Signal: Breakthroughs, Emergencies, and Unpaid Parking Tickets

Hi LinkedIn,

Big news. Beginning next Tuesday morning, Signal is going twice a week. Alex Kliment will lead the Tuesday version, and Willis Sparks will continue to author the Friday edition.

If you like what you see, be sure to sign up for Signal to receive it in your inbox first thing every Tuesday and Friday morning: eurasiagroup.net/signal.

-Ian

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The Word

Let’s start with this… The Saudi government announced this week that women will be allowed to drive beginning next June. It’s a big win for human rights, but let’s move beyond the headline to look at what else this decision tells us — and a couple of its less obvious implications for the kingdom’s future.

One — This is a breakthrough for Saudi Arabia’s long-term economic development. In the 21st century, every country must develop the highest possible percentage of its human capital. That’s not political correctness. That’s economic efficiency and innovative capacity. If you try to compete while allowing just half your citizens to contribute, you’ll fall well short of your potential.

Two — It’s another sign that the current king and his soon-to-be-successor know the kingdom can’t thrive indefinitely by selling oil. More than half of university graduates in Saudi Arabia are women, but they represent just 22 percent of the workforce. The plan it to increase that to 30 percent by 2030. Letting women drive will help.

Three — That plan, intended to diversify and modernize the Saudi economy, is called Vision 2030, and its champion is Crown Prince Mohammed bin Salman. Lifting the driving ban shows that he won’t shy from a fight with cultural conservatives and royal rivals as he advances toward the throne.

Four — Social conflict in Saudi Arabia will now intensify behind closed doors. The police won’t try to stop women from driving, but some husbands and fathers will. The hashtag “women of my house won’t drive” is trending on Saudi social media. It’s much easier to change law than to change culture.

Five — There are 800,000 men in Saudi Arabia — many of them South and Southeast Asian immigrants — who earn their living by chauffeuring Saudi women. Many will lose their jobs. That’s no reason to keep the ban, but someone in government better be thinking about this.

Next Up… What’s the most important responsibility of government? To provide for the security of its citizens. An awful new reality has taken hold for the 3.5 million US citizens who live in Puerto Rico. The double gut punch delivered by Hurricanes Irma and Maria left the entire island without electricity, maybe for months, and small teams of emergency management professionals from the mainland are over-matched. There’s not enough drinkable water, medicine, or gasoline. Many roads are unusable. An unknown number of people are cut off from all communication with the outside world. The looting begins before sundown.

Puerto Rico faced a deep fiscal crisis before the storms hit. No, Congress won’t give the island a full financial bailout. No, Puerto Ricans can’t vote in national elections. But these are citizens of the world’s sole superpower, and there’s a lot more Washington can do to help. President Trump approved an emergency declaration for Puerto Rico two weeks ago and says he’ll visit. More importantly, he waived the Jones Act on Thursday, allowing non-US ships to help with supplies. This story is just beginning. Keep watching.

Elsewhere… Germany’s far-right won seats in parliament this week for the first since 1945, some of that party’s moderates have already quit, rising Japanese political star Yuriko Koike launched a new party, Iraqi Kurds voted for an independent state, Turkey’s president threatened war in response, France’s president offered a vision of Europe’s future, desperate Venezuelans are flowing into Colombia, Thailand’s supreme court convicted former prime minister Yingluck Shinawatra in absentia, and an Italian woman married herself. (No complaints from Signal, but we’re really hoping the word “sologamy” doesn’t catch on.)

Finally… You’re looking for that perfect gift for Chuseok, South Korea’s traditional autumn harvest celebration, and you’re drawing a blank. Here’s an idea. Your northern neighbor says he wants to take “merciless action” against your friend across the sea, your friend says the neighbor better be ready for some “fire and fury,” and you’re stuck right in the middle of all this. Why not grab this wartime survival kit? Why give candy again when you can give that special someone a box that includes combat rations, a sturdy sleeping bag, a hand-cranked radio, and a first-aid kit? A sad sign of the times.

