Daily Archives: August 26, 2020

The U.K. economy is set to lose 22 billion ($29 billion) from the collapse of international travel during 2020, according to a report published on Wednesday.

Travelers and tourists are staying away from the U.K. in droves because of continuing uncertainty around travel restrictions designed to curb the spread of Covid-19, the report by the World Travel & Tourism Council (WTTC) found.

As a result, international visitor spending this year could plunge by 78% compared with 2019 levels, equating to a loss of 60 million ($79 million) a day, or 420 million a week, to the U.K. economy, according to WTTC estimates.

Read:Global tourism loses $320 billion in first five months of 2020, says UN

Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown said the bleak outlook for the travel and tourism sector has been reflected in the stock market.

Carnival CCL, -3.77%, the worlds biggest cruise company, and budget airline easyJet EZJ, +0.02% exited the FTSE 100 earlier this year after a major collapse in their share prices.

For easyJet, there has been a slight recovery this month after bookings came in higher than expected but with some travel corridors closed once again, it is clear the challenges are far from over, Streeter said.

On Wednesday, Carnivals Princess Cruises said that two cruises set to sail in early 2021 would be canceled, blaming border restrictions and the continued uncertainty of airline travel.

We share in the disappointment of this cancellation for guests of our world cruises because it is a pinnacle cruise vacation experience, booked by some of our most loyal guests, Jan Swartz, Princess Cruises president, said in a statement.

Carnival said guests currently booked on these canceled voyages will receive a refundable Future Cruise Credit (FCC) equivalent to 100% of the cruise fare plus an additional nonrefundable FCC equal to 25% of the cruise fare paid.

Read: Some of Europes biggest travel companies are leaving consumers covering the cost of coronavirus holding on to cash while handing out credit notes

The cancellations follow an announcement on Tuesday by Cunard, also owned by Carnival, that its services will be suspended until March 2021. After very careful consideration and reviewing the latest guidance, we simply dont feel it would be sensible to start sailing again with our current schedule so we have reviewed future itineraries, Cunard President Simon Palethorpe said.

Earlier in August, Ryanair RYA, +1.43%, Europes largest airline, announced that it would reduce its flight capacity by 20% during September and October due to a fall in bookings.

Visitors from France and Spain who may have planned a weekend long city break to the UK will now postpone or cancel, given the freshly imposed quarantine rules. Other European tourists may also stay away, not wanting to run the risk of being confined to hotel rooms if new restrictions are brought in, Streeter added.

According to WTTCs 2020 Economic Impact Report, during 2019, travel and tourism was responsible for almost four million U.K. jobs, or 11% of the countrys total workforce. It also generated nearly 200 billion to the U.K. economy last year - around 9% of GDP.

We urgently need to replace stop-start quarantine measures with rapid, comprehensive and cost-effective test and trace programs at departure points across the country, Gloria Guevara, WTTC President & CEO, said. This investment will be significantly less than the impact of blunt quarantines which have devastating and far-reaching socio-economic consequences, she added.

Read:Covid-19 turned the hotel industry upside down, but it wont change what people want

Between 2016 and 2018, the largest inbound source markets to the UK were travelers from the U.S. and France, each accounting for 10% of all international arrivals, with Germany coming in third with 9%, and Ireland and Spain in joint fourth place with 7% each, the WTTC said.

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$79 million a daythats how much the U.K. is losing from tourism collapse - MarketWatch

Sparking outrage and controversy, ex-president Eduardo Duhalde has suggested that there will be no midterm elections next year, anticipating a coup dtat since "Argentina is the world champion of military dictatorships."

The former president, who served in office from 2002 to 2003, also predicted that the country is heading towards "a scenario worse than 2001."

"Nobody can ignore that militarism is making a comeback throughout Latin America," Duhalde told the Animales Sueltos television programme, calling it "ridiculous" to expect elections in such a context.

"Im not saying that the coup will come from [President] Alberto Fernndez, lets not personalise this, he said. Argentina runs that risk because this is such a great disaster this is the most complex presidency weve ever had and could generate a worse climate than begone with them all (a reference to the 2001-2002)."

In the same Monday night interview, the Peronist ex-president suggested that the pandemic was costing President Fernndez sleep when he had already told him that he had to take at least three hours a day off from politics if he wished to escape the fate of other presidents, including Duhalde himself.

"Im convinced that the winners should govern and the losers as well. One party cannot govern alone. The president should not permit himself to talk about the past because the past cannot be changed discussing the past is the task of journalists while leaders should not talk about the past but govern," Duhalde concluded.

Duhaldes statements were promptly rejected by politicians across the spectrum. Defence Minister Agustn Rossi dismissed as "an impossible scenario," asserting: "There is a strong commitment to democracy and the Constitution; I dont see any disaster on the horizon."

Rossi ruled out any coup dtat due to the depth of the socio-economic crisis caused by the coronavirus crisis, including the cancellation of next years midterm elections, saying "the Armed Forces are absolutely integrated into the democratic system, perhaps more than any force on the continent."

