Weekend reading links

1. K-shaped growth in the Indian car industry?

Hyundai Creta, a premium feature-laden mid-segment SUV with prices starting at Rs 11 lakh-plus, has emerged as the country’s top selling car in June 2025. With Maruti’s Ertiga, a Multi-Utility Vehicle, the two accounted for almost two-thirds of all cars sold in the month. What is also remarkable is that nearly one in three Creta buyers is a first-time car owner. Officials in Hyundai said the contribution of first-time buyers in Creta’s customer base has gone up sharply to 29 per cent in 2024 from just 12 per cent in 2020. The car market has had a mixed year in 2024-25. While it hit a new sales peak at 4.3 million, the growth was sluggish at just around 3 per cent, primarily due to the continuously declining sales of entry level cars... The entry-level car segment is in a bad shape, primarily due to two factors: higher price tag of Rs 4 lakh-plus due to better safety norms including six airbags, and sluggish income growth in the lower end of consumer base. The bigger problem is that an entry-level car costs nearly four times the prices of a scooter or motorcycle...

According to industry data, sales performance of entry-level cars priced below Rs 5 lakh – a crucial indicator of demand in the economy given that this segment largely attracts first-time buyers – is dire. This segment used to account for nearly a million units a decade ago – 9,34,538 to be precise in FY16. It has since declined to just 25,402 units in FY25. The Maruti Suzuki Alto, for instance, sold more than 18,700 units in June 2019, and was the best-selling then. In June 2025, the Alto and S-Presso combined sold a little over 6,000 units... The two-wheeler segment sales dropped 6.2 per cent to 46.74 lakh units in April-June 2025, pulled down by motorcycles and mopeds. When juxtaposed, suggests a dwindling of purchasing power at the lower and middle-class segments...

According to data collected by the NGO People Research on India’s Consumer Economy – which some carmakers refer to internally – car penetration in Indian households that have a yearly income of less than Rs 4 lakh reduced to 1.4 per cent in FY20, from 1.9 per cent in FY16. Car penetration in households that earn between Rs 4 lakh to Rs 7 lakh annually also reduced to 8.3 per cent from 12.1 per cent in the same time period. Families with incomes of less than Rs 4 lakh and between Rs 4 lakh and Rs 7 lakh are said to make up for around 80 per cent of all Indian households. Though FY20 was the latest data available with a carmaker, they said the trend has not changed in the subsequent years.

2. Cafes are another illustration of the lack of consumption depth in the Indian market.

Running a cafe in India is something that even the boldest players have struggled to perfect, even after decades. Mid-market physical coffee chains like Cafe Coffee Day have collapsed, premium brands like Starbucks are fighting an uphill battle, and artisanal chains like Blue Tokai are facing steady losses. The truth is nobody has cracked the profitability code. The challenges are easy to spot. India may be the world’s seventh-largest coffee producer, but its per capita coffee consumption stands at a minuscule 70g compared to the global average of 1.3kg. “The math simply doesn’t add up when you factor in rental costs, labour complexity, and consumer price sensitivity,” said Abhinav Mathur, CEO of Kaapi Machines, a firm that supplies and services high-quality coffee machines. Cafes cough up 15–20% of their sales as rent at prime locations. For instance, Starbucks reportedly pays Rs 25 lakh ($29,000) per month to operate in Mumbai’s prime spots. The company needs to sell over 500 cups a day just to break even on rent.

The unit economics of coffee making in India is brutal.

“Rent is what makes or breaks a cafe brand in India,” said Mathur. “For Starbucks, rent makes up about 15–20% of its revenue... Even Blue Tokai spends about 15% of its sales on rent, said Chitharanjan. This is “reasonable” for its business model, he said... The investment in equipment adds another layer of complexity to running a cafe. For instance, opening a 1,000-square-foot Blue Tokai outlet costs Rs 85 lakh–1 crore, said Chitharanjan. And espresso machines cost Rs 2.5–5 lakh, depending on whether it’s a semi-automatic or an automatic one... Moreover, Indian consumers have been conditioned by decades of affordable commodity coffee pricing. For instance, a traditional filter coffee in South India costs Rs 15–30, creating psychological barriers to premium pricing. “People find it culturally difficult to pay Rs 200 for coffee,” said Mathur.

