July 2021 – Nick Corbishley

Quelle Surprise: Covid Cases Surge in Europe’s Tourism Hot Spots, Just One Month After Grand Reopening

It turns out that a massive increase in cross-border travel — particularly by air — is a great way of spreading an airborne virus.

“Pack your bags, Europe is opening back up!” That was the message sent out, to great fanfare, just a month ago. Many Northern Europeans, starved for the best part of two years of sun, sea and sand, flocked southward. But unfortunately, it turns out that cross-border travel — particularly by air — is a great way of spreading an airborne virus. The Covid-19 pandemic is once again raging in many of Europe’s vacation hot spots, from Portugal to Spain, to Malta and Greece. Catalonia, from where I am writing this article, is one of the worst hit.

For the first time in over a year and a half, Barcelona, the region’s capital, is crawling with tourists (albeit, thankfully, not nearly in the same numbers as before). But it’s unlikely to last, given that the number of Covid cases is surging to dangerous levels. With an infection rate of 1,160 per 100,000 over a 14-day period, Spain’s north-eastern region boasts one of the five worst rates of contagion in mainland Europe. Infections are expected to peak at the end of this month, by which point the region’s hospitals anticipate having as many as 500 patients in critical condition, said Gemma Craywinckel, the director of public health.

As recently as two weeks ago, the local government’s health secretary, Josep Maria Argimon, was blaming the rising cases on two factors: the “more contagious” delta variant and a surge in social interaction among local people, particularly the young as they embarked on their end-of-school-year trips and made merry during the Sant Joan midsummer festival (June 23). But last week he finally admitted that the recent surge in overseas arrivals had also played a part: “Catalonia’s position as an important tourist destination makes it more likely that an explosive situation can occur.”

Mask Aversion

It’s impossible to know how many of the incoming tourists have been vaccinated and how many haven’t. Based on my own on-the-ground observations, most of them are in their twenties, thirties or forties. Quite a few of them are not wearing masks as they pour into shops and other indoor settings, even though their use indoors is mandatory here in Spain. My wife, a jewellery designer who works in a craft jewellery store in the tourist-heavy barrio of El Borne, has to stop roughly one out of every three tourists that comes through the door. She respectfully but assertively asks them to don their mask. Many are happy to oblige, others somewhat less so.

“I don’t think that’ll be necessary,” said one happy-go-lucky American yesterday, as he sauntered into the store. “I’ve already had both jabs,” he said, with a touch of pride, to which my wife replied, again respectfully but a little more firmly: “I’ll ask you again: please put your mask on. In Spain it is the law. And just because you’ve had the vaccine doesn’t mean you can’t catch it and spread it to others.”

The fact that this is news to many of the shop’s customers is testament to just how poorly informed some vaccinated travellers appear to be. They genuinely seem to believe that the vaccine grants them total protection from contagion. Perhaps this should come as no surprise given the overly simplistic, often confusing messages they are receiving from their respective health authorities. That includes the absurd notion being broadcast by the US government that the current pandemic is exclusively a “pandemic of the unvaccinated”.

Recent weeks have produced more than enough evidence of breakthrough infections to dispel this idea. In early July, Israeli Health Ministry data suggested the Pfizer-BioNTech vaccine’s effectiveness in preventing infection had fallen as low as 64%, from over 90% pre-Delta. By this week that number had apparently nosedived to 39%. Two possible reasons cited for this are that delta is better than previous variants at evading the vaccine’s immune protection and the rapidly diminishing effectiveness of the vaccine over time. There’s also, of course, another possible explanation: the manufacturers over-egged the vaccine’s effectiveness.

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Remittances to Latin America Surge, Even As Virus Crisis Continues to Bite in Host Economies

One of the rare economic success stories of the past year. But there are also downsides and dark sides to the remittances story.

