foreignpolicy--2020-03-12--Demise of the Petrostates

Demise of the Petrostates

The epic collapse in the price of oil , set off by Russia and Saudi Arabia last weekend , has obvious winners and losers .
The winners : anyone with a car , and countries such as China , India , and Japan with few oil resources of their own .
The losers : Russia , Saudi Arabia , and the shale oil sector in the United States .
Russian President Vladimir Putin ’ s decision to let a deal on production cuts collapse and Saudi Crown Prince Mohammed bin Salman ’ s subsequent start of a price war could @ @ @ @ @ @ @ million per day in lost export revenues .
U.S. shale oil companies , struggling with declining production and crushed by debt , face a similar shortfall in income .
Yet these three powers all have the resources to sail through the crisis .
Shale producers might go bankrupt , but that won ’ t topple the U.S. economy .
Russia has accumulated $ 650 billion in reserves , has virtually no government debt , and is running a budget surplus .
Saudi Arabia has less room to maneuver but plenty of financial power @ @ @ @ @ @ @ oil prices rise again .
But behind these giants is a whole list of petrostates around the world , where oil wealth fuels economies , stabilizes power , and pays off competing interests .
Petroleum revenues are their main source of government income .
Unlike Russia , Saudi Arabia , and the United States , many of the world ’ s petrostates don ’ t have the resources to weather a shock to their economies , let alone a protracted decline in oil prices .
On the contrary , many of them rely @ @ @ @ @ @ @ a political and social stability that now threatens to unravel.Many petrostates rely on a high oil price to maintain a political and social stability that now threatens to unravel .
Iran , as Saudi Arabia ’ s great geopolitical rival , is the obvious other target of Riyadh ’ s price war .
Iran ’ s teetering petro-economy has been further devastated by the reimposition of sanctions , causing oil exports to plunge since 2018 .
The population is impoverished .
Add to this toxic economic cocktail the effects of the new coronavirus @ @ @ @ @ @ @ than any county besides China .
As of March 11 , Iran has officially confirmed 9,000 cases and 354 deaths , although the actual numbers are likely much higher .
Prominent members of the government and clergy are either infected or dead .
Iran ’ s leaders have survived many shocks over their 40 years in power , and speculation about the regime ’ s collapse has always proved futile .
Will this time be different ?
It is difficult to imagine the regime surviving the triple shock of sanctions , coronavirus , @ @ @ @ @ @ @ Nigeria has all the elements of a classic petrostate : Though it overtook South Africa to become the continent ’ s largest economy in 2019 , it exports little besides crude .
Political stability depends on a tenuous and complex balance among different elite groups and regional power brokers , with profits from oil being the glue that holds this fractious mix together .
Nigeria ’ s oil windfall also helps smooth the frictions between a better-off Christian south and an impoverished Muslim north .
Meanwhile , the government buys peace from militias @ @ @ @ @ @ @ part by sharing oil revenues with them .
With so many projects to fund and palms to grease , Nigeria ’ s government budget requires oil priced at $ 57 per barrel.With so many projects to fund and palms to grease , Nigeria ’ s government budget requires oil priced at $ 57 per barrel .
On March 10 , the government announced emergency plans to cut the budget .
Algeria , where oil and gas account for almost 95 percent of exports , has been shaken by a yearlong wave of protests @ @ @ @ @ @ @ , after his decision in February 2019 to seek a fifth presidential term .
Algerians are angry after decades of stagnation under the rule of a military elite loath to leave power .
Bouteflika resigned in April 2019 , and the leadership transition currently underway will involve a complicated redistribution of the economic pie .
With oil revenues set to shrink , there will be less money to go around—and less margin for error during the ongoing transition .
On Mar .
10 , current Prime Minister Abdelaziz Djerad warned that the country @ @ @ @ @ @ @ exacerbated by the oil price collapse , and called on Algerians to make fewer demands on the government .
An economic and political implosion could have effects beyond Algeria ’ s borders by sending a new wave of migrants toward Europe .
Kazakhstan is another petrostate facing an unstable brew of popular discontent amid a complicated succession .
Former President Nursultan Nazarbayev , who ruled Kazakhstan with an iron fist since 1990 , stepped down last year , handing formal authority to a loyal apparatchik , Kassym-Jomart Tokayev .
Nazarbayev ’ s daughter @ @ @ @ @ @ @ of the country ’ s rubber-stamp Senate .
This potential dynastic succession has already caused unexpectedly large protests that the government has aggressively suppressed .
Lower living standards , the inevitable result of falling oil prices and the emergency government spending cuts Tokayev has already announced , may yet loosen the Nazarbayev family ’ s grip on power .
Driven by China ’ s insatiable demand for energy , global oil production has boomed in recent decades .
Now that China ’ s economy is frozen by the coronavirus and cheap Russian and @ @ @ @ @ @ @ , many more petrostates could come under pressure .
For Angola , struggling to get out of a debt trap that has left the country beholden to Chinese creditors , the price collapse also could not have come at a less opportune time .
Oman , one of the Gulf ’ s poorer oil exporters , has a new sultan looking to consolidate his power—a bad time to be imposing austerity budgets .
Venezuela is a rare oil exporter that may be hit less hard than expected , in part because of its @ @ @ @ @ @ @ state-owned oil giant , Rosneft .
How will we know when petrostates are beginning to crack ?
Look no further than their currencies .
Because oil is priced in dollars , most petrostates keep their currencies roughly pegged to America ’ s .
Saudi Arabia has kept the riyal at 3.75 to the dollar since 1986 , while Nigeria ’ s naira , Algeria ’ s dinar , and Kazakhstan ’ s tenge are also kept relatively stable against the dollar .
As the balance of payments worsens , the petrostates ’ central @ @ @ @ @ @ @ stable .
Saudi Arabia has financial reserves to last years , but many smaller producers do not .
Nigeria , whose currency has been under pressure , has lost 20 percent of its foreign exchange reserves since the middle of 2019—even before the fall in prices .
In Oman , speculation is rising that a devaluation of the rial may be coming soon .
The oil price war began as an epic battle among the world ’ s three largest producers .
But Russia , Saudi Arabia , and the United States all @ @ @ @ @ @ @ shocks .
If the pain gets too great , Putin needs only to answer the phone when Mohammed bin Salman calls .
Smaller petrostates don ’ t have that luxury .

The epic collapse in the price of oil, set off by Russia and Saudi Arabia last weekend, has obvious winners and losers. The winners: anyone with a car, and countries such as China, India, and Japan with few oil resources of their own. The losers: Russia, Saudi Arabia, and the shale oil sector in the United States.
The epic collapse in the price of oil, set off by Russia and Saudi Arabia last weekend, has obvious winners and losers. The winners: anyone with a car, and countries such as China, India, and Japan with few oil resources of their own. The losers: Russia, Saudi Arabia, and the shale oil sector in the United States.
Russian President Vladimir Putin’s decision to let a deal on production cuts collapse and Saudi Crown Prince Mohammed bin Salman’s subsequent start of a price war could cost each country more than $100 million per day in lost export revenues. U.S. shale oil companies, struggling with declining production and crushed by debt, face a similar shortfall in income.
Yet these three powers all have the resources to sail through the crisis. Shale producers might go bankrupt, but that won’t topple the U.S. economy. Russia has accumulated $650 billion in reserves, has virtually no government debt, and is running a budget surplus. Saudi Arabia has less room to maneuver but plenty of financial power to tide Mohammed bin Salman over until oil prices rise again.
But behind these giants is a whole list of petrostates around the world, where oil wealth fuels economies, stabilizes power, and pays off competing interests. Petroleum revenues are their main source of government income. Unlike Russia, Saudi Arabia, and the United States, many of the world’s petrostates don’t have the resources to weather a shock to their economies, let alone a protracted decline in oil prices. On the contrary, many of them rely on a high oil price to maintain a political and social stability that now threatens to unravel.Many petrostates rely on a high oil price to maintain a political and social stability that now threatens to unravel.
Iran, as Saudi Arabia’s great geopolitical rival, is the obvious other target of Riyadh’s price war. Iran’s teetering petro-economy has been further devastated by the reimposition of sanctions, causing oil exports to plunge since 2018. The population is impoverished. Add to this toxic economic cocktail the effects of the new coronavirus epidemic, which has hit Iran harder than any county besides China. As of March 11, Iran has officially confirmed 9,000 cases and 354 deaths, although the actual numbers are likely much higher. Prominent members of the government and clergy are either infected or dead.
Iran’s leaders have survived many shocks over their 40 years in power, and speculation about the regime’s collapse has always proved futile. Will this time be different? It is difficult to imagine the regime surviving the triple shock of sanctions, coronavirus, and oil price collapse completely unscathed.
Nigeria has all the elements of a classic petrostate: Though it overtook South Africa to become the continent’s largest economy in 2019, it exports little besides crude. Political stability depends on a tenuous and complex balance among different elite groups and regional power brokers, with profits from oil being the glue that holds this fractious mix together. Nigeria’s oil windfall also helps smooth the frictions between a better-off Christian south and an impoverished Muslim north. Meanwhile, the government buys peace from militias in the oil-rich Niger Delta region in part by sharing oil revenues with them. With so many projects to fund and palms to grease, Nigeria’s government budget requires oil priced at $57 per barrel.With so many projects to fund and palms to grease, Nigeria’s government budget requires oil priced at $57 per barrel. On March 10, the government announced emergency plans to cut the budget.
Algeria, where oil and gas account for almost 95 percent of exports, has been shaken by a yearlong wave of protests against its unpopular ruler, Abdelaziz Bouteflika, after his decision in February 2019 to seek a fifth presidential term. Algerians are angry after decades of stagnation under the rule of a military elite loath to leave power. Bouteflika resigned in April 2019, and the leadership transition currently underway will involve a complicated redistribution of the economic pie. With oil revenues set to shrink, there will be less money to go around—and less margin for error during the ongoing transition. On Mar. 10, current Prime Minister Abdelaziz Djerad warned that the country faces an unprecedented “multi-dimensional crisis” exacerbated by the oil price collapse, and called on Algerians to make fewer demands on the government. An economic and political implosion could have effects beyond Algeria’s borders by sending a new wave of migrants toward Europe.
Kazakhstan is another petrostate facing an unstable brew of popular discontent amid a complicated succession. Former President Nursultan Nazarbayev, who ruled Kazakhstan with an iron fist since 1990, stepped down last year, handing formal authority to a loyal apparatchik, Kassym-Jomart Tokayev. Nazarbayev’s daughter, meanwhile, wields influence as president of the country’s rubber-stamp Senate. This potential dynastic succession has already caused unexpectedly large protests that the government has aggressively suppressed. Lower living standards, the inevitable result of falling oil prices and the emergency government spending cuts Tokayev has already announced, may yet loosen the Nazarbayev family’s grip on power.
Driven by China’s insatiable demand for energy, global oil production has boomed in recent decades. Now that China’s economy is frozen by the coronavirus and cheap Russian and Saudi Arabian oil is flooding the market, many more petrostates could come under pressure. For Angola, struggling to get out of a debt trap that has left the country beholden to Chinese creditors, the price collapse also could not have come at a less opportune time. Oman, one of the Gulf’s poorer oil exporters, has a new sultan looking to consolidate his power—a bad time to be imposing austerity budgets. Venezuela is a rare oil exporter that may be hit less hard than expected, in part because of its deep financial relationship with Russia’s state-owned oil giant, Rosneft.
How will we know when petrostates are beginning to crack? Look no further than their currencies. Because oil is priced in dollars, most petrostates keep their currencies roughly pegged to America’s. Saudi Arabia has kept the riyal at 3.75 to the dollar since 1986, while Nigeria’s naira, Algeria’s dinar, and Kazakhstan’s tenge are also kept relatively stable against the dollar. As the balance of payments worsens, the petrostates’ central banks will struggle to keep their currencies stable. Saudi Arabia has financial reserves to last years, but many smaller producers do not. Nigeria, whose currency has been under pressure, has lost 20 percent of its foreign exchange reserves since the middle of 2019—even before the fall in prices. In Oman, speculation is rising that a devaluation of the rial may be coming soon.
The oil price war began as an epic battle among the world’s three largest producers. But Russia, Saudi Arabia, and the United States all have the resources to withstand any short-term shocks. If the pain gets too great, Putin needs only to answer the phone when Mohammed bin Salman calls. Smaller petrostates don’t have that luxury.


