Plus: Flag of the day
IN TODAY’S EDITION
1️⃣ The IMF outlook’s four intriguing lines |
2️⃣ Flag of the day |
3️⃣ Can you trademark a drug lord’s name? |
Hi Intriguer. Over the next week and change, Washington DC is playing host to International Intrigue’s first US-based event as well as the Spring Meetings of the IMF and World Bank!
Imagine: a gorgeous venue, exquisite hors d'oeuvres and apéritifs, and a room full of the world’s most formidable minds gathered to better understand our most pressing challenges, and… the IMF/World Bank meetings, all happening within a week! What a town DC is.
On that frightfully witty note, you can register here to meet my Intrigue co-founder Helen Zhang and the Intrigue team, as well as hear from bestselling author and former French spy, Jack Beaumont.
It’s 6:00 PM ET on Wednesday, April 24 at Immigrant Food at Planet Word.
Now, after teasing you about the IMF/World Bank Spring Meetings, we’d better tell you what they’ve actually been up to, so let’s crack on with our top story.
Congress to vote on $95B in military aid.
The US House of Representatives will vote on separate aid bills for Ukraine, Israel, and US allies in Asia as soon as this Saturday, according to Speaker Mike Johnson. He’s also introduced a border security bill. Some members of Johnson’s Republican Party have staunchly opposed further US military aid to Ukraine, and have threatened to oust him as Speaker.
Biden proposes additional tariffs on Chinese steel.
US President Joe Biden has announced plans to triple the import tariffs on Chinese steel during a visit to Pittsburgh, the home of US steelmaking. “The bottom line is I want fair competition with China, not conflict”. We’re guessing he wouldn’t mind a few votes from local steelworkers either.
No party wins majority in Croatia.
The ruling Croatian Democratic Union (HDZ) party looks to have won the most votes in parliamentary elections yesterday (Wednesday), but has fallen short of a majority. The Social Democrats, led by President Zoran Milanović (a critic of the EU and NATO), came second. Negotiations to form a coalition government are underway, though neither party appears to have a straight path to power.
US reinstates Venezuela oil sanctions.
The White House has announced it’s letting a Venezuela oil sanctions relief package expire, due to the Maduro regime’s lack of progress towards free and fair elections. Maduro committed last year to letting opposition figures run against him, but authorities went on to disqualify the leading candidate. The election is scheduled for Sunday July 28.
EU wants explanations from TikTok.
The EU Commission has given TikTok 24 hours to present a risk assessment on its new app, TikTok Lite, which operates on a controversial ‘watch-and-get-rewarded’ system. The app launched in France and Spain this month.
TOP STORY
The four most intriguing lines from the IMF’s World Economic Outlook
Bulgarian economist and IMF chief, Kristalina Georgieva
The International Monetary Fund (IMF) just dropped its latest World Economic Outlook. Didn't have time to read all 202 pages? We got you.
Okay, full disclosure: it opens with 20 pages of throat-clearing, and closes with 75 pages of charts and data, so it’s more like 107 pages. But still, we got you.
Here are the four most intriguing lines from the report.
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"The risk of a hard landing has faded"
Even the IMF itself seems a little surprised by this, conceding that world growth has exceeded its own projections, even as high interest rates help curb inflation.
How? It’s partly thanks to government spending, wealthier households dipping into their pandemic savings, and more migrants helping fill labour shortages.
But also, some of the fears – like spikes in energy costs caused by Russia’s invasion, or higher shipping costs caused by Houthi missiles – haven't fully materialised. Why? One factor is that a "non-Western-aligned oil tanker fleet" is still bringing Russia's sanctioned energy exports to world markets. But…
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"Medium-term prospects remain the lowest in decades"
The IMF here blames a mix of short-term factors like high borrowing costs, plus longer-term factors like “geo-economic fragmentation” – ie, the emergence of rival US and China-aligned 'blocs'. The idea is that these blocs can disrupt the movement of cash, people, and ideas to where they might be most productive. And to complicate things further…
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"The likelihood of spillovers has increased"
As emerging economies have, well… emerged, this also means they're "no longer just on the receiving end" of big global shocks like the 2008-09 financial crisis. They now also risk being the source of those shocks, with global spillovers.
China’s sheer size means it leads the pack, bringing positive shocks like its earlier breakneck growth, to hoover up the world's exports. But it also risks negative shocks, whether it’s the ability to ramp up production and hit jobs elsewhere, or the risk of a steeper property crash rippling through the world's energy, mining, and transport sectors. So therefore…
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We need to "consider strengthening fiscal positions"
The IMF is only too happy to offer suggestions, even though many of them are practically or politically tricky. For example, it calls for governments to cut deficits so their balance sheets are braced for the next shock. But the IMF also concedes that’s a tough call during this 'Great Election Year' around the world.
The IMF also encourages countries to diversify their trade to help dilute shocks. And that makes sense in theory, but if you're (say) a soy farmer in Brazil, all the customers in the world can't replace China, which buys 60% of all soybeans.
