Home truths: Ukraine’s internal strains

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1:05The Economist.

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

1:27These days, the tech race is really overwhelmingly a talent race. Clever people are the currency wherever they hail from. But America is putting the squeeze on skilled worker visas, and it's not going to have the effect that the administration expects. And for the first time, the number of school-aged children globally who are obese exceeds those who are severely undernourished. Yet despite more awareness and education about nutrition, the number of overweight kids just keeps going up.

2:03First up, though.

2:12At the end of his speech at the United Nations in New York yesterday, Ukraine's President Volodymyr Zelensky made an impassioned appeal. Don't stay silent while Russia keeps dragging this war on. Please speak out and condemn it. Please join us in defending life and international law and order. People are waiting for action. But as Russia drags the war on, the internal signs of strain are becoming more and more apparent. It's now three years and seven months into the war. Chris Lockwood is our Europe editor. Ukraine is surviving, but it's clear that its difficulties are mounting militarily, economically, and perhaps above all, politically.

3:00Well, we will take those in turn, but let's first get a snapshot of the war itself. How are things going? Well, the situation on the front line really has been frozen since the end of 2022. There's been very, very little exchange of territory. Russia has nibbled away, but has not been able to break through at any point, hasn't taken any territory of any size, hasn't taken any town or city of any size, just a couple of small villages, really. So it's almost frozen. At the same time, of course, Russia is subjecting Ukraine to a fierce aerial bombardment using missiles and drones. But on the front line itself, it's pretty static, though, with tremendous losses.

3:41Now, that situation is an awful lot better than what might have happened. The whole country could have been overrun. In fact, Russia hasn't even managed to take the city of Kharkiv, which is just 35 kilometers from the border. Russia now sits on about a fifth of Ukraine's total area. It had 10 % before the beginning of this war. But that number hasn't changed at all. The flow of goods out of Ukrainian ports is carrying on quite well. Putin hasn't managed to control the Black Sea. So things are an awful lot better than they might have been. But one of the last times we spoke about the war, Ukraine was having a problem with recruitment, with just raw manpower.

4:16Yes, and that's still true. Whereas Russia can bring in as many soldiers as it likes, it pays them well and it is running up an enormous budget deficit to do it, but it doesn't have a shortage of troops. Ukraine is finding it very difficult to get people to fight. It is running out of people. Good news for it is that it's relying much more on drones rather than manpower. Russia is the one doing the advancing, so it needs more people to do it. But yes, morale is getting low among the army and the numbers that they need to plug the gaps, to put it very brutally, come every month harder to get. And you mentioned other concerns, including economy and politics.

4:54Let's look at the economy, a now three years and seven months wartime economy. Yes. Now, the economy is clearly not thriving. It remains on life support. Government tax receipts don't even begin to cover the cost of fighting this war, let alone other services. So it's racking up the debt. That's OK. That's still manageable. But it's critically relying on assistance from foreign countries. And of course, America is now less likely to want to pay some of that money. So it's very problematic indeed. It needs to bring in about$45 billion or so. That's roughly the budgetary shortfall. And so far, Western pledges are only filling about half of that.

5:33So this is an economy facing a difficult and non-sustainable future without a lot of foreign assistance, which can't necessarily be projected to be forthcoming forever. And on the matter of politics, we spoke earlier in the year about the protests after the government tried to undermine the independence of two anti-corruption agencies. Quite forceful, swift response from the people. Tell me about internal politics at the moment. There's a feeling that democracy is going a little off track in Ukraine at the moment. One sign of it was when the government tried to put direct control over what was supposed to be independent anti-corruption agencies.

6:12There were protests about that, both domestically and from foreign partners, and the government swiftly backtrack. But there's a sense that Zelensky now rules from inside a bubble, that he trusts only a very limited number of confidants. Steve hasn't, of course, had to face an electorate since 2019, the last time there was an election in Ukraine. And parliament also, of course, hasn't been elected during the war. So there's a sense that democracy is fraying. We hear more and more stories about newspapers being lent on, media owners being lent on to cover the government more effectively. And the security services being abused to target opponents.

6:53People get raided. Political opponents have had things like bank accounts frozen and travel bans imposed on them. So there are a lot of worrying signs that the system is closing down. And one of the things that's been very sustaining for Ukraine always has been that it's been a very open society. And that is starting to fray at the edges. But on the matter of elections, the explanation has always been the country is at war, is under martial law, couldn't hold elections. Yes, legally, that is true. Martial law is in place and you need martial law so that you can conscript people, so that you can prevent people from leaving the country.

7:29And the Constitution says that while martial law is in place, then you can't hold an election and the president's term doesn't run out. Nominally, Zelensky's term should have ended in May of last year. And clearly it hasn't. And the same for the parliament. The parliament should have been re-elected and it hasn't been. But there are ways around it. For instance, martial law could be lifted very temporarily, or of course the constitution could be changed. That's a tricky process, but certainly not impossible. But the problem is, without an election, there's this clear feeling that people are starting to lose confidence in their government and don't have a way of renewing that confidence, either in Mr.

