At your services: Britain’s economic bright spot

0:00Jimmy Swaggart:Did you know the SIBO VIX Index at its core is a measure of market uncertainty? The VIX Index could be rising because of bullish positioning in the underlying SIBO SBX Index Options market due to fear of missing out rather than fear of downside. Download our white paper at SIBO.com slash VIX Insight. There are risks associated with SIBO Company products. Review the disclosures and disclaimers at SIBO.com slash US underscore disclaimers. Nine in ten of us are confident in our day-to-day travel, reassured by the mobility systems in place. But only 45 % of the engineers, policymakers and operators behind those systems feel the same way.

0:44Jimmy Swaggart:Economist Enterprises' new research, supported by Brembo, provides a practical roadmap for making our systems safer and more trustworthy. Read the report to learn more about this trust gap and the crucial actions needed to close it. Search Safety in Motion to explore the research.

1:05Jimmy Swaggart:The Economist

1:12Jimmy Swaggart:Hello and welcome to The Intelligence from The Economist. I'm your host, Jason Palmer. Every weekday, we provide a fresh perspective on the events shaping your world.

1:27Jimmy Swaggart:Our Middle East correspondent has felt compelled to investigate the disappearance in 2012 of Austin Tice, an American journalist in Syria. After months of reporting, the threads of clues reveal much about the former Assad regime. And Jimmy Swaggart was one of America's most prominent televangelists, and did a pretty good job of showing that even the most fervent men of God are fallible. Our obituaries editor looks back on his rise and fall.

2:04But first...

2:12Jimmy Swaggart:Another day, another bit of unhappy news from Britain's Office of National Statistics. The economy has shrunk, again. Only a little bit this time. Sustained growth has been elusive for really quite a while. Low wages have led to the kind of cost-of-living crunch that's familiar elsewhere. But Britons can't resist making cutesy abbreviations, so here it's called Cosi Lives. For all those lemons, though, Britain does have a chance to make some lemonade. In the context of some fairly uninspiring economic news that's come out of Britain in the past weeks, months, years of continued stagnation. We were trying to find what we called not a silver lining, but at least a copper lining.

2:58Jimmy Swaggart:Archie Hall is our Britain economics correspondent. One of the places we realised that was interesting was that Britain's actually done tremendously well in selling services abroad. It's become a bit of a services emporium in large part because British workers have gotten so cheap, wage growth hasn't been very high, and also British assets look pretty cheap as well, and at least some managers think they're quite attractive to invest in. So starting with the services emporium part, how did that come to pass? How did Britain become a services central? Yeah, so Britain's always been an economy that's been quite services-centered and has quite an advantage in services.

3:34Jimmy Swaggart:And that reflects a kind of long-standing strength in its education system. That reflects, if you're talking about selling services internationally, the fact that Britain's in quite a convenient time zone. You can work very easily both with people in Asia and with people in the Americas. in a way that would be difficult for either of the others to do. But there are some new shifts too. And the most consequential of those is that Britain's actually gotten very, very cheap. And so you can get all those advantages for a much lower price if you're an international company than you could have potentially 10, 20, 30 years ago.

4:02Jimmy Swaggart:I mean, one thing that I found very, very striking looking into this is that if you look at average wages just across the private sector and the economy, as recently as about 10 years ago, kind of 2014 type territory, British wages and American wages weren't really that far off if you looked at them in American US dollar terms, if you looked at them from the perspective of a dollar-focused company trying to decide where to put jobs, now Britain's about 30 % cheaper. So there's a real cost advantage. The flip side of that is Britain's low-wage economy, which is lamentable for all the reasons we discussed, but it also means there is a cost advantage to locating in Britain.

4:35Jimmy Swaggart:And so that does mean that we've seen a pretty big boom in services exports, something like up about 45 % on average over the past decade in real terms. And that reflects both that cheapness in wage growth terms, but also cheapness in currency terms. The fact that sterling took a bit of a beating after Brexit, it's come back a little bit, but for quite a long time and to extend still today, in currency terms as well, Britain looks quite cheap if you're looking at it from a foreign perspective. And when you say services, what kind of services are we talking about broadly? So in the official statistics, you have the very vague and unhelpful term of other business services, which encompasses a pretty large slug of what we're talking about and communicates nothing.

