Weekend Box: Partygate, Salvador Strongman & more
Welcome to The Weekend Box, Audley’s weekly round-up of interesting or obscure political, business and cultural news from around the world.
Image Credit/ Chatham House
BO JOs DEFENCE
Jeremy Paxman famously described his technique when approaching a political interview. ‘I ask myself why is this lying bastard lying to me?’, he said.
MPs on the House of Commons Standards and Privileges Committee may have been asking themselves the same this week as former PM Boris Johnson came before them to argue he didn’t intentionally mislead parliamentarians when denying there had been lockdown parties in Downing Street. His defence? Essentially that he’s an idiot who didn’t understand his own rules and couldn’t possibly be expected to adhere to them anyway.
Johnson’s problem is not just the committee with its power to suspend him from Parliament. It’s the court of public opinion. People remember the lockdowns he ordered. They recall the ban on visiting elderly relatives in hospital, the instruction not to hug their grandchildren, the Christmases and birthdays spent alone. They remember the haunting image of an elderly monarch sitting isolated at the funeral of her husband. And they now know the person who ordered it was laughing at them all along.
Ordinarily, ‘backbench MP speaks to parliamentary committee’ would be up there with ‘Boris Johnson tells lie’ in the list of unremarkable events, but this feels more significant. On the same day he was being embarrassed by the committee, Johnson tried – but failed – to lead a rebellion against Rishi Sunak’s new Brexit deal. His grip on British politics may finally be slipping.
After a turbulent few years, it felt like a corner had been turned this week. The man who, in the words of Sunday Times political journalist Tim Shipman, once squatted ‘like a toad across British politics’, is a diminished figure watching his successor chalking up a series of policy wins. The sense that the age of Johnson is over is palpable. As one of Rishi Sunak’s allies put it at the end of a good week for him, “it’s his party now”.
Image Credit/Presidencia El Salvador
EL SALVADOR’S STRONGMAN
What politician wouldn’t like a sustained approval rating of 75%? How about 90%, with neighbouring leaders entreating you to share the secrets of your success? Such political heaven has become reality for El Salvador’s President, Nayib Bukele. Yet his current popularity is the result of strongman politics and authoritarian methods that are becoming contagious in the region while threatening democracy and human rights. They are also methods which may yet fail.
Bukele is a maverick with a talent for publicity, as shown by his making Bitcoin legal tender in 2021. Faced with a gang-driven murder rate that, at 106 per 100,000 people in 2015, was the highest in the world, he executed a crackdown that, according to government figures, has dropped the rate to 7.8 per 100,000. This on a par with the US and well below neighbouring Honduras’s 36.
His tactics have centred on the wholesale incarceration of the members of two gangs who have terrorised Salvadorians for years. After 87 people were killed one weekend last year, he forced through a ‘state of exception’, allowing police to arrest anyone without showing cause. 62,000 people – 2% of the population - were locked up. Many are now in a new 40,000 capacity ‘terrorist-confinement prison’, that is the centrepiece of Bukele’s war on crime.
The positive impact has been widely acknowledged, but security has come at a cost. Fear of the gangs has been replaced for many by fear of the army and the police. Bukele has sacked the attorney-general and the Supreme Court judges, replacing them with loyalists who will rubber stamp his ongoing ‘state of exception’ each month, while waiving the constitutional term limit that would have stopped him running for re-election next year. Free media are leant on and his trolls smother critics online.
Bukele courts the interest shown in his mano dura (‘iron fist’) policies by his neighbours. Associates have set up a sister party in Guatemala and his team have opened an office in Haiti to advise the government there on tackling gang violence.
Yet his methods may yet come back to haunt him. Poverty and unemployment endure and those locked up will form new criminal networks. Bukele may find, like others before him, that suppression alone does not deliver lasting security or prosperity.
Image Credit/ Gage Skidmore
WAR ON WOKE
Florida Gov. Ron DeSantis, Trump’s top rival for the GOP nomination, is championing a multi-state coalition against President Biden’s environmental, social, and corporate governance (ESG) agenda. Last week he was joined by 18 governors, who are seeking to protect individuals from the ‘‘woke’ ESG movement which in their words, ‘threatens the vitality of the American economy and Americans' economic freedom.’
