National

Khalifa Haftar, the charismatic general-turned-warlord who became a key power broker after the fall of dictator Muammar Gaddafi, is back in his stronghold in the eastern Libyan city of Benghazi following a health scare that sparked rumors he was dead. The question is, for how long?

Why it matters: If the 75-year-old general’s grip slips, the resulting power vacuum could give ISIS room to grow, and refugee flows would become harder to manage. That would be a problem, for Italy especially. And if militia groups that have been loyal to Haftar launch a chaotic grab for the region’s crude supply, the price of oil could rise further. That would hit you in your wallet.

Libya has effectively been two countries since 2015, with different factions vying for control after the civil war that followed Gaddafi’s downfall. 

Haftar’s Libyan National Army gained control and legitimacy in eastern Libya by taking ground ceded to Islamist insurgents and commanding authority over lucrative oil fields. 

An eastern government backed by Haftar continues to compete with a rival UN-recognized government in Tripoli, 800 miles to the west. It’s an uneasy duel for control of a country that is still riddled with ISIS fighters.

The first rule of being a strong man who rules over a hive of squabbling, heavily-armed antagonists is don’t ever let them think you’re a goner. That’s particularly true for Haftar, a soldier of fortune who helped bring Gaddafi to power in a 1969 coup only to spend years plotting the Libyan dictator’s ouster from exile in suburban Virginia after falling out of his good graces. 

For such a larger-than-life figure, the mere appearance of weakness can be a cue for potential rivals. Haftar, who told the crowd gathered to meet him in Benghazi that he “should be addressing you standing up but I am obliged to do so sitting down,” seems keenly aware of this.

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Libya: When a strongman looks weak

Khalifa Haftar is back, but for how long?

Members of the Libyan Special Forces ride past a billboard bearing Haftar's image in Benghazi. Photo: Abdullah Doma/AFP/Getty Images

World

Libya

Khalifa Haftar, the charismatic general-turned-warlord who became a key power broker after the fall of dictator Muammar Gaddafi, is back in his stronghold in the eastern Libyan city of Benghazi following a health scare that sparked rumors he was dead. The question is, for how long?Why it matters: If the 75-year-old general’s grip slips, the resulting power vacuum could give ISIS room to grow, and refugee flows would become harder to manage. That would be a problem, for Italy especially. And if militia groups that have been loyal to Haftar launch a chaotic grab for the region’s crude supply, the price of oil could rise further. That would hit you in your wallet.

Mexico's newly inaugurated president, Andrés Manuel López Obrador (AMLO), may have just scored a big political victory after a rocky start to his tenure. The U.S. State Department announced yesterday its intention to deliver $5.8 billion in aid and investment to Central America to stem the tide of migrants flocking toward the U.S. border. 

Why it matters: AMLO has worked energetically since taking office to sell the White House on a "Marshall Plan" of support to address the region's growing migrant crisis. The U.S. commitment is a preliminary sign that he's at least being heard.

While much of the support falls under existing commitments, Mexico's foreign minister welcomed it as "good news for Mexico."

The big picture: Upon taking office, the Mexican president was caught between an irresistible force and an immovable object.

To his south, people fleeing poverty and violence in Central America have been crossing Mexico’s porous southern border on their way to the United States. 

To his north, President Trump has made tightening border security his No. 1 domestic political issue. AMLO didn’t want to antagonize Mexico’s main trading partner by letting more migrants pass through.  

AMLO, who is grappling with a high crime rate and strained resources at home, also recognizes that taking in migrants creates its own set of political headaches. 

Asylum requests in Mexico have increased more than tenfold over the past five years, reaching 14,544 in 2018. Those numbers were expected to rise even further after AMLO’s administration committed to take in asylum-seekers who have cases currently pending in the U.S. 

While he campaigned as a compassionate voice on immigration, Mexico’s new left-wing leader spied the need for a grand solution. The U.S. funding will contribute to a $30 billion aid package envisioned by AMLO.

AMLO even dangled the prospect of Chinese investment to bring Trump to the table, according to the NY Times — reasoning that the U.S. might be more willing to pay up if it feared that China might try to expand its influence in the region by opening its wallet.

For context, Beijing is already a big investor and trading partner in the more prosperous parts of Latin America. While a quixotic idea to build a canal through Nicaragua hasn’t really gone anywhere, China has been investing in infrastructure in some smaller Central American markets. It’s also offered carrots to regional governments to get them to drop diplomatic recognition of Taiwan in favor of Beijing.

