Economist 10/13/15

  1. Over the past few months most of Latin America’s currencies and stockmarkets have suffered a battering. The IMF now expects the region’s economy to contract slightly this year.What went wrong in Latin America? The short answer is China’s slowdown, which has punctured commodity prices and, with them, exports from and investment in South America.In some cases the woes are mainly self-inflicted. Brazil and Venezuela kept spending even after the commodity boom began to subside. Both are now suffering deep recessions.From the Panama Canal north, the region’s economies are tied much more closely to the United States than to China. Mexico, Central America and the Caribbean are net commodity importers.Well-managed economies in South America, such as Peru, Chile and Colombia, are adjusting gradually to a harsher world. They are still growing, albeit at only 2-3%, because they have been able to apply a modest amount of monetary and fiscal stimulus.
  2. THE arguments over Britain’s continuing membership of the European Union are heating up. On October 12th the cross-party “In” campaign was formally launched under the label “Britain Stronger in Europe”.The chairman of the campaign is to be Lord Rose, a former chief executive of Marks and Spencer, itself a quintessentially British retailer.He has the support not just of the three living former prime ministers, John Major, Tony Blair and Gordon Brown, but also of a clutch of other pro-EU business figures, including Richard Branson.When David Cameron, the prime minister, eventually calls the in/out referendum on EU membership that he has promised to hold before the end of 2017, the Electoral Commission will officially designate one campaign on each side.Mr Cameron is refusing to say when he might hold the referendum. He has embarked on a renegotiation of Britain’s EU membership that he hopes will form the basis of a government recommendation to remain in.The prime minister knows that Brexit would be at best economically risky and at worst seriously damaging, driving away much-needed foreign investment.
  3. In Yemen’s Sana’a civilian life has disintegrated due to on going war between Houthi rebels and Saudi backed coalition. People sleep and wake up to the sound of air raids.The World Health Organisation (WHO) reports that as of October 4th a total of 5,462 people have been killed and 26,447 injured since the fighting flared up in March. But the UN warns that these numbers are a gross underestimate.Locals think life is returning to medieval ways, as jobs are few and much of the day time is spent stocking up on fuel, food, water and firewood. There is a shortage of cooking gas. Sana’a has electricity for just one hour every five days.At one petrol station in the Haddah district of Sana’a, vehicle owners wait for days to buy fuel in queues that stretch for a kilometre or more.
  4. On September 13th the Dutch Safety Board made public the results of a 14-month-long investigation into the physical cause of MH17’s crash. As expected, it concludes that a Russian-made BUK missile brought the plane down. The report is an exemplar of European technocratic neutrality: meticulously detailed and devoid of emotion.The board delineated a 320-square-kilometre zone from which the missile might have been launched.The attempt to place blame will come only next year, when a separate criminal investigative team completes its work.
  5. China is now the world’s second-largest economy and aspires to be a global power. Its working-age population is shrinking, yet it remains stubbornly reluctant to accept new entrants.It was different with the Vietnamese. At the height of the exodus, 100,000 people entered China through the border town of Dongxing in Guangxi—ten times the local population.They were later settled in six provinces.The government gave the new arrivals housing and jobs, many of them in state-run farms or factories set up especially for the Vietnamese.Even the Vietnamese have had difficulties. Many are poorer than Chinese-born locals whose command of Mandarin and better contacts in southern China’s factory boomtowns have given them a leg up.Aside from the Vietnamese, China has only 583 refugees on its books—most of them from Somalia and Nigeria. This year about 60,000 Burmese poured across the border into China to escape fighting between rebels and government forces.Refugees from North Korea never even get shelter. China calls them “criminals” or “illegal economic migrants”—partly because it remains an ally of North Korea, but also because it fears attracting a lot more of them.
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