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Economy
Turkish President Tayyip Erdogan poses with Somali President Hassan Sheikh Mohamud and Ethiopian Prime Minister Abiy Ahmed following a press conference in Ankara, Turkey, December 11, 2024.
Ethiopian President Abiy Ahmed and Somali President Hassan Sheikh Mohamud announced a critical agreement to end a yearlong dispute over Ethiopia’s access to the Arabian Sea. The leaders announced the deal in Ankara after marathon talks mediated by Turkish President Recep Tayyip Erdoğan, whois increasingly emerging as a key player in the Horn of Africa.
What’s the conflict all about? Ethiopia has been the most populous landlocked country in the world since Eritrea broke away in 1993, and the lack of a major seaport has held back development. In January, Ethiopia signed a deal to lease a port from a breakaway region in Somalia, Somaliland, in exchange for recognizing its independence. In response, Somalia threatened to expel Ethiopian troops that are in the country to fight al-Shabab terrorists, and some feared the conflict could escalate into an echo of the devastating 1977-78 Ogaden War.
Why is Turkey involved? Ankara has deep ties to both sides in the conflict and an abiding interest in keeping the peace between them. Turkey’s largest overseas military base is in Somalia, where Turkish troops have trained thousands of their Somali peers. Turkey also backed the Ethiopian government during the 2020-22 Tigray war by providing feared Bayraktar drones.
“The agreement will help make Turkey into an even more relevant power in the region, with Ankara pitching itself as a security partner for African countries,” says Eurasia Group expert Emre Peker.
Turkish businesses have invested over $2 billion in Ethiopia as well, a figure surpassed only by China.
“Aside from expanding its diplomatic and political clout in Africa, the deal will also help Turkey build more commercial inroads in the region,” says Peker. “Ethiopian access to Somali ports could facilitate more trade, and Turkish businesses will benefit from potential preferential treatment on marquee infrastructure projects.”
What now? Representatives will meet again in February for “technical talks” that are meant to hammer out the details of port access.Buildings seen from Lake Ontario along the skyline of the city of Toronto, Ontario, Canada, on July 01, 2023.
The Bank of Canada cut interest rates by half a point to 3.25% on Wednesday to kickstart some growth in the Canadian economy. Gov. Tiff Macklem indicated that further cuts would be more gradual.
Macklem said the outlook for the Canadian economy was uncertain, in part because President Donald Trump has threatened to impose tariffs on Canadian imports.
“If those things happen, they will have a big impact on the Canadian economy and will dramatically impact our forecast,” he said. “Let’s hope that does not happen.”
Bank of Nova Scotia economist Derek Holtsaid the rate cut was so steep that it seemed “like an apology note” after slowing the economy with earlier inflation-fighting increases.
Canada's economy has been shrinking on a per capita basis for six quarters, with most growth associated by an immigration-driven population increase. Figures released last Friday showed the unemployment rate rose to 6.8%, up from 6.5%.
But Macklem said Canada is not in a recession: “We’ve not seen widespread lay-offs or widespread job losses typically seen in a recession.”
Justin Trudeau welcomed the rate cut, clearly hoping to avoid more economic bad news while his Conservative opponents prosecute him as a hapless economic leader.
Protesters hold placards during a candlelight vigil to condemn South Korean President Yoon Suk Yeol's surprise declarations of the failed martial law and to call for his resignation in Seoul, South Korea, December 5, 2024.
On Thursday, Han Dong-hoon, the leader of South Korean President Yoon Suk Yeol’s party, said he was opposed to impeaching Yoon because it would add to national confusion. By Friday, however, he had changed his mind.
“Should Yoon continue to serve as president,” Han said Friday, "I think there is great risk for extreme actions like this martial-law declaration to happen again."
Now, the clock is ticking: By Saturday, lawmakers will vote on Yoon’s future, and if two-thirds agree to impeach, he will be immediately suspended from office.
Han’s change of heart may be linked to reports that Yoon ordered Han’s arrest when he declared martial law on Tuesday. According to the National Intelligence Service deputy director, Yoon’s arrest list also included the leader of the main opposition Democratic Party, Lee Jae-myung, and three opposition lawmakers. But there is confusion about that, too, because the head of the intelligence service said the opposite — that Yoon had not ordered arrests of the lawmakers.
