The World This Week

Our editors give us a breakdown of this week’s current affairs

United Kingdom: Harry Street  

Inflation remains in the UK news headlines, as rates surge to 3.2% in August. This was the highest rate increase since the Bank of England has been allowed to independently set interest rates and has greatly surpassed the BoE’s target of 2.0%. A strong labour market and surges in food and transport costs are currently key factors in the high rate of inflation; however, the worst is yet to come. Gas and electricity bills are set to increase in the coming months due to a rise in wholesale prices, and VAT is expected to be increased for the hospitality sector. Economists are currently split on the inflation issue facing the UK; some believe that inflation will level off once large one-off price increases start to slow down. Others, however, are less optimistic and believe it could be a significant problem over the next few months, and may rise even more by the end of 2021. Economic theory highlights how inflation can be heavily dependent on expected inflation, meaning these expected price increases may further exacerbate this issue for the UK; hence, ignoring the problem, as some suggest, may prove fatal.

The Prime Minister reshuffled his cabinet this week, hoping to help improve Britain’s image on the world stage and to help level up his domestic reform agenda. Most notably, Michael Gove has been moved to the ministry of housing, communities and local government to oversee planning reform and to tackle regional inequality, which seems to be a key issue that Johnson wants to address. Gavin Williamson, the previous education secretary, has been removed from his post and has been replaced by Nadhim Zahawi, who has been a key force in the UK’s coronavirus vaccine rollout. This was the result of Williamson making many crucial mistakes in the education sector, including the poor handling of public examinations and the use of a grade-calculating algorithm that was ultimately overturned. Other notable figures have also been reshuffled or removed from government entirely; however, there are suggestions that this is just the first stage of a two-step plan, as Johnson hopes to make further changes in 2024 if re-elected as Prime Minister. 

Europe: Cameron Fulton 

France have piled the pressure on Brussels to act on unrest over fishing rights with the UK. Jean Castex, French PM, spoke to the European Commission this week, to combat restrictions on fishing in the English Channel. He suggested economic levers to be implemented to protect his country’s fishing boats, after both nations failed to agree on establishment of rights to licence in the waters ahead of a set September 30thdeadline. The two nations have already clashed on the matter in May, as two British Navy vessels were sent to patrol waters around Jersey, where around 50 French ships were protesting.

Unpublished internal models were surfaced by the FT this week, detailing the ECB’s prediction that inflation will hit 2% by 2025. This is a year earlier than economists have been widely reporting, and has caused markets to slip, in fear over soon-than-expected raised interest rates. Both German and Italian yields have risen, pushing borrowing costs to their highest in two months, after continued usage of PEPP was put into doubt. German bonds rose by 0.03 percentage points on Friday, whilst Italian 10-year bonds rose by 0.05.

The new frontrunner for the German Elections on the 26th September, the SPD’s Olaf Schulz, is to be questioned over money-laundering accusations. He is to appear in front of the Bundestag finance committee on Monday, just days before the country goes to the polls. The CDU/CSU see this as a final roll of the dice to claw back their recently lost lead in the election, with Schulz’s popularity being previously the leading reason for his party’s ascent to the top of the polls. Merkel’s party has been attacking Schulz on three fronts: the failure of Wirecard during his time as finance minister, a cum-ex tax scandal and the aforementioned money laundering accusations.

Asia Pacific: Sophie Evans 

The UK, US and Australia have recently launched a new security partnership, termed ‘AUKUS’, through which the US and UK will provide technology to Australia in order to build nuclear-powered submarines. The defence pack has been called a ‘landmark moment’ for the West’s involvement with China in the Indo-Pacific region. The aim of the defence pact has been viewed as  to restrain the influence of China in the contested South China Sea. However, British PM Boris Johnson has stated it was not “intended to be adversarial” to China. China has reacted angrily to the announcement, made last Wednesday by the three nations, and has stated that it will ‘severely damage regional peace and stability’, with the Chinese embassy in Washington denouncing it as representing a “cold war mentality.” France has also reacted negatively, as France’s foreign minister, Jean-Yves Le Drian, has termed the agreement a “stab in the back” as the alliance means that Australia has scrapped a deal worth £30 billion for Paris to provide 12 diesel-electric submarines. The EU is similarly unhappy with AUKUS, as it competes with the union’s own Indo-Pacific strategy. No doubt, the deal marks a change in the world order – as many speculate that NATO may become less relevant as the partnership binds the US into European and Asia-Pacific security.  

