Europe and Africa “need each other more than ever before” in a global economy that is becoming “more confrontational,” European Commission President Ursula von der Leyen said on Monday.
Speaking at the European Union-African Union summit in the Angolan capital of Luanda, von der Leyen said the two continents must deepen economic cooperation in an era of trade barriers, global overcapacity and export restrictions.
Von der Leyen said she sees the potential for the expansion of existing trade relations, even though a third of African exports already go to Europe.
She also pointed to the EU’s Global Gateway agenda, which she called “more than an infrastructure development programme,” highlighting the example of the Lobito Corridor in southern Africa.
At the last EU-African Union summit three years ago, a goal was agreed to invest a total of €150 billion ($173 billion) in Africa by 2027, von der Leyen said.
More than €120 billion has already been mobilized, she said, arguing that “at a time when other major investors are rethinking their global engagement, Europe’s commitment to Africa is here to stay.”
“The case for Africa and Europe to join forces is overwhelming,” the European Commission president said. “Let us find new ways of doing so. Let us walk this path together.”
Leaders from the two blocs are convening in Luanda amid a whirlwind of international diplomacy in southern Africa on the heels of a G20 summit in Johannesburg, the first such meeting on African soil.
The talks have arguably been overshadowed by frantic discussions on the controversial US peace plan for Ukraine, with EU leaders including German Chancellor Friedrich Merz holding a meeting on the proposal in Luanda on Monday.
On the first day of the summit, officials were set to cover a range of issues, including peace, security and multilateral cooperation, migration, mobility and prosperity, before a joint declaration is released on Tuesday.
The EU currently deploys 12 civilian and military missions and operations on the continent, including in Libya, Mali, Somalia and the Central African Republic, most of which are aimed at supporting counterterrorism efforts, increasing stability and conflict prevention.
But both sides are also looking to further increase cooperation across other areas, 25 years since the first EU-AU summit was held in Cairo in 2000.
President of the European Council Antonio Costa (L) and President of the European Commission Ursula von der Leyen make a statement after the informal talks between EU heads of government on Ukraine at the EU-Africa Summit. Dati Bendo/European Commission/dpa
WASHINGTON (AP) — The American economy expanded at a healthy 3% annual pace from April through June, boosted by strong consumer spending and business investment, the government said, leaving its previous estimate unchanged.
The nation’s gross domestic product — the nation’s total output of goods and services — picked up sharply in the second quarter from the tepid 1.6% annual rate in the first three months of the year.
Consumer spending, the primary driver of the economy, grew last quarter at a 2.8% pace, down slightly from the 2.9% rate the government had previously estimated.
The final GDP estimate for the April-June quarter included figures showing that inflation continues to ease, to just above the Federal Reserve’s 2% target.
People in China are so discouraged about the economic outlook that many have taken to social media to call it the “garbage time of history,” referring to the end of NBA games when the result is settled and players go through the motions until time runs out.
Use of the phrase earned rebukes from state-run media over the summer, but it tapped into a deepening gloom that has spread to Wall Street as fresh data point to worsening weakness in top economic drivers. Bank of America recently cut its 2024 growth forecast to 4.8% from 5% and sees further slowing in the next two years to 4.5%.
In an article for the China Leadership Monitor last weekend, Rhodium Group partner Logan Wright said that while China is still growing faster many other countries, its global influence probably peaked in 2021.
That’s when it reached 18.3% of world GDP, before dipping to 16.9% in 2023. Meanwhile, the U.S. share is sitting at about 25%.
The problem isn’t just cyclical. Wright said “the primary reason that China’s economic slowdown is structural in nature is one that Beijing acknowledges: the credit and investment-led growth model has reached a dead end.”
All that capital fed massive property construction and infrastructure development. But noting has replaced them as growth drivers, and China’s teetering financial system is unlikely to give rise to any new ones, he wrote.
Credit expansion will slow, dragging down investment growth and the economy’s long-term prospects, he said. Meanwhile, the political leadership’s fear of letting defaults, bankruptcies and unemployment rise is preventing the financial system from channeling capital to more productive sectors of the economy.
“The financial system itself is now constraining China’s economic growth rather than facilitating it,” Wright explained. “In addition to demographics and the changing external environment, financial constraints are the primary reason why China’s economic slowdown is structural in nature and why China’s economy is likely to grow at rates below potential over the next decade.”
To be sure, Beijing has known its old growth model couldn’t last and has promoted advanced manufacturing in emerging sectors like EVs and green energy as alternatives. But those aren’t big enough to offset declining property or infrastructure construction, he said.
China’s leadership has also identified the need to rebalance the economy toward more consumption instead of investment. But that’s hampered by income inequality that requires an overhaul of fiscal policy to prioritize transfer payments that boost household spending.
Given the obstacles, what’s likely to happen is that consumption growth will continue to decline gradually and weigh on future economic growth, Wright predicted.
President Xi Jinping and China’s other leaders may not fully grasp the severity of the situation, as the official economic statistics they digest look increasingly dubious. At the same time, they also appear fixated on overtaking the U.S. as the world’s top economy.
But if Xi and company can change their worldview, it could help the Chinese economy, Wright said. For example, export-led growth that relies on taking global market share sparks trade barriers. By contrast, focusing more on domestic consumption could reduce trade conflicts.
Still, he’s not convinced it will happen.
“China’s economy peaking in global influence also offers Beijing a new opportunity to realistically redefine its goals and to become less confrontational with the rest of the world’s economic and political interests,” he said. “But we are under no illusions that such a redefinition is probable.”
The warning comes as investors have also been jolted recently by red flags about China’s economy.
PDD Holdings, the parent company of e-commerce giant Temu, stunned Wall Street last month with weak quarterly results and a warning that intense competition will dampen future profits. Shares sank more than 30%, wiping out $50 billion in PDD’s market value.
That was the latest warning sign that the world’s second-largest economy could be headed for a downward spiral caused by overproduction and Beijing’s industrial planning.
“Simply put, in many crucial economic sectors, China is producing far more output than it, or foreign markets, can sustainably absorb,” wrote Zongyuan Zoe Liu, a China scholar at the Council on Foreign Relations, in Foreign Affairs magazine before the PDD reported earnings. “As a result, the Chinese economy runs the risk of getting caught in a doom loop of falling prices, insolvency, factory closures, and, ultimately, job losses.”
Recommended reading: In our new special issue, a Wall Street legend gets a radical makeover, a tale of crypto iniquity, misbehaving poultry royalty, and more. Read the stories.
We continue to read headlines about how artificial intelligence (AI) can substantially increase labor productivity across the global economy, creating both time and informational efficiencies. Yet there seems to be an argument about where and how this can revolutionize the world of education. As districts become increasingly more data driven, we need to accept that AI is here to stay and leverage information management solutions to drive student outcomes.
