World in Brief - The Economist Roundup

 

World in Brief

The Economist Roundup

The World Economic Forum in Davos

Political and business leaders from around the world descend on the Swiss alpine resort of Davos this week for the annual meeting of the World Economic Forum. More than 60 heads of state and government are expected to attend, including Li Qiang, China’s premier, and Volodymyr Zelensky, the president of Ukraine, who will address the conference and is promoting his plan to end the war in his country. They will rub shoulders with more than 1,000 company bosses and financiers.

Topics of debate are likely to range from the threat of escalation in the Middle East and the consequences of disruption in the Red Sea for global supply chains, to the economic potential of generative artificial intelligence. But in 2024, which is the biggest election year in history, bosses will be keen to understand what political changes could mean for their business. Expect America’s presidential election, and the possible return of Donald Trump, to feature especially prominently.

After 100 days the Gaza war staggers on

Thousands of Israelis gathered in Tel Aviv at the weekend to mark 100 days of war in Gaza—and to demand a deal that would free the roughly 130 hostages still held there, even if it stops the fighting. Around the world, meanwhile, thousands of people attended pro-Palestinian protests that called for a ceasefire to end a conflict which has killed at least 23,000 Gazans.

Yet no such deal seems imminent. Israeli troops are still combing northern Gaza for tunnel shafts and searching the southern city of Khan Younis for Yahya Sinwar, the leader of Hamas in Gaza. The army chief urges “patience”.

Egypt, which has replaced Qatar as the main mediator between Israel and Hamas, is trying to broker an agreement to release the remaining hostages. Israel’s prime minister, Binyamin Netanyahu, may, one day, have to choose between securing their freedom and continuing to fight Hamas—the war’s two irreconcilable aims. For now, though, that war grinds on.

Iowa’s Republican Caucuses

Donald Trump appears to be coasting toward the Republican Party’s nomination for president. But on Monday he will face his first real electoral test: the Iowa caucuses.

Mr Trump is the first choice of 48% of probable Republican caucus-goers, according to a poll from NBC News and the Des Moines Register. Nikki Haley, a former governor of South Carolina, and Ron DeSantis, the governor of Florida, trail by some 30 points as they battle for second place. Both remain longshots. But a strong showing in the Hawkeye State could provide momentum for future contests. A bigger upset for Mr Trump could come from the weather. Sub-zero temperatures could affect turnout and the outcome of the caucuses, which require Iowans to attend lengthy in-person events rather than simply cast a ballot and go home. Democrats may have a more comfortable time. This year, for the first time ever, they will choose their candidate by mail.

An unhappy new year for German business

On Monday Germany’s statistics agency released figures for last year’s GDP. Europe’s biggest economy shrunk in 2023 by 0.3%—making it the only big economy to contract. Last year ended with an unexpected drop in business confidence. The outlook for 2024 is hardly rosier.

Germany is facing headwinds including a budgetary crisis, high interest rates and high energy prices. Several prominent economists predict another year of contraction. Businesses are struggling. Last week Galeria Karstadt Kaufhof, a chain of department stores, became the first high-profile collapse of the year.

In a country admired for its stability, labour relations are unusually fraught too. Train drivers have walked out and doctors are threatening to. A demonstration in Berlin on Monday will mark the end of a week of action by farmers, who blocked roads with their green tractors. Despite the government agreeing to their demands over fuel subsidies the Mistgabelmop (“pitchfork mob”) have pledged to keep up the disruption.

 

 

Donald Trump and other Republican presidential candidates urged their supporters to brave icy weather to vote in the Iowa caucuses on Monday. Speaking at a rally in the city of Indianola, Mr Trump said his nomination would send a message “to the entire world”. The former president is the first choice of nearly half of probable Republican caucus-goers, according to polls.

 

Nauru, a small Pacific island nation, cut diplomatic ties with Taiwan after the latter elected William Lai Ching-te, of the ruling Democratic Party, as its president. Taiwan’s deputy foreign minister accused China of trying to “seize Taiwan’s diplomatic relations” by poaching Nauru as its ally. Earlier a delegation of former American officials arrived in Taiwan, where they are expected to meet Mr Lai.

 

America said its army had shot down a missile directed at a navy vessel by Houthi rebels. It was the first such attack since America launched air strikes on the Iran-backed militant group in Yemen. Separately, Gaza’s Hamas-run health ministry said that more than 24,000 people have been killed in the enclave since the war began.

 

Bernardo Arevalo was sworn in as Guatemala’s president. His inauguration was delayed after the Supreme Court allowed politicians from the opposition party to retain their control of Congress. Eventually, though, a lawmaker from Semilla—Mr Arevalo’s progressive party—was elected as Congress’s president. Mr Arevalo’s opponents have tried to prevent him taking office since his landslide victory in elections in August.

 

North Korea claimed it successfully test-fired a new solid-fuel hypersonic missile. The launch came days after Kim Jong Un, North Korea’s dictator, declared South Korea his country’s “principal enemy”. Meanwhile Choe Son Hui, North Korea’s foreign minister, arrived in Russia for a three-day visit. Western countries accuse North Korea of aiding Russia’s invasion of Ukraine by sending ballistic missiles.

 

A volcano erupted in Iceland, unleashing molten lava on the town of Grindavik, setting buildings on fire. Gudni Johannesson, Iceland’s president, said “no lives are in danger”. It was the second eruption on the Reykjanes peninsula in southwest Iceland in less than a month. Defences built after the eruption last month helped contain the lava.