British think tanks the Institute For Public Policy Research and Common Wealth said in a report Thursday that big firms made inflation “peak higher and remain more persistent,” particularly within the oil and gas, food production and commodities sectors.
The author’s analysis of financial reports from 1,350 companies listed in the U.K., U.S., Germany, Brazil and South Africa found nominal profits were on average 30% higher at the end of 2022 than at the end of 2019.
This does not necessarily mean that overall profit margins have risen, but it does mean that higher prices have been shouldered by consumers, the authors said.
“Companies with (temporary) market power seemed to be able to protect their margins or even reap ‘excess profits’, setting prices higher than would be socially and economically beneficial,” they wrote.
The report stresses that corporate profits were not the sole driver of inflation and did not cause the energy market shock following Russia’s invasion of Ukraine in February 2022. But the report authors argue that so-called “market power” has not been sufficiently captured in the current debate around the causes of inflation, particularly when compared with the impact from the labor market and rising wages.
“In an energy shock scenario, if costs were equally shared between wage earners and company owners, one would expect the rate of return to fall as firms do not increase prices fully to make up for higher costs, and wage earners do not fully keep up with inflation. But this is not what happened. A stable rate of return – for example, as seen in the UK – suggests pricing power by firms, which allowed them to increase prices to protect their margins,” it said.
Glencore declined to comment when contacted by CNBC. The other companies did not respond.
Inflation began a steady march higher in mid-2020 amid a host of factors including global supply chain constraints, volatile food production conditions, tight labor markets, pandemic stimulus measures and the Russia-Ukraine war.
The impact of so-called “greedflation,” or companies raising prices more than needed to protect margins from higher input costs and market movements, has been contested.
Severalanalysts, along with policymakers including European Central Bank President Christine Lagarde, have cited the issue as a potential contributing factor to inflation.
But what constitutes “greedflation” is not an exact science. This year, the boss of U.K. supermarket giant Tescosuggested that some food producers may be raising prices more than necessary and fueling inflation, a claim that was strongly denied by the industry.
A blog posted by economists at the Bank of England in November found “no evidence” of a rise in overall profits among companies in the U.K., where they say prices have risen alongside wages, salaries and other input costs, with a similar picture in the euro zone.
“However, companies in the oil, gas and mining sectors have bucked the trend, and there is lots of variation within sectors too – some companies have been much more profitable than others,” they wrote.
The U.S. announced Wednesday $175 million in additional Ukraine aid from its dwindling funds for Kyiv but Biden failed to convince Republican senators to back a larger $110 billion emergency spending bill that included a large chunk of aid for Ukraine (of around $50 billion) amid continued disputes over southern border security.
US President Joe Biden (R) talks to Russian President Vladimir Putin prior to the US-Russia summit at the Villa La Grange, in Geneva on June 16, 2021.
Peter Klaunzer | AFP | Getty Images
“If Putin takes Ukraine, he won’t stop there,” Biden said, Reuters noted. Putin will attack a NATO ally, he predicted, and then “we’ll have something that we don’t seek and that we don’t have today: American troops fighting Russian troops,” Biden said.
“We can’t let Putin win,” he said.
The address drew an angry response from Moscow, with Russia’s Ambassador to the U.S. Anatoly Antonov commenting on Telegram that Biden’s comments were “provocative rhetoric unacceptable for a responsible nuclear power.”
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The U.K.’s National Cyber Security Centre said Thursday that Russian intelligence services had led a “campaign of malicious cyber activity attempting to interfere in UK politics and democratic processes.”
In a statement released on their website, the NSCS said the attempts of interference were “sustained” but “unsuccessful.” It linked a group called Star Blizzard to the activity, which the NSCS said “is almost certainly subordinate to Centre 18 of Russia’s Federal Security Service.”
According to the statement, U.K. parliamentarians were targeted from at least 2015 until this year, alongside journalists, universities, NGOs and public sector organizations. It also said the activity led to several leaks including of U.K.-U.S. trade documents before the 2019 U.K. election.
— Sophie Kiderlin
THU, DEC 7 20239:27 AM EST
Russian nationalist who wanted to run against Putin to stay in detention
Igor Girkin (Strelkov), the former top military commander of the self-proclaimed “Donetsk People’s Republic” and nationalist blogger, who was detained in July and remanded in custody awaiting trial on charges of extremism, sits inside a glass defendants’ cage during a hearing to consider an appeal on his extended pre-trial detention at the Moscow City Court in Moscow on October 17, 2023. (Photo by Natalia KOLESNIKOVA / AFP) (Photo by NATALIA KOLESNIKOVA/AFP via Getty Images)
Natalia Kolesnikova | Afp | Getty Images
Russian nationalist Igor Girkin, who had said he wanted to challenge Vladimir Putin in a presidential election in March, had his detention extended for six months on Thursday as he awaits trial on charges of inciting extremism.
The ruling, announced by a Moscow court, extinguishes the already faint prospect that Girkin might be allowed to run.
The 52-year-old is known in the West for his role in the shooting-down of Malaysia Airlines Flight MH17 over Ukraine in 2014 with the loss of 298 passengers and crew. A Dutch court last year convicted him in absentia of murder. Girkin has denied involvement.
The former Federal Security Service (FSB) officer had organised pro-Russian militias in eastern Ukraine since early 2014. Also known as Igor Strelkov, he has repeatedly said Russia faces upheaval unless the military leadership fights more effectively in Ukraine.
He could be jailed for five years if convicted of “public calls to commit extremist activity.”
Girkin complained in a Telegram post last May that authorities in the Russian-controlled part of Ukraine’s Donetsk region were failing to provide support payments to families of men who had been called up to fight against Ukraine.
Girkin posted that “to have someone shot for such a thing would be too little”. His lawyer said Girkin admitted writing the post but did not agree that it amounted to extremism or incitement. Girkin announced his unlikely election bid from prison last month, telling supporters to set up a headquarters and collect signatures.
His detention will now run well beyond the March 17 election, in which Putin is expected to stand and win comfortably. Girkin has said Putin was misled by Ukraine, the West and his own defense and security chiefs before launching his invasion in February 2022.
In directly criticising the president, he crossed a line that not even mercenary chief Yevgeny Prigozhin had dared to breach. Prigozhin, who mutinied against the defense establishment after savaging its conduct of the war, was killed in a plane crash in August that is still under investigation.
Russian President Vladimir Putin claimed Thursday that Russia’s economic isolation as a result of international sanctions is actually helping the country to become a “growth center” in a “new global economy.”
Addressing the Russia Calling business forum in Moscow Thursday, Putin said sovereignty was a requisite for economic success, repeating claims made previously that sanctions had made Russia economically self-sufficient.
“The world has entered an era of radical changes and serious tests not only for specific companies and sectors, but also for whole countries and regions of the world,” Putin said.
