Coronavirus Politics Daily: Asia's factories lag, Finland misses Russians, Venezuelan gas lines

Coronavirus Politics Daily: Asia's factories lag, Finland misses Russians, Venezuelan gas lines

Asia's manufacturing is still sick: Hailed for successfully managing the public health challenges of the pandemic, some of Asia's exporting powerhouses are now coming to terms with the economic impact of the crisis. A series of surveys released Monday show that the continent's crucial manufacturing sector took another hit last month as global trade continued to contract. While China's manufacturing activity expanded in May, showing some signs of a modest economic comeback, some of the region's export heavyweights have suffered their sharpest economic downturns in over a decade, as new export orders from their main trade partners remain slim. South Korea, for example, has been hailed for its apt management of the health crisis, but its exports have now slumped for three months straight, with shipments contracting 23.7 per cent year-on-year in May. Similarly, Taiwan has recorded just 7 deaths from the virus, but its manufacturing activity fell again in May from the previous month, while the IMF predicts that the economic bloc made up of Indonesia, Malaysia, Philippines, Thailand, and Vietnam will grow at -0.6 percent this year, down from its earlier estimate of +4.8 percent. Analysts now say that the region's economic rebound could take way longer than previously predicted.


Finland feels Russia's absence: While Finland's entire economy is reeling amid government-mandated lockdowns, the people of South Karelia, the picturesque Finnish border region that abuts Russia, are under particular stress as border closures keep out Russian tourists who are an economic lifeline for the area. Last year, some two million Russians visited, infusing cash into the lake district's tourist-dependent retail and agricultural sectors. But as Russia continues to grapple with one of the worst coronavirus outbreaks in the world, the Finland-Russia border is unlikely to reopen before the usually-lucrative summer tourist season – and could even stay shuttered for the rest of the year. Experts now say that for every month that the border is closed, local Finnish businesses could lose an estimated 25 million euros, shedding 900 jobs in total. Indeed, it's the worst crisis to hit the area since the economic turmoil caused by the collapse of the Soviet Union some 30 years ago. Finland's tourism industry is trying to boost domestic travel and lure tourists from elsewhere in Europe, but whether this will offset the loss from Russia this summer remains to be seen.

Venezuela's pain: Venezuela faced a severe economic crisis well before coronavirus arrived, but COVID has now inflicted a new degree of pain. The country's fuel shortage not only leaves drivers walking to work, stalled in traffic, in long lines hoping pumps will contain enough liquid to partially refill empty tanks, or sucking gasoline through plastic tubing to siphon it from one vehicle to another. It now also leaves coffins containing the remains of COVID-19 victims sitting in parked hearses that are unable to reach cemeteries because they have no fuel. It's an irony made even more bitter by the reality that Venezuela has the world's largest proven reserves of crude oil.

Demography is destiny. That ominous-sounding pronouncement, credited to French philosopher Auguste Comte, is today taken to mean that a nation's fate depends on the youthfulness of its population. For a poor country to become rich, it needs lots of young people ready to work, to support those too old or too young to work, and to pay taxes. This is called the "demographic dividend."

That's an important part of China's success story. Over the past 40 years, more than one billion people have emerged from poverty in China. Waves of young people surged from the countryside into cities to work in factories. The state invested in education, and wages helped young workers, and then their children, go to school. The state also began a drive to develop the technologies of the future, by any means necessary. In China, once dirt-poor, hundreds of millions have created a middle class.

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Get insights on the latest news about emerging trends in cyberspace from Marietje Schaake, International Policy Director at Stanford University's Cyber Policy Center and former European Parliamentarian:

This week we talk about one of my favorite topics, regulation. Laws are often framed as a barrier to innovation and not always recognized as a key enabler of freedoms and the protection of rights. But what's more is that regulation is a process, and one that can have tons of different outcomes. So, being in favor or against regulation doesn't mean anything. Except that those who oppose any changes are apparently benefiting from the status quo.

