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Baltimore Mayor Brandon Scott at a news conference on June 29, 2023.
HARD NUMBERS: Fentanyl ravages Baltimore, Argentina declines by design, Harvard denies degrees to protesters, Oz tries alleged mushroom murderer
6,000: The city of Baltimore has won a grim distinction, recording 6,000 overdose deaths over the past six years, a drug death rate “never before seen in an American city.” Experts blame a flood of the extremely powerful synthetic opioid fentanyl, which occurred right as local politicians were shifting their attention to other challenges such as gun violence and the pandemic.
8.4: Argentina’s economic activity in March fell by 8.4% compared to the same month last year, the steepest drop of its kind since 2020 and the fifth straight month of declines. This pain, of course, is partly by design, as radical reformist President Javier Milei has imposed drastic spending cuts in order to put the economy on more sustainable footing for the future. Will it work? Here’s Ian Bremmer’s take on the question.
13: Harvard University’s governing board will not award degrees to 13 graduating students who participated in pro-Palestinian protest encampments earlier this semester. The move defies a faculty recommendation to award the degrees. The board said the students could still appeal. As GZERO readers know, our own Riley Callanan just graduated from Columbia University, where she covered the protests and police crackdowns. Here’s what it was like for her.
3: An Australian woman is going on trial for murdering three elderly people by serving them poisonous mushrooms at a lunch she hosted. And the plot thickens like a cremini stew: The dead were the parents and aunt of the woman’s ex-husband … who was ALSO at the lunch (but did not die).
Two types of cicadas that resurface every 13 and 17 years, respectively, are making their rare appearance this spring.
HARD NUMBERS: Cicadas plan historic reunion, China uncorks stimulus binge, Collusion claim rocks shale, Argentina gets more IMF money, Melinda Gates walks out the door
221: Can you hear it? If you’re in the US Midwest you sure can. After 221 years, two local broods of cicadas – red-eyed, beetle-like insects that grow underground for years before emerging for a single summer of cacophonous buzzing and mating – will emerge at the same time. Brood XIII, based in Illinois, comes up every 17 years, while Brood XIX does so every 13 years. For context, the last time they were out at the same time, Illinois wasn’t even a state yet.
140 billion: As its GDP growth picks up again, the Chinese government is looking for some further stimulus, and what better way to invigorate the economic senses than $140 billion in long-dated sovereign bonds? Beijing will start selling the paper this week, putting the funds towards “modernization.” China is looking to wean itself off of an economic model that relies heavily on property investment.
10: At least 10 new class action lawsuits allege that US shale oil producers colluded to keep crude prices up, driving up gasoline prices too. The shale oil industry, which uses advanced technologies to pull petroleum hard-to-develop shale rock formations, has boomed in the past decade, catapulting the US into the global top spot in oil production.
800 million: The IMF is set to disburse another $800 million in support for Argentina after determining that new President Javier Milei’s radical austerity reforms have helped to stabilize the economy. The eccentric Milei, a self-described “anarcho-capitalist,” has slashed spending since he was elected on promises to fix a moribund economy mired in triple-digit inflation. For a deeper look at how and why Milei is succeeding, see this Quick Take by Ian Bremmer.
12.5 billion: Philanthropist Melinda Gates, formerly married to Microsoft founder Bill, is stepping down from the Bill and Melinda Gates Foundation, one of the largest donor organizations in the world. As part of her agreement, she will keep $12.5 billion to direct towards her own work supporting women, minority groups, and families. To date, the foundation has given out more than $75 billion in grants to development and healthcare projects. Melinda and Bill divorced in 2021.
Milei is beating the odds. Will it last?
What happens when a country with triple-digit inflation and chronic fiscal deficits elects a chainsaw-wielding populist with a dead dog for chief counsel as president?
Back in November, following the unexpected triumph of the self-styled “anarcho-capitalist” Javier Milei in Argentina’s presidential election, I expected the economy would further collapse in short order.
