October 2022, Volume 28, Number 4
Russia invaded Ukraine on February 24, 2022. After six months of fighting, some 6.6 million Ukrainians had moved to European countries, including 3.8 million who registered for temporary protected or similar status. Seven million Ukrainians are displaced inside the country, and 13 million are trapped by fighting and unable to move.
Five million Ukrainians, mostly women and children, moved to the EU, where almost four million applied for permits that allow work and access to schools and health care. By August 2022 over 400,000 Ukrainians were employed in EU countries, including 200,000 in Poland and 100,000 each in the Czech Republic and Italy.
In September 2022, Ukraine counterattacked and pushed Russian forces back in the northeast of the country. As the fighting continued, analysts outlined three possible outcomes, Russian or Ukrainian victories or a stalemate, with stalemate the most likely outcome. Russia often wins wars of attrition eventually, as in Chechnya, Syria and WWII.
Many EU governments introduced plans to attract non-EU citizens who can work from anywhere, hoping to boost local economies with skilled tech workers who earn at least E2,000 to E3,000 a month. Most countries grant five-year visas to digital nomads. There were 15 million US digital nomads in 2021, double the number in 2019 before covid.
Europe struggled to adapt to higher gas prices, raising the prospect of another 1970s era of falling real incomes, growing inequality and rising social tensions. China, the US, and the Eurozone account for two-thirds of global economic activity, and slowdowns in all three promise rising unemployment.
Britain. Inflation topped 10 percent in summer 2022, prompting a wave of strikes by workers whose real earnings dropped. A quarter of British workers belong to unions, and union leaders argued that British workers must receive sufficient wage increases to maintain their real earnings and incomes.
Conservative PM Boris Johnson was replaced by Liz Truss in September 2022, who immediately pledged action to help people deal with rising energy prices. The pound has been dropping against the dollar, and approached parity with the dollar in September 2022. Truss is known for being opportunistic, switching positions to be on the winning side, although Truss says her hero is the Iron Lady Margaret Thatcher who took on unions and deregulated the British economy.
The House of Lords was created in the 1300s and has existed in its current form since 1801. Members receive $379 a day for their service, and some pay L3 million or more for an appointment in the form of support for the ruling PM who appoints them. There are about 800 members of the House of Lords compared to 650 in the House of Commons, making it second only to China’s National People’s Congress with 2,980 members among legislative bodies.
The average age of Lords is 71, and about 100 are heredity peers whose titles and membership pass from one generation to the next. Some Lords work hard and scrutinize bills approved by the Commons, while others rarely appear. About 700 Lords are nominated by the PM and appointed by the Queen, including 86 who were nominated by Johnson.
Queen Elizabeth II’s death in September 2022 highlighted the wealth of the Windsor royal family, which Forbes estimates to be $28 billion, including the $20 billion Crown Estate. The British government provides a Sovereign Grant of almost $100 million a year.
Germany. The coalition government led by Olaf Scholz struggled with energy policy in summer 2022 after Russia reduced the volume of gas flowing through the Nord Stream 1 pipeline. Nord Stream 2 was completed but not put into service because of Russia’s February 24, 2022 invasion of Ukraine, which also led to a Zeitenwende or major increase in German defense spending.
Germany deepened its dependence on Russian energy over the past two decades and decided to close its nuclear plants by 2024 after the Fukishima nuclear accident in 2011. In August 2022, the government announced that the three remaining nuclear plants would continue to operate after 2024.
The gas crisis prompted a rethink of Germany’s energy policies. Germany resisted LNG gas because Siberian gas delivered via pipeline was cheaper, but allocated $2.5 billion for four floating LNG plants to handle gas delivered by ship and moved around the country via new pipelines. Liquefied natural gas is chilled to minus 260F so that its volume is reduced to one six-hundredth for transport. The US surpassed Qatar as the world’s largest exporter of LNG in 2022.
Drought reduced water levels on the Rhine and Danube rivers, disrupting shipping and the river-boat cruise industry. Over 1.5 million visitors a year take river cruises in Europe, and Viking and other river boat operators offered vouchers good for discounts on future cruises when they had to substitute buses for ships when the river was too low.