Is the world at a tipping point when it comes to regulating big tech?

And I would say absolutely. The outsized power of big tech is recognized more broadly because the harms are so blatantly clear. Harms to democracy, public health, but also to fairness in the economy are all related to the outsized power of unaccountable and under-regulated big tech. Now, what's significant is that this debate has finally hit home in the United States after it was already recognized as a problem in many other parts of the world.

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Do we spend too much time thinking about our own carbon footprints and not enough time thinking about bigger factors? Climate journalist Elizabeth Kolbert acknowledges it's necessary for individuals to make changes in the way they live, but that isn't the number one priority.

"What would you do to try to move this battleship in a new direction? It requires public policy levers. And it requires … some pretty serious legislation." Ian Bremmer spoke with Kolbert, an award-winning journalist and author and staff writer at The New Yorker, on a new episode of GZERO World, airing on US public television.

Watch the episode: Can We Fix the Planet the Same Way We Broke It?

Not everyone thinks that President Biden's decision to pull all US troops out of Afghanistan by 9/11/21 is a good idea. Conservative Congressman Mike Waltz (R-FL), a combat-decorated Green Beret with multiple tours in Afghanistan, thinks that the US still needs to maintain a small presence in the country to avoid incurring "massive risks." In a spirited discussion with Ian Bremmer on GZERO World, Waltz, who served as counterterrorism advisor in the George W. Bush administration, argues, "The next 9/11, the next Pulse Night Club, which is right on the edge of my congressional district, the next San Bernardino, that's now on Biden's watch. He owns it with this decision." Their conversation is featured in the upcoming episode of GZERO World, which airs on US public television starting Friday, April 23. Check local listings.

Vaccines are the best hope to end the COVID-19 pandemic. But rich countries are hogging most of the doses, with more than 83 percent of shots administered to date having gone to residents in high- and upper-middle-income countries. Most poor countries will have to wait years to achieve widespread vaccination, according to one study.

To address this inequity some stakeholders are pushing hard for waivers to intellectual-property (IP) rights through World Trade Organization trade rules so that manufacturers in poorer countries can make their own vaccines locally. India and South Africa have been leading the charge, which would essentially mean that deep-pocketed pharma companies like New York-based Pfizer, for instance, would have to hand over the keys to the kingdom, allowing local companies in New Delhi and Johannesberg to make generic versions of their vaccines.

Unsurprisingly, the debate has gotten fiery, with passionate arguments emerging both for and against.

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Carl Bildt, former Prime Minister and Foreign Minister of Sweden, shares his perspective on Europe In 60 Seconds:

What are the Russians up to against Ukraine?

We simply don't know, except the fact that they're concentrating a huge amount of military forces. And you don't do that for nothing or for fun. They are there for a purpose, to have pressure or to undertake limited to larger operations. We simply don't know. And when Putin delivered his State of the Union speech the other day, he didn't say a thing about this. They are now talking about withdrawing the forces. But let's wait and see. They have talked about withdrawing forces from Syria for a long time, but we haven't seen that as of yet.

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Australia rips up Belt & Road deal: Australia cancelled two 2018 deals signed between Victoria, Australia's wealthiest state, and the Chinese government, that committed the two sides to working together on initiatives under China's Belt and Road infrastructure development program. Foreign Minister Marise Payne said that the agreements "were adverse to our foreign relations." Similar deals between Victoria and institutions in Iran and Syria were also abandoned by the Australian government this week, under a 2020 law that allows Canberra to nullify international agreements struck at local and state level. (Australian universities say the "foreign veto bill" amounts to "significant overreach.") Meanwhile, Beijing hit back, calling the move "unreasonable and provocative," and accusing Canberra of further stoking divisions after a series of escalatory moves by both sides that have seen China-Australia relations deteriorate to their worst point in decades. Chinese investment in Australia dropped by 62 percent last year, a massive blow for Australia's export-reliant economy.

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