Tracking and managing data plays a critical role in the success of our students, so now more than ever, there is a fundamental need for districts to implement a modern solution partner to do that heavy lifting. Manually building spreadsheets, pulling out pivot tables, and building formulas and dashboards from scratch can waste our valuable time and resources. What might take days, or even weeks, for an administrator to input can be done in seconds by the right software. Intelligent educational software instantly recognizes patterns in data, even when they are not immediately apparent. This can be crucial for identifying trends, correlations, or factors influencing student performance that might be overlooked by manual analysis.
Ultimately, data management software allows us to shift our focus to having the right conversations, providing personalized learning experiences, delivering targeted support, and making impactful decisions to promote student success.
Here are three ways a modern data solution can improve student outcomes in your district:
Create collaboration among stakeholders
A solution that centralizes, consolidates, and synthesizes data can drive conversation among school counselors, psychologists, administrators, intervention specialists, classroom teachers, and anyone else invested in students’ success. It allows the team to support the whole child by seeing students’ data through a variety of different lenses, ultimately enabling classroom teachers to make informed decisions and improve the overall learning experience for their students—and this can be initially accomplished through the use of just a few key dashboards.
As our district sees the effects of these initial dashboards come to life, we know that our students are more likely to succeed if families are engaged in their learning. A dashboard that tells the story of the whole child allows teachers to share data-driven insights with students and families, providing a clear picture of academic progress. Seeing a report card once a semester isn’t enough for families to understand how their kids are doing, and a modern data solution allows families to see trends over time in academics, mental health, attendance, and more. This provides families with clear, easy-to-understand visualizations of their child’s performance and challenges, enabling collaborative efforts to support student learning both inside and outside the classroom.
Identify patterns for at-risk students to provide real-time support
No student can be evaluated for at-risk behavior by test scores alone. By tracking attendance, behavioral patterns, mental health, grades, and other key markers, educators can pinpoint students who may be struggling and intervene before issues escalate.
The software provides data in real-time—which is crucial for identifying students at risk of academic challenges or dropping out. Data analysis software also creates algorithms and allows for the identification of patterns and trends in student performance. This proactive approach of using consistent dashboards each week allows us to quickly see which students are in the at-risk category, and drive immediate conversations about those specific students.
Create individualized support and pathways
A modern data solution can create personalized student experiences by tailoring educational content, support, and interactions to meet individual needs and preferences. The software can do a deep dive into each student’s history and instantaneously outline what’s needed to reach personal goals in academics, career readiness, and social-emotional skill building. We can clearly see enabling students to define and track their progress toward goals and plans in our roadmap, as we continue to empower students to take an active role in managing their own future.
We can also explore using a modern data solution to help students easily connect with community partners, courses, or other resources. This includes students accessing opportunities like: job shadowing, career mentorship, informational interviews, internships, and practicums. As schools are finding value by weaving in a variety of student-centered experiences with real-life and relevant learning activities into their curriculum, students can use the software to log hours and keep them on track.
Data management platforms have the potential to revolutionize education in many ways, transforming the traditional model of teaching and learning. By leveraging algorithms and analytics, a modern data solution can analyze data in real-time, providing educators with immediate insights to make informed, timely decisions that positively impact student success. Ultimately, it frees educators to get back to doing what they do best—challenging and supporting every student, every step of the way.
Keith Pomeroy, Upper Arlington Schools
Keith Pomeroy is the Chief Administrative Officer for Upper Arlington Schools in Columbus, OH. He previously served as the Director of Technology at Olentangy Local School District in Lewis Center, OH and New Albany-Plain Local Schools in New Albany, OH.
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TAIPEI — 2024 will be a bumper year of elections around the world, but one of the first votes on the calendar will also be one of the most hotly contested and consequential: Taiwan, where there are vital strategic interests at play for both the U.S. and China on January 13.
If the campaign started with expectations in the U.S. that the ruling, pro-independence Democratic Progressive Party (DPP), whose top brass are frequent and welcome guests in Washington, would stroll to victory, the final stages of the presidential and legislative race have turned into a nail-biter.
Chinese President’s Xi Jinping’s Communist Party leadership, increasingly assertive in its claim that democratic Taiwan is part of China and keen to see the ruling party in Taipei ousted, is trying to swing the election through a disinformation campaign of hoaxes and outlandish claims on social media.
And the tactics may be working. The latest polls for the first-past-the-post presidential race on the My Formosa portal have DPP leader William Lai on 35.2 percent, only just keeping his nose out in front of his main challenger from the Beijing-friendly Kuomintang (KMT), Hou Yu-ih,on 30.6 percent. On Tuesday, the Beijing-leaning United Daily News put both candidates on 31 percent.
“This is not a walk in the park,” admitted Vincent Chao, a city councillor and prominent DPP personality, speaking to POLITICO’s Power Play podcast at a campaign event in New Taipei, a municipality surrounding the capital.
It could hardly be a more febrile period in terms of security fears over the Taiwan Strait, where insistent Chinese maneuvering has been matched by a high-stakes U.S.-backed boost to the island’s defenses. Only on December 15, the U.S. approved another $300 million of spending on defense kit, sparking a retort from China that the expenditure would harm “security interests and threaten peace and stability across the Taiwan Strait.”
Lai’s opponents are playing hard on these security implications of the vote, and are accusing him of bringing the island closer to conflict because of his past comments in favor of the island’s independence. China has, after all, continually warned that independence “means war” and Xi has said Beijing is willing to use “all necessary measures” to secure unification. Lai has hit back that his rivals “are parroting the [Chinese Communist Party line] as propaganda to score electoral benefits.”
For the global economy, open war over Taiwan would be a disaster, perhaps even outstripping the shock of Russia’s invasion of Ukraine, due in particular to the island’s critical role in microchip supplies.
Head-to-head race
The specter of a DPP defeat has raised the temperature of the fevered last few weeks of the campaign.
Chao, the DPP councillor and a former political secretary in Taiwan’s Washington representation, admitted that the DPP ends the year in “a head-to-head race” in the final stretch. “I mean, it’s democracy and the party has been in power for eight years. Anything could change,” he said.
Wearing a jaunty white and green “Team Taiwan” tracksuit, the party’s signature colors, he talks above the backstage din of an evening event, held among the tower block estates of New Taipei. Volunteers hand out pork dumplings, the outgoing president Tsai Ing-wen gives a rousing speech about freedom and security, and there are ballads of national loyalty and singalong love songs. It feels heartfelt, but also very Taiwanese in its orderliness, the crowd sitting on stools in the evening heat, waving small flags in unison.
Chao is candid about the scale of China’s social media offensive.
The specter of a DPP defeat has raised the temperature of the fevered last few weeks of the campaign | Annabelle Chih/Getty Images
“What we’re seeing is a much more sophisticated China,” Chao reflected. “They’ve grown much more confident in their abilities to influence our elections, not through military coercion or other overt means, but through disinformation, through influencing public opinion, through controlling the information that people see … through social media organizations like TikTok.”
One of the many unfounded stories that gained currency on social posts was a claim the U.S. had asked Taiwan to develop biological weapons research, a rumor aimed at raising anxiety about an arms race. Another accused the DPP of covert surveillance of its rivals.
