Hundreds of millionaires, billionaires urge politicians at Davos to tax their wealth
Darryl Coote – January 17, 2024
Actor Simon Pegg is among the millionaires urging world leaders congregating in Switzerland for The World Economic Forum to tax their wealth, warning of rising economic inequality. File Photo by John Angelillo/UPI
Jan. 17 (UPI) — Nearly 270 millionaires and billionaires urged world leaders congregating in Switzerland for The World Economic Forum on Wednesday to tax their wealth, warning that if their elected representatives don’t address the drastic rise in economic inequality, the consequences will be “catastrophic.”
“Our request is simple: we ask you to tax us, the very richest in society,” the letter signed by 268 millionaires and billionaires from 17 countries and published Wednesday.
“This will not fundamentally alter our standard of living, nor deprive our children, nor harm our nations’ economic growth. But it will turn extreme and unproductive private wealth into an investment for our common democratic future.”
The World Economic Forum is being held this week through Friday and will be attended by political leaders as well the world’s rich and powerful in the Swiss resort town of Davos where they will discuss global, regional and industry goals.
In their letter to the congregated world leaders, the hundreds of rich signatories said they are surprised their previous calls to be tax have yet to be heeded, stating they are not seeking drastic changes, only financial policies that will prevent society from further degradation.
Actor Brian Cox, who famously plays a wealthy media mogul in “Succession,” is among the real-life millionaires urging world leaders congregating in Switzerland for The World Economic Forum to tax their wealth amid rising economic inequality. File Photo by Jim Ruymen/UPI
“Inequality has reached a tipping point, and its cost to our economic, societal and ecological stability risk is severe — and growing every day. In short, we need action now,” the letter states, adding that philanthropy and one-off donations will not fix the issue.
“Not only do we want to be taxed more but we believe we must be taxed more. We would be proud to live in countries where this is expected, and proud of elected leaders who build better futures.”
The letter’s signatories include filmmaker and Disney heir Abigail Disney, actors Simon Pegg and Brian Cox and Valerie Rockefeller of the U.S. Rockefeller family.
“We need our governments and our leaders to lead. And so we come to you again with the urgent request that you act — unilaterally at the national level, and together on the international stage,” they said.
The letter comes as a new poll published Wednesday shows that 74% of wealthy people support higher taxes on their fortunes, while 75% support the introduction of a 2% tax on billionaires, as proposed by the European Union Tax Observatory.
The poll by Survation on behalf of the nonpartisan Patriotic Millionaires surveyed more than 2,300 people from G20 countries who hold more than $1 million in investable assets, excluding their homes, making them the richest 5% of society.
A majority of respondents at 58% said they also supported the introduction of a 2% wealth tax for people with more than $10 million.
“Throughout history, pitchforks were the inevitable consequence of extreme discontent, but today, the masses are turning to populism, which is on the rise throughout the world,” Disney said in a statement.
“We already know the solution to protect our institutions and stabilize our country: it’s taxing extreme wealth. What we lack is the political fortitude to do it. Even millionaires and billionaires like me are saying it’s time. The elites gathering in Davos must take this crisis seriously.”
The World Economic Forum kicked off Monday, which is when Oxfam published its Inequality Inc. report that warned inequality has worsened since 2020, with the world’s richest five men seeing their fortunes double while the planet’s poorest 60% became poorer.
In the enemy camp. What the future holds for Russia
The New Voice of Ukraine – January 15, 2024
Putin claims that Russians are living better
Russia will become North Korea, and Putin will become Kim Jong-un
Regarding Russia and its near future, we must realize that the margin of economic and institutional stability of Russian statehood will remain strong. However, Russia will still undergo profound changes and transformations.
The political system in Russia will be in a state of latent turbulence. The ruling Kremlin elite will do its best to preserve the image of the collective Putin in the public mind. However, the Kremlin’s towers will be swaying in different directions as all participants prepare for the transition of power in post-Putin Russia. A step-by-step plan has been created on how and who to act.
In the Russian Federation, people’s trust in each other is low by world standards, which indicates tension in society, mass fears, and mutual alienation at the social level.
A similar situation will be observed in the regions, particularly in the national republics and autonomous districts. Centrifugal processes will accelerate, provoking a reaction from the central government. A striking example of a “watchdog” over certain national fringes is the head of Chechnya, Ramzan Kadyrov. This will provoke even greater confrontation.
