Signal: Decisive Decisions, #ImmigrantGoals, and Currencies Crushed

Hi LinkedIn,

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

-Ian

---

REDRAWING THE LINES: GERMANY AND COLOMBIA

Over the past four days, Germany’s coalition government nearly collapsed because of a schism over the country’s migrant policy, and a left-wing candidate got 8 million votes in Colombia’s presidential election.

What’s the common thread? Both stories flow from bold political gambles, framed in moral terms, that national leaders took years ago and which have fundamentally reshaped politics in their countries ever since.  

In Germany, which Gabe has been watching closely as always, Chancellor Angela Merkel’s 13-year tenure is looking increasingly tenuous as she faces rebellion within her own ranks over migrant policy. Her interior minister, Horst Seehofer of the Bavaria-based CSU party (for decades the more conservative alliance partner to Merkel’s own CDU) says he wants to turn away migrants at Germany’s southern border, directly flouting Merkel’s policy of allowing them in. If the CSU breaks with Merkel, her government could collapse, potentially triggering new elections.

What changed to get us here: Merkel’s historic 2015 decision to open the country’s borders to more than a million migrants from the Middle East and North Africa. In last fall’s elections, the upstart AfD party rode a scorching anti-immigrant platform into the Bundestag, becoming the first far-right party to make it there in Germany’s postwar history and swiping a huge chunk of CSU voters along the way. So for the more conservative figures in Merkel’s coalition, it’s a no brainer: take a harder line on migrants or risk losing more ground to the AfD. The Chancellor now has two weeks to work out a new Europe-wide solution in which other countries accept more migrants. But with anti-immigrant parties running Hungary, Poland, Austria, and now Italy, that won’t be easy. Merkel’s moral stand in 2015 may yet have deep political consequences in 2018.

In Colombia, the fact that Gustavo Petro, a former mayor of Bogota and one-time guerilla, had an opportunity to lose this Sunday’s presidential runoff to center-right candidate Ivan Duque was by itself historic. Never has a left-wing figure made it so far at the national level in Colombia, a country run virtually since independence by center-right parties. 

What changed to get us here: Outgoing President Juan Manuel Santos in 2016 signed a controversial peace accord that ended 50 years of war with the left-wing FARC guerrillas. Throughout that conflict, the stigma of rebel violence closed off space for a normal left-wing politics and reduced much of political debate to the question of how to deal with the FARC. Now, issues like the economy and corruption have become much more salient for most Colombians, and there was Petro, running on a socially-progressive platform that took aim at inequality and pledged to wean Colombia off of fossil fuels.

Still, Mr. Duque won on a distinctly center-right platform – in many ways influenced by his political patron, hardline former president Alvaro Uribe – that envisions a staunchly pro-business agenda alongside revisions to some of the peace deal’s more lenient aspects. And with strong turnout, he commands a robust mandate. But Mr. Petro was upbeat on election night, pledging to lead a left-wing opposition from the seat he now gets in the Senate. Whether a newly viable opposition from the left pulls Duque towards the center or pushes him more towards his base in a deeply polarized country is a new story that may reshape Colombia profoundly, and fast.

PUPPET REGIME: TRUMP AND KIM CELEBRATE FATHER’S DAY

As Donald Trump and Kim Jong-un nurture their great relationship, Puppet Regime caught up with them for a special Father’s Day fishing trip. Fred Trump and Kim Jong-Il ought to be proud of their boys.

THREE STORIES IN THE KEY OF: GOOOOOOOOLLLLLLL

Half of humanity tunes in to the World Cup every four years, making it the single most watched event on the planet. True, most people probably see it as an escape from the tumult and tensions of global politics. But we at Signal are incorrigible nerds who just can’t help it... So here are three big political stories that, while watching the World Cup, we JUST CAN’T UNSEE.

Anti-establishment upstarts: Brexit. Trump. Duterte. Five Star. Mahathir (sort of), insert your example here, but knocking the establishment off its perch is all the rage in global politics these days and, at least so far, this World Cup is no exception. For one thing, perennial powerhouses Italy (which has won four cups) and the Netherlands (a reliably strong team which has been to the finals the most times without winning) inexplicably failed even to qualify.

Now, in the early days of play, we’ve already seen some startling upsets: Mexico beat defending champs Germany, causing an actual earthquake back home, and tiny Iceland, playing in its first world cup ever under the direction of a part-time dentist, managed a tie against mighty Argentina (cue jokes about how Argentina has big trouble with tiny islands). Throw in Portugal wrestling Spain to a draw, and the Swiss doing the same to tournament favorites Brazil, and disruption is in the air.

Still, a lot of World Cups have kicked off with some upsets – but in the end, a small group comes out on top: in fact, since 1950, just one final match has been played without Brazil, Germany, Argentina, or Italy in it. And who could forget English football god Gary Lineker’s famous definition of football as “a simple game, in which 22 men chase a ball for 90 minutes and in the end, the Germans win.” Will that idea hold, or is another expert opinion about to get sent off?

Spy games: The World Cup is a contest among nations and all nations spy on each other, full stop. Some are just better at it than others.

A few weeks ago, a random Swedish fellow showed up at the South Korean team’s training facility in Austria, pretending to be a “tourist.” They kicked him out. So he drove up a nearby mountain overlooking the pitch and paid a local couple to let him set up shop in their house with a telescope and a camera. His mission: record and report on Korea’s tactics in order to help the Swedes win in their upcoming World Cup match.