Greece. The government has struggled to deal with Syrian and other migrants who travel by boat from Turkey’s western coast to nearby Greek islands. Under a 2016 EU-Turkey agreement, the EU provides money to Turkey to improve conditions for migrants there in exchange for Turkish efforts to prevent illegal exits and to accept the return of migrants who reach Greece.
Relatively few migrants have been returned from Greece to Turkey. Instead, Greek authorities have been towing boats and rafts with migrants back to Turkey, according to a 2022 EU audit of border control agency Frontex. The Greek government disputes NGO reports of widespread migrant pushbacks.
Italy. Rising interest rates and the falling Euro strained business in Italy, where public debt is 150 percent of GDP and there is regional inequality and social polarization that contributes to political instability.
PM Mario Draghi lost a vote of no confidence, and the Brothers of Italy led by Giorgia Meloni won 26 percent of the vote on September 25, 2022 in the first national elections since 2018. Meloni, Italy’s first female PM, promised to restore respect for the family and reduce immigration with the support of populists Matteo Salvini and Silvio Berlusconi; their coalition won 44 percent of the vote.
Italy banned cruise ships weighing more than 40,000 tons from the San Marco basin surrounding Venice in 2012, but delayed enforcement until alternative ports were developed nearby so that cruise ship visitors could travel to Venice by bus. Many of the largest cruise ships went to Marghera, the commercial port on Venice’s mainland, while some smaller ships went to Chioggia, another city built on islands nearby.
Netherlands. The Dutch government in June 2022 proposed to halve the country’s ammonia and nitrogen emissions by 2030; many of the nitrogen emissions are from the country’s 1.5 million cows. Some 52,000 Dutch farms employed 150,000 full-time workers in 2020.
The government has allocated E25 billion to help farmers to reduce nitrogen emissions or, if they cannot, to buy out their farms. Environmentalists praised the government plans, while farmers protested. The PM and his cabinet went on a listening tour to discuss with farmers ways to reduce emissions and preserve farming.
The EU’s Natura 2000 plan aims to protect 18 percent of EU land and eight percent of its marine territory from too much ammonia and nitrogen, including on privately owned land. Over half of Dutch residents live below sea level, prompting government efforts to reduce climate change.
A $500 million, 417-foot long sailing yacht built by the 300-employee Oceano boat builder for Amazon founder Jeff Bezos in Rotterdam has a mast too high to pass under the historic 1927 Hef bridge, which can be raised to 230 feet above the water. Oceano offered to pay to remove the middle section of the bridge and replace it after the yacht passed, drawing protests from those opposed to dis-mantling the bridge.
Historically, most Dutch residents were Calvinists, Protestants who believe in self-discipline, frugality and conscientiousness. A third of the Netherlands is below sea level, forcing residents to cooperate to build dikes and keep the sea at bay.
Sweden. The anti-immigrant Sweden Democrats became the second-largest party in September 2022 elections, winning 20 percent of the vote while the dominant Social Democrats won 30 percent. The Sweden Democrats are expected to support a center-right coalition government led by Ulf Kristersson of the Moderate Party that has 176 seats in the 349-member Parliament.
The Sweden Democrats are expected to push the coalition to adopt policies that restrict immigration and make it easier to deport foreigners convicted of crimes. Almost 20 percent of Swedish residents were born abroad, and there has been an uptick in gang-related gun violence often linked to immigrant youth.
The anti-migrant Danish People’s Party and Norway’s Progress Party have joined governing coalitions in these countries. However, the center-right coalition in Sweden is expected to keep the Sweden Democrats out of the cabinet.
Turkey. Turkey hosts over four million refugees, mostly Syrians, more than any other country. However, economic turmoil and nationalism are eroding the welcome for immigrants, prompting President Recep Tayyip Erdogan to promise to send a million refugees home within the next year, echoing populists who use anti-migrant messages in a bid for votes in national elections scheduled for 2023.
At least 200,000 Syrians are seasonal farm workers, many of whom receive half of the $10 daily wage paid to Turkish farm workers. In Malatya, east of Ankara, the heart of Turkey’s dried apricot production, Syrians are employed to shake apricots from trees unto tarps and then cut them and remove the pits before drying. The government acknowledges the importance of seasonal Syrian workers by exempting them from the need for work permits. Most of the Kurds who once migrated seasonally within Turkey to fill seasonal farm jobs no longer do so.
