Gulf-co-operation counsel: what next for the region

0:03The Economist.

0:09Hello and welcome to The Intelligence from The Economist. I'm Jason Palmer.

0:14Rosie Blau:And I'm Rosie Blau.

0:19Today on the show, our America at 250 series concludes and how plants use the sound around them.

0:33First up, though.

0:39Okay, how about a couple of quick questions? On Iran, Mr. President, you said that Iran violated the ceasefire. Will they face any consequences? You'll find out.

0:53You'd hardly have known over the weekend there was an Iran war ceasefire in place. I don't like the fact that they took a shot. Day after day, attacks on and from Iran. Attacks on U.S. allies Bahrain and Kuwait, an apparent response to U.S. Central Command confirming airstrikes on Iran overnight. It's also hard to figure out the state of negotiations between America and Iran. American officials said there would be more high-level talks in Qatar this week. Iran's deputy foreign minister said yesterday that there wouldn't. In short, it's all still uncertain. And that uncertainty, for Iran and for all its regional neighbors, may be the most potent and lasting harm of this war.

1:37Jason Palmer:The Gulf states aren't total strangers to conflict. They went through the tanker wars in the 1980s. They endured Saddam Hussein's occupation of Kuwait in 1990. Greg Karlstrom is a Middle East correspondent for The Economist. And yet, I think in many ways you could argue this is the greatest shock the Gulf has ever been through, even though the consequences of this war might seem less visible than previous ones. The consequences have, on the basis of our conversations over those four months alone, seemed pretty visible, Greg. Yes and no. You've had thousands of Iranian missile and drone strikes on Gulf states, and they've caused tens of billions of dollars in damage.

2:21Jason Palmer:But mercifully, they killed very few people. We'll compare that to the invasion of Kuwait, for example, when hundreds of Kuwaiti civilians were killed. So we haven't seen anything like that this year. And despite the closure of the Strait of Hormuz, even though you could bring almost nothing through for four months, we haven't seen shortages in the Gulf. Countries in this region have spent huge amounts of money to keep shelves stocked and to keep their economies somewhat functioning. So they've managed to blunt the most direct impact of the war for their residents. But this war comes at a time when the Gulf is a very different place than it was in the 1980s or the 90s.

3:00Jason Palmer:Back then, it really was the world's petrol station. Dubai was a sort of sleepy trading town on the coast. It wasn't yet a household name. Saudi Arabia was a dour place that didn't even offer tourist visas. Today, it's something much different. It's a huge player in everything from finance to logistics. Some of the world's biggest airlines are in this region. Some of the world's biggest sovereign wealth funds. You have millions of expats who have moved here over the years, drawn by low taxes and stability and the opportunity to start businesses and settle down. It's a very different region than it was.

3:36Jason Palmer:But all of that growth, all of that change has depended on the perception that the Gulf is stable and secure. and Iran has damaged that perception. By which you mean sort of permanently damaged that perception? It depends on how the war ends, if the war has ended, and that depends a lot on Donald Trump. I hate that that is the answer to almost every question in global politics these days, but it's really true here. If America and Iran can get to a lasting deal that ends their state of hostilities, then I think the Gulf could move on from this quite quickly. That perception of risk in the region will dissipate.

4:13Jason Palmer:On the other hand, if the deal falls apart and we see a return to fighting between America and Iran, we could see even more destructive Iranian attacks in the Gulf. And obviously that would have far worse consequences. When I talk to people in the region, though, the expectation that most have is that we won't see either of those outcomes. We will see this interim deal remain in effect, but no broader transformative peace between America and Iran. And that is going to leave the Gulf with an elevated level of risk for the foreseeable future. And it's going to leave them with three challenges. They will have to rebuild confidence.

4:49Jason Palmer:They will have to rethink what it means to diversify their economies at a time of elevated risk. And they will have to navigate the geopolitics of a moment where they don't trust each other. and they also have lost trust in America as well. And so what's your take on gold countries' readiness to tackle all three of those things? No one is entirely prepared for it, but you have some countries that are much better positioned than others. I would say at one end of the spectrum is a country like the UAE, where first there are no signs that there's been a mass exodus of expats from Dubai or elsewhere.

5:26Jason Palmer:People speak pretty positively about the way the government defended the country from Iranian attacks. So there seems to be confidence within the expat population. They have lots of fiscal firepower to prop up their economy, to offer incentives to try and woo back tourists and business travelers. And they have alternatives to the Strait of Hormuz. They're planning to expand ports and build new pipelines and look for ways to bypass the Strait. So they're in a much better position than a country like Bahrain, which went into the war with one of the highest debt-to-GDP ratios in the world, with limited foreign reserves.

