The Economist - 18 May 2024

Год выпуска: May 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 AMERICA DICTATOR-PROOF?

• How dictator-proof is America? Briefing, page 16.
• The many vulnerabilities, and the enduring strengths, of Americas republic: leader, page 9.

An American startup boom

• The go-getting spirit has revived, page 61.
• Big tech’s splurge on Al looks irrationally exuberant: leader, page 12.

China, Russia and the grey zone

• Xi Jinping is more subtle than Vladimir Putin, but just as disruptive: leader, page 11.
• Russia's president wants to strengthen the two countries' "no-limits" partnership, page 34.
• China's bullying of Japan, the Philippines and Taiwan risks sparking an explosion, page 52.
• Britain once saw China as a golden opportunity; now it sees a threat, page 49.

The BJP’s power vacuum

• A leadership struggle is brewing in India’s ruling party, page 29.
• Narendra Modi boosts the BJP’s Muslim-baiting: Banyan, page 33.

Economists and God

• An ageing product outperforms expectations, page 72.

The world this week Politics

• In a surprise shake-up of Russia’s security apparatus, Vladimir Putin moved Sergei Shoigu from his job as minister of defence, a role he has held since 2012, to the national security council. His replacement is Andrei Belousov, an economist with no experience of security matters but who has worked extensively on military budgets. The changing of the guard will have little effect on operations in Ukraine. Mr Putin prefers to speak directly to Valery Gerasimov, his senior general in the field. Mr Belousov said his task was to achieve victory, but “with minimal human losses”, presumably just on the Russian side.
• Mr Putin met his Chinese counterpart, Xi Jinping, in Beijing. It was his first trip abroad since winning a sham election in March. The leaders reaffirmed their support for each other. Mr Xi has been accused by Western officials of propping up Mr Putin’s war machine in Ukraine.
• Antony Blinken, America’s secretary of state, visited Ukraine, where he held talks with Volodymyr Zelensky, the president, about the arms that are being sent to the country following Congress’s passage of a military-aid bill. Mr Zelensky said more missile-defence systems were needed. Mr Blinken showed off his guitar skills in Kyiv, joining a local rock band to play Neil Young’s “Rockin’ in the Free World”.
• The Russians said they had entered Vovchansk, a border town in Ukraine’s north-east close to Kharkiv, the country’s second-biggest city and where many civilians have sought refuge. Russia has deployed five battalions in its advance into the area, one of its biggest ground attacks since the start of the war.
• Robert Fico, the prime minister of Slovakia, was shot and seriously wounded while visiting the town of Handlova. The interior minister described the attack as politically motivated. A suspect was arrested. Mr Fico, a populist-nationalist, has sought closer ties with Russia and wants to defang the country’s public broadcaster.

Learning from Big Brother

• Georgia’s parliament passed a law that will require NGOs and media groups that receive at least 20% of their funding from abroad to register as foreign agents. Fighting broke out among MPs as the vote was held. Called the “Russia law” by critics because of its similarity to rules that stifle dissent in Russia, the legislation has brought tens of thousands of protesters out onto the streets. The European Union has warned that the measures threaten the country’s chances of joining the bloc.
• Pro-independence parties lost their majority in Catalonia’s regional election, which for the first time gave the most seats to the Socialists. The result ends more than a decade in power by parties seeking to secede from Spain. The conservative People’s Party increased its number of seats from three to 15. The Socialists will try to form a coalition government with other parties.
• The UN said that 600,000 people had fled Rafah in south Gaza, as Israel stepped up its incursion into the area. Fighting also intensified in north Gaza, where Israel had been winding down its operations. Meanwhile America’s State Department said it was “reasonable to assess” that Israel may have used American weapons in a way that is “inconsistent” with its obligations under international law, but that there was “no direct indication of Israel intentionally targeting civilians”. The White House moved forward with a plan to send another $1bn-worth of arms to Israel.
• A small group of Israeli protesters vandalised food-aid packages that were en route to Gaza from Jordan. America condemned the “looting”. Meanwhile Israel opened a new aid crossing at Erez that the UN hopes will enable a constant stream of supplies into Gaza.
• Celebrations to mark Israel’s founding in 1948 were muted. Fireworks were cancelled and the families of the hostages being held in Gaza organised an alternative event to protest against the government’s failure to bring the captives home. Binyamin Netanyahu, the prime minister, was heckled during a speech.
• A Swiss court convicted Ousman Sonko, who was interior minister under The Gambia’s former dictator, Yahya Jammeh, of crimes against humanity between 2000 and 2016, including murder and torture. Mr Sonko is the highest-ranking official to be convicted in Europe under the principle of universal jurisdiction, whereby a person who commits a crime in one country can be tried and jailed in another.
• Lawrence Wong was sworn in as Singapore’s prime minister in a carefully crafted handover of power arranged by Lee Hsien Loong, who had held the job for 20 years. iMr Wong retains his role as finance minister, but has relinquished his chairmanship of the central bank to Gan Kim Yong, who is also deputy prime minister.

