Our editors give us a breakdown of this week’s biggest news stories
United Kingdom: Ross Alexander Hutton
Given that the fall in the U.K.’s R-number to between 0.7 and 1.0 indicates a shrinking pandemic, with the rolling averages for deaths, cases and hospital admissions moving downward, the Johnson administration appears to be cautiously optimistic that the national lockdown is succeeding in protecting the nation’s healthcare capacity whilst vaccinations accelerate. Although the trends are moving in the right direction, the levels of cases are still “alarmingly high” such that the Prime minister cautioned against premature lockdown easing. Instead, Johnson insisted that Britain will be “going down in tiers nationally” but only when the nine priority groups have been vaccinated. Treasury officials are already preparing for this eventuality to produce an economic “road map” for lifting restrictions which is likely to be a fraught process as Sunak and Johnson are known to hold differing views on the speed of re-opening the economy. In the end, as influential as some conservative backbench MPs may wish to be, the scientific data on when it is most appropriate to carefully ease restrictions will probably speak for itself.
Unsurprisingly, the governor of the Bank of England Andrew Bailey weighed into the debate over the economic road ahead. Bailey noted the strength of the U.K.’s vaccination programme which he forecasts will bring forward the economic recovery into the spring as consumer confidence returns. However, there are still grounds for restraint as the unemployment rate is still projected to rise to 7.8% later this year. Hence, while policymakers are confident the economy will ‘bounce back’, it’s not exactly certain where it will bounce ‘to’. That is, the post-Covid economy will look and operate differently – just look to the Highstreet! This is why the bank’s Monetary Policy Committee announced its intention to force commercial banks to prepare for the ‘possibility’ of negative rates over a short period, in the event of a weaker recovery than projected.
Whilst policymakers focus on the immediate health and economic crisis, the former central banker Mark Carney – now the UN’s envoy for climate action and finance – has been urging policymakers to pay attention to the omnipresent existential threat of the climate crisis. He argues that “when you look at climate change from a human mortality perspective, it will be the equivalent of a coronavirus crisis every year from the middle of this century”. But with fiscal stimulus aimed at saving existing economic structures, the former Governor suggested that “the scale of investment in energy, sustainably energy and sustainable infrastructure needs to double”. When the U.K. hosts the consequential climate summit in Glasgow later this year, policymakers will need to raise ambitions to not only build back better but build back greener if the world is to make use of the last best chance to avoid the worst consequences of the climate crisis.
Europe: Peter Hourston
Pressure is mounting on President of the European Commission Ursula von der Leyen over her decision to trigger Article 16 of the Northern Ireland Protocol and the EU’s sluggish vaccine rollout. At a meeting of EU Ambassadors, Dublin representative Tony Hanney said that von der Leyen had made a “very serious mistake” in her decision to close the border, which was quickly followed by a humiliating climbdown, between Northern Ireland and the Republic of Ireland in response to concerns about vaccine supplies. However, despite this, there were calls for unity from member states such as France and The Netherlands who defended the European-wide procurement of vaccines. Von der Leyen also admitted that some other countries, particularly the UK, were advancing more quickly with public vaccinations, commenting that “I’m aware that a country might be a speedboat and the EU more a tanker.”
Former European Central Bank President Mario Draghi has been asked by Italian President Sergio Mattarella to lead a government of national unity in Italy following last week’s resignation of the coalition led by newly departed prime minister Giuseppe Conte. Dradhi’s lack of political experience mirrors that of the technocratic government of Mario Monti, who was prime minister from 2011-13 during the debt crisis. Talks between the former coalition partners broke down on Tuesday which gave Mattarella no choice but to ask the 73-year former central banker to steady the ship. The President has the power to call a general election should a new government fail to gain a parliamentary majority, but is reluctant to do so given the serious nature of the pandemic in Italy, which has recorded over 80,000 deaths.
Asia Pacific: Satyajit Mohanan
Thousands took to the steers to protest against Myanmar junta’s attempt to quell dissent by shutting down most of the country’s internet. Myanmar’s coup last week ended the country’s nine-year-old democratic transition and plunged one of Asia’s
poorest nations into period of uncertainty. Myanmar’s military detained Aung San Suu Kyi and other senior members of the country’s ruling party after several days of rising tensions over the results of a recent election. The coup came hours before Myanmar’s newly elected parliament was due to meet for the first time since a November 8 election, the results of which the military has contested. Protestors shouted slogans such as “Democracy — our cause”, “Down with the military government”, and and held up their three fingers in a salute popularised during neighbouring Thailand’s democracy protests last year.
