Weekend reading links

1. Samsung's spectacular turnaround, from being in the doldrums as late as in 2024.

This month its market value, which has soared by 400% in the past year, hit $1trn for the first time, propelled by furious spending on artificial-intelligence infrastructure. In the first quarter of 2026 its operating profit rose to 57trn won ($38bn), more than eight times as much as a year before. Analysts expect profits to keep rising at a blistering pace, thanks in particular to the seemingly insatiable demand for its advanced memory chips... Semiconductors accounted for 61% of sales and 94% of operating profits in the first quarter. It is one of just three firms capable of making at scale the memory chips needed for ai, alongside SK Hynix, a South Korean rival, and Micron, an American one. The number of memory chips Samsung sold in the first quarter was up by about 20% on the preceding three months, but the average selling price rose by 90%.

2. The Economist argues that the calm in global oil markets despite a supply shock of some 14 mb per day can be traced to the 4 mbpd of increased exports by the US and the 4.5 mbpd of reduction in Chinese imports, coupled with rationing across countries. 

3. As the rise of AI threatens white-collar jobs and increases the returns to capital, The Economist proposes some measures to redistribute the gains. 

If employment falls, income that once went to workers is likely to show up as high profits in AI firms, chipmakers, data centres or elsewhere in the supply chain. Clever tax reforms, such as levies on corporate profits that are above a normal return on capital, on land and on natural resources, could capture these rents. The case for inheritance taxes to prevent the entrenchment of a capital-owning elite looks even stronger than before. At the same time governments could help workers adjust. Public wage-insurance, which smooths out falls in income after job losses, can help workers find better opportunities (and so can eventually pay for itself). Denmark’s active labour-market policies, in which the state helps people find and train for new occupations, have been proved to cut spells in unemployment... 

A last set of radical ideas, such as the partial nationalisation of ai firms. This week a South Korean presidential adviser floated a citizens’ “dividend” from AI businesses, sending the local stockmarket down by 5%, before backtracking. In America politicians murmur about giving citizens shares in AI companies via “Trump accounts”. In economic terms there is little difference between a well-designed tax system and a government stake in the private sector—and countries without AI giants will have to rely on taxes rather than seizing shares in foreign companies. But America may find that some public ownership is the best way to make the social upside from the technology transparent.

4. The changing face of Reliance Industries.

5. America's remarkable productivity growth miracle since the pandemic (it predates the AI boom).

Now with AI coming of age, the productivity spurt is likely to continue. 

6. Egypt may well be the leader in land monetisation to promote economic growth in any substantial form.  (HT: Adam Tooze)

Since 2015, Egypt has increasingly contributed public land as equity, while foreign investors provide capital, development expertise, and project execution. Once a project is completed, revenues are shared according to pre-agreed division... in 2023, Egypt appointed the bank’s International Finance Corporation as its advisor for the asset monetization program, leveraging its experience supporting emerging markets. While land monetization has been tried elsewhere, Egypt’s projects are among the largest... For the Ras el-Hekma development on the country’s North Coast, Egypt contributed approximately 40,600 acres of state-owned land along the Mediterranean. The UAE (via its ADQ sovereign wealth fund) committed roughly $35 billion, the largest foreign direct investment in Egyptian history. Egypt received immediate foreign currency inflowsfor the land, a 35 percent stake in the project, and long-term profit participation... A similar project, also on the North Coast, is Alam el-Aroum/Samla near Marsa Matrouh. The Qatar Investment Authority-linked Qatari Diar is investing almost $30 billion, which includes a $3.5 billion upfront land payment for some 20 million square meters and $26 billion in development investments. A revenue share for Egypt (15 percent after cost recovery) is part of the deal.

Another arrangement is in place for Egypt’s New Administrative Capital (NAC). About thirty miles east of Cairo, the NAC is designed as the government seat and a commercial hub; reports estimate total development costs of up to $58 billion, including infrastructure and governmental, commercial, and residential districts. Foreign direct investment plays a role in specific sub‑components like the Central Business District (CBD) and future free-trade‑zone ventures. Chinese banks led by the Industrial and Commercial Bank of China provided 85 percent of funding for twenty towers in the CBD. The China State Construction Engineering Corporation developed the CBD; Gulf investors (such as the United Arab Emirates’ DP World) developed commercial parcels. The state monetized land incrementally for the NAC, and parcel sales financed development, without increasing Egypt’s debt.

All this appears very impressive. While the article paints a picture of success, it would be interesting to peel layers and scrutinise this. 

7. This is anecdotal, but tells a lot about why India lags in manufacturing.

8. Spain is undertaking an ambitious experiment in immigration.

Since 2022, Spain’s foreign-born population has surged by an annual average of 665,000, the equivalent of adding a city the size of Málaga each year. Last year the country accounted for roughly one-third of the total increase in the EU’s immigrant population, according to the Rockwool Foundation, a Berlin think-tank. Supporters say the influx has given Spain’s ageing society a much-needed burst of economic vigour. Critics call it a poorly planned strategy that is straining the country’s infrastructure and creating new social tensions... In less than a quarter of a century, Spain’s foreign-born population has gone from one in 20 residents to almost one in five, a higher proportion than even the US... Last month the Spanish government’s most contentious immigration move to date took effect — a sweeping amnesty giving at least half a million people the chance to gain residency and work permits and move out of the shadow economy... applicants must prove he was in Spain before January 1 this year and has been there for five consecutive months.

The country is already experiencing an acute housing shortage, has among the highest youth unemployment rates at over 10%, and the anti-immigrant Vox party is running third. The final outcome on the rapid rise in immigration is yet to be known. 

9. Ruchir Sharma points to an area where China trails badly behind the US, the negligible role of the renminbi as an international currency. 

With a 17 per cent share of global GDP, but only 2 per cent of central bank reserves, China is trailing 30 to 40 years behind previous superpowers at a similar stage of their ascents... Britain at its peak accounted for 40 per cent of trade, but 60 per cent of trade payments were in sterling. China by contrast has a leading 15 per cent share of global trade, but only 2 per cent of trade bills are invoiced in renminbi...

China will remain an incomplete superpower until it can match this financial firepower. For decades, it has kept its financial system more tightly sealed than any other major nation. It now ranks in the bottom fifth of nations by international investment position, which captures the level of foreign ownership in the domestic market. Foreigners own less than 5 per cent of the stocks and bonds in China, one-fifth the level in the US. Its home market is something of a local prison. Beijing has generated economic growth with heavy infusions of government money, corralled at home by capital controls. Its money supply has multiplied sixfold since 1980 to 230 per cent of GDP, among the highest in the world. This liquidity sloshes around inside the walled economy, much of it in the domestic debt market, battered lately by a property bust. Beijing is wary of easing controls, lest it unleash capital flight.

10. The US has been the biggest oil export beneficiary of the Iran war.

11. The booming market for whey protein.

Prices for whey protein isolate have soared fivefold to €28,000 a tonne since 2023, outstripping cheese and butter prices by more than four times as producers struggle to keep pace with a booming protein market... Thirty years ago whey was primarily used in animal feed or spread on farmland as a fertiliser. Whey is the liquid separated from curds during the cheesemaking process. Now, dairy groups upgrade the liquid by filtration to produce whey protein isolate, a valuable ingredient for use in sports supplements as well as groceries such as yoghurt, bread and fizzy drinks, as weight-loss drugs and the protein megatrend propel demand. “This is reshaping the economics of dairy,” said Jose Saiz, analyst at Expana, a commodity market information service. “It used to be a product with no value . . . now cheese could become the byproduct of whey production.”

