Welcome to this special edition of Signal, in which we'll look at why everything is getting more expensive these days, how inflation is affecting other global issues, and what — if anything — can be done about rising prices while the pandemic keeps raging. This edition is part of a joint project between GZERO Media and Citi Private Bank called "Living Beyond Borders."

Thank you for reading.

The Signalistas

How long will COVID-fueled inflation last?

Carlos Santamaria

Everybody's talking about inflation these days. Rising prices are affecting people from all walks of life, all around the world.

In the US, buying a used car now costs on average 45 percent more than it did in January. Europeans are bracing for a tough winter with soaring natural gas prices that come at the worst possible time.

Asian investors mentioned the word "inflation" on calls this quarter the most times since 2003, when the SARS epidemic battered China's economy. In Lebanon, whose annual rate of inflation is now the world's highest, surpassing Venezuela and Zimbabwe, most people buy local not to support local businesses but rather because they can't afford imports.

Inflation, however, isn't always bad, and is actually a sign of a healthy economy as long as it stays around an annual 1.5-2 percent. But now in most countries it's creeping up too much due to the economic fallout from the ongoing pandemic.

Eighteen months later, demand is booming. Consumers have a lot more cash burning in their wallets than a year ago because they didn't spend much at all in 2020. Businesses too are humming again, and need energy and raw materials to keep their plants running and products delivered on time.

But the real problem is on the supply side. Persistent COVID-related disruptions to supply chains mean there's simply not enough stuff, or you can't get it as fast as you'd like. When you can, it's gotten more expensive, and as the added costs get tacked on, the price of everything goes up.

For instance, a new car has become a luxury all around the world due to a global shortage of semiconductors. If you're in the market for a new house or want to build a factory, prices are going through the roof and projects are getting delayed because building materials — particularly those sourced from overseas, which is the case for most countries — are scarce and will take longer to acquire.

Meanwhile, inflation is fast becoming a global political headache.

Most Brazilians blame President Jair Bolsonaro for the rise in their cost of living. In Turkey, President Recep Tayyip Erdogan has already fired two central bank governors since the pandemic began because they opposed the big stimulus spending he needs to stay popular while the country's currency plummets and inflation remains sky-high. Tunisia's President Kais Saied is also feeling the heat after having had little success persuading businesses to lower their surging prices.

US President Joe Biden's ambitious plans to expand the country's social safety net could get tanked by moderate Democrats who fear investing $3.5 trillion now will spur more inflation just as the economy is stabilizing, and have Republicans on their side. But there's also a bipartisan generational divide: a survey commissioned by the Federal Reserve shows that retiring boomers — many still traumatized by the 1970s "stagflation" period of low economic growth coupled with double-digit inflation — are a lot more worried about inflation than younger Americans.

Still, there's little that can be done right now to fix the problem from the supply side. Central banks raising interest rates could temper demand, removing some of the pressure on prices, but it won't move the needle on inflation from messed-up supply chains while COVID lingers.

Moreover, when governments do intervene on supply by restricting exports that other countries need, for instance Argentinian beef or Russian wheat, it makes things worse because such distortions may provide some short-term relief but in the long term only further increase demand — and therefore costs for everyone. (This, along with several climate-related droughts, explains why global food prices are now rising at the highest pace since 2007, when food riots sparked a wave of social unrest across parts of Africa and Asia.)

Inflation clearly wasn't a blip, but most economists say we shouldn't panic (yet). Inflation, they say, will likely return to target levels once the pandemic is behind us. But as long as COVID stays, so will its disruptor effect on all economies. So perhaps the way out of today's inflation is to get vaccines everywhere.

The Graphic Truth

Gabrielle Debinski

The pandemic brought the global economy to its knees, disrupting supply chains and causing a surge in unemployment. The economic volatility also sent many major currencies into a tailspin. While already-weak economies have been hit hardest by inflation, many medium and high-income countries have also seen their currencies depreciate over the past 18 months amid protracted lockdowns, border closures and supply chain constraints. We take a look at which major currencies have depreciated the most in 2021 when measured against the US dollar.

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Citi Private Bank

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What We're Watching: Inflation's impact on energy, climate, and… pasta


Energy price surge + winter = ? Natural gas prices are at all-time highs in Europe. In the US, they've gone to a 14-year peak. With demand from post-COVID economies outstripping supply, and winter coming, bills for heating and electricity could soar — and drive up inflation on both continents. Fears about natural gas have, in turn, caused a run in oil markets, driving crude prices to three-year highs as well. Meanwhile, restrictions on using coal have contributed to blackouts in China, causing some exporting factories there to slow production just ahead of Christmas season, when demand for Chinese-made consumer goods soars. More holiday demand chasing fewer gadgets and clothes would mean higher prices. And then of course there's the question of how to tackle inflation while promoting climate change policies that are meant to reduce emissions…

Will inflation affect climate goals? In the lead-up to COP26, a big UN climate summit, governments and corporations are questioning whether a hasty transition to green policies might further increase prices of things like air travel, contributing to the inflation problem. The European Central Bank says that slashing carbon emissions to net zero by 2050 could have unpredictable impacts on inflation, but ECB President Christine Lagarde says it's "the least of our worries, " and will allow inflation to rise beyond its usual 2 percent target while the bloc meets its climate goals. After all, inflation is not the only cause of the current spike in food prices, which are also driven by climate-change induced bad weather destroying farmers' crops in many places. But as governments push for decarbonization, many industries will have to change how they make things, likely driving up costs. Still, large economies like the US, the UK, and China seem committed to the move to a more sustainable world, saying that boosting energy efficiency could lower household heating bills, while more fuel-efficient vehicles could cut consumer costs in the long term.

