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Will consumer demand outstrip supply in the U.S. running up to Christmas?

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In this week’s Business Line, we look at how consumers in the U.S. may not get much in the way of promotions and discounts as demand is set to outsrip supply in the retail sector.

We also report on Taiwan’s hope for an economic recovery in its final quarter of 2020, as its main export markets in Europe and the U.S. celebrate Christmas.

Also in this episode, brought to you from Dubai, we look at an annual report entitled: The State of the Global Islamic Economy, where there is cause for cautious optimism.

U.S. CONSUMER SPENDING

Retail sales in the U.S. grew by a sluggish 0.3% in October. A surge in nationwide coronavirus infections and the expiration of a 500-euro weekly boost to unemployment cheques has put the brakes on spending and contributed to the slowest retail sales growth in the country since the spring.

Debbie McIndoe is a resident in New York, and shared her concern:

“I definitely have a problem with shopping because the money is low, you know, everybody is in the house and nobody’s getting jobs right now. The economy is not so hot. Hopefully it will change,” she told us.

Money concerns combined with the very real possibility of another lockdown is completely transforming consumer habits this festive season, as Simeon Siegel, a senior retail analyst at BMO Capital Markets, explained:

“For the past 10 years, we kept hearing this mantra that people want to buy experiences, they don’t want to buy things.

“Well, in this current norm, we’re operating in, you can’t have experiences outside the house. You don’t travel. So things become your experiences.

“We’ve seen furniture, we’ve seen anything that improves your experience at home – at home fitness has gone through the roof,” he said.

And we can expect retailers to be pretty scrooge-like with discounts, as demand remains broadly high relative to stock.

“I think this is the first holiday in a long time where demand is going to outstrip supply, and what that means is don’t expect that many discounts.

“So from a consumer perspective, inventory is light. Deals are going to be light as well.

“From a stock perspective, I think we should all expect sales may disappoint, but margins and profitability are probably going to be better than we’ve seen in a while,” Simeon Siegel said.

However, many Christmas shoppers will still brave the elements and visit shops.

“And I think what we will find is for the stores that offer a compelling product and for the stores that offer products that you cannot get online, people will brave the elements.

“And in this instance, the element is obviously the weather, but it’s even more obviously the pandemic,” he added.

TAIWAN’S EXPORT ECONOMY

Meanwhile on the other side of the world, Taiwan with its export-driven economy, is hoping that widespread lockdowns in the U.S. and Europe won’t have a domino effect on its economy in Q4.

Taiwan has a population of almost 24 million, had less than 700 confirmed cases of COVID-19, and seven deaths as of the end of November.

However, the island has an export orientated economy highly dependent upon demand from the West.

That hasn’t hindered optimism for an economic rebound in the final quarter of 2020, as Venson Tsai, a financial analyst for Cathay Pacific Group, explained:

“Speaking of the situation right now, the most important thing is that the pandemic is still slowly gaining ground in Europe and America. Some cities are locked down in Europe, and their economic growth has slowed down a little. But this is not likely to recede, and America, as long as cities are not locked down, it will be blessed with the shopping peak season of Q4. In this case, Taiwan’s year end exports can still reach a high. So if we look at Taiwan’s economy, it is still on its path to recovery.”

But many local businesses which depend on tourism and domestic sales have not had much reason to share this optimism, as shop owner, Chen, explained:

“Business fell around 50 per cent to 60 per cent. There are no tourists coming around, this seriously affects the business here. Our district has suffered greatly. Old shops in the neighbourhood have closed down.”

The prevailing hope is that 2021 will bring with it a successful COVID-19 vaccine and a return to business as close to as usual as possible.

GLOBAL ISLAMIC ECONOMY

Consumer spending across the Islamic economy totalled over 1.85 trillion euros in 2019.

That’s according to a report on the state of the Global Islamic Economy.

Following its publication, I met with the CEO of the Dubai Islamic Economy development centre, Abdulla Mohammed Al Awar, to review the findings.

In this week’s Business Line, we look at how consumers in the U.S. may not get much in the way of promotions and discounts as demand is set to outsrip supply in the retail sector.

