The Economist - January 20 2024

Год выпуска: January 2024

Автор: The Economist Newspaper and The Economist Group

Жанр: Экономика/Политика

Издательство: «The Economist Newspaper Ltd»

Формат: PDF (журнал на английском языке)

Качество: OCR

Количество страниц: 76

HE’S WINNING: BOS INESS BEWARE

• What a second Trump term would mean for American business and the economy: leader, page 7.
• Many ceos fear it would be worse than the first, page 53.
• Why are Americans so gloomy about their great economy? Page 17.
• Trump and the budget, page 55.

Narendra Modi's electoral juggernaut

• India's prime minister must realise that illiberalism could imperil his country's economic renaissance: leader, page 8.
• The bjp may seem unstoppable, but there is still life in Indian democracy: briefing, page 14.
• India's economy, page 61.
• How Hindu is India's foreign policy? Banyan, page 32.

Israel is accused of genocide

• The case makes a mockery of the court: leader, page 9.
• It is more about politics than legal strategy, page 51.
• Israel's judge in The Hague is its government's bogeyman, page 52.

Javier Milei v the caste

• Argentina's new president is slashing spending and enraging his enemies, page 25.

Why AI fakes are winning

• Many researchers think they will eventually become undetectable, page 70, and leader, page 10.

The world this week Politics

• Donald Trump stormed to victory in the Iowa caucuses, the first contest in the Republican race to choose the party’s presidential nominee for November’s election. Mr Trump took 51% of the vote, underlining his dominance in the race (in 2016, when Mr Trump started his first presidential campaign, he came second with 24%). Ron DeSantis and Nikki Haley were far behind, taking 21% and 19% of the caucus vote respectively. Some 65% of caucus-goers thought Mr Trump would be fit for the presidency even if he were convicted of a crime.
• Israel marked 100 days since the Hamas attacks of October 7th. At a big commemorative event in Tel Aviv many carried pictures of the more than 130 hostages still being held in Gaza. Meanwhile, under a deal brokered by France and Qatar, Israel and Hamas agreed that medicines would be given to the hostages while more humanitarian aid would be delivered to Gaza where conditions are increasingly dire. Intense fighting continued in southern Gaza, especially around Khan Younis where Israel believes Hamas’s leaders are holed up. Jordan said Israeli air strikes had damaged its military field hospital there.
• America and Britain bombed dozens of Houthi targets in Yemen in response to almost two months of attacks on commercial vessels in the Red Sea. The Iranian-backed group continued its campaign, however, firing on several ships, which just prompted more American strikes against the militants. The American government put the Houthis back on a list of terrorist groups.
• Tensions increased between Iran and Pakistan after Iran launched a missile attack in western Pakistan targeting Jaish al-Adl, Sunni militants whom it considers to be terrorists. Pakistan then fired missiles into eastern Iran, hitting what it said were "terrorist hideouts”. Each country has accused the other in recent years of harbouring militants in the border region. Iran also hit targets in Iraq and Syria.
• Russia and Niger, whose democratically elected leader was overthrown last year by a soldiers'junta, agreed to enhance military co-operation.
• Azali Assoumani, who came to power in 1999 in a coup, won election to a fourth five-year term as president of the Comoros, an archipelago in the Indian Ocean. His opponents cried foul.
• Britain’s home secretary, James Cleverly, asked Parliament to proscribe the Islamist Hizb ut-Tahrir group under the Terrorism Act 2000. Anybody belonging to the group, or showing support for it, could face up to 14 years in prison. Mr Cleverly said that Hizb ut-Tahrir’s praise of the October 7th attack by Hamas on Israel constitutes "promoting and encouraging terrorism”.
• Rishi Sunak, Britain’s prime minister, survived a challenge from rebels in his own Conservative Party to a new law clearing the way for a controversial plan to deport illegal migrants to Rwanda. Three Tories resigned from their posts because they think the legislation is too weak.
• Donald Tusk, Poland’s new reformist prime minister, and politicians from the previous right-wing Law and Justice (pis) government continued to row. The Constitutional Tribunal blocked Mr Tusk's attempt to remove the head of the public prosecutor’s office, after Andrzej Duda, the country's president, said the dismissal did not have his consent. Mr Duda is from the pis. A meeting between Mr Tusk and Mr Duda to smooth things over ended in acrimony. And the former deputy foreign minister was arrested over a visa scandal.

Keep on truckin'

• Polish lorry drivers suspended their blockade of three border crossings into Ukraine, after reaching a deal with the Polish government over driver permits. Ukraine said the blockade had hurt its economy and its war effort.
• Ukraine shot down a Russian military spy plane over the Sea of Azov and damaged another Russian aircraft used for airborne command. The planes were being used to co-ordinate Russia’s ground operations. The spy plane could track more than 300 targets simultaneously.
• William Lai Ching-te was elected president of Taiwan, giving a third term in office to the independence-minded Democratic Progressive Party. He will be inaugurated in May. Mr Lai has been an even more outspoken proponent of Taiwan’s national sovereignty than the incumbent president, Tsai Ing-wen, though in his victory speech he emphasised his aim of avoiding confrontation by talking to China. The DPP lost its parliamentary majority, however.
• The election in Taiwan angered China. It warned the Philippines "not to play with fire” and summoned the Filipino ambassador after the country’s president, Ferdinand Marcos junior, congratulated Mr Lai. China said that this was "a serious violation of the One China principle”. The Pacific nation of Nauru ditched its diplomatic links with Taiwan in order to forge closer ties with mainland China, leaving Taiwan with j ust 12 cou ntries that formally recognise it.
• The new government of the Maldives said it had asked India to withdraw the 80 or so troops it has stationed there by March 15th. Last year the Indian Ocean archipelago elected a new president, Mohamed Muizzu, who is strengthening ties with China and red ucing his country’s long-standing reliance on India. The Indian foreign ministry did not give a timeline for any withdrawal.
• North Korea's dictator, Kim Jong Un, pivoted away from his country’s formal desire for unification with South Korea, ordering the closure of all state offices that had been working towards that goal. Mr Kim said his people should no longer think of South Koreans as "fellow countrymen”. Meanwhile North Korea's foreign ministervisited Russia for talks. North Korea is supplying Russia with weapons for its war on Ukraine.

