The Economist - 27 July 2024

Год выпуска: July 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: 132

CAM SHE WIN?

• Joe Bidens vice-president has an extraordinary opportunity. But she also has a mountain to climb: leader, page 9.
• Which Kamala Harris is now at the top of the Democratic ticket? Page 19, and Lexington, page 25.

Game changer

• Technology is transforming how sport is broadcast—and watched: leader, page 10 and briefing, page 15.
• Paris could influence how cities host the Olympics in future, page 51.

The world this week Politics

• Joe Biden withdrew from the presidential race. His resignation came after several prominent figures called on him to step aside. He endorsed Vice-President Kamala Harris to succeed him. In an Oval Office address on Wednesday the president said there is “a time and a place” for “new” and “younger voices”.
• Kamala Harris has enough backing from delegates to be the Democratic presidential candidate, her campaign says. The vice-president quickly secured the backing of top Democrats in Congress including Chuck Schumer and Hakeem Jeffries. Democrats say they have raised over $250m for her campaign since Mr Biden withdrew on Sunday. Her formal nomination is likely to take place by a virtual roll call ahead of the party’s convention in Chicago next month.
• Binyamin Netanyahu, the Israeli prime minister, addressed a joint meeting of Congress. He defended Israel’s actions in Gaza and told lawmakers: “We’re not only protecting ourselves; we’re protecting you.” He also thanked Presidents Joe Biden and Donald Trump fortheir support of Israel. Republicans in the chamber reacted enthusiastically. Scores of Democrats boycotted the speech. Thousands of people gathered outside the Capitol in protest.
• Kimberly Cheatle resigned as the director of the Secret Service. Calls for her to quit followed the attempted assassination of Donald Trump. In a letter to staff she reportedly took “full responsibility for the security lapse".
• In the EU’s annual rule-of-law report on its members, Italy’s right-wing government was chastised for interfering in news reporting at RAI, the state broadcaster. Bulgaria, Hungary, and Malta were among those criticised for failing to prosecute corruption.
• The candidate backed by Emmanuel Macron’s party retained the chairmanship of France’s National Assembly despite gains by the far left and right in elections on July 7th. Mr Macron said Gabriel Attal, the prime minister, would stay on as a caretaker until the Olympic games in Paris close.
• Ukraine reached an agreement to restructure $20bn in debt to foreign lenders, reducing it by about one-third. The EU moved forward with a plan to use the interest on frozen Russian assets to offer Ukraine a $50bn loan.
• A Russian court sentenced Evan Gershkovich, a reporter for the Wallstreet Journal, to 16 years in a penal colony on charges of spying for the CIA. Speculation has swirled about whether the Kremlin might try to trade Mr Gershkovich fora Russian assassin imprisoned in Germany.
• At least 40 migrants died at sea after the boat they were on caught fire off the coast of Haiti. More than 80 people were on board the vessel, a United Nations agency said. The Haitian coastguard rescued 41 people, with 11 of them taken to hospital. The cause of the fire remains unknown.

Don’t be a sore loser

• Venezuelans head to the polls on Sunday to elect a new president. Nicolas Maduro, the incumbent, said the country may “fall into a bloodbath” if he loses. Polls place the authoritarian leader behind the opposition candidate Edmundo Gonzalez, a former diplomat. Luiz Inacio Lula da Silva, the president of Brazil, expressed fear over Mr Maduro’s rhetoric and urged him to “respect the democratic process”.
• The Houthis, an Iran-backed militia in Yemen, struck an apartment building in Tel Aviv, killing one person and wounding at least eight others. A day later, Israeli jets bombed the port of Hodeidah in Yemen, almost 2,000km away, causing huge fires. Scores of people were wounded.
• In a meeting brokered by China, the Palestinian secular nationalists of Fatah and the Islamists of Hamas signed an agreement to form an interim “national reconciliation government” for the occupied West Bank and Gaza after the war with Israel. The two groups have signed several such deals in the past, none of which has led to actual reconciliation.
• The International Court of Justice said that Israel’s ongoing occupation of east Jerusalem and the West Bank, the transfer of settlers there and the forced displacement of Palestinians were clear breaches of international law. The judges ordered Israel to cease all new settlement activities and evacuate the settlers already there. The court has no way of enforcing the decision.
• The World Health Organisation said it had detected traces of polio in wastewater in Gaza. It said it would be hard for Gazans to follow advice aimed at preventing the spread of the disease given the breakdown of water and sanitation services.
• Uganda’s security forces have arrested dozens of people who joined peaceful anti-corruption protests in defiance of a ban. Yoweri Museveni, the president of Uganda since 1986, warned ahead of the march to parliament that demonstrators were “playing with fire”. Britain and America imposed sanctions earlier this year on several Ugandan officials, including the speaker of parliament, on allegations of corruption.
• South African police uncovered a crystal-meth laboratory and a stockpile of the drug with a street value of around 2bn rand ($108m) about 130km from the administrative capital. Among those arrested were three Mexicans.
• More than 20% of Sudan’s pre-war population of roughly 50m have been uprooted since the start of its civil war.
• Though millions have fled to neighbouring countries, the majority—nearly 8m—remain inside Sudan.