The Kremlin’s towers will be swaying in different directions
These processes will be deepened and accelerated by the country’s difficult social and economic situation, which has wholly switched to war. Inflation, an increase in the discount rate, higher prices for food, fuel, housing, and utilities, significant import restrictions, and rising lending rates will also increase tensions. The social gap between large metropolitan areas and the regions will rapidly deepen. Forced mobilization and border closures will increase the shortage of skilled labor. At the same time, it is impossible not to note the steps the Russian Federation took to stabilize the financial and economic system, which resulted in a budget deficit of 0.7% of GDP.
Putting the economy on a war footing, coupled with the West’s toughened sanctions policy against exports to Russia, will undoubtedly lead to a deepening shortage of certain consumer goods, from imported cars and spare parts to gaskets and toothpaste. Gray imports, which the Russians use in their military-industrial complex, cannot cover the needs of a country of 110 million people for essential hygiene products or household appliances. This situation will undoubtedly strengthen China, which is already actively pursuing economic expansion in Russia. An example is the assembly of JAC cars under the Moskvich brand at the former Renaut plant. The well-known Russian Lada Kalina will suffer a similar fate of complete “Chineseization.”
The state of affairs in the Russian armed forces will also affect public sentiment. “Meat assaults” will remain a key tactic of Russian generals. This will affect the moral and psychological state of the personnel, and the growth of the death conveyor will further drive Russian society into alcoholic apathy. The return of demobilized soldiers from the front will lead to massive criminalization of the Russian hinterland, including yesterday’s convicts. Problems with army logistics will remain. Russian soldiers will continue to be massively underfunded and underprovisioned and will go into battle with outdated weapons.
Old and new special operations
Russia will not abandon the KGB’s usual practice of creating “sources of instability” in different parts of Europe and the world. The main areas of such work are the Balkans (Kosovo, Bosnia and Herzegovina), Kazakhstan (northern regions of the country), Armenia, Moldova, the Baltic States, Niger, and Sudan. In the Baltics, the Russians will only “shake” the socio-political situation through their agents, playing the old card of “protecting the rights of Russian speakers.” They will provoke a direct armed conflict in Kosovo, using historical differences between Serbia and the former autonomous province of the Socialist Federal Republic of Yugoslavia. In Kazakhstan, a scenario using proxy armed groups such as the “Donbas militia” of 2014 is possible. The main goal of such sabotage activities is to divert attention from Ukraine and create global chaos and the illusion that complete peace cannot be established without the participation of the Kremlin and Russia.
Putin’s Death and the Transition of Power
2024 is the year of the Russian presidential election. However, even Putin’s death or re-election for another term will not fundamentally change the strategic situation for Ukraine. But there are nuances.
Putin’s obvious re-election will show that the Kremlin’s policy remains unchanged. That is, the military and political leadership will continue to try to implement a strategy to restore the Russian Empire within the borders of the former Soviet Union.
At the same time, the order of the International Court of Justice in The Hague significantly restricts Putin’s international communications. It marginalizes not only him personally but the entire country. Consequently, Russia’s official representation in the international arena will primarily be purely formal. It will only be fully effective in some African and Asian countries. As a result, this factor will undoubtedly push Russia to the margins of the global political landscape, turning it into a third-world country. This status has already become a significant problem for Russian elites and those Russian citizens who are used to considering themselves “people of the world.” And now they will live in a new “North Korea” with a new “Kim Jong-un.”
A Ukrainian floating drone that is devastating Russia’s Black Sea fleet can now fire missiles
Tom Porter – January 15, 2024
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Ukraine has used sea drones to attack Russia’s Black Sea fleet.
It’s now able to fit them with missiles enabling them to fire at ships, it says.
Ukraine has had to improvise to offset Russia’s naval superiority.
Ukraine claims it has fitted the floating drones it is using to devastate Russia’s Black Sea fleet with missile launchers, making them even more deadly.
Ukraine’s intelligence service, the SBU, in early January released grainy video footage which it claimed showed its “Sea Baby” drones firing missiles at Russian vessels.
According to the Ukrainska Pravda, Russian ships had left a port near Sevastopol in occupied Crimea to sink the drones after an attack — but instead of seeking to outpace them, the drones turned back and fired missiles at the Russian vessels.
It’s unclear exactly when the incident took place, or what kind of rockets were used.
The SBU confirmed the authenticity of the video to Business Insider.
It’s not the only enhancement Ukraine has made to the devices, the report said, with the drones now fitted with up to 850 kilograms of explosives, flamethrowers, $300,000 worth of communications equipment, and material designed to evade radars.
Throughout its two-year-long battle to repel the Russian invasion, Ukraine has had to resort to improvisation and ingenuity to offset Russia’s military and manpower advantages.
