Israel continued to pound Gaza, even as ceasefire negotiations began in Qatar. The familiar dynamic will soon be interrupted by a new American administration. Our analysis shows that Nordic firms have markedly better fundamentals than the European average; we examine what’s behind all that success (10:18). And our series The World Ahead considers how democracy will fare in Asia in 2025 (18:37). Runtime: 25 min

Israel continued to pound Gaza, even as ceasefire negotiations began in Qatar. The familiar dynamic will soon be interrupted by a new American administration. Our analysis shows that Nordic firms have markedly <a href="https://www.economist.com/business/2024/12/30/why-are-nordic-companies-so-successful?utm_campaign=a.io&utm_medium=audio.podcast.np&utm_source=theintelligence&utm_content=discovery.content.anonymous.tr_shownotes_na-na_article&utm_term=sa.listeners">better fundamentals</a> than the European average; we examine what’s behind all that success (10:18). And our series The World Ahead considers how democracy will <a href="https://www.economist.com/the-world-ahead/2024/11/20/will-democracy-prevail-in-asia-in-2025?utm_campaign=a.io&utm_medium=audio.podcast.np&utm_source=theintelligence&utm_content=discovery.content.anonymous.tr_shownotes_na-na_article&utm_term=sa.listeners">fare in Asia</a> in 2025 (18:37). Runtime: 25 min

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The Intelligence

Gaza peace talks resume—with a sense of a deadline

Against the clock: Gaza peace talks

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Jason Palmer [00:00:03] The Economist.

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. There’s just something about companies from the Nordic countries. Sure, they are the Big East like Ikea. But across the board Nordic firms, margins are bigger and their debt piles smaller. The question is, can it last? And the next in our series The World Ahead considers how democracy will fare in Asia in the coming year. There are some good signs and some bad, but one part of the region looks particularly worrisome. First up, though.

Another series of peace talks began in Qatar over the weekend. But on the ground in Gaza, you’d hardly know that peace was on anyone’s mind. Israel’s military struck more than 100 of what it called terror targets, saying they eliminated dozens of Hamas terrorists. Gaza’s health ministry run by Hamas put the death toll on Saturday alone at nearly 90 fighters and civilians, some of them children. It’s all too familiar a story, but there is a sense that for better or for worse, something will change soon.

Anshel Pfeffer [00:01:52] What we’re seeing at present is more moves towards a cease fire slash hostage release agreement.

Anshel Pfeffer [00:01:52] What we’re seeing at present is more moves towards a cease fire slash hostage release agreement.

Jason Palmer [00:02:02] And self harm as the Economist’s Israel correspondent based in Jerusalem.

Jason Palmer [00:02:02] And self harm as the Economist’s Israel correspondent based in Jerusalem.

Anshel Pfeffer [00:02:07] We’ve been here so many times before in this dynamic for over a year now. What’s changed now is we have a time frame of two weeks before the inauguration of Donald Trump in which we have basically the representatives of the outgoing and the incoming administration working together with Israelis, with other parties like Egypt and Qatar, to try and have something tangible, some kind of deal in place by the time Joe Biden leaves the White House.

Anshel Pfeffer [00:02:07] We’ve been here so many times before in this dynamic for over a year now. What’s changed now is we have a time frame of two weeks before the inauguration of Donald Trump in which we have basically the representatives of the outgoing and the incoming administration working together with Israelis, with other parties like Egypt and Qatar, to try and have something tangible, some kind of deal in place by the time Joe Biden leaves the White House.

Jason Palmer [00:02:41] When you say moves on hostage release, what is the latest on that?

Jason Palmer [00:02:41] When you say moves on hostage release, what is the latest on that?

Anshel Pfeffer [00:02:45] So on Saturday, Hamas put out a video of Larry Alabi, a young Israeli soldier, a 19 year old woman who has been held now since October 7th in Gaza. The video, which seems to be proof that Leary is still alive. She’s one of the hostages whose parents have been very also active in calling upon the Israeli government and other governments to work harder to try and reach such a deal. And we’ve seen this in the last couple of months, a few times, in which Hamas have put out one of these videos, obviously, for psychological pressure, sectoral warfare on Israeli families and society and the Israeli government, because it does add pressure on the Netanyahu government as well. Whenever Israelis see one of their people still alive in Gaza. And it’s obviously also a sign that Hamas wants to reach a deal, that they have their motive. They need a period in which they can rebuild their organization, in which Israel’s incessant attacks will cease for a while. Hamas also needs on the political level to show that they can get something in exchange for those hostages that they captured. So that’s one sign of some kind of progress. And we’ve also heard in the next few hours about a list of 34 names of Israeli hostages which Hamas are now proposing to release. We don’t know of those 34 how many of them are alive hostages and more importantly, the names not they’re obviously bargaining chips that Hamas wants to keep in future rounds of negotiations. But all in all, this does look like a positive momentum towards a possible agreement. But as we’ve said, we’ve been here before.

