The World This Week

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

Asia Pacific: Sophie Evans 

Rescue teams in Indonesia continue searching for six missing people following a strong earthquake that destroyed parts of Sumatra island on Friday. The 6.2 magnitude quake killed at least eight people and injured dozens. It hit the island’s north at a depth of 12km minutes after a less violent tremor on Friday morning, according to the United States Geological Survey (USGS). It has damaged hundreds of homes and buildings, including banks, schools and mosques. Terrified residents have been forced to evacuate to temporary shelters. More that 6000 people have been evacuated in Sumatra’s West Pasaman and Pasaman city, where rescue workers were using heavy equipment to search for survivors in the rubble. Abdul Muhari, spokesman of Indonesia’s National Disaster Mitigation Agency has stated that “at the moment the search is on going for six people we predict have been buried in a landslide.” Authorities in West Pasaman have declared a two-week state of emergency as search and relief efforts continue. Indonesia sits on the Pacific :Ring of Fire”, making it prone to earthquakes – in 2004, a 9.1 magnitude quake killed 220,000 people throughout the region. 

Sri Lanka’s financial crisis that has led to fuel shortages has worsened as authorities impose up to 5 hour-long power cuts throughout the nation. The country has been struggling to deal with issues with its foreign exchange which have hampered purchases of diesel for power plants. The crisis saw reserves drop to $2.36 billion at the end of January, with fuel shortages triggering long queues at petrol stations and unannounced power outages. As foreign exchange runs short, Sri Lanka is also facing shortages of essential goods and fast rising inflation. The government is struggling to pay for diesel imports – worrying in a country of 22 million people requiring 4,000 tons of diesel every day. After months of refusing to consider the International Monetary Fund (IMF), a cabinet spokesperson has said the nation was open to discussions with international financial institutions and multilateral lenders on seeking assistance. 

India: Rudra Sen

India abstained from voting on the United Nations Security Council resolution that condemns Russian invasion of Ukraine. Several critics are arguing that the primary motive behind India’s decision to abstain from the vote is to continue its practice of neutrality and non-alignment in the international arena. India’s Permanent Representative to the United Nations, Tirumurti urged both sides to return to the path of diplomacy and make efforts to end violence and hostilities, while explaining India’s decision to abstain from the vote. He further added that by abstaining from the vote, India retained the option to be able to reach out to both sides in its pursuit to restore peace and find a middle ground through diplomatic channels. 

The Government of Delhi has recently announced that it will lift all COVID-19 restrictions subject to the positivity remaining below 1%. This means that the night curfew that was introduced to control the spread of the Omicron variant  from 11 pm to 6 am will be lifted. The fines for not wearing a mask or face covering has been decreased as well but it is still mandatory. Moreover, schools will be allowed to completely offline in the national capital for the first time in over two years. The decision to lift all these restrictions was taken due to a decline in daily COVID-19 cases and to allow Delhi’s  economy to function without hurdles. 

China: Tommy Pigatto 

As Russian forces conduct an invasive “military operation” in the North, East, and South of Ukraine, the Chinese Communist Party has yet to fully acknowledge Russia’s all-out military assault on the Eastern European nation, instead questioning the legitimacy of calling Russian military activities an “invasion”, with some Chinese foreign policy experts going as far to question if reports out of the Ukraine are “fake news”. After weeks of blaming Western media outlets for exacerbating the threat of conflict in the Ukraine, Beijing’s strong political and economic ties with Moscow have seemingly produced a China willing to tacitly support the invasion of Ukraine, framing Russian aggression as a necessary response to years of NATO encroachment, and forwarding the narrative that Russia–not the Ukraine–is the real victim of the post-Cold War international system. While Chinese President Xi Jinping has reiterated that Beijing respects the territorial integrity and sovereignty of all countries, he has refused to comment on Russia’s invasion directly, instead abstaining from voting on the United Nations condemnation of the invasion. With China maintaining its claims on Taiwan, a condemnation of Russian aggression would delegitimize a future potential Chinese “military operation” in the South China Sea. 

Africa: Laura da Silva 

Russia-Africa relations have become uncertain after the Russian invasion of Ukraine. Russia has become increasingly involved in the economies of many African countries, through trade, aid, and the provision of military training. South Africa’s government has condemned Russia’s action in a statement, saying “it is dismayed at the escalation of the conflict in Ukraine” and “calls on Russia to immediately withdraw its forces from Ukraine in line with the United Nations charter”. South Africa’s position will be a blow to Russia, as the two are allies and are both members of BRICS – a trading group made of developing economies. Moreover, South Africa has investments in Russia amounting to nearly 80 billion South African rand ($5bn), while Russian investments in South Africa total around 23 billion Rand. Kenya has gone further in their condemnation of Russia. Kenya’s ambassador at the UN security council, Martin Kimani, said: “The territorial integrity and sovereignty of Ukraine stands breached. The charter of the United Nations continues to wilt under the relentless assault of the powerful.” Regardless of how African nations react to Russia’s invasion, analysts say the continent will feel heavy repercussions. Dzvinka Kachur, a researcher at Stellenbosch University, warns that the conflict will cause distractions from sustainability goals which are critical for poverty relief in Africa. Additionally, the conflict not only risks disruptions to aid, but also military and peacekeeping support on the continent. “A lot of attention will be taken away from conflicts that are quite urgent here in Africa, such again as the Sahel, the conflict in Mozambique, and the conflict in Ethiopia,”  says Pauline Bax, director of an African crisis group. Critically,  analysts predict a hit to African economies because the price of bread and similar stable goods will likely increase, as Russia and Ukraine supply about 30% of the world’s wheat, which will hit the continent hard as African people grapple with economic hardship worsened by the pandemic.