“Only a strong, stable and, I stress, sovereign country will be able to pass this phase successfully, to become one of the growth centers of the new global economy,” he said, in comments translated by Reuters.
Putin accused the West of destroying its own financial system, claiming that “it has been resting on its laurels, for so long becoming accustomed to monopolies and exclusivity, to the lack of real alternatives, to the habit of changing nothing, that it is becoming archaic.”
Putin also claimed Russia’s gross domestic product was set to grow 3.5% in 2023 after a 2.1% contraction in 2022. “Today, GDP is already higher than it was before the Western sanctions attack,” he told delegates.
— Holly Ellyatt
THU, DEC 7 20238:01 AM EST
Putin’s spy chief tells U.S: Ukraine will become your Vietnam
Russian President Vladimir Putin’s foreign intelligence chief told the United States on Thursday that Western support for Ukraine would turn the conflict into a “second Vietnam” haunting Washington for years to come.
Putin sent troops into Ukraine early last year, triggering a war that has killed or wounded hundreds of thousands and led to the biggest confrontation between Russia and the West in six decades.
MOSCOW, RUSSIA – MAY 09: (RUSSIA OUT) Russian Foreign Intelligence Service (SVR RF) Director Sergei Naryshkin seen while visiting the Victory Day Red Square Parade on May 9, 2023 in Moscow, Russia. Moscow marks Victory Day with a parade after a fresh wave of strikes across Ukraine. (Photo by Contributor/Getty Images)
Contributor | Getty Images News | Getty Images
The West has given Ukraine more than $246 billion in aid and weapons, but a Ukrainian counteroffensive has failed and Russia remains in control of just under a fifth of Ukrainian territory. “Ukraine will turn into a ‘black hole’ absorbing more and more resources and people,” Sergei Naryshkin, head of Russia’s Foreign Intelligence Service (SVR), said in an article in the SVR’s house journal, “The Intelligence Operative”.
“Ultimately, the U.S. risks creating a ‘second Vietnam’ for itself, and every new American administration will have to try to deal with it.”
U.S. President Joe Biden has warned that a direct NATO-Russia confrontation could trigger World War Three and repeatedly ruled out sending American soldiers to Ukraine. The Vietnam War was in effect an East-West Cold War conflict in which the United States fought alongside the forces of South Vietnam against a north supported by the communist powers of China and the Soviet Union.
The war, in which several million were killed, ended in 1975 with victory for North Vietnam and ignominious defeat for the United States, which had lost more than 58,000 of its own combatants and kindled a powerful anti-war movement at home. Biden pleaded with Republicans on Wednesday for a fresh infusion of military aid for Ukraine.
— Reuters
THU, DEC 7 20236:51 AM EST
The hardest part of Ukraine’s winter period is ahead, intelligence official says
Utility man on the platform of a cherry picker truck repairs electricity on January 15, 2023 in Dnipro, Ukraine.
Global Images Ukraine | Getty Images News | Getty Images
The hardest part of the winter period is yet to come, an Ukrainian intelligence official said Thursday, warning that Ukraine needs to strengthen air defenses ahead of expected Russian strikes on Ukraine’s energy infrastructure.
“Russia is retaining certain capabilities to produce various types of weapons. It is a serious challenge for Ukraine’s security and defense forces and the pro-Ukrainian coalition. We need more support. The hardest part of winter is ahead,” Andrii Yusov, the representative of the Main Intelligence Directorate at Ukraine’s defense ministry, said during a nationwide telethon Thursday, media outlet Ukrinform reported.
Firefighters work to put out a fire at energy infrastructure facilities, damaged by Russian missile strike, as Russia’s attack on Ukraine continues, in Kyiv region, Ukraine November 15, 2022.
State Emergency Service Of Ukraine | via Reuters
Russia’s missile stocks are much lower compared to last year and the beginning of the full-scale invasion, Yusov said, but he warned that the threat of Russian missile and drone attacks on Ukraine’s civil and energy infrastructure remains.
Ukraine has braced itself for another season of intense attacks on its power networks after its experience last year of attacks and power blackouts. State-owned power grid operator Ukrenergo said in April that Russian forces had used over 1,200 missiles and drones to attack Ukraine’s energy infrastructure since October 2022. With 250 of those weapons hitting their desired targets, over 40% of the energy grid was damaged, the operator said.
Firefighters work to put out a fire in an energy infrastructure facility, damaged by a Russian missile strike, as Russia’s attack on Ukraine continues, in Zhytomyr, Ukraine, Oct. 18, 2022.
State Emergency Service Of Ukraine | via Reuters
Ukrenergo described last winter as “the most difficult heating season in the history of the Ukrainian energy system,” saying “no European energy system has experienced such a large-scale destruction attempt.”
— Holly Ellyatt
THU, DEC 7 20235:51 AM EST
Ukraine’s Danube port infrastructure hit by Russian drones, governor says
IZMAIL, UKRAINE – AUGUST 2, 2023 – A little girl is pictured during the building of the Marine Terminal damaged in the Russian drone attack on the port infrastructure of Izmail situated on the Danube River Wednesday night, August 2, Izmail, Odesa Region, southern Ukraine.NO USE RUSSIA. NO USE BELARUS. (Photo by Ukrinform/NurPhoto via Getty Images)
Nurphoto | Nurphoto | Getty Images
A driver was killed and grain infrastructure damaged by a Russian drone attack on Ukrainian grain infrastructure near the Danube River, the governor of Odesa region said on Thursday.
The governor said the drone attack lasted for over two hours overnight, and that while most were shot down, some got through, damaging a storage building, an elevator and trucks.
Ukraine’s Danube ports have become a key artery for the country’s huge export volumes of grain as Russia blockades the Black Sea since invading its neighbor in February 2022.
Moscow hit Danube port infrastructure with waves of drone attacks in August and September, but the latest overnight attack came after a recent lull.
The latest strike was the first on Danube facilities since Nov. 21.
Ukraine’s air force said 18 Shahed drones were launched in total at the southern Odesa region and Khmelnytskyi region, which is in west Ukraine. Fifteen of the drones were shot down by air defence rocket systems and mobile fire groups, the air force said.
— Reuters
THU, DEC 7 20235:38 AM EST
Russians want to ask Putin when the war will end, poll shows
A man walks past a contract army service mobile recruitment point in Moscow on July 6, 2023.
Natalia Kolesnikova | AFP | Getty Images
Russian citizens appear increasingly keen to question Russia’s leadership on the expected time frame and outcome of the war in Ukraine, despite attempts by the Kremlin to avoid a focus on what it calls a “special military operation” before the 2024 election.
A survey by independent Russian polling organization Levada Center published Tuesday looked at the questions that Russian citizens want to ask Russian President Vladimir Putin during the upcoming “Direct Line” — an annual phone-in that allows the Russian public to ask Putin a variety of (admittedly curated) questions. It will take place on Dec. 14.
The Levada Center found that 21% of all questions in the open-ended poll related to the end of the war in Ukraine and what the outcome of the so-called “special military operation” would be.