The Indian Government unveils plans to privatise two of its twelve owned state banks. This decision would undo the work done in 1969 where India’s then prime minister Indira Gandhi nationalised 14 banks to help cement state control in the financial system. The measure was part of several market-orientated financial reforms unveiled in India’s recent budget. This comes amid the large scale protests by farmers of the country against India’s agricultural reforms that allow for greater private participation. Sources say that the immediate need to shore up government revenues and to limit a destabilising rise in defaults after the pandemic forced this policy shift. While India’s corporate sector and many right leaning economists hailed this shift, some warned that private owned banks care little for the poor and the rural population. They argue that business friendly attitude of private banks would offset the importance given to the other weaker economic sections.
US Secretary of State Antony Blinken criticised Beijing on its treatment of Uighurs, Tibetans, Hong Kong and the coup in Myanmar in his first conversation with his Chinese counterpart. Blinken said on Twitter, “ I made clear the US will defend our national interests, stand up for our democratic values, and hold Beijing accountable for its abuses of the international system,”. Blinken’s tough stance came soon after he promised to continue former President Donald Trump’s tough approach to China in a rare point of agreement between the two administrations. He also agreed that Beijing is carrying out genocide in the western region of Xinjiang, where it is alleged that more than one million Uighurs and other mostly Muslim Turkic-speaking people have been held in camps. However, analysts argue that while the Biden administration is tough on China, there would be space for cooperation unlike the scenario under the previous Trump administration.
Africa & Middle East: Camille Capelle
A change in the special US-Saudi relationship emerged this week as Biden’s administration has announced a discontinuation of support with regards to Saudi Arabia’s military actions in Yemen. However, the President also announced that this would not affect its commitment to protecting Saudi Arabia from Iranian-sponsored threats at home. While this is far from an end to the unconditional relationship that the two countries maintain, it does signal Biden’s desire to reintroduce a human rights dimension into US foreign policy, even regarding its allies. On the Friday after the announcement, Saudi Arabia temporarily freed two Saudi Americans, who had spent 307 days imprisoned without conviction, as a gesture of goodwill.
In Tunisia, an enormous protest against police brutality, in open defiance of lockdown measures and police roadblocks in the capital. The rally signalled people’s anger at the violence and democratic abuses by the police and a call to defend the revolution of 2011. A significant difference with previous protests is that this time, the demonstration had the support of an influential political organization, the UGTT Union.
North America: Amelia Brown
GameStop stock, whose Reddit backed-rise shook the financial industry last week, has been steeply dropping again this week, down to around $60 a share this weekend, compared to the company’s highest ever end of day price of almost $350 a share last week. Treasury Secretary Janet Yellen addressed the ‘GameStop saga’ on ABCNews Thursday before meeting with the SEC, saying, “we really need to make sure that our financial markets are functioning properly, efficiently, and that investors are protected.”
Yellen also appeared on Friday with President Biden as he spoke about his $1.9 trillion stimulus package they are both pushing for. Biden is now stuck between his call for unity of the nation (and government) and his promise to provide resounding financial relief from the continuing pandemic, as Republicans are against the pricey package but Democrats have control of Congress and could push it through anyway. While the stimulus package could be a lifeline for many families and businesses, the other shining light is the vaccination campaign. Johnson & Johnson filed for Emergency Use Authorization from the FDA this week, hoping to get approval for the one-shot vaccine. The efficacy rate was lower than the Moderna and BioNTech/Pfizer vaccines already approved, sitting at 66%; however, that is above the needed 50% rate for approval, plus the regime is just one jab, and does not require the freezing temperatures that made the logistics of rollout so difficult with the previous two.
Elementary and secondary schools in Ottawa and other parts of Canada’s Onterio province opened this week after being strictly online for the past 4 weeks. The city hasn’t reported any covid deaths this past week, and just 58 new cases. The entire province has seen a steep decrease in cases since mid January when stay-at-home orders were put into effect. Meanwhile, British Columbia has extended their stay-at-home restrictions indefinitely, and Alberta aims to start limited school openings this coming week. Nova Scotia has a new premier as of voting Saturday night—Iain Rankin will take over as premier of the province’s majority government party, the Nova Scotia Liberal Party.