12. The UK's experience of small altnets driving broadband expansion and lowering prices has come with excesses. 

Over the past decade, more than £31bn has been raised to roll out full fibre broadband across the UK, with private equity giants, including Macquarie and KKR, backing upstart challengers — or “altnets” — in the sector. Yet despite the initial investor optimism that the “altnets” could snatch customers away from industry leaders, the firms have been dogged by high build costs, lower-than-expected customer uptake and a sharp response from the country’s largest provider — BT’s Openreach — to deploy its own fibre infrastructure. The destruction of shareholder value has been brutal. At the last count, the “altnets” posted losses of more than £1.5bn in 2024, according to Enders Analysis. After accumulating some £9bn of net debt as of 2025, some companies have already been placed into administration, while others have fallen into the hands of lenders... 

Prior to the “altnet boom”, which accelerated from 2021 onwards, only 24 per cent of Britons had access to full fibre internet, according to Ofcom. Fast forward five years, that number is now more than 78 per cent, with altnets serving almost 20mn homes with full fibre, according to Assembly Research. By next year, Ofcom estimates 95 per cent of UK homes will have full fibre, putting it in line with Europe’s leaders, including Spain and Luxembourg, where regulators encouraged full fibre rollout earlier than the UK. The “altnets” have also forced BT’s telecoms infrastructure provider Openreach and Virgin Media O2 to expand their own fibre networks, giving consumers a choice between providers who are now forced to think faster and harder about how to up their game. This added competition has meant prices have fallen, with the average monthly real-terms list price of UK full fibre broadband falling from £62.38 in September 2021 to £43.46 in September 2025, a drop of 30 per cent... altnets are taking close to 1mn [customer] lines from BT annually.

13. Alan Beattie argues that EU has initiatied several trade measures against China, though their implementation has been weak, primarily due to internal opposition within the bloc. 

One of the recent instruments with a bit more bite is the Foreign Subsidies Regulation (FSR), launched in 2023 and designed to level the playing field against state-backed Chinese companies bidding for contracts or producing and selling in the EU. It’s notable that it gives a lot of investigatory and decision-making powers to the Commission, specifically to the internal market and competition directorates, which are used to having autonomous powers. By starting investigations into their operations, the FSR has managed to get some Chinese companies to pull out of public procurement bids. But when the EU tries to use its internal market powers to investigate supposedly subsidised Chinese businesses trading in the single market, it becomes clear just how strongly Beijing is willing to resist. Last week, in an investigation dating to 2024 into the Chinese cargo scanner company Nuctech, Beijing cited new supply chain security laws to forbid Chinese companies to comply with requests for information, saying Brussels’ extraterritorial reach was illegitimate.

14. Arvind Subramanian and Devesh Kapur on the contrasting tales of India and China in monetisation of lands by urban local bodies. 

China’s land revenues increased from less than 1 per cent of GDP to more than 10 per cent at its peak. In contrast, India’s revenues have stagnated at about 1 per cent of GDP through the entire growth phase. Put differently, the Chinese government’s collections from land revenue for every urban resident that was available for spending were about 15 times more than India’s in 1999; at its peak in 2020, this multiple increased to 225.

15. As AI capex surges, there are growing doubts about whether it will generate the returns required to justify it.

For each of these hyperscalers, I collected the consensus estimates of analysts for the capital expenditures and revenues between 2025 and 2030. In these five years, capital investments are expected to rise by 20 per cent a year, a growth rate never seen before in this industry. Meanwhile, revenues are expected to grow 15 per cent annually. If we make the heroic assumption that there are no costs, then the additional revenue is the profit these companies are expected to make from their additional investments in AI data centres. Yet, even under these extremely optimistic assumptions, I calculate the implied return on investment is highly negative for all of them except Amazon. These numbers show that if the hyperscalers continue on the current trajectory, the AI boom will become a story of one of the largest destructions of shareholder value in history... If the hyperscalers want to generate, say, a 10 per cent return on investment, they would have to find an additional $2tn to $5tn in revenue a year. A tall order for a group of companies that currently generates revenues of just $1.5tn per year.

See this comparison with the technology, media and telecom (TMT) bubbles of the late nineties.

In 2025, US businesses invested almost $1.5tn in IT equipment and software. At the peak of the TMT bubble, it was $466bn or $829bn when adjusted for inflation. Indeed, the US economy is growing solely because of the tech boom. I calculate that over the past four quarters, 93 per cent of US GDP growth was explained by tech investments. Even at the peak of the TMT bubble, it barely reached 60 per cent.

16. Tim Harford points to evidence that retailers jack up prices in response to shocks much faster than they bring prices down, and that retailers make their money not so much during the upcycle than in the downward phase.

Johannes Brinkmann and Nikhil Datta of the University of Warwick recently published an analysis of the impact on petrol and diesel prices of the oil price shock in 2022, following Russia’s onslaught in Ukraine. They found that in the UK, retailer margins compressed: the wholesale price of diesel rose by 39 pence per litre, while retail prices only rose 16 pence. This is the opposite behaviour to that predicted by the greedflation hypothesis. A natural explanation of this price compression is that retailers feel under more intense scrutiny when prices are rising. Brinkmann and Datta show that searches on the petrolprices.com website increased dramatically when prices did — and that areas where such searches were more common were also areas where the price compression was more intense. 

Brinkmann and Datta’s analysis is merely the latest in a long tradition of research describing “rocket and feather” pricing at the pump — capturing the idea that pump prices neither faithfully track the ups and downs of the crude oil market, nor exaggerate them — instead, they shoot up like a rocket but drift down again like a feather. What is more, the quick surge upward reaches prices less lofty than one would expect; it is during the slow descent that retailers make their money. Fifteen years ago, Matthew S Lewis and Howard Marvel noted that customers spent more effort searching when prices were rising, even though there was little benefit to that search, since most retailers were charging similar prices. When pump prices were falling, there was more variability from forecourt to forecourt and a higher return to shopping around, but most customers did not bother, feeling content that prices were moving in the right direction.

17.  Preference shares are a complicated instrument.

The “preference” investors receive — usually a slightly higher dividend — comes at the expense of voting rights. Preference shares therefore arguably resemble the worst of both worlds of debt and equity. Like bonds, they do not offer any influence over the company’s decision-making. Like ordinary shares, they do not come with a contractual claim to annual payouts as dividends are subject to management discretion. Such non-voting shares have been a prominent feature in corporate Germany. Four of the 40 blue-chips in the Dax have used them to establish substantive two-tier share structures for years: Volkswagen, Porsche and BMW, the three auto giants, and glue and detergent maker Henkel. All are dominated by controlling families who hold a tight grip over the firm. 

Two further Dax companies — Merck and Fresenius — are listed as “partnerships limited by shares”, a German legal structure known by its acronym KGaA, that makes some shareholders more equal than others through other means. Deutsche Bank listed its asset management arm DWS as a KGaA in 2018, too, warning at the time that this structure could dent its valuation. Yet the club of German blue-chips with differential voting rights will soon become smaller after BMW shareholders voted to abolish preference shares last week at its annual meeting. The group’s 54.7mn preference shares, representing 10 per cent of BMW’s equity, will soon be swapped into ordinary shares with voting rights... In the US, dual-class share structures have become increasingly popular as fast-growing tech groups want to tap public markets while keeping outsized voting power for insiders. Elon Musk’s SpaceX even wants to grant its CEO 10 times as much voting power as external investors.