China. China’s GDP was $18 trillion in 2021, second to US GDP of $23 billion. With more rapid Chinese economic growth, China was expected to have the world’s largest GDP by 2030, but covid lockdowns and an aging population may slow Chinese growth.
China provided $1 trillion in grants and loans to 150 developing countries via its Belt and Road initiative, which the US called debt-trap diplomacy because of the danger than countries would be unable to repay. Sri Lanka, Zambia, and other borrowers built roads, ports, and railroads and are unable to repay, requiring that China stretch out repayment.
Chinese manufacturers installed half of the world’s heavy duty industrial robots, almost 250,000, in 2021 to cope with a shrinking workforce. China produced 30 percent of the world’s manufactured goods in 2021 with 147 million employees, down from the peak 169 million in 2021; 365 million Chinese were employed in services.
China continues to build coal-fired power plants and increasing its carbon emissions; coal generates about two-thirds of China’s power. US power plants generate 1,150 gigawatts to produce electricity (one gigawatt powers 770,000 homes).
China’s repression of Muslims in Xinjiang has led many governments and firms to avoid goods from this western region in order to avoid forced labor. Many ethnic Uyghurs are forced to live in camps and work in factories, prompting the US to ban all products from Xinjiang.
The US the Uyghur Forced Labor Prevention Act that went into effect in June 2022 assumes that goods from Xinjiang are made with forced labor, while the EU is considering a ban on all products made with forced labor without mentioning Xinjiang. DHS chairs the interagency Forced Labor Enforcement Task Force, and is seeking more funds for CBP to investigate and block imports of goods that may be made with forced labor, including cotton, tomatoes and polysilicon-based products.
The ILO in September 2022 reported that there were 17 million people in forced labor around the world, including four million forced to work by governments.
China has over 3,000 ships that fish in deep waters, and environmentalists believe that they are overfishing waters around the world. Over 10 percent of the Chinese deep-sea fishing ships operate legally around the Galápagos islands, raising fears that overfishing there may deplete unique species in the UNESCO World Heritage Site that inspired Charles Darwin’s theory of evolution.
Chinese fishing boats transfer their catch to refrigerated mother ships that provide food and fuel and return the catch to China. The FAO warned that stocks of the most prized ocean fish continue to decline.
India. India produces more milk than any other country, over 200 million tons a year from 80 million cows (the US has fewer than 10 million dairy cows). Almost half of India’s milk is from buffaloes and another quarter is from crossbred cattle bred for the resilience of indigenous cattle and the higher yields of European breeds. India’s dairy sector includes large farms that use fans and misters to cool cows as well as small farmers who sell milk to village cooperatives.
Philippines. The Philippine government ordered KBR to raise the wages of the 1,200 Filipino workers employed at the US military base of Diego Garcia from $5.25 an hour to the $7.25 federal minimum wage. KBR says that, when considering the housing and food provided to migrants, they already earn more than the federal minimum wage. Diego Garcia is 1,000 miles off the southern tip of India.
Qatar. Facilities for the November-December 2022 World Cup were built by migrants from Asian countries, some of whom paid for their Qatari jobs and then were not paid by local employers. The Al Bandary firm did not pay workers for months; workers who protested were deported. About two-thirds of the 2.8 million residents of Qatar are migrant workers.
After winning its bid to host the World Cup in 2010, Qatar adopted a minimum wage and ended the kafala employment system that made workers dependent on their sponsors, giving employers the power to prevent workers from leaving the country.
Saudi Arabia. Saudi Arabia plans to spend $100 billion a year over the next decade to become a destination for tourists, with a goal of attracting 55 million by 2030. However, with Mecca accessible only to Muslims and alcohol often banned, attracting tourists may be difficult.
The government is spending $40 billion to develop Ad Diriyah, the mud-brick UNESCO World Heritage site 15 miles from Riyadh where the ruling ibn Saud family took power in the 1700s and forged an alliance Wahhab religious leaders in 1744. The Saudi Arabia population rose from about two million in the 1920s to 34 million today, including 12 million foreigners led by two million Bangladeshis, 1.5 million Filipinos and a million Egyptians.
The Standard Oil Company of California, which discovered oil in Saudi Arabia in 1935, became Saudi Aramco, and after WWII the US guaranteed Saudi Arabia’s security in exchange for Saudi oil. After the November 1979 attack on the Grand Mosque in Mecca, Saudi Arabia became more conservative, restricting women and adding religious instruction in schools.