We also report on Taiwan’s hope for an economic recovery in its final quarter of 2020, as its main export markets in Europe and the U.S. celebrate Christmas.

U.S. CONSUMER SPENDING

Retail sales in the U.S. grew by a sluggish 0.3% in October. A surge in nationwide coronavirus infections and the expiration of a 500-euro weekly boost to unemployment cheques has put the brakes on spending and contributed to the slowest retail sales growth in the country since the spring.

Debbie McIndoe is a resident in New York, and shared her concern:

“I definitely have a problem with shopping because the money is low, you know, everybody is in the house and nobody’s getting jobs right now. The economy is not so hot. Hopefully it will change,” she told us.

Money concerns combined with the very real possibility of another lockdown is completely transforming consumer habits this festive season, as Simeon Siegel, a senior retail analyst at BMO Capital Markets, explained:

“For the past 10 years, we kept hearing this mantra that people want to buy experiences, they don’t want to buy things.

“Well, in this current norm, we’re operating in, you can’t have experiences outside the house. You don’t travel. So things become your experiences.

“We’ve seen furniture, we’ve seen anything that improves your experience at home – at home fitness has gone through the roof,” he said.

And we can expect retailers to be pretty scrooge-like with discounts, as demand remains broadly high relative to stock.

“I think this is the first holiday in a long time where demand is going to outstrip supply, and what that means is don’t expect that many discounts.

“So from a consumer perspective, inventory is light. Deals are going to be light as well.

“From a stock perspective, I think we should all expect sales may disappoint, but margins and profitability are probably going to be better than we’ve seen in a while,” Simeon Siegel said.

However, many Christmas shoppers will still brave the elements and visit shops.

“And I think what we will find is for the stores that offer a compelling product and for the stores that offer products that you cannot get online, people will brave the elements.

“And in this instance, the element is obviously the weather, but it’s even more obviously the pandemic,” he added.

TAIWAN’S EXPORT ECONOMY

Meanwhile on the other side of the world, Taiwan with its export-driven economy, is hoping that widespread lockdowns in the U.S. and Europe won’t have a domino effect on its economy in Q4.

Taiwan has a population of almost 24 million, had less than 700 confirmed cases of COVID-19, and seven deaths as of the end of November.

However, the island has an export orientated economy highly dependent upon demand from the West.

That hasn’t hindered optimism for an economic rebound in the final quarter of 2020, as Venson Tsai, a financial analyst for Cathay Pacific Group, explained:

“Speaking of the situation right now, the most important thing is that the pandemic is still slowly gaining ground in Europe and America. Some cities are locked down in Europe, and their economic growth has slowed down a little. But this is not likely to recede, and America, as long as cities are not locked down, it will be blessed with the shopping peak season of Q4. In this case, Taiwan’s year end exports can still reach a high. So if we look at Taiwan’s economy, it is still on its path to recovery.”

But many local businesses which depend on tourism and domestic sales have not had much reason to share this optimism, as shop owner, Chen, explained:

“Business fell around 50 per cent to 60 per cent. There are no tourists coming around, this seriously affects the business here. Our district has suffered greatly. Old shops in the neighbourhood have closed down.”

The prevailing hope is that 2021 will bring with it a successful COVID-19 vaccine and a return to business as close to as usual as possible.

GLOBAL ISLAMIC ECONOMY

Consumer spending across the Islamic economy totalled over 1.85 trillion euros in 2019.

That’s according to a report on the state of the Global Islamic Economy.

Following its publication, I met with the CEO of the Dubai Islamic Economy development centre, Abdulla Mohammed Al Awar, to review the findings.

I stared by asking him to explain what the report is – and its key findings.

“We consider it a benchmark in terms of data on the Islamic economy sector. So what this report provides is actually a resource in terms of what are the key investments in the various sectors of the Islamic economy.

“What 2019 showed us is that the consumers spend almost 2.02 trillion U.S. dollars on the real Islamic economy sectors: halal food, pharmaceuticals, cosmetics, family-friendly tourism, media recreation. And in terms of Islamic finance assets, that stood at 2.88 trillion US dollars.

“We are glad to see that the UAE has fared well. It’s within the top three in the global Islamic economy indicator. It leads in two of the sectors, media and recreation, as well as modest fashion,” he added.

