What We're Watching: California's governor faces the heat, worrying signs for Argentina's president, a Malaysian deal

California Governor Gavin Newsom speaks at St. Mary's Center during a Stop The Recall rally ahead of the Republican-led recall election, in Oakland, California, U.S., September 11, 2021.

The world's fifth largest economy votes: Voters in the US state of California will vote Tuesday on whether to fire the state's Democratic Governor, Gavin Newsom, and replace him with someone else. Some 46 candidates have put their names on the ballot to take the governor's mansion from Newsom, the former San Francisco mayor who has been broadly criticized for his pandemic policies — in particular his decision to keep many public schools closed last year, as well as dining out at an exclusive restaurant while telling Californians to stay home. But while the recall effort initially had steam, low projected turnout and an uninspiring group of replacement options — including right wing shock-jock Larry Elder and Caitlyn Jenner of Kardashian fame — mean that Newsom will likely survive. The vote has national implications: there is increasing pressure on the state's 88-year old Senator Diane Feinstein to retire before her term is up in 2024, and it would be up to the governor to appoint her replacement. With the Senate currently divided 50-50, a Republican governor could flip control back to the GOP. But that's a long-shot: Republicans only make up 24 percent of the electorate, compared to 35 percent in 2003, the last time the state recalled its Democratic governor. Who took over after that? The Terminator.


Bad signs for Argentina's president: The coalition of President Alberto Fernandez got walloped over the weekend in mandatory primaries that are considered a dry-run for November's mid-term elections. His leftwing Peronist ticket pulled just 31 percent of the vote, almost ten points behind the center-right opposition Juntos por el Cambio (Together for Change) list, and won in just 8 of Argentina's 24 provinces. The result isn't hugely surprising, considering how bad things are in Argentina at the moment. Inflation is flirting with 50 percent, and Argentina has one of the highest death rates per 100,000 in the world. If these results repeat in November, Fernandez would lose his Senate majority, vastly complicating his ability to govern in the second half of his term. At the same time, his powerful Vice President Cristina Fernandez de Kirchner, who was president from 2007 to 2015, is breathing down his neck, pushing for more economic interventions in order to boost support in the election. With Argentina already reeling from a debt crisis, that could prove disastrous. Argentina has lurched from crisis to crisis in recent years, with big political swings to match. Indeed, the next two months could be particularly perilous.

A big deal in Malaysia: The country's ruling coalition has signed an agreement with the opposition, in a move that boost's the teetering prime minister, and could stabilize politics for a bit after a tumultuous few years. In August, current PM Ismail Sabri Yaakob became the third prime minister in as many years, with a majority so slim that the country's monarch called for a vote of confidence to prove that he was really in charge. The new agreement, meant to shore up political stability while the country grapples with the pandemic, grants the opposition a say on all legislation and matters of economic recovery, and lowers the voting age from 21 to 18. No date has been set for the confidence vote, but that will be the next big milestone for Ismail Sabri, who will now try and pass the 2022 national budget to boost confidence. A strong showing will put him in the clear for a while, and give Malaysia a chance to dig out of the pandemic without further political upheavals.

The key for small business growth? More digital support.

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The key for small business growth? More digital support.

The pandemic ushered in a boom in new businesses, with growth driven largely by entrepreneurs and small businesses in online retail, transportation, and personal services. According to our recent survey, small businesses indicated that to continue to thrive, greater digital support is even more important than more loans or grants. Their top priorities? Better internet connections. More cybersecurity capabilities. Greater digital sales support. Increasing digital payments. Read more about how we can work together on this important issue from the experts at the Visa Economic Empowerment Institute.

Iran’s nuclear program runs hotter

Talks between Iran’s government and world powers over the future of Iran’s nuclear program continue. The US and Iran are still not communicating directly; Britain, China, France, Germany, and Russia are shuttling between them.

The good news is that they’re all still talking. The bad news is that, after eight rounds of negotiations, the main players haven’t agreed on anything that would constitute a breakthrough.

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January 6 laid bare "the deep divisions, the partisan infighting, the polarization within our society," says Fiona Hill, the former US senior director of the National Security Council. In a GZERO World interview, she spoke with Ian Bremmer about her concerns about the state of democracy in the United States.

Hill famously testified against her impeached boss, Donald Trump, who stayed in power after being acquitted by the Senate of abuse of power and obstructing Congress. She also notes that divisions actually make America look weaker on the global stage — particularly to someone like Russia’s president Vladimir Putin.

Watch this episode of GZERO World: American strife: Will US democracy survive? Fiona Hill explains post-Jan 6 stakes

Kevin Allison, director of geotech at Eurasia Group, is concerned about the rise of very powerful tech companies disrupting centuries of geopolitics led by the nation-state.

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The problem with China’s Zero COVID strategy: GZERO World with Ian Bremmer - the podcast

Listen: Xi Jinping's zero-COVID approach faces its toughest test to date with omicron. Why? Because China lacks mRNA jabs, and so few Chinese people have gotten COVID that overall protection is very low. A wave of lockdowns could disrupt the world's second-largest economy — just a month out from the Beijing Winter Olympics.

That could spell disaster for Beijing, Yanzhong Huang, senior fellow for global health at the Council on Foreign Relations, tells Ian Bremmer on the GZERO World podcast. If things get really bad, though, Huang believes China will pivot to living with the virus, especially as the cost of keeping zero COVID in the age of omicron becomes too high.

Subscribe to the GZERO World Podcast on Apple Podcasts, Spotify, Stitcher, or your preferred podcast platform to receive new episodes as soon as they're published.

Carl Bildt, former Prime Minister and Foreign Minister of Sweden, shares his perspective from Kiev, Ukraine

First question, how is the crisis in this part of Europe developing?

Not good. There's been a week of intense diplomacy with talks in Geneva, and Brussels, and Vienna that produced virtually nothing. The Russian, sort of key demands are outrageously unrealistic. They know that is the case. The US is trying to engage them on somewhat different issues. We'll see if there's any prospect there, but it doesn't look too good. I think the likelihood is that we gradually will move into the phase of what the Russians call military technical measures, whatever that is.

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For Angela Hofmann, practice head for Industrial & Consumer at Eurasia Group, the world's most visible brands are in for a very rocky year.

Navigating culture wars will be very tricky, as well as fighting with competing demands from consumers, employees, and regulators on issues like China, diversity, and voting rights.

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Political polarization in the US isn’t just a problem within the country, points out former US national security official Fiona Hill. Deep divisions, she says, actually make America look weaker on the global stage — particularly to someone like Russia’s president Vladimir Putin.

“Putin loves our disunity," Russian expert Hill tells Ian Bremmer. "It's incredibly useful as a tool to exploit in that toolkit that he has.”

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An emboldened Putin thrives on American disunity

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