The Economist - 17 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

FOOTLOOSE AND FANCY DEGREE

How countries compete for talent

• How countries should compete for mobile talent: leader, page 7.
• Even as some governments strive to attract brainboxes, others turn them away: briefing, page 12.
• Britain and immigration, page 40.

Our presidential-election forecast model

• A data-driven assessment of the contest between Donald Trump and Kamala Harris: leader, page 9.
• Why the polls don’t tell the whole story, page 18.

New nuclear threats

• America s nukes have underwritten security for 80 years. Now it faces more adversaries and less-confident allies: leader, page 8.
• America prepares for a new nuclear-arms race, starting as early as 2026, page 16.
• If Donald Trump is re-elected, will South Korea go nuclear? Page 24.
• In a dangerous world, cutting-edge missile defence is all the rage, page 43.

What Ukraine can gain in Kursk

• The country has every right to strike targets in Russia, but should not overreach: leader, page 9.
• Ukraine must decide whether to dig in, pull back or grab more as a bargaining chip, page 36.

Does the brain learn like Al?

• The successes of Ai algorithms are inspiring new theories of how brains learn, page 60.

The world this week Politics

• An incursion by Ukrainian troops deep into Russian territory caught the Kremlin by surprise. Ukraine’s most senior commanderclaimed his forces controlled 1,000 square kilometres (386 square miles) of Russia’s Kursk region. More than 200,000 Russian civilians were evacuated and a state of emergency was declared in a second Russian province, Belgorod, as the fighting spread there. Volodymyr Zelensky said the operation was justified as the region was a launching point for Russian attacks on his country. Vladimir Putin pledged to repel the Ukrainian advance.
• German media reported that an arrest warrant had been issued for a Ukrainian diving instructor who is suspected of carrying out the attack on the Nord Stream gas pipelines in the Baltic Sea two years ago. It remains unclear whether the Ukrainian intelligence services or armed forces had direct involvement in the explosions.
• Hamas refused to join a new round of peace negotiations. America has pressed for the continuation of indirect talks in the hope that a ceasefire in Gaza would defuse tensions and reduce the risk of a wider war between Israel and Iran and its proxies, including Hizbullah in Lebanon. America has also bolstered its forces in the region.
• Mohammad Javad Zarif resigned as vice-president for strategy in Iran, a sign of the deep divisions within the government of Masoud Pezesh-kian, the new president. Mr Zarif’s resignation followed the appointment of a cabinet that includes several conservatives and only one woman.
• Mali and its Sahelian neighbour, Niger, cut diplomatic ties with Ukraine in response to reports that it provided important battlefield intelligence to Malian rebels. The claims followed a deadly rebel attack in late July that reportedly killed dozens of Malian government troops as well as allied mercenaries from Russia’s Wagner Group.
• The WHO declared the outbreak of mpox, which has spread from Congo to neighbouring countries, to be a “public health emergency of international concern” iMore than 15,600 mpox cases and 537 deaths have been reported across Africa this year, though experts believe the true number is much higher.
• Mexico’s president, Andres Manuel Lopez Obrador, suggested that he would suspend talks with his Brazilian and Colombian counterparts aimed at pressing Venezuela to publish voting data in its disputed presidential election. Nicolas Maduro, Venezuela’s autocratic leader, declared victory despite reams of evidence that he lost to the opposition. Mr Lopez Obrador now wants to wait for Venezuela’s Supreme Court, which is controlled by Mr Maduro, to rule on the matter.
• Fabiola Yahez, a former first lady of Argentina, gave testimony to prosecutors claiming that her former partner, Alberto Fernandez, who was president from 2019 to 2023, abused her. During an inquiry into alleged corruption under Mr Fernandez, evidence was found of possible domestic abuse and a separate investigation was opened. Ms Yahez alleges that Mr Fernandez pressed her to have an abortion and regularly beat her. He denies the claims.
• The new interim government in Bangladesh said it w as gravely concerned about attacks on Hindus and other religious minorities in the wake of Sheikh Hasina’ssurrender of powder. Hindus are traditional supporters of Sheikh Hasina’s Awami League, which they considera secular party in the Muslim-majority country.
• Reports surfaced of a drone attack on Myanmar’s Rohingya Muslims, possibly killing 200 people. Villagers were apparently fleeing fighting near Maungdaw, in Rak-hine state, and waiting to cross into Bangladesh w hen they were mown down. The Arakan Army, a rebel group fighting the niling junta on behalf of the ethnic-Rakhine minority, was reportedly to blame, though it has denied any involvement.