8:09Zelensky or indeed in a challenger. But at what point do these strains conspire to actually force Mr. Zelensky's hand to hold that vote or indeed to deal with any of the other sources of protest problems that he's got? Clearly, if there were to be a ceasefire, then I think elections would follow really quite quickly. There's no real doubt about that now. But in the absence of a ceasefire, I think Mr. Zelensky will go on trying to govern without an election. I mean, he'll say he doesn't have any choice. And I think in that case, the pressure will mount on him. And at some point next year, if that's the situation we're in, it will just become inevitable that they'll have to find a way.

8:47And perhaps the Europeans can help there both by putting some pressure on him and, of course, in giving assistance in actually holding the election. One big part of the problem will be that so many people are out of the country. So there have to be an enormous, mostly European effort to poll diaspora voters. Of course, these things always happen. You often have foreign voting in elections, but not on the kind of scale that we're talking about. You say there one of the big ifs is about a ceasefire. You don't sound like you're expecting one soon. Well, it's very hard to say. That's a question that fundamentally depends on Vladimir Putin and not on the Ukrainians.

9:22Donald Trump has been putting enormous pressure on Vladimir Putin to agree to a ceasefire, but so far not. It could happen at any time. The Russian economy is clearly suffering from the war, both in terms of the number of dead it's losing and the cost of it, and also because of Ukrainian attacks on its oil infrastructure. Something like a fifth of Russian refineries have been knocked out by Ukrainian missiles. But on the other hand, a war is what enables Vladimir Putin to maintain his apparatus of state repression. And once that war comes to an end, all of that starts to fray a little bit, becomes a little harder for him to manage perhaps.

9:57He certainly doesn't seem to be in any great hurry to have a ceasefire. So be wary of predicting one anytime soon. Chris, thanks very much for your time. Thank you.

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11:48The H-1B visa

11:56What this proclamation will do is raise the fee that companies pay to sponsor H-1B applicants to$100 ,000. This will ensure that the people that are... The stated reason? To stem the flow of foreign workers and leave more jobs for Americans. But it's not as simple as that, and there will be some unintended consequences. Foreign workers are really important for big tech firms who essentially dominate these visas.

12:26Every year, there's a quota of around 85 ,000 H-1B visas that are issued, and this does not include the renewals. But the impact of the new$100 ,000 fee could be much broader than what the government expects. So let's wind back a bit. You say foreign workers are kind of integral to the high-tech world in America. Talk me through that. So to put some numbers to your question, Amazon alone received around 14 ,000 approvals last year. And if you go through the list of companies that are there on the list, it includes all the big tech firms like Amazon, Meta, Google, Microsoft. Plus, it also includes a whole host of IT services companies, predominantly Indian IT services companies.

13:07Indian citizens routinely scoop up around three-fourths of these visas. And China gets around 12%. Once you exclude China and India, no other country gets more than 2 % of these visas. And I think it also reflects where a lot of these tech workers are coming from. And so the complaint from a lot of Trump supporters has been a lot of American jobs have been going to workers from predominantly India and China. And so if this is disproportionately affecting the tech industry, how has it responded to the new charge? I guess the first reaction for a lot of companies was shock because nobody was expecting something like this.

13:39And over the weekend, many companies advised a lot of their H-1B employees not to leave the country until things became a lot clearer. And to be clear, the quota for this year is exhausted. So the new fees is only going to apply from next year. So there is a lot of time between now and then. And most expect there to be certain exemptions made. For instance, if you're a graduate student who graduated from a university in America, you may get an exemption. We don't know yet, but these are all the possible exceptions that are being discussed. What this has done is it has definitely hit India's IT sector a lot harder.

14:14And one of the reasons for that is Indian IT firms have been a big part of this H-1B process. And a lot of their business model in the past relied on sending workers over to America to be able to service a lot of the firms that are their customers. And they use these visas a lot. And so this has been also been looked at as a big blow to their business model where they can't now use these visas or send workers back and forth. So whether or not this bit of legislation changes the flow of workers to America as is intended, it's going to change the IT scene in India? I think so, because for the Indian IT services firms, they were already grappling with the rise of AI and what that means to their business model, fewer number of workers, more automation.

14:55But I think for a while, the firms have been preparing for this shift. So in the previous Trump administration, the number of rejections that were applied for H-1B approvals from Indian IT service firms, that soared. So in response to that, a lot of companies did a couple of different things. First and foremost, they hired more local workers for wherever they needed it. And second is they had more jobs back in India or outside US. And so they're trying to reduce their reliance on H-1Bs anyway. The second thing is for Indian tech workers, there are now more alternatives than just the IT services firms.