Trouble in paradise

• Four people were killed during rioting in New Caledonia, a French Pacific-island territory, afterthe French National Assembly passed a law allowing French citizens who have lived there for ten years to vote in elections. Locals fear the law will dilute the political power of the Kanak people.
• Several days of protests against rising food and electricity prices left four people dead in Pakistan-administered Kashmir. The violence ended after the Pakistani government promised to provide subsidies.
• The director of Britain’s GCHQ, which handles signals intelligence, said that China, more than Russia or Iran, poses the biggest risk to cybersecurity. Anne Keast-Butler criticised China’s “irresponsible actions”. Meanwhile, three men were charged in London with spying for Hong Kong’s intelligence agency.
• The IMF’s staff praised Argentina’s “better-than-expected performance” and recommended the country receive the next tranche of loans under a bail-out agreement. President Javier Milei has undertaken a number of painful economic reforms and spending cuts; unions recently held a general strike. Argentina’s annual inflation rate stood at 289% in April, though the month-on-month rate has eased, allowing the central bank to cut its key interest rate from 50% to 40%.
• Joe Biden and Donald Trump agreed to hold two presidential televised debates, on June 27th and September 10th. The dates are much earlier than normal in the election cycle and have been arranged outside the auspices of the commission that decides the timings. The candidates may want early debates so that they can recover in the polls if they trip up.

The world this week Business

• Joe Biden imposed another round of tariffs on Chinese exports to America, most notably increasing the duties on electric vehicles to ioo%. America imports relatively few Chinese EVs but Mr Biden suggested his steps were preemptive. Chinese carmakers are expanding in Europe, but “We’re not going to let China flood our market,” said the president, with one eye on votes in Michigan, the centre of America’s car industry and a crucial state in November’s election. Tariffs are also going up on semiconductors, solar cells and critical minerals. A furious China described the decision as “political manipulation” and vowed to retaliate.
• Anglo American decided to break up its business to fend off a revised takeover bid from ВНР, valued at £34bn ($43bn). Anglo will divest its coking coal assets and spin off its platinum and De Beers diamonds divisions. It is also considering the options for its nickel business in order to focus on copper, iron ore and crop nutrients. The mining giant’s headquarters are in London but it employs 45,000 people in South Africa, where it was founded in 1917; the govern ment there will want a say in any demerger or sale process.
• The Brazilian government replaced Jean Paul Prates as chief executive of Petrobras, the state oil company, with Magda Chambriard, the former head of the energy regulator. Markets took a dim view. The move will be cheered by leftwing politicians who want Petrobras to lower prices and invest more to create jobs.
• The competition accelerated in artificial-intelligence services. Open AI updated its chatbot model to GPT40 (the “o” stands for omni, or all-encompassing). The latest version is able to interpret voice commands to hold a “conversation”. And Alphabet unveiled Project Astra, an AI assistant that also responds to voice commands.
• All the energy used to power data centres for AI is causing tech companies’carbon emissions to rise. Microsoft reported a 31% increase in its indirect (Scope 3) emissions last year from building more data centres (including the carbon found in construction materials) as well as from semiconductors, servers and racks.
• Tencent announced a sharp increase in quarterly net profit to 42bn yuan ($5.8bn), boosted by advertising and e-commerce. The Chinese tech giant’s gaming business also showed improvement, which Tencent hopes will be boosted by the forthcoming release in China of “Dungeon & Fighter”, a popular mobile game.

Hope springs eternal

• The annual inflation rate in America dipped to 3.4% in April, following two consecutive monthly rises. Investors are poring over every detail of the monthly consumer-price indices for clues about when the Federal Reserve might cut interest rates. The slightly lower inflation data delighted markets, propelling the S&P 500, NASDAQ Composite and Dow Jones Industrial Average to record levels.
• Higher prices in Japan that are causing consumers to tighten their belts were the main factor behind the economy shrinking by 0.5% in the first three months of the year, quarter on quarter. An earthquake at the start of 2024 also dented output.
• Britain’s economy pulled out of recession in the first quarter of 2024, growing by 0.6% compared with the last quarter of 2023. That was a faster pace of growth than America’s 0.4% and the euro zone’s 0.3% on the same basis. But compared with the first quarter of 2023, GDP rose by only 0.2%.
• The meme stocks at the centre of a day-traders’ frenzy during the pandemic came roaring back. GameStop’s share price surged by 74% and AMC Entertainment’s by 78% in a day. The cause was a sudden burst of activity on the Roaring Kitty account on X, which had been dormant since June 2021. Roaring Kitty is the brainchild of Keith Gill, a small trader who posts video clips and images as clues about his investment tips without mentioning the name of the company.
• Despite turning a profit in the first three months of 2024, SoftBank reported another annual net loss, of ¥228bn ($i.4bn) for the 12 months ending March 31st. The Japanese tech investment company is banking on Al for its future growth, based on the performance of Arm, a chip designer that floated on the stockmarket in September and in which SoftBank owns a 90% stake.

Now you can own a piece of Pi

• Raspberry Pi announced its intention to list shares on the London Stock Exchange. The firm, based in Cambridge, has sold over 60m low-cost singleboard computers and modules since it began trading in 2012. It grew out of a charitable foundation to promote the study of computing, allowing children (and their parents) to build their own PC and learn coding. It has a dedicated fan base.

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