.:26:53.

thousand in private collections as well. This was the main single

:26:53.:27:00.

damage was done. But we understand there has been considerable damage,

:27:00.:27:05.

there has been considerable losses there. Let's talk now about the

:27:05.:27:11.

advance of the French and the malian Government. Do you think

:27:11.:27:17.

that -- Malian Government. Do you think the Islamist rebels are

:27:18.:27:22.

fainting back, what will be the town in the north still in the

:27:22.:27:27.

hands of the rebels. We expect now that the French will probably

:27:27.:27:31.

retake that in the next few days. What President Hollande has said,

:27:31.:27:35.

military intervention in Mali will be over. The French will retire to

:27:35.:27:38.

their bases, after that they will have a support and training role

:27:38.:27:43.

for Malian and other west African troops, who will be expected to

:27:43.:27:47.

complete the conquest of the north, and then hold the territory. The

:27:47.:27:52.

big question is how difficult a job will that be. Where exactly are

:27:52.:28:02.

have the rebels now gone. Will they guerrilla war of the kind we have

:28:02.:28:08.

seen for decades in this part of intelligence believes is some of

:28:08.:28:11.

these Islamist leaders have already gone to the mountains, where there

:28:11.:28:18.

is a well-established cave complex in the far north of Mali. We have

:28:18.:28:22.

heard from Malian military sources that they believe some of the

:28:22.:28:27.

rebels are now hiding in Timbuktu and other towns, and they pose a

:28:27.:28:37.
:28:37.:28:40.

into the north, and refugees return, we will see a lot of people being

:28:40.:28:50.
:28:50.:28:51.

accused of being infiltrators and talk about developments in Mali, we

:28:51.:28:54.

have a Tuareg sociologist, Sufiah Yusof, Noman Benotman, a former

:28:54.:29:00.

Libyan Jihadi, now of the counter extremist, Quilliam Foundation, and

:29:00.:29:03.

Ian Bremmer, President of the Eurasia Group, we will talk about

:29:03.:29:08.

the library in a moment. First of all, Dr Yusof, do you think, when

:29:08.:29:12.

you hear it said that there may be a regrouping, and there maybe

:29:13.:29:18.

further activities by the Islamists, what is your view of what is

:29:18.:29:25.

happening at the moment? I think that this is the first step.

:29:25.:29:34.

Probably the Islamists will melt a. Will they come back, as he said?

:29:34.:29:39.

they have their opportunities, and the means, perhaps. If they can't

:29:39.:29:48.

do that, perhaps they will resort to other things, dirty terrorism in

:29:48.:29:53.

cities and things like that. Wherever they find easy targets.

:29:53.:29:59.

Ian Bremmer, just on the basis of what Dr Yusof says, do you think

:29:59.:30:08.

the French might be embroiled for be? It is clear that Hollande

:30:08.:30:14.

easier battle at the beginning, he had to walk that back today. He

:30:14.:30:17.

said today the French are wing so far. I remember when President Bush

:30:17.:30:20.

said mission accomplished in Afghanistan, it didn't go well for

:30:20.:30:25.

them. 60% of French supported it at the beginning, I bet if you took a

:30:25.:30:29.

poll that will still be already going down. They will be there in

:30:29.:30:36.

six months time. My colleague is of biding their time or urban

:30:37.:30:41.

insurgency, or waiting to see attacks against French civilians in

:30:41.:30:47.

Mali or closer to home, it could be France. There are a lot of folks

:30:47.:30:54.

object of global war on terror was the US, today it is France. This

:30:54.:30:59.

you heard it said there that there is some idea that the groups are

:30:59.:31:04.

disappeared to the mountains, but some are still local? Some of them,

:31:04.:31:09.

of course, I agree what was said from Timbuktu, it is well known the

:31:10.:31:18.

tactics by all the Salafi Jihadists, I would rather say that rather than

:31:18.:31:24.

Islamists. They want different things? Yes, there is two main

:31:24.:31:34.
:31:34.:31:39.

largest guerrilla warfare in the about them, the war is against them,

:31:39.:31:44.

the other one more dangerous, a very low level urban guerrilla

:31:44.:31:54.
:31:54.:31:58.

warfare. What do the Tuaregs want? They want good governance. Under

:31:58.:32:02.

this Malian Government? Under this Malian Government, they have never

:32:02.:32:09.

been generally seperatist, I don't think so. Of course there was this

:32:09.:32:17.

declaration of independence, but it was more, I think, sort of part of

:32:17.:32:24.

a bargaining strategy. So the Tuareg, and the other groups are

:32:24.:32:34.
:32:34.:32:34.

not aligned in terms of their talking about. There is all sorts

:32:34.:32:37.

of different sub-Al-Qaeda groups, and different conversations about

:32:37.:32:44.

who else is out there? Al-Qaeda is not the same thing as the Tuareg.