foreignpolicy--2020-03-12--Major Economies Face a ‘Sudden Stop’

Major Economies Face a ‘Sudden Stop’

The global economy was already reeling from the impacts of the coronavirus outbreak , with countries in lockdown and fear of contagion freezing travel , spending , and investment .
But U.S. President Donald Trump ’ s decision to ban all travel from Europe for at least a month , announced late Wednesday in a halting Oval Office address , has only added to the market panic and will increase the economic pain for airlines , hotels , restaurants , and such big manufacturers as Boeing and Airbus .
The Dow Jones Industrial Average plummeted 10 percent Thursday with a @ @ @ @ @ @ @ day since the October 1987 “ Black Monday ” crash , just a day after another huge drop formally ended the 11-year bull market that Trump inherited .
Asian and European stock markets also tanked Thursday with double-digit percentage losses in the wake of Trump ’ s speech , while crude oil prices plunged again on expectations that travel bans will only further diminish demand for oil .
The economic impacts of the virus , initially expected to be modest and dismissed by Trump as alarmist fantasies invented to hurt his presidency , @ @ @ @ @ @ @ year that was expected to see a healthy rebound in global growth after two years of trade wars has turned into a market bloodbath , with growing fears of recession in Asia , Europe , and the United States .
As in the financial crisis of 2008-09 , capital flows threaten to dry up , with potentially catastrophic consequences for a world awash in debt as never before .
“ We typically use the term ‘ sudden stop ’ in the context of emerging markets , where capital flows can come to a @ @ @ @ @ @ @ into recession , ” said Robin Brooks , chief economist at the Institute of International Finance .
“ What is happening now in the United States is similar , just that it isn ’ t driven by external capital flows but by a sharp rise in risk aversion due to COVID-19.
” The Federal Reserve announced a massive , trillion-plus dollar program to inject liquidity into the financial system and help stem the market routs , its third intervention this week ; the Dow ignored it and kept falling .
One critical issue @ @ @ @ @ @ @ the outbreak and its attendant disruption will last .
China , which was in near-total lockdown at the beginning of the year , is showing signs of returning to activity .
Europe , meanwhile , is just feeling the brunt of the outbreak , with Italy in near-paralysis and other countries preparing similar measures .
And hopes that the virus would be a one-quarter wonder are quickly fading .
Brooks last week downgraded U.S. growth expectations to 1.3 percent for the year , on the assumption that the worst of the virus would @ @ @ @ @ @ @ would kick in .
“ That V-shaped recovery assumption is now looking more and more problematic , as the sharp drop in oil prices is increasing credit issues in the United States and raising recession risk , ” he said .
Globally , he expects growth to drop to just 1 percent this year—the lowest level since the depths of the great financial crisis .
Thursday ’ s market panic came after Trump ’ s brief but error-filled speech Wednesday night .
Facing severe criticism for his administration ’ s mishandling of the @ @ @ @ @ @ @ the blame for the rise of cases in the United States on Europe , where the outbreak is currently growing the fastest .
He slapped a 30-day ban on travel from all 26 countries in the Schengen free-movement zone in Europe—though , oddly , not from the United Kingdom , where the outbreak is spreading rapidly .
“ The European Union failed to take the same precautions and restrict travel from China and other hotspots , ” Trump said .
“ As a result , a large number of new clusters in the @ @ @ @ @ @ @ Europe.
” ( In reality , the virus has been spreading for weeks undetected in the United States , in part because the Trump administration actively discouraged health professionals ’ efforts to combat the virus . )
The travel ban , which in some ways is a fulfillment of Trump ’ s policy to isolate the United States from the rest of the world , only adds to the global economic decoupling that began with his tariffs and trade wars and continued with the outbreak ’ s shattering of delicate , cross-border supply @ @ @ @ @ @ @ economic impacts have become clearer—in terms of lost wages , rising health care costs , and shuttered factories—global stock and bond markets and central bankers have made plain their fear of an impending recession .
And while the severe market correction is already bad enough for the economic outlook—analysts late last year forecast that such a move would halve U.S. growth—there is another kind of “ sudden stop ” that can poleax economies : when businesses stop getting revenue and have trouble paying their employees , who then stop making purchases .
“ @ @ @ @ @ @ @ common in developing countries , ” said Richard Baldwin , a professor of international economics at the Graduate Institute in Geneva .
“ This sudden stop of cash flow is now happening within G-7 countries , especially in services .
That could lead to lots of bankruptcies , and there could be real , permanent damage.
” That is becoming especially evident in the travel and tourism sector—especially now that Trump has decided to ban travel from Europe .
The huge hospitality industry was already wobbly from the effects of the virus , @ @ @ @ @ @ @ to deal with a sudden drop in demand for travel , especially overseas .
( Don ’ t even start on cruise lines , which are being bludgeoned by the crisis . )
Trump himself cheered the collapse in international travel , celebrating that Americans would spend more money at home , even as domestic airlines hemorrhaged cash .
The World Tourism Organization just slashed its outlook for global tourism from healthy growth to contraction , which will cost the industry between $ 30 billion and $ 50 billion this year .
Airline @ @ @ @ @ @ @ in air travel is even worse than in the aftermath of the Sept. 11 , 2001 , terror attacks .
But they have been chalking that up to the “ fear factor ” associated with the virus , hoping that after a few months of empty planes , business will pick up .
Now , with his ban on travel from Europe , even as the outbreak continues to spread , Trump seems to be guaranteeing a prolonged slump .
“ We knew that the impact of Sept. 11 was circumscribed in a @ @ @ @ @ @ @ about their recovery , ” said Loizos Heracleous , an expert on the aviation industry at the University of Warwick in Britain .
“ That was an event , whereas the coronavirus is a live process.
” Trump ’ s travel ban may be symbolic in a way , since international travel had already cratered .
But the knock-on effects of formally prohibiting travel from Europe are potentially huge—and will only deepen the demand shock unleashed by the outbreak so far .
The United States is one of the world ’ s leading @ @ @ @ @ @ @ that earns the most money— $ 214 billion a year—from tourism .
About one-fifth of the 80 million people who visit the United States each year are from Europe , but they won ’ t be visiting anytime soon .
“ In the short term , there will be a lot of pain , not only for aviation , but also for other sectors , including tourism , retail , restaurants , transportation , everything that people who travel would use , ” Heracleous said .
Aviation , directly and indirectly , supports @ @ @ @ @ @ @ about $ 2.7 trillion in economic activity , he noted .
U.S. and European airline stocks plunged even more than the broader market on Thursday , with stocks in international carriers , which typically make about 15 percent of their sales on trans-Atlantic travel , posting losses of 10 percent or more .
Airlines are freezing hiring , talking about unpaid furloughs , and deferring capital expenditures , like buying new aircraft—which in turn is bad news for big manufacturers like Boeing and Airbus .
And while Trump ’ s travel ban won @ @ @ @ @ @ @ in his speech , directly affect cargo and trade between the United States and Europe , it could indirectly .
A big part of airlines ’ business is carrying high-value cargo in the belly of aircraft .
With no passenger flights crossing the Atlantic , suppliers will have to find new freight routes for that cargo or face further disruptions to supply chains already rattled by shutdowns in China , South Korea , and elsewhere .
Trump ’ s latest travel ban will also sour trade talks with the European Union , which @ @ @ @ @ @ @ ’ s specious use of tariffs to block European imports and threats of more to come .
Investors and analysts were hoping that the United States and Europe could reach some sort of limited trade accord this year in order to remove the specter of truly damaging tariffs on autos .
Instead , Trump has opted to further alienate what was once among Washington ’ s closest allies .
“ The European Union disapproves of the fact that the U.S. decision to impose a travel ban was taken unilaterally and without consultation , @ @ @ @ @ @ @ in a joint statement .
Mar .
12 : This article was updated to include the Fed intervention .

