Kicking and screaming: protests at World Cup

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1:04The Economist

1:11Rosie Blau:Hello and welcome to The Intelligence from The Economist. I'm Rosie Bloor. And I'm Jason Palmer.

1:20Rosie Blau:Today on the show, tax in space. And will India's elite tighten their belts?

1:36But first...

1:46Rosie Blau:When the whistle blows today for the first match of the World Cup, millions of people will be watching. But it won't just be football fans flocking to the great stadium in Mexico City. In recent weeks, there have been giant protests there over the country's 130 ,000 missing people.

2:07Rosie Blau:Demonstrators are taking advantage of that rare international audience to draw attention to their cause. The Mexican government had hoped the tournament would be a chance to show itself as a hub for technology, innovation and foreign investment. Now there's a more basic question. Can it keep all those eyeballs on the beautiful game? This World Cup is going to be the most watched sporting event ever. There's going to be 104 matches spread across 16 different cities in three countries. That's the United States, Canada and Mexico. Hal Hodgson is The Economist's America's editor. The US is going to have 78 matches and Canada and Mexico are going to have 13 each.

2:51and in Mexico the matches are going to be hosted in Guadalajara, Monterrey and Mexico City. Mexico's hosting schedule is attracting particular attention and not necessarily the good kind.

3:04Rosie Blau:If Mexico is only hosting 13 matches, why is it under such scrutiny? Well, Mexico is one of the most dangerous countries in the world is the short answer. It's the third most dangerous country ever to host the World Cup after South Africa and Brazil. in May the average was 44 people murdered every day and the most powerful drug gangs in the world control not just their own business but entire swathes of territory in Mexico they extort legitimate businesses for money they can shut down entire cities it was actually only in February this year that gangsters brought Guadalajara itself one of the host cities to an absolute standstill.

3:46After a Mexican government operation had resulted in the death of El Mencho, a renowned gang leader, the leader of the Jalisco New Generation cartel, the gangsters basically came out in the streets and took over the city and shut it down. And so they have shown very clearly that they have enormous power to do what they like. They clearly have the capability to to massively disrupt the World Cup. But the key thing to remember is that they almost certainly won't, because all that would bring them is trouble. They're far more likely to quietly exploit the World Cup rather than getting involved to make some kind of big demonstration or make a political point, which would only really be likely to bring the government and even the American government down on their heads.

4:30Rosie Blau:So is it that criminal gangs are just massive football fans and so not planning to disrupt things then? It's not out of respect for the game, no. They see a business opportunity the same as anyone. The World Cup is going to bring enormous numbers of people into the regions that they control and they have an opportunity to sell those people drugs or prostitutes or to run fraud operations to steal money from them. What's in their interest is to exploit the World Cup just like legitimate businesses want to use the World Cup to make money. They don't have an interest in messing around and disrupting it and causing problems.

5:06So the idea that the gangs pose a security threat to the World Cup is probably misplaced.

5:12Rosie Blau:Mexico is, as you say, though, a very dangerous place. So presumably there are also some plans to make sure that there aren't security risks. That's right. This is a heavily militarized police force that operates in Mexico. And there are about 100 ,000 forces deployed in order to keep the country secure. But the Mexicans, they understand the logic that the gangs operate under. And so they are more worried about, for instance, a rogue terrorist attack or drones sort of crashing into stadiums or crashing into fans in stadiums. They are more worried about quotidian security threats rather than the gangs attacking World Cup operations.

5:53But even terrorism is more likely to be a problem in America than Mexico. Mexico doesn't have much of a history of these so-called lone wolf terrorist attacks. Part of the reason for that is that it's much easier to get weapons in America. That is, after all, where the Mexican gangs get their weapons.

6:09Rosie Blau:There are protests planned too, is that correct? There's quite a few groups in Mexico who are planning to use the spectacle of the World Cup to further their own agendas. The biggest group is Mexico's teachers who say that they are not paid enough and have already blocked the road in Guadalajara to one of the main stadiums and say that they will do that all the way through to match day. Another interest group is a group of activists. They're the family members of what Mexicans call the disappeared. This is a group of 150 ,000 or so people who have disappeared off the face of the earth. Really what's happened to them is they've either been killed or recruited by gangs.

6:52And their family members are pressing the government to do more to figure out what happened to them. And they are using the World Cup as a platform for publicity as well.

7:02Rosie Blau:Isn't security a huge issue for Mexico, given that that is exactly what Trump has been talking about in terms of his relationship with Mexico for months now? Yeah, it's a huge test for Mexico's president, Claudia Sheinbaum, because it becomes a very public question whether or not Mexico is managing to maintain control over its own territory. So Trump has been putting out there for months the idea that Claudia Sheinbaum is terrified of the gangs and that she can't even run her own country and that the gangsters run the country. And so any little incident during the World Cup, and you know, it's quite hard to get through a whole World Cup without some sort of incident, is quite likely to be blown out of proportion and taken in the context of Donald Trump and the Americans saying that the Mexican government is not in control of its own country.

7:50So that's what the Mexicans care about. They're not really worried. They don't think that gangsters are going to blow up the World Cup. They think that any little thing like a drone mishap, could bring more Trumpian attention down on their heads and make their lives harder.

8:05Rosie Blau:And we've also heard quite a lot of discussion about visas and Iran. Where has all that landed? The latest seems to be that Trump has said that the Iranian football team can play matches that are scheduled to take place on American soil, but that they cannot stay overnight on American soil. And so as a result of that, Claudia Sheinbaum has offered for the Iranian team to stay in Mexico overnight, to basically base itself out of Mexico and travel into the United States for its matches, which I can only imagine will presumably prove to be quite a difficult turnaround if they have matches in the afternoon and then they have to hightail it back over the border.

