Our editors give us a breakdown of this week’s biggest news stories
United Kingdom: Ross Alexander Hutton
Despite unveiling a plan to “return to normality” by Christmas in a press conference in July and explicitly avoiding the draconian measures introduced in March, Boris Johnson is now said to be considering a month-long lockdown across England. It comes as France and Germany announced lockdowns this week and advisory documents published by SAGE concluded that the U.K. is heading for a far higher death toll than during the first wave unless strict, nationwide measures are introduced. Missing the opportunity to opt for a ‘circuit breaker’ has placed Johnson’s government in a rather similar position to March, with cases and deaths rising, and only hardening choices available. It seems, therefore, the announcement Johnson hoped he would never have to make is now imminent. The prospect of another national lockdown has provoked the IMF to revise its predictions for U.K. economic growth downward as its managing director, Kristalina Georgieva, advocated for a substantial increase in fiscal stimulus to counter the effects of the pandemic. These next few days will be consequential for the U.K. economy and the health of the nation – all eyes are on Downing Street.
The aftermath of the Intelligence and Security Committee’s bombshell Russia report are being felt in Whitehall as a group of MPs and peers initiated legal action against the U.K. government for failing to “protect” UK democracy from foreign meddling. Although the report was expected to reach a conclusion on Russian interference, it raised more questions than answers by accusing the government of failing to even investigate the issue. Hence, these legislators are taking the legal path to force an independent inquiry.
Two weeks. That’s how long negotiators have until the mid-November deadline agreed for a Brexit deal to be struck in time for ratification. Talks have intensified but there is still no sign of concessions on the key sticking points. These negotiations will likely come down to the wire with both sides agreeing to a common set of principles and legal frameworks to satisfy their ‘red-lines’. Yet, with the second wave of the pandemic dominating, there is no guarantee the impetus to reach a deal will be powerful enough to meet the moment.
Europe: Peter Hourston
Coronavirus restrictions loom across Europe as several countries have announced fresh winter lockdowns. The European Commission has warned that there is a “real risk” that the capacity of healthcare systems across the EU would be breached by rising admissions to hospitals. French President Emmanuel Macron said in a national television address on Wednesday night that the lockdown there, which began on Thursday and is due to end at the beginning of December, would be more lenient than in the spring, as schools and factories are remaining open. In Germany, Federal Chancellor Angela Merkel, in agreement with regional governments, announced the closure of restaurants and bars in November, but that schools, hair salons and retailers will remain open. Merkel stressed the need for urgency, declaring that, “We have to act, and act now, to prevent an acute national health emergency.” Belgium, according to data published by the European Centre for Disease Prevention and Control, is the second worst affected country in the EEA, and imposed a similar lockdown to the spring on Friday. The wave of public health measures has had an immediate economic reaction, with stocks falling to their lowest levels since May. The European Central Bank predicted “a significant softening in economic activity” arising from the restrictions, suggesting further cuts in interest rates.
Terrorism has once again struck at the heart of the French Republic. After the beheading of a schoolteacher who showed cartoons of the Prophet Muhammand to his pupils in a civics lesson in Ile-de-France earlier in October, on Thursday a 21 year old Tunisian man beheaded the sexton and two women parishioners at the Notre-Dame Basilica in Nice. Last night, reports came through of a shooting in Lyon where a Greek Orthodox Priest was injured. In response President Macron resolutely defended the secular values of the French Constitution, “It’s France that has been attacked. Our country has been hit by an Islamist terror attack.” He called for national unity and said France was being targeted “for our values, for our taste for liberty. I say it clearly once again, today — we will not give any ground.” Macron’s stance has led to waves of protests in Muslim-majority countries such as Iran, Qatar, Kuwait, Pakistan, Bangladesh, who have accussed the President of promoting Islamophobia. In particular, Turkish President Recep Tayyip Erdogan, who has several foreign policy disputes with Macron in Libya, Syria and the Eastern Mediterranean, personally insulted his French counterpart and called for a boycott of France.
Asia Pacific: Satyajit Mohanan
China has unveiled its five-year economic plan which places great emphasis on quality growth and transforming China into a technological powerhouse.
Initial details released by the Communist Party’s Central Committee Thursday stressed the need for sustainable growth and also pledged to develop a robust domestic market.
In Thursday’s statement, officials pledged to stick to a strategy of boosting domestic demand and opening up the economy over the next five years.This plan comes as a counter-measure to America’s plans to contain the rise of it’s geo-political rival. China also plans to lower its carbon foot print and adopt more environment sustainable policies. It also reaffirmed its commitment to to maintain peaceful development with Taiwan and long term stability and and prosperity in Hong Kong.
Africa & Middle East: Camille Capelle
A new independent credit rating report by an agency of the African Union and other international organisations has shown the drastic impact that the current pandemic has had on many African countries’ debt standing. The report criticizes credit ratings agencies who have been downgrading 11 African countries evaluations and negatively assessed 12 more in the midst of the global health crisis, a time when access to investment and resources are more critical than ever. Interest rates have doubled for these countries, of which Zambia has been affected the worst. It has been shown that these negative assessments help create a further downward spiral during crises, from which it becomes increasingly more difficult to re-emerge.
