Aurelia Butler

Saudi Arabia’s deep pockets and Italy’s soft power were on display at rival events in Paris this week, as Crown Prince Mohammed bin Salman and Prime Minister Giorgia Meloni pitched their capitals’ bids to host the World Expo 2030 — a world fair that attracts millions of visitors and billions of dollars in investment.Guests at a Saudi reception held at Paris’ cavernous Grand Palais Éphémère exhibition hall on Tuesday were treated to mocktails, stuffed dates and a curious spectacle to showcase the oil-rich kingdom. First, there were sword-wielding traditional male singers. Then, an orchestra played as projectors beamed images of actress Sofia Vergara, of Modern Family fame, shimmying through a Riyadh shopping mall in a pink bustier dress.The following evening, Meloni appeared at a reception in the flower-filled garden of Italy’s embassy in Paris to woo the same delegates who will vote later this year on the winning Expo city.She introduced a 30-minute sound and light show, seemingly juxtaposing Italian humanist values to those of authoritarian Saudi Arabia. A pianist with a blue mohawk played alongside a string quartet while white-clad dancers performed and a voice intoned: “Men, women, ideas coming together” and “What is best for humanity?”Guests were treated to Prosecco and platters of cured meats, fresh pasta and gelato. “Ah, I love Rome,” sighed one German delegate, as if imagining himself already there in 2030.

Crown Prince Mohammed bin Salman, right, at Saudi Arabia’s official Expo bid reception in Paris © Saudi Press Agency/Reuters

The winner of the global popularity contest will be selected in November through a secret ballot of 179 countries. South Korea’s port city of Busan is also on the short list and President Yoon Suk Yeol was in Paris this week to advocate for his country’s bid. But with the 2025 Expo being held in Osaka in Japan, Busan is considered a long shot for 2030.Ukraine’s Black Sea port of Odesa had pitched to host the Expo before Russia’s invasion in February 2022 and submitted its application in autumn. But with the war raging, it has now been ruled out. This leaves Italy’s capital Rome and the Saudi capital Riyadh as the two frontrunners. France already backed Riyadh nearly a year ago, while Brazil this week became the latest country to announce its support for Rome. “There is no real criteria for the vote,” said Pascal Boniface, an international relations expert at French think-tank Iris. “It’s really the bilateral relationship that counts — and the insistence and pressure that the candidate country applies.”For Prince Mohammed, securing the Expo for Riyadh is part of an overall effort to boost the kingdom’s influence, as it seeks to reduce economic dependence on fossil fuels, position itself as a financial hub and broaden its tourism industry beyond religious pilgrims.Having utilised Saudi Arabia’s $650bn sovereign wealth fund to snap up top football clubs and players such as Cristiano Ronaldo and gain sway over global golf, the Expo would be another glittering prize.Critics say Prince Mohammed is using such events to clean up his country’s image after the 2018 murder of journalist Jamal Khashoggi at the hands of Saudi security agents inside the kingdom’s consulate in Istanbul.French president Emmanuel Macron helped rehabilitate the prince by hosting him at the Élysée Palace last July, where Macron backed the Saudi bid for the Expo.Human rights groups have already slammed the prospect of an Expo in Riyadh as a “whitewash” of the kingdom’s “abysmal human rights record, both past and present”, including its silencing of dissidents, repression of women and frequent use of the death penalty.“He wants to show Saudi Arabia is open to the world and get people to stop talking about Khashoggi, Yemen or the repression in the kingdom,” said Boniface. “Winning the event would be another sign that Saudi Arabia simply cannot be treated as a pariah state by the rest of the world.”Giorgia Meloni said she remained determined to win the contest © Christophe Ena/APBy contrast, Rome had a compelling case for hosting an inclusive and inspiring world fair, said Giampiero Massolo, a retired diplomat now heading the Italian bid committee. He added that such an event should not merely be a tool to “promote one single country or one single person”.“It is our belief that expos are there in order to show what the world can achieve if countries work together,” said Massolo. As part of its pitch, Rome is proposing an Expo powered entirely by solar energy.Italian cities have form in hosting such events: Milan was revitalised by hosting the 2015 Expo and Massolo said Italy now hoped the “big unifying project” would similarly reinvigorate Rome.Asked about France not backing Rome’s bid, Meloni said she was “not in a position to judge others’ choices” and remained determined to win the contest.“I believe that Rome’s candidacy is an excellent choice that [many] countries can still make, so my focus is on those,” she added.An Élysée official said this week that Saudi Arabia won French support because it was the first and only country to have asked — and hinted that Paris also had other interests. “We also wanted in this way to induce Saudi Arabia to make commitments to us on subjects which were otherwise important to us,” said the person without providing specific details.France imports oil and gas from Saudi Arabia as well as exporting aircraft and defence equipment, with Riyadh pledging this week to buy a significant amount of jets. Saudi Arabia also plays a key diplomatic role in the Middle East where France has aims it is pushing for.Boniface said other nations were likely to make similarly self-interested calculations. “Human rights doesn’t usually play into the decision-making,” he said. “The economic aspects really matter and that’s why Saudi had such a strong hand to play.”If the Saudi bid emerges victorious, Boniface said, “it will mean they will have offered contracts and forms of compensation to countries that back it — this is not corruption, but just implicitly how things work”.Additional reporting by Adrienne Klasa in Paris More