The Levada Center reported that questions in this category included questions about the time frame for an end to the war, the end of mobilization, and the possibility of peace or victory.
“The poll indicates that the Russian public continues to have questions about the end and outcome of the war despite the Russian government’s attempts to silence anti-war rhetoric and protests to mobilization,” the Institute for the Study of War noted Wednesday.
The poll is consistent with recent independent Russian polling indicating that Russians increasingly support a withdrawal of Russian troops from Ukraine and showing that over half of Russian respondents believe that Russia should begin peace negotiations with Ukraine, the ISW noted.
Russian President Vladimir Putin at an annual televised phone-in with the country’s citizens at the Moscow’s World Trade Center studio on June 30, 2021.
Sergei Savostyanov | Afp | Getty Images
Putin is expected to use the Dec.14 phone-in (which will be combined with his annual press conference) to announce that he intends to run in the March 2024 presidential election. It’s widely expected that Putin will try to steer clear of predicating his campaign on the war, however, with a focus on domestic stability instead.
It’s therefore unclear if Putin intends to address questions about the war during the “Direct Line” event.
“The Kremlin also appears to be increasingly implementing measures to ensure that Putin’s actual electoral success does not depend on battlefield successes and domestic force generation efforts,” the ISW noted.
— Holly Ellyatt
THU, DEC 7 20234:44 AM EST
Russia’s presidential elections to be held on March 17 next year
Russia’s Federation Council, the upper house of Russia’s Federal Assembly, voted unanimously Thursday to hold Russia’s next presidential election on March 17, 2024.
“In essence, this decision marks the start of the election campaign,” Valentina Matvienko, speaker of the upper house of parliament, said Thursday, according to news agency Interfax.
Russian President Vladimir Putin has not yet announced whether he will stand for reelection, although he is widely expected to do so. He is expected to announce his intention to run again in his annual press conference and public phone-in on Dec. 14.
Russian President Vladimir Putin on a screen at Red Square as he addresses a rally and a concert marking the annexation of four regions of Ukraine — Luhansk, Donetsk, Kherson and Zaporizhzhia — in central Moscow on Sept. 30, 2022.
Alexander Nemenov | Afp | Getty Images
The Kremlin insists that political plurality is alive and well in Russia but, in reality, there is a “systemic opposition” of several long-standing political parties that largely toe the government line.
Many of Putin’s critics and political opponents have been silenced through imprisonment or sustained campaigns of harassment and intimidation that have prompted them to flee the country. A number have died in suspicious circumstances in the more than two decades Putin has been in power. The Kremlin has invariably denied any involvement in attacks on the political opposition.
— Holly Ellyatt
THU, DEC 7 20233:44 AM EST
Russia rebukes the U.S. after Biden comments on potential NATO-Russia war
Anatoly Antonov, Russian ambassador to the United States.
Mark Wilson | Getty Images News | Getty Images
A top Russian official said U.S. President Joe Biden’s warning about a potential direct clash between the U.S. and Russia “is unacceptable for a responsible nuclear power.”
Anatoly Antonov, Russia’s ambassador to the United States, commented on Telegram Thursday that the U.S. was trying to ”‘add fuel’ to the fire of the Ukrainian war ‘by proxy.’”
Russia has repeatedly claimed that the war in Ukraine is a “proxy war” and that the country is being used by its Western allies, such as NATO, to try to “defeat” Russia. NATO, which has supplied large amounts of military aid to Ukraine, says it is helping Kyiv to defend its territorial sovereignty after Russia’s unprovoked invasion in early 2022.
“They have completely lost touch with reality, easily talking about the likelihood of a direct clash between the armed forces of our countries,” Antonov wrote.
“This kind of provocative rhetoric is unacceptable for a responsible nuclear power,” the official added.
Antonov’s comments came after Biden pleaded with Republicans on Wednesday for a fresh tranche of military aid for Ukraine, warning that a victory for Russia in Ukraine would strengthen Moscow to such an extent that it could then attack NATO allies and draw U.S. troops into a war.
“If Putin takes Ukraine, he won’t stop there,” Biden said, Reuters reported. Russia could then attack a NATO ally, he warned, and then “we’ll have something that we don’t seek and that we don’t have today: American troops fighting Russian troops,” Biden said.
“We can’t let Putin win,” he said.
Russia’s ambassador to the U.S. repeated claims that “Washington and its insatiable military-industrial complex are the direct beneficiaries of the bloodshed in Ukraine” and that Washington was “wreaking havoc around the world just to save American hegemony from decline.”
— Holly Ellyatt
THU, DEC 7 20233:28 AM EST
U.S. Senate Republican block Ukraine, Israel aid bill over border dispute
An emergency spending bill to provide billions of dollars in new security assistance for Ukraine and Israel was blocked in the U.S. Senate on Wednesday as Republicans pressed their demands for tougher measures to control immigration at the U.S. border with Mexico.
The vote was 49 in favor to 51 against, leaving the $110.5 billion measure short of the 60 votes needed in the 100-member Senate to pave the way to start debate, threatening President Joe Biden’s push to provide new aid before the end of 2023.
The vote was along party lines, with every Senate Republican voting no along with Senator Bernie Sanders, an independent who generally votes with Democrats but had expressed concerns about funding Israel’s “current inhumane military strategy” against Palestinians.
The bill would provide about $50 billion in new security assistance for Ukraine, as well as money for humanitarian and economic aid for the government in Kyiv, plus $14 billion for Israel as it battles Hamas in Gaza. Senate Majority Leader Chuck Schumer, a Democrat, also voted “no” so that he could introduce the measure again in the future.
U.S. Senate Majority Leader Chuck Schumer (D-NY) speaks to reporters after the weekly senate party caucus luncheons at the U.S. Capitol in Washington, D.C., U.S., December 5, 2023.
Ken Cedeno | Reuters
After the vote, Schumer noted the risks if Ukraine falls, saying it was a “serious moment that will have lasting consequences for the 21st century,” risking the decline of Western democracy. Republicans said it was essential to make their case for tighter immigration policies and control of the southern border.
“Today’s vote is what it takes for the Democratic leader to recognize that Senate Republicans mean what we say,” Senate Republican Leader Mitch McConnell said in a floor speech earlier on Wednesday. “Then let’s vote. And then let’s finally start meeting America’s national security priorities, including right here at home.”
Even if the bill passes the Senate, it still would need to be approved in the Republican-controlled House of Representatives, where dozens of Republicans have voted against Ukraine aid, including Speaker Mike Johnson.
— Reuters
THU, DEC 7 20232:42 AM EST
Do not let Putin win, Biden pleads with Republicans on Ukraine
President Joe Biden pleaded with Republicans on Wednesday for a fresh infusion of military aid for Ukraine, warning that a victory for Russia over Ukraine would leave Moscow in position to attack NATO allies and could draw U.S. troops into a war.
