Signal: Nationalists in Davos, Europe Divided, and #WoYeShi in China

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Hi there,

Alex here, back in the cockpit after a week off. In this edition of Tuesday Signal we look at two “nationalists” in Davos, contemplate a new East-West divide in Europe, and tell you which African leader pledges to save the UK from the costs of Brexit.

Send your love/hate to us, sign up a friend here, and tune in to CBSN at 9:30am EST where I’ll discuss the news of the day and the news of the letter.

Cheers,

-Alex Kliment (@saosasha)

TRUMP AND MODI TELL IT ON THE MOUNTAIN

This week, the world’s economic and political elite gather at the Swiss ski resort of Davos for the annual World Economic Forum. US President Donald Trump’s address on Friday will surely be the main event — his America First agenda is in many ways a direct challenge to the globalized multilateralism long-favored by the Davos crowd.

But we’ll also hear from another world leader with a decidedly nationalistic streak, who nevertheless remains more invested in globalization — albeit with a twist. That’s Indian Prime Minister Narendra Modi, whose speech today opens the Forum.

Trump’s politics, and Modi’s, reflect the different legacies of globalization. On the one hand, global trade and investment lifted hundreds of millions of people out of poverty in the developing world — particularly in Asia, which is now the world’s biggest economic engine. And so leaders across the region continue to favor globalization, but (here’s the twist) only on terms that favor their own nascent middle classes and bourgeoning domestic industries. That’s the message Chinese President Xi Jinping delivered last year at Davos. Modi, whose country now makes the third largest contribution to global economic growth, will sound similar tones.

Meanwhile, on the other side of the globalization ledger are parts of the middle class in Europe and, especially, the United States, who have experienced trade, technology, and immigration as threats to economic security and national identity. These are the voters who put Donald Trump in office. It’s in their name that he has pledged to dramatically narrow the scope of US leadership and responsibility, deliberately shunning the costs of “globalism” in order to put “America First.”

These two trends: a narrower US role and greater assertiveness from rising economic powers are what will shape every discussion, deal, and debate at Davos this week. Watch Modi and Trump closely — they’ll tell the whole story. Also, watch out for avalanches.

GRAPHIC TRUTH: GLOBALIZATION’S NEW DRIVERS

As many of the world’s political and economic leaders gather at Davos, two big global trends are shaping the world they are there to discuss. First, the US under Donald Trump is stepping away from its traditional role as advocate and guarantor of “globalization.” Second, the balance of economic power continues to shift towards developing economies that are asserting their interests more boldly. Who contributes most to global growth now?

SHUTDOWN UPSHOT

Dear Americans, as you read this week about the particulars of the latest US government shutdown and stopgap funding deal, spare a thought for the confused citizens of other countries. Yes, there’s plenty of instability, unrest, and vitriol in their political lives too, but the shutdown seems to be a uniquely American phenomenon. Two quick points:

First, why does this seem to happen only in the US? In parliamentary systems, budget deadlocks often result in a vote of no confidence, and then a new government. But in the US, the presidential veto and the Senate filibuster enable one person or a small group of people to hold political rivals hostage over a political issue (in the current case, immigration reform) by preventing government from funding its own operations. Since the US doesn’t do early elections, the result is a bitter stalemate and, from time to time, a shutdown.

Second, more broadly: how does it look to the rest of the world? Well, it sure doesn’t help the already tarnished image of liberal democracy globally. “What’s happening in the United States today will make more people worldwide reflect on the viability and legitimacy of such a chaotic political system,” claimed an editorial by China’s state-owned Xinhua news agency on January 21. Like it or not, Xinhua is right — and a majority of Americans seem to agree.

GZERO WORLD WITH IAN BREMMER: THE MUELLER INVESTIGATION

This week on the GZERO World, Former US Prosecutor Preet Bharara breaks down President Trump’s combative relationship with the Justice Department and what to expect from the Mueller investigation.

