Aurelia Butler

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Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.A quarter of a century later it remains a resonant and notorious image of European arrogance. Michel Camdessus, then the French managing director of the IMF, stands over Suharto with arms imperiously folded as the Indonesian president, head bowed, signs a humiliating and wildly excessive list of conditions in return for an emergency loan during the Asian financial crisis in 1998. Now Indonesian accusations of oppression by Europeans are being aired again, this time over Brussels’ demands that palm oil producers prove that their exports to the EU do not cause deforestation. Indonesia’s economy minister has accused the EU of “regulatory imperialism”; the Indonesian foreign ministry’s videoed annual address last year contained an image of a jackboot marked with the EU logo stamping on a palm oil plantation.As Brussels’s attempts to manage its trading partners’ production processes proliferate — from standards on renewable fuels to deforestation to carbon emissions to plastic packaging and employment conditions — so do accusations of condescending heavy-handed coercion from those who have to comply.The bureaucratic intrusiveness of the deforestation regulation has aroused particular resentment. The EU has made some effort towards lightening the load: last year it set up a task force with Indonesia and Malaysia on implementing the rules. But there does not seem to be much appreciation of the dark historical resonances.Many of the countries affected by the deforestation regulation are former European colonies still growing colonial-era crops. The oil palm is native to west and central Africa, not south-east Asia. It was brought to the then Dutch East Indies by 19th-century European colonists and grown in plantations worked by indentured and forced labour shipped in from around the region.One of the large palm-growing companies active in Indonesia, Socfin, has a holding company listed on the Luxembourg stock exchange. It was originally founded in 1909 by a Belgian, Adrien Hallet, who grew rubber and palm oil in the Congo. The Belgian colonial presence in the Congo included viciously extractive colonists who cut children’s hands off as punishment for failing to meet rubber-tapping quotas.Indonesia won its independence from the Netherlands (which, like the rest of western Europe, razed most of its own forests centuries ago in the process of getting rich) in a bloody war in the 1940s. But the country’s palm-oil growers are still being forced to follow rules dictated in Europe. Large-scale foreign-owned producers such as Socfin will almost certainly find it easier to comply than will Indonesian smallholders.Framed like that, you can see how the EU’s pious insistence that its trade policy furthers “European values” might grate just a tiny little bit. It’s not the first time that clodhopping European insensitivity has irritated former colonies. During fractious negotiations on preferential trade agreements with the African-Caribbean-Pacific grouping of countries in 2007, then-trade commissioner Peter Mandelson unwisely said Nigeria “wants to sit like an elephant in the middle of the road” and obstruct progress. The Democratic Republic of Congo in 2010 banned the Belgian official Karel De Gucht, then the EU’s development commissioner (and later trade commissioner), from the country over comments he made about the former Belgian colony. In 2022 Josep Borrell, the EU’s foreign policy chief, was rightly criticised for describing Europe as geopolitically a “garden” and most of the rest of the world as a “jungle”, and suggesting that EU ambassadors were sent forth to tame the wilderness.Meanwhile, in post-Brexit Britain, the then home secretary Suella Braverman imperilled trade talks with India in 2022 by singling out Indians for overstaying their visas when visiting the UK. In practice, many middle-income countries show reserves of pragmatic tolerance that Europeans do not necessarily deserve. Indonesia, for example, continues to negotiate a bilateral trade deal with Brussels. Brazil, along with the other three South American countries that make up the Mercosur grouping, is ready to sign a trade agreement with the EU despite its own resentment over the deforestation regulation. Delhi appeared to use the outrage in India over Braverman’s unwise remarks as leverage to press its demands for more work visas in the UK-India trade talks rather than abandon the deal altogether.We are, after all, where we are. The pumping of carbon dioxide into the atmosphere by rich countries cannot be undone: the cities of Europe will not be flattened to allow the land to return to forest. No solution to climate change will be possible without the big middle-income countries reducing carbon emissions, though huge amounts of development aid to help the transition wouldn’t go amiss. But EU policymakers might just reflect that exploitative imperialism is a traditional European value too, and that what looks like progressive principle in Brussels can come across as hypocritical coercion on the receiving [email protected] CapitalWhere climate change meets business, markets and politics. Explore the FT’s coverage here.Are you curious about the FT’s environmental sustainability commitments? Find out more about our science-based targets here More