8:44It makes for a rather strange wrinkle in their schedule.

8:47Rosie Blau:Hal, we have a tendency to talk up all the problems before a big sporting event and then it's usually good. I mean, aren't there quite a lot of upsides to Mexico hosting the World Cup in the long run? Absolutely. And the point we talked about earlier about the gangs is kind of demonstrative, right? It's in almost everybody's interests for this to go really well. Everybody stands to make a bit of money out of it. Lots of people stand to have temporary jobs that will be important to them. And for the Mexican government, while the risk is that something happens that brings Trump down on their heads, the possible reward is that everything goes pretty well and Mexico implicitly becomes a country that hosts World Cups with Canada and the United States.

9:30Two rich, developed countries, Mexico less rich, less developed, standing toe-to-toe with them, organising the biggest sporting event in the world.

9:39Rosie Blau:Hal, thank you very much. Thanks for having me, Rosie.

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10:47at pure.com slash wholehome.

10:58The heavens have long fascinated and inspired humanity. Shira Aviona is a business correspondent. In the ancient world, they set the stage for myth and divinity.

11:15During the scientific revolution, they compelled us to reconsider the shape of the universe and our place in it.

11:26Ten, nine, we have ignition sequence start. By the afterglow of the space age, the cosmos had cemented itself as a frontier of exploration and innovation. One giant leap for Vandera. A testament to human curiosity. Touchdown confirmed. We're safe on Mars.

11:49Now, the realms beyond Earth may come to embody an even more essential condition of the human experience. Taxation.

12:00Rosie Blau:So, Shira, you've brought us back down to Earth with a firm bump there. How does taxation fit into all of this? Yes, as Benjamin Franklin once said, death and taxes, the only certainties. Space as an industry is shifting rapidly from a government-run scientific endeavour to a huge private market. So the World Economic Forum estimates that annual sales in the commercial space sector could hit 1.8 trillion by 2035. And companies are no longer just launching satellites. They're planning asteroid mining, off-planet tourism, and even private space stations. So it is becoming a real possibility that companies are actually going to make a lot of money out in space.

12:42Rosie Blau:who is going to tax that? Right, so the legal regime that governs space activity in general was really not designed for this kind of large-scale commercial activity. Right now, when anyone launches a vessel into space, it's registered with the flag of a certain country, and governments sometimes have launch fees and things like that. But the legal regime of space law doesn't really envision real commercial activity that is not directly tied to a launch on Earth. And right now, also under that regime, space is the province of mankind. It's not divided up into American space space, if you think of the analogy to airspace or Russian space space or anything like that.

13:25And so this raises a lot of difficult questions for governments that want to tax space activity, but don't really necessarily know how that might be achieved.

13:36Rosie Blau:And are any governments currently trying to tax this space space, this province of mankind? Not yet. So, for example, in the 70s, several countries that sit on the equator claimed, well, satellites that orbit around the equator are actually in our airspace, if you think about it. And countries like Russia and China have also said tentatively in various laws, as, well, maybe we might want to do this at some point. But no one has really made that kind of first attempt to say, this activity in space is taxable by my country. And part of that is that we're on the cusp, but not quite there yet in terms of the actual commercial activity.

14:17So lots of companies have announced plans, but they haven't carried those to fruition to the point where it would really bring this question to the fore. So for example, when we have at some point private space stations, which are currently being planned, and two citizens of two different countries go on to that private space station. Neither of them are citizens of the country which launched the private space station, and they start a retail business up in the heavens. Who gets to tax that activity? Is there going to be a VAT on space sales? Not to mention that if we really do have life on Mars, as Elon Musk imagines, you can think about real economic activity and people staying up in space for more than half a year and losing their tax residency on Earth.

15:01So it raises a lot of interesting questions that are academic right now, but very soon they won't be.

15:08Rosie Blau:So as you say, it's quite academic, it's quite abstract right now, but there are examples of this here on Earth, right? We have the oceans, we have Antarctica, many areas which actually belong to no country right now. So surely there's precedent. Yes, but none of the analogs are perfectly comparable. So, for example, we're familiar with sovereign waters and know how to deal with that example. And there's a clear delineation between the ocean that is all of ours and as collective property and each individual country's sea space. With Antarctica, the status quo was basically frozen in 1959 when the treaty that governs Antarctica came into force.

15:50And that recognized a few countries' national claims and said there should be no commercial exploitation of Antarctica at all. Neither has been applied to space. And in fact, one of the big questions is where does space begin? There's no actually widely recognized legal definition. So, you know, if you think about low Earth orbit and things like that, you can get into lots of tricky questions about, okay, say you do agree that space is the province of mankind. Well, where does it begin then?

16:21Rosie Blau:So Shira, what are the options here? Where might this be headed? The high-minded academics among us have suggested more treaties, a kind of grand international bargain. But unfortunately, I think as with many other areas, we're not in a world order that's particularly conducive to that kind of broad-based international cooperation, especially when there's a lot of money to be made. As profits from space become more and more consequential, we might see a breaking of the taboo that there's no such thing as space property. and if Elon Musk really does achieve his dream of a self-governing city on Mars, the ultimate battle may not be, in fact, with the planet's climate, but with the IRS.

17:06Rosie Blau:Fascinating. Shira, thank you so much. Thanks very much, Rosie.