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012
How AMLO could ruin Mexico
Did covid come from a lab?
China loses the Philippines
The capex bonanza
MAY 29TH–JUNE 4TH 2021
Two states or one?

The hopeless peace process
012
012
012
Contents The Economist May 29th 2021 5
The world this week Asia

7 A summary of political 19 Myanmar’s worried
and business news investors
20 Commerce after a coup
Leaders
21 Islamists in Bangladesh
9 Israel and Palestine
Two states or one? 21 Australia’s frisky whales
10 Corporate investment 22 India’s crisis eases
Innovation nations 23 Banyan China loses the
10 The euro zone Philippines
Take one for the team
China
11 Ventilation
Fresh thinking about 24 Inequality in education
fresh air 25 Hazing at weddings
On the cover
12 Mexico 26 Chaguan A revealing
The Israeli-Palestinian peace The false messiah Afghan strategy
process has become an
obstacle to progress: leader, Letters
page 9. The ideal of two states 15 On digital currencies,
has failed. It has left the Holy technology and China, United States
Land looking like one unequal Wyoming, ice hockey
state, page 37 27 Texas moves righter
28 The George Floyd Act
Briefing
How amlo could ruin Mexico 29 Central America
16 Mexico’s populist
Andrés Manuel López Obrador 29 Infrastructure year
president
pursues bad policies by
The unnoticed radical 30 Wildlife wars
improper means: leader, page 12.
Elections on June 6th will 31 New York’s new island
determine how deeply—and 32 Lexington The Kamala
ruinously—he can transform his dilemma
country: briefing, page 16
The Americas
Did covid-19 come from a lab?
33 Patronage in Brazil
How can the world prepare for
a future pandemic when it does 34 Chile’s new constitution
not know where this one came 36 The Shining Path returns
from? Page 50. What to make of 36 Canada’s Butter Rage
the lab theory, page 51.
Improving the ventilation of
buildings will help curb covid-19,
page 67. The case for clean air: Middle East & Africa
leader, page 11
37 One-state reality in
the Holy Land
China loses the Philippines Its
action in the South China Sea is 40 Islam and homosexuality
stirring resentment: Banyan, Free exchange When 40 Mali’s coup within a coup
page 23 does transitory inflation 41 A vicious jihadist is dead
become sustained? Some
The capex bonanza Firms are lessons from the 1970s,
rediscovering their love for page 65
investment: leader, page 10.
We analyse their plans, page 59
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Contents continues overleaf
012
6 Contents The Economist May 29th 2021
Europe Finance & economics

42 Belarus hijacks a plane 59 An investment bonanza
43 Russia’s Czech problem 60 Recovery in the euro zone
44 A Turkish mobster takes 61 Buttonwood The
on the government crypto-fiat divide
44 Norwegian folk music 62 How to end the pandemic
45 Parisian voters 62 America’s housing market
46 Charlemagne How 63 Morbid finance in France
farmers still rule Europe 64 Chasing Chinese assets
65 Free exchange Inflation
Britain and the 1970s
47 The bbc’s problems
48 An Australian trade deal Science & technology
49 Bagehot Mr Levelling Up 67 How covid-19 really
spreads
70 Eunuch gm mosquitoes
70 Autonomous weapons
71 A better fog trap
International
50 Where covid-19 came
from Books & arts
51 The likelihood of a 72 History and memory in
laboratory origin Russia
73 Satirical fiction
74 Cosmopolitan Prague
74 A history of censorship
Business
75 Persian music
53 The future of Big Oil
55 China’s logistics race Economic & financial indicators
55 Chinese tech’s online 76 Statistics on 42 economies
binge
56 A rare dax mega-merger Graphic detail
56 Refloating the cruise 77 Educated voters’ leftward shift is surprisingly old
industry
57 Bartleby Decision fatigue Obituary
58 Schumpeter Strategic 78 Yuan Longping, feeder of China and the world
u-turns
Volume 439 Number 9247

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012
The world this week Politics The Economist May 29th 2021 7
of the coronavirus. A foreign agency said he was very con

ministry spokesman accused cerned about Iran’s claim to be Coronavirus briefs
America of smearing China enriching uranium to a purity To 6am GMT May 27th 2021
