Bern turn: New Hampshire’s primary

Hey, Ryan Reynolds here wishing you a very happy half off holiday because right now Mint Mobile is offering you the gift of 50% off unlimited. To be clear, that's half the price, not half the service. Mint is still premium unlimited wireless for a great price. So that means a half day. Yeah. Give it a try@mintmobile.com Switch upfront payment of $45 for three month plan equivalent to $15 per month. Required new customer offer for first three months only. Speed slow. 135 gigabytes of network busy. Taxes and fees extra. See mintmobile.com hey, Ryan Reynolds here for Mint Mobile. You know, one of the perks about having four kids that you know about is actually getting a direct line to the big man up north. And this year he wants you to know the best gift that you can give someone is the gift of Mint Mobile's unlimited wireless for $15 a month. Now you don't even need to wrap it. Give it a try@mintmobile.com Switch upfront payment of $45 for a three month plan equivalent to $15 per month. Required new customer offer for first three months only. Speed slow after 35 gigabytes. If network's busy, taxes and fees extra. See mintmobile.com. Hello and welcome to the Intelligence on Economist Radio. I'm your host, Jason Palmer. Every weekday we provide a fresh perspective on the events shaping your world. It'll be a tense meeting today between Argentine officials and the International Monetary Fund. The IMF has coughed up its largest bailout ever and. But the Argentine administration is stalling on keeping up payments. Which side will blink? And everybody knows how bad cattle farming is for the environment. Not everybody knows just how bad shrimp farming is. Now scientists in Singapore have the solution, a nutrient solution in which they're growing artificial shrimp from scratch. First up, though, Yesterday in New Hampshire, America held its first primary elections for the 2020 presidential race. Unlike in the Iowa caucuses earlier this month, clear results came swiftly. This victory here is the beginning of the end for Donald Trump. As polls had predicted, Senator Bernie Sanders led the pack, just ahead of Pete Buttigieg.

We're going to Nevada.

We're going to South Carolina. We're going to win those states as well. And Senator Amy Klobuchar made a comeback, placing third with 20% of the vote. There's still plenty of campaigning to be done as more primaries and caucuses play out. But Iowa and New Hampshire, the sites of the first votes on candidates, play an important role, perhaps more psychological than mathematical, in slimming down the field. No Democrat has gone on to win the presidency. Who didn't place first or second in those states. That's a troubling fact for Senator Elizabeth Warren and former Vice President Joe Biden fourth and fifth place respectively. Both gave similarly positive assessments after the result.

Our campaign is built for the long.

Haul.

And we are just getting started. It ain't over, man.

We're just getting started. Our US Policy correspondent, Idris Khloon was in New Hampshire for the votes.

The interesting results, as much as who did well is who did poorly and Elizabeth Warren did pretty badly. She got 9% of the vote. She doesn't seem to have a grip on the liberal wing of the party as Mr. Sanders does. She has now reformulated her campaign and says that she is the unity candidate. Traditionally, that's looked like a tough perch. Kamala Harris tried to do it. It didn't work out so well for her. Cory Booker tried to do that. It didn't work out so well for him. And most dramatically is Joe Biden's fifth place finish. He got just 8% of the vote. For someone who sells himself to voters on electability and experience, the fact that he's not able to win a single election looks troubling for him.

And how significant do you think it is that Mr. Sanders won as was expected? Does that look like a lead he can maintain?

Bernie's probably the front runner to win the entire nomination at this point. The fact that he's won slim victories in Iowa and New Hampshire is worth noting. But he's won those victories outright, which is important. And I think that part of his strength comes from from the fact that he has really solidified control over the liberal wing of the party. And the moderate faction seems divided. There isn't a clear standard bearer who can take over. Biden is going to limp on through South Carolina and Nevada. Buttigieg is looking strong. Klobuchar has some new wind breathed into her campaign. And there's a looming question of Michael Bloomberg's intervention. He has sat out the four early primary states. He's going to get involved in the Super Tuesday states where he's been spending a time of lot hundreds of millions of dollars on advertising. That might mean that the moderates are continuously fractured for a longer time than they would be, meaning that there isn't a real clear alternative to Senator Sanders on his way to the nomination. And there was a similar dynamic in 2016 where Donald Trump was initially supported by a strong, enthusiastic faction of the party, but a minority faction.

We wanna thank the people of New Hampshire, right. Do we love the people of New Hampshire?

