Next generation leaders, Prime Minister Corbyn, another chapter in Venezuela, trade deals and tee-shirt cannons
Hi, Signal fans. I’m Willis Sparks, Global Macro Director at Eurasia Group. In case you missed it, the esteemed Matt Peterson has been called up to the journalistic majors and is now working at The Atlantic. We miss him already, but his departure makes me the new lead author of Signal. Call it a “soft coup.” The mission is still to inform, enlighten, and amuse. Thanks for reading.
[Join us to discuss Signal and the week’s news live on Facebook at 11 am ET today (July 14). See you at facebook.com/eurasiagroup. If you miss it, you’ll be able to watch the recap video there afterward.]
The Word This Week
President Trump had fun in Paris, Turkey marks the one-year anniversary of a deadly army uprising, and Beijing bristles at Western coverage of the passing of Liu Xiaobo, but let’s start with this….
Voters like fresh faces; nothing new about that. But we’ve seen some recent extremes. Those who voted for Donald Trump knew they were backing a man who had never served in government. For some, that’s one of his finest qualities. Add his bare-knuckle style and an eagerness to flip off the establishment, and his hardest-core supporters couldn’t wait to see him win.
Then came elections in France. Emmanuel Macron will win prizes in the role of Europe’s anti-Trump, but here again voters shoved aside the “tried and (sometimes) true” to elect a man who’d never before run for office, a guy who created a political party from nothing just 15 months ago. It’s not just that the center-right and center-left establishment parties that dominated French politics for decades finished in third and fifth place respectively in the first round of presidential voting, though that’s historic. It’s that the percentage of MPs under the age of 50 now serving in France’s parliament surged from 17.5% before this year’s election to 51.5% after. A jaw-dropping 72% of deputies are serving for the very first time. That’s a political revolution, though where Macron can lead it remains to be seen.
Where’s the next bolt-from-the-blue contender? Japan’s ruling Liberal Democratic Party took a beatdown in Tokyo elections earlier this month, and Prime Minister Shinzo Abe, plagued by scandals, now sports an approval rating in the 30s. Who’s watching from the wings? Japan’s political star of the moment, Tokyo Governor and former defense minister Yuriko Koike, is no kid. This is a savvy political veteran. But it’s no small thing that a woman is the one now making waves in Japanese politics.
We don’t think she’ll have the resources and backing outside Tokyo to replace Abe, but we’ll watch closely to see if she and her upstart party (known as “Tokyites First”) can boost her standing by winning seats in the next round of lower house elections, due by December 2018. It won’t hurt her profile that she will lead the drive toward the 2020 Tokyo Olympics. She’s still an underdog at the national level, but in today’s volatile world, best for us to keep an open mind.
There’s also a presidential election next fall in Brazil. Given the depth of economic stagnation in that country and public exhaustion with the still-ongoing biggest political and financial scandal in Brazil’s modern history, that country is ripe for a deck-clearing election. This week’s corruption conviction of former president Lula underlines the point. Our Brazil team has its eye on Sao Paulo mayor Joao Doria as an interesting outsider.
Of course, not everyone can expect sweeping change. Germany will give Angela Merkel a fourth term this fall, and Putin will probably squeak through (sarcasm alert) in next spring’s Russian presidential election. But if advertising is the art of persuading people they’ve waited all their lives to buy a product they’ve never heard of, voters in more and more places, fed up with the entire political class in their countries, will soon be looking for candidates and political parties with the least familiar names possible.
Next up… A thought experiment. Let’s say that lead players in Britain’s Conservative Party decide it’s time to send Theresa May packing. “We’ll have to have a general election,” they’ll reason, “because we can’t put forward another prime minister with no voter mandate.” So they go to elections, but it’s the Labour Party that wins the chance to form a government. Jeremy Corbyn becomes prime minister. (I did say it was a thought experiment) What happens to Brexit? Might it somehow evaporate?
Corbyn is no fan of EU membership, whatever mixed signals he continues to send. But, you say, Labour MPs overwhelmingly voted against Brexit last year. Isn’t that a sign that a future Labour government might lead the UK toward a change of heart and a do-over vote? Not so fast. As our own Mij Rahman noted last week, only 100 of the 262 seats that Labour carried in last month’s elections voted to remain in the EU. Corbyn knows that Labour needs the backing of many working class voters who want Brexit if he is to win an election and govern with any sort of mandate. The mess gets messier.