and of ignoring the possibility level of 60%, a level only coun
Weekly confirmed cases by area, m
that the virus originated in the tries that are making bombs
3
United States. attempt to reach. India
2
Twentyone competitors in a Abubakar Shekau, the leader of Western Europe
100km ultramarathon in a Boko Haram, a jihadist group 1
mountainous area of western that enslaves girls, reportedly Other US
China were killed by extreme died in Nigeria after blowing 0
weather, including hail. himself up to avoid capture by 2020 2021
Belarus hijacked a Ryanair rival jihadists. Mr Shekau has
Vaccination doses
plane flying from one eu coun The Texas legislature passed a been declared dead five times % of adults with
Total ’000 1st dose 2nd
try (Greece) to another (Lithua bill that allows the state’s before, only to resurface. But
Israel 10,568 98 92
nia) with more than 100 people residents to carry a handgun this time the reports appear to UAE 12,416 95 60
on board. The plane was in without a licence. The law sets be true. Bhutan 483 95 0
Belarusian airspace. Citing a up an online course in gun Mongolia 2,730 90 44
“bomb threat”, the authorities safety for people unsure about Army officers in Mali forced Malta 491 87 50
sent a fighter jet to make it how to handle weapons. the president and prime min Maldives 465 75 39
Britain 61,995 74 45
land in Minsk, the Belarusian ister to resign because they
Chile 17,794 70 55
capital. They arrested two Israel and Hamas, the militant were upset about a reshuffling Bahrain 1,621 68 56
passengers: Roman Protasev Islamist group that controls of the cabinet. The same offi Canada 21,638 67 6
ich, an exiled journalist, and Gaza, stuck to a recently cers carried out a coup last United States 287,789 66 50
his girlfriend. Mr Protasevich agreed ceasefire. To bolster the September. Sources: Johns Hopkins University CSSE;
had rallied opposition to Alex truce Antony Blinken, Amer Our World in Data; United Nations
ander Lukashenko, the despot ica’s secretary of state, held After years of dodge and
who stole Belarus’s presi separate meetings with Binya deferment, Jacob Zuma, a The number of officially
dential election last year. No min Netanyahu, Israel’s prime former president of South recorded cases in India con
bomb was found. Russia minister, and Mahmoud Africa, appeared in court. He tinued to fall, on one day
applauded Mr Lukashenko’s Abbas, the president of the faces 18 charges relating to an dropping below 200,000 for
boldness; the eu mulled sanc Palestinian Authority. He also arms deal signed by the gov the first time in weeks.
tions on his isolated regime. went to Egypt and Jordan. ernment in the late 1990s,
including an allegation that he Germany banned most visi
Switzerland said it was walk Republicans in the American accepted a bribe from Thales, a tors from Britain because of
ing away from years of negoti Congress introduced legisla French defence firm. Both he the spreading Indian variant
ations on a new treaty with the tion to beef up the govern and the firm deny the charges. of covid19 in that country.
eu aimed at harmonising ment’s monitoring of anti French officials said people
dozens of messy individual Semitic attacks. The conflict In Peru 16 people were massa entering from Britain would
deals on trade, investment and between Israel and Hamas has cred in a village in a region have to quarantine, but
the movement of people. led to a “dangerous and drastic known for cocaine production. stopped short of an outright
surge in antiJewish hate” in The authorities blamed Marx ban. Research in Britain,
Police in India visited Twitter’s America, Britain and other ist Shining Path militants, who meanwhile, found that two
offices after it added a warning countries, according to the killed tens of thousands of doses of either the Astra
of misinformation to tweets AntiDefamation League, a people in the 1980s and 1990s. Zeneca or Pfizer vaccine pro
posted by members of the civilrights group. The killings came two weeks vide good protection against
ruling party. The tweets pur ahead of a tense presidential the Indian variant.
