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18 January 2016 |
The Economist offers an interesting perspective on immigration this week in its article, ‘Migrant Men and European women.’ In light of the attacks in Cologne on New Year’s Eve there appears to have been a complete U-turn from the nations which pledged to help migrants. However, the Economist argues that ‘the moral imperative has not changed since Aylan washed up on that beach. Half of Syria’s cities have been blasted to rubble, hundreds of thousands of people lie dead and tens of thousands are starving in towns under siege. Thousands more refugees arrive in Greece every week. Those who would shut them out must explain where they should go instead.’ This moral question remains. It is clear that we cannot just ignore the matter however, there needs to be some sort of system and organisation. Migrants need to accept and follow the laws for the respective country they enter and efforts need to be made in order to cease the tension between the migrant and the native. Whilst this friction is no doubt present through all migration in history, in an age in particular in the West where equality is preached, this should not be a problem. The Economist explains that ‘It is not “culturally imperialist” to teach migrants that they must respect both the law and local norms such as tolerance and sexual equality. And it is essential to make it as easy as possible for them to work. This serves an economic purpose: young foreign workers more than pay their way and can help solve the problem of an ageing Europe. It also serves a cultural one: immigrants who work assimilate far more quickly than those who are force to sit around in ghettos. In the long run most children of migrants will adopt core European values.’
Acting too quickly? David Cameron appears to be adamant to quickly wrap up the situation in Europe, with him claiming that he wants to complete the discussions on the EU referendum by late February in order to bring the expected in-or-out vote forward to 2016. One of the many fears for the in campaign is the hype currently surrounding the immigration debate, which remains one of the key renegotiation points. Cameron is currently arguing that immigrants should not be able to claim benefits until they have been in the UK for four years. However, his position appears to be weak and it is unlikely that he will be successful on this. Nonetheless, in-campaigners argue that despite the renegotiation, the UK should vote to stay with the European Union considering the economy is reliant on the Europe for exports. The Economist explains that if the UK leaves they might have to ‘like Norway and Switzerland…accept most EU rules and even pay money to Brussels.’ On the other hand, the leave campaign argues that ‘as a big economy and large market for other EU members, Britain would secure a favourable deal.’
Even the big firms are struggling... Walmart is closing 269 stores reports the BBC after failing to compete with retailers such as Amazon. The decision follows reports from sales in November and December, which according to the BBC did not meet its 3.7% target, falling short by 0.7%. In turn this will 'affect 10,000 US workers and 16,000 worldwide' reports the BBC. This comes following Walmart's decision to focus on becoming more 'nimble' rather than large and expansive. If other firms take this approach this could be detrimental for the US economy as unemployment is likely to increase which would consequently reduce people's spending power.
In other business news, job cuts are expected in Somerset after Shepton Mallet moves its cider production to Ireland. This will reduce workers at the site from 124 full time workers to 4. The company, according to the Guardian, has been criticised for its treatment of workers who found out about the cuts following reports in the media.
Reuters also reports this week on how Volkswagen may buy back cars impacted by the emissions scandal. Whilst nothing has been confirmed by the German car manufacturer as of yet, this could be an interesting move on behalf of VW, but will it repair the damage caused to its image by the overall emissions scandal?
The students are up in arms! Student grants have been abolished after ‘the government used secondary legislation… avoiding proper debate in the Commons and the Lords’ reports The Observer. The article goes onto express how the government’s behaviour is contradictory to the Prime Minister’s claims that ‘your dreams are our dreams’ as he encourages and promotes equality. However, it would appear that his Chancellor George Osborne has a different agenda. Osborne who is committed to get a budget surplus by 2020 has been fixated on cutting with each quarterly review adding new strategies in order for the government to save money but the question is at what cost? Theory does not always work in practise. The Telegraph reports on the new shocks facing middle income families with regard to pensions. Whilst confirmation has yet to be given to these cuts, the proposal will potentially see a saving of £12.5bn a year through cutting pension reliefs to ‘the basic rate of tax’ reports the Telegraph. Analysing the impact of this further by stating ‘If that helps the Chancellor meet his fiscal targets, so be it, but it is bound to be negative for the economy, resulting in less spending and/or less saving.’ Therefore, the question is proposed again, at what cost will the budget surplus be achieved? Currently, it would seem that if achieved by 2020, the budget surplus may only be momentary.
China is facing a challenge which could potentially change the political outlook of the country. The Economist reports that whilst economic growth in China is higher than any Western nation, the recent fluctuations in the stock market has resulted in ‘fears among investors that the Communist party does not have the wisdom to manage the move from Mao to market’, explaining that China ‘is caught in a dangerous no-man’s-land between the market and state control.’ Hence China has recently pursued a ‘semi-fixed currency and semi-porous capital controls.’ However, despite this liberalisation, workers remain dissatisfied with the ‘lack of financial options’ for savers explains the Economist. Will China be able to ‘clean-up’ its financial situation before it is too late?
In other global news, Isil’s latest advice to jihadists is to dress as a westerner in order to cover their identity reports the Telegraph. As terror remains a massive threat to Western nations is bombing the central organisation in Syria the best move? Hence the problem appears to be from within; people are leaving the UK and other Western nations to join Isil. With the latest advice issued from the Islamic State which promotes to behave like a Westerner the fight remains.
After much anticipation the Iran sanctions have been lifted reports the New York Times. This follows the investigation by International Atomic Energy Agency who concluded that 'Iran had fulfilled requirements to limit its nuclear activities'. However, whilst this will result a flood of oil to the market as well as 'roughly $100 billion in impounded money', Obama enforced new sanctions on 'several Iranian individuals and companies accused of violating United Nations restrictions on ballistic mission tests.' In turn whilst not comparable to the original sanctions, they may help ensure Iran's commitment to disarmament.
Despite the political and security elements to the sanctions, the economic repercussions of the sanctions lifting are expected to be harsh. The Telegraph reports on how within 10 days Russian oligarchs have lost $11bn due to the falling oil price and the weak Russian currency. This has resulted in market players cutting costs with BP for example cutting 4,000 jobs. It's fair to say that it may take a while before oil prices increase in particular as world economies such as manufacturing powerhouse China economic growth slows.