A worsening migration crisis in the Americas

This is an audio transcript of the FT News Briefing podcast episode: A worsening migration crisis in the Americas

Sonja Hutson
Good morning from the Financial Times. Today is Thursday, September 15th, and this is your FT News Briefing.

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Sonja Hutson
Western powers want to plug the loopholes in their sanctions on Russia. Porsche is cruising towards an IPO. And a migration crisis in the Americas keeps getting worse.

Michael Stott
This has become a region-wide migration crisis. This is no longer just about the US and Central America or the US and Mexico.

Sonja Hutson
I’m Sonja Hutson, in for Marc Filippino, and here’s the news you need to start your day.

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Sonja Hutson
Turkey’s president Recep Tayyip Erdoğan plans to meet with his Russian counterpart, Vladimir Putin, tomorrow. Erdoğan says he wants to remain neutral regarding Russia’s war in Ukraine and he’s refused to sign on to western sanctions. But US and EU officials have been ratcheting up pressure on Turkey not to let Russia use its banks to evade sanctions. The US is concerned about Turkish banks that are part of Russia’s payments network called Mir. It’s Russia’s alternative to Visa and Mastercard. Five of Turkey’s largest banks are now members of Mir.

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Sonja Hutson
Volkswagen is moving ahead with plans to publicly list its sports car brand, Porsche. An IPO could come in the next few weeks and executives are hoping to replicate the success Ferrari had with its IPO in 2015. Ferrari’s listing proved that carmakers could also be valued as luxury businesses. Here’s the FT’s Peter Campbell.

Peter Campbell
There is the idea that if a luxury carmaker such as Ferrari or such as Porsche is tied up within a larger carmaker, then its true value is never really realised. And so, what Volkswagen is hoping to do here is by spinning off some of Porsche — now they’re not selling all of it; they’re selling some of the shares in it — that they will be able to unlock value that is currently held within Porsche as a company that they think could help the company trade as a luxury business or as a somewhere between a carmaker and a luxury business.

Sonja Hutson
Well Peter, can Porsche actually compete with Ferrari as a luxury brand?

Peter Campbell
Well, this is the entire debate. So the key issue about whether something is luxury is how expensive it is to access the brand. Yeah, if you want to buy a Mercedes-Benz, you can probably buy one for about £30,000-35,000. If you want to get into the Porsche brand, you can do that for about £60,000 with its cheapest models. But if you want to get into the Ferrari brand for a new car, you’re looking at spending about £200,000. And so it is much more exclusive than Porsche is. Now, the argument that the Porsche advisers are making and are going to be making to investors this week and over the next couple of weeks before the shares begin trading, is that, yes, Porsche has a lot of cars in Ferrari’s price segment, but it also has the advantages of scale. It means it can get cost savings when it comes to doing lots of different models. But really that’s not the way that luxury and exclusivity works.

Sonja Hutson
That’s the FT’s global motor industry correspondent Peter Campbell.

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Sonja Hutson
The migration crisis in the Americas keeps getting worse. In the past year, nearly two and a half million migrants were apprehended at the US-Mexico border. That’s a new record. And it’s not just people fleeing Mexico and Central America anymore. The FT’s Latin America editor Michael Stott just interviewed a top US official about this. He joins me now to discuss. Hello, Michael.

Michael Stott
Hi, Sonja.

Sonja Hutson
So it seems like migration hasn’t been making headlines in the same way that it was during the previous administration, the Trump administration. But people are now coming to the US in even greater numbers than they were back then. What’s behind this latest surge?