What garbage

• A balloon full of rubbish sent by North Korea landed near the South Korean president’s office in Seoul. The rubbish did not contain any dangerous substances. It is the first time Pyongyang has landed a balloon inside the presidential compound.
• Bangladesh scrapped most quotas on government jobs after almost 200 people were killed in clashes. The Supreme Court quashed the ruling that reserved nearly a third of state jobs for the families of veterans who fought for independence. The nationwide curfew has been partially relaxed.
• The Central Committee of the Chinese Communist Party held its “third plenum”, a meeting seen as of unusual importance because it has led to radical economic policies. This one was long on promises of reform. The pension age (currently 60 for men) is to rise.

The world this week Business

• The fallout from a botched software update by Crowd-Strike, which on July 19th triggered one of the biggest-ever IT outages, continued to disrupt firms around the world. By knocking out equipment relying on Microsoft Windows, the malfunction caused thousands of flights to be cancelled, hospital operations to be delayed and banks to temporarily cease trading. Some businesses may take weeks to recover. Insurers are preparing for losses stretching into the billions.
• Aviation firms faced plenty of other woes, too. The owner of British Airways now seems unlikely to complete a takeover of Air Europa, after EU officials said it had done too little to assuage concerns that the deal would hurt competition. Ryanair’s chief executive said that he expected a fall in fares seen during the spring to be sustained into the summer. At the Farnborough Airshow, an industry jamboree, executives lamented a shortage of Airbus and Boeing planes.
• Alphabet reported revenues of $84.7bn for the three months to June, 14% higher than for the equivalent period in 2023. Advertising revenue rose by 11%, allaying concerns that alternative AI services such as ChatGPT will soon eat into its profits. Nevertheless, its share price still dropped by 5% over the following trading session, as part of a broad sell-off of big tech stocks.
• Netflix also had a good quarter, reporting that earnings per share had risen by 48% compared with the same period last year. The streaming service added 8m new subscribers in the three months to June, which saw the release of blockbuster hits such as “Baby Reindeer” and the third series of “Bridgerton”.
• By contrast, quarterly profits at Tesla were a disappointment. Its net income fell to $1.5bn, far short of the $1.9bn that analysts had expected. Revenues rose, but by far less than operating costs did. Tesla will also delay the launch of a fleet of self-driving taxis. By the end of the day its share price had fallen by 12%.

Carat and stick

• Share prices for sellers of luxury goods also took a tumble on July 24th. Those of LVMH, Prada and Kering (which owns Gucci) all dropped by around 5%. Investors worried about faltering demand from Chinese consumers as the economy continues to cool. Many have been forced to roll out hefty discounts in Chinese stores.
• Deutsche Bank announced it would stop buying back its shares for the remainder of the year, after spending €1.6bn ($1.7bn) on litigation during the second quarter.
• Over the same period, the equity-trading arm of BNP Paribas shot the lights out. Revenues rose by 58% year-on-year, while the bank’s overall net profit crept up by 1.6%. The traders benefited from high volatility around elections in Europe, plus an interest-rate cut from the European Central Bank.
• India’s government unveiled its first budget since the ruling Bharatiya Janata Party lost its parliamentary majority in June. It included $24bn of new spending on job-creating measures, including contributions to new employees’ wages, internship schemes and training programmes for women. Agriculture and related sectors will receive $18bn. The cost will be met, in part, by higher capital-gains taxes.
• Ukraine struck a deal to cut the face value of $20bn of debt to bondholders by around a third, clearing the path to a formal restructuring in the near future. The deal was endorsed by America, Britain and the IMF, from which Ukraine can now seek additional bail-outs.
• The British pound reached its strongest level since the vote to leave the EU in 2016, as measured against a trade-weighted basket of its peers. Its gains have been fuelled by faster growth than was expected, delayed interest-rate cuts and the perceived stability of Britain’s new Labour government.

Prime that pump

• The People’s Bank of China surprised markets by cutting several of its benchmark short-and long-term lending rates by 0.1 percentage points. Days later it cut its medium-term rate by 0.2 percentage points.
• The Bank of Canada lowered its policy rate from 4.75% to 4.5%, its second consecutive quarter-point cut, having been the first G7 central bank to reduce rates in this cycle. Inflation stood at 2.7% in the year to June, but officials seem to believe that sluggish growth will cool it further.
• America’s Securities and Exchange Commission approved the first batch of exchange-traded funds that are permitted to invest in ether, the world’s second-biggest cryptocurrency. It is an alternative to bitcoin, which saw its first SEC-approved ETFs launched earlier this year.