As a result, every major chain in the country—from Cafe Coffee Day to Third Wave Coffee—is currently loss-making. For instance, Starbucks’ losses have gone up by more than 5X to Rs 136 crore in the two years to FY25. Similarly, Third Wave Coffee, a chain launched in 2016, posted losses of Rs 110 crore in FY24—almost double the previous year... Despite the industry’s growth, sustainable profitability remains elusive for most players. The successful brands have generally followed one of two strategies: premium positioning with high margins but limited scale (Blue Tokai, Third Wave)—still leading to losses, or ultra-low-cost operations with minimal infrastructure (delivery-only players like the now-struggling Zepto Cafe). 

Some comments on the article offer useful insights.

The psycographic-lifestyle-income gap between cafe coffee consumer and filter coffee consumer is very huge. So for any given locality (physical or qcomm) the market size has a unpenetratable celing. And that market that pays 200-400 for a coffee won’t be happy with just coffee – so the need for complex menus and costly ambiences. The tea shop culture is so broad based in India (which also offers filter coffee and instant coffee with snacks) – the cafe culture stands in isolation or should I say has painted itself in to a corner. So before entreprenuers study economics and business scaling, they should first study culture... These coffee chains expect American levels of coffee consumption when their prices are relatively 5-10x higher making it an extremely premium product. The average person in US spends between 0.1-0.2% of their monthly salary on a single cup of coffee (assuming $5 per coffee). Applying the same multiplier means a cup of coffee in india should not cost more than 50-100 rupees, far cry from the 250-400 being charged currently.

3. An assessment of the India-UK FTA here. 

4. As the IMF revises global (and US) growth rates upwards, Ruchir Sharma points to the problem with the models used by economists.

Many economists had assumed that, by lowering imports, tariffs would strengthen the dollar almost automatically, as an accounting identity. Instead, it suffered its worst fall over the first half of a year since the early 1970s. This unexpected turn is now attributed to the fact that the dollar started the year historically overvalued. Many foreigners were heavily exposed to dollar assets. Of late, they have been hedging those risks and investing more outside the US. Many countries are increasingly attractive places to park money, in part because tariff threats inspired them to push economic reform and cut trade deals with non-US partners. 

The bigger mystery is why the stagflationary impact of tariffs has yet to materialise in the aggregate data. Is the US really enjoying a free lunch, taking in $300bn a year in tariff revenues with none of the expected heartburn? By some estimates, foreign exporters are indeed absorbing 20 per cent of the costs — a much larger share than they did in response to tariffs in Trump’s first term. The remaining 80 per cent, however, is still getting paid in roughly equal shares by US corporations and consumers. The likely answer is that the negative economic effect of tariffs is being countered by other forces, including the mania for artificial intelligence and more government stimulus. Since January, estimates of what the big tech companies will spend this year on building out AI infrastructure have risen $60bn to $350bn. Smaller businesses are scrambling to catch the wave too, further boosting growth. And all this excitement is neutralising the fear that trade policy uncertainty would dampen animal spirits and freeze new capex. AI-driven bullishness is also lifting growth by keeping financial conditions loose, even with higher interest rates... Meanwhile, the promise of tax relief makes it easier for US corporations to absorb a larger than expected share of the tariff costs, rather than pass it all on to consumers. Trump’s “big, beautiful bill” is expected to save US businesses around $100bn this year and more than that in 2026, mainly in tax breaks.

5. Rama Bijapurkar makes an important point about the current Indian middle class. She writes that the older middle class was dominated by government jobs that offered decent salaries, job security, health care, pensions, etc. With government job recruitments slowing and formal large private sector jobs not compensating, the current middle class is far less secure. 