Anshel Pfeffer [00:02:45] So on Saturday, Hamas put out a video of Larry Alabi, a young Israeli soldier, a 19 year old woman who has been held now since October 7th in Gaza. The video, which seems to be proof that Leary is still alive. She’s one of the hostages whose parents have been very also active in calling upon the Israeli government and other governments to work harder to try and reach such a deal. And we’ve seen this in the last couple of months, a few times, in which Hamas have put out one of these videos, obviously, for psychological pressure, sectoral warfare on Israeli families and society and the Israeli government, because it does add pressure on the Netanyahu government as well. Whenever Israelis see one of their people still alive in Gaza. And it’s obviously also a sign that Hamas wants to reach a deal, that they have their motive. They need a period in which they can rebuild their organization, in which Israel’s incessant attacks will cease for a while. Hamas also needs on the political level to show that they can get something in exchange for those hostages that they captured. So that’s one sign of some kind of progress. And we’ve also heard in the next few hours about a list of 34 names of Israeli hostages which Hamas are now proposing to release. We don’t know of those 34 how many of them are alive hostages and more importantly, the names not they’re obviously bargaining chips that Hamas wants to keep in future rounds of negotiations. But all in all, this does look like a positive momentum towards a possible agreement. But as we’ve said, we’ve been here before.

Jason Palmer [00:04:27] And you say this is now a question both of the outgoing and the incoming presidential administrations in America from the perspective of the Biden administration. How do you view what’s going on now?

Jason Palmer [00:04:27] And you say this is now a question both of the outgoing and the incoming presidential administrations in America from the perspective of the Biden administration. How do you view what’s going on now?

Anshel Pfeffer [00:04:37] Well, Joe Biden from October 7th has been very clear how committed he is trying to get as many of the hostages back. Some of them also are American citizens. But in general, he’s been very involved personally in that, including multiple phone calls and meetings with hostage families. And I think for him, it’s very important to have another release of hostages take place before he leaves the White House. And this isn’t just Joe Biden’s desire for another bit of legacy before he leaves important members of his team, including the secretary of state. Blinken are also very deeply involved in this.

Anshel Pfeffer [00:04:37] Well, Joe Biden from October 7th has been very clear how committed he is trying to get as many of the hostages back. Some of them also are American citizens. But in general, he’s been very involved personally in that, including multiple phone calls and meetings with hostage families. And I think for him, it’s very important to have another release of hostages take place before he leaves the White House. And this isn’t just Joe Biden’s desire for another bit of legacy before he leaves important members of his team, including the secretary of state. Blinken are also very deeply involved in this.

Antony Blinken [00:05:14] So what I can tell you is this. We very much want to bring this over the finish line in the next two weeks, the time that we have remaining. And we will work every minute of every day of those two weeks to try to get that to happen.

Antony Blinken [00:05:14] So what I can tell you is this. We very much want to bring this over the finish line in the next two weeks, the time that we have remaining. And we will work every minute of every day of those two weeks to try to get that to happen.

Anshel Pfeffer [00:05:26] And Donald Trump has also expressed a number of times his interest in there being a ceasefire even before he enters office in two weeks. So we do have this kind of rare convergence of interest from both the outgoing and incoming administrations, which at least here in the region, is felt as some kind of a momentum towards reaching a deal in the next couple of weeks. Another expression of Biden’s commitment to Israel we’ve seen in recent days is the announcement that the United States will be supplying Israel with another major package of arms and munitions to the tune of $8 billion. That’s even before Donald Trump comes in. And people, at least in Washington and in Jerusalem here, are expecting Trump to be no less supportive of Israel’s war effort.

Anshel Pfeffer [00:05:26] And Donald Trump has also expressed a number of times his interest in there being a ceasefire even before he enters office in two weeks. So we do have this kind of rare convergence of interest from both the outgoing and incoming administrations, which at least here in the region, is felt as some kind of a momentum towards reaching a deal in the next couple of weeks. Another expression of Biden’s commitment to Israel we’ve seen in recent days is the announcement that the United States will be supplying Israel with another major package of arms and munitions to the tune of $8 billion. That’s even before Donald Trump comes in. And people, at least in Washington and in Jerusalem here, are expecting Trump to be no less supportive of Israel’s war effort.

Jason Palmer [00:06:12] Is that so? That part is clear. At least you say there was a convergence of views as regards the hostages, you think a convergence of views also on funding supporting Israel in this war?

Jason Palmer [00:06:12] Is that so? That part is clear. At least you say there was a convergence of views as regards the hostages, you think a convergence of views also on funding supporting Israel in this war?

