The World Today for October 19, 2017

NEED TO KNOW

ARGENTINA

One Country, Two Leaders, Two Mysteries

When Irish rocker Bono met Argentine President Mauricio Macri recently, the two discussed Santiago Maldonado, an activist who went missing while campaigning against energy companies exploiting land claimed by the indigenous Mapuche people in Patagonia.

His disappearance evokes memories of the country’s dictatorship in the 1970s and 1980s, when dissidents were routinely arrested and never seen again. But it also shows the hazards of Macri’s push to boost the Argentine economy after years of stagnation.

“The government’s ability to ramp up investment in Vaca Muerta will be put to the test,” Michelle Carpenter, an analyst at global risk firm Verisk Maplecroft, told the Financial Times, referring to a Patagonian shale field.

The Associated Press reported that Macri promised to find out what became of Maldonado. But clearly his main priority is fixing Argentina’s struggling economy.

“We have turned a corner,” Macri said on Bloomberg Television. “Without a fixed exchange rate, without any type of price controls, we have been reducing inflation. I am more confident than ever that in 2019, we will have single-digit inflation.”

He has reason to crow.

Macri’s predecessor, ex-President Cristina Fernández de Kirchner, presided over one of the most chaotic periods of Argentina’s fraught history. Her conflicts with American hedge funds led to the global investment community freezing Argentina’s access to credit markets (Macri settled those issues). A web of corruption scandals threatens to put her in jail to this day, the Miami Herald noted.

Still, Kirchner is running for Senate in legislative elections Sunday, suggesting she intends to fight the allegations against her to the bitter end and remain a thorn in Macri’s side.

He has reason to be concerned. Argentines want jobs and prosperity. But many fear American-style capitalism will enrich the few at the expense of ordinary people.

“Macri’s reform initiative hopes to make Argentina more attractive to foreign investors,” wrote Stratfor. “But economic reform could also cause a political backlash that may put Macri’s possible re-election in 2019 at significant risk.”

Argentines are skeptical that Macri can change things. Bloomberg recently reported that bank deposits equal only 15 percent of gross domestic product. More than 40 percent of economic transactions are “informal.”

Recent polls illustrate the electorate’s ambivalence. Macri’s approval rating is at 46.5 percent, the highest since early 2016, according to Reuters. His “Let’s Change” coalition of political parties is expected to gain seats but not win a majority.

Kirchner is forecast to win her race despite the whiff of suspicion surrounding the mysterious murder of a prosecutor hours before he was to testify against her for covering up a high-profile terrorism investigation, the New York Times reported.

Argentina is changing. But it’s not clear by how many steps forward – or back.

WANT TO KNOW

CHINA

New and Improved

China’s Communist Party is reeling from infighting and scandals. But Chinese President Xi Jinping appears to be more powerful than ever – set to receive a second five-year term at the helm and expected to enshrine his authoritarian vision for revitalizing the party.

Xi opened the latest Communist Party congress on Wednesday with a marathon speech in which he said that under him Chinese socialism was entering a “new era,” the New York Times reported.

Amid widespread anger over corruption, he referred repeatedly to social tensions unleashed by economic inequality, pollution and inadequate access to health care, schools and housing.

But like many anti-corruption drives around the world, his “new era” will not be an embrace of transparency and liberal values. Rather, he will focus on imposing greater discipline within the party and suppressing dissent outside it. This week, some speculate that he may set the stage for holding on to power in some form beyond his second term, breaking the example set by his predecessor.

RUSSIA

Spoiler Alert

The daughter of Russian President Vladimir Putin’s political mentor has announced she will run against him in Russia’s presidential election next March. But analysts said her candidacy looked like a Kremlin-backed “spoiler” campaign.

With Alexei Navalny, the most prominent opposition politician, likely to be barred from the ballot, the presence of journalist and socialite Ksenia Sobchak will grant the election more legitimacy and simultaneously split the liberal vote, the Guardian reported.

In announcing her candidacy, Sobchak refrained from direct criticism of Putin, making her candidacy look a lot like the anemic one waged by oligarch Mikhail Prokhorov in 2012 – in which he won only 8 percent of the vote.

Sobchak claimed Putin “did not look happy” when she informed him of her decision recently. But in September the newspaper Vedomosti said the administration itself was considering asking her to run.

Putin is widely expected to win another six-year term easily, despite Navalny’s efforts – his rallies have drawn large crowds but also resulted in several stints in jail for organizing unsanctioned protests.

INDIA

Shifting Winds

The US secretary of state offered New Delhi yet another signal of Washington’s gradual drift toward India and away from Pakistan in a rare policy address on Wednesday, saying the Trump administration “is determined to dramatically deepen ways for the United States and India to work together.”

Contrasting the “shared values and vision” of India and the US with those of China, which he said had undermined the “international, rules-based order,” Tillerson emphasized that the US is a reliable partner, Bloomberg reported.

That’s always in question in New Delhi, where policymakers have been frustrated by Washington’s continued backing of Islamabad despite India’s contention that Pakistan’s intelligence services support terror groups that regularly stage attacks on Indian soil. Tillerson made only brief mention of Afghanistan and Pakistan, saying the US welcomes India’s assistance in Afghanistan and that Pakistan must take “decisive action” against terrorist groups.

More telling was his pitch for India to emerge as a trade partner to rival China – in part by buying more American-made military hardware.

DISCOVERIES

Filthy Rich

Switzerland is known for its banking secrecy and wealth – so much wealth, in fact, that massive amounts of gold and silver flow through the nation’s sewage system.

Last year, government researchers discovered three tons of silver and over 100 pounds of gold mixed in with runoff sludge in several water treatment plants – amounting to some $3.1 million, Reuters reported.

But don’t suit up and take to the sewers to spelunk for hidden treasures just yet.

According to the Swiss government study, the metals were only found in trace amounts, and likely originated from the nation’s watchmaking, pharmaceutical and chemical industries, all of which use the precious metals in their processes.

Based on the find, scientists with the Swiss Federal Institute of Aquatic Science and Technology are mulling over whether it’s cost effective to sift out the trace particles, as opposed to burning them, as is normally the case.

Meanwhile, it’s not the first time the Swiss were found flushing riches down the toilet: Last month, toilets at three restaurants and a bank in Geneva were clogged by $100,000 in large-denomination banknotes.

That’s taking “filthy rich” to a whole new level.

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