Biden spoke as the United States planned to announce $175 million in additional Ukraine aid from its dwindling supply of money for Kyiv.
U.S. President Joe Biden gestures as he delivers remarks on aid to Ukraine from the White House in Washington, U.S., December 6, 2023.
Kevin Lamarque | Reuters
He signaled a willingness to make significant changes to U.S. migration policy along the border with Mexico to try to draw Republican support.
“If Putin takes Ukraine, he won’t stop there,” Biden said. Putin will attack a NATO ally, he predicted, and then “we’ll have something that we don’t seek and that we don’t have today: American troops fighting Russian troops,” Biden said.
“We can’t let Putin win,” he said, prompting an angry reaction from Moscow.
Russia’s RIA news agency quoted the Russian ambassador to the United States, Anatoly Antonov, as saying that Biden’s comments on a potential U.S.-Russia conflict were “provocative rhetoric unacceptable for a responsible nuclear power.”
However, Senate Republicans later on Wednesday blocked Democratic-backed legislation that would have provided billions of dollars in new security assistance for Ukraine and Israel, among other international concerns, saying they wanted to press their point about the importance of tighter border policy.
The White House warned this week that the U.S. is running out of time and money to help Ukraine repel Russia’s invasion.
White House national security adviser Jake Sullivan, in a phone interview with Reuters about building up Ukraine’s defense industrial base, said the U.S. was sticking to its long-held position not to pressure Ukraine into negotiations with Russia. “That’s going to have to be up to them. We’re just going to keep fighting day in and day out to try to secure this money,” Sullivan said.
“We’re going to keep making the case that it would be a historic mistake for the United States to walk away from Ukraine at this moment and we believe that argument will ultimately penetrate and prevail,” he said.
— Reuters
WED, DEC 6 20239:04 AM EST
U.S. says Russia rejected proposal for release of Paul Whelan, Evan Gershkovich
Russia in recent weeks rejected a substantial new proposal for the release of Paul Whelan and Evan Gershkovich, two Americans considered by the U.S. to be “wrongfully detained” in Russia, State Department spokesperson Matthew Miller said on Tuesday.
Former U.S. marine Paul Whelan who is being held on suspicion of spying talks with his lawyers Vladimir Zherebenkov and Olga Kralova, as he stands in the courtroom cage after a ruling regarding extension of his detention, in Moscow, Russia, February 22, 2019.
Shamil Zhumatov | Reuters
Miller declined to provide details on what Washington proposed and it was the first time the United States revealed such a proposal had been made. Whelan and Gershkovich have been charged in Russia with spying, which they deny.
“In recent weeks, we made a new and significant proposal to secure Paul and Evan’s release. That proposal was rejected by Russia. We shouldn’t have to make these proposals. They never should have been arrested in the first place. They should both be released immediately,” Miller told reporters.
Wall Street Journal reporter Evan Gershkovich looks out of an enclosure for defendants before a court hearing to consider an appeal against his pre-trial detention on espionage charges in Moscow, Russia, October 10, 2023.
Evgenia Novozhenina | Reuters
“It will not deter us from continuing to do everything we can to try and bring both of them home.” The proposal was not for other detainees, Miller said.
The Russian state news agency RIA on Wednesday quoted Kremlin spokesman Dmitry Peskov as responding by saying: “We don’t discuss this topic in public.”
— Reuters
WED, DEC 6 20233:38 AM EST
As Putin visits allies, Russia reasserts its influence in the Middle East
This pool photograph distributed by Russian state agency Sputnik shows Russia’s President Vladimir Putin and President of the United Arab Emirates Sheikh Mohamed bin Zayed Al Nahyan attending a welcoming ceremony ahead of their talks in Abu Dhabi on December 6, 2023.
Sergei Savostyanov | Afp | Getty Images
Russian President Vladimir Putin is making a rare trip abroad Wednesday as he meets with Moscow’s allies in the Middle East: Saudi Arabia and the United Arab Emirates.
Talks with UAE President Mohammed bin Zayed Al Nahyan are expected to focus on the current state of multifaceted bilateral cooperation and the prospects for further expansion of ties, as well as current international issues, with an emphasis on the situation in the Middle East.
In Riyadh, Vladimir Putin is scheduled to meet with Crown Prince and Prime Minister of Saudi Arabia Mohammed bin Salman Al Saud. The talks will focus on the bilateral cooperation in trade, economic and investment spheres, and on various aspects of interaction in multilateral formats. The leaders will also exchange views on the regional and international agenda.
The working trip is Putin’s first visit to the region since October 2019, although Russia, Saudi Arabia and the UAE have regular diplomatic ties and all belong to the major oil producing alliance known as OPEC+.
Russia’s visit to the Middle East sees it reasserting its diplomatic clout in the region, with Moscow occupying the rare position of being allies with regional arch-rivals, Iran and Saudi Arabia, and surrounding countries such as Syria, Iraq and Qatar. Russia also enjoyed cordial relations with Israel but has become increasingly critical of the conflict in Gaza as the humanitarian crisis has worsened.
Putin is also set to welcome Iranian President Ebrahim Raisi to Moscow Thursday, with analysts at the Institute for the Study of War noting Tuesday that Putin’s “bout of diplomatic outreach” was “likely focused on strengthening Russia’s position with Gulf States while continuing to solidify the deepening Russian–Iranian security partnership.”
— Holly Ellyatt
TUE, DEC 5 20239:03 AM EST
Russia repeats that it’s ready for negotiations with Ukraine
Moscow has repeated that it’s ready for talks with Ukraine, with the Kremlin’s spokesman claiming Russia would prefer to negotiate through “political and diplomatic means.”
“The President has repeatedly said that the main thing for us is to achieve our goals [in Ukraine],” Kremlin Press Secretary Dmitry Peskov told RTVI, Russian state news agency Tass reported.
“And, of course, we would prefer to do this primarily through political and diplomatic means. That’s why we remain ready for negotiations.”
TOPSHOT – Pedestrians walk past a New Year decoration stylised as the “Kremlin Star”, bearing a Z letter, a tactical insignia of Russian troops in Ukraine, in Moscow on January 02, 2023. (Photo by Natalia KOLESNIKOVA / AFP) (Photo by NATALIA KOLESNIKOVA/AFP via Getty Images)
Natalia Kolesnikova | Afp | Getty Images
Peskov again reiterated Moscow’s criticism of Ukraine for pulling out of previous negotiations. Kyiv has said it won’t hold talks with Moscow while Russian troops remain on its territory.
The Kremlin representative also commented on a report in the Izvestia newspaper, which stated that negotiations between Moscow and Kyiv could resume on the territory of one of the Western countries — for example, in Hungary. Peskov said that the idea could theoretically materialize.
— Holly Ellyatt
WED, DEC 6 20237:43 AM EST
UK announces new sanctions on Russia’s military suppliers
The U.K. announced 46 new sanctions Wednesday targeting individuals and groups that it accused of “supplying and funding Putin’s war machine.”