Self Promotion Interlude: Eurasia Group’s Willis Sparks and Mujtaba Rahman talk Brexit, Germany’s election, and Catalonia’s independence referendum.

What we’re watching

Violence in Rio — A surge of violence in the Rocinha slum in Rio de Janeiro made headlines across Brazil last weekend, highlighting the policing problems that face a state in fiscal crisis. It’s not just Rio. This is a national problem, and one that further increases demand for an outsider candidate in Brazil’s October 2018 presidential election — particularly one who promises a restoration of law and order.

Guatemala — President Jimmy Morales, a former TV comedian, is now in legal trouble and may lose his immunity from prosecution. If Morales is pushed out, Vice President Jafeth Cabrera will succeed him. Maybe. Except that Cabrera faces charges that he accepted $500,000 in campaign cash from a drug trafficker known widely as “El Fantasma,” which translates as The Phantom, but who is not a very good phantom, because he has been captured and extradited. Jokes aside, Guatemala’s fragile institutions are holding some powerful people accountable.

What the world owes New York City — A local New York TV station has uncovered evidence that the North Korean government has more than 1,300 unpaid parking tickets in New York City. The Dear Leader owes our city $156,000. Turns out Russia owes $104,000, Iran owes $185,000, Syria owes $362,000 (good luck getting that one back), and China owes almost $400,000. #AxisOfDeadbeats

What we’re ignoring

The rising price of oil — Why did Brent prices hit a two-year high (nearly $60) this week? Stronger Chinese demand? Supply factors like Turkey’s threat to cut off the oil exports of Iraqi Kurds? The cumulative impact of OPEC and Russian supply cuts? We’re ignoring the jump, because all these factors are temporary, and supply will increase in response to (briefly) higher prices. Bottom-line: Oil-export dependent economies like Russia, Venezuela, and Mohammed bin Salman’s Saudi Arabia will continue to rust until they find new sources of long-term growth. 

Uganda’s fighting MPs — During a debate over raising the presidential age limit, a big deal for 73-year old Yoweri Museveni after 31 years in power, a session of Uganda’s parliament erupted into a chair-throwing, tie-pulling, shirt-rumpling melee. Signal was not impressed with their brawling skills. These guys wouldn’t last 30 seconds with protesting French farmers or South Korean students.

Your Weekly Bremmer

Watch the G-Zero World with Ian Bremmer and Mike Allen of Axios.

Hard Numbers

5 million: Hurricane Maria has left almost 1.5 million Puerto Ricans without access to drinkable water.

480,000: The United Nations increased its estimate this week for the number of Rohingya Muslims who’ve fled violence in Myanmar to 480,000 up from 300,000.

7: The government of North Korea issued seven invitations to Republican Party-linked organizations in an attempt to improve their understanding of President Trump. #GoodLuckWithThat

6 of 28: After a historically poor election result for Germany’s SPD, center-left parties are poised to participate in only six out of the twenty-eight governments in the EU. Compare that with 10 of 15 EU governments in 2000.

13: Support for democracy in Latin America has fallen to its lowest level in at least thirteen years, according to a recently released survey. Latin American elections in 2018: Brazil, Mexico, Venezuela, Colombia, Costa Rica, El Salvador, and Paraguay. #ShouldBeInteresting

Words of Wisdom

“I have five children for whom I am responsible and ultimately you have to be able to look yourself in the mirror.”

• Co-leader of the far-right Alternative for Germany (AFD) party, Frauke Petry decides to quit the party after its historic election victory in protest against other party leaders’ refusal to moderate their positions.

Signal is your window on our wonkery. Signal is written by Willis Sparks with editorial support from Gabe Lipton (@gflipton).

If you like what you see, be sure to sign up to receive it in your inbox first thing every Tuesday and Friday morning: eurasiagroup.net/signal.