In a further development of the Iraqi anti-establishment protests which have been going on for the past year, police forces have now cleared Tahrir square of the symbolic tents and encampments which have been built up there since the start of the popular action. Police claim the clearing was done in coordination with the protesters and that no one was harmed and that no further tensions were created. Nevertheless, people mourn online for the removal of a part of the people’s history and protestors reaffirm that this does not signal the end of their movement, which shall continue until the people are truly heard and their grievances addressed.
North America: Amelia Brown
As early voting began this week in some states, voting turnout is already eclipsing 2016. As of today, over 91 million people already voted through mail-in ballots or early in-person. Early voting ahead of Election Day in Texas and Hawaii already passed their total 2016 turnout. Voters sometimes waited in line for 12 hours to cast their ballots in person. Millions opted to send their ballots through the mail, making it likely that the results for who the next president will be won’t be finalized until later this coming week at least.
To secure doses of developing coronavirus vaccines, Mexico is hosting seven companies from the US, China, Russia, Germany, France, and Italy to do phase 3 human trials. Unable to compete with wealthier countries, who have already bought more than half the developing doses, Mexico is leveraging the promise by some pharma companies that countries that help develop the vaccines will get priority in negotiations of successful doses. Mexico has deals with three companies to get enough doses for 92% of their population by the end of 2021 if the vaccines get approved.
Canada’s Immigration Minister Marco Mendicino announced the country’s three year plan to bring in more than 1.2 million immigrants. The pandemic stifled plans this year to allow in 342,000 immigrants, but Mendicino said the administration is still committed to increasing new permanent residents, who he said drive the population and economic growth. Conservative critics say that there is no way the government will be able to safely bring in that many immigrants, and point out how the back up of applications this year will impact the process for years to come.
South America: Annie Smith
Citizens of Chile voted overwhelming to rewrite its country’s constitution this week, legislation which dates back to the military rule of General Augusto Pinochet. The vote was the result of months of mass protests against the dictatorship-era constitution, which they believe caused inequalities by putting the private sector in charge of health, education, housing, and pensions. Over seven million people turned out to vote, and 78% voted in favour of a new constitution; voters will return to the polls on 11 April 2021 to choose the 155 people that will make up the convention to draw up the new constitution.
A Bolivian judge has annulled the arrest warrant for ex-President Evo Morales, after he was accused of sedition and terrorism last year. The decision comes after the Mas party won the country’s general election on 18 October, and the annulment paves way for Morales to return without fear of arrest. Morales is currently still in exile in Argentina, with Bolivia’s people weighing a date of 11 November for his return.
Science & Technology: Paula Plechschmidt
Apple’s annual report was released this week and reflects the regulatory pressures that the company has been facing over the past year. It acknowledged the political animosity that has been forming towards big tech, especially in regard to the adversity it is facing with their app store fees. For the first time Apple has acknowledged that they could face serious material losses if the app store fees would be reduced as they are allegedly necessary in order to curate and secure the marketplace.
As everyone is working from home, the demand for technology is consistently rising. This has caused Apple to beat revenue goals even despite the iPhone 12 delay. Mac computers have grown 29% this year to a value of $9bn and sales of iPad rose 46% to $6.8bn.
India’s eCommerce market is booming and Reliance and Amazon are going head-to-head in order to get a share of it. The market is projected to be worth $86bn by 2024 and shows incredible potential especially for Amazon, after shutting down online stores in China last year. Reliance has a challenging project set out for itself, being up against Amazon and Walmart-owned Flipkart who already control 70% of the market.
Business: Tom Woods
Deltic Group, which is the UK’s largest nightclub operator, has put itself up for sale. The conglomerate owns 52 nightclubs across the country, including well-known venues such as Oceana and Pryzm. The nightlife industry has almost completely ground to a halt in the wake of the COVID-19 pandemic, with only 10% of Deltic’s floor space currently open. The Group is currently making a loss of around £1 million every month, and CEO Peter Marks has the firm would run out of money by December if no investment or governmental support is provided. Marks has slammed the government’s approach to nightclubs during the pandemic, saying he feels his industry has been “choked to death” and only offered a “few crumbs on the floor”. Despite being part of just one of two industries that the government has not allowed to reopen, nightlife venues have received no specific support from the English or Welsh governments. Their situation is a little less bleak in Scotland, where the government this week announced grants of up to £50,000 for clubs.
The FTSE 100 has endured its worst week since March amidst mounting anxiety over the ongoing second wave of COVID -19 in the UK. £72 billion has been wiped off its value following a nightmare week which has seen other stock markets also dramatically fall in value. Germany’s Dax finished the week 4.2% lower, while the major US indexes saw their value tumble by 3.4% or more.
Theory: Cassi Ainsworth-Grace
Economic theory is far behind economic policy. Michael Hirsh writes on the eve of the election that the pandemic has shown that economic theory is years behind what is needed right now in policymaking. The events of the last fifteen years have proven that economics is just not a science, and economists are scrambling for new ideas. Hirsh cites that this disconnect between policy and the academic institution is evident with the inability to find a replacement for the CARES Act in the US. He concludes that the impasse in Congress is partly to do with the meandering pace that theory is taking in terms of playing catch-up with the real world – budget perhaps matter less than they are emphasised in theory, as near-zero interest rates mean debt servicing costs are falling, but significant growth in national debt under the Trump administration remains a concern for many.
Hirsh’s article is an important one. The election is not only a political question but an economic one. And as Economics courses remain slow to update, future economists will fall even further behind the pace of policy.