November 26th – The BESA Times
Fifty-Ninth Edition - Monday, 26th Every week, a complete snapshot of what happened around the world in the past seven days
Saudi Arabia is facing a future of cheaper oil, but for this country, oil could very well be everything. One should bear in mind that the petroleum sector makes up 45% of Saudi Arabia’s GDP. On Friday the oil prices fell by more than 6%, currently standing at below $60 per barrel. After browbeating the US’s Middle Eastern ally in order to prevent oil price jumps, President Donald Trump has praised Saudi Arabia for its efforts to lower the prices by more than 30% (from $80 to $58.14) over the course of the past 2 months. Mr Trump’s pressure comes at a time of great political controversy for this Gulf state and the slowing down of the global economic growth. Despite acknowledging that the de facto leader, Prince Mohammed, was involved with the assassination of the dissident journalist Khashoggi, the President has signaled that the Saudi effort to keep the oil prices low and the continued purchase of American weapons was more important than their leadership’s involvement in the murder. The Saudis, despite the pressure from the US, want to see oil prices rise. The country’s oil barrel production is approaching 11 million barrels a day and its oil dependent budget requires the price to be $80 per barrel just to break even.
Protests broke out on the streets of Paris, France, where 8,000 people took to the streets united by a common message, that President Emmanuel Macron was out of touch with the lives of the common people and that he has impoverished them over the course of his 18 months as president of the Republic. The protestors were part of the Gilets Jaunes (yellow-vest) movement, a grassroots organization with no formal leader or political affiliation, relying on social media to organize their protests. 106,000 protestors wearing yellow vests were recorded across France, last Saturday this number was 283,000. Some of these protests turned violent and countrywide it claimed 2 lives and left hundreds injured. It started as an online petition against the government’s decision to increase fuel taxes in order to push drivers towards greener transportation alternatives but very soon it turned into a, sometimes violent, public display of discontentment. The protestors claimed that France is the most taxed country in the world and that the president does not listen to the people anymore, while in the provinces public transportation, hospitals and public services are closing. They have criticized the country’s lack of transparency in the way it handles taxpayer money, claiming that the president takes from the poor and gives to the rich, putting himself in a bubble surrounded by rich people with no knowledge of how the rest of French people live.
Turmoil over the Gibraltar ends as Spain reaches an agreement with the EU and UK after Spain’s Prime Minister Pedro Sanchez threatened to block the approval for any deal concerning Brexit earlier this week. An important thing to remember is that Gibraltar became part of the UK in 1713 with the Treaty of Utrecht, but Spain has tried several times to recapture it. A referendum in the territory in 1967 resulted in 99.06% of people voted to remain British and over 98% voted to remain in the EU in 2016. It is well known that the question of Gibraltar is of an upmost importance to Spain and it has wanted shared sovereignty of the territory in the past, but currently it insists on it’s future right to discuss about the fate of the peninsula bilaterally with the UK. Now Mr Sanchez has promised to drop resistance after what he describes as “difficult” but “fruitful” negotiations which clarified the status of Gibraltar. The product of these negotiations is that a statement will be adopted by the EU leaders which underlines that the territory “will not be included in the territorial scope” of future EU-UK deals, and that any “separate agreements between the EU and the UK over Gibraltar” will require Spain’s “prior agreement”, EU officials said.
What to remember from last week’s news?
The three candidates to replace Angela Merkel as the leader of the Christian Democratic Union, Friedrich Merz, Annagert Kramp-Karrenbauer and Jens Spahn, appeared together on stage. Mr. Merz emerged as the favourite, promising to re-establish CDU as the party of law and order in an attempt to win back conservatives who had switched to the Alternative for Germany party.
The CIA concluded that the Saudi Arabia’s de facto leader, Prince Mohammed bin Salaman, ordered for the “dead or alive” capture of the dissident journalist Jamal Khashoggi, which resulted in the journalist’s murder. This poses a threat to the royal family as domestic attempts continue their efforts to curb his wide-ranging powers.
America’s deficit in traded goods with China had increased by 4.3% in September to $34.7 billion, a record high. This was due to an 8% rise in American imports from China and the exports remained flat. The two reasons for this is that America’s fast growth tends to attract more imports and because of the lesser domestic power of the US president compared to China’s when it comes to what companies can and cannot export or import.
Did you know:
It is possible to economically (but not morally) estimate the value of human life. This is usually done when trying to draft a cost-benefit analysis of public projects in order to put a monetary value on the benefits of saving lives. One way of doing this is to use the wages; life’s value is the present discounted value of the lifetime stream of earnings, however this does not account for leisure time. Another way to do it is to simply ask a person how much their life is worth to them, easy right? Thus a more common approach with this method is to ask the individual to put a value on the things that might make them richer but increase the likelihood of them dying. People may lie when asked directly but their actions when they think nobody is watching never do, that’s why according to a revealed preference approach which looks at individual’s choices when faced with a monetary compensation needed when something increases their odds of dying or how much individuals are willing to pay to decrease these odds. This way, according to a Harvard University expert Kip Viscusi the value of human life is roughly $8.7 million.
What to expect from the coming week:
It almost seems like the saga of Brexit will never end as we expect to hear more about it in the following week. China’s involvement in the stealing of technology from the US will probably be further looked into, as the trade relations between the two countries worsen. We also expect to hear more from the ongoing situation with the migrant caravan in Mexico headed towards the US south border.
WRITTEN BY ALEKSA TRIFUNOVIC PLEASE DIRECT ANY INQUIRY TO AS.BESA@UNIBOCCONI.IT
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