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Digital Protectionism, Preparing for the Worst, It’s Cold Outside, Argentina Diversifies and the Week in Review

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Digital Protectionism, Preparing for the Worst, It’s Cold Outside, Argentina Diversifies and the Week in Review

Happy Friday friends. Before you get to the Week in Review, we want to remind you to take a listen to the latest episode of the Perch Pod, where Tony Rinna joined Jacob Shapiro to talk all things South Korea.  Also, we know we are being pushy but we still would be happy [adj. “showing or feeling pleasure or contentment”] if you could rate us on Apple’s podcast platform when you get a chance.  Next up on the Perch Pod, Jacob, and Xander Snyder, our VP of Analysis will celebrate our 20th show, as well as the end (finally) of 2020 for a review of the year and a preview of what we consider major geopolitical events to look out for in 2021. Keep your eyes peeled on the 28th of December.  And now, masks on, and on with the WiR.

Digital protectionism. The European Commission proposed two far-reaching digital reforms that promise to increase European scrutiny and control over online platforms and to ensure that digital “gatekeepers” do not stifle a more competitive online business environment.

What it means: The European Commission is essentially laying out a blueprint for a distinctively “European” digital future – infused with “European” values and governed by “European” laws. This is as much about protecting European privacy and data as about creating the opportunity for a truly European tech giant to emerge. As technology and geopolitics square off, the creation of self-sufficient tech ecosystems even in allied political blocs is becoming as big an issue as physical supply chains.

Preparing for the worst. Russian Prime Minister Mikhail Mishustin signed a number of orders into law, including a grain export quota of 17.5 million tonnes for shipments of wheat, rye, barley, and maize from Feb. 15-June 30, and an additional wheat export tax of 25 euros per tonne during the same time period.

What it means: If you’ve been reading along with us for a while, you know the potential for rising food prices due to regional droughts and COVID-19 supply chain disruptions has been one of our chief concerns for the year ahead. Russia moving to install a grain export quota comes as a severe drought in South America is raising concerns over crop yields and the UN’s Food and Agriculture Organization’s Food Price Index saw its largest month-on-month rise since July 2012 and its highest overall level since December 2014.

It’s cold outside. Natural gas and coal shortages due to the arrival of earlier than expected colder temperatures are leading to frustration in Uzbekistan and cut-offs for small and medium-sized enterprises.

What it means: We are less concerned about the shortages themselves and more concerned about reports that Uzbek authorities have sought to restrict journalists from reporting on the current situation. Uzbekistan is one of the last true frontier economies in the world and it has taken considerable steps toward political and economic liberalization in recent years, but it still has a long way to go.

Argentina diversifies. Argentina signed a ~4 billion agreement with China to strengthen the country’s rail infrastructure; Argentina also signed a deal with Russia for 10 million doses of the Sputnik V COVID-19 vaccine.

What it means: Take note, newly chosen Transportation Secretary Pete Buttigieg! The U.S. is woefully behind large swathes of the developed world when it comes to high-speed rail. Argentina diversifying its geopolitical relationships will no doubt concern the U.S., which is waking up to the fact that its position in Latin America based is not as secure as it would like to think. In the meantime, maybe China could front some money to help the U.S. build a Belt and Road connecting major Texas cities with each other? Or from the most important port in the nation (New Orleans) to other major southern cities? We kid. (Mostly.)

Honorable mention

It sure is a strange world when you find yourself agreeing with Tom Cruise on the importance of wearing masks and social distancing.

Russia’s State Duma approved a law that would allow the government to fine public officials who insult Russian citizens.

Iran and Turkey resolved a diplomatic spat over Turkish President Recep Tayyip Erdoğan reading a poem.

Mexico’s congress passed a new national security law. If you missed our take on this last week, click here to read it.

Cuba announced it will unify its monetary system on Jan. 1.

The Biden administration is hinting it will seek closer ties with Cuba. Dirty Dancing: Havana Nights here we come.

A Chinese market regulator fined Alibaba and Tencent 500,000 yuan (~$76,000) for not seeking approval before proceeding with acquisitions.

Controversial Indonesian cleric Rizieq Shihab turned himself in to police after a clash between his supporters and Indonesian police.

India’s Supreme Court may form a committee comprising members of farmers unions across India and the Indian government to resolve the impasse between them.

END