The sea drones, or unmanned surface vehicles (USVs), it’s developed have been vital to the success of the attacks, with the remote-controlled devices used to surveil Russian naval bases and launch attacks on ships by being fitted with explosives.
The drones “have provided Ukraine’s nearly non-existent navy with an asymmetric capability to challenge Russia’s larger and more capable Black Sea Fleet,” Nicholas Johnson, a naval warfare expert with the RAND Corporation, told Business Insider.
“Ukraine’s employment of these small explosive vessels has imposed Russian losses and shown operational impacts on their ability to wage war.”
The drones are built using components that are readily available, are much cheaper than missiles, and don’t need a crew to operate them, notes security expert Wes O’Donnell.
Their capacity to strike Russia’s fleet in its own naval bases has challenged Russia’s dominance of the Black Sea, forcing it to move ships away from Sevastopol to evade attacks, said Johnson.
Vasyl Maliuk, who leads the SBU, told CNN last year that the drones are built without private sector involvement in a secret underground base and are continually being modified and improved on.
Johnson said that fitting the vessels with rocket launchers massively increased the type of targets they could attack.
“This modification would also allow USVs to hold a wider range of assets at risk, potentially including targets ashore, small boats, or even employing surface-to-air missiles to target aircraft,” he said. “By utilizing joint salvos of missiles from USVs in addition to aircraft and ground launchers, Ukraine could leverage multiple axis of attack further complicating Russia’s air defense picture.”
However, they come with some drawbacks. Interruptions to the camera feed can make them difficult to control, and they can go off course, with a drone found washed up ashore near Sevastopol in September 2022 and seized by Russia, reports say.
Johnson told BI that the vessels are vulnerable to air or boat attacks, and their signals can be scrambled by electronic-warfare units, meaning they can be cut off from their controllers.
And recent adaptations, such as fitting them with expensive missiles, mean they are no longer just a relatively cheap way of launching mass attacks on Russian ships, but would have to be used more carefully, he said.
“We are on the brink of an autocratic government, someone who is blatantly saying, If I’m president again, I’m going to be a dictator:” Green Day’s Billie Joe Armstrong fears for America’s future
Paul Brannigan – January 15, 2024
Billie Joe Armstrong.
Green Day‘s Billie Joe Armstrong has spoken about his fears for the direction American politics is taking, and warns that the prospect of an autocratic government in the US is “at our doorstep”.
Armstrong’s band will release their 14th studio album ‘SAVIORS’ on Friday, June 19, and, in a new interview with Vulture, the 51-year-old vocalist/guitarist talks about how the album’s first single, The American Dream Is Killing Me, released back in October last year, deals with the “overwhelming” anxieties that come with being “an over-stressed American”.
“Our politics are so divided and polarized right now,” says Armstrong. “We had an insurrection. We have homeless people in the street. We have so many issues, and they come onto your algorithm feed at such a pace. It just stresses you out, the anxiety of being an American and how it becomes so overwhelming.”
Reflecting on how his band’s new record shares some of the DNA of 2004’s American Idiot album, Armstrong notes, “I think it was easier to satirize George Bush because we didn’t have social media. It was before all the tech bros came in. Now you have these billionaires who would rather shoot a rocket into space than deal with the infrastructure we have here.”
Looking ahead, Armstrong admits that he is concerned by the current political landscape in America.
“We are on the brink of an autocratic government, or someone who is blatantly saying ‘If I’m president again, I’m going to be a dictator’,” he says. “What’s that Maya Angelou quote? When people tell you who they are, believe them. [Actually, ‘When someone shows you who they are, believe them the first time’] It’s this exaggeration that became what can actually happen. It’s based on a cult of personality. America is not supposed to be about the cult of personality; we’re supposed to be about a group of people who are making laws that would make the American people’s lives easier and affordable. Getting good jobs, getting good health care, protecting people from corporations taking advantage of them. I feel like we are completely lost on that, the real American ideal.
Canadians worry US democracy cannot survive Trump’s return to White House, poll finds
Steve Scherer – January 15, 2024
Former U.S. President and Republican presidential candidate Donald Trump campaigns, in Indianola Canada’s Prime Minister Justin Trudeau makes a speech, in Vancouver
OTTAWA (Reuters) – About two-thirds of Canadians surveyed this month said American democracy cannot survive another four years of Donald Trump in the White House, and about half said the United States is on the way to becoming an authoritarian state, a poll released on Monday said.
The November U.S. election is likely to pit President Joe Biden against Trump, who is the clear frontrunner to win the Republican nomination as voting in the presidential primary race kicks off in Iowa on Monday.