And the Republicans were not able to unify around a single opposition candidate, someone like Marco Rubio or Jeb Bush, until Trump had already built up a commanding lead in the delegate counts. You can imagine a scenario in which Senator Sanders is able to concoct a similar strategy all the way to the Democratic National Convention, which will be held in Milwaukee.

And Mr. Sanders and Mr. Buttigieg sort of swapped first and second place after Iowa. What do you make of Mr. Buttigieg's chances now? He's made a strong showing in New Hampshire.

It's definitely good for Buttigieg to be winning Iowa. It's good for him to narrowly place second in New Hampshire. The difficulty for him in terms of the rest of the race is that Iowa and New Hampshire are exceptionally white states. Buttigieg does well with that demographic. He's not doing as well with black voters or with Hispanic voters. If Buttigieg is not able to make inroads with non white voters, then he's going to have a very difficult time actually shoring up votes in the upcoming states. And if that happens, then the money could dry up, which is another thing that's at play here. That all could change the length at which the campaigns are able to keep themselves afloat.

And you mentioned Mr. Biden as limping on. Is there still a chance he can come back from this, or do you think his campaign is falling apart?

Every campaign that does poorly in Iowa and New Hampshire comes up with an explanation for how they're going to mount a comeback strategy in the future states. Historically, that has always looked like a long shot. Biden is now in that position of having to come up with a strategy. Right now that all hinges on South Carolina. That's why he went there. He skipped over Nevada, which actually votes before South Carolina in part because that's his last stand. That's his wall. If he's unable to actually get a win, a substantial win in South Carolina, it looks really difficult.

What about Amy Klobuchar's good night? How do you expect things to play out for her now?

She's definitely got momentum. I don't want to say Clobementum, because that's a gross portmanteau. The issue with her is going to be the lack of a strong campaign infrastructure in the upcoming states, I think in part because she didn't expect to be doing as well as she's doing now. But again, she could contribute to the kind of splitting of the moderate wing, which may ultimately end up being beneficial towards Sanders, especially if Elizabeth Warren continues her fate.

And of course, a couple of candidates dropped out last night. The entrepreneur Andrew Yang, Senator Michael Bennett. The PAC is thinning, but it still isn't very thin.

Yes, the pack will keep getting smaller, in part because it's already so big and it's still, I think, unusually large in part because of how chaotic the Iowa caucuses were. The traditional role of winnowing was kind of lost out of Iowa, and the fact that all the candidates are fairly bunched together by historical standards has limited the winnowing effect of places like Iowa, New Hampshire.

I guess we should be grateful we can talk about results today, given the fiasco after the Iowa caucuses, the likes of which we won't see again, I hope.

Well, in Iowa, it's organized by the Democratic Party. In New Hampshire, which is a primary as opposed to a caucus, it's run by the state. So, you know, states are generally pretty good at running elections in America and that should not be a problem. I think in the upcoming primary states, Nevada is a caucus and they were planning to use the same app that Iowa used so well, but they have since ditched that plan. And in theory that will mean that the caucuses are conducted more smoothly and that results are transmitted within, say, a week of the actual election.

And what next then? What to look out for?

There's another debate next week. There is a caucus in Nevada on February 22, which will feature a large number of Hispanic voters voting for the first time. And then on the 29th, a week later is the South Carolina primary, which of course has a substantial portion of black voters that will be critical for determining Biden's last stand. And Super Tuesday comes on March 3, just a couple days after South Carolina. That will feature the entry of Bloomberg and we'll see how well he stacks up against the competition. So far, none of them have been able to compete. We'll see what the power of money is, how many friends it can buy you. One thing about the early primary states is that even there are four of them, but they account for about a tenth of the total votes that are cast on Super Tuesday. In terms of actually determining who is likeliest to win the night nomination, Super Tuesday is much, much more important and we should have a much smaller field after Super Tuesday. We should have a much clearer sense of who is on track to actually win the nomination afterwards.

Thanks for your time, Idris, and happy onward travels.

Thanks a lot for having me.

Argentina is running out of money and is at risk of defaulting on its deb. Today, a mission from its biggest creditor, the International Monetary Fund, arrives in Buenos Aires for talks. The IMF granted its largest ever bailout to Argentina in 2018 to the tune of $57 billion. 44 billion of that has already been handed over. But that's just part of the country's hundred billion dollar overall debt that it needs to restructure. And a deal with the IMF is seen as critical to negotiations with private creditors. On Saturday, firebrand Vice President Cristina Fernandez de Kirchner said the government would not repay even half a cent of its IMF loan before the country emerges from recession. Argentina has already defaulted eight times in its history. Another failure to pay would spell disaster for the country and for the populist Peronist movement that leads it. But it might also have serious consequences for the imf, which is under fire for its handling of the bailout. Those looming fears might actually be good news for this week's negotiations.

