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Silicon Valley Bank collapse: Not 2008 all over again
Ian Bremmer shares his insights on global politics this week on World In :60.
With the Silicon Valley Bank collapse, is it 2008 all over again?
There's one very clear way that it's not, which is that it's not a big enough crisis for people to come together. And remember, after 2008, everyone understood that we needed to do everything possible to get the markets functioning, get trust in the system again, and avoid a great depression. Nobody's saying that right now. And it's not just because the US political system is more divided, it's also because people feel like it's fine to go after the "woke" banks. It's fine to go after the Trump era deregulation around the medium size banks. And everyone can point at their favorite villain while you don't really need to do a hell of a lot beyond the bazooka that Secretary Yellen threw at SVB and Signature Bank this weekend. So no, in that regard, it's very much not 2008 all over again. In some ways I'm happy about that and other ways I'm not.
As China reopens to tourism, is COVID finally behind us?
Well yeah, in the sense that we can travel everywhere. I mean, the fact that you haven't been able to go to China for three years now. First because of COVID, then because of zero-COVID policies is a real problem. I mean, engaging with Chinese policy leaders, corporate leaders on a Zoom, you're just not getting a lot of information. And Munich Security Conference was the first time I met with a senior Chinese delegation face-to-face, aside from China's then ambassador, now foreign minister to Washington in three years. So I mean, just my level of understanding of what the hell is going on in China is significantly less than I need it to be. And now that we can all start going to China again, that's a really big deal. So I think that makes COVID behind us. Of course, long COVID isn't behind us. And this is a permanent disease that, in terms of COVID's reality, people are still going to die from this thing, but in terms of treating it like a pandemic, yeah, I think it's pretty clear that that we are over and done with and I'm glad to say it.
Will the AUKUS deal shift the balance of power in the Indo-Pacific region?
No, I don't think so. I mean, it's a big deal for the Americans to be sharing advanced nuclear technology and hardware with the Australians, something the Americans wouldn't have done before. That is in part a growing concern about China. By the way, it's also potentially an intelligence risk because Australian level of security around their intelligence and information and their susceptibility to espionage from Beijing is a lot higher than that of the United Kingdom, than that of the United States. So there is a risk on board with that, but no, I think the important thing is that the Americans are continuing to focus on what is really a pivot towards Asia, more military equipment, more economic engagement, and of course, more concern of American allies and partners all across the region that they need the Americans from the security perspective, even as China becomes the critical economic partner. So that I think is important incrementally, strategically, but I wouldn't say AUKUS is the big mover, this week's San Diego meeting notwithstanding.
- SVB collapse: Don’t say the B-word ›
- Yellen brings bazooka to stop SVB contagion ›
- China-US tensions over COVID origins & Russia's war ›
- COVID ain't over ›
- Hard Numbers: Colombia's grim record, Ukraine reconstruction planning, Chinese beach tourists, India's strong arm ›
- What We’re Watching: Battle for Bakhmut, Xi’s diplomatic muscle, AUKUS sub deal ›
- Who does Washington blame for the Silicon Valley Bank collapse? - GZERO Media ›
- Ian Explains: Banking turmoil and the panic pandemic - GZERO Media ›
A day after the elections, officials tally votes at a collation centre previously stormed by unknown assailants in Lagos, Nigeria on February 26, 2023.
What We’re Watching: Nigerian election results, Italian migrant tragedy, COVID lab leak report
Nigeria starts presidential vote count
Early results from Nigeria's presidential election are still trickling in Monday, as delays at some polling stations forced people to vote throughout the night on Saturday and the following day. Final numbers could take days, especially if the race is very tight. So far, the big news is that Peter Obi, a third-party insurgent posing the most serious threat to the Nigerian political establishment since the restoration of democracy in 1999, captured Lagos, the country's biggest city and state. Obi is facing off against ruling party candidate Bola Ahmed Tinubu and opposition hopeful Atiku Abubakar. To avoid a runoff, a candidate must win the popular vote and 25% of ballots in at least two-thirds of Nigeria's 36 states. Whoever comes out on top, the final result "will most likely leave a large chunk of Nigerians upset," tweeted Amaka Anku, head of Eurasia Group's Africa practice, who's covering the election on the ground. Anku highlighted the low voter turnout — although it's unclear whether fewer people actually showed up or if biometric ID verification prevented unregistered people from voting.
Migrant boat sinks off Italian coast
At least 62 people, including children, died after a rickety wooden boat carrying approximately 150 migrants sank off the coast of southern Italy on Sunday. Search and rescue teams found 80 survivors, all of them adults. The number of migrants crossing violent seas from northern Africa to reach Europe has accelerated recently, with 105,000 intercepted by Italy last year, up 38,000 from 2021. Far-right Italian PM Giorgia Meloni, who has vowed to crack down hard on asylum-seekers trying to arrive by sea, blamed human traffickers and demanded more help from EU leaders to address the crisis, while the opposition 5-Star Party derided her government’s migration policy. Meloni has placed restrictions on charity boats and refused to accept rescue ships, demanding other countries take in more refugees. Meloni's hardline stance on migration remains at odds with human rights groups and Brussels as well as most individual EU member states, but she is unlikely to back down — after all, she was elected by Italians to be tougher on this issue, which provokes strong emotions on both sides.
