Venezuela in crisis, wine wars in France. 9 to 15 April: What just happened?
Empty supermarket shelves, rising violence, power cuts - what’s going on in Venezuela?
Various reports this week describe the economic situation in Venezuela as a “crisis’, a “complete disaster”, even a “descent into chaos”. Food, medicine, and power are in short supply, prices are shooting up, and social tension is getting worse. The situation is very complicated. The country traditionally earned most of its money by exporting massive amounts of oil to other parts of the world. But the oil price has fallen to its lowest rate for years, meaning much less money is coming in. ‘Money’ here means US dollars - the currency used for buying stuff from other countries, which it needs to do because it doesn’t produce enough food itself. It gets even more complicated when you consider the politics involved. The current left-wing government is under pressure due to the present state of the economy. It’s blaming the current crisis on the global elites that control the oil trade - that an “economic war” is being waged on the country. The right-wing opposition blames the government itself, saying its “socialist project” is failing to provide the population with a basic standard of living. Where the truth lies is anyone’s guess. What’s undeniable is that the economic threads that tie Venezuelan society together seem to be rapidly unwinding.
Thought the whole tax haven story had run its course? Nope!
Just 11 days following the ‘Panama Papers’ revelations, Oxfam have released a report that claims US corporations have up to $1.4 trillion hidden away in tax havens. What’s more, while the top 50 companies paid a reported $1 trillion in tax between 2008 and 2014, they received over $11.2 trillion in government financial assistance during the same period. Oxfam’s annoyed about this, not just because they think everyone should pay their tax, but because they believe there’s a direct link between tax avoidance and growing inequality around the world. This time Apple, Microsoft, Walmart and others are facing the heat. Apple tops Oxfam’s list, with something like $181 billion held offshore in three offshore companies; while General Electric comes second with $119 billion held in 118 different tax haven companies. You can see how this all works when you consider where many of these companies report their profits being made. In 2012, US companies reported £80 billion of profit in Bermuda (pop. 65,000), more than their combined reported profits in Japan, China, Germany and France (combined pop. 1.65 billion), four of the world’s five largest economies. Really??
One of the world's largest coal companies is bankrupt. This is big.
On Wednesday, Peabody Energy, the world’s largest private-sector coal company filed for bankruptcy in the US. Almost half of the energy used in the US came from coal until 20 years ago, and Peabody was the main supplier. So why the sudden crash? Loads of reasons. A big one is China, who are buying way less coal than they used to. Plus, governments around the world are under more and more pressure to find greener ways to produce energy: nuclear and renewables provide almost a third of all US energy nowadays, and fracking is becoming more popular too (though not with everyone). Now Peabody is $10.1 billion in debt. Oops. And it’s not just about the money. The company has laid off 20% of its global workforce in the last three years. The same story has been played out in the UK, a country whose coal industry has been in decline for decades. It’s not that energy demands are down in these countries, but that cheaper energy is often being supplied from abroad. Peabody’s problems show how changing trends, which some people think are good in the long-term (like more sustainable energy sources), can be bad news for a lot of people here and now.
We’re depressed, and it’s costing trillions
A new report by the World Health Organization has found the anxiety and depression are costing the world economy nearly $1 trillion a year in lost productivity, as well as “untold human misery”. Without treatment, the WHO reckon that up to 12 billion working days might be lost by the year 2030. To put it another way: that’s 50 million years of work! That’s the bad news. The good news is that if we can find a way to treat it, then for every $1 spent, we can recoup $4 in better health and the ability to work. Mental health has been underfunded for decades, largely because for a long time, people weren’t very willing to talk about it openly, and didn’t take it as seriously as physical health problems: perhaps these arguments proving how essential it is to the economy will help people recognise just how important the issue really is.
Welcome to the ‘wine wars’
Last week around 100 French winemakers stopped four trucks carrying imported wine from Spain and emptied the contents – all 70,000 litres of it – onto the road. That’s one hell of a Sangria session! The French winemakers claim that cheap imports from across the border are threatening their livelihoods. They say Spain is flooding the French market with cut-price plonk, diluting it with even cheaper wine from South America. The Spanish say this is all nonsense. Italy and Spain both produce cheaper wine than the French, who bought 580m litres of the stuff from Spain in 2014. Spain’s head wine honcho Rafael del Rey says “... we make good wine at good prices. I can see why competitors don’t like that, but it’s life; it’s the economy.” But the French say regulations are much tighter in France, meaning they couldn’t produce wine at that price even if they wanted to. Zut alors!
So where do most female billionaires come from?
The answer is China, which according to new research, is now home to 49 of the 73 self-made female billionaires worldwide. Leading the way is Zhou Qunfei, the founder of Lens, which makes touch screens for mobile devices, supplying the likes of Apple and Samsung. Known for sleeping in her office, she’s currently reckoned to be worth $7.8 billion, and is one of many women scaling the heights of business in China. The rest live in the US, UK, and just six other countries. But this elite group are not reflective of the country as a whole. Sadly, they’re the exception, not the rule. Over half of entry-level jobs are filled by women in China, but they’re still only 8% of boards and 9% of executive committees. It seems, that despite this high-level success, there’s still a long way to go in achieving gender equality in the workplace here, as with the rest of the world.
Heroin? Cocaine? No thanks, we prefer cheese and sausages
Six highly trained sniffer dogs at Manchester Airport in the UK failed to uncover any ‘class A’ drugs during a seven-month period last year. Instead they mostly found “cheese and sausages”, which would certainly make a better lunch than heroin pie. So what’s this got to do with the economy, you might ask? Well, they did cost the UK government (and therefore the taxpayer) some £1.25 million, which is no small chunk of change. The idea was that they’d help stop the black market trade in narcotics in the country, which is worth around £6 billion a year – which seems strange given that the UK decided to add the money made from the sale of illegal drugs and prostitution to its GDP figures from 2014 after the EU suggested it. So the plan is: invest £1.25 million in blocking the drugs from getting in, but if they do get through, count them as economic success anyway. Confused? We are. And so are the dogs at Manchester Airport!