The global economy was already reeling from the impacts of the coronavirus outbreak, with countries in lockdown and fear of contagion freezing travel, spending, and investment. But U.S. President Donald Trump’s decision to ban all travel from Europe for at least a month, announced late Wednesday in a halting Oval Office address, has only added to the market panic and will increase the economic pain for airlines, hotels, restaurants, and such big manufacturers as Boeing and Airbus.
The global economy was already reeling from the impacts of the coronavirus outbreak, with countries in lockdown and fear of contagion freezing travel, spending, and investment. But U.S. President Donald Trump’s decision to ban all travel from Europe for at least a month, announced late Wednesday in a halting Oval Office address, has only added to the market panic and will increase the economic pain for airlines, hotels, restaurants, and such big manufacturers as Boeing and Airbus.
The Dow Jones Industrial Average plummeted 10 percent Thursday with a 2350.60 point drop, the worst trading day since the October 1987 “Black Monday” crash, just a day after another huge drop formally ended the 11-year bull market that Trump inherited. Asian and European stock markets also tanked Thursday with double-digit percentage losses in the wake of Trump’s speech, while crude oil prices plunged again on expectations that travel bans will only further diminish demand for oil.
The economic impacts of the virus, initially expected to be modest and dismissed by Trump as alarmist fantasies invented to hurt his presidency, have now become painfully clear. A year that was expected to see a healthy rebound in global growth after two years of trade wars has turned into a market bloodbath, with growing fears of recession in Asia, Europe, and the United States. As in the financial crisis of 2008-09, capital flows threaten to dry up, with potentially catastrophic consequences for a world awash in debt as never before.
“We typically use the term ‘sudden stop’ in the context of emerging markets, where capital flows can come to a sudden halt or reverse and force countries into recession,” said Robin Brooks, chief economist at the Institute of International Finance. “What is happening now in the United States is similar, just that it isn’t driven by external capital flows but by a sharp rise in risk aversion due to COVID-19.”
The Federal Reserve announced a massive, trillion-plus dollar program to inject liquidity into the financial system and help stem the market routs, its third intervention this week; the Dow ignored it and kept falling.
One critical issue for whether recession looms is how long the outbreak and its attendant disruption will last. China, which was in near-total lockdown at the beginning of the year, is showing signs of returning to activity. Europe, meanwhile, is just feeling the brunt of the outbreak, with Italy in near-paralysis and other countries preparing similar measures.
And hopes that the virus would be a one-quarter wonder are quickly fading. Brooks last week downgraded U.S. growth expectations to 1.3 percent for the year, on the assumption that the worst of the virus would pass soon and that a second-half recovery would kick in.
“That V-shaped recovery assumption is now looking more and more problematic, as the sharp drop in oil prices is increasing credit issues in the United States and raising recession risk,” he said.
Globally, he expects growth to drop to just 1 percent this year—the lowest level since the depths of the great financial crisis.
Thursday’s market panic came after Trump’s brief but error-filled speech Wednesday night. Facing severe criticism for his administration’s mishandling of the coronavirus outbreak, Trump sought to pin the blame for the rise of cases in the United States on Europe, where the outbreak is currently growing the fastest. He slapped a 30-day ban on travel from all 26 countries in the Schengen free-movement zone in Europe—though, oddly, not from the United Kingdom, where the outbreak is spreading rapidly.
“The European Union failed to take the same precautions and restrict travel from China and other hotspots,” Trump said. “As a result, a large number of new clusters in the United States were seeded by travelers from Europe.” (In reality, the virus has been spreading for weeks undetected in the United States, in part because the Trump administration actively discouraged health professionals’ efforts to combat the virus.)
The travel ban, which in some ways is a fulfillment of Trump’s policy to isolate the United States from the rest of the world, only adds to the global economic decoupling that began with his tariffs and trade wars and continued with the outbreak’s shattering of delicate, cross-border supply chains. As the magnitude of the economic impacts have become clearer—in terms of lost wages, rising health care costs, and shuttered factories—global stock and bond markets and central bankers have made plain their fear of an impending recession.
And while the severe market correction is already bad enough for the economic outlook—analysts late last year forecast that such a move would halve U.S. growth—there is another kind of “sudden stop” that can poleax economies: when businesses stop getting revenue and have trouble paying their employees, who then stop making purchases.
“This kind of crisis—a sudden stop crisis—is common in developing countries,” said Richard Baldwin, a professor of international economics at the Graduate Institute in Geneva. “This sudden stop of cash flow is now happening within G-7 countries, especially in services. That could lead to lots of bankruptcies, and there could be real, permanent damage.”
That is becoming especially evident in the travel and tourism sector—especially now that Trump has decided to ban travel from Europe. The huge hospitality industry was already wobbly from the effects of the virus, particularly airlines, which were cutting capacity to deal with a sudden drop in demand for travel, especially overseas. (Don’t even start on cruise lines, which are being bludgeoned by the crisis.) Trump himself cheered the collapse in international travel, celebrating that Americans would spend more money at home, even as domestic airlines hemorrhaged cash. The World Tourism Organization just slashed its outlook for global tourism from healthy growth to contraction, which will cost the industry between $30 billion and $50 billion this year.
Airline executives have been bemoaning that the collapse in air travel is even worse than in the aftermath of the Sept. 11, 2001, terror attacks. But they have been chalking that up to the “fear factor” associated with the virus, hoping that after a few months of empty planes, business will pick up. Now, with his ban on travel from Europe, even as the outbreak continues to spread, Trump seems to be guaranteeing a prolonged slump.
“We knew that the impact of Sept. 11 was circumscribed in a way, and airlines had more certainty about their recovery,” said Loizos Heracleous, an expert on the aviation industry at the University of Warwick in Britain. “That was an event, whereas the coronavirus is a live process.”
Trump’s travel ban may be symbolic in a way, since international travel had already cratered. But the knock-on effects of formally prohibiting travel from Europe are potentially huge—and will only deepen the demand shock unleashed by the outbreak so far. The United States is one of the world’s leading tourism destinations and by far the country that earns the most money—$214 billion a year—from tourism. About one-fifth of the 80 million people who visit the United States each year are from Europe, but they won’t be visiting anytime soon.
“In the short term, there will be a lot of pain, not only for aviation, but also for other sectors, including tourism, retail, restaurants, transportation, everything that people who travel would use,” Heracleous said. Aviation, directly and indirectly, supports about 65 million jobs worldwide and underpins about $2.7 trillion in economic activity, he noted.
U.S. and European airline stocks plunged even more than the broader market on Thursday, with stocks in international carriers, which typically make about 15 percent of their sales on trans-Atlantic travel, posting losses of 10 percent or more. Airlines are freezing hiring, talking about unpaid furloughs, and deferring capital expenditures, like buying new aircraft—which in turn is bad news for big manufacturers like Boeing and Airbus.
And while Trump’s travel ban won’t, as he initially said in his speech, directly affect cargo and trade between the United States and Europe, it could indirectly. A big part of airlines’ business is carrying high-value cargo in the belly of aircraft. With no passenger flights crossing the Atlantic, suppliers will have to find new freight routes for that cargo or face further disruptions to supply chains already rattled by shutdowns in China, South Korea, and elsewhere.
Trump’s latest travel ban will also sour trade talks with the European Union, which were already problematic thanks to the president’s specious use of tariffs to block European imports and threats of more to come. Investors and analysts were hoping that the United States and Europe could reach some sort of limited trade accord this year in order to remove the specter of truly damaging tariffs on autos. Instead, Trump has opted to further alienate what was once among Washington’s closest allies.
“The European Union disapproves of the fact that the U.S. decision to impose a travel ban was taken unilaterally and without consultation,” the EU’s leaders said in a joint statement.
Mar. 12: This article was updated to include the Fed intervention.


foreignpolicy--2020-03-12--The Coronavirus Is Killing Globalization as We Know It

