Face mask couture: Which world leader wore it best? Global leaders in the COVID era
Fashion has always gone hand-in-hand with global politics, and mask-wearing during the COVID-19 era is no different. Ian Bremmer investigates on GZERO World.
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Building on its previous commitment, Walmart is investing an additional $350 billion in products made, grown and assembled in America - supporting more than 750,000 new jobs by 2030. This pledge will aim to avoid more than 100M metric tons of CO2 emissions, advance the growth of U.S. based suppliers, and provide opportunities for more than 9,000 entrepreneurs to become Walmart suppliers and sellers through Walmart's annual Open Call.
China's GDP grew a lower-than-expected 4.9 percent year-on-year in the third quarter of 2021, a whopping three percentage points less than in the previous period. It's a big deal for the world's second-largest economy, the only major one that expanded throughout the pandemic — and now at risk of missing its growth target of 6 percent for the entire year.
Normally, such a drastic slowdown would have put the ruling Communist Party in a tizzy. But this time, Xi Jinping knows this is the price he must pay for his big plans to curb rising inequality and boost the middle class at the expense of the CCP's traditional economic mantra: high growth above all else.
Why is GDP growth slowing down now? For one thing, a combination of rising coal prices, tighter regulations on power consumption related to climate policy, and soaring demand in countries that buy a lot of Chinese-made stuff have all resulted in an energy crunch that'll likely worsen disruptions to global supply chains that rely heavily on China.
For another, Xi's crackdown on excessive borrowing in the real estate sector — which accounts for almost 30 percent of China's economic activity but was so in the red that it posed a systemic risk — is causing a lot of pain. Evergrande and other large property developers are missing deadlines to pay their creditors, and halting projects for homes they've already sold but have no money to build.
Finally, there's the pandemic itself, via strict local lockdowns that have hurt Chinese retail and travel in the only country in the world that still believes in zero COVID.
China's leader thinks that an economic slowdown, however painful in the short term, will be worth it in the long run because the economy needs structural reforms to narrow the income gap and deliver what Xi calls "common prosperity."
In a speech that stunned the business community two months ago, Xi confirmed that "common prosperity" means vastly expanding China's middle class, partly by raising taxes on the rich. He wants some of this wealth to be redistributed in order to make China a more equal society. (Indeed, the 1 percent have seen the writing on the wall — a single mention of regulating "excessively high incomes" prompted several panicked CEOs to immediately donate billions to charity right when Xi was going after the tech sector.)
Xi's goal is for China's GDP to continue expanding, but at a less ambitious pace so Chinese workers have time to earn more and become more productive at the same time. China, he says, should move away from mostly churning out cheap exports that pollute the planet as Chinese factories have done for decades to focus on producing high-quality, sustainably-made goods for the local market.
But it's a risky move. Winding down economic activity to the 2-3 percent annual growth levels of mature economies like the US or Germany will be a tricky balancing act for China. Sluggish growth that drags on could deter investment, and trigger social unrest if unemployment gets too high as a result.
Meanwhile, slower Chinese economic growth will have serious ripple effects for the rest of the world, given China's outsize role in the global economy.
The so-called "factory of the world," will probably continue exporting a lot of stuff, but not as much as it did before, and more of its exports will be high-value tech goods. Local companies will also likely outsource more of their manufacturing to lower-cost neighbors such as Bangladesh or Myanmar, and over time most Chinese-made products will get more expensive.
Xi's "common prosperity" vision comes with many risks for China's juggernaut of an economy. But if he delivers on his promise, expect him to stay in power for a long time.
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What We're Watching: Bangladesh religious violence, Ecuadorian drug emergency, Lebanese to vote, Russia ditches NATO
October 19, 2021
Religious tension rising in Bangladesh: Clashes between Hindus and Muslims in Bangladesh have surged over the past week, leaving at least four people dead. After an image was posted on Facebook showing the Quran at the feet of a statue at a Hindu temple, Muslims burned Hindu-owned homes and attacked their holy sites. Both sides have taken to the street in protest, with Hindus saying that they have been prevented from celebrating Durga Puja, the largest Hindu festival in the country. Such acts of sectarian violence are not uncommon in Bangladesh, a majority-Muslim country where Hindus account for nine percent of the population. Indeed, as Eurasia Group's Kevin Allison recently warned, unverified social media content stoking inter-ethnic conflict is a massive problem throughout South Asia, where for many people Facebook is synonymous with the internet.