EUROPE’S NEW DIVIDE

Germany’s domestic political limbo has subsided. Paris and Berlin are freshly committed to strengthening and revitalizing the European Union. And even the economic picture in Europe is rosier for the first time in years, according to the IMF. On the whole, you’d think things look pretty good for the continent.

But a deeper crisis is brewing. While the debt meltdowns that roiled the continent after 2008 revealed deep divisions between Europe’s wealthier North and poorer South, the European Union now faces a growing East-West split over political values as members from the former Eastern Bloc flout core EU principles of liberal democracy.

In Hungary, Prime Minister Viktor Orban — thirty years ago a fearless dissident who railed against Soviet power — has been building an avowedly “illiberal state” that looks as much towards Moscow as it does towards Brussels. In Poland, a more acute crisis is afoot as the right-wing government’s efforts to politicize the judiciary have raised the prospect of an unprecedented but risky move by Brussels to suspend Warsaw’s voting rights within the EU. But Orban has pledged to veto any such measure on behalf of the Poles, making it unlikely that Brussels ultimately delivers on this threat.

Hungary and Poland say that Eurocrats are stepping on their hard-won sovereignty. But Brussels now faces a tough challenge. It must impose a cost on the Eastern Europeans for failing to live up to EU principles — cutting EU funding to them is one option — but without deepening East-West antagonism in a way that could imperil broader Franco-German efforts to unify and revitalize the EU as a whole. And unlike the North-South divides which could ultimately be addressed with hard cash, disputes over values are much harder to resolve.

TRUMPED FOR A YEAR

Saturday marked the first anniversary of the most unexpected and unusual presidency in modern US history. And whether you love him or hate him, there’s no denying Donald Trump’s impact on America’s role in the world. To mark the occasion, top analysts at our parent company, Eurasia Group, put together a region-by-region look at how The Donald’s “America First” presidency has rippled across the globe.

Among the highlights, he’s “reinforced the power of authoritarian strongmen in the Middle East and North Africa” given the Europeans a “perilous optimism” about the Transatlantic relationship, sowed deep uncertainty in Latin America, and opened the way for President Xi Jinping to expand China’s soft power in Asia and more broadly. Meanwhile, the alleged “shithole” comments haven’t done anything to endear him to Africa. And of course, “this can’t be where the White House and Kremlin thought they’d be after a full year of the Trump presidency” right? 

Read the full rundown here, and buckle up for year two.

HARD NUMBERS

90,000: Special “conquest” prayers were held in all of Turkey’s 90,000 mosques over the weekend to lend support to the government’s recently launched military offensive into Syria. Once a bastion of state-enforced secularism, Turkey under Erdogan has embraced a new Islamic nationalism.

390: 390 women are planning to run for the House of Representatives, more than at any other point in US history. Hillary’s loss, Trump’s win, and the spread of #MeToo have galvanized what could be a sea change in female political participation.

97: According to a recent poll, 97 percent of Brazilians believe their government caters to a small, powerful elite. Look for an outsider to gain traction ahead of the country’s high-stakes October presidential election.

70: Almost 70 percent of female Chinese university students say they have experienced sexual harassment, with fewer than 4 percent reporting them to the police. #MeToo goes global. #WoYeShi

40: In countries with recently ended civil wars, there’s a 40 percent chance of lapsing back into conflict. The risk falls by 1 percent for each subsequent year of peace.

WORDS OF WISDOM

“We will make sure we become very close to them. So what they’ve lost with Brexit they can come and recover from Zimbabwe.”

— The new President of Zimbabwe Emerson Mnangagwa offers the Brits an olive branch. Probably not what Brexiteers had in mind with #GlobalBritain.

This edition of Signal was prepared with editorial support from Kevin Allison (@KevinAllison), Gabe Lipton (@gflipton), and Leon Levy (@leonmlevy). Spiritual counsel from Willis Sparks. Give a friend the Signal here.