Trade and business links are another lever. According to Japan’s Nikkei newspaper, some 300 executives from big Taiwanese businesses operating China were called to a meeting by by China’s Taiwan Affairs Office Director Song Tao, a close ally of China’s President Xi, in early December and roundly encouraged to fly home to Taiwan support a pro-Beijing outcome in January.
A third concern is an international system buckling under new conflicts and crises, with less time to devote to Taiwan’s freedoms, all compounded by an uncertain outcome in the upcoming U.S. election. In the wake of Beijing’s ’s clampdown on freedoms in Hong Kong and with the backwash of the Ukraine crisis, anxieties run high among DPP supporters about Taiwan’s outlook and the need for high levels of deterrence.
“We really do not want to be the next Ukraine,” Chao added, with feeling.
Bending with Beijing
Opinion is strongly divided about the smartest tactical response toward China’s muscle flexing.
Opinion is strongly divided about the smartest tactical response toward China’s muscle flexing. | Annabelle Chih/Getty Images
Across town, at one of the opposition’s bases, where campaigners wear tracksuits in the white and blue of the Kuomintang party, International Relations Director Alexander Huang said his political troops were “within touching distance” of a possible victory.
Keen to shake off a reputation of being reflexively pro-China, as opposed to merely cautious about riling its powerful neighbour, the KMT hosted cocktails for foreign journalists in a trendy, Christmas-decorated bar, bringing together Chinese news-agency writers with Western reporters covering the election.
Huang, who hails from a military intelligence background and studied Chinese military and security doctrine in Washington, argued renewed Western support and commitments of defence expenditure by the U.S. administration increased the risk of something backfiring over Taiwan’s security. “We are under a great military threat [from China],” he told Power Play. “Our position is deterrence without provocation: assurance without appeasement.”
He also reckoned the current chilly relations between the governing DPP party and Beijing were widening distrust. “Our current government has no direct communication with the other side. If you are not able to communicate your view to your adversary, how can you change that?”
It’s less clear what reassurances the KMT expects from Beijing in return for a more accommodating relationship. Huang cites a possible decrease in trade tensions, which can hit Taiwanese agriculture and fishing when Beijing turns the screws, and further action on climate change and pollution (Taiwan is downwind of China’s emissions).
Colorful cast
The race certainly does not lack for colorful personalities.
The DPP’s presidential candidate, Lai, is a doctor and parliamentarian, while his KMT rival Hou is a former policeman and mayor in New Taipei. Mindful that the mood has become cynical about political elites, both sides have chosen frontmen who can claim humble roots: Hou hails from a family that scratched a living as food market traders, while Lai, the epitome of a slick Taiwanese professional, grew up with a widowed mother after his father died in a mining accident.
Hou is a former policeman and mayor in New Taipei | Annabelle Chih/Getty Images
The “Veep” contenders are flashier than the main candidates and more media-friendly. Hsiao Bi-khim, educated in the U.S. and until recently ambassador to Washington, is a pet-lover who styles herself as an agile “cat warrior” in stark contrast to China’s pugnacious “wolf-warrior” diplomats. Her KMT opponent is Jaw Shaw-kong, a formidable, populist-tinged debater and TV personality, who channels overt pro-Beijing sentiment, recently calling for more alignment in military planning with China’s leadership.
The billionaire Foxconn founder Terry Gou, who had run as a maverick, wafting pets as incentives to couples to have more babies to combat a worryingly low birthrate, quit the race after China’s tax authorities launched punitive investigations into his company, the builder of iPhones.
Russell Hsiao of the Global Taiwan Institute, a non-partisan research organization, reckoned that even if the DPP wins, its mandate will be less compelling than in the glory days of 2020, when it surged to a record level.
The guessing game of how likely an intervention — or even invasion — by China is helps explain the nervy tenor of this race.
The KMT’s Huang thought a “full-scale, kinetic invasion” is unlikely in the immediate future. How long does he think that guarantee would hold? “I would say not for the next five years, if we get our policy right.”
Hardly the most durable time-frame.
Taipei politics being a small world, Huang is a longstanding frenemy of the DPP’s Chao, who counters that Taiwan urgently needs to retain its defiant stance and deepen its strategic alliances with the West. They just disagree widely on the means to secure its future.
“The aim of [Beijing’s] engagements is unification … by force if necessary. Democracy, freedom, they are not just words. They represent what our people sincerely believe and hope to uphold.”
Stuart Lau contributed reporting.
Anne McElvoy is host of POLITICO’s weekly Power Play interview podcast, whose latest episode comes from the Taiwan election campaign.
The fall of House Speaker Kevin McCarthy today demonstrated again that the one sin that cannot be forgiven in the modern Republican Party is being seen as failing to fight the Democratic agenda by any means necessary.
Of all the accusations that could be leveled against McCarthy, the notion that he was insufficiently committed to battling Democrats would not seem high on the list. As the GOP minority leader in the previous Congress, McCarthy voted to reject the 2020 election results in two key states and tried to impede the House committee that investigated the January 6 insurrection. Then, as speaker this year, he backed the GOP vote last summer to censure Democratic Representative Adam Schiff over his role in investigating former President Donald Trump while Democrats held the majority; empowered hard-line Republican conservatives to undertake sweeping investigations of President Joe Biden’s administration as well as his son Hunter; and even launched, on his own authority, an impeachment inquiry into the president without any hard evidence of wrongdoing.
Yet on two occasions this year, McCarthy refused to risk chaos in the domestic and global economy, choosing instead to accept bipartisan deals with Democrats, first to avoid default on the federal debt and then to keep the federal government open when it faced a possible shutdown last weekend. And that was simply too much collaboration for the eight hard-line conservative Republicans who voted to remove him today, making him the first speaker ever forced out by a motion to vacate the position.
The proximate cause of McCarthy’s fall was his decision, during his agonizing 15-ballot ascent to the speakership in January, to accept a change in House rules that allowed a single member to file a motion to remove him. That let Representative Matt Gaetz trigger the process that doomed McCarthy, even though the majority of the GOP conference voted to maintain him as their leader.
Yet McCarthy’s removal also underscored how the incentives in the modern GOP coalition now almost entirely push in one direction: toward greater conflict with Democrats and the embrace of polarizing policies that reflect the priorities and grievances of the GOP base. It’s no coincidence that critics accused McCarthy of not fighting hard enough for conservative demands at the same moment Trump and the other 2024 GOP presidential contestants are advancing militant ideas once considered politically radioactive, such as deploying the U.S. military into Mexico to attack drug cartels, ending birthright citizenship for the U.S.-born children of undocumented immigrants, ripping up civil-service protections for government workers, and dispatching the National Guard into blue cities to fight crime.
“Certainly if you step back at 30,000 feet, whatever the particular causes or idiosyncrasies of this decision, it will be part of a general sense of the party going further and further in this hard-line direction,” Bill Kristol, a conservative strategist, told me.
In one respect, McCarthy’s demise continues a cycle among House Republicans that now traces back nearly half a century. From the late 1970s through the ’80s, a coterie of combative young House members led by Newt Gingrich and Vin Weber rose to prominence by founding a group, called the Conservative Opportunity Society, that accused Republican congressional leaders—and, at times, even then-President Ronald Reagan—of negotiating too many deals with Democrats.