Global central banks are entering a new phase in their battle with inflation as economists warn that recessions will be the price of achieving shared 2 per cent goals.Headline rates of inflation across most of the world’s economies have fallen back sharply since the autumn but core rates — which exclude volatile categories such as energy and food — remain at or close to multi-decade highs.These rates, seen as a better gauge of underlying price pressures, have sparked concern that central banks will struggle to hit their targets without wiping out growth. “The next leg of the improvement in the inflation numbers is going to be harder,” said Carl Riccadonna, chief US economist at BNP Paribas. “It requires more pain, and that pain likely involves a recession in the back half of the year.” Torsten Slok, chief economist at Apollo Global Management, added: “The only way to get inflation down to 2 per cent is to crush demand and slow down the economy in a more substantial way.” The Bank of England has a particular problem, raising rates by a substantial half percentage point on Thursday, a day after data for May showed core inflation rising to 7.1 per cent.Its peers were able to move less aggressively at their respective meetings last week. The European Central Bank raised rates by a quarter-point while the US Federal Reserve skipped a rate rise entirely, but both signalled inflation was far from vanquished and warned of further increases ahead.Joachim Nagel, head of Germany’s central bank, has warned inflation is a “very greedy beast” and it would be a “first-order error” to stop raising interest rates.The Fed’s favoured measure of core inflation, the personal consumption expenditures index, has hovered around 4.7 per cent for the past six months. The eurozone’s equivalent figure has been sticky at about 5 per cent.Fed chair Jay Powell told the US Congress this week that the “process of getting inflation back down to 2 per cent has a long way to go”. Markets are responding to central banks’ renewed hawkishness. They now expect US interest rates to peak at 5.25-5.5 per cent, up from 5-5.25 per cent at the start of the month. In the eurozone, investors are increasingly pricing in the possibility of rate rises in July and September.However, some traders question the resolve of central bankers. A Bank of America survey of 81 fixed-income fund managers found 60 per cent thought central banks would accept 2 per cent to 3 per cent inflation if it meant avoiding a recession. Just over a quarter thought rate-setters would be willing to generate a recession to lower it further.Isabel Schnabel, a member of the ECB’s executive board. She has said rate-setters needed to ‘err on the side of doing too much rather than too little’ © Andrew Caballero-Reynolds/AFP/Getty ImagesSome economists think core inflation will soon follow the headline measure down. Referring to the eurozone, Martin Wolburg, an economist at Italian insurer Generali, said: “If you look at pipeline price pressures, they have come right down — producer price inflation is almost zero — and that will feed through.”But Isabel Schnabel, a member of the ECB’s executive board, said eliminating high inflation was still “fraught with risks”, arguing rate-setters needed to “err on the side of doing too much rather than too little”.One problem in defeating inflation is that the labour market remains tight on both sides of the Atlantic. Former Fed chair Ben Bernanke and ex-IMF chief economist Olivier Blanchard have warned that wages need to rise at a similar pace to productivity growth to have any meaningful impact on inflation. Schnabel said governments were adding to inflationary pressures by failing to reverse the spending provided to offset the impact of the Covid-19 pandemic and Europe’s energy crisis. Only half of this emergency spending was expected to be reversed by 2025, she said. More