Thankfully for the people of Argentina, that didn’t happen. In fact, since taking office in December, President Milei’s economic team has seemingly achieved what I (along with most political analysts and economists) thought impossible: Monthly inflation has come down every month for the past three months, from 25% in December to nearly 10% in March, with forecasters expecting the April figure to come in at single digits. The government did this by turning the 5.5% budget deficit it inherited into the country’s first surplus in over a decade, while boosting the central bank’s reserves, lowering its benchmark interest rates, and reducing the money supply – all without destabilizing currency and financial markets.
That’s not to say average Argentines are having a good time (more on this below). But this is a big deal nonetheless, and it’s one that I’m very happy to have been wrong about – just as I’ll be happy if I’m wrong about Ukraine eventually getting partitioned (although I’ll take the under on that).
Why didn’t the economy collapse?
One key reason is that President Milei turned out to be significantly more sensible and moderate than candidate Milei, to most everyone’s surprise.
Unlike Argentina’s last several administrations, which were known quantities to anyone who covered the country, Milei and his inner circle were completely untested outsiders with a reputation for intransigence and ideological dogmatism. Absent a better first-hand assessment of him and the people surrounding him, I was more willing to take his campaign promises and stated views at face value than I would have otherwise. And let me tell you, some of those were … pretty out there.
Upon taking office, however, Milei proved himself more willing to listen, engage, and compromise than I expected. Despite his combative rhetoric, the most institutionally weak president in modern Argentine history – with little support in Congress and among governors – went back on his promise never to negotiate with the so-called “political caste.” He quickly backed off the most outlandish/ambitious (depending on who you ask) libertarian economic policies he and his original advisors had run on – at least for now. The most notable of these were dollarization (aka replacing the peso with the greenback as the local currency), abolishing the central bank, and lifting currency controls, which if implemented on day 1 as pledged would have caused the sharp and immediate crisis that I predicted.
Instead, Milei appointed a strongly pragmatic economic team that has been well-received both by markets and the IMF – two essential players in Argentina’s economic stabilization. Led by the experienced ex-banker Luis Caputo, whom former president Mauricio Macrinicknamed “the Messi of finance,” the government embarked on a sweeping shock therapy agenda consisting of a 54% devaluation and draconian fiscal and monetary tightening. Wisely (but contrary to economic orthodoxy and Milei’s campaign rhetoric), they decided to keep currency and capital controls in place to prevent a disorderly run on the peso from wreaking havoc on markets. The gamble has paid off thus far, with investors, businesses, and the IMF all welcoming Milei’s steps with open arms.
Can it last?
While shock therapy has been successful at balancing the budget and slowing inflation, it has come at a great social cost. The fiscal and monetary austerity has caused a deep recession, with economic activity shrinking more than 10% year-on-year in March, unemployment rising, and real salaries hitting their lowest point since 2003. The government is hopeful that all the sacrifice will soon give way to a V-shaped recovery as output expands in the second quarter thanks to agricultural exports. However, most economists are skeptical, and it’s unclear how much more pain Argentines will be willing to take before they turn on the president’s policies.
Caputo’s original deficit reduction plan envisioned a mix of 60% spending cuts and 40% tax increases. That plan, however, was blocked by Congress earlier this year, leaving the government with no choice but to rely on unpopular spending cuts for the bulk of it. While Argentina's public sector is without a doubt excessively bloated and in need of a good trim, many of the real-term cuts (referred to as “blending” in Argentina) to social spending that the Milei administration is banking on to balance the budget are regressive, recessionary, and therefore socially and politically unsustainable.
Mass protests against budget cuts to public universities two weeks ago drew more than 400,000 people, and labor unions called for a nationwide general strike tomorrow. Public discontent can only intensify as the austerity measures cut deeper, further undermining the president’s ability to pass legislation and limiting his room to maneuver. With the president’s approval ratings starting to trend down (albeit from honeymoon-level highs) and opposition to his policies mounting both on the streets and in Congress, this is the greatest risk to Milei’s plan.
Will Milei and Argentines have what it takes to stick with the treatment until the patient is cured? Or will they let this painful fiscal adjustment and recession go to waste even though their best chance for success in decades could be right around the corner?
As a fan of Argentina (and, you know, people in general), I know what I’m hoping for. But as they say, hope is not a strategy.