Between January and May of this year the total amount Mexico received in remittances — transfers of money by workers of Mexican descent mainly in the US but also other countries to individuals in Mexico — surged by 21.75% compared to the same period last year, from $15.75 billion to $19.17 billion. Spanish lender BBVA says it’s on target to set another annual record, of around $47 billion. That’s after increasing by 11.4% in 2020, to $40.6 billion. This all happened despite the fact that GDP in the US, where 98% of the remittances to Mexico originate, slumped by 3.5% last year, the worst annual decline since 1946.

Mexico is the third largest recipient country for remittances inflows worldwide, behind India ($83 billion of inflows in 2019) and China ($70 billion), both with populations more than ten times larger than Mexico’s. After nine consecutive years of increases in inflows, Mexico’s economy is receiving more than double the amount it received in 2011 ($19 billion). The most important host regions for remittance outflows are the United States and Canada ($200 billion), the Arabian peninsular ($130 billion) and Europe ($121 billion).

Mexico was not the only country in Latin America to witness a sharp rise in remittances last year. In El Salavador, where remittances account for 24% of GDP, $5.93 billion of remittances arrived in 2020, $275 million more than the previous year. The Dominican Republic saw its total remittance haul surge by 16%, to $8,219 million. A similar trend was observed in Honduras, Nicaragua and Guatemala. Bucking the Trend None of this was expected. In late April 2020, as the global economy seized up and financial markets cascaded, the World Bank released a press release warning that remittances were likely to drop significantly across the world’s low and middle-income economies:

Remittance flows are expected to fall across all World Bank Group regions, most notably in Europe and Central Asia (27.5 percent), followed by Sub-Saharan Africa (23.1 percent), South Asia (22.1 percent), the Middle East and North Africa (19.6 percent), Latin America and the Caribbean (19.3 percent), and East Asia and the Pacific (13 percent).

In the wake of the Global Financial Crisis, there was a six-year downtrend in remittances to Mexico, totalling 21%. Yet the opposite has happened during this downturn — and not just in Mexico. As the World Bank reported in May this year, despite COVID-19, remittance flows remained resilient in 2020, registering a smaller decline than previously projected:

Officially recorded remittance flows to low- and middle-income countries reached $540 billion in 2020, just 1.6 percent below the 2019 total of $548 billion, according to the latest Migration and Development Brief. The decline in recorded remittance flows in 2020 was smaller than the one during the 2009 global financial crisis (4.8 percent).

In some regions remittance income actually increased. In Latin America and the Caribbean it went up by 6.5%; in South Asia, by 5.2%, and in the Middle East and North Africa, by 2.3%. But it fell in East Asia and the Pacific (7.9%); in Europe and Central Asia (9.7%) and in sub-Saharan Africa (12.5%). Most of the decline in flows to Sub-Saharan Africa have been attributed to a 28% decline in remittance flows to Nigeria. Excluding those flows, remittances to Sub-Saharan Africa increased by 2.3 percent.

Six Possible Reasons

It is still not entirely clear why remittances have weathered this crisis — at least so far — so much better than the last one. Here are six possible reasons:

