The Economist - February 3 2024

Год выпуска: February 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: 88

HOW TO END THE MIDDLE EAST’S AGONY

• War is spreading across the Middle East. There is an alternative: leader, page 9.
• America makes a big push to end the war in Gaza. And maybe bring a lasting peace too, page 35.
• The case for bailingout Egypt: leader, page 11, and analysis, page 38.
• Despite a threat to one of its main trade routes, China prefers to sit out the Red Sea’s security crisis, page 31.

The end of the social network

• A new social-media landscape is solving some problems—and creating new ones: leader, page 10.
• As Facebook turns 20, politics is out; impersonal video feeds are in: briefing, page 14.

Bidenomics in a second term

• What four more years of Joe Biden would mean for America's economy, page 61.

Why charter schools work

• The evidence for them has strengthened, justas both parties have run away from them: leader, page 11.
• Charter schools do things that all Democrats say they support, page 17.

Inside the Zelensky v Zaluzhny feud

• Ukraine's army chief faces the sack, page 41.

The world this week Politics

• American, Egyptian, Israeli and Qatari negotiators met in Paris to discuss the framework fora long humanitarian pause in the fighting in Gaza. It would allow for the exchange of hostages still being held in Gaza with Palestinian prisoners in Israel. Binyamin Netanyahu, Israel's prime minister, said he would not accept a deal that required Israeli troops to leave Gaza permanently without Israel’s "total victory" over Hamas. Nonetheless Ismail Haniyeh, a senior Hamas leader, said the group was considering the proposal.
• Three American soldiers were killed and 40 others wounded in a strike on a base in Jordan known as Tower 22, which supports American operations in Iraq and Syria. Kataib Hizbullah, an Iranian-backed Iraqi militia, is believed to have been responsible. America hinted that its response might come in waves.
• Israel said it had evidence that at least a dozen of the 13,000 Gaza-based staff members of UNRWA, the UN agency that helps Palestinians, were involved in Hamas’s attack on Israel on October 7th. In response more than ten countries, including America and Germany, unrwa’s two largest funders, said they would freeze donations, unrwa says that without the money it will be forced to cease operations at the end of February amid the humanitarian crisis in Gaza.
• Israeli troops disguised as medics and other civilian roles killed three members of Palestinian armed groups in a hospital in the West Bank. Israel says the raid prevented a major imminent attack. A doctor at the hospital said one of the men was receiving medical treatment. Experts believe Israel’s ruse probably violated the laws of war.
• The Iranian-backed Houthis attacked more merchant ships linked to America and Britain off the coast of Yemen. America carried out more air strikes on Houthi targets, including the destruction of a fleet of drones that were being prepared to attack vessels.
• The African National Congress, South Africa’s ruling party, suspended Jacob Zuma, a former president, after he said he would campaign for a newly formed rival party. The split makes it more likely that the anc will lose its majority for the first time in national elections, which are due to be held later this year.
• Burkina Faso, Mali and Niger, three west African countries run by military juntas, said they would withdraw from ECOWAS, the regional bloc, which has been pressing for a return to civilian rule.

The quid pro quo

• The Biden administration confirmed that it would sell 40 F-16S to Turkey. The confirmation of the arms deal came the day after Turkey officially approved Sweden’s membership of nato. America had linked the sale of the fighter jets to Turkey's ratification of Sweden’s application.
• After intense negotiations, the European Union agreed to release Csobn ($54bn) in aid to Ukraine. Because the money is coming from the eu budget it required unanimous approval. Viktor Orban, the prime minister of Hungary, had been blocking the deal until this week’s summit.
• Meanwhi Ie Volodymyr Zelensky, Ukraine’s president, was reported to have asked Valery Zaluzhny, the country’s most senior general, to resign. Tensions between the two men are running high after General Zaluzhny said that the war was ata stalemate, contradicting the official line that Ukraine is making advances.
• The Spanish government’s amnesty bill for Catalan nationalists was surprisingly defeated in a parliamentary vote. Thejunts per Catalunya party withdrew its support, claiming the amnesty would not cover Catalan politicians w'ho are being investigated on terrorism charges. Last year huge protests were held throughout Spain against the amnesty, the centrepiece of a deal that allowed the Socialists to continue in government. The bill could be resubmitted with revisions.
• The Democratic Unionist Party in Northern Ireland announced its return to the power-sharing executive that it walked out of two years ago. Sir Jeffrey Donaldson, the dup leader, agreed to a deal with the government in Westminster that will reduce checks and paperwork on goods moving from the British mainland to the province and staying there. But the Brexit-imposed Irish sea border is not going away entirely.
• Imran Khan was handed two more prison sentences: 14 years for selling state gifts for personal profit and ten years for leaking classified documents. His wife was also imprisoned. Mr Khan, who has been in prison since August in the state-gifts case and barred from political office, says all the charges against him are politically motivated. His party has faced restrictions in campaigning ahead of a general election scheduled for February 8th.
• In Thailand the Constitutional Court ruled that the reformist Move Forward party had broken the law by wanti ng to change the country’s lese-majeste legal code, which outlaws any criticism of the monarchy. The court ordered the party to ditch its policy. Though no MPs will be punished by the court's decision, it gives ammunition to Move Forward’s enemies, who want to abolish the party.
• The Philippines and Vietnam signed an agreement to co-operate on maritime security in the South China Sea Chinese state media said the deal "will only irritate the situation" and increase the risk of conflict.
• Brazil’s president, Luiz Inacio Lula da Silva, sacked the deputy head of Abin, the country’s intelligence agency, and four other officials, amid claims that Abin spied on critics of Jair Bolsonaro during his presidency. Police raided properties associated with Carlos Bolsonaro, one of the former president’s sons, who is suspected of being at the heart ofthe spying ring. He has denied any wrongdoing.
• America’s House of Representatives came closer to impeaching Alejandro Mayor-kas, the secretary of homeland security, for, Republicans say, failing to stop the surge of migrants crossing the Mexican border. Voting along party lines a committee approved two articles of impeachment, which will be put to the full House.