ported to detail plans drawn up Iran’s Guardian Council runoff, which pits Keiko
by the opposition to discredit disqualified most of the candi Fujimori, the daughter of a An outbreak of the variant in
the government’s handling of dates who registered to run in former president convicted of Melbourne led to a new lock
the pandemic, but factcheck the presidential election on corruption, against Pedro down in the Australian state
ing organisations said the June 18th. Only seven candi Castillo, a leftwing activist. of Victoria, a disappointment
documents were fake. dates, mostly hardline and for the city, which last year
pious, were allowed on the In Mexico the police chief of had one of the world’s longest
America warned its citizens ballot. The conservative judi Sinaloa state, the name of lockdowns. Vaccination rates
not to travel to Japan, after an ciary chief, Ebrahim Raisi, is which is associated with a in Australia remain very low.
increase in the number of the frontrunner to succeed powerful drug cartel, was
covid19 cases there. A survey Hassan Rouhani, who is rela murdered by bandits who fired Argentina entered a nineday
suggested that 80% of Japan tively moderate. 200 bullets into his car. lockdown. Cases are surging
ese believe the Olympic games, amid a slow takeup of the jab.
which are due to begin in Iran reached a deal with the A soldier in Canada was
Tokyo in July, should be post International Atomic Energy charged with mutiny for the
poned again or cancelled. Agency to extend for a month first time in decades. The → For our latest coverage of the
an agreement that allows reservist is accused of trying to virus please visit economist.com/
China responded angrily to an international monitors to persuade other soldiers to join coronavirus or download the
American call for more inspect its nuclear him to disrupt the distribution Economist app.
investigations into the origin programme. The head of the of covid19 vaccines.
012
8
The world this week Business The Economist May 29th 2021
Singapore’s firstquarter gdp Uber said it would allow its its platform. WhatsApp has
figure was revised, revealing a drivers in Britain to join a long used privacy as a selling
much faster expansion than union, the first time that the point; it the most popular
had been thought. The econ ridehailing company has messagingapp in India.
omy grew by 3.1% compared given official recognition to a
with the previous three union in any country. In Feb The first private licence to
months; manufacturing out ruary Britain’s Supreme Court operate mobile services in
put was up by 10.8%. ruled that Uber must extend Ethiopia was awarded to a
employee rights, such as a consortium that includes
Joe Biden confirmed that he minimum wage, to its drivers. Vodafone. The bid for a second
would not impose sanctions licence from mtn, a South
on the corporation that built The fallout from the collapse African company, was rejected
At least two directors nominat the Nord Stream 2 pipeline, of Greensill Capital, a financ as too low. The liberalisation of
ed by Engine No. 1, a small, which will transport gas from ing firm, spread to Italy, where Ethiopia’s telecoms is a proxy
environmentally minded Russia to Germany. Critics the central bank pushed Aigis in the tech war between Amer
hedge fund, were elected by contend the project’s main Banca, a specialist lender ica and China. The winning bid
shareholders to the board of purpose is to increase Euro based in Milan, into liquida is supported by Washington
ExxonMobil. It is the most pean reliance on Russian tion. A basket of Aigis’s assets, through lowcost foreignaid
significant victory yet in the energy, but Mr Biden said that were sold to another Italian loans; mtn’s proposal was
push by activist investors to sanctions would be counter bank for €1 ($1.20). backed in part by a Chinese
force big oil companies to do productive, given that the state investor.
more on climate change. pipeline is almost complete. The city of Washington, dc,
The decision is a win for the sued Amazon, claiming that
German government, and a the retailer forced thirdparty No passport required
Environmental legacy blow to Ukraine, which will sellers to agree not to sell their Following an aborted launch in
In a ruling with ramifications lose income from transit fees wares at lower prices any December, Virgin Galactic
for the whole oil industry, a for Russian gas. where else on the internet. conducted a successful test
Dutch court sided with green Amazon, which also faces flight of its vss Unity space
campaigners and found that Turkey’s president sacked a investigations in Europe and craft, which touched down in
Shell was in part responsible deputy governor at the coun India, said it would fight the New Mexico after reaching an
for climate change, ordering it try’s central bank, the third lawsuit. Meanwhile, Amazon altitude of 55.45 miles
to cut its carbon emissions by defenestration of a senior secured its deal to buy mgm, (89.2km). The company hopes
45% by 2030 from 2019 levels. official within two months. paying $8.45bn for the film to put paying passengers into
Shell currently aims to lower Recep Tayyip Erdogan has studio. orbit next year. Blue Origin, a
emissions by 20% in 2030 and whittled away at the central spacetourism venture backed
45% in 2035 from 2016 levels. It bank’s independence over the WhatsApp, a popular encrypt by Jeff Bezos, will send its first
is to appeal against the verdict. years in his attempt to sup edmessaging service owned paying passenger into space on
press interest rates, replacing by Facebook, said it was suing July 20th. The current bid for
Activist investors have in the governor with a supporter the government of India over the tourist seat to be occupied
creased their clout during this in March. Since then the lira new rules requiring it to be by the lucky (and brave) person
year’s shareholders’ meetings has slid by 15%. able to trace messages sent on on that mission is $2.8m.