The majority will be in quasi-formal or quasi-informal small private company employment, small entrepreneurs with limited business scalability and ability to withstand environmental cycles, and self-employed gig workers with varying levels of skills and low levels of stability... They are exhausted from generating the energy needed to find meaningful work and navigate their way up the socio- economic ladder in the absence of facilitating structures. They are in search of white-collar respectability, stability, security, predictability, social mobility, recognition (which the old middle class had). Their holy grail, ironically, is a “government job”. Their deepest desire is a less exhausting life (lower aspiration levels, dreams that are “bonsai”), with little struggle and uncertainty. Is India’s famed aspirational middle class giving way to version next, the exhausted middle class? The stability and homogeneity we assume in the growing numbers of the middle class actually is a mass of heterogeneity and has inbuilt income and occupation volatility... Perhaps we should change our conceptual frame of a single middle class to a two tiered one – an economic development-driving “genuine” middle class that has the attributes discussed earlier; and a consuming capable class with purchasing power at the moment.

6. Art of the Deal in international trade diplomacy.

The president clearly has a winning formula for getting his way. First make shocking demands to stoke panic. Then pull back for time-limited negotiations. Having a mix of economically vulnerable, retaliation-shy, and pliable trade partners helps. Finally, strike an agreement below the initial threat level, and sell the result as a win-win.

7. Canada's prized export, maple syrup, 73% of its global output comes from there, is facing 35% Trump tariff. 

Over 45mn kilogrammes of Canadian maple syrup — enough to smother 3bn American pancakes — went across the border in 2024, amounting to almost 60 per cent of the country’s total demand... For years, syrup flowed freely across the border. But in 1909 US tariffs were imposed to protect American production. In 1972, when those tariffs were cut back to zero, the US Department of Agriculture released a research report which found that the maple tariff was “never very effective in protecting the domestic maple industry from foreign competition”. After this, Canada made its own efforts to protect the industry. In 1996, a maple syrup federation was created in Quebec — where 90 per cent of its syrup comes from. The cartel (known formally as the Quebec Maple Syrup Producers) sets a floor on global syrup prices and smooths out variable harvests. Once processed, Canadian maple syrup can sit in the federation’s enormous warehouses — which have 53 Olympic swimming pools’ worth of storage capacity — for years without degrading. The federation says that it any unsold inventory can be added to this strategic reserve. It also points out that it has made strides diversifying away from US buyers in recent years, reducing the proportion of production that goes there by roughly 20 percentage points over the last couple decades.

8. A snapshot of US imports and exports from India.

And why Trump thinks that India is the "tariff king".

9. Donald Trump on Jerome Powell in a graphic.

10. Good primer on Trump tariffs. This on industry-specific tariffs.

This is on the great walk back on China, whose tariffs are only slightly higher than India's and much lower than Brazil's.

11. The diminishing Palestinian state.

12. FT long read on how Eli Lilly's Mounjaro and Zepbound came from behind to overtake Novo Nordisk's Ozempic and Wegovy as the leading obesity drugs. 

13. Good graphic about the scale at which AI's consumption of computing power and electricity is growing.

14. Robin Harding points to two contrasting facts about the Japanese economy.

Number one: the yield on 30-year government bonds hit an all-time high of 3.21 per cent earlier this month after a series of weak auctions — a sign, perhaps, that markets are finally becoming concerned about the country’s enormous public debt. Number two: according to Morgan Stanley, Japan’s budget deficit was almost completely eliminated in the first quarter of this year, putting the public finances in their best position for almost three decades.

15.  Desalination of water is a rapidly growing industry. Global desalination industry is expected to exceed $20bn in 2027, from less than $15 bn in 2024. And annual growth in desalination capacity is 6-12%. Middle East and North Africa account for 70% of the global capacity.

16. Finally, the progression of Trump tariffs since April 2, 2025.

And their country-wise tariffs.

