The Economist - 22 February 2025

Год выпуска: February 2025

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: 80

The would-be king

• Expect a titanic struggle over the power of the president: leader, page 11.
• Donald Trump is a reckless president, but not yet a lawless one: briefing, page 16.

Europe’s worst nightmare

• The region must start to prepare for life without the transatlantic alliance: leader, page 12.
• Donald Trump is junking a partnership that has kept the peace in Europe for nearly 80 years, page 51.
• How Vladimir Putin plans to play Mr Trump, page 41.
• Can Europe withstand four years of Trumpian assault? Charlemagne, page 45.

Meet Generation Hustle

• In an ageing world, young Africans are becoming more important. How to ensure they fulfil their potential: leader, page 13, and report, page 37.

China’s Silicon Valley

• Xi Jinping wants the private sector to thrive again—within limits: leader, page 14.
• Behind DeepSeek lies a little-known but world-leading university, page 33.
• China’s medicines are surprising the world, too, page 58.

Management consultants and DOGE

• What will Elon Musk mean for Accenture, McKinsey and their rivals? Page 55.

The world this week Politics

• America held its first meeting with Russia about bringing the war in Ukraine to an end. The talks between Marco Rubio, America’s secretary of state, and Sergei Lavrov, Russia’s foreign minister, took place in Riyadh, Saudi Arabia’s capital, without any representatives from Ukraine or the European Union. The State Department said both sides had laid “the groundwork for future co-operation”. Donald Trump’s rapprochement with Russia has stunned Europe, but a hastily convened emergency summit in Paris revealed divisions on the next steps to take. Sir Keir Starmer, Britain’s prime minister, offered to send British troops to Ukraine as part of a peacekeeping force.
• The acrimony between Mr Trump and Volodymyr Zelensky intensified, after the American president blamed Ukraine for starting the war. “I would like to have more truth with the Trump team,” retorted Mr Zelensky. Mr Trump then called Mr Zelensky a dictator who should call an election.

With friends like these

• The transatlantic alliance was also put under strain following a speech by J.D. Vance, America’s vice-president, at the Munich Security Conference. Mr Vance delivered a ferocious attack on European democracy, accusing Europe of backtracking on free speech, promoting mass immigration and marginalising dissenting voices on the right.
• Adding to the sense of political uncertainty in Europe, Germany prepared to vote in an election on February 23rd that is expected to be won by the Christian Democrats, who could take months to form a coalition. Immigration is a big issue. An Afghan asylumseeker killed a mother and her daughter when he rammed a car into a crowd a mile from the site of the Munich conference. Meanwhile, in Austria a Syrian asyhim-seeker stabbed a 14-year-old boy to death.
• Pope Francis was admitted to hospital with double pneumonia. The Vatican cancelled the 88-year-old pontiff’s engagements and described his condition as “complex”.
• Israeli forces withdrew from much of southern Lebanon but remained in five locations along the border. The Lebanese government said this was a violation of the ceasefire agreement that in November ended 13 months of fighting between Israel and Hizbullah. Israel said it would keep its troops there until the Lebanese army was in place to monitor the areas dominated by the Shia militia.
• More Israeli hostages were freed from Gaza under the ceasefire agreed to by Israel and Hamas. The militant group also released the bodies of four Israelis it had held captive, including siblings who were aged four and nine months when they were abducted.
• Three weeks after taking Goma, eastern Congo’s biggest city, M23 captured Bukavu, the region’s second-biggest. The Congolese army put up little resistance to the rebel group, which is backed by Rwanda. The government of the Democratic Republic of Congo in Kinshasa, 1,500km (930 miles) away, has in effect lost control of the eastern part of the country, which looks ever more likely to become the site of yet another full-blown war.
• South Africa’s government of national unity postponed the release of a budget at the last minute following a dispute over a proposed tax increase. It will now be presented on March 12th. It was the first time a budget has been postponed since the end of the apartheid regime in 1994 and is a sign of the pressure being put on the ruling African National Congress by the Democratic Alliance, its main coalition partner.
• Kathy Hochul, the governor of New York state, held talks with political leaders on whetherto remove Eric Adams as mayor of New York City. The federal Department of Justice recently directed New York federal prosecutors to shelve corruption charges filed against Mr Adams in an apparent quid pro quo for his support of Mr Trump’s immigration agenda. Mr Adams denies this and any wrongdoing. Several prosecutors and city officials resigned in protest. No governor has ever removed a New York City mayor from office.
• The Trump administration continued its war against diversity, equity and inclusion policies, as the Education Department told schools not to use race as criteria for employing staff, awarding scholarships or treating pupils differently. “Put simply, educational institutions may neither separate or segregate students based on race,” the department’s memo warned.
• South Korea’s disgraced president, Yoon Suk Yeol, appeared in court at his criminal trial for insurrection following his brief imposition of martial law in December. His lawyers asked that he be released from detention. Mr Yoon’s separate impeachment trial is being conducted by the Constitutional Court, and is heading towards a conclusion.
• Pravind Jugnauth, who was prime minister of Mauritius until losing an election last November, was arrested on money-laundering charges. He denies all the claims against him. Mr Jugnauth negotiated a controversial deal last October in which Britain will cede control to Mauritius of the Chagos Islands, which house a strategically important military base in the Indian Ocean.
• Brazil’s attorney-general filed charges against Jair Bolsonaro, a former far-right president, and 33 others, claiming that they tried to stage a coup in 2022 to keep Mr Bolsonaro in power after he lost an election. Hours later, Donald Trump’s media group sued a prominent judge on Brazil’s Supreme Court over alleged censorship. That judge, Alexandre de Moraes, will rule on whether Mr Bolsonaro, an admirer of Mr Trump, will go to jail.