Anshel Pfeffer [00:06:21] Well, that’s a big question. What will Trump’s and his administration’s policy be on the Middle East? We’ve heard different things from different people who are going to be taking up senior posts in the administration. We’ve gotten much tougher statements on Iran and much stronger support from Israel from various people. But we’ve also heard other voices saying this administration does not want to be involved in the war. It wants to be ending wars rather than starting new ones, doesn’t want a war with Iran. And there’s also a major involvement of the Saudis, who are very close to Trump and some of his family and to Raj. They want to see an end to this war and they want to use the promise of some kind of Saudi Israeli pact. Normalization agreement as a way of also ending the war and starting the rebuilding of Gaza. So exactly the mechanisms of how Trump and his team see that happening. Will they agree for Israel to have yet another military push in Gaza before that happens? It will they be insisting on a much sooner, a ceasefire. And as we know, their negotiation tactics are very different than those of the Biden team. We may actually see a ceasefire happening much sooner than we think just because they have more levers of pressure on Netanyahu. And also within Israel, Netanyahu has to be able to explain to the Israeli public why he’s standing up to the American administration when it’s Biden. And Israelis tend to see Biden and the Democrats as slightly less supportive of Israel than he can say, look, I’m standing up for Israel’s interests. But Donald Trump is seen as being much more pro-Israel. So for Netanyahu to say no to Trump is something which will be much more difficult for him to explain also.

Anshel Pfeffer [00:06:21] Well, that’s a big question. What will Trump’s and his administration’s policy be on the Middle East? We’ve heard different things from different people who are going to be taking up senior posts in the administration. We’ve gotten much tougher statements on Iran and much stronger support from Israel from various people. But we’ve also heard other voices saying this administration does not want to be involved in the war. It wants to be ending wars rather than starting new ones, doesn’t want a war with Iran. And there’s also a major involvement of the Saudis, who are very close to Trump and some of his family and to Raj. They want to see an end to this war and they want to use the promise of some kind of Saudi Israeli pact. Normalization agreement as a way of also ending the war and starting the rebuilding of Gaza. So exactly the mechanisms of how Trump and his team see that happening. Will they agree for Israel to have yet another military push in Gaza before that happens? It will they be insisting on a much sooner, a ceasefire. And as we know, their negotiation tactics are very different than those of the Biden team. We may actually see a ceasefire happening much sooner than we think just because they have more levers of pressure on Netanyahu. And also within Israel, Netanyahu has to be able to explain to the Israeli public why he’s standing up to the American administration when it’s Biden. And Israelis tend to see Biden and the Democrats as slightly less supportive of Israel than he can say, look, I’m standing up for Israel’s interests. But Donald Trump is seen as being much more pro-Israel. So for Netanyahu to say no to Trump is something which will be much more difficult for him to explain also.

Jason Palmer [00:08:05] And we have been talking about this so much in terms of what will be going on in America. What about internally? You mentioned the politics there. Is this story different from the Israeli public perspective at this stage?

Jason Palmer [00:08:05] And we have been talking about this so much in terms of what will be going on in America. What about internally? You mentioned the politics there. Is this story different from the Israeli public perspective at this stage?

Anshel Pfeffer [00:08:17] Well, the Israeli public, from all the surveys that we’ve seen in recent months, is overwhelmingly in favor of this deal. Israelis see this more as a hostage released than the cease fire agreement. But when Israelis are asked, are they prepared for a ceasefire in Gaza for the return of the hostages? We’re seeing 60 plus percent of Israeli public in favor. On the other hand, the government and Anthony himself have repeatedly said that they’re not prepared to end the war until Hamas is totally vanquished. So Netanyahu needs to try and protect his own coalition before accepting what most the Israeli public wants. And his far right partners, who represent a minority of Israelis are very much against ending the war. They have plans for annexation of parts of Gaza and the permanent Israeli presence there, even building Israeli settlements. So it is an a very difficult balancing act between the public opinion and his political parties here.

Anshel Pfeffer [00:08:17] Well, the Israeli public, from all the surveys that we’ve seen in recent months, is overwhelmingly in favor of this deal. Israelis see this more as a hostage released than the cease fire agreement. But when Israelis are asked, are they prepared for a ceasefire in Gaza for the return of the hostages? We’re seeing 60 plus percent of Israeli public in favor. On the other hand, the government and Anthony himself have repeatedly said that they’re not prepared to end the war until Hamas is totally vanquished. So Netanyahu needs to try and protect his own coalition before accepting what most the Israeli public wants. And his far right partners, who represent a minority of Israelis are very much against ending the war. They have plans for annexation of parts of Gaza and the permanent Israeli presence there, even building Israeli settlements. So it is an a very difficult balancing act between the public opinion and his political parties here.

Jason Palmer [00:09:15] And as you said, we’ve been here many times before. More talks starting in Qatar now. What do you think the prospects for reaching a deal are?