Sixty-four percent of respondents in the Angus Reid Institute poll of 1,510 Canadians said they agreed with the statement: “U.S. democracy cannot survive another four years of Donald Trump.” Twenty-eight percent disagreed.
The Jan. 6, 2021 attack on Capitol Hill by Trump supporters seeking to block certification of Biden’s 2020 election win shocked many Canadians, and Prime Minister Justin Trudeau publicly blamed Trump for inciting the mob.
Trump has vowed if elected again to punish his political enemies, and he has drawn criticism for using increasingly authoritarian language.
Three times as many Canadians say a Biden victory would be better for Canada’s economy (53%) than a Trump win (18%), according to the poll which was seen exclusively by Reuters. The poll, taken between Jan. 9-11, had a margin of error of plus or minus 2 percentage points
Forty-nine percent of people said the United States is on the way to becoming an authoritarian state and 71% of Canadians say the concept that the rule of law applies equally to everyone is weakening in the United States.
The Trump campaign did not respond to a request for comment
about the poll.
“What we’re seeing is people quite alarmed about the prospect of a return of Donald Trump,” said Shachi Kurl, president of Angus Reid Institute.
The polling is also “an indictment” of “how poorly Canadians now view the democratic institutions and the checks and balances that in the past people on both sides of the border took for granted,” she added.
American allies around the world and financial markets are watching the election with unease given the isolationism and the protectionist trade policies of Trump’s presidency. Because of their proximity and economic ties, Canadians have more at stake than most countries.
Two-thirds of Canada’s 40 million people live within 100 km (62 miles) of the U.S. border, and the trade relationship with the United States is of existential importance to Canada.
Three-quarters of all exports go to the southern neighbor, and half of its imports come from the United States, including 60% of all imported fresh vegetables.
“One can make the argument that there’s no country that would be more negatively affected by a Trump win than Canada,” said Kim Nossal, a professor of political studies at Queen’s University in Kingston and author of “Canada Alone: Navigating the Post-American World”.
In his first term, Trump forced the renegotiation of the North American trade pact and clashed with Trudeau, who he once called “very dishonest and weak”.
Trump’s “mercantilist view involves thinking of Canada and every other so-called friend of the United States as no friend at all, but just a bunch of free-riders sucking off the wealth of the United States,” Nossal said. “He is the ultimate protectionist.”
There is a provision in the new North American trade pact that requires it to be reviewed for renewal after six years, or during the next American president’s term in 2026.
(Reporting by Steve Scherer; Editing by Alistair Bell)
Media: Russia receiving military-linked goods from Finnish companies
Dinara Khalilova – January 15, 2024
Over 20 Finnish companies managed or owned by Russians have been exporting high technology and other goods that can be used in the military industry to Russia, according to an investigation by Finland’s public broadcaster YLE Published on January 15th.
The investigation revealed that at least nine customers of the Finnish companies have direct links to the Russian military sector and intelligence agencies such as Russia’s Federal Security Service (FSB).
These are small logistics firms operating mostly in southeastern Finland, near major logistics hubs, YLE wrote. At least four of them are already subjects of criminal investigations.
A Russian-linked company operating in Lappeenranta has sent to Russia “numerous packages” with sensors, diesel engines, fuel pumps, and transmission equipment, which experts have classified as critical supplies in warfare, according to the investigation.
According to Russian public procurement data, two of the firm’s clients have ties to the FSB, with one of the clients posting a letter on their website thanking the FSB for good cooperation.
Similar components were reportedly found in destroyed Russian weapons and vehicles in Ukraine, but not all of them were subjected to Western sanctions, which has made it easier to export them to Russia.
Other products exported to Russia by the Finnish companies include equipment for military research, product development, and intelligence activities, as well as engine parts and electronics, the media outlet wrote.
It is not clear, though, whether the Russian military has specifically used the goods exported from the Finnish companies covered in the investigation.
According to YLE, some goods were exported from Finland to Russia through Uzbekistan, which Russia has reportedly used to evade Western sanctions.
Following the outbreak of the full-scale war against Ukraine, Western countries imposed extensive sanctions against Russia, banning imports of electronics and other goods critical for the production of high-tech weapons like missiles or drones.
In spite of these restrictions, Moscow continues to acquire dual-use goods via third-party countries like Uzbekistan, Kazakhstan, Turkey, or China.
Toy manufacturers’ shift from China is no child’s play
Richa Naidu – January 15, 2024
An undated handout photo of the Aequs toy manufacturing facility in Belgaum
LONDON (Reuters) – Toy makers grappling with surging costs in China are finding no easy options when it comes to shifting production to cheaper centres elsewhere.
