Weekend Box #107: #FreeKara-Murza, Tik-Scholz & more
Welcome to The Weekend Box, Audley’s weekly round-up of interesting or obscure political, business and cultural news from around the world.
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#FREEKARA-MURZA
What’s the cost of living a principled life? How far would your courage take you? A little over two years ago, Russian journalist and political activist Vladimir Kara-Murza, a married father of two, returned to his native country and publicly spoke out to condemn the kleptocratic regime of Vladimir Putin and his invasion of Ukraine.
Friends urged him not to go. As a vocal critic of the Putin regime and activist for the Magnitsky Acts, passed in some 35 countries around the world and sanctioning Russian individuals involved in corruption and human rights abuses, Kara-Murza was already a marked man. This was evidenced by two attempts to poison him with Novichok nerve agents, which he had been lucky to survive.
His response to pleas not to return to Russia was to ask how he could implore other Russians to stand against Vladimir Putin if he did not do so himself. Within hours of an interview from Moscow with CNN, where he described Putin’s regime as ‘a regime of murderers’ and predicted that the Ukraine war would ultimately be Putin’s downfall, he was arrested, subsequently charged with treason, and sentenced to 25 years.
Two years later, in isolation in a Siberian prison camp similar to that where another opposition leader Alexei Navalny was held then almost certainly murdered, and after most other Russian opposition leaders have been killed, Kara-Murza still speaks out, unbroken despite declining in health stemming from his poisoning and the denial of medical treatment.
He is not forgotten. At an anniversary event on Thursday to call for his release, an impressive gathering of advocates, including wife Evgenia and former state hostage Nazanin Zaghari-Ratcliffe, all paid tribute to Kara-Murza as the personification of an alternative Russia and called for action to #FreeKaraMurza. Foreign Secretary, keep at it.
Image credit/Presidency of the Republic of Ecuador on Flickr/Public Domain
ECUADOR KICKS DOWN DOORS IN MEXICO
In a dramatic escalation of diplomatic tensions, Mexico has lodged a formal complaint with the International Court of Justice calling for Ecuador to be expelled from the UN, following a contentious police raid on its embassy in the capital Quito on April 5th.
This unusual move came after Ecuadorian forces stormed the Mexican embassy to arrest Jorge Glas, Ecuador’s former vice-president, who was seeking asylum within its walls. The UN Secretary General, António Guterres, has added his voice to the criticism of Ecuador’s decision to storm the embassy. Several international experts have described the raid as a flagrant breach of international diplomatic norms.
Mexico's President Andrés Manuel López Obrador is also demanding that Ecuador issue a public apology, compensate for damages, and vow to refrain from such actions in the future.
The raid has been at the heart of soaring tensions between the two nations since Glas, a fugitive convicted of criminal activities, sought refuge at the Mexican embassy in December. Ecuador insists that Glas' crimes are criminal and not political, challenging Mexico's decision to consider asylum.
Mexico has severed diplomatic ties with Ecuador following the incident. Numerous Latin American leaders have also spoken out, condemning the raid as a breach of the Vienna convention on diplomatic relations.
During a recent meeting of the Organization of American States (OAS) in Washington DC, Ecuador’s deputy minister of human mobility argued that Glas did not qualify for asylum and was not politically persecuted. However, OAS Secretary General Luis Almagro countered, emphasizing that violent incursions and the detention of asylum seekers do not contribute to peaceful resolutions and should not set a precedent. This high-stakes diplomatic row leaves the international community watching closely as tensions continue to grow.
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THE RISE OF ZIG - NO STARDUST
Zimbabwe has introduced a new currency, the Zimbabwe Gold (ZiG), in a bid to stabilise its economy after years of financial instability and hyperinflation.
The ZiG is a gold-backed currency aimed at replacing the rapidly devaluing Zimbabwean dollar. Central Bank Governor John Mushayavanhu announced that the ZiG would have a market-determined exchange rate, starting trading at 13.56 to the US dollar.
The introduction of the ZiG is Zimbabwe's sixth attempt since 2008 to establish a stable national currency, following the country's experience with hyperinflation that once reached 11,200,000%.
