SAC Takes Control, New Italian PM, Mercosur Gets Flexible and the Week in Review

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SAC Takes Control, New Italian PM, Mercosur Gets Flexible and the Week in Review

Happy Friday, Perch-folk. As always, be sure to check out our podcast. A Scottish-themed episode drops Monday and it’s not to be missed. If you missed our post on the African Continental Free Trade Agreement (AfCFTA) earlier this week, it’s worth a read. We think it’s great and we are definitely not biased. Wear your masks and catch you on the flip side.

The “SAC” takes control. The Myanmar military seized power in a coup d’état, declaring a state of emergency and turning over power to an 11-member “State Administrative Council.”

What it means: Myanmar is a critical component of China’s plan to secure over-land access to the Indian Ocean, thereby bypassing the strategic chokepoints it fears could be used against it in the case of any military conflict. That’s why China simply referred to the coup as a “cabinet reshuffle.” The U.S. called it like it was – something it wasn’t willing to do during the 2013 Egyptian coup d’état for fear of upsetting its relationship with a key Middle Eastern ally. That tells you most of what you need to know – China will do what it must to keep the relationship with Myanmar stable, and the U.S. will struggle to balance its concern over human rights and political freedoms with the cold geopolitical reality of great power competition over Myanmar’s critical position in the Indo-Pacific.

If you missed the incredible video of the woman doing her aerobics routine as the coup literally happened behind her, it’s worth a watch. And if you’re like us and thought the sound she was listening to was an absolute banger, here is the full recording. You’re welcome.

A new Italian Prime Minister? Former European Central Bank chief Mario Draghi was tasked by Italian President Sergio Mattarella to form a new government.

What it means: In the last Eurobarometer poll, Italy was the EU member-state with the least amount of trust in the European Union. Just 28 percent of respondents said they trusted the European Union, and just 32 percent said they trusted the European Central Bank, which Mario Draghi served as president of during the height of the EU sovereign debt crisis. Aside from Greece, Italy has by far more debt than any other European country, at a whopping 149 percent of GDP (Greece’s is 187 percent and Germany’s is 67 percent, to put that in some perspective). Draghi has proven himself an able politician, and he will need every bit of his skill and grit to deal with the COVID-19 pandemic and the structural economic issues that have plagued Italy. The stakes couldn’t be higher. Salvini is waiting in the wings.

Mercosur gets flexible. Uruguayan President Luis Lacalle Pou traveled to Brazil and met with Brazilian President Jair Bolsonaro. The two leaders discussed “the possibility of making Mercosur’s business with other nations more flexible.”

What it means: Mercosur was the subject of one of our very first Perch newsletters. Brazil will reportedly be hosting a meeting of Mercosur leaders in March and they will talk about being more “flexible.” The long-term trends at play here are the reversal of political and economic integration among South American economies and the increased economic engagement with non-South American countries. Both trends have ramifications for Latin American countries at the regional level and for their global position.

Honorable mention

According to a scientific study, cheese “was shown to be the most protective food against age-related cognitive problems, even late into life by far.” Red wine reportedly helps too. Cheers!

The Food and Agriculture Organization at the United Nations (FAO) published its monthly update to the Food Price Index. Overall food prices were up 4.3 percent month-on-month, the eighth consecutive month of rising prices and the highest monthly average since July 2014

New Caledonia’s government collapsed.

Cambodia and South Korea reached an agreement in principle on a free trade agreement to be signed in mid-2021.

Mexico’s Supreme Court ruled against President Andres Manuel Lopez Obrador’s (AMLO) modification of the Electricity Industry Law.

Russian opposition figure Alexei Navalny was sentenced to 2 years and 8 months in a penal colony.

A U.S. official told the German newspaper Handelsblatt that the U.S. is ready to negotiate a resolution to the disagreement over the Nord Stream 2 pipeline.

Brazilian Attorney General Augusto Aras declined to extend Operation Lava Jato.

The U.S. withdrew its support from the Saudi-led intervention in Yemen’s civil war and will spearhead a diplomatic effort to bring the conflict to an end.