Ecuador's state of emergency… again: Ecuador's President Guillermo Lasso has declared a nationwide state of emergency to deal with surging crime fueled in large part by drug trafficking. The measure allows the government to limit freedom of movement and assembly, and gives the military authority to patrol the streets. This comes less than a month since Lasso, a pro-business social conservative elected in February, declared another state of emergency after a gang war inside a jail in the port city of Guayaquil killed more than 100 people. The oil-rich Andean nation of 17 million people has become a transit country for Colombian and Peruvian cocaine where Mexican drug cartels are becoming more influential. The state of emergency might limit burglaries, auto thefts and homicides in the short term, but what happens when it's lifted?
Will Lebanese elections matter? Less than a week since Lebanon saw some of its worst sectarian street violence in years, its parliament voted to hold new legislative elections on March 27, two months earlier than planned. (However, a simultaneous vote on introducing female quotas in parliament failed to pass.) It'll be the first popular vote since 2019, when mass protests over political corruption and economic crisis rocked the country. The pressure is now on for Najib Mikati — who became interim prime minister in July after months of political deadlock — to secure a financial recovery package from the IMF that would pave the way for more international investment and aid as the country plunges further into one of the worst economic catastrophes in modern history. Talks with the IMF will be tough because the government and banks aren't willing to implement the public sector reforms or debt restructuring initiatives that the Fund wants. Indeed, as sectarian tensions linger and many kleptocrats retain prominent roles in Lebanese political life, the upcoming election may not move the needle at all.
What We're Ignoring
Russia breaks up with NATO: Russia says it'll sever diplomatic ties with NATO and withdraw its representatives from the alliance's headquarters in Brussels. This isn't a massive surprise given that relations between Moscow and the EU have been strained for years, particularly since Russia annexed Crimea in 2014. But things heated up recently when the EU expelled eight Russians from its offices for alleged spying (Russia's diplomatic presence in Belgium has been steadily shrinking for years because of espionage claims; Moscow denies them.) Perhaps as a tit-for-tat, Russia announced Tuesday that it would not supply more natural gas supplies to power-hungry Europe as it had previously pledged to do. The EU, for its part, has long accused Russia of using gas exports as a political weapon, but this latest move couldn't come at a worse time as energy prices have reached record highs across Europe. As a bonus, stirring up trouble with NATO allows Vladimir Putin to drive a wedge between Eastern and Western European members, one of his favorite pastimes.
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Ian Bremmer's Quick Take:
Read Ian Bremmer's wide-ranging essay in Foreign Affairs that puts in perspective both the challenge, and the opportunity, that comes from the unprecedented power of Big Tech.
Hi, everybody. Ian Bremmer here on the road, something we haven't done very much recently, but will increasingly as we try to move through COVID. And I want to talk to you about a new article that I just put out in Foreign Affairs that I'm calling "The Technopolar Moment." Not unipolar, not bipolar, not multipolar, technopolar. What the hell does technopolar mean?
It means that increasingly big technology companies are themselves geopolitical actors. So to understand the future of the world, you can't just look at the United States, Europe and China. You need to look at the big tech companies, too.
Now I'm saying that. I never felt that way about big oil or about the banks or any other major multinationals. And the reason for that is because they all exist in real physical space. And as a consequence, they are regulated in physical space or sometimes not effectively regulated. But nonetheless it is inside sovereign government entities, and their territories that they exist.
Technology companies actually have sovereignty over their digital space. They not only determine what the rules are going to be. But they actually create it from the ground up. They're the architects. They drive the algorithms. They own the data. They decide what to do with it. I mean, everything about that space is the mandate of the tech companies themselves. And that is the kind of power in digital space that increasingly feels like a parallel world to physical space where governments are in charge.
And so we see a couple of interesting things that come from this. First of all, I first became aware of this after January 6th. By far the biggest event that had transpired in terms of domestic political stability, instability of my lifetime by a domestic actor. And the response did not come from Congress, did not come from the executive, did not come from the judiciary. They all failed to act.