Latin America: Leo Le Borgne
Following the aftermath of the fatal 2019 Vale dam disaster, the Brazilian government is compensating the affected peoples and communities £5 billion in reparations. The environmental disaster, which claimed the lives of 270 people, has polluted rivers and resulted in the destruction of neighbouring forests and the Brumadinho community. Brazilian prosecutors have charged many of those involved in the project with murder. The Vale company is one of the world’s largest nickel and iron ore producers.
The Cuban government has taken the decision to liberalise its economy in response to the economic turbulence caused by the pandemic. Small private businesses will now be able to expand their operations in fields of more than 2,000 activities, a stark comparison to the original 127 industries that these businesses were permitted to operate in. The Cuban economy shrank by 11% in 2020, with one of the only non-state sectors, tourism, being badly hit.
Science & Technology: Paula Plechschmidt
Kuaishou, a rival to tiktok, had its IPO two days ago. Following the impressive $5.4 bn raised during the IPO the company’s stock gained 194% and its shares surged. This impressive performance could push its rival ByteDane to push for its own listing and indicates a strong counterpart to tiktok in the Chinese space. While this seems like a win, this success comes at a time where the Chinese regulatory powers are holding technology firms under much more scrutiny. The reminder that at any point the government could step in at any point has been pinpointed as a major problem by Kuaishou, but unfortunately one that cannot be avoided. “Given that the internet business is highly regulated in China, intensified government regulation of the short video, live streaming and e-commerce industries in China could also restrict our ability to maintain or increase our user base or the user traffic to our platform, which will materially and negatively impact our business operations and financial results,” Kuaishou warned in its IPO prospectus.
Australia’s tech regulators want to push legislation that will for big tech companies to pay for news. Rod Sims, Australia’s competition regulator believes that “Google has inserted itself as the guardian of the internet; that has damaged journalism and that can damage our society”. This worry, while being a real threat, has now caused Google to consider shutting down its search engine in Australia. Rather than deterring Mr. Sims, this has led him to point out that exactly these kind of threats that indicate the sheer amount of power big tech like Google wields, should be proof that laws like the proposed one should be passed.
Business: Tom Woods
Fashion retailer Asos have bought out fellow clothes company Topman for around £265 million. The move is the latest step towards dismantling the once-mighty Arcadia retail empire which, facing administration, is being picked at by firms thriving in the space. Other Arcadia firms that have been bought out include Debenham’s, which was purchased by Boohoo, which is now targeting deals to acquire Burton, Dorothy Perkins and Wallis. Consensus agrees that Arcadia’s demise is largely a result of their firms’ failure to adapt to the digital age, a space where newer, more innovative firms such as Asos and Boohoo have thrived. This has, of course, been exacerbated by the pandemic, which has further rewarded firms that largely adept at operating in the digital space.
Cuba has announced the introduction of further liberalisation of its economy. Since the Cuban revolution of the 1950s, the country has identified itself as communist with a state-controlled economy. However, the state has been under tremendous pressure to reform in recent years. The Trump presidency imposed damaging sanctions on the country, while the COVID-19 pandemic also hurt any potential growth. As a result, Cuba’s economy shrank by 11% last year. Cuba already has a small private sector consisting of around 600,000 people. However, these reforms promise to balloon this part of the economy, taking the number of industries where private enterprise is permitted from 127 to over 2,000.
Theory: Cassi Ainsworth-Grace
In a recent issue of The Review of Black Political Economy, Dr. Nina Banks, associate professor of economics at Bucknell University and president-elect of the National Economic Association, has theorised that a form of labour has been historically overlooked: community activism by Black and other marginalised women. Her paper adds another dimension to understanding the impact of women’s unpaid work, which has remained persistently invisible. In the same way as unpaid household work, Banks argues that Black women’s community activism is another form of unpaid work unaccounted for in economic measures. This is despite the grass-roots organisations behind this community work improving living conditions, housing and increasing access to food, as well as providing basic social and health services local governments have neglected. Banks’ paper heralds in a shift in feminist economics through its intersectional lens, calling attention to the way that multiple forms of oppression impact economic lives.