It's pay-back time

• E. Jean Carroll pledged to use the $8301 that Donald Trump was ordered to pay her in damages on something he hates. A jury awarded the $83111 for defamatory remarks made by Mr Trump against Ms Carroll, whom he sexually abused according to another court jury. After coming face-to-face with him in court, she described Mr Trump as "just something in a suit”.

The world this week Business

• The Federal Reserve kept its main interest rate on hold at a range of 5.25% to 5.5%· It was the fourth consecutive time the central bank has held rates. With inflation on the wane, investors are impatient fora rate cut; the Fed offered little information about when it expects to do that. It did issue a more neutral outlook by saying that it was “moving into better balance” on jobs and inflation, but it all but ruled out a rate cut in March. Stock-markets swooned.
• Boeing withheld its usual forward guidance for the year when it presented its quarterly earnings. The planemaker's 737 Max 9 aircraft were grounded when a panel fell from an airliner soon after take-off. The 737 Max 9S have started flying again, though the Federal Aviation Administration has limited Boeing’s production of the plane.
• Microsoft reported a big jump in revenues, boosted in large part by artificial intelligence, which it is now applying "across every layer of our tech stack”, according to Satya Nadella, its chief executive. The company pointed to the success of its Azure ai cloud service, which provides access to large and small language models integrated with infrastructure, data and tools. But Microsoft’s share price dipped, as investors fretted about the increasing costs of keeping up with ai developments.
• A "notably larger” rise in spending on ai at Alphabet also weighed on market sentiment after it announced its results, even though revenue grew more than expected at Google's cloudservices business.
• Amazon withdrew its proposed acquisition of iRobot, following objections from the European Union. IRobot makes the Roomba autonomous vacuum cleaner; the eu claimed the deal would have allowed Amazon to hoover up competition in the market. After Amazon’s announcement iRobot said it would shed a third of its staff, after sales fell by 25% last year.

Bumps in the road

• After becoming the world's biggest seller of electric vehicles, BYD said it expects its profit last year will have grown by up to 86%. But it also warned of increasing competition from Chinese rivals. Meanwhile Renault called off its planned ipo of Ampere, its EV division, because of "current equity-market conditions”; in other words, souring investor sentiment on growth in the EV industry.
• "It’s true the pace of EV growth has slowed,” General Motors said in its earnings, but it pointed out that ev sales are still rising, and should account for 10% of all car sales in America this year. The weak spot in the carmaker's otherwise positive outlook remains China; it sold 2.1m vehicles there in 2023, down from a peak of 4m in 2017.
• Although it is a laggard in evs, Toyota retained its crown as the world’s biggest seller of vehicles in total, notching up 11.2m in sales last year. Volkswagen parked in the number-two spot again, selling 9.2m.
• In a surprising change to its strategy, Saudi Aramco, under the direction of the Saudi government, abandoned an aim of increasing its maximum oil output and is to stick to current targets. Some industry watchers wondered if this was a response to a possible slowing of demand, whereas others said it was a reaction to spare capacity.
• The IMF said it now expects the world economy to grow by 3.1% this year, up from the 2.9% it forecast last October. This is in part because of "greater-than-expected resilience" in the American economy, which expanded at an annual rate of 3.3% in the last three months of 2023. But the fund’s biggest upward revision was to Russian GDP, which it now thinks will grow by 2.6%. Despite sanctions by the West, Russia has been able to sell its oil elsewhere. Exports of Russian diesel to Brazil, for instance, have soared over the past year.
• The euro zone’s economy registered zero growth in the final quarter of 2023, narrowly avoiding a recession (GDP fell by 0.1% in the previous three months). The economy grew by just 0.5% for the whole year.
• A judge in Hong Kong ruled that Evergrande be put into liquidation. Saddled with over $3oobn in liabilities, the developer is at the heart of China’s property crisis. The ruling applies to its Hong Kong-based holding company, part of a sprawling financial network. Enforcing the order will depend on courts and officials in mainland China, where most of Evergrande’s assets are held.

Rich man, poor man

• A judge in Delaware struck down the $55.8bn pay package awarded by Tesla to Elon Musk in 2018, finding that as the "superstar CEO”, he had "dominated the process” that led to the deal. "Never incorporate your company in the state of Delaware,” Mr Musk retorted on X. He is going to ask Tesla's shareholders "immediately" to transfer the company’s incorporation base to Texas.

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