World in Brief - The Economist Roundup

World in Review

The Economist Roundup

A dramatic decision in Horn of Africa

A surprise announcement from Ethiopia and Somaliland, the latter an internationally unrecognised state, has made the volatile geopolitics of the Horn of Africa even more so. On Monday Abiy Ahmed, Ethiopia’s prime minister, revealed that he had agreed a deal for his landlocked country to lease a port and a 20km stretch of Red Sea coastline from the breakaway Somali province. In exchange the Ethiopian government may recognise Somaliland—that would be the first time a country has done so since the would-be state declared its independence from Somalia in 1991.

Leaders in Mogadishu, Somalia’s capital, are furious. On Tuesday they recalled the Somali ambassador from Ethiopia. They are now asking the African Union, which is hesitant to redraw the continental map, to intervene. But the AU, much like Somalia itself, may find it is powerless to do much about it.

A terrible start to 2024 for Japan

Japan is in shock from a dreadful start to the year. On January 1st a magnitude 7.6 earthquake struck the Noto peninsula on the north of Honshu, the country’s main island. It killed at least 65 people. On the following day a coastguard aircraft carrying supplies to the disaster zone collided with a passenger jet at Haneda airport in Tokyo. All 379 people aboard the civil aircraft survived, but five of the six crew members on the coastguard flight were killed.

The earthquake did not trigger a large tsunami, as initially feared, but caused severe damage. The recovery will be protracted. The tremor revived memories of the big earthquake in 2011 that caused a vast tsunami and meltdown at the Fukushima nuclear plant. No nuclear plants were harmed in the latest quake, but the government’s efforts to restart stations closed after 2011 will now probably encounter more resistance. Officials will also face many questions about the causes of the plane crash.

Race for Electric Vehicles

BYD sold more EVs than Tesla in the fourth quarter of 2023, making it the world’s biggest electric-vehicle maker. The Chinese firm notched up more than 525,000 EV sales, driven by the domestic popularity of cheaper models. Still, Tesla exceeded its annual target, adding 485,000 sales in the fourth quarter to reach a total of 1.8m in 2023.

Russia - Ukraine Air Assault

Russian officials said that they shot down 12 Ukrainian missiles headed for Belgorod, a Russian town near the border. The two sides have recently stepped up their aerial assaults. Volodymyr Zelensky, Ukraine’s president, claims that Russia has launched 300 missiles and 200 drones over the past five days. Russian officials say that a Ukrainian attack on Belgorod on Saturday killed 25 people.

2024 in preview - The Decarbonisation of industrial activities

Greenhouse-gas emissions by heavy industry, which along with the power sector is the biggest global net emitter, have so far escaped serious regulation. That is because industry is difficult and expensive to decarbonise. But in 2024 the first shots of a “brown-to-green” revolution will be fired.

There are several reasons for the shift. First, technology is improving. Cement, for instance, can now be made with less “clinker” (a carbon-intensive input). Second is policy: 2024 will reveal if the EU’s effort to impose carbon border adjustment taxes will take hold. If it does, America may introduce a similar system. This would encourage companies around the world to decarbonise in order to retain access to big markets. Finally, there has been a shift in global finance. Many investors, in reaction to the excesses of “ESG” activism, which called on them to spurn legacy industries, are shifting to a more pragmatic approach. The decarbonisation of heavy industry will require trillions of dollars, but the wheels are turning at last.