What Business And Political Leaders Are Discussing Behind Closed Doors | Davos 2020

Ian Bremmer, president and founder of Eurasia Group, discusses the most important issues at the World Economic Forum in Davos, Switzerland. Climate is at the top of the agenda this year, but Bremmer said CEOs are having more discussions about the very likely possibility of an economic slowdown. Bremmer says if you want businesses to focus on sustainability, you have to figure out how to make sustainability good for business.

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What Business And Political Leaders Are Discussing Behind Closed Doors | Davos 2020

Why The American Dream Is Gone — But The Chinese Dream Is Alive

Eurasia Group president Ian Bremmer, author of “Us vs. Them: The Failure of Globalism,” explains how the American working and middle classes haven’t seen improved standards of living over the past 40 years. This has resulted in the rise in anti-establishment figures like Trump and Bernie Sanders—mirroring the populist wave in Europe.

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Following is a transcript of the video:

Ian Bremmer: If you are a member of the working or middle class in the United States your life has not improved in last 40 forty years.

We have taken hundreds and hundreds of millions of people out of poverty around the world over the course of the past decades. The rise of China has been extraordinary, 1.4 billion people we’ve never seen anything like it. That growth has occurred on the back of open borders and free trade, no question.

But you have lost a lot of opportunities in the West. You have created much greater structural inequality and it’s not just about the economy, but the economy’s a big piece of it. If you are a member of the working or middle class in the United States your life has not improved in the last 40 years, you feel like the American dream no longer applies to you while the Chinese feel like the Chinese dream that’s something that they can be a part of. That obviously undermines the notion of liberal democracy.

If the majority of Americans don’t think they’re capitalists ’cause they don’t have capital then they’re not gonna support a capitalist system and they’re particularly not gonna support it if they think that the capitalists on top aren’t doing anything for them. If their infrastructure isn’t being invested into, if their schools aren’t being invested into, if their policing isn’t being invested into, if their healthcare is worse than it used to be, if we’re not responding to a massive opioid crisis then they’re not going to support these governments.

And by the way, we’re saying this at a time when the US economy is growing at a strong clip. We’re saying this at a time when the IMF has just upgraded their expectations for global growth in 2018 and 2019 to 3.9%, the best the world economy has done since before the financial crisis. If that’s the case now, what’s gonna happen in the next recession? What’s gonna happen suddenly when we don’t have a huge tax plan that benefits everyone and we’re spending like crazy and increasing the deficit. What’s gonna happen suddenly when times get tighter and when the corporations aren’t hitting the profitability that they are right now. I mean clearly this is a situation that is going to get worse.

We elected Trump in the United States. So people think it was an illegitimate election but there’s no question he got the Republican nomination over 16 other candidates and Ted Cruz was probably number two. Bernie Sanders was clearly enormously popular on the Democratic side. Whoever won the US election, we’ve not seen an election like this with this kind of anti-establishment sentiment in certainly, not as long as I’ve been alive, and in Europe the vote for Brexit, in Germany, the support for the Alternatives For Deutschland party for the first time a nationalist party in the German parliament since Word War II. Given their history that’s extraordinary. In Italy, the Five Star movement, the Northern League winning from the far left and the far right, this is obviously not an accident.

Why Nikki Haley Is Fighting Trump Over Russia

Eurasia Group president Ian Bremmer explains why UN Ambassador Nikki Haley is standing up for herself in a public disagreement with the Trump administration over US sanctions on Russia after the president flipped his position.

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Following is a transcript of the video:

Ian Bremmer: Trump has changed his tone on Russia.

Nikki Haley is someone with a long political future and she’s very aware of that. She is not someone that is about to sit and kowtow, we’ve seen that on her statements on Russia consistently since she’s become UN Ambassador. There’s no question that she’s been probably the most hawkish of the major Trump advisors on Russia from day one, when a lot of people have been criticizing Trump for being unwilling to go after Putin individually.

Trump has changed his tone on Russia. He has become harder-lined, he has supported putting very significant sanctions against major Russian oligarchs, which is putting a serious crimp on the Russian economy, much worse than what we saw from the Europeans, that was Trump directly supporting those sanctions.

