Nationalist politics meets global virus meets economic earthquake

Nationalist politics meets global virus meets economic earthquake
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With the world mired in coronavirus management, humanitarian advocates like David Miliband, president and CEO of International Rescue Committee, have been flailing to get political attention for the situation in Syria. A Russia-Turkey brokered ceasefire started midnight, but substantial risk remains. “We know coronavirus doesn’t respect borders and that it hits the vulnerable hardest. So refugees are at considerably greater risk,” Miliband told Global Translations. Beyond the humanitarian mess of a half-million newly displaced children (48,000 more in the last week), prepare for big geopolitical effects: Turkey, Lebanon and Jordan are all at political breaking points.

Lebanon’s PM admits “we can no longer protect our people”: meaning an IMF bailout is on the cards. Turkey has opened the floodgates for 3.5 million refugees to head to Greece and Bulgaria creating a tense border stand-off with the EU. That’s turned the world’s self-styled soft power into an armed border patrol service, as the bloc chooses refugee push-back rather than risk another Brexit or far-right surge. Meanwhile Jordan — home to more refugees per capita than anywhere — says its peace deal with Israel is at risk.

Like everything corona-related, the political explosion could hit fast. As you sit reading this, you’ve probably struggled to follow coronavirus hygiene instructions today. A refugee has no chance, in addition to being a pawn of others. “The smugglers are building up their business model very quickly,” Austria’s European Affairs Minister Karoline Edtstadler, Austria’s Federal Minister for the EU and Constitution, warned me. This month, globalization is a really messy closed loop.

Nationalist politics meets global pandemic

How do you project credibility when you lead a government known for alternative facts? What do you do when you’re neither authoritarian nor globalist, and a few droplets of liquid on a plane can spread a virus across your country? Anthony Fauci, of the U.S. National Institute of Allergy and Infectious Diseases, has served six presidents and feels stuck. He told POLITICO: “You should never destroy your own credibility. And you don’t want to go to war with a president.” More from me and Eli Okun here. The political problem exists both ways, writes Nahal Toosi about the impossible position of Cui Tankei, China’s smooth-talking ambassador in Washington.

Vodka solution: Can’t get hand sanitizer at your supermarket or pharmacy? Use strong vodka (60 percent alcohol) or rubbing alcohol instead. And if you’re the person stockpiling sanitizer for your family: just remember that means you’re the one putting them at risk. Your family’s health depends on other people’s hygiene as well as your own.

REALITY CHECK — THE MIKE BLOOMBERG IMPLOSION: Bloomberg learned Tuesday that his money was able to buy a presidential campaign, but couldn’t paper over his record. Yet, he still got much of what he wanted from his campaign. A moderate headed for the Democratic nomination: Check. Months of anti-Trump messaging in all 50 states (at a cost of $410 million): Check. Bloomberg also still has Hawkfish, the world’s biggest political advertising agency you never heard of, led by former Facebook CMO Gary Briggs with the help of people like Jeff Glueck. Upshot: Bloomberg is off ballot papers, but he’s not leaving the election.

The billion dollar question: Yes, Bloomberg has already released a new #DumpTrump / #GoJoe ad. Elizabeth Warren, whose debate evisceration of Bloomberg helped sink his chances, also quit the campaign yet continues to fight.

ECONOMIC EARTHQUAKE AND ITS AFTERSHOCKS

There’s a merging of political and economic pressure across the West. Coronavirus is piling on pressure for companies and governments to eliminate excessive dependence on China (more from Bruegel’s Alicia García-Herrero), while the Trump administration’s mercantilism is translating into effects as diverse as a boom for Nokia — “Heads of state are meeting and asking: what can we do for you?” Finland Foreign Minister Pekka Haavisto told Global Translations — and a resurgence of American antitrust policy.

France never wastes a crisis: Emmanuel Macron positions himself as the world’s honest broker, but his government seems to have produced only hot air around coronavirus. So look instead, at France’s track record. France uses these sorts of moments to argue for a relaxation of competition and other economic rules. Here is their 2009 effort, while 2020’s case in point is France and Germany pushing the European Commission to consider geostrategic factors when deciding antitrust cases (shipbuilding is their latest pet sector). In parallel, Thierry Breton, the French former tech CEO who serves as the EU’s internal market commissioner, this week told POLITICO that consumer prices have been given too much priority in assessing the health of European markets.

In other words, Europe is moving to say ‘goodbye competition, hello industrial strategy’ in search of some home-grown Big Tech and Big Manufacturing. Parallel U.S. efforts to rein in Big Tech amount to the Trump administration making a play for the global antitrust crown currently in Brussels’ hands. The U.S. power play: Attorney General William Barr is taking control of American antitrust probes, as the department boosts its enforcement efforts. That’s likely bad news for the Kings of Silicon Valley, as Barr was previously general counsel for Verizon and did antitrust work for Time Warner, shepherding some of history’s biggest telecom mergers.

