Reuters World News - Ukraine summit, Nike and Lego in Russia and the Saudi-Qatar relationship

Episode Date: June 17, 2024

A summit on Ukraine ends with key powers spurning a joint communique agreed on by dozens of countries. A Dutch man brings Western goods into Russia despite brands like Nike and Lego pulling out. And business is booming after a detente between Saudi Arabia and Qatar. Plus, Prime Minister Benjamin Netanyahu denounces the Israeli military’s plan for tactical pauses in fighting to allow more aid into the Gaza Strip.     Sign up for the Reuters Econ World newsletter here. Listen to the Reuters Econ World podcast here. Visit the Thomson Reuters Privacy Statement for information on our privacy and data protection practices. You may also visit megaphone.fm/adchoices to opt out of targeted advertising. Learn more about your ad choices. Visit megaphone.fm/adchoices

Today, Israeli Prime Minister Benjamin Netanyahu despans his inner war cabinet and denounces the military's plan for tactical pauses in fighting. Key global powers fail to sign up to Ukraine's Peace Summit communique. Howard Dutchman is getting Western goods into Russia despite brands withdrawing from the country. Business is booming after a detente between Saudi Arabia and Qatar. It's Monday, June 17. This is Reuters World News. bringing you everything you need to know from the front lines in 10 minutes every weekday.

I'm Tara Oaks in Liverpool. And I'm Carmel Crimmons in Dublin. Israeli Prime Minister Benjamin Netanyahu has dissolved his war cabinet after the departure of centrist former general, Benny Gantz. The move comes as his government is involved in another spat with the army. This time, over military plans to hold daily tactical pauses and fighting along a key aid route to facilitate deliveries into Gaza. Netanyahu criticized the plan, saying that it was, quote, unacceptable to him.

The military said normal operations would continue in Rafah the focus of its Gaza operation. The latest development highlights the country's divide on its Gaza strategy, as international pressure bills on Israel to step up humanitarian efforts. And campaigning begins in earnest ahead of French elections at the end of June. As he prepares for his opening game against the end of June, Austria and the Euros, French soccer captain Killeen Mimbape took the time to encourage French youth to get out and vote, saying the situation was dire.

And as the UK prepares for an election of its own, one pollster has warned that Britain's ruling Conservative Party faces electoral extinction on July 4th, after damning figures halfway through the campaign. Market Research Company Savanta found 46% support for Kier-Starmers' Labour Party, while support for the Conservatives had dropped dropped to 21%.

China's housing slump is triggering fresh calls for the government to pump cash and credit into the economy. The property sector has been the biggest drag on China's economic growth, and new home prices fell at the fastest pace in a decade in May. Retail sales were a rare bright spot,

beating forecasts thanks to a holiday boost, but industrial output in May, disappointed, raising pressure on Beijing for policy support. Talking about governments and markets, do check out the latest edition of my podcast, Reuters Econ World. It's all about neoliberalism

and how Argentina is doing six months into President Javier Malay's term of office. You can catch it on Reuters.com or wherever you listen to your podcasts. We are at a war and we don't have time for prolonged work. Moving to peace means acting fast. Preparations will take months, not years.

President Vladimir Zelensky speaking at a summit on Ukraine's future, The weekend meeting in the Swiss Alps ultimately fell short of its goals, notably absent, Russia and China. The decision by Beijing to stay away, all but assuring the summit would fail to achieve Ukraine's goal of persuading major countries from the global south to join in isolating Russia. India, Saudi Arabia, South Africa, Indonesia and Mexico did not sign the final statement. And no country came forward to host a sequel. Dave Graham is in Switzerland. So there had been a lot of chatter before the conference, before the summit, that they wanted to announce a follow-up meeting at the end of this one.

That did not occur. There was a lot of talk about Saudi Arabia or perhaps another country from the Middle Eastern region being on the cards to pick up the baton from Ukraine. That did not happen. And from what we understand, that was in part due to the fact that the next potential hosts of the summit, wanted Russia to be on the invitation list for the next one. However, it did not seem as though the Western allies, powers of Ukraine were quite ready to go that step yet. And so the fact that there isn't yet consensus around how the next conference should look means that the process is still clouded in a certain degree of uncertainty.