Graphical summary of geoeconomic risks from the China dependence

Arguably, the most significant corporate trend of today is the rush to break out from China’s manufacturing dominance and diversify away from the country. This trend assumed importance in the course of Donald Trump’s first term and has now become an existential reality for companies and countries.

But while the intent to diversify or decouple is real, the reality of translating the goals into action has been challenging for multinational corporations. Sample this

A Bain survey of chief operating officers, conducted before Trump’s re-election last year, found that while 80 per cent were planning to increase supply chain onshoring or reshoring over the next three years — up from 63 per cent in 2022 — only 2 per cent had successfully completed such plans. “Changing suppliers or shifting production is easier said than done, and because organisations are all looking at the same locations, that is likely to create capacity constraints in terms of skilled labour and factory space,” says Simon Geale, executive vice-president at Proxima, a supply chain consultancy owned by Bain & Company. 

For a start, the dependency on China varies widely across product categories. A new McKinsey Global Institute report has formulated a product-level trade rearrangement ratio to measure a country’s trade dependency on China. It is the ratio of a country’s imports of that product from China to the total global exports of that product. The ratio is directly proportional to trade dependence. The weighted average of all the imports of a country from China can be calculated to determine its aggregate trade dependence on China. 

The China Brazil-rearrangement ratio is highest, dominated by China’s massive $40 billion imports of soybeans from Brazil. This dwarfs the potentially available soy export market, which is about $20 billion, because other exporters already ship most of their soybeans to China. Beyond US–China ratios, other rearrangement ratios greater than 0.2 are China–India and India–US. Often, these midrange ratios are driven by acute points of reliance for specific products. For India’s exports to China, for example, the higher ratio is driven by products like castor oil. India is the largest global supplier of castor oil, and castor oil is one of China’s largest imports from India, used mainly as a building block in its chemical industry. China gets more than 99 percent of its castor oil imports from India, and the rearrangement ratio for this product is correspondingly high. 

Interestingly, Chinese imports have among the highest rearrangement ratios with its trade partners - with Brazil, India, the US, and Japan - making the country dependent on those countries in some products. This does point to the leverage those countries might have with their exports to China. Apart from Brazil, India and the US appear to have substantial leverage. Does castor oil provide India with any meaningful leverage over China? What’s the leverage that the US might want to deploy against the Chinese?

For India, too, the graphic points to a high risk concentration in its exports and imports. In a geopolitically fraught world, governments ought to take cognisance of these trends and step in to strategically realign them. 

The report calculates the ratio for all US imports from China to identify the likely product pain points.

The report finds that while 61% of US business input imports from China have ratios below 10% (thereby making substitution easy), the ratio falls to 35% for product imports. It’s in capital goods that 37% of imports have ratio between 0.75 and 1. 

In contrast, China’s imports from the US are easier to substitute, since they are also widely exported by others. 

The report finds that Europe will become the fulcrum for any trade rearrangement. 

Across nine varied simulations, European imports from China and exports to the United States both go up by nearly $200 billion. As intra-European trade shifts to the United States, it leaves holes filled by increased Chinese exports—assuming Europe does not choose to alter its own trade policies. Others will be affected, too: exports to the United States from as many as 70 countries may increase by more than 10 percent.

A new paper by ECB economists sheds light on the extent of dependency of European and US economies on Chinese imports. They use novel quantitative metrics like indices on export similarity, partner similarity, and ideal point distance. 

This shows the US and EU’s import concentration dependence on geopolitically distant countries like China, Russia, and Iran for a few advanced technology products. 

The authors analyzed import concentration in the US and the Euro Area using the Herfindahl–Hirschman Index (HHI) to identify supply chain risks. This shows their import concentration dependence on all advanced technology products.

This shows the general import concentration dependence risk for all products.

Clearly, the US is much more dependent than EU in terms of a sigificant share of their imports on several products coming from geopolitically distant countries across both all products in general and advanced technology products in particular. 

Critical minerals, specifically in their processing, are only the most salient example of this dependence. 