Michael Stott
So Sonja, I think what’s important to underline is that this has become a region-wide migration crisis. This is no longer just about the US and Central America or the US and Mexico. We’ve got migrants fleeing all over Latin America now in much greater numbers and overwhelming some of the countries in the south of the region as well. And behind all of this is economic crisis, is hardship from Covid, but it’s also really the collapse of Venezuela as a country. Venezuela’s had 6.8mn people leave over the last five years, which is on the same scale to Syria. And then on top of that, you’ve got Cuba and you’ve got Haiti. And in the case of Cuba, of course, we had last year the demonstrations and mass protests, and the government’s response to those was to crack down. So that led to an increasing sense of frustration on the island, an increasing sense of desperation that things were not gonna change, that they’ll maybe get worse. And people, as a result, are fleeing in what this official, Ricardo Zúñiga, told me was the greatest number since the 1959 revolution.

Sonja Hutson
So Michael, you spoke to the state department official whom you just mentioned, Ricardo Zúñiga. What did he say that really stuck out to you?

Michael Stott
What was striking about what he said was that he’d never seen anything like this on this sort of scale. And he was underlining just how serious it’s become for other countries in the region. So you have countries like Colombia that are hosting over 2mn Venezuelans. Countries like Peru, Ecuador and Chile that are hosting huge numbers of Venezuelans and who are also seeing now Cubans starting to come in in greater numbers, and Haitians as well. And the problem is that in Cuba and Haiti, these crises don’t have any easy or quick resolution. I mean, in the short to medium term, they’re likely to only get worse.

Sonja Hutson
So how are countries in the region responding to this?

Michael Stott
So Colombia’s mounted a huge effort to try and help people arriving from Venezuela. And they’ve been praised for that quite widely. But it’s put enormous strains on their budget, on their health and their education systems. And, of course, there’s always a risk of a backlash. And we’ve seen in some countries, like Chile, quite a big backlash against Venezuelans, Venezuelans being blamed in many cases unfairly for crime or for joblessness or for competition for labour. It’s becoming more difficult to manage this socially, and particularly in a region that’s already suffering the consequences of Covid and what that did to the economies, because this was, we shouldn’t forget, one of the world’s hardest hit regions from Covid, in terms of the health impact and the economic impact.

Sonja Hutson
How much of a problem will this migration crisis be for the Democratic party? I mean, they’ve got the midterm elections coming up in November.

Michael Stott
So it’s a major political headache. It’s something that Trump supporters and the Republicans want to use to bash the Democrats with. That, you know, we’ve got here a president who’s soft on migrants. The response of the Biden administration has been to try to create safe and legal pathways for controlled migration and to put in place a package of support to try to address the root causes of migration. And this is a 4bn four-year programme for Central America. The difficulty, of course, is this was launched last year. But it’s also migration now from Cuba, from Haiti, from other parts of Latin America. And I think there is a legitimate question about whether a package focused on Central America is really gonna do enough to change the situation in the region. And I think Ricardo Zúñiga himself would say quite clearly that they see this as very much a long-term situation and something that’s gonna take many, many years to fix.

Sonja Hutson
Michael Stott is the FT’s Latin America editor. Thanks, Michael.

Michael Stott
Thank you, Sonja.

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Sonja Hutson
Ukraine’s president Volodymyr Zelenskyy is vowing to take back Crimea and all territories occupied by Russia. He said this while he was visiting one of the towns Ukrainians have taken back as part of their recent counteroffensive.

Lawrence Freedman
We’ve reached a position where the Russian options have narrowed enormously and there’s all sorts of grim possibilities that might still await us. But by and large, I think this is very much the beginning of the end of the war.

Sonja Hutson
That’s King’s College Professor Emeritus Lawrence Freedman. He says as the war carries on, the focus will shift to Crimea.

Lawrence Freedman
If you had any sort of rational decision-making in Moscow, you would assume that somebody has worked out that Crimea starts to become quite vulnerable. And this, in the end, matters I’m sure far more to Putin and so on than the Donbas.

Sonja Hutson
Lawrence Freedman is an emeritus professor of war studies at King’s College in London. He was speaking to Gideon Rachman on this week’s Rachman Review podcast. It’s out today and we’ll have a link in the show notes.

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Sonja Hutson
You can read more on all these stories at FT.com. This has been your daily FT News Briefing. Make sure you check back tomorrow for the latest business news.

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