How Javier Milei is turning Argentina's economy around
Ian Bremmer's Quick Take: Hi, everybody. Ian Bremmer here and a Quick Take to kick off your week. And today, I want to take us to Argentina, where newly elected President Javier Milei deserves a round of applause, at least for where we see the country so far in his administration.
We've had a first budget surplus that Argentina has enjoyed in over a decade. And monthly inflation, which has been significant highs and impossible for the people, is actually slowing down. Now, that's a really big deal. After several administrations in Argentina doing their damnedest to destroy the economy, Milei is turning the place around. He's succeeding. And by the way, this was not what I expected when the elections were happening. When he was first elected, I wrote, “expect more economic collapse imminently. ” And clearly that didn't happen. And that's a great thing. for the Argentinean people. I'm happy to be wrong about this. And by the way, I'll be very happy if I could be wrong about Ukraine getting partition, that seems like a tougher one. But nonetheless, what happened and why has he been more successful than I expected? It's worth thinking about.
Well, first of all, what the challenges were. Milei’s party has a thin minority in Congress, so he's had to use presidential decrees to push most of his ambitious economic reforms. He's the weakest president in institutional terms that Argentina has had in modern times. So he's swimming against a really strong current. And the Peronists who control a lot of power in Congress and among mayors and governors and the trade unions. I mean, these are people that would love to see Milei fail. So, first of all, my expectation was that no matter how smart well-thought through his economic policies were likely to be, the desire of the kleptocracy that's been in place for such a long time in having this guy fail and come back to power themselves, would be so strong that he wouldn't have any chance to get anything through.
In other words, they wouldn't be willing to compromise. Now they have shown themselves willing to compromise. And some of this is if you leave Cristina Kirchner out, who's really kind of volatile and horrible, polemic as a governor and corrupt as someone running the country, a lot of the peronists are really happy to see essential things happen in the economy that they don't have to take responsibility for. In other words, it's on Milei. It's not on them. And so there's a willingness to provide some compromise, even though that's going to mean smaller budgets, more austerity, that they're not going to get as much. They're willing to give him a little more rope than I expected before he became president. That's interesting. That's absolutely worth paying attention to. The difference between the Kirchner's and her inner circle and the Peronists that have been running the country to ruin for a long time.
Second point though, is that Milei himself has been much more of a thoughtful leader in terms of economic policy and his willingness to back down from eccentric and overdone claims than I had expected when he first became president. Now look, unlike Argentina's last several administrations where they were pretty well known to anyone that covered the country and I've traveled there and got to know the cabinets and met with the presidents and all of that. In this case, you had a complete outsider. I had no idea who was around Milei and a lot of what was being said about him was a little bit out there, like for not just the fact that he wanted to go after the leftist libtards, but I mean, the fact that he had cloned dogs and that, you know, claimed to actually, talk with one of them that died from beyond the grave. And, I mean, a lot of the comments that he made were beyond eccentric.
Having said that, there was also a lot of media coverage of Milei that really didn't like him because he was a right-wing libertarian, and also because he aligned himself with Trump and said nice things with the former president. And then of course, goes and does immediate interview with Tucker Carlson, who was a spreader of disinformation and a bomb thrower, not exactly someone you can trust, but that, of course, meant that ideologically, a lot of people that were covering him were not covering him honestly. They were knee jerk reacting to, this guy is going to be an idiot. And frankly, you know, absent an understanding of the people around him, I was more willing to go along with that.
Well, it became fairly clear once he was in as president that his initial appointments were better than that. I sat down with his foreign minister to dinner back in January and was pretty impressed with her both individually, as a very competent, engaging and smart person on policy, but also in the way that she described, which struck me as very honest, her relationship and conversations with the president.
I heard from many people from different countries, developed countries around the IMF that his appointment of the former president Macri's economic advisor to the IMF board was extremely well received. This was someone that was really well respected across the markets and meant that the IMF negotiations were likely to go quite well, and that the meetings that Milei had with Georgieva, the managing director of the IMF, were very strong.
