The Economist - 24 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: 80

IS EUROPE READY?

• American wavering and Russian aggression reveal just how ill-equipped Europe is to defend itself: leader, page 9, and briefing, page 14.
• A spotlight on Germany's armed forces,page 45, and European military spending, page 63.
• Vladimir Putin will not stop, page 41.
• The Kremlin's intelligence agencies have learned from their mistakes, page 51.
• Ukrainians are becoming pessimistic, page 43.
• After the fall of Avdiivka, page 44.
• Two new books chronicle the war, page 71.

A primer on the Trump trials

• The flimsiest of the cases is set to go first, and Democrats who wish to see the former president locked up by election day will be frustrated, page 19.
• Why sanctions disappoint Even the harshest sanctions on Russia are no substitute for military aid to Ukraine: leader, page 10.
• The West's enemies are benefiting as its financial power declines, page 61.

Who wants to be a university president?

• America's hardest job: Schumpeter, page 60.

Middle Ages, misunderstood

• A new book argues they were a time of progress, page 74.

The world this week Politics

• Some 400 people were arrested across Russia for marking the death of Alexei Navalny, the country’s leading opposition figure. Mr Navalny was found dead at the Arctic penal colony to which he had been recently bundled, the result of "sudden death syndrome”, according to the authorities, who refused to release his body to his family. Politicians in the West held Vladimir Putin responsible. Despite his incarceration, Mr Navalny continued to infuriate the Russian president, relaying “Arctic hugs and polar greetings to all” in his new year message. His wife, Yulia Navalnaya, has vowed to continue his work. America prepared new sanctions against Russia.
• The Russian regime has a long reach hitting its enemies. A Russian helicopter pilot who defected to Ukraine was found dead in Spain. The head of Russia’s foreign intelligence service described the man as a "traitor and criminal" Russia executed several Ukrainian prisoners of war after capturing Avdiivka, according to reports. Ukraine’s new commander-in-chief, Colonel General Oleksandr Syrsky, withdrew his troops from the eastern town to stop them being encircled. The fall of Avdiivka is a blow to Ukraine’s war effort. Russia had briefly occupied it in 2014 before Ukraine retook the town and reinforced its position there. Russian flags now flutter again over its municipal buildings.
• Polish farmers blockaded Poland’s border with Ukraine, stepping up their protest against Ukrainian grain imports, which they blame for undermining their market. The protests present a quandary for the new Polish government, which says it backs the farmers, but is also highly supportive of Ukraine.
• Finland made its strongest accusation yet that Russia is gathering groups of illegal migrantsand sending them over the border. The interior minister said that thousands of migrants were waiti ng to cross, after 1,300 had entered between August and December (before that just one person a day was crossing over). New laws are being prepared to boost border security.

Sunak is sunk

• Britain’s Conservative Party lost two by-elections to the opposition Labour Party, the latest in a run of defeats for the Tories. By-election losses for governing parties are not uncommon, but the swing to Labour far exceeded the party's national poll lead of 20% over the Conservatives. In Wellingborough, hitherto one of the Tories’ safest seats, the fall in the party's share of the vote was the biggest since the second world war.
• Benny Gantz, a member of the Israeli war cabinet, said that unless the remaining hostages who were seized by Hamas on October 7th are freed by March 10th, Israel would launch a ground offensive in Rafah, the city in southern Gaza to which many Palestinians have fled. March 10th is also the probable start of Ramadan. Efforts to broker a ceasefire continued in Cairo, although Qatari mediators said progress was slow. The death toll in Gaza passed 29,000. Meanwhile, America vetoed a un resolution demanding an immediate ceasefire in Gaza. The United States is proposing its own resolution calling fora temporary ceasefire which also warns Israel not to invade Rafah.
• The World Food Programme, a un agency, announced that it was pausing food deliveries to northern Gaza, because aid convoys faced chaos and violence there “due to the collapse of civil order”.
• Syria blamed Israel for an air strike on a building in Damascus that killed at least two people. Israel has carried out a dozen attacks in Syria this year on targets connected to Iran.
• Senegal’s Constitutional Council slapped down an attempt by the government to postpone the presidential election, which had been scheduled for February 25th. The council said it must now take place as soon as possible.
• Israel and Brazil became ensnarled in a diplomatic tangle, which started when Luiz Inacio Lula da Silva compared Israel's military action in Gaza to "when Hitler decided to kill the Jews”. Israel’s foreign minister said Brazil’s left-wing president would be "persona non grata” in the country until he retracted the statement. In response, Brazil withdrew its ambassador from Israel.
• A judge in Haiti investigating the assassination in 2021 of the then-president, Jovenel Moise, charged his wife with involvement in the killing. The indictment says that Martine Moise, who was injured in the attack, had given contradictory evidence and was herself interested in power. Some, including Ms Moise, say the charges are political. Her lawyer has denied that she played any role in the murder.
• The Pakistan Muslim League-Nawaz and Pakistan People’s Party cemented a coalition agreement, following an election in which Tehreek-e-Insaf, the party of Imran Khan, Pakistan’s imprisoned opposition leader, came first. The PML-Nand PPP will forma government with the support of smaller parties. Shehbaz Sharif of the PML-N will again become prime minister, a job he held until last August. The PPP’s Asif Ali Zardari, widower of Benazir Bhutto, a slain former prime minister, will return as president.
• At least 26 people were killed in tribal clashes in Papua New Guinea. Local police said it was the worst outbreak of violence they had seen in the remote Highlands area, where tribal conflicts have worsened because of an influx of illegal weapons. A state of emergency was declared in Port Moresby, the country’s capital, last month, after riots killed 16 people. The government is struggling to impose order.
• Chinese coast guards boarded a Taiwanese tourist boat that was visiting the Kinmen islands, which lie just 10km (six miles) off the coast of China but belong to Taiwan. A few days earlier two Chinese fishermen drowned after they were chased away from the Kinmens by Taiwanese coast guards. Responding to Taiwan’s protests, China said there was no such thing as "restricted” waters.