Do you like pasta? We like it too, and we're not alone. It's hugely popular around the world – from Brazil and Chile to the Philippines, to South Africa and Tunisia, as well as across Europe and the US. Its popularity isn't a mystery. It's easy to find, easy to make, goes with lots of other types of food, and is (usually) inexpensive. But to prepare all that pasta, we need semolina, the flour most often used to make many forms of noodles. And to make semolina, we need durum wheat. But extremely hot and dry weather will cut the export of durum wheat from Canada, the world's lead supplier, by almost a third. Add a lousy wheat crop in Italy, where the consumption of pasta is not unknown, and you've got supply cuts, and therefore higher prices, for one of the world's most popular foods and a dish that low-income people can usually afford. The price of durum wheat is now up 90 percent.

The Graphic Truth

Carlos Santamaria

Global food prices have jumped by one-third since a year ago, as a result of pandemic- and climate-related supply chain disruptions as well as export restrictions. While the situation isn't (yet) as bad as in 2007-2008, when sharp increases in food prices triggered civil unrest across many parts of the world, the trend isn't a good one. Food price inflation and, in more extreme cases, the risk of famine will only exacerbate the challenges of economic collapse and mass unemployment left behind by COVID. We take a look at how the global prices of five key food products have changed since the pandemic began.

Podcast: Inflation, interest rates, and economic recovery

When the pandemic hit in full force in the US, the government had to act quickly to keep the economy afloat. One major thing that the Federal Reserve did was lower interest rates to zero. That helped money keep flowing and borrowing rates low on things like mortgages, cars, and other things Americans needed. The danger in juicing the economy this way, however, is that inflation could go up, and higher consumer prices could end up hurting our wallets. How does the government strike the right balance? Listen to more about the US recovery, the international picture, and what could come next in this podcast featuring Robert Kahn, director of Global Strategy and Global Macro at Eurasia Group; David Bailin, CIO and Global Head of Investments at Citi Global Wealth; and Steven Wieting, Chief Investment Strategist and Chief Economist at Citi Global Wealth. Moderated by Caitlin Dean, head of Geostrategy at Eurasia Group.

Inflation quiz!

1. Which European country experienced the highest recorded rate of hyperinflation?

A. Hungary

B. Poland

C. Germany

2. A loaf of bread cost how many Zimbabwean dollars in 2009?

A. One billion

B. One trillion

C. One quatrillion

3. In 1949, US President Harry Truman was feeling the pinch of post-war inflation. What did he do about it?

A. Made the Fed raise interest rates

B. Cut spending

C. Bumped his salary up

Hard Numbers: ECB remains calm for now, Nigerians in poverty, Brazilian instability, Japanese deflation

Gabrielle Debinski

10: Inflation in the European Union reached a 10-year high in recent weeks, fueled largely by rising energy costs. While some observers are sounding the alarm, the European Central Bank has remained calm(ish), saying that inflation will likely taper off early next year as production bottlenecks stabilize and the pandemic (here's hoping) recedes for good.

45.2: The World Bank predicts that by next year, 45.2 percent of Nigerians (more than 95 million people) will be living in poverty as a result of inflation caused by supply chain disruptions and food price rises fueled by the pandemic. That's a jump of five percentage points from 2019 levels.

4: Brazil's central bank has raised its reference interest rate four times since March in a bid to curb rising inflation, which reached 10 percent annually last month. In a region traumatized by years of financial volatility, President Jair Bolsonaro is already facing political backlash and a tough reelection bid next year.

-0.3: Japan is the only major economy to have experienced deflation during the pandemic, with prices dropping 0.3 percent from the previous year in recent months. Tokyo has long been trying to boost consumer spending and demand, which have lagged in part because of Japan's aging population.


1. A — Toward the middle of 1947, Hungary's inflation rate had reached, we kid you not, 13 quatrillion percent. That meant prices doubled every 16 hours, and the central bank even printed a one hundred quintillion (16 zeros) pengo bill that was worth a lot less by the time it left the mint.

2. B — Everyone was a trillionaire in Zimbabwe those days, except that it didn't buy you much, since the economy was a shambles because Robert Mugabe kept printing money like there was no tomorrow.

3. C — Four years after World War II, Truman was still making only $75,000 per year, the set pay rate for US presidents since 1909. During his second term, he convinced Congress to raise it to $100,000 (now it's $400,000).

This edition of Signal was written by Gabrielle Debinski, Alex Kliment, Carlos Santamaria, and Willis Sparks. Art by Jess Frampton and Paige Fusco, graphics by Gabriella Turrisi.

Want to know what your GZERO writers are reading/ watching/ listening to at the moment?