I then asked Abdulla Mohammed Al Awar about how important the UAE’s success was in the fintech sector.

“Quite, quite tremendous, to be honest with you. The fintech industry has really taken off now even more so, you know, with what has happened in 2020. But what has been apparent, I think the whole digitalisation of the banking sector and Islamic finance sector over the last years has proven that in order to be successful in this sector, you really need to embrace fintech,” he replied.

He also talked about the surprise findings in the report.

“The halal food sector…. that makes sense because your producers today for food and your exporters are from Australia, from the U.S., South America, and some European countries are heavily ranked in terms of exports, halal food exports. It clearly signifies to me that this is a global ecosystem.

“So that indicator also provides an avenue for us to partner with other nations who place the Islamic economy as an important component in their strategies. You have Malaysia, you have the UAE, you know, you have Saudi Arabia, who have historically always been there as leading in the indicator. But Indonesia over the last two years, for example, rose very quickly as well in the rankings because the government there formulated certain strategies specifically addressing the Islamic economy sectors,” he concluded.

Read from source: https://www.euronews.com/2020/12/01/will-consumer-demand-outstrip-supply-in-the-u-s-running-up-to-christmas

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Spain drafts new foreign policy that incorporates gender perspective

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The Spanish government has updated its guidelines for international relations. A draft of the 2021-2024 Foreign Action Strategy, which the Cabinet is planning to send to parliament on Tuesday, discusses the “opportunity” to improve relations with the United States now that Joe Biden is the new US president. It also emphasizes the need for “a feminist foreign policy” and “humanitarian diplomacy.”

This document will replace the previous foreign policy strategy drafted in 2015. Although it only represents the government’s opinion, other sources were consulted – including regional, provincial and local authorities, and national agencies such as the Council of State, the government’s top advisory body.

The 100-page text draws a somber picture of a fractured global scenario where the concept of multilateralism is in crisis. “We live in an increasingly volatile and fragmented world that tends to generate two opposing trends: an outward force of disunity marked by the rise of populisms and exclusionary nationalisms, and an inward force with inclusive answers to global challenges,” reads the document.

In this context, Spain hopes to gain added relevance in the international arena with a policy based on “reformed and reinforced multilateralism.” The strategy, drafted in the middle of the coronavirus pandemic, holds that the health crisis has accelerated processes that were already underway, but that it is still too soon to know whether we are immersed in “an era of change or in a change of era.”

The following are some of the main points:

United States. The Biden administration “opens up a more optimistic scenario” and “an opportunity that has to be taken.” Spain wants “a broader agenda for bilateral relations in the economic and trade spheres,” and will seek to get “unfair unilateral trade measures lifted,” alluding to tariffs on olive oil and wine. The existing cooperation on defense issues should be maintained, and the Cervantes Institute will open a new branch in Los Angeles, adding to the ones in New York, Chicago and New Mexico.

Europe. Spain will encourage “a more federal European Union” with greater strategic autonomy, competence over more policy areas, and more matters that may be approved through qualified majorities rather than unanimous votes. Spain will play an active role in the Conference on the Future of Europe, which will address necessary reforms for the EU, and encourage the integration process when it holds the six-month rotating EU presidency in the second half of 2023. The document calls for the consolidation of permanent tools of joint debt issue and for Europe to create its own resources, as well as for a harmonized tax system that ends competition within the EU. The United Kingdom’s withdrawal from the EU is described as “a great opportunity for Spain to take on greater leadership towards a more global Europe.”

Feminism. Spain will approve a Feminist Foreign Policy Strategy to incorporate gender issues “in all areas of foreign action” and it will “lead by example” by encouraging a greater presence of women in Spain’s external activities. Women currently represent 28% of diplomats and 20% of mission heads. Spain will also lead initiatives to promote diversity, “particularly LGTBI rights and the rights of all communities that are underprivileged or discriminated against.”

