The Economist - 19 October 2024

Год выпуска: October 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: 100

THE ENVY OF THE WORLD

• America’s economy has had an extraordinary run. Will politics bring it back to Earth? Leader, page 11.
• The American economy has left other rich countries in the dust. Special report, after page 40.

Anatomy of Trudeau's fall

• How the world's most reasonable country grew sick of centre-left liberalism: leader, page 12, and analysis, page 25.

Inside Iran's sanctions-busting

• The Biden administration has weakened Americas best financial deterrent against Iran: leader, page 12.
• Iran's secret oil trade funds its wars. Our investigation uncovers its breadth, page 59.

Russia’s spies go feral

• Vladimir Putin’s “everything, everywhere, all at once" strategy of assassination, arson, sabotage and hacking against the West, page 50.

Starship and the economics of space

• Starship promises to change what is possible beyond Earth: leader, page 14.
• The rockets are nifty, but it is the satellites that make SpaceX valuable: briefing, page 16.
• Starship's success is necessary for NASA to return to the Moon; it also puts the agency's failings into sharp relief, page 66.

The world this week Politics

• The diplomatic row intensified between Canada and India over the murder of a Sikh separatist near Vancouver. Canada expelled six Indian diplomats, including the high commissioner, claiming a link to the shooting in June 2023 of Hardeep Singh Nijjar, an activist who pushed for a Sikh homeland in India. Explaining the expulsions, Justin Trudeau, the Canadian prime minister, said the police evidence could not be ignored and it was necessary “to disrupt the criminal activities” that threatened public safety. Canadian police described a broad campaign against Indian dissidents in the country involving criminal gangs. A furious India denied the claims and expelled six Canadian diplomats, including the acting high commissioner.
• Genaro Garcia Luna, Mexico’s federal security minister during the “war on drugs” between 2006 and 2012, was sentenced to more than 38 years in prison by a court in New York for taking bribes from the Sinaloa cartel and protecting its members from arrest.
• Argentina’s economic outlook continued to improve, with the country’s risk index compiled by JPMorgan Chase, a bank, hitting its lowest level in five years. Inflation has continued to slow, running at 3.5% month-on-month in September. All of this is good news for Javier Milei, Argentina’s libertarian president, who has slashed public spending in an effort to curb rising prices. The nationwide poverty rate, however, rose to 53% in the first six months of 2024, up from 42% over the previous six months.
• America took the rare step of deploying military personnel to Israel. The Pentagon sent a TH AAD missile-battery system and its associated crew to the country to boost Israel’s defence capabilities following Iran’s recent missile attack. In the past America has used navy ships and fighter jets to help defend Israel. This week the Pentagon dispatched long-range bombers to target weap-ons-storage sites in Yemen belonging to the Houthis, a rebel group backed by Iran who have fired missiles at Israel.

Carrots and sticks

• As well as bolstering Israel’s security, the Biden administration also warned the Israeli government that it must allow more humanitarian aid into Gaza, or risk a reduction in the arms it receives from the US. Among other things Israel must allow at least 350 lorries of aid a day into the area. The deadline for complying comes after America’s election on November 5th. Israel said it took the matter seriously.
• The horror in Gaza continued, as at least 50 people were killed across the strip, according to Palestinian health officials, who do not provide a breakdown of civilian and combatant casualties. Israeli forces claimed they were targeting Hamas in Jabalia, in north Gaza.
• At least 147 people died and scores more were injured when a fuel tanker caught fire following a crash in northern Nigeria. The victims had rushed to the scene of the crash to collect petrol leaking from the tanker. Fuel-tanker explosions are common in Nigeria because of bad roads and poor vehicle maintenance.
• Italy sent its first batch of illegal migrants to Albania to process their requests for asylum, under a controversial arrangement with the Albanian government. Italy has stressed that only men who are not considered to be vulnerable and come from safe countries will be sent abroad for processing. The first batch, of just 16 men, came from Bangladesh and Egypt. If their asylum claims are rejected they will be repatriated.
• Poland is also cracking down on migration. The prime minister, Donald Tusk, announced that he intended to suspend the right of asylum to stop the flow of illegal migrants. It was unclear if such a suspension would be allowed under EU law.
• Facing a budgetary squeeze, the French government admitted that it would not be able to fulfil a pledge of €3bn ($3,3bn) in military aid to Ukraine this year, and that the figure would be closer to €zbn. The news came just a few days after Volodymyr Zelensky visited Paris, where he presented his “victory plan” for defeating Russia to Emmanuel Macron. The French president’s office said the meeting confirmed France’s “unwavering support” for Ukraine.
• Marine Le Pen, the parliamentary leader of the hard-right National Rally in France, took the stand in her trial for misuse of European Parliament funds. Ms Le Pen is accused of overseeing a system that spent money which was earmarked strictly for European Parliament affairs on employing party assistants. Ms Le Pen insists there were no irregularities, but if found guilty she could be banned from running for office for five years.
• The Social Democrats were on course to form a government in Lithuania, after the party won the first round of a parliamentary election. Vilija Blinkeviciute looks set to be prime ministerand has already begun coalition talks with other centre-left parties.
• China held a series of war games around Taiwan after the Taiwanese president, Lai Ching-te, gave a big speech on national day. The Chinese government described the speech as a “provocation”. The Pentagon said the war games were “irresponsible, disproportionate and destabilising”. Xi Jinping later visited Dongshan in China’s southern Fujian province, where Chinese nationalists were defeated in a battle in 1953.

