Global Hot Spots to Watch in 2019
FAREED ZAKARIA, CNN HOST: This is GPS, the GLOBAL PUBLIC SQUARE. Happy New Year, and welcome to all of you in the United States and around the world. I'm Fareed Zakaria coming to you live from New York. Today on the show an in-depth look at what 2019 may bring with it, for America and the world. A nuclear treaty with North Korea? A big beautiful wall on the southern border? A new Middle East crisis? I will ask Ian Bremmer, Rana Faroohar and David Miliband about that and much more. Then this week China landed a rover on the dark side of the moon. And weak Chinese sales made Apple miss its target. What can we expect from the other super power in 2019? I will talk to the man Trump calls the leading authority on China.</s>DONALD TRUMP, PRESIDENT OF THE UNITED STATES: He was saying that China has total respect for Donald Trump and for Donald Trump's very, very large brain.</s>ZAKARIA: Also, 2019 will surely bring some momentous decisions. How should House Democrats approach their investigations of the Trump presidency? How should Trump deal with China? How should countries deal with the climate crisis? How should anyone approach any decision? Well, Steven Johnson has written the book about just that. But first, here's my take. It is nearly the mid-point of Donald Trump's four-year mandate, a good time to take stock of what has been the most unusual presidency in modern times. In fact, one would probably have to go back to Andrew Jackson to find anyone who has occupied the White House with as much tumult, drama and disruption. Watching his first two years in office what is striking about Donald Trump is that much more any president I have watched or read about, he is a gambler. Unconstrained by precedent, history, norms, or official advice, Trump simply acts on his impulses and his ideas. Sometimes this can be refreshing. He's forced Washington to take a closer look at assumptions about China. He asks what exactly is being accomplished by America's military interventions in the Middle East. He's focused attention on the problems of the working class in an age of globalization and technological revolutions. But the problem is that Trump's same style, impulsive, erratic, disruptive, means he has no thoughtful policies of his own. His management style is so imperious and narcissistic that he struggles to retain talented officials. He has no background in policy nor any inclination to learn anything about it. So he simply wings it. The result is that he has many balls up in the air and no clear plan as to how to catch them. He took us to the brink of war with North Korea hoping to get Pyongyang to cave. When it didn't, he simply declared victory and moved on. He has begun a trade war with China with no clear sense of the deal he actually wants. He insults key allies for no reason in service of no strategy. And now he has shut down the government with rhetoric that leaves him little room for a face-saving compromise. So far the effects have mostly been bewilderment and a sense of unease as people try to understand where all this is leading and whether things will settle down. Well, let me tell you, they won't. Trump thrives in an atmosphere of chaos where all the attention is focused on him and nothing is ever normal or settled. As the pressure increases from the House Democrats, Robert Mueller, China, expect more impulsive, emotional decision making, not less. The greatest risk, of course, is that one of these days in one of these arenas one of those balls drops. We have experienced Donald Trump in normal times. What will it be like for America and the world to watch Donald Trump when some great international crisis hits, as it so often does? Buckle your seatbelts for 2019. And let's get started. Let's bring in my terrific guests to get their thoughts on 2019 and what the year ahead will bring. David Miliband is the president and CEO of the International Rescue Committee. He was the Foreign secretary of the United Kingdom from 2007 to 2010. Rana Faroohar is CNN's global economics analysts and a global business columnist for the "Financial Times." Ian Bremmer is the founder and president of the Eurasia Group, a political risk consulting firm that operates around the world. Rana, let me ask you, when you look at 2019 it does seem economically we are entering a more troubled period.</s>RANA FAROOHAR, CNN GLOBAL ECONOMIC ANALYST: Yes.</s>ZAKARIA: The two great engines of growth in -- over the last decades have been the United States and China.</s>FAROOHAR: Yes.</s>ZAKARIA: Both economies seem to be slowing and central banks around the world which have been providing cheap money so that people could get low-interest mortgages and loans seem to be turning off the tap.</s>FAROOHAR: I think you're right. I think that we are at a real inflection point. And if you just look historically, recovery cycles tend to go in eight to 11-year periods. We're 10 years into a recovery cycle. So if you just take it on historical data we are due for a slowdown probably this year or next year. And I think that that probably is going to be the case. How quickly it comes and how sharp it is depends on a couple of things. One, how the U.S.-China trade conflict goes. China is definitely slowing down. It was even before there was conflict with the U.S. But it's really feeling short-term pain. I think longer term pain is going to be felt by the U.S. but already you're seeing companies like Apple downgrading their results. You're going to see more companies saying look, China is slowing, our business is not as good there. That's going to hit the U.S. economy. The other question of course is interest rates. We saw the Fed hike rates, and we see Donald Trump trying to politicize the Fed which frankly is an unforced error, you know. If there's been any institution globally that's done a lot to stabilize economies in the last 10 years it's been the central bankers of the world. But they are at a difficult balancing point. Regardless of what else is happening in politics, there is a big debate right now about how much inflation we can really expect to see. The numbers are good in the U.S. We have a slowdown in China and Europe. That could affect the global picture. At the same time you have technology spreading throughout lots of different industries that may be slowing inflation. So should they hike? Should they not? That's the big question for 2019.