6 ★ FINANCIAL TIMES Tuesday 3 March 2020
I N T E R N AT I O N A L
M A X S E D D O N— MOSCOW
Russian president Vladimir Putin’s
spending promises are under threat
from falling oil prices that could hurt the
savings the Kremlin is tapping to rekin-
dle growth.
The coronavirus outbreak last week
pushed Brent crude, the international
oil benchmark, down 10 per cent to a
year low of close to $50 a barrel.
The fall puts prices near Russia’s
break-even price of $42 a barrel, threat-
ening the policy that has helped Moscow
run a budget surplus and save $125bn in
excess oil and gas revenue in a national
wealth fund since 2017.
Facing a fall in living standards that
pushed his approval ratings to record
lows, Mr Putin pledged in January to
spend Rbs4tn ($60bn) on infrastruc-
ture and social spending as part of
sweeping changes that could allow him
to remain in power.
The national wealth fund, squirrelled
away during years of austerity, is key to
those plans. Officials want to tap Rbs1tnfrom the fund to help pay for Mr Putin’s
spending drive. The fund also plans to
spend Rbs2.55tn on buying the central
bank’s controlling share inSberbank,
Russia’s largest lender. Most of the pro-
ceeds will be used to finance the
increase in spending.
Sinking oil prices could derail those
plans by cutting inflows into the fund
and weakening the rouble, hampering
Russia’s ability to purchase foreign cur-
rency to build further reserves. The rou-
ble traded at 67 to the dollar on Friday,
its lowest rate since September last year,
as falling commodity prices prompted
investors to sell their holdings.“If the [oil] price stays above or in line
with the... [Russian central bank’s]
baseline of $55 a barrel this year, and
then $50 a barrel in 2021-22, this financ-
ing operation for Putin’s political [spe-
cial operation] will stay on the rails,”
said Christopher Granville of TS Lom-
bard. “If oil were to dip towards $40, the
adverse impact would be reinforced by a
nasty pincer movement from the rouble
exchange rate.”
On Sunday, Mr Putin told officials and
the heads of Russia’s main oil producers
that “the current level of oil prices is
acceptable for the Russian budget and
our economy”, according to a transcriptof the meeting released by the Kremlin.
“Our accumulated reserves, including
the national wealth fund, are sufficient
to ensure the situation remains stable
and that all budgetary and social obliga-
tions are fulfilled even if the situation in
the global economy worsens,” the presi-
dent said. Anton Siluanov, finance min-
ister, said Russia could finance its budg-
etary obligations for four years, even
with oil at $30 a barrel.
Russia’s finance ministry told the
Financial Times it would continue to
use surplus oil and gas revenues for for-
eign currency purchases as long as oil
prices remained above the $42 cut-offprice. If prices were to fall lower, Russia
would sell foreign reserves in propor-
tion to the scale of the dip.
This policy is intended to prevent a
repeat of the crisis during the last big
slump in oil prices in 2014, after which
the rouble’s value against the dollar
halved and the central bank switched to
a free float. The central bank said it “had
sufficient instruments to prevent
threats to financial stability” if market
reaction to the coronavirus worsened,
but it has not signalled it would inter-
vene to strengthen the rouble.
Additional reporting by Henry Foy and
Nastassia AstrasheuskayaDAV E L E E— SAN FRANCISCO
J O H N B U R N - M U R D O C H— LONDON
Democratic presidential candidates
Bernie Sanders and Elizabeth Warren,
right, have received the most small
donations from employees at Califor-
nia’s tech companies ahead of today’s
Super Tuesday primaries — despite
their threats to drastically curb the
influence of Big Tech.
Senators Sanders and Warren have each
received roughly one-third of donations
from workers atFacebook,Twitter,
Google,Amazon,Tesla,Netflix,Uber
andAppleduring the election cycle,
according to a Financial Times analysis
of Federal Election Commission data,
showing that progressive politics reso-
nate in Silicon Valley.
This compares with 26 per cent for
Pete Buttigieg — who dropped out of the
race on Sunday night — and 8 per cent
for Joe Biden.