Of course, the only thing that trumps good intelligence is better counterintelligence – so to confuse the Swedish tourist/mountaintop-peeper, the South Korean coach switched his players’ numbers from practice to practice because, he said, “it is very difficult for Westerners to distinguish between Asians, and that’s why we did that.”

Sweden defeated South Korea 1-0 on Monday.

The (hi)stories in the rosters: World Cup players must be citizens of the countries that field them, and yet dozens of them weren’t actually born under the flags they play for. The story of the moment there, of course, is that the debate about immigration and naturalization is setting fire to politics in the US and Europe almost daily (see Germany above). 

But there’s also a broader historical sweep written into these rosters: 

The legacy of French colonialism in the dozens of French-born players who have gone to play for Morocco, Senegal, and Tunisia, where they have family ties. 

The anguish of the former-Yugoslavia in the 1990s, reflected in the number of ethnic Serbian, Croatian, and Kosovar players on Switzerland’s roster. 

The story of how a booming post-war West German economy would ultimately transform German society by admitting hundreds of thousands of low-wage Turkish “guest workers” in the 1960s, among them the grandparents of Germany’s (and Arsenal’s) star midfielder Mesut ?zil. 

World history written in the rosters of the World Cup. What other stories do you see here?

GRAPHIC TRUTH: #IMMIGRANTGOALS

World Cup rosters always feature a number of players born outside the countries they play for. Here’s a look at the eleven teams with the largest percentage of foreign-born players in the 2018 tournament.

CURRENCIES GET CRUSHED ACROSS THE WORLD

Over the past few weeks, half a dozen countries around the world have seen their currencies collapse in the worst self-off in more than 5 years. In fact, it’s becoming a bit of a thing these days. Argentina’s peso has shed more than 10 percent against the dollar in the last week despite a cabinet reshuffle and recent deal between the country and the IMF aimed at calming investors’ concerns. So far this year, Turkey’s lira had plunged 30 percent before the government reluctantly moved to let the central bank stop the bleeding. Brazil, already mired in economic and political crises, has also taken it lumps, as a recent nationwide truckers strike tipped its currency and stock markets into freefall.

What’s going on here? Take it away Gabe: Since the global financial crisis in 2008, many countries known as “emerging markets” (who are in the middle of the global pack when it comes to per capita GDP) saw huge growth because of a few important things: the European and US central bank were practically giving away free money, which many investors threw into fast-growing (riskier) economies; global trade was humming along, helping lower-wage countries that export manufactured goods; and oil prices were generally low, a problem for petro-states but a good deal for most other countries which import the stuff.

Now, all of those things are changing: The US is raising interest rates, which means investors are pulling money out of emerging markets; trade wars loom, making people uncertain about what they can export, to whom, and at what price; and oil prices are on the rise. All of this is creating trouble for emerging markets whose social and political vulnerabilities have been papered over by favorable external winds.

Enter politics: Against this backdrop, major elections loom in Turkey, Pakistan, Mexico, and Brazil. In Mexico, an anti-establishment frontrunner could upend decades of economic policy. In the others, uncertainty about the electoral outcome itself is the story. On the far side of votes that will themselves be shaped by tougher economic times, politics may yet make things worse. 

HARD NUMBERS

50 million: China wants to be a football superpower by mid-century. To that end, President Xi Jinping is pushing ahead with a 50-point plan that envisions 20,000 training centers, 60,000 new fields, and 50 million players in the country by 2020. China, with 1 billion people, has qualified for the event just once (in 2002). Uruguay, with a population of 3.4 million, has qualified 13 times since 1950 and won the tournament (once) during the same period.

42,000: The Philippines’ blunt-spoken president, Rodrigo Duterte, has announced he wants to give 42,000 guns to community leaders for use in killing drug traffickers. Human rights watchdogs say Duterte’s scorched earth “drug war” has already led to thousands of extrajudicial killings of dealers, addicts, and traffickers. Pouring 42,000 weapons into that situation – what could possibly go wrong?

79: South Korea’s President Moon Jae-in, who was elected in part on a promise to improve relations with North Korea, has seen his approval skyrocket to 79 percent, according to Gallup Korea. That’s the highest rating that any democratically-elected leader of Korea has ever had at this point in their presidency.

70: In Yemen, Saudi-backed forces have been waging an assault on the port city of Al Hudaydah over the past week, which is controlled by Houthi rebels who ousted the government in 2014. Any interruption of sea access to Al Hudaydah could worsen what is already the world’s worst humanitarian catastrophe, as 70 percent of the humanitarian aid that reaches Yemen travels through the port.

66: A fresh poll on the Trump administration’s policy of separating thousands of asylum seekers and illegal immigrants from their children – and we note that Messrs Miller, Kelly, and Sessions all say it’s a policy even if Homeland Security Sec’y Nielsen’s says it is not – shows that 66 percent of Americans oppose the practice. But a slim majority of Republicans (55 percent) supports it, muting GOP criticism of the White House as Trump heads to Capitol Hill to discuss immigration reform with Republicans later today.

This edition of Signal was written by Alex Kliment (@saosasha) and prepared with editorial support from Kevin Allison (@KevinAllison), Gabe Lipton (@gflipton) and Leon Levy (@leonmlevy). Spiritual counsel from Willis Sparks.

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