Read: Red Roulette — What would you do if you came from nothing and years later ended up making billions from brokering business deals with China's red aristocracy, but then your well-connected, uber-rich wife divorced you and kept most of your money before vanishing in one of Xi Jinping's first anti-corruption crusades? You'd get the hell out of Beijing and write a book about it, of course. That's exactly what Desmond Shum did, and interestingly not a peep from the CCP so far. By the way, his ex-wife is still missing. — Carlos

Watch: Round Midnight – It's not just the soundtrack. Or the great Dexter Gordon's performance, which earned him an Oscar nomination. Or director Bertrand Tavernier's obvious love for jazz and the men and women who create it. Round Midnight (1986) is the best film about music, any kind of music, I've ever seen because Tavernier lets the players play, and he reveals the relationship between the music and the life going on around it. — Willis

Read: I Couldn't Love You More — Are You My Mother, part of the Dr Seuss brand, is a story about a baby bird searching for his mother, and was a staple in my home growing up. I couldn't help but think of the children's book when I recently read the novel I Couldn't Love You More by British writer Esther Freud. The story focuses on three generations of women in one family, mainly traversing England and Ireland in the 1960s. Using delicate prose, Freud explores how very messy maternal and familial relations can haunt a person well into adulthood. It also subtly raises the question: what is a mother anyway? — Gabrielle

Raise: Victor — It's been twenty years since the brash Dominican teenager Victor Vargas tried to pick up the lovely "Juicy Judy" at NYC's Hamilton Fish public swimming pool. But Peter Sollett's classic indie film Raising Victor Vargas is just as fresh, intimate, and sweltering a portrait of life, love, and family on Manhattan's Lower East Side today as it was then. Check it on Netflix or Amazon here. Bonus: the film was shot the week before 9/11 -- see if you can spot the Twin Towers cameo. — Alex

Our newsletter is called Signal. We chose that name because we wanted to do our best to separate "signal" from "noise" for our readers — to cut through ideology and emotion to try to offer insight into what's happening, why it's happening, and what might happen in the future. With that in mind, here's what has happened in the United States over the past 24 hours and how we got here.

President Donald Trump has built a large following by telling people that American politics is a game that has been rigged against his supporters. In November, he was defeated by Joe Biden in a free and fair election. Before, during, and after that election, Trump has tried to persuade his followers that the election was stolen from them. That charge is false. It has been the subject of dozens of lawsuits and court cases, and no court has found that it has merit.

Read Now Show less

This year has been disastrous on so many levels as the COVID crisis wreaked havoc around the world. While coverage of the once-in-a-century pandemic dwarfed everything else in 2020, we have seen other huge political stories this year that will continue to shape the world for years to come.

We, your four Signal writers, each chose one big story that, to one degree or another, went under the radar as the global health crisis took centre stage. What do these tell us about the current state of our G-Zero world?

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Welcome to this special edition of Signal where we'll look at the question of how politics and markets are shaping the drive for "sustainability." This edition is part of a joint project between GZERO Media and Citi Private Bank called "Living Beyond Borders."

-The Signal team

Wait, before we get started here — what is sustainability anyway? Good question! "Sustainable" business practices are those that minimize negative impacts on the environment and society, in ways that make them "sustainable" over the long term. In recent years, the effects of climate change and resource depletion have caused soaring interest in "sustainability." And to make sustainable practices not only virtuous but also lucrative, governments nurture them by creating incentives, including subsidies for renewables, caps on emissions, or clear regulatory standards for what counts as "sustainable" in the first place.

Because this all involves tradeoffs and compromises between interest groups (and even countries), it's inherently political. And that's why we're here to talk about it. First up, a look at a big moment for the most important sustainability-related pact in the world… the Paris Climate Agreement..

The US is rejoining the Paris Climate Accord. What comes next?

Gabrielle Debinski

While the US played a major role drafting the Paris Climate Accord, a 2015 global treaty aimed at mitigating the effects of climate change, it was also the only country out of nearly 200 signatories to pull out of the landmark pact.

Now President-elect Biden says he will rejoin the accord on day one of his administration in January. But while rejoining the treaty in practice is relatively straightforward, Biden will face plenty of political challenges at home — and abroad — once the US is back in the mix.

So what comes next for the Paris Climate Agreement, and how might things change once the US is back on board?

How does the US rejoin the pact? Biden can rejoin the pact by issuing an executive order, and then sending a letter to the UN stating the US' intention to opt back in. That's the easy part.

The problems come once the US is back in the fold. First, the Biden administration will have to set new goals for reducing carbon emissions by 2030 through domestic initiatives. While these are voluntary non-binding targets, Washington will have to provide regular reports to the UN on its progress. These check-ins are not optional.

Biden's goals. The president-elect says that he will recommit the US — the world's second largest producer of carbon dioxide in absolute terms — to emissions reduction goals, including a $2 trillion investment in clean energy sources during his first term. Biden has also said that he'll tie the US' post-pandemic economic recovery to clean job initiatives, and that under his watch, the US will resume its global leadership role in tackling climate change.

Will domestic politics allow Biden to pull this off? While many members of the Democratic party will surely be relieved that the US has renewed its commitment to Paris, progressives like Representative Alexandria Ocasio-Cortez and Senator Bernie Sanders have been pushing Biden to go even further. But to date, Biden's support for ambitious policy initiatives like the Ocasio-Cortez sponsored Green New Deal — which aims to revamp every building in America to be more energy-efficient and create clean-energy jobs — has been inconsistent.

Biden has tried to appeal to Americans in states like Pennsylvania and Ohio who still rely on jobs in fossil fuel industries (as well as moderate Republicans), while trying not to alienate progressives within his own party. This balancing act will only get harder as the post-pandemic recovery takes center stage in 2021 — and tensions within the party will likely get worse once Biden is actually in the White House.