Symbolic gestures

• In its latest bout of sabre-rattling North Korea blew up two roads within its borders that link it with South Korea. The North has said it will destroy all existing rail and road networks connecting the two countries, which were first severed during the Korean war.
• At least 21 workers were killed in an attack on a coal mine in the Pakistani province of Balochistan. Baloch separatists, who have carried out a number of deadly assaults in recent months, denied any involvement. The incident came shortly before Pakistan hosted a summit of the Shanghai Co-operation Organisation, a security forum that counts China, India, Iran and Russia among its members.
• SpaceX’s Starship project took one giant leap forward when the rocket’s huge first-stage booster returned directly to its launch pad, caught safely by the gantry’s massive arms. As well as being an engineering first the latest test suggests that SpaceX’s plans for a reusable spacecraft will work, which would slash the cost of sending cargo, and eventually humans, into space. “Bigstep towards making life multipla-netary was made today,” said Elon Musk, SpaceX’s founder.

The world this week Business

• Facing snarl-ups in production caused in part by the continuing strike at its west-coast facilities. Boeing plans to raise up to $25bn in new capital and has secured a $iobn credit line. The company revealed its plans in a regulatory filing. It has also decided to slash 17,000 jobs, or 10% of its workforce, and will not proceed with any more furloughs of workers that were introduced at the start of the strike. The first deliveries of the 777X jet, which Boeing hopes will turn its fortunes around, were delayed again, to 2026. The Biden administration held talks with both sides in the dispute to try to broker a deal.
• Meanwhile, Airbus announced the loss of 2,500 jobs in its defence and space division, which is losing money on building satellites. It noted the “ever-evolving”space market.
• Britain’s annual inflation rate fell to 1.7% in September, the lowest it has been since April 2021. Markets now expect the Bank of England to cut interest rates in November. Recent data showed America’s inflation rate dipping to 2.4% in September.
• In its annual report the International Energy Agency said that investment flows to clean-energy projects were nearing $2trn a year, almost double the combined amount spent on new oil, gas and coal supply, and that China accounted for 60% of the renewable capacity added globally in 2023. Solar-powergeneration in China alone will exceed today’s total electricity demand in America a decade from now. The IEA also raised its forecast of worldwide demand for electricity, in part because of the use of air-conditioning to mitigate hotter temperatures.
• Google signed a deal with Kairos Power, a startup, to construct small modular nuclear reactors that will power its data centres. SMRs are much smallerthan standard nuclear plants, but can be more easily built to cut costs. Kairos will provide Google with a capacity of 500 megawatts by 2035. With the rise of energy-intensive artificial intelligence, big tech companies are trying to cut their emissions. In July Google admitted that its greenhouse-gas emissions were 48% higher in 2023 than in 2019.
• Nvidia’s share price hit a new high. The supplier of graphicsprocessing units has seen its stock drop at times this year amid investor worries about whether AI investment is a boom or a bust, but tech markets have rallied since the Federal Reserve started cutting interest rates last month. The S&P 500 and Dow Jones Industrial Average reached record closes this week.
• The renewed exuberance in tech stocks was slightly deflated, however, by ASML reducing its sales forecast for next year. The supplier of the world’s most advanced machines for chipmaking warned of “customer cautiousness” and that “foundry dynamics” have resulted in changes to the timings of demand for its gear. Net bookings, or orders, were far lower in value than markets had expected. The company’s share price swooned.

Don’t hail the cab

• Tesla’s stock struggled to recover from the drubbing it received following the firm’s unveiling of its much-hyped Cybercab, a two-seater robo-taxi. Elon Musk gave little detail at the event of the roadmap the vehicle must follow to enter service, other than it will be available “before 2027”.
• The latest quarterly earnings from America’s big banks were well received by investors. JPMorgan Chase recorded a net profit of $12.9bn. Although that was less than in the same quarter last year, it was better than analysts expected. It was a similar story at Bank of America, Citigroup and Wells Fargo. But at Goldman Sachs profit jumped by 45% to $3bn and at Morgan Stanley by 32% to $3.2bn: its stock hit a new high.
• Walgreens announced the closure of 1,200 of its 8,700 stores over the next three years. The pharmacy chain follows its rivals CVS Health and Rite Aid in reducing its bricks-and-mortar presence in the face of growing competition from Walmart and Amazon.
• Apolitical row brewed in France over the potential sale of Sanofi’s consumer-drugs business to an American private-equity firm. The pharmaceutical company’s announcement that a bid by Clayton, Dubilier & Rice had beaten that of a local consortium has raised French hackles. The government has suggested it could block the sale, or take a stake in the business.

Reviving the spirits

• Hong Kong slashed taxes on brandy, gin, whisky and other strong drinks as part of an effort to boost nightlife in the city. Visitor numbers are still around 30% lower than in 2018. Cutting alcohol taxes could be an idea for other governments trying to tempt punters back to city centres, notably in London, where the rate of closure of night-time businesses has been described as a “crisis” by their trade body.

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