Sample this about SpaceX  

Elon Musk's special class of shares currently gives him control of 85 per cent of the voting power at SpaceX.

Weekend reading links

 1. Net FDI from India has been negative for several months now.

2. WSJ graphics on US health care system. Cost of inpatient procedures are much higher than elsewhere.

Cost of pharmaceuticals too are much higher.

3. The rise and rise of iPhone manufacturing in India. 

The company assembled about 55 million iPhones in India in 2025, up from 36 million a year earlier, people familiar with the matter said, asking not to be named because the numbers aren’t public. Apple makes about 220 million to 230 million iPhones a year globally, with India’s share of the total increasing rapidly.

4. For those advocating currency depreciation as the response to a sharp increase in oil prices, Sachidanand Shukla has a cautionary note pointing to the importance of stability and credibility of the rupee.  

The allure of a depreciating exchange rate lies in its simplicity: It makes ones’ goods cheaper for foreigners. However, this is often a Faustian bargain. For many emerging and developed markets alike, the reality of a currency in freefall is not a boom in exports, but often a harsh blow to purchasing power and investor confidence. Imagine yourself in the shoes of a big global financial investor. How confident will you be in investing a billion dollars if you lose 9-10 per cent in a year due to depreciation?

On a related note, as the RBI deploys an expansive toolkit to stabilise the rupee, Rajeswari Sengupta writes that RBI has engaged strongly in the forex markets, selling over $30 bn in the spot markets in March. Its other actions were intriguing. 

It imposed regulatory restrictions —barring banks from taking positions in the offshore non-deliverable forward (NDF) market and capping their daily onshore FX exposure to $100 million each... The RBI did not merely restrict new positions; it required banks to unwind existing ones, reportedly at a cost of ₹4,000–5,000 crore. In effect, banks were penalised for actions that were fully legitimate at the time. Such retrospective costs risk undermining confidence and making banks more cautious in FX markets. Lower participation could reduce liquidity. And when liquidity dries up, currencies tend to become more volatile, not less.

5. The human cost of Israel's bombings of Lebanon.

On the day the cease-fire came into shaky effect — and most civilians across the region began to breathe a sigh of relief — Israel proceeded to launch one of the deadliest strikes on Lebanon ever, including in the heart of densely populated Beirut, without any warning. The operation, which the Israel Defense Forces sayattacked Hezbollah command centers, hit 100 targets in 10 minutes, killed over 350 people and wounded well over 1,000, many of them civilians... over the past six weeks, Israeli strikes in Lebanon continue, and have forced more than a million people from their homes and have left over 2,000 people dead and multiple villages in ruins.

6. The rise of China's export control measures.

China announced restrictions on exports 30 times between 2021 and 2025, the report by the EU Chamber of Commerce in China found, up from just 11 in the previous five years. Since 2020, Beijing had turned to “geoeconomic” controls — measures aimed at achieving geopolitical goals, it said. These include 10 that made use of global chokepoints in supply chains, such as China’s rare-earths exports, and 10 others aimed at coercing other countries using economic measures.

China has also announced sweeping new regulations to punish foreign companies that are trying to decouple their supply chains from China by increasing reliance on non-Chinese suppliers. These measures are part of the government's efforts to counter rising protectionism and decoupling from China. 

The 18-point regulations, described in state media as an effort to “prevent security risks in industrial and supply chains,” supplement the already formidable authority afforded to Chinese regulators to investigate multinational corporations for moving supply chains out of China. Under the new rules, regulators can question employees and examine corporate records during investigations. The regulations also allow authorities to bar companies and individuals from leaving China if they are suspected of moving supply chains elsewhere under foreign pressure... The State Council, China’s cabinet, justified the measures as necessary to protect the country’s economic stability and national security — a rationale it has previously used to expand its ability to pressure companies. China has also adopted sweeping state secrets laws to prevent information from leaving the country.

7. Iran has been adapting to US sanctions.

During the pandemic, Beijing vowed to invest $400 billion in the country in the coming decades in exchange for a steady supply of oil. In 2024, it purchased 90 percent of Iran’s oil exports, according to the International Energy Agency. China also accounted for roughly a quarter of Iran’s non-oil exports from 2019 to 2024, according to data compiled by Harvard University’s Atlas of Economic Complexity, purchasing billions of dollars of Iranian chemicals and metals.

Payments are made in renminbi, China’s currency, avoiding the use of dollars and the need to involve American banks, which are often the primary entities used to help enforce sanctions violations. China, in return, appears to provide nearly 30 percent of the commodities that Iran imports, selling everything from furniture to sunflower seeds. There is another crucial layer of trade between the nations not recorded in official statistics. Both countries have engaged in a complicated barter system that involves secret financing channels. Iran ships oil to China and in return, Chinese state-backed construction companies have built airports and other infrastructure.

8. The new fragile European countries - Britain, Italy, and France (or Bifs).

9. The remarkable resilience of the European Union.

Europeans still trust the EU over their national political systems, and the margin is wider than it has been since the noughties. (More on this later.) Support for the euro, which was as low as 51 per cent in 2013, has grown to a record high of 74 per cent in the EU, and 82 per cent in the Eurozone. To repeat, that is a near-consensus in favour of the single currency at a time of economic malaise in much of the continent. As for the country-by-country findings, 21 per cent of Austrians think membership is a bad thing. That makes them the most Euro-sceptical people in the union.

10. India reached peak college education premium in 2011?

11. Jason Bordoff makes the important point that, unlike earlier, the risk of oil shocks is a less restraining factor on US supplies.

In 2012, the US was far less equipped to absorb even a small disruption. US crude production averaged just 5mn barrels a day in 2009; last year it approached 14mn. Two decades ago, the US imported about 60 per cent of its oil consumption. Today it is a net exporter and the world’s largest exporter of liquefied natural gas.

12. The data centre construction boom in the US is being held back by construction and other delays, with almost 40% of those due this year at risk of falling behind schedule. 

13. Finally, excellent description of the regressive nature of income taxation especially for the richest Americans.

In 2021, ProPublica published an investigation built on a bunch of leaked tax documents revealing what the richest Americans really pay — or don’t. Warren Buffett had a true tax rate of 0.1 percent; Jeff Bezos had 0.98 percent; Michael Bloomberg had 1.3 percent... Let’s focus on Jeff Bezos because he’s much more of a classic case. Jeff Bezos started his own business. He owns a dominant amount of the stock. And over the course of the years, he has taken a salary that is no higher than $82,000. It’s been more than 20 years now, and his salary is always capped at $82,000.

You might say: Well, why would it be? He started the company — he’s the man. Why isn’t he taking a huge salary to reflect all that he put into the company? The reason is: Salaries are for suckers. When people take a salary, they’re subject to high income taxes and payroll taxes, and Jeff Bezos and a lot of our other multibillionaires have no interest in paying those taxes.

So instead, they take their benefits through the growing value of their stock — and their stock has grown enormously. And that massive growth of stock happens entirely tax free — with no time frame under our current system in which that stock will ever be subject to tax. That is because we only impose a tax if the stock is sold, and Bezos never has to sell the stock because he can simply borrow against the stock and use that money to support his lifestyle and to pay any interest that’s due on the loan... you’re just taking out one loan after another, sometimes paying one loan back with another, and you’re just doing this again and again.

The interview also makes a reference to Andrew Mellon's views on capital gains (or investment returns) taxation.