Rich man, poor man

• Joe Biden raised $42m for his re-election bid in January and had $130m in the kitty at the start of February, more than any other presidential candidate has amassed at this point, according to his campaign. Donald Trump’s campaign coffers are being drained by legal fees, and his war chest could reportedly run dry by the summer. A judge’s recent order for Mr Trump to pay $355m, plus interest, for cooking the books at the Trump Organisation won’t help. He has taken to selling gold-coloured Trump-branded sneakers for $399 a pair to raise money.

The world this week Business

• Nvidia’s fourth-quarter earnings exceeded expectations. Revenue at the maker of chips for artificial intelligence hit $22.1bn, up by 265% from a year earlier, and it made a net profit of $12.3bn, a rise of 769%. It predicted even stronger sales this quarter, even though it is struggling to keep up with demand. Nvidia’s market valuation has soared past $1.7trn, spurring much of the recent rally in the S&P 500.
• Japan’s Nikkei 225 stockmarket index hit a new high, surpassing the previous record set 34 years ago. The Nikkei is up by 18% since the start of this year, as foreign investors flock to Japanese stocks made cheaper by the weak yen.
• HSBC reported a record pre-tax annual profit of $30.3bn, another bank to benefit from charging higher interest rates. Markets, however, focused on а $3bn write-down that HSBC booked in the fourth quarter related to its stake in a Chinese bank, the largest charge taken yet by a foreign lender because of its exposure to China’s struggling property market. hsbc’s share price swooned.
• In China the central bank lowered its five-year loan prime rate from 4.2% to 3.95%. The bigger-than-expected cut to the rate, which is used to determine mortgages, is the latest in a number of official attempts to try to revive a moribund housing market.
• Meanwhile, foreign direct investment to China last year plunged to its lowest level in decades, accord ing to a measure from the State Administration of Foreign Exchange. The country’s direct-investment liabilities in its balance of payments, which reflects the foreign capital going into China, came to $33bn in 2023, a big drop from the $180bn recorded in 2022 and the lowest amount since 1993.
• Mortgage rates have moved back above 7% in America, according to the Mortgage Bankers Association, as expectations fade that the Federal Reserve will cut interest rates soon.
• Walmart’s revenues surged to $648.1bn for the 12 months ending January 31st (as it raked in $1.2m a minute). However, the average amount that shoppers spent per trip dipped slightly in its fourth quarter. Last November Walmart said it would be "managing a period of deflation”, but it noted this week that although prices for general merchandise goods were lower than a year ago, they were a bit higher for food and consumables.

Network effects

• Two of America's biggest credit-card issuers are merging. Capital One, which issues credit cards on MasterCard and Visa networks, agreed to buy Discover, which has its own network, for $35bn.
• ВНР reported a sharp reduction in net profit for the six months ending December 31st. The Australian miner booked another $3.2bn charge in relation to the Samarco dam failure in Brazil in 2015 (taking its total provisions for the disaster to $6.5bn so far) and a $2.5bn impairment on its nickel business in Western Australia. Nickel prices have collapsed amid a global glut of the metal, caused by Indonesia pumping up production at its cheaper mines. Traders are also paring their bets on the price amid slowing growth in the demand for electric vehicles, which contain nickel in their batteries.
• The war in Gaza had a big impact on Israel’s economy in the fourth quarter of 2023, as GDP contracted by 5.2% compared with the third quarter. The deployment of 300,000 reservists has taken a big chunk out of the labour force, and the building industry has been hurt by restrictions on Palestinian workers. Imports and exports plummeted. The economy grew by 2% over the whole year.
• Sales at bae Systems grew by 9% in 2023 to £25-3bn ($31.9bn) and it expects growth of 10-12% this year. The defence company's order backlog of £70bn is its biggest ever and includes new nuclear-powered submarines for the Australian and British navies, bae is also restarting production of parts for the M777 howitzer, used to great effect by Ukraine against Russia.
• Rivian forecast that its output of electric trucks would be flat this year and that it would cut 10% of its staff. Rivian's IPO in 2021 pushed its market value above that of General Motors, but its share price has fallen by almost 90% since then.

Let's go for a spin

• London’s ВТ Tower is to become a luxury hotel, BT (formerly British Telecom) is selling the building to MCR Hotels, which includes the High Line and Lexington in New York among its assets, for £275m ($347m). The 177-metre-high communications tower opened in 1965 as the Post Office Tower and has featured in several films and TV programmes, including "Doctor Who”. The question on everyone’s lips is whether MCR will reopen the tower’s famous revolving restaurant. It was closed in 1971 following a bombing in the toilets.

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