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TOPIC: economy

Economy

A Cold French Shower On All The De-Dollarization Hysteria

Sure, financial instability in the U.S. and the weaponization of the dollar have raised crucial questions about how long the dollar can remain the world's de-facto currency. But France's leading business daily says don't expect major changes any time soon.

-Analysis-

PARIS — Americans are a strange bunch. Fifteen years after allowing the eruption of the largest global financial crisis in nearly a century, they were not even able to prevent a bank with more than $200 billion in assets from collapsing in a few hours.

These people are as careless with their public accounts as they are with their private finances. This year, the U.S. public deficit is expected to approach 6% of GDP, almost double that of the European Union. As if this impasse were only a minor problem.

Can we continue to trust a country's currency so inconsistent with money?

More and more countries are answering this question by buying gold. After beginning their return to the yellow metal in 2009, just after the great financial crisis, central banks acquired 1,136 tons last year. A record for over half a century!

And if they have increased their purchases, especially in emerging countries, it is not only to protect their reserves from inflation or banking crises. It may also be with monetary plans in mind.

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Globalization Takes A New Turn, Away From China

China is still a manufacturing juggernaut and a growing power, but companies are looking for alternatives as Chinese labor costs continue to rise — as do geopolitical tensions with Beijing.

-Analysis-

PARIS — What were the representatives of dozens of large American companies doing in Vietnam these past few days?

A few days earlier, a delegation of foreign company chiefs currently based in China were being welcomed by business and government leaders in Mexico.

Then there was Foxconn, Apple's Taiwanese subcontractor, which signed an investment deal in the Indian state of Telangana, enabling the creation of 100,000 jobs. You read that right: 100,000 jobs.

What these three examples have in common is the frantic search for production sites — other than China!

For the past quarter century, China has borne the crown of the "world's factory," manufacturing the parts and products that the rest of the planet needs. Billionaire Jack Ma's Alibaba.com platform is based on this principle: if you are a manufacturer and you are looking for cheap ball bearings, or if you are looking for the cheapest way to produce socks or computers, Alibaba will provide you with a solution among the jungle of factories in Shenzhen or Dongguan, in southern China.

All of this is still not over, but the ebb is well underway.

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Beirut Blast And Us: A New Generation Of The Lebanese Diaspora Finds Its Voice

Lebanese citizens spread around the world have gradually gotten connected in new ways, thanks to the internet and social media. But the author recalls how the massive explosion in the port of Beirut triggered something altogether different.

-Essay-

PARIS — In a Paris emptied by the pandemic’s first summer, I was in the Jardin du Luxembourg when the images of the Beirut explosion started showing up in my Instagram feed.

There was a huge detonation, then an even bigger blast, followed by a massive mushroom cloud — red, white, and orange.

The posts showing images of the wounded and damage in the streets soon followed. It was quickly clear that people had been killed and the magnitude of the blast had destroyed buildings around the city.

We’d find out later that the explosions — which were first triggered on August, 4th, 2020, in 6:07 p.m. local time, — detonated 2,750 tons of ammonium nitrate that had been stored at the Port of Beirut. That’s equal to 1.1 kilotons of TNT, and the explosions shook virtually every corner of the country of 6 million people and were heard more than 240 kilometers (150 miles) away on the island of Cyprus.

It is considered the most powerful non-nuclear explosion in history.

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How Argentina Has Become China's Foothold In Latin America

China has become one of Argentina's most important trading partners and is increasing its military bases in the country. As China seeks to challenge the liberal world order, Argentina risks rifts with other key allies.

-Analysis-

BUENOS AIRES — There was a media furore worldwide in February over the sighting and subsequent downing of mysterious Chinese balloons by the U.S. coastline. The unnerving affair naturally raised a question mark in countries beyond the United States.

Here in Argentina, currently run by a leftist administration with leanings toward Russia and China, we might pertinently wonder whether or not the secretive Chinese base set up in the province of Neuquén in the west of the country in 2015-17 had anything to do with the communist superpower's less-than-festive balloons. It is difficult to say, of course, given the scarcity of information on the base, but the incidents are an opportunity to revise China's presence in Argentina.

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Society
Flora Toelo Karambiri

Meet The "Patchers," Burkina Faso's Mobile Tailors Cutting Corners On-The-Go

Seven days a week, the "patchers" of Burkina Faso roam the streets of the country's capital, looking out for any clothes that might need mending.

OUAGADOUGOU — They are easy to spot as they crisscross the capital of Burkina Faso. With sewing machines on their shoulders and scissors in hand, they travel around in search of their daily tasks. Many in urgent need make use of their services to adjust an outfit, mend holes, replace a zipper, sew on buttons or repair a tear.

These are the mobile tailors or rafistoleurs ("patchers") of this West African nation of 22 million. They save people time, trouble and often money, and are a common sight on the streets of Ouagadougou.

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Ideas
Hector Zajac

The Direct Link Between Turkey's Earthquake Toll And Global Real Estate Markets

The shoddy homes that collapse on their inhabitants in Turkey's recent earthquake were badly, and hastily, built as part of a worldwide real-estate fever typically fueled by greedy governments indifferent to safety norms and common sense.

-Analysis-

There is bitter irony in an earthquake striking a zone already decimated by terrorism and war, where the vulnerable must suffer from natural destruction on top of their rulers' cruelty or, at best, cynical indifference. Under such calamitous conditions, how is one to interpret the observation of Turkish President Recep Tayyip Erdogan that the February quakes that killed more than 40,000 were fate's work?

