The Intelligence from The Economist: The day Hamas came: a report from an Israeli kibbutz

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Hello and welcome to the intelligence from the Economist. I'm your host,

Aura Ogumbi. Every weekday we provide a fresh perspective on the events shaping your world.

Pemex, Mexico's national oil company, is on troubled waters.

Despite some bits of its business being profitable, it has become the world's most indebted oil

company. Is there any hope for a turnaround? And Nintendo's new Super Mario game comes out today

and it's 2D. You might be wondering, hasn't tech moved on from that? But according to our

correspondent, there's a good reason why the game is getting a vintage chic makeover.

First up though.

My name is Adam. I'm from Kibbutz, Iran. At 7 October, about 6.20 in the morning,

I woke up to the sound of red alert alarm sign. Unfortunately,

there's something regular about us. So I stayed in bed.

Adam Pered is a former member of the Israeli Special Forces and a resident of near Am,

a Kibbutz in Israel less than two kilometers from Gaza's northeast border.

On Saturday, the 7th of October, Hamas fighters tried to enter the Kibbutz.

Wendell Stevenson writes for The Economist. Since Hamas launched its attack on Israel

almost two weeks ago, she's been in Tel Aviv speaking to those who were targeted.

Adam told me how he and his fellow residents defended their community.

Then I heard gunshots. So I took my clothes, took my pistols and ran to my ex-wife's house.

My children were there. In the middle of the road, I met Imbal. Imbal is the commander of the KK,

the emergency squad. She was very upset asking what happened. She told me that her father

told her that there is terrorist 200 meters from Kibbutz in Iran. I told her now to call the KK,

the squad, to the armory. She said that the key is in her house. So she ran to her house. I ran

back to my house. I took two things, my bulletproof vest and my cigarettes. We drive to the armory.

Now I told her again to call again the KK. They came one by one. When we got between two to three

members, we went to the fence. When the attack began, residents of near Ham realized the electricity

had gone off. But one advantage of there being no power was that it meant that the heavy metal

front gates which were electric remained locked. They decided not to switch the electricity for

the gates back on and this meant that Hamas couldn't enter with their trucks that were mounted with

machine guns. Usually when a red alert siren goes off, residents head for their safe rooms built of

reinforced concrete with special blast resistant windows and heavy steel doors designed to protect

them from rockets. But these rooms are just not designed to protect them from intruder attacks

and the doors don't lock. As the volunteer defence force, the Kitat Koninut took their positions,

their families and the other residents could only take cover as best they could.

The Kabut's defenders stationed themselves in pairs around the perimeter fence. Adam and his

fellow resident Eli were in their position next to the rear gate of the Kabut for about 20 minutes

when they heard a gunfight start near a chicken hatchery about 200 meters away through the avocado

fields. At the rear gate I took cover in a house that were very well built. I asked from Ham another

member of the KK to go to the roof with another soldier that lives in Iran. I want to tell you

that I'm not a member of the KK, I'm just a man that knows how to fight. I saw a battle between

five to six soldiers and two five to six terrorists between 200 to 250 meters from us.

Every terrorist that went to our Kabuts to our fence, I ran to him, I killed him three bullets

to the body, one bullet to the head. I saw not a soldiers, I saw Israeli boys between the 8 to 18

to 19 fighting with terrorists with automatic weapons. They were I think too many and it came

in surprise. I want to help the soldiers but I couldn't and it was very very very upsetting.

Adam told me this battle lasted for several hours and then more Hamas gunmen arrived.

After three to four hours suddenly came three four vans in each van was about 10 to 12 terrorists

with machine guns and RPG. Now Israel Army sent another platoon but there was a lot of

terrorists against a few soldiers and one of the terrorists shot RPG on the tank.

I asked Han that was in the roof, Han was who is winning and he told me the terrorist.

So I took the Okitoki and told everybody that they are slaughtering our soldiers

and they will go straight into the Kabuts and I said the sentence every five minutes

no one is entering Niram, no one is entering Niram and they said we understood Adam we understood

and it didn't move because they knew if they stood from the fence if they go back to their house

our family will be slaughtered. By early afternoon all the Kitak Konanout defending Niram understood

that it was a very dangerous moment. Everyone was now desperately calling anyone they knew in the army,

generals, retired officers, the special forces, emergency response, regional command,

pleading for help, telling them if you don't send a force right now Niram will fall.