The fairness of taxing more lightly incomes from wages, salaries and professional services than the incomes from business or from investments is beyond question. In the first case, the income is uncertain and limited in duration; sickness or death destroys it, and old age diminishes it. In the other, the source of income continues; the income may be disposed of during a man’s life, and it descends to his heirs.

Is populism the transition to a return to the traditional left-right political system?

This blog has repeatedly argued (see this, this, this, this, and this) on the need for the progressive and centrist parties to break free from the grip of the educated and the business interests.

Reinforcing this point is Thomas Piketty in an interview by Joel Suss. Piketty identifies three big ideologies since the industrial revolution - nationalism, liberalism, and socialism. 

The nationalist side is what you see with all the anti-migrant movements in France, in Britain, et cetera. Trump is certainly a nationalist, both on the anti-migrant, ethnocentric dimensions, but also in his sort of extractivist discourse with respect to the rest of the world. The pure liberal, pro-business camp has been weakened considerably by rising inequality and stagnating middle class income. These days, I think you cannot be re-elected anymore with a basic pro-business agenda. Look at the Conservative party in Britain — the electoral base that’s going to be happy with this is so narrow that you will never be re-elected. This is why the right-wing party [Reform UK] and even sometimes a billionaire like Elon Musk are turning to the sort of nationalist, anti-migrant, anti-left discourse because they feel this is the only way — to put it in a very cynical manner — to try to get the popular vote. 

Then you have the democratic socialist side, you can call it the left-wing or more egalitarian side. This political family has been incredibly successful historically. It has built the welfare state and brought prosperity and equality to an extent that nobody could have imagined a hundred years ago. But they have sort of stopped thinking about the future. They have become in some cases just a force of conservation, of defending the welfare state, defending the social system. 

He makes an important point about the agenda of wealth redistribution. 

It’s just a practical, rational question of how you share the wealth, how you share the tax burden, how to share power. And I think, historically, the building of the welfare state system, progressive taxation — this is not a populist achievement, this has been a rational, socialist, democratic achievement, which now nobody is questioning… Every time you have a party that is trying to push for equality and redistribution you also always have some elite who try to portray this party as populist.

And why the discontent from widening inequality and stagnating living standards has been captured by the right-wing populists, despite their coalition with the corporate interests.

I think the left has not been very good at redefining its agenda for several reasons. The main reason is that the left has been a victim of its own success. The welfare state has become a reality — nobody really wants to return to a situation before [the] first world war where total tax revenue and public spending will be less than 10 per cent of GDP. Now the only question is: do we stabilise it at 40 or 50 per cent in some European countries or do we keep going up… The other reason is educational expansion. Because it was successful, it has built a new class of highly educated people voting for the left… But if you grew up in a small city or small village, it’s just more difficult to access universities than if you grow up in a large conurbation, for a given parental income, given social characteristics. For all sorts of reasons… the allegiance to the left in this process of educational expansion has turned around completely — it used to be the case that the less educated would vote for the left… so the left has to redefine equality in access to education which makes people with lower social class origins, and particularly people in the smaller cities, feel more respected. 

It’s not just about education; it’s also access to hospitals, access to public transportation. It’s easy to criticise people who use their car when you have the metro in London. The entire movement of educational expansion, health expansion and also ecological concern has created a new educational divide and territorial divide. This is where the left has been in difficulties. One thing that we observe today throughout western democracies is that you have this disconnection between the income cleavage and the education cleavage. For a given income, when you move up in education you actually get more left in terms of vote. And for a given education, when you go up in income you turn to the right. The two dimensions used to go together but they don’t anymore. The other big transformation is this territorial gap [inequality between regions] which has returned to levels we have not seen since the early 20th century.

He has some advice for the socialist side, 

I think they need to rethink, to have a new agenda for the future — more internationalist and also more egalitarian. This will have to come with a very strong compression of inequality and power and wealth distribution. I’m not saying it’s going to be easy, but the alternative is the nationalist side right now, because the pro-business, liberal side has been weakened by rising inequality and stagnating median income… The UK Labour Party has to move left in terms of economic and fiscal policies because the UK has so many parties on the right already. You cannot compete with the Conservative and Reform parties on the right.

Piketty has a striking factoid about inequality in France. 

In France, the top 500 wealth holders used to collectively own €200bn in 2010. Now they collectively own €1,200bn — it’s been multiplied almost by six. Of course, GDP per capita, average wage or even average wealth has not been multiplied by six over this period.

Piketty’s central point is that the mass base of the pro-business centre, the liberals, has shrunk so much as to make them unelectable on their own. They must ally with the nationalists or socialists to be able to fashion an electable coalition. 

This is a return to the old left-right paradigm. The centrist liberal agenda emerged as a synthesis of the duelling thesis of the right and anti-thesis of the left. The changes in the economic structure, nature of work, trends like globalisation, etc., have now weakened the centre and created the space for the return of the old right and left. While the right has mobilised its coalition to be back as an electoral force, the left is struggling to mobilise and respond electorally. The thesis in the form of the nationalist right has emerged and is awaiting the return of the anti-thesis in the form of the socialist left. 

Piketty makes an important point about how the success of the thesis will create the seeds for hastening the emergence of the anti-thesis.

Let’s see when the nationalists are in power how they are going to cut spending, because in practice, even if you cut everything you’re giving to migrants, that’s not that much. That’s not going to get you money for the health service and universities. This nationalist discourse will become a more right-wing, anti-public spending discourse. That will contribute to making the political system return to a left-right system, which to me is the most promising way to make social and economic progress. Not because the left is always right and the right is always wrong — both sides have different viewpoints and different economic experiences to bring to the democratic table.

Weekend reading links

1. Beneficiaries of George Soros and his Open Foundation.

Among the beneficiaries is Hungary’s Viktor Orbán whose Oxford scholarship was paid by Soros in 1989. Talk about no good deed going unpunished. Another kind of beneficiary is Scott Bessent, the US Treasury secretary, who ran Soros’s hedge fund for many years. Soros was the anchor $2bn investor in Bessent’s own hedge fund, Key Square Group, in 2015.

2. Chinese companies produce many AI tech components.

3. Yogendra Yadav reviews Partha Chatterjee's new book, For a Just Republic: The People of India and the State. 

4. The US tariffs latest update.

5. India's IT industry facts of the day

The top five Indian IT firms had free cash flows of nearly $13bn in the 2023-24 financial year, according to HFS Research. And Infosys said on September 11 it had approved a $2bn share buyback offer — a week before the Trump order. Yet the R&D to sales ratio for India’s IT industry is abysmal: 0.88 per cent on average, according to a 2024 report by India’s Ministry of Corporate Affairs.

6. China moves to restrict Ericsson and Nokia equipment in their telecom networks. 

Chinese state-backed buyers of IT equipment — which include mobile network operators, utilities and other industries — have begun more closely analysing and policing foreign bids. That process has required contracts by Sweden’s Ericsson and Finland’s Nokia to be submitted for “black box” national security reviews by the Cyberspace Administration of China where the companies are not told how their gear is assessed. The reviews by the powerful tech watchdog can stretch three months or longer. Even in cases where the European groups ultimately secure approval, the lengthy and uncertain audits often leave them at a disadvantage to Chinese rivals that face no such scrutiny, the people said... Beijing’s growing sales restrictions have collapsed Ericsson’s and Nokia’s combined market share in China’s mobile telecoms networks to about 4 per cent last year from 12 per cent in 2020.