Finally, the IMF also warns against the disruptive risks of "protectionist policies" (eg, tariffs) and "industrial policies" (backing specific industries). And again, the theory is sound, but the reality is alarming if you're an auto worker in Bavaria who’s just finding out that China has a Porsche Taycan lookalike for $29k.
INTRIGUE’S TAKE
These kinds of IMF projections can generate some easy headlines (see below), but they're also a useful and credible barometer for our world. And overall, that barometer is now telling us two things.
First, our world's economy seems more resilient than we realise: we somehow shrugged off years of gloomy predictions to keep growing the pie.
But second, our world is starting to bump up against the limits of what we can do under current settings: growth is tapering off, debt is maxing out, and lower-income economies are struggling to close the gap.
So for us, the big picture here is that, as jarring as this may sound for those of us born into an historic blip of prosperity and security, nothing is inevitable.
Honourable mentions:
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The IMF expects that, generally, the benefits of "AI’s enhancement of labor productivity” will outweigh the costs from AI replacing workers.
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"Nearly two in every three new [workers] over the medium term will come from India and sub-Saharan Africa".
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"In low-income countries, interest payments are estimated to average 14.3% of general government revenues in 2024, about double the level 15 years ago."
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The IMF projects the US to grow 2.7% this year, double the rate of G7 peers. China is facing “dimmer prospects” at 4.6%, while India eases to 6.8%, and Latin America to 2%. Africa is speeding up to 3.8%.
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MEANWHILE, ELSEWHERE…
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🇰🇷 South Korea: Seoul has “strongly protested” against an annual Japanese report renewing Tokyo’s claims over contested islets off Korea’s east coast. The two neighbours (plus North Korea) cite various historical records to bolster their conflicting claims, but South Korea has controlled the Dokdo islets since 1952.
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🇷🇺 Russia: The Kremlin has announced it’s withdrawing all of Russia’s 1,960 peacekeepers from Nagorno-Karabakh, months after they watched Azerbaijan seize the enclave of ethnic Armenians. Russia’s peacekeeping mission there was set to end next year, but Moscow is now diverting all its resources towards its invasion of Ukraine.
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🇦🇺 Australia: Canberra has unveiled its first-ever National Defence Strategy, pursuing a ‘strategy of denial’ with the US to “ensure no country attempts to achieve its regional objectives through military action”. It involves USD$32B in extra defence spending over the next decade, across land, air, sea, cyber, and space.
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🇭🇳 Honduras: The foreign minister says Honduras will be recalling its top diplomat from Ecuador in response to a widely criticised police raid on the Mexican embassy in Ecuador earlier this month. Venezuela, Nicaragua, and Mexico have already severed diplomatic ties with Ecuador.
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🇹🇳 Tunisia: Italian Prime Minister Giorgia Meloni has travelled to Tunisia to meet President Kais Saied, signing new deals aimed at stabilising Tunisia’s economy and halting irregular migration to Europe. This is Meloni’s fourth trip to Tunisia in less than a year.
EXTRA INTRIGUE
Here’s what’s happening in other worlds
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Art: New York’s Metropolitan Museum of Art has returned a small copper statue to Iraq after researchers deemed the artefact, dating from the third millennium B.C., was likely looted.
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Society: An EU court has ruled that the name of the late drug lord ‘Pablo Escobar’ cannot be trademarked after his brother attempted to file a claim.
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Sport: The organisers of Beijing’s half-marathon have launched an investigation after three African athletes appeared to let China's top runner, He Jie, win the race.
FLAG OF THE DAY
Zimbabwe (formerly Rhodesia) gained its independence from the UK on this day in 1980. To mark the occasion, it adopted a brand-new flag featuring the ‘Zimbabwe Bird’ derived from sculptures found in the country’s mediaeval ruins.
The flag’s red star is associated with socialism, while its white triangle represents peace. The remaining space includes black (representing heritage), green (symbolising agriculture), gold (for its mineral wealth), and red (for the struggle of its people).
Intrigue’s rating: 9.3/10.
DAILY POLL
Should lowering debt be a priority for your government? |
Yesterday’s poll: What role do you see AI playing in our world's future?
🟨🟨🟨🟨⬜️⬜️ 🤖 It's gonna change everything (43%)
🟩🟩🟩🟩🟩🟩 📊 It'll change a lot, but there's still too much hype (53%)
⬜️⬜️⬜️⬜️⬜️⬜️ 🤷 Meh (3%)
⬜️⬜️⬜️⬜️⬜️⬜️ ✍️ Other (write in!) (2%)
Your two cents:
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📊 A: “Since developers will apparently run out of fresh training data by 2026, I think we can safely put aside our fears of the robots for the moment.”
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🤖 A.R: “I remember in 1989 sitting in a corporate meeting and marketing was playing the dancing baby from the Internet and I thought this will be a fad. I won’t make that mistake again.”
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✍️ M.C.M: “What role will governments play in it? How will producers and consumers integrate it into their industries and lives, respectively? Many questions, few answers for now.”
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🤖 J.R: “It will take a while, but AI will eventually take over most of the jobs in the world, leaving us to sit on our hands and wait to see if it considers us worth supporting in our idleness.”
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