Bibi talk: a speech light on detail

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The Economist.

Hello and welcome to the Intelligence from the Economist. I'm Rosie Blore.

And I'm Jason Palmer. Every weekday we provide a fresh perspective on the events shaping your world.

Food price inflation is taking a toll everywhere. But Nigerians spend a larger share of income on food than people anywhere else in the world. Climate change isn't easy to fix. But what about the political causes of this crisis?

And by now it's easy to think of Starbucks as a bland business that doesn't offer communities much more than a few barista jobs. New research suggests otherwise. Franchises spark more business innovation in a way that, say, Dunkin Donuts does not. But first.

We meet today at a crossroads of history. Our world is in upheaval.

Last night in America's Congress, a defiant Israeli prime minister gave a speech that sought to justify his ongoing war in Gaza. Benjamin Netanyahu framed the war as much more than just a battle between his country and Hamas.

In the Middle East, Iran's axis of terror confronts America, Israel and our Arab friends. This is not a clash of civilizations. It's a clash between barbarism and civilization.

America has, in keeping with history, ardently supported Israel throughout The war, which Mr. Netanyahu pitched as a necessary partnership.

America and Israel must stand together.

Republicans, in particular, applauded what they heard outside, though protests simmered and American flags were burned.

Many choose to stand with evil. They stand with Hamas. They stand with rapists and murderers. These protesters stand with them. They should be ashamed of themselves.

Those who had come to see if Mr. Netanyahu would hint at a future beyond the war will have left disappointed.

Netanyahu didn't really say anything new. He spoke about how Israel will achieve a total victory over Hamas.

Anshelfeffer is our Israel correspondent, and yet.

Again, as he has over the last 10 months, hasn't given any indication of what Israel's overall strategy is for ending the war and what Gaza's status will be once the war is over.

Did that surprise you? Were you expecting to be able to read some tea leaves or to get straight answers about those kinds of questions?

To be honest, I wasn't surprised. Netanyahu's main aim in going to Washington and giving this speech to Congress was to impress Israelis back home. He is very low in the polls right now. If elections were held in Israel, he would lose. Three quarters of Israelis want him to resign, either immediately or after the war. And Netanyahu has tried to show Israelis that he is still the master statesman. He can get an invitation to Congress and get all those standards, ovations and make a great show.

So do you think he succeeded in that?

Well, that remains to be seen in the polls and whenever an election is held in Israel. This is what Netanyahu has done in the past, and sometimes it's worked. I think that if we look at the actual substance in the speech and the way in which he tried to marshal support in the US and kind of harness that both for himself and for Israel in this war, I don't think it's going to have much of an impact. We already knew that. They're on his side on Israel's. The speech itself, I think, was mainly window dressing.

Did it present Israelis with what you think they wanted to hear, at least?

No, it didn't. Israelis, I think, both from the polls and from what I'm hearing from many Israelis on the ground, want at this point some kind of idea of when the war may end. Will there be a truce or a ceasefire agreement? For Israelis, that means, first and foremost, the return of over 100 hostages still in Gaza.

One of those freed hostages, Noor Gamani, is here in the gallery, sitting near my wife Sarah.

He made a big deal out of the hostage in the gallery who he referred to and presented during the speech.

On the morning of October 7th, the entire world saw Noah's look of Desperation as she was violently abducted to Gaza on the back of a motorcycle. I met Noah's mother, Leora a few months ago. She was dying of cancer. She said to me, prime Minister, I have one final wish. I wish to hug my daughter Noah one last time before I die. Two months ago, I authorized a breathtaking commando rescue operation. I think it's one of the most moving things. When Noah was reunited with her mother, Leora and her mother's last wish came true.

He said he's doing everything to get the hostages back, but he didn't give any hint of whether he'll accept. The current ceasefire agreement, which we're hearing from people involved in the negotiations is at a critical moment. And when it comes to an ending of the war and what would happen in Gaza after the war, he was extremely vague. He said that Gaza should be demilitarized and de radicalized, but there was no details or any idea of how that could happen. He said Gaza should have a civil administration run by Palestinians who don't want to destroy Israel. He didn't explain how he saw that happening either. So on any kind of concrete arrangements or strategy for ending the war and for achieving some kind of stability, let alone peace, after it, Netanyahu was very sparse and this was a 52 minute speech. He had a lot of time to go into detail, but he didn't.

Which makes the most notable thing about it, the fact that he did it in Congress. But as you say, it was a very partisan audience. We, we saw protest outside, American flags being burned.

