The Economist - 13 April 2024

Год выпуска: April 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

THE NEXT HOUSING DISASTER

• Global warming is coming for your house. Who will foot the bill? Leader, page 7.
• Homeowners face a $25trn reckoning: briefing, page 13.

Who are America’s swing voters?

• They are extraordinarily rare, but we have found some: leader, page 9.
• America is evenly divided and partisan. Yet a small number will change their mind in November, page 17.

Elon envy: pity Tesla’s rivals

• The EV market is cooling. Which Tesla wannabes can survive? Page 50.

What if Ukraine loses?

• Any form of Russian victory would be debilitating for the West, and especially for Europe: Charlemagne, page 44.

Life in Al utopia

• What will humans do if artificial intelligence solves everything? Free exchange, page 62.

The world this week Politics

• Japan’s prime minister, Kishida Fumio, visited Washington for talks with Joe Biden and to address Congress. America and Japan are strengthening their military alliance, which includes closer co-operation between their command structures. Japan is also to join an American mission to the Moon, meaning a Japanese astronaut will be the first non-American to walk on the lunar surface. America, Japan and the Philippines then prepared fortheir first trilateral summit. The Philippines’coastguard has recently clashed with Chinese vessels in the South China Sea.
• China’s leader, Xi Jinping, met Ma Ying-jeou in Beijing. Mr iMa served as president of Taiwan from 2008 to 2016, establishing friendlier ties with China. The relationship grew colder after he left office. China is trying to court friendly Taiwanese politicians, while freezing out independence-minded officials, such as the incoming president, Lai Ching-te.
• South Korea’s liberal opposition parties won the most seats in parliamentary elections, trouncing the conservative party of President Yoon Suk-yeol. The liberals fell short of a super-majority, however.
• In a tense phone call between Joe Biden and Binyamin Netanyahu the American president warned the Israeli prime minister that Israel must do more to protect civilians and negotiate a ceasefire with Hamas. America’s policy, Mr Biden said, would be determined by Israel’s “immediate action”. Israel said it would open the Erez crossing and allow in direct shipments from Ashdod, an Israeli port, opening major new conduits for aid into Gaza. The following days saw a big increase in the number of trucks entering Gaza with humanitarian aid. Mr Biden later offered “ironclad” support to Israel if Iran attacks it.
• Israel withdrew its ground troops from Khan Younis, leaving just one brigade deployed in Gaza. The remaining troops will try to prevent Palestinians from leaving the south, now home to almost 90% of Gaza’s 2.2m people, and returning to the north.
• Ismail Haniyeh, the leader of Hamas, who is based in Qatar, said three of his sons were killed in Israeli strikes. Israel said that the three men were members of Hamas’s military wing.
• Jacob Zuma, a disgraced former president of South Africa, won a court case allowing him to mn for office in a general election on May 29th. Mr Zuma had been barred by electoral officials because of a conviction forcontempt of court and prison sentence of 15 months. His new party, known by its initials, .MK, is polling above 10% of the national vote.
• An overcrowded ferry capsized off Mozambique, killing at least 96 people who had been trying to flee an outbreak of cholera. Separately, at least 38 migrants, including children, died in a shipwreck off the coast of Djibouti.
• Climate-change activists won their first-ever case in the European Court of Human Rights. The court ruled that Switzerland had failed to protect its citizens’ rights in a case brought by a group of women in their 70s, who argued that old people were particularly vulnerable to intensifying heatwaves. The judges established a right to protection by the state “from the serious adverse effects of climate change on lives, health, well being and quality of life”. Forty-six countries are covered by the ECHR’s jurisdiction.

Dicing with danger

• Russia and Ukraine blamed each other for drone strikes on the Zaporizhia nuclear plant, which is in Ukraine but controlled by Russian forces. It was the first time the facility had been attacked directly since November 2022. The International Atomic Energy Agency said such attacks increased the risk of a nuclear accident and called an emergency meeting.
• Seven people were killed in a Russian drone strike on Kharkiv, Ukraine’s second-most-populous city. Russia has stepped up its attacks on the city in recent months, which Ukrainian officials think may be a prelude to a new Russian incursion. Kharkiv lies just 30km (19 miles) from Russia.
• Britain, Belgium, Denmark, Germany, the Netherlands and Norway signed a pact to co-operate on protecting underwater pipelines and other infrastructure in the North Sea. The sabotage of the Nord Stream pipeline in 2022 and damage to a pipeline in the Baltic Sea in 2023 are still unexplained. Some suspect Russian involvement; others have fingered Ukrainian agents.
• Iceland is to have a new prime minister. Bjarni Benediktsson, who leads the conservative Independence Party, was chosen by the ruling coalition to lead the government after Katrin Jakobsdottir, of the Left-Green Movement, resigned to run for the mostly ceremonial post of president.
• A scathing report into transgender health care for children was published in Britain. The Cass Review recommended moving away from a model of medical intervention for trans-identifying children to one based on therapy. It also criticised the “toxicity” of the debate on gender for inhibiting open discussion.
• Mexico suspended diplomatic relations with Ecuador, after Ecuadorean police stormed the Mexican embassy in Quito to arrest a former Ecuadorean vice-president. Jorge Glas took refuge in the embassy last December after he faced an arrest warrant for corruption (he has already served prison time on similar charges). He says he’s innocent. Mexico said it had granted him asylum.
• The first parents in America to be held criminally responsible fora mass shooting carried out by their child were sentenced to between ten and 15 years in prison. Their 15-year-old boy shot dead four fellow pupils at his school in suburban Detroit in 2021. The parents were found guilty in separate trials earlier this year of involuntary manslaughter. Their son was sentenced to life in prison.
• Arizona’s Supreme Court banned abortion in the state, reviving a law from 1864 to justify its ruling. The order was put on hold for two weeks, but the decision has already had political reverberations. Arizona is one of the swing states on which the presidential election in November hinges.