Fiscal support initiatives. Most countries with large populations of migrant workers have taken measures to support businesses and jobs, allowing remittances to continue to flow. In the US workers with roots in Mexico and other Latin American countries have received government support, such as unemployment benefits and stimulus money, which enabled them to continue sending money back to their families.
Essential jobs. Many Latino immigrants in the US kept hold of their jobs because their jobs were deemed essential, says Sonia Plaza, co-chair of the World Bank’s Global Knowledge Association for Migration and Development (KNOMAD): “They have been in everything from cleaning services, hospitals and everything that provides services despite COVID-19.” For this reason they have also been disproportionately impacted by the health fallout of COVID-19. According to the CDC, Hispanics and Latinos are 1.9 times more likely to contract COVID-19 than their non-Hispanic white counterparts, 2.8 times more likely to be hospitalized from COVID-19 and 2.3 times more likely to die from COVID-19.
Acquired human resilience. Most Latin American migrants are well accustomed to big economic crises, says Plaza. As such, when a crisis like this one hits, they are more flexible and willing to shift to other sectors to find new work.
The economic fallout of the virus crisis in the US last year was not quite as brutal as initially feared. In general, the income from remittances received from the US, where the majority of Latin American immigrants reside, did not decrease last year. One reason for this was the country’s comparatively better — or rather, less bad — economic performance. Last summer, the IMF forecast that the US economy would shrink by 5.9%. In the end, it shrank by just 3.5%. By contrast, some large European economies contracted by more than double that, including France (-8.23%), Italy (-8.87%) and Spain (-11%). It’s worth noting that remittance flows between Spain and most Latin American countries fell sharply last year.
The formalization of payment transfers. Before the pandemic-induced lockdowns and travel restrictions made it much more difficult to cross borders, many immigrants carried the remittances home with them or sent them via a friend, or with a courier. When the borders closed, they had no choice but to send them through official channels, whether via banks or money transfer companies. And that meant that the money was more likely to show up in official records.
Heightened solidarity. If things were bad in the US last year, they were orders of magnitude worse in countries like Mexico, El Salvador and the Dominican Republic, which have neither the fiscal firepower or monetary leeway to offset the external and internal shocks unleashed by the pandemic. Against this backdrop, many migrant workers in the U.S. and elsewhere who weren’t overly impacted by the crisis — such as staff at hospitals treating Covid patients or construction workers — sent more money to their families to help them weather the crisis back home.

That money has played a vital role in sustaining not only families and local communities but also entire regional and national economies. Most of the money that gets sent is spent very quickly into the local economy, often on rents, basic provisions or building costs.

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Vaccine Certificates Are Making Global Travel Harder, Not Easier

Vaccine certificates were ostensibly rolled out to help facilitate cross-border travel as vaccination numbers increased. But thanks to vaccine geopolitics, the opposite is happening.

Montse, a Mexican friend of a Catalan friend of mine, was supposed to come to Barcelona at the beginning of July, as she does just about every year, to visit old friends and family. Last year, for obvious reasons, she didn’t. But this year was going to be different. She made sure she did everything right. She booked the flight months in advance, got fully vaccinated, through the university she works at, and did a PCR test two days before her flight, which came out negative. Yet she never left the ground.

On her arrival at Mexico City’s Benito Juarez airport, Montse was politely informed by Aeromexico/KLM staff that she wouldn’t be able to board the plane. When she asked why, she was told: “you took the wrong vaccine.” That vaccine was Chinese-manufactured Sinopharm.

Wrong Vaccines

This is happening to more and more people, particularly in less advanced economies, as vaccine passports sprout into existence in more and more places. Countries like Israel, Saudi Arabia, and Singapore have already introduced them in recent months. On July 1, the EU became the first major global economy to do so, with the ostensible aim of easing travel within and (in theory) to Europe for EU citizens and residents who are fully vaccinated or have recovered from COVID-19. But it’s also making it hellishly hard for many vaccinated people from other parts of the world to visit the continent.

The reason for this is that the EU (European Union) Digital COVID Certificate programme only relaxes travel to and within the region for recipients of one of the four vaccines approved by the European Medicines Agency (EMA): Comirnaty (BioNTech-Pfizer), Janssen (Johnson & Johnson), Spikevax (Moderna) and Vaxzevria (Oxford-AstraZeneca). Among the vaccines that haven’t made the grade are Russia’s Sputnik V, China’s Sinopharm, Sinovac and Cansino; India’s first indigenous Covid-19 vaccine, Covaxin, and Covishield, the Oxford-AstraZeneca vaccine that is produced under license by the Serum Institute of India.

This means that people from places that are not on the EU’s safe list of third-party countries that have received one of these vaccines are barred entry, unless the country they hope to visit has made exemptions. Their number is legion.

Russian and Chinese-made vaccines, together with Covishield, have dominated vaccine supplies in many parts of Asia, Latin America and Africa, mainly because US pharmaceuticals couldn’t find a good enough profit angle for their own vaccines while many Western governments have preferred to hoard their own supplies. The result? While around 25% of the world’s population has received at least one dose of a COVID-19 vaccine, just 1% of people from low-income countries are partially vaccinated.

