Join Corbyn Duncan, Global correspondent at The Economist, as he delves into how Houthi rebels are exploiting shipping routes in Yemen, highlighting the implications for world trade. Ore Ogunbiyi, an Africa correspondent, shares insights from a Ghanaian rum distillery, revealing its role in revitalizing the local economy. Meanwhile, Alex Hearn discusses the escalating AI race between the U.S. and China, showcasing China's cost-effective innovations that are narrowing the technological gap. Tune in for a fascinating exploration of these global dynamics!
The Houthi militia's extortion tactics for safe passage in the Red Sea are significantly disrupting global trade and increasing shipping costs.
China's rapid advancements in artificial intelligence pose a competitive threat to the United States, especially with the emergence of sophisticated large language models.
Deep dives
China's Rapid Advancement in AI
China is rapidly closing the gap with the United States in artificial intelligence, demonstrating significant advancements at a lower cost. Recent changes in regulations have allowed Chinese companies to develop large language models (LLMs) that rival those from leading American firms. For instance, Alibaba's Quen chatbot has evolved impressively, becoming one of the best chatbots worldwide within a year. This swift progress is causing concern in Western countries, as they scramble to maintain their technological edge amidst competitive pressure from Chinese innovations.
Increased Shipping Risks in the Bab al-Mandab Strait
The Bab al-Mandab Strait faces heightened risks for shipping due to repeated attacks by the Houthi militia, significantly affecting global trade routes. As a result, shipping volumes through the Suez Canal have drastically decreased, causing a surge in insurance costs and diverting traffic around Africa, which increases operational costs. ship owners are reportedly negotiating payments with the Houthis to ensure safe passage, effectively creating a toll-like system that adds to the overall expense of shipping. These developments have resulted in significant increases in shipping prices, impacting consumers and causing revenue losses for Egypt due to reduced canal usage.
Reviving Ghana's Alcohol Market with Luxury Rum
In Ghana, a new wave of entrepreneurship is emerging in the alcohol sector, typified by the RAINN distillery, which aims to redefine local rum as a luxury product. Founded by Amma Mensah, the distillery focuses on high-quality ingredients and a cultural narrative linked to African royalty, contrasting with a history of cheap spirits flooding local markets. The distillery not only aims to celebrate Ghanaian culture but also addresses the need for responsible alcohol consumption in a country with rich ceremonial traditions involving alcohol. Such ventures could pave the way for African spirits to gain recognition globally, much like tequila in Mexico.
The procedure is simple—genial, even. Contact Houthi rebels in Yemen and pay up, and your freight can pass into the Red Sea unmolested. We examine how this extortion affects world trade. China is fast closing its gap with America on AI innovation, and doing so far more cheaply (7:22). And a trip to a Ghanaian rum distillery reveals a regional trend (15:44).