Latin America. Spain will encourage relations between the EU and Latin America and support the completion of an agreement with the Mercosur trade bloc. The king and queen will visit Chile to celebrate the 500th anniversary of the first documented circumnavigation of the globe. Several Central American countries, as well as Peru and Mexico, are also celebrating the bicentennial of their independence. The latter country is also observing the controversial 500th anniversary of Hernán Cortés’ conquest, and Spain will work towards “a constructive dialogue about the celebration of historical milestones.” In Venezuela, “the priority will be restoring the democratic framework and providing support for overcoming the political and humanitarian crisis.” As for Cuba, the country is “updating its political and economic model” and Spain must stimulate this process “through critical yet constructive support.”

Immigration. Spain supports a European System of Immigration and Asylum guided by the principles of solidarity and equally shared responsibility. It wants to see “integral management of borders,” a zero-tolerance policy against smuggling rings, and the creation of “safe, regular and orderly migration channels.”

Health. Spain will support the European Commission’s efforts to create the foundations for “a European health union,” as well as the reform and reinforcement of multilateral global institutions such as the World Health Organization (WHO).

United Nations. Spain will apply to sit on the UN Human Rights Council for the 2025-2027 period. The technological platform for the UN system in Quart de Poblet (Valencia) will be consolidated and expanded.

China. Spain will seek “more balanced relations” with China, especially on economic issues, avoiding “dynamics of confrontation.” It will encourage a strategic relationship through the EU, without ignoring “clear elements of rivalry in terms of values and interests” especially on human rights issues and unfair competition.

Development aid. The document maintains a commitment to earmark 0.5% of Spain’s gross domestic product (GDP) to development aid. A new law on international cooperation for sustainable development will be passed, and the Spanish International Cooperation Agency will undergo reform.

Climate. Spain wants to lead agreements on climate change with a “climate diplomacy.” It will encourage an international coalition on green hydrogen (hydrogen production from water) and will commit to the protection of biodiversity.

Western Sahara. Spain’s priority with regard to its former colony is to “contribute to the UN’s efforts to reach a political solution to the conflicts in the region in accordance with international parameters.”

Gibraltar. Gibraltar is only mentioned in reference to the recent agreement of December 31 laying out the groundwork to incorporate the British Overseas Territory into the Schengen space. Spain will “encourage the negotiation process for an agreement between the EU and the UK with regard to Gibraltar.”

 

Read from source: https://english.elpais.com/politics/2021-01-26/spain-drafts-new-foreign-policy-that-incorporates-gender-perspective.html

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Ukraine nursing home fire: Four arrested after Kharkiv blaze leaves 15 dead

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Ukrainian authorities have arrested four people in connection with a deadly fire at a retirement home in Kharkiv.

15 people were killed after a blaze ripped through the nursing home on Thursday afternoon in the eastern Ukrainian city, according to emergency services.

Nine others were rescued, five of whom have been taken to hospital for treatment.

Pictures from the scene showed blackened rooms and barred windows on the upper floor of the two-storey building, which had been converted into a home for the elderly. 50 firefighters attended the incident to extinguish the flames.

In a statement on Facebook, the country’s attorney general, Iryna Venediktova, said four people have been arrested.

The suspects include those who owned and rented the building, as well as the manager of the retirement home. Authorities say they are investigating if the fire was started by arson or the short circuit of an electrical appliance.

Ukraine’s President Volodymyr Zelensky visited the centre in Kharkiv and has announced a national day of mourning for Saturday.

In an earlier tweet, the President called on local authorities to do “everything possible” to help victims and relatives who had lost loved ones.

 

Read from source: https://www.euronews.com/2021/01/21/ukraine-nursing-home-fire-15-dead-and-five-hospitalised-after-blaze-in-kharkiv

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Europe’s space leaders seek to boost sector in light of Brexit, COVID and international competition

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The European Space Conference in Brussels takes place this week, so Euronews spoke to European Space Agency Director General Jan Wörner about the challenges the sector faces in 2021.

Brexit troubles Europe’s space sector

Brexit is a headache for the European space sector, as the UK is a permanent and committed member of ESA, but is now outside the EU. Leaving the EU has made everything more complicated: under the terms of the agreement signed in December 2020 the UK can continue to be part of the Copernicus Earth observation programme at least until 2028, as both the EU and ESA contribute funding to it. However, it loses access to high-quality positioning from the EU’s Galileo satellites, and is now out of EGNOS. The British stop being a full member of the European space debris tracking system, but still have access to it as a non-EU partner.