Moonlight shadows

• Tens of millions of people in Canada, the United States and Mexico turned out to watch a solar eclipse. Some of the regions where a total eclipse was viewable included parts of southern Ontario and Quebec, upstate New York, Indiana and Texas and Sinaloa and Durango. The event drew hordes of eclipse-tourists, who booked 92% of Airbnb listings within the zone of totality.

The world this week Business

• The Biden administration said it would provide $6.6bn in direct funding to TSMC to support its facilities in Arizona for manufacturing the world’s most advanced semiconductors. TSMC, based in Taiwan and the world’s largestcontract chipmaker, will have three sites in Phoenix when it completes a new factory there. It is increasing its investment to $65bn, the largest-ever foreign direct investment in a “greenfield” project, meaning built from scratch, in America. TSMC supplies chips to Apple and Nvidia foruse in smartphones and artificial intelligence.
• Intel unveiled its Gaudi 3 chip for AI, which it claims is faster and more power-efficient than Nvidia’s H100. It tested the chip on two open-source large language models: Llama, which is run by Meta, and Falcon, a project backed by Abu Dhabi. Intel also announced a plan to create, with other tech companies, an open platform for enterprise Al that will “accelerate deployment” of secure generative AI systems.
• Disney is to crack down on users who share passwords to its streaming services. Bob Iger, Disney’s chief executive, said the crackdown would be gradually rolled out to different countries starting in June. Netflix implemented a similar policy last year, and it has since reported a surge in subscribers.
• Boeing’s safety record was in the spotlight again. An engineer at Boeing alleged that the company took shortcuts on quality and safety when it manufactured 787 and 777 jets, leaving them with potential structural flaws. Boeing described the claims as “inaccurate”. And the Federal Aviation Administration investigated yet another incident involving a Boeing plane, this time an engine panel that fell off a 737-800 during take-off from Denver. Meanwhile, Alaska Air received $160m in compensation from Boeing for the panel that fell off one of its aircraft in January, leaving a gaping hole in the plane. The airline said it expects further payments.
• Tesco, Britain’s biggest supermarket chain, reported a big rise in pre-tax profit to £2.3bn ($2.9bn) for the 12 months ending February 24th. It expects higher profits this year, as inflationary pressures have “lessened substantially”. Meanwhile, John Lewis, a troubled department-store and supermarket chain, appointed Jason Tarry, a former senior executive at Tesco, as its new chair. Dame Sharon White held the position for five years, the shortest-ever tenure in the job.

A victory, of sorts

• The EU’S General Court ruled that sanctions imposed on Mikhail Fridman, a Russian investor, and Petr Aven, his business partner, between February 2022 and March 2023 must be annulled. The court found that the EU had not “sufficiently substantiated” its reasons for linking Messrs Fridman and Aven to Vladimir Putin’s regime after Russia invaded Ukraine. Mr Fridman is one of Russia’s most prominent businessmen. Both men are still subject to sanctions not covered by the judgment.
• Two bits of economic data changed market calculations about the Federal Reserve’s path towards interest-rate cuts. America’s annual inflation rate rose again, to 3.5% in March from 3.2% in February. And American employers created 303,000 jobs in March, the highest number since last May, suggesting that the economy remains red-hot. Stockmarkets sagged and the yield on government bonds jumped in response to both sets of data. Investors have narrowed their bets on when and how the Fed will cut this year, though some of those bets, of up to seven cuts, were wildly optimistic.
• Fitch reduced its outlook for China’s sovereign credit-rating from stable to negative, but retained the country’s A+ rating (iMoody’stooksimilaraction in December). Fitch forecasts that China’s central- and localgovernment debt will rise to 61.3% of GDP this year. In 2019 it was 38.5% of GDP.
• HSBC decided to sell its business in Argentina, and will book a $ibn pre-tax charge in its first-quarter earnings related to the sale. The bank said it would also have to acknowledge $4-9bn in losses on its books linked to the falling value of the peso when the deal closes, though this would neither affect its financial strength nor its tangible net asset value. HSBC has been gradually pulling back from markets outside Asia in order to focus on its business there.

Serenity and strife

• “We’ll have AI that is smarter than anyone human probably around the end of next year,” predicted Elon Musk in an interview. Mr Musk’s prophesy is conditioned on the continuing supply ofchips and electricity. Meanwhile, Mr Musk had more earthly matters to consider when he caused a huge political row in Brazil by calling for the resignation of a Supreme Court judge whom he suspects of ordering a block on certain right-wing accounts on his messaging service, X.

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