They were very engaged and he was willing to listen on issues of what the Argentinian government needed to do economically, which has led to a very constructive bilateral relationship between them, utterly essential given what Argentina's economic situation looks like right now. So all of that has been very positive. Now, having said that, there's no question that this cost of writing the Argentinian economy, has meant a fall in real incomes, leading to a slowdown in consumption and economic growth and a downturn in living standards and an increase in poverty.
That is happening. It's going to get worse. And government approval for now, given everything I've been saying, is actually surprisingly sticky and strong, especially if we look at Argentina standards historically. Will he be able to continue this? There's no question, it is a very high bar, and that high bar is not only because that Peronist opposition is still there, and they don't want him to be seen as a historic success, but also because economically, this would be hard for just about anybody.
But there's no question that for his first several months in government, this guy deserves respect for what he's been able to actually accomplish. And a final point is, you know, I don't think we should have such a problem with being wrong. And you only have a real problem with being wrong if you are so ideologically attached to what you were saying to begin with. And if it's just a question of analysis and you made a mistake in your analysis, you go back, you get the analysis right and you change your mind, and that's fine. Also, sometimes the world changes and so you change your mind.
But, you know, if the fact is that the analysis is wrong and it's not like I have a problem with Milei doing well, I would love him to do well. I would love the Argentinean people to succeed, and to get out of the corruption and the devastatingly poor economic policies that they've experienced for decades now. This is a country, anyone that spends time there knows incredible education, very, very beautiful and fertile land and a place that you just want to spend time. And they have been run into the ground by poor governments, a series of poor governments. And if Milei is the guy that turns that around, he has nothing but support from me.
That's all for me. And I'll talk to you all real soon.
Students gather in front of the Sorbonne University in support of Palestinians in Gaza, during the ongoing conflict between Israel and the Palestinian Islamist group Hamas, in Paris, France, April 29, 2024.
Student protests go global
As police ramp up efforts to dismantle pro-Palestine encampments and demonstrations on US campuses, the student protests are going global.
Students at four universities in Australia have jumped onto what they call a “global wave” of pro-Palestinian activism, vowing to occupy areas of campus with encampments until their schools cut financial ties with Israel.
In the Middle East, student protests are raging from Kuwait to Egypt to Lebanon, where students occupied central locations on campuses on Monday and Tuesday, calling for divestment and an end to the war in Gaza.
Tensions are also rising between students and authorities inFrance, a country with a history of protest and the largest Jewish population in Europe. Students in Paris at the Sorbonne and Sciences Po began occupying parts of their institutions last week. On Saturday, Prime Minister Gabriel Attal said his government “would not tolerate the actions of a dangerously acting minority trying to impose its rules and an ideology coming from North America,” while the president of the Île-de-France regionsuspended funding for Sciences Po until “calm and security have been restored.”
Encampments have also popped up at universities in the UK, Canada, Turkey, Germany, Japan, India, and Argentina. For many protesters, fighting for a cease-fire has taken on a larger meaning. They continue to call for divesting from Israel, but they also tie the plight of Palestinians to global structures of oppression and link the war in Gaza toissues like police brutality, the mistreatment of Indigenous people, racism, and climate change.Javier Milei, the President of Argentina, speaks at the final day of the conservative conference on February 24, 2024.
Hard Numbers: Argentina in the money, China-Libya drones plot in Canada, Recording Gaza’s casualties, Arms spending peaks
0.2: Argentina is in the black for the first time since 2008. The South American country is starting Q2 with a 0.2% fiscal surplus in quarterly revenues. President Javier Milei took a victory lap and promised to continue his fiscal austerity program, causing bond valuations to jump.
2: Two former UN employees in Montreal were charged with participating in a conspiracy to sell Chinese military equipment to Libya, including large drones capable of carrying multiple missiles. The men are accused of violating sanctions related to the Libyan civil war (2014-2020) between 2018 and 2021. One of the suspects was arrested Tuesday, but the other remains at large.
80,000: The US State Department’s annual human rights assessment found that nearly 80,000 people in Gaza have been killed or injured during the Israeli offensive, amounting to some 3% of the population.
2.4 trillion: The Stockholm International Peace Research Institute found that global military expenditures reached an all-time high of $2.4 trillion, a year-over-year increase of 6.8%. The United States alone made up 37% of that spending, and with China spending another 12%, the two leading military powers cumulatively spent just under half of the world’s entire military budget.
