It’s an increasingly common occurrence these days – social media posts escalating into full-scale diplomatic impasses.
On Friday, Canada’s Foreign Ministry condemned the arrests of Samar Badawi and other female activists in Saudi Arabia. “We urge the Saudi authorities to immediately release them”.
At first, the message did not draw much attention. Western governments have repeatedly criticised the Kingdom over its human rights record in the past. But on Sunday the Saudis reacted strongly: “The Canadian position is an overt and blatant interference in the internal affairs of the Kingdom of Saudi Arabia…”tweeted the Kingdom’s Foreign Ministry.
The feud soon went far beyond Twitter as Riyadh, among other things, expelled Canada’s ambassador, ordered more than 10,000 state-sponsored Saudi students in Canada to leave the country, and cancelled all direct flights between the two nations indefinitely. If that wasn’t enough, the Financial Times reported yesterday that the Saudi Central Bank and state pension funds have instructed their overseas asset managers to dispose of all their Canadian assets “no matter the cost”. Not content that it had gone far enough, the Saudi Foreign Ministry subsequently took the altercation back to Twitter again, saying that the Kingdom is “looking at implementing additional measures”.
But why would Saudi Arabia, which has gained widespread recognition and positive PR recently for various reforms undertaken within its Vision 2030 plan, take such a hardline stance on this issue?
The answer may lie in the nature of the reforming process itself. Canada is not one of Saudi Arabia’s most important allies, so picking this fight is a relatively low-risk and cost effective way of sending a message that might deter future criticism abroad. After all, Mohammad Bin Salman, the Kingdom’s crown prince, may consider himself the manager of an unprecedented and delicate process which won’t be made any easier by critics weighing in from all corners.
These events are unlikely to have a material effect on long-term forecasts, but they could affect the attractiveness of Saudi Arabia to international investors over the short and medium terms. If the desire is strong to make Vision 2030 a reality, Saudi leaders may need to accept that they will increasingly be held to higher standards by international observers as a result.
The Trump administration will impose fresh sanctions on Russia as a response for the nerve agent attack against former Russian spy Sergei Skripal earlier this year. The US also warned that if Russia does not provide evidence that it is no longer using chemical and biological weapons, and does not allow on-site UN inspections within 90 days, it intends to impose a second round of harsher sanctions.
In a historical vote, the senate of Argentina rejected a motion to legalise abortion by a small margin. The 10-hour debate mobilised thousands of people from within the country and across the region. Although the proposal was rejected, it is likely to be debated again in the near future. Only two countries in Latin America, Cuba and Uruguay, have legalised abortion so far.
Ryanair has fallen into a new crisis after German pilots joined their colleagues across Europe in a wave of coordinated strikes that have been timed to cause maximum disruption. In total, 400 flights are due to be cancelled on Friday, disappointing tens of thousands of customers in the middle of the holiday season.
Business & Economy
In the midst of what has been a bad year for the company, Glencore published its half-year results yesterday. Despite increasing its profits by almost a quarter to set a new record for its interim results, investors were left unimpressed as the results fell short of expectations and the firm faces higher operating costs over the short term. The company has also been coming under pressure due to corruption scandals in the DR of Congo, Venezuela and Nigeria.
EY, one of the Big Four accounting firms, accelerated its expansion into legal services by buying UK-based legal tech innovator Riverview Law. Riverview Law uses technology to provide a fixed fee legal service that helps major corporate clients cut their legal costs. EY, which employs about 2,200 law practitioners worldwide, said the acquisition further establishes it as a “leading disruptor” in legal managed services, one of the legal market’s fastest-growing sectors.
WPP, the global communications behemoth, has agreed to acquire Chicago-based e-commerce specialist Gorilla through Wunderman, one of its subsidiaries. The British firm announced on Wednesday that Gorilla, which reported revenues of roughly $40m last year, will become part of Wunderman's growing global commerce offering.
What happened yesterday?
Sterling dropped below $1.29 amid fears of a no-deal Brexit, which pushed British stocks up – the FTSE 100 finished the day 0.75% up at 7,776.65 – and suggested that the devaluation of the currency may boost the economy over the short term. In America, the Dow Jones Industrial Average fell 0.18% to 25,583.75 and the S&P 500 lost 0.03% to 2,857.72.
Concerns over a potential trade war grew stronger yesterday as China retaliated the American measures taken earlier this week with the announcement of a 25% tariff on $16bn worth of American imports. Medical equipment, fish meal, wood waste, paper, fuels, metal scraps, cars and bicycles are some of the products targeted. The two largest global economies are expected to continue their tit-for-tat trade escalations as policymakers from both countries show unwillingness to back down.
Meanwhile, China’s trade figures for July were made public, showing the country’s trade surplus with the US marginally shrinking to $28.09bn from a record $28.97bn in June.
Tritax Big Box Reit
Coca-Cola HBC AG (CDI)
Grupo Clarin SA GDR (Reg S)
Impact Healthcare Reit
Legal & General Group
Randgold Resources Ltd.
NextEnergy Solar Fund Limited Red
Premier African Minerals Ltd
Int. Economic Announcements
(13:30) Continuing Claims (US)
(13:30) Initial Jobless Claims (US)
(13:30) Producer Price Index (US)
(15:00) Wholesales Inventories (US)
Columns of Note
Writing for the FT, Janan Ganesh argues that Donald Trump is not an isolationist, as many believe. In fact, he says that the American president wants to participate in the world economy, just under different terms. While it is true that the current US administration has rescinded treaties and institutions, and its president ran on a campaign of “America first”, it is also true that Trump has taken measures to position himself on the world stage. Some of the official acts that exemplify this idea are his meeting with Kim Jong-Un, his direct attack on Syria, and his call for greater military spending by NATO members. “The point is not that these are good foreign policies. The point is that these are policies”.
In The Times, Simon Nixon writes that Brexit could result in a permanent negative relationship with Europe. He warns of a scenario, a rather likely scenario in his view, in which Britain falls out of the EU with no deal whatsoever, and the country’s leadership is unwilling to recognise Britain’s debt with the EU, of around €40bn. In this scenario, the EU would naturally seek a way of collecting its debt, further damaging relations between the two. Under these conditions, says Nixon, the UK will find itself under pressure to negotiate better terms with the continent, resulting in an advantageous outcome for Europe.
Did you know?
Mainland China has a population of around 1.38 billion people, less than one million of whom are foreigners. In other words, only 0.072% of the total population are immigrants. This gives China the lowest score in the world for migrant percentage of total population, even less than North Korea, despite having a booming economy and global cities like Shangai, Shenzhen and Guangzhou.
House of Commons
In recess until 4 September 2018
House of Lords
In recess until 4 September 2018
In recess until 4 September 2018