Jason Palmer [00:09:15] And as you said, we’ve been here many times before. More talks starting in Qatar now. What do you think the prospects for reaching a deal are?

Anshel Pfeffer [00:09:25] I think you’ve asked me in the past here about that, and it’s really very difficult to make any type of prediction. We have been here before. I think that we do have a two week window of opportunity here when both outgoing and incoming administrations are involved. And that’s why we’re getting all these leaks and all these reports coming out about possible progress. But until the is happening on the ground, until the hostages are actually walking out of Gaza and Israeli forces are holding their fire, then you know, it’s still very premature.

Anshel Pfeffer [00:09:25] I think you’ve asked me in the past here about that, and it’s really very difficult to make any type of prediction. We have been here before. I think that we do have a two week window of opportunity here when both outgoing and incoming administrations are involved. And that’s why we’re getting all these leaks and all these reports coming out about possible progress. But until the is happening on the ground, until the hostages are actually walking out of Gaza and Israeli forces are holding their fire, then you know, it’s still very premature.

Jason Palmer [00:10:01] Angel, thanks very much for joining us.

Jason Palmer [00:10:01] Angel, thanks very much for joining us.

Anshel Pfeffer [00:10:03] Thank you for having me, Jason.

Anshel Pfeffer [00:10:03] Thank you for having me, Jason.

Jason Palmer [00:10:21] When you think of Nordic countries, a few images probably spring to mind. Norwegians have their deep fjords. Swedes have meatballs. Danes produce lots of those murderous crime dramas.

Jason Palmer [00:10:21] When you think of Nordic countries, a few images probably spring to mind. Norwegians have their deep fjords. Swedes have meatballs. Danes produce lots of those murderous crime dramas.

Jason Palmer [00:10:35] When you imagine a Finn, you’re probably imagining a sauna. Aside from these colorful tropes, though, Nordic countries are famous for their social democracies, their high taxes, their broad and generous welfare systems. What’s often overlooked, though, is just how much this small region’s businesses punch above their weight.

Jason Palmer [00:10:35] When you imagine a Finn, you’re probably imagining a sauna. Aside from these colorful tropes, though, Nordic countries are famous for their social democracies, their high taxes, their broad and generous welfare systems. What’s often overlooked, though, is just how much this small region’s businesses punch above their weight.

Guy Scriven [00:10:58] Note that companies tend to outperform on the world stage. The region is quite small, but it produces a lot of kind of corporate giants.

Guy Scriven [00:10:58] Note that companies tend to outperform on the world stage. The region is quite small, but it produces a lot of kind of corporate giants.

Jason Palmer [00:11:08] Guys, Griffin is a global business writer for The Economist.

Jason Palmer [00:11:08] Guys, Griffin is a global business writer for The Economist.

Guy Scriven [00:11:11] So that includes Lego and Ikea and Spotify and Novo Nordisk. But as geopolitical tensions rise around the world, life could start to get a bit harder for these superstars of the Nordics.

Guy Scriven [00:11:11] So that includes Lego and Ikea and Spotify and Novo Nordisk. But as geopolitical tensions rise around the world, life could start to get a bit harder for these superstars of the Nordics.

Jason Palmer [00:11:26] So you mentioned some absolutely enormous companies, clearly. But what do you mean in terms of punching above their weight?

Jason Palmer [00:11:26] So you mentioned some absolutely enormous companies, clearly. But what do you mean in terms of punching above their weight?

Guy Scriven [00:11:33] So, for instance, if you look at the kind of total shareholder returns generated in the past ten years, firms from the four big Nordic countries, so that’s Denmark, Sweden, Norway and Finland all outperformed the kind of average of Europe. Not only that, the big Nordic companies on average tend to be more profitable, less indebted and spend more on research and development than international rivals are.

Guy Scriven [00:11:33] So, for instance, if you look at the kind of total shareholder returns generated in the past ten years, firms from the four big Nordic countries, so that’s Denmark, Sweden, Norway and Finland all outperformed the kind of average of Europe. Not only that, the big Nordic companies on average tend to be more profitable, less indebted and spend more on research and development than international rivals are.

Jason Palmer [00:12:06] So what’s going on there, do you think? Why this, dare I say, Scandi success story?

Jason Palmer [00:12:06] So what’s going on there, do you think? Why this, dare I say, Scandi success story?