The responses came from the tech companies deciding to de-platform Parler, Amazon and Apple, de-platforming the sitting President of the United States by Facebook and by Twitter. And to the extent that people were eventually arrested and then tried, that came because of information they had posted on social media platforms. Now those companies, I mean, no one's voted for their rules. They decide in a kind of capricious way, what they do or don't want to do to respond.
I'm not saying that they didn't take responsible decisions. That's an entirely different point. But the fact was, they exerted sovereignty. It wasn't just true about January 6th. Was true, the most important attacks on the United States and on its allies, last year was the SolarWinds attack. And the US government and the Europeans weren't even aware of the attacks when they occurred. It was Microsoft that found out about them. And they were the ones that, with other private sector companies, figured out how to attack back.
In other words, whether you're talking about the economy or politics or national security, as all of those areas increasingly moved to a mixture of the virtual world and physical space, and as tech companies dominate the virtual space, they increasingly exert sovereignty. And so if we want to understand what the world is going to look like in 10 to 20 years and the balance of global power, we need to understand what drives these tech companies. What kind of actors are they? What do they want? What are they orienting towards? And then see which of those models are likely to play out what the balance of power looks like, including them as geopolitical actors.
Now, two other things I want to say aside from "read the piece "so you can see what I have to say about all this. The first is, to the extent that we need to think about how these firms operate. Well with governments, we think about whether or not they're democracies or authoritarian regimes. And of course, no one is the perfect democracy. No one's really a perfect authoritarian regime. But you exist on a spectrum. Some countries are vastly more authoritarian, North Korea on one end, China and Russia towards that end. Some countries are much more democratic, Germany, Canada on one side, the United States towards that side, but slipping down, countries like Hungary and Turkey, not so much.
Okay. In the technology space, there is no tech typology. We don't have one. All we think is, "Well, they want to make money." But actually, if you think about the relationship of these companies to the state, they do have very different models. In fact, I'd argue they have three. One is the globalist model, kind of an outgrowth of their historic libertarianism, which is don't get involved. Don't regulate me. We want to have strong lobbying that allows us to capture regulations of the public sector. We want to be dominant in the space, be able to write the rules that the government will use to regulate us and achieve, maintain monopoly status in spaces that we exist in. I would argue that Apple is much closer to that kind of a model, Tencent, for example, in China.
And there's also national champions. And national champions are the technology equivalents of Lockheed in the 20th century, but for the 21st century. And these are companies that actually want to align with governments, think of the governments as very important partners. And they're not trying to invest as much in a global world, but instead understand there's going to be a much more fragmented world. I would argue that Microsoft is more in that direction, Amazon to a degree, Google a little bit. And they're balancing more between the two. And in the case of China, a company like Huawei would certainly be in that environment.
And then finally you have techno utopians, people that believe driving their corporations, that the government is literally going to go away. They're not going to be relevant in their space. I think Vitalik Buterin from Ethereum would definitely be in that space where he thinks that the future of currency will be crypto and not sovereign currencies, not fiat currencies anymore. So the government just won't matter in the digital space. It will be crypto. And some of what Elon Musk is trying to do with space is in that orbit. Some of what Mark Zuckerberg talks about in the metaverse would look like that. China used to have someone like that in terms of Jack Ma, but they don't anymore because they certainly don't want that model to exist in China.
The big remaining question then is where do we go from here? Who's going to win? And it's too early to say. But it's really interesting to play out three quick thoughts. One to the extent the globalists win, which means that the governments don't continue to do a lousy job of regulating the space. They don't align with the corporates. The corporates would rather continue to capture the regulatory space, that implies, we don't have a technology cold war between the US and China. Global models for technology continue to work more effectively over time. And it means Europe is actually much more important because they probably to the extent that anyone is developing effective rules of the road. They're going to be better at that, more thoughtful at that than the Americans or Chinese would be.
If the national champion model wins, then it is the Chinese continue to focus on squeezing the private sector. Everyone has to align with the government. The Americans increasingly do that too. It becomes a technology cold war. And there's very little space for Europe. In fact, everybody else needs to align to one or the other.