The Coronavirus Is Killing Globalization as We Know It Until recently , most policymakers and investors remained complacent about the potential economic impact of the coronavirus crisis .
As late as the end of February , most wrongly assumed that it would have only a brief , limited , China-specific impact .
Now they realize that it is generating a global shock , which may be sharp—but which most still expect to be short .
But what if the economic disruption has an enduring impact ?
Could the coronavirus pandemic even be the nail in the coffin for the current @ @ @ @ @ @ @ has highlighted the downsides of extensive international integration while fanning fears of foreigners and providing legitimacy for national restrictions on global trade and flows of people .
All sorts of businesses have suddenly realized the risks of relying on complex global supply chains that are specific not just to China—but to particular places such as Wuhan , the epicenter of the pandemic .
Chinese people—and now Italians , Iranians , Koreans , and others—have become widely seen as vectors of disease ; senior Republican politicians in the United States have even labeled the @ @ @ @ @ @ @ , governments of all stripes have rushed to impose travel bans , additional visa requirements , and export restrictions .
The travel ban on most arrivals from Europe that U.S. President Donald Trump announced on March 11 is particularly broad , but far from unique .
All of this is making economies more national and politics more nationalistic .
Much of this disruption may be temporary .
But the coronavirus crisis is likely to have a lasting impact , especially when it reinforces other trends that are already undermining globalization .
It may @ @ @ @ @ @ @ chains , reduce the hypermobility of global business travelers , and provide political fodder for nationalists who favor greater protectionism and immigration controls .
The complex China-centered global supply chains on which so many Western companies have come to rely are particularly at risk .
The cost advantage of producing in China has eroded in recent years as the country has become richer and wages have soared .
The risks of doing so were highlighted by President Trump ’ s imposition of punitive tariffs on imports from China in 2018 and 2019 , @ @ @ @ @ @ @ While the January deal marked a fragile truce in the U.S.-China trade war , the perils of producing in China remain ; both Democrats and Republicans increasingly view China as a long-term strategic rival that needs to be contained .
And no sooner had the trade war abated than the coronavirus intervened .
The extended shutdown of many Chinese factories has pushed exports down 17 percent in the first two months of the year compared with a year earlier , and it has disrupted the production of European cars , iPhones , and @ @ @ @ @ @ @ powerful thing .
And there are still many advantages to producing in China , such as scale and efficient logistics .
But the coronavirus crisis could mark a tipping point that prompts many businesses to remodel their supply chains and invest in more resilient and often more local patterns of production .
One option is to shift and diversify operations across other Asian economies , such as Vietnam or Indonesia .
Another is to shorten supply chains , with U.S. companies moving production to Mexico and European ones to Eastern Europe or Turkey @ @ @ @ @ @ @ robots and 3D printing within advanced economies , producing locally closer to consumers .
A second enduring consequence of the coronavirus crisis may be reduced business travel .
Technology gurus have long argued that videoconferencing and chat apps would eliminate the need for most business travel and allow many people to work from home more .
Yet until the coronavirus crisis , business travel had continued growing , seemingly inexorably .
Now , whether because of government bans , business decisions , or individual caution , all but the most essential international travel @ @ @ @ @ @ @ can work from home are increasingly staying put .
Thanks to this forced grounding , businesses may discover that while face-to-face meetings are sometimes necessary , technological alternatives are often just fine—and also much less costly , time-consuming , and detrimental to family life .
And at a time of increasing concern about the impact of airplane emissions on the climate , and with many businesses keen to highlight their commitment to environmental awareness and sustainability , there is both an environmental reason and an economic one why business travel may decline .
@ @ @ @ @ @ @ plays into the hands of nationalists who favor greater immigration controls and protectionism .
The speed and scope of the virus ’ s spread across the globe have spotlighted people ’ s vulnerability to seemingly distant foreign threats .
The coronavirus has not just spread to global hubs such as London and New York .
It has also leaped directly to provincial cities such as Daegu , South Korea ’ s fourth-largest city ; nursing homes in the suburbs of Seattle ; and even small towns such as Castiglione d ’ Adda ( @ @ @ @ @ @ @ 10 towns in Lombardy first quarantined by the Italian government in February .
While internationally minded leaders have mouthed fine words about the need for cross-border cooperation in the face of an unprecedented common threat , their actions have often belied this .
Many ostensibly liberal governments have slapped restrictions on travel and trade more draconian than even Trump dared impose at the height of his conflict with China last year .
Jacinda Ardern , New Zealand ’ s leftist prime minister , was quick to bar travelers from China who are not @ @ @ @ @ @ @ .
While such blanket bans may or may not be warranted on public health grounds , they provide greater legitimacy for those who view closing the border as the solution to every ill .
Even within the European Union ’ s ostensibly barrier-free single market , France and Germany have banned the export of face masks ; so much for the liberal internationalism and commitment to the EU of President Emmanuel Macron and Chancellor Angela Merkel .
More shocking still is that none of the 26 other EU governments has responded to Italy @ @ @ @ @ @ @ China has .
Granted , the coronavirus crisis has also exposed the hollowness of nativists ’ assertions that their anti-immigration and protectionist policies make people safer .
Even though the nationalist coalition that runs Lombardy ’ s provincial government is led by Matteo Salvini ’ s far-right League party , it has not been successful in protecting the region from the coronavirus .
Nor , for all his desire to decouple from China , has Trump been able to prevent the coronavirus from reaching the United States .
Trump himself may yet pay @ @ @ @ @ @ @ election for his insouciance and inept mismanagement of a public health crisis .
But in general , the coronavirus crisis is a political gift for nativist nationalists and protectionists .
Even within the European Union ’ s ostensibly barrier-free single market , France and Germany have banned the export of face masks ; so much for the liberal internationalism .
It has heightened perceptions that foreigners are a threat .
It underscores that countries in crisis can ’ t always count on their neighbors and close allies for help .
And with India @ @ @ @ @ @ @ vast pharmaceutical sector , it provides ammunition to those who wish to localize production of all sorts of products on national security grounds .
More broadly , it may strengthen those who believe in strong government , prioritizing societal needs over individual freedom , and national action over international cooperation .
As a result , the coronavirus crisis threatens to usher in a less globalized world .
Once the pandemic and panic abate , those who believe that openness to people and products from around the world is generally a good thing will @ @ @ @ @ @ @ in fresh and persuasive ways .