The candidates competing to take on
President Donald Trump in November’s
election have collectively poured mil-
lions of dollars into California, flooding
the airwaves with ads and holding events
across the state ahead of today’s pri-
mary. The Golden State, with its 415 del-
egates, is Super Tuesday’s biggest prize
of the 14 states voting.
Small donations to 2020 presidential
candidates from employees of the
state’s most prominent tech firms
totalled $1.1m by the end of Janu-
ary 2020, accounting for 2.6 per
cent of all donations by individu-
als in California who stated their
employer ($42m).
Mr Sanders and Ms Warren
lead the way in small dona-
tions, most money com-
ing from people giving
between $50 and $1,
over the past two years.
This suggests that they
enjoy strong grassroots
support, while othercandidates, including Mr Biden, have
received fewer contributions but in big-
ger denominations.
Tech workers’ support for Mr Sanders
and Ms Warren — who have proposed
dramatic measures to limit the influence
of Big Tech — illustrates how progressive
political activism has flourished at
many Silicon Valley companies.
It also suggests a split between
the priorities of the industry’s
rank-and-file and the owners
and boards that have lobbied
against calls to restrict their
power, pay more taxes or be split
into smaller companies. Face-
book’s lobbying bill in
2019 was $16.7m,
while Google’s parent
company, Alphabet,
s p e n t $ 1 2 .6 m ,
according to data-
base OpenSecrets.
“I’ve never vol-
unteered with anycampaign before,” said Janelle Jolley, 33,
who until August worked on Google’s
search ads team. She now volunteers at
the San Francisco field office for Mr
Sanders, based in the city’s predomi-
nantly Latino Mission District.
Other candidates have enlisted Sili-
con Valley’s brightest and most power-
ful. Former New York mayor Mike
Bloomberg, who has spent half a billion
dollars on a campaign that hinges on the
outcome of Super Tuesday, has hired
Joshua To, former Google director of
design for virtual and augmented real-
ity, Gary Briggs, Facebook’s former chief
marketing officer, and Jeff Glueck, pre-
viously chief executive of location app
Foursquare, to work on his campaign.
Their moves come as Big Tech faces
accusations of undermining democracy
and helping elect Mr Trump. “I see these
brilliant, highly educated, passionate
people working on things that are
meant to make somebody wealthy,” said
Dan Couch, formerly at internet radiostart-up TuneIn, now a Sanders volun-
teer. “I was complicit in it, so I’m trying
to live my values more clearly now.”
Those within Big Tech need to adhere
to policy on political activity as compa-
nies try to avoid being seen as politically
biased. “Facebook employees may par-
ticipate in personal political activities,
on their own time, with their own funds
and in accordance with their own politi-
cal preferences and desires,” the social
media company stated in its policy.
Google said employees were free to
take unpaid leave to work on campaigns,
so long as their work credentials were
never used as a way of bolstering sup-
port for a candidate. Twitter would not
share its policies on employee political
engagement with the Financial Times.
Many tech firm staff said they were
reluctant to speak about their work in
politics for fear of jeopardising their
return to work after the campaigns.
Notebookpage 10
Megan Greenepage 11JA M E S S H OT T E R— BRATISLAVAIgor Matovic met the Slovak president
yesterday ahead of efforts to form a
new coalition government, after his
anti-corruption movement scored a
resounding victory in Saturday’s par-
liamentary election.The self-made millionaire, who has
spent the past decade assailing Slova-
kia’s establishment and distancing him-
self from traditional politicians, is
poised to become the central European
nation’s next prime minister.
In an unexpectedly strong showing,
Mr Matovic’s Ordinary People party
stormed to victory, putting it on course
to oust the leftwing populist Smer party
that has dominated Slovak politics for
the past 14 years.
His party won a quarter of the vote, up
from 11 per cent in 2016, by tapping into
the deep anger in Slovak society trig-
gered by the murder of a young investi-
gative journalist two years ago.
“We wanted to reach the 2m people
who had lost faith in politics,” Mr
Matovic said. “We take this result as a
request from people who want us to
clean up Slovakia.”
His surprise win was a sign of the
impact of the murder of Jan Kuciak and
his fiancée Martina Kusnirova in 2018
on Slovak politics. The killing triggered
the biggest protests in Slovakia’s inde-
pendent history, forcing Smer’s leader
Robert Fico to resign as prime minister
and helping liberal activist Zuzana
Caputova to win the presidency last
year.
