Digest for 11 February to 17 February

Americas 

This week’s headlines from the Americas are mostly confined to economy and the wall. As the slowdown in Europe has been continuing apace for months now, the first signs of slow down from the US are also starting to rear their head. However, some analysts are calling the record slowdown in US retail sales a fluke caused by the perfect storm of the government shutdown and trade negotiations. Data released in the coming week should tell us if this is really the case or a sign of something more serious.

Assorted Americas Headlines

• According to the World Inequality Database, 400 Americans own more of the country’s wealth than the 150 million adults in the bottom 60 percent of the wealth distribution, whose share of the nation’s wealth fell from 5.7 percent in 1987 to 2.1 percent in 2014.
• The number of jobs in the U.S. solar industry dropped by 3.2 percent in 2018, in a second year of losses. (Reuters)
• US retail sales fell by 1.2% in December, the biggest monthly drop since 2009. The projection was a 0.1% rise in December. (Axios)
• Trump declares national emergency, citing the border wall. 3.6 billion$ expected to be freed as a result. (Axios)
• Reports that China is in contact with Venezuela’s interim government, and in discussions about debt repayment. China has denied this. (WSJ)

Europe

While it’d be tempting to also talk about the deepening European slowdown, Europe has something more interesting for in store for us: Spain. This week saw the start of a high profile trial of several Catalan politicians charges with separatism. This trial directly and immediately led to the collapse of the Spanish government, with pro-Catalonian independence parties pulling out of the PM’s coalition. The subsequent fail of the budget vote led the PM to call for snap elections on April the 28th. The biggest winner from this development is the far-right party Vox, which took seats in a regional parliament recently, (mentioned in an older digest) but are still not represented in the national parliament. This is bound to change, as polls place Vox’s support at 10%, as opposed to 2% last general election. With Vox’s impending entry into Spanish national politics, it seems the rise of the far right is not quite stemmed yet.

Assorted Europe Headlines 

• Hungarian women with four kids or more will no longer have to pay income taxes. (Reuters)
• The British economy grew by 1.4% in 2018, a six year low. (Reuters)
• China cancelled trade talks with the UK due to British intention to dispatch its aircraft carrier to the South China Sea.
• Germany narrowly avoids a recession, growing by 0.02% in the fourth quarter of 2018.
• Russian Government presents 390 Billion$ Economic Development Plan, emphasizing non-energy infrastructure, ecology, and demography. (SF)
• The Russian Ministry of Economic Development stated that Russia’s 2.3% GDP growth in 2018 resulted from one-off factors and does not represent sustainable growth. (BMB Russia)

East Asia

India was shaken by a car bomb targeting a convoy of about a thousand members of its security forces, which led to the death of 40 officers. This is one of the deadliest attack in recent history, which has inflamed tensions between the two nations, with India in the midst of an election cycle and Pakistan in extremely dire financial straits. In response, India is expected to withdraw Pakistan’s ‘most-favored nation’ status, which was granted in 1996, while (at least) also striking terrorist groups harbored in Pakistan. Another interesting development is Iran raising its voice to condemn Pakistan, a couple of days after a terrorist attack inside Iran itself. This seems to be less about Iran worrying about Pakistani support of terrorism, but more about her currying favor with India given Iran waited until the attack happened in India to criticize Pakistan. In effect, it seems Iran found an opening to scratch India’s back in the hopes India returns the favor as the US ramps up its pressure campaign.

Assorted East Asia Headlines 

• Negotiations between the US and South Korea over monetary compensation for US military presence have finally wrapped up, with South Korea agreeing to increase the amount it pays by 8.2% to 890 million$. The money covers the pay of South Korean workers at bases in addition to construction and logistical support. (SF)
• Turkey urged China to close its Uighur detention camps, in a noted break from Turkey’s avoidance in addressing this issue. It is also the first Muslim country to speak out. (Reuters)
• Australia signed a 50 Billion$ submarine deal with France, in a bid to acquire 12 new submarines. (GPF)
• China’s national retail sales rose just 8.5 percent over the Lunar New Year, the slowest growth rate in a decade. Tourism revenue also grew at a pace of 8.2 percent, compared to 12.1 percent in 2018. (South China Morning Post)
• Chinese exports grew by 9.1 percent year on year in January, however exports to the US contracted by 2 percent. (CNN)
• China’s overall imports from the United States decreased by 41.4 percent year on year — its lowest figure since February 2016.
• Chinese banks issued a record-high ($476 billion) in new yuan loans in January, an almost threefold increase compared to last month.(Bloomberg)
• Japan’s GDP grew by 1.2% in December, after 2 months of contraction. (GPF)

Middle East Assorted Headlines

• Iraq extended its electricity and gas contract with Iran for one more year. (GPF)
• The US Official Marshall Billingslea has stated that the US has dismantled Hezbollah’s financial network in West Africa. (The National UAE)
• During a visit to Lebanon, the Iranian FM called on the country to accept his country’s offer to supply Lebanon with an anti air defense system. His statement comes a week after similar calls by Hezbollah’s leader. (Daily Star)
• Due to rising food prices, the Turkish government has set up stalls where municipal authorities will sell vegetables at a subsidized price. (Hurriyet)
• US Officials have stated that efforts to sabotage Iran’s missile program have sped up. (NYT)
• 27 IRGC members were killed and 13 injured in a truck bomb attack Iran’s Sistan and Baluchestan Province. A Sunni militant group claimed responsibility for the attack.
• Jordan and Arab Fund agree on 96 Million$ loan.

Africa

• Following French airstrikes on their convoy, the Chadian military has captured about 250 UFR rebels. (SF)
• FDI in Africa increases after two years of decline. (Bloomberg)