Amidst these moves, Europeans have been half-hearted in their efforts to restrict Huawei and ZTE. 

Huawei and ZTE have retained 30 to 35 per cent of the European mobile infrastructure market, down only 5 to 10 percentage points from 2020, data from Dell’Oro Group shows. Germany has 59 per cent of installed 5G gear sourced from Chinese groups, according to John Strand of Strand Consult, even though the country plans to phase out high risk Chinese vendors by 2029.

7. FT writes on the wealth of the super-rich

When Forbes magazine released its first global billionaires list in 1987, just 140 names appeared on it. The 2025 version featured more than 3,000 people, worth a collective $16tn. Even allowing for factors such as the rise of China and over three decades of inflation, it is a staggering increase in both numbers and values; the net worth of Elon Musk, judged the world’s richest person in April 2025, was estimated at $342bn — compared with $295bn for the entire class of 1987. Globally, the average wealth of the top 0.0001 per cent of the population grew on average 7.1 per cent a year between 1987 and 2024, compared to 3.2 per cent for the average adult, according to Gabriel Zucman, a professor of economics at the Paris School of Economics and at the University of California, Berkeley... The top 400 wealthiest Americans had a total effective tax rate of 23.8 per cent of income in the years from 2018 to 2020, including individual income taxes, estate and gift taxes, and corporate taxes. In comparison, the rate for the wider US population was 30 per cent, rising to 45 per cent for the highest-earning workers.

Historically, asset-based taxes were the main revenue source for governments. Taxes on income in the UK, for example, were a mid to late-20th century phenomenon closely tied to the emergence of a welfare state. Now, as demographics worsen (with fewer worker and more retired people), the case for wealth taxes is becoming more compelling. 

8. How housing prices in the UK have changed over the last 35 years. 

9. GCCs are cannibalising the business of India's IT services firms.

As GCCs grow, they are eating into the pie of IT services majors, both in terms of business and skilled talent... Out of the 200,000 tech roles in India in FY25, approximately 120,000 were in GCCs, with a 10–15% year-on-year growth, said Vikram Ahuja, co-founder of ANSR, a GCC solutions platform... The real evolution started with traditional companies coming in to set up true capability centres, like [department-store chain] JCPenney, [luxury-superstore chain] Saks Fifth Avenue, [lingerie retailer] Victoria’s Secret…They have no business to be experimenting with this concept. All airlines, hotel chains, car-rental companies are coming. So, it’s become industry agnostic. On the contrary, the more low-tech and the more traditional you are, the more the need [for a GCC]... Lloyds has hired over 2,500 engineers in Hyderabad within 14 months, with 95% focused on tech. At Barclays’ India operations, two–thirds of its tech workforce is now in-house—a stark jump from just about 33% a decade ago. Even Indian lenders are following suit. Just six months ago, RBL Bank achieved a 60:40 split between in-house and outsourced tech talent—a significant leap from the 35:65 ratio of a few years ago.

A major reason for the exit is the low and stagnant wages paid by IT services firms, even as the scope of work expands. 

9. Private equity is taking over India's IB and IGCSE school chains. And results are not good.

Private equity firms are betting big on Indian education, and their playbook mirrors a Western model—optimised for cost control, standardised for scale-up, and centralised for effective management... Both CBSE and state-board campuses face tighter fee caps and myriad state-level approvals. International boards like International Baccalaureate (IB) and Cambridge have a wider fee latitude and can levy “development” charges, creating room for upgrades and margins. The model makes money within India’s nonprofit rulebook. The school usually sits in a Section-8 entity to satisfy K–12 regulations. A for-profit services arm—typically charging 10–15% of school revenue through the likes of management fees, royalties, and infrastructure leases—operates on the side... 

Investors like GSF fall back on the same approach with each school: centralise leadership, trim excess, introduce standardised systems, and make visible infrastructure upgrades. But beneath the surface, the effects of this strategy vary sharply... While fee hikes have remained within the standard 5–10% range at premium schools like Sancta Maria (Rs 7–8 lakh in annual fees)—already operating near permissible ceilings—some lower-fee campuses could see steeper increases... Infrastructure investment varies significantly by operator and campus... The international school Manthan in Hyderabad saw 60–70% staff attrition after a 100% ISP acquisition... At TIPS Coimbatore, acquired by Globeducate, 20% of the staff left after the founder exited... Student numbers, too, fell by nearly a fifth at Glendale and Oakridge in the years after their acquisition... Pre-acquisition pay rises of 8–15% have been slashed to 2–7% under new management—standard practice in the West, but a sharp adjustment in Indian schools... The result: well-trained, experienced teachers leave, and classroom quality drops... The same Western-school playbook that made these operators successful abroad doesn’t map cleanly onto India’s hyper-competitive, founder-led education landscape.

Weekend reading links

1. After all the bluster about "reclaiming the Panama Canal" from Chinese owners, it now emerges that the Chinese authorities have not yet cleared the $23 bn sale from HK-based CK Hutchison and a Blackrock-backed consortium. And apparently, China’s state-owned shipping conglomerate Cosco is now seeking at least a 20-30 per cent stake in the deal. 

2. Spain is taking a contrarian path. 

Spain is having a moment bucking Western political trends. The country has recently recognized Palestine as a state, resisted President Trump’s demand that NATO members increase their defense spending to 5 percent of gross domestic product and doubled down on D.E.I. programs. But there’s no better example of Spain going its own way than immigration. At a time when many Western democracies are trying to keep immigrants out, Spain is boldly welcoming them in. The details are striking. In May, new regulations went into effect that eased migrants’ ability to obtain residency and work permits, and the Spanish Parliament began debating a bill to grant amnesty to undocumented immigrants. These reforms could open a path to Spanish citizenship to more than one million people. Most of them are part of a historic immigration surge that between 2021 and 2023 brought nearly three million people born outside the European Union to Spain.

3. Domestic Institutional Investors (DIIs) are driving Indian equity markets, having replaced the role of Foreign Institutional Investors (FIIs).

Investments by DIIs grew at a much higher rate of 55.4 per cent from 2014-15 to 2019-20, compared with 37 per cent in the post-Covid period (2021-22 to 2024-25)... In absolute terms, investments by DIIs reached an all-time high of ₹14 trillion at end-March 2025. In contrast to the rapid growth of DII investments over the past decade, FII investments grew at only 4.9 per cent. Consequently, their outstanding investments, at ₹10 trillion at end-March 2025, were about 29 per cent lower than those of DIIs...

The co-movement (correlation) between FII investments and the equity market (BSE Sensex), which was 0.37 from January 2000 to March 2014, fell to a negligible (–) 0.03 from April 2014 to June 2025, implying that over the past decade, FIIs have had virtually no impact on the equity market. In contrast, the correlation between DII investments and the equity market, which was (-) 0.20 during January 2000 to March 2014, rose sharply to 0.59 during April 2014 to June 2025, suggesting that over the past decade, DIIs have predominantly influenced the equity market.

4. DeepSeek further delays the release of its new model after failing to train it using Huawei's chips, exposing the limits of China's indigenous chips.

