This is gps the Global Public square. Welcome to all of you around the United States and Around The World. Im Fareed Zakaria coming to you from new york city. Here is my take. The world that probably bests describes the Biden Administrations efforts and Public Policy is ambitious. Most of its initiatives from Infrastructure Funding to support for green transformation to aiding ukraine are big and bold. Now the white house is trying to put together another major effort that if successful will be a game changer. The saudiisraeli normization. There are many complications that could derail the negotiations but if a deal comes together, The Middle EastStrongest Military and most technically advanced power, israel, will be allied to the regions strongest economic power, saudi arabia, which is still the Swing Suppliers of the worlds oil. All under an American Security architecture. That would be a major win for washington. For over a decade now, the u. S. Has been searching for a role in The Middle East that is not the old quasiimperial one and yet secures american interests in this crucial region allowing washington to focus on the larger challenges posed by russia and china. By organizing a softer alliance between israel and saudi arabia, biden could rely on these two countries to anchor the region economically and militarily. There is a price and it is substantial. Saudi arabia wants an American Security guarantee and American Technology to build a Nuclear Energy industry. That includes the domestic enrichment of uranium which the u. S. Has never facilitated in another country. Of course, many countries with home grown Nuclear Industries enrich theiren uranium, from india to france. My understanding based on sources in the u. S. Government is that the two sides are close to agreement on the Nuclear Issue which will likely involve an american controlled Enrichment Facility in saudi arabia. The Security Umbrella is reportedly not going to contain a version of natos article 5 guarantee but rather a softer commitment to respond and take action if saudi arabia is attacked. This will require careful language to ensure that the clauses not invoked if the saudis precipitate a crisis as they have in recent years. It would include some assurances that they could accommodate u. S. Interests on the price of oil, and exclude China Military from its territory and assuming these issues could be overcome, washington should open up its Security Umbrella to saudi arabia. The truth is that ever since the Carter Doctrine of 1980, which declared that the persian gulf was an area of vital interest to the United States, washington has recognized that intervention in the gulf by a hostile power would threaten the Economic Life blood of the industrial world. And when such an attack took place against kuwait in 1990, directly threatening saudi arabia, the u. S. Did, in fact, come to the rescue of riyadh. The largest challenge is with israel. This deal would be concluded with the most extreme rightwing government in israels history. One that is trying to alter the constitutional makeup of the country and moving to make a Palestinian State an impossibility. But saudi arabia and the u. S. Have a lot of leverage. Israel needs this deal more than they do. And in particular, israels Prime MinisterBenjamin Netanyahu who faces protests and orn going trial and a restless coalition of extremists. If washington and riyadh work together, they might be able to pull off a new u. S. Saudiisrael alliance that could make greater progress on palestinian rights that has taken place in decades. Both riyadh and washington should make clear to netanyahu that he has to take hard steps to keep open the path for a twostate solution. That means a freeze on the expansion of jewish settlements in the west bank, and an end to the legalization of illegal outposts and the opening up of areas currently under israeli control to allow the palestinians to command their towns into the west bank. This would enrage netanyahus most Coalition Partners who want to an ex all of the west bank. Biden should present bb with a strategic Grand Bargain that includes action on the palestinian issue. Let bibi figure out to manage his coalition or how to break it and form a new one. What biden is proposing is gooder to the United States, saudi arabia and israel. Extremists in netanyahus government should not be allowed to veto it. Bibi, is banking that the saudi arabia doesnt give a damn about the palestinians will and sell them out but he may be mistaken that the crown prince Mohammad Bin Salman has opened up the country and implemented Major Economic and social reforms. He might not want to anger them by abandoning the palestinians as well. And if he insists it is possible that biden will back him up, and some Democratic Senators will probably make it clear to bibi that the price of Senate Ratification is a Real Movement on the twostate solution. In that Case Netanyahu will have to decide what he wants more. A truly historic advance in israels security, or keeping afloat his rickety controversial extremist coalition. Go go to cnn. Com fareed for a link to my Washington Post column this week. With fewer than three hours to go before the federal sh shutdown, the Senate Passed legislation late last night to keep it funded for only another 45 days. As ive said before, the u. S. Is the only nation where legislators approve spending and then have to approve paying for that spending when the bills come due. It