Kurds in the right place: a truce nears

0:28The Economist But combine a volatile president slapping tariffs on imports with some longer-run economic trends, and the effect could be precisely the opposite. And, I don't know about you, but when I think of caviar, I think of lush surroundings, high-society stuff. I do not think about it slathered on baked potatoes or chicken McNuggets or even slurped off the back of a hand. But that is becoming the done thing.

1:02But first...

1:10Last week, Abdullah Ocalan, long considered Turkey's public enemy number one, made a long-awaited statement from prison. Pyotr Zilevski is our Turkey correspondent. In his message, the head of the PKK, a Kurdish militia Ocalan founded almost half a century ago, called on his fighters to lay down their weapons and disband. The PKK has been locked in a war with Turkey since 1984.

1:49On Friday, Turkey's ruling Justice and Development, or AK, party was hammering home the message, calling for the rebel group and its regional offshoots to dissolve. On Saturday, the group said it would abide by Ocalan's call and declared a ceasefire. That announcement may mean that one of the world's longest-running conflicts could finally be coming to an end. Piotr, how did all of this come about? So the statement appears to be the culmination of secret talks that began almost a year ago between Ocalan and Turkish operatives. It also began when Devlet Bakheli, the head of Turkey's ultra-nationalist MHP party, got involved and launched an initiative to bring an end to the conflict.

2:39That was both welcome and unexpected because the ultra-nationalist had long been the biggest obstacle to peace talks with the PKK. It's estimated that Kurds make up up to a fifth of Turkey's population. They are one of the largest ethnic groups in the wider region. And Ocalan founded the PKK and originally wanted a separate state for the Kurds. Since then, the organization has moderated its aims and has fought in the name of autonomy and cultural rights for the Kurds. Ocalan has been locked up for 26 years since his capture by Turkish commandos in Kenya, 1999. He has seemingly been convinced that it is now the right time to call on his group to disarm.

3:30So why has this happened now? Why the call for peace now? Turkey seems to have concluded that amid the regional turmoil, which began with the Hamas attack against Israel in October of 2023, Turkey needs to bring the Kurds on side. The reason for that is that Turkey fears that the PKK might be becoming an instrument in the hands of Israel and some other Western countries. Turkey also has had the PKK on the defensive. The group has been unable to carry out large-scale guerrilla attacks inside Turkey for some time now. Bombing campaigns, drone attacks, and incursions had destroyed many of its bases in northern Iraq.

4:19And in Syria, the group's offshoot is facing additional pressure from both Turkey and the new interim government in Damascus. Syria's new leadership wants the Kurdish militia that runs much of the country's northeast to disarm and to dissolve. And Turkey has threatened another ground offensive. It has already launched two or, by some counts, three against the group unless it comes to terms with Damascus. Piotr, in a turbulent world, this is a really good news story, isn't it? Well, it certainly promises to be a good news story if conflict does indeed end. This isn't the end of the process. This is not the beginning either, but it's certainly a big step.

5:01And for both sides, an end to this war, which has now lasted for more than four decades, would bring plenty of relief. More than 40 ,000 people have been killed in the fighting since 1984. or millions more have been displaced. But this would mean different things to each side. For the Turkish state, PKK disarmament would be a big win in and of itself. But it would also mean a chance to dismantle or at least weaken Kurdish autonomy in Syria. It could also prevent what policymakers in Ankara see as a fledgling alliance between the Kurdish insurgents and Israel. For Turkey's president, Recep Tayyip Erdogan, it could mean another term in government.

5:50And what will it mean for the Kurds? Well, that's the tricky part because we don't know. There has been no transparency to the talks so far. In fact, Ocalan's statement is probably sort of the first public statement on the issue. So what we're talking about is not what the PKK specifically and Turkey's Kurds more generally have been offered, but what they expect or what they hope to get out of this process. And what they want, the main Kurdish party in Turkey, is political talks, negotiations, an offer of new language and cultural rights for the Kurds, perhaps through a new constitution, and an amnesty, partial or in general, for PKK fighters.

6:34At the bare minimum, Turkey's main Kurdish party, known as Dem, expects an end to the repression against it. Over the past decade, well over 100 Kurdish mayors elected to office in freely contested elections have been sacked and replaced by government surrogates and sometimes arrested. Scores of other Kurdish politicians have endured the same fate. And are the Kurds likely to get what they want now? Well, it's unclear because the ruling party in Turkey, meaning Erdogan's party, was not framing this as a negotiation, a peace process, but as a PKK capitulation. So what they suggest is that they are not negotiating concessions, they are negotiating terms of surrender.