Between three and four hours everybody included me, tried to call the army but nobody came.

Han made the simple thing he just called the police and told them there's a fight 200 meters from us.

After five minutes came a special unit of the police and now the numbers were even

and now the Israeli force started to win.

The Kabuts employs several dozen Gazans who had already arrived for work when the attack began.

One group who were working in the Pomela Orchard got into their van and turned

onto the main road when they heard gunfire but they were shot out there. They first cowered in

their vehicle and then they fled back to hide in the orchard. They hid for hours, terrified they

could be killed by either side. Another group of the Gazan workers from the Kabuts were found later

killed in their van on that main road in a scene of carnage with several vehicles and dead bodies

strewn in the middle of the road. The residents of Niram I spoke to were really shaken by the

slowness of the Israeli army to rescue besieged and embattled communities. By late afternoon

when the terrorists had been killed and repelled the Kabuts' WhatsApp group started to fill with

messages people wanted to leave. This was pretty much forbidden as there were still terrorists

at large and the situation was dangerous and chaotic but families packed into their cars

and began to drive out. When it was all over Adam was glad to finally be able to see his family.

At the end of the days I went straight to my ex-wife's house. I saw my children, my family,

everybody was crying. They worried about me, they worried about themselves. There was a panic

that would stay forever. At approximately one o'clock in the night I drove everybody outside

Niram to Tel Aviv Hotel and when I look at the guys that were special units in the KK

I saw him do the same things like I am because it's something that we made to do, we built to do.

That is the main reason we are not the heroes. The heroes are the other members of the squad

that served a regular job and they stood next to me and didn't walk away.

These are the heroes of Niram. Our leaders don't deserve citizens like us.

It should be remembered that the escape of Niram is really a bright spot in that terrible day and

then normally as so many Kibbutzes and communities were overrun by gunmen. I was just talking to the

grandson of a couple kidnapped from near Oz in the south where more than a quarter of the inhabitants

were killed or kidnapped that day.

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Mexico's national oil company, Pemex, is in a tough spot.

This month, the firm CEO, Octavio Romero, appeared before lawmakers.

He told them Pemex didn't have the money to pay $500 million owed to three suppliers,

and that Pemex was busy rather than worried.

The firm's exploration and production arm is profitable.

But in other areas, like its refining operations, Pemex has faced losses.

Its debt totals more than $100 billion, equivalent to 8% of Mexico's GDP.

And fallout from a stumbling Pemex could spell trouble for the rest of the country.

Pemex has a huge debt problem.

Sarah Burke is the Economist's Mexico City bureau chief.

It's the most indebted oil company in the world, with $108 billion of debt.

In July, Fitch, a credit rating firm, downgraded it.

And last year, Moody's, another ratings agency, downgraded the government's bond status.

And it mentioned Pemex's debt as a factor.

Pemex needs financial support from the government to pay its creditors.

But it's not clear how much longer the firm can rely on bailouts to stay afloat.

Sarah, how did Pemex get to this point?

Well, its heyday was in the 1970s.

Mexico discovered one of the world's largest oil fields in the Gulf of Mexico.

Alongside the bananas, a new industry is developing.

Oil, huge oil fields have been found.

And now the government is racing to develop them as fast as possible.

But the government sort of milked Pemex to the max.

So they did things like put exorbitantly high taxes on Pemex,

which meant the company couldn't really invest in things.

And they compelled the company to make poor business decisions

by telling them what they wanted to do.

Essentially, they were subject to government policy.

And over time, debt grew and that's left Pemex in a very bad spot.

It never properly ventured into natural gas exploration, for example.

And there's also a very underdeveloped petrochemicals operation in Mexico.

And have governments tried to fix this problem?

Yeah, they have, but none of them have really done it properly.

Over the past decade, there have been two presidential administrations

with different approaches.