is nonsense and it points to americas fiscal irresponsible. Which is what i want to talk to Catherine Rampell from the Washington Post, a commentator here at cnn and brilliant. So, one thing i want to start with is why are the maga republicans, you know, dying on this sword . Which is Spending Cuts. I thought that was the tea party republicans, the paul ryan wing of the republican party. Trump came in saying i dont want to cut medicare or cut spending. I want to increase spending which he did. So what is going on. I think it is performative. Theyre not really interested in cutting spending. This performative desire to get fiscal deficits under control is really at odds with the policies on the table. They have ruled out Spending Cuts to all of the places where spending is actually a major problem, long island trajectories of that spending any way. Im talking about entitlement, social security, medicare and other parts of annual discretionary budget defense. Theyre not super interested in touching those either. So when you rule out all of the mage year categories of spending and as well as spending increasing, you end up fighting over a very, very tiny share of the budget, each category of which would be very unpopular to cut. So, yeah, i dont think they mean it. So 45 days from now were back to the same. Because theyre not actually proposing anything real . No. I mean they have put on the table some pretty dramatic cuts to specific programs like, for example, rental assistance, or food assistance. But none of that is going to get through. That is 0. 1 of the budget. Yes. Again, the discretionary portion of the budget, the share that they fund every year as opposed to being on auto pilot is less than a third of total spending. So if you rule out all of the obvious places to cut, and then you also rule out within that annual discretionary budget things like border patrol, or law enforcement, you end up having to propose very deep cuts to a few programs which would devastate those programs and make virtually no difference to our longterm debt trajectory. How do we get here . Because were running deficits now that are in the 8 to 10 range. How do we get here . I think if there is any bipartisan agreement within washington, it is that we should not cut entitlements and we should not raise revenues on at least 98 of the population. So that is a recipe in and of itself for having larger deficits. But then on top of that, you have, as you menged, trump was into increasing spending despite being a tight fisted businessman and he would bring budgets under control. If you look at not only the tax cuts, which have gotten a lot of Attention Nrp Under Trump which cost around 2 trillion, if you look at how much he added in new spending before covid, it was like 3 trillion. And then additional spending of course after covid hit. Which was about 5. And budget added more in response to covid. Some of the spending programs were not about the pandemic, of course. And then you have on top of that, a number of very expensive industrial policies that have been put in place, which you could debate on the merits, but you cant debate the fact that for the most part they do cost quite a bit of money. All of those things add up. So we already had, in the backlog, these unsustainable deficits coming and then we made them worse because Neither Party has put forward any realistic approach to undoing those problems and in fact, their exacerbating them and adding spending and biden has committed to extending the majority of the trump tax cuts at this point. So it feels like what you began by saying is that the core of the issue, which is ever since Ronald Reagan comes in and he decides hes going to do these big tax cuts and increase Defense Spending, what i think became clear is the American People are very comfortable with republicans on taxes and democrats on spending. In other words, they like republican levels of taxes and democratic levels of spending but there is a huge gap, that means you have a huge amount of and you make that up by borrowing. Yes. Absolutely. And for a while, Interest Rates were very low. So it was relatively costless for us to continue borrowing. Today the tenyear treasury is at 4. 5 , over 4. 5 . That starts to get more painful in the years ahead, because the amount of money that well be forced to spend on just servicing the debt alone will increasingly crowd out other kinds of priorities. To be clear, there are categories of spending that i think we should be devoting more resources to. Things that will pay off. You know, making tsure there is no lead in the pipes so kids could grow up to be productive healthy workers and universal prek. All of those kinds of priorities are getting crowded out by the fact that we have shown so much cowardice in making tough choices about the things that are on auto pilot as well as the other kinds of policy measures that seem popular. But that were not funding. Even if their popular, we need to find a way to pay for them. As you say, we were able to do all of this because Interest Rates were low. But now the tenyear treasury is at 4. 