15:29We've talked about in the past, these global capability centers where essentially companies go to India or places like India and set up R &D centers there directly. That has now created a new avenue of employment. So it's not just the IT services firms, now you have a whole host of other options that are available. So in a sense, this impact has been blunted a bit, but still I think it's a pretty big shock for a lot of companies in this space. And what's your view on what this legislation will do in America? Will it accomplish its intended effect to reassure American IT jobs? I think if the proposal as it stands now goes ahead, it's going to have a pretty big impact on tech firms in the US.

16:06In the past, we have seen anytime there's been a shock in terms of the number of visas that could be given to tech firms, firms have responded by hiring more overseas. I think it also disproportionately hinders smaller startups who don't have the reach of the lawyers or the fees to be able to afford this kind of stuff. And really small startups rely on talent. That is their lifeblood. And I think it's going to make it harder for them to be able to hire this kind of talent more easily. So in a sense, I think it's pretty negative for US's tech sector, which relies on overseas workers, whether it's graduates or workers.

16:37I can't see it being positive in any way right now. Thanks very much for your time, Shailesh. Thank you for having me.

17:00In the 1980s, junk food became a dietary staple. And those sweet, crunchy snacks spread all over the world. As a result, the number of overweight children has gone up and up. Despite public health campaigns attempting to slow the trend, Childhood obesity is increasing faster than ever before.

17:26A new report released by UNICEF on September 10th showed that for the first time, there are now more children who are obese than children who are underweight. Slovea Cankova is our healthcare correspondent. Right now, we have one in five children globally between the ages of five and 19 who are overweight. And half of those children are obese. And in some part of the West, now we have children of healthy weight who are the exception. Slovea, first of all, just remind me what the difference is between being overweight and obese. So there are reference ranges for healthy weight based on a child's age and height, and they're separate for boys and girls.

18:16A child who is significantly higher than that healthy range is overweight, and obesity is when it's really off the chart. This used to be a rich world problem, but you're saying it's now global. Where is it at its worst? The highest rates are in a bunch of islands in the South Pacific, around the Cook Islands, where 40 % of children are obese. But it's really a problem all over the world. The worst countries are India-Americans. The US is in the top 20 with one in five children being obese. In South America, the rates are very high as well. In Europe, you've got Hungary, which is top of the pack with 15%.

19:01But the really worrying trend is that much poorer places, part of Africa and the Middle East, are very rapidly catching up to where Western Europe and America are now. And what's really worrying, of course, is that poor countries are not set up at all to deal with this problem. And they're still struggling with lots of children, young children, who are also underweight, which is already a health problem because it changes metabolism in a way that predisposes them to rapid weight gain later in life, diabetes and other chronic diseases. So when those children are faced with the types of foods that make them obese, they're even more likely to become obese and have these health problems than children in rich Western countries.

19:51It does seem surprising that this trend is so widespread even in poorer countries. Why is that? The answer is basically that ultra-processed foods or unhealthy packaged foods that are full of sugar, fat and salt are now sold everywhere, even in the poorest countries. They are becoming a daily part of children's diets across the world, crowding out fresh fruits and vegetables and healthy proteins. And UNICEF did a survey in 20 poor and middle-income countries. And what they found was that in most of those countries, over half of infants, those are children between 6 and 24 months of age, more than half of those children consumed sweet drinks or sugary foods.

20:42And those packaged foods are marketed as healthy parents' thing. They're buying something good for their children. But even here in Britain, independent analysis have found that they often lack essential nutrients and they're very low on protein. What they have a lot of is sugar. Slovea, as you say, we know why children are obese. We know what causes it. We know what to do about it. Why isn't there a change? It's been a very tough problem to tackle. It's become clear that children are growing up in what public health people call the obesogenic environment, where there's junk food everywhere. They're bombarded with advertisements.

21:29It's cheap. It's easy to access. It's delicious. And as a result, when you start eating that from a very young age, you develop a taste for it. Really, food preferences are set based on what you're fed early in life, which is why it's really important that children eat healthy. And unfortunately, that's not what's happening. But some countries are starting to test measures that restrict in various ways junk and unhealthy foods, either in school cafeterias or through sugar taxes, bans on advertising, especially online, where children are seeing these ads now. Some are restricting where junk food is placed in the supermarket to discourage impulse purchases or kids nagging their parents to buy those candy bars that you see right when you enter.

22:21But it's become clear that it's not going to be one thing or a quick change for sure. It has to be a package of measures. Some of those are now being tried out in various places. Some countries are definitely thinking a lot more seriously about this now, and they are starting to move very slowly in the right direction. Slovea, thank you so much for talking to me. Thank you, Rosie.

23:04That's all for this episode of The Intelligence. We'll see you back here tomorrow.