But we’ve also seen Trump still angry about the idea of getting rid of 60 Russian diplomats and doing more than individual European countries, even though the U.S. is bigger. We’ve seen Trump being much more upset about, most recently with Nikki Haley, when she says, we’re definitely putting more sanctions on, and he overturns her.

So, there’s something about the Trump/Putin relationship, at least in Trump’s mind, that makes him not want to take him on in the same way that pretty much everyone in congress, and many of those in his own administration want him to. It’s unusual, particularly because Trump usually doesn’t care about offending people. Like if someone annoys him or does something bad to him he is the first one to hang up the phone, we saw that with the Australian Prime Minister for example. He’s the first one to insult and offend directly in a meeting, we’ve seen that with a host of leaders, the Mexicans, for example, many of the Europeans.

This is not something that upsets Trump personally, so it’s a little unusual, and because it’s Nikki Haley, who sees herself not just as a Trump person but, you know, former governor, someone that certainly is thinking about higher positions in the future, she’s thinking about her own brand, more than she’s thinking about her brand vis-a-vis Trump. And, obviously if she gets in a lot of headlines that is, that makes her a little more vulnerable in terms of Trump’s own decision to keep her or not, but at the end of the day, everyone in the Trump administration has a half-life that seems to be a little smaller, a little shorter than that of other administrations we’ve ever seen. So whether she thinks she can really last for four years or eight, I think is an open question.

The Biggest Risks Facing The World In 2018

Every year, Eurasia Group puts out their Top Risks report, and the world pays attention – from Wall Street to Washington. Here is their ranking for the top risks facing the world in 2018. The following is a transcript of the video:

The biggest risks facing the world in 2018

Eurasia Group released its predictions for the biggest global risks in 2018

Here’s what to watch for in the geopolitical landscape this year.

10: Security in Africa

Instability in less-developed countries like Somalia and Mali will spill over into Africa’s core countries. 

Dangers from the terror groups like al-Shabab will intensify. Increased security costs will hurt countries like Kenya and Nigeria.

9: Identity politics in Southern Asia

Islamism, anti-Chinese sentiments, and intensifying nationalism in India are leading to a rise of populism. Persecution of Muslim Rohingya has triggered a humanitarian crisis. 

Prime Minister Modi’s use of Hindu Nationalism in the 2019 election could give cover to radicalized elements of society.

8: United Kingdom

Brexit negotiations could lead to endless fights. It could also cost Prime Minister Theresa May her job. Her potential replacement could complicate Brexit talks even further. 

7: Protectionism 2.0

Anti-establishment movements have led to proposals of border walls and metaphorical walls in the global economy.

Policy makers are now forced to work more on “behind-the-border” measures like bailouts, subsidies, and “buy local” requirements.

Protectionism 2.0 creates barriers in the digital economy and in blue-collar industries as well.

6: The erosion of institutions

Institutions like governments, the courts, political parties, and the media continue to lose public credibility.

Anti-establishment populism could lead to political turmoil and authoritarianism in some countries. 

5: US-Iran relations

Trump will support Saudi Arabia to contain Iran in other countries like Syria and Yemen. Iran will push back against more sanctions from the US.

If the Iran Nuclear Deal can’t hold, Iran will ramp up its nuclear program, creating another threat to the US and Israel.

4: Mexico

Uncertainty over NAFTA could harm Mexico’s economy and play a major role in the country’s election. Voter frustration over corruption, drug gangs, and slow growth could lead to a new president. Obrador could break with previous investor-friendly economic policies. 

3: Global tech cold war

US and China will compete to master artificial intelligence and supercomputing. Both countries will struggle for market dominance all around the world. Fragmentation of the tech companies could lead to major market and security risks.

2: Accidents

While there hasn’t been a major geopolitical crisis since 9/11, there are many places where a misstep could lead to serious conflict.

The likeliest risks:

Conflict in cyberspace, fighting over North Korea, battlefield accidents in Syria, US-Russia tension and dispersal of ISIS fighters.

1: China loves a vacuum

China has developed the most effective global trade and investment strategy.

It uses Chinese tech companies to advance state interests and has extended its influence in other countries that are now more likely to align and imitate it. 

A US-China conflict on trade will become more likely this year.

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