Details of the chaotic planning “are more damning than initially expected and indicate that South Korea’s political system may have narrowly escaped a far more destabilizing outcome," says Eurasia Group’s Jeremy Chan.
The opposition controls a majority but falls eight votes short of the two-thirds margin needed to impeach. If Han lends his support to the effort, then Yoon’s goose is likely cooked.
Meanwhile, amid fears that Yoon might try to declare martial law again, South Korea's acting defense chief says he would refuse any such orders.
Watch the streets. Many South Korean voters are outraged by Yoon’s actions, and a failure to remove him from office quickly is likely to cause the modest protests and strikes to grow dramatically. We have our eye on the reaction to the impeachment vote, and to Han’s reversal on fighting it.
Hard Numbers: Notre Dame’s stones gleam after cleaning, Trump threatens yuge tariffs, Iceland gets new gov, Vaccine promises AIDS end
Participants make their way past the Notre-Dame Cathedral as they attend the 13th edition of the stand up Nautic Paddle race on the river Seine in Paris, France, December 1, 2024.
42,000: Workers restoring Paris’ Notre Dame Cathedral after the fire that ravaged it five years ago had to clean 42,000 square meters of stone. They used special techniques to minimize damage to the original masonry in the process and the results are stunning: See it for yourself: The medieval cathedral reopens to the public on Dec. 8.
100: President-elect Donald Trump on Saturday threatened to impose 100% tariffs on goods imported from BRICS countries (Brazil, Russia, India, China, and South Africa, as well Iran, Egypt, Ethiopia, and the UAE), should the organization try to issue its own currency or displace the dollar’s place in world trade. It’s an odd threat, as some members – namely Russia and Iran – are already so heavily sanctioned that trade with the US is non-existent, while others – Brazil, Egypt, and the UAE – are major US allies.
15: Iceland’s Social Democrats gained 15 seats in the Althing – one of the world’s oldest parliaments – and will unseat the ruling conservatives after seven years of power following Saturday’s snap election. It’s yet another example of the anti-establishment trend few democracies seem able to escape in this election-studded year.
2: A twice-yearly vaccine against HIV/AIDS has proven 100% effective against contracting the virus, which a UN report for World AIDS Day on Sunday called a “historic crossroads” in the fight to end the epidemic. Generic versions of the drug will be available in 120 low-income countries, mostly in Africa and Asia, but the manufacturer has not approved generic patents for Latin America, which may represent a crucial weak spot in distribution.Mexican President Claudia Sheinbaum speaks after reading a letter to be sent to U.S. President-elect Donald Trump, warning that tariffs would cause inflation and job losses in both countries, at National Palace in Mexico City, Mexico, November 26, 2024.
Last night, Donald Trump made clear that no country will be immune to his tariff agenda. In a post on Truth Social, he accused Canada and Mexico – America’s top two trading partners – of not doing enough to curb the flow of fentanyl and illegal immigration and threatened them each with 25% tariff hikes. He also vowed to impose an additional 10% tariff on China for its role in producing the precursor chemicals for fentanyl.
The announcement caused Mexico’s peso to slide, suffering a 1.7% drop against the US dollar, and for Canada’s dollar to hit a four-year low, dropping 0.7%.
In a press conference on Tuesday, President Claudia Sheinbaum responded to Trump’s threat by arguing that tariffs would not solve the migration or drug crisis and would come at the cost of the auto industry – noting that cars from America’s biggest auto manufacturers are some of Mexico’s principal exports to the US. Auto stocks fell in response to the post – with General Motors down as much as 7% on Tuesday. Canadian Prime Minister Justin Trudeau hopped on the phone with Trump, seizing the moment to show voters he knows how to handle the incoming US president.
Meanwhile, Chinese stocks remained relatively solid – dropping just 0.2% – likely because the 10% tariff was lower than many investors’ worst expectations.
The US economy was also unphased by the news, with the Nasdaq and S&P 500 both making gains in response to Trump appointing hedge fund manager Scott Bessent as treasury secretary. Bessent is expected to be a steward of the stock market and a moderator of Trump’s wildest economic ambitions.
