Highlights of the week: While personal sanctions are still being underworked in the UK, Africa distances itself from russia, and the green transition requires even more oil

During the scorching past week, the world mostly discussed the Trump case and the surrounding rallying of a large part of the Republicans. After all, if the fragile relationship between the political and judicial spheres is violated in the USA, it could pose a threat to the export of entropy. And overall, there are few pleasant things about this putin henchman. However, Mind suggests diverting attention from Trump and focusing on much more interesting issues in the USA and Europe, which were discussed by the global media on the eve.

The problems faced by the British Treasury due to the frozen assets of russian oligarchs were written about by The Guardian on Saturday. The newspaper describes how the employees of the Office of Financial Sanctions Implementation (OFSI), with a rather modest budget, oversee the expenses of 1,600 sanctioned individuals. The volume of assets frozen by the sanctions regime has grown from £44.5 million in September 2021 to £18.4 billion in December 2022.

At the same time, the compensation for experts, whose role includes, among other things, granting licences for essential expenses to sanctioned individuals, is lower than that of an intern in a law firm. So, it is not surprising that, for example, Mikhail Fridman obtained a licence to pay the salaries of 19 employees, including drivers, private chefs, housekeepers, and service staff. Another striking case was the issuance of an OFSI licence last year to Yevgeny Prigozhin, which allowed him to hire lawyers to sue a British journalist for defamation.

Meanwhile, the outlet notes that russian oligarchs pay much higher fees to British lawyers than to American ones… All of this cannot fail to concern the public organisation Spotlight on Corruption, which urgently demands a thorough independent review to ensure that the licensing regime in the UK does not create false incentives for sanctioned oligarchs to spend their frozen assets, including on legal services or so-called basic needs.

The limit of the kremlin's appeal is in Africa. How the African continent has detected russia's cynicism

Other outlets discussed the reasons for several African countries snubbing putin's summit. The Economist, for instance, believes that this is largely due to the cynicism of the approach by the russian dictator towards the African continent, which became evident in russia's withdrawal from the Black Sea grain initiative. In 2023, there were 17 African leaders opposed to 43 in 2019 – this can be seen as a failure of the kremlin's dwarf.

russia accounts for a minuscule share of direct foreign investment in Africa. In 2020, the trade between russia and Africa reached $14 billion, constituting 2% of the total trade volume on the continent and roughly a twentieth of the trade between the EU and Africa. During the first russia-Africa summit, officials boasted about signing agreements amounting to $12.5 billion, of which only a small fraction materialised. Hence, it's not surprising that leaders of Kenya, Nigeria, and other major economies skipped this year's event.

Therefore, as always, the kremlin's main strategy relies on dirty politics – supporting friendly regimes and elites, particularly through low-cost but highly effective arms supplies and wagner mercenaries. Its disinformation campaigns are aimed at influential African voices on social media. They are partially effective because the messages find fertile anti-Western ground, especially in French-speaking West Africa. In a survey of 23 African countries in 2022, Gallup found that the countries with the highest approval ratings for russia were Mali (84%) and Côte d'Ivoire (71%). The top seven were French-speaking.

However, there is a limit to russia's allure. A British outlet states: "To judge by the low turnout for this week’s summit, African leaders are recalibrating their views of russia. Mr putin’s officials blame Western pressure. In truth, it reflects exactly the sort of African autonomy they cynically claim to champion."

The consumer is buying less, but there are prospects for demand recovery

Bloomberg delivered two pieces of news – one good and one bad. The bad news is that companies within the S&P 500 index are showing profit declines for the third consecutive quarter, and earnings per share have dropped by 7% after over 80% of index participants reported their results. The good news is that earnings prospects are improving. According to Bloomberg Intelligence forecasts, earnings growth, except in the energy sector, will rebound in the current quarter.

The outlet suggests that optimism is returning to corporate boardrooms as data continues to indicate the resilience of the economy, which could support further growth. The Federal Reserve no longer predicts that its aggressive monetary policy tightening will lead to an economic recession. Forecasters from major Wall Street companies, from JPMorgan Chase & Co. to Bank of America Corp., have reduced their dire warnings of a downturn. Earnings forecasts for companies like Royal Caribbean Cruises Ltd. and Coca-Cola Co. indicate that American consumers are still willing to spend.

The financial indicators of Apple also testify that not all consumers are faring poorly. The company's revenue declined by 1%, but its profit increased to $19.88 billion. The iPhone manufacturer gained in the last quarter due to high sales on the App Store, Apple Music subscriptions, and watch sales, as reported by The New York Times.

Last week, Meta, the parent company of Facebook, and Alphabet, the parent company of Google, reported double-digit profit growth due to the recovery of digital advertising sales. Microsoft achieved a record quarterly profit thanks to increased sales in cloud computing, while Amazon nearly doubled the expected profit on Wall Street.

For most of 2022, the tech industry struggled due to weak digital advertising, e-commerce, and computer sales. The downturn led companies like Meta, Alphabet, Microsoft, and Amazon to lay off thousands of employees. While Apple managed to avoid lay-offs, it now faces the question of how deeply the pandemic has impacted its business. Sales of iPads and Mac computers surged as people began working from home, but new tablet and computer purchases over the past year have been modest. In the last quarter, iPad sales decreased by 20% to $5.79 billion, and Mac sales dropped by 7% to $6.84 billion, according to the company.

Consequently, Apple's stock price fell by approximately 2% in after-hours trading after the company forecasted that sales in the current quarter would be similar to the period from April to June, as the acceleration of iPhone and software sales is offset by double-digit declines in Mac and iPad sales.

With no significant new revenue streams, the company has focused on increasing sales in developing markets. In April, Apple opened its first stores in India and attracted eager crowds of customers. Over the past quarters, its sales there doubled compared to the previous year, as more Indians are purchasing higher-priced phones. The growth in sales allows Apple to capitalise on a market that is predicted to have a billion smartphone users by 2026.

Green transition. Why is the European consumer starting to rebel?

And finally, on the topic that concerns today's Ukrainian consumer. The Washington Post reports on how in Europe, where this summer has brought brutal heatwaves and violent fires to the Mediterranean region, there is a growing negative reaction to some of the world's most ambitious 'green' goals. After all, Europe is currently trying to explain to the Germans which cars they can drive, to the Italians which stoves are acceptable, to Polish miners why they must give up coal, and to the British why they can't continue exploiting vast oil and gas reserves in their country.

Last week, the Prime Minister of the United Kingdom Rishi Sunak visited Scotland, where he announced his decision to open up the North Sea for more oil and gas drilling. This led to activists from Greenpeace covering Sunak's countryside estate in Yorkshire with an "oil-black fabric," warning that his plan for maximising the use of fossil fuel reserves could jeopardise Britain's emissions commitments and push the climate into a dangerous zone.

And indeed, surveys show strong support for emissions reduction in the UK and Europe. However, enthusiasm wanes when sociologists delve into more detailed questions about people's readiness to change their lifestyles or spend more money. Similarly, in Ukraine, few consumers are willing to pay for electricity at its actual cost rather than a subsidised industrial tariff, and even fewer are willing to pay bills with a 'green' tariff.

But there's no need to worry; the UK is not changing its green course, just like other countries that demand preferences to shield themselves from economic losses due to the green transition. It is just that during the transition itself, everyone will need oil and gas for decades to come. So, why buy foreign oil, asks Sunak. Especially since a significant amount of fossil fuel in Europe comes from russia.