Finally… We end in Venezuela, where the release from prison of opposition leader Leopoldo Lopez made headlines on July 8. I’ll spare you the details on what we think the government might be up to and how the opposition will respond. The Venezuela story is NOT going to get better. The Maduro government is going down. The only question is how, when, and how many will die in the street as the endgame unfolds. This is a country that imports virtually everything except crude oil. There is no coming oil price recovery that can bail out this government. The release (to house arrest) of Lopez is chapter 94 in a story winding its way circuitously toward resolution, one that ends with Maduro living in another country or in jail. Only then can Venezuela (maybe) get back on its feet.
Self-Promotion Interlude: Watch EG Live on Iraq after ISIS’s defeat in Mosul
What we’re watching:
A devastating humanitarian crisis — If the world doesn’t respond, 20 million people in Yemen, South Sudan, Somalia, and northeastern Nigeria risk starvation. The US has contributed more than $1.8 billion over the past nine months, and President Trump pledged $640 million for the UN World Food Program during last week’s G20 meeting in Hamburg. But more will be needed from donors around the world to provide these people with food, drinking water, medical care, and temporary shelter. They can’t wait.
Iraq — Now that Mosul is (mostly) ISIS-free, the battle for Iraq’s political future — and the next stage of tension between the Shia-majority, battle-tested Shia militias, beleaguered Sunnis, and independence-minded Kurds — can begin.
The Transpacific Partnership — Seriously. Can Japan’s new trade deal with Europe help Japan’s Abe and US farmers persuade the Trump administration to reverse field on US membership in the TPP? Probably not, but if Trump forced through a few face-saving changes and rebranded it as the “Trump Pacific Partnership,” I’m betting his supporters would be less angry than if the Mexico border wall doesn’t get built or ObamaCare remains on the books. A Trump backtrack on TPP is pretty unlikely, but as our Scott Seaman has said, Abe isn’t giving up. Maybe he’ll make a success of TPP-minus the US, and a future US president will be more interested in signing on.
The North American Free Trade Agreement — Speaking of controversial trade deals, next Monday is the day the Trump administration is scheduled to tell us exactly what it wants from renegotiation of NAFTA. Expect lots of talk about how much the world has changed since 1994.
What we’re ignoring:
Stories about the Merkel-Macron meeting — Reports from the Franco-German Ministerial meeting can’t tell us much about the future of the euro or collective European defense because Merkel is still running for Chancellor. We don’t know whether her next coalition partner will be the pro-Europe Social Democrats or the Euroskeptic FPD. Nor do we know how much political capital Macron will have when these questions are finally answered.
The slow-drip Trump-Russia stories — OK, of course we’re not ignoring these stories, and neither will you. This is the brightest, shiniest object in the galaxy. But I’m seriously thinking about heading up to the roof of Eurasia Group’s Fifth Avenue headquarters with a tee-shirt cannon to ensure the widest possible distribution of my new “Wait for Mueller” tee-shirt collection. You can have any color you want, as long as it’s black.
Your Weekly Bremmer
Watch the World in 60 Seconds from the UN.
25 days passed during the march of Turkish opposition figure Kemal Kilicdaroglu and his followers from Istanbul to Ankara in protest against President Erdogan’s widening crackdown against public dissent.
13 percent more will be spent by Britons on their classic breakfast “fry-up” after Brexit, according to one recent estimate. #BreakfastMeansBreakfast
1,235 days was the length spent by Venezuelan opposition figure Leopoldo Lopez in solitary confinement prior to his release this week.
450 wild animals were imported by the President of the Democratic Republic of Congo Joseph Kabila from Namibia. Namibians are selling wildebeests into the DRC to pay for all those bronze statues they’re buying from North Korea.
1,200 people, 211 vehicles, 341 horseback riders and 63 aircraft will be present in the Bastille Day Parade jointly attended by Emmanuel Macron and Donald Trump. Top that Mar-a-Lago.
91-year old former Senegalese President Abdoulaye Wade has returned to the country to help boost his party’s chances in upcoming parliamentary elections. That’s Macron + Trudeau + 11 years.
Words of Wisdom
“If they ask me what my final wish is, I would say the person who caused all this suffering and oppressed thousands of innocents, I want to spit in his face”
– Exiled cleric and alleged coup plotter Fethullah Gulen reminds us that one year on from last year’s failed coup attempt, Turkey remains deeply divided.