Until recently, most policymakers and investors remained complacent about the potential economic impact of the coronavirus crisis. As late as the end of February, most wrongly assumed that it would have only a brief, limited, China-specific impact. Now they realize that it is generating a global shock, which may be sharp—but which most still expect to be short. But what if the economic disruption has an enduring impact? Could the coronavirus pandemic even be the nail in the coffin for the current era of globalization?
Until recently, most policymakers and investors remained complacent about the potential economic impact of the coronavirus crisis. As late as the end of February, most wrongly assumed that it would have only a brief, limited, China-specific impact. Now they realize that it is generating a global shock, which may be sharp—but which most still expect to be short. But what if the economic disruption has an enduring impact? Could the coronavirus pandemic even be the nail in the coffin for the current era of globalization?
The coronavirus crisis has highlighted the downsides of extensive international integration while fanning fears of foreigners and providing legitimacy for national restrictions on global trade and flows of people.
All sorts of businesses have suddenly realized the risks of relying on complex global supply chains that are specific not just to China—but to particular places such as Wuhan, the epicenter of the pandemic. Chinese people—and now Italians, Iranians, Koreans, and others—have become widely seen as vectors of disease; senior Republican politicians in the United States have even labeled the disease the “Chinese coronavirus.”
Meanwhile, governments of all stripes have rushed to impose travel bans, additional visa requirements, and export restrictions. The travel ban on most arrivals from Europe that U.S. President Donald Trump announced on March 11 is particularly broad, but far from unique. All of this is making economies more national and politics more nationalistic.
[Mapping the Coronavirus Outbreak: Get daily updates on the pandemic and learn how it’s affecting countries around the world.]
Much of this disruption may be temporary. But the coronavirus crisis is likely to have a lasting impact, especially when it reinforces other trends that are already undermining globalization. It may deal a blow to fragmented international supply chains, reduce the hypermobility of global business travelers, and provide political fodder for nationalists who favor greater protectionism and immigration controls.
The complex China-centered global supply chains on which so many Western companies have come to rely are particularly at risk. The cost advantage of producing in China has eroded in recent years as the country has become richer and wages have soared. The risks of doing so were highlighted by President Trump’s imposition of punitive tariffs on imports from China in 2018 and 2019, leading businesses to scramble for alternatives.
While the January deal marked a fragile truce in the U.S.-China trade war, the perils of producing in China remain; both Democrats and Republicans increasingly view China as a long-term strategic rival that needs to be contained. And no sooner had the trade war abated than the coronavirus intervened. The extended shutdown of many Chinese factories has pushed exports down 17 percent in the first two months of the year compared with a year earlier, and it has disrupted the production of European cars, iPhones, and other consumer goods.
Listen Now: Don't Touch Your Face A new podcast from Foreign Policy covering all aspects of the coronavirus pandemic Learn More
Inertia is a powerful thing. And there are still many advantages to producing in China, such as scale and efficient logistics. But the coronavirus crisis could mark a tipping point that prompts many businesses to remodel their supply chains and invest in more resilient and often more local patterns of production.
One option is to shift and diversify operations across other Asian economies, such as Vietnam or Indonesia. Another is to shorten supply chains, with U.S. companies moving production to Mexico and European ones to Eastern Europe or Turkey. A third is to invest in robots and 3D printing within advanced economies, producing locally closer to consumers.
A second enduring consequence of the coronavirus crisis may be reduced business travel. Technology gurus have long argued that videoconferencing and chat apps would eliminate the need for most business travel and allow many people to work from home more. Yet until the coronavirus crisis, business travel had continued growing, seemingly inexorably.
Now, whether because of government bans, business decisions, or individual caution, all but the most essential international travel has been canceled, and those who can work from home are increasingly staying put.
Thanks to this forced grounding, businesses may discover that while face-to-face meetings are sometimes necessary, technological alternatives are often just fine—and also much less costly, time-consuming, and detrimental to family life. And at a time of increasing concern about the impact of airplane emissions on the climate, and with many businesses keen to highlight their commitment to environmental awareness and sustainability, there is both an environmental reason and an economic one why business travel may decline.
Perhaps most significantly, the coronavirus crisis plays into the hands of nationalists who favor greater immigration controls and protectionism.
The speed and scope of the virus’s spread across the globe have spotlighted people’s vulnerability to seemingly distant foreign threats. The coronavirus has not just spread to global hubs such as London and New York. It has also leaped directly to provincial cities such as Daegu, South Korea’s fourth-largest city; nursing homes in the suburbs of Seattle; and even small towns such as Castiglione d’Adda (population: 4,600)—one of the 10 towns in Lombardy first quarantined by the Italian government in February.
While internationally minded leaders have mouthed fine words about the need for cross-border cooperation in the face of an unprecedented common threat, their actions have often belied this. Many ostensibly liberal governments have slapped restrictions on travel and trade more draconian than even Trump dared impose at the height of his conflict with China last year.
Jacinda Ardern, New Zealand’s leftist prime minister, was quick to bar travelers from China who are not New Zealand citizens from entering the country. While such blanket bans may or may not be warranted on public health grounds, they provide greater legitimacy for those who view closing the border as the solution to every ill.
Even within the European Union’s ostensibly barrier-free single market, France and Germany have banned the export of face masks; so much for the liberal internationalism and commitment to the EU of President Emmanuel Macron and Chancellor Angela Merkel. More shocking still is that none of the 26 other EU governments has responded to Italy’s urgent appeal for medical assistance—though China has.
Granted, the coronavirus crisis has also exposed the hollowness of nativists’ assertions that their anti-immigration and protectionist policies make people safer. Even though the nationalist coalition that runs Lombardy’s provincial government is led by Matteo Salvini’s far-right League party, it has not been successful in protecting the region from the coronavirus. Nor, for all his desire to decouple from China, has Trump been able to prevent the coronavirus from reaching the United States.
Trump himself may yet pay a price in November’s presidential election for his insouciance and inept mismanagement of a public health crisis. But in general, the coronavirus crisis is a political gift for nativist nationalists and protectionists.
Even within the European Union’s ostensibly barrier-free single market, France and Germany have banned the export of face masks; so much for the liberal internationalism.
It has heightened perceptions that foreigners are a threat. It underscores that countries in crisis can’t always count on their neighbors and close allies for help. And with India limiting exports of life-saving drugs from its vast pharmaceutical sector, it provides ammunition to those who wish to localize production of all sorts of products on national security grounds. More broadly, it may strengthen those who believe in strong government, prioritizing societal needs over individual freedom, and national action over international cooperation.
As a result, the coronavirus crisis threatens to usher in a less globalized world. Once the pandemic and panic abate, those who believe that openness to people and products from around the world is generally a good thing will need to make the case for it in fresh and persuasive ways.


foreignpolicy--2020-03-12--An Iranian Proxy Group Is Likely Behind Attack That Killed U.S. Soldiers in Iraq

An Iranian Proxy Group Is Likely Behind Attack That Killed U.S .
Soldiers in Iraq Welcome to Foreign Policy ’ s Security Brief .
What ’ s on tap today : New information emerges on the rocket attack on a military base in Iraq that killed two U.S. personnel and one British soldier , coronavirus fears spread to military exercises , and the FBI dispatches a team to Sudan to probe an assassination attempt against the prime minister .
If you would like to receive Security Brief in your inbox every Thursday , please sign up here .
Shiite militia @ @ @ @ @ @ @ killed two U.S. personnel and a British soldier on a military base north of Baghdad , according to the head of U.S. Central Command , though he stressed that the investigation into the attack is still ongoing .
Gen. Kenneth McKenzie , the Centcom chief , told a congressional panel on Thursday that an Iranian proxy group could be behind the attack , indicating there ’ s no end in sight to tensions with Iran in the region .
“ While periods of decreased tension may provide the illusion of a return to @ @ @ @ @ @ @ ’ s actions indicate the Iranian regime ’ s desire to continue malign activities , ” McKenzie said , during testimony before the Senate Armed Services Committee .
The attack comes as the United States began a partial drawdown of military forces from the Middle East amid months of heightened tensions after the U.S. military strike killed Iranian military commander Qassem Suleimani in January .
Suleimani fallout continues .
It ’ s still unclear exactly who is behind the attack , but the date is significant : March 11 would have been Suleimani @ @ @ @ @ @ @ separate hearing before the House on Wednesday , McKenzie said Suleimani ’ s killing had made it harder for Iran to control its proxy groups in Iraq .
“ I have always said that Iran can certainly direct attacks in Iraq , ” he said .
“ Iran may not be able to prevent attacks from occurring in Iraq .
And frankly , the fact that Qassem Suleimani is no longer there to tie it all together makes it a little bit more difficult for them to effect command and control.
” Coronavirus @ @ @ @ @ @ @ allied militaries aren ’ t taking any chances amid the coronavirus pandemic .
Norway cancelled the last leg of a major military exercise in the Arctic due to concerns about the virus .
The exercise involved around 15,000 troops from Norway , the United States , and other allies .
Nearly two dozen troops involved in the exercise have been placed under quarantine .
The decision is the latest in a string of cancellations involving U.S. troops .
Last week , U.S. European Command announced that it would cancel a joint missile defense @ @ @ @ @ @ @ also scaled back exercises in Africa later this month .
Afghan peace deal progress .
The Afghan peace deal is beginning to take shape .
After initially dragging his feet , Afghan President Ashraf Ghani has agreed to release 1,500 Taliban prisoners before intra-Afghan negotiations begin .
( The peace deal signed between the United States and the Taliban called for the release of 5,000 prisoners . )
Ghani said the remaining 3,500 prisoners would be released on a progressive basis after the formal talks begin .
Ghani ’ s announcement comes as @ @ @ @ @ @ @ from the country .
Hundreds of U.S. troops have already pulled out of Afghanistan , part of the first phase of Washington ’ s commitment to reduce its troop presence from about 13,000 to to 8,600 .
Sudan assassination attempt .
The FBI has dispatched a team of investigators to Sudan to help the Sudanese government investigate a failed assassination attempt against Prime Minister Abdalla Hamdok , according to several U.S. officials familiar with the matter .
On Monday , unknown attackers targeted the leader ’ s motorcade with a bomb and guns @ @ @ @ @ @ @ highlights the fragility of Sudan ’ s democratic transition .
The FBI did not respond to request for comment .
Zimbabwe sanctions update .
The U.S. Treasury and State Departments announced updated sanctions on senior Zimbabwean officials this week over human rights violations , including on state security minister Owen Ncube and former military commander Anselem Sanyatwe .
Several Senate aides who spoke to Foreign Policy said the updated list is long overdue , and it came in large part at the insistence of lawmakers .
The timing of the announcement reflects how @ @ @ @ @ @ @ issuing and updating sanctions , one of the Trump administration ’ s most frequently used foreign-policy tools .
New Sahel envoy .
The State Department announced this week it has tapped J. Peter Pham to be its new special envoy for Africa ’ s Sahel region , confirming Foreign Policy reporting in December that the department was creating the post .
He will have his hands fullt : Terrorist groups , including offshoots of ISIS and al Qaeda , are gaining ground in West Africa despite yearslong counterterrorism campaigns by France and regional @ @ @ @ @ @ @ Northern Ireland .
U.S. President Donald Trump has nominated former White House Chief of Staff Mick Mulvaney to serve as special envoy to Northern Ireland , a post left vacant when Trump assumed the presidency in 2017 .
Concerns over Brexit and its impact on tensions in Northern Ireland had led to calls for an appointment .
USAID move .
Bethany Kozma , a Trump appointee and advisor on women and gender issues , has been tapped as the new deputy chief of staff of the U.S. Agency for International Development .
Kozma @ @ @ @ @ @ @ s efforts to promote anti-abortion platforms in international institutions .
The case for a Pacific deterrence initiative .
Randall Schriver , a former senior Pentagon official under Trump , and Eric Sayers of the Center for a New American Security , call for a new fund to invest deterrence in the Indo-Pacific , like what the Pentagon established in Europe after Russia invaded Ukraine in 2014 , in this piece for War on the Rocks .
The intra-Afghan negotiations were scheduled to begin on March 10 , but disagreements over prisoner swaps prevented @ @ @ @ @ @ @ will releasing Taliban prisoners on Saturday as the first step toward opening intra-Afghan negotiations .
For more from FP , subscribe here or sign up for our other newsletters .
Send your tips , comments , questions , or typos to securitybrief @ foreignpolicy.com .