:32:44.:32:52.

No, of course not. The other people, the inhabitants of the northern

:32:52.:33:00.

part of Mali, there are Arabs, there are all of them, what they

:33:00.:33:05.

want is basically a good governance. They want good governance, and they

:33:05.:33:10.

are not getting it, where do the Americans stand on this? It seems

:33:10.:33:17.

very clear that Barack Obama is not on for any for moreen adventures?

:33:17.:33:19.

It is very clear, the -- Foreign adventures? It is clear the United

:33:19.:33:23.

States is providing refuelling and transport, we are picking up French

:33:23.:33:28.

soldier, bringing them to Mali and going back. We are OK with that. We

:33:28.:33:32.

have 60,000 plus dead in Syria and no appetite for that. President

:33:33.:33:37.

Obama's inAugustation speech is focusing on nation-building at home.

:33:37.:33:41.

We are reducing adventure in the Middle East not increasing it.

:33:41.:33:49.

Let's move on to talk about what we think has happened, this burning of

:33:49.:33:58.

that there are hundreds of hands, the building of the

:33:59.:34:03.

collection was going on day by day, how important was the collection?

:34:03.:34:06.

It is hard to estimate how many documents were damaged and how many

:34:06.:34:14.

are still in good shape. Of course historically it is just such a rich

:34:14.:34:18.

heritage, a treasure. If it disappears, it would be such a

:34:19.:34:25.

disaster, actually. Much of it is about the flowering of Malian

:34:25.:34:31.

cultural life around Timbuktu in the 14th and 15th centuries, we

:34:31.:34:39.

haven't had a huge cache of documents like that before?

:34:39.:34:49.
:34:49.:34:51.

really, if these documents we lose this documentation. When it

:34:51.:34:59.

the rebels would burn it? Because Look, first of all, I think I still

:34:59.:35:04.

have a of doubt if they really burned all of it. Because I know

:35:04.:35:09.

they have something with some specific documents or manuscripts,

:35:09.:35:16.

it has to do with sufficientism, they have a strong ideolgical

:35:16.:35:21.

Sufism. Sufi documents have already been destroyed? They think it is

:35:21.:35:26.

they are leaving the down, it is a religious duty. Do you think they

:35:26.:35:32.

still have a lot of doubt about what kind of damage. It has not

:35:32.:35:40.

lot of conflicting reports. If it is true, Dr Youssouf, how

:35:40.:35:45.

cultural heritage to have lost this material? I think it would be a

:35:45.:35:55.
:35:55.:35:55.

very sad thing. But what I would like to say about this, is Malians,

:35:55.:36:01.

ought to take advantage of their culture while it is there. And not

:36:01.:36:11.
:36:11.:36:21.

wait until it is not there to capitalise on it. To get everything

:36:21.:36:27.

they can get out of it. Because once it is not there, then it is a

:36:27.:36:37.

problem. I think it is not enough to have manuscripts in a place like

:36:37.:36:42.

the Ahmed Baba Institute. What is more important, it is like having

:36:42.:36:52.
:36:52.:36:56.

pieces in a museum, what is more important is promoting the cultural

:36:56.:37:05.

heritage, and helping people be aware of that heritage. Helping

:37:05.:37:07.

them to incorporate it in their own intelligence.

:37:07.:37:12.

Thank you very much. The US and Japan today agreed to work closely

:37:12.:37:15.

with South Korea to dissuade North Korea from carrying out what is

:37:15.:37:19.

called a nuclear test of a higher level. However, the north Korean

:37:19.:37:22.

news agency announced that forcing the country to give up the right to

:37:22.:37:26.

satellite launch is a little short of pressurising it to abandon its

:37:26.:37:30.

sovereignty. So South Korea remains constantly alert to attack, and the

:37:30.:37:34.

rare attempt at defection. Newsnight was given extraordinary

:37:34.:37:40.

access to the closed border area, frozen in time since the end of the

:37:40.:37:47.

Korean War. Every day, for 6 years, someone has

:37:47.:37:54.

patrolled the world's last Cold War frontier. Today it is Lieutenant

:37:54.:37:58.

Yoo Hak-joo, a baby-faced 24-year- old, a love of long distance

:37:58.:38:02.

running and a girlfriend who worries back home. The South Korean

:38:02.:38:06.

army unit he leads are known as Flying Dragons, the small stprech

:38:06.:38:15.

of border they defend, -- stretch of the border they defend is bleak

:38:15.:38:20.

and the facilities rudimentry, and the temperatures today below minus

:38:20.:38:24.

