With Rishi Sunak becoming the newest resident of 10 Downing Street, the UK has had five prime ministers and seven chancellors of the exchequer over the past six years. Of late, the turnover has been even faster: three prime ministers in less than two months and four chancellors in just over three. No wonder the country has become a global laughing stock.
On social media, one Fatima Said tweeted: “As an Arab, I have to ask: is Britain ready for democracy? Does the UK need a strongman to help them overcome their political instability?” After that, the jokes came thick and fast. “Maybe after they resolve their ‘ancient hatreds’ they can learn to share the island,” was one reply. “Here in Africa, we can only watch as tensions rise and political unrest grows. As winter approaches in the UK, what lies ahead for this troubled island nation?” was another. “Britain needs to be put under some internationally approved mandate status until it is ready to govern itself,” was a third.
But it’s not just Britain that’s in trouble. Tens of thousands have been protesting about the cost-of-living crisis in France, while there have been strikes at the country’s refineries. The far right has been gaining ground all over Europe; the current Swedish government stands only with its support and it is in office in Italy. The eurozone posted its biggest ever trade deficit in August. In the US, a poll last month found that more than 60 per cent of Republicans and nearly one third of all Americans still believe Joe Biden did not win the 2020 presidential election legitimately. And in many of the richest countries in the world, millions are having to resort not only to food banks, but potentially, this coming winter, to “warm banks” as well.
Without the imperative to act responsibly and ensure the primacy of stability, there is no real freedom at all
The fabled liberal democratic model long vaunted by a West that has pressed the rest of the world to adopt it, sometimes by force of arms, is faltering badly. It really is time to suggest that Europe and America might try to learn a few lessons from other countries, rather than giving them lectures on how to behave.
Let’s start with South-East and East Asia in particular. For it’s there that, on the whole, stability and moderation (the latter sometimes more in name than in action, but all the same) that have been the key words for decades. That emphasis has pretty much kept the peace in an area of the continent that was often called the Balkans of Asia – riven by religious and ethnic faults both in the region and within countries. That is what has driven the spectacular growth, and it’s at the core of the nearly 700 million strong Association of South-East Asian Nations – one of the few parts of the world that economists predict could escape the global trend towards stagflation.
Stability is so prized because they know very well it cannot be taken for granted. Communism was a genuine threat in the region from the 1950s to the 1970s, leading to an insurgency in what was then Malaya and the full takeover of Laos and Vietnam. Communal tensions could boil over if order was not determinedly kept. In the case of Singapore, the very long-term existence of the state was not assured – as one of the country’s great thinkers, Kishore Mahbubani, has pointed out, city-states tend to get swallowed up by neighbours.
Moderation has been necessary as inclusive nation-building is still ongoing, especially in countries whose borders were set, often arbitrarily, by their former colonisers’ empires. Ideology unhinged from reality has been seen as the catastrophe that it is, especially in the case of the genocidal Khmer Rouge regime in Cambodia. Even Vietnam has ditched communist strictures in its successful path to development. Not for this region the “disruptor in chief” style of outgoing UK prime minister Liz Truss, who destroyed the Conservative party’s reputation for economic competence in her mere 45 days in office. Instead, pragmatism has generally ruled. As the Guardian’s Larry Elliott wrote recently, “The tiger economies of East Asia used the full range of measures available to them, including tax, procurement, public ownership, state aid, infant industry support and capital controls.”
There is no space here to go into the merits or demerits of the “Asian values” argument, but it is certainly the case that there is very little enthusiasm for the hyper-individualism that animates so many in the West – an attitude that has undermined the very concept of objective reality, since numerous people now insist that “their truth” must be respected, however little evidence backs it up. The community and the country come first, an approach that Europeans frequently lambast as being oppressive, but which is vital to any society that wishes to resist the loneliness and anomie of atomisation and remain cohesive.
“Freedom”, that great watchword of everyone from American gun rights lobbyists, to Atlanticist libertarians, to the warmongers who have bombed developing countries for decades to bring them its blessings: this means little if you can no longer pay your mortgage due to skyrocketing interest rates; if you have to choose between having enough to eat and heating your home; and if, as the peoples of the Middle East know so well, the price of it being "gifted" to you causes your state institutions to disintegrate, and crime, terrorism and even slavery to thrive.