Guy Scriven [00:12:11] Well, one factor is that Nordic companies are kind of natural globetrotters. All the countries are quite small, so their domestic markets are quite small. So that means quite early in the lifecycle of a company, they tend to venture abroad. And that forces them really to kind of sharpen their business models and improve their products if they want to face kind of competition in America or China or Germany, say. So what you see is that actually a very large share of sales of Nordic companies come from abroad. Another kind of important factor is that Norway companies are really keen adopters of new technologies. So if you look at cloud computing or AI, Nordic companies top the rankings when compared to the rest of Europe in terms of adopting these kind of technologies. And there’s a long history of this. So Lego, for instance, after the Second World War, pioneered the use of plastic in toy making. And the kind of gains from that you still see today in young Nordic companies. So there was a kind of thriving startup scene in Stockholm. Helsinki, for instance, is full of gaming companies like Rovio, which is the maker of Angry Birds. But there are plenty of others as well.

Guy Scriven [00:12:11] Well, one factor is that Nordic companies are kind of natural globetrotters. All the countries are quite small, so their domestic markets are quite small. So that means quite early in the lifecycle of a company, they tend to venture abroad. And that forces them really to kind of sharpen their business models and improve their products if they want to face kind of competition in America or China or Germany, say. So what you see is that actually a very large share of sales of Nordic companies come from abroad. Another kind of important factor is that Norway companies are really keen adopters of new technologies. So if you look at cloud computing or AI, Nordic companies top the rankings when compared to the rest of Europe in terms of adopting these kind of technologies. And there’s a long history of this. So Lego, for instance, after the Second World War, pioneered the use of plastic in toy making. And the kind of gains from that you still see today in young Nordic companies. So there was a kind of thriving startup scene in Stockholm. Helsinki, for instance, is full of gaming companies like Rovio, which is the maker of Angry Birds. But there are plenty of others as well.

Jason Palmer [00:13:30] It’s hard not to wonder if there’s any correlation there. Also, with the Nordic model that we often hear about high tax, big government, happy people and social democracies.

Jason Palmer [00:13:30] It’s hard not to wonder if there’s any correlation there. Also, with the Nordic model that we often hear about high tax, big government, happy people and social democracies.

Guy Scriven [00:13:38] Yes, there is in part. Right. So the kind of successful government policy is a third factor here underpinning the Nordic success. If you look at measures of kind of business friendly regulation, the Heritage Foundation, which is a conservative think tank in Washington, produces an index of economic freedom. And Denmark, Sweden and Norway all make the kind of top ten of this index. If you speak to bosses in Denmark and Sweden, they all tell you that it’s much easier to hire and fire workers than it is in the rest of Europe. So in a lot of ways, the Nordics is an example of how to do business friendly regulation, right? And although the Nordic countries have a reputation for being places where the tax levels are really high and government spending is really high, some of that is kind of true. But when it comes to how businesses operate, if you look at the corporate tax level across the Nordics, that rate is roughly on par with what you see in America. And so actually, the Nordic countries have set up a system in quite a clever way to hinder businesses as little as possible.

Guy Scriven [00:13:38] Yes, there is in part. Right. So the kind of successful government policy is a third factor here underpinning the Nordic success. If you look at measures of kind of business friendly regulation, the Heritage Foundation, which is a conservative think tank in Washington, produces an index of economic freedom. And Denmark, Sweden and Norway all make the kind of top ten of this index. If you speak to bosses in Denmark and Sweden, they all tell you that it’s much easier to hire and fire workers than it is in the rest of Europe. So in a lot of ways, the Nordics is an example of how to do business friendly regulation, right? And although the Nordic countries have a reputation for being places where the tax levels are really high and government spending is really high, some of that is kind of true. But when it comes to how businesses operate, if you look at the corporate tax level across the Nordics, that rate is roughly on par with what you see in America. And so actually, the Nordic countries have set up a system in quite a clever way to hinder businesses as little as possible.

Jason Palmer [00:14:50] So it’s a little bit of Nordic being a traveling out into the world, people being technology friendly, having a good business environment. That’s the sum of it.

Jason Palmer [00:14:50] So it’s a little bit of Nordic being a traveling out into the world, people being technology friendly, having a good business environment. That’s the sum of it.

Guy Scriven [00:15:01] Well, there’s one more factor that we haven’t gotten to, Jason, which is basically patient capital. So if you look across Nordic companies and this is an exercise that McKinsey did, they reckon that about 4/5 of large companies have long term ownership. And that compares with about 3/5 in the rest of Europe and one fifth in America. And by long term ownership in the Nordics, they mean only the kind of rich families and business dynasties that hold large chunks of company stock. Or they mean nonprofit foundations. So, for instance, Carlsberg and Novo Nordisk are backed by nonprofit foundations. And Merck and Lego have backing from big family dynasties. And the advantage of this is that it helps companies plan for the long term. So if you listen to the boss of Novo Nordisk, he often talks about how his main focus every day is kind of what will the company look like in a decade? And that’s a kind of sharp contrast from companies in other parts of the world where the next quarterly earnings is really what’s at the top of everyone’s mind.