King Fahd turned to the US to help liberate Kuwait after Iraq invaded in 1990, prompting dissent from Osama bin Laden and other Saudi Arabia religious conservatives that culminated in 15 of the 19 hijackers on 9/11 being Saudis. Current King Salman appointed his 31-year old son crown prince in 2017, making Mohammed bin Salman the heir apparent.
Saudi Arabia is locked in a proxy war with Iran in Yemen. MBS has come under suspicion for the surprise resignation of the Lebanese PM during a visit to Saudi Arabia that was quickly reversed and the killing of journalist Jamal Khashoggi in 2018. MBS has launched a Vision 2030 plan to substitute technology and tourism for oil as the mainstay of the Saudi Arabia economy despite some dis-satisfaction with MBS’s policies among the 15,000 members of the royal family, including 2,000 senior family members.
Sri Lanka. The Rajapaksa family led by Mahinda used a victory over Tamil Tiger separatists in 2009 to take and hold power for most of the past two decades. After being voted out in 2015 elections, the Rajapaksas returned to power in 2019 with the support of Buddhist Sinhalese who are a majority of the 22 million residents, and turned the country into a family business.
The Rajapaksa government made many mistakes in economic policy, taking on foreign debt to expand government and welfare services while cutting taxes. The Sri Lankan government defaulted on its $36 billion in foreign debt in May 2022, the first Asian country to default since Pakistan in 1999. Whimsical Rajapaksa policies backfired, including forcing farmers to go organic by banning imports of fertilizer, which reduced crop yields and required more food imports. Food prices rose over 80 percent between 2021 and 2022.
Protestors took over government buildings in July 2022, forcing the Rajapaksas to flee to the Maldives. China holds much of Sri Lanka’s debt, and its strategy is usually to defer repayment of loans but not reduce the principal owed. The Rajapaksas took Chinese loans to upgrade the port in their hometown of Hambantota and, when it was unable to repay the loan, gave the Chinese state company that rebuilt the port a 99-year lease in 2017, an example of what the US calls debt-trap diplomacy.
South Africa. The government is debating Basic Income Grants of at least R620 a month for the 34 million people aged 18 to 59 by raising taxes on the richest 10 percent of households, which have 3.5 million people. Average pretax incomes in these households are about R38,000 per person, and their tax rate would have to increase from 33 to 50 percent to cover the cost of a BIG system.
ANZ. The OECD reported that Canada and Australia faced the most severe labor shortages in summer 2022. About 30 percent of the residents of Australia and New Zealand were born abroad, and both countries largely closed their borders to immigration to prevent the spread of covid. About two-thirds of the population growth that averaged 1.6 percent a year before covid came from immigration, and population growth slowed during covid.
Australian issued 80,000 working holiday visas in 2020 and 2021, down from 180,000 a year before covid.
Citrus farmers in Riverina NSW complained in September 2022 of labor shortages in 2022, saying that they must pay more than the casual rate under the horticultural award of A$26.73 an hour. Some farmers say that their employees are earning A$200 to A$300 a day. The National Farmers Federation (NFF) wants the value of benefits such as housing and food when determining whether workers are receiving at least the minimum wage, and supports criminal penalties for employers who commit wage theft.
Under the UK-Australia FTA, British backpackers will not have to do 88 days of farm work beginning in 2024 in order to extend their working holiday visas and accept nonfarm jobs. The Labor government elected in 2022 plans a special agriculture stream under the Pacific Australia Labor Mobility (PALM) program to bring more Pacific Islanders to Australia that includes four-year portable visas and respect for worker rights.
Australian farm land prices are rising. Macquarie Group sold its 103,000-hectare Lawson Grains farm in NSW and Western Australia for A$600m to Canada’s Alberta Management Investment Corporation, while Hughes Pastoral paid A$215 million for the 438,000-hectare Miranda Downs station at Normanton in Queensland and $100 million for 550,000 hectares in the Northern Territory.
Dutch seafarer Abel Tasman discovered New Zealand in 1642, and a year later the Dutch East India Company adopted the name in honor of Zeeland, a western province of the Netherlands. Te Paati Maori wants to change the name of the country to Aotearoa or land of the long wide cloud and to change other place names to their Maori labels.