Vietnam, currently enduring its worst wave of the COVID-19 pandemic, has approved Cuba’s Abdala vaccine in a desperate attempt to raise vaccination rates. The country has one of the worst vaccination rates of the region, with a mere 6.3% of its 98 million population having received two doses of the vaccine. The three-dose vaccine recently introduced from Cuba has proved 92.28% affective in recent trials. Cuba has also promised to deliver large quantities of the vaccine to Vietnam by the end of the year.  

Bats found in limestone caves in Northern Laos have been found to carry coronaviruses which share a fundamental characteristic with the SARS-CoV-2. Researchers at the University of Laos and France’s Pasteur Institute have been searching for viruses similar to the one which causes Covid-19 among horseshoe bats. Three viruses which have been located in Laos – BANAL-52, BANAL-103 and BANAL-236 have been hailed by head of pathogen discovery at the Pasteur Institute, Dr Marc Eloit as ”the closest ancestors of Sars-CoV-2 known to date.” This discovery has moved scientists closer to pinpointing the cause of Covid-19 pandemic as resulting from a spillover of a bat-borne virus.  

India: Rudra Sen

India administered 20 million vaccine doses on the birthday of Prime Minister Narendra Modi and broke its previous record of 13 million jabs in a day. India has given more than 790 million doses since its vaccination drive began in January. However, only 20% of the eligible adults have been fully vaccinated and 594 million people have received at least one dose. The government plans to complete its vaccination drive by the end of this year. Experts estimate that 10 million vaccine doses need to be administered every day for this target to be achieved. Rural India and poorer states are reportedly lagging in the vaccination drive compared to urban areas and richer states.

India’s Foreign Minister S Jaishankar has told his Chinese counterpart Wang Yi that the bilateral relations between the two will only improve if there is mutual agreement to disengage from the disputed border. In June 2020, tensions between the two neighbours led to casualties on both sides for the first time in decades. This led to further escalation of the border dispute as thousands of Indian and Chinese soldiers were deployed. However, several rounds of discussions involving top military commanders have resulted in the pushback of troops in certain regions. Wang Yi, in return, has said that both countries should attempt to work together to ensure that such border skirmishes don’t take place in the future.

China: Tommy Pigatto

Chinese President Xi Jinping has yet to announce his attendance at the COP26 climate change summit in Glasgow. 

China has applied to join the CPTPP trade pact, the Asia-Pacific trade treaty originally created by the United States to counter China’s influence.

Chinese media outlets lash out at Australian plans to pursue closer military ties with the United States and United Kingdom.

Africa: Laura da Silva 

Kenya faced a historic jump in fuel prices this past week after the country’s energy regulator put an end to subsidies on petrol, diesel, and kerosene. The price of petrol in Nairobi increased by around 6% to a record high of 135 shillings. Subsidies on fuel were put in place earlier this year to reduce the cost of living which has increased rapidly over the past year, due to the huge job losses suffered as a result of shrinking GDP, and the Covid-19 pandemic which has stifled usually strong economic sectors like tourism. As a result of the fuel-price increase, the cost of diesel increased 7.4% to 115.6 shillings a litre, and Kerosene, which is used to cook in many homes across Kenya, rose 13% to 110.82 shillings a litre. This increase will have large repercussions on inflation, as fuel-price increases places upward pressure on the cost of food, transport, electricity, and manufacturing. This fuel inflation will no doubt be a key issue when the monetary policy committee meets later this month to review the national benchmark interest rate, which has sat at 7% for the past year. 

