Our editors give us a breakdown of this week’s current affairs
United Kingdom: Harry Street
Following last week’s report of strong economic growth throughout the second quarter, the Office for National statistics has announced a fall in the unemployment rate, which now sits at 4.7%. This is an unsurprising result of coronavirus restrictions easing, creating room for record high levels of job vacancies, greatly driving up the number of people in work. Nevertheless, many firms continue to suffer from a squeeze on the labour supply, as self-isolation rules mean businesses can be left without staff at quite short notice.
Retail banks across the UK have been closing thousands of branches over recent years, as the country moves towards a cashless society. However, this cost-saving initiative is proving to be unpopular with small businesses and the older UK population. Their reliance on their local branches is being recognised by the FCA, which is considering to block UK banks from closing too many branches. In response, UK banks are discussing a pilot scheme of “shared banking hubs”, which would allow consumers to still access necessary cash, whilst the banks can benefit from lower, shared costs.
Europe: Cameron Fulton
European leaders are fearing a repeat of the 2015 migrant crisis due to present unrest in Afghanistan. EU commissioner, Ylva Johansson, stated the bloc will not turn their back on the people of the middle east nation but are adversely hoping to avoid a large migration movement according to Joseph Borrell, EU high representative for foreign affairs. Greece has already shown hostility towards excessive immigration across their border, with the implementation of a 25-mile fence bordering Turkey. According to the UN, over 400,000 Afghans have already been displaced this year, with many more expected across these next uncertain months.
A potential migrant crisis has also led to fears of resurgent right-wing populism across Europe. Emmanuel Macron stated there was to be no ‘repeat of 2015’ this week, both regarding a crisis and revival in right-wing populism. After the Syrian migrant crisis, there was a huge increase in popularity for anti-migrant policy across Europe, pushed by right-wing parties such as AfD in Germany, and Marine Le Pen’s Rassemblement National in France. And, with elections within the next year for both European superpowers, both Macron and Angela Merkel will be keen to avoid another crisis for the sake of their nations, and their parties.
Elsewhere, reforms to the EU Common Agricultural Policy have caused concern for farmers across the bloc this week. The €50 billion-a-year subsidy system is expected to be cut and used instead to pursue ecological targets. Previous attempts at this have failed since 2014, though recent promises regarding cuts to EU emissions suggest changes will be more concrete. Whilst the policy will improve the bloc’s environmental policy, it will likely induce structural unemployment as funds are redirected. Specifically in Ireland, though farmers are expected to receive €10.5 billion across the next seven years, this will be diverted towards more eco-friendly farming, leaving many farmers without necessary funding.
The shift towards environmentally friendly policy has also been justified this week, with heat waves causing wildfires across the Mediterranean region. Record temperatures of 48.8C were recorded in Italy, with sweltering weather also affecting Greece, Albania and North Macedonia. The European Forest Fire Information System had by 18 August registered 1,400 blazes this year alone, over 600 more than the annual average. The EU has mobilised emergency assistance to affected nations.
Asia Pacific: Sophie Evans
Two more journalists have been arrested by Myanmar’s military government in the most recent post-coup crackdown on the media. The two journalists, Sithu Aung Myint, a writer for news site Frontier Myanmar and commentator for Voice of America radio and Htet Khine who had worked for the BBC Burmese service were arrested on the 15th of August – as reported by army-owned television. Myint was charged with sedition and spreading false information via social media that was critical of the junta and promoted opposition movements whilst Khine was accused of harbouring Myint – a wanted criminal suspect – as well as working for a shadow National Unity Government. These arrests are the most recent of many actions taken by the government to work against the continuing opposition to army rule, with over 1000 killed by security forces and since the coup in February. 98 journalists have been arrested in the past seven months, as the nation’s new regime has effectively criminalised independent journalism.