The presidential zeal

• Bernardo Arevalo was sworn in as Guatemala's president. Since his landslide election victory last August, sections of Guatemala’s political elite have done their utmost to stop the anti-corruption Mr Arevalo from taki ng office. His swearing-in ceremony was delayed by nine hours amid more shenanigans from his opponents in Congress, underlining the huge battle he faces fighting corruption.
• In Ecuador the prosecutor who was leading an investigation into the recent storming of a television station by an armed gang was assassinated, according to the country’s attorney-general. Cesar Suarez was shot dead in the city of Guayaquil, the centre of most of the violence that has rocked the new government.

The world this week Business

• China’s economy grew by 5.2% last year, just above the government's target of 5%. Speaking at Davos, Li Qiang, China’s prime minister, crowed that the government had not had to resort to massive stimulus to achieve an economic rebound. However, the figure is a comparison with the low base of 2022, when GDP expanded by just 3% because of pandemic restrictions. Investors weren’t impressed. Chinese stockmarkets extended their rout from the start of 2024, despite the authorities ordering some institutional investors not to sell shares. China’s population also fell in 2023 for the second year, by 2m people to 1.409bn.
• German GDP was 0.3% smaller in 2023 than the previous year, as higher prices hit household consumption and trade. The economy may have avoided a recession in the second half of the year, just. An initial estimate showed GDP shrinking by 0.3% in the fourth quarter over the third quarter, but the statistics office now says that in the third quarter the economy merely "stagnated".
• Britain recorded an unexpected rise in inflation. The annual rate rose to 4% in December, the first increase in ten months. Coming after a surprise increase in America’s inflation rate (to 3.4% in December) and a rise in the euro zone’s (to 2.9%) investors are pushing back their estimates of when central banks will cut interest rates. Christine Lagarde, president of the European Central Bank, hinted this week that the ECB won’t start reducing rates until the middle of the year.
• America’s big banks reported a mixed bag of earnings. Net profit at Goldman Sachs was $2bn in the fourth quarter, which was better than markets had expected. But its annual profit of $8.5bn was its worst in four years. Morgan Stanley’s 12-month profit of $9.1bn was also its worst since 2019. By contrast, JPMorgan Chase's net profit of $49.6bn was a record for the bank, which benefited more than its rivals from higher interest rates. Citigroup is slashing at least 20,000 jobs, a tenth of its workforce. It reported a hefty loss for the fourth quarter related in part from its exposure to Russia.
• BlackRock struck a deal to buy Global Infrastructure Partners for $12.5bn. It is the asset manager’s biggest acquisition since 2009, when it bought Barclays Global Investors, GIS owns infrastructure and energy assets, including London’s Gatwick and City airports.

Flight cancelled

• A federal judge blocked JetBlue Airways’ proposed takeover of Spirit Airlines, finding that the merger of America’s sixth-and seventh-largest carriers would hurt competition. The $3.8bn deal was announced in July 2022 and had been delayed in the courts ever since.
• Kroger and Albertsons pushed back the date by which they hope to complete their proposed merger, as talks continue with the Federal Trade Commission and state regulators about combining the two supermarket giants. Meanwhile Washington state asked a judge to halt the deal, arguing that it would lead to higher prices for consumers.
• Shell sold its 68-year-old onshore-oil business in Nigeria to a consortium of mostly local companies. Like other energy giants that have withdrawn from the Delta region, Shell has grappled with damage to infrastructure, often blamed on communities suffering from damage to their environment. Meanwhile, BP confirmed Murray Auchin-clossas its new chief executive; he has held the job on an interim basis since the resignation of Bernard Looney last September.
• Apple passed Samsung last year to become the world's biggest seller of smartphones by volume, according to I DC, a market-research firm (Apple has long been the most profitable smartphone-maker).
• Apple shipped nearly 235m of the devices, 4% more than in 2022 and despite a downturn in the wider market. That compared with Samsung’s 227m, a drop of 14%. Transsion, a Chinese manufacturer, made the top five by selling lots of its phones in Africa.

Rising stock

• The news was a fillip for Apple in a week when Microsoft pipped it to become the most valuable company. Microsoft is now worth around $2.9trn on the stockmarket, compared with Apple’s $2.8trn.
  The revolution in chipmaking spurred another big takeover, as Synopsys, which makes software tools for chip design, agreed to buy Ansys, which provides engineering simulation software to a variety of industries, for $35bn.
• An annual survey of global chief executives by PWC found that a quarter of them expect to cut their workforce by at least 5% this year because of generative artificial intelligence. Those cuts are already starting to materialise, with Google reportedly laying off hundreds in advertising and Amazon making hundreds of redundancies in its streaming business, both because of AI.

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