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Crypto Country, Mexico Elections, the United States of Europe, Nigeria and the Week in Review

Blog / Weekly Review

Crypto Country, Mexico Elections, the United States of Europe, Nigeria and the Week in Review

Happy Friday. If you haven’t checked out LatamPolitik, our thrice-a-week newsletter on Latin America geopolitics, click here and sign up for a free trial. If you haven’t listened to our latest podcast with Russian analyst Andrey Sushentsov, click here to listen or read the transcript. If you need help managing geopolitical risks in your business or with your investments, e-mail us at info@perchperspectives.com. Catch you on the flip side!

Crypto-country. El Salvador’s President, Nayib Bukele, sent his “Bitcoin Law” to El Salvador’s Congress, proposing to make bitcoin legal tender in the country and requiring “every economic agent to accept bitcoin as payment when offered.” The bill passed easily (62-22).

What it means: El Salvador has been a U.S.-dollar economy since 2001. Bukele, who the Biden administration views as an authoritarian-in-the-making, tried to cozy up to Biden early in his presidency only to be spurned by Washington. So it makes some sense that he’d look for an alternative to the U.S. dollar in his own country. What’s remarkable is he didn’t seek out China, Russia, the EU, or anyone else for that matter – but a cryptocurrency, and a particularly limited one in bitcoin. There’s also already plenty of FOMO from other countries in the region, with Paraguay and Panama now reportedly considering similar moves.

Mexico’s next phase. Mexico held legislative elections and while President AMLO’s Morena party did well, winning roughly 35 percent of the vote according to preliminary figures from the National Electoral Institute and in line for a clear plurality in Mexico’s Chamber of Deputies, it fell short of an outright majority. Meanwhile, AMLO met with U.S. Vice President Kamala Harris and came away from the meeting declaring that Harris was an “extraordinary woman” and that U.S.-Mexico relations were now in “a completely new phase.”

What it means: Mexico’s election results are a stark reminder of just how divided Mexico is internally – and how AMLO remains the overwhelming choice of Mexico’s poor and rural populations. In the words of Jorge Zepeda Patterson, Mexico seems to behave like two countries these days – and AMLO can only lay claim to being president of one of these Mexicos. The AMLO-Harris meeting went about as well as it possibly could have – but despite the pleasantries, the interests of both sides aren’t pointed in the same direction.

The United States of Europe? German Foreign Minister Heiko Maas made an extremely important speech on Monday. Maas proposed eliminating the requirement that major EU policy decisions on issues like taxation and foreign policy be made unanimously. In Maas’s own stark words: “I therefore say it only, the veto must disappear.” Maas said the goal of the current German government and whichever German government replaces it in the next federal election later this year must pursue a more sovereign Europe.

What it means: Germany is growing tired of smaller EU-member states blocking EU initiatives (here’s looking at you, Hungary!). One of our key predictions of the decade ahead is the emergence of a stronger, more coherent European Union – and the only way that happens is if Germany decides to take a more active role in shaping EU policy – i.e., if Germany follows through on exactly the sort of prescriptions Maas offered this week.

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Don’t forget about Nigeria. Twitter deleted a tweet by Nigerian President Muhammadu Buhari that threatened secessionist groups in the southeast portion of the country. Buhari responded by banning Twitter throughout the country. Nigeria’s Attorney General threatened to prosecute anyone still using the platform.

What it means: Between an ongoing Islamist insurgency in the north, last October’s widespread protests against police brutality, and now a clear effort by Buhari to crack down on dissent, the short-term future of Africa’s most populous nation looks unstable and potentially violent. As far as we can tell, no one is paying attention to what’s happening in Nigeria these days, but we are and think it is woefully underrepresented in global media and in strategic decision-making about sub-Saharan Africa in general.

Honorable mention

A herd of wandering elephants is making its way across China.

Farmers are abandoning crops, Nevada is banning the watering of about one-third of the lawn in the Las Vegas area, and the governor of Utah is literally asking people to pray for rain. #2021

Vaccines do not cause forks to stick to your head. You can trust us on this one.

The U.S. Senate passed The U.S. Innovation and Competition Act, which will provide over $50 billion in funding over the next five years to support domestic semiconductor production and 5G innovation.

Turkey started limiting the exports of raw materials involved in manufacturing furniture due to domestic shortages.

Peru held the second round of its presidential elections. 99 percent of the vote has been counted and self-professed Marxist Pedro Castillo is clinging to a roughly 72,000-vote lead over rival Keiko Fujimori.

Nicaraguan police arrested a number of major political opposition figures including Cristiana Chamorro, vice president of the famous opposition paper La Prensa and daughter of former President Violeta Chamorro.

China’s Central Commission for Discipline Inspection (CCDI) is investigating Hu Xiaogang, vice-president of China Great Wall Asset Management, for “severe” violations and financial misconduct during his time as vice-president of China Orient Asset Management.