Additionally, after a tumultuous four years of the Trump administration, which prioritized rolling back domestic climate policy, the incoming Biden administration will have a lot of rolling back (or forward, depending on your perspective) to do of its own. While some of this can be done through executive order, Biden's goal of making the US carbon-neutral by 2050 relies on sweeping action from the US Congress — and to go deep he needs the Senate to turn blue when Georgians head to the polls next month in an election that will decide control of the chamber.

Meanwhile, on the global stage, lack of US leadership has undermined efforts to tackle climate change in recent years. With the US responsible for almost 15 percent of global emissions, any meaningful advances on decarbonization require Washington's cooperation. But climate-related innovation and diplomacy, traditionally driven in large part by the US, have stalled in recent years under the climate-skeptic Trump administration.

What's more, the abdication of US leadership on climate action has undermined relations with other nations, including both wealthy allies and developing countries that rely on US support to help them meet their own mitigation goals. (The US originally pledged $3 billion to help poor countries quit fossil fuel use, but the Trump administration slashed the budget by two thirds.)

But while the US has been missing in action, China has extended its Paris commitments, pledging to become carbon-neutral by 2060, a massive feat for the world's largest carbon emitter. "It is precisely because the Communist Party regime is bent on shaping the next century that its leader takes climate change seriously," Adam Tooze, who spoke to GZERO Media this past spring, wrote in Foreign Policy.

Meanwhile, the EU has also set a net zero carbon goal by 2050, and has made climate action a key part of its post-pandemic recovery effort. Major economies including the UK, South Korea, and Japan have made similar pledges, while India, the world's third largest emitter, has also committed to stronger climate action.

Though China and the EU are largely setting the global climate agenda, neither of them has America's economic scope or power, which is crucial to getting countries all around the world to take the threat of global warming seriously.

Looking ahead: In order to make meaningful global change on decarbonization, the US needs to be at the front of the pack. But rebuilding trust, and leadership bonafides, after taking a back seat for four years will surely take time.

The Graphic Truth

Gabrielle Debinski

During the early months of the pandemic, scientists announced some rare good news in a hellish year: as energy demands fell because of stay-at-home policies, global carbon emissions plummeted. Some hoped the impact might be long lasting. But mere months later, as the pandemic recovery has picked up in many countries, greenhouse gas emissions have ramped up again, reaching pre-pandemic levels in many places. Here's a look at the amount of carbon dioxide produced in several regions and countries during the first six months of 2020.

Investing for a post-COVID world

Citi Private Bank

As the virus departs in 2021, the global economy will recover more quickly and robustly from the COVID recession than from a more typical large downturn. The backdrop this optimistic outlook is the remarkable resilience seen despite the pandemic.

Read the full report, learn more about key themes in the report, and view related videos.

What We’re Watching: The politics of ESG, the priorities of “Renewable China”, and the Big Losers in all of this

Carlos Santamaria

The future of ESG: Global investor interest in supporting sustainable companies has soared in recent years. But how do you define "sustainable"? One widely used criteria is ESG, which stands for "environmental, societal, and (corporate) governance." The catch, however, is that there still isn't a uniform definition of ESG criteria and regulation across different markets. For example, the EU and the US — home to the largest financial markets in the world — still disagree on the basic question of whether pension funds can classify or not. Meanwhile, outside of these two markets and some parts of Asia, the concept of ESG is relatively scarce in much of the developing world. So, what about China, where the sustainable investment market remains virtually untapped? If the Chinese join the party, it could be a game-changer. The larger the ESG market, the more lucrative it can be — and the better that is for society and the planet. But that means that the world's three largest economies, which hardly see eye-to-eye on anything these days, will have to agree on common standards for global ESG investment to truly take off. We're watching to see if and how that might happen.

Renewable China: The world's second largest economy pollutes — a lot. But China has also in recent years emerged as a leader in renewables investment. Why? One reason is that Beijing is increasingly worried about the security of its massive oil imports. Much of those come from the Middle East, where China has relied for decades on the US to provide security. But now that the US itself is a leading oil producer, Washington is less interested in the region, making China more vulnerable to supply disruptions there. At the same time, China's heavy reliance on coal-fired energy plants has poisoned China's air and water, and even stoked unrest. All of this has prompted the Chinese government to become, in recent years, an industry leader in the development of renewables like solar and wind power technologies. China is also the world's largest maker and buyer of electric cars. One big thing to watch here is how much China cooperates with other economies -- particularly the US. Are we headed for a world where the two largest economies are green tech rivals or partners?

Those who see red in a greener world: The sustainability revolution is undoubtedly good for the planet and, as we've seen, for financial investors too. But spare a thought for those who have the most to lose in all of this: oil-exporting economies. Even before the coronavirus pandemic kneecapped global demand for oil — briefly sending prices into negative territory — they faced big challenges. The shale oil revolution in the US had whittled away American demand for foreign crude. Emissions reduction and renewables policies in the US, China, and Europe were undercutting long-term demand for what the Saudi Arabias, Russias, Nigerias, Venezuelas, and Iraqs of the world sell. In these countries, oil delivers more than two thirds of export earnings and is the bedrock of the budget. Over the next decade, oil exporters have tough choices to make about how to diversify their economies. Demographic pressures make the problem especially acute in the Middle East and Africa: in Saudi Arabia and Nigeria, for example, more than two thirds of the population is under 30. Even when oil prices were high, the energy industry wasn't going to provide enough good jobs for them. Countries with bigger rainy day funds, like Saudi Arabia or Russia, may have more time to figure this all out. But what of cash-strapped Iraq or economically-wrecked Venezuela?