And then finally, you have the techno utopians. And it's hard for this to play out what happens to the world if the techno utopians win. Because in part it depends on if they win at what? Do they win at currency? In which case, central banks start mattering a lot less. And the US looks like it's in decline. Why? Because you no longer have the global reserve currency as the US dollar.
What happens if the metaverse ends up being a space that's completely ungoverned by the United States and other governments? Well, it means the governments will be expected to do a lot less. Federal power will erode. And the social contract will be driven either by those corporations in those spaces or not at all, a lot more inequality in that kind of an environment. Anyway, a lot to think about here, a piece that I've been considering pieces of for a long time now. I hope you find it worthwhile and we'll be talking more soon. Be good.
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The Graphic Truth: China's growing share of the world economy
October 18, 2021
China gets away with a lot these days in Hong Kong, Xinjiang, and elsewhere. That's because over the past decade, its economy has experienced explosive growth, making it an indispensable trading partner for almost every country in the world. At the same time, China has been expanding its share of the global economy, and is now set to overtake the US as the world's biggest economic powerhouse in the near term. We take a look at China's annual growth rate and share of the global economy based on GDP over the past decade.
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The European Union is, for better or worse, the most ambitious experiment in human history in institutionalized multinational cooperation. Its success depends on the willingness of its members to abide by its rules.
In recent years, the populist-nationalist governments of former Communist bloc members Hungary and Poland have flouted some of those rules in order to boost their own popularity with citizens suspicious of the EU's liberal values on issues like immigration and minority rights. In response, the EU has scolded these "illiberal" governments and threatened forceful action – so far without much effect.
The fight between EU institutions and Poland and Hungary has escalated.
In Poland, the latest battle is over judicial authority. According to EU treaties, all union members are subject to EU laws and the final authority of the European Court of Justice. But Poland's constitutional court ruled last week that Poland's constitution trumps EU law, a direct challenge to the basis of EU membership.
In Hungary, Prime Minister Viktor Orbán has faced off with the EU over press freedom and minority rights. The latest row began when Hungary's parliament passed legislation that bans the display to minors of products that depict or promote homosexuality or gender transformation themes. The government says the law protects kids and Hungary's family values, while the European Commission says it undermines values of tolerance and individual freedom enshrined in European law.
In the past, picking fights with the EU has boosted the popularity of both Orbán and Poland's Law and Justice Party-led government, headed by Jaroslaw Kaczyński, by playing on the anger that social conservatives feel toward liberal elites in Brussels. That's the main reason these governments tend to welcome fights with the EU.
They also know that, no matter how frustrated EU officials become with challenges from Warsaw and Budapest, the EU can't kick them out. Ejection requires a unanimous vote of all 27 EU members. To protect their own interests, Poland would veto such a move against Hungary, and Hungary would do the same for Poland.
But… there are three main reasons to believe that this time it's different.
First, it appears EU officials have had enough. Poland's court ruling is too direct a challenge to EU rules to ignore, and Hungary's government has been picking fights with Brussels for years.
Second, the European leader most instrumental in persuading EU institutions to go easy on Poland and Hungary is now leaving the stage. Germany's Angela Merkel will soon be out of power, and the country's likely incoming center-left coalition government will be much less sympathetic to rule-of-law challenges from its Eastern neighbors.
Third, Brussels has a powerful new weapon. The European Commission can withhold large amounts of much-needed COVID recovery funds until these two governments prove they respect EU rules. That's 36 billion euros ($41.7 billion) for Poland and 7.2 billion euros for smaller Hungary. The Commission is already signaling that Poland and Hungary will have to offer serious and specific concessions before checks are cut. Initial disbursements have already been delayed.
The Polish and Hungarian governments have limited leverage to fight back. Opinion polls show that strong majorities in both countries favor continued EU membership — and both governments have acknowledged as much. In Poland, the court rulings sent hundreds of thousands of pro-EU Poles into the streets in protest.
And Hungary's Orbán faces a tough fight for re-election next year against a united opposition that has labelled the race a choice of "Orbán or Europe."
Both governments need only look toward the Czech Republic, where a surprise election result last weekend leaves euroskeptic, anti-immigration populist Andrej Babiš on the verge of losing power.