ZiG is fully backed by significant gold and foreign currency reserves, aiming to restore public confidence in the monetary system and the economy.
Zimbabweans have 21 days to exchange old notes for the new ZiG currency. The US dollar will remain legal tender, reflecting a lack of trust in local currency due to past economic crises.
About 80% of all transactions are conducted in US dollars. Even state-owned companies, such as the Zimbabwe Electricity Supply Authority, are urging customers to pay their electricity bills in US dollars.
The central bank said that the ZiG will be closely monitored to prevent overprinting and devaluation. However, economists remain sceptical about the stability and acceptance of the new currency, citing gold's variable value and the government's track record.
Some Zimbabweans greeted the new currency with dark humour. Tongai Dube, a maths teacher, said, “to be honest, I couldn't help but laugh. What they simply did was what they used to do: cut zeros off the currency and present it as something new.”
Robert Mugabe may be long gone, but his legacy of his disastrous economic policies remains. New currencies won’t change the fundamental troubles of political instability and corruption undermining the Zimbabwean people’s hopes of prosperity.
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TIK-SCHOLZ
In the battle between security concerns around China’s access to the world’s data and electoral vote-winning, it seems vote-winning is, er, winning. This week Olaf Scholz was the latest in a series of high-profile politicians taking to TikTok to spread their message to young voters.
Announcing his arrival on the platform, the German Chancellor reassured potential viewers, “I will not dance. Promise.” He follows in the footsteps of French President Emmanuel Macron, who joined the platform in 2020, and US President Joe Biden, whose first post in January was captioned, ‘lol hey guys’, and saw him answering questions about the impending Superbowl final. Ireland’s youngest leader, Simon Harris, is dubbed the ‘TikTok Taoiseach’ for his active engagement with his 95,000 followers.
The purpose of these leaders joining the platform is invariably to gather support among younger voters, particularly critical for Scholz given the upcoming European elections in June - the voting age is 16 - and crucial regional German elections in September. He is also competing with rivals who have leveraged the channel effectively. The hard-right Alternative for Germany (AfD) has 411,600 followers and Maximilian Krah, its leading candidate in the European election, combines political messages with the kind of dating advice that is popular on the channel: ‘Real men are right wing. Real men have ideals. Real men are patriots. Then you’ll get a girlfriend.’
Scholz’s move marks a divergence in German government policy, which last year ordered its ministries’ staff to delete TikTok on work-related devices for security reasons. Security concerns around the app are well-documented and governments have taken action in various forms. Scholz’s spokesperson confirmed that his debut on the app coinciding with an upcoming visit to China this weekend was, however, simply ‘chance’.
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K-POP KNOCKED OFF THE TOP?
K-pop’s ascendancy as a pop-cultural force suddenly looks less secure, as anxiety is growing within the market that it may be past its peak.
Shares in a number of K-pop’s major music agencies are down “as much as nearly 50% from a 2023 high,” leaving firms eager to find new growth opportunities. The slump comes at a time when two acts who could be said to represent the peak of K-pop’s relevancy, BTS and Blackpink, are on hiatus, and some are in fact pointing to the saturation of groups since K-pop became a global phenomenon as a possible reason for the downturn.
Falling album sales, particularly in China, have also been suggested as an explanation. In a research note, Goldman Sachs – which believes shares in the three largest Korean management companies should be 85-137% higher than in mid-March – argues that the market should focus instead on offline concert audiences as the more important metric for measuring the appetite for K-pop. Similarly, HSBC analysts have said: “Current concerns about the K-pop outlook do appear to be excessive… [there are] various other ways to monetize K-pop fans.”
Agencies are currently pursuing different strategies, however. Major firm Hybe Co. is trying to widen the net, having signed a deal with Universal Music Group NA to increase “its digital and geographical reach.” Other firms are promoting new acts to offset headwinds from album sales in China.
In spite of the downturn, Bloomberg note that shares in Hybe and other firms are now trading “at about one standard deviation below their five-year average forward earnings,” and Morgan Stanley has described the risk-reward for investors in K-pop as “attractive.” So, perhaps it is too early to say ‘sorry to burst your bubble’ – or should that be ‘pop your bubble’?
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.