The Economist - 20 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

GENZ

Reasons to be cheerful

• Reasons to be cheerful about the young: leader, page 9.
• The world economy has been kind to Generation Z, page 57.
• Demands grow to restrict young people’s access to phones and social media, page 67.
• Our numbercrunching shows that the plight of graduates in China is much worse than previously thought, page 32.

Is generative Al built on theft?

• Lawyers v large language models, page 51.
• Moving beyond today's LLMs will require some fundamental breakthroughs, page 64.

Howto counter Iran

• Israel should try a novel tactic to respond to Iran's missile attack: restraint: leader, page 10.
• An old conflict enters a new phase, page 36.
• Iranians fear their brittle regime will drag them into war, page 37.

Musk v Brazil’s supreme court

• Elon Musk’s latest feud, page 25.

Shrinking America

• Much of America is shrinking, something its system of government makes even harder than it need be: briefing, page 15.

The world this week Politics

• Iran launched an unprecedented direct attack on Israel in retaliation for a strike at the beginning of April that killed two generals at its embassy compound in Damascus, Syria’s capital. Almost all of the more than 300 drones and missiles launched by Iran were successfully intercepted. America, Britain, France, Jordan and other Arab states contributed to Israel’s defence. Binyamin Netanyahu, Israel’s prime minister, said his country was determined to defend itself. Joe Biden, Americas president, urged him to show restraint to avoid regional escalation.
• Local officials said that four Palestinians were killed by Israeli settlers in the West Bank. Thei r deaths took place amid violence that erupted after the killing of a 14-year-old Israeli boy in what the Israeli army said was a terrorist attack.
• Gulf states were battered by storms that caused floods leading to the deaths of 20 people. The United Arab Emirates saw its heaviest rainfall since records began 75 years ago. Dubai airport, the world’s second-busiest, told passengers to stay away.
• Donors pledged around $2.ibn to humanitarian relief in Sudan, which is facing the world’s largest humanitarian crisis because of a year-old civil war. Experts warn that the country is entering the grip of famine, which could lead to 500,000 deaths.
• Ghana failed to reach a deal on debt forgiveness with its creditors, which holds up its efforts to emerge from default and an economic crisis. Without a sufficiently large write-off of debt it will be unable to access a $3bn bail-out from the IMF.
• Nigeria’s inflation rate climbed to 33.2%, a 2 8-year high, fol lowing a collapse in the value of its currency, the naira. Although the central bank has increased interest rates, prices have continued to rise because of economic reforms, including the removal of a fuel subsidy.

Stable government

• The prime minister of Singapore, Lee Hsien Loong, announced that he would step down on May 15th, after 20 years in office. In a long-planned succession Mr Lee is handing the reins to Lawrence Wong, his deputy, who is also the finance minister. iMr Wong will be only the fourth prime minister in the city-state. iMr Lee’s father, Lee Kuan Yew, held the job from 1959 to 1990.
• Two violent incidents shocked Sydney. A man stabbed five women and a man to death, before he was shot dead by a policewoman. The perpetrator had mental-health issues. And in what police described as a terrorist attack, a 16-year-old boy stabbed and injured a bishop at an Assyrian Orthodox church during a mass that was being streamed live. A mob confronted police outside the church, where the boy was being held for his own safety.
• Australia’s Labor govern me nt announced plans to increase defence spending by A$5obn ($32bn) over the next decade. That would raise defence spending from 2% of GDP to 2.4%. Australia, America and Britain have created the AUKUS security pact to counter Chinese ambitions in Asia Pacific.
• America is to reimpose oil sanctions on Venezuela for failing to keep to the spirit of an agreement to allow a free and fair presidential election. The Venezuelan authorities have since barred the opposition’s most popularcandidate.
• American firms have until the end of iMay to wind down their business in the country’s energy sector, although some existing licences to sell Venezuelan oil, such as the one granted to Chevron, will still be valid.
• The Democratic-controlled Senate in America voted swiftly to toss out the impeachment of Alejandro Mayorkas, the homeland security secretary, dismissing the trial and rejecting claims by Republicans that iMr Mayorkas had wilfully ignored border-security law.
• The first-ever criminal trial of an American president, former or sitting, got under way in New York. Donald Trump faces charges of illegally concealing hush-money payments to a porn star, which he denies. Dozens of potential jurors were dismissed during jury selection because they could not promise to be impartial. The trial could last six to eight weeks.
• iMike Johnson, the speaker of America’s House of Representatives, pushed forward with a complex package of bills that would provide military aid to Ukraine, Israel and other allies. The Senate had passed a single bill, but it ran into opposition in the House, not least from supporters of Mr Trump, who gripe about giving more funding to Ukraine.
• Meanwhile, Ukraine’s president, Volodymyr Zelensky, said his army had been unable to thwart a Russian attack that destroyed a power plant, because “We ran out of missiles.” Separately, a Russian missile attack on Chernihiv, in northern Ukraine, killed 18 people.
• In Germany police arrested two German-Russian men for allegedly spying for Russia. One of the men is suspected of planning to sabotage an American facility in Bavaria that trains Ukrainian troops. He is also thought to have fought for pro-Russian forces in the Ukrainian region of Donetsk from 2014 to 2016.