The sanctions include the targeting of businesses in Belarus, China, Serbia, Turkey, the UAE and Uzbekistan who continue to support Russia’s illegal invasion of Ukraine, the Foreign, Commonwealth and Development Office said in a statement.
Russian weapons manufacturers and defense importers were also among the list of 46 new sanctions imposed as well as three entities and individuals supporting the Wagner Group network and operators of so-called “shadow fleet” vessels “used by Russia to soften the blow of oil-related sanctions imposed by the U.K. alongside G7 partners.”
“Today’s measures will disrupt Putin’s ability to equip his military through third-party supply chains in Belarus, China, Serbia, Turkey, the UAE and Uzbekistan,” the FCDO said.
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Among those sanctioned today were 31 individuals and entities linked to Russia’s military industrial complex and the designing and manufacturing of drones and missile parts and the importing and supplying key electronic components.
The latest sanctions package comes as G7 leaders meet virtually to discuss and agree additional measures designed to reduce revenue streams that Russia needs to finance its war in Ukraine.
G7 leaders are expected to announce a ban on Russian diamonds and measures to manage some 300 billion euros ($323.58 billion) in immobilized Russian central bank assets, sources familiar with the matter told Reuters earlier.
— Holly Ellyatt
WED, DEC 6 20237:05 AM EST
Putin says Russia’s relations with the UAE have reached a new high
This pool photograph distributed by Russian state agency Sputnik shows Russia’s President Vladimir Putin and President of the United Arab Emirates Sheikh Mohamed bin Zayed Al Nahyan attending a welcoming ceremony ahead of their talks in Abu Dhabi on December 6, 2023.
Sergei Savostyanov | Afp | Getty Images
Russia’s relations with the United Arab Emirates have reached an “unprecedented high level,” President Vladimir Putin said Wednesday as he began a working trip to the Middle East.
Putin prepared to begin negotiations with UAE President Mohammed bin Zayed Al Nahyan by calling the emirates Russia’s main trading partner in the Arab world.
“Today, thanks to your position, our relations have reached an unprecedented high level. And we are in constant contact, our colleagues are constantly working with each other,” Putin said at the start of talks.
This pool photograph distributed by Russian state agency Sputnik shows Russia’s President Vladimir Putin attending a meeting with President of the United Arab Emirates in Abu Dhabi on December 6, 2023.
Sergei Savostyanov | Afp | Getty Images
Discussions are expected to focus on “the state and prospects for further development of multifaceted Russian-UAE cooperation, as well as current international issues with an emphasis on the state of affairs in the Middle East region,” the Kremlin said earlier.
In comments ahead of the talks, Putin said “we will discuss with you the situation in the hottest spots, first of all, of course, in the Arab-Palestinian-Israeli conflict. Of course, I will inform you about the situation in the Ukrainian crisis,” he added.
— Holly Ellyatt
WED, DEC 6 20233:42 AM EST
Support for Ukraine is shaken amid U.S. impasse over future funding
Ukrainian President Volodymyr Zelenskyy, during a meeting with Romanian counterpart Klaus Iohannis at the Cotroceni presidential palace in Bucharest, Romania, on Oct. 10, 2023.
Bloomberg | Bloomberg | Getty Images
Ukraine’s allies are trying to mount a show of support to Ukraine this week as the future of more military funding is in doubt.
Leaders of the Group of Seven countries are set to hold a virtual meeting on Wednesday with Ukraine’s President Volodymyr Zelenskyy. The war will be on the agenda, but the meeting comes amid bitter wrangling between U.S. lawmakers over an additional aid package of over $100 billion that would include aid to Ukraine and Israel, as well as U.S. border security funding.
There are heightened concerns that if Ukraine does not receive more aid, it will not be able to continue fighting Russia’s invasion, a prospect worrying U.S. and Ukrainian officials as the summer counteroffensive is already deemed to have largely failed in its objectives.
U.S. Treasury Secretary Janet Yellen said Tuesday that the U.S. would be “responsible for Ukraine’s defeat” if Congress failed to approve the Biden administration’s multibillion-dollar funding request for Ukraine, Reuters reported. Meanwhile, Zelenskyy’s chief of staff Andriy Yermak said Tuesday that there was a “big risk” that Ukraine would lose the war without further U.S. funding.
Zelenskyy canceled a virtual briefing with U.S. lawmakers Tuesday as the furore over future aid continued. No reason was given for the cancellation.
The trips were his first to the Middle Eastern region since the war in Ukraine began in February 2022.
Both countries are key trading partners for Russia, and have remained neutral in the Ukraine conflict, refusing to adopt Western-led sanctions against the country over its invasion of Ukraine. Putin has made very few journeys outside Russia’s borders in recent months, and these visits spotlight the importance of the oil-rich Mideast Gulf Arab states to the Kremlin’s international relations.
In Abu Dhabi, Putin met with UAE President Mohammed bin Zayed al-Nahyan “to review the current state of multifaceted bilateral cooperation and the prospects for further expansion of ties, as well as current international issues, with a focus on the situation in the Middle East,” according to a Kremlin readout.
A post from the UAE leader’s official X, formerly Twitter, account said: “Today in Abu Dhabi I discussed with President Vladimir Putin the ties between our two nations, and the importance of strengthening dialogue and cooperation to ensure stability and progress. The UAE will continue to support efforts aimed at enabling global growth, prosperity and development for all.”
Putin, according to Russian state news agency RIA Novosti, told his Emirati counterpart: “Today, thanks to your position, our relations have reached an unprecedented high level. And we are in constant contact, and our colleagues are constantly working with each other. And indeed, the United Arab Emirates is Russia’s main trading partner in the Arab world.”
The Russian leader then flew to Riyadh to meet with Saudi Crown Prince Mohammed bin Salman and “discuss bilateral cooperation in trade, economic and investment areas” as well as “exchange views on the regional and international agenda,” the Kremlin readout said.
It also said that the two leaders would discuss oil, Israel’s war in Gaza, and the situations in Yemen and Syria. It was not immediately clear whether the two would discuss Russia’s war in Ukraine.
The meeting with the de facto Saudi leader came after oil prices fell despite a joint decision by OPEC+ members to make greater output cuts.
The visits will be followed by Putin hosting Iranian President Ebrahim Raisi in Moscow on Thursday. The Kremlin’s alliance with Iran has grown dramatically in importance, as Tehran has become a key trade partner and supplier of the weapons that Russia deploys in Ukraine.
Energy was likely to be central to discussions between Putin and the Middle Eastern leaders, particularly after last week’s OPEC+ meeting during which Russia, Saudi Arabia and other members of the oil producers’ alliance agreed to voluntary output cuts for the first quarter of 2024.