The bottom line: Whatever the motivation for the U.S. decision, the support for Mexico’s investment and aid program is an important boost for AMLO just a few weeks into his term.   

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Trump buys into AMLO's "Marshall Plan" for Central America

Mexico's new president gets a win from Washington

Secretaries Pompeo and Mnuchin with AMLO following his election. Photo: Pedro Pardo/AFP/Getty Images

Mexico

Mexico&#x27;s newly inaugurated president, Andrés Manuel López Obrador (AMLO), may have just scored a big political victory after a rocky start to his tenure. The U.S. State Department announced yesterday its intention <a class="gtmContentClick" data-vars-link-text="to deliver" data-vars-click-url="https://eurasiagroup.us12.list-manage.com/track/click?u=7404e6dcdc8018f49c82e941d&amp;id=3a0a6d31de&amp;e=416c8644b2" data-vars-content-id="8caf0597-6962-4556-8aba-52d7cd881422" data-vars-headline="Trump buys into AMLO&#x27;s &quot;Marshall Plan&quot; for Central America" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://eurasiagroup.us12.list-manage.com/track/click?u=7404e6dcdc8018f49c82e941d&amp;id=3a0a6d31de&amp;e=416c8644b2" target="_blank">to deliver</a> $5.8 billion in aid and investment to Central America to stem the tide of migrants flocking toward the U.S. border. Why it matters: AMLO has <a class="gtmContentClick" data-vars-link-text="worked energetically" data-vars-click-url="https://eurasiagroup.us12.list-manage.com/track/click?u=7404e6dcdc8018f49c82e941d&amp;id=33d045ed94&amp;e=416c8644b2" data-vars-content-id="8caf0597-6962-4556-8aba-52d7cd881422" data-vars-headline="Trump buys into AMLO&#x27;s &quot;Marshall Plan&quot; for Central America" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://eurasiagroup.us12.list-manage.com/track/click?u=7404e6dcdc8018f49c82e941d&amp;id=33d045ed94&amp;e=416c8644b2" target="_blank">worked energetically</a> since taking office to sell the White House on a &quot;Marshall Plan&quot; of support to address the region&#x27;s growing migrant crisis. The U.S. commitment is a preliminary sign that he&#x27;s at least being heard.

President Biden has made the COVID-19 crisis and a post-Trump return to national unity and traditional democratic ideals his top priorities. From vaccinations to stimulus to schools, Biden is seeking bipartisan compromise while showing a willingness to use executive authority and bare Democratic majorities in the U.S. House and Senate to implement his policies. Republican leaders are navigating deep party divisions over if and how to move beyond former President Trump.

Politics & Policy

A law passed by Egypt's parliament this week means that anyone with more than 5,000 social media followers will be treated like a media company under the country’s strict media laws, which make it a crime to engage in vaguely defined bad behavior, like inciting law-breaking or publishing false information. 

Why it matters: What the Egyptian government portrays as a strike against fake news, critics see a further muzzling of speech in a country that routinely jails journalists and scores near the bottom of global press freedom rankings. And there’s a broader trend at work here: governments around the world are attempting to control the flow of subversive information (however they define it) through their societies.

Many countries, including Egypt, have adopted a technocratic approach to information control: by passing laws (and in China’s case, implementing sophisticated censorship systems) that regulate online speech, governments can not only clamp down on specific threats, they create a broader chilling effect that encourages self-censorship.

Then there’s the blunt-force option: disconnecting the internet to stop rumors and protests from spreading. 

Shutoffs have serious downsides: for one, they’re expensive, since many people now depend on the internet for their livelihoods. 

But they are a popular tool across parts of Africa, where English speaking regions of Cameroon were cut off from internet for much of last year, as well as in India, where authorities have pulled the plug more than 170 times since 2012, most often in anticipation of public unrest in specific regions of the country.

Finally, there is Russia’s favored approach: undermine trust in information by pushing out so much disinformation that people don’t know what to believe. 

It’s a slow-burn strategy that’s been supercharged by the rise of social media and is now being weaponized and exported to the West. 

So far, the U.S. and U.K. have resisted passing new laws aimed at stamping out fake news, but Germany, which has a history of censoring hate speech, has adopted the technocratic approach. Last year, it passed a law that threatens websites that fail to quickly delete material that contains incitements to hatred or crime, slander, or other verboten content or face stiff fines. 

What to watch: If fake news rocks the 2018 U.S. midterms, more democracies may decide they have no choice but to follow Germany’s lead.