Fools rush in...

• President Javier Milei of Argentina faced criminal complaints alleging fraud and talk of impeachment after he promoted a risky cryptocurrency, $LIBRA. The memecoin’s value surged as supporters bought it, but then collapsed amid allegations of insider trading. Meanwhile, Mr Milei went to Washington to discuss a loan with the IMF.
• A poll by the Angus Reid Institute suggested that if Mark Carney wins the Liberal Party’s leadership race in Canada, and thus becomes prime minister, the Liberals will surge to within three points of the Conservatives. Mr Carney, a former governor of the central banks of both Canada and Britain, ties with the Conservative leader, Pierre Poilievre, on economic issues. The poll indicates the Liberals will fare less well if Chrystia Freeland, a former minister of finance, becomes leader.

The world this week Business

• China’s leader, Xi Jinping, held a rare public meeting with the country’s leading tech entrepreneurs, underscoring the government’s change of heart towards an industry it had cracked down on a few years ago. Mr Xi was seen shaking hands with Jack Ma, the founder of Alibaba, who at one stage moved to Japan after criticising Chinese regulators. Liang Wenfeng, the founder of Deep Seek, was also there, as were bosses from Tencent, BYD and CATL. Baidu’s share price plunged when its chief executive was not spotted at the gathering. With China’s economy struggling and the rivalry with America heating up, Mr Xi has become more favourable towards private enterprise.
• Meanwhile, South Korea banned further downloads of DeepSeek’s generative artificial-intelligence app, claiming it doesn’t comply with the country’s data-privacy laws.
• Apple and Google made TikTok available for download again at their app stores in America. TikTok was briefly unavailable in the country at the tail end of the Biden administration, which blocked it over claims the Chinese-owned platform poses a threat to data privacy. It was restored for users who already had the app ahead of the inauguration of Donald Trump, who gave TikTok a reprieve while a solution is found to its ownership.
• Microsoft unveiled its Majorana i chip, which it claims would allow quantum computers capable of solving “industrial-scale problems” to be developed within years, rather than decades. The new chip is based on a substance Microsoft calls a “topoconductor”, one of a class of materials known as topological superconductors. The company claims that its topoconductor can produce more reliable and scalable qubits based on Majorana fermions, subatomic particles with intriguing quantum properties. Experts said it would take time to evaluate its impact.
• Mr Trump threatened to impose tariffs of 25% or higher on all imports of cars, chips and pharmaceuticals to the United States, the latest salvo in his trade war. Like most pronouncements from the president, it was unclear whether his threat was real or a tactic to attain lower duties for American exports. He has also proposed “reciprocal” tariffs to match the tax rates that other countries charge on imports.

Inflationary pressures

• In Britain the government’s imposition of a value-added tax on private-school fees was cited as a contributing element to a surprise surge in inflation. Asmaller-than-expected decrease in airfares was another factor. The annual rate jumped to 3% in January from 2.5% in December, the highest level in ten months. Core inflation, which excludes volatile food and energy prices, rose to 3.7% from 3.2%. The Bank of England said recently that it expected inflation to rise, and it remained cautious about further cuts to interest rates.
• Australia’s central bank lowered its benchmark interest rate to 4.1%, the first cut since November 2020. The country’s annual inflation rate has fallen to 2.4%, within the bank’s target range.
• A strong rebound in business investment helped boost Japan’s economy in the last three months of 2024. GDP expanded by 2.8% at an annualised rate in the quarter.
• In another blow to the London Stock Exchange, Glencore’s chief executive, Gary Nagle, said the commodities firm was considering whether to delist its shares and trade on another bourse, possibly New York. It is one of the LSE’s most valuable companies. Last year 88 companies left or transferred their primary listing from the LSE, the most since the financial crisis of 2007-09. Rio Tinto, meanwhile, urged shareholders to reject a proposal to delist its shares in London and unify them in Australia.
• The High Court in London gave its approval to Thames Water’s request to borrow up to £3bn ($3.8bn), as the embattled utility tries to avoid insolvency. Thames Water, the biggest provider of water and sewage services in Britain, is carrying a huge debt load and still faces legal challenges from junior creditors. KKR, a privateequity firm, has reportedly submitted a bid to take a majority stake in the company.

Now that’s a zinger

• Kentucky is no longer fingerlickin’ good enough for KFC, which is moving its headquarters from Louisville to Plano, Texas. The decision was taken by Yum Brands, which owns KFC and wants it to share offices in Plano with Pizza Hut, another fast-food chain in its portfolio. Kentucky Fried Chicken started out in the Bluegrass State in the 1930s, when Colonel Harland Sanders developed his famous “secret recipe”. To placate Kentuckians outraged by the move, KFC has promised to build a flagship restaurant in Louisville.

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