Gingrich’s pugnacious rejection of cooperation carried him to the speakership when Republicans recaptured the chamber in 1994, after four decades in the minority. But within a few years, Gingrich faced his own rebellion on the right from critics who thought he was too quick to cooperate with then-President Bill Clinton. Gingrich eventually resigned from the speakership under pressure after the GOP suffered unexpected House losses in the 1998 midterm election, following its move to impeach Clinton over his affair with a White House intern.
The pattern resurfaced after Republicans won a sweeping House majority in 2010. Representative John Boehner, an old-school Republican who ascended to the speakership, faced an unending barrage of criticism from conservatives rooted in the new Tea Party movement over his attempts to reach agreements with Democratic President Barack Obama to avoid a debt default or government shutdown. Boehner resigned from the speakership and Congress itself in 2015, one step ahead of conservative critics in his conference determined to remove him. The same dynamic unfolded under Boehner’s successor as speaker, Representative Paul Ryan, who only lasted two tumultuous terms before deciding to leave Congress and not seek reelection in 2018.
McCarthy found himself caught in the same undertow as Boehner and Ryan, with a portion of his conference immovably convinced that he was conceding too much ground to Democrats. “We saw it with Boehner and saw it with Ryan, and now this is, of course, the epitome of it,” former Democratic Representative David Price, a political scientist who has written several books on Congress, told me.
In the first speech from critics during the debate over McCarthy’s removal, Republican Representative Bob Good of Virginia echoed the arguments that the right had raised against Boehner and Ryan. After arriving in Congress in 2021, Good declared, he was frustrated that Republicans “had not used every tool at our disposal to fight against the harmful, radical Democrat agenda that is destroying the country.” McCarthy had promised something different, Good insisted, but had failed to take the fight to Democrats hard enough. “We need a speaker who will fight for something, anything, other than just staying or becoming speaker,” Good said.
The key difference from those earlier episodes is that the attack on McCarthy came even though he conceded far more to his critics on the right than Boehner or Ryan did. McCarthy’s strategy as speaker generally was to give the right almost everything it demanded and to expect the members from more competitive districts (including the 18 in districts that voted for Biden in 2020 and another 16 in seats that only narrowly preferred Trump) to eventually support him. By and large, they did so. And today, the members from that competitive terrain stood indivisibly beside McCarthy, perhaps fearful that whoever comes next would create even more problems for them. The Republicans from more competitive seats “are very much at risk in 2024, and yet I don’t know what their limits might be,” Price said. “They haven’t revealed that yet. And so all the attention is on the far right.”
As today’s vote demonstrated, most House Republicans were comfortable with McCarthy’s leadership. Yet the fact that a rump group of conservatives still rejected him after all his concessions to the right captures the seemingly boundless sense of urgency and threat that now animates the GOP coalition. For years, Trump and other party leaders have told their voters that the Democratic agenda represents an effort to erase and uproot America as these voters understand it; in his last public rally before the January 6 insurrection, Trump declared that if Democrats won control of the Senate, “America as you know it will be over, and it will never—I believe—be able to come back again.”
As Trump’s commanding lead in the GOP presidential race demonstrates, there’s enormous receptivity in the party for that apocalyptic message. And it’s those fears of being displaced in a changing America that have created the cycle in which the pressure on Republican congressional leaders perpetually pushes them toward harsher tactics and more aggressive policies. Former Republican Representative Tom Davis, who chaired the National Republican Congressional Committee, notes that the hard-liners who deposed McCarthy are accurately reflecting the views of their own voters. “It’s frustration and anger at Washington, and we are going to throw sand in the wheels at whatever they are going to do there,” Davis told me a few hours before McCarthy’s fall. “That’s the level of anger out there in these districts. Blame it on members, but voters elected these folks.”
The January 6 attack on the Capitol provided one grim measure of how that anger bubbling through large swaths of the Republican base can trigger tumultuous and destabilizing events. McCarthy’s removal today showed another. It’s not likely that either was the last.
NEW DELHI — The G20 endorsed language in support of Ukraine’s territorial integrity, but the group of the world’s biggest economies weakened a previous stance that directly blamed Russia for the war in Ukraine.
The joint communiqué for the G20 summit in India stated that all countries should “refrain from action against the territorial integrity and sovereignty or political independence of any state.” That language was unchanged from a draft first reported by POLITICO on Saturday.
The wording, which Western countries wanted in order to signal a continued anger at Russian President Vladimir Putin’s invasion of Ukraine, could also appease Moscow’s complaints that attacks inside Russia have escalated since Kyiv launched its counteroffensive. Russian Foreign Minister Sergey Lavrov was deeply involved in the weeks of negotiations leading to the final version.
But the joint statement didn’t include a direct condemnation of Russia’s invasion of Ukraine, which a G20 statement in Bali last November did. Some officials contend that a shift was the only way to get buy-in from some of the group’s more Moscow-friendly members — let alone the fact that Russia is also in the bloc.
Critics argued that U.S. President Joe Biden could have gotten more. Svitlana Romanko, founder and director of the pro-Ukraine group Razom We Stand, called the communiqué “weak” and “cowardly by not even mentioning Russia or its ongoing war crimes.”
But some G20 members say it reflected a fair compromise. “It is a fact that this is today a very polarizing issue and there are multiple views on this,” Indian External Affairs Minister Subrahmanyam Jaishankar said Saturday, referring to Ukraine. “Bali was a year ago, the situation was different. Many things have happened since then.”
There’s further language in the declaration that Western officials could herald as victories. It references adherence to the United Nations charter, which stipulates that no country can threaten another’s territory and sovereignty by force — a key demand of the U.S. and the EU in the run-up to the G20 summit. And it also calls for the “full, timely and effective implementation” of the Black Sea Grain Initiative which has stalled after Russia pulled out during the summer.
British Prime Minister Rishi Sunak has already touted the document as a “good and strong outcome.”
“What you’ll see in the communique is strong language, highlighting the impact of the war on food prices and food security, calling on Russia to re-enter the Black Sea grain initiative to allow exports to leave that part of the world and help feed millions of the most vulnerable people as well as the communique recognizing the principles of the U.N. charter respecting territorial integrity,” he said.
NEW DELHI — When world leaders gather at the G20 summit on Saturday morning, the smiles may be more awkward than usual.
While China’s Xi Jinping and Russia’s Vladimir Putin won’t be there, a B-list of strongmen with their own damning human rights records will be ready to embarrass the leaders of Western democracy with some stiff handshakes and fixed grins.
Some of these international bad guys also have played an increasingly assertive role in negotiations on the Ukraine war — interventions welcomed by the Ukrainian government. However unsavory their domestic records may be, that means they can’t be ignored.
Take Saudi Arabia’s Mohammed bin Salman. According to U.S. intelligence, he approved the gruesome murder of journalist Jamal Khashoggi. But last month, he hosted a multinational meeting in Jeddah aimed at kick-starting peace talks. He’s also staying on after the G20 for a state visit in India.