So first, Enrique Peña Nieto, who was Mexico's president from 2012 until 2018,

tried to make Pemex more independent and profitable.

He controversially broke up its monopoly

and opened up the oil sector to private investment.

Peña Nieto said that this would help bring more benefit for Mexicans.

And it was actually a move that the current president protested at the time.

So that gives us an idea of how different the next administration's policies will be.

Peña Nieto's reforms led to some success.

There was discovery of new oil fields

as these private companies worked together with Pemex.

But within Pemex, corruption and debt ballooned.

Debt grew from $61 billion in 2012 to over $100 billion

by the time Peña Nieto left office in 2018.

So what is this government strategy?

So in 2018, the current president, Andrés Manuel López Obrador,

who's often called AMLO, was elected.

And his goal was to restore Pemex to its former glory.

He wanted Mexico to produce more of its energy at home rather than import it.

So he started giving handouts to Pemex.

He has gradually reduced its tax rate, too.

Both moves were meant to get Pemex's debt under control.

And he also moved away from that independent competitive model of Peña Nieto.

So he's restricted private companies' ability to operate alongside Pemex in the energy sector.

And now, is this strategy working any better than the previous administrations?

So both the president and Octavio Romero, who is the head of Pemex, say it is.

So it's true that Pemex's debt has somewhat fallen this year.

In 2022, the firm did turn a profit for the first time in a decade.

Mr. Romero has criticised the credit ratings agencies, like Fisch, that I mentioned earlier,

saying that they've been harsh to Pemex.

But a lot of the reason that they've done well in the past year was because the oil price rose.

I'm pessimistic that the government's plan is going to turn things around in the long term,

or enough.

And why is that?

Pemex really needs to change how it does business.

So the government's basically giving it handouts,

without really asking it to make meaningful changes.

And second, Amalor wants Pemex to be powering the Mexican economy like it did in the 70s,

which simply isn't possible.

Mexico isn't an oil economy anymore.

And indeed, it doesn't need to be.

It has a very successful manufacturing base.

And this is costing huge amounts of money.

Amalor is spending not only on propping up Pemex,

but on a project including a new refinery.

And it's going to basically be a problem left to the next government,

because Amalor finishes his term in 2024.

So, Sarah, what should the next government do?

I mean, should and what it will, are obviously two different things.

His successor is most likely Claudia Schaenbaum,

who's the candidate from his party and very close to the president.

But she's also quite different.

She's very technically minded, and she has a PhD in environmental engineering.

So she hasn't published a policy or plan for Pemex,

so we don't know what her plans are.

But she should do two things.

She should have the government take on some of Pemex's debt,

because it's actually more expensive for Pemex to service it than for the government.

And second, she should think about what role Pemex should play in Mexico,

and that's probably a more modest one than the current president seems to think.

It will probably involve less refining and more private partners.

Sarah, thank you so much for joining us.

Thanks.

For many of us of a certain generation, it's something we remember vividly.

Inserting the plastic cartridge for Super Mario Bros. into our Nintendo console

and grabbing the tiny controller.

Tom Wainwright is the economist, tech and media editor.

We'd spend hours sitting in front of the TV inhabiting Mario,

jumping on turtles, collecting coins, going down bright green pipes, and eating mushrooms.

All in a bid to rescue Princess Peach from Bowser, an evil fire-breathing reptile.

And we did all of it in a simple two-dimensional world.

After his first mission to rescue Peach in 1985,

Super Mario spent the next decade running from the left to the right of players' screens.

It was only in 1996 when Nintendo released a powerful new 64-bit console

that Mario gained the freedom to run and jump in three dimensions.

Ever since then, most of Mario's outings have been in sprawling 3D worlds,

and his 2D adventures seem to have been relegated to history, but no longer.

Tom, what do you mean no longer? Is Mario returning to 2D?

Yeah, he is. He's back in a 2D game in a new game called Super Mario Bros. Wonder.

And to anybody who has played the old Mario games from the 1980s and 1990s,

this is going to look kind of familiar.

It's an old-school, side-scrolling, two-dimensional game,

which really is reminiscent of the kind of thing that I used to play when I was 10 years old.