The big picture: Entire countries are in the “fake news” game

A new law in Egypt, and "fake news" vs. censorship

Sisi is watching, in Cairo. Photo: Amar Makar/AFP/Getty Images

Fake news

Misinformation

A law passed by Egypt&#x27;s parliament this week means that anyone with more than 5,000 social media followers will be treated like a media company under the country’s strict media laws, which make it a crime to engage in vaguely defined bad behavior, like inciting law-breaking or publishing false information. Why it matters: What the Egyptian government portrays as a strike against fake news, critics see a further muzzling of speech in a country that routinely jails journalists and scores near the bottom of global press freedom rankings. And there’s a broader trend at work here: governments around the world are attempting to control the flow of subversive information (however they define it) through their societies.

From the Valley to D.C., Big Tech players like Facebook, Google and Amazon are under more scrutiny than ever as new technology develops and privacy and antitrust concerns grow in lockstep with companies’ ambitions.

Technology

Let’s say you are Iran. The U.S. has torn up a deal you were abiding by, and reimposed crippling sanctions that are exacerbating a currency crash and broader economic crisis. You’re in no mood to roll over for Uncle Sam — Washington’s demands are beyond the pale — but what are you gonna do about it?  

Between the lines: You could threaten oil shipments through the Strait of Hormuz, or encourage your proxies in Yemen, Syria, and elsewhere in the Middle East to step up their attacks against U.S. allies and interests. But why go to all that trouble and expense when you could inflict pain on the Great Satan and its friends with a tap or two on a keyboard and the click of a mouse? 

Iran has done cyber-damage before. Back in 2012 Tehran launched a series of cyberattacks against the U.S. and Saudi Arabia as tensions were on the rise. This time around, Tehran will almost certainly be tempted to do the same. 

Here’s one reason why it might not want to do anything too provocative – along with two reasons why you should be worried anyway. 

Unlike the Obama Administration, Donald Trump and his hawkish national security adviser John Bolton are almost certainly ready (if not actively itching) to respond ferociously to any Iranian cyberattacks, particularly if they cause any serious damage to people or property in the U.S. 

Iran knows this and may reason that it’s better to go after something in the neighborhood and relatively low-risk, like Saudi companies’ business networks, rather than to invite U.S. wrath by going after something more sensitive in Uncle Sam’s own house, right? 

Cyber weapons aren’t like missiles that you can just stockpile and pull out whenever you want. Hackers’ access to networks comes and goes as their targets discover and defend against new threats. So if Tehran thinks it has a shot on goal, it might feel pressure to take it. Iran will step carefully, but it may be more likely to consider a riskier attack on a higher value American target – if the opportunity presents itself. 

There’s another problem: Cyber weapons can be hard to control once you make the decision to use them. As an example, when suspected Russian hackers hit Ukraine with a big ransomware attack last year, the malware — which had been augmented with weapons-grade code stolen from the U.S. National Security Agency — spread well beyond its initial target. 

It caused billions of dollars of damage and wiped out IT systems in dozens of countries, including Russia. No one was killed. The attack didn’t destroy the computers that regulate control systems in a power plant or take down the intensive care unit of a major hospital. But next time might not be so lucky. 

Why it matters: Put together, Iran’s incentive to retaliate while it can, and the potential for unintended, even deadly, consequences adds a dangerous new dimension to an already-tense standoff. 

Iran could use cyberattacks to hit back against the U.S.

Iranian president Rouhani and Foreign Minister Zarif. Photo: Michael Gruber/Getty Images

Iran

Let’s say you are Iran. The U.S. has torn up a deal you were abiding by, and <a class="gtmContentClick" data-vars-link-text="reimposed crippling sanctions" data-vars-click-url="https://www.axios.com/renewed-sanctions-will-hurt-irans-economy-but-us-benefits-uncertain-12b20f22-c719-4909-a609-b7a1ef1d1118.html" data-vars-content-id="e11f2695-5a6a-45cc-ae0f-01eaf2213274" data-vars-headline="Iran could use cyberattacks to hit back against the U.S." data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/renewed-sanctions-will-hurt-irans-economy-but-us-benefits-uncertain-12b20f22-c719-4909-a609-b7a1ef1d1118.html" target="_self">reimposed crippling sanctions</a> that are exacerbating a currency crash and broader economic crisis. You’re in no mood to roll over for Uncle Sam — Washington’s demands are <a class="gtmContentClick" data-vars-link-text="beyond the pale" data-vars-click-url="https://eurasiagroup.us12.list-manage.com/track/click?u=7404e6dcdc8018f49c82e941d&amp;id=f7e81d98e0&amp;e=51aaed0a65" data-vars-content-id="e11f2695-5a6a-45cc-ae0f-01eaf2213274" data-vars-headline="Iran could use cyberattacks to hit back against the U.S." data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://eurasiagroup.us12.list-manage.com/track/click?u=7404e6dcdc8018f49c82e941d&amp;id=f7e81d98e0&amp;e=51aaed0a65" target="_blank">beyond the pale</a> — but what are you gonna do about it?  Between the lines: You could threaten oil shipments through the Strait of Hormuz, or encourage your proxies in Yemen, Syria, and elsewhere in the Middle East to step up their attacks against U.S. allies and interests. But why go to all that trouble and expense when you could inflict pain on the Great Satan and its friends with a tap or two on a keyboard and the click of a mouse?

