The Week of May 7th, 2018

Care

1. The art of the deal

America leaves another Obama-era international agreement

President Donald Trump announced on Tuesday that the United States will pull out of the Iran nuclear agreement. This agreement, negotiated by the Obama administration in 2015 along with the UK, France, Germany, Russia, China, Iran, and the EU, stipulated that Iran would limit its enrichment of uranium and halt the development of its nuclear weapons in exchange for sanctions relief by the US and others.

The JCPOA, as the agreement is formally known, was controversial from the start, when it prompted the majority of the Republican Senate caucus to pen an open letter to the Iranian regime blasting Mr Obama’s decision. During the 2016 election cycle, virtually every Republican candidate swore to tear up and renegotiate the deal, each one vying to outdo the other in their commitment to kiboshing it. Criticisms of the deal focus on certain clauses that hamstring enforcement, giving Iranians plenty of time to clean up their nuclear tracks before being inspected. Opponents of the deal argue it would eventually allow Iran to develop a nuclear weapon, and does nothing to constrain its sponsorship of terrorism and repression across the Middle East.

In Iran, however, voters have rewarded the deal’s negotiator, Hassan Rouhani, the country’s president, with repeated convincing victories in parliamentary elections. On the other hand, recent protests signal that the populace is tired of the country’s economic isolation and wasted military efforts in Syria and Yemen. The benefits of relaxed sanctions have not yet trickled down. Some within the Iranian foreign policy establishment also criticize the deal. Javad Zarif, the country’s chief diplomat, complained that Iran’s economy was not benefitting enough from the concessions.

The effect of this decision is open to debate, but one of two outcomes seems most likely. It is possible that the other signatories to the deal will continue their commitment. Iran itself has indicated it will attempt to make the deal continue to work--with the only change being that the US will no longer have a voice in negotiations about Iran’s nuclear program. At worst the deal could fall apart entirely, in which case Iran would likely continue towards developing a nuclear weapon, and a new source of uncertainty will have been added to an already dangerous world.

2. Upsetting the applecart

The opposition in Malaysia overcomes major obstacles

There is much to unpack from Malaysia’s most recent election, held on Wednesday. The result, the ousting of the governing coalition United Malays National Organization (UNMO), is shocking given the electioneering tomfoolery the ruling parties engaged in, from gerrymandering to locking up critics and bribing voters. This is UNMO’s first lost election, having won all of them dating back to the first in 1955. Only the abysmal performance of the nation’s current leader, Najib Razak, gave the opposition an opportunity to contend. Another warning sign was the previous election in 2013, in which UNMO lost the popular vote but secured a parliamentary majority.

However, the new leaders are not exactly a breath of fresh air. 92-year-old Mahathir Mohamad, a former five-term UMNO prime minister, defected from the party to lead the alliance of opposition parties, known as Pakatan Harapan, or PH. Paradoxically, it was Dr Mahathir who pioneered many of the underhanded tactics used to rig recent elections, including the express appeals and favoritism granted to the country’s Malay Muslim majority. Complicating matters further is Anwar Ibrahim, leader of one of PH’s parties. Mr Anwar is another former UMNO leader who is currently in prison for a sodomy conviction from 1998; he fell out spectacularly with Dr Mahathir and says the conviction was politically motivated. Mr Anwar is to be released from prison in June and is widely expected to take over the top job once he returns to Parliament; some on the ground remain skeptical the two former foes are now at peace.

For Malaysia, often held up as a rare example of tolerance and democracy among Muslim-majority countries, this may represent a grand leap forward towards a more meritocratic form of government. After one-party rule for its entire existence, the election is the first transfer of power in its history, an important step for democracies. However, PH must remain vigilant to not fall prey to instituting the same unfair tactics UMO increasingly resorted to in recent years. It also remains to be seen if the coalition of mismatching parties can rule with anything approaching a consensus. However, for a few days at least, Malaysians can rejoice in reasserting themselves as voices of change.

3. Marooned on an island

China militarizes its disputed territory in the South China Sea

In a move both dreaded and expected for quite some time, China augmented its military capabilities in the South China Sea, heightening tensions in one of the most contested regions of the world. Last week Beijing quietly ordered the installment of anti-ship and anti-aircraft missiles on three of its military fortifications in the South China Sea. Since then China reportedly deployed military aircraft and more than a dozen warships to several of their man-made bases near the Spratly Island Chain.

China claims more than 80% of the sea, through which more than $5 trillion of shipping passes annually. Four other countries, including Vietnam and the Philippines, have claims in the area, but  would be woefully outgunned in a direct military confrontation with China. Rodrigo Duterte, the usually loud and confrontational president of the Philippines, has come under fire for his friendly stance toward China.