Turkey’s President Recep Tayyip Erdoğan, who has locked up thousands of political opponents and stifled media freedom, met Putin just this week in an effort to unblock grain shipments through the Red Sea.
One official involved in preparations for the summit in Delhi this week joked that the optics will be challenging. “No one wants that photo-op with MBS, let’s face it,” the official said.
But overall, Western diplomats are unapologetic about engaging with the bad boys of the G20 — reflecting a growing realization in Western capitals the battle to win minds on the Ukraine war is not working and needs buy-in from the countries beyond the affluent capitals of Europe and North America.
“I’m not here to issue scorecards,” said U.S. National Security Adviser Jake Sullivan, when asked this week if President Biden was relaying U.S. concerns about Narendra Modi’s record on religious and press freedoms during his multiple meetings with the Indian leader.
Biden is expected to hold a meeting with MBS, with whom he shared an infamous fist-bump last year, a sign to many that all had been forgiven.
One European official involved in the preparations praised India for its work behind the scenes in trying to get consensus on an agreement rather than settling on different positions.
“If they succeed, it shows that the G20 has a future,” said the official, who was granted anonymity to speak openly due to the sensitive nature of the matter.
Ukraine remained the most divisive issue for G20 diplomats trying to hammer out a summit communique, with negotiations continuing late into Friday night.
U.S. President Joe Biden is expected to hold a meeting with Saudi Arabia’s Mohammed bin Salman | Pool photo by Madel Ngan via AFP/Getty Images
G7 countries — and the EU — are demanding that the principles enshrined in the U.N. Charter on territorial integrity and national sovereignty are reflected in the language.
Also weighing on minds is the global economy. German Chancellor Olaf Scholz touches down in Delhi just as economic figures showed that industrial production in Europe’s economic powerhouse nose-dived again in July.
China is battling a slowing economy and a real-estate crisis. But it’s countries like India that are witnessing the kind of accelerated growth levels that suggest it is on the up.
In New Delhi, giant posters of a smiling Modi, India’s prime minister, speckle the routes downtown.
This is India’s moment in the sun. Modi’s government has used its stint in the chair to show it can play a more assertive role in the global order.
India’s self-confidence as it hosts the global shindig signals a deeper geopolitical shift.
Three western officials with direct knowledge of the summit preparations said Brazil and South Africa, in particular, were playing a key role behind the scenes in coordination with India to get consensus on a final summit declaration, the holy grail of gatherings such as this.
HIROSHIMA, Japan — As the leaders of the Group of Seven gather for their annual summit in Japan this week, three world-changing conflicts — past, present and potential — will converge.
The atomic bomb that ended World War II destroyed much of the city of Hiroshima, where the leaders will meet. Today, Russia’s war in Ukraine is costing thousands of lives and billions of dollars as it drags on. And then there’s the risk of another horrifying catastrophe to come, as China threatens Taiwan.
And it’s over China where the alliance may come unstuck.
For hawks like the U.S. and Japan, the summit beginning Friday offers a timely opportunity to make the case to Europe’s leaders directly that it’s time to get off the fence when it comes to confronting China.
“This G7 Summit will be an appropriate venue to also discuss security issues and our security cooperation not only in Europe, but also in the Indo-Pacific region,” Noriyuki Shikata, cabinet secretary at the Japanese prime minister’s office, told POLITICO.
The U.S. is betting on at least the appearance of common ground with allies about the People’s Republic of China. Ahead of the summit, U.S. National Security Council spokesperson John Kirby told reporters: “You can expect to hear at the end of those discussions that all the G7 leaders are of a common mind about how to deal with the challenges that the PRC presents.”
But — beyond the inevitably bland diplomatic lines of a summit communique — getting consensus on meaningful security measures for the Indo-Pacific region will be hard, even in the symbolic setting of Hiroshima.
East Asia is again descending into a state of growing security risks and military imbalance, this time due to China’s aggressive moves against Taiwan and the South China Sea.
“There’s a feeling that there’s a little bit of a gap, perhaps, between where the Europeans are on some China issues and where the U.S. is,” said Zack Cooper, former aide to the U.S. National Security Council and a senior fellow at the American Enterprise Institute.
Chief among the points of tension is how far to go in trying to stop a potential Chinese invasion of Taiwan, which could trigger world war and wreck the global economy. The self-governing island, which Beijing claims as its own, provides most of the world’s advanced computer chips that are vital to the tech and defense industries. Not all European governments are convinced it’s something they need to prioritize. “It’s going to be a continuing challenge,” Cooper said.
Picking friends
NATO is set to extend its footprint in Asia and set up a new liaison office in Tokyo to better coordinate with regional partners, such as Australia, South Korea and New Zealand.
However, French President Emmanuel Macron has repeatedly called on NATO to focus only on the Euro-Atlantic theater, saying Asia — China — is not covered geographically. He also triggered an outcry with recent comments to POLITICO, suggesting that Taiwan’s security was not Europe’s fight, and that the EU should not automatically follow America’s lead.
Justin Trudeau comes to the G7 following months of intelligence leaks that have painted his government as weak on foreign interference | Yuchi Yamazaki/AFP via Getty Images
Macron’s stance sets France — which is the EU’s biggest military power — apart from the U.S. and Japan, and also from the U.K., where Prime Minister Rishi Sunak is expected to announce a new security deal with Japan during his visit.
“Ukraine today could be East Asia tomorrow,” Japanese Prime Minister Fumio Kishida said last year, not long after Russia’s full-scale invasion began. Last week, Japan’s Foreign Minister Yoshimasa Hayashi made an even more explicit warning in a speech made to his 27 EU counterparts in Sweden.
“China is continuing and intensifying its unilateral attempts to change the status quo by force in the East and South China Seas. China is also increasing its military activities around Taiwan,” Hayashi said. “In addition, China and Russia are strengthening their military collaboration, including joint flights of their bombers and joint naval exercises in the vicinity of Japan.”
The Chinese-Russian ties will be part of the G7 leaders’ discussions, according to two officials involved in the process, who spoke on condition of anonymity because summit preparations are not public. While the Chinese authorities stop short of openly arming Russia in its war against Ukraine, a long-term strategic partnership between Beijing and Moscow is unshakable for President Xi Jinping.
G7 countries such as the U.S. and Japan are expected to raise the need to sanction countries that work around Western trade restrictions on Russia, according to the officials. Chinese companies found to be selling dual use goods to Russia would be a top focus.
Bully tactics
China’s willingness to throw around its economic weight is one area where there’s likely to be more unity between G7 allies.
The need to fight back against economic coercion will take center stage at the summit. The EU, U.S., Canada and Japan are going to rally around calls to combat China’s use of its economic power to bully smaller economies that act against its political interests.
“The sense of urgency and unity is a force factor in and of itself. For example, never before has the G7 addressed economic coercion,” Rahm Emanuel, the U.S. ambassador to Japan, told POLITICO.