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SINGAPORE (Reuters) – The yen was pinned on the weaker side of 155 per dollar on Thursday as the Bank of Japan (BOJ) kicks off its two-day rate-setting meeting, leaving traders nervous as to whether Tokyo will intervene while policy deliberations are still underway.Having traded in a tight range over the past few days, a buoyant dollar finally broke above the 155 yen level for the first time since 1990 in the previous session, and was last steady at 155.34 yen in early Asia trade.Intense speculation of intervention from Japanese authorities to shore up the yen had hampered the dollar’s ascent towards the psychologically key level, seen by some market participants as a line in the sand that would prompt Tokyo to take action.The breach of the 155 yen level comes as the BOJ meets to discuss monetary policy, though expectations are for the central bank to keep its short-term interest rate target unchanged following last month’s landmark exit from negative rates.”We expect the BOJ meeting to deliver a marginally hawkish hold outcome,” said Carl Ang, fixed income research analyst at MFS Investment Management.”As for policy signalling, April seems a little early to pivot away from the BOJ’s March communication that accommodative financial conditions will continue for the time being.Continued expectations of gradual policy tightening and a low terminal policy rate make it difficult for the yen to appreciate significantly, even if at historically depressed levels.”BOJ Governor Kazuo Ueda said this week the central bank will raise interest rates again if trend inflation accelerates toward its 2% target as expected.In the broader market, the dollar was on the front foot, recouping some of its losses after a slight tumble earlier in the week following upbeat business activity data in the euro zone and the UK, which had in turn sent the euro and sterling higher.The euro was last 0.04% higher at $1.0702, but edged slightly away from an over one-week high hit on Wednesday, while sterling was off 0.01% at $1.2463.The dollar steadied at 105.79 against a basket of currencies, pulling away from a nearly two-week low hit in the previous session.Trading in Asia was thinned with Australia out for a holiday.The Aussie tacked on 0.04% to $0.6500, buoyed by receding bets of rate cuts from the Reserve Bank of Australia (RBA) this year after the country’s consumer price inflation slowed less than expected in the first quarter.”Inflation is moderating but it has some way to go before the RBA can be confident it will return to the 2–3% target range on the desired timetable,” said Justin Smirk, senior economist at Westpac.”As such, we expect the RBA to remain on hold in May and have pushed back the date of our first rate cut to November, from September previously.”The New Zealand dollar gained 0.08% to $0.5940. More

SYDNEY/LONDON (Reuters) – British multinational miner Anglo American (JO:AGLJ) said on Thursday it had received an all-share buyout proposal from the world’s largest listed mining company, Australia’s BHP Group (NYSE:BHP).London-listed Anglo American, which owns mines in countries including Chile, South Africa, Brazil and Australia, had a market capitalisation of $36.71 billion as of Wednesday’s close, according to LSEG data.The deal, if agreed, would give BHP access to more copper, one of the most sought after metals in the clean energy transition, and potash, two of its strategic commodities, as well as more coking coal in Australia.It could also trigger a wave of transactions for any unwanted assets such as iron ore, nickel and diamonds, where Anglo owns 85% of industry giant De Beers.”There can be no certainty that any offer will be made nor as to the terms on which any such offer might be made,” Anglo American said in a statement, adding the unsolicited proposal is non-binding and highly conditional. The company said its board was reviewing the proposal and did not disclose the share ratio on offer.BHP declined to comment when asked about earlier reports about preliminary talks with Anglo American. A deal would be conditional on being preceded by separate demergers by Anglo American of its entire shareholdings in Anglo American Platinum and Kumba Iron Ore to its shareholders. Under UK takeover rules, BHP has until May 22 to make a firm offer.BHP, best-known for mining iron ore, copper, nickel and coking coal, had a market capitalisation of about $149 billion as of Wednesday. The Australian market is closed on Thursday for a public holiday.If the Anglo American deal came to fruition, it would be the second major acquisition for BHP in about a year after its 2023 purchase of Oz Minerals.The proposal comes as BHP chair Ken MacKenzie approaches the final stretch of a nine-year term at the miner he has steered since 2017.Anglo American said in February it would embark on a review of assets after a 94% plunge in annual profit and a series of writedowns. It has seen a fall in demand for most of the metals it mines and took a $1.6 billion impairment charge on its De Beers diamond business. The global mining sector has seen a recent slew of merger and acquisitions despite rising concerns around the economic outlook of one of the world’s largest metals buyer, China.More broadly, M&A activity has registered an uptick in the first few months of this year, including mega deals.Both of the mining firms have recently identified potash as an important business which would complement their mining operations as food demand grows.BHP is currently focusing on its Jansen potash project in the Canadian province of Saskatchewan whereas Anglo American has its hopes on the Woodsmith potash mine in Yorkshire.($1 = 1.5396 Australian dollars) More