in a wide range of industries.
This week Aston Martin faced
down a mini revolt, when 18%
of shareholders opposed its
pay policy for directors and
17% went against the reelec
tion of Lawrence Stroll as
chairman. Mr Stroll is credited
with rescuing the struggling
sportscar maker with an
injection of capital in 2020.
Germany’s two biggest proper

ty companies, Vonovia and
Deutsche Wohnen, agreed to
merge, creating Europe’s larg
est residential realestate
group. The deal is contro
versial. Rents have soared in
Berlin, producing a political
backlash. The firms gave assur
ances that they would limit
rent increases to 1% a year in
Berlin for the next three years
and provide flats for young
families at below market rents.
012
Leaders 9
Two states or one?

The peace process has become an obstacle to progress
H ave more time and effort ever been devoted to peace to so

little effect? America began overseeing talks between the Is
raelis and Palestinians three decades ago. But the Holy Land re
Jewish and democratic while permanently controlling all of that
territory. Many critics of Israeli policy, including some liberal
Jews, now compare the Palestinians’ treatment to apartheid.
mains contested by two peoples who cannot bring themselves to The Palestinian demand for rights is resonating abroad, not
live together. The fighting in May that left 242 Palestinians and least in the halls of America’s Congress. By allying Israel to the
ten Israelis dead accomplished nothing except to clear the field Republican Party, Mr Netanyahu has helped make the Palestin
for the next round of fighting. ians part of America’s culture wars. Progressives in the Demo
The peace process set up in the Oslo accords in 1993 aims to cratic Party have started to declare that Palestinian lives matter.
create two states that agree to disagree—using land swaps, secu America is Israel’s most important ally. True, American aid
rity guarantees, a deal to share Jerusalem and a limited “right of matters less than it did and Israel now produces most of its own
return” for Palestinians. Israel’s prize was to be a thriving de advanced weapons. It has relations with more countries, includ
mocracy and a sanctuary for Jews; for Palestinians it was the pro ing its Arab neighbours through the Abraham accords. Yet if it
mise of selfrule. At times, peace has been tantalisingly close, drifts away from Europe and America and towards countries like
only to recede again amid mutual recrimination. Russia, China and populist India, it will be a blow to Israel as a
Today, however, instead of being a pathway to peace, the two Western, liberal and democratic ideal.
state “process” is barring the route. Everyone pretends that More important, Mr Netanyahu’s “antisolutionism” leaves
peace is still on the agenda when, in reality, it is not (see Middle his country less able than ever to navigate a future with the Pal
East & Africa section). That is a formula for strife. Almost every estinians. His embrace of the Jewish far right makes eruptions
thing that matters can be deferred with the promise that, one more likely even as it fires up militant Palestinians—witness the
day, it will be resolved in a deal that is perpetually over the hori recent communal violence in Israeli cities. The wall that seals off
zon. It is also a formula that, by default, leads to a single state. Israel from the West Bank has led to deeper distrust between Ar
The idea that the twostate framework is harmful will not abs and Jews. The settlements, once thought negotiable, have
come as news to the Palestinians. Under it, the vision of a viable, become permanent obstacles to peace.
contiguous, sovereign Palestine has receded. The status quo has served Israel well but is
Palestinian territory in the West Bank is an ar not sustainable. Sooner or later there will be a
chipelago in an expanding sea of Israeli settle reckoning that requires a new formula for liv
ments that are illegal under international law. ing next to the Palestinians. Adhering to Oslo
Gaza is a solitary island, cut off by an Israeli and while undermining it in practice feeds the reali
Egyptian blockade. The Palestinian Authority ty of one state—because it makes two states
was supposed to be a government in waiting. harder to realise.
