Signal: Syria Simmers – Mr. Juncker Goes to Washington – Singapore’s Cyber Dreams

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

---

A TENSE ENGAGEMENT OVER THE GOLAN

On Tuesday, the Israel Defense Forces used two surface-to-air missiles to shoot down a Syrian fighter jet that strayed two kilometers into Israeli airspace over the Golan Heights. It is the first time Israel has shot down a manned Syrian aircraft in four years, and comes at a time of heightened tensions in the region, as Syrian strongman Bashar al-Assad moves to mop up remaining resistance to his regime, and a host of foreign countries with a stake in the conflict push to shore up their interests. Here's Willis Sparks with the rundown on what it all means.

Why did this happen?

Israeli defenses are on high alert at the moment, because Assad’s forces are attacking Syrian rebels in areas near the Israeli border. Assad is close to reestablishing control of territory long held by rebel groups. The Israeli action appears to have been an automatic response to a Syrian jet that got too close. 

What might happen next? 

Tensions are high. Syria reacted angrily on Monday after Israel evacuated Syrian volunteers providing humanitarian assistance in rebel-held areas in the face of a Syrian military advance – the so-called White Helmets. Also on Monday, Israel reportedly used its “David's Sling” missile defense system for the first time, in this case in response to two Syrian surface-to-surface missiles fired near Israeli territory.

That said, a major escalation in response to this particular incident is unlikely. Israel understands that Assad has survived Syria’s civil war and will remain in power, but it wants to signal to his victorious forces that they must respect Israeli airspace and defenses now and in the future. The Syrian government will continue to issue complaints and threats, but Syria is fighting rebels, not Israel.

How does this piece fit in the broader puzzle?

This otherwise isolated incident is interesting because it highlights the complex overlapping relationships playing out in a very tight space. A few key facts:

• The primary threat to Israel comes not from Syrian forces but from Iranian fighters that Assad has invited to set up operations near the Israeli border.
• Israeli Prime Minister Benjamin Netanyahu continues to court the Russian government in hopes of winning an agreement that would sideline Iranian involvement in Syria. 
• Russian forces would like to elbow Iranian forces from Syria to expand its own influence there, but Russia also cares about it relationship with Iran. 
• Tuesday’s incident involved the use of US-made Patriot missiles to shoot down a Russian-made Syrian jet, a reminder that outside powers still have intense interest in this arena of conflict. 

Throw in Turkish forces, various Kurdish groups, surviving Syrian rebels, the remnants of ISIS, ambitious Russians, internal Trump administration tensions over relations with Moscow, an increasingly isolated and frustrated Iranian leadership, and some keenly interested Saudis and there is plenty of suspicion, hostility, and weaponry to keep the region on simmer for the foreseeable future.  

MR. JUNCKER GOES TO WASHINGTON

Today, European Commission President Jean Claude Juncker, who oversees the bloc’s executive body, heads to Washington for a last ditch effort to resolve the EU’s ongoing trade dispute with the US. After President Trump’s disruptive performance at the NATO summit in Brussels two weeks ago, America’s European allies aren’t holding their breath for a grand bargain.

But as Gabe explains, unlike security, where the US is by far the world’s leading power, trade is one area where America no longer holds an unequivocal upper hand. The global economy is more of a three-sided contest between the US, EU, and the China — who, respectively, make up around 15, 16, and 19 percent of global GDP in 2018 (accounting for purchasing power).

What’s more, the US is more vulnerable to EU retaliation than President Trump likes to think. The EU plays an important role as the world’s biggest consumer of services, a sector that has become crucial to US growth. In 2017, US services exports to the EU were more than four times larger than those to China. The decision to move ahead with proposed tariffs on European automobiles could spark serious economic blowback against portions of the US economy so far unscathed by Trump's trade actions. The administration’s recent move to tee up $12 billion in aid to farmers hurt by the ongoing trade spat with China shows the US isn’t invincible.

While Juncker arrives in DC with a plan for progress, he’s also likely resigned to the prospect that a breakthrough may well not be forthcoming. For his part, President Trump tweeted out yesterday that “tariffs are the greatest!”

But for average Americans, the outcome of today’s discussion is far more consequential than haggling over NATO spending quotas or European fines on Google. They could soon be forced to confront the painful reality that, at least economically, America is no longer the unrivaled top dog.