5 . There were debts like every industrialized country, around 3 . Were now running 8 of gdp. At solve problems point does this is this unsustainable . Well that expression, if something cant go on forever it wont. That is sort of where we are. Were not facing a crisis today, obviously. Markets do seem to be responding to some extent to these longterm fiscal challenges in the United States, at least that is one way to interpret where the longterm Treasury Rates have gone up but so far the world is continuing to lend to us. They shrugged off, other investors and governments Around The World have shrugged off challenges that we face. But as we continue to see more political dysfunction, including in this shutdown threat, including in the threat to, in fact, needlessly default on our debt when we could have paid it off, i wonder how sustainable that will be. And again, it will tart to become more painful to run the deficits when the world seems a little less willing to lend to us essentially for free. Catherine, always a pleasure. Thank you so much. Next on gps, one the ways Kevin Mccarthy avoided a Government Shutdown was keeping ukraine funding out of the legislation. Well talk about the wests Aparn Waning Interest in ukraine when we come back. 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There was an interesting thing that came across in your interview which i thought, was zelensky saying i hear all of the western leaders telling me theyre with me but i look in their eyes and i wonder. That is right. He said exactly that and he said, before he said that, he said i have good intuition. And my intuition has served me well and then he made this point. And it was quite a powerful point because i think he really does realize that the support that was there is in certain quarters not as strong as he was and he came to washington after you and i saw him and i felt that very strongly. It was a different reception than the one that he had last time he was in washington. Im not sure how dangerous it is right now, im particularly worried about the u. S. I think in the u. S. , going into an election year, you know, it is going to be difficult to sustain support. In europe, there are countries which are tiring, if we have a tough winter with High Energy Prices but in europe there is much more recognition of the stakes of this. And they are existential stakes that are for ukraine and for europe. And the challenge and i know we spoke about this while we were in ukraine, i came away from a week there and i saw him and i saw his wife and a bunch of people and most the people in the key government and the real realization is this whatter is not going to be over any time soon. It is a war of attrition, the front has barely moved so the focus needs to shift to how to ensure that ukraine can, as a country, as an economy survive and thrive while it is still at war in the Eastern Front and that means much more focus On Air Defense and much more focus on ukrainian capability. So the fact that their building up their Drone Capability is really important and it means a different kind of approach to assistance to ukraine and that is the question whether the west could do that. So, richard, and you charlie put out an interesting essay in Foreign Affairs trying to begin the process of thinking about a negotiation and i talked to people when i was in ukraine about this and what their response was and particularly this was private, publicly, it is fighting to get everything back. A couple of people said to me, look, the problem is Richard Haasss proposal is premature because we cannot, to zannys point, we cannot function as a nation as an independent economy without being able to have odessa, without being able to export our grain out of odesa and right now because of the way that the russians control the sea of azov, the black sea, we at least have to get back enough space in the south that we could control that. But that strikes me,s that going to be hard. It is going to be hard. And the ukrainians have made life for difficulty by the hyping of the counteroffensive. It raised expectations that it hasnt quite delivered. That is nature of warfare, a letdown. But they have a bigger problem. In Foreign Policy, you always run into difficulty when there is a gap between your ends and your means and i would say it is increasingly apparent between the ends. We need economic reparations and war crimes accountability and what their military means are. At solve pme point theyre goin have to recon with that gap and decide what me do. Do they change the ends or the means. Were going to get to that point. Yes, maybe we were premature, but this process has to begin. There has i think it has begun privately in ukraine and at solve problems point it is going to have to begin between the United States and ukraine because it is going to be unsustainable to maximize the ends if people come to the conclusion, however desirable, it is not feasible. Could i weigh in on that. To the great Richard Haass, i think youre right that in the end the territorial ambitions going back to the pre1991 borders are unlikely to say that right now. Even the 2014 are hard to but where i disagree is the notion that there is any realistic hope of negotiating with putin. One, Vladimir Putin clearly thinks he could outlast the west, that the west is tiring. Hes waiting for 24 and hoping that trump will win and even if you did some dieseleal, he with deal with it and anything on a negotiation let me take issue with the great zanny. I didnt say putin is ready to negotiate. Indeed he is not. He wants to wait us out and see what happens in 24. There is an argument for putting a proposal on the table not because putin will jump at it, but to shape the west. If we could put they could put something on the table, the russians balk at it anden this it is easier