5:13Jimmy Swaggart:But that's your consultants, that's your PR types. And in other categories, you also have a bunch of kind of finance types. That's your bankers, your lawyers, your operations, human resources. I quite like the term email jobs, which is a bit of a COVID-ism, but is quite a nice way of encapsulating the sorts of things Britain does quite well at. In that those jobs are largely made up of sending emails, receiving emails, processing emails. All of the above. There's a lot of tapping away on Outlook Gmail, whatever your preferred product would be. So who are the customers? Who's buying all this cheap email processing?

5:45Jimmy Swaggart:So everyone, but particularly the Americans. So if you look at where since 2016, the Brexit referendum, which was where the pound got a lot cheaper and this process, which is already happening, was really amped up. You've seen an increase of about 70 % in real terms of services exports to America. So in context, the overall British economy has grown by a little bit over 10 % in that time. That's a huge difference. The economy's on really, really well. And one really striking example of this is JPMorgan Chase, the bank, which has a digital operation in Glasgow. It's quite a longstanding one, but it expanded it quite a lot recently, just moved into a big new office building, again, reflecting some of these trends.

6:22Jimmy Swaggart:And one thing they told me that I found really striking was if you think about where it's more expensive or less expensive to put coders, they see Glasgow, which is sort of a second city in Britain, as it were, as sitting about halfway between their cheaper American offices, which are more expensive. that's you know texas that sort of thing and their offices in india which are cheaper on the other end and if anything slightly closer to india so if you're comparing britain to a lot of its peers there's now actually a really quite striking cost profile between the two but some of the economic factors that you're talking about this in driving the services emporium economy would apply to other parts of the economy right sure so there are certainly other places where the fact that Britain's been a bit of a basket case, not done tremendously well, which obviously isn't a great place to be starting from, does present opportunities.

7:11Jimmy Swaggart:So one of the other places we were looking at was the pricing of British assets, the pricing of how British government bonds, gilts are, which are now some of the highest yielding, so some of the cheapest bonds of any rich country, and the pricing of stocks as well. So British companies, or at least British listed ones, which are also looking quite cheap across a variety of measures. And again, that's not where you want to start. But that does mean that actually, if you're looking at this from an investor perspective, that's much more appealing in a certain way than buying into, say, somewhere like America, where the valuation is a lot higher.

7:41Jimmy Swaggart:And obviously, that's not a free lunch. There's a reason that's true, and that, in large part, at least we'd argue, reflects a lot of the chaos, and particularly a lot of the fiscal risks. So a lot of the messing around with the government budget and where that might lead in terms of concerns about runaway inflation or the government losing control of its debt and so on that were obviously particularly pronounced during the Liz Truss era in 2022, when she laid out 45 billion of unfunded tax cuts and the guilt market slightly lost its mind. But also we've seen more worryingly narrower episodes of that stress in more recent times, including with this government.

8:13Jimmy Swaggart:We saw one very, very recently last week with a kind of welfare rebellion in Parliament, where the Labour Party refused to do some fairly small cuts to the welfare bill. We saw that again in January. We saw that again last October. So there are real risks. But also those risks are at this point, at least to a certain degree, priced in. And so the question for the British government is how can you make it such that pricing doesn't turn out to be kind of good and appropriate pricing for real risk, but rather actually that's just a good deal. And Britain, as it turns out, is going to be a place that manages self-responsibly, does produce some economic growth and does have assets that are precisely worth buying.

8:47Jimmy Swaggart:But coming back to the question of the service economy and what it brings to Britain and why Britain is strong for it, that's a pretty good silver lining, I guess. You've mentioned repeatedly the cloud, but why not make more of that, I suppose, because there are plenty of places that dine out well on that, basically. No, absolutely. And Britain totally should. You ideally would hope that you have a booming services export on the basis of being really productive, doing really great things, offering a really compelling kind of world-beating product. In some sectors, that's totally true for Britain.