7:24And I think that what is driving this is the need for the ruling party to seem tough or to continue to seem tough on the PKK and the Kurds. But what we are hearing already is rumors that the government might be considering upcoming steps. And these would involve a monitoring process of perhaps a few months to see, you know, if the PKK does in fact commit to laying down arms and figuring out the logistics of what comes next, where these weapons would be deposited, and what happens to PKK fighters, whether at least some of them would be able to return to Turkey, whether they would be allowed to remain in northern Iraq, etc.

8:06But one thing that suggests that concessions and more concessions might be in the pipeline is that Erdogan himself might need the Kurds and more specifically the Dem, the main Kurdish party, to help him get another term in office. Erdogan is now president after being prime minister. His term runs out in 2020. And technically, he is not eligible to run again unless he can get Turkey's parliament to endorse constitutional changes or to call an early election. In both cases, he doesn't have the numbers. He doesn't have enough seats in parliament to push through any of those initiatives. But he would have enough seats if he were to get them, the Kurds, on board.

8:57So that, meaning Erdogan's own ambitions, might help the Kurds. So, Pyotr, it's not exactly a triumphant end, but some cautious optimism here. Well, you know, a lot of things are up in the air at the moment. This is obviously a good start to what might be a genuine peace process. But Turkey has been here before, and it has seen previous ceasefires break down, and it has seen hostilities restart. So the ceasefire is hardly rock solid. There's also the regional dimension, and that's an even bigger and more complicated question, because the Kurdish militia in Syria that I mentioned at the beginning has not agreed to lay down arms.

9:39In fact, they have said, or at least their leader has said, that they do not feel bound by Ocalan's call. It simply doesn't apply to them. But they are coming under pressure from Turkey and the new Syrian state. That means PKK and the Kurds are stuck between a rock and a hard place. Piotr, thank you so much for talking to me. Thank you.

10:19This week, as part of Donald Trump's policy blitzkrieg, he saw through on his campaign promises on tariffs. The president had already slapped a 10 % duty on all imports from China. On Tuesday, he bumped that up to 20%. He also imposed a 25 % levy on goods from Mexico and Canada. All three countries are retaliating. Trump's intention is to make America rich again. He acknowledged in his speech to Congress that the task wasn't simple. There'll be a little disturbance, but we're okay with that. It won't be much. No, you're not. Since then, he's given some carmakers a one-month reprieve. But with the economy already showing signs of weakening, what will the effect be of this political volatility?

11:11On one level, the fact that he's done this is not surprising. Simon Rabinovich is our US economics editor. He has said for years that he loves tariffs, he believes that they're essential for reinvigorating the American economy. But on the other hand, certainly as far as the North American tariffs go, there had been an expectation that he would basically play chicken up until the deadline and then eventually back down. America has a very deep integrated trading relationship with Canada and Mexico. Putting these tariffs in place is really the most extreme act of protectionism that we have seen to date from Donald Trump.

11:53It puts at risk the deeply integrated North American trading relationship, potentially with devastating consequences for Canada and Mexico, but also very bad for America. It's going to raise prices for American consumers, and it's going to really throw American supply chains into a state of serious concern. So Simon, why has he done this? Well, analysts do wonder whether it might be the prelude to more negotiations, more bargaining. One idea that's on the table is that both Canada and Mexico might erect the same kind of tariff wall against Chinese imports as America has in place. And so therefore, effectively, you'll have kind of a fortress North America against Chinese imports.

12:35At this point, that would be seen as a relatively good outcome by markets. We've already seen the beginning of a market sell-off in America and globally as well. That started on Monday as soon as Donald Trump made his announcement. and that will certainly continue if he holds to his guns and does not back down on these tariffs. Look, he seems to really believe that putting these tariffs in place is going to be good for American manufacturing and is going to be good for the government as well, generating effectively a new stream of tax revenue. But I think looking at the big picture, you can see that there are a lot of concerns that are beginning to build up about Trumponomics.

13:12The U.S. economy is affected by much more than just what is decided in the Oval Office. But it is becoming increasingly clear that the start of Donald Trump's presidency is coinciding with and potentially causing a period of some weakness. Simon, we've been talking in recent months about how well the US economy was doing. So where's that concern coming from? The momentum does remain reasonably strong, carried over from a very strong 2024. And so far, the hard economic data is holding up fairly well. But a series of surveys have started to look a little bit more worrying. Primarily, they've been focused on consumer sentiment.