Guy Scriven [00:15:01] Well, there’s one more factor that we haven’t gotten to, Jason, which is basically patient capital. So if you look across Nordic companies and this is an exercise that McKinsey did, they reckon that about 4/5 of large companies have long term ownership. And that compares with about 3/5 in the rest of Europe and one fifth in America. And by long term ownership in the Nordics, they mean only the kind of rich families and business dynasties that hold large chunks of company stock. Or they mean nonprofit foundations. So, for instance, Carlsberg and Novo Nordisk are backed by nonprofit foundations. And Merck and Lego have backing from big family dynasties. And the advantage of this is that it helps companies plan for the long term. So if you listen to the boss of Novo Nordisk, he often talks about how his main focus every day is kind of what will the company look like in a decade? And that’s a kind of sharp contrast from companies in other parts of the world where the next quarterly earnings is really what’s at the top of everyone’s mind.

Jason Palmer [00:16:09] But you mentioned insofar as there are all of these favorable wins for Nordic countries that the things might be set for change.

Jason Palmer [00:16:09] But you mentioned insofar as there are all of these favorable wins for Nordic countries that the things might be set for change.

Guy Scriven [00:16:16] Yes. I mean, it hasn’t all been completely perfect, right? So I think just before Christmas, you saw the collapse of Northvolt, which was a big, much hyped kind of battery maker from Sweden. And that got into trouble because it’s kind of spread itself too thin. But beyond headline making failures, there are reasons that you might worry about the Nordic business model, which is very dependent on kind of globalization. So obviously, as geopolitical tensions rise around the world and more countries put up various types of trade barriers like tariffs, this is going to make life much harder for the big successful Nordic companies. And there’s a kind of open question as to whether they can continue their success in a world where big countries like America and China are stepping back from free trade.

Guy Scriven [00:16:16] Yes. I mean, it hasn’t all been completely perfect, right? So I think just before Christmas, you saw the collapse of Northvolt, which was a big, much hyped kind of battery maker from Sweden. And that got into trouble because it’s kind of spread itself too thin. But beyond headline making failures, there are reasons that you might worry about the Nordic business model, which is very dependent on kind of globalization. So obviously, as geopolitical tensions rise around the world and more countries put up various types of trade barriers like tariffs, this is going to make life much harder for the big successful Nordic companies. And there’s a kind of open question as to whether they can continue their success in a world where big countries like America and China are stepping back from free trade.

Jason Palmer [00:17:06] I mean, I guess that’s the downside of putting so much of your business outside of your country. Being a Nordic adventurer, that means you’re much more subject to the winds outside your country.

Jason Palmer [00:17:06] I mean, I guess that’s the downside of putting so much of your business outside of your country. Being a Nordic adventurer, that means you’re much more subject to the winds outside your country.

Guy Scriven [00:17:16] That’s absolutely right. And what essentially it would probably mean for the Nordic companies is that they would have to be more adaptable going forward. So we’ve already had kind of very clear examples of Nordic businesses getting into trouble with kind of choppier geopolitical waters. So in 2023, Carlsberg’s business in Russia was seized by the government and placed under what the Russian government called temporary management. And the business units that were eventually sold off. That’s a big write down. And Musk, the big shipping company, has had its boats and container terminals in the Red Sea fired up by his missiles. And so there are really clear examples of Nordic companies already getting into trouble. But if you ask the bosses of the companies how they plan to respond and how they think about this, they tend to bring up another characteristic of Nordic companies, which is this adaptability and the ability to be flexible in the face of kind of geopolitical change is something the Nordics are going to have to rely on in the coming decade.

Guy Scriven [00:17:16] That’s absolutely right. And what essentially it would probably mean for the Nordic companies is that they would have to be more adaptable going forward. So we’ve already had kind of very clear examples of Nordic businesses getting into trouble with kind of choppier geopolitical waters. So in 2023, Carlsberg’s business in Russia was seized by the government and placed under what the Russian government called temporary management. And the business units that were eventually sold off. That’s a big write down. And Musk, the big shipping company, has had its boats and container terminals in the Red Sea fired up by his missiles. And so there are really clear examples of Nordic companies already getting into trouble. But if you ask the bosses of the companies how they plan to respond and how they think about this, they tend to bring up another characteristic of Nordic companies, which is this adaptability and the ability to be flexible in the face of kind of geopolitical change is something the Nordics are going to have to rely on in the coming decade.

Jason Palmer [00:18:20] Guy, thanks very much for your time.

Jason Palmer [00:18:20] Guy, thanks very much for your time.

Guy Scriven [00:18:22] Thank you, Jason.