China is becoming the most formidable rival America has faced, and the risk of confrontation with Russia, North Korea or Iran still looms. Authoritarians are rising, the chaotic Afghanistan exit revealed the limits of U.S. power, and the pandemic, climate change and other critical challenges continue to pose grave threats.

Today, Brazilians poured into the streets to vent their anger about something that, in fairness, makes a lot of people's eyes glaze over: pension reform.

The big picture: It's the same issue that's roiled politics in Spain, France, and Argentina recently. In Nicaragua last year, it prompted a violent political crisis. And in Russia, it's the one thing Vladimir Putin is truly afraid of.

Governments do a lot of things, but few of them affect people's welfare as directly as paying for their retirement. 

A pension is a promise: you will be provided for in your old age. When governments break that promise — as many do to avoid a debt crisis — the political consequences can be severe.

Many countries make overly generous promises when they set up their pension systems, underestimate how long people would live, or simply mismanage the money. 

Often, to keep the payments flowing, governments have to divert money from other productive uses or run up huge deficits. In Brazil's case, the financial mess threatens the country's economic stability and growth.

One approach is to cut the outlays for retirees by raising the retirement age, narrowing eligibility, or reducing payouts. 

But all of that is politically explosive. It not only hurts pensioners, but also the families who must often help shoulder the burden of supporting them.

But the jump would be huge. In Europe, taxes would have to rise as much as 30% to cover future pension outlays, says the IMF. That would be political suicide.

What usually happens instead is compromise. 

Brazilian President Jair Bolsonaro wants to save $300 billion over the next decade but will almost certainly settle for less. 

Last year, Vladimir Putin watered down his own pension reform after it lopped double digits off his approval rating almost overnight.

It's a problem in the world's largest economy too. In the U.S., the Social Security system will have to start paying out less than originally promised in 2035 unless Congress reforms it. Many U.S. states and cities are facing pension overhauls or higher taxes to put their plans on a more sustainable footing.

The bottom line: The political compromises required to solve these problems will be painful. Pension reform cuts to the heart of what governments owe their citizens, and the difficult tradeoffs they face when those promises become unsustainable.

Pension reform spooks governments all over the world

It's one thing Vladimir Putin seems genuinely afraid of

Protests against pension reform in Saõ Paolo. Photo: Fabio Vieira/FotoRua/NurPhoto via Getty Images

Brazil

Today, Brazilians poured into the streets to vent their anger about something that, in fairness, makes a lot of people&#x27;s eyes glaze over: pension reform.The big picture: It&#x27;s the same issue that&#x27;s roiled politics in Spain, France, and Argentina recently. In Nicaragua last year, it <a class="gtmContentClick" data-vars-link-text="prompted a violent political crisis" data-vars-click-url="https://eurasiagroup.us12.list-manage.com/track/click?u=7404e6dcdc8018f49c82e941d&amp;id=d48080b47c&amp;e=51aaed0a65" data-vars-content-id="ef0dbcaf-735e-46e3-b795-ec066dfddd3e" data-vars-headline="Pension reform spooks governments all over the world" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://eurasiagroup.us12.list-manage.com/track/click?u=7404e6dcdc8018f49c82e941d&amp;id=d48080b47c&amp;e=51aaed0a65" target="_blank">prompted a violent political crisis</a>. And in Russia, it&#x27;s the one thing Vladimir Putin is truly afraid of.

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Stories

Pension reform spooks governments all over the world

Trump buys into AMLO's "Marshall Plan" for Central America

Iran could use cyberattacks to hit back against the U.S.

The big picture: Entire countries are in the “fake news” game

Libya: When a strongman looks weak