Young Palestinians look on it as the agent of Is Instead of imposing peace in one topdown
rael’s occupation, even as they laud Hamas, the stroke of diplomatic brilliance, a more realistic
violent Islamist group that rules Gaza, for standing up to Israel. aim would be to build it patiently from the bottom up. The guid
In place of the stagnant twostate effort, the new Palestinian ing principle should be to focus on the human and civil rights of
vision is to demand individual rights in one state. Those in Gaza Palestinians. Israel will not grant Palestinians full rights tomor
and the West Bank resent needing Israel’s permission (often row. But it can make its Arab citizens more equal by devoting re
withheld) to travel to see their families. The recent fighting was sources to their communities. It could make the administration
fuelled by a dispute over property in East Jerusalem, where most of Jerusalem more inclusive, so that tiffs over fencing do not es
Palestinians are mere “residents”. Even Israeli Arabs complain of calate into war. It must take more responsibility for the suffering
inequality and rose up during the fighting in Gaza. in the West Bank and Gaza—and work harder to alleviate it.
That leaves Israel in a quandary. It has thrived under Oslo. A focus on rights also makes Palestinian leaders more ac
gdp per head has grown by over half in the past 30 years. Its Iron countable. They cannot easily demand rights from Israel that
Dome missiledefence system largely shields it from Hamas’s at they deny their own people. Mahmoud Abbas is in the 17th year
tacks. A divided, weak Palestinian leadership suits Binyamin of a fouryear term as president. His Fatah party is sclerotic. Ha
Netanyahu, the prime minister, who shows little interest in the mas tramples the rights of its people, including women and mi
Palestinians. And it’s not just him: the conflict did not feature norities. Better Palestinian leaders are a prerequisite for peace.
much in any of the four elections Israel has held since 2019. Abandoning Oslo carries risks, obviously. Unbound, Israeli
This cannot last. The Oslo figleaf lets Israel claim that the oc settlers might push farther into Palestinian territory. Hamas,
cupation will be undone in a final deal. As the interim power in which wants a single state in which Palestinians would out
charge, it has no duty to extend full rights to the West Bank. But weigh Jews, might redouble its resistance. But today’s path is
54 years after the sixday war, the idea of a temporary occupation even riskier.
rings increasingly hollow. Peace always starts by acknowledging reality. It takes root by
Without hope of an agreement, Israel’s critics have begun to improving lives and renewing politics. That can flourish into
talk of a “onestate reality”. This challenges Israel: as the Holy something new. Then, one day, the parties can start talking
Land has as many Jews as Palestinians, it cannot remain both again about a deal, whether of one state or two. n
012
10 Leaders The Economist May 29th 2021
Corporate investment
Innovation nations
Firms are rediscovering their love for investment
A s the rich world reopens, the contours of the postpan in the next few years—as good an incentive as any to expand ca
demic economy are becoming clear. The latest trend is a glo pacity. Some firms, especially in consumerfacing industries,
bal surge in capital spending (see Finance section). Forecasters are low on inventory and are frantically trying to catch up.
reckon that overall real investment worldwide will soon be a Yet capital spending is rising not just because the economic
fifth higher than it was before the pandemic. America’s business cycle is on the up. Firms are also adjusting to permanent pan
investment is rising at an annual rate of 15%. By 2022 companies demicinduced shifts, from an emerging norm of “hybrid work”
in the s&p 500 are forecast to be spending over a tenth more on to greater online shopping. The big tech firms, whose products
factories, technology, r&d and the like. Barely a day goes by are so important to this shift, have led the investment charge. In
without a large firm boasting about how much it plans to 2020 they accounted for a third of total r&d spending in the s&p
splurge. at&t says it will throw $24bn a year at its networks. 500; this year they are boosting capex by 30% relative to 2019.