To top it all off, France, Spain, Italy, Portugal and Poland want to create a trade weapon to allow them to charge the likes of Facebook, Starbucks and Apple punitive sums for the registration or renewal of their trademarks in Europe if, for example, President Donald Trump starts getting addicted to tariffs on European wine. All that leaves Europe’s liberals, led by Sweden (now that the U.K. is out) mounting a last-ditch counter-attack against this protectionist mood.

WE’RE ALL MERCANTILISTS NOW: Jim Balsillie, the Canadian co-founder of Blackberry, the Center for Internet Governance, and Balsillie School for International Affairs, dropped into POLITICO HQ to outline how he thinks the democratic world should take on China’s “corporate state” and the “toxic” tech world he used to swim in.

Balsillie says that the sorts of fights described above show “the world has moved from comparative advantage to value chains based on claiming IP and data.” That means “none of us are clients, we’re mere commodities … you’re just an input of appropriation.” He wants you to think of this world as your own personal form of colonialism: where both China and Big Tech are “neo-feudal … a mutant form of capitalism.”

Balsillie is all about the structural forces at work in our economy. He says the tech rot is so deep that antitrust isn’t the antidote: “You don’t break up five slave companies into 20. The question becomes: is what you are doing right? Not ‘can you capture some benefits afterwards?'”

Political clean-out needed: Balsillie says, much like George Soros, that there is effectively a “co-conspiracy” between governments and Facebook. “We’ll let you cheat in elections if you leave us alone to cheat on markets,” he said. He wants all Canadian political parties disarmed at the same time, supports the International Grand Committee on disinformation, and would like to see a transatlantic digital stability board. His final appeal is to Republicans to join his crusade because power that depends on big data is “the greatest violation of the libertarian construct.”

Read more from Finland’s Pekka Haavisto and about the Green Industrial Complex in this week’s Sustainability Spotlight.

NEXT LEVEL CORONA

STILL GLOBAL, BUT DIFFERENT: We’re facing a more digital version of globalization thanks to coronavirus, a model that:

  • May bring manufacturing home to reduce dependence on China, without bringing the jobs alongside it (automation).
  • Elevates virtual product launches and conferences (everything’s livestreamed anyway).
  • Brings us to a remote working tipping point? (Twitter’s Jack Dorsey wants you to think so).

What activities do you see changing in your life? I’m skipping the cinema (hello streaming service wars), but sticking with the metro (hello sustainability and hand sanitizer). Email me at globaltransations@politico.com

FROM THE I TOLD YOU SO DEPARTMENT. Coronavirus impacts levels are spiraling to 2008 financial crisis levels. The OECD forecasts global growth at 1.5 percent for 2020 (down from 2.9 percent in November and 2.4 percent last month), and the IIF has it at 1 percent (with China down to 4 percent and the U.S. to 1.3 percent). Even a 0.5 percent U.S. Federal Reserve rate cut sent markets plunging this week, because those markets realize the world lacks the monetary policy and fiscal policy ammunition that was used to save the world from ongoing recession in 2008. Believing otherwise is like “believing in miracles,” said Nouriel Roubini, the doom merchant of 2008.

GLOBAL MAILBOX

THE EXACT NATURE OF HUAWEI ISSUE: As POLITICO revealed a $350 million Huawei reputation-saving campaign, I asked you to describe the exact nature of the Huawei 5G threat (if you see one). The European leaders I spoke to reject the framing: they all insist in a focus on outcomes not companies or countries. Estonian President Kersti Kaljulaid — who knows a thing or two about being hacked by power players — said “we should legislate for the objective of safety and then it’s for technology providers to show us the pathway by which it is kept safe.” Kaljulaid also said that if European countries went with individual approaches, “we would be taken one-by-one into the courts” for failing to uphold a level playing field in the EU’s internal market. Edgars Rinkēvičs, Latvia’s foreign minister, said after signing a 5G cooperation agreement with Secretary of State Mike Pompeo that the important thing is “transparency” and “independent checks” of the networks. But even Nokia’s home government wouldn’t commit to a ban. The Finnish minister Haavisto said simply that “this situation is making us even more careful.”

Jack Ditterline‘s suggestion to Global Translations may explain why Europeans prefer to be wary of all outsiders rather than leap to support Americans in this debate. Ditterline said the key to the Huawei threat is that China may use Huawei similarly to how the CIA and German BND intelligence agency secretly owned and operated Crypto AG, a leader in encryption technology during the Cold War.

TRIVIA TIME

The answer to last week’s question — which is the smallest capital city by population in Central and South America: Belmopan, the capital city of Belize, population 16,451. The winner is Bucharest-based Ana Corca, director of Business Development for Orkin Pest Control Romania & Hungary. Ari Eger-Beyeler, fresh from winning two weeks ago, also got the right answer.

TRIVIA QUESTION: Which towns and villages (name at least two from two different countries), fight for the title of world’s wettest place?

