Sri Lanka Suffers from Economic and Political Crisis as Russian Hackers Target Ukrainian Companies
The island nation of Sri Lanka is facing one of the worst economic and political crises. The Russian Military is using its fleet of hackers to target Ukrainian companies and organizations and engage in cyberwarfare. 3D-printed homes are the solution for affordable housing. Major retailers profit from rising inflation. Twitter’s board is trying to stop Elon Musk’s acquisition. Here are this week’s stories.
1. Sri Lanka’s Economic and Political Crisis
The island nation of Sri Lanka is facing one of the worst economic and political crises causing record-high inflation, shortages of basic necessities like food and fuel, and widespread protests. Several factors lead to the crisis, including China’s debt-trap, bad choices by the government, and the effects of the pandemic. Following a bloody civil war in 2009, The Sri Lankan government lacked funds to invest in its economy, so China lent the struggling nation billions under unfair conditions and high-interest rates and bribed the Sri Lankan politicians to accept the loan. Sri Lanka used the money for projects like the Hambantota port, but the port was running into losses, so Sri Lanka leased out the port for 99 years to China. In the end, Sri Lanka lost its main port, which its economy heavily relied on, to China under a phenomenon that the US calls “debt-trap diplomacy.” In 2019, President Gotabaya Rajapaksa sharply cut taxes to stimulate the economy, but the move backfired and hindered government revenue. Sri Lanka then had to fall back on its foreign exchange reserves to pay off government debt. The Sri Lankan President also banned all fertilizer imports in 2021 to prevent the drain of foreign exchange reserves, but it backfired and led to a drastic fall in agricultural production. Sri Lanka’s tourism industry has also collapsed after the pandemic and large-scale terrorist attacks in 2019. These factors have led to extreme scarcity of food and fuel and an inflation rate of 17.5%. India is helping Sri Lanka and has provided over $2.5 billion, food, and energy.
2. Russian Military Hackers Target Ukrainian Companies
The Russian Military is using its fleet of hackers to target Ukrainian companies and organizations and engage in cyberwarfare. Recently, a Russian state-sponsored hacking group, Sandworm, tried to attack a large Ukrainian private energy company that provides electricity to two million residents. The Ukrainian government says they have successfully stopped the attack. The Russian government has been testing its cyber weapons on Ukraine for years. The Russian group Sandworm also targeted Ukrainian energy companies back in 2015 and 2016 and was successful in cutting power. Russia and China have also hacked into many US companies and organizations, including Solarwinds, which led to a series of data breaches of thousands of organizations globally and the United States federal government, and the Colonial Pipeline, which impacted computerized equipment managing the pipeline and let to a gasoline shortage in many areas. The US government has since proposed an aggressive policy that calls out Russia’s cyberattack groups.
3. 3D Printed Homes are the Solution for Affordable Housing
Home prices are at record highs after the pandemic. According to the National Association of Realtors, the median home sales price in 2021 was $346,900, up 16.9% from 2020 and the highest on record going back to 1999. Home sales had the strongest year since 2006, with 6.12 million homes sold, up 8.5% from 2020. Home prices still remain high, and now interest rates have started rising. Homebuyers are currently running into interest rates as high as 5%, making homes even more expensive and out of reach of many Americans, but 3D printed housing could change that trend. 3D printed houses are partially built by a robotic construction system that stacks layers upon concrete from the ground up to create the framework for a new home. The 3D printer can make 40 percent of a house, and then workers have to come and finish it. This is transforming the speed and cost at which homes are being developed and sold. In the end, it should save the buyer between 20% and 30%. Across America, many 3D house printing companies are emerging and building affordable neighborhoods.
4. Major Retailers Profit from Rising Inflation
Major Retailers in the US are blaming inflation and raising their prices, bringing in billions of dollars in additional profit. Accountable.US has released a report which reveals that the nation’s top 10 retailers have increased their earnings by $24.6 billion over the past two years for a total of $99 billion. Nonfinancial US companies documented their most profitable year since 1950. These companies have raised prices on their products and blamed it on rising production and supply costs. Corporate greed has caused consumer prices to increase by 7% and contributed to inflation. The increase in profits also accounts for the stability of the US stock market despite a high rate of inflation and Russia’s invasion of Ukraine. These gains have also benefited Americans. Labor data shows that average hourly earnings in 2021 rose 5.7%, and the average wage rose 11%. The growth of profits is expected to slow down in 2022 because the Federal Reserve is raising interest rates, and Congress has decreased pandemic spending.
5. Twitter’s Board is Trying to Stop Elon Musk’s Acquisition
After purchasing a 9% stake in Twitter, Elon Musk has made offers to buy the social media platform. Twitter’s board has indicated that it is not interested in being purchased by the billionaire, but Musk is persistent. Musk has offered to acquire the remaining shares in Twitter for $54.20, a 38% premium, which will value the company at $41.4 billion. Twitter’s board responded by implementing the shareholders' rights plan, making it more difficult and expensive for Musk to acquire the company. The plan will allow shareholders to double their stake in the company at a discounted rate, but make Musk pay a premium on each share. Even Jack Dorsey, Twitter’s founder and former CEO, is fed up with the board’s decisions and criticized them on Twitter. He and the current CEO seemed to show support for Musk. Musk hopes to acquire the platform and address how Twitter moderates its content and handles misinformation.
Above were my top stories for the week of April 17, 2022. Thank you, and see you next week!