20. Twice a day the Lieutenant and his men walk the Armistice Line

:38:24.:38:30.

drawn by the United Nations 20 years a checking for any signs of

:38:30.:38:32.

disturbance in South Korea's perimeter fence. This is where the

:38:32.:38:35.

two sides in the Korean War stood when the fighting stopped. South

:38:35.:38:40.

Korea and the US on this side, North Korea and China on the other.

:38:40.:38:44.

Not much has changed here since. The old enemy, North Korea, begins

:38:44.:38:49.

just over a mill away, across a buffer zone, packed with land mines.

:38:49.:38:54.

And, on the southern side, telephones, rigged up moing the

:38:54.:38:59.

mines for stray defectors -- rigged up among the mines for stray

:38:59.:39:05.

defectors to call across, the army wouldn't say when they last called.

:39:05.:39:11.

The food isn't bad, one of the conscriptss is a trainee chef.

:39:11.:39:16.

Every man has not chosen to be here, in Japan you serve two years

:39:16.:39:20.

national service. The Government has talked about bringing it down.

:39:20.:39:27.

But with the birth rate declining some are worried it will leave the

:39:27.:39:32.

country vulnerable. Some already know what vulnerable is all about.

:39:32.:39:35.

TRANSLATION: It is less about hierarchy more about brotherhood,

:39:35.:39:40.

we eat, sleep and lead together. It is high-stress but I lead my men to

:39:40.:39:45.

do our duty. Any hesitation could lead to my family, the Korean

:39:45.:39:48.

people and my friends to be in danger. We need to be ready to

:39:48.:39:51.

defend this position with everything we have got. We need to

:39:51.:39:58.

be mentally prepared. For the soldiers here, two 2kms away, North

:39:58.:40:01.

Korea can seem especially threatening. This frontier is

:40:02.:40:05.

scattered with old battles, and the last military conflict between the

:40:05.:40:09.

north and the south was two years ago. In his new year's address this

:40:09.:40:13.

year, the north Korean leader talked about ending confrontation

:40:13.:40:17.

with the south. And with South Korea, China and Japan, all

:40:17.:40:22.

starting this year with new leaders, many people are hoping there's a

:40:22.:40:28.

chance for a political this aw. Since then -- thaw. Since then

:40:28.:40:34.

north crowia has defied the UN and announced it will launch long-range

:40:34.:40:39.

rockets and carry out a third nuclear test. The live fire

:40:39.:40:43.

exercises aren't for show. One young recruit told me he gets most

:40:43.:40:46.

scared at night listening to gunfire from the north. Scared

:40:46.:40:50.

perhaps that this could happen again. Just a few miles away from

:40:50.:40:55.

the Lieutenant's stretch of the boarder, lies Gloster Hill, where

:40:55.:41:00.

British servicemen, fighting with their American allies 60 years ago,

:41:00.:41:05.

watched their regiment overrun by the Chinese army. There weren't

:41:05.:41:09.

many left alive to remember it. They kept coming. When they came

:41:09.:41:17.

they did come, and in great numbers. You know. When we were on Gloster

:41:17.:41:22.

Hill, all you could see was the hills covered in them, like ants.

:41:22.:41:26.

You would look around there, they were on that hill, that hill, keep

:41:26.:41:31.

looking around. That was it. He this just kept coming. These days,

:41:31.:41:36.

it is Korean soldiers who stand eyeball-to-eyeball at the border's

:41:36.:41:41.

only Joint Security Area. North and south, 24-hours a day, guarding the

:41:41.:41:45.

line of control inside the UN compound. The list of rules for

:41:46.:41:50.

visitors here reflects just how tense relations have remained, no

:41:50.:41:55.

pointing, no shouting, and until recently, no blue jeans.

:41:56.:42:03.

It has been so long, though, that the uneasy truce has become almost

:42:03.:42:13.
:42:13.:42:13.

good money to visit a piece of the of South Korea's top tourist sites,

:42:13.:42:17.

even with visiting Chinese. There are gift shops, message boards, and

:42:17.:42:27.
:42:27.:42:32.

statues to take your photo with. only one school to choose from. And

:42:32.:42:37.

the English lessons, given by real American soldiers are perhaps the

:42:37.:42:42.

biggest draw. But, this is still the frontline,

:42:42.:42:47.

in an unresolved conflict between a heavily-armed communist state, and

:42:47.:42:51.

its capitalist arch enemy. One in Asia could change very quickly.

