The winner takes it all

Written by Juan Palenzuela, Associate

Edited by Harriet Moll, Creative Director

Good morning, Guyana stands out in many ways to the rest of South America. A former British colony, it is the only English-speaking country in the continent, which makes it much closer in many ways to the English-speaking Caribbean than to South America itself. But what really makes it stand out are its demographics. Unlike all the other South American nations, the Guyanese have traditionally voted along ethnic lines: the East Indian descendants, who form the majority of the urban middle class, have consistently backed the People's Progressive Party (PPP); while the Afro-Guyanese have traditionally backed the People’s National Congress, the party of the incumbent President David Granger. Meanwhile, the mixed and Amerindian Guyanese have served as the swing voters. Politics in the country have been relatively peaceful regardless of those racial divides. The presidential elections that took place on Monday were no exception. However, tension and anguish were clearly more prevalent this time. The importance of these elections cannot be overstated. The discovery of vast reserves of oil in 2015 and again in 2018 fuelled the struggle for power between the two main parties, and with oil revenues on the way, whoever wins this time will oversee an increase in social expenditure, which could make that winning party very popular for years to come. Many fear that that increased popular support could enable the winner to get away with corruption and incompetence, akin to what happened in neighbouring Venezuela. Those fears are very valid. In fact, they may already have been validated as the results of Monday’s elections are not yet known. After the opposition was reported to be slightly ahead on Wednesday, vote counting has paused and has not resumed since. Something is afoot. But the hope is real. In a country stuck in its colonial past where people’s party preference has been driven almost exclusively by allegiance to their own community rather than policies, the boost in social expenditure will benefit every Guyanese. In the long run, that could bridge all ethnic divides once and for all.

News

Russia and Turkey agreed on a ceasefire last night to avoid a major escalation of the war in Syria. The agreement took place after Turkish President Recep Tayyip Erdogan met with Putin in Moscow. They agreed to establish a security corridor and joint patrols, which could bring some peace to war-torn Idlib. Elizabeth Warren ended her presidential campaign yesterday, after a dismal Super Tuesday performance. Warren abstained from endorsing another candidate, saying that she needs more time. The contest to take on Donald Trump in November is now between former Vice President Joe Biden, 77, and Vermont Senator Bernie Sanders, 78. Governments around the world have ramped up measures to avoid the spread of Covid-19 as cases near 100,000 worldwide. Nonetheless, the director-general of the World Health Organization said yesterday in a statement that his organisation fears some countries are not doing enough, and that political commitment does not match the threat level. He is likely pointing fingers at Donald Trump, who called the death rate reported by the WHO “false”.

Business and economy

HSBC had to evacuate around 100 staff from its Canary Wharf office in London yesterday after an employee was confirmed with Covid-19. As a result, employees of the investment bank’s research department are now working from home, in the first example of a major disruption to a UK financial institution due to the outbreak. The fight between Jack Dorsey, Twitter’s CEO and Paul Singer, head of the hedge fund Elliot Management, an activist investor; intensified yesterday with new calls for Dorsey to step down. Elliot took a 4% stake in the company, worth around $1bn, and has fought to oust Dorsey as Twitter’s CEO, citing corporate governance concerns. JCB, the construction equipment manufacturer, restarted its full production schedule in its British factories after the Covid-19 outbreak threatened its supply chain earlier this month. The slowdown in supplies from China forced the manufacturer to slash working hours and stop its planning schedule.

Columns of note

The impact that Covid-19 will have on some large businesses has been thoroughly discussed, and it has been advised in some cases that employees work from home. Little attention has been paid, however, to the impact the outbreak will have on gig workers, argues Gillian Tett at the FT. They are in a particularly vulnerable position, as they lack access to company-funded unemployment insurance, sick pay and medical benefits. The headlines might point to the disruption caused by the coronavirus outbreak, but nothing can excuse Flybe’s years of chronic mismanagement, argues Alastair Osborne in the Times. The company had an ownership structure that was set up to fail, and with little incentives from investors, the collapse was almost inevitable regardless of the outbreak.

Source: New Yorker

Markets

The week ahead

Equity markets globally have continued to plunge due to fears caused by the Covid-19 outbreak and the impact it has had on supply chains. In America, the stimulus announcement by the Fed did not do much. The Dow Jones Industrial Average was down 3.58% at 26,121.28, while the S&P 500 was 3.39% lower at 3,023.94. The Nasdaq Composite also dipped 3.10% to 8,738.60. In Europe, By the end of trading, the benchmark Stoxx 600 lost 1.43% to 380.76, alongside a 1.51% drop on the German Dax to 11,994.72, while Spain's Ibex 35 was off by 2.55% to 8,683.0. In the UK, meanwhile, the FTSE 100 was down 1.62% at 6,705.43 and the FTSE 250 had given back 2.13% to 19,323.13.

What's happening today?

Finals Global Ports SIG Multivarex AGMs Ecofin Global PCF Bank Interim Dividend Payment Date Aberforth Spli. Daejan Holdings Montanaro UK Zegona Com

UK Economic Announcements (08:30) Halifax House Price Index Int. Economic Announcements (07:00) Factory Orders (GER) (13:30) Balance of Trade (US) (13:30) Unemployment Rate (US) (13:30) Non-Farm Payrolls (US)  (15:00) Wholesales Inventories (US) (20:00) Consumer Credit (US)

Source: FTSE 100, Financial Times

Did you know?

Guyana’s population is 25% Hindu, making it the country with the largest proportion of Hindus in the Western hemisphere.

Parliamentary highlights

House of Commons No business scheduled House of Lords No business scheduled Scottish Parliament No business scheduled