South Africa’s constitutional court has denied an application by ex-president Jacob Zuma to rescind his sentence of 15 months in jail for contempt of court. The 15-month sentence was handed down to Zuma in June when he refused to testify at a commission of inquiry into the widespread corruption in government that occurred during his presidency, known locally as the Zondo Commission. Friday’s judgment was delivered by Justice Sisi Khampepe at the Constitutional Court in Johannesburg, where she stated that Zuma’s application was no more than “litigious skulduggery”, and that “it is quite simply not for these sorts of circumstances the law of rescission caters [for]”. The trial of the former president has become a test of the efficacy of the Constitutional Court, and of the power of Zuma’s faction within the African National Congress (ANC), the country’s ruling party, as his jailing in July sparked violent riots, looting and vandalism throughout South Africa, killing more than 300 people and costing businesses billions of South African rand.

North America: Amelia Brown 

The US FDA has gotten into a challenging position this week–their scientific advisory committee  voted overwhelmingly against authorizing a Pfizer/BioNTech booster shot for everyone over 16. This goes against President Biden’s plans for a comprehensive booster vaccine program to get the spreading delta variant under control and prevent breakthrough cases. However, the agency is not bound to the advisory committee’s decisions, and could still approve Pfizer’s application. The advisory committee did, however, recommend the third dose for those 65 and over, at greater risk for severe infection, and frontline healthcare workers. The application for booster shots comes as the CDC released this week a study that showed the efficacy of Pfizer drops more steeply than Monderna or Johnson and Johnson, while both mRNS vaccines decline over time anyway. The setback in the booster shot approval led to a decline in stock for Pfizer, BioNTech, and Moderna. 

California Governor Gavin Newsom survived a special recall election on Tuesday night. The recall was the culmination of frustration over the handling of covid-19 and harsh/ restrictions. Yet, the longstanding blue state affirmed Newsom against Republican challenger Larry Elder, a radio host who talks against vaccines and masks. Despite the victory for Democrats, frustration across the party over the $276 million cost of the recall, which was a landslide ‘no’ vote, has prompted calls for changes to the recall system. 

The Alberta Premier announced on Wednesday their own version of a vaccine passport, which would allow businesses to avoid restrictions if they check for proof of vaccination or a negative test from the past 72 hours. Thursday, the province saw vaccinations triple, as people lined up outside pharmacies to get their first or second jabs. 

Latin America: Leo Le Borgne 

The 6th Community of Latin American and Caribbean States (CELAC) Summit started off Saturday in Mexico City. The summit is taking place following an en-masse series of electoral victories won by left-wing and socialist politicians. With the likes of Mexico’s Andres Manuel Lopez Obrador, Peru’s Pedro Castillo, and Argentina’s Alberto Fernandez, the recently elected heads of state represent the surging ‘pink tide’ that is ideologically shifting the region towards the left of politics. The heads of Venezuela, Cuba, and Bolivia, all political bastions of Latin American socialism, have also made their arrival in Mexico City. This summit occurs amidst Brazil’s decision to leave the organisation last year due to accusations that CELAC empowers undemocratic leftist governments. Drawing inspiration from the European Union, President Obrador suggested the formation of an economic bloc to confront the region’s most prominent challenges such as climate change and the Covid crisis. The rising prominence of CELAC has been seen by leftist leaders as a potential replacement of the Washington-based Organisation of American States (OAS), which has been described as ineffective and dysfunctional.

Argentine President Alberto Fernandez’s government plunged into political chaos following a poor electoral performance in the Buenos Aires province ahead of the November 4 midterm elections. Cristina Fernandez de Kirchner, Argentina’s vice president who hails from a party more radical than President Fernandez’s centre-of-left Peronist party, has forced the president’s hand in conducting a major cabinet reshuffle. This includes the replacement of key government officials allied to the president, with ones that are more favoured by de Kirchner, such as the replacement of ex-cabinet chief Santiago Cafiero with Juan Manzur. With Fernandez’s administration marred by its handling of the Covid crisis, Vice President de Kirchner is capitalising on her political leverage to bend Fernandez to more hardline, leftwing political demands.