</s>ZAKARIA: Quickly, you mentioned to me that when you talk to American chief financial officers.</s>FAROOHAR: Yes.</s>ZAKARIA: Most of them expect a recession this year.</s>FAROOHAR: Yes. More than half of CFOs at U.S. big companies expect a recession. About 80 percent of economists think we're going to see a slowdown this year or next year.</s>ZAKARIA: David Miliband, looking at the world geopolitically, what do you see?</s>DAVID MILIBAND, PRESIDENT AND CEO OF THE INTERNATIONAL RESCUE COMMITTEE: Well, I think that in 2018 we saw what it means for the global ship of state to have no anchor. And the great danger for 2019 is that we have an age of impunity. In 2018 we saw the murder of Khashoggi, but also the immiseration of the people in Yemen. We saw hospitals run by the International Rescue Committee in Syria again bombed by Russian as well Assad forces. And the idea that we're living in a world where the -- not just the institutions but the norms and values of the post-war period are no longer upheld is a very dangerous prospect. When you add it to the economic picture that Rana has produced what you see is economics and politics pulling in opposite directions and in potentially very dangerous directions.</s>ZAKARIA: David, how much of that was inevitable with the rise of China, with the resurgence of Russia? In other words, these norms were Western norms, they were American norms. Is this inevitably the world we are entering?</s>MILIBAND: No, I don't think so. A man who has -- I can't remember talked about the post-American world. Who was that?</s>MILIBAND: A man, a famous book of --</s>FAROOHAR: A brilliant man.</s>MILIBAND: A brilliant man. Ten years ago. But the post-American world doesn't need to be the Wild West. Because talk about China, the first country you mentioned. They have had enormous benefit from the global multilateral system but they are also investors in the global multilateral system. And I would argue that we are seeing in global politics the old adage that nature abhors a vacuum. And when you create a vacuum all sorts of actors can move in and it's easier for maligned actors to move in than for benign actors. And the great danger, let's be honest, the pivot to Asia that President Obama announced 10 years ago, it was based on a reality of shifting economic power. The great danger is that the Chinese leadership calculate that far from investigating in the global multilateral system they are better off either building their own or just opting out of it. And that is the political challenge. The Russians is obviously a different case. They are exploiting weakness and there is no sanction. And when there is no sanction that's how you end up with the bombing of hospitals or the killing of journalists. An age of impunity is one in which global rules are not enforced.</s>ZAKARIA: Ian Bremmer, for the last two years, what we have watched is a rising populist tide almost everywhere. But there are many people who think, well, you know, this is also going to run its course, these guys have no answers. What do you see when you look around the globe at populism?</s>IAN BREMMER, FOUNDER AND PRESIDENT, EURASIA GROUP: Well, there are two thing aren't running their course. One, as David just said, there were eyes of China with a different set of norms and values and new architecture that competes with the U.S. And second, that the developed economy, that the democracies actually don't have the leaders, those leaders don't have the legitimacy. The institutions themselves are eroding. That's what the populism is all about. And for those that had hoped that people like Macron in France represented a shift in tide in populist support. His approval ratings are 23 percent right now. You know, I mean, let's face it. That's not where Trump is today. Merkel, Angela Merkel isn't going anywhere any time soon but she's had to abdicate the chairmanship of her party. And so she's already essentially a much weaker leader in 2019 than she was in 2018. If you look around the world, even Canada, where Doug Ford is the premier today, I mean, it's a softer form of populism in the United States but that's the-second most powerful position in the country. Trudeau himself is weaker. It's only Japan that's the exception. And they are an exemption because they haven't had the immigration. It's very homogenous. Their population is shrinking. So per capita even though the economy is not growing they're feeling a little better. And the military is constitutionally not allowed to actually participate in wars around the world. Add to that the lowest adult social media participation rate in all of these countries and suddenly you say this isn't a model that we could even try to adapt to in the United States. Well, 2019 is going to see a lot more populism unfortunately for those that hope that the center is going to hold than 2018 experienced.</s>ZAKARIA: And David, when they look around the world at the United States, I mean you've had to do this when you were Foreign minister of Britain. What do they -- you know, if you were advising a foreign government on how to deal with Donald Trump, what would you say?</s>MILIBAND: Well, you'd say three things, obviously. One, this is an unpredictable super power. We've never had experience with an unpredictable super power. It's precisely been predictability that has given it power in the past. Secondly, transactions matter far more than values. It's absolutely evident that the administration has no preference for dealing with liberal democratic nations over autocratic nations. Thirdly, and I think what's interesting is that in the end President Trump wants the deal. And he often advertises that he wants the deal more than anything else. We'll see this tested in the shutdown which obviously in some way a domestic question. But if you think about the Chinese trade, quote-unquote, war, you think about the North Korea example, in the end he doesn't want to go over the edge. And I think people are figuring that out.</s>ZAKARIA: All right. When we come back President Trump said this morning as he departed for Camp David that if anybody else but him were president we would be at war with North Korea. Not quite sure why. But so will Trump get a deal with Kim in 2019. I'll ask the panel. And of course I will ask David Miliband about Brexit when we come back.