DeepSeek was encouraged by authorities to adopt Huawei’s Ascend processor rather than use Nvidia’s systems after releasing its R1 model in January, according to three people familiar with the matter. But the Chinese start-up encountered persistent technical issues during its R2 training process using Ascend chips, prompting it to use Nvidia chips for training and Huawei’s for inference, said the people... Training involves the model learning from a large dataset, while inference refers to the step of using a trained model to make predictions or generate a response, such as a chatbot query... Industry insiders have said the Chinese chips suffer from stability issues, slower inter-chip connectivity and inferior software compared with Nvidia’s products. Huawei sent a team of engineers to DeepSeek’s office to help the company use its AI chip to develop the R2 model, according to two people. Yet despite having the team on site, DeepSeek could not conduct a successful training run on the Ascend chip, said the people. DeepSeek was still working with Huawei to make the model compatible with Ascend for inference, the people said.

5. India's wealth and income landscape.

6. GST notices issued by Karnataka Commercial Taxes Department to informal traders who use UPI payments system forces some of them to turn back on UPI.

The trigger was a series of Goods and Services Tax (GST) notices sent to street vendors who have been using the Unified Payments Interface (UPI) to accept payments. The state’s GST department had flagged them as unregistered traders whose turnover exceeded the limit over which GST registration is mandatory—Rs 40 lakh per annum for the supply of goods and Rs 20 lakh for services. These notices have set off a wave of fear rippling through small traders in several states where governments have taken similar action. In Karnataka, over 14,000 street vendors recently threatened to go on strike over the issue. The strike was called off after the state government hit pause on 6,000-odd notices following the backlash, but reports say other states like Andhra Pradesh, Uttar Pradesh, Tamil Nadu, and Gujarat have also begun requesting merchant turnover data. UPI may have brought simple, instant digital payments to India’s streets, but as the country’s small traders are finding out, it’s also brought fully traceable transactions—putting them directly under the lens of tax authorities for the first time.

7. The Bola Tinbu administration in Nigeria devalued the Naira sharply after taking charge in 2023, plunging the economy into chaos. Impressively, things seem to be looking up now, especially in manufacturing.

Facing ever-rising input costs and the threat of stock shortages, some companies used last year’s shock as a catalyst to reduce their reliance on imported materials... The use of local raw materials in the manufacturing sector increased to an average of 57.1 per cent last year, up five percentage points from 2023, according to MAN... In instances where some key raw materials are not available domestically, companies are finding other clever ways of keeping costs down... Regulatory uncertainty still bedevils business, although executives are hopeful that a new tax law signed by Tinubu and set to take effect next year would streamline the onerous burdens on them. Even so, the fight to localise supply chains has been worth it for those that succeeded. The naira has also stabilised since last year’s devaluation, as Tinubu’s reform agenda shows signs of bearing fruit.

One more example from recent times of how sharp devaluations have yielded quick wins. Argentina is the other example.

8. From a review of Breakneck, a book by Dan Wang, a Chinese-Canadian tech analyst.

Wang’s central contention is that China is run as an engineering state that excels at construction while the US has become a lawyerly society that favours obstruction. By 2020 all nine members of the Chinese Politburo’s standing committee had trained as engineers. By contrast, the US has turned into a “government of the lawyers, by the lawyers and for the lawyers.” The result is that the country’s legal aristocracy prioritises process over outcomes and systematically favours the well-off, Wang argues. From 1984 to 2020, every single Democratic presidential and vice-presidential nominee had attended law school. The consequences of these differing approaches can be seen in how the two countries have built high-speed railways. In 2008 Californian voters approved funding for an 800-mile rail link between San Francisco and Los Angeles, while China began construction on a similar length railway between Beijing and Shanghai. Three years later the Chinese line opened at a cost of $36bn and carried 1.4bn passengers in its first decade of operation. The first segment of California’s train line may open some time between 2030 and 2033 at an estimated cost of $128bn.

The book has some very striking statistics

For example, in 1990 there were just half a million cars in China. By 2024 there were 435mn, many of them electric. China now has the (over) capacity to build 60mn cars a year out of a total global market of 90mn cars sold. The country has emerged as a world leader in drones, precision manufacturing, industrial robotics and solar and wind energy, and is rapidly deepening its expertise in artificial intelligence, where the US probably still retains an edge. China also has 31 nuclear power stations under construction, compared with just one in the US. By 2030, China will account for 45 per cent of the world’s industrial capacity compared with 38 per cent for all the world’s other high-income states, including the US, Europe and Japan, according to the United Nations Industrial Development Organisation... Although 50 per cent of China’s economy may be dysfunctional, Wang argues 5 per cent performs superbly well with its leading tech companies now challenging the best in the world.

9. Tej Parikh writes that the rise of intangibles (IP, brand value, code, content, talent etc.) is responsible for four major trends in the US equity markets - high concentration, exceptionalism, volatility and bubble-like valuations. American investment in intangible assets surpassed tangible ones and its intangible investment of $4.7 trillion in 2024 is nearly twice that of combined France, Germany, the UK, and Japan. 

He also writes that intangible assets make up 90% of the total enterprise value of the 15 largest US companies, considerably higher than that of the broader US corporate sector. 

For US stocks, Kai Wu of Sparkline estimates that accounting for intangible assets would cut perceived overvaluation by about 25 to 50 per cent, relative to headline valuation metrics. “While the market is by no means cheap, once firms are given credit for their intangible assets, valuations look far less frothy than the headlines imply,” he says.

This graphic compares the US and European high-tech companies.

10. India's textile exports story.

Until around 2010, India held the second spot in global apparel exports, but its slow growth through the 2000s allowed Bangladesh to overtake it... During this period, many large Indian companies, too, expanded their manufacturing ecosystem to Bangladesh. Trade-policy analyst S Chandrasekaran indicates that roughly 25 per cent of textile manufacturing units in Bangladesh are Indian-owned — including brands like Shahi Exports, House of Pearl Fashions, Jay Jay Mills, TCNS, Gokaldas Images, and Ambattur Clothing. As they grew in size and faced labour issues here, they moved to a place where this problem could be addressed, said Kumar of Premier Agencies. While the average salary of employees in Tiruppur is over $180-200 (about ₹15,500-17,500) a month, in Bangladesh, it is around $100-115 (about ₹8,500-10,000). Despite these challenges, industry players believe India retains an edge due to its strong raw material base. The country is the world’s largest cotton producer and has an abundant supply of polyester, silk, jute, and man-made fibres, while Bangladesh relies on imports from India and China.

11. Two graphics from Unhedged on the extent of market concentration in the US equity markets.

And this

12. Peter Navarro takes aim at India for its Russian oil and arms purchases. 

13. SpaceX survives on government contracts and pays no taxes.

SpaceX has most likely paid little to no federal income taxes since its founding in 2002 and has privately told investors that it may never have to pay any, according to internal company documents reviewed by The New York Times... SpaceX can seize on a legal tax benefit that allows it to use the more than $5 billion in losses it racked up by late 2021 to offset paying future taxable income. President Trump made a change in 2017, during his first term, that eliminated the tax benefit’s expiration date for all companies. For SpaceX, that means that nearly $3 billion of its losses can be indefinitely applied against future taxable income... In 2020, federal contracts generated about $1.4 billion, or 83.8 percent, of the company’s total revenue that year. The next year, federal contracts brought in about $1.7 billion, or 76 percent, of the total revenue.

