Our editors give us a breakdown of this week’s current affairs
United Kingdom: Harry Street
Ahead of the government’s Budget next week, the UK Chancellor has announced a large pot of money that will be shared between large city regions across the country. This pot of roughly £7bn intends to improve the transportation across city regions, which are mostly in northern England and the Midlands. For example, the government hopes these funds will allow for better tram links and new stations across the cities that will further improve the transport links. These schemes are part of Boris’ vision of a levelled-up United Kingdom, which has been the key rhetoric throughout his tenure as Prime Minister. Most importantly, it hopes to make commuting simpler and faster in cities across the country, as they currently fall short of the capital’s transportation schemes.
The UK has finally closed a trade deal with New Zealand, after 16 months of negotiations. This deal hopes to reduce many tariffs across goods such as clothing, wine, and vehicles. Although the deal’s legalities need to be finalised, this is a move in the right direction for the UK; strengthening its connections with allies are key to recovering from the pandemic and rebuilding after Brexit. However, there are doubts on how impactful the deal will be on the UK’s economy, with reports from the Department of International Trade giving a best-case scenario of a 0.01% boost to GDP. Hence, this deal is more focused on improving its relations with the Indo-Pacific region, which is receiving great attention from Johnson’s government as they recognise this growing area may be key to a successful United Kingdom.
Once again, cases of COVID-19 are seeing a large uptick, with a continuous reporting of over 45,000 new cases a day. This number seems to be increasing, too, and many health experts fear that the government needs to act soon to help protect the NHS from becoming overwhelmed this winter. Sajid Javid, the current UK Health Secretary, has made it clear that the government is constantly reviewing the situation and is willing to implement restrictions if cases continue to worsen; however, he also emphasises that the government does not want to undo the recent economic recovery unnecessarily. The government’s “Plan B” is looking more likely, which enforces masks in some settings, encourages working from home, and could include vaccine passports. Although Plan B may seem the UK is heading back towards lockdowns, many are unsure as to why it is not being implemented sooner. The impacts on economic activity are likely to be small and could allow the country to avoid stricter restrictions being implemented further down the line, which may have significant impacts on people and businesses.
Europe: Cameron Fulton
Central and Eastern Europe have become the centre-point of the world’s COVID crisis. The world’s highest 12 death rates are found in this geographical area, other than Russia. Latvia has 115 cases per 100,000 whilst Romania has the worst daily death rate: 19 deaths per million. Although far lesser than previous figures, the rates remain concerning without a long-term solution. Populations are doubtful of the legitimacy of the vaccine scheme, with mistrust of governments dating back to the Soviet-era, causing lag compared to the rest of the continent. The growing predicament has led to action from governments, implementing social restrictions once again. Latvia has implemented a national lockdown once more, with a month curfew, online education and only essential shops being opened. Estonia and Romania are likely to follow, with the latter already pausing in person education for two weeks and mandatory mask wearing. The heightened restrictions have had a reaction in Romania, with inoculation centres reaching a record 62,500 vaccinations on Thursday.
Merkel addressed the growing feud between Poland and the EU this week, commenting at her final European summit she is ‘deeply concerned’. The conflict has heated up in recent weeks, with Polish governance failing to buckle to EU judicial law, which has led to threats of sanction from Brussels. The German chancellor has sought out peace talks, speaking with Polish PM Mateusz Morawiecki, in the first EU meeting for heads of governments since Polish top-courts ruled parts of EU law were incompatible with the country’s constitution. Mr Morawiecki has publicly defended the decision, warning the EU was becoming a “centrally managed organism run by institutions deprived of democratic control”. The comments were not positively met in parliament, with Ursula von der Leyen, head of the European Commission, one of many to retort.
Moldava declared a state of emergency on Friday, as the gas crisis begins to bite the Gazprom reliant nation. Moldovian PM, Natalia Gavrilita, has stated low supplies have become ‘critical’, with a loss of around a third compared to last year’s supplies, and are now seeking emergency support from the EU. The supply cuts have come due to the expiry of the nation’s most recent contract with Gazprom, who themselves further slashed supplies amid the wider energy emergency. The EU has endorsed the nation, who are facing prices five times that of last year’s supply.
Africa: Laura da Silva
There has been a sharp escalation of intimidation tactics against aid organisations in Ethiopia this week, as Ethiopian air raids prevented a scheduled UN humanitarian flight from landing in the capital of the Tigray region. This tension between the Ethiopian government and aid organisations is occurring during the world’s worst hunger crisis in a decade, with close to half a million people in Tigray facing famine-like conditions. Since June of this year, the Ethiopian government has placed what the UN is calling “a de facto humanitarian blockade” on the region. It is almost a year on from the start of the war on the ethinic population in Tigray, and people are beginning to starve to death. Unfortunately, the conflict has only intensified between regional forces and the central government as the Ethiopian government began launching air raids on the Tigrayan capital Mekelle this past week. The international community has voiced concern about these recent strikes, which the Tigray People’s Liberation Front (TPLF) claims show a disregard for civilian lives.