A message from Microsoft:

Today in Technology: Nelson Mandela’s Legacy

Nelson Mandela would have been 100 last week, and the world celebrated his legacy. In the latest edition of Today in Technology, Microsoft President Brad Smith and Communications Director Carol Ann Browne visit Mandela’s home village of Qunu, South Africa, to see how access to high-speed broadband internet is improving the lives of people in the region. Watch → Today in Technology

GRAPHIC TRUTH: DRIVING A BARGAIN?

President Trump has proposed tariffs of between 20 and 25 percent on foreign automobiles and auto parts. The plan, now under consideration by the Department of Commerce, would hit American allies who sell into the US market and consumers forced to pay higher prices at the showroom. Here’s an estimate of how average prices for three vehicle models in the US would change if a 25 percent tariff was put in place.

SINGAPORE’S SWEET CYBER DREAMS MEET MESSY REALITY

If you live in Singapore, you may have been feeling a bit creeped out this week. Last Friday, the government revealed that hackers broke into the country’s biggest public hospital network in June. The intruders were after details of Prime Minister Lee Hsien Loong’s drug prescriptions, but in the process, they stole private, non-medical information belonging to 1.5 million residents – about a quarter of Singapore’s population. It was the worst data breach in Singapore’s history, and a big setback for a country that has been investing heavily to transform itself into a “Smart Nation” where people can do everything from report potholes to manage their medical records online.

Beyond the immediate logistical, financial, and bureaucratic challenges, the incident highlights a broader dilemma facing countries around the world: digital technologies have the potential to revolutionize how governments administer public services, but aggregating citizens’ information into enormous databases also creates enormous new vulnerabilities. When governments fail to stop malicious hackers from exploiting those vulnerabilities, it erodes the basic contract between citizens and their leaders.

This issue has surfaced previously in public debates around India’s Aadhaar database. More than a billion people have signed up for the biometric ID program, which allows citizens to receive social benefits or open a bank account using their fingerprint. But some privacy and security experts worrythat putting personal information about more than a billion citizens in one place – and making the Aadhaar ID a prerequisite for access to all kinds of public services – could leave the country vulnerable to massive identity theft or a disruptive cyberattack. Singapore’s experience shows that even a wealthy, well-run cybersecurity powerhouse may struggle to make the next digital leap without leaving its population exposed to new forms of digital harm.

In the wake of the hack, Singapore has disconnected the computers at its public healthcare centers from the internet. That may improve security, but it will also make it harder for doctors, nurses, and patients to benefit from the connected “Smart Nation” that Singapore is trying to build. 

HARD NUMBERS

 46.9 billion: The United States signed foreign arms deals worth $46.9 billion during the first half of the fiscal year. That already comfortably exceeds the $41.9 billion in weapons deals agreed to during all of fiscal 2017.

26 billion: Mexican president-elect, Andrés Manuel López Obrador, spelled out his infrastructure priorities on Monday, including the construction of 300 new rural roads, a tourist train between the resort city of Cancun and the southeastern state of Chiapas, and a new airport for Mexico City. The government plans to fund the estimated $26 billion cost of the projects by cutting government salaries and benefits, streamlining purchases, and stamping out corruption. 

6,000: The European Commission this week offered to pay 6,000 euros to member states for each migrant they take in after making the arduous journey across the Mediterranean – part of a broader EU proposal to house refugees in dedicated centers while their asylum claims are processed. As of May, the number of migrants arriving in Europe by sea was running at about half the level seen during the first five months of 2017.

8.5: Ethiopia’s economy is forecast to grow 8.5 percent this year. That's one of the fastest rates for any country in the world, and it's providing recently-appointed Prime Minister Abiy Ahmed the political cover to pursue difficult reforms.

4.2: The Turkish lira fell by as much as 4.2 percent against the dollar on Tuesday after the central bank held interest rates steady, defying market expectations of an interest rate hike and raising concerns about the bank's independence. President Recep Tayyip Erdo?an, who assumed office with broadly expanded powers earlier this month, and recently appointed his son-in-law finance minister, railed against high rates despite the country facing its worst inflation in 14 years.

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