These fights will drag on into next year. But this time, Brussels may finally be fighting to win.
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Jon Lieber, head of Eurasia Group's coverage of political and policy developments in Washington, shares insights on US politics:
What is the legacy of Colin Powell?
Former Secretary of State Colin Powell tragically died of complications of COVID-19. He was the first Black Chairman of the Joint Chiefs of Staff, the first Black National Security Advisor and the first Black Secretary of State. And he leaves a legacy of a long career, dedicated almost entirely to public service.
Powell's legacy will probably be defined by two things. One is the creation of the Powell Doctrine developed in the aftermath of the Vietnam War, which gave a blueprint for US military action that had to be overwhelmingly decisive and with a clear exit plan to avoid the kind of quagmire that the Vietnam War became. The second legacy item is his unfortunate role in making the case for the Iraq War, with a presentation in 2003 in front of the UN on Iraq's possession of chemical weapons, that later turned out to be false. This was a key justification used at the time by the Bush administration and a stain on Powell's otherwise excellent reputation.
Unfortunately, because Powell died of complications of COVID-19, he had been treated for multiple myeloma, which weakens the immune system and he was fully vaccinated. This means his death will become a political football among the 10% to 15% of Americans who are hardcore anti-vaxxers, and who claim the vaccines don't actually protect you from COVID-19. A sad day for the Powell family and a tragic day for America.
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What We're Watching: Viktor Orbán's rival, Pakistan's Taliban making moves, abducted Americans in Haiti
October 18, 2021
Can this guy defeat Viktor Orban? Hungary's opposition movement of odd bedfellows has finally settled on the person they think has the best chance of defeating PM Viktor Orbán at the ballot box: Péter Márki-Zay, a politically conservative small-town mayor from southeastern Hungary, who beat out left-leaning European Parliament member Klara Dobrev in a weekend poll. Márki-Zay has a lot going for him: as a devout Catholic and father of seven it will be hard for the ultraconservative Orbán to paint him as a progressive threat, even as Márki-Zay reaches out to reassure left-leaning groups that he will protect LGBTQ rights. What's more, Márki-Zay has little political baggage: until recently he was a marketing executive. But can the relatively inexperienced Márki-Zay keep the various opposition factions happy? The stakes couldn't be higher: since taking power more than a decade ago, Orbán has deliberately made Hungary into an "illiberal" state, cracking down on the press, undermining the rule of law, and clashing with the EU. Bonus: if Márki-Zay stays in the news, you get to say "Hódmezővásárhely" the name of the city he currently runs.
Pakistani Taliban making a move? Emboldened by the triumph of their coreligionists in Afghanistan, Pakistan's Taliban movement — known as Tehrik-e-Taliaban, or TTP — is becoming more active as well. Seven years ago,Pakistan's military crushed the TTP in the regions of Pakistan along the Afghanistan border where they operate. But local reports say that they are coming back now, extorting local businesses, seizing territory, and carrying out terrorist attacks that have killed hundreds of civilians and soldiers. Pakistan, of course, has long-standing ties to the Afghan Taliban, but it's not clear whether that will help them manage growing tensions with the Pakistani Taliban who, for now, want political recognition and control over tribal borderlands. Would it be a mistake for Islamabad to negotiate with the TTP? A poll from last week showed that 55 percent of Pakistanis would welcome a Taliban-style government throughout the country.
Can Biden rescue abducted Americans in Haiti? Crisis-wracked Haiti was rocked by another catastrophe Sunday, when gang members abducted 17 foreign missionary workers (16 Americans and one Canadian national), including five children. It is yet another sign of the deteriorating security situation in the country, where nearly complete lawlessness has reigned since President Jovenel Moïse was assassinated in July. Large swaths of the capital Port-au Prince are now dominated by increasingly powerful gangs, who rule by terror and often kidnap civilians for ransom. In recent days, even Prime Minister Ariel Henry himself was forced to flee an official commemoration ceremony in the capital when gangs drove his security detail from the site. The US says it is working closely with the Haitian government to rescue the kidnapped missionaries, but remained mum on details. The Biden administration says it doesn't pay ransoms to terrorist groups or gangs, but we're watching to see whether it caves to the bad guys' demands.
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