And the Zionist occupation.

And the Zionist occupation.

What does it tell you that Mr. Netanyahu gets the, that kind of reception now? Does that speak to a changing relationship with America, do you think?

I think both Israeli and American politicians like to talk about bipartisan support for Israel, but there's no doubt that in recent years at least we've seen that support coming in a much more clear and full throated way from the Republican side of American politics. Even though, you know, right now we have a Democrat in the White House and Joe Biden has supported Israel to the hilt. But Biden and others in the Democratic Party have also been critical of some aspects of the way Israel's been conducting the war. And Netanyahu and many Israelis don't want to hear any type of criticism right now. They're not in a place for that. I don't think that's entirely new. We've been seeing the trends for years now. And it's interesting to look back at Netanyahu's Previous speeches to Congress. This is Netanyahu's fourth speech. He's broken the record held by Winston Churchill. He is now the world leader who's made the most speeches to Congress. And every time Netanyahu has made a speech to Congress, it's been when there was a Democrat in the White House and the Republicans controlled either the Congress or Senate or both. And Netanyahu has always used this as a way of trying to demonstrate, both in Washington and to Israelis back home, that even if the president is not wholly supportive of him, he can still drum up the support on the Hill.

Well, I was digging more on the sort of American response to him and how that might be changing. And it's sort of notable that two people in the coming election were not there. J.D. vance, the Republican nominee for vice president in the coming election, Kamala Harris, the presumptive Democratic nominee for president. Does that say anything in particular to you, or do you take the party lines that it was simply scheduling conflicts?

Well, Kamala Harris is especially interesting because as vice President of the United States, she's also the President of the Senate. And by tradition, the President of the Senate sits there at any of these addresses, and she wasn't there. And even if it was just a scheduling conflict, I sure someone posted on social media yesterday all the previous appearances by foreign leaders during this term to Congress, and she was there. So the fact that now for some reason, she couldn't solve her scheduling issues and she wasn't there, I think does say something. Netanyahu will be meeting her today on Thursday, but there was an element of a snub here. JD Vance is also interesting. I think that Vance, even though he's a Republican and therefore supposed to be pro Israel, there's also, as we've seen in some of his interviews and speeches, isolationist streak there. Maybe he doesn't want to be seen in this setting either. I mean, we know that he's not very keen on America's support to Ukraine. He said that he is supportive of Israel, but there could be a signal here as well.

So then I guess the only question is what we can expect next from Mr. Netanyahu and what kind of clarity we can hope for on how he's conducting the war.

Well, I think we should look beyond this speech. First, the meeting with Biden. Biden has been very, very closely involved in the negotiations for a ceasefire and for the release of hostages. He's taken it personally. He's met multiple times with hostage families. Actually, he's probably met with them more than Netanyahu has himself. I think Biden will be pressing Netanyahu to give an answer. Is he prepared to go ahead with the talks with Hamas and with what is by now a pretty comprehensive agreement on the and Netanyahu when he gets back to Israel, the Knesset, Israel's parliament, will be in recess, so he has a bit more room for maneuver. Even though his far right partners have said they'll bring down the government if he accepts an end to the war or even a temporary ceasefire, they won't be able really to do very much in the next three months of the summer recess. So I think next few weeks will be the moment when Netanyahu finally, after months of procrastination, will have to make a call.

Anshul, thanks very much for your time.

Thank you for having me, Jason.

A big part of why Israelis are frustrated with Mr. Netanyahu, not just citizens but also his generals, is that he does not appear to have or even want a plan for what comes after the war. That is a question of staggering scope, as our editor in chief Zanny Minton Beddoes found in reporting for our subscriber only Saturday show the Weekend Intelligence Gaza is in absolute ruin. 60% of buildings are damaged or gone. How to bring order, security, legitimate rule? The thinking so far is dangerously optimistic. Scroll back to Saturday and have a listen.

Nigeria is seeing a record annual pace of food inflation.

Ore Ogumbi is the Economist's Africa correspondent.

And that became pretty evident to me when I visited Obalinde market. So I'm asking people in the market today about the price of things. So these beans now around last year, how much were you selling these beans? Let's say 4,000, 4,005 but this year 10,095. So the kinds of staples that make up the main parts of people's meals like beans and maize now cost 400% more more than they did a year ago. A bag of sorghum for example, has more than tripled in price. Let's say before if you hold like 300,000 go to market at least you come back with plenty market. But now, even though if you carry 1 million go to market, your back of motor will not even. But in that same time frame, wages have barely moved and what you've ended up with is a deepening food crisis. Hunger of this magnitude was once concentrated in conflict ridden areas in the north of Nigeria, but now it's come to affect poorer households nationwide. Of the 44 million food insecure people in West Africa and the Sahel, more than half of them are Nigerian Ora.

