The Economist - 22 June 2024

Год выпуска: June 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: 84

DAWN OF THE SOLAR AGE

• The exponential growth of solar power will change the world: leader, page 9.
• An energy source that gets cheaper the more you use it marks a turning point in industrial history: Essay, page 41-Overcapacity in China is causing prices to tumble, page 59.
• Floating solar, page 60.
• Solar power in Africa, page 50.

Al and war

• Warfare is about to be transformed by artificial intelligence: leader, page 10.
• An Al-assisted general staff may be more important than killer robots: briefing, page 16.
• Palmer Luckey wants to disrupt the defence business: Schumpeter, page 64.

A report card on Milei’s reforms

• Argentina's president has made progress, but radical experiments with the currency could undo all his work: leader, page 12, and analysis, page 26.

China in the Arctic

• Despite intensifying big-power rivalry in the far north, China still sees opportunities, page 32.

The champagne boom

• Collectors are taking fizz seriously, page 76.

The world this week Politics

• Vladimir Putin visited North Korea. The Russian president was given an elaborate welcome before holding talks with Kim Jong Un, the Asian country’s dictator. The pair have strengthened their alliance during the war in Ukraine, with North Korea providing Russia with weapons. The West fears that in return Russia is helping North Korea with its nuclear programme. Both leaders signed a mutual-defence pact. Mr Putin then went to Vietnam, where he was also given the full state-visit treatment.
• Thaksin Shinawatra, who was deposed as Thailand’s prime minister in a coup in 2006 and returned from exile last year, was formally charged with insulting the monarchy. Mr Thaksin, an influential figure in Thai politics, was granted bail, deferring for now the problematic prospect of sending him to prison. The indictment is one of three politically charged cases that could rock Thai politics. The Constitutional Court has set dates for early July to hear one case that could bringdown the prime minister, Srettha Thavisin, and another that could ban Move Forward, the main opposition party.
• Meanwhile, Thailand became the first country in South-East Asia to legalise same-sex marriage, after the upper house of parliament overwhelmingly approved the measure. The king now needs to sign the bill, paving the way for gay weddings later this year.
• A global summit to shore up support for Ukraine in its fight against Russia ended without securing the agreement of the big non-aligned countries. China stayed away from the gathering in Switzerland and countries such as India, Indonesia, Mexico, Saudi Arabia and South Africa did not sign the final communique.
• Jens Stoltenberg, the secretarygeneral of NATO, said that 23 of the alliance’s 32 members would meet a target of spending at least 2% of GDP on defence this year. That is up from just three countries in 2014 and ten in 2023. Mr Stoltenberg was in Washington to discuss next month’s NATO summit, which is expected to reach a deal on providing security assistance and training to Ukraine. Meanwhile Mark Rutte, the outgoing Dutch prime minister, looked set to succeed Mr Stoltenberg as NATO’s leader in October.

The French revolution

• Jordan Bardella, the president of the hard-right National Rally (RN) in France, urged voters to hand his party an absolute majority at snap elections called for June 30th and July 7th. Polling shows the RN’s parliamentary party, which is led by Marine Le Pen, winning the most seats but falling short of a majority. Bruno Le Maire, the finance minister, subtly criticised Emmanuel Macron’s decision to call the election, saying it had caused “worries, incomprehension, sometimes anger” among French people.
• The Israel Defence Forces said that it would hold a daily “tactical pause” of military activity on a road in the south of Gaza to allow more aid to enter the territory through the Kerem Shalom crossing. Binyamin Netanyahu, Israel’s prime minister, denounced the decision. The IDF made it clear that this did not amount to a ceasefire. It said that fighting would continue in Rafah, where eight soldiers were killed recently.
• Mr Netanyahu released a video criticising the Biden administration for its treatment of Israel during the current war in Gaza. He said that it was “inconceivable” that America had been “withholding weapons and ammunitions” in recent months. The White House said it did not know what the prime minister was talking about, stressing that only one shipment of heavy bombs had been delayed.
• After the departure of Benny Gantz and Gadi Eisenkot, Mr Netanyahu dissolved his six-member war cabinet. Some of the decisions previously made by the war cabinet will now fall to the larger security cabinet, which includes some of Mr Netanyahu’s far-right allies.
• At least 550 people died during the haj, the annual pilgrimage to Mecca in Saudi Arabia, as temperatures in the city hit 51.8°C (125°F). Around 1.8m Muslims are expected to travel to the site for the pilgrimage this year.
• A ship that was attacked recently by Houthi insurgents from Yemen sank in the Red Sea, the second vessel that the rebels have sunk since starting their campaign to disrupt shipping last November. One crewman died in the incident. The Houthis used a drone boat packed with explosives.
• South Africa’s two biggest political parties, the African National Congress and the Democratic Alliance, formed a coalition government headed by Cyril Ramaphosa, the president, after the ANC lost its parliamentary majority. The new government, which also includes other smaller parties, agreed to focus on economic growth, cheering investors. MK, the party of Jacob Zuma, a disgraced former ANC president, will join the opposition.
• The UN Security Council adopted a resolution ordering the Rapid Support Forces, a rebellious Sudanese paramilitary group, to lift its siege of el-Fasher, in the Darfur region. It also called for a halt in fighting between the RSF and the official Sudanese Armed Forces. The resolution, which passed after Russia abstained, points to a hardening of international opinion against the RSF amid concerns that it and allied Arab militias are conducting genocide in Darfur.