“When measured against the recent past, the G7 and EU are more strategically aligned in key economic and military matters,” added Emanuel, who served as chief of staff to former U.S. President Barack Obama.
When it comes to the European view, EU Commission President Ursula von der Leyen is clear that the bloc is “competing with China” and will need to up its game. “We will reduce strategic dependencies — we have learned the lessons of the last year,” she said in a press conference ahead of the trip.
Justin Trudeau, the Canadian prime minister, comes to the G7 following months of intelligence leaks that have painted his government as weak on foreign interference, specifically from China. He’ll be carrying Canada’s message that it can be a safe, non-authoritarian alternative to Russia and China for supplying critical minerals and energy, including nuclear power.
Despite the toughening rhetoric on China, what still unites the G7 countries is an eagerness not to shut the door on talks with Beijing.
US President Joe Biden arrives to attend the G7 Summit in Hiroshima on May 18, 2023 | Brendan Smialowski/AFP via Getty Images
The Biden administration has for months been seeking to secure a visit to China for top Cabinet members, such as Treasury Secretary Janet Yellen. Biden’s national security adviser, Jake Sullivan, held eight hours of talks with the Chinese Communist Party’s foreign policy chief, Wang Yi, this month.
Just before he left for Japan on Wednesday, U.S. President Joe Biden was asked whether his last-minute decision to truncate his trip abroad could be seen as “almost a win for China.” Instead of staying in the region for a summit of the Quad — Japan, India, the U.S. and Australia — Biden plans to return to Washington Sunday to deal with domestic issues.
The president downplayed the move as something China could use to its advantage, noting he will still meet with Quad nation leaders in Japan. “We get a chance to talk separately at the meeting,” he said
Then, Biden was asked whether he has plans to speak with the Chinese president soon.
“Whether it’s soon or not, we will be meeting,” he said, before leaving the room.
Cristina Gallardo in London and Zi-Ann Lum in Ottawa contributed reporting.
United Nations Secretary-General António Guterres backed the reform of the U.N. Security Council and the international financial system to align them with the “realities of today’s world.”
Both the U.N. body and the financial architecture reflect the power relations of 1945 and need to be updated, Guterres told a press conference Sunday on the margins of the G7 summit in Hiroshima, Japan, according to Reuters.
“The global financial architecture is outdated, dysfunctional and unfair,” Guterres said. “In the face of the economic shocks from the COVID-19 pandemic and the Russian invasion of Ukraine, it has failed to fulfill its core function as a global safety net.”
Guterres made the same point on Saturday, writing in a tweet that it was “time to think seriously about the reform” of the international financial architecture.
The U.N. Security Council came under fire in April when Russia assumed the rotating presidency of the 15-member body despite the fact that 141 countries condemned its aggression on Ukraine. Experts have claimed that Russia’s veto in the Security Council undermines the U.N.’s effectiveness on the international stage.
Japan’s Prime Minister Fumio Kishida said he would increase security at G7 meetings taking place in his country, a day after a man threw a smoke bomb at him at a campaign event.
Kishida was campaigning Saturday ahead of next week’s by-elections for the Japanese parliament when an explosive device was hurled toward him. Footage on Twitter appeared to show a bodyguard kicking a smoke bomb away from the prime minister and bundling him away, after the device landed near them. A 24-year-old man was arrested at the scene.
Japan will host the leaders of the Group of Seven most industrialized nations at a summit in Hiroshima next month.
On Sunday, speaking after emerging unscathed from the smoke bomb incident, CNN quoted Kishida as saying: “Japan as a whole must strive to provide maximum security during the dates of the summit and other gatherings of dignitaries from around the world.”
G7 foreign ministers are meeting Sunday for a three-day conference in Karuizawa, where they are expected to discuss China’s aggression toward Taiwan, Russia’s war in Ukraine, and North Korea’s missile testing. G7 climate ministers, meanwhile, are completing a two-day meeting in Sapporo.
The Kishida incident had eerie echoes of the shocking assassination of former Prime Minister Shinzo Abe last July.
The outlook for the global economy is likely to remain weak in the medium term amid heightened risks to financial stability, according to International Monetary Fund Managing Director Kristalina Georgieva.
“We expect 2023 to be another challenging year, with global growth slowing to below 3 percent as scarring from the pandemic, the war in Ukraine, and monetary tightening weigh on economic activity,” Georgieva said on Sunday at a conference in China. “Even with a better outlook for 2024, global growth will remain well below its historic average of 3.8 percent,” she said.
“It is also clear that risks to financial stability have increased,” Georgieva said. “At a time of higher debt levels, the rapid transition from a prolonged period of low-interest rates to much higher rates — necessary to fight inflation — inevitably generates stresses and vulnerabilities, as evidenced by recent developments in the banking sector in some advanced economies.”
Policymakers have acted decisively in response to threats to financial stability, helping ease market stress to some extent, she said. But “uncertainty is high, which underscores the need for vigilance,” she added.
Georgieva also warned about risks of geo-economic fragmentation, which she said “could mean a world split into rival economic blocs — a ‘dangerous division’ that would leave everyone poorer and less secure. Together, these factors mean that the outlook for the global economy over the medium term is likely to remain weak,” she said.
Georgieva spoke during the second day of the China Development Forum in Beijing. The three-day annual event is a social mixer of politics and business, bringing together members of the Chinese Politburo with dozens of CEOs from Western companies like Siemens, Mercedes-Benz and Allianz.
“Fortunately, the news on the world economy is not all bad. We can see some ‘green shoots,’ including in China,” Georgieva said, adding that Beijing is set to account for around a third of the global growth this year.
Opinions expressed by Entrepreneur contributors are their own.
Before the global economy can recover and stabilize market patterns, the focus must be placed on dynamic markets where costs are lower and production is higher, over industrialized countries.
In emerging markets, there are generally fewer rules and regulations than in developed countries. Governments are more willing to trade with other nations and conduct business as long as their people and companies see economic prosperity.
Emerging markets are integral to any company’s growth strategy, but what factors make it so? This article answers that question and discusses strategies for entering one.
What do rising economies look like in 2023?
Emerging markets are the growing economies of developing nations that have become dynamic enough to increase participation in global trade. These markets have many characteristics similar to already developed markets but with a much lower cost and a higher enthusiasm for new products.
Integration — Welcomes investment, focuses on barter and supply rather than manufacturing, and engages more with global markets.
Liquid equity — Increased local debt and equity in both domestic and foreign markets, with easy cash flow.
Increased trade — Lower transportation, storage and labor costs result in higher profit margins that help increase trade for both domestic and international investment.
Enhanced legislative support — Foreign investment taxes and regulations are less stringent in emerging nations, allowing for an easy flow of goods and investment.
Best strategies for winning in rising economies in 2023
Opportunities in vibrant markets need to be pursued aggressively. The right plan can aid in generating higher revenue owing to population size alone. Investors can increase their chances of success and return on investment by utilizing one of four strategies when entering these markets:
1. Understand the political and commercial environment
It’s crucial to be aware of the political situation in any country you want to invest in. The political forces that govern emerging markets can have a significant impact on your ability to generate profits.