A distinguished Malaysian diplomat once told me that the French national motto, “liberty, equality, fraternity”, lacked a further indispensable noun – “responsibility”. He was right. The states of South-East and East Asia are by no means perfect, but many have come very far in a short time. They have done so, by and large, by bearing in mind a lesson that the western nations currently facing both internal and external crises appear to have forgotten. For without the imperative to act responsibly and ensure the primacy of stability, there is no real freedom at all.
Four reasons global stock markets are falling right now
There are many factors worrying investors right now and triggering a rush out of stock markets. Here are four of the biggest:
1. Rising US interest rates
The US Federal Reserve has increased interest rates three times this year in a bid to prevent its buoyant economy from overheating. They now stand at between 2 and 2.25 per cent and markets are pencilling in three more rises next year.
Kim Catechis, manager of the Legg Mason Martin Currie Global Emerging Markets Fund, says US inflation is rising and the Fed will continue to raise rates in 2019. “With inflationary pressures growing, an increasing number of corporates are guiding profitability expectations downwards for 2018 and 2019, citing the negative impact of rising costs.”
At the same time as rates are rising, central bankers in the US and Europe have been ending quantitative easing, bringing the era of cheap money to an end.
2. Stronger dollar
High US rates have driven up the value of the dollar and bond yields, and this is putting pressure on emerging market countries that took advantage of low interest rates to run up trillions in dollar-denominated debt. They have also suffered capital outflows as international investors have switched to the US, driving markets lower. Omar Negyal, portfolio manager of the JP Morgan Global Emerging Markets Income Trust, says this looks like a buying opportunity. “Despite short-term volatility we remain positive about long-term prospects and profitability for emerging markets.”
3. Global trade war
Ritu Vohora, investment director at fund manager M&G, says markets fear that US President Donald Trump’s spat with China will escalate into a full-blown global trade war, with both sides suffering. “The US economy is robust enough to absorb higher input costs now, but this may not be the case as tariffs escalate. However, with a host of factors hitting investor sentiment, this is becoming a stock picker’s market.”
4. Eurozone uncertainty
Europe faces two challenges right now in the shape of Brexit and the new populist government in eurozone member Italy.
Chris Beauchamp, chief market analyst at IG, which has offices in Dubai, says the stand-off between between Rome and Brussels threatens to become much more serious. "As with Brexit, neither side appears willing to step back from the edge, threatening more trouble down the line.”
The European economy may also be slowing, Mr Beauchamp warns. “A four-year low in eurozone manufacturing confidence highlights the fact that producers see a bumpy road ahead, with US-EU trade talks remaining a major question-mark for exporters.”
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The Africa Institute 101
Housed on the same site as the original Africa Hall, which first hosted an Arab-African Symposium in 1976, the newly renovated building will be home to a think tank and postgraduate studies hub (it will offer master’s and PhD programmes). The centre will focus on both the historical and contemporary links between Africa and the Gulf, and will serve as a meeting place for conferences, symposia, lectures, film screenings, plays, musical performances and more. In fact, today it is hosting a symposium – 5-plus-1: Rethinking Abstraction that will look at the six decades of Frank Bowling’s career, as well as those of his contemporaries that invested social, cultural and personal meaning into abstraction.
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Name: HyperSpace
Started: 2020
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Sector: Entertainment
Number of staff: 210
Investment raised: $75 million from investors including Galaxy Interactive, Riyadh Season, Sega Ventures and Apis Venture Partners
The specs: 2018 Audi RS5
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Transmission: Eight-speed automatic
Power: 450hp at 5,700rpm
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Atalanta v Udinese (5pm)
Benevento v Parma (5pm)
Cagliari v Hellas Verona (5pm)
Genoa v Fiorentina (5pm)
Lazio v Spezia (5pm)
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GIANT REVIEW
Starring: Amir El-Masry, Pierce Brosnan
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Our legal consultant
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
UK’s AI plan
- AI ambassadors such as MIT economist Simon Johnson, Monzo cofounder Tom Blomfield and Google DeepMind’s Raia Hadsell
- £10bn AI growth zone in South Wales to create 5,000 jobs
- £100m of government support for startups building AI hardware products
- £250m to train new AI models