Jason Palmer [00:18:41] We started 2024 by looking forward to lots of elections around the world. Largest among them India’s. As expected, Prime Minister Narendra modi won a third term, but the victory was by an unexpectedly small margin. The people were heard. Democracy held in Bangladesh, democracy had been taking an ever worse beating under Prime Minister Sheikh Hasina, sparking widespread protests in the summer. In August, she fled. Democracy got a leg up. What about the bigger picture of democracy in Asia in 2025? As part of our ten part series called World Ahead. We asked our Asia editor, Emma Hogan, exactly that.

Jason Palmer [00:18:41] We started 2024 by looking forward to lots of elections around the world. Largest among them India’s. As expected, Prime Minister Narendra modi won a third term, but the victory was by an unexpectedly small margin. The people were heard. Democracy held in Bangladesh, democracy had been taking an ever worse beating under Prime Minister Sheikh Hasina, sparking widespread protests in the summer. In August, she fled. Democracy got a leg up. What about the bigger picture of democracy in Asia in 2025? As part of our ten part series called World Ahead. We asked our Asia editor, Emma Hogan, exactly that.

Emma Hogan [00:19:28] 2024 was a big year for democracy in Asia. Mostly because of the Indian election in June 2024, in which Narendra modi, the prime minister, was really gunning for a majority of 400 seats, which is what he was boasting that his BJP party would get beforehand. But in the end, the BJP won just 240 seats. So Prime Minister Modi has to now govern in a coalition. And that means, although his rhetoric has remained broadly similar, combining Hindu nationalist agenda with more strongman instincts, he’s had to make a series of significant compromises.

Emma Hogan [00:19:28] 2024 was a big year for democracy in Asia. Mostly because of the Indian election in June 2024, in which Narendra modi, the prime minister, was really gunning for a majority of 400 seats, which is what he was boasting that his BJP party would get beforehand. But in the end, the BJP won just 240 seats. So Prime Minister Modi has to now govern in a coalition. And that means, although his rhetoric has remained broadly similar, combining Hindu nationalist agenda with more strongman instincts, he’s had to make a series of significant compromises.

Jason Palmer [00:20:13] And what do those include? In what, in fact, do you think will be the dynamic going forward?

Jason Palmer [00:20:13] And what do those include? In what, in fact, do you think will be the dynamic going forward?

Emma Hogan [00:20:18] The Supreme Court has already blocked several BJP run states on measures targeting Muslim minorities. But I think more U-turns are likely in 2025. Not least as the BJP has faced significant criticism from the RSS, the nationalist group which it sprung from. And although the BJP has won a series of state elections recently, it has been notable for the absence of Prime Minister Modi and those campaigns. So they’ve tended to be won on local issues rather than on the Modi brand.

Emma Hogan [00:20:18] The Supreme Court has already blocked several BJP run states on measures targeting Muslim minorities. But I think more U-turns are likely in 2025. Not least as the BJP has faced significant criticism from the RSS, the nationalist group which it sprung from. And although the BJP has won a series of state elections recently, it has been notable for the absence of Prime Minister Modi and those campaigns. So they’ve tended to be won on local issues rather than on the Modi brand.

Jason Palmer [00:20:51] And what about India’s neighbors? Pull the lens out just a bit.

Jason Palmer [00:20:51] And what about India’s neighbors? Pull the lens out just a bit.

Emma Hogan [00:20:55] The one to watch out for the most is Bangladesh, which saw really a very significant moment in 2020 for the overthrow of Sheikh Hasina as government by student led protesters. Sheikh Hasina, who’d been in charge of the country and was increasingly autocratic for many years, has fled to India actually. So there’s potentially going to be a point of tension between Narendra modi and Muhammad Yunus, the interim leader of Bangladesh, as Bangladesh wants to extradite Sheikh Hasina for what they allege are crimes against humanity.

Emma Hogan [00:20:55] The one to watch out for the most is Bangladesh, which saw really a very significant moment in 2020 for the overthrow of Sheikh Hasina as government by student led protesters. Sheikh Hasina, who’d been in charge of the country and was increasingly autocratic for many years, has fled to India actually. So there’s potentially going to be a point of tension between Narendra modi and Muhammad Yunus, the interim leader of Bangladesh, as Bangladesh wants to extradite Sheikh Hasina for what they allege are crimes against humanity.

Jason Palmer [00:21:33] And as you say, it was a big year for democracy in the sense that so many people went to the polls and other neighboring country would be Sri Lanka. What’s going on there?

Jason Palmer [00:21:33] And as you say, it was a big year for democracy in the sense that so many people went to the polls and other neighboring country would be Sri Lanka. What’s going on there?

Emma Hogan [00:21:41] It’s been really striking what’s happened there. The new president comes from a party which began as a Marxist Leninist movement. That coalition won a landslide victory in a parliamentary poll in November. But although Arkady, as he’s known, is untested in power, he’s definitely toned down his party rhetoric and push for reforms. So it’ll be an interesting case study of what will happen with democracy there as well.

