The people of Earth have faced a global pandemic, extreme weather and a senseless war in quick succession and the economy is buckling under the weight of these problems. Global inflation is relentlessly marching upward. The latest American figure is 8.5% for July, but to make my point I will have to take you back to when it was 9.1% in June. This was the highest level in four decades. Speaking of 40 years, the United Kingdom is itself facing inflation levels above 10% for the first time in 40 years. Closer to home, in the Republic neighbouring Eswatini, the same measure is just shy of the 8% mark. This is a figure that was last seen over a decade ago. Then come to Mbabane and you find inflation reported within the target band and way too close to being half the number reported in Mzansi.
You wouldn’t be the first to wear that quizzical look on your face. How can inflation be so low here when we are an economy that depends very much on the produce of others? Who can comment on the veracity of the Swazi numbers? More than 70% of our imports are from SA but, on average, we are able price lower than they can? At best, this is a miracle; at worst, a fabrication. Our economic woes are due for public debate. However, matters of public interest very quickly invoke political themes and I don’t know how much truth such discussions can realistically carry in a country that is not particularly known for being a trailblazer for freedom of speech rights.
The picture shows the latest inflation number published by the British Office for National Statistics. The last time inflation was this high, your parents were teenagers. The expectation is for inflation to continue to rise, approaching the 20% mark by early 2023. The UK is in problems innit.
The biggest contributor to UK inflation has been the realisation of Putin’s interpretation of diplomacy. He invaded Ukraine and closed the tap on the fossil fuels that this world runs on. Heads of States are scrambling all over the place looking for alternative sources of energy that for now remain elusive. In the meantime, we have to pay a premium on energy until supply of this finite resource can go back to something resembling “normal” levels.
The UK energy regulator, Ofgem, is set to review energy prices in October. In this case "review" loosely translates to "Siya phezulu." The island has been experiencing warm weather conditions that are not characteristic. In fact, the weather has been so warm that it has broken records that go as far back as 1659. The hottest day in UK history was recorded this year. But here come some famous words: “Winter is coming.” The energy crisis guarantees that this will be most expensive winter ever for the Brits. They will have to pay about triple what they paid on the same bill 12 months ago.
So I ask again, how bad can it get? *clears throat* … *Russel Peters voice*, “Real’ bad!”
Russia’s Economy Since the Invasion
The world’s problem child, Moscow, has been an unwelcome guest in Ukraine for exactly 6 months this week. The repercussions of invading a sovereign state in the modern era are obvious. Rules for maintaining conditions for peace are well documented in the myriad of international peace agreements that many of our countries are party to. The Russians knew what they were risking.
The earliest sanction on Russia came 3 days before the actual invasion. The Russian leader’s decree of 21 February 2022 expressed that Russia recognised eastern Ukraine as outside the territory of Ukraine and therefore independent. Before he had swallowed those words, the US and the EU interrupted on some, “Imma let you finish”. They instituted sanctions by COB. By the time Russia invaded on 24 February 2022, the UK had frozen assets of 5 Russian banks; Germany had suspended the USD 11 billion gas pipeline between Russia and Germany that was meant to increase gas supply to Germany; Australia had restricted travel for 8 Russian officials; and, Japan, Canada and Iceland had restricted trade. Basically every other country followed suit soon after invasion day and to date, Russia is facing a historically high sanction count at over 5000 different targeted sanctions.
Russia’s economy was on the upswing when the year opened. They were on course for accelerated growth this year. Six months on from the invasion, how are things going? Glad you asked. After the events described in the preceding paragraph, Russia stopped publishing some economic data; but from the information that is in public media, the consensus seems to be “Russia is wounded, but not crushed.” The Russian currency shed a lot of value initially in late February to around end of March but bounced back after the government limited currency transactions and imports fell sharply. The only countries still trading with Russia are doing so either reluctantly or surreptitiously.
Western rhetoric has been that the Russian economy is struggling and the economy will shrink by at least 10% in 2022. So far, it appears the number is closer to half of that. Which is why the Russian leader has been loud, saying things like “the sanctions have failed.” Multinational companies with billions of dollars invested in the Russian economy had to suspend operations suddenly in response to pressure from investors and consumers. Companies like Adidas, Shell, McDonald’s, H&M, Ikea and others wound down operations in that region and left leaving hundreds of thousands without jobs. This vacuum is slowly being filled. For example, when Starbucks quit Russia, closing 130 outlets in the process, it was taken over by a local rapper and Russified. The new, genius name for the coffee chain that he came up with all by himself is “Stars Coffee.” I LOL’d at that, personally. “So creative.”
What I’m Reading
I’m still reading Americanah. I’m about half way through. Ifem finds that America is not what she thought it was. There are rats and dingy apartments in America too. People have to work 3 jobs to barely make a living wage. She adjusts over time and gets into interesting romances as a young woman should. Interesting because it’s relationships with white guys. She is very sensitive to racial differences and idiosyncrasies of ethnicity. She distinguishes between an African, a black person from the Caribbean, an American black, a half-cast, a dark caucasian... and on it goes. She observes differences on how they carry themselves and how they relate to the Whites in particular. I’ve met someone just like her in real life. People who can notice racial tension where you would think none exists. I still haven’t figured out how she is dating outside her race when it matters so much to her what race people are. It’s still an okay read.
If anything else happened this week, I missed it. Till next Sunday 👋🏾.
Comments