THE BASE HAS SPOKEN — SUPER TUESDAY RUN-DOWN: A week is a long time in politics. Instead of guiding you through Bernie Sanders’ socialism (thanks for all your emailed thoughts), I’m noting that Super Tuesday weakened Sanders and next week may break him. POLITICO’s John Harris explains more in 2 left standing. Six states and Democrats Abroad deliver their verdict on Tuesday. While Sanders won five of those contests in 2016, the trend is against him in the two biggest states that will vote: Michigan (clear Biden lead) and Washington (swapping from Sanders-friendly caucus format to primary). On March 17, Florida and Ohio vote: both strong Biden territory.

The Sanders campaign appeared cornered, with a passionate base, but as my colleague Ryan Lizza wrote, Biden “made a mockery of the senator’s main argument for his campaign. Sanders has repeatedly said that he will turn out new disaffected voters, rally the working class to his cause, and spike youth turnout to unprecedented levels. None of it has happened.”

BORIS JOHNSON’S WAR WITH THE DEEP STATE: The latest includes U.K.’s top immigration civil servant suing the government, calling his Cabinet minister boss Priti Patel a lying bully.

BIBI BOUNCE AND SLOVAK SHOCK: Benjamin Netanyahu — who won his first national election in 1996 — is back on top in Israel. Meanwhile, the corruption-mired Slovak government is headed for the door, after the Ordinary People party more than doubled its polling numbers at the ballot box (winning 25 percent instead of the expected 11 percent), putting Igor Matovič on track to oust Peter Pellegrini as prime minister.

THE BORRELL DOCTRINE: The EU’s new chief diplomat is hawkish, realistic and wants to supply weapons to allies fighting terrorists, writes David Herszenhorn.

12 PEOPLE AND THINGS THAT RUINED INDIA: POLITICO’s Tunku Varadarajan takes a historic look at his homeland to understand how India came to be led by “Hindu-fundamentalist” Narendra Modi.

NORTH KOREA’S MOST PROFITABLE INDUSTRY —HACKING: Forged $100 bills that apparently yielded $15 million a year were not enough: the totalitarian state has pivoted to hacking banks.

It’s an upside down world. Finland’s foreign minister (himself an anomaly being from the Finnish Green party) tells us in this week’s Sustainability Spotlight about how Finnish industry is greener than even his own party sometimes. That would be no surprise to Richard Adams, who’s leading the charge for a green industrial complex out of Denver.

Meanwhile U.K. carbon emissions are now down to 1888 levels (mostly thanks to abandoning coal). That’s a fascinating turn of events as the EU and UK sit down to negotiate the terms of their future relationship, and the EU battles over how to get to its target of climate neutrality (Greta Thunberg rained on their climate parade).

The U.K. ought to be careful though: the Bank of England is considering whether to adopt a digital currency, just as PwC’s Alex de Vries calculated that a single Bitcoin transaction uses as much electricity as a British household does in two months, and as much as 780,650 Visa transactions.

Best green idea on the Global Translations desk this week

INTERNATIONAL WOMENS DAY SUNDAY: The U.N. doesn’t have good news for you.

FOLLOW THE MONEY: After cancelled U.N. conferences, now the IMF Spring meetings will be “virtual” (IMF officials say they aim for limited live programming). The European Central Bank has stopped travel, visits to its offices and events until at least April 20. The Trilateral Commission is also shrinking its next D.C. con-fab, but will still feature USTR Robert Lighthizer interviewed by Carlyle co-founder David Rubenstein and Bridgewater founder Ray Dalio (h/t Daniel Lippman). Next in your inbox: an MWC-style implosion of SXSW in Austin (scheduled March 13-22).

CHINA WIPOED OUT: Singapore regulator Daren Tang is the nominee to replace Australian Francis Gurry as chief at the World Intellectual Property Organisation, a United Nations agency. The U.S. and Europe supported Tang to fend off Chinese candidate Wang Binying, given China’s poor track record on intellectual property infringement.

UN-HAPPY — UNITED NATIONS STAFF LACK CONFIDENCE IN LEADERSHIP: A U.N. staff survey found a quarter of lower-ranked staff see improvements from a new management system, and just nine percent of U.N. Secretariat staff think it’s safe to challenge the status quo. Luckily, nine in 10 are still proud to work for the U.N., reported Colum Lynch.

THE NATION CITY — RAHM ROARS BACK INTO CONVERSATION: John F. Harris interviewed Rahm Emanuel about his new book, “The Nation City: Why Mayors Are Now Running the World.” Listen to audio of POLITICO’s conversation with Emanuel here.

DISPATCHED, MATCHED AND HATCHED: Boris Johnson will be the first British PM to get divorced, married and have a baby while in Downing St. This will be “at least” his sixth child.

VIRTUAL BOOK CLUB

Remote: Office Not Required by Jason Fried and David Heinemeier Hansson

Disorganization: Olivier Blanchard and Michael Kremer 23 years ago published this paper which argued that the post-Soviet collapse in output in Central and Eastern Europe was largely due to disruptions of supply chains. Fast-forward to today’s coronavirus and trade war disruptions to see the 2020 meaning.

THANKS to editor John Yearwood and Luiza Ch. Savage, Laurens Cerulus, Paola Tamma, Kalina Oroschackoff, Matt Wuerker, Eli Okun, Kalina Oroschackoff and Matt Kaminski.





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