The Graphic Truth

Carlos Santamaria

As more investors back responsible businesses and funds, the growth of assets under management that are ESG compliant (under one standard or another) has been soaring in recent years. What's more, the geographic scope of this market is growing. A few years ago it was mainly big in Europe , but it's now picking up fast in the US and expanding to Asia, driving a massive boost this year alone. Why? By throwing a glaring spotlight on global inequality, the thinking goes, the pandemic has been a major driver of investment that focuses less on hard profits and more on socially and environmentally responsible capital management. Will this sustainability surge carry on next year? We take a look at ESG investment's upward trend over the past eight years — globally and by region.

Podcast: Can sustainable investing save our planet?

Two centuries ago, Benjamin Franklin called on American business leaders to "do well by doing good." He believed that companies could be profitable while also fostering healthier and happier communities. Today, amid a pandemic that has laid bare acute economic, social, and environmental problems around the world, that challenge is more pressing than ever. How can investors meet it? Learn more in this podcast featuring Harlin Singh, Head of Sustainable Investing at Citi Private Bank; Elree Winnett Seelig, the Head of ESG for Markets and Security Services at Citi; Rohitesh Dhawan, Director of Global Energy and Natural Resources at Eurasia Group; and Gerry Butts, Eurasia Group's Vice Chairman.

Hard Numbers: Coal still king in Asia, EU to cut emissions, ESG in the Global South, COVID’s tiny temperature impact

Carlos Santamaria

638 billion: Investors have poured $638 billion into new coal power plants around the world, with more than 80 percent of them in Asia. Analysts predict that most of these projects will go ahead despite falling demand and environmentalist pushback, as many Asian governments seek to protect their coal sectors from the economic impact of COVID-19.

55: European Union leaders have agreed to cut carbon emissions by at least 55 percent compared to 1990 levels by the end of the decade. The new commitment — included in the EU's hard-fought deal on a $2 trillion coronavirus rescue package — is in line with the bloc's overall pledge to reach "net zero" emissions by 2050.

6: Only six of the world's top 100 most sustainable companies are based in the Global South. Three are in Brazil, two in China, and one in South Africa. While ESG-compliant businesses are doing well in many rich nations, ESG has yet to take off in most developing countries, mainly due to vague ESG criteria and market barriers that limit the flow of global ESG investment to many emerging economies.

0.01: The pandemic pushed global carbon emissions down by more than 7 percent this year, the biggest annual drop since World War II. That, however, will only lower global temperatures by a "negligible" 0.01°C thirty years from now.

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This edition of Signal was written by Gabrielle Debinski, Alex Kliment, Carlos Santamaria, and Willis Sparks. The art and graphics were made by Annie Gugliotta, Paige Fusco, and Gabriella Turrisi.

In the weeks leading up to the US presidential election, we spoke to journalists and commentators from around the world about how the result might affect their countries. Then, in the days after Joe Biden's victory became clear, we went back to some of them to see what they now expect from the next American administration. Here's what we heard from Brazil, China, Ethiopia, India, Iran, Israel, Japan, Mexico, and the Philippines.

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In this special edition of Signal, we'll take a look at the growth, future, and political challenges of the places where most of us live… cities. This edition is part of "Living Beyond Borders," a joint project between GZERO Media and Citi Private Bank that explores how global political trends affect people's lives.

- The Signalistas

Cities on the frontlines

Alex Kliment

We live on an (increasingly) urban planet. Today, for the first time in human history, more than half of the world's population (55 percent) lives in cities. By 2050, that figure will rise to more than two-thirds, with close to 7 billion people living in urban areas. Cities have always been centers of opportunity, innovation, and human progress. But they are also often on the front lines of the major political and social challenges of the day. Here are four areas in which that's true right now.

Climate change. Cities are hugely vulnerable to climate change and will have to take the lead in efforts to contain and adapt to it. More than 90 percent of the world's cities lie in coastal areas exposed to rising sea levels. At the same time, large cities' traffic, transport infrastructure, and buildings are responsible for 75 percent of global carbon emissions.

The major global climate change agreements — like the Paris Accord — exist at the national level, but implementation falls largely on cities. Many large cities are already taking the lead on their own — in some cases (as in the US currently) working at cross purposes with national leaders who are climate skeptics.

Technology. Urban planners are excited about "smart cities" where digital technologies (including sensors and cameras deployed across the city) can make the city more efficient, less polluted, and more responsive to citizens' needs. But there are two big political issues here.

First, who's watching all of this? All of those data flows have to be monitored and safeguarded by someone. As cities get "smarter" they'll wrestle with politically fraught tradeoffs between urban efficiency and personal privacy.

Second, who's making all of this? Smart cities require next generation 5G networks. Right now, the most cost-effective manufacturers of 5G equipment are Chinese companies. But the US government has banned them at home over national security fears and is pressuring other countries to do the same. As the world slouches towards a bigger US-China tech divide, cities that want the technologies of the future will be caught in the middle.

Pandemic. All of the things that make cities vibrant centers of progress and innovation – density, diversity, strong connections with the rest of the world – also make them sitting ducks for outbreaks of contagious disease. That's been particularly true of the coronavirus pandemic. COVID-19 first spread in a city (Wuhan, China — population 10 million) and since then, the overwhelming majority of the disease's victims have been in cities. In the US, for example, a study in June found that more than 94 percent of all cases (and deaths) have been in urban areas.