There are outstanding questions over the role of British companies in building spacecraft for EU-related projects. ESA DG Jan Wörner told Euronews he believes ‘it is possible to have a solution’, given that non-EU countries like Switzerland and Norway are able to take part in the construction of satellites under Brussels contracts. However, the sheer size of the UK space sector is an issue. “Some fear in Brussels that if a big member state is doing something different, then this could be a magnet for other countries to do the same,” admits Wörner.

EU project to beam internet to all

A hot topic around the virtual and real water coolers at the Brussels Space Conference will be the Commission’s new plans to create a network of low-Earth orbiting internet satellites, which should offer broadband, 5G and more to rural communities across the bloc.

The initiative is being spearheaded by Commissioner for Internal Market, Thierry Breton, with a broad consortium of space industry players comprising Airbus, SES, Arianespace, Eutelsat, OHB, Orange, Telespazio and Thales Alenia Space.

The vision is similar to the Starlink and OneWeb systems, both of which have already launched satellites aimed at offering a new kind of holy grail in communications, a low-flying communications network from orbit which allows everyone, at least in theory, to enjoy high-speed connectivity.

The European version would be a public-private partnership, and initial work will begin this year.

Defining ESA-EU relations

The EU’s enthusiasm for space is clear: just before Christmas the European Commission and Parliament approved a 14.8 billion euro budget for EU space activity. The funding for the period 2021 to 2027 includes 9 billion for Galileo and 5.4 billion for Copernicus.

It’s part of a continued and rising commitment to developing Europe’s space sector, but it does beg the question of just how close ESA and the EC would like to become? For Wörner, moving further in the EU’s direction is a ‘political decision’ but not one that necessarily fits with ESA’s principals on return on investment, which see agency member states receiving reciprocal industrial contracts which are very close in size to their level of investment in a given programme. “The link between what ESA is doing and what states want to happen is very close, and a really big advantage,” he says.

The current director of Earth Observation at ESA, Josef Aschbacher, has said that defining the relationship between the two organisations is one of his main objectives when he replaces Wörner in July 2021.

Competition from US and China

A key focus of the Brussels Space Conference is the desire for Europe to develop a vibrant and independent private space sector. So far, major initiatives like Galileo and Copernicus have spawned a large number of small and specialist space startups selling value-added services based on the free data from these two projects. However, the old continent has so far struggled to create the kind of attention-grabbing commercial space firms like SpaceX and Planet Labs that NASA has helped foster in the US.

Then, there’s the speedy growth and unbridled ambition of the Chinese to take into account. When Jan Wörner first came to his job in 2015 he made a media splash with his dreams of creating a ‘village on the Moon’. In late 2020, however, he could only watch in awe as the Chinese sent a robotic mission to fetch samples from the Moon. It’s something only the Soviet Union and the United States have achieved before.

“My first thought was congratulations, of course,” he says, “but I quickly thought ‘ah, they are fast, and we should be faster'”. He told Euronews he hopes the joint ESA-NASA Mars Sample Return mission will be even more inspiring and impressive and give Europe’s exploration programme a much-needed boost in publicity.

There are areas where ESA is a leader, particularly in Earth observation thanks to the Sentinel fleet. Catching space debris and working out how to deflect an asteroid on a collision course with Earth are another two of the growth areas for public and private initiatives in Europe. ESA is also pushing ahead with its Space Rider vehicle, an un-crewed flying machine which resembles a mini-Shuttle, and could offer commercial and institutional clients a relatively low-cost means of reaching orbit, and returning home afterwards.

However, the new Ariane 6 rocket continues to face delays. Much vaunted as a flexible new vehicle to compete in this highly-competitive market, the replacement for the heavy-lift Ariane 5 is now only due to launch in the second quarter of 2022. Arianespace has called on European governments to step up their commitment to launchers to better compete with SpaceX, which has grown rapidly on the basis of lucrative American government launch contracts.

Read from source: https://www.euronews.com/2021/01/11/europe-s-space-leaders-seek-to-boost-sector-in-light-of-brexit-covid-and-international-com

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