Even the World Health Organization is calling the West out on its greed. “Some countries and regions are actually ordering millions of booster doses before other countries have had supplies to vaccinate their health workers and most vulnerable”, said World Health Organization Leader Tedros Adhanom Gebreyesus, adding that the global community is “making conscious choices right now not to protect those most in need.”

The World Health Organization also flagged concerns earlier this year that vaccine certificates would create “two types of citizen”: the vaccinated and the non-vaccinated. This is particularly unfair to those in the many countries where it is still difficult to access vaccines. They will essentially be unable to travel beyond their borders for the foreseeable future. But the problem goes even deeper than that. It now turns out that many of the millions in these countries who have managed to get vaccinated will also be unable to travel to places where the vaccines they have taken are not approved…

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Does the Fate of Ivermectin As a Covid-19 Treatment Rest in the Hands of the Deeply Conflicted Bill & Melinda Gates Foundation?

One of the world’s biggest vaccine proponents and strident defender of intellectual property rights is funding, directly and indirectly, large trials into cheap, off-patent, off-label COVID-19 treatments, including ivermectin.

The evidence backing ivermectin’s efficacy against Covid-19 continues to stack up, even as most health authorities refuse to approve its use. The last two months have seen the publication of three peer-reviewed meta-analyses demonstrating clear benefits. A review by Pierre Kory et al summarised findings from 18 randomized controlled treatment trials, concluding that ivermectin produced “large, statistically significant reductions in mortality, time to clinical recovery, and time to viral clearance.” Another study, led by Doctor Andrew Hill, a well-respected international medical researcher reported a 56% reduction in mortality together with favourable clinical recovery and reduced hospitalisation.

A third study, by Andrew Bryant et al, analysed the existing data from clinical trials according to conservative Cochrane meta-analysis standards — a gold-standard in science. Published in the American Journal of Therapeutics, the study found that “ivermectin prophylaxis reduced COVID-19 infection by an average 86%”. The study concluded that “large reductions in COVID-19 deaths are possible using ivermectin”, adding that “the apparent safety and low cost suggest that ivermectin is likely to have a significant impact on the SARS-CoV-2 pandemic globally.”

Still in Limbo

But national and supranational health authorities continue to drag their feet. The US Food and Drug Administration, together with the European Medicines Agency (EMA) and the World Health Organization, insist that there is still not enough good quality data to approve ivermectin as an off-label treatment against Covid. Its use, they say, should therefore be restricted to well-designed, randomised control trials.

Over 20 countries around the world, including India, Bolivia, Mexico and Slovakia, have ignored that advice and are using the medicine, to some degree or another, largely with significant success. The latest country to do so is Indonesia, which is in the grip of its biggest wave of infections to date. In most countries, however, the drug is still in limbo as their respective health authorities await the outcome of large randomised controlled trials.

The problem is that large randomised trials are prohibitively expensive, costing millions of dollars to conduct. As a result, they tend to be funded by large pharmaceutical companies seeking FDA or EMA approval for the drugs they themselves have developed. It also makes it difficult to secure new indications for generic medications that are already approved for other purposes. After all, who is willing to invest millions of dollars testing a drug that is likely to generate little, if any, financial return?

But with the world fighting a losing battle against a fast-spreading, rapidly evolving coronavirus that has sent the global economy spinning, desperate times call for desperate measures. Money has been found and mobilised. According to Hill et al, there are at least five large, placebo-controlled clinical trials on the use of ivermectin for COVID-19 currently underway.

One of them, dubbed the TOGETHER trial, is being conducted at McMaster University in Ontario, Canada. The trial has been running since last summer. The goal, according to the trial’s official website, is to “identify which repurposed therapies are most effective, in order to slow the pandemic while many countries await the delivery of vaccines.”