When we talk about the devastating impacts of the pandemic, and particularly its disproportionate public health and economic effects on minorities, the poor, and women, we are talking primarily about urban crises.

Polarization. No matter who wins next week's US presidential election, the electoral map is likely to be a sea of red (many less densely populated precincts that voted Republican) with large islands of blue (Democrat-leaning cities). But that political divergence between more liberal big cities and more conservative towns and rural areas isn't just an American phenomenon.

In 2016, for example, Londoners overwhelmingly voted against Brexit. Poland's recent presidential election was similar, a right-wing conservative beat a liberal big city mayor by drawing votes from the countryside. In Turkey, strongman president Recep Tayyip Erdoğan is least popular in the big cities, particularly his hometown of Istanbul, which his party lost control of last year.

The political divergence between town and country, and between cities and national governments, will become increasingly acute as cities grow and gain more economic power.

The Graphic Truth

Carlos Santamaria

By 2030, ten urban areas are projected to attain "megacity" status, a population of more than 10 million people. Six will be in Asia, where more than half of the population will be living in cities at the end of the decade. But the fastest growing megacities will be in Africa — including new megacities in Dar es Salaam (Tanzania) and Luanda (Angola). Can urban planners and governments in Africa keep pace with this rapid urban growth? We look at the world's upcoming megacities, comparing their current and future estimated populations, to get a sense of how crowded each megalopolis will be in 2030.

Join us for four virtual events starting on November 10

Citi Private Bank

Citi Private Bank

Urbanization may radically change not only the landscape but also investors' portfolios. Creating the livable urban centers of tomorrow calls for a revolution in the way we provide homes, transport, health, education and much more.

Our expert guests will explore the future of cities and its implications for your wealth.

Learn more.

PODCAST: Big cities after COVID-19 — boom or bust?

The coronavirus crisis has hit cities particularly hard. How will that affect what our cities look like in the future, and what role can local governments play in addressing the socioeconomic inequalities that the pandemic both illuminated and exacerbated? In this special podcast, Signal's Alex Kliment discusses this and more with Ida Liu, Citi Private Bank's Head of North America, in a conversation moderated by Eurasia Group's Caitlin Dean. Listen here.

The Graphic Truth

Gabrielle Debinski

Over the past seven decades, dozens of countries have experienced rapid urbanization as people flock from rural areas to cities in search of more diverse economic opportunities. During that time, the global urban population has increased six-fold. Here is a look at how that trend has played out in major regions of the world. While North America and Latin America have been predominantly urban for decades, it is only more recently that East Asia has made this transition, while sub-Saharan Africa is just on the cusp of being majority urban. Here is a look at how urbanization played out globally since 1950, with forecasts out to 2050.

What We’re Watching: The perfect city, cities vs nations, the post-pandemic planning problem

Willis Sparks

The construction of China's "perfect city" In April 2017, China's President Xi Jinping personally chose the site for the Xiongan New Area, about 60 miles south of Beijing. What's the Xiongan New Area? It's not only an attempt to relieve the crushing congestion of China's capital city, it's a bold bid to create a "city of the future." Of the 1,000 "smart city" projects around the world, half are in China, and Xiongan is the most ambitious in scale. Its architects say it will serve the needs of citizens with high-tech smart infrastructure and higher environmental standards than exist elsewhere in heavily polluted China. But it will also serve as a laboratory for cutting-edge surveillance of the city's residents. By following its progress and measuring its successes and failures, we'll learn much about how "smart cities" can create a higher quality of life for us all — but also how governments can use new tools to compromise personal privacy in the name of social order. The Xiongan project, with full political and financial backing of the Chinese government, is due for completion in 2035.

Cities going at it alone: Last December, the mayors of four Central European capitals got together and promised something big to the European Union: "miracles." At a time when the EU was threatening to withhold funding for increasingly illiberal national governments of Poland, Hungary, Czech Republic and Slovakia, the progressive and liberal big city mayors in these countries asked Brussels to just give them the money directly so they could work "miracles" in areas like climate policy. This trend of big cities increasingly looking to operate independently of their national governments — and alongside each other — on transnational issues like climate change, cybersecurity, or immigration has become more pronounced in recent years, particularly in countries where the political divide between progressive cities and more conservative national governments is increasing. The coronavirus pandemic has shed a new light on that trend. On the one hand, as the disease tore through cities around the world, big cities in some of the hardest hit countries — like the US and Brazil — found themselves fighting the disease without much help from pandemic-skeptic federal governments. This forced cities and states to act more independently in areas like sourcing PPE for their healthcare workers, imposing quarantines, or deciding when to reopen schools. But here's the question: given that the economic impact of the pandemic has hit urban areas particularly hard, will that broadly make cities more dependent on national governments in the coming years as they look for much-needed stimulus and recovery funds?

How will COVID-19 affect future urban planning? While it's easy to assume that the pandemic will "destroy" highly congested urban centers, throughout history some modern cities actually benefited in the long term from the lessons learned from dealing with a public health crisis. For instance, London only embarked on the engineering marvel of its present-day sewer system after it was crushed by cholera — a water-borne disease — in the 1850s. Urban planners widely expect that future cities will be designed to be healthier for residents. But which cities will have the cash to reinvent themselves as "safer" areas to live and work? The coronavirus has wreaked economic havoc on urban centers worldwide in developing and developed countries alike, and cash-strapped local and national governments may prioritize getting people back to work and helping those who have lost jobs. We're watching to see which mayors will see the wisdom in spending on pandemic-proofing their cities, and which cities will get left behind because they made a false choice by thinking only about their short-term problems.