for the president and for others to say, hey, we put something on the table and by the way, you dont have to compromise your longterm goeal. And they have a peace plan but it is everything we want everything, 1991 borders. It is always good to have proposals for peace plan. So im not against that. But what is really important is to change the mindset particularly in this country where if there is a view this war needs to be over and then were going to start rebuilding ukraine. This is an extended conflict or an extended frozen conflict so the right way to think about it, this is much more like israel. How do we ensure this country thrives with an aggressive belligerent aggressor on the border. With involved longterm help and nato and eu and that is all part of the deal. We have to stop. When we come back, well talk about something very interesting and very tragic that has happened in the news. The disappearance of the flight of three quarters of the armenians and why did it happen and what happened, when we come back. And we are back here on gps with The Economists Zanny Minton Beddoes and Richard Haass. Richard, what happened, for those who dont understand, nagornokarabakh was an enclave and i think no other country in the world had recognized it but it had been protected and now azerbaijan is running it over. It is a huge human tragedy. What is the geopolitical angle here. It is disappearing and it is a human tragedy. Geopolitically, i think the most interesting part of this is about russia. For 30 years this special situation has been maintained and russia allowed it or in some ways enabled it to be maintained. Russian peace keepers. 100 and theyve stopped. And theyve pulled back and watch this all unfold, the tragedy of it. I dont think it is that cynical. I dont think they wanted this. My guess is, fareed, and you and zanny may disagree with me, they have a lot on their plate right now in ukraine and elsewhere and the plate is small. We think of russia as a great power. It is less than that. It has capabilities, yes, but it is thought a great power. It cant multitask in certain ways. So i think this is one what the french we call a this is one of the consequences of combat and it is just going to be miserable for these innocent people. I totally agree. You could see one side of that russia increasing Defense Spending by 70 . That means theyre running out of everything, too. Absolutely. For me, the striking thing is the length of time this has been going on, the nagorno war began 30 years ago and that was the big conflict. The beginning of my career. Now 30 years on it is over in a matter of hours, practically. I think this is a function of russian weakness and it is a sense that so focussed russia has to be on ukraine, it is both unable to focus on others, and others around the rest of the Russian Federation are taking advantage of that. And so i think this is, to me, a sign of russian weakness, not russian strength and to your point, the russians are mobilizing, shifting huge, huge share of their economy on to a war footing. Now that is not so great for ukraine because although obviously the Western Partern of ukraine that have a much bigger gdp than russia, were not going to shift that much to increase Defense Spending that much. But russia is that is why i think it is going to go on for years and years because russia is mobilized for a war economy. Russias economy is 15 times the size of ukraines. There is so much to talk about. One thing that struck me about in the United States, Dianne Feinstein dying before she retired. And shes unfortunately not the only person in the u. S. Senate these days who you wonder whether they will die before they retire. What is it about American Politics that is attracting a kind of geriatric obs, we have two likely candidates to the presidency. One will be pushing 80 and one in his early 80s by time of theection the election. On one hand, we are an aging society and maybe our politics reflect it. Clearly incumbency gives great advantaged. Most dont want to give it up. Most of the society is much younger and doesnt identify with these people. You see it on issues like technology. They have a real difficulty understanding it. And these are also demanding jobs. I was in government when i was a lot younger. The idea of working those kind of days, seven days a week now, that to me is a somewhat troubling prospect. You have a very young Prime Minister in britain. We do. We have a young Prime Minister and this is one area where most of the rest of the world looks at the u. S. And rolls their eyes. We cannot understand that in a country with, what 300 million plus people, there is a same group of crates that are running and sticking it and im not surprised that younger americans are completely disillusioned by this. And this weeks cover of The Economist is living to 120. So if theyre going to stick with these people. Theyre only 80. The other thing that ive been tracking is china. It feels like the chinese government, everybody is waiting and maybe i should start with you on this, zanny, everybody is waiting for chinas plan to get out of its economic troubles. Theyve had economic troubles in the past and people forget but they have many bubbles and real estate. But they always had this technocratic government that figured a way out of it. Right now, it seems more frozen than i would have expected. Youre right. They seem to be flailing in a way that we never thought china would. Remember in the