The paper shows that in terms of general trade exposure, both the EU and the US have had increasing manufacturing trade exposure to these countries since 1996.

It’s interesting that while the Chinese share of high technology and all manufacturing products for the US has declined the most and significantly so since 2017 after President Trump started pursuing restrictions…

… the same has increased and significantly so for the EU.

It’s interesting that each of the US, Japan, and EU still exceeds China in their shares of global IP5 patents, which are filed in atleast two jurisdictions and are considered of higher quality. 

The paper uses the Global Trade Alert (GTA) database to look at all the strategic and distorting policy interventions used by EU members individually and collectively as the EU to address the geoeconomic risks and promote their domestic manufacturing industries. It finds a pronounced shift towards EU collective action since 2018. 

This evolution is largely a strategic response to the technological ascension of China and escalating global trade tensions, signaling a deliberate move away from fragmented national policies towards cohesive, unified EU strategies. The introduction and deployment of critical policy tools such as the Anti-Coercion Instrument (ACI) and the Carbon Border Adjustment Mechanism (CBAM) epitomize this strategic reorientation aimed at managing the vulnerabilities arising from selective decoupling and heightened competition with China.

This is the sectoral distribution of such interventions by EU. The first panel mistakenly refers to EU targets, but covers those targeting non-EU targets. 

This captures the motivations behind such interventions by EU (again the panels are reversed.).

Finally, this captures policy instrument-wise interventions for EU, US and China. 

There’s a global convergence in responding to the China problem and it rapidly growing in speed and scope. Unfortunately, Donald Trump’s tariffs are clearly muddying the waters and inadvertently may be helping China mitigate the consequences of these responses. As an illustration, the Trump tariffs on India would not only slow down Apple’s diversification from China, but also deter other prospective investors seeking to diversify into arguably the largest opportunities outside China. 

Process discovery as a rationale for RCTs?

I have blogged on multiple occasions (see this paper), highlighting the point that the most important thing in development is not the WHAT to do, but the HOW of implementing what’s already known. 

Unfortunately, the mainstream international development discourse and funders are obsessed with the former, almost to the exclusion of the latter. The headline focus on ideas and innovations as opposed to state capabilities is only an illustration. 

Randomised Control Trials (RCTs) are a good example. It informs us about the headline efficacy of an intervention. But it tells us very little about the mechanics of implementing the intervention (in addition to the WHY of the intervention), arguably the most important reason why good ideas rarely translate to realised development outcomes. 

Consider Edtech. A government has fitted all classrooms with smart screens and established a computer laboratory with systems installed with personalised adaptive learning (PAL) software. How do we integrate digital media and its content with the physical classroom instruction across 20,000 schools, or even 100 schools?

There are several uncertain parts, even if the PAL software is mapped to the curriculum. How to effectively use the computer lab - number of hours/classes per week, sequencing of physical classroom and lab work, more than one child using a terminal, monitoring the child’s progress and appropriate follow-up, etc.? Similarly, how to effectively use the smart screen - pedagogy that toggles back and forth between using the blackboard and the digital content, which content to use where and when, how to deliver content effectively, and the general felicity of the teacher in intermediating the digital medium and its contents. See more here. 

The efficacy of these Edtech interventions depends on getting these details right. I’ll define this implementation challenge as one of process discovery. It is the mapping of the details of the processes that increases the likelihood of successful implementation. 

The process discovery maps provide the blueprints that can be used by frontline officials to implement the respective programs. They would be the default or Minimum Viable Product (MVP) for the implementation of programs. These process discovery maps can be simplified and made as user-friendly as possible to enable their practical utility. Interested officials will start with the MVP and improve it to suit their contexts and styles. 

The headline efficacy evaluation RCT of development interventions is an overrated, even wasteful, pursuit. Did anybody in the world of practice of education pedagogy doubt the efficacy of software like PAL, if implemented effectively, as to require an expensive and long-drawn RCT? The main outcome from these RCTs is the publication of some papers and the burnishing of academic credentials. 