Xenophobic protests have begun in South Africa, as unemployment worsens and the unemployed look for scapegoats. About 2,000 protestors gathered in Hillbrow, near Cape Town, as part of ‘Operation Dudula’ to demonstrate against migrant workers. Operation Dudula, Zulu for “drive back”, has gained momentum as the pandemic has brought huge economic hardship and driven up unemployment. Similarly, in Soweto near Johannesburg, a mob gathered yielding weapons and accusing migrant workers of stealing their jobs. Past xenophobic protests have turned violent. Attacks against foreigners in 2008 left at least 62 people dead, whilst those in 2015 also left many dead and injured. According to some reports, 12 people have been killed during this round of xenophobic violence, although 10 out of the 12 are South African. Around 3.9 million foreigners live in South Africa, a country with a population of 59 million, including political refugees, according to national statistics. The worsening joblessness and economic hardship have caused the unemployed to look to foreign workers as scapegoats, which Human Rights Watch says has often been the case in a country with one of the world’s most unequal societies. These protests also come after President Cyril Ramaphosa announced earlier this month that the government is working on legislation to install a quota for foreign workers in South African companies.

North America: Amelia Brown 

President Biden announced on Friday his nomination for the Supreme Court when Justice Breyer retires at the end of this term. His nominee is Ketanji Brown Jackson, a DC federal appeals judge currently. If Judge Jackson is confirmed by the Senate, she will be the first Black woman to sit on the US’s highest court, and just the 6th woman to ever sit on the bench. Her confirmation would also create the highest proportion of women on the court at once, joining Justices Sotomayor, Kagan, and Barrett for a 4-5 split. The Senate majority leader, Chuck Schumer, said he plans to move quickly to schedule the vetting hearings and confirmation vote for Jackson. The voting process should be fairly easy, as a simple majority is all that is needed to confirm, which the Democrats have as of now. Additionally, Jackson was already bipartisanly confirmed by the Senate on multiple occasions, most recently to become a DC court of appeals judge in June of 2021. 

The US Bureau of Energy Management concluded a three-day auction this week for the lease of blocks of ocean off the coast of New York and New Jersey. The 488,000 acres of ocean are to be used for wind turbines to generate offshore wind power. The Biden administration is pushing for more sustainable energy practices in the US, which is far behind Europe in having only two small offshore plants. US, German, French, Portuguese, and UK companies in various joint ventures bought up the blocks of ocean, bidding a total of over $4 billion. 

Canadian Prime Minister Justin Trudeau has joined his allies in imposing sanctions on Russian President Vladimir Putin and other top Russian officials. Although there will be little practical impact since Putin has very limited holdings in Canada, it is a show of coordination and support with other Western states. Trudeau is also calling for Russia to be removed from SWIFT, an international banking system that could cripple their financing abilities. While British Prime Minister Boris Johnson is also calling for this step, other allies such as the US and EU advise against this. Besides sanctions against Russia, Canada is looking to help those in Ukraine and their loved ones in Canada. Canadian telephone companies have almost all waived charges for long distance calls to Ukraine, as well as suspending roaming charges for calls, texts, and data for users within Ukraine.  

Latin America: Leo Le Borgne 

Colombian government officials reported at least 23 guerilla members, including a leader, killed during a military operation. Military bombardement took place in Arauca, a northeast department bordering Venezuela, and targeted ex-members of the Revolutionary Armed Forces of Colombia (FARC). The FARC signed a peace agreement with Colombia in 2016, ending all guerilla and warfare operations in return for juridical leniency. However, FARC members against the peace agreement defected, and gravitated towards the northeastern region of Colombia and other major narcotrafficking routes within the country. The Colombian government accuses neighbouring Venezuela of harbouring and supporting FARC dissidents and ELN rebels, one the remaining active guerilla groups in Colombia. About 5000 FARC dissidents and 2500 ELN fighters are suspected to be left. The Andean nation’s northeast corridor is host to very sensitive industries such as oil and livestock, and is vulnerable to guerilla attacks.