Great Recession of 2008, 2009, chinese supported the world economy. Whereas this time i think it was probably a year ago we were having this conversation and the expectation was the u. S. Would have a hard landing and that china once it lifted the covid restrictions, teconomy would coe roaring back. The u. S. Looks strong and at the moment and the chinese economy hasnt. I think it is a function of several things. Firstly, they really do have a big debt problem. They have a serious property bust in a big so they cant spend their way out of this. They could do a huge stimulus. They could boost consumption. But then you goodet into what seems to be Ideology Concerns of xi jinping that he doesnt want to give Welfare Payments so theyre reluctant to do that. And hes massively killed off Animal Spirits by locking up senior entrepreneurial leaders by hitting the tech sector very hard. And then the fight with the u. S. , the economic constraints, the Export Controls are making a difference to china. So you add that up, in the shortterm the economy is good trouble and i think a lot of confidence is profound. For the first time when i talk to chinese, whether it is corporate types or anyone in the last few months from china has been so down beat about the prospects for the economy there. So what does a china with this kind of economic profile translate into in Foreign Policy. I think you see reestablishment of a more normal diplomatic relationship with the United States particularly in the economic realm. I think that is what they are most interested in. Does a chinese leadership that cant get its legitimacy and public support out of delivering High Economic returns which theyve done for decades, do they reform economicallyine though it may mean giving up political control or look to Foreign Policy as providing ballast for them and if the economy continues to encounter head winds, at solve problems point as he ends his third term or beginning a fourth, does xi jinping look to taiwan and say that is going to be the legacy and the source my legitimacy because the economy cant provide it for me. Well have to have both of you back to talk about that because it is a huge, huge subject. Thank you Zanny Minton Beddoes and Richard Haass. Next on gps, are we reaching a Tipping Point on the world of fossil fuels. Ill discuss that with the head of the International Agency who says yes. Oil prices have risen again in recent months. Surging past 90 a barrel. That is partly due to recent supply cuts from countries like russia and saudi arabia. It is also because despite all of the money and effort being put into the clean energy transition, Global Oil Consumption is expected to hit record levels this year. But according to new research from the International Energy agency, oil demand will peak by 2030. Which means in just a few years Oil Consumption will finally start declining. Will that come fast enough to avert catastrophic Climate Change and what did woe need to do to decash orbonize faster, wi speak to fatih birol. Pleasure to have you have on. Thank you very much. So you have a unique kind of global porch from which to look at energy. Give us the big pike. What is happening over the next decade or two . I see it take a Clean Energy Economy is emerging. Emerging fast and faster than many people realize. Just let me give you an example. This year, of all of the new power plants built in the world, installed in the world, more than 80 is mainly solar and wind and others but it is dominating the game and painly because they are becoming cheaper. When we get to the transportation sector, cars and trucks and others, also we see a major electricification. One of 25 cars world in the world was electric and this year one out of five cars sold is electric. This is growing exponentially. China and u. S. And other parts of the world. So these are changing the picture of energy mix and in that context, we may expect that the oil and coal use globally could peak before the end of this decade. So, that last part of what you said has gotten you into some controversy. You have said first coal, then ole and natural gas will all peak. Saudi arabia government has attacked you for saying this. Others have at opec has attacked. You stand by what you say which is fossil fuels are going to peak 2030 . You are right. Some oil producers, they have a different view which i respect. Were looking at the data and this is a result. It doesnt mean that as of 2030 we dont use any more oil or gas or whatever. We will use them. But we will need them less. And if we want to reach our climate targets, we should even use much less than what we have today. Even at the peak, the use of oil, gas and coal, the Temperature Increase will still be in line with 2. 4 degrees celsius, which is significantly higher than what scientists tell us that it should be 1. 5 degrees celsius. There is a big difference between 1. 5 and 2. 4 degrees celsius. Which it means a lot of extreme weather events as weve seen this summer, more and more of that for the several years to come. What do you think of what President Biden and the congress have done . The Inflation Reduction Act which has a huge number of green subsidies. In my view, this part of 2015 agreement, this is a single most important climate action. It is going to give a big push for clean energies, it is extremely important for the United States and for the rest of the world. It seems most important transition that could take place with technology that we already have is to move from coal to natural gas. If it is half of the co2 of coal. Is there a plan . Is that likely to happen. It will reduce emissions significantly but it will not bring us to 1. 