The Economist - 3 August 2024

Год выпуска: August 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: 70

CHINESE BUSINESS GOES GLOBAL

• As the West hides behind tariffs, Chinese companies are gaining ground in the global south: briefing, page 11.
• The hard lessons for Western incumbents: leader, page 6.

The Middle East on the brink

• Israeli assassinations in Beirut and Tehran could intensify a regional war, page 32.
• Hopes of avoiding all-out conflict start still with a ceasefire in Gaza: leader, page 7.
• After the killing of one of its leaders, Hamas faces a dilemma, page 33.

Taxing tourists

• Attempts to cope with an overabundance of visitors are often self-defeating, page 52.
• Taxes could make tourism work for locals and visitors alike: leader, page 9.
• Tourism top trumps, page 53.

Venezuela’s stolen election

• Peaceful protests and judicious diplomacy might just oust Nicolas Maduro: leader, page 7.
• His theft of the election is plain for all to see, page 29.

The cynic’s guide to industry awards

They are both ridiculous and ubiquitous, which is a sad commentary on the human condition: Bartleby, page 48.

The world this week Politics

• At least 20 protesters were reportedly killed in clashes with police after Nicolas Maduro was declared the victor of Venezuela’s presidential election by the country’s electoral commission. The opposition says exit polling showed that its candidate, Edmundo Gonzalez, was the clear winner in the high-turnout contest. It has been unable to obtain results from many polling stations. America called for the immediate publication of the precinctlevel polling. Nine countries in the region, including Argentina and Peru, called an emergency meeting of the Organisation of American States, which said the vote was unreliable. China, Iran, North Korea and Russia congratulated Mr Maduro.
• Ismael “El Mayo” Zambada and Joaquin Guzman Lopez, two leaders of the Sinaloa drug cartel in Mexico, were arrested in El Paso, Texas. Mr Guzman is a son of Joaquin “El Chapo” Guzman, who is serving a life sentence in a Colorado prison. A lawyer for Mr Guzman junior said he had not made a plea deal with American authorities. He had apparently tricked Mr Zambada into flying to El Paso, though Mr Zambada’s lawyers say their client was kidnapped.

One by one

• Israel said that a rocket fired by Hizbullah killed 12 children and teenagers at a football ground in a Druze village in the Golan Heights. Israel retaliated with a strike on Beirut’s southern suburbs, a Hizbullah stronghold, killing Fuad Shukr, the militia’s top military commander. Shortly after, Ismail Haniyeh, Hamas’s most senior political leader, was killed in a strike in Tehran, which he was visiting. Israel also claimed that it had killed Muhammad Deif, the overall commander of Hamas’s military wing, in a strike on Gaza on July 3th.
• Masoud Pezeshkian was sworn in as Iran’s ninth president (Ismail Haniyeh had been in Tehran for the inauguration). He has promised to fight corruption, fix the ailing economy and improve relations with the West, but will probably struggle to implement any major reforms.
• Israel’s military prosecutor opened an investigation into a group of soldiers accused of sexually abusing a Palestinian prisoner held at a detention camp. That prompted a mob of Israelis to storm the base where the soldiers were detained.
• Hours later there was a riot at anotherbase, home to Israel’s military court. Several rightwing lawmakers joined the demonstrations. Herzi Halevi, the army chief, said the scenes were “bordering on anarchy”.
• Separatist rebels and jihadists in Mali reportedly killed dozens of mercenaries from Russia’s Wagner Group who were in a convoy with troops from the west African country. The attack near the Algerian border is the worst known loss for Wagner in Africa.
• Jacob Zuma, the former president of South Africa, was finally booted out of the African National Congress. The 82-year-old upended the country’s politics in May by leading his new party, uMkhonto weSizwe, to third place in a general election, depriving the hitherto hegemonic ANC of its national majority.
• Ethiopia floated its currency, ending decades of efforts to manage the value of the birr. The decision was approved by the IMF, which hours later announced loans worth $3-4bn over four years. Relations with the fund had been hampered by the war in the Tigray region.
• At least 166 people were killed in landslides caused by heavy rains in India’s southern state of Kerala. Scores more are thought to be buried under the mud and rubble.
• The junta in Myanmar extended the country’s state of emergency, which has been in place since a military coup in 2021, for another six months. The army has lost vast swathes of territory to various groups of ethnic rebels, who have started to co-ordinate their operations.