14. A summary of Indonesia's economy.

Official figures suggest annual GDP growth is still close to 5 per cent, a number that has remained largely stable over the past decade other than during the Covid-19 pandemic. But more granular economic data indicates that Indonesia’s once-burgeoning middle class is shrinking, the economy is creating more informal jobs than formal jobs, underemployment is rising, car and motorcycle sales are plummeting, and credit growth is at a three-year low... The economy is growing more slowly and creating fewer quality jobs, both of which are eroding the purchasing power of the country’s 280mn citizens. Manufacturing’s share of GDP has slid from a peak of 32 per cent in 2002 to 19 per cent last year, though it remains the biggest contributing sector to GDP... At the heart of the problem is Indonesia’s focus on developing its cyclical and capital-intensive commodities sector over labour-intensive manufacturing, which generates more employment and higher wages. Although the resource-rich archipelago is the world’s top exporter of nickel products, palm oil and coal, it is the country’s factories that have created more high-paying jobs and underpinned middle-class employment...

Indonesia was once home to a thriving manufacturing industry that created millions of stable jobs and formed the foundation of the country’s aspiring middle class. For years it ranked among the world’s top producers of apparel, footwear and furniture. Its success came despite a late start relative to its south-east Asian neighbours. Modernisation only began in earnest during the 1960s as a result of the industrial policies of former dictator Suharto. The industrial sector grew by an annual average of 10.7 per cent in the three decades starting from 1967, when he took office. In 1993, the World Bank described Indonesia as one of the “east Asian miracles” for its rapid growth, and declining inequality and poverty. But the glory days ended in 1997, when Indonesia and several of its neighbours suffered rapid capital flight during the Asian financial crisis and had to be bailed out by the IMF. Suharto was toppled in 1998. Growth plummeted, and between 2000 and 2024, the manufacturing sector averaged 4.3 per cent a year, less than half the previous rate. That period coincided with an increased focus on boosting Indonesia’s resources sector amid a global commodities boom driven by industrialisation and urbanisation in China. Successive governments introduced protectionist policies such as the local content rule, which requires manufacturers to source a certain percentage of products from the domestic market, to support domestic companies.

Weekend reading links

1. AI is already starting to bind on hiring decisions of Indian IT firms.

Salaries have been stagnant at the starting levels for years.

2. A reality check on private finance mobilised by multilateral and bilateral lenders in sub-Saharan Africa

By their own reckoning multilateral and bilateral lenders mobilised $88bn of private finance for low- and middle-income countries in 2023, only a belated jump after years of stagnation (see chart). Just $20bn went to sub-Saharan Africa, of which $10bn reached the poorest countries. By comparison, the region received $62bn of aid that year... In 2018 a task-force launched at Davos, the annual gathering of the World Economic Forum, envisaged that every public dollar could whip up two or more from the private sector. Such ratios are rarely achieved. A forthcoming study by odi Global, a think-tank in London, examines a subset of investments called “blended concessional finance”, where some of the capital comes at below-market rates. It finds that by 2021 each dollar was attracting about 59 cents of private co-financing in sub-Saharan Africa, and 70 cents elsewhere.

3. President Trump's Executive Order on pharmaceutical prices should draw attention to the practices followed by Big Pharma. This is a good illustration.

Take the example of Keytruda, a cancer treatment from Merck, which is manufactured in Ireland. According to Jefferies, an investment bank, Merck holds the intellectual property (IP) for Keytruda in the Netherlands. The arrangement allows the firm to book profits at a tax rate of 10.5%, roughly half what it would pay if the ip resided in America.

4. Mexico is taking democracy to the judiciary.

On June 1st Mexicans will vote to elect judges to 850 federal posts, nine Supreme Court seats, 22 powerful tribunal jobs and thousands of roles in lower courts. In 2027 a second vote will see the rest of Mexico’s judiciary filled. A few countries elect a handful of judges, mostly to lower courts. Mexico will become the first country in the world where every judge on every court is chosen by popular vote. Mexico’s Congress passed the constitutional changes required for this upheaval in September last year. It was Andrés Manuel López Obrador’s final act as president, achieving one of his most cherished goals. His successor, Claudia Sheinbaum, has followed in his footsteps. Their party, Morena, argues that the election of judges will make the judiciary more democratic, purge corruption and nepotism, and widen access to justice.

There are several cocnerns.

The only place where judges are currently elected to higher courts is Bolivia. Its Supreme Court judges have been elected since 2011. The selection mechanism has been a disaster, with the court’s authority undermined by an endless political squabble to control it. Two-fifths of Bolivians who voted in the most recent judicial election spoiled their ballots. In Mexico, judicial elections pose a graver danger than mere chaos: control of the justice system by drug gangs. Criminal gangs are happy to kill or threaten public officials to get what they want. The gangs already field their own candidates in local elections. More quotidian corruption of judges by businessmen and officials, also endemic, will probably expand. It is hard not to see the elections as a final step that entrenches Morena as Mexico’s political hegemon...

Institutional knowledge will be lost. Only a minority of sitting federal judges are standing for election. Just three of the current 11 Supreme Court judges are running. A study by Mr Ríos found that it took an average of 24 years to become a magistrate. From June, cases on constitutional law and million-dollar commercial disputes will be heard by people who may have never set foot in a courtroom.

5. The emergence of the UAE, a country with less than a million citizens, as a major investor in Africa.

Persian Gulf investments in Africa, primarily by the Emirates, have exploded in recent years. Since 2019, $110 billion worth of deals — mostly by firms tightly aligned with the ruling powers — have been announced, dwarfing amounts pledged by any other country... Like other oil-producing nations in the Persian Gulf, the Emirates is looking to diversify its economy away from fossil fuels, and it sees Africa as an essential part of the plan... Powerhouse Emirati corporations based in Dubai and Abu Dhabi with political connections are in dozens of countries across Africa... 

AMEA Power is already building or operating clean energy plants in Burkina Faso, Djibouti, Egypt, Ethiopia, Ivory Coast, Kenya, Morocco, South Africa, Togo, Tunisia and Uganda and has plans to expand. Abu Dhabi National Energy Company has projects in Morocco, Senegal and South Africa and is participating in a project to invest $10 billion in renewable energy in sub-Saharan Africa. DP World, the gargantuan government-backed ports and logistics operator, has invested billions of dollars in ports and economic free zones from Algeria to Zambia, including in the Berbera port city in the breakaway republic of Somaliland, where the Emirates also has a military base. Last summer it announced that it would spend another $3 billion on African ports over the next three to five years. Last year, the Emirati International Holding Company invested more than $1 billion for a 51 percent share in the Mopani Copper Mines in Zambia. Spending in Egypt has also soared. Last year, the Emirates agreed to invest $35 billion to develop a new city and tourism destination on Egypt’s Mediterranean coast.

Emirati investment in Africa has ramped up as China’s has tapered off. Once the biggest foreign investor on the continent through its Belt and Road Initiative, China still has a large presence, but Beijing has pulled back in recent years after a series of debt crises in Africa and economic problems at home. In 2022 and 2023, the Emirates announced a total of $97 billion in investments in Africa — three times China’s total, according to fDi Markets, a database of foreign investments. U.S. investment in 2023 was about $10 billion... The U.A.E.’s total foreign assistance in Africa exceeded $1 billion in 2023-24... Meanwhile, Mr. Trump has fast-tracked America’s exit from Africa, ending billions of dollars in funding, dismantling the U.S. Agency for International Development and ending all contributions to the African Development Bank. The State Department’s reorganization plan also calls for the elimination of most operations in the region.

6. Germany's unique labour market problem - highest labour force participation rate and low unemployment rate, coupled with the lowest number of hours worked.

7. Ramesh Chand has an excellent op-ed drawing attention to the success of expansion of soyabean crop cultivation for edible oils in India. The growth story is amazing.