Hard Numbers: London’s languages, US cities' economic boom, Asia’s concrete jungles, Addis Ababa's bike love

Gabrielle Debinski

300: London — a city where a large chunk of the population is foreign born — is home to the world's most internationally diverse student body. More than 300 languages are spoken by London's school students, many of whose families immigrated from South Asia, Africa and Europe.

70: In the decade following the 2008 global financial crisis (which left more than 11 million Americans unemployed within months), America's largest cities — including San Francisco, Boston, and New York — accounted for over 70 percent of the country's job growth. By contrast, unemployment is still at pre-2008 levels in many American rural areas and small towns.

39: Public green spaces like parks and nature reserves, which many city dwellers have flocked to in COVID-19 times, are a luxury in most of Asia's crowded urban centers. In the region's 22 major cities, average green space per capita is only 39 square meters (420 square feet), about half of the figure in Africa and more six times smaller than the per capita average in Latin America.

800: Many big city governments struggle with traffic congestion, but in developing economies the problem is often exacerbated by poor infrastructure. The answer isn't always to build more roads: Addis Ababa has an ambitious plan to build 800 kilometers (490 miles) of bike and pedestrian lanes by the end of the decade.

QUIZ TIME: What do you know about cities?

1. In the year 1650, what was the most populous city in the world?

a. London

b. Istanbul

c. Beijing

2. Pandemics have reshaped cities throughout history — which of these major urban landmarks was directly related to post-pandemic planning?

a. New York's Central Park

b. Rome's Colosseum

c. Cairo's Khan el-Khalili marketplace

3. In 1960, the federal capital of Brazil was moved to a new city, Brasilia, designed and built from scratch in a remote swath of desert by the visionary architects Oscar Niemeyer and Lucio Costa. Where was Brazil's capital before that?

a. São Paulo

b. Rio de Janeiro

c. Belo Horizonte


1 — B. In 1650, Istanbul was the largest city in the world, with an estimated population of 700,00 people. The second largest city then was Edo (Tokyo), with 500,000.

2 — A. The cholera epidemic of 1832 in New York spurred planners to create "lungs for the city" — Central Park was one of the major results of that initiative, along with a modern aqueduct and water system, which turned out to be a more effective way to eradicate cholera, which is water-borne.

3 — B. Until 1960, Brazil's capital was in the "marvelous city" of Rio de Janeiro.

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This edition of Signal was written by Gabrielle Debinski, Alex Kliment, Carlos Santamaria, and Willis Sparks. The arts were made by Annie Gugliotta and Gabriella Turrisi, and graphics by Ari Winkleman and Gabriella Turrisi.

Spiritual counsel from Walter Ruttmann, who knew how to make a city sing — silently. What's your favorite "city" film?

Today we've got a restoration (of sorts) in Bolivia, a border wall in Greece, and a big economic bounce-back in China. Bonus: which country is home to most of the world's most polluted cities?

Alex Kliment

MAS appeal in Bolivia

Alex Kliment

Call it a counter-counter revolution at the ballot box. One year after mass protests over election irregularities drove Bolivia's long-serving leftist populist President Evo Morales from office, his preferred candidate has won the presidency — possibly by a landslide.

But can the country's new leader, a soft-spoken economist named Luis Arce, move the country beyond the political trauma of the past year?

The back story. Morales, the first indigenous leader of majority-indigenous Bolivia, held power for 14 years, using the country's lucrative natural gas exports to lift millions out of poverty. But his efforts to sidestep term limits dented his support. After charges of fraud in last fall's presidential vote prompted widespread unrest, the military forced him out of office and into exile. Many on the left called it a coup and were outraged when right-winger Jeanine Áñez took over as an "interim" leader and moved quickly to overturn Morales policies, while riot police repeatedly clashed with his supporters. Áñez flirted with a presidential run of her own, but she backed out in order to unify support behind the right's candidate, former President Carlos Mesa.

On Sunday, Arce, the candidate of Morales' Movement Towards Socialism (MAS) party, won the election. While official results aren't out as of this writing, independent studies suggest it was a walloping, driven by massive support for MAS in the countryside. Áñez has already publicly congratulated Arce on the win, reducing the likelihood of protests or rejection of the results by Mesa's supporters. For the Morales camp, the result offers political vindication after a year of upheaval and uncertainty.

Who is Luis Arce? As Morales' minister of finance and economy, the 57-year-old Arce was in the cockpit during the years when Bolivia's poverty rate dropped from two thirds of the population to less than 40 percent, and GDP soared.

But he's hardly Evo 2.0. Arce has none of the combative charisma of Morales, a highlander who grew up as a llama herder and once headed Bolivia's powerful coca growers union. A technocratic type from an urban middle-class family who studied economics in the UK, Arce's political style is basically "the polar opposite" of Morales, according to Oliver Stuenkel, a prominent regional analyst.

The challenge ahead. "We will govern for all Bolivians," Arce said Sunday, as he pledged to form a "unity government." It remains to be seen what that means, given that MAS has likely reinforced its strong control over Congress.