Before we get on to why this is, just explain to me exactly what you mean by food insecure.

Okay, good question. So it's effectively people who can't easily access enough affordable nutritious food. So not necessarily starving, but struggling to access enough good food.

Okay, so tell me, we've seen food price inflation in lots of places. Why is it so high in Nigeria?

So, Rosie, I'd say that the government is mostly to blame for the recent spikes in food prices, but not just this government. So the last administration actually randomly introduced a plan to change the banknotes and that caused the most hardship in rural areas which are especially cash dominant and fewer people have bank accounts or use mobile money. Then these farmers who were struggling to access cash would then charge middlemen who were also struggling to access cash a premium if they paid electronically. And that in turn pushed up prices of food in the markets. At the same time the currency was weakening. And this is partly due to the necessary reconciliation of foreign exchange rates that have been a bit all over the place for a while. And in fact, in the first half of this year alone, the naira has seen a 40% fall against the dollar, making it the worst performing currency in the world. And this in turn has then pushed up the cost of foods that it imported, as well as the seeds and fertilizers which are also often imported, that the farmers themselves rely on. In addition to all this, the government has also removed fuel subsidies and then pricier fuels make it more expensive to run farming machine and to get harvests from farms to the markets.

So if a lot of this is to do with the government, it sounds like some of these problems could be sorted out quite quickly.

You're probably right. I do think the effects of some of these short term problems might pass or at least settle somewhat if wages adjust accordingly. But the problem is that Nigeria still faces longer term challenges like climate change, for example. So most crops in Nigeria are rain fed as opposed to irrigated in a more controlled way. So they're more vulnerable to droughts, which you see more of in the north, which is the country's breadbasket. Now, at the same time, the desertification from the Sahel is causing nomadic herders to move their cattle into arable land, arable land, which there's less of because of the climate, and then the animals trample or eat the crops. This is actually something that came up with the women I was talking to at the market. So people there, they were complaining that they don't have space for Farming. If you go to farm to farm there, Boko Haram or other enhancement will meet you, then they will finish. This then leads to really bloody conflict between the herders and the farmers. So you've got farmer, herder conflict in the northwest, terrorism in the northeast, and all other kinds of criminality in Nigeria's middle belt, which are all keeping farmers away from their lands in the country's breadbasket.

Okay, so the combination of climate change and conflict is clearly very problematic. What can actually be done?

Well, you've got the developmental sector trying to fill in the gaps. So the UN's World Food Programme, for example, is helping more than a million of the most vulnerable people a month in northern Nigeria. And they've been focusing on that especially hard hit area for a while now. And then you've got the World bank, which has actually provided the government with $800 million for a conditional cash transfer program which would target 15 million households. But the problem is the rollout of that program has been a bit shaky. It's been launched, it's been relaunched, and now it's mostly been stored as it's been caught up with bureaucratic inertia.

So it sounds like we're back on the Nigerian government again. Is there any prospect of them changing what they're doing?

About a year ago, just after he was elected President, Bola Tinubu actually declared a state of emergency on food insecurity. He had a 10 point plan. People were pretty happy with it and it seemed like he was on job. But one of his main promises was that the savings from that fuel subsidy removal that I mentioned earlier would be reinvested into farming and agriculture. And that doesn't seem to have materialized. There was also plans for a program to give free fertilizer to farmers which would then boost production. But that hasn't gone very far either. Apparently some politicians have put pictures of their faces on the sacs and then used them to reward people who voted for them. This month, the government announced new plans to waive import duties on maize and wheat and to enforce a recommended retail price, although I'm not quite sure how. And the government itself plans to import 500,000 tons of both grains as well, which to be fair, if done soon enough, should actually make a dent. But overall, so far since this new administration has come in, they haven't been able to stop food prices from soaring. In fact, food inflation just keeps getting worse every month. And for Nigerians, who spend a larger chunk of their incomes on food than any other country in the world, that really, really takes its toll.

Ora, thank you so much for your time and it's absolutely lovely to have you back on the show.

Thanks, Rosie.

How's it all going there? Just tell us quickly.