Soybean started spreading in India with the introduction of the Barag variety in the early 1970s. It was brought from Mississippi, United States (US), by scientists of Illinois University. The area under soybean reached a reasonable base of 100,000 hectares in the mid-1970s and kept increasing in leaps and bounds. The area crossed 13 million hectares in 2022-23, and it is still rising. With 99 per cent of the area being rainfed, it did not put any stress on water resources. Soybean output increased from 130,000 tonnes during the mid-1970s to 13.6 million tonnes during 2021-22 to 2023-24, ie more than 100 times increase in less than five decades. Production doubled every four years between 1975-76 and 1999-2000. No crop in India has increased so much in less than 50 years after reaching a comparable base. Such examples are rare even abroad and almost absent in a rainfed situation.

But the story of stagnant productivity raises concerns.

On the flip side, the yield of soybean in the country has remained flat and fluctuated around one tonne per hectare for 45 years. It rose above 1 tonne in some favourable years but again returned to 1 tonne. There is another distinguishing feature of soybean that its output witnessed a 100-fold increase in 48 years without any appreciation in productivity, except an initial edge in yield through the introduction of an exotic germplasm... What role did domestic research & development (R&D) play after the initial introduction and adaptation of exotic soybean seeds in the 1970s, which brought a big one-time jump in yield? Domestic agricultural R&D has at best ensured sustaining productivity by checking any decline in yield over time. However, it is baffling that the National Agricultural Research System could not bring any improvement in yield in 50 years despite reasonable expenditure. But the rest of the world has moved on. In the mid-1970s the yield in the US was two times and the world average was 60 per cent higher than that of India. The recent yield of soybean in the US and Brazil is 3.3 times and the world yield is 2.6 times the soybean yield in India. 

The main reasons for stagnant productivity are: One, an absence of collaboration and germplasm transfer from US universities after the initial introduction; two, India’s policy of a ban on genetically modified (GM) food crops (GM varieties now occupy 75 per cent of the area under soybean in the world); and three, the inability of national agricultural research systems to achieve any breakthrough in soybean productivity. If the soybean yield in India had kept pace with that in the US or Brazil, our production would have doubled and India’s import dependence would have been 40 per cent lower than what it is now.

8. Steven Pinker's thoughtful essay on Harvard. 

According to its critics, Harvard is a “national disgrace,” a “woke madrasa,” a “Maoist indoctrination camp,” a “ship of fools,” a “bastion of rampant anti-Jewish hatred and harassment,” a “cesspool of extremist riots” and an “Islamist outpost” in which the “dominant view on campus” is “destroy the Jews, and you’ve destroyed the root of Western civilization”... 

Most of my colleagues, too, follow the data and report what their findings indicate or show, however politically incorrect. A few examples: Race has some biological reality. Marriage reduces crime. So does hot-spot policing. Racism has been in decline. Phonics is essential to reading instruction. Trigger warnings can do more harm than good. Africans were active in the slave trade. Educational attainment is partly in the genes. Cracking down on drugs has benefits, and legalizing them has harms. Markets can make people fairer and more generous. For all the headlines, day-to-day life at Harvard consists of publishing ideas without fear or favor...

A poll of my colleagues on the academic freedom council turned up many examples in which they felt political narrowness had skewed research in their specialties. In climate policy, it led to a focus on demonizing fossil fuel companies rather than acknowledging the universal desire for abundant energy; in pediatrics, taking all adolescents’ reported gender dysphoria at face value; in public health, advocating maximalist government interventions rather than cost-benefit analyses; in history, emphasizing the harms of colonialism but not of communism or Islamism; in social science, attributing all group disparities to racism but never to culture; and in women’s studies, permitting the study of sexism and stereotypes but not sexual selection, sexology or hormones (not coincidentally, Hooven’s specialty)...

Harvard, too, is not a monastic order but part of a global network. Most of our graduate students and faculty members were trained elsewhere, and go to the same conferences and read the same publications as everyone else in academia. Despite Harvard’s conceit of specialness, just about everything that happens here may be found at other research-intensive universities. Finally, our students are not blank slates which we can inscribe at will. Young people are shaped by peers more than most people realize. Students are shaped by the peer cultures in their high schools, at Harvard and (especially with social media) in the world. In many cases, students’ politics are no more attributable to indoctrination by professors than are their green hair and pierced septums... 

Harvard, as I am among the first to point out, has serious ailments... But Harvard is an intricate system that developed over centuries and constantly has to grapple with competing and unexpected challenges. The appropriate treatment (as with other imperfect institutions) is to diagnose which parts need which remedies, not to cut its carotid and watch it bleed out.

9. Graphic on how Chinese solar panel makers drove down prices.

In 2023, Chinese-headquartered companies produced 84 per cent of the world’s solar modules and 92 per cent of solar cells, according to BloombergNEF… Chinese-made panels are still dirt cheap at about $0.09 per watt, on BloombergNEF data, down from $1/watt at the start of 2012.

10. FT has an article on China's dominance of rare-earth minerals and the export controls it placed in early April on the export of seven rare earth elements and permanent magnets made from them (which are also used in fighter jets like US F-35s). 

The controls, which require exporters to gain licences from commerce ministry officials for shipments of the seven targeted rare earths and of permanent magnets that are made from them, highlighted the geopolitical leverage conferred by China’s dominance over global mineral supply.

More on the latest restrictions

Rather than raw materials in bulk they involve finished articles, particularly magnets, made by only a few Chinese companies and traceable through the supply chain. Unlike previous export controls, they are executed via end-user licensing requirements for materials with dual military and civilian use, which restricts foreign companies selling them on. If China really does maintain and enforce a ban on sales to the US, it could affect the manufacture of F-35 fighter jets as well as electric vehicles. The materials involved are so-called medium and heavy rare earths, which are harder to extract and process. Industry experts say that increasing supply from elsewhere is likely to take years, as is retooling EV or other supply chains to use other technologies. Prices of heavy rare earths such as dysprosium shot higher after the controls were announced.

And the shocking reality that even as Trump wages war, America appears to have done very little to prepare for it by, for example, stockpiling rare earth reserves. 

11. Sweden's paradox of social democracy coexisting with a surge in billionaire wealth. Ruchir Sharma writes.

Sweden saw billionaire wealth rise by 4 points to 31 per cent of GDP — the biggest increase, and to the highest level, of the 20 major economies in my analysis. Sweden has 45 billionaires, about 1.5 times more per capita than the US, which is often said to be enjoying a new gilded age. The richest American ever was John D Rockefeller in around 1910, when his fortune surpassed 1.5 per cent of GDP... A functioning economy will generate a balanced billionaire class, with more “good” wealth from industries like tech or manufacturing than “bad” wealth from sectors such as real estate or commodities. Not that real estate or commodities are inherently bad. But they contribute less to productivity and are less likely to be held in high popular esteem than, say, cars or software. In Sweden, the “good” billionaires are outnumbered two to one by the “bad” ones... At just 12 per cent, the “good” share of billionaire wealth is third lowest among my top 10 developed countries... Nearly 70 per cent of Sweden’s billionaire wealth comes from inheritance, third highest on my list after France and Germany... The country taxes capital much less heavily than salaries, and sometimes taxes capital regressively... Sweden has also held interest rates well below the European average, and low rates tend to inflate asset prices, while making it easy for the rich to borrow money to make more of it.

12. Finally, Simon Kuper points to some ideas to be a great thinker - read books; don't use screens much so that you have time for other things; do your own work, not the world's; be multi-disciplinary; be an empiricist who values ideas; always assume you might be wrong; keep learning from everyone.