Jan 30 update

Republican politicians piled pressure on President Joe Biden to target Iran directly after an attack on an American base in Jordan by Iranian-backed militias killed three American soldiers on Sunday. Lindsey Graham, a Republican senator, called for America to “hit Iran now”. The White House said it was seeking a “very consequential” response, but John Kirby, a White House spokesman, also said the government was “not looking for a war with Iran”. Iran distanced itself from the attacks, dismissing American claims of involvement as baseless.

A court in Hong Kong ordered Evergrande, a Chinese property giant, to liquidate because of its debt of over $300bn. The judge who made the ruling said “enough is enough” after the company failed to come up with a restructuring plan. Trading in Evergrande shares in Hong Kong was suspended. They had fallen by 21% following the announcement.

The EU announced it would review its funding of UNRWA, the UN’s agency for Palestinian refugees, after 12 of its staff were alleged to have been involved with Hamas’s attack on Israel on October 7th. UNRWA, which is sheltering more than a million Gazans, says many of its aid operations could stop by the end of February after more than a dozen countries suspended funding following the allegations.

The Financial Times reported that the EU plans to undermine Hungary’s economy if it does not lift its veto on a €50bn ($54bn) aid package to Ukraine at a leaders’ summit later this week. The bloc’s members could slash EU funding to Hungary, aiming to pile pressure on Viktor Orban, its pro-Russian prime minister. Hungary’s EU minister described the proposals as “blackmail”.

Ghana’s central bank cut the country’s benchmark interest rate by a percentage point to 29%, making it the first African country to loosen its monetary policy in 2024. The move comes as inflation falls; the annual rate was 23.2% in December—a 21-month low. Ghana also hopes to reach a restructuring deal with its commercial creditors in the coming months, after it defaulted on its debt in 2022.

The African National Congress, South Africa’s ruling party, suspended the membership of Jacob Zuma, the country’s former president, after he launched a rival organisation in December. Mr Zuma’s near decade-long tenure was dogged by corruption, which the ANC has struggled to shake off. The party has ruled South Africa since the end of apartheid, but looks more vulnerable than ever heading into this year’s elections.

Japan’s “SLIM” spacecraft resumed operations more than a week after it landed on the Moon. JAXA, Japan’s space agency, said the explorer had regained power after a problem with its solar panels. It will now begin research to understand the origins of the Moon. SLIM’s lunar landing made Japan the fifth country to land a spacecraft on the Moon, following India’s successful Chandrayaan-3 mission in August.

In the run-up to America’s presidential election, keep on top of the stories that matter with The US in brief, our new daily update.

Figure of the day: $83m, the sum a court ordered Donald Trump to pay E. Jean Carroll, an advice columnist, for insults and denials of a sexual assault. Read the full story here.

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PHOTO: AP

How will America retaliate against Iran?

Since October Iran-backed groups have fired drones and rockets at American outposts across the Middle East 160 times. Almost all have missed or been shot down. On Sunday one got through, killing three American soldiers. The incident piles pressure on President Joe Biden to retaliate.

Mr Biden said that “radical Iran-backed militant groups operating in Syria and Iraq” were responsible. Iran’s Islamic Revolutionary Guard Corps has supported armed groups in both countries, many of which operate under the umbrella of a so-called Islamic Resistance in Iraq, and some of which have been absorbed into Iraq’s armed forces.

An American military response appears inevitable. But while modest reprisals may appear inadequate, heavy retaliation could cause other problems. The attack comes as America and its allies are attempting to negotiate a pause in the Israel-Hamas war and a hostage deal. An eruption of violence between America and Iran could quash hopes of restoring calm any time soon.

PHOTO: GETTY IMAGES

Tension between Iran and Pakistan

The 900km border between Iran and Pakistan has long been plagued by violence. Iran claims Sunni militants are given sanctuary in Pakistan, while Pakistan alleges Baloch separatists, who agitate for their own state, are housed in Iran. On January 16th Iranian missiles and drones killed two people in Pakistan’s Balochistan province; two days later retaliation by Pakistan killed nine alleged militants in Iran. The strikes were a major escalation.