The countries hit, Turkey and Syria, lie on a seismic powder keg. They have shaken before and will keep shaking, and nothing can be done about that. But much can be done to prevent the natural vulnerabilities that threaten so many countries becoming disasters of Biblical proportions. Something can always be done to mitigate the harm of even a 7.8-level quake and its aftershocks striking at the end of a freezing winter night.

Talking of the clash of tectonic plates is confusing, as the scale can boggle the mind. But it refers to the movements of vast plaques, 70 kilometers thick, that rub against each other while shifting in opposing directions. Even without a cataclysm like the earthquakes, such movements can push up the ground a few centimeters a year to form mountain ranges over millions of years.

In this process, rocks on their edges accumulate enormous amounts of pressure that are suddenly released in quakes as they snap, before moving.

Our short time on this planet has amply shown the impact of a shifting earth on our fragile civilization and socio-economic organization.

And while science has evolved and can better predict earthquakes, it has yet to do it well enough to allow for a city's evacuation.

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Economy
Christian Putsch and Christina zur Nedden

First Signs The China-Africa Love Affair Is Growing Cold

China has invested billions in multiple African countries in order to expand its influence. But both sides have been quietly scaling back the relationship, as Africans resent one-sided deals and China fears defaults on debt.

-Analysis-

JOHANNESBURG — In December, Kenya's new president, William Ruto, broke a taboo that pertains to pretty much every Chinese loan agreement with African governments: the secrecy clause.

Ruto's predecessor Uhuru Kenyatta had refused to publish contracts for billion-dollar projects, citing clauses to that effect. But that caused so much public anger that Ruto made disclosure a campaign promise.

The ominous details relate to the construction of an entirely overpriced rail line from Nairobi to the coastal city of Mombasa worth $3.6 billion. The case explains why Beijing is so keen to keep such contracts confidential.

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Economy
Beatriz Nofal*

A Latin American Common Currency? Not So Fast

Brazil and Argentina have raised the idea of a shared currency for the South American trading zone. But few believe this is possible without more economic harmonization in the region.

-Analysis-

BUENOS AIRES — Proposals for a single currency for Mercosur, the South American trading zone, re-emerged during Brazil's President Luiz Inácio Lula da Silva visit last month to the Argentine capital. Speaking alongside host President Alberto Fernández, he clarified that this was a long-term project to facilitate regional trade without using U.S. dollars, not a short-term plan to replace national monies with a "Southern" currency.

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Ideas
Héctor Abad Faciolince

A Writer's Advice For How To Read The Words Of Politics

Colombia's reformist president has promised to tackle endemic violence, economic exclusion, pollution and corruption in the country. So what's new with a politician's promises?

-Essay-

BOGOTÁ — Don't concentrate on his words, I was once advised, but look at what he's doing. I heard the words so long ago I cannot recall who said them. The point is, what's the use of a husband who vows never to beat his wife in January and leaves her with a bruised face in February?

Words are a strange thing, and in literal terms, we must distrust their meaning. As I never hit anyone, I have never declared that I wouldn't. It never occurred to me to say it. Strangely, there is more power and truth in a simple declaration like "I love her" than in the more emphatic "I love her so much." A verbal addition here just shrinks the "sense" of love.

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Geopolitics
Anita Inder Singh*

Modi Is Wrong: Russia's War Also Creates Real Risks For India

By shrugging aside Russia’s aggression, India has shown indifference to fears that China could follow Russia’s example.

-OpEd-

NEW DELHI — India is wrong to dismiss Russia’s war in Ukraine as Europe’s problem. The illegality and destructiveness of the invasion, and consequential food and energy crises, have global ramifications.

Stay up-to-date with the latest on the Russia-Ukraine war, with our exclusive international coverage.

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This explains why 143 out of the 193 member-states of the UN General Assembly voted against recognizing Russia’s illegal annexation of four Ukrainian regions after holding sham referenda there. Ninety-three voted in favor of expelling Russia from the UN Human Rights Council.

India has abstained from every vote in the UN condemning Russia’s aggression in Ukraine. The reason? Moscow is India’s top arms supplier and some 70% of India’s military platforms are of Russian origin.

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FOCUS: Russia-Ukraine War
Boris Grozovsky

The Militarization Of Russia's Economy, And The Demise Of The Oligarchs

By putting the economy on a war footing, Putin risks returning Russia to the days of Stalinist totalitarianism, where there will be no oligarchs or businesses left, only loyal administrators.

-Analysis-

MOSCOW — The war with Ukraine has not gone according to Vladimir Putin's plan. Eleven months have passed, but less than 17% of Ukrainian territory, including Crimea, is under Russian control.

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eyes on the U.S.
Ginevra Falciani and Bertrand Hauger

Eyes On U.S. — California, The World Is Worried About You

As an Italian bestseller explores why people are fleeing the Golden State, the international press also takes stock of unprecedented Silicon Valley layoffs. It may be a warning for the rest of the world.

-Analysis-

For as long as we can remember, the world has seen California as the embodiment of the American Dream.

Today, this dream may be fading — and the world is taking notice.

A peek at the Italian list of non-fiction best-sellers in 2022 includes California by Francesco Costa, a book that looks to explain why 340,000 people moved out of the state last year, causing a drop in its population for the first time ever.

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Why are all these people leaving a state that on paper looks like the best place in the world to live? Why are stickers with the phrase “Don't California my Texas” attached to the back of so many pick-up trucks?

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