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THREE STORIES IN THE KEY OF: UNINTENDED CONSEQUENCES

THREE STORIES IN THE KEY OF: UNINTENDED CONSEQUENCES

Every action has a reaction—sometimes unintended. Here are three stories about the unintended consequences of governments’ actions that caught our attention this week.


Russia’s sanctions windfall: A more confrontational US foreign policy is delivering an unexpected windfall to Moscow—more money in the bank. That’s because Russia has benefited from two simultaneous effects of US sanctions. First, the price of oil, Russia’s main export, has risen steadily in anticipation of the re-imposition of US sanctions against Iran. Second, US measures against Russia itself have caused the value of its currency, the ruble, to fall by 15 percent since mid-August. The combined result is that a barrel of Russian crude, which is typically sold in dollars, is worth around 30 percent more todaythan one sold back in January.

Saudi Arabia’s tech funding: Saudi Arabia’s alleged killing of journalist Jamal Khashoggi has led a number of high-profile US business people to withdrawfrom an upcoming investment conference in Riyadh, a consequential development for the kingdom as it seeks to attract know-how from abroad. But the next wave of the backlash may wash over Silicon Valley—as Crown Prince Mohammed bin Salman, known as MBS, has directed at least $11 billion in Saudi funds to Silicon Valley since mid-2016, according to the Wall Street Journal. As global elites sour on MBS as a result of the Khashoggi affair, many American tech companies and entrepreneurs could soon find their sources of funds under fresh scrutiny.

US aid to Central America: A migrant caravan of at least 1,500 Hondurans is currently making the more than 3,000-mile overland journey to the United States. Yesterday, members of the caravan were detained by Guatemalan officials for making what they claim was an illegal border crossing. This story hasn’t escaped the attention of President Trump, who threatened in a recent tweet to cut off all aid to Honduras, the second poorest country in Latin America, if the group isn't quickly returned home. But a reduction in US aid to Honduras, which has already been slashed by the Trump administration (see graphic below), may simply exacerbate the factors that led these migrants to flee their country in the first place.

Khant Thaw Htoo is a young engineer who works in Eni's Sakura Tower office in the heart of Yangon. As an HSE engineer, he monitors the safety and environmental impact of onshore and offshore operations. He also looks out for his parents' well-being, in keeping with Myanmar's traditions.

Learn more about Khant in the final episode of the Faces of Eni series, which focuses on Eni's employees around the world.

On his first day as president, Joe Biden signed a remarkable series of executive orders. Boom! The US rejoins the Paris Climate Accord. Bang! The United States rejoins the World Health Organization. Pow! No more ban on immigration from many Muslim-majority countries. Biden's press secretary reminded reporters later in the day that all these orders merely begin complex processes that take time, but the impact is still dramatic.

If you lead a country allied with the US, or you're simply hoping for some specific commitment or clear and credible statement of purpose from the US government, you might feel a little dizzy today. The sight of an American president (Barack Obama) signing his name, of the next president (Donald Trump) erasing that name from the same legislation/bill, and then the following president (Biden) signing it back into law again will raise deep concerns over the long-term reliability of the world's still-most-powerful nation.

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Kevin Sneader, Global Managing Partner at McKinsey & Company, provides perspective on what corporate business leaders are thinking during the global coronavirus crisis:

Should businesses be pessimistic or optimistic about 2021?

It's easy to be gloomy about the year ahead when faced with the realities of a cold, bleak winter in much of the world. Add to that lockdowns across Europe, surging case numbers and hospitalizations, and dreadful events in the Capitol in the US to name a few reasons for pessimism. But I think there is a case for optimism when it comes to this year. After all, it's true to say that it's always darkest before the dawn, and my conversations with business leaders suggest there are reasons to be positive by 2021.

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Renowned tech journalist Kara Swisher has no qualms about saying that many of the country's social media companies need to be held accountable for their negative role in our current national discourse. Swisher calls for "a less friendly relationship with tech" by the Biden administration, an "internet bill of rights" around privacy, and an investigation into antitrust issues.

Swisher, who hosts the New York Times podcast Sway, joins Ian Bremmer for the latest episode of GZERO World, airing on public television nationwide beginning this Friday, January 22th. Check local listings.

Brexit pettiness lingers: Here we were naively thinking the Brexit shenanigans were over after the EU and UK agreed to an eleventh-hour post-Brexit trade deal last month. We were wrong — the saga continues. Now, a new row has erupted after the Johnson government said it will not give the EU ambassador in London the same diplomatic status awarded to other representatives of nation states. Unsurprisingly, this announcement peeved Brussels, whose delegates enjoy full diplomatic status in at least 142 other countries. The UK says it will give the EU envoy the same privileges as those given to international organizations, which are subject to change and do not include immunity from detention and taxation given to diplomats under the Vienna Convention on diplomatic relations. EU members are furious, with officials accusing London of simply trying to flex its muscles and engaging in "petty" behavior. The two sides will discuss the matter further when UK Prime Minister Boris Johnson meets EU representatives next week, their first face-to-face since the two sides settled the Brexit quagmire on December 31. Alas, the Brexit nightmare continues.

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The GZERO World Podcast with Ian Bremmer. Listen now.

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