13:52There's one very closely watched index published by the University of Michigan. That fell in February to its lowest level since 2023. A similar indicator from the conference board shows that consumer expectations for the economy have dropped quite precipitously. And both of those working together would suggest that harder times do lie ahead. And why is that? Well, for consumers, the threat of tariffs is something that really does loom large in the way that they're looking at the economy. They see them as something that will lead to inflation. And certainly economists would agree that you would at least see a one-off increase in price levels in America.

14:30So all of that does appear to be making consumers just a little bit more pessimistic about what the outlook involves. It's also something that's beginning to affect businesses. is when they make their investment plans, they want to have an environment of policy certainty. The one thing that we can say about Donald Trump so far is that he's created an environment of great policy uncertainty. And so that's also having a dampening effect on business spirits. The labor market has started to slow down as well. So all of these things together don't paint the brightest picture. And the last thing to note is that the stock market has also started to register some of these concerns.

15:05You know, it rallied very strongly after Trump's election win. But since he actually took office, it's down. And I think that's a sign that investors are beginning to see these worrying signs and are projecting forward that it's not the greatest outlook for America. But Simon, we're only a few weeks into Trump's presidency. It can't all be him. Of course it isn't. As you say, it's only weeks into his presidency. The data that we're getting is for even earlier in that time period. So it's certainly not down to Donald Trump just yet. And you could look, for example, at the property market. The property market is something that has been slowing for a couple of years.

15:41And the reason for that is that the Federal Reserve had to raise interest rates aggressively to deal with very high inflation. Mortgage rates four years ago had been at around 2.5%. Now they're close to 7%, not far off their highest in decades. That's putting a lot of pressure on the property market. If you look at pending home sales in January, they fell to their lowest since 2001. So I think this is just indicating that the economic backdrop writ large is a very complex thing. It's not all down to Donald Trump. And there are reasons for America to be slowing that are relatively independent of politics.

16:18And so you're saying that looking at all of these indicators, this is more than just a blip? Well, I think it is more than just a blip. Again, stripping politics out of the equation for a second. America has had a phenomenal period of economic growth. And so economists looking at that, many would say that it was kind of getting to be late in the stage of the growth cycle. You had a stock market that has been incredibly powerful. And so for some time, analysts have been saying that potentially it was ripe for a correction. If you look at valuations in America, much higher than in virtually any other market globally.

16:53Equally, consumers had a lot of savings that had been built up during the COVID pandemic. They've by and large spent down those excess savings. And so it really was to be expected that you would have some slowdown in the offing for America. Nevertheless, I think what we're seeing on the political side is that Donald Trump, so far at least, his policies might actually be accelerating that slowdown. You have, number one, all of the uncertainty that's been generated by his tariff threats. Those will push up the price level and be negative for economic growth. So that obviously is a headwind for the economy.

17:29And on the fiscal side, you had had hopes and expectations that he'd be cutting taxes quite aggressively. So far, he's not been able to do that. He probably will not be able to do that in large measure. And so, you know, he's not going to be delivering that kind of fiscal boost for the economy. At the same time, you have the so-called Department of Government Efficiency, the Elon Musk outfit, that's not delivered much in the way of savings. It is, however, generating a lot of disruption, adding to uncertainty, and just making for a generally less positive backdrop for investors, for businesses, for consumers.

18:07Simon, great to talk to you. Thank you so much. Thank you, Rosie. And Simon will be presenting this week's edition of Money Talks, where he'll be discussing more about Donald Trump's love for tariffs and what that means for America and the rest of the world. You'll be able to listen to that later today.

18:35Welcome to the caviar class. You guys didn't know you needed it. Danielle Zostavsky is sometimes called the caviar queen. I started just showing, you know, me eating with black bread and butter, then showing it with cucumbers and with tomatoes, and it kind of went crazy. I was really not expecting that. Her family run a US-based caviar company called Marquis, and she shows off its products on TikTok. We're taking a Pringle. We're taking some creme fraiche. We're taking some caviar. In her videos, she dollops glossy sturgeon eggs onto everything from crisps to ice cream, Doritos and seedless cucumber boats.