Emma Hogan [00:21:41] It’s been really striking what’s happened there. The new president comes from a party which began as a Marxist Leninist movement. That coalition won a landslide victory in a parliamentary poll in November. But although Arkady, as he’s known, is untested in power, he’s definitely toned down his party rhetoric and push for reforms. So it’ll be an interesting case study of what will happen with democracy there as well.

Jason Palmer [00:22:06] And pulling the lens out further. Where else to look for how democracy is doing in the whole of Asia?

Jason Palmer [00:22:06] And pulling the lens out further. Where else to look for how democracy is doing in the whole of Asia?

Emma Hogan [00:22:13] Well, in many ways I feel that the picture is mixed, but the area that I’m perhaps most worried about is Southeast Asia. You’ve got a new president in Indonesia, Prabowo Subianto. He has been accused in the past of atrocities which he’s always denied during the earlier period when he was in the military. But he’s taken on a very militaristic stance already as president. So, for example, he got his whole cabinet to take part in a boot camp for several days to kick off the new era.

Emma Hogan [00:22:13] Well, in many ways I feel that the picture is mixed, but the area that I’m perhaps most worried about is Southeast Asia. You’ve got a new president in Indonesia, Prabowo Subianto. He has been accused in the past of atrocities which he’s always denied during the earlier period when he was in the military. But he’s taken on a very militaristic stance already as president. So, for example, he got his whole cabinet to take part in a boot camp for several days to kick off the new era.

Speaker 5 [00:22:46] They’ve gathered at the Indonesian military academy in the mountainous region of Mangalore in central Java. Cabinet members dressed in camouflage uniforms and combat boots freely.

Speaker 5 [00:22:46] They’ve gathered at the Indonesian military academy in the mountainous region of Mangalore in central Java. Cabinet members dressed in camouflage uniforms and combat boots freely.

Emma Hogan [00:22:58] There’s also been the arrest of an opposition politician, which prosecutors incest is not politically motivated. And then there’s also the added element in Indonesia that the outgoing president, Jokowi, his son, is now vice president. So there’s a sort of sense of political dynasty in Indonesia, which Jokowi said when he came into power in 2014 would not be the case in that country. And then in Thailand, you’ve also got a grim situation in that the Move forward party, which won a plurality of seats in the election of 2023, has been banned by the Constitutional Court. Its politicians have been barred from participating in politics for a decade. So that’s really quite draconian. While many of the protesters in Thailand in 2020 remain in jail. And then combined with that, you’ve also got Myanmar, where a military junta has been in power for several years. There’s still a civil war raging in parts of the country. But even the anti junta forces that are winning are perhaps no big fans of democracy. Several of them are backed by China, for example. So overall, it’s not the best picture in other parts of Asia.

Emma Hogan [00:22:58] There’s also been the arrest of an opposition politician, which prosecutors incest is not politically motivated. And then there’s also the added element in Indonesia that the outgoing president, Jokowi, his son, is now vice president. So there’s a sort of sense of political dynasty in Indonesia, which Jokowi said when he came into power in 2014 would not be the case in that country. And then in Thailand, you’ve also got a grim situation in that the Move forward party, which won a plurality of seats in the election of 2023, has been banned by the Constitutional Court. Its politicians have been barred from participating in politics for a decade. So that’s really quite draconian. While many of the protesters in Thailand in 2020 remain in jail. And then combined with that, you’ve also got Myanmar, where a military junta has been in power for several years. There’s still a civil war raging in parts of the country. But even the anti junta forces that are winning are perhaps no big fans of democracy. Several of them are backed by China, for example. So overall, it’s not the best picture in other parts of Asia.

Jason Palmer [00:24:09] And what about on balance, if it makes any sense at all, to kind of take the democratic temperature of Asia as a whole? What are the prospects? What does your crystal ball tell you?

Jason Palmer [00:24:09] And what about on balance, if it makes any sense at all, to kind of take the democratic temperature of Asia as a whole? What are the prospects? What does your crystal ball tell you?

Emma Hogan [00:24:18] Well, I mean, of such a large and diverse region, it’s hard to make too many sweeping views. But I think that democracy is clinging on in much of Asia. But there are some really worrying signs in other parts.

Emma Hogan [00:24:18] Well, I mean, of such a large and diverse region, it’s hard to make too many sweeping views. But I think that democracy is clinging on in much of Asia. But there are some really worrying signs in other parts.

Jason Palmer [00:24:31] Emma, thanks very much for joining us.

Jason Palmer [00:24:31] Emma, thanks very much for joining us.

Emma Hogan[00:24:33] Thank you, Jason.

Jason Palmer [00:24:56] That’s all for this episode of the intelligence. We’ll see you back here tomorrow.

Jason Palmer [00:24:56] That’s all for this episode of the intelligence. We’ll see you back here tomorrow.

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