6:03Jason Palmer:Those problems have been exacerbated by the war. Bahrain hasn't been able to export oil, which has strained its finances. It's probably going to rely on bailouts from its Gulf neighbors for some time to come now. And so I think it's going to be very difficult for Bahrain to try and grow its economy going forward. And then you have a lot of countries that are somewhere in the middle. And I think what we've seen over the past four months, particularly because those countries don't have alternatives to the Strait of Hormuz, I think it's going to make it harder for them to position themselves as tourism hubs or hubs for business or look for ways to diversify away from hydrocarbons.

6:39Jason Palmer:So in a lot of ways, this war has made at least some of these Gulf countries work on changes that were kind of already underway. It's going to speed them up and it's going to perhaps take them in a different direction. I think one lesson for the Gulf from these past few months is they need to invest a lot more money in strategic sectors to try and mitigate this newfound risk that they face. So I think you're going to see a lot of investment in defense, in logistics, building these ports and pipelines and things to bypass the Strait of Hormuz. Food security is going to be a big conversation, hydroponic farms and other ways to try and grow food.

7:17Jason Palmer:I think you're going to see a lot of money pouring into that and probably less money going into ski resorts in the desert and sci-fi cities on the Red Sea coast and the sorts of things that they were focused on before. The other lesson from this, and it's one that I'm skeptical the Gulf states will actually learn, is that they need to be more united going forward. What do you mean by that? What we've seen over the past few months, indeed, is that Gulf countries have very different views of Iran. Some want to try and reconcile with it now. Others think it's a threat and they're focused on trying to contain it, and they don't trust one another.

7:53Jason Palmer:We've seen even their air defenses over the past few months have not been properly integrated, despite years and years of pleas from the Americans. Each of the Gulf countries is probably too small and too weak to confront Iran on its own. So this should be a moment where you would think the Gulf gets together and comes up with a unified position and tries to harden its defenses vis-a-vis Iran. But if past this prologue here, I think it may end up deepening those divisions and we'll see each Gulf country going its own way. Greg, thanks very much as ever for joining us. Thank you, Jason.

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9:05Rosie Blau:As you most certainly know by now, America celebrates its 250th birthday this weekend. In recent months, we've been diving deep into The Economist's own archive to chart American history through the lens of our past coverage. Now our final chapter brings us to the current day.

9:34Today there is unprecedented turmoil in our capital markets. Nobody. Years of risky subprime lending had helped inflate demand for housing. Annie Crable is a senior digital editor. By 2007, house prices were falling. Soon, many borrowers began to default. Mortgage-backed securities lost value. And banks were hit hard. Lehman Brothers is going bankrupt. And financial markets from Asia to Europe are doing their utmost to prevent Monday from turning from dark to black. As banks began to collapse, the financial system seemed on the verge of unraveling. The Bush administration proposed a$700 billion bailout, largely an attempt to protect those institutions deemed too big to fail.

10:29The crisis triggered the worst global recession since the Great Depression.

10:41I stand here today humbled by the task before us. In November 2008, America elected its first Black president. Barack Obama seemed to embody what commentators called post-racial America. The vast majority of African Americans thought that his election would improve race relations. That was the hope, anyway. Antipathy towards Obama and his policies fueled a new populist movement called the Tea Party, which would reshape the Republican Party. Conservative media amplified the baseless claim that Obama had not been born in the United States, a conspiracy theory that Donald Trump, then a reality television star, enthusiastically supported.

11:33It's a real possibility, much greater than I thought two or three weeks ago, then he has pulled one of the great cons in the history of politics.

11:49In 2012, a 20-year-old man armed with a semi-automatic rifle walked into Sandy Hook Elementary School and killed 20 young children and six adults before killing himself. The majority of those who died today were children. beautiful little kids between the ages of 5 and 10 years old.

12:20School shootings had already become a familiar problem, but the mass murder of children shocked the country and briefly raised hopes that Congress would pass tough gun laws. It did not. The Economist said, If even the slaughter of 20 small children cannot end America's infatuation with guns, nothing will. In the decade after Sandy Hook, there were 900 shootings on school grounds in America. Ladies and gentlemen, I am officially running for president of the United States, and we are going to make our country great again. When Trump announced his presidential campaign in 2015, few pundits gave him a chance of winning.