Welcome to Foreign Policy’s Security Brief. What’s on tap today: New information emerges on the rocket attack on a military base in Iraq that killed two U.S. personnel and one British soldier, coronavirus fears spread to military exercises, and the FBI dispatches a team to Sudan to probe an assassination attempt against the prime minister.
Welcome to Foreign Policy’s Security Brief. What’s on tap today: New information emerges on the rocket attack on a military base in Iraq that killed two U.S. personnel and one British soldier, coronavirus fears spread to military exercises, and the FBI dispatches a team to Sudan to probe an assassination attempt against the prime minister.
If you would like to receive Security Brief in your inbox every Thursday, please sign up here.
Attack on Base Could Stoke Iran Tensions
Shiite militia groups are likely behind an attack that killed two U.S. personnel and a British soldier on a military base north of Baghdad, according to the head of U.S. Central Command, though he stressed that the investigation into the attack is still ongoing. Gen. Kenneth McKenzie, the Centcom chief, told a congressional panel on Thursday that an Iranian proxy group could be behind the attack, indicating there’s no end in sight to tensions with Iran in the region.
“While periods of decreased tension may provide the illusion of a return to normalcy, ample intelligence and indeed yesterday’s actions indicate the Iranian regime’s desire to continue malign activities,” McKenzie said, during testimony before the Senate Armed Services Committee. The attack comes as the United States began a partial drawdown of military forces from the Middle East amid months of heightened tensions after the U.S. military strike killed Iranian military commander Qassem Suleimani in January.
Suleimani fallout continues. It’s still unclear exactly who is behind the attack, but the date is significant: March 11 would have been Suleimani’s 63rd birthday. In a separate hearing before the House on Wednesday, McKenzie said Suleimani’s killing had made it harder for Iran to control its proxy groups in Iraq. “I have always said that Iran can certainly direct attacks in Iraq,” he said. “Iran may not be able to prevent attacks from occurring in Iraq. And frankly, the fact that Qassem Suleimani is no longer there to tie it all together makes it a little bit more difficult for them to effect command and control.”
What We’re Watching
Coronavirus fears upend military exercises. U.S. and allied militaries aren’t taking any chances amid the coronavirus pandemic. Norway cancelled the last leg of a major military exercise in the Arctic due to concerns about the virus. The exercise involved around 15,000 troops from Norway, the United States, and other allies. Nearly two dozen troops involved in the exercise have been placed under quarantine. The decision is the latest in a string of cancellations involving U.S. troops. Last week, U.S. European Command announced that it would cancel a joint missile defense exercise with Israel, and military officials also scaled back exercises in Africa later this month.
Afghan peace deal progress. The Afghan peace deal is beginning to take shape. After initially dragging his feet, Afghan President Ashraf Ghani has agreed to release 1,500 Taliban prisoners before intra-Afghan negotiations begin. (The peace deal signed between the United States and the Taliban called for the release of 5,000 prisoners.) Ghani said the remaining 3,500 prisoners would be released on a progressive basis after the formal talks begin. Ghani’s announcement comes as the United States officially begins withdrawing troops from the country. Hundreds of U.S. troops have already pulled out of Afghanistan, part of the first phase of Washington’s commitment to reduce its troop presence from about 13,000 to to 8,600.
Sudan assassination attempt. The FBI has dispatched a team of investigators to Sudan to help the Sudanese government investigate a failed assassination attempt against Prime Minister Abdalla Hamdok, according to several U.S. officials familiar with the matter. On Monday, unknown attackers targeted the leader’s motorcade with a bomb and guns but he escaped unharmed. The attack highlights the fragility of Sudan’s democratic transition. The FBI did not respond to request for comment.
Zimbabwe sanctions update. The U.S. Treasury and State Departments announced updated sanctions on senior Zimbabwean officials this week over human rights violations, including on state security minister Owen Ncube and former military commander Anselem Sanyatwe. Several Senate aides who spoke to Foreign Policy said the updated list is long overdue, and it came in large part at the insistence of lawmakers. The timing of the announcement reflects how overburdened the Treasury Department has become with issuing and updating sanctions, one of the Trump administration’s most frequently used foreign-policy tools.
Movers and Shakers
New Sahel envoy. The State Department announced this week it has tapped J. Peter Pham to be its new special envoy for Africa’s Sahel region, confirming Foreign Policy reporting in December that the department was creating the post. He will have his hands fullt: Terrorist groups, including offshoots of ISIS and al Qaeda, are gaining ground in West Africa despite yearslong counterterrorism campaigns by France and regional governments with U.S. support.
Mulvaney to Northern Ireland. U.S. President Donald Trump has nominated former White House Chief of Staff Mick Mulvaney to serve as special envoy to Northern Ireland, a post left vacant when Trump assumed the presidency in 2017. Concerns over Brexit and its impact on tensions in Northern Ireland had led to calls for an appointment.
USAID move. Bethany Kozma, a Trump appointee and advisor on women and gender issues, has been tapped as the new deputy chief of staff of the U.S. Agency for International Development. Kozma is influential in the Trump administration’s efforts to promote anti-abortion platforms in international institutions.
Foreign Policy Recommends
The case for a Pacific deterrence initiative. Randall Schriver,a former senior Pentagon official under Trump, and Eric Sayers of the Center for a New American Security, call for a new fund to invest deterrence in the Indo-Pacific, like what the Pentagon established in Europe after Russia invaded Ukraine in 2014, in this piece for War on the Rocks.
The Week Ahead
The intra-Afghan negotiations were scheduled to begin on March 10, but disagreements over prisoner swaps prevented that from happening. The Afghan government will releasing Taliban prisoners on Saturday as the first step toward opening intra-Afghan negotiations.
That’s it for today.
For more from FP, subscribe here or sign up for our other newsletters. Send your tips, comments, questions, or typos to securitybrief@foreignpolicy.com.


foreignpolicy--2020-03-12--Putin Wants the World to Keep Guessing

Putin Wants the World to Keep Guessing

Putin Wants the World to Keep Guessing Vladimir Putin does like to surprise .
The Russian president ’ s political-theatrical impresario Vladislav Surkov may have left the administration , but the boss showed he can still manage a big reveal on Tuesday .
Having launched a series of constitutional reforms and notionally handed the matter first to the legislature and then a later public vote , Putin allowed himself to be called to speak to the State Duma , the lower chamber of the legislature , on the subject of resetting term limits—which would allow him to remain in power @ @ @ @ @ @ @ cheesy melodrama , he said he thought there should be a hard two-term limit .
Then , after a breath , he conceded that if the Duma thought the clock ought to be reset to zero and the Constitutional Court agreed , he would accept that .
Of course , this was all choreographed .
The initial proposal had been made by the 83-year-old Valentina Tereshkova , the world ’ s first woman in space and an iconic figure of Russian triumph .
Although Putin notoriously dislikes coming into Moscow , and the @ @ @ @ @ @ @ hours , when Duma speaker Vyacheslav Volodin invited him to weigh in on the issue , he was there in 90 minutes .
Besides , Volodin is Putin ’ s former first deputy chief of staff—not a man to try to bounce the boss .
So does this mean we know what is going to happen in 2024 , when Putin ’ s current time in office is set to run out , and that Putin will rule until 2036 , when he ’ ll be 83 ?
No , of course not—the @ @ @ @ @ @ @ , either .
This is , after all , classic Putin .
One of the most problematic Western myths about him is that he is some kind of deep and subtle schemer , the geopolitical grandmaster playing three-dimensional chess with the world .
He is actually quite the opposite , the judo fighter seeking and reacting to the opportunities that arise .
His real strength is his capacity to move quickly , decisively , and unexpectedly .
This is especially evident in his response to the so-called 2024 question .
Last year , @ @ @ @ @ @ @ happen after he had come to the end of his constitutional term and whether “ Putinism ” could survive without Putin began to became a genuinely destabilizing force .
For a while , Putin remained aloof from the debate .
On one level , this reflects a wider disengagement from much of the real work of the presidency .
He may still be active on the international scene , but he has been neglecting much of the day-to-day domestic governance that , in such a hyperpresidential system , demands the boss ’ s @ @ @ @ @ @ @ tired and bored , more eager to shed than retain many of the duties of the presidency .
On another level , though , this is his usual approach , sitting back and letting others pitch their favored solutions to the problem of the day .
And they did .
Some advocated an outright presidency-for-life , others sidestepping into a strengthened prime ministership .
Others proposed enforced union with neighboring Belarus so that Putin could sidestep into a new role as president of his new joint state , although this was never a @ @ @ @ @ @ @ guarantees for ex-presidents , to make retirement a more tempting option .
In a system where the rule of law takes second place to the cannibalistic realities of power , one of the key challenges is how anyone hands over the position and status from which wealth and security flow .
Some sketched halfway houses between the Kremlin and the retirement home , positions that would still give Putin some kind of leverage , role , and protection .
So which did Putin go for ?
Pretty much all of them .
A @ @ @ @ @ @ @ , from Putin finding a successor he feels he can trust to his health deteriorating ( rumors abound that he is seriously ill , although none yet with any evidence behind them ) .
The national mood is also unpredictable : at present , 45 percent of voters want Putin to stay on , 44 percent to quit in 2024 .
So , in his usual style , he is creating a range of options and putting off any decision until later .
The Constitutional Court will approve the proposed zeroing of the @ @ @ @ @ @ @ bit of political theater , to allow Putin to accept it with dignity and demonstrate his willingness to follow the rules .
But that need not mean that he will stand again in 2024 , just that he can .
He has other possibilities .
The State Council , presently a poorly defined advisory body , is being reconstituted as part of the new constitutional changes , although no one quite knows as what .
It may be that its chair will be vested in the kind of powers , perks , and @ @ @ @ @ @ @ new gig for Putin .
The same is true of the Security Council , which since he appointed his former prime minister and loyal factotum Dmitry Medvedev to become its deputy chair could be reshaped to suit .
Part of the constitutional reforms is a proposal that any former president has the right to become a senator for life in the Federation Council—the upper house of the legislature—with immunity from prosecution .
That would be a handy kind of retirement with honor and security .
Beyond that , who knows what could still @ @ @ @ @ @ @ maverick nationalist Vladimir Zhirinovsky raised eyebrows by seeming to suggest that Putin should be crowned tsar .
Part of his role as one of Russia ’ s fake opposition leaders is to entertain and distract , and the idea seems ludicrous today .
It is a brave Russia-watcher who ever says never , though .
This way , Putin keeps everyone guessing , his options for the future open , and his centrality in the system .
Strategic ambiguity is crucial for him , in that as soon as his elites know—or think @ @ @ @ @ @ @ they will be looking for ways to bend that to their advantage .
He might not become a lame duck president—Putin and his position are too formidable for that—but he might begin to limp a little .
More to the point , it would open and deepen divisions within the elite at a tense and uncertain time , and one of the takeaways Putin has drawn from the collapse of the Soviet Union is that a divided state is a vulnerable one .
Besides , we must acknowledge that we know painfully little @ @ @ @ @ @ @ closest circle .
The people to whom he is closest are not his ministers or even his political technologists .
Many of them are now ultra-rich oligarchs , men for whom Putin has been a lucrative patron and an unyielding krysha— “ roof , ” or “ protection ” in Russian criminal and now political slang .
While Putin can undoubtedly arrange himself a safe and comfortable post-presidential existence , their terror is no doubt that a successor may well want to elevate his ( and it likely will be his , not @ @ @ @ @ @ @ throw some of them under the bus as symbolic scapegoats for two decades of industrial-scale embezzlement .
A new generation of men-who-would-be-king ( or tsar ) may be looking to find ways to ease Putin ’ s transition out of office , but these cronies are likely trying to persuade him to stay .
Putin is known to change his mind .
Indeed , he probably changed his mind about 2024 , initially indicating that he definitely would not stand again , and then apparently opting to leave that door open .
The @ @ @ @ @ @ @ thus continue for as long as he wants it to .