As we go into these talks today, I think there's a measure of optimism on both sides and I think the fear of failure is a serious factor there.

David Smith is our Argentina correspondent, reporting from Buenos Aires.

Argentina faces an economic crisis. Very high inflation, a deep recession, rising unemployment, and the prospect of another default would be semi catastrophic for this country. At the same time, on the other side, I think we can see an institution, the imf, that is facing serious questions both internally and externally on the way that it managed and handled this record loan to Argentina over the past couple of years. So I think, you know, yes, the stakes are high for both, but equally the fear of failure is serious. And I think that drives both sides to compromise over the next week or so.

And what is it about what the IMF has done that's being called into question? In what way do people think the bailout has been mismanaged?

Well, a couple of years ago, when the last Argentine government of Mauricio Macri turned to the IMF amid a crisis over devaluation of the peso and a lack of confidence, basically the IMF stepped in with a record loan, $57 billion, 44 billion, which has now been taken in total. And the management of that was showing a degree more flexibility than the IMF has traditionally in the past. And the consequences were that inflation didn't come down, unemployment rose, a deep recession began. And at the IMF in Washington, it's clear that there have been serious questions internally over the way this was handled and whether the institution should have stuck to the principles Going in of a sustainable economic plan going forward, rather than showing the kind of flexibility, particularly when the peso was devalued and the government of Mauricio Macri was allowed to intervene on the markets to prop it up with IMF money.

And what is the Argentine administration aiming for in these talks?

The aim of the new government of Alberto Fernandez and his vice president, Cristina Fernandez de Kirschner. They don't necessarily speak the same voice, by the way. Alberto Fernandez's view is that he wants a compromise. He wants a settlement with the IMF based on the idea that the country must grow first and that the country must come out of recession. And then in time, probably in two to three years, putting back the debt timeline, Argentina was due to start repaying next year to the IMF. The government is looking at minimum 2023, 2024, before beginning to pay back. Should be said that his vice president, Cristina Fernandez de Kirschner, is suggesting that the IMF should take a haircut, which is not what the IMF wants to hear and not necessarily what the Fernandez government wants to put out there as we go into these negotiations.

But how would the IMF deal with simply the request for a stay of execution, do you think?

Oh, I think there's a willingness to listen. I think the key, I gather, from IMF sources is that there is a sustainable plan from the Fernandez government. So you look at balancing the budget, which they're hoping to do this year. You look at dealing with some fundamental structural issues, for example, de indexing, pensions, the state pension program here from inflation. So in other words, you don't give a pensioner if inflation is running at more than 50%, which it is. You don't give them 50% immediately because that in turn becomes the fuel for inflation. This is a symbol of where the IMF wants this to go and where the government is showing that it's willing to listen and in a sense, accept that there has to be a sustainable agenda as well.

So there are real, concrete connections then to the way Argentines lead their lives. What did they make of these negotiations and the current status quo?

Well, there's a very deep skepticism about the IMF in this country. You only have to go back to the country's collapse in 2001 and the default that followed, to know that many Argentines feel that the imf, while a helpful resource on occasions, then expects the country to do as it wishes. You know, I saw one gentleman in line the other day at a supermarket publicly bemoaning the IMF and That speaks to, I think, 60%, we're told in the polls, who view the IMF negatively. But having said all that, I think there is a growing recognition on both sides here that they can't go back to the way it was. And, you know, we have to look no further than the fact, Jason, that in the past, on occasions, Peronist governments in particular, have used the threat of default as a negotiating tool. We're not hearing that this time. We're hearing no, we want to pay our debts. We need more time. Give us that time so that we can recover.

But as you say, this kind of standoff with creditors has happened several times before in Argentina. What is it that brings the country into trouble with debts with such regularity?

For many, it would be the nature of Peronist leadership, which, after all, is dedicated to the working class, which has always been strong on defending workers rights, rights. Trade unions, and therefore wage rounds, tend to be dominated by the trade unions insisting that wages keep in line with inflation. Inflation, to my mind, is the biggest single issue, and the government clearly understands. They've introduced, for example, a shopping basket where prices are frozen for basic elements, and they're hoping this time that they can bring it down and follow that up. It should be said by saying to the unions that we can't just go on raising wages in line with inflation, which in turn turn becomes the source of further inflation and further economic crisis.