The World Bank and other donors have now implemented tens of RCTs involving Edtech solutions. While there’s a rich library of evidence on the efficacy of Edtech solutions when implemented effectively in pilots, there’s very little by way of process discovery maps about the HOW of its implementation. 

The same could apply to the implementation of teaching at right level, youth skilling programs, maternal and child health tracking software applications, interventions to improve public health or nutrition, measures to increase effectiveness of health insurance, use of body cameras by police and hot sport policing, adoption of better management techniques by SMEs to improve productivity, use of Dashboards by officials to monitor and follow up on programs, provision of information to improve farm productivity, etc. 

Like with the Edtech example above, in all these cases, I’m not sure about the value proposition (to the practitioners in governments and other implementers) that comes with just an efficacy evaluation. Who would dispute that if done well, all of them would be efficacious, albeit in varying degrees? The challenge is to do well at scale. 

In these circumstances, if donors still wish to support RCTs, here is a suitable compromise. By all means, support the RCT, but use the opportunity to also prioritise the creation of process discovery maps. They derisk processes and can serve as a template to guide the scale implementation by large systems in business-as-usual environments. 

This can create the incentives for the emergence of process discovery maps along with efficacy evidence. The researchers get to publish papers, the governments get detailed implementation templates, and donors get both efficacy accountability and contribute to effective scaling. 

As a rough thumb rule for donors, how about mandating that every efficacy evaluation RCT also have a process discovery map, wherever possible?

Weekend reading links

1. Impressive cost reduction in space technologies.

In the past 15 years, rocket launch costs have dropped from $50,000 per kilogramme to under $2,000. They are expected to dip below $200/kg with Starship — a reusable, heavy-lift launch vehicle being developed by SpaceX.

This is a summary of the opportunities presented by the space economy.

As a factory floor, space offers a set of unique properties. Microgravity assists new assembling habitats that may enable breakthroughs. Pharmaceutical companies have studied protein crystallisation on the International Space Station... Certain alloys can also only be created in low-gravity environments while orbital solar panels can collect energy 24/7, unaffected by weather or nightfall. These could be the next leap in clean energy... The infrastructure that we build in orbit can directly benefit Earth. Space-manufactured semiconductors can power more efficient data centres. Orbital pharmaceuticals could treat previously incurable diseases. Space-based solar panels can provide clean energy... Data companies are training AI on satellite imagery. Hedge funds use this information for commodity trading while logistics companies optimise routes. Companies can use the data provided from satellite imagery to predict retail footfall, agricultural yields, subsurface water location and supply chain disruptions. US based start-up Locus Lock is producing satellite-enabled GPS receivers that maintain ultra-precise accuracy even in compromised environments — critical for autonomous vehicles in dense cities, military operations in contested spaces, and orbital spacecraft navigation.

2. Andy Haldane has a scathing description of the legacy of "independent" central bankers. 

Unquestionably, we are in an era of fiscal laxity. Fiscal deficits across the G7 currently average around 6 per cent of GDP. These countries have collectively failed to run a fiscal surplus this century. That has caused government debt across the G7 to rise well in excess of 100 per cent of GDP, its highest for three-quarters of a century. This is expected to worsen further due to the effects of population ageing, climate change and President Donald Trump’s flagship “big, beautiful bill”. Whisper it quietly, but central banks have played an important supporting role during this era of fiscal laxity. Their direct purchases of government debt — quantitative easing — peaked at well over $10tn, around a third of the outstanding stock at the time. This was monetary financing in all but name. In the immediate aftermath of the global financial crisis, however, such measures were justifiable in preventing an inflation undershoot. Later-stage QE, including purchases made in response to Covid-19, is harder to justify. With fiscal policy highly expansionary, QE’s primary purpose was to placate fretful bond markets rather than boost inflation. In doing so, central banks’ holdings of government debt rose to approaching half of the outstanding stock in the UK and Japan, almost a third in the Eurozone and a quarter in the US. This was a mild, backdoor form of fiscal dominance.