Foreign policies that are conducive to investment and a vibrant economy can be strengthened by stable governments that are receptive to such efforts. Having an understanding of shifting political environments and having the assistance of local political forces can make investments safer.
Stability is a prerequisite for prosperity, and prosperity requires an open economy where money and goods can move freely across national boundaries. Emerging markets embrace good business practices and investment to boost their economies and bring them up to speed with those of developed nations. In some circumstances, emerging markets may even offer significantly larger returns due to the environment.
2. Hire local teams
The major purpose of investing in developing markets is to expand your business and capitalize on local opportunities. Hiring local people and resources is more logically efficient because they are more familiar with indigenous scenarios, which in turn can boost investment opportunities.
Local hiring also increases the economy of the community and strengthens emotional attachment among locals, motivating them to work harder and support long-term objectives in these markets. Additionally, the lower wages result in cost savings that don’t just boost earnings but also support local economic development.
For example, emerging economies like Saudi Arabia allow massive investment but make it compulsory that the board have local members. They also fix a percentage of local employees to be hired against the foreign workforce. In the long run, this also sends the political message that foreign companies bring business and prosperity.
CEOs and businesses believe they can conduct business in emerging economies and marketplaces in the same way they do in developed countries; yet, infrastructural quality varies by country. For instance, political officials or pragmatic leaders often enforce contracts in developing economies instead of the legal system.
4. Utilizing extensive distribution to reach customers
Utilizing extensive distribution helps raise product awareness and ensures that the company reaches the maximum number of people. It enables businesses to expand their reach and gain the best possible market coverage and when done right, this strategy has the potential to generate millions of loyal customers.
There is a lot of untapped potential in emerging markets. If investors can combine local practices with their expertise and technical innovation, the opportunities are virtually limitless.
The Reserve Bank of India (RBI) on Friday released the November 2022 issue of its monthly bulletin on state of the economy and said headline inflation is beginning to show signs of easing.
With headline inflation beginning to show signs of easing, the domestic macroeconomic outlook appears to be resilient though it is still sensitive to global headwinds, the bulletin said on Friday.
The article published in the latest RBI bulletin also said the outlook for the global economy remains clouded with downside risks. Global financial conditions have been tightening and deteriorating market liquidity is amplifying financial price movements.
Markets are now pricing in moderate increases in policy rates and risk-on appetite has returned. In India, supply responses in the economy are gaining strength, it noted.
“With headline inflation beginning to show signs of easing, the domestic macroeconomic outlook can best be characterised as resilient but sensitive to formidable global headwinds,” the article said.
Urban demand appears robust, while rural demand is muted but more recently picking up traction, it added.
The article has been prepared by a team led by RBI Deputy Governor Michael Debabrata Patra.
The RBI, however, said the opinions expressed in the article are those of the authors and do not represent the views of the central bank.
BALI, Indonesia — Rishi Sunak will invite Xi Jinping to collaborate more closely on global challenges in the first meeting between a British prime minister and Chinese president in nearly five years.
Sunak and Xi will hold a bilateral meeting Wednesday on the margins of the G20 leaders’ summit in Bali.
Ahead of the meeting — confirmed only 24 hours before it was due to take place — Downing Street insisted it was “clear-eyed in how we approach our relationship with China.”
The prime minister’s spokesman said there was a need “for China and the U.K. to establish a frank and constructive relationship,” but stressed that “the challenges posed by China are systemic” and “long-term.”
The two leaders are likely to discuss the war in Ukraine, energy security and climate change among other issues, No. 10 said.
Theresa May was the last prime minister to meet Xi, during a visit to Beijing in January 2018, at a time when Downing Street was still referring to the “golden era” of relations supposedly ushered in by David Cameron and George Osborne.
U.K.-China relations have worsened in the wake of China’s crackdown on democratic freedoms in Hong Kong, the oppression of the Uyghur Muslim minority of Xinjiang province, and concerns about the security implications of allowing Chinese companies to build critical national infrastructure in the U.K.
News of the meeting comes after Sunak softened his language on China and suggested he was abandoning plans to declare the country a “threat” as part of a major review of British foreign policy.
In response to questioning from POLITICO during the trip, Sunak described China as “a systemic challenge” but stressed that dialogue with Beijing was essential to tackling global challenges such as climate change.
Speaking to Sky News Tuesday, the PM said: “I think our approach to China is one that is very similar to our allies, whether that’s America, Australia and Canada — all countries that I’m talking about exactly this issue with while we’re here at the G20 summit.”
Sunak’s spokesman said Tuesday that the prime minister would “obviously raise the human rights record with President Xi” at the meeting.
But he added: “Equally, none of the issues that we are discussing at the G20 — be it the global economy, Ukraine, climate change, global health — none of them can be addressed without coordinated action by the world’s major economies, and of course that includes China.”
Xi has already held bilateral talks with various leaders during the summit | Kevin Frayer/Getty Images
Xi has already held bilateral talks with U.S. President Joe Biden, French President Emmanuel Macron and Australian Prime Minister Anthony Albanese among other leaders during the summit.
In addition to the talks with Xi, Sunak will also hold meetings with Biden, Albanese, Indian Prime Minister Narendra Modi, Japanese Prime Minister Fumio Kishida and Indonesian President Joko Widodo.
Iain Duncan Smith, the former Tory leader and co-chair of the Inter-Parliamentary Alliance on China, warned that the U.K. was “drifting into appeasement” with Xi.
“I am worried that the present prime minister, when he meets Xi Jinping, will be perceived as weak because it now looks like we’re drifting into appeasement with China, which is a disaster as it was in the 1930s and so it will be now,” he said. “They’re a threat to our values, they’re a threat to economic stability.”
Bob Seely, another Tory MP and member of the Inter-Parliamentary Alliance on China, added: “We need to talk to nations, especially those that may challenge our values and stability, but it is dangerous to normalize relations when they are not normal.”
But Alicia Kearns, chair of the Commons foreign affairs select committee and a member of the China Research Group, welcomed Sunak’s meeting with Xi. “It is important they meet to prevent miscalculations,” she said. “We cannot simply cut off China, we must work to create the space for dialogue, challenge and cooperation.”
The housing market is shifting, but not everywhere. As cities across the globe continue to adjust after the pandemic, certain metropolitan areas are more at risk of a housing bubble than others, according to a new report by UBS.
Alexander Spatari | Getty Images
A housing bubble refers to an increased rise in home prices at a rapid pace, driven by increased demand and limited supply. When the bubble inevitably “bursts,” usually driven by increased interest rates, demand decreases.
The UBS Global Real Estate Bubble Index examined 25 cities across the globe, tracking current values and risk-based classifications (depressed, undervalued, fair valued, overvalued, and bubble risk) to determine which areas are most at risk of a housing bubble.
Across the globe, Toronto was the city with the highest risk of a housing bubble — prices are 17% higher than they were a year ago, marking the biggest increase in five years.
In the U.S., Miami was the city with the highest risk of a housing bubble and reported the highest house prices and rental growth of all the cities in the study.