Abu Dhabi and Moscow have grown closer since Putin’s invasion of Ukraine, at least in terms of commerce: overall trade between Russia and the UAE increased by nearly 68% on the year to $9 billion in 2022, according to Russian state news agency Tass. Russian exports to the UAE comprised $8.5 billion of that total.
In February 2023, Russian Ambassador to Saudi Arabia Sergey Kozlov pledged to bring Russian-Saudi bilateral trade to $5 billion annually, Middle East Briefing reports. That figure was $1.75 billion in 2022, but trade in sectors like agriculture, fertilizer and energy commodities has increased significantly, according to Russian economic analysts.
Putin’s trips overseas have been severely limited due to the International Criminal Court’s arrest warrant for him over alleged war crimes. Notably, Saudi Arabia and the UAE have not ratified the statute that governs the ICC, meaning they are not obligated to arrest the Russian leader on their territory. The visits are the first by Putin to those countries since 2019.
Widespread mobile ownership, together with rapid digitalization after the pandemic, helped spur the expansion of digital financial services in Southeast Asia, said PwC. The region is made up of Singapore, Malaysia, Thailand, Indonesia, the Philippines, Vietnam, Brunei, Laos and Cambodia.
Some examples include Thailand’s PromptPay, which enables bank account users to receive and send payments via national IDs, mobile numbers or email addresses. In the Philippines, the government distributed Covid-19 financial aid via digital platforms, while Singapore encourages and incentivizes hawkers to adopt contactless QR code payment services.
“This enhanced availability and convenience of digital payments will see the bulk of the regional population leveraging mainstream digital financial products, such as e-wallets, further expediting the expansion of financial services,” said PwC.
Southeast Asia is poised for a strong growth potential with its digital economy set to reach $1 trillion by 2030 — backed by strong fundamentals including over 460 million digital consumers, young and tech-savvy populations, as well as rising internet penetration.
“As more players enter the fray with new business models and the industry becomes increasingly fragmented, we see the fight to the top turning more intense,” said PwC.
Digital payments using e-wallets in Southeast Asia amounted to $22 billion in 2019 and are predicted to grow more than fivefold and exceed $114 billion by 2025, according to data cited by PwC.
“Given the convenience it provides, digital wallets have proven to be a natural breeding ground for super apps in Southeast Asia,” said PwC, pointing to the rise of Paytm in India and AliPay in China.
The digital wallet boom is partly driven by companies building super apps which often include their own e-wallet offerings such as WeChat and AliPay in China, Grab and GoTo in Southeast Asia, Careem in the Middle East, and Rappi and Mercado Libre in Latin America, an OliverWyman report said.
A super app is one single app that allows users to access multiple services from transportation or shopping, to payments and food delivery.
“In some regions such as Southeast Asia, [digital payments via e-wallets] are already more common than physical card payments and set to dominate point-of-sale [systems] overall,” wrote Dan Jones and Alex Walker of OliverWyman.
According to PwC, lowering the barriers to digitalization for merchants will drive digital financial services as the “majority of Southeast Asian businesses are small and medium-sized enterprises lacking necessary understanding of digital and its benefits while also unable to afford related transformation costs.”
PwC also predicts “aggressive investments by central banks to develop proof of concept for central bank digital currencies” in order to facilitate cross-border payments with lower transaction fees.
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CBDCs are digital forms of fiat currencies issued by central banks.
Singapore’s central bank said in a 2021 report that cash is “generally incompatible” with the digital economy and the demand for cash as a means of payment is set to decline further.
“For digital payment services to make a bigger impact, a sharper focus on accessibility, simplicity and affordability is key, while overcoming the trust barrier. Moreover, industry players need to first understand the global megatrends re-shaping the future of payments, before beginning to future-proof their businesses,” said PwC.
In fact, the median U.S. household was nearly $40,000 wealthier in 2021 than in 2019, according to new data from Pew Research. Pew used data from the U.S. Census Bureau’s three latest Surveys of Income and Program Participation to determine how household wealth changed during the pandemic.
U.S. households had a median net worth of $128,200 in 2019, which rose to $166,900 in 2021, Pew found. Figures were calculated using December 2021 prices.
While overall median net worth grew 30%, some groups saw their wealth grow at an even faster clip during the height of the pandemic. Here’s how household wealth changed between 2019 and 2021.
Households from all levels of wealth saw their net worth increase between 2019 and 2021, but those who didn’t have much before the pandemic didn’t see their assets grow nearly as quickly as other groups.
Households in the bottom 25th percentile saw their median net worth jump from $0 in 2019 to $500 in 2021, Pew found. While these households likely held debt both before and after the pandemic, in 2019, about half had no wealth or held more in debt than they did in assets.
Pandemic-era benefits such as stimulus checks, expanded unemployment benefits and child tax credits likely played a role in helping Americans catch up. Additionally, home values skyrocketed during this period, giving homeowners a boost.
Here’s how much median household net worth grew in each wealth quartile, according to Pew’s analysis, which excluded the top 1% and bottom 1% of households.
Unsurprisingly, the wealthiest American households saw their assets grow the most between 2019 and 2021.
However, households in the 25th to 50th percentile saw their wealth grow the largest percentage, rising 38% between 2019 and 2021. Median household wealth grew 22% among the 50th to 75th percentile and about 16% among the wealthiest 25th percentile.
Though the share of households with no assets or who owe more than they own shrank between 2019 and 2021, it remains fairly common, Pew found. In 2019, 15% of all U.S. households had no wealth or were in debt, compared to 11% in 2021.
That percentage is higher among Black households, however, with 24% having a $0 net worth in 2021, down from 29% in 2019, according to Pew. Asian households are the demographic least likely to have no wealth, with just 7% in that situation.
Across racial and ethnic demographics, multiracial households saw the largest reduction in the share of households without wealth. The share of multiracial households with no wealth fell from 24% in 2019 to 16% in 2021, Pew found.
Having a high income doesn’t necessarily mean a higher net worth, but it can help. The order of racial and ethnic groups ranked by household wealth is the same as the order of these groups ranked by household income.
Douglas Boneparth, a certified financial planner and president of Bone Fide Wealth, agrees more time in the market is better. However, he recently told CNBC that “this assumes you don’t need to go to that well and interrupt those investments, that you can actually stay invested.”
He says to tackle high-interest credit card debt “as soon as possible” so that you’re able to then put your money into investments and keep them there.
Ideally, you can strike a balance between getting out of debt and investing — even if you have to start small with your investments. It all depends on your personal situation. If you have debts that are past due, for example, you’ll want to address those as soon as possible to avoid long-term consequences such as damage to your credit score.
Beyond that, your personal money goals may help you decide where your money goes. If you’re close to retirement, you might want to get more aggressive with your debt payoff to avoid bringing those liabilities into your golden years.
A majority, 61%, of people say they’re negatively affected during the holidays: 44% say they’re more stressed than usual, and 17% report a decline in their overall wellbeing, according to a Monster survey of 612 U.S. workers in November.