How likely is Trump to follow through? Eurasia Group US analyst Noah Daponte-Smith says it’s hard to predict. “What we do know,” he says, “is that Trump is serious about the tariffs and has the legal means to implement them if he wants.” Even if Trump doesn’t implement them on day one, “the threat of implementation will hang over the USMCA relationship for the entire Trump term if these underlying grievances are not addressed in the manner Trump desires.”The Snoopy balloon prepares to join the Macy's Thanksgiving Day Parade on West 77th street in New York, on November 23, 2023.
100: This Thursday marks 100 years since the famous Macy’s Thanksgiving Day parade first took New York City by storm with “floats, brass bands ... and clowns in profusion.” The event – famous for its seven-story tall balloons of cartoon characters – was originally themed around Christmas, to whet people’s appetites for holiday shopping. The pageantry has had its run-ins with political issues and culture wars over the years. Last year’s installment, for example, drew boycott demands from ultra-conservative groups upset about the inclusion of two non-binary performers.
288,000: Economic need, meet political reality. To offset declining birth rates and the retirement of skilled workers, Germany will require an influx of as many as 288,000 foreign workers every year until 2040. Is that feasible at a moment when anti-immigrant backlash is one of the leitmotifs of German and wider European politics?
44: Pudge tried to dodge, but his plan was too plump by half. A South Korean man was sentenced to a suspended prison term for deliberately gaining more than 44 pounds in a bid to escape military service. South Korea runs a conscription system in which all able-bodied men serve for nearly two years.
2 million: President-elect Donald Trump’s promise to deport millions of undocumented migrants has scared the stalks off of the US agriculture industry, where roughly half of the country’s 2 million farm workers are thought to lack legal status. Industry leaders warn that deportations from the fields could cause inflation to soar, and have sought assurances that Trump’s plans will focus more narrowly on undocumented migrants with criminal records.
1,006: Africa is home to some of the most vibrant tech hubs in the world – Lagos, Nairobi, and Cape Town among them – but also to increasingly sophisticated cybercrime operations. Over the past two months, Interpol has arrested 1,006 people across 19 African countries on charges of ransomware schemes, digital extortion, fraud, and trafficking. Those nabbed in the crackdown had scammed or fleeced at least 35,000 people out of nearly $200 million.President-elect Donald Trump attends the America First Policy Institute gala at Mar-A-Lago in Palm Beach, Florida, on Nov. 14, 2024.
25: President-elect Donald Trump took aim at Canada and Mexico via Truth Social on Monday, posting about his plan to charge the countries — currently America’s No. 1 & No. 2 trading partners, — a whopping 25% tariff on all products entering the US. The tariff would be enacted on Jan. 20, 2025, Trump said, and would “remain in effect until such time as Drugs, in particular Fentanyl, and all Illegal Aliens stop this Invasion of our Country!” He then posted that he would charge China, where the precursor chemicals to fentanyl are made, “an additional 10% tariff, above any additional Tariffs, on all of their many products coming into the United States of America.”
49: Uruguay’s left-wing opposition leader Yamandú Orsiwon the small South American country’s presidential election with 49% of the vote in a neck-and-neck runoff contest on Sunday. It was yet another rebuke of an incumbent party — the theme of many global elections this year — but not to worry: Uruguay is remarkably stable, and Orsi is a moderate with no radical plans.
1: One crew member died on Monday when a DHL cargo flight crashed during its attempted landing in Vilnius, Lithuania, with surveillance video showing a huge ball of flames as the plane went down. Lithuanian officials said they could not rule out whether Russia played a role in the crash, following months of suspicions over Moscow’s possible role in other cases of sabotage against the German shipping giant. Germany, meanwhile, is sending investigators to Vilnius to aid with the probe.
3: Human Rights Watch has determined that an Israeli drone strike that killed three journalists in Lebanon last month was most likely a deliberate attack on civilians, which is a war crime. More than 3,500 people in Lebanon have died amid Israel’s invasion, and more than 1 million have been displaced from their homes in the 5.3-million-strong country.
300: Asylum applications in Ireland have spiked 300% so far this year – with a fourfold increase from Nigeria – compared to last. The rise has been driven by tougher immigration stances in the UK, including a quixotic plan to house asylum-seekers in Rwanda. The uptick is becoming a political issue in Ireland, with voters increasingly concerned by the impact of increased migration on scarce housing.