Leaks from the murder probe
revealed allegedly widespread links
between businessmen, politicians and
judges, keeping corruption at the fore-
front of the political debate.
Mr Matovic tapped into the angry
public mood. In January, his party was
polling in the single digits but an unor-
thodox campaign punctuated by col-
ourful antics helped catapult him to the
front of a fragmented field.
He filmed himself slapping signs read-
ing “Property of the Slovak Republic”
on the fence of a luxury villa in Cannes
owned by a former Smer minister.
When a nationalist politician appeared
drunk during a parliamentary debate,
Mr Matovic brandished a sign reading:
“He’s smashed.” He also once parked a
caravan with a sign reading “Fico
defends thieves” in front of parliament.
The 46-year-old’s critics say his
unpredictable style and lack of a clear
platform beyond fighting corruption
mean any government he leads is likely
to be unstable. “Matovic is like an
unguided missile,” said Raul Rodrigues,
a voter in Partizanske in central Slova-
kia. “It’s really hard to get an agreement
on anything with him. I cannot imagine
him as prime minister.”
Mr Matovic’s supporters said criti-
cism stemmed from their leader’s will-
ingness to tackle uncomfortable truths.
“Matovic is a very good person who tells
the truth. He is never quiet,” said Tomas
Sudik, a candidate for Ordinary People.M I C H A E L STOT T— BOGOTA
Alberto Carrasquilla heard a clear mes-
sage from the protests that shook Latin
America last year: taxes need to go up.
Mr Carrasquilla, Colombia’s finance
minister, said that although his country
was Latin America’s best-performing
economy last year, growing 3.3 per cent,
the government needed to listen to the
demands of protesters to improve pub-
lic services, to be funded by the better-
off. “We have a middle class which is
growing and this middle class is more
demanding,” Mr Carrasquilla said. “It
wants more and better public services.
The big challenge we have is that our
collection of taxes is very low for the
level of income.
“There is a greater willingness to
demand extra spending than to pay
more taxes... The only way to break
out of [this] is with higher taxation.”
His comments are a sign of how the
reverberations from riots that began in
Chile in October have been felt across
Latin America. Like Chile, Colombia
enjoys a strong reputation among inves-tors for conservative macroeconomic
policies and steady growth, avoiding i ts
neighbours’ booms and busts.
But the millions who poured on to the
streets of cities up and down the Andean
region last year demanding better pen-
sions, free access to universities and
higher quality healthcare have
prompted governments to rethink an
economic model that had relied heavily
on free-market economics.
Colombia’s top rate of income tax rose
last year to 39 per cent from 33 per cent
as part of a broader reform that reduced
high levels of corporate tax. But Mr Car-
rasquilla does not want to stop there.
“We are being told we should tax three
to four percentage points of GDP more
and use that money intelligently,” he
said, referring to advice given by inter-
national organisations.
An economist with a doctorate from
the University of Illinois, Mr Car-
rasquilla is serving as Colombia’s
finance minister for a second time. But
he acknowledges that the challenges
now are very different. His first period
was in 2003-07, a halcyon era in which
Latin America was enjoying a commodi-
ties boom and Colombia’s growth was
averaging almost 6 per cent a year.
“I think the message Latin America
should get is that the middle class is very
strong ,” he said. “It’s more edu-cated... and we need to be aware that
there are some concerns which didn’t
exist 10 or 15 years ago.”
Opponents say President Iván
Duque’s government needs to go beyond
raising personal taxes and boosting
spending to attacking corruption. Sergio
Fajardo, a centre-left former mayor who
ran against Mr Duque for the presidency
in 2018, said Colombians’ perceptions of
corruption had changed.Previously, voters criticised individ-
ual politicians as corrupt. Now, Mr
Fajardo said, “there is a generalised per-
ception that ‘they are robbing me’, that
this is a corrupt system and it’s taking
opportunities away from me”.