9:18Jimmy Swaggart:And if you kind of listen to the government, that's certainly what it aspires to be the case everywhere. that's an ideal. Britain certainly in economic terms does not now live in the realm of the ideal. We live in the realm of having had pretty dismal economic growth the past 15 plus years. But at least that does mean that kind of as we see people noticing that and realizing that and gradually correcting for that that opportunities also emerge not least in the services export space. Archie, thanks very much for joining us. Thank you for having me.

10:07Jimmy Swaggart:In December last year, I was one of the first journalists into Damascus after the regime of Bashar al-Assad fell. Gareth Brown is a Middle East correspondent for The Economist. 50 years of dictatorship just collapsed. I don't think the celebratory gunfire has stopped since Bashar al-Assad fled the country. Since Damascus fell, less than 20... Within hours of getting into the country, one of the first things I did was go to Sidnaya, this very notorious prison north of Damascus. I was there watching as the Syrians were let out. Some people were so bewildered they'd been in so long they'd forgotten their own name.

10:45Jimmy Swaggart:The conditions were atrocious. and I came on the intelligence at the time to talk about the fall of the regime and this state of prisons, of torture chambers, of brutality that Assad had built and there was always this light din in the back of my mind and that was what happened to Austin Tice, the American journalist who disappeared over a decade ago. Austin had snuck across the border into Syria from Turkey and he disappeared after a few months reporting in the country. He hadn't been heard from since, he almost vanished without a trace. My hunt for Austin Tice is the story that I will start to tell on the weekend intelligence tomorrow.

11:25Jimmy Swaggart:But Gareth, why was it Austin Tice who occupied your attention? As you say, plenty of people were subjected to terrible things by the regime. Why did Austin's story grab you? I think there were two things in particular that drew me to Austin's story. Firstly, I saw a lot of parallels between myself and him. Austin had basically showed up in Syria as a freelancer and just started doing journalism. I did something similar myself in 2016. I went to Iraq to cover the war there, started out just after I graduated, and Austin showed up in Syria. He'd been a Marine for 10 years, then he'd gone to law school.

12:00Jimmy Swaggart:He was in law school when he went to Syria. So I always felt connection to his story. But I also think Austin's story is not really just about him as an individual. It tells a much bigger story, and it goes way beyond just one missing American journalist. So bring us up to speed on Austin's story. When was the last time he was seen? So the last confirmed public sighting of Austin was in September 2012, when a video of him was uploaded to YouTube almost out of the blue. In this video, Austin is blindfolded and surrounded by masked men who are chanting Allahu Akbar, God is great. Oh, Jesus. Oh, Jesus.

12:43Jimmy Swaggart:But American officials I spoke to believe the video was staged to make it look like he'd been captured by an opposition group or jihadists instead of the regime of Bashar. This was in some ways our starting point. The podcast tries to build on this. So we've tracked down some people who dealt with Austin whilst he was in the regime's captivity. people who actually met with him, sat with him, talked with him, interrogated him, treated him to try and bring the last confirmed information closer to the present day. Well, in that meantime, what efforts have been made to find him? There's multiple strands of effort that have been happening since December the 8th, but also over the last decade or so.

13:24Jimmy Swaggart:A number of people who were setting up back channels over the years, trying to convince Assad that it was in his interest to release Austin. We speak to some of those people in the podcast. We had official delegations being sent by President Trump to Damascus to meet senior Syrian officials. And then we have more on the ground efforts, private organizations, books, security agencies. There are all these disparate efforts, but obviously none of them ever achieved their goal. I sort of understood why that was the case in the process of this investigation. I spent many, many hours sitting with very dodgy people at times, being outright lied to.

14:02Jimmy Swaggart:I was sent on wild goose chases. I went to foreign countries chasing up leads, which materialized into nothing and don't even make it into the podcast. There was so much deception involved in this, and I think that is probably something that's plagued any investigation into Austin's fate over the last decade or more. And when you say that what you found is much more than just about one missing man, what did you mean by that? What does it tell us about the Syrian regime? I think Austin's case shows us a lot about the nature of Assad's regime. Lies, deceit were not only tolerated, but they were necessary to thrive, to reach to the top of it.