U.S. Vice President Kamala Harris is set to head to Southeast Asia tomorrow in a diplomatic initiative to bolster economic and military cooperation with China’s next door neighbours. The trip has been seen as an attempt to boost perception of the U.S. ‘s alignment with its foreign policy – as a top priority of the Biden administration continues to be combating China’s influence in the region. Following the events in Afghanistan, the U.S. government has stressed that the rise of the Taliban will not deter the U.S. strategic goals to strengthen partnerships and continue their heavy political and naval presence across Asia Pacific. Harris is due to visit Singapore, followed by Vietnam. Her trip to Vietnam has faced expected criticisms, as comparisons have been made between the rushed evacuation of Americans in Afghanistan last week and the chaotic 1975 evacuation of US citizens and allied Vietnamese from a CIA rooftop as the Viet Cong took power in Saigon. Doubts regarding U.S. dependability following their rushed pull-out from Afghanistan have no doubt muddied their international reputation, with some experts claiming that the Biden administration aims to use this trip to gain back the trust of Southeast Asian countries.
India: Rudra Sen
The Supreme Court of India has expressed its displeasure on the ‘regressive mindset’ of the Indian Army for not allowing women to take part in the National Defence Academy’s entrance exams. Therefore, the Supreme Court has passed an interim order to permit women candidates to sit for these entrance exams. While many retired officers have lauded this decision, they have also voiced concerns about the immediate implementation of the Supreme Court’s order. They contend that the current infrastructure, training policies and curriculum of the NDA might not be well equipped. Lt Gen Arora, the first woman in India to secure the rank of Lieutenant General in the Indian Army called for the implementation of this order to be taken step by step and gradually. Furthermore, the Supreme Court asked the Indian Army why it required the judiciary to intervene by passing such orders to give more opportunities to women and why they could not do it themselves.
UNICEF’s recent report titled ‘The Climate Crisis is a Child Rights Crisis: Introducing the Children’s Climate Risk Index’ (CCRI) highlighted that children in India are at ‘extremely high risk’ due to the impacts of climate change. This index ranks countries based on children’s exposure to environmental shocks like heat waves and cyclones and thereby how these shocks will affect their access to essential services. India is ranked 26th out of 163 countries where children are at the most risk.
Middle East: Dhruv Shah
Despite Israel being one of the world’s most vaccinated nations, with over 78% of the populace being double vaccinated, the country is now facing a devastating fourth wave of infections within the country as a result of the Delta variant. The country has logged over 8000 cases as of August 17th and one of the highest infection rates at over 650 new daily cases per million people. Scientists around the world fear that a similar spike in cases will occur around the world as vaccine effectiveness against Covid 19 gradually drops.
Yesterday, President Joe Biden addressed the nation regarding the ongoing situation in Afghanistan at the White House. President Biden has defended the US’s rushed and haphazard evacuation of Americans from Kabul, after critics questioned his empathy and judgement following a turbulent exit from the country. A defiant Biden pushed back against critics, stating, “I don’t think it was a failure.” The President has pledged that the US military is committed to evacuating any remaining Americans and Afghani interpreters who have helped the US government. Since August 14th, over 13,000 people have been airlifted from the country.
North America: Amelia Brown
As the country was just getting over the initial damage of a 7.2-magnitude earthquake this week, which killed over 2,000 people, Tropical Storm Grace ravaged Haiti once again. Continued landslides, flooding, and unstable buildings complicate aid and search and rescue efforts even further. Aid organisations are also concerned that the living conditions after the natural disasters, as well as the barriers they create for giving out vaccinations, makes the country vulnerable to a serious outbreak of covid-19.
Another Tropical Storm turned Hurricane, Henri, is set to make landfall in the Northeastern states early Sunday afternoon. Henri is set to have up to 75 mph winds and drop down half a foot of rain. New York and Connecticut have declared states of emergency in preparation, with Boston also taking action by putting up flood barriers in the city. A concert in New York City’s Central Park Saturday night, meant to celebrate the city’s recovery from covid-19, was called off halfway through as threats of lightening loomed, despite Mayor de Blasio saying, “Since the real impact is not expected until well after the concert, we believe absolutely we can do both these things at once.”
