Pivot’s closing article for 2018 indicated that global affairs are shifting to a new normal and so must get used to expecting the unexpected. Only one month in to 2019 and we have been witness to both the thinkable and unthinkable. To say January was eventful would be a correct. In the span of 31 days we have seen the longest ever U.S. Government Shutdown, Europe clouded by further Yellow Vest protests, Brexit uncertainty, Venezuela a hotbed of controversy, and other major shifts in geopolitics. If the rest of the year is like this, we are in for a lot of drama.
Trump’s New Normal – Pelosi’s Speakership
The United States began the year with a government shutdown that lasted from December 22nd until January 25th, 35 days. This cost the U.S. economy approximately $11 billion, with GDP growth projected to shrink as a result of nine executive departments being closed and 800,000 employees not paid. What does this, the longest shut down in U.S. history, represent? The power of a now formidable opposition to the White House in the form of a Democrat controlled House of Representatives.
With funding disputes on the U.S. Border Wall on-hold till mid-February, the reopening of government services is essentially a u-turn by the Trump Administration who stated they would not agree to fund the closed agencies until financial support for the wall was provided. However, with government employees put in dire circumstances, food banks relied upon due to missed pay cheques, a significant portion of the American population and economy were put at risk.
This was a sign for President Trump to get used to robust opposition in the form of Nancy Pelosi’s return to the speakership. A seasoned politician, Pelosi is wielding the wide powers of the House as a force against Trump. This is evident with the U.S. Constitution stating:
“All Bills for raising Revenue shall originate in the House of Representatives; but the Senate may propose or concur with amendments as on other Bills.”
Article 1, Section 7, Clause 1
If a Democrat majority in the House has already resulted in a stand-off over the border wall which persisted for 35 days, wait to see what other challenges may arise in 2019.
Brexit – A Game Of Chicken
It has become evident that Brexit negotiations are evermore a game of chicken. For those not familiar, it involves either the EU or UK giving in first so there is no collusion, or in this case avoiding a no-deal Brexit. It seemed like May had swerved. However, the events of the past few days may change that. Although the EU may say it will not renegotiate, Her Majesty’s Government and the House of Commons have different plans.
Although rejected by a margin of 230 votes on January 15th in the Commons, amendments made January 29th seem to have a majority support a deal. These changes include the Spelman Amendment which is an advisory clause which advocates against a no-deal Brexit. However, it was an amendment by Sir Graham Brady which sought the desired change, replacing the Northern Irish backstop with “alternative arrangements.”
The clock continues to tick towards March 29th. A Brexit deal will be needed soon so the required legislation can be passed by Westminster and so all European parliaments can ratify the Withdrawal Agreement. By the end of February we will have a clearer picture of future arrangements, be it a deal, a referendum, an extension, or even another election.
Venezuela – President Who?
Who is the President of Venezuela? That is the question on the minds of many foreign affairs departments globally. This is due to President Maduro’s second term (which commenced January 10th) being deemed illegitimate by many states due to voter fraud and corruption. Instead, Juan Guaido, President of the National Assembly, swore the oath of office as acting president. This is due to the Venezuelan Constitution allowing the National Assembly President to become Acting President if the office is vacant.
In response, the United States supported Guaido which was followed by Maduro ordering U.S. diplomats to leave within 72 hours and the severing of diplomatic relations (an order with was later redacted). This was followed by Australia, Canada, the U.K. and seven South American nations indicating their support for Guaido. This enraged the likes of China and Russia who continue to recognise Maduro.
Currently, Venezuela is the midst of protests with the economic turmoil worsening due to economic uncertainty. The international community cannot decide on who is the legitimate leader and the crises looks like it will remain ongoing for some time. Unless dialogue begins, no end is in sight.
Do we hear the people sing? Do we hear the distant drums? – Yellow Vest Protests
It would be reminiscent of a scene of a modern Les Miserables, but yellow vest protests continue to challenge the financial policies of the Macron Government. For those who do not know, the Yellow Vest Movement, or the Mouvement de Gilets Jaunes, is a political movement for economic equality. Namely, it opposed the tax reforms of the Macron Government due to the burden falling on the lower and middle classes.
Initially sparked by high fuel prices, this has now encompassed high living costs. Having entered an eleventh straight week of protests, tens-of-thousands have taken to the streets with violence and destruction not only in France but major centres such as Toulouse, Nice, Dijon, Bourges and Strasbourg. With much violence, over 2,000 civilians have been injured and over 1,000 police officers harmed in their attempts to quell the protests.
It doesn’t seem that this will end anytime soon. January saw increased violence and destruction. Now with counter-protests by red scarves over the actions of the Yellow Vest Movement, it seems demonstrations will not end till further concessions are given, although the Macron Government has already abolished the fuel tax, put a six-month moratorium on fuel prices, ended taxes on overtime and bonuses, and promised 100 Euro increases to wages.
Jair Bolsonaro – Who is Brazil’s New President?
New Years’ Day saw the Brazilian Presidency change hands from Michel Temer to Jair Bolsonaro. After years of corruption with investigations about Temer, the impeachment of his predecessor Dilma Rousseff, and the sentencing of Luiz Inácio Lula da Silva, Bolsonaro has vowed to end the previous political instability. Although only a month has passed, the seasoned politician and populist has already made a major mark.
Some of his administrative actions have raised criticism. Namely, he stripped the National Indian Foundation (FUNAI) of its mandate to demarcate indigenous land. Even though controversial, other policies have been met wide acclaim. Since taking office, share prices have increased by 8% due to markets finding key reforms such as changes to the pension system favourable.
Recently in hospital to have a colostomy bag removed, Bolsonaro has had a busy month. As a politician who made a lot of key promises, he must act on them to ensure that he maintains his voter base and support around the country.
Goodbye OPEC – Qatar’s Departure
Although announced in December, Qatar officially withdrew from the Organisation of Petroleum Exporting Countries (OPEC) on January 1st. Even though many observers were shocked at the news, this is part of a long-term economic strategy involving a growing Qatari presence in liquified natural gas (LNG).
Whilst many thought that the withdrawal was due to the Saudi-led blockade on Qatar, it is instead a Qatari attempt to consolidate its LNG market in the wake of international growth and a greater presence by the U.S., Russia, and Australia. Nevertheless, a growth in demand would be advantageous for the small but economically mighty Middle Eastern nation.
What comes next?
January had a lot happen and there is no point denying that. This is the beginning of quite an eventful year that will see some dramatic shifts in geopolitics. With Europe in a state of uncertainty, the U.S. in a state of divisiveness and Latin America undergoing major economic and political shifts, as well as other major activities that will have short and long term ramifications, it’s now a waiting game to see what will happen next.