:42:51.:42:54.

One man, who knows what it is like to eyeball your brother enemy each

:42:55.:43:04.

day is Taishou, now a financial an -- Taishou it a, now a financial an

:43:04.:43:09.

cyst, he was, two years ago, one of the soldiers guarding the blue huts

:43:09.:43:15.

along the line of control. It was so tense at the frontier, he said

:43:15.:43:25.

he never slept very well, everyone between the two lines every day.

:43:25.:43:29.

One day when I was patrolling, one guard from North Korea called my

:43:29.:43:35.

name. I was so surprised the first time, but I felt this feeling of

:43:35.:43:42.

friendship, they actually called my name. We are the same Koreans, we

:43:42.:43:52.
:43:52.:43:56.

When we lock at their mouths, they They swear at us. Do you mouth bad

:43:56.:44:06.
:44:06.:44:08.

recorded in there, we have no chance to contact them in person or

:44:08.:44:15.

in facial expressions, that is not Metropilis is 30 miles from the

:44:15.:44:17.

frontline, one reason why the US army has its main military base

:44:17.:44:23.

here, on a slice of prime real estate, bang in the middle of the

:44:23.:44:27.

capital. The razor wire against the neon of Seoul's party district.

:44:27.:44:32.

There are 28,000 American troops still based here, in the next

:44:32.:44:35.

couple of years, half those bases, including most of this one, will

:44:35.:44:45.
:44:45.:44:46.

close, and the troops will move to is where they are moving to. The

:44:46.:44:54.

town of Pyeongtaek, 06 miles south, 60 miles south, they will be out of

:44:54.:45:04.
:45:04.:45:04.

this new location gives them more military, just on the other side of

:45:04.:45:11.

this sea here, many people are bond whaerg the future will look like?

:45:11.:45:17.

-- wondering what the future will look like? Construction has already

:45:17.:45:25.

rebalancing of troops in Asia. 60% of the forces could be based here.

:45:25.:45:31.

China is building up its Navy too, with aircraft carriers and

:45:31.:45:36.

submarines. There could be two superpowers in the area. Some local

:45:36.:45:39.

families are wary of their new neighbours. There has been solar

:45:39.:45:48.

panels and new jobs, but some say it is not enough to make up to make

:45:48.:45:52.

up for having US soldiers on their doorstep. This man is raising

:45:52.:45:57.

awareness of what the new base could mean. TRANSLATION:

:45:57.:46:05.

rational has changed. It used to be north, now it is fighting wars

:46:05.:46:11.

America wants to fight. This location is ideal for the US. They

:46:11.:46:19.

to face off with China. America says its rebalance something not

:46:19.:46:23.

about China, but safeguarding regional peace, as it has done for

:46:23.:46:29.

decades. But trip wires exist. Like the one guarded by the

:46:29.:46:37.

Lieutenant and his Flying Dragons. Beijing and Washington and -- feel

:46:37.:46:43.

differently about how to defend against North Korea. A sobering

:46:43.:46:45.

thought for the night patrols collecting ammunition. If this Cold

:46:45.:46:50.

War relic ever turns hot again, this handful of conscriptss will be

:46:50.:46:57.

facing a different kind of battle to the one their grandfather's --

:46:57.:47:03.

grand fathers' fought. That's all we have time for now. We will be

:47:03.:47:11.

we have time for now. We will be back tomorrow, goodbye.

:47:12.:47:21.

and start to blow the rain back up from the channel across the whole

:47:21.:47:26.

of the UK, turning wetter in possibly turning more drizzley

:47:26.:47:31.

towards the south. Still heavy bursts of rain for northern England

:47:31.:47:41.
:47:41.:47:44.

is damp and drizzley. Some dryer rain to come across the south west

:47:44.:47:49.

of England. An amber rain warning in Devon, and also across South

:47:49.:47:54.

Wales. Over the hills 50mms, two inches of rain in 24 hours on

:47:54.:47:59.

The rain clearing away from Northern Ireland in the afternoon,

:47:59.:48:04.

it may get late sunshine out things go down hill. Early sunshine

:48:04.:48:06.

but wet and windy through the afternoon. Some of the rain will be

:48:06.:48:10.

heavy, particularly over the hills. Look how mild it is and how it

:48:10.:48:14.

changes on Wednesday. Brighter, yes, but sunshine and some showers, and

:48:14.:48:18.

Will most of us retire poor? Plus, why Iceland didn't pay us back for its broke banks, the capture of Timbuktu, and life in the Korean DMZ.

With Kirsty Wark.


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