World in Brief - The Economist Roundup

 

World in Brief

The Economist Roundup

East Africa’s growing tensions

Geopolitics in the Horn of Africa is already off to a combustible start in 2024. Tensions between Ethiopia and Somalia are running high. The former’s bid for a naval base on the coast of Somaliland, an internationally unrecognised breakaway state, has provoked an outcry. Meanwhile, fears are mounting that, nine months into its catastrophic civil war, Sudan’s most infamous warlord, Muhammad Hamdan Dagalo (better known as Hemedti), is edging close to outright victory over the national army.

African leaders are hoping nerves will be calmed by an extraordinary summit in Uganda on Thursday of the Intergovernmental Authority on Development, an east African bloc. But complications abound. IGAD wants to mediate a ceasefire between the armed factions in Sudan, and has invited Mr Dagalo to talks. But Sudan’s de facto president, General Abdel Fattah al-Burhan, is refusing to attend, in protest at Mr Dagalo being treated as his equal. That puts the chances of a breakthrough even closer to zero.

Spain’s strong recovery

Trade-balance figures due on Thursday will say more about Spain’s neighbours than about the country itself. Spain runs a trade deficit pretty much constantly. When its biggest trade partners—France, Germany and Italy—are sluggish, that deficit expands. That expansion is even greater when Spanish demand is stronger.

Such is the case now. Spain has recovered strongly from a terrible pandemic (both epidemiologically and economically). Last year’s GDP growth was around 2.4%. The EU forecasts that this year’s will be just 1.7%, but that is still well ahead of its predictions for those big European partners. Among the bloc’s five biggest countries by population, only Poland is expected to do better. Inflation last year was also almost half the EU’s overall, though it is expected to approach average levels in 2024. In a country constantly evaluating its heft against that of its neighbours, even selling a bit less to them might be construed as good news.

TSMC hopes for a chip-market boom

On Thursday TSMC, the world’s largest chipmaker, reported fourth-quarter results. The Taiwanese company’s profits declined for the third quarter in a row, as revenues decreased slightly over the same period in 2022, to NT$625bn ($19.6bn). The chipmaker is coping with weak demand in the smartphone market, where sales have been declining globally for several years.

Demand is growing for chips designed to train and run artificial-intelligence software. But AI chips sell in much lower volumes than those designed for smartphones, which have been TSMC’s mainstay for over a decade. The market for chips is cyclical, driven by the length of time it takes to expand manufacturing capacity to meet demand. World Semiconductor Trade Statistics, an industry body, forecasts that the bust in the overall chip market will turn to a boom in 2024, with sales growing by 13%. TSMC will be hoping to benefit.

 

America launched a fourth round of strikes on the Houthis in Yemen, hitting dozens of targets according to officials. The latest attack came shortly after a drone fired by the Iranian-backed militants struck an American vessel in the Gulf of Aden. Earlier the Biden administration redesignated the Houthis as a terrorist organisation. The new classification, which will come into force in 30 days, will require American institutions to freeze funds belonging to the group.

 

Pakistan conducted “precision military strikes” inside Iran. According to Pakistan’s foreign ministry, “a number of terrorists” were killed. The attack came two days after Iran launched similar strikes against militants operating in Pakistan. On Wednesday Pakistan recalled its ambassador from Iran, and temporarily suspended all high-level visits between the two countries.

 

OPEC said it expects global oil demand to remain robust in 2024 and 2025, due to a strong global growth forecast and slowing inflation. Oil prices ticked up on the news. In contrast with OPEC’s forecast, the IEA said that growth in oil demand will halve in 2024 because of China’s slow economic recovery and greater take-up of electric vehicles.

 

Singapore’s transport minister resigned after he was slapped with 27 charges, including two counts of corruption. S. Iswaran, who was arrested last year, has rejected the allegations, which included receiving bungs from a property tycoon. He said he will “now focus on clearing my name”. The case shocked the city-state known for its scrupulous governance.

 

The government of Comoros, an east African island, imposed an overnight curfew after protesters rejected the re-election of Azali Assoumani. On Wednesday the army fired tear gas to disperse demonstrators in Moroni, the capital. Mr Assoumani’s opponents said the vote, which was held on Sunday, was fraudulent; the government denies the allegations.

 

An American court banned Apple from selling advanced models of its smartwatches. The US International Trade Commission ruled last year that a blood oxygen monitoring feature in the devices violated a patent. Apple said it would continue to import models without the disputed feature—regulators agreed to that on Wednesday. The tech giant overtook Samsung to become the largest seller of smartphones in the world last year.

 

Sheryl Sandberg, Meta’s former chief operating officer, said she would quit the social-media giant’s board in May. She said that after 12 years it felt “like the right time to step away”. Alongside Mark Zuckerberg, the firm’s founder and chief executive, Ms Sandberg was instrumental in Meta’s rapid rise.