Vladimir Putin does like to surprise. The Russian president’s political-theatrical impresario Vladislav Surkov may have left the administration , but the boss showed he can still manage a big reveal on Tuesday. Having launched a series of constitutional reforms and notionally handed the matter first to the legislature and then a later public vote, Putin allowed himself to be called to speak to the State Duma, the lower chamber of the legislature, on the subject of resetting term limits—which would allow him to remain in power until 2036.
Vladimir Putin does like to surprise. The Russian president’s political-theatrical impresario Vladislav Surkov may have left the administration, but the boss showed he can still manage a big reveal on Tuesday. Having launched a series of constitutional reforms and notionally handed the matter first to the legislature and then a later public vote, Putin allowed himself to be called to speak to the State Duma, the lower chamber of the legislature, on the subject of resetting term limits—which would allow him to remain in power until 2036.
In an act of cheesy melodrama, he said he thought there should be a hard two-term limit. Then, after a breath, he conceded that if the Duma thought the clock ought to be reset to zero and the Constitutional Court agreed, he would accept that.
Of course, this was all choreographed. The initial proposal had been made by the 83-year-old Valentina Tereshkova, the world’s first woman in space and an iconic figure of Russian triumph. Although Putin notoriously dislikes coming into Moscow, and the security preparations surrounding any presidential movements take hours, when Duma speaker Vyacheslav Volodin invited him to weigh in on the issue, he was there in 90 minutes. Besides, Volodin is Putin’s former first deputy chief of staff—not a man to try to bounce the boss.
So does this mean we know what is going to happen in 2024, when Putin’s current time in office is set to run out, and that Putin will rule until 2036, when he’ll be 83? No, of course not—the man himself probably doesn’t know, either.
This is, after all, classic Putin. One of the most problematic Western myths about him is that he is some kind of deep and subtle schemer, the geopolitical grandmaster playing three-dimensional chess with the world. He is actually quite the opposite, the judo fighter seeking and reacting to the opportunities that arise. His real strength is his capacity to move quickly, decisively, and unexpectedly.
This is especially evident in his response to the so-called 2024 question. Last year, uncertainty within the elite about what would happen after he had come to the end of his constitutional term and whether “Putinism” could survive without Putin began to became a genuinely destabilizing force.
For a while, Putin remained aloof from the debate. On one level, this reflects a wider disengagement from much of the real work of the presidency. He may still be active on the international scene, but he has been neglecting much of the day-to-day domestic governance that, in such a hyperpresidential system, demands the boss’s attention. Frankly, he has appeared tired and bored, more eager to shed than retain many of the duties of the presidency.
On another level, though, this is his usual approach, sitting back and letting others pitch their favored solutions to the problem of the day. And they did. Some advocated an outright presidency-for-life, others sidestepping into a strengthened prime ministership. Others proposed enforced union with neighboring Belarus so that Putin could sidestep into a new role as president of his new joint state, although this was never a serious option.
Others focused instead on guarantees for ex-presidents, to make retirement a more tempting option. In a system where the rule of law takes second place to the cannibalistic realities of power, one of the key challenges is how anyone hands over the position and status from which wealth and security flow. Some sketched halfway houses between the Kremlin and the retirement home, positions that would still give Putin some kind of leverage, role, and protection.
So which did Putin go for? Pretty much all of them.
A great deal can happen in four years, from Putin finding a successor he feels he can trust to his health deteriorating (rumors abound that he is seriously ill, although none yet with any evidence behind them). The national mood is also unpredictable: at present, 45 percent of voters want Putin to stay on, 44 percent to quit in 2024.
So, in his usual style, he is creating a range of options and putting off any decision until later. The Constitutional Court will approve the proposed zeroing of the term clock unless this too is a bit of political theater, to allow Putin to accept it with dignity and demonstrate his willingness to follow the rules. But that need not mean that he will stand again in 2024, just that he can.
He has other possibilities. The State Council, presently a poorly defined advisory body, is being reconstituted as part of the new constitutional changes, although no one quite knows as what. It may be that its chair will be vested in the kind of powers, perks, and immunities that might make it a possible new gig for Putin.
The same is true of the Security Council, which since he appointed his former prime minister and loyal factotum Dmitry Medvedev to become its deputy chair could be reshaped to suit.
Part of the constitutional reforms is a proposal that any former president has the right to become a senator for life in the Federation Council—the upper house of the legislature—with immunity from prosecution. That would be a handy kind of retirement with honor and security.
Beyond that, who knows what could still emerge? Back in 2016, the maverick nationalist Vladimir Zhirinovsky raised eyebrows by seeming to suggest that Putin should be crowned tsar. Part of his role as one of Russia’s fake opposition leaders is to entertain and distract, and the idea seems ludicrous today. It is a brave Russia-watcher who ever says never, though.
This way, Putin keeps everyone guessing, his options for the future open, and his centrality in the system. Strategic ambiguity is crucial for him, in that as soon as his elites know—or think they know—what will happen in 2024, they will be looking for ways to bend that to their advantage. He might not become a lame duck president—Putin and his position are too formidable for that—but he might begin to limp a little. More to the point, it would open and deepen divisions within the elite at a tense and uncertain time, and one of the takeaways Putin has drawn from the collapse of the Soviet Union is that a divided state is a vulnerable one.
Besides, we must acknowledge that we know painfully little about the deliberations in Putin’s closest circle. The people to whom he is closest are not his ministers or even his political technologists. Many of them are now ultra-rich oligarchs, men for whom Putin has been a lucrative patron and an unyielding krysha—“roof,” or “protection” in Russian criminal and now political slang.
While Putin can undoubtedly arrange himself a safe and comfortable post-presidential existence, their terror is no doubt that a successor may well want to elevate his (and it likely will be his, not her) own cronies, and perhaps throw some of them under the bus as symbolic scapegoats for two decades of industrial-scale embezzlement.
A new generation of men-who-would-be-king (or tsar) may be looking to find ways to ease Putin’s transition out of office, but these cronies are likely trying to persuade him to stay. Putin is known to change his mind. Indeed, he probably changed his mind about 2024, initially indicating that he definitely would not stand again, and then apparently opting to leave that door open. The battle for Putin’s future will thus continue for as long as he wants it to.


