Arvind's Newsletter-Weekend edition

1.How BCCI won, Indian economy gained INR22,000 crore from Cricket World Cup 2023, opined Economic Times

Amid the heartache of India’s loss in the finals, the ICC’s coffers are overflowing with financial triumph. The ICC Men’s Cricket World Cup 2023 has elevated the game beyond mere entertainment, solidifying its status as a global financial juggernaut. 

In 2019, the World Cup held in the UK yielded an economic impact of more than GBP350 million. Fast forward to 2023, Bank of Baroda, a financial institution, projects that the event will infuse a staggering USD2.6 billion (approximately INR22,000 crore) into India’s economy. 

The India versus Australia finals at Narendra Modi Stadium in Ahmedabad broke records with 1.25 lakh attendees, surpassing prior World Cup editions — 2015 had 1.01 lakh fans, and 2019 drew 752,000. The influx of visitors has fuelled spending on accommodations, travel expenses, fuel, and food, stimulating economic activity. 

The government has also seen an uptick in tax collections, contributing to an overall surge in national tax revenue. Beyond the stadium, the tournament made online history, hitting around 59 million concurrent viewers on Disney+Hotstar during the finals. Read on

2.Smaller Indian companies propel BSE market cap towards $4 trillion milestone

The mcap of all BSE-listed stocks finished at a new record of Rs 328.33 trillion ($3.94 trillion), despite the benchmark indices ending with losses. Stocks outside the top 100 now contribute 40 per cent to the country’s mcap, up from 35 per cent at the start of this financial year (2023-24).

Since April 1, India’s mcap has risen 27 per cent. Meanwhile, the mcap of the top 100 companies has grown 17 per cent to Rs 195 trillion, while those outside the top 100 have seen their market value surge 46 per cent to Rs 133 trillion.

According to Bloomberg data, India’s mcap has risen nearly 13 per cent so far this calendar year, even as China’s has seen a 5 per cent erosion in its mcap. The US is the only market in the top 10 mcap club that has grown at a faster clip than India at 16 per cent. The combined world mcap has grown 9 per cent this year to $106 trillion.

3.Israeli intelligence ‘dismissed’ detailed warning of Hamas raid reports Financial Times.

A senior Israeli military intelligence officer dismissed a detailed warning predicting Hamas’s raid of October 7, calling it an “imaginary scenario”, said two people familiar with the discussions.

Sentries on Israel’s border with Gaza, many of them female soldiers who watch and analyse a constant feed of video and other data gathered near the electronic fence surrounding the enclave, sent a detailed report weeks before the attack to the highest-ranking intelligence officer in the southern command, both people said.

The report was sent using a secure communications system and contained specific warnings, including that Hamas was training to blow up border posts at several locations, enter Israeli territory and take over kibbutzim, the person with direct knowledge of the contents of the warning said.

Israel’s failure to prevent the attack, which the government says killed more than 1,200 people, is now seen as its largest intelligence failure since Egypt and Syria launched a surprise assault in 1973 on Yom Kippur, Judaism’s holiest day.

The lower-ranking soldiers also warned their analysis of several videos showed Hamas was rehearsing taking hostages, and that they felt an attack was imminent, the person said. The memo was triggered by the sighting of a high-ranking Hamas military commander overseeing the training, who was identified by the sentries against a database of faces and identities maintained by Unit 8200, a part of the Israeli intelligence corps.

4.OpenAI ‘was working on advanced model so powerful it alarmed staff’ reported Guardian quoting a Reuters report

OpenAI was reportedly working on an advanced system before Sam Altman’s sacking that was so powerful it caused safety concerns among staff at the company.

The artificial intelligence model triggered such alarm with some OpenAI researchers that they wrote to the board of directors before Altman’s dismissal warning it could threaten humanity, Reuters reported.

The model, called Q* – and pronounced as “Q-Star” – was able to solve basic maths problems it had not seen before, according to the tech news site the Information, which added that the pace of development behind the system had alarmed some safety researchers. The ability to solve maths problems would be viewed as a significant development in AI.

However, other reports on Q* were less alarmist. Read below as reported in various tech blogs and Twitter feeds.

5.Lessons from the ascent of the United Arab Emirates

Over the next few weeks Dubai will be abuzz. Tens of thousands of diplomats, activists and business folk are due to fly in to join the UN’s annual climate pow-wow. The United Arab Emirates’ skill at wrangling countries and industries with vastly disparate interests, in the hope of making further progress on tackling climate change, will be on full display. But that is not the only reason to pay attention to the UAE. It also shows how to thrive in the multipolar age.

The country is home to just over 0.1% of the world’s people and produces only 0.5% of its gdp, but it contains nearly 10% of the world’s oil reserves, and this wealth helps it punch above its weight. Like many emerging countries today, it straddles political and economic divisions. It is a closed autocracy, yet one of the world’s most open economies. It is a close ally of America, but its biggest trading partner is China. Although its GDP per person exceeds that of Britain or France, it is often seen as part of the global south and is a hub for Indian and African businesses, making it the Singapore of the Middle East. And in 2020 it was one of the first Gulf countries to normalise relations with Israel.

Another lesson is to welcome foreign talent. With just 1m locals, the UAE needs lots of both highly skilled and low-skilled migrants. And the world is full of go-ahead people hoping to make their fortunes. Whereas Saudi Arabia is resorting to heavy-handed measures to attract expertise, such as requiring regional offices to be set up in the country, the UAE focuses on making itself a more attractive place to live and do business. A golden-visa scheme set up in 2019 offers professionals long-term residency; a select few can even apply for citizenship, once unheard of in the Gulf. In time Saudi Arabia, which is just starting to wean its economy off oil, may become a serious rival. Although the uae severely restricts political freedoms and has a bad record on human rights, the threat of competition is spurring it to become more socially and economically liberal.

Nor has the UAE forgotten the gains from trade. Other countries have favoured industrial policy and protectionism, but it has been doing deals. India, wary of free trade, signed its first such deal in a decade with the UAE; commerce between the two has since leapt by 16% in nominal terms. An agreement with Israel has given the UAE precious tech know-how and Israeli firms access to deep pools of capital and the bigger Gulf market. Western airlines stopped flying to Tel Aviv after the war in Gaza began. Etihad and Flydubai, two Emirati carriers, still make regular flights there.

Yet some opportunities are turning out to be pitfalls. As America’s influence wanes, enterprising powers everywhere will be tempted to amass influence abroad for themselves. Muhammad bin Zayed, the UAE‘s ruler, has duly seized the initiative. The country’s pragmatism has sometimes served it well. In much of Africa it is a welcome business partner, without the imperial baggage of the West; at the un climate meeting, it hopes to be a broker between rich and poor. But the UAE has also made terrible mistakes.

Fearing the influence of political Islam in its backyard, and wanting to protect trade flows, the UAE is arming the Rapid Support Forces, a Sudanese militia that is committing genocide in Darfur. In the past that approach has failed miserably. In Libya the UAE backed a warlord who tried to march on Tripoli in 2019 and lost. In Yemen it joined Saudi Arabia in a long war against the Houthi rebels, before partially withdrawing in 2019.

Over the years the UAE’s rulers have built mechanisms to ensure a stable business environment at home; they know, too, that domestic failures would quickly incur the ire of their citizens. But the regime faces no such constraints abroad, allowing it to indulge its whims and protect its interests, no matter the consequences elsewhere. In a fragmented world, many countries will be looking for new ways to play on the global stage. The UAE shows the promise that lies ahead—and the perils, too.