13:21I'm using my own money. I'm not using the lobbyists. I'm not using donors. I don't care. I'm really rich. I'll share that next time. But voters were in an anti-establishment mood. He championed a new brand of nationalism that viewed foreign affairs as a zero-sum game. He won, of course. And over his first term, he captured the Republican Party. He passed tax cuts that favored the wealthy and appointed three conservative justices to the Supreme Court. That court would later make historic decisions, including overturning Roe v. Wade.

14:05During Trump's first term, debates over sex, race, and power intensified. The killing of George Floyd by a white police officer prompted another reckoning. Please! Please! Please again, please! Citing other instances of racism and police brutality, millions marched under the banner, Black Lives Matter.

14:46We were pretty understated in our coverage of COVID-19 when it first appeared in China around January 2020. But as we all know, it was not an understated event. I'm declaring a public health emergency of international concern over the global outbreak of novel coronavirus. To slow it down, state and local governments imposed sweeping restrictions, which was a lot to absorb in liberty-loving America. I will not comply! I will not comply! I will not comply! More than a million Americans died. Trump's handling of the pandemic did not inspire confidence. And then I see the disinfectant where it knocks it out in a minute, one minute.

15:41And is there a way we can do something like that by injection inside or almost a cleaning? Voters turned on him in 2020, favoring instead a veteran Democrat, Joe Biden, for president, despite the fact that he was well past retirement age. But Trump refused to concede, claiming falsely the election had been rigged. That culminated in a rally on January 6th, 2021, after which his supporters stormed the Capitol. We want Trump! We want Trump! We want Trump! At this hour, our democracy is under unprecedented assault, unlike anything we've seen in modern times. By that time, The Economist already had a podcast, The Intelligence.

16:34It will last a very long time. It really was a watershed moment for American politics, and not in a good way. When Biden took office, he presided over perhaps the most energetic American government in nearly half a century. But in 2024, it became clear to voters that Biden himself was not as energetic as his government. Capitalizing on high inflation, concerns about immigration, and short memories, Mr. Trump defeated Kamala Harris in the race for the White House. In his second term, Trump has doubled down on the policies of his first. New Orleans and Minneapolis are the latest targets of the Trump administration's federal immigration crackdown.

17:19You can see some live images.

17:21Rosie Blau:...towards what President Trump has called America's Liberation Day. He says he will unveil a massive slate of import taxes on all countries. An Israeli defense official says the attack has been coordinated with the U.S. and had been planned for months. Smoke can be seen coming from buildings in terror.

17:45To paraphrase Ben Franklin, America is a republic, if you could keep it. As the country marks its 250th birthday, the great liberal experiment is again under strain. In another 50 years, when America marks its 300th birthday, historians might look back at this moment and judge whether its citizens kept their republic. And once we watch, where's the gallantly streaming? Where's the rocket's red glare?

18:36Rosie Blau:We tend to think of hearing as a uniquely animal sense. We certainly know how to make a lot of noise

18:50Rosie Blau:But scientists have long wondered if plants might be secretly listening in A study in 2018 claimed that one species of Asian shrub Grew larger leaves when exposed to Buddhist chants Another last year found that the sound of traffic stunted the growth of marigolds. And for plants, as with the rest of us, hearing could prove useful.

19:22We have evolved in our understanding of how plants interact with sound quite a lot in recent years.

19:28Rosie Blau:Matt Kaplan is a science correspondent. We used to think that because plants don't have ears, they couldn't hear. But as time has progressed, we have increasingly found that plants most definitely are using sound to gain information about the world around them. So if plants don't have ears, how are they using sound? So sounds are waves, they're energy waves, and they cause vibrations. That's why even someone who is deaf can hear, and I put here in quotes, bass from a really loud vehicle passing by because the bass makes you shake. You feel it in your body. Plants have water inside them, and when waves of energy hit them, they vibrate.

20:19And plants can detect that. We didn't realize that they were making use of that information, but they do.

20:27Rosie Blau:So what are they doing with that information then? So some of the most interesting research has demonstrated that when plants are being nibbled on by a plant-eating insect, they can detect what kind of nibbles they are based upon the vibrations of the nibbler. And they can then respond accordingly. I mean, it's unbelievable the arsenal that plants have at their disposal. They can respond to and attack by flushing their leaves with chemicals that make them taste terrible. But more interestingly, in recent years, we've discovered that plants can release chemicals into the air that smell sweet to parasitic and carnivorous insects to come and eat the herbivorous insects that are on the plant.