The high deficits and rising debts creates incentives for more fiscal dominance.

In recent criticism of the Federal Reserve, Trump put a precise estimate on the size and source of the benefits from lower rates — $360bn a year in reduced government refinancing costs per percentage point. This signals a far stronger form of front-door fiscal dominance. Because central banks primarily affect short-term interest rates, the risk is most acute when government debt maturities are short and shortening. In the US, two-thirds of government debt outstanding is now under a five-year maturity. Last year, around a third of the debt issued was under a one-year maturity. These patterns are being mirrored internationally. UK government debt has a weighted average maturity of over 14 years. But that too has been falling, with forecast debt issuance averaging a nine-year maturity. The tilt to short-dated issuance has also been seen in Canada, Germany, France and other OECD countries. More than 40 per cent of the OECD’s $50tn-plus in outstanding sovereign debt will need to be refinanced in the next three years. In the face of steepening yield curves, these debt strategies make fiscal sense.

3. Tej Parikh has two graphics on how disconnected the US equity markets have become from its economy.

4. Where's India's version of Scale within its startup ecosystem?

Meta has invested $15bn in Scale AI, a data labelling start-up that claims just 900 employees. Scale’s 28-year-old chief executive, Alexandr Wang, will take up a job at a new Meta lab devoted to creating AI “superintelligence”... Scale AI is both a talent and a data play. The company’s main business is providing high-quality annotated data for training AI models. Now that the big AI companies have scraped most of the internet, Scale’s labelling work can help them improve the quality of their models.

With an increasing number of Western multinationals shifting their core data-related back office functions to India through Global Capability Centres (GCCs), there's a golden opportunity for India to emerge as tthe software development centre of the world. This will create opportunities for startups to come up with solutions like that of Scale. 

5. China's quiet infiltration of the UN system.

A study by Shing-hon Lam of the University of California and Courtney J Fung of Macquarie University found China had nearly 1,600 UN staff in 2022 compared with more than 5,000 for the US, though it is building new staff pipelines through internships... This year, China pledged $500mn to the WHO over five years. Part of this voluntary funding is expected to involve secondment opportunities for Chinese technical and advisory staff... While the ITU is currently led by American Doreen Bogdan-Martin, her predecessor was China’s Houlin Zhao. “The director-general is now American but China put — mostly African — people close to China in high positions, such as the current director of the Development Bureau,” the EU official added. Cosmas Luckyson Zavazava, formerly head of Zimbabwe’s telecommunications agency, is now director of the ITU’s Telecommunication Development Bureau. According to the EU official, he was strongly backed by China, which has close ties with Zimbabwe, including Huawei-led telecoms infrastructure projects.

6.  Important distinction between ICE and EVs.

EVs are fundamentally different from internal combustion engine (ICE)-based cars in terms of where the value is captured. The production process for ICE cars is far more disaggregated, with value — and thus profits — being earned at various places along the supply chain. For EVs, value addition is more concentrated, for example, in the production of batteries. This has serious implications for India’s auto-component sector.

7. Private equity funds increase reliance on continuation funds in times of sharply reduced exits. 

Buyout groups used so-called continuation funds — in which a private equity group sells assets from one of the funds they manage to a fresher fund also managed by the firm — to exit $41bn of investments in the first six months of 2025, according to a report by investment bank Jefferies. That was equal to a record 19 per cent of all sales by the industry, and 60 per cent higher than a year ago... Private equity groups sit on more than $3tn in unsold deals and are nearing four consecutive years in which they have returned only about half the cash investors traditionally expect... Continuation funds give investors the choice to roll over their investment or to cash out. For their private equity sponsors, they allow the firm to keep portfolio companies beyond the typical 10-year life of a fund, and to crystallise performance fees on the assets sold while collecting a steady stream of management fees from the new fund buying the investments.