5 degrees celsius. What is the best, is from coal to renewable energies. Solar. Wind, hydropower. Dont you need base load capacity, you need a backup because the sun doesnt always shine. You are completely right. If there is no sun, you might be in trouble if you did not have Nuclear Power or hydropower or batteries in that case and many countries are building this bedrock and chinese one of them, building Nuclear Power one after another, hydropower but also a lot of coal. They do a lot of coal and it is one of issues that china has to deal with. In fact, on one hand, china is the champion of Clean Energy InvestmentAround The World today but on the other hand they are building coal plants but i believe it will be short lived. We will see even in china coal use will decline very soon. What are you seeing on nuclear . I know that the Biden Administration has finally made it easier, but it still takes a long time, very expensive, can we see a real Nuclear Revival . Nuclear is coming back. The invasion of ukraine by russia reminded many governments Around The World that the electric security is very important. There for generating at home is and the Nuclear Power, this invasion gave a boost to Nuclear Power across the world. We have to leave it at that, fatih birol, thank you very much. Thank you very much. Next on gps, canada said the Indian Government may have killed a canadian citizen on canadian soil. How is this story Playing Out In India . Ill give you a hint. Not in the way you think. 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They are ainvestigating a credible allegation linking acts of the Indian Government to murder of a canadian citizen on canadian soil. 45yearold har Deep Singh Nijjar was head of a british temple who was gunned down by oun identified assailants in the temples parking lot in june. Perhaps trudeau thought by publicly raising the allegations he might shame the indab government to cooperate with canadas investigation. In the west, the news that india may have ordered a hit on canadian soil is shocking. And such an act could only hurt indias ambitions in the foreign stage. Antony blinken has asked india to cooperate in the canada investigation, editorials and outlets like the Financial Times and The Economist call for consequences should the allegations be proven. But in india, the reaction is very different. And reveals that, in fact, just intrudo failed. And in which Television Anchors cast canada as not the stable democracy you or i may know, but as a Rogue State Bent on protecting terrorists. Justin trudeau, the open terror back with sympathies for terrorists. Hes at the point of no return. One commentator on Indian Television threatened canada with a nuclear attack, the indian scholar describes the countrys reaction well. If we did it, it was right. If we didnt, you were wrong. And an analysis piece in the times conjured you will colonial powers ganging up claiming it would be a Rallying Point for the anglosaxon block to come together against india. Indian officials have denied canadas claims and in the same breaths have accused canada of providing a safe haven for terrorists. That might sound like a puzzling and absurd allegation but it is a reference to the fact that nijjar was a separatist, one of many six abroad who advocate for a separate country for indian sikhs. The homeless is called hallistan. It goes back decades and it includes an armed militancy in india that peaked in the 1980s. As The Economists notes, the movement was responsible for the death of thousands in the 1980s and 90s, but has since become little more than an idle Talking Point in the sikh dia spora. Whatever the reality of this one case, tensions between india and canada over the dia spora have been long running and india accusation that canada has been too soft on sikh activists deserved some scrutiny. But it is true that playing up this kind of threat to india is politically useful for Prime MinisterNarendra Modi and his party. You see, Justin Trudeaus Hole Strategy Of Naming And Shaming India Fund Nltally misunderstanding the dynamics of modys Hindu Nationalism which is rooted in the belief that the hindu majority has been passive for to long in the face of threats and when presented itw an opportunity he knows how to translate it into political gold. Take one example. In 2019 a Suicide Bomber carried out the worst attack in cashmere in decades killing dozens of indian soldiers. Indian blames pakistan militants and sent in the Indian Air Force to carry out strikes on what it said was a militant Training Facility in pakistan. Though pakistan denied the strikes hit much of anything. But nonetheless, it is the wirs Final A Cross Border Operation had been carried out in almost 50 years. Modi then said in a Campaign Speech that he believed in barging into the houses of terrorists and killing them. He implied without any evidence that the Opposition Party sympathies lay with the terrorists. Pollsters reported a boost in modis Approval Ratings after the strike. Now modi faces another election. Next spring. And he will surely be helped if he could run by standing up to Sikh Acceptar Tix and regardless you how much of a threat it actually is. Thank you for being part of my program this week. I will see you next week