Business: Aoife Doyle 

Never in economic war have so many countries deployed such a number of weapons against a country. As much of the western world woke up to the news that Russian troops had crossed into Ukraine, countries deployed their arsenal of economic and political sanctions. In the field of economic conflict, everyone faces the consequences, with inflation a lethal weapon. The economic theatre remains crucial to how it all pans out, energy the battlefront with fears of a 1970s style energy shock. Boris Johnson announced a package of sanctions including freezing Russian finance, plutocrats, banning flights from entering UK airspace and denial of some western technology, attempting to squeeze Russia from the global economy. Berlin suspended work on the Nord Stream 2 gas pipeline, the US and allies will cut off more than half of Russia’s high-tech imports. The coordinated package of sanctions is intended to cause a financial crisis and hinder their military capability. The Ukrainian president Vladimir Zelenskiy called on further sanctions as Russian troops captured Chernobyl and moved on the capital, Kyiv. Leaders remain divided over banning Russia from the Swift payment network, which is pivotal for the flow of money worldwide. There would be a major disruption to the global banking network as buying oil and gas from Russia would become extremely hard and the risk of global banking chaos is high. The ban of Russia from Swift would have to be unanimous from countries and the implication of such a ban is too large for many European economies to sustain.  

Mounting covid cases, climbing prices, and a drop off in government aid culminated in the sixth consecutive monthly decline in American incomes after adjusting for inflation. The Commerce Department announced that after-tax incomes rose just 0.1% in January. Wages were affected by a further spike in cases associated with the Omicron variant keeping millions of employees working from home, and the enforcement of mask mandates resulted in total hours worked falling during the month. The expanded child tax credit programme expired at the end of 2021, and so parents did not receive payments for the first month since mid-2021, consequently, income from government programmes fell 1.3% in January. Despite a decrease in incomes, Americans continued to spend, after adjusting for inflation consumer income rose 1.5% with spending on goods fuelling this incline.  

The Anglo-Australian group revealed record-breaking profits boosted buoyant iron core, copper and aluminium prices. The company’s pre-tax profits doubled from 2020, and underlying earnings were up 72% on the same period. Rio Tinto announced a special dividend, along with the final dividend and the interim dividend both already declared, which increases the total pay-out to investors totalling $16.8bn. The chief executive, Jakob Strausholm credited the company’s strict capital allocation, converting earnings into higher free-cash flow for their stellar financial performance. Underpinning the results is the increase in commodities including iron ore, which saw its price rise by 48% during 2021. Whist the financial performance of Rio Tinto is one to be rivalled, the company face increasing pressure to decarbonise their operations, with a key priority of converting energy supply from gas to renewables. Building the company’s portfolio of assets to equip it for the next decade will determine if the FTSE 100’s fifth largest company can continue to grow meaningfully.  

Culture: Armaan Gheewala

Russia’s invasion of Ukraine has displaced thousands of families. Many of these displaced people have been forced out of their cars due to massive traffic jams, but have continued on foot for ‘1000 kilometres, feeding airstrikes in minus four degrees’ in what has been an estimated twelve hour journey to the Polish border, where the government are accepting more than half of the 150,000 refugees. Though some, who are too exhausted and traumatised from the displacement are staying on the side of the road ‘using blankets, towels and coats against the bitter cold’. This illustrates just the catastrophic social injustice Russia’s invasion has induced; a clear human rights violation. The capital, Kyiv, has imposed a strict night curfew as ‘citizens hunkered down in bunkers after a night of missile fire raining down on the city’. This attack has caused an outrage all over the world, with Ukrainian and Russian diasporas protesting against Russian consulates in their respective cities with notable ones taking place in Edinburgh on Thursday and Friday calling on ‘Nato to protect Ukraine’s airspace’

Yubo is the new social media app has taken over the teen space however the company is receiving widespread criticism for not having any sort of age verification portal therefore leading to thousands of unwarranted sexual and even racial abuse occurring. This was well documented by a Sunday Times reporter who ‘posed as a 15-year old girl on Yubo where she was exposed to a slew of vile content’. For instance, certain accounts using lude and lascivious language whilst being suspected of not being teenagers. In combat, schools, local councils and parents have all discouraged the use of the app to the potential dangers that it holds, like any other unmonitored chat room. Further investigation into the app revealed that  around 3.6 million users in the UK alone where children have been found to have been victims of sexual harassment, racism and online bullying. 

Theory: Cassi Ainsworth-Grace 
The IMF has put out a new article on how governments should be prepared to support heavily indebted firms. This is of particular concern as interest rates are going up to fight inflation, but corporates are in record levels of debt and facing higher servicing costs. The IMF employs a new indicator to measure the extent to which countries’ insolvency and restructuring regimes are prepared for crisis, examining factors such as out-of-court-restructuring, hybrid restructuring, institutions, liquidation and reorganisation. Using this indicator, 2/3 of the emerging market economies whose corporate debt was more vulnerable to adverse economic conditions than the average country also had systems of crisis preparedness that were weaker than average. Additionally, they found that Almost 40% of advanced economies with vulnerable corporate debt had below-average crisis insolvency systems that could struggle in the event of a large number of restructurings. The IMF says all countries should prepare for crises more effectively.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s