And it's not just Mario who's doing this, either. We also are seeing Sonic the Hedgehog,

who was Sega's great rival to Mario during the 1990s.

Like Mario, he began as a 2D character and then had a 3D phase,

but this month, there's a new game coming out called Sonic Superstars,

which is a kind of 1990s-style 2D side-scrolling game.

The graphics have been revamped, and it all looks more modern than a 21st-century way,

but the style of gameplay and the two dimensions in which it takes place is very old-fashioned.

So why is this happening now? Is it just nostalgia and the fact that the generation

who played these games are growing up and they're now older and have more money to spend?

I think that's definitely part of it, yeah. I mean, the people who grew up with these characters

are, by all accounts, still largely quite into their games. You know, the 30 and 40-somethings

of today are playing games in a way that, in past generations, was on the norm.

But there are financial motives as well. I mean, video games have become unbelievably

complicated and lengthy and expensive to produce, even more so than blockbuster Hollywood films.

I mean, a top game can sometimes take the best part of a decade to make, and some of them have

Hollywood-esque budgets of hundreds of millions of dollars. But unlike some of these games like,

say, Grand Theft Auto, which has been in development for the best part of 10 years,

Sonic Superstars was reportedly dreamed up by Sega developers over a Zoom drinks party during

lockdown, and they put it together incredibly quickly. So you mentioned Mario and Sonic,

but is anyone else trying to get in on this 2D trend?

Well, yeah, and it goes beyond gaming. We see it also in Hollywood, so you might remember earlier

this year there was a movie that was out Spider-Man Across the Spider-Verse.

My name is Miles Morales. I'm Brooklyn's one and only Spider-Man, and things are going great.

It threw out the 3D style that has been ubiquitous in animated films ever since Pixar made Toy Story

back in 1995, and it replaced it with a kind of hand-drawn hybrid look, which has been dubbed

2.5D, which in some ways mimics the look of classic Spider-Man comic books.

And Teenage Mutant Ninja Turtles is another example. There was a Turtles movie

that came out earlier this year in May, and similarly that had a kind of almost a sketchbook

style, which the animators said was inspired by their own doodles when they were teenagers.

Both of these films were pretty successful. Both of them won a lot of praise from critics

for their style. And again, it's another example of the old 3D style that had been popular for a

long, long time being replaced by something simpler and something more two-dimensional.

And Tom, do you think this trend is a flash in the pan, or is it going to continue?

It's hard to say. I mean, these things do come and go in trends, but I think it's certainly

going to continue at least for a while longer, because we've already got a few other 2D or

pseudo 2D projects already in the works. Disney in November is going to be releasing a new

animated feature film called Wish. And that is also not quite 2D, but it has a sort of slightly

flattened look, which seems to be inspired by the illustrated fables on which that film is based.

And then in the gaming world in January, Prince of Persia, which is an old franchise from 34 years

ago, is having a reboot. Again, that used to be a 2D game. It then had a 3D era, and now it's back

in 2D form in a new game called The Lost Crown. And so it seems we are going to see a bit more of

this. And it's funny because in media at the moment, the two big trends are that on the one hand,

we've got a lot of excitement about the metaverse and all this kind of immersive stuff, which will

see people experiencing media in all new formats. But at the same time, with the revival of these

2D formats, you've got this move back to something very old fashioned and old school. And it seems

the audience is quite like that. Tom, thank you so much for coming on the show. Thank you.

That's all for this episode of The Intelligence. The show's editors are Chris Impey and Jack Gill.

Our deputy editor is John Jo Devlin, and our sound engineer is Will Rowe. Our senior producers are

Rory Galloway and Sarah Larniuk. Our senior creative producer is William Warren. Our producers are

Maggie Kedifa and Kevin Canas. Our assistant producer is Henrietta McFarlane, and we had

extra production help this week from Benjiguy. We'll all see you back here on Monday.

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and that's NetSuite. Learn more when you download NetSuite's popular key performance

indicators checklist. Absolutely free at netsuite.com slash intelligence. That's netsuite.com slash

intelligence.

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