I mean, it's not that I don't miss the podcast, but Rosie, I won't lie, it's going great. I'm having a lovely time and really enjoying it.

Delighted to hear it. Great to talk to you. Thanks so much.

Thanks for having me, Rosie.

In the 1990s, Starbucks revolutionized coffee culture with an aggressive expansion campaign that saw stores opening the world over. It is now a staple of many high streets. Tiktokers delight in hacking the chain's menu to create drinks like the Cotton Candy Cloud Refresher. Ask for the summer skies drink with vanilla syrup and lavender cold foam or a toasted marshmallow latte. Ask for white mocha with half the.

Amount of toasted vanilla syrup. I think oat milk just kind of.

Ties it all together and then of course, go on with some whipped cream. But could Starbucks have a hand in some other innovations, too?

The coffee chain Starbucks can be a great help to local economies.

Gavin Jackson is the Economist's finance and economics correspondent.

A new working paper finds that when a branch opens up, it seems to create new businesses just because it's the kind of place where people like to hang out and do nothing.

That's pretty surprising to me. I think of Starbucks as the kind of place we talk about as killing creativity and killing independence, not spurring them. How do we know it's having that effect?

Some academics out of Columbia University did a study and they found that a new Starbucks in an American neighborhood without a coffee shop leads to between one and four new companies per year over the next seven years. The idea that they have is that new entrepreneurs need somewhere to hang out, to meet people, to form the networks that are essential for an early stage startup. And Starbucks provides a kind of third space, as they put it, not work, not home, where you can just hang out. You can grab a coffee, sit at the sofa and chat. And that they think is very important for a kind of startup ecosystem.

But couldn't it just be that Starbucks is riding the wave of a local area that's already growing?

That's definitely a possibility because if you just think about it, what's the kind of place that gets a new Starbucks opening up? It's somewhere that's probably on the way up. It's gentrifying. Richer people are moving in. It's the kind of basically someone who might Want to start a startup might end up moving. So if Starbucks is just identifying those kinds of places, it's not really doing anything right. It's just an indicator that these are areas where you would expect to see a startup boom anyway. So the authors have a few tricky little methods to get around that problem and they rely on two things. NIMBYism, anti building sentiment and the basketball player Irvin Magic Johnson. So with NIMBYism, what they did was they compared places where Starbucks opened up with places where Starbucks had tried to open location but ended up not being able to because of planning objections. The idea is that those are very similar to the places where Starbucks opens. And then the idea with Magic Johnson was the brand had a partnership with the basketball player to open up some branches in poorer neighbourhoods, more minority heavy neighbourhoods, which they usually wouldn't open. So that was an idea that, well, if it's Starbucks doing this, then we should see the same effect in places that don't normally get a Starbucks. And in both cases they did find the same sort of difference in local business growth.

Feel like we should be having this conversation in a Costa Coffee or something just to show we're not completely leaning on Starbucks. Is it about that chain or is it any coffee shop?

The authors test that idea a little bit and they do that by looking at a few different chains. So one of them being Dunkin Donuts. If a Dunkin Donuts opens up in the area, do you get new business creation? Apparently not. And they hypothesized that that's because Dunkin Donuts doesn't provide the kind of sofas, seating that Starbucks does. But they also looked at a chain called Caribou Coffee, which is this chain in the Midwest of America, and they said that does actually provide similar benefits to Starbucks and it's because you can just hang out there.

So do you buy this hypothesis?

Well, it's a working paper, it's not been peer reviewed and it seems a little bit implausible to me that a coffee chain could have this much impact on local economies. But on the other hand, there is some historical precedent here. If you think about London's 18th century coffee houses, they had a big role in forming the global economy as we see it today. Think of Lloyds of London, possibly the world's most important insurance market. That started as a coffee house where merchants, traders and so on met and they priced insurance contracts. Or even London Stock Exchange, one of the most important stock exchanges in the formation of capitalism, that started in a coffee house. These places were called Penny universities because the idea was, for the price of a cup of coffee, you get access to some of the finest minds of the time. There's another puzzle as well. When Starbucks opened, the founder was inspired by trips to Italy and seeing Italian coffee shops. Yet Europe has much less innovation than America, so maybe there's something else going on. Perhaps Italians should consider trading their espressos for a cotton candy frappuccino, just in case.

I've never heard anything so sacrilegious. Gavin, thank you so much for your time.

Thanks for having me.

That's all for this episode of the Intelligence. We'll see you back here tomorrow.

Sam.