Overall, the cities analyzed saw nominal price growth of 10% from mid-2021 to mid-2022, marking the highest increase since 2007. With the exception of Tokyo, every city analyzed demonstrated rent prices higher than they were before the pandemic.
Additionally, mortgage rates have nearly doubled across all of the cities, and with increased prices, affordable city housing is far more scarce than before the pandemic, the report found.
While New York saw the lowest price growth since mid-2021. Price growth was especially low in Manhattan and the luxury segment. Still, the Big Apple remains one of the least affordable cities in the country due to increased demand and limited supply following the mass exodus during the pandemic.
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The S&P 500 is down nearly 20% year-to-date, the dollar has lost lots of buying power, and the fed has made it increasingly difficult for young buyers to purchase their first home.
With all these factors at play, it is essential to listen to economic experts like Jerome Powell. Powell spoke on interest rates again in early September. The Fed is expected to continue raising interest rates until the inflation numbers are under control. “Restoring price stability will take some time and requires using our tools forcefully to bring supply and demand into better balance,” Mr. Powell said in those remarks. “While higher interest rates, slower growth and softer labor market conditions will bring down inflation, they will also bring some pain to households and businesses.”
The oil cartel OPEC’s choice to pare back oil supply will harm the global economy and especially developing countries, U.S. Treasury Secretary Janet Yellen told the Financial Times in an interview published Sunday.
“I think OPEC’s decision is unhelpful and unwise — it’s uncertain what impact it will end up having, but certainly, it’s something that, to me, did not seem appropriate, under the circumstances we face,” Yellen said, adding that “we’re very worried about developing countries and the problems they face.”
The cartel of 13 oil-producing countries on Wednesday agreed to reduce production by 2 million barrels a day as of November, in the context of an already tight market and rising world inflation in part caused by high energy prices.
OPEC’s move marks a victory for Russia against the EU and the U.S. — Russia’s a major oil producer and an OPEC+ country that cooperates with the cartel. Ever since Moscow’s invasion of Ukraine, the West has been imposing economic sanctions against Russia, including on its oil sector, and encouraging other countries around the world to follow suit. Despite this effort, Moscow continues to sell its oil to countries like India, China and Turkey.
OPEC took the decision despite a flurry of trips by EU and U.S. leaders to Saudi Arabia in recent weeks to try to convince the country’s crown prince and new Prime Minister Mohammed bin Salman to ramp up oil production to fight inflation.
The world oil price already started to rise after the announcement on Wednesday, moving from around $86 to over $93 per barrel.
Meanwhile, Moscow congratulated “the truly balanced, thoughtful and planned work” of OPEC countries which served to “oppose the actions of the United States,” Kremlin spokesperson Dmitry Peskov said in a TV interview broadcasted on Sunday.
This summer I was at a gathering in the weeks after the Supreme Court decision striking down Roe v Wade. A senior executive from one of the country’s largest corporations was asked about his company’s reproductive rights benefits. As is befitting of his company’s size and stature, he sketched out, with some pride, its top-of-the-line health care benefits. He went on to describe how pleased–and relieved–his senior leadership team was when they confirmed that their health insurance already covered travel for medical procedures. This means that it covers travel from states that restrict reproductive rights to those that provide abortions.
He was pleased because the travel provisions were in place, yes. He was also pleased because it meant his company did not have to take any action in those immediately post-Roe days. Instead of having to “make a statement,” they could keep their proverbial corporate head down and not risk “becoming part of the story.”
Crisis averted. Sigh of relief.
Except maybe not. Because sometimes remaining silent is not a bullet dodged, but rather a cost postponed.
And the cost, in this case, can be many of the women who work for–or buy from, or invest in–your company.
Women cannot afford to stay where they do not have support
Ellevest recently introduced its proprietary Ellevest Women’s Financial Health Index. The index is the first-of-its-kind, quantitative measure of the financial health of women in the U.S. It includes inputs like the gender pay gap, the availability of paid family leave, inflation, and women’s representation in government and corporate leadership. Also included is a measure of reproductive rights, given that they have a fundamental financial impact on women and their families.
This year, the index has been declining rapidly, in part due to restrictions on reproductive rights for women, as well as the increase in inflation and the tanking of consumer confidence, indicating that the financial health of women in the U.S. has also been heading south. In fact, by the index’s measure, women are in worse financial shape today than they were in the depths of the pandemic.
We also shared the results of our second annual Ellevest Financial Wellness Survey. It is perhaps not surprising that this survey showed that more than half of women–and more than 60% of millennial and Gen Z women–said that the overturning of Roe v. Wade has had a significant impact on their mental health.
But make no mistake: They are also making the connection to their pocketbooks. Millennial women rank the restriction of reproductive rights as one of their top five financial worries. For Gen Z women, it featured in second place behind inflation–interestingly, though perhaps not surprisingly, a tie with climate change. And lest you write this off as youthful “wokeness,” climate change was a top-five financial worry for women across all age demographics.
There are three main takeaways for corporate executives:
Silence can cost you women employees
Women report that they want to work at companies whose values align with theirs: Some 44% of women say they would look to leave an employer whose views on reproductive rights do not align with their own. That also goes for 56% of millennial women, 53% of Latinas, and 45% of Black women.
So how are women reacting to this rapidly shifting landscape? Well, they’re sending their resumes out. That’s right: A full 55% are looking for a new job. And 38% report that they are saving money so they can leave their job.
This could hurt.
Silence can also cost you women customers
But the economic cost of your company’s silence may not stop there. It can hit the revenue line: 59% of women–and two-thirds of younger women–say it’s important for them to invest and spend with companies that stand for reproductive rights. In other words, they may in fact want you to “become part of the story.”
That could hurt even more.
Companies are focusing on men’s top financial priority
A final insight for corporate leaders, from the survey: The Ellevest survey revealed that men’s top financial priority is growing their retirement savings. Fair enough. And here your corporate benefit plans–with their heavy emphasis on 401(k)s–tend to be on target.
Women’s top financial priority? “Supporting my family.” And understandably so, given that our society expects women to shoulder a disproportionate share of the family care responsibilities. This feels particularly acute, coming out of a pandemic in which women were the social safety net, and given ongoing economic uncertainty.
Corporate benefits plans are supposed to help… well, not so much. Only 5% of the country’s lowest paid workers, most of whom are women of color, had access to paid parental leave in 2020. And even among the nation’s top 10% of earners, it’s only 36%. Not to mention flexible work policies, child, and family care support, and so on. It’s another version of silence on an issue that matters to every woman–in this case, her primary financial priority.
So, corporate executives: Just as your women employees and customers may misinterpret your silence, don’t let her current silence lull you.
Sallie Krawcheck is the CEO and co-founder of Ellevest, the wealthtech company built by women, for women. Previously, she led Merrill Lynch, Smith Barney, and Citi Private as CEO and was CFO of Citi.
The opinions expressed in Fortune.com commentary pieces are solely the views of their authors and do not necessarily reflect the opinions and beliefs of Fortune.
Credit: UBS
