The World Today for May 08, 2018

NEED TO KNOW

ARGENTINA

Pendulum Swing

When Equity International, Goldman Sachs and Centaurus Capital announced an Argentinian real-estate deal worth $300 million in early April, they did so with confidence that President Mauricio Macri’s liberalization efforts would finally stabilize the nation’s volatile economy.

But Macri’s moves to kickstart markets after a decade and a half of tight government oversight aren’t making up ground quickly enough. He must now find a way to curb runaway inflation amid the backdrop of a crippling drought and 2019’s presidential elections.

When Macri took office in 2015, he inherited an economy marred by the successive presidencies of Nestor Kirchner and his wife Cristina Fernandez de Kirchner. The former came to power in 2003 after a decade in which the Argentinian peso was pegged to the dollar amid efforts to deregulate the economy. Instead, those efforts had sent unemployment skyrocketing and forced the nation to default on hundreds of billions in foreign debt.

The Kirchners’ hefty market controls, generous energy and transportation subsidies, import restrictions and nationalization of the nation’s oil and airline companies appealed to a work-starved electorate.

But they also brought inflation to a staggering 40 percent by 2016, Stratfor reported.

Enter Macri, who pledged to reintroduce liberal reforms at a gradual pace to ease the pendulum back to a bullish economy typical of emerging markets. His gradual subsidy cuts and reductions in public spending dropped inflation to 24 percent by 2017.

Argentinians rewarded Macri for his nominal improvements with a landslide victory for his party in last year’s legislative elections, the Guardian reported.

But the situation is still dire for many families who can’t keep up with rising prices. Marilin Rivas, a mother of two, recently told Al-Jazeera that her husband’s salary often isn’t enough to afford the basics, and in one week, bakers collectively gave away over 5.5 tons of bread because customers could no longer afford to buy it.

A persistent drought may soon prevent bakers even from giving food away, Voice of America reported. The Buenos Aires Grains exchange estimates that the value of grain exports could decrease by $3.4 billion due to a drought that’s ravaged Argentina’s lucrative agricultural sector since November.

Meanwhile, Argentina’s economic woes show no signs of abating.

The nation’s central bank was forced to raise interest rates to 40 percent last week to support its struggling currency – it was the third rate hike in two weeks, the BBC reported. Economists, fearing another crisis a la Venezuela, are recommending that would-be investors abandon ship before it’s too late, Forbes reported.

Macri has promised to assist farmers through debt assistance programs and is defending his administration’s currency yo-yo-ing, the Financial Times reported.

But his declining approval rating has coalition partners wondering if he’ll even be given a second mandate in which to implement more reforms, the Economist wrote. His primary opposition in 2019’s presidential election, the Kirchners’ Peronist coalition, may utilize the ploys of the movement’s namesake once again to capitalize on economic uncertainty.

Some investors like Goldman Sachs and others appear to still have confidence in Macri. But it remains to be seen whether the markets and his own people feel the same way.

WANT TO KNOW

ITALY

Taking Care of Business

Italian President Sergio Mattarella called on the country’s rival political parties to accept a neutral caretaker government until someone can cobble together a coalition or fresh elections can be held.

Speaking after the third round of consultations with political leaders failed to yield a workable solution on Monday, Mattarella suggested he could himself define the caretaker government, the New York Times reported. In the worst-case scenario, it would last until no later than early next year – the final deadline he suggested for holding fresh elections if the parties can’t come to an agreement.

Mattarella scolded the lawmakers for failing to make progress, saying if they can’t reach an agreement, “It would be the first time in the history of the republic,” that the parliament was dissolved before the legislators ever got down to work.

More than half of Italians voted for the far-right League and the leftist Five Star Movement on March 4. However, neither won a majority in parliament, and neither has been able to attain one by forming a coalition.

NIGERIA

Rescue Relief

Nigeria’s army said it had rescued around 1,000 hostages who were being held by the Islamist militant group Boko Haram in the northeast of the country.

Those rescued were mainly women and children, but the group also included some young men who had been forced to fight for the militants, Reuters reported the military as saying in a statement.

The army said it rescued hostages from Malamkari, Amchaka, Walasa and Gora villages of Bama Local Government Area in the northeastern state of Borno with the assistance of troops from neighboring countries who make up the Multinational Joint Task Force.

Boko Haram has kidnapped thousands since 2009, when it began a military struggle designed to create an Islamic state in the northeast. The government has been saying since December 2015 that the militants had been defeated. But several high-profile attacks have occurred in recent months – including a raid on an all-girls’ school in February.

On the eve of the four-year anniversary of the Chibok abductions earlier this month CNN cited UNICEF as saying Boko Haram has kidnapped more than 1,000 children in Nigeria since 2013.

CHINA

The Purge

A Chinese court sentenced the former Communist Party boss of the southwestern city of Chongqing to life in prison for corruption, signaling that President Xi Jinping’s war on graft continues unabated.

Reuters quoted Chinese state media as saying the court sentenced Sun Zhengcai to life after he admitted he had taken bribes of more than 170 million yuan ($27 million).

Until he was abruptly removed from his post in Chongqing and replaced with an official with close ties to Xi, Sun had been considered a contender for a top leadership position in the party, the agency said.

In a case where the verdict was essentially a foregone conclusion, prosecutors charged Sun in February with accepting “huge sums” in bribes over 15 years as an official in Chongqing and during various other postings, including a term as minister of agriculture.

Xi’s crackdown has resulted in jailing or punishment for thousands of officials and brought down dozens of senior party and military officials. But there are rumblings that it’s as much about purging the disloyal as rooting out graft.

DISCOVERIES

Playing God

The El Niño weather pattern warms ocean waters, killing fish and spelling disaster for local fishermen.

To avoid the fabled climate event’s wrath, the ancient Peruvian Chimú civilization may have made many sacrifices – including of children.

Archaeologists recently uncovered the remains of 140 sacrificed children in Trujillo, a coastal city of Peru, discovering what is likely the largest mass child sacrifice event in history, National Geographic reported.

Researchers suggested that an event such as El Niño could have disrupted the ancient society’s fisheries and canals, and that the children may have been sacrificed to keep such disastrous impacts at bay.

But the researchers uncovered other ghastly details about the sacrifice: Damaged sternums and rib cages suggest the children likely had their hearts removed.

For all the intricacies of the sacrifice, however, it appears that the Chimú didn’t find lasting protection: The Incas conquered their empire only decades later.