Judicial review

• Joe Biden proposed a radical overhaul of America’s Supreme Court. including 18-year term limits for its justices. Kamala Harris endorsed the plan, though it is unlikely to come to fruition. Mike Johnson, the speaker of the House of Representatives, said the Democrats wanted to change the court because they disagree with its recent decisions and that the proposal was “dead on arrival”.
• Ms Harris raised $200m in her first week as the Democrats’ presumptive presidential candidate, according to her campaign. That is more than Mr Biden raised in the first three months of the year. The polls show her now running neck and neck with Donald Trump.
• The man who plotted the terrorist attacks of 9/11, Khalid Sheikh Mohammed, and two of his abettors have agreed to plead guilty to conspiracy and murder in a deal that will see them imprisoned for life rather than face the death penalty. The three men have been in American custody since 2003 and are being held at Guantanamo Bay.
• Southport, a seaside town in Britain, became the scene of one of the country’s most tragic mass stabbings. A 17-year-old youth has been charged with entering a children’s Taylor Swift-themed dance class with a knife, killing three girls, all under ten years old. Eight other children and two adults who tried to protect them were seriously injured. A vigil for the victims was overshadowed by violence after suspected far-right protesters clashed with police.
• Britain’s new finance minister, Rachel Reeves, said she had discovered a £22bn ($28bn) hole in the country’s public finances. She claimed that the previous government covered up the financial mess and left an “unforgivable” inheritance. The previous Tory finance minister, Jeremy Hunt, rejected her claims, saying that the overspend was a result, among other things, of Labour’s decision to raise public-sector pay.
• Russia said it had taken control of Pivdenne in Ukraine’s Donetsk region, as it continued its slow but steady progress against Ukrainian forces. Pivdenne lies just outside Toretsk, a coal-mining town, where Ukraine has so far held the line. Russia claimed to have also captured two villages on the road to Pokrovsk, a transport hub 70km (43 miles) west of Toretsk. Meanwhile Russia launched one of its biggest drone attacks across Ukraine since the start of the war.
• After a culturally sophisticated and provocatively outre opening ceremony, the Olympics got underway in Paris. Heavy rain led to increased pollution in the Seine, causing the men’s triathlon to be delayed (the swimming leg was held in the river). Suspicion fell on leftwing groups for sabotaging the French rail network on the opening day and telecoms networks two days later.

The world this week Business

• The Bank of Japan raised its benchmark interest rate for only the second time in 17 years, to 0.25% (it increased the rate in March for the first time since 2007). It also plans to reduce its ¥6trn ($39bn) monthly bond purchases by half by the spring of 2026. Japanese government officials had been uncharacteristically vocal in their desire to see the bank halt the decline of the yen. The weakened currency has fuelled inflation, which has remained above the bank’s 2% target for 27 months.
• The Federal Reserve made no changes to its main interest rate but left the door open for a cut in September. Earlier data suggested the American economy grew at an annualised rate of 2.8% in the second quarter, double the 1.4% expansion in the first quarter.
• The euro zone’s GDP grew by 1% on annualised basis in the second quarter (or by 0.3% on a straight comparison with the first quarter). Germany’s economy contracted again by whatever measure was used.
• Boeing reported a $1.4bn quarterly net loss, in part because the extra safeguards it is putting in place to tackle quality issues have slowed down production. Its defence and space division also racked up an operating loss. Meanwhile, the company named Kelly Ortberg as its new chief executive. Mr Ortberg used to run Rockwell Collins, which supplied Boeing with electronics. He retired in 2021.
• Boeing is not the only aerospace company with big problems. Airbus recorded a higher-than-expected charge of almost €1bn ($1.1bn) related to its space business. It has already cut its target for deliveries of commercial planes.
• Microsoft reported a solid set of earnings for the second quarter, with revenue from its Azure cloud division up by 29%, year on year. Still, that figure was slightly below market expectations, which Microsoft blamed in part on capacity constraints for artificial intelligence, where demand is racing ahead of its ability to provide services. The company said its investments in Al would continue to increase. Capital spending hit $19bn in the quarter, a rise of 80%.
• Meta also announced an increase in spending on AI in its earnings. “I’d rather risk building capacity before it is needed rather than too late,” said Mark Zuckerberg. Separately, Meta reached a settlement with Texas over claims that its now-obsolete facial-recognition system gathered biometric data from Texans on Facebook without their permission. Meta is paying $1.4bn to settle the charges, the largest amount ever obtained from an action brought by a single state, according to Texas.

AI, AI, oh

• Meanwhile, another global outage hit Microsoft’s systems, this time a cyber-attack on its email service and its Minecraft video game. The effects of the recent worldwide interruption to Microsoft systems from a faulty update distributed by CrowdStrike, which provides security software, continued to reverberate. Delta Air Lines said it lost $500m because of the disruption.
• The US Consumer Product Safety Commission decided that Amazon is legally responsible for defective goods from third-party sellers on its website, and must issue safety recalls and notify consumers if a product is faulty. Amazon is appealing against the decision.
• BP and Shell reported bumper quarterly profits. BP said it would build its sixth oil platform in the Gulf of Mexico, underlining the continuing importance of fossil fuels to big energy companies. Shell posted a loss in its renewables business. The company recently shelved a biofuels project in Europe because of poor market conditions in that industry.
• Air New Zealand ditched its short-term climate target, the first big international airline to do so. The carrier had hoped to reduce carbon emissions by 28.9% by 2030 compared with 2019 levels, but that goal ran into headwinds, including the unavailability of fuel-efficient aircraft and u 11 afford ability of alternative jet fuels. It is also withdrawing from the Science Based Targets initiative, a collaboration among various NGOs, but remains committed to reaching net zero by 2050.

The cinematic universe

• “Deadpool & Wolverine” notched up $211m in box-office sales over its opening weekend in America, a record sum for an R-rated film. It took a further $233m in international markets. “Inside Out 2”, meanwhile, has surpassed $1.5bn in global sales since its release in June, pushing it over the lifetime gross receipts of “Barbie” and “Top Gun: Maverick”. “Deadpool & Wolverine” and “Inside Out 2” were made by Marvel and Pixar, two Disney subsidiaries, giving the company a couple of big hits after a few summers of relative box-office wash-outs.

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