Speaking to Radio Rivadavia last Tuesday, Rossi said: "Im in touch with military reality every day and I would say that scenario is impossible in Argentina today," going on to explain:"We have a political system with certain tensions but its a strong system. There were elections last year where one candidate won and the other accepted the result, transferring power, and Congress is functioning despite the pandemic, as is the judiciary."

"We all respect Duhalde for his political history and for having been president at a difficult moment for the country," commented the minister when interviewed by FM Delta radio.

"Of everything he said, what is true is that every couple of years in other Latin American countries the armed forces take on greater relevance [President Jair] Bolsonaro in Brazil, the coup in Bolivia, the decision to close down Congress in Peru but it seems to me that transferring all this to Argentina is a very serious error," Rossi concluded.

'Extremely serious'

Human rights leaders also criticised the remarks. The President of the Grandmothers of Plaza de Mayo, Estela de Carlotto, was among them, describing the comments as "extremely serious" and disastrous.

I am outraged by what this man said," said Carlotto, declaring in a radio interview that never again is never again.

"It is very important to condemn the sayings of Duhalde," she added. "Duhalde tried to explain today, but the truth is that I didn't understand anything he said.

Later on Tuesday, Duhalde reiterated his comments though he said maybe the length of the coronavirus lockdown had lowered the tone of his analysis.

He stressed again, however, that political leaders are not aware of "what is happening with society's poor and the crumbling middle class."

"I say what I think and I believe I have grounds to do so, he added. In 2001, society did not collapse not because I governed, but because I formed a co-government. We must govern together.

"If we continue fighting, we are going towards an anarchic process in Argentina," said the former president.

President Fernndez, who has met with Duhalde on multiple occasions since taking office, remained silent on the issue, though he did retweet a post on Twitter from Vilma Ibarra, Legal and Technical Secretary to the Presidency.

The government , together with the Argentine men and women, is firm and attentive to prevent them from shrinking our democracy, " read the message.

TIMES/PERFIL

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Duhalde widely criticised after suggesting 'coup d'tat' may be on cards - Buenos Aires Times

Despite its proclaimed support for the Lukashenko regime, the Kremlin is increasingly frustrated with the Belarusian president, who has skillfully avoided integration with Russia and engaged in a multivector foreign policy with the West. A democratic alternative to Lukashenko with a proper privatization program will likely be accepted by Moscow as it seeks to gain access to key assets of the Belarusian economy.

On February 7, 2020, Vladimir Putin held talks inSochi with Alexander Lukashenko, who came toRussia onaworking visit. Photo: kremlin.ru.

The August 9 presidential election in Belarus was the latest challenge to the regime of Alexander Lukashenko, a strongman known as Europes last dictator, who has ruled the country for 26 years. This time the challenge came from the young female democratic opponent Svetlana Tikhanovskaya. Despite overwhelming popular support, Tikhanovskaya officially won only about 10 percent of the vote, while Lukashenko claimed a landslide victory with over 80 percent. Unprecedented mass protests against the rigged election followed, resulting in police violence and international outrage over the brutal crackdown on the peaceful demonstrations. Still, these were not Lukashenkos only problems.

Another challenge facing the Belarusian president is his Russian counterpart Vladimir Putin, who increasingly wants him gone. On the surface such an assumption might seem strange for at least two reasons: first, Belarus and Russia are members of the Union Statea supranational formation established in 1996and second, both leaders have emerged as resilient autocrats. In reality, their interests stand in direct opposition, and their regimes have diverging socio-economic roots, making Lukashenko and Putin as alike as a dolphin and a shark.

Following the dissolution of the Soviet Union, Russia and Belarus followed very different paths. Boris Yeltsins government in Russia engaged in market reforms and privatization, which resulted in numerous valuable state assets (including oil and gas companies) being sold at discounted prices to a narrow circle of people who eventually became Russias first oligarchs. At the same time, average Russians went through economic ruin, while the countrys social safety net inherited from the Soviet timesfree healthcare, higher education, housingcrumbled.

Public resentment with the reformers ran high, and many people started to feel nostalgic for the stability of the Soviet erasentiments that were harnessed by Vladimir Putin when he came to power in 2000. He exploited the public mood for his own political gain. For example, to please this part of the electorate, he readopted the Soviet anthem and claimed that the collapse of the Soviet Union was the greatest geopolitical catastrophe of the 20th century. But these concessions were superficial, as major results of the Yeltsin era, such as the privatization of the Russian economys commanding heights, were preserved. While initially Putin did go after some oligarchs (notably, Vladimir Gusinsky, Boris Berezovsky, Mikhail Khodorkovsky), they were not eliminated as a group and remained one of the pillars of his regime. In fact, many of Putins close associates joined the oligarchic ranks over the next two decades, thus showing continuity between Yeltsins and Putins Russia.

Belarus followed a completely different path, one that is more comparable to China than to Russia. Under Lukashenko, who was first elected president in 1994, the commanding heights of the Belarusian economy remained in the states hands. The Soviet-era social safety net was also preserved. The ultimate rejection of wholesale privatization has been an essential trait of the Lukashenko regime ever since. Additionally, Lukashenkos political ambitions have shaped Minsks relationship with Moscow. In the late 90s, when the Union State project was first forged, some members of the Russian elite saw him as a potential successor to Yeltsinas a head of a united statedue to his popularity with large groups of the Russian electorate. But realizing that Lukashenkos leadership would bring imminent nationalization, Yeltsins family ultimately favored Putin, who was not seen as a threat to the status quo.