8.  Kavitha Rao makes some good suggestions on GST reforms. This about the revenue from different rates.

In response to another question in Parliament, Minister of State for Finance Pankaj Chaudhary reported 70-75 per cent of GST collected in 2023-24 came from the 18 per cent rate while just 5-6 per cent came from the 12 per cent bracket. Further, 6-8 per cent of revenues was from the 5 per cent slab, and the highest tax slab of 28 per cent contributed 13-15 per cent last financial year... compensation cess... contributes... ₹1.44 trillion in 2023-24 and ₹1.49 trillion in 2024-25, or 7.6 per cent of net GST.

9. Profile of Viktor Orban, Prime Minister of Hungary since 2010, and the massive system of self-aggrandising crony capitalist system that has been built in the country.  

10. It's beyond imagination how the world is reacting to the genocide in Gaza, and that for 21 months of being played out on live television.

The World Food Program, an arm of the United Nations, said this week that the hunger crisis in Gaza had reached “new and astonishing levels of desperation, with a third of the population not eating for multiple days in a row.”... the number of children dying of malnutrition had risen sharply in recent days... The Gaza ministry of health has reported more than 40 hunger-related deaths this month, including 16 children, and 111 since the beginning of the war, 81 of them children... Throughout the war, U.N. agencies and independent aid groups have accused Israel of allowing far too little food into Gaza, warning of impending famine for its more than two million people... Hollow-eyed, skeletal children languish on hospital beds or are cared for by parents, who gaze helplessly at protruding ribs and shoulder blades, and emaciated limbs resembling brittle sticks. The haunting scenes are a stark contrast to the plenty that exists just a few miles away, across the borders with Israel and Egypt.

France's decision to recognise the Palestinian state will put pressure on others to follow suit. 

11. The US equity markets are on a roll, and it now remains to be seen when and how the reversal will strike. 

Backed by the Trump administration, crypto assets are clearly on a bubble.

The value of global crypto assets reached $4tn for the first time this month as speculators anticipated a deluge of money into the sector in response to new US digital asset legislation. That number again. Crypto’s achievement is astonishing given that it is devoid of intrinsic value and its contribution to the productive economy is minimal compared to that of Nvidia et al. Its chief utility appears to be to enable payments by criminals and to scammers, while gratifying the urges of gung-ho speculators. It is striking that crypto’s performance has even made gold, the traditional if volatile bolt hole for nervous money in dangerous times, look boring...

The great 18th century Mississippi bubble, initiated by the Scottish economic theorist and gambler John Law, obtained exclusive rights to develop land in French-owned Louisiana, along with monopoly rights over the French tobacco and slave trades. Law’s company even took over the collection of French taxes and management of the note issue — all with the backing of the French regent, the Duke of Orléans. Fomo fuelled the bubble until the whole edifice imploded spectacularly in 1720 amid rip-roaring inflation and spiralling government debt.

12. John Burn-Murdoch uses data from the World Happiness Report to point out that youth well-being in Anglosphere countries has been declining compared to stability in Europe. 

The share of young adults regularly experiencing stress and anger has risen sharply over the past 15 years in the US, Canada, UK, Ireland, Australia and New Zealand. But it has been largely stable elsewhere in the west, according to detailed data from the Gallup World Poll used in the report. It’s a similar story for young people’s faith in the ultimate social contract: that if you work hard you’ll be rewarded with security, stability and status. Outside the English-speaking world, confidence in this fundamental tenet of societal fairness is flat across the age spectrum. In the Anglosphere it is high only among the oldest, and in tatters among the young.

He points to a fascinating likely contributor, housing prices. 

In Germany and Spain real house prices have climbed 32 and 44 per cent respectively since 1995. In the US the equivalent figure is 85 per cent, while the UK, Ireland, Australia, New Zealand and Canada all come in north of 200 per cent. The result has been a brutal snatching away of the particularly Anglophone dream of home ownership. Rates of ownership among people aged 25-34 in English-speaking countries have slumped by between 20 and 50 percentage points over the same 30-year period.