Where did COVID come from?
Did COVID-19 come from a lab? Some time ago, that was considered unlikely, but now a classified and updated US Energy Department report says the virus most likely came from a laboratory leak. This is a significant development because of the considerable scientific expertise at the DOE’s disposal, though it reportedly has “low confidence” in the finding. The FBI reached a similar conclusion a while back, yet opinions in the US intelligence community are as polarized as they can be, as other agencies maintain that the pandemic began with a transmission from animals to humans. The only thing most seem to agree on is that the virus was not part of a Chinese biological weapons program. The finding, which the DOE says is based on new evidence (yet no details are available), underscores the continuing controversy over the origins of COVID, the emergence of which, as well as China’s secrecy over it, has been a significant source of tension between Beijing and the rest of the word. Still, what has changed from a few months ago is that the lab leak theory has gone from mere conspiracy theory to something that just might be a plausible explanation to something we will probably never have a definitive answer to: where COVID really came from.A woman in a protective suit walks past a shop as COVID outbreaks continue in Shanghai, China.
What We're Watching: China's COVID shenanigans, Oz olive branch, Peru vs. Mexico, Twitter succession
Counting China’s COVID deaths
In recent weeks, China has announced an abrupt about-face on its zero-COVID policy, which imposed tough (and economically costly) restrictions on freedom of movement inside China for the past three years. Despite predictions that a sudden end to existing COVID rules could contribute to one million deaths, the state has lifted lockdowns, ended many testing and quarantine requirements, and halted contact-tracing systems. For a government that works hard to persuade its people that it protected them from the COVID carnage in Western democracies, it’s a big risk. How to keep the number of COVID deaths down? Just redefine what counts as a COVID death. Going forward, only those with COVID who die of pneumonia or respiratory failure will be counted as COVID fatalities. (The US counts any death to which the virus contributed as a COVID death.) China’s change will make it much harder for Chinese health officials to properly allocate resources to respond to COVID spikes, and more infections will create mutations that generate new variants that cross borders. Officials in many countries, including the US, have argued over how to define a COVID death, but the question is especially sensitive in an under-vaccinated country of 1.4 billion people.
Australia tries to repair China trade ties
“Australia’s approach is to cooperate where we can, disagree where we must and engage in the national interest,” Australia’s Foreign Minister Penny Wong said before touching down in Beijing for a meeting on Wednesday with her Chinese counterpart Wang Yi. It’s the first time a high-ranking Australian official has visited the mainland since 2019 due to extremely tense bilateral relations. Wong reiterated that the meeting itself was a triumph given that diplomatic ties were all but frozen until new Aussie PM Anthony Albanese was elected in May, promising to reestablish dialogue with China. While no major public breakthroughs were announced on trade impediments, Beijing and Canberra vowed to establish a consistent high-level dialogue. Why has the mood been so grim? Well, President Xi Jinping is especially peeved at Canberra for joining US efforts to build a bulwark against China in the Asia Pacific by joining alliances including the Quad and AUKUS. Things got particularly bad in 2020 when Australia backed calls for an international investigation into the origins of COVID-19, prompting Beijing to impose devastating tariffs and bans on Australian exports. The Albanese government is keen to fix that, given that key Aussie exports – like wine – have plunged due to Chinese tariffs.
Peru clashes with Mexico as political crisis deepens
Peru has ordered the Mexican ambassador to leave the country after Mexico City granted asylum to the family of leftist President Pedro Castillo, who was recently arrested for trying to dissolve Congress and stage a coup. Simply put: Peru is a hot mess. Castillo, a former rural school teacher with no prior political experience, was accused of corruption and ineptitude and faced multiple impeachments since coming to office last year. Castillo's wife is also being investigated for partaking in alleged corrupt activities. Peru’s government, now led by Dina Boluarte, recently declared a state of emergency to manage mounting social unrest that’s led to at least 26 deaths. Crucially, Mexico isn’t the only state criticizing Lima. Fellow leftist regimes in Argentina, Colombia, and Bolivia released a joint statement expressing concern over Castillo’s “undemocratic harassment.” Meanwhile, Peruvians continue to protest, with some calling for new elections and others demanding Castillo be released. While Peru’s Congress is set to greenlight early elections, they wouldn’t take place until April 2024. That’s unlikely to placate the angry masses.
What We're Ignoring: Whoever becomes the new Twitter boss
After 57.5% of Twitter users voted for him to step down as CEO in an online poll, Elon Musk now says he'll do it ... once he finds the right person to replace him. Hmmm. But even if he does, any incoming Twitter boss won't have as much free rein over the social platform as its mega-rich owner, who still plans to run the tech side. More importantly, why drop $44 billion on buying Twitter to let someone else call the shots? The poll result likely gave Musk the perfect excuse to get out but still do whatever he wants by pulling the strings behind the scenes so he won't face so much blowback. The problem is that whoever steps into his shoes, none of the Twitter fights that Musk has started over hate speech moderation or who gets verified will likely be resolved anytime soon. Unless, of course, the new CEO is Snoop Dogg, who clearly wants the job and would certainly make Twitter anything but boring.