foreignpolicy--2020-03-12--Trump Can’t Deport the Coronavirus

Trump Can’t Deport the Coronavirus

In a speech that terrified markets and got basic facts wrong , U.S. President Donald Trump announced a ban on travel from much of Europe to the United States on Wednesday night .
In it , he described COVID-19 as a “ foreign virus ” and attempted to put the blame on European countries for not responding as quickly as he claimed the United States had .
But the new coronavirus is not a foreign problem now .
It never was , nor could be , in an age as globalized as this one .
Once it had escaped containment @ @ @ @ @ @ @ , China , making its way to the United States was as inevitable as the arrival of McDonalds in downtown Beijing more than two decades ago .
Right now , COVID-19 is burrowed into bodies and smeared on door handles nationwide in the United States , regardless of where its hosts came from or what passport they hold .
It leaps from American host to American host , just as it does between others .
When the chains of contact are reconstructed , they will show patterns of infection inside U.S. communities—quite possibly @ @ @ @ @ @ @ detected .
This is the same the world over , even in China .
The virus is not a Chinese problem or a foreign one .
It is universal .
We ’ ve seen this horror movie .
You can bar the doors and the windows , but the serial killer is already inside the house—and has been for some time .
To be sure , the number of coronavirus cases in the United States is smaller than in Italy , France , or Germany , despite its larger population .
But the @ @ @ @ @ @ @ virus spreads and as more existing cases are discovered through testing that has been critically short on the ground , as a study in Seattle has revealed .
Italy has tested 40 times as many people per capita as the United States ; France has tested seven times as many .
Far from the vision of the United States being the “ best in the world ” painted in Trump ’ s speech , the U.S. response has been widely lambasted .
Trump has often seemed less afraid of the number of cases @ @ @ @ @ @ @ or inclusion in the statistics .
Two things make this ban especially absurd , even on its own terms .
Viruses don ’ t respect passports .
If the measure is medically motivated , U.S. citizens returning from Europe need to be kept out , too—or at the very least subject to quarantine .
The first is the exclusion of U.S. citizens , permanent residents , and their immediate families .
From a humanitarian point of view , of course , this is a good thing .
Avoiding stranding people far from their @ @ @ @ @ @ @ legal necessity , too .
But viruses don ’ t respect passports .
If the measure is medically motivated , U.S. citizens returning from Europe need to be kept out , too—or at the very least subject to the same two-week quarantine other countries , such as Israel , are imposing on returnees .
The second is its restriction to the countries of the Schengen Area , but the exclusion of the United Kingdom and Ireland .
The U.K. has far more confirmed coronavirus cases than the majority of European nations , and @ @ @ @ @ @ @ the U.K. and those nations .
The only way to make sense of the exclusion is to see it as a political measure—an attempt to reach out to a British prime minister who Trump believes is an ideological ally against a European Union he openly despises .
From a public health point of view , it ’ s nonsense .
To top all this off , even though Western Europe is showing the worst numbers outside of China , there is every chance that this is simply because of the continent ’ s @ @ @ @ @ @ @ It beggars belief that Russia—not included in the ban—has just 28 cases , or that Turkey has just one .
The virus is very likely running rampant throughout the developing world , just as it is in the United States .
It may be , of course , that Trump hopes to extend such measures and went for Europe first as a shield from accusations of racism .
But to ban Europe alone makes zero sense .
The public health consensus is virtually unanimous .
Americans don ’ t need to be protected @ @ @ @ @ @ @ need to be protected from each other—in order to care for each other .
Social distancing , self-quarantine , and the closure of mass events are vital .
Americans don ’ t need to be protected from foreigners at this point .
They need to be protected from each other .
Your neighbor is just as likely to give you the coronavirus as a foreigner .
A mass program to encourage Americans to come together as a community by standing some distance from each other—a policy that has , for now , contained @ @ @ @ @ @ @ extent and kept Hong Kong virtually virus-free for weeks—matters more than any travel ban .
Trump , of course , loved travel bans long before the coronavirus arrived .
Throughout his campaign he boasted he would install a “ Muslim ban.
” In office , he targeted nations rather than faiths in order to give the Supreme Court enough cover to pretend his ban was something other than what he promised .
He has used the language of disease to describe Islam , and immigrants .
“ There ’ s a sickness .
@ @ @ @ @ @ @ ’ s a sickness going on .
There ’ s a group of people that is very sick , ” as he remarked when asked in 2015 whether his proposed travel ban would apply to a Canadian Muslim .
When challenged on his failure to take basic preparation measures despite the weeks of warning since the Wuhan outbreak , he has pointed over and over to his decision to ban travel from China , falsely claiming that the United States was the first country to do so .
Trump ’ s vision has @ @ @ @ @ @ @ sitting safely away from the dangers of the world while still commanding it .
The president—not known to be a student of the past—may not realize that one of the perils of fortresses , historically , was the plague , which ran rampant through populations besieged inside them .
Trump can ’ t keep out an invisible foe or pretend that the problem is the fault of the rest of the world .
We have met the enemy , and it is us .
Correction , March 12 , 2020 : Italy has @ @ @ @ @ @ @ capita as the United States ; France has tested seven times as many .
A previous version of this story misstated these per capita numbers .

In a speech that terrified markets and got basic facts wrong, U.S. President Donald Trump announced a ban on travel from much of Europe to the United States on Wednesday night. In it, he described COVID-19 as a “foreign virus” and attempted to put the blame on European countries for not responding as quickly as he claimed the United States had.
In a speech that terrified markets and got basic facts wrong, U.S. President Donald Trump announced a ban on travel from much of Europe to the United States on Wednesday night. In it, he described COVID-19 as a “foreign virus” and attempted to put the blame on European countries for not responding as quickly as he claimed the United States had.
But the new coronavirus is not a foreign problem now. It never was, nor could be, in an age as globalized as this one. Once it had escaped containment within its original small patch in Wuhan, China, making its way to the United States was as inevitable as the arrival of McDonalds in downtown Beijing more than two decades ago.
Right now, COVID-19 is burrowed into bodies and smeared on door handles nationwide in the United States, regardless of where its hosts came from or what passport they hold. It leaps from American host to American host, just as it does between others. When the chains of contact are reconstructed, they will show patterns of infection inside U.S. communities—quite possibly from well before the virus was first detected. This is the same the world over, even in China. The virus is not a Chinese problem or a foreign one. It is universal.
We’ve seen this horror movie. You can bar the doors and the windows, but the serial killer is already inside the house—and has been for some time.
To be sure, the number of coronavirus cases in the United States is smaller than in Italy, France, or Germany, despite its larger population. But the U.S. cases are growing exponentially—both as the virus spreads and as more existing cases are discovered through testing that has been critically short on the ground, as a study in Seattle has revealed.
Italy has tested 40 times as many people per capita as the United States; France has tested seven times as many. Far from the vision of the United States being the “best in the world” painted in Trump’s speech, the U.S. response has been widely lambasted. Trump has often seemed less afraid of the number of cases on U.S. soil than of their discovery or inclusion in the statistics.
Two things make this ban especially absurd, even on its own terms.
Viruses don’t respect passports. If the measure is medically motivated, U.S. citizens returning from Europe need to be kept out, too—or at the very least subject to quarantine.
The first is the exclusion of U.S. citizens, permanent residents, and their immediate families. From a humanitarian point of view, of course, this is a good thing. Avoiding stranding people far from their loved ones is desirable—and quite possibly a legal necessity, too. But viruses don’t respect passports. If the measure is medically motivated, U.S. citizens returning from Europe need to be kept out, too—or at the very least subject to the same two-week quarantine other countries, such as Israel, are imposing on returnees.
The second is its restriction to the countries of the Schengen Area, but the exclusion of the United Kingdom and Ireland. The U.K. has far more confirmed coronavirus cases than the majority of European nations, and there is constant and frequent travel between the U.K. and those nations. The only way to make sense of the exclusion is to see it as a political measure—an attempt to reach out to a British prime minister who Trump believes is an ideological ally against a European Union he openly despises. From a public health point of view, it’s nonsense.
To top all this off, even though Western Europe is showing the worst numbers outside of China, there is every chance that this is simply because of the continent’s advanced health care and detection facilities. It beggars belief that Russia—not included in the ban—has just 28 cases, or that Turkey has just one.
The virus is very likely running rampant throughout the developing world, just as it is in the United States. It may be, of course, that Trump hopes to extend such measures and went for Europe first as a shield from accusations of racism. But to ban Europe alone makes zero sense.
The public health consensus is virtually unanimous. Americans don’t need to be protected from foreigners at this point. They need to be protected from each other—in order to care for each other. Social distancing, self-quarantine, and the closure of mass events are vital.
Americans don’t need to be protected from foreigners at this point. They need to be protected from each other.
Your neighbor is just as likely to give you the coronavirus as a foreigner. A mass program to encourage Americans to come together as a community by standing some distance from each other—a policy that has, for now, contained South Korea’s outbreak to some extent and kept Hong Kong virtually virus-free for weeks—matters more than any travel ban.
Trump, of course, loved travel bans long before the coronavirus arrived. Throughout his campaign he boasted he would install a “Muslim ban.” In office, he targeted nations rather than faiths in order to give the Supreme Court enough cover to pretend his ban was something other than what he promised.
He has used the language of disease to describe Islam, and immigrants. “There’s a sickness. They’re sick people. There’s a sickness going on. There’s a group of people that is very sick,” as he remarked when asked in 2015 whether his proposed travel ban would apply to a Canadian Muslim. When challenged on his failure to take basic preparation measures despite the weeks of warning since the Wuhan outbreak, he has pointed over and over to his decision to ban travel from China, falsely claiming that the United States was the first country to do so.
Trump’s vision has always been of a Fortress America, sitting safely away from the dangers of the world while still commanding it. The president—not known to be a student of the past—may not realize that one of the perils of fortresses, historically, was the plague, which ran rampant through populations besieged inside them.
Trump can’t keep out an invisible foe or pretend that the problem is the fault of the rest of the world. We have met the enemy, and it is us.
Correction, March 12, 2020: Italy has tested 40 times as many people per capita as the United States; France has tested seven times as many. A previous version of this story misstated these per capita numbers.