The UN have emphasised Africa’s “disproportionate vulnerability” to climate change, in a report released ahead of the COP26 climate summit this past week. Tuesday’s report warned that more than 100 million extremely poor people in Africa are threatened by accelerating climate change. A commissioner at the African Union Commission echoed this concern: “By 2030, it is estimated that up to 118 million extremely poor people will be exposed to drought, floods and extreme heat in Africa, if adequate response measures are not put in place.” The extremely poor are defined by the World Meteorological Organization as those who live on less than US $1.90 per day. Africa carries the heaviest burden of the global climate change effects, despite contributing less than 5% of the world’s greenhouse gas emissions. The International Monetary Fund (IMF) estimates that sub-Saharan Africa has faced losses of over US$520 million in direct economic damages annually as a result of climate change since 2000. UN chief Antonio Gutierrez said at the COP26 climate conference in Glasgow on Thursday that, “The carbon pollution of a handful of countries has brought humanity to its knees and they bear the greatest responsibility.” He called out the G20 countries as being responsible for four-fifths of planet carbon pollution, and added that “China and the United States must do more than what they have announced so far”, if we are to stay on track towards the goal to reduce global emissions.
North America: Amelia Brown
The US Federal Reserve (Fed) announced on Thursday new rules limiting stock trading for top officials in the bank. The new rule bans agency policymakers and senior officials from buying individual stocks, agency securities, or entering into derivatives. Additionally there will be more oversight and approval of securities buying and selling, and there is a ban on any trading during periods of heightened financial stress. These changes come in the wake of two local Fed branch presidents resigning in September over criticism of their investment activity–neither however broke any rules for Fed officials, leading to the review and tightening of the permitted activity for top officials.
Although the Hollywood crew worker’s union strike did not go ahead last week due to a new contract being drafted, the attention to conditions for film workers was re-ignited this week. Cinematographer Halyna Hutchins was killed on set in New Mexico by the firing of live rounds unknowingly by actor Alec Baldwin. The director, Joel Souza, was also injured but not fatally. The assistant director handed the actor what was supposed to be a ‘cold gun,’ meaning a real one filled with blanks that make the bang and flash without a real bullet. The mix up is under investigation, but both the AD, actor, and armourer say they did not know that gun was loaded. There’s mixed precedent for whether the production company or anyone involved will be charged for involuntary manslaughter, negligent homicide, or another criminal charge. The conditions on set were put into question by other crew members though, with half of the production crew walking off earlier the day of the accident in protest of working conditions and pay. Concerns over the gun safety had also been raised earlier to the unit production manager over lack of checks and over accidental discharges.
A ‘Buy American’ plan proposed in the US budget bill has seen backlash from the Canadian government, which sent letters to top US officials Friday expressing their concern. The International Trade MInister, Mary Ng, expressed deep concern about the disruption the plan will have on the auto sector and Canada-US cooperation in the industry. A tax-credit for purchasing electric vehicles within Biden’s ambitious budget plan would be partly only for vehicles assembled in the US. Ng claims this violates North American trade agreements and hints at trade retaliation.
Latin America: Leo Le Borgne
Colombian security forces arrested the notorious drug lord Dario Antonio ‘Otoniel’ Usuga on Saturday. As head of the Gulf Clan, Usuga was the country’s most wanted drug trafficker. The drug cartel is the most powerful criminal organisation in Colombia,and holds an extensive criminal network in the Andean nation and abroad. President Ivan Duque compared Usuga’s capture to the assassination of Pablo Escobar in the 1990s, calling it “the biggest blow against drug trafficking in our country this century”. Usuga’s arrest is quite significant, as he was able to operate under the radar of the police and military for nearly a decade. The narco kingpin hid in Colombia’s dense jungles and rural areas, maintaining a discrete, complex communication network and security framework to avoid arrest. Usuga is likely to face extradition to a US federal court.
A senate inquiry released a report recommending the indictment of Brazilian President Jair Bosonaro for ‘crimes against humanity’ among other accusations. Bolsonaro is largely blamed for his mishandling of the Covid 19 pandemic that claimed over 600,000 Brazilian lives. The report pinpoints the president’s anti-scientific and careless response towards the pandemic as grounds for criminal negligence and crimes against humanity with regards to his failure to protect vulnerable Brazilian indigenous communities from the virus. The report comes amid Bolsonaro’s slumping approval rating and an upcoming general election next year.