In an effort to improve relations, on Monday Pakistan’s government will host Iran’s foreign minister in Islamabad. Expect a mechanism for curbing cross-border militancy and improving intelligence sharing. But the diplomatic patch up could be tested by more violence. On Saturday nine Pakistani labourers were killed by gunmen, likely to be Baloch militants, in Saravan, an Iranian city near the border. The Pakistani government has also approved the deployment of troops for the “peaceful conduct” of elections being held on February 8th, potentially drawing troops away from border duties at an exceptionally tense time.

PHOTO: AP

Vietnam and the Philippines unite against China

On Monday Ferdinand Marcos, the president of the Philippines, arrived in Hanoi for talks with his Vietnamese counterpart, Vo Van Thuong. The Philippines and Vietnam are neighbours, forming the western and eastern shores of the South China Sea. And they make common cause in resisting efforts by China to enforce its claim to almost all the waters between them, and in pursuing their own maritime ambitions.

In conflicts over disputed waters in the South China Sea, the front lines are defended by coastguard cutters jostling, rather than warships exchanging gunfire. To strengthen their hand, the Philippine and Vietnamese coastguards have struck a co-operation agreement, to be signed while Mr Marcos is in Hanoi. The accord is far from being an alliance. But it is a clear sign that wherever in the western Pacific China is throwing its weight around, its neighbours are getting together to push back.

PHOTO: GETTY IMAGES

Is this the end of Evergrande?

A Hong Kong court on Monday ruled to liquidate Evergrande, the world's most indebted property developer, following years of failed attempts to restructure the Chinese company. China’s property sector was thrown into disarray in 2021 as government rules on leverage pushed companies to default. Evergrande defaulted at the end of 2021 and has never satisfied a group of offshore creditors with a plan to restructure the group. It has over $300bn in liabilities.

The ruling will send yet another shock through China’s property sector. Not least because of doubts over jurisdiction. It is unclear whether authorities within mainland China would uphold such a ruling from a Hong Kong judge. For weeks momentum has been building for a full winding-up of the group. Two groups of creditors are said to have recently united in support of the liquidation, according to Reuters. It is far from certain how much these bondholders, based outside of China, will be able to recoup. One thing is clear: the ruling will not be the final chapter in Evergrande’s saga.

PHOTO: GETTY IMAGES

Forecasting America’s weather

Meteorologists, hydrologists and climate scientists are gathered in Baltimore this week for the annual conference of the American Meteorological Society, the official body for those responsible for forecasting the weather. Their profession is increasingly important. Weather impacts much of life, from sports matches to supply chains, and it is being made more variable and extreme by climate change. That makes it trickier to predict.

A recent study by economists at the University of Arizona estimated that, in terms of mortality costs alone, improving forecasts by 50% would be worth $2.1bn to America’s economy each year. The financial strain caused by extreme weather events like storms is becoming ever more monumental. In hurricane-prone states like Florida some houses are now completely uninsurable. Swiss Re, an insurer, found that in the first half of 2023 thunderstorms hitting America accounted for almost 70% of the $50bn-worth of all insured losses from natural catastrophes worldwide. Getting the weather wrong can be an increasingly expensive mistake.

PHOTO: CAPITAL PICTURES

A cult classic is re-released

“Peeping Tom”, released in 1960, was directed by Michael Powell of the much loved British film-making duo Powell and Pressburger, the pair behind “The Red Shoes”. Shockingly depicting a serial-killer photographer who films the terror of his victims, “Peeping Tom” was reviled by critics as a “depraved” and “evil” work which deserved to be “flush[ed]...down the nearest sewer.”

The film in effect ended Powell’s career. But two decades later it acquired a champion in Martin Scorsese, an acclaimed American director who cites Powell and Pressburger as a major influence and thanks to whose support “Peeping Tom” is now revered as a cult classic. According to Mr Scorsese the film confronts our “morbid urge to gaze”, and shows “how close movie-making can come to madness.” In 1979 there was just one, fading print of the film in the whole of America. Now carefully restored, on Monday it is being reissued in lavish annotated UHD and Blu-Ray editions.