When the going gets tough, the tough get going: World leadership has been under a magnifying glass since the offset of Covid-19. Some leaders have excelled, such as Prime Minister of New Zealand – Jacinda Ardern, Prime Minister of Norway – Erna Solberg, Chancellor of Germany – Angela Merkel, and President of Taiwan – Tsai Ing-wen, while others have been called into question.
In the US, one in four American workers are now out of a job, 40 million Americans have applied for unemployment benefits in the last three months, there are widespread protests in the country over police brutality, and President Trump seems to stoke violence rather than rationally govern the people under his ward. The world’s wealthiest country is known for having one of the weakest social safety nets among developed nations. In this peer group, the US is home to more than two-fifths of all millionaires, but has the highest poverty rate and wealth gap. However it was undoubtedly ‘risk-on’ for global equity indices this week with the S&P and FTSE/JSE up 5.2% and 8.4%, as measured in USD and ZAR, respectively!
In contrast to this equity market positivity, we have included a link to a recent interview with economics professor, Nouriel Roubini, who is much more bearish in the face of continued investor exuberance over the past few months.
Meanwhile in South Africa, President Ramaphosa has been supporting bumbling Ministers in preference to showing strong leadership traits and taking the nation into his confidence. Adding to the confusion, he declared that “we have been operating under an economy which has been colonial and racist” and that a “new economy” must be built. Whilst we understand the tragic history of disparity under the Apartheid regime, what is now required to alleviate poverty is a coherent response to business closures and increasing unemployment. The President’s ‘inclusive’ vision should be clear and designed to crowd in investors, business owners, and government technocrats, all of whom would be the driving forces behind a strong and sustainable economic recovery.
- There have been widespread protests in the US over the disproportionate level of violence used against black Americans by police officers – this was in reaction to the death of George Floyd, a victim of police brutality. President Trump has been criticised for his response to the violence, as he appeared to provoke further violence rather than to curtail it. An incident that may characterise his leadership was when he decided to teargas peaceful protestors outside the White House for a photo-op, bible in hand.
- Current and former defence secretaries have issued rare public dissents questioning President Trump’s intention to use military force against American citizens in order to dissuade protests in the country.
- Facebook employees have staged a virtual walkout after Mark Zuckerberg decided to not follow Twitter’s lead in taking action against President Trump’s incendiary posts.
- While the reported number of cases of Covid-19 is reducing in countries that were first hit, the number of new cases is growing faster than ever worldwide, with more than 100 000 reported each day. According to Times data, new hotspots are emerging in Latin America, Africa, Asia, and the Middle East, indicating that the geography of the pandemic is shifting seismically. In Brazil the death toll passed 30 000 earlier in the week, Egypt’s active cases have spiked reaching more than 28 000, and Bangladesh now has 55 000 known active cases.
- Anthony Fauci stated that the US should have 100 million doses of a Covid-19 vaccine by the end of the year. Moderna has produced the first viable vaccine candidate, which should go into the final stage of trials by mid-summer.
- President Putin has declared a state of emergency in a region of northern Siberia after a massive fuel spill in the area. The accident may be one of Russia’s worst-ever, with a leak of 20 000 tons of diesel, significantly threatening the arctic environment.
- Follow this link for an interview with economics professor Nouriel Roubini, who in 2006 warned of the 2008 Global Financial Crisis. In the interview, he provides his reasoning for why he thinks the global economy will recover in an U-shape rather than a V-shape as many economists and investors have been predicting.
- On Tuesday, Judge Norman Davis found that while the national state of disaster to reduce the curve of Covid-19 was rational, many of the restrictions in level four and three were not rationally connected to the objectives of slowing the rate of infection or limiting the spread of the virus (an example of this is the ban on tobacco). The Gauteng High Court ordered that lockdown regulations which are “invalid and unconstitutional” should be amended within 14 days. The government is set to appeal the judgement and has extended the national state of disaster to mid-July.
- Former Public Protector, Thuli Madonsela, has published a letter to President Ramaphosa where she questions the constitutionality of the government’s Covid-19 lockdown regulations. Please follow this link for the letter.
- The National Prosecuting Authority has appointed advocates Ouma Rasethaba and Rodney De Kock as two new Deputy National Directors of Public Prosecutions. The appointments are effective immediately and will support the leadership of the authority, which will hopefully go some way in eradicating State Capture from the system. More senior appointments are due to be made soon.
- South African Airways will be rising back from the dead – the South African government has agreed to finance the restructuring of the national carrier. The plan is still under discussion, but reportedly the government will provide an additional R4.6 billion to aid the airline.
Sources: Dynasty, Reuters, Bloomberg Markets, The New York Times, Daily Maverick, and Moneyweb, etc