Six years ago, monopoly maker Hasbro approached Indian durable goods and aerospace supplier Aequs to sub-contract.
“They said if you can get into toy manufacturing, now we’re looking to shift millions of dollars worth of product from China to India,” Rohit Hegde, Aequs’ head of consumer verticals, told Reuters. “We said: as long as we can get at least about $100 million of business in the next few years, we can definitely invest in it.”
Fast forward to today and Aequs makes dozens of types of toys for Hasbro and others including Spin Master in two 350,000-square-foot facilities in Belgaum, India.
But Hegde and other manufacturers acknowledge that India and other countries cannot match China for efficiency, limiting companies’ efforts to shift to lower cost bases and raising the risk of higher toy prices in future if the bulk of production remains in China.
“We don’t have the port facilities (in India) that China does. We don’t have the road facilities that China does. They have been doing this for the last 30 years, their efficiency levels are much better than ours,” Hedge said.
Still, for toy manufacturers including Hasbro and Barbie doll maker Mattel, the risks of relying on China for most of their production were highlighted during the COVID-19 pandemic, when Chinese ports struggled to export goods and were periodically shut down, leaving shipments stranded.
Soaring labour costs in China had already been driving manufacturers across industries to diversify production geographically.
A report by Rhodium Group last September showed that total announced U.S. and European greenfield investment into India shot up by $65 billion or 400% between 2021 and 2022, while investment into China dropped to less than $20 billion in 2022, from a peak of $120 billion in 2018. Mexico, Vietnam and Malaysia also drew some of this redirected capital.
Yet toymakers are struggling to shift production even as other industries succeed.
As of the first seven months of last year, mainland China still made 79% of toys sold in the United States and Europe, versus 82% in 2019, according to U.S. and European Union import data provided to Reuters by S&P Global Market Intelligence’s trade data service Panjiva.
In comparison, mainland China in 2019 accounted for 35% of U.S. and EU apparel imports. This reduced to just 30% in the year to July 31, with India and Mexico the biggest beneficiaries.
“Is it easy to re-shore away from mainland China? No, it isn’t. That goes double for toys,” S&P Global Market Intelligence’s Chris Rogers said. “It’s more complicated because they’re highly seasonal — you’re asking a partner to sit on inventory for most of the year. Toy makers also have to be doubly rigorous on safety, sourcing and making sure workers are treated well.”
While China’s minimum wage varies from between 1,420 yuan per month to 2,690 yuan per month ($198.52-$376.08), in India unskilled and semi-skilled workers can be secured for between 9,000 Indian rupees and 15,000 Indian rupees a month ($108.04- $180.06), according to central bank estimates.
But setting up to source from other countries can take 18 months if a company is buying product from a contract manufacturer, and up to three years if a firm is building a new factory from scratch, Rogers said.
Toys to be sold in the autumn go into production starting in May and are then stored or shipped.
‘MORE REASONABLE COST’
Hasbro began addressing its outsized dependence on China as an operational risk in its annual report in 2018, while Mattel has reportedly been shifting away from China since 2007, when it had to recall millions of toys tainted with lead paint. Efforts across the industry have ramped up since the pandemic.
Hasbro did not respond to a request for comment, while Mattel declined to comment for this story.
Spiralling Chinese wages are helping push up toy prices. In the UK, for instance, prices rose by about 8% in the first six months of 2022, according to Circana, formerly known as NPD. The risk for consumers is that prices will keep on rising sharply if manufacturers can’t cut costs by moving to cheaper production centres.
Though U.S. duties on Chinese toys are currently negligible, that could also change as some Republican politicians have called for revoking China’s “permanent normal trade relations” status. Such a move could raise the price of toys in the United States by more than a fifth, according to the National Retail Federation.
“We are all looking at derisking China,” said Nic Aldridge, managing director at Bandai UK, the maker of Tamagotchi virtual pets. “Raw materials costs have gone up a lot in China, we’re looking for places where we could get a more reasonable cost.”
Bandai still mostly manufactures in mainland China but some of its products are made in Taiwan, Japan, Vietnam. It is looking at India and Thailand as additional locations, Aldridge said.
MGA Entertainment, maker of LOL Surprise and Bratz dolls, has found infrastructure outside China to be a road-block to diversifying sourcing to countries like India and Vietnam, even as its exports from China last holiday season dropped versus the year before.
India accounted for only 1% of U.S. and EU toy imports over the past five years, according to Panjiva’s data.
“The issue in India is really the gridlock of moving even from one state to another. There are so many crazy regulations,” MGA Entertainment CEO Isaac Larian told Reuters.