19:10Henrietta McFarlane is an assistant producer for The Intelligence. She's not the only connoisseur educating the online masses. The hashtag Caviar Talk has 4.7 billion views on TikTok. Caviar bumps, which involves slurping a spoonful of the roe off the back of a hand, has become a social media trend. And restaurants across the world have since added this indulgent offering to their menus.

19:38But hang on, before we go any further, isn't caviar really, really expensive? I mean, how much of this is an online trend to look at and how much can you actually see in sales numbers? Yes, you're right, Jason. Caviar is really expensive. Caviar Russe, which is a US-based retailer, sells their 50-gram tins starting at around$100 and going up to around$1 ,000. But yes, this viral trend is actually reflected in sales. Caviar Russe has seen their sales quadruple since 2019. And the industry overall is growing really quickly. Right now it's valued at 3.1 billion US dollars and it's projected to be worth 4.6 billion by 2029.

20:19And what I found interesting when reporting this story is that lots of companies told me young people are driving this trend. Caviar has long been associated with a lifestyle of opulence and luxury. It was the favourite food of Russian Tsars, for example, and it was then introduced into European fine dining in the 19th century. And actually, this increased demand over time led to low sturgeon supplies. That has driven up prices. So caviar is still really, really expensive. So given that it's still really expensive, then what's driving this trend for people to consume apparently more and more of the stuff?

20:54Well, one reason that this has happened is because restaurants and retailers have worked to demystify caviar and make it seem more accessible. So for example, Momofuku's New York-based noodle bars serve whole fried chicken with creme fraiche and caviar. And Caviar Caspia, which is a restaurant chain, serves baked potatoes topped with caviar. And actually, the general manager of their London branch told me that the baked potatoes make up 70 % of their orders at the restaurant, much to the frustration of the chefs. And another approach to demystifying caviar is to educate customers. Caviar Roots, which I mentioned earlier, they run this caviar class called Caviar 101, where they educate customers on taste profiles, the history and the production of caviar.

21:37And as something of a novice in the caviar world, I sort of always associate it with Russia. Does that play into the market here at all? That's really historical. Russia and Iran were once the world's largest exporters of caviar. And a lot of the traditional ways to eat caviar are associated with Russia because of that. But a series of bans and restrictions placed on the industry in the early 2000s due to overfishing and especially in the Caspian Sea has led to a proliferation of farmed caviar and that can be done anywhere in the world. So today most caviar in the world is farmed and China is the world's largest exporter.

22:12And so if it can be made anywhere then surely the supply could go up and maybe the price comes down? Not necessarily actually Jason. The reason caviar is so expensive is because of the time taken for female sturgeon to mature. The beluga species, for example, takes 15 to 20 years. And so even when you farm caviar, it's going to stay pretty expensive. But there are ways that that is changing. So different companies are experimenting with cultivated caviar, so fish-free caviar. And one company, Caviar Biotech, is working with stem cells derived from sturgeon roe to basically grow caviar in a dish.

22:53So straight from the meatless burger into fishless caviar. Exactly. It's a pretty similar process, actually, to the way that companies are experimenting with lab-grown meat. And that would drive down prices and also offer a more sustainable alternative. But for now, caviar's price tag is really part of its allure. And whether people want to enjoy caviar on a McDonald's chicken nugget or a more traditional blini, it's definitely a luxury to show off, especially on TikTok. I'm seeing from what's in front of us here that you once again want me to indulge in a TikTok trend and try some of this stuff.

23:26Yes, Jason, I think we should try some. I see before me Doritos, Pringles, Chicken McNuggets. Where shall we begin? I think we should start with the McDonald's chicken nugget. Honestly, before today, I haven't had one of these since I was a kid. And then I would do a blob of sour cream. And then of course, a little blob of caveat. Well, how big the blob? Whatever you fancy, Jason. I would go for a bit more than that. More than this. Okay. There you go.

23:59ASMR. That's big on TikTok as well. I may have lost the taste. Really? I think this is one where you're going to want to get the proportions just right. Why don't you try it as a bump though as well? Get a little spoonful, about the same amount as you put on the chicken nugget, and you put that onto the back of your hand. Leave it there for a second and it's going to warm to your body temperature and you can slurp it off the back of your hand.

24:23Can you taste it this time? Yes. And I like it. I mean, it's rich and buttery and fishy and salty and yes, I'm in. I mean, not that I can afford this experience again. I'll have to stick with just the nuggets. Thanks, Henrietta, for introducing me to this flavoursome trend. Thanks for having me, Jason. Thank you.

25:13Thank you.