The Economist - 10 February 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: 76

WHO IS IN CONTROL?

Xi v the markets

• Why investors are losing faith in China's president: leader, page 9.
• The country's stockmarket nightmare is not ove r, page 59.
• Μarkets are pummelling the well-to-do: briefing, page 15.
• Can China's consumers save the day? Page 33.

Ukraine and the rise of killer drones

• Pioneered in Ukraine, they are the weapons of the future: leader, page 10.
• They offer precision warfare at scale and could one day become as dominant as artillery, page 66.

Trump's lead: smaller than it looks

• Whatthe national polls do not tell you, page 79.

When is it too soon to write history?

• The answer rests on how soon you want to read it, page 71.

Our two cents on Taylor Swift

• Hysteria reflects the overlap of politics, conspiracy and celebrity: Back Story, page 74.
• The meltdown: Lexington, page 24.

The world this week Politics

• A panel of three judges at the federal appeals court in Washington, DC, rejected Donald Trump’s claim that he is immune from prosecution for allegedly trying to overturn the result of the election in 2020. Mr Trump had argued that he could only face prosecution in relation to “official acts" if Congress impeached and convicted him first, but the judges ruled that the former president is now merely “citizen Trump" His trial in the case was due to start on March 4th, but the judge overseeing those proceedings has postponed the date indefinitely.

They couldn't run a bath

• Republicans in the Senate blocked a compromise bill, which they themselves had spent months helping to craft, that tied military aid to Ukraine and Israel to stricter measures on border control. Mr Trump had made it clear that the party shou Id not make a deal with Democrats on the border, as he wants to keep the issue alive for the election. The Democrats then separated the military-aid package into a different bill fora second vote.
• In another fiasco, the Republican-controlled House of Representatives rejected a vote to impeach Alejandro Mayorkas, America’s secretary of homeland security. It was a fruitless gesture that was in essence based on Mr Mayor-kas’s remarks that the border with Mexico was secure. A few Republicans joined Democrats in opposing the measure. The Republican leadership vowed to hold another vote.
• America and its allies struck Iranian-backed militias in Iraq and Syria in retaliation for an attack that had killed three American soldiers at a base in Jordan. The Pentagon said that one of its strikes killed one of the commanders of the Kataib Hizbullah militia who had planned the attack.
• Antony Blinken, the American secretary of state, visited Saudi Arabia, Israel and elsewhere in the Middle East in an effort to negotiate a hostage deal and ceasefire in Gaza between Israel and Hamas. Binyamin Netanyahu, the Israeli prime minister, rejected Hamas's demands as "delusional”, but talks continue. Arab states hinted they might be willing to offer security guarantees to Israel if it agreed to the establishment of a Palestinian state.
• Senegal's presidential election was postponed for ten months, sparking a constitutional crisis. It was supposed to be held on February’ 25th. President Macky Sall will remain in power beyond the end of his legal term in office, which finishes on April 2nd.
• Hage Geingob, the 82-year-old president of Namibia, died weeks after being diagnosed with cancer. Nangolo Mbumba, the vice-president, has taken over as interim head of state until elections are held in November.
• The UN called for $4.ibn in humanitarian aid to support 17.4m people in war-torn Sudan and neighbouring countries.
• Support for the African National Congress, which has been in power in South Africa since the end of apartheid in 1994, has fallen below 40% just months ahead of a general election in which the party is expected to lose its parliamentary majority.
• Michelle O'Neill, the leader of Sinn Fein in Northern Ireland, became the first-ever Irish-nationalist head of the province's government. She was sworn in as first minister following the decision of the pro-British Democratic Unionists to return to the powersharing executive.
• It was announced that King Charles III of Britain has cancer. He had recently been in hospital for a procedure on his prostate, but "a separate issue of concern” was found. The king has stepped back from making public appearances.
• Pakistan suffered a wave of violence ahead of a general election on February 8th. At least 30 people were killed by bomb blasts in two towns close to the border with Afghanistan. And ten policemen died when their station in Khyber Pakhtunkhwa was attacked by around 30 militants. A candidate for the national parliament was shot dead in the province a week earlier.
• Five years after being detained in China on espionage charges, Yang Hengjun, an Australian citizen, was handed a suspended death sentence by a court in Beijing. Mr Yang was born in China and blogged about its affairs. The Australian government said it was "appalled” by the decision. The sentence may be commuted to life imprisonment after two years.
• Nayib Bukele, who describes himself as the world's coolest dictator, romped home to re-election in El Salvador. Mr Bukele is popular because of his crackdown on crime, though he has retained power by circumventing a one-term limit on the presidency.
• At least 130 people were confirmed dead and hundreds were missing after wildfires swept through Chile’s central region. Separately, Sebastian Pinera, a two-time president of Chile, died after the helicopter he was piloting crashed in the south of the country.
• The governor of Donetsk province in eastern Ukraine said that Russia was pounding the area with between 1,500 and 2,500 artillery shells and rockets a day. Meanwhile rumours continued to swirl that Volodymyr Zelensky’, Ukraine’s president, is about to replace several senior generals and government officials. “A reset is necessary,” he said in an interview.
• The farmers’ protests that have swept across Europe spread to Italy and Spain. The farmers have a wide range of complaints, including stringent green targets which they say are hurting their industry. The European Commission said that it would ditch a proposal to halve the use of pesticides, an apparent concession to the farmers. It also removed firm targets for agriculture from an ambitious plan to reduce greenhousegas emissions by 2040.
• Meanwhile, the European Parliament backed a measure where certain vegetables grown using new'genomic techniques may be exempted from the EU's strict regulations on genetically modified crops. Supporters of NGTS say the technology reduces the use of fertilisers and pesticides and makes crops more resilient to climate change.