“(But) the infrastructure is getting better and better as these countries realize the opportunity they have to take business away from China and they are investing,” he said.
(Reporting by Richa Naidu. Additional reporting by Manoj Kumar and Casey Hall; Editing by Susan Fenton)
Pritzker: Confiscation of Russian assets needs collective action
Martin Fornusek – January 15, 2024
The decision to confiscate frozen Russian assets must be taken on a collective level and is unlikely to happen quickly, U.S. Special Representative for Economic Recovery in Ukraine Penny Pritzker said during the World Economic Forum on Jan. 15, Ukrinform reported.
Western countries have frozen over $300 billion in the Russian central bank’s sovereign assets since the start of the full-scale invasion of Ukraine.
Last week, Bloomberg reported that the White House backs legislation that would allow the confiscation of Russia’s funds. Washington reportedly seeks to coordinate such a step with Group of the Seven (G7) members.
“I think there’s enormous hope that the Russian sovereign assets could become an easy source of financing,” Pritzker said at the sidelines of the Davos summit, according to the Radio France Internationale (RFI).
“The whole thing is very complicated. And the first thing you know is a ton of lawyers need to get involved.”
Around two-thirds of the assets are held in European accounts, while only up to $5 billion are frozen at U.S. institutions.
Involved countries have been so far hesitant to outright seize the assets over numerous legal and fiscal pitfalls.
Instead, the EU has been discussing ways of providing Ukraine with a windfall tax on profits generated by the frozen assets. In October, Belgium announced it would create a $1.8 billion fund for Ukraine, financed by the tax revenue from interest on frozen Russian assets.
The World Bank assessed early in 2023 that the total cost of Ukraine’s reconstruction would amount to $411 billion. Ukrainian Foreign Minister Dmytro Kuleba commented earlier this week that the full amount of Russian assets could cover over 80% of recovery costs.
The U.S., with the support of the U.K., Japan, and Canada, are reportedly preparing viable options for confiscating the assets, which should be discussed during a G7 meeting in February.
Why the World Is Betting Against American Democracy
Nahal Toosi – January 15, 2024
Liesa Johannssen/AP
When I asked the European ambassador to talk to me about America’s deepening partisan divide, I expected a polite brushoff at best. Foreign diplomats are usually loath to discuss domestic U.S. politics.
Instead, the ambassador unloaded for an hour, warning that America’s poisonous politics are hurting its security, its economy, its friends and its standing as a pillar of democracy and global stability.
The U.S. is a “fat buffalo trying to take a nap” as hungry wolves approach, the envoy mused. “I can hear those Champagne bottle corks popping in Moscow — like it’s Christmas every fucking day.”
As voters cast ballots in the Iowa caucuses Monday, many in the United States see this year’s presidential election as a test of American democracy. But, in a series of conversations with a dozen current and former diplomats, I sensed that to many of our friends abroad, the U.S. is already failing that test.
The diplomats are aghast that so many U.S. leaders let their zeal for partisan politics prevent the basic functions of government. It’s a major topic of conversations at their private dinners and gatherings. Many of those I talked to were granted anonymity to be as candid with me as they are with each other.
For example, one former Arab ambassador who was posted in the U.S. during both Republican and Democratic administrations told me American politics have become so unhealthy that he’d turn down a chance to return.
“I don’t know if in the coming years people will be looking at the United States as a model for democracy,” a second Arab diplomat warned.
Many of these conversations wouldn’t have happened a few months ago. There are rules, traditions and pragmatic concerns that discourage foreign diplomats from commenting on the internal politics of another country, even as they closely watch events such as the Iowa caucuses. (One rare exception: some spoke out on America’s astonishing 2016 election.)
But the contours of this year’s presidential campaign, a Congress that can barely choose a House speaker or keep the government open, and, perhaps above all, the U.S. debate on military aid for Ukraine have led some diplomats to drop their inhibitions. And while they were often hesitant to name one party as the bigger culprit, many of the examples they pointed to involved Republican members of Congress.
As they vented their frustrations, I felt as if I was hearing from a group of people wishing they could stage an intervention for a friend hitting rock bottom. Their concerns don’t stem from mere altruism; they’re worried because America’s state of being affects their countries, too.
“When the United States’ voice is not as strong, is not as balanced, is not as fair as it should be, then a problem is created for the world,” said Ronald Sanders, Antigua and Barbuda’s longtime ambassador in Washington.
Donald Trump’s name came up in my conversations, but not as often as you’d think.