President of Chechnya, Ramzan Kadyrov, dressed in the national costume, dances as part of The Day Of Chechen Language celebrations in Grozny April 25, 2010. The Day Of The Chechen Language holiday was established by Kadyrov in 2007 to promote the national language.
Hard Numbers: Chechnya bans beats, Poland’s right stays strong, Biden cancels student debt (again), Argentina battles dengue, “Hardest Geezer” runs Africa
116: Can you feel the beat? If you’re in Chechnya, from now on you are only rocking between 80 and 116 beats per minute. That’s because a new law bans any music faster or slower than that range. The Goldilocks move, taken by the quasi-Islamist dictatorship of Ramzan Kadyrov, aims to shield the North Caucasus republic – which is part of Russia – from insidious Western influences. But don’t worry – as GZERO design captain Ari Winkleman points out, you can still listen to Radiohead’s “Creep” (92 bpm) on repeat in the streets of Grozny.
52.5: Polish PM Donald Tusk’s centrist governing coalition won just 52.5% of the vote in Sunday’s municipal elections, a narrow victory that underscored the persistent strength of the far-right Law and Justice Party, which took close to 34%, the largest share of any single party. Tusk’s coalition ousted Law and Justice from national power in bitterly fought general elections last fall but has continued to clash with the party over rule-of-law issues and appointments ever since.
25 million: The Biden administration on Monday announced a sweeping new program of student debt forgiveness that it said would give relief to some 25 million borrowers, including those who are either facing economic hardship, owe more now than they did at the start of their payback periods, or who have had debt for more than 20 years. The new plan replaces an earlier one that was struck down by the Supreme Court but is expected to face some legal challenges of its own.
232,996: Argentina is facing its biggest-ever outbreak of dengue fever, with some 232,996 cases of the virus already registered this season, nearly double last year’s figure. Experts say that warmer temperatures, potentially linked to global warming, are extending the breeding season for the mosquitos that carry the disease. Dengue is sometimes fatal and never fun – high fevers, severe body aches, vomiting, and it can be more lethal the second time you get it.
9,940: If you think your little 20-minute morning run is something special, consider the feat achieved by the UK’s Russ Cook, otherwise known as “The Hardest Geezer.” Cook just finished running from South Africa to Tunisia – ie, the entire continent of Africa. The 9,940-mile journey, which he ran for charity, took him almost a year to complete. To celebrate, the 27-year-old endurance athlete knocked back a strawberry daiquiri.Residents of Avellaneda protest against the DNU (Decree of Necessity and Urgency) and the Omnibus Law promoted by the government of Javier Milei.
The masses test Milei with major protest
Starting mid-day Wednesday, Argentina’s most powerful unions will stop work to demonstrate against the financial overhauls proposed by new President Javier Milei, as his omnibus spending bill works its way through Congress. An impressive turnout is expected for the march to the national Congress in Buenos Aires, with smaller solidarity protests across the country. Workers everywhere – from banks to domestic airlines to those informally employed – say they will join the strike.
Union leaders recognize the need for economic reform (with 211% inflation rates and 40% of Argentines living in poverty, who wouldn’t?) but object to the working class being tasked with carrying so much of the burden. Milei has already used his executive powers to slash subsidies for transport and energy, among other areas, but his administration says increases to childcare and food aid benefits are meant to prevent catastrophe for impoverished citizens. The radical cuts proposed in the omnibus bill are all but certain to be moderated in Congress, where Milei’s party holds only a small minority of seats — but no one expects a painless experience.
Is Milei’s honeymoon period ending? It’s one thing to wave a chainsaw around and yell about the “communist shits” in power, but it’s quite another to reverse Argentina’s century-long economic decline. A strong turnout against the cuts could put pressure on lawmakers to ease up, but don’t expect a collapse of the overhaul effort even in the case of a massive showing. The economic situation demands change – even unpopular change – and Milei’s rivals from former President Cristina Fernández de Kirchner’s party are only too happy to let Milei’s approval rating take a beating before they make their move.