Regardless, to reunify a country deeply polarized along political, economic, and racial lines, Arce will need to craft a vision that appeals both to the predominantly rural, indigenous-dominated areas that are the MAS support base, as well as to the urban centers that align with the political right.

He'll also have to shake the suspicion that he's a stalking horse for Morales. During his campaign, Arce was careful to distance himself from Morales, and MAS party leaders now say they think Morales' time has passed. But he remains an influential figure who merits close attention, particularly if Arce opens the way for him to return from exile in Argentina.

The pandemic rages. Bolivia has suffered one of the highest COVID-19 death rates per 100,000 people in the world, in part because political uncertainty undermined the public health response. Meanwhile, the pandemic-driven collapse in demand for global commodities like natural gas and precious metals — which make up 80 percent of Bolivia's exports — has plunged the country into its worst economic crisis in decades, threatening to reverse the progress that Morales and Arce made in reducing poverty.

Bottom line: Arce's convincing victory shows that the left remains the dominant force in Bolivian politics. But after a year of trauma, can the mild-mannered successor to one of the region's most charismatic and visionary populists move Bolivia past its bitter polarization?

PUPPET REGIME: A "viral" US presidential endorsement

There aren't many undecided voters left, but in the latest Puppet Regime, a very influential player in US politics makes a long-awaited presidential endorsement. Who will benefit: Biden or Trump? See it here.

What We're Watching: Greek border wall, China’s economic rebound, US overtures to… Syria?

Carlos Santamaria

Build that wall... in Greece: The Greek government has finalized plans to build a wall along part of its eastern border with Turkey to prevent migrants from staging mass crossings to reach European Union territory. The move follows a March standoff between Athens and Ankara when Turkish President Recep Tayyip Erdoğan declared he was "opening" the border because Turkey could no longer cope with so many migrants fleeing Syria. Since then, migrant flows via Turkey to the EU have declined dramatically due to the coronavirus pandemic and tougher policing, but Greeks and Turks (as always) remain at odds over what to do with the migrants: Greece wants Turkey to do more to stop migrants crossing, while Turkey says Greece is sending back migrants who arrive at Greek islands in the Aegean Sea. As the two sides continue to bicker over this issue — and over energy rights in the Eastern Mediterranean — the only thing that's clear is that Greece won't demand that Turkey pay for the wall.

China's economic recovery: As most of the rest of the world grapples with a pandemic-fueled recession, the country where COVID-19 began is doing quite well. China's GDP grew 4.9 percent in the third quarter compared with the same period in 2019. That's slightly less than expected but still an impressive feat for a country whose economy contracted by a whopping 6.8 percent during the first quarter as China shut down the entire city of Wuhan and halted most economic activity to contain the coronavirus. Can Chinese consumers sustain the economic recovery — until now largely driven by a massive government stimulus program for state-controlled firms and online shopping — by spending more on brick-and-mortar retail and services? In the longer term, we're watching to see how the world's second largest economy will deal with long-term declining demand for its products in many of its major export markets.

An American in Damascus: The Wall Street Journal has reported that Kash Patel, the Trump administration's top counterterrorism official, recently traveled to Syria for secret talks with an unidentified official representing the Bashar al-Assad government. If true, it's the first known meeting between a senior US official and the Assad regime since the start of Syria's civil war a decade ago. The US halted diplomatic relations with Syria in 2012 in response to Assad's brutal crackdown on Syrian protesters and civilians. Patel's reported goal in Damascus was to win the release of some or all of (at least) six Americans held hostage by Assad's government. Trump's supporters will say this effort is a reminder that the president will talk with anyone to advance US interests, while his critics will call it a cynical last-minute attempt to boost his re-election chances. But we're watching this story, not to judge its political motivations or implications, but to see whether these talks can reunite hostages with their families.

Red Pen: Trump didn't break US foreign policy

Donald Trump has wrecked US foreign policy beyond repair, according to a recent Washington Post column by Josh Rogin. But in this week's Red Pen, Ian Bremmer and Eurasia Group's Jeffrey Wright argue that the institutions are more resilient than Rogin thinks, and that Trump's America First approach reflects deeper domestic misgivings about America's global role that will outlast his presidency. Watch the video here.

Hard Numbers: Nagorno-Karabakh truce, US gun sales, toxic Indian air, Sudan's US payout

Carlos Santamaria

4: Armenia and Azerbaijan have agreed to a humanitarian ceasefire in the disputed region of Nagorno-Karabakh, which is suffering its worst violence in decades. It took just four minutes for the Armenians to accuse the Azeris of violating the truce by firing artillery shots and rockets. Azerbaijan, of course, sees things differently.

29 million: Instability and social unrest continue to drive US gun sales. The FBI conducted 29 million background checks for this year's arms sales through September, outpacing the number conducted in all of 2019. Keep in mind that neither gun companies nor the US government provides complete data on gun sales.

14: Of the world's 20 most polluted cities, 14 are in India. As seasonal air pollution worsens, irritating eyes and lungs, that could spell even more respiratory trouble for a country that has already suffered more than 7 million COVID-19 cases.

335 million: US President Donald Trump announced on Monday that he will remove Sudan from the State Department's list of state sponsors of terrorism after Khartoum agreed to pay $335 million in damages to US terror victims. Removal from the list means Sudan will be eligible for much-needed international development assistance funding.

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This edition of Signal was written by Alex Kliment, Carlos Santamaria, and Willis Sparks. Spiritual counsel from Gabrielle Debinski in the mountains.


American carnage