Yes, I was told, a Trump win in 2024 would accelerate America’s polarization — but a Trump loss is unlikely to significantly slow or reverse the structural forces leading many of its politicians to treat compromise as a sin. The likelihood of a closely split House and Senate following the 2024 vote adds to the worries.
The diplomats focused much of their alarm on the U.S. debate over military aid to Ukraine — I was taken aback by how even some whose nations had little connection to Russia’s war raised the topic.
In particular, they criticized the decision to connect the issue of Ukrainian aid and Israeli aid to U.S. border security. Not only did the move tangle a foreign policy issue with a largely domestic one, but border security and immigration also are topics about which the partisan fever runs unusually high, making it harder to get a deal. Immigration issues in particular are a problem many U.S. lawmakers have little incentive to actually solve because it robs them of a rallying cry on the campaign trail.
So now, “Ukraine might not get aid, Israel might not get aid, because of pure polarization politics,” said Francisco Santos Calderón, a former Colombian ambassador to the United States.
Diplomats from many European countries are especially unhappy.
They remember how, when Russia launched its full-scale invasion of Ukraine, many Republicans downplayed concerns about the far-right fringe in their party that questioned what was then solid, bipartisan support. Now, as the debate over the aid unfolds, it seems the far-right is calling the shots.
There’s a growing sense among foreign diplomats that moral or national security arguments — about defending a country unjustly invaded, deterring Russia, preventing a bigger war in Europe and safeguarding democracy — don’t work on the American far-right.
Instead, some are stressing to U.S. lawmakers that funds for Ukraine are largely spent inside the United States, creating jobs and helping rebuild America’s defense industrial base (while having the side benefit of degrading the military of a major U.S. foe).
“If this doesn’t make sense to the politicians, then what will?” the European ambassador asked.
A former Eastern European ambassador to D.C. worried about how some GOP war critics cast the Ukraine crisis as President Joe Biden’s war when “in reality, the consideration should be to the national interests of the United States.”
Foreign diplomats also are watching in alarm as polarizing abortion politics have delayed the promotions of U.S. military officers and threaten to damage PEPFAR, an anti-AIDS program that has saved millions of lives in Africa. That there are questions about America’s commitment to NATO dumbfounds the diplomats I talked to. Then, there are the lengthy delays in Senate confirmations of U.S. ambassadors and other officials — a trend exacerbated by lawmakers from both parties.
“There was always a certain courtesy that the other party gave to let the president appoint a Cabinet. What if these courtesies don’t hold as they don’t seem to hold now?” a former Asian ambassador said. “It is very concerning.”
When Republicans and Democrats strike deals, they love to say it shows the system works. But simply having a fractious, lengthy and seemingly unnecessary debate about a topic of global security can damage the perception of the U.S. as a reliable partner.
“It is right that countries debate their foreign policy stances, but if all foreign policy issues become domestic political theater, it becomes increasingly challenging for America to effectively play its global role on issues that need long-term commitment and U.S. political capital — such as climate change, Chinese authoritarianism, peace in the Middle East and containing Russian gangsterism,” a third European diplomat warned.
The current and former diplomats said their countries are more reluctant to sign deals with Washington because of the partisan divide. There’s worry that a new administration will abandon past agreements purely to appease rowdy electoral bases and not for legitimate national security reasons. The fate of the Iran nuclear deal was one example some mentioned.
“Foreign relations is very much based on trust, and when you know that the person that is in front of you may not be there or might be followed by somebody that feels exactly the opposite way, what is your incentive to do long-term deals?” a former Latin American diplomat asked.
Still, there’s no ambassadorial movement to band together and draw up a petition or a letter urging greater U.S. unity or focus.
The diplomats’ countries don’t always have the same interests. Some have plenty of polarizing politics themselves. In other words, there will be no intervention.
Some of the diplomats stressed they admire America — some attended college here. They acknowledged they don’t have some magical solution to the forces deepening its political polarization, from gerrymandered congressional districts to a fractured media landscape.
They know the U.S. has had polarized moments in the past, from the mid-1800s to the Vietnam War, that affected its foreign policy.
But they’re worried today’s U.S. political divisions could have lasting impact on an increasingly interconnected world.
“The world does not have time for the U.S. to rebound back,” the former Asian ambassador said. “We’ve gone from a unipolar world that we’re familiar with from the 1990s into a multipolar world, but the key pole is still the United States. And if that key pole is not playing the role that we want the U.S. to do, you’ll see alternative forces coming up.”
Russia’s diplomats, meanwhile, are among those delighting in the U.S. chaos (and fanning it). The Eastern European ambassador said the Russians had long warned their counterparts not to trust or rely on Washington.