Aliyev and kicking

• Ilham Aliyev cruised to victory in Azerbaijan’s election. The result was never in doubt. The autocratic president brought the poll forward from October 2025 to take advantage of a surge in his popularity following the army’s swift victory over Armenian fighters in Nagorno-Karabakh last September. Amnesty International said Azeri authorities had intimidated government critics even more than usual ahead of the election.

The world this week Business

• The big oil giants reported bumper profits for 2023. BP’s underlying profit of $13.8bn was its second-largest in a decade. Murray Auchincloss, the new chief executive, announced that the company would extend its share buyback programme. Total-Energies' net profit of $21.4bn was a record. Chevron's net income, also $21.4bn, was its second-highest since 2013, as was ExxonMobil’s $36bn since 2012. Exxon also claimed a big victory when two activist investors withdrew their proposed shareholder motion for the company to speed up its emissions reductions. Exxon is still ploughing ahead with a lawsuit questioning the investors' motives. Shell recently reported a profit of $28bn.

A conflict of interests

• War in the Middle East has hurt sales at McDonald’s in the region. The fast-food retailer said its business in Malaysia, Indonesia and France, which has a large Muslim population, had also been affected. The chain was targeted by protesters after a franchised outlet in Israel offered free meals to soldiers. Starbucks has also reported that similar boycotts are affecting its business.
• New York Community Bancorp tried to reassure investors that its business was still sound, after its credit rating was cut to junk status by Moody’s. N’YCB, which bought the assets of Signature Bank after it went to the wall last year, has spooked investors by reporting a quarterly loss related to its exposure to commercial property loans. Its share price has since plummeted, wiping 60% off its market value.
• China has fallen further into a deflationary spiral. Consumer prices in January were 0.8% lower than in the same month last year, the biggest such drop since 2009. It is another headache for policymakers in Beijing, who are contending with a weak economy, a crashing property market and feeble stockmarkets.
• The value of German exports plunged by 4.6% in December compared with November, a much sharper drop than had been expected. The value of exports fell to €125bn ($137bn), the lowest since March 2022; they declined by 1.4% over the whole year. There was some good news for the beleaguered German economy. Industrial orders rose by 8.9% in December, the most si nee June 2020.
• Markets took a positive view of Fatih Karahan’s appointment as the new governor of Turkey’s central bank. Hafize Gaye Erkan abruptly resigned after just eight months in the job, over what she claimed was a "character assassination campaign” against her in sections of the press. Mr Karahan used to work as an economist at both the Federal Reserve Bank of New York and Amazon. With inflation in Turkey running at 65%, he is expected to continue with the bank's aggressive round of interest-rate rises.
• Investors reduced further their expectations of the Federal Reserve making a cut to interest rates in March, after American employers added 353,000 jobs in January, double the number that analysts had forecast.
• After 18 months of negotiations, the parent company of Yandex, Russia’s Google, agreed to sell all its business in Russia to a consortium of Yandex managers and Russian investors. The $5.2bn sale by the Dutch-registered Yandex marks the biggest corporate exit from Russia since the start of its war against Ukraine. Yandex’s managers stressed that it would remain “private and independent”.
• Meta’s share price fell back a bit from the 20% jump it registered after reporting solid quarterly results and announcing its first-ever shareholder dividend. The company’s revenues from digital ads surged in the last three months of 2023 (as they did at Google and Amazon). Meanwhile, Meta announced that it will encode artificial-intelligence generated images on its plat forms with new technological specifications that it hopes will become a labelling standard across the wider socialmedia industry.
• In other earnings news, Uber reported its first annual net profit since its IPO. Snap’s share price took a dive after its results disappointed investors; the operator of Snapchat is cutting about 10% of its 5,000 strong workforce. Disney narrowed the losses in its streaming business. And Toyota’s stock hit a record, after the Japanese carmaker raised its profit forecast; its finance chief said sales of electrichybrid vehicles were soaring.

The lucky country

• The Australian government readied a bill that will give employees the right to ignore calls and texts from their bosses outside working hours, with fines for employers who break the rules. The Greens, who pushed for the change, reckon Australians work six weeks unpaid overtime a year. The “right to disconnect” was first introduced in France (of course) and the revolution has spread to around 20 countries. Australia also has an unofficial Go Home on Time Day, first observed in 2009.

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