Business: Aoife Doyle 

The record energy market surge has claimed its first victims as two UK suppliers, PfP Energy and MoneyPlus Energy, ceased trading. The UK’s gas market reached an all-time high on Tuesday, with the electricity market prices at levels not seen since 2008. These price highs were bolstered by a stronger demand for gas-fired power and a plunge in wind speeds that had diminished renewable energy generation the past week. The government is said to be open to considering short-term measures to support companies and protect households as winter approaches. Business secretary, Kwasi Kwarteng, began talks with energy industry representatives over the concerns about the rise in wholesale gas prices. Kwarteng insisted that there was more than enough gas supply to meet the demand required over the next months and that supply emergencies this winter were no more than gossip. 

Culture: Armaan Gheewala

Some Afghan girls have returned to primary schools, only on Saturdays though however secondary school girls are still uncertain about their return to any form of education. The Taliban has announced that girls will return to schools but only in segregated classrooms and no date has been issued nor any guidance on how to approach these new rules therefore has caused many disruptions and problems for teachers at schools. A local school’s principal stated in their speech about the importance of girl’s education that the ‘education boys may affect a family but the education of girls affects society’ reinforcing the need for education at a young level.

A ‘Reclaim Pride’ Parade occurred on Saturday in Liverpool following a string of homophobic and transphobic attacks and hate crimes in the city and surrounding county. Their facebook post stated that most pride events today are ‘completely divorced from the very real political struggles the community still faces’ pointing out the performative activism many companies partake just to increase short term profits and brand awareness. 

Lower Paid NHS workers are facing an overall income reduction after Boris Johnson just announced a 3% pay increase to NHS workers. The PM had originally proposed a 1% pay increase but because of immediate backlash from the opposition and the public, this was upped to the 3%. However, research from the commons library suggests that with the £20 universal credit system being phased out next month and a new ‘health and care tax’, this is effectively cancelling out any increase the pay rise would make.

Science & Technolgoy: Abi Byrne

Evidence from an Israeli study show that participants who received a third Covid-19 vaccine booster are much less likely to test positive for SARS-CoV-2 or to develop severe COVID-19 than are those who have only had the two-dose course. Participants who had received the booster were 19.5 times less likely to become seriously ill with covid in comparison to people of the same age who have only received two jabs. This study has been acknowledged as the most robust findings yet in favour of administering covid vaccine boosters, despite some concerns over potential sampling bias in the data. It’s important to note that the type of people who would sign up to a booster trial could very possibly to have a different level of risk of contracting covid-19, compared with those who would not get a third jab. However, the implications of these findings have the potential to be further damaging to global vaccine inequality, with fears of wealthier nations offering booster jabs to their citizens whilst billions around the world are still waiting for their first jab.

Scientists who have investigated a preliminary SARS-CoV-2 viral genome analysis say the virus may have jumped from animals to humans on more than one occasion. It is early days for the research and the paper has not yet been peer reviewed, but if further analysis reaches the same conclusions, it will add substantial weight to the theory that the covid-19 pandemic originated from several marketplaces in Wuhan, China. As well as making the proposition that the virus escaped from a lab much less probable.

Theory: Cassi Ainsworth-Grace 

As the 26th UN Climate Change Conference of the Parties (COP26) meeting in Glasgow rapidly approaches, our failure to rein in climate change is becoming more and more apparent. A new report by the UN, published on the 17th of September, suggests we are not achieving our aims. The report projects that world greenhouse gas emissions are set to rise 16% by 2030 compared with 2010, based on all the climate pledges by the Parties to the Paris Accord. Countries will need to develop stronger emission reduction goals if we are to meet the targets set by the Paris Accord. The urgency of this is underscored by the IPCC’s 2021 report that found the window for limiting global warming to around 2°C to 1.5°C is closing fast.

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