The establishment rules, OK

• Thailand was thrown into political turmoil, as the Constitutional Court dismissed Srettha Thavisin as prime minister. In a 5-4 decision, the court found that Mr Srettha was disqualified from holding office because he had appointed a convicted lawyer as a cabinet minister. The lawyer had once represented Thaksin Shinawatra, the de facto leader of Mr Srettha’s Pheu Thai Party. Mr Thaksin is on trial charged with criticising the royal family when he was in exile in 2015.
• Kishida Fumio announced that he would stand down as the leader of Japan’s Liberal Democratic Party, and thus as prime minister. His three years in power have been blighted by a political corruption scandal, rising living costs and a weak yen. “Politics cannot function without public trust,” Mr Kishida conceded at his press conference. He did not endorse any of the candidates who may join the race in September to become the LDP’s newr leader and Japan’s prime minister.
• India’s government w ithdrew a draft broadcasting bill that it had circulated to a small number of people in the industry amid concerns that it would obstruct free speech and unduly restrict entertainment and online content. The government is providing extra time for comments. That it is listening at all is seen as a sign of its weakened power following the recent election, w'hen it lost its parliamentary majority.
• Minouche Shafi к resigned as president of Columbia University, the third head of an Ivy League university to step down over their handling of the fallout from the war in Gaza. Protests have caused chaos on campuses across America.
• Elon Musk held a live-streamed interview with Donald Trump on X. Despite a delayed start, the event w'as listened to by over im people, giving Mr Trump a wide audience as he tries to re-boot his campaign following Kamala Harris’s entry into the presidential race. Mr Trump w'as his usual erratic self, calling Ms Harris “a radical left lunatic” one minute and describing heras a “beautiful woman” the next.

Heroes and villains

• Shortly before the Musk-Trump event the European Union’s internal-markets commissioner, Thierry Breton, wrote a (non-approved) letter to Mr Musk warning him that he had an obligation to mitigate “the amplification of harmful content”. Mr Musk responded with an expletive-themed meme suggesting Mr Breton do something that is anatomically impossible. X’s owner has also riled the British government, with his posts savaging its handling of recent riots. Mean-while Venezuela did actually ban X, accusing it of promoting pro-democracy protests.

The world this week Business

• Starbucks surprised markets by ditching Laxman Narasimhan as chief executive with immediate effect, replacing him with Brian Niccol, who has run Chipotle, a fast-food chain, since 2018. Mr Niccol will take up his new job next month, and become the fourth CEO at Starbucks within the past two years. Mr Narasimhan came under pressure to improve sales from Howard Schultz, an influential former CEO. Elliott Management, an activist hedge fund, had also sought changes. The company’s share price soared after the shake-up in management was announced.

Fasten your seat-belts

• Elliott Management is also circling Southwest Airlines and has launched a proxy fight to replace ten of the carrier’s 15 directors. Elliott has built an 8% stake in the company and wants it to implement a plan to boost its share price, which has fallen by 25% over the past year. Southwest’s profit margins are below its rivals’ and it is contending with delivery delays of Boeing’s 737 MAX aircraft. The airline has adopted a poisonpill strategy to stop any investor amassing more than 12.5% of its shares.
• One of the biggest-ever takeovers in the snacks industry was announced, when Mars agreed to buy Kellanova for $36bn. Mars, wrhich is privately held, owns many chocolate brands, including Bounty, M&.M’s and Snickers; food brands such as Ben’s rice and Dolmio sauces; and pet foods and health services, including Pedigree and Whiskas. Kellanova was spun out of Kellogg’s last year and produces its cereals outside America. It also holds the Pop Tarts and Pringles brands in its portfolio.
• America’s annual inflation rate fell slightly in July to 2.9%, the first time it has been under 3% since March 2021. The core rate, which excludes energy and food prices, also cooled, to 3.2%. The easing of inflationary pressures makes it more likely that the Federal Reserve will cut interest rates in September. In Britain the rate of inflation rose in July for the first time this year, to 2.2%.
• The International Energy Agency forecast that the global demand for oil will have risen by less than im barrels a day this year, far below last year’s growth of 2.1m b/d. America is still soaking up oil but in China demand contracted in June for a third consecutive month. In July China’s crude-oil imports sank to their lowest level since the draconian lockdowns of September 2022.
• China’s direct investment liabilities, a measure of foreign capital flowing into the country, fell by $15bn in the second quarter, only the second time the figure has turned negative, according to official statistics. Foreign investment into China has fallen sharply since 2021, when it hit a record $344bn.
• Sales of pure-electric and hybrid vehicles overtook those of conventional cars for the first time in China. According to the China Passenger Car Association, these new-energy vehicles accounted for 51% of total vehicle sales in July, up from 7% just three years ago.

A wheel Indian success story

• The biggest initial public offering in India for more than two years took place when Ola Electric Mobility, which makes electric road scooters, raised 6ibn rupees ($732m) on the Bombay stock exchange. Its share price rose by 20% on the first day of trading. Ola sold 330,000 scooters in its latest fiscal year, double that of the previous year.
• Japan’s stockmarkets recovered most of their losses from the recent turmoil, which saw the Topix plunge by 12% in a day, its worst performance since 1987. Both the Topix and the Nikkei 225 indices are roughly back to where they were before the rout, but still below the record peaks they reached at the end of July. The S&P500 and NASDAQ Composite have also rallied.
• With inflation easing, the central bank of New Zealand lowered its key interest rate by a quarter of a percentage point, to 5.25%. It was the first cut to the rate since March 2020.
• UBS made a net profit of $1.1bn in the second quarter, twice as much as analysts had forecast. Revenues from its investment bank rose by 38%, year on year, to $2.8bn. It was the Swiss bank’s first quarterly report since formally completing its acquisition of Credit Suisse in May, 15 months after the Swiss government asked it to rescue its rival.
• AstraZeneca passed £200bn ($257bn) in stockmarket value, the only London-listed company to currently attain that benchmark. The drugs giant is now worth £30bn more than Shell, but its market capitalisation is dwarfed by that of Novo Nordisk, Europe’s most valuable company. It is now worth $6oobn, boosted by demand for its diabetes and obesity drugs, Ozempic and Wegovy.

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