That includes Jane Naumova, 25, who lives in London and works in advertising.UK workers are entitled to 28 paid vacation days each year. Naumova’s employer offers even more: one mental health day for each quarter, birthdays off, a day off for every year working for the company, and a break around the winter holidays. That’s roughly two months, or 8 weeks, of business days off per year.
Her company’s stance is critical to Naumova’s relatively low stress level during the end-of-year rush.
Many clients spend the bulk of their marketing budgets between Black Friday and the New Year. Even so, Naumova says her company completely shuts down from December 22 to January 3, and she’s taking off the priorweek, too.
“Honestly, work isn’t my top priority right now,” she says. “My main focus is on my mental health. I do love my job, but I wouldn’t sacrifice anything for it.”
Her boss doesn’t hold it against her: Naumova’s employer is proactive in promoting a “healthy relationship with work, especially for us Gen Z people,” she says.
“Lately, I’ve been dealing with some anxiety for personal reasons,” she says, “so I just went to my boss, asked for some time off for mental health, support on a few projects, and decided to skip going to the office until the end of the year.”
Her company has a three days in-office policy, but Naumova will return to that schedule in January. That’s generous by U.S. standards, where just 17% of workers say they’re getting more remote work flexibility during the holiday season, according to Monster.
Her colleagues encourage each other to fully unplug during their scheduled time away, too, which helps, she says. It’s a well-communicated expectation that everyone should actually get to enjoy and decompress on holidays.
By now, Naumova has her time-off prep down to a science: In the weeks leading up to her break, she creates handover materials, meets with her team to discuss the plan, and splits up tasks among colleagues.
To get in good shape for her time away this winter and still meet her year-end deadlines, Naumova is putting in some longer days. But for her team, that kind of extra effort usually means starting 30 minutes earlier or staying late an extra 15 minutes every now and then.
“Nobody is overworking for hours,” she says. “And even if there is an emergency, we have clear instructions from the management to get this time back.”
Overall, Naumova says her company’s support of time off make her a better, more well-rested employee who is more likely to stick around.
“The main thing to remember is that you are getting paid for this time off, as it’s already included in your salary,” she says. “It’s not something you should be working toward or feel awkward when asking for it.”
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“AI can certainly recognize your house cat, but it’s not going to solve world hunger,” Theo Omtzigt, chief technology officer at Lemurian Labs, tells CNBC Make It.
One reason AI likely won’t replace people completely is both pretty simple and complex: math.
Large language models, a subset of generative AI, rely on powerful mathematical formulas to process and identify patterns in vast amounts of data to convert users’ prompts into new text, image, video or audio outputs.
But human intelligence goes far beyond pattern recognition. That’s why the mathematical models powering current generative AI systems are “relatively super simple,” Omtzigt says.
“Right now, the machine learns how to recognize a cat and what it will look like in different lighting,” he says. “We would have to progress a lot deeper in our understanding of creative thoughts, ethics and consciousness before we would even have the building blocks to think of how to create an AI that would be able to wipe out humanity.”
Another reason tech experts don’t believe AI will replace people is because it gains knowledge differently than humans.
“Generative AI and machine learning techniques are very heavily based on correlation, as opposed to causation,” Justin Lewis, BP’s vice president of incubation and engineering, said Thursday during a panel discussion at the AI Summit New York2023.
After processing many images of rain, an AI model may learn to correlate rain with clouds because in every picture of rain, there are clouds. However, a human learns that clouds produce rain, says James Brusseau, a philosophy professor at Pace University who also teaches AI ethics at the University of Trento in Italy.
“AI and humans are both knowledge producers, just like the sculptor and painter are both artists,” he tells CNBC Make It. “But they will be forever, in my mind, be distinct and separated. One will never be better than the other so much as they will just be different.”
AI won’t replace humans, but people who can use it will
Fears about AI replacing humans aren’t completely unwarranted, but it won’t be the systems on their own that take over.
“There’s definitely going to be a difference between those that use AI and those that don’t,” Trevor Back, chief product officer at Speechmatics, said during Thursday’s panel discussion at the AI Summit New York 2023.
“If you don’t use AI, you are going to struggle since most roles will use some form of AI in the way that they act,” he said.
For example, many tech experts currently see AI being used as a tool that helps people boost their productivity. A software engineer may use AI to speed up the code review process and identify potential errors they or another human may have missed.
Since AI doesn’t seem to be disappearing any time soon, one of the best ways to fend off worries about being replaced by it is to explore how these systems work and how they can help you, Brusseau says.
“Curiosity is good,” he says. “You have to say ‘I’m not afraid of what the machine might do to me. I’m interested in what it can do for me.’”
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Holidays at your in-laws’ house is not one of them, says Sara Jane Ho, a Harvard-trained etiquette expert. Ho is the founder of the finishing school Institute Sarita, host of the Netflix show “Mind Your Manners,” and author of an upcoming book, also called “Mind Your Manners.”
If an in-law lobs a passive aggressive comment or a more direct insult your way, “just agree and play along,” she says. “Be very smiley.”
In the moment you should only be agreeable. And you can let your spouse do the “dirty work” of explaining to their parents why certain comments are inappropriate, Ho says.
The same rule applies when your parents say something that makes your partner uncomfortable.
“You need to take care of your parents and they need to take care of their parents,” Ho says.
If it doesn’t make sense to smile and agree, Ho suggests just being silent.
“Oftentimes, I feel like when people are being rude the best thing is to just not say anything,” she told CNBC Make It earlier this year. “Let everyone wallow, and let them wallow in their misbehavior.”
Don’t let the comments or questions sour your mood during the holiday.
“The greatest power is showing that the other person doesn’t have power over you,” Ho says.
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The project renovated 20 buses that were once owned by SBS Transit, Singapore’s public transport operator, giving them a renewed purpose within the hospitality sector.
The resort hotel officially opens on Dec. 1 and bookings are now available on its website.
The property sits near local attractions like the Changi Village Hawker Centre, Changi East Boardwalk, and Changi Chapel & Museum.
The resort hotel has seven distinct room categories, each with different in-room amenities. Nightly room rates start at SG$398 ($296) and some rooms even come with a bathtub and king-sized bed.
Among the different room types, the Pioneer North room has handrails in the toilet and shower area, built to meet the needs of senior guests, a representative from the resort hotel told CNBC.
Alternatively, the Hamilton Place room is designed to be wheelchair accessible, equipped with an external accessible restroom and a ramp leading up to the room’s entrance, she added.
Each room covers 45 square meters and can accommodate three to four guests, the resort’s website showed. Although these retired buses have been entirely refurbished, some features such as the steering wheel, driver seat and windows have been preserved.
The driver’s seat, steering wheel and windows have been retained as part of the room’s design.
Source: The Bus Collective
Recreational activities are not available on the property, but The Bus Collective will be organizing guided tours which guests can book at the resort hotel’s experience center, the representative said.