Business: Aoife Doyle
The official figures released on Friday showed that the budget deficit in the government’s fiscal year – 12 months ending on September 30th – was the second-highest total on record but an improvement from the prior year. The figure was not as severe as predicted by the White House, attributing to the importance of the $1.9 trillion (about $5,800 per person in the US) relief package passed by Congress and the successful rollout of vaccines. The accelerated reopening of the economy bolstered tax revenue which rose to $4 trillion, as wealthier individuals and corporations paid more in their taxes than expected. Treasury Secretary Janet L. Yellen emphasised that the budget numbers are proof that the economy is recovering and a clear sign that the economic plans of the Biden administration are working. However, another deadline is fast approaching to raise or suspend the statutory limit on how much debt the federal government can carry, splitting both the Democrats and Republicans. As interest rates are historically low in the US, the government can afford to take on additional debt, improving the long-run fiscal and economic health of the United States.
The second budget announcement of the year will come on Wednesday 27th October as Chancellor Rishi Sunak will deliver his next Budget and Spending Review. Analysts expect Sunak to rebalance books after the massive borrowing to pay for the pandemic, with jobs plans, minimum wage, council tax and students’ loans all in the spotlight. The Chancellor may have made the year’s most significant financial announcements already. In September, a 1.35% increase in National Insurance from April 2022, the state pension ‘triple lock’ suspended for a year, and the £500 million Household Support Fund, announced earlier this month, for councils to distribute to help people in England pay for their needs throughout the winter. A missing highly anticipated announcement at the Conservative party conference was an increase to the minimum wage for workers over 23. A 5.7% increase in raising the wage to £9.42 per hour would see Johnson accept the recommendations of the independent Low Pay Commission. Such an increase would bring the national living wage very close to the Living Wage Foundation’s current recommendation of £9.50 an hour. During the Conservative party conference, Sunak indicated that he would use tax rises to fund future spending pledges. In the March 2021 Budget, it was published that many tax thresholds would stay frozen until 2026, including the capital gains tax allowance. However, upon recommendation from the Office of Tax Simplification, we may see the CGT allowance decrease, aligning it more closely with income tax rates.
Culture: Armaan Gheewala
Students from across the UK have been raising awareness around the recent rise in spiking drinks (which has already been a huge issue in night clubs). However, many students and females feel frustrated that night clubs are not doing enough to make these groups feel safe therefore have planned a sit-in on Wednesday 27th of October to demonstrate the necessity of preventative measures. Several nightclubs (including student unions) have already demonstrated their support by closing their clubs that night however this isn’t enough if real change wants to be seen.
Greta Thunberg has spoken about the lack of politician’s effort and participation in combating global warming through the performative nature of summits (like the COP26 that it is happening in November). ‘The public need to uproot the system… we can’t expect everything to happen at these conferences’ emphasising the need for actual action and reshaping of government policy in order to adequately tackle climate change.
Science & Technology: Abi Byrne
At a United Nations climate summit held 12 years ago in Copenhagen several wealthy nations pledged to give $100 billion per year to less wealthy nations by 2020. This money was to be used to adapt to current climate change as well as mitigating further rises in global temperatures. This pledge has not been met. Regardless of which method used to account for total money channeled to less wealthy nations, there is no realistic scenario in which this target has been met. Frustrations at these failings are contributing to rising tensions ahead of the COP26 summit, which is to be held next month in Glasgow. Several pledges have already been made before the official start of the summit, giving hope that this target of $100 billion annually will be met, but for real progress to be made against rising temperatures many believe a complete overhaul of climate finance will be required.
In what seems to be an entirely politically motivated move, the Mexican government has accused 31 scientists and officials of money laundering and organised crime. These are extremely serious charges, which are mostly reserved for drug traffickers, and even a formal accusation can lead to imprisonment in a maximum-security prison without the opportunity to seek bail. All accused deny the allegations and have received an outpouring of support from the international scientific community, with over 50 universities and professional societies condemning the allegations.
Theory: Cassi Ainsworth-Grace
This week The Economist has featured a discussion of ‘real-time’ economics. The emergence of real-time economics represents a paradigmatic shift in the discipline. No longer will economists, financiers and central bankers wait months, or even years for accurate measures of productivity, GDP and other similar key indicators which often have significant time lags. Much of this change has been driven by the now ubiquitous nature of mobile phones and the Internet, with granular data being collected every second, 24/7. One only needs to look at the Apple Mobility Index to get a glimpse into the microscopic data captured by our expanding digital footprints.