TROUBLE FOR THE CROWN PRINCE

There are intriguing signals from Riyadh this week that some of Saudi Arabia’s most powerful men are feeling the heat. On Tuesday, Prince Ahmed bin Abdulaziz boarded a plane in London, and Crown Prince Mohammad bin Salman was there to meet him when he landed in Riyadh. Here’s why that’s a big deal:


  • Prince Ahmed is the last-surviving full brother of King Salman.

  • Years ago, Prince Ahmed hoped to one day succeed his brother as king. Instead, King Salman named his son Mohammad bin Salman, known widely as MBS, as his next in line.

  • In response, Prince Ahmed moved to London, where he has reportedly criticized both the king and crown prince over Saudi Arabia’s role in the war in Yemen.

  • MBS doesn’t appreciate criticism. That’s the subtext behind speculation that he may have ordered the murder of journalist Jamal Khashoggi at the Saudi consulate in Istanbul on October 2.

  • Nor does MBS want to share power. That’s the message of his move last year to detain a number of powerful princes and some of the kingdom’s most powerful businessmen, and his broader consolidation of control over the kingdom’s interior ministry and national guard.

This raises a couple of interesting questions. Is Prince Ahmed’s return from exile a signal from King Salman that power will now be shared among senior family members rather than concentrated in the hands of MBS? It seems unlikely Prince Ahmed would have risked a return from exile without some guarantee of safety. And if King Salman still intends that his son will be the next king, how secure can Prince Ahmed feel about his future inside the kingdom?

This curious manoeuvring comes at a time when the Saudi government faces heavier foreign pressure than at any time since the September 11 terrorist attacks.

First, the Turkish government refuses to allow the Khashoggi murder to fall from front pages. On Wednesday, Turkey issued its first official statement on the killing: “In accordance with plans made in advance, the victim, Jamal Khashoggi, was choked to death immediately after entering the Consulate General of Saudi Arabia.” The body was then dismembered “again, in line with advance plans.” This won’t be the last word we hear from Turkey on this story.

Second, the US and UK governments called this week for an immediate halt to the war in Yemen and for all parties to the conflict to join UN-led peace talks within 30 days. This is a direct rebuke to MBS, with whom President Trump appears to have good relations, because MBS has taken direct ownership of a Saudi-led military offensive in Yemen that fuels a crisis in which, according to the UN, as many as 14 million Yemenis face risk of starvation.

The bottom line: These stories touches on three crucial elements of the Saudi story: Succession, an aggressive Saudi foreign policy, and reform within the kingdom. For now, it still seems unlikely that MBS will have his wings clipped in a lasting way. But fallout from the Khashoggi murder, domestic and international, continues to mount.

Facebook unveiled plans for a new cryptocurrency and payment system on Tuesday. It's called the Libra, and it's not-so-modest goal is to "reinvent money," and "transform the global economy" so that "people everywhere can live better lives." Ambitious much, Zuck?

This is a huge political gamble, but the rewards could be enormous. Here's a quick look at the tradeoffs:

The risks: Facebook is asking its 2.5 billion users — and government regulators — to entrust it with something that's vitally important to people everywhere and a power that governments jealously protect: access to money. And it's doing so at a time when trust in Facebook and other big Silicon Valley companies is at a low ebb.

Whether it's a concern that Big Tech has become too powerful or that it's not doing enough to protect privacy or put a stop to fake news, it's a heck of a time to launch a new techno-utopian project that could give Silicon Valley much more power — including the ability to track not just what people say they like but how they spend their money.

Mark Zuckerberg understands this — the Facebook founder is setting up Libra as a Swiss-based non-profit that will be governed by an "association" of 28 tech and financial companies and non-profits of which Facebook is just one member. He's also promising that Facebook will not mix personal data with payment information, and to cooperate with regulators.

But this will always be Zuckerberg's baby, and by launching Libra, he's painting a big new political bullseye on his own back.