One of the tours offered is a biking trip around Pulau Ubin — an island off the coast of Singapore. This tour is priced at SG$99 per person and includes a two-way ferry transfer to and from the island. Other experiences include a guided food tour and sailing at Changi Sailing Club.
The Bus Collective was founded by WTS Travel & Tours, a Singaporean travel agency, along with its partners LHN Group, a real estate management services group, and Sky Win Holding, an investment holding group headquartered in Singapore.
The renovation process of the decommissioned buses.
Source: The Bus Collective
WTS Travel and partners wanted to showcase how tourism, nature and environmentalism can come together and be a “catalyst for creating unique and exciting new experiences,” Micker Sia, managing director of WTS Travel told CNBC.
He added that the project aims to “establish a precedent for eco-conscious practices in construction and hospitality … setting a new standard for sustainable luxury.”
Although The Bus Collective only operates in Singapore currently, Sia told CNBC it could expand in the future. “We are definitely open to exploring opportunities for growth and innovation in the future … and we believe it has the potential to resonate with audiences in other locations within the Asia Pacific region,” Sia said.
The 61-year-old, known at home as Jokowi, is due to leave office in October 2024 after completing the maximum two terms as president.
But critics and analysts say the leader, who has enjoyed consistently high approval ratings throughout his near decade-long tenure, is attempting to retain power through members of his close family.
Last month, his eldest son, Gibran Rakabuming Raka, 36, was officially named the vice presidential running mate of Defence Minister Prabowo Subianto for the Feb. 14 general election race under the right-wing Gerindra Party.
That came just days before the country changed the eligibility criteria for presidential or vice-presidential candidates, allowing individuals under the age of 40 to register for either role if they previously held regional posts. Gibran is the mayor of Solo.
The constitutional court, which was helmed by the president’s brother-in-law Anwar Usman at that time, was widely criticized for changing the law, which enabled Jokowi’s son to contest the election. The court’s ethics council has since ordered Anwar to be removed from his post as chief justice after finding him guilty of ethics violations.
According to a poll in mid-October by Kompas Research and Development, 60.7% of respondents consider the participation of Jokowi’s eldest son Gibran in the election as a form of dynastic politics.
“Most respondents see this kind of politics as tending to prioritize family interests over the interests of society,” Kompas said in a report. “It is no wonder then that more than half of respondents in this poll stated their disagreement with the practice of dynastic politics.”
Separately, Jokowi’s youngest son, Kaesang Pangarep, was appointed chairman of the Indonesia Solidarity Party (PSI) in September, a few days after he officially became a party member.
PSI, which launched in 2018, focuses on young voters through issues like women’s rights, pluralism and corruption. It hopes to secure seats in the House of Representatives for the first time in the upcoming election.
Adding to Jokowi’s political chessboard is also his son-in-law Bobby Nasution, the current mayor of Medan.
Jokowi is “trying to retain political influence through his sons and son-in-law, Medan mayor Bobby Nasution,” said Julia Lau, senior fellow and co-coordinator of the Indonesia Studies Programme at Singapore’s ISEAS–Yusof Ishak Institute.
Back home, Jokowi’s loyalists are reportedly outraged, Reuters reported, saying that cabinet ministers within his inner circle have accused him of seeking to hang on to power through judicial interference and nepotism.
According to Reuters, Andi Widjajanto, once Jokowi’s right-hand man, resigned from his post as governor of the National Resilience Agency after the constitutional court ruling. Andi, who called the timing of his resignation deliberate, said: “As someone that worked with Jokowi for a long time I am very, very disappointed in him.”
These are “nepotistic strategies,” said Vedi Hadiz, director and professor at the Asia Institute at the University of Melbourne.
Jokowi’s sons are “part of the broader plan” to form a political dynasty before he leaves office, he continued.
“Kaesang Pangarep’s ascent into the leadership of the PSI is geared to help achieve the aim of gaining victory for the Prabowo-Gibran pairing, as the PSI has moved, also controversially, into the Prabowo orbit lately.”
Indonesia’s President Joko Widodo, second from the right, with his wife Iriana Widodo and sons Gibran Rakbuming Raka, far left, and Kaesang Pangarep, far right, taking part in the traditional wedding ceremony in preparation for the wedding of Jokowi’s daughter in Solo, Central Java on Nov. 7, 2017.
“Kaesang, 28, is a political neophyte and running on his father’s coattails,” she added, noting how the PSI has now become “a vehicle to channel the Widodo clan’s aspirations.”
These developments don’t bode well for the country’s already fragile state of democracy, which only emerged 25 years ago after decades of authoritarian rule.
It also weighs heavily on Jokowi’s reputation. The former furniture salesman captured national hearts when he became the country’s first leader who didn’t come from a political or military background, raising hopes of a pushback against elitist-led systems.
But as his sons climb up the political ladder, critics are now drawing comparisons with existing political dynasties around Southeast Asia.
“Many liberals and intellectuals in Indonesia are now calling for a deeper look into the corruption and weakening of several democratic institutions in the country, their constitutional court, the anti-corruption commission, etcetera, that has occurred on Widodo’s watch,” said Lau from ISEAS–Yusof Ishak Institute.
Following failed attempts by his team to extend Jokowi’s tenure, she said, “this latest series of moves seems to be their way of trying to claw a permanent hold for themselves but may well backfire.”
“What is sure is that Widodo is playing a risky game in the last phase of his presidency,” Lau added.
Analysts are now expecting what they call “a Jokowi effect” for the PSI and Gerindra parties.
Choosing Gibran, Jokowi’s eldest son, “is a clear signal by Prabowo’s camp to associate its presidential bid with the successes of Jokowi-era programmes and policies,” global research firm Asia House said in a report.
“The nomination of Gibran as his vice-presidential candidate is likely to win Prabowo votes from Central Java — where Jokowi’s family is originally from — and shift the support of Jokowi’s supporters from Ganjar and PDIP to the Prabowo camp.”
The PDIP, or Indonesian Democratic Party of Struggle, is the country’s ruling party.
The PSI is also seeking to capitalize on the popularity of Jokowi, who has unusually high approval ratings for a two-term president.
“The idea is that the popularity would rub off on Kaesang Pangarep and improve the electoral performance of the PSI,” explained Hadiz from the University of Melbourne.
“If that is accomplished convincingly, the Jokowi family can effectively take complete control of a political party. It never had such control before given the Soekarno family’s grip on the PDIP,” he said, referring to referring to Indonesia’s first president.
Meanwhile, the PDIP is increasingly distancing itself from Jokowi. His relationship with PDIP chair Megawati Sukarnoputri is now under pressure following his sons’ pivot to other parties.
“While some interpret Gibran’s candidacy as evidence of Jokowi’s involvement in dynastic politics, it’s also perceived as a snub to PDIP, the party that both supported Jokowi’s presidential bids and backed Gibran when he ran for mayor,” Asia House said.