Back in 2015 Xi Jinping, China’s leader, made an ambiguous statement implying the nation had no intention of militarizing the area. China claimed its bolstered military presence was  a defensive response to threats on its sovereignty. Still and perhaps presciently, US Navy Admiral Philip Davidson warned that China “is now capable of controlling the South China Sea in all scenarios short of war with the United States." While a direct military confrontation is almost unthinkable in the immediate future, it is unclear how China plans to leverage its newly developed dominance in the area.

4. A fool and his money…

Argentina’s president struggles with inherited mistakes

Under reformist president Mauricio Macri, the Argentine ruling party of Cambiemos has consistently sought to restore international confidence in the country’s failing economy since taking power almost three years ago. Recently these efforts have been on the verge of collapse, as political pressures pushed the government to lower interest rates at the same time that US bonds, against which all other bonds are implicitly compared, reached an interest rate above three percent, causing investors to shift their pesos to dollars. As a result, the Argentinian peso became the worst-performing emerging market currency of the year, losing around a fifth of its value against the dollar.

After a series of moderate measures failed to stabilize the failing currency, the government resorted to emergency measures, dramatically raising the peso’s interest rate to 40% from 33.25% this Friday. The measure successfully stopped the currency’s drop and was well-received by investors, as well as lowering the country’s anticipated deficit by 0.5 percent of GDP. However, raising interest rates will have a punishing effect on an economy seeking to expand after decades of populist mismanagement, limiting funds available for investment and signaling weakness after the optimism that followed Mr Macri’s victory. Mr Macri himself seems to worry the measures will not be enough, and has requested a generous loan from the International Monetary Fund, an international financial institution, to prevent a repeated fall. Investors and Argentinians will hope that Mr Macri can deliver the economy he promised them after decades of socialist stagnation and poverty, as more and more of his predecessors’ mistakes continue to haunt his administration.  

5. Catching some rays

California will begin requiring clean energy connected to new homes

In a historic moment for renewable energy in the United States, the California Energy Commission, the state’s energy policy body, voted 5-0 to require solar power for new homes. California already leads the way when it comes to green energy, as many cities in the Golden State require new buildings to use solar power or commit to using clean energy of some form. California also recently set new energy targets, pledging that by 2030, 50% of power produced in-state will come from sustainable sources. The new mandate, a boon to solar companies, also marks a step towards California’s long-term goal of modernizing the electricity grid. Home builders can satisfy the policy in one of two ways, either adding solar panels to rooftops or building a shared solar-power system serving a group of homes.

The unanimous decision is expected to add $8,000 to $12,000 to the average cost of a home. While critics charge that raising the costs of homeownership is incomprehensible in a state where affordable housing is already scarce, supporters of the measure argue the energy savings will offset the initial financial hardship. Although the long-term implications of this policy shift are uncertain, it is clear that California’s decision represents a major change during a time when the federal government’s attitude towards clean energy is ambivalent to say the least.

Don’t Care

0. Having a loud mouth

Journalists shine the wrong light on Don Blankenship

This week former coal executive, convicted felon, and US Senatorial candidate Don Blankenship placed third in the West Virginia Republican primary behind two other candidates not named Don Blankenship. In one of the most closely watched races in the nation, Mr Blankenship attracted widespread media attention for his unabashed stance as the most Blankenship of all the candidates. Mr Blankenship’s corruption, populism, and amorality truly appalled the millions of television viewers who tuned in for the unfortunate coverage of what some pundits began calling, “Blankengeddon”.

Journalists all across the Beltway asked the question, “Why is Don Blankenship gaining so much momentum?” Then they asked that question five more times on fifteen other media platforms. Throughout the race, nervous citizens around the nation watched the Blankenmometer displayed by CNN, Fox, and MSNBC to keep up on the latest developments concerning Mr Blankenship’s campaign.

It is sad that such a Blankenly bad candidate could gain so many votes in a race where there were two qualified non-Blankenship candidates to support. These non-Blankenships were serious candidates with solid non-Blankenship policies and Blankenshipless records. Although it is a relief that a non-Blankenship ultimately won, it is pathetic that the feckless Blankenship-loving voters of West Virginia who don’t like the informed anti-Blankenship media, like this publication, gave Mr Blankenship so much undeserved attention.   

Sachin Shukla, David Gernon, Phil Straus, Jose Trejos, Avid Dravid and Edmund Bannister contributed to this report.