Cancelled

• The prime minister of Belgium, Alexander De Croo, sharply criticised the decision by a district mayor in Brussels, Emir Kir, to order police to shut down a conference being held by national conservatives, an emerging political alliance in Europe. The event’s speakers included Nigel Farage, who championed Brexit in Britain, and Viktor Orban, the populist prime minister of Hungary. Mr Kir, a Socialist,said he wanted to shut the conference because protesters were targeting the venue (the courts disagreed and the conference resumed). Mr De Croo, a liberal, said that “Banning political meetings is unconstitutional. Full stop.”
• An envoy for business in the EU who was controversially hand-picked for the role by Ursula von der Leyen, the president of the European Commission, quit just hours before he was supposed to start the job. Markus Pieper, who comes from the same party in Germany as Mrs von der Leyen, had scored lower on a test for the position than othercandidates.
• Britain’s plan to ban anybody born after2008 from ever buying cigarettes passed its first big hurdle. Rishi Sunak, the prime minister, easily won a vote in the House of Commons by 383 to 67. A significant number of those who voted against the bill came from his own Conservative Party; no opposition Labour Μ Ps voted against it. The bill now moves to its next stages. If implemented, the ban would be among the strictest in the world. New Zealand scrapped a similar plan earlier this year.

The world this week Business

• As it adjusts to slower demand for its electric vehicles, Tesla is reportedly set to shed io% of its global workforce, or around 14,000 jobs. Adding to the woes of Elon Musk’s firm, two senior executives said they were leaving. Tesla’s deliveries fell in the first quarter of this year. As other carmakers, especially in China, step up their EV ambitions, Tesla is facing intense competition in markets that it used to have to itself a few years ago. Its share price is down by 37% this year. The company wants shareholders to reaffirm Mr Musk’s pay at its annual general meeting in June, after a court in Delaware struck it down in January.
• The latest estimates from the IMF suggest that global GDP is on track to grow by 3.2% this year. The fund said the world economy “remains remarkably resilient” and that there would be “less economic scarring” than it had thought from the pandemic. The biggest upgrades to its forecasts for the largest economies it tracks were for America, where the IMF now thinks GDP will expand by 2.7%, and Russia, projected to grow by 3.2%.
• China’s economy grew by a bette r-than-expected 5.3% in the first quarter of 2024, year on year, helped by a 6.1% rise in industrial production. Much of the growth came in January and February. In March retail sales struggled, and the output of cement plummeted, highlighting the problems besetting the country’s property market.
• Markets were rattled by figures that showed retail sales growing rapidly in America, more evidence that the economy remains red-hot. Investors pushed back their bets on an interest-rate cut from the Federal Reserve. They were also perturbed by comments from Jerome Powell, the Fed’s chairman, about inflation taking “longerthan expected” to fall to the central bank’s 2% target.

The numbers game

• Britain’s annual inflation rate slowed to 3.2% in March, from 3.4% in February. Inflation is now lower in Britain than in America, where it is 3.5%, but higher than the euro area, where it stands at 2.4%. Still, the figures caused traders to think that the Bank of England might not reduce interest rates until September or November.
• Goldman Sachs released a set of quarterly earnings that at last delighted investors. Net profit surged by 28% in the first quarter, year on year, to $4.ibn, helped by a 32% jump in revenue from investment banking and a 10% rise in revenue from trading. The results take some of the pressure off David Solomon, the bank’s chief executive, who faces a shareholder proposal at the impending annual general meeting to vote against his pay award.
• Microsoft announced a $1.5bn strategic investment in G42, a firm developing artificial-intelligence technology in Abu Dhabi, which is backed by the emirate’s government. The deal has the blessing of the Biden administration, which persuaded G42 to divest from China and focus on America.
• A little of the shine came off ASML, Europe’s most valuable tech company, when it reported a big drop in quarterly sales. The value of the company’s orderbookforthe lithography machines it supplies, which are an essential component in chip manufacturing, plunged to €3.6bn ($3.8bn) in the first quarter, from €9.2bn in the final quarter of 2023. ASML expects the second half of the year to be stronger “in line with the industry’s continued recovery from the downturn” in the chip cycle.
• LVMH saw its weakest quarter for sales growth since the post-pandemic boom three years ago. The luxury-goods company recorded a big drop in revenue from champagne and w'atches and jewellery in the first three months of 2024, though sales in Japan grew' by double digits, helped by the weak yen and an influx of Chinese shoppers. Meanw hile Bernard Arnault, LViMH’sboss, shored up his succession plan by asking shareholders to approve the addition of two of his sons to the board; they join two other siblings.
• CVC Capital Partners, one of Europe’s biggest private-equity firms, announced its intention to list shares on the Euronext exchange in Amsterdam. CVC had planned an IPO in 2022, which was upended by Russia’s invasion of Ukraine. It also considered a float last year, but postponed it in November amid market uncertainties.

Running ahead

• Following its first annual loss in three decades, Adidas raised its profit guidance for the year on the back of strong sales in the first quarter. Adidas may face a new reputational problem, how'ever, with the revelation that Rishi Sunak, Britain’s prime minister, has a penchant for its popular Samba trainers. Mr Sunak, whom one newspaper has described as a “geeky tech bro”, recently made a humorous “fulsome” apology for reducing the hip appeal of the shoes. I’ve worn them for “many, many years”, he said.