Nike stopped selling its sportswear to Russia soon after Moscow launched its full scale invasion of Ukraine over two years ago. But that hasn't stopped an online sports retailer owned by a Russian soccer club selling Nike soccer boots online. The man who got these shoes to Russia is Wienand Herinks, a 40-year-old Dutch citizen who lives in Moscow. Since a conflict began, Herings has built a thriving business that provides Russian consumers with Western goods whose makers have pulled out of Russia. Taslo Hamel has been reporting on the story. So Tassolo, how has herrings managed to continue importing Western goods into Russia? They are pursuing a two-trackapoucher, I would say.

First, they have a legal entity owned by the person who also runs herrings inside the EU in the Netherlands, which manages to buy some goods directly from totally normal and ordinary Western supplies, not from the brands directly, because those brands, they often, which is also the case for Lego and Nike, for example, they forbid the sale of their goods to Russia, but they can buy goods from intermediaries, like one of the hundreds or thousands of traders of such consumer goods in Europe and ship those goods to Russia.

The second approach is via third countries, and Herring has managed to set up sort of like a network of third-party partners in third countries, above all in Turkey, where those goods are largely available and from where they can ship them to Russia. And what's been the reaction of some of the brands involved? Yeah, well, one has to say they clearly disapprove of the business model and they don't like what they see, right? They all told us they are clearly not happy about their products ending up in Russia because they withdrew from those markets. They exert pressure on their direct clients and business partners.

They have clauses in their contracts for bidding, for example, the shipment of their goods. to Russia. But, you know, I mean, these products like espresso coffee, sneakers, toys, they are everywhere. They are so widespread. There's hundreds and thousands of people and hands they go through. I think as there is such strong demand in Russia for those goods, we have no reason to believe this will change anytime soon. Ten billion dollars in contracts. Not bad for two formerly frosty neighbors like Qatar and Saudi Arabia. A trip by Saudi Arabia. A trip by Saudi crown prince Mohammed bin Salman to Qatar in 2021, helped bury the hatchet after a boycott

which worried investors in an unstable region. Since then, business has been booming. Andrew Mills is in Doha. So Andrew, what are some of the big projects which have been launched between the two countries? I mean, the biggest and kind of flashiest projects have really related to construction and infrastructure. And it's Qatari companies winning huge contracts in Saudi Arabia. You've got country companies building the headquarters of Niyom, which is the very large Saudi economic zone that's being built on the edge of the Red Sea. You've got a country company building an entire island, man-made island in the Red Sea, that will have five hotels and resorts on the island.

me about snow in the desert, because that's one of the projects, right? Saudi Arabia is building something called Trujina, which is Saudi Arabia's first outdoor ski hill. This is in the mountains. But of course, there's no snow and there's not much water. And so there's 147-kilometer long water pipeline that's being constructed to haul water to an artificial lake that will then be used in the wintertime to make artificial snow. A Qatari company called Redco International has signed a billion-dollar-plus contract

to build the concrete culverts that go under that pipeline. And what are both countries hoping for here? What's the benefit to them at their rift-fading? For Qatari construction companies, they've had it pretty good in Qatar over the 10 years leading up to the World Cup. They built, you know, 200 plus billion dollars worth of new infrastructure here.

But a lot of that has now been built. So it's a great opportunity for these country companies just when there's not much work here in Qatar to begin looking next door for huge contracts across the border. For the Saudis, you know, Saudi Arabia is going through its biggest construction boom ever in its history. And it's trying to do this very quickly.

It's trying to get these gigaprojects up and online by 2030 in order to sort of develop whole new areas of its economy beyond oil. And so they need capacity of other companies to come in and help them complete these projects on time. That's it for Monday. We'll be back tomorrow with our daily headline show. If you haven't listened already, check out our weekend episode looking at the specialist doctors who were building a healthcare system in Gaza.

their fate and the fate of the mission in the months since October 7th. And to never miss an episode, subscribe on your favourite podcast player or download the Reuters app.