And now what do they say? “We told you so.”
So the world’s envoys are reconsidering how their governments can deal with this America for many years and presidents to come.
Some predicted that a Republican win in November would mean their countries would have to become more transactional in their relationship with the United States instead of counting on it as a partner who’ll be there no matter what. Embassies already are beefing up their contacts among Republicans in case they win back the White House.
“Most countries will be in defensive positions, because the asymmetry of power between them and the United States is such that there’s little proactively or offensively that you can do to impact that,” said Arturo Sarukhan, a former Mexican ambassador to the United States.
When I asked diplomats what advice they’d offer America’s politicians if they were free to do so, several said the same thing: Find a way to overcome your divisions, at least when it comes to issues that reverberate beyond U.S. borders.
“Please create a consensus and a long-term foreign policy,” said Santos, the former Colombian ambassador. “When you have consensus, you don’t let the internal issues create an international foreign policy crisis.”
Davos: Global crises set to dominate gathering of business leaders
Faisal Islam – Economics editor – January 15, 2024
A woman takes a picture in front of a screen displaying AI-generated artwork
Just a week ago, the expectation about the latest gathering of the World Economic Forum in Davos, Switzerland, was of a line being drawn under three years of pandemic, lockdown and Ukraine war energy shocks.
Inflation is falling, and 2024 was set to be the year that central banks start cutting interest rates, including here in the UK. In three years of different rolling, merging global crises, the world economy has been in the shadow of massive geopolitical shifts.
The events of the past few days shows that the “polycrisis” is far from over.
Perhaps the most telling development has been the ability of the Houthis to use relatively cheap drones and armaments to cause havoc with world trade. Air strikes on the Houthis in Yemen were carried out explicitly to keep the currents of trade and economic recovery flowing through the straits leading to the Suez Canal.
But oil prices jumped on Friday because the risk of a wider confrontation in the region has also gone up. In three months the crisis in Gaza has led to RAF jets attacking targets in Aden. What will be happening three months from now?
As it happens, this sort of fundamental diplomatic challenge is made for the World Economic Forum. Launched in 1971, and held every year in the Alpine ski resort of Davos, the conference puts together the world’s top business people and politicians, as well as key players from charity and academia.
Where else would the Israeli president, Saudi foreign minister and Qatari prime minister be present in the same space at the same time, alongside French President Emmanuel Macron, UK Foreign Secretary David Cameron, US Secretary of State Antony Blinken and Chinese Premier Li Qiang?
Expectations are low surrounding the grim situation in the Middle East, but this is the sort of place where constructive and unexpected conversations can take place discreetly.
There had been a whiff of decay about Davos since the pandemic. G7 leader appearances were getting rarer. Rishi Sunak hasn’t been and isn’t going this week. In a huge year for elections across the globe the US delegation this year is particularly thin. Republicans in particular view the event with some suspicion.
The Republican Party’s Ron DeSantis, a potential presidential candidate, last year called Davos a “threat to freedom” run by China. The Florida governor said any policies emerging from the forum were “dead on arrival” in his state. The view in Davos is that he thought that such rhetoric would play well in the presidential primaries which also start this week.
Ukraine’s President Volodymyr Zelensky is attending, and will be mindful of “Ukraine fatigue” reaching Washington DC and becoming prevalent in developing countries.
Security is always tight at the Davos gathering
For the UK, some in the business community appear ready to go beyond a curious interest in the Labour Party in this election year.
Chancellor Jeremy Hunt and shadow chancellor Rachel Reeves will be competing for the attention of UK business leaders and international investors.
If business investors are worried about Labour’s economic plans, for example for extra investment spending, the World Economic Forum is exactly where it may, or may not surface. I recall then-opposition leader David Cameron’s parade of meetings with world leaders, just before he became prime minister in 2010.
There has been a backlash against some of the corporate do-gooding typical of the event, especially the recent focus by investors on companies’ environmental and social policies.
Put brutally, the world of the past two years has seen massive returns for hydrocarbon extractors, carbon emitters and arms companies.
The optimism will come from a hope that disturbed geopolitics can somehow settle without a further energy shock.
Artificial intelligence will be everywhere, with the ChatGPT-creating Open AI boss Sam Altman being paraded to the world’s business and political leaders by Microsoft, which is now vying with Apple to be the world’s biggest company.
So at the start of a delicate year of disorder and uncertainty in global politics and diplomacy, and question marks about economic recovery from years of such crisis, it is difficult to imagine a better moment for a gathering like the World Economic Forum this week.
The task is to travel towards the light at the end of the tunnel. It will not be easy.
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