The restructuring of Brazil’s notoriously complex consumption taxes, which has been attempted previously by various governments multiple times without success, is a key step in President Luiz Inacio Lula da Silva’s plan to boost growth.The proposal, which must still be debated by Congress, plans to over eight years merge various levies into a value-added tax (VAT) with separate federal and regional rates.The proposal, which would shift the tax basis from where goods are produced to where they are consumed, is expected to benefit the coffers of Brazil’s wealthier and more populous states. While the VAT change is set to take eight years, the proposal sets out a 50-year transition period for the place-of-consumption reform, starting in 2029 in a bid to soften the opposition of some state governors.The federal government would also finance a fund devoted to the states’ development, at a cost of 8 billion reais in 2029 and rising to an annual amount of at least 40 billion reais ($8.38 billion) from 2033. A second fund would be created to compensate for tax benefits already granted by states, to which the government would allocate a total of 160 billion reais from 2025 to 2032.Prior to the official presentation of the bill, Speaker Arthur Lira said it should be voted on in the Lower House in the first week of July. Finance Minister Fernando Haddad has emphasized that his team’s immediate focus over the next two weeks will be solely on securing its approval.The proposal acknowledged exemptions in standard tax rates, including a reduced rate for some goods and services related to health, education, public transportation and rural production.($1 = 4.7729 reais) More

PARIS (Reuters) -Zambia has clinched a deal to restructure more than $6 billion in debts owed to other governments, a French official said on Thursday, in a long-awaited breakthrough to ease pressure on the southern African country’s strained public finances. Zambia in 2020 became the first African country to default on its sovereign debt during the COVID-19 pandemic and has struggled since in protracted negotiations to agree a deal on the $12.8 billion of external debt it was trying to restructure.”We have reached an agreement on the outline of a debt treatment, we’ve reached the end of the negotiation,” the French official, who did not wish to be identified, told journalists.Zambia’s public sector creditors agreed to reschedule $6.3 billion, including $1.3 billion in arrears, and private sector creditors are expected to do the same on the $6.8 billion owed to them, the official said.”We’ve already spoken to representatives of the private sector and they know what to expect, that they will have to restructure and make a comparable effort,” the official added. The agreement calls for Zambia’s debt to be rescheduled over more than 20 years with a three-year grace period during which only payments on interest are due. The restructuring agreement with official creditors paves the way for Zambia to receive another $188 million tranche of money from the International Monetary Fund, part of a $1.3 billion package approved in August 2022. “This agreement paves the way for the completion of the first review of Zambia’s three-year Extended Credit Facility Arrangement, which is helping put Zambia on a path toward sustainable economic growth and poverty reduction,” Kristalina Georgieva, managing director of the International Monetary Fund, said in a written statement.The scale of the debt relief Zambia requires has been a concern for some of the country’s main creditors.Some Western officials have accused China – Zambia’s largest bilateral creditor – of dragging its feet in restructuring talks, something Beijing denies.Of the $6.3 billion in debt owed to government bodies, $4.1 billion was owed specifically to Export-Import Bank of China, the French official said. “I am pleased that the international community has come together to support Zambia in its time of need,” U.S. Treasury Secretary Janet Yellen said in a statement. “I urge all official bilateral and private sector creditors to quickly finalize the debt restructuring process that will provide relief to Zambian families and encourage the private investment that is needed to jump start the economy.” Zambian President Hakainde Hichilema was one of about 40 leaders attending a summit in France on Thursday and Friday aimed at easing the debt burden on some of the world’s most vulnerable countries while freeing up billions of dollars in new funds for climate finance.Beijing was keen not to be seen further holding up debt relief for Zambia at the summit, the official said, adding that French President Emmanuel Macron’s talks with Chinese authorities in Beijing in April also helped unblock the situation.Zambia is viewed as a test case for a debt restructuring framework backed by the Group of 20 wealthy nations intended to streamline relief for countries caught in a developing world debt crisis sparked in part by the coronavirus pandemic.However, the process has been achingly slow for Zambia, a fact that has discouraged all but a handful of other struggling governments from seeking help under the mechanism. More

(Reuters) – BlackRock (NYSE:BLK) has announced layoffs that would impact less than 1% of its workforce as a result of budget reallocations to support critical priorities, according to a memo seen by Reuters on Thursday. The investment management firm has about 19,500 employees across more than 30 countries.BlackRock had cut 500 jobs earlier this year while reshaping its teams, joining several Wall Street titans in slimming their ranks to save costs amid an economic downturn caused by higher interest rates, volatile markets and geopolitical tensions. The company’s new round of job cuts followed a recent business review process, Chief Operating Officer Rob Goldstein and Global Head of Human Resources Caroline Heller said in a memo to staff.The departments impacted were not known immediately, but the asset manager’s headcount will be higher at the end of 2023 than at the beginning of the year despite the job cuts, the memo said.On Wednesday, JPMorgan Chase (NYSE:JPM) cut around 20 investment banking jobs in Asia in a fresh round of layoffs, Reuters had reported, citing a source with direct knowledge of the matter. More