The trial has already tested and “dropped” hydroxychloriquine, lopinavir/ritonavir (an antiretroviral medication used in the treatment and prevention of HIV/AIDS) and metformin (an anti-diabetes medication). It is currently testing fluvoxamine (an anti-depressant), interferon-lambda (a regulator of intenstinal viruses), doxazosin (used to treat prostatic hyperplasia and hypertension) and ivermectin and will report its findings in the coming months.

There’s only one potential problem: where it gets its money.

The Together Trial has received millions in funding from three main sources: the Rainwater Foundation; Fast Grants, an American charity that provides funding for scientific research whose donors include Arnold Ventures, The Chan Zuckerberg Initiative, Jack Dorsey and Elon Musk; and last but not least, the Bill and Melinda Gates Foundation.

The Gates Foundation, as readers are no doubt aware, is one of the world’s biggest backers of vaccine research, as well as the second largest funder of the World Health Organization (WHO). It is also heavily invested in large pharmaceutical companies, including Pfizer and BioNTech, the joint manufacturers of the world’s most profitable Covid-19 vaccine, and Merck, the original manufacturer of ivermectin which has an antiviral compound, molnupiravir, in Phase 3 clinical trials for COVID-19.

As well as founding and funding the Vaccine Alliance (GAVI), the Gates Foundation is a passionate defender of pharmaceutical companies’ intellectual property rights. For months the world’s largest private foundation blocked attempts to temporarily lift coronavirus vaccine patent protections, preventing poorer countries from gaining cheaper access to COVID-19 vaccines, until it was finally forced to reverse course. As for McMaster, it is developing homegrown vaccines to fight COVID-19 in its “specialised lab and production facilities.”

In other words, an organisation that is hugely committed and invested in vaccine development is running one of the world’s largest clinical trials into one of the biggest threats facing COVID-19 vaccines: existing off-label medicines. To top it off, the trial is being part-financed by arguably the world’s biggest vaccine cheerleader whose interests are closely aligned with the world’s biggest pharmaceutical companies, some of which it is directly invested it.

The potential for conflicts of interest is huge. If a cheap, off-patent drug like ivermectin were approved for use against COVID and if it worked as effectively and as safely as most trials suggest, it would pose a direct threat to novel treatments being rolled out by pharmaceutical companies whose safety data is no match for ivermectin’s. It could also even jeopardise the emergency use authorisation granted to the COVID-19 vaccines, one of the basic conditions for which is that there are no alternative effective treatments available for the disease. As such, if ivermectin or some other promising medicine were green-lighted, the vaccines could be stripped of authorisation.

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A Worrying Trend Emerges in South America, As Right-Wing Populists Take A Leaf Out of Trump and Netanyahu’s Playbook

If the elected leaders of long-established democracies like the US and Israel can question the workings of their electoral system, why can’t others of less-established ones?

Exactly one month has passed since 17.4 million Peruvians cast their ballot in the country’s run-off presidential elections. But the country still has no president. The losing candidate, Keiko Fujimori, a former congresswoman and daughter of former President Alberto Fujimori, has refused to concede, claiming that her opponent Pedro Castillo’s party, Peru Libre, committed voter fraud. And now it transpires that Peru’s version of Rasputin is back: a recent investigation revealed that Vladimir Montesinos, a former long-standing head of Peru’s intelligence service who is in jail for crimes against humanity, has been pulling strings from behind the scenes (and behind bars) to try to get Fujimori proclaimed victor.

But it doesn’t appear to be working — at least not if the intended goal is to win the election for Fujimori. Her team’s legal challenges have so far led nowhere. A call by former high-ranking military officers for a military coup has also failed. Peru’s National Elections Jury (JNE) has dismissed all of Fujimori’s campaign’s appeals against the electoral outcome. International observers from the Organization of American States (OAS) and the European Union (EU), among others, have ruled out any irregularities. And the United States and European Union have publicly praised the electoral process.