Over time, as Putins grip on power was secured, the Russian elite started to look with increased interest at Belarusian assets, such as oil refineries and factories. The 2013 incident involving Vladislav Baumgertner, head of Uralkali, a leading global potash producer, is a case in point. Baumgertner was arrested in Minsk, having come on the invitation of the Belarusian prime minister to discuss the escalating conflict between Uralkali and its former partner Belaruskali. The two companies formed an exporting cartel, but Baumgertner accused his Belarusian counterpart of illegal sales on the side and pulled out of the cartel, predicting collapse in potash prices and thus jeopardizing the Belarusian economy, which gets about eight percent of its profit from the potash industry. Baumgertner became Lukashenkos hostage in one of its many wars with Russia over Belarusian industrial assets. He was later extradited to Russia, where the criminal case against him was eventually dropped in 2015.

Given these differences and conflicting interests, why, then, are Minsk and Moscow still formally united in one state? For one, states can be allies for pragmatic reasons, regardless of their ideological differenceslike Maos China and Nixons USA, who joined forces against the USSR, which they both feared. Putin needs Belarus as a geopolitical ally due to its strategic location between Russia and Europe. Pragmatic cooperation with the Lukashenko regime may have led some members of the Russian elite to believe that they could gain access to Belarusian assets. To lure Minsk into a deeper integration, the Kremlin largely subsidized the Belarusian economy, including selling it gas and oil at discounted prices. Still, for many years, Lukashenko refused to be fully integrated with Russia, although he joined Putin in co-founding the Eurasian Unionthe Russian presidents geopolitical pet project. But both Belarus and Kazakhstan, another co-founder of this supposed counterweight to the European Union, refused to surrender any authority to the transnational body, that is, to Russia. Lukashenkos unwillingness to fall in line increasingly frustrated the Kremlin, and feuds between the two countries became regular business, but Belarus dependence on Russian subsidies and Russias security imperatives would always incentivize a compromise.

In 2018, however, tensions started to grow beyond the usual. First, as a result of its geopolitical adventures that cost Russian economy a heavy price and the decline in global oil and consequently gas prices, the Kremlin decided that it needed a more tangible return on its investment in Belarus. Second, the Kremlins ambitious geopolitical projectsthe Nord Stream II and Turkish Stream gas pipelinesbegan to stall. Amidst these challenges, Moscow opted to hike gas prices for Belarus, implying that, should Lukashenko agree to fully integrate into Russia, he would be granted gas contracts at Russian domestic prices.

The timeframe of this last push is based on Putins estimate of the poor state of the Belarusian economy, which would leave Lukashenko no choice but to join Russia. Another factor was Moscows growing concern about Minsks tilt toward the West.

Lukashenko dabbled in foreign policy multivectorism for a while, as did many other post-Soviet states. But since his efforts were largely unsuccessful, Moscow was not worried about his flirting with the West. In recent months, however, the situation has begun to change. Minsks relationship with Brussels has softened. In February, US Secretary of State Mike Pompeo visited Minskthe first such visit of a high profile American official in 26 years, which resulted in full restoration of diplomatic relations. Moreover, Lukashenko claimed that NATO would not tolerate a Russian invasion of Belarus and would rightly respond with a war.

All these developments alarmed the Kremlin, which at first tried the usual disciplinary measure of denying Belarus its gas discount, and then reignited the idea of removing Lukashenko from the top job through the August 9 presidential election. Perhaps the 33 Russian mercenaries affiliated with the Kremlin-linked Wagner group who were arrested days before the election had been sent to Minsk at the Kremlins directive to cause disorder (Moscow bluntly denied it, of course).

But after Lukashenko rigged the election and Belarus became embroiled in mass protests and countrywide strikes that utterly undermine his regime, whom does the Kremlin see as his replacement? And wouldnt the victory of a democratic opposition candidate, such as Tikhanovskaya, be Moscows worst nightmare?

To answer these questions, consider the differences between the Russian and Belarusian socio-economic models. With Lukashenko in charge, the key assets of the countrys economy prized by the Russian elite will remain in the hands of the Belarusian state. But if the democratic opposition comes to power, it would most likely launch a privatization program, opening up great opportunities for Russian investors. Russian control over the commanding heights of the Belarusian economy would de facto mean Russian control over the country, even without formal annexation. Such dependence implies that the Belarusian democratic opposition would not be able to successfully challenge the Putin regime.

It is still unclear if Lukashenko will ride out the current storm and, if he does, how long his regime will be able to survive, even with his multivectorism. With Lukashenko in power, Belarus would preserve its status as the last relic of the long vanished USSR, but judging by the magnitude of the August protests, Belarusian people are already rejecting it. As ever, the Kremlin is watching closely.

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What Putin wants from Lukashenko - Institute of Modern Russia