It is aiming to boost the global number of 7-Eleven stores 18% to about 100,000 by 2030 and for the chain to be in 30 countries and regions, up from 20 now.The plan is part of a large-scale restructuring that involves selling off lower-performing supermarket assets – a strategy pursued after pressure from activist investors.Since last year, the company has announced the closure of dozens of Ito-Yokado supermarkets, exited its apparel business, and completed the sale of its Sogo & Seibu department store unit. It also agreed to spend more than $2 billion to scoop up convenience stores in Australia and the United States. 7-Eleven North America chief Joseph Michael DePinto said the group will “continue to aggressively pursue opportunities” in mergers and acquisitions in the region.ValueAct Capital, a U.S.-based investor that has harshly criticised the company’s asset allocation and tried to expel its president, last week praised the group’s restructuring plan, saying it would vote in favour of its board nominees. (This story has been refiled to add the dropped first name of executive Joseph Michael DePinto in paragraph 5) More

(Reuters) -Meta Platforms disappointed investors on Wednesday with forecasts of higher expenses and lighter-than-expected revenue, knocking nearly $200 billion off its stock market value and raising fears the surging cost of AI is outpacing its benefits.Shares of the Facebook (NASDAQ:META) and Instagram parent dropped about 15% in extended trade following the report, its market capitalization plunging to about $1 trillion. The late-day slump in Meta’s stock value was just short of the $232 billion one-day loss suffered on Feb. 3, 2022, which was the record one-day loss of market capitalization for any U.S. company. Alphabet (NASDAQ:GOOGL) shares fell 3% in extended trade and Microsoft (NASDAQ:MSFT) declined 2%, with concerns that Wall Street may have underestimated the cost of the AI race hitting those Big Tech companies ahead of their reports on Thursday. Nvidia (NASDAQ:NVDA) lost 1.4% and Amazon (NASDAQ:AMZN) dropped 2.6%. Meta said it expects April-June revenue in the range of $36.5 billion-$39 billion, with a midpoint of $37.8 billion, compared with analysts’ estimates of $38.3 billion, according to LSEG data.The company raised its forecast for expenses this year to support investments in new AI products and the computing infrastructure needed to support them, adding that it expected spending would continue to increase next year. It raised its 2024 total expense forecast to $96 billion-$99 billion, from $94 billion-$99 billion. It also expects 2024 capital expenditure to fall within a range of $30 billion-$40 billion, up from its earlier forecast of $35 billion-$37 billion, it said. CEO Mark Zuckerberg told analysts on a conference call that the focus on AI would “grow our investment envelope meaningfully before we make much revenue from some of these new products.”Zuckerberg’s comments and the quarterly results tempered expectations for Meta’s AI investments after a series of smash-hit quarters for the social media giant. Meta enjoyed the biggest one-day gain in market capitalization in Wall Street history after its last quarterly report, when it posted robust results and announced a first-ever dividend. “Investors are skeptical of the growing AI spending. Some of those investments could take years to pay off,” said Jasmine Enberg, principal analyst at Insider Intelligence. “But Meta is in the AI race to win it, and Meta AI could be a dark horse. It has a built-in audience through its existing apps, and it will have an advantage in eventual monetization through its ad ecosystem,” Enberg said. The company has been updating its ad-buying products with AI tools and short video formats to boost revenue growth, while also introducing new AI features like a chat assistant to drive engagement on its social media properties.It announced last week that it is giving its Meta AI assistant more prominent billing across its suite of apps, meaning it will start to see how popular the product is with users in the second quarter.”For all Meta’s bold AI plans, it can’t afford to take its eye off the nucleus of the business – its core advertising activities,” said Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown.The company’s metaverse-oriented Reality Labs division missed expectations for the first quarter, posting sales of $440 million. Investors had been expecting $475 million, according to LSEG data. The unit’s sales leaped 30% from the year prior, but were still below the average revenue of $523 million posted in previous first-quarter reports since Meta started disclosing Reality Labs revenue in 2021. Reality Labs lost $3.8 billion in the quarter, putting it on track this year to match the $16 billion it lost over the course of 2023. Zuckerberg also described potential monetization plans for Meta’s AI chatbot, such as using it for business messaging and customer support. Meta theoretically stands to benefit from regulatory pressures bearing down on its Chinese-owned short video competitor TikTok, which is facing the threat of a U.S. ban, although Meta CFO Susan Li told investors she was not yet ready to assess the business impact of the potential setback for its rival. Meta posted first-quarter revenue of $36.5 billion, roughly in line with expectations of $36.2 billion, according to LSEG data. Meta’s daily active people (DAP), a metric it uses to track unique users of any one of its apps Facebook, Instagram, Messenger or WhatsApp in a day, grew 7%.DAP grew 8% in the preceding quarter. Meta disclosed only the DAP figure for user growth, a first for the company. It said earlier this year that it would no longer break out numbers for flagship social network Facebook, whose growth has slowed in recent years. More