Colombia has had to contend with an
unprecedented influx of migration over
the past four years, as more than 1.6m
Venezuelans settled in the neighbouring
country. The refugees are boosting
growth, but Mr Carrasquilla estimates
that they are costing about 0.4 per cent
of gross domestic product in extra
health and education spending.Away from the picket lines in the
boardrooms of Bogotá, the concerns of
business centre on the weakness of the
export sector, which is heavily depend-
ent on sales of oil and coal. Poor infra-
structure and rural violence have held
back agricultural exports, which many
feel should be a bigger proportion.
Domestic demand pushed up Colom-
bia’s imports last year but exports were
sluggish, meaning the account deficit
widened to an estimated 4.4 per cent.
The IMF commented that “the deficit
should continue to be comfortably
financed by buoyant FDI [foreign direct
investment] and relatively resilient
portfolio inflows” but noted that Colom-
bia was more exposed to negative risks.
Ricardo Avila of El Tiempo newspa-
per credits Mr Carrasquilla with
improving Colombia’s growth rate and
meeting fiscal deficit targets but worries
about a growing use of one-off income,
such as central bank profits, to balance
the books. “There are underlying con-
cerns about how sustainable the model
is in the long term,” he said.
Local media reports suggest Mr Car-
rasquilla is eyeing a move to the central
bank, perhaps at the end of the year.
When pressed on the central bank role,
he said: “It could be, in the future... it’s
very interesting. My first job was there, I
have many connections there.”K A D H I M S H U B B E R— WASHINGTON
The US Supreme Court agreed yester-
day to review the Affordable Care Act
for a third time after a district judge
attempted to undo Barack Obama’s sig-
nature healthcare law.
A ruling is unlikely this year but oral
arguments could come before the
November presidential election, putting
more attention on healthcare in a cam-
paign where it is already centre stage.
A coalition of Democratic state attor-
neys-general, along with the Democrat-
ic-controlled House of Representatives,
has urged the Supreme Court to shore
u p t h e l e g i s l a t i o n , k n o w n a s
Obamacare, and rule it constitutional.
The Trump administration, at the
appeals court level, has called for the
entire act to be thrown out. The govern-
ment asked the Supreme Court not to
hear the case until further proceedings
in the lower courts had played out.
Healthcare has been a key issue in the
Democratic presidential primaries, with
frontrunner Bernie Sanders calling for
the nationalisation of health insurance
under his Medicare-for-All plan. Joe
Biden, former vice-president under Mr
Obama and a leading rival to Mr Sand-
ers, has said Democrats should build on
Mr Obama’s healthcare achievements.
In the 2018 midterm elections, Demo-
crats successfully used healthcare as a
rallying cry to win back the House of
Representatives and a swath of state-
level offices across the US.
The Supreme Court has generally
upheld the Affordable Care Act on two
occasions, including in 2012 when Chief
Justice John Roberts, a conservative,
sided with the liberals to uphold the
requirement to buy insurance.
The case the Supreme Court has
agreed to take up stems from a change in
the legislation, enacted by the Republi-
can-controlled Congress early in Donald
Trump’s administration. The original
act had placed a tax on people who did
not buy healthcare insurance, but in
2017 the penalty was reduced to zero.
Adistrict judge in Texas ruled in 2018
that the provision compelling individu-
als to purchase coverage was unconsti-
tutional. The judge went further, how-
ever, and said the entire law had to be
undone because that part of the act
could not be separated.
The Supreme Court is expected to
decide the case in its next term, which
starts in October. That would tee up a
ruling before June 2021.
US election
Big Tech workers back candidates promising to limit industry’s influence
Russia
Oil price fall threatens Putin’s spending plans
Kremlin’s economy boost
at risk as coronavirus
pushes down Brent crude
Election
Maverick
millionaire
shakes up
politics in
Slovakia
Latin America.Fiscal policy
Colombia eyes tax rise after protests
Finance minister says Bogotá
is listening to demands
for better public services
Legal tussle
Obamacare
faces Supreme
Court review
for third time
‘Our collection of taxes
is very low for the level
of income’Alberto CarrasquillaIgorMatovic meets President
Zuzana Caputova for talks yesterdayOn the march: students take part
in a Medellín rally last month
against government policies
Joaquin Sarmiento/AFP/GettyMARCH 3 2020 Section:World Time: 2/3/2020 - 19: 07 User: john.conlon Page Name: WORLD3, Part,Page,Edition: LON, 6 , 1