But the endless succession of appeals serve another purpose: they buy Fujimori time. And time is something she desperately needs rights now. If she doesn’t win this election, she will probably end up back behind bars, like her father and “Tio” Montesinos. Perhaps even more importantly, the ongoing legal challenges help to cement and normalise the idea among a large section of Peru’s population, particularly in the capital, Lima, that Castillo won the election through fraudulent means, despite all the evidence to the contrary. One recent poll showed that 31% of Peruvians thought the claims were credible.

“Rasputin” Is Back

Ironically, the only side that has actually been caught committing fraud so far is the Fujimori campaign. In recent days recordings have been leaked of telephone conversations between Montesinos, who is widely regarded as the power behind the throne in President Alberto Fujimori’s government, which ruled Peru from 1990 to 2000, and a former military commander discussing bribing three members of the National Electoral Tribunal (JNE) to secure Keiko’s victory. But the plan didn’t pan out.

“If we had done things the way we had initially proposed, we wouldn’t be in this shitty situation,” says Montesinos in one of the recordings. “They [Keiko’s campaign team] can’t do anything now. I’m just trying to help, because if they don’t win, they are screwed: the girl (Keiko) will end up in jail and the other man (her father, Alberto) will die where he is (also in jail). That is the situation.”

When it comes to bribing officials, Montesinos — who is sometimes referred to as Alberto Fujimori’s “Rasputin” — has form.

In 2000, secret videos recorded by Montesinos himself came to light showing him bribing elected congressmen into leaving the opposition and joining the pro-Fujimori group in Congress. Six years later, he was sentenced to 20 years’ imprisonment for crimes against humanity. He was also found guilty of operating a vast web of illegal activities, including embezzlement, graft, gunrunning, and drug trafficking. In 2016 he received an additional 22 years of prison time for the forced disappearance of a professor and two students in 1993. They were among thousands who were forcibly disappeared during Peru’s internal conflict (1980-2000).

Now, Montesinos is hatching plots from behind bars. While it is unlikely that he will be able to actually get Castillo’s narrow electoral victory overturned, the longer he and the Fujimoris can delay Castillo’s inauguration, the more difficult it will be for Castillo’s government to govern once it does take power.

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HSBC in Big Trouble in its Biggest Market, China

As HSBC pivots further to Asia and away from the West, its business in China gets more and more complicated.

HSBC, headquartered in the UK, is first and foremost an Asian bank. The Hongkong and Shanghai Banking Corporation Limited cut its teeth in the 19th century in Greater China. In 2020, its Mainland and Hong Kong operations accounted for 39% of its annual $50 billion in revenue, while the United Kingdom, its second largest market, brought in 28%. The bank is now selling off its retail banking units in France and the United States and scaling back its presence in some emerging markets in order to accelerate its eastward pivot.

But there’s a problem with this plan: Its success rests largely on the bank’s ability to maintain good relations with the Chinese government. And that is proving to be a tough proposition.

Relations have soured significantly over the past two years after it was revealed in 2019 that HSBC had ratted out Chinese telecom giant Huawei to the U.S. Department of Justice for breaching U.S. sanctions on Iran. The information provided by HSBC led to the arrest of Meng Wanzhou, Huawei’s chief financial officer and daughter of the company’s founder, in Vancouver in 2018.

As geopolitical tensions have escalated between the US and China, HSBC has had to walk a tightrope in its relations with China on the one hand and Washington and London on the other. The lenders’ travails reveal a core challenge for multinational firms operating in China: the market is vital to their growth prospects, but Western firms doing business there increasingly risk being mired in the ratcheting tensions between Beijing and the West.

But given the size and growth of the market, many big global banks have decided to continue expanding in China, whether organically or through acquisitions. HSBC Holdings PLC, Standard Chartered PLC and Citigroup Inc. have all unveiled plans to beef up their wealth management operations in China, targeting the growing middle class. But with net profits for foreign lenders falling precipitously and Beijing demanding that foreign companies toe the line as the US ramps up sanctions on China, it’s getting more and more complicated.

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