14:39Jimmy Swaggart:And looking at Austin's case, we see this deceit time and time again, not just with Syrian officials lying to each other, lying to Assad, but also lying to the Americans. Austin's case really is emblematic of the failure of US-Syrian relations over the last decade or more. His disappearance basically tracks the course of the conflict. And for the first few years, Washington and Damascus simply didn't talk. And that changed when Trump came to power and they decided to start talking again because of Austin's case. In many ways, Austin's case brought these two countries to dialogue once again after several years of bitter diplomatic acrimony.

15:18Jimmy Swaggart:this is a story about austin tice but it's about much broader themes which are really critical in understanding why syria's war went on for so long why it turned out the way it did this is a podcast about austin tice but it's also about far more than that and i think if you listen through the three episodes you will see and feel and hear that thanks for joining us gareth i can say i haven't heard any of the three-part series yet but i am extremely excited to learn more about it for now. Thanks for your time. Thank you, Jason. And I do hope people give it a listen. The first episode of the series is out tomorrow and will be free to listen to.

15:56Jimmy Swaggart:For parts two and three, you're just going to have to become a subscriber. And I remind you that in The Economist's app, all of our shows are ad-free. So there's a lot less of this.

16:34Jimmy Swaggart:We'll see you next time. with SIBO Company products. Review the disclosures and disclaimers at SIBO.com slash US underscore disclaimers. Nine in 10 of us are confident in our day-to-day travel, reassured by the mobility systems in place. But only 45 % of the engineers, policymakers and operators behind those systems feel the same way. Economist Enterprises' new research supported by Brembo provides a practical roadmap for making our systems safer and more trustworthy. Read the report to learn more about this trust gap and the crucial actions needed to close it. Search Safety in Motion to explore the research.

17:24Austin Tice:In 1978, Jimmy Swagger was granted a vision of heaven.

17:29Jimmy Swaggart:Anne Rowe is The Economist's obituaries editor.

17:32Austin Tice:He found himself standing at the portals of glory on the glassy sea. He heard the cherubim singing, Holy, Holy, Holy. And he looked on the face of God and sitting at his right hand, Jesus Christ, to whom he'd given his life.

17:52Jimmy Swaggart:And in that vision as I stood there, I had been praying for some time. I had been seeking God. I'll never forget the moment, the time, or the place.

17:59Austin Tice:But his reaction was not what he expected.

18:03Jimmy Swaggart:Somebody said, Jimis Wargert, you must have shouted for joy. I didn't. You must have lifted your hands in adoration and praise. No, I didn't. I stood there and I trembled and I shook. I fell to the floor. I was standing on that glassy sea that is now empty, but one day will be filled.

18:25Austin Tice:What was it that made him so afraid? There could be very few people who had made so many people devote their lives to Christ as their saviour. He'd built up this extraordinary enterprise where he was on more than 3 ,000 local television channels in America. He was on cable. He had contacts and a television presence in 140 countries. His donations by 1986, which was the peak of his ministry, were running at half a million dollars a day. Sometimes hallelujah He could pack 100 ,000-seater stadiums when he came to visit cities. They saw a man who was so full of the Holy Spirit that he danced and shouted and whispered.

19:15Austin Tice:He would sit down at the piano and sing songs like the one you're hearing now, sometimes hallelujah. and then they too like him would be filled with the spirit and speak in tongues and fall down i may not look like much tonight but i'm washed in the blood

19:38Austin Tice:he had a terrific amount of wealth from this he also considered that he'd come up the hard way It was an age of televangelists who looked, as he put it, perfumed and pompadoured pretty boys, who called themselves preachers, but he was a preacher of the old style. He'd been born into some poverty. His father was a part-time grocer and trapper. He dropped out of school, but almost immediately he started preaching, because he had had an epiphany, a saving moment when he was eight years old, and was waiting in line to go and see a movie in his little town called Faraday. The Holy Ghost spoke to him then and said, don't go in there, give me your heart instead.

20:25Austin Tice:He still tried to go in and the ticket machine wouldn't work. So he took this as a sign that he had actually been called. And knowing that, he then managed to get an old Plymouth to run around in, around Louisiana, all the small towns, preaching and preaching too at the back of flatbed trucks, preaching in the street, anywhere he could. He was making perhaps$30 a week. He realized that it was going to be a hard slog to bring Christ to everyone he wanted to bring him to.