The payoff: If Libra can survive the inevitable political and regulatory storm (and convince its billions of users that they can trust the underlying technology and financial stability of the new cryptocurrency) the upside could be enormous.

How enormous? The Libra website claims that more than 30 percent of the world's population — about 1.7 billion people — currently lack access to traditional bank accounts. Many more pay steep fees to transfer money using traditional payment services. Libra, by contrast, promises access to anyone in the world with a simple smartphone — and to make payments as inexpensive as sending a text message.

Plug those capabilities into a social network whose user base is roughly double the population of the biggest country in the world, and the results could be revolutionary — not just for billions of people who would gain new access to financial resources, but for Facebook's business model, and for central banks and governments that have traditionally sought to control the flow of money through their economies.

That would be a techno-utopian dream come true, but it's a power that governments won't willingly surrender.

Does the leader of Hong Kong appear weaker withdrawing the extradition bill?

Well as we'd say in Australia, "Is the Pope a Catholic?" Of course. This means that Carrie Lam's authority within the Hong Kong SAR is reduced and her standing in Beijing is reduced as well. But I think the bottom line is that China will resist any efforts to remove her from office, despite local pressure.

Is the US – China trade war coming to an end anytime soon?

Depends Dr. Bremmer on what your definition of "any time soon" happens to be. My prediction is simply this: once they get to the G20 meeting in Osaka Xi Jinping and President Trump will agree to reboot the negotiations process but then it's a question of the substance of the deal. My prediction is A) there will be a deal sometime between now and the end of the year. And secondly, the nature of the deal will be America yielding on the questions of tariffs to the Chinese and China yielding to the Americans on the amount that President Trump expects in the purchasing order of future American goods by the Chinese. That's my bottom line. Both countries need the economic outcome. Both countries therefore have a deep interest in securing a deal. Doesn't mean the end of the economic war however, technology reigns supreme.

If Willis's story on Tuesday about Argentina being plunged into darkness after a nationwide power failure didn't get you packing a flashlight and checking that your car has a full tank of gas, this one should. Over the weekend, the New York Times said anonymous US officials had revealed a US campaign to plant "potentially crippling malware" inside Russia's power grid "at a depth and with an aggressiveness that had never been tried before."

Quick thoughts:

This is a big provocation. It's the cyber equivalent of mining a harbor — an aggressive move that falls short of actual conflict but sends an unmistakable message: mess with us, and we'll mess you up.

The leak was probably intentional. The campaign fits with the new US strategy, launched under the Trump administration, of trying to deter cyber adversaries like Russia, China, and Iran from hacking its critical infrastructure. By disclosing the US campaign, US officials are effectively telling Russia (and by extension China and Iran), that they've got a loaded gun cocked and pointed at their economies.

That's dangerous. People — and governments — may not always behave rationally when a gun is pointed at their heads. Russia might be even more inclined to lash out. And unlike more conventional forms of conflict, cyber isn't a domain where the US can be sure it has an overwhelming advantage if push comes to shove.

It gets worse. The Times said US cyber officials described a "broad hesitation" to go into details of cyber operations against Russia with President Donald Trump because they feared he might cancel it or tell other governments about it. Among other things that are disturbing about this story, a lack of communication between the President and US cyber warriors could send mixed signals that further embolden US adversaries.

It's no secret that cyberattacks are becoming more commonplace. But where do most of them originate and what countries do they target most? The graphic above shows the most significant offenders and victims since 2006. Hackers in China, Russia, Iran, and North Korea account for three-quarters of all major attacks. Nearly a fifth of attacks, meanwhile, have targeted institutions or companies in the United States.

(At least that we know of: this chart highlights known attacks on government agencies, tech companies, and other operations that caused more than $1 million in economic damage. But many cyberattacks are never disclosed, and some countries are more transparent than others, so consider this a cross-section of a much bigger — and more disturbing — picture.)