To have and to hold

• Joe Biden announced new legal protections for migrants who are in America illegally but married to American citizens. The newsystem streamlines the process for applying for permanent residency, but applicants must have lived in the United States for at least ten years. Around 500,000 spouses could potentially benefit, in one of the most significant presidential actions on immigration in a decade.
• Large protests were held in Brazil against a proposed change to the law that would equate abortions after 22 weeks to homicide. Conservatives in Congress support the bill, but critics note that late abortions are often performed on children who were abused by relatives. Abortion is legal in Brazil only in cases of rape, fetal deformation and when the woman’s life is in danger.
• Ecuador will temporarily suspend visa waivers for Chinese nationals from July ist, as tens of thousands of migrants travel to the country en route to the United States. Ecuador is one of only two South American countries that grant visa-free travel to Chinese visitors (Suriname is the other). From there, they often head north. The number of Chinese nationals trying to cross the US border has rocketed since 2022.

The world this week Business

• Dave Calhoun, Boeing’s CEO, was questioned by American senators about recent safety incidents involving his company’s planes, such as the blowout of a door panel on a 737 MAX. Richard Blumenthal, the chairman of the committee investigating the failures, described Boeing as “an iconic company...that somehow lost its way”. Mr Calhoun, who is stepping down, apologised for the recent incidents and two earlierfatal crashes. Meanwhile, the latest whistleblower to make a complaint revealed that Boeing lost track of 400 faulty parts, and that some of them may have been installed on planes. Boeing’s share price is down by 30% this year.
• Nvidia overtook Microsoft and Apple to become the world’s most valuable company, with a stockmarket value of more than $3.3trn. The maker of chips for artificial intelligence has seen its share price surge by 40% since issuing bumper quarterly revenues and profits a month ago, and expects sales to increase from the roll-out of its Blackwell chip, billed as the world’s most powerful. Nvidia is only one of a dozen companies to lead the S&P500 since its creation in 1926. It recently split its stock, lowering the share price to make it more attractive to small investors.
• Broadcom’s share price also hit new highs, after the chipmaker announced a ten-for-one stock split that comes into effect in July. Over the past few years big tech companies have been using stock splits to dilute the price of their surging shares, though Meta and Microsoft have notably not done so.
• A study by the IMF said that the “sheer scale and speed of the transformation” in AI would amplify job losses, reducing the share of labour income in national accounts and exacerbating inequality. It called on governments to prepare social systems that will “cushion the transition costs for workers”.

Investor reprieve

• A judge in Texas dismissed what remained of ExxonMobil’s lawsuit against activist investors over its emissions targets. Arjuna Capital and Follow This had proposed a proxy vote on quickening the pace of Exxon’s emission cuts, but they dropped the proposal when it threatened to sue, claiming they were abusing the proxy system. The judge ruled that the case against Arjuna was now invalid, as it had pledged not to refile the motion. He had already removed Follow This from the suit.
• Tesla submitted a letterto a judge in Delaware asking for new legal arguments on Elon Musk’s 2018 pay deal, after 77% of the company’s shareholders backed the package at their annual meeting. In January the judge voided the package in a case brought by a dissident shareholder, who claimed the sum, now worth around $46bn, was too large. Tesla says the vote backing Mr Musk’s pay “significantly impacts” the issue. But lawyers for the dissident investor insist the vote has no legal impact.
• Fisker, a maker of electric vehicles, filed for bankruptcy protection in America. The company went public in 2020 amid a wave of optimism in the industry, but its sales never took off. Fisker was de listed by the New York Stock Exchange recently because its share price was “abnormally low” Toyoda Akio’s reappointment as chairman of Toyota won the support of just 72% of shareholders, down from 85% last year. Two big proxy advisers had recommended voting against Mr Toyoda for failing to oversee the proper certification process on some vehicles. It was a rare instance of a rebellion in corporate Japan.
• The ownership structure of Heathrow was overhauled, following the decision of Ferrovial, an infrastructure group, to sell down its stake. Ardian, a French private-equity firm, is now the airport’s largest share holder, with a 22.6% stake. Saudi Arabia’s sovereignwealth hind is taking 15%. The other big investor is the Qatar Investment Authority, with a 20% holding. (Heathrow’s chairman, Lord Deighton, is also chairman of The Economists parent company.)
• Singapore returned to the top spot in an annual ranking of competitiveness among 67 countries compiled by IMD, a business school. The city-state last topped the poll in 2020. Switzerland came second and Denmark, last year’s champion of efficiency, came third. America dropped three places to 12th spot. China climbed seven places to 14th. Venezuela took the wooden spoon.

Knights of Wall Street

• Employees from Chessify, an online chess platform, won the World Corporate Chess Championship in New York, beating a team from Chess-Mood, another platform. Banks and financial firms, including BlackRock and Goldman Sachs, took part in the rapidround format, though only two, Susquehanna and UBS, made it through to the semi-finals. A team from Google came second-bottom in its group.

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