So is that to say that Argentina is on a path to avoid these troubles next time around?

To me, it is striking, Jason. I was here in the early 2000s when the country collapsed and then defaulted for the eighth time in terms of its sovereign debt. I think there's a recognition this time around that the consequences of that could be disastrous. You know, for many years, you've heard Argentines say, well, somos argentinos. We're Argentines, we're different. I think this latest crisis is making most wake up to the fact that you can't just do business the way you've always done it and expect that the world will come in and bail you out. This government, a Peronist government, after all, has to think differently this time.

David, thank you very much for your time.

Thank you, Jason. A pleasure.

Artificial meat has been heralded as a solution to the environmental impact of animal farming. Now the same approach is being trialed for another food with less than green credentials, the humble shrimp, the farming of which threatens many of the world's mangrove forests.

So for a long time, beef has been targeted by environmentalists because of Their contribution to global warming.

Farah Chia reports for the Economist in Singapore.

But as it turns out, shrimp is just as big an environmental problem.

Why is that? What are the environmental effects of shrimp and shrimp farming?

Well, firstly, shrimps are bottom feeders, and they seem to do quite well when they are farmed along the coast. So for this reason, shrimp agriculture has been a major contributor to global forest mangrove loss. And these mangroves are peat rich. A peat box stores on average, 10 times more carbon per hectare than in any other ecosystem, including forests. A study in 2017 by C4 Research Institute found that a kilogram of farmed shrimp was responsible for almost four times the amount of greenhouse gas emissions of a kilogram of beef farmed. That is to say, strangely, that eating a surf and turf dinner of prawn cocktail and steak could be more polluting than driving across America in a fuel efficient automobile.

So building shrimp aquaculture on the coasts contributes to sort of raising these mangrove forests. But what about catching them in the wild? Is that any better?

Well, eating shrimp caught from the wild is not much better. Catches are declining all over the world as a result of overfishing. And trawlers can pull up as much as 20 kg of bycatch for every kilogram of shrimp. And this is because the net that they use for shrimp is way smaller in terms of its mesh size. And to add to the list of controversies surrounding shrimp fishing, the industry is full of reports of the appalling treatment of workers on shrimp fishing vessels, including human trafficking and child labor. So one such Investigation by the UN found that 59% of a sample of Cambodians who had escaped Thai fishing boats saw fellow crew members being murdered by their own captain.

That is a grave statistic. And so the solution might be then artificial shrimp. But I mean, how is artificial shrimp made?

So, in Singapore, Shok Meets, which is a young startup led by two stem cell biologists, they are stepping up to the challenge. The firm tries to grow artificial shrimp just as much as Western firms are trying to create beef without cows. So we aren't talking about plant based meats on the market here. They are working on cell based ones. The process involves submerging these shrimp cells in a nutrient rich solution.

But what does that end up looking like? I mean, it's sort of just some cells in a dish, right?

Well, not really, Jason. At the moment, what you get is shrimp mince in some form. And the firm has seen some success in using the shrimp mince in Chinese dumplings. At a food disruption summit last year, they presented it to some investors who said that it tasted just the same, that it tasted exactly like shrimp meat. Unfortunately, I wasn't one of them who got to taste it. The current cost of producing a shrimp that way is $5,000 a kilogram. But shrug meats seems fairly confident that they can get this down to $50 a kilogram by the year's end. They intend to do this by swapping out farmer grade ingredients for food grade and plant based ones.

So it's kind of a mix then it's the sort of lab grown approach and the plant based approach. But any of it is better than farming or even catching shrimp in the regular way?

Yes. So what they call this, I think is a hybrid approach where the plant based ingredients come in in the nutrient solution. So the meat itself is not necessarily plant based, if you understand what I mean. So if they succeed in bringing the cost down to say, $50 per kilogram, that positions them pretty well to enter the premium meat market. Shrimp today costs anywhere between 30 to 40 degrees per kilogram. But also I think that increasingly more people demand to know about their food these days, where it comes from, how it is harvested. And cell based technologies may be one way to provide that accountability.

Thank you very much for your time, Farah.

Thank you, Jason. It's been a pleasure.

That's all for this episode of the Intelligence. If you like us, give us a rating on Apple Podcasts and you can subscribe to the economist@exterator.com radio. Offer 12 issues for $12 or 12 pounds. See you back here tomorrow.