Ahead of the 2021 Federal elections on 20 September, the leaders of Canada’s five major parties have had their first week campaigning. The five leaders taking part in the debate in a few weeks are: Justin Trudeau for Liberal Party of Canada; Erin O’Toole for Conservative Party of Canada; Jagmeet Singh for New Democratic Party; Yves-François Blanchet for Bloc Québécois; and Annamie Paul for Green Party of Canada. The People’s Party of Canada, lead by Maxime Bernier did not meet the criteria to participate in the upcoming debate, but will still be taking part in the public campaigning. Climate change, covid-19 and vaccines, taxes and province independence will all surely be big topics of the upcoming election.
Latin America: Leo Le Borgne
The Colombian government has announced that it will accept as many as 4000 Afghan refugees who were contracted by the U.S. government, following negotiations with the US State Department officials. Colombian president Ivan Duque specified that the refugees will only remain in the country temporarily upon waiting for a final transfer to the US. Colombia’s decision to accept Afghan refugees was taken in light of the ongoing Venezuelan refugee crisis, with more than 2 million fleeing from the economically battered nation.
Meanwhile, Hurricane Grace launched a tempestuous assault onto eastern Mexico. With maximum winds blowing consistently at 201km per hour, Grace has so far claimed the lives of 8 in Mexico. Grace’s winds accompanied by heavy rain are in a position to land onto Veracruz, an oil-producing state. Small towns and local fishing villages have been especially impacted by Grace, with immense rainfalls forcing fishing boats to be brought to higher ground, and businesses and homes boarding up their windows to limit the incoming damage of the hurricane.
Peruvian president Pedro Castillo’s newborn government hit an early political snag over the resignation of foreign affairs minister Hector Bejar, following his comments suggesting US Central Intelligence Agency and Peruvian military involvement in previous terrorist attacks in the country. Oscar Maurtua, a seasoned career diplomat, was sworn in on Friday. Castillo’s victory in the Peruvian presidential elections has sent shockwaves across private industries, with the far-left president attempting to assuage fears of radical economic policies that would threaten businesses.
Business: Aoife Doyle
Jeff Bezos’ space company Blue Origin has issued a lawsuit against the US government over NASA’s decision to award a $2.9billion lunar landing contract to Elon Musk’s SpaceX. The lawsuit, filed on Friday in Washington DC., marks an escalation of tensions between the world’s richest men. Blue Origin claimed that two providers were needed to build the landing system, transporting astronauts to the moon’s surface as early as 2024. The contract is to support NASA’s Artemis programme, which has hopes for humans to return to the moon for the first time since 1972.
Huarong Asset Management, China’s largest “bad bank” has announced that it will receive financial assistance from a group of state-backed companies after months of silence following reporting a $16billion loss in 2020. Huarong was created in the late 1990s to swallow up the ugliest loans from state-owned banks. The bank has since expanded into a financial conglomerate by lending to high-risk companies by leveraging its access to cheap loans from state-owned banks. Forcing itself into the very foundations of Chinese banking, Beijing looked the other way for many years as companies such as Huarong continued to borrow large amounts of money to fund expansion and became so intertwined in the Chinese financial system that experts claimed the bank was “too big to fail”. An injection of cash into the company will give Huarong more time to sell off parts of its empire, but it is noted that analysts are uncertain whether the investment will be enough to absorb the losses.
Theory: Cassi Ainsworth-Grace
This week is the annual Jackson Hole summit, where central bankers across the world come together to discuss the monetary policy issues facing the economy today. Markets are paying particular attention to this meeting as Federal Reserve Chairman Jay Powell is speaking, and may hint about whether the US central bank will start tapering its monthly purchases of federal government debt. There seems to be a growing belief that tapering will begin this year. Economic inequality, particularly following the uneven impact of the pandemic, will also be an important subject at the summit.
The St Andrews Economist 