Last August, DeSantis passed a resolution barring Florida’s state pension fund managers from considering ESG in their investment practices, and the coalition is looking to take this state-wide. In Congress, they are attempting to thwart Biden’s plans to undo a Donald Trump-era requirement that mandates that workplace retirement plans focus purely on financial gains. This has now led to Biden using his first veto as President. House speaker, Kevin McCarthy, who is an opponent of Biden’s ESG agenda said of the move, “despite a bipartisan vote to block his ESG agenda – it’s clear Biden wants Wall Street to use your retirement savings to fund his far-left political causes.” As the ESG market becomes even more politicized, banks are reassessing their pitching language stateside and in some cases removing the acronym entirely.
While DeSantis and red-state politicians are retaliating in force against ‘woke’ corporate ESG, over in Europe the EU Commission is brandishing its regulatory pitchforks to do the opposite. On Wednesday it announced a New EU Directive “on green claims' ' that would sanction companies who used unsubstantiated, or misleading environmental claims with penalties amounting to at least 4% of revenue. Sustainability continues to be high on the agenda of the commission, the European Central Bank, and European businesses alike, while bodies like the US federal reserve have been comparatively slow to act. As we see newcomers like DeSantis challenge and probe the ‘ESG agenda’ of banks and asset managers in Congress, we could see the gap between Europe and the US widen even further.
Image Credit/ Mankind 2k
TROUBLE IN STORE
For decades, John Lewis has been a paragon of British retail. Its employee-ownership model, known as the partnership, is often cited as the way to motivate and fairly reward staff.
So, on the face of it, the uncertainty in this week’s news over the company’s financial future, and indeed the partnership model itself, comes as a real shock. But to retail analysts, a decline in the John Lewis Partnership’s fortunes were some time in the making. One pointed to eroding customer service, a “victim of regular cost-cutting and reducing investment in supporting the retail proposition”. Another put it more bluntly: “it is skeleton staff on the shop floor.” Scrimping on staff numbers has dented John Lewis’ brand, leading to a worsening performance. It is easy to see how things can spiral from there – and the impact of inflation has hit the ‘nice to have’ items on sale at John Lewis stores and the Partnership’s supermarket, Waitrose, more than other retailers.
The UK business media reported on rumours that the Partnership’s chair, Dame Sharon White, was on the hunt for equity investment. The corollary of injecting external capital would mean the end of the 100% employee ownership model – something previously considered unthinkable. The force of speculation led Dame Sharon to write a lengthy LinkedIn post stating she wants the partnership model to thrive for another 75 years.
Another Dame, Helena Morrissey, said there was at least one positive to come from the reaction to John Lewis’ travails: they have “affirmed its National Treasure status.” The Partnership is in a tight spot, but the loyalty of its customer base remains – for now.
Image Credit: Loren Javier
THAT BEAR IS BAD NEWS
The Weekend Box does its best to take timely news stories on large themes and make them digestible for our readers. On certain occasions, we must admit when a story is a lot to take in; ‘unconventional’ even by our standards of ‘Unconventional Wisdom’. Case in point: Hong Kong and Macau screenings of the Winnie the Pooh slasher movie ‘Blood and Honey’ this week have been cancelled, possibly for political reasons.
“Hold on,” our readers may be asking, “Winnie the Pooh: Blood and What?” To untangle this news, we must explain the bizarre circumstances that led to a ‘Winnie the Pooh’ slasher film existing in the first place. Development on ‘Blood and Honey’ began swiftly after the original Pooh stories entered the public domain. The film’s interpretation of the cuddly titular character and his friend Piglet as “villains…going on a rampage” made a splash online, as users were quick to respond to the idea (or gimmick) of the beloved characters being warped into murderous monsters.
“Makes sense, the internet eats up things like that. But why were the screenings cancelled?” It has been speculated the cancellations were due to China’s sensitivity around depictions of Winnie the Pooh, which have been used for mocking comparisons with President Xi Jinping in the past. This is not the first time a piece of horror media has been the subject of this specific brand of controversy: the Taiwanese horror video game ‘Devotion’ was pulled from circulation in 2019 due to an in-game reference to the president that mentioned the fictional bear.
Hong Kong audiences who hoped to see ‘Blood and Honey’ can take consolation in the fact that the creative mind behind the film has two more, non-Winnie the Pooh horror interpretations of childhood classics in the pipeline, which they should be able to enjoy without screenings being cancelled: ‘Bambi: The Reckoning’ and ‘Peter Pan: Neverland Nightmare’. “Hooray..?”
And that’s it for this week. I hope you found something of interest that you might want to delve into further. If so, please get in touch at cwilkins@audleyadvisors.com.
For now, that’s The Weekend Box officially closed.