Sony is piling $18bn into an expansion push. Semiconductor Other companies now recognise that they need to pull up
firms are engaged in one of the biggest capital their socks. Highstreet retailers are at last in
spending (or capex) sprees in history. S&P 500 investment vesting heavily in online offerings to compete
That is both a sharp change and an enor $trn with Amazon. Restaurants continue to improve
Capex R&D FORECAST
mously significant one. Sharp, because before 1.2 their dineathome service even as dinein
0.9
covid19 managers embraced capex austerity. reopens, allowing them to squeeze more sales
0.6
America’s business investment had stagnated 0.3 out of preparing food. Consultancies are find
relative to gdp for several decades. Britain’s was 0 ing ways to let their staff remain connected
15% lower than in the late 1990s. Even as busi 2017 18 19 20 21 22 when they are not in the office. Growth in global
ness profits soared, firms devoted a smaller shipments of computers for companies will be
share of their cashflows to capex and r&d, and more to share even faster this year than last. All this promises a world in which
buybacks and dividends. Significant, because investment in people get more done in less time.
new technologies and business practices is the secret sauce be Firms in some industries still play by the rules of the 2010s.
hind higher living standards. Weak capital spending contribut Mining companies seem cautious about shelling out in order to
ed to the rich world’s sluggish productivity and growth in the relieve supply bottlenecks in commodity markets. Big hotel
2010s, and to the gnawing sense that capitalism was misfiring. chains appear to have no plans to install rainforest showers in
Now, though, all that is changing. Fiscal stimulus has put every room. And it remains to be seen whether the postpan
money in people’s pockets. In America real disposable income demic norm will be one of structurally higher investment
per person is 27% higher than it was in February 2020. And as spending, or whether firms slip back into their old ways. For
economies reopen, people are in the mood to spend. Companies now, though, stand back and appreciate the global capex surge.
can thus be more confident there will be demand for their wares It promises a more dynamic form of capitalism. n
The euro zone
Take one for the team

To avoid a two-speed Europe, Germany must learn to live with a little inflation
I nflation in germany exceeded 2% in April. If the Bundes

bank’s latest forecasts prove right, it could soon reach 4% for
the first time in nearly 30 years. Inflation angst is rising among
inflationary beast. In the early 2000s, shortly after the birth of
the euro, Germany restrained wage costs and the southern Euro
pean economies lost competitiveness against it. As the south
the country’s monetary hawks. The exigencies of the pandemic erners recovered from their debt crises, they narrowed the gap
muted German grumbling about the European Central Bank’s ul by clamping down on their own labour costs, while Germany did
traloose monetary policy. But as inflation rises, so will reflexive too little to adjust. That set the euro zone on a demanddeficient,
German demands that the bank should taper its bondbuying. deflationary path. The area’s economy has never fully recovered,
Such clamouring would be misguided. Europe’s recovery is even as the ecb has used up most of its ammunition.
more subdued than America’s, making the odds even better that That lost decade is one reason why spiralling wages and pric
the inflation spike will prove temporary. And the interests of the es in Europe are vanishingly unlikely, even as overheating is a
weaker members of the currency union, still crawling their way possibility in America. What is more, the hit from the pandemic
back to health, should come first. in Europe has been worse. Output in the euro zone fell further
The hyperinflation of the 1920s etched inflationphobia deep than in America last year. Despite this, its fiscal stimulus looks
into the German psyche. After the second world war the Bundes stingy compared with the Biden administration’s largesse. The
bank earned a fearsome reputation by being the first to tame the eu’s new €750bn ($919bn) recovery fund will take years to be dis
012
The Economist May 29th 2021 Leaders 11
bursed fully. Investors expect inflation in five years’ time to lan fered a deep downturn last year, with the economy shrinking by
guish below the ecb’s target of “close to, but below 2%”. Expecta 5%, but it fared far better than France, Italy and Spain, where
tions in America, by contrast, are above 2%. output fell by nearly twice as much. Unemployment in Germany
Further reassurance can be gained from peering into the me remains low, at 4.5%. Its reliance on manufacturing and exports
chanics of Germany’s inflation spike. As in America, it reflects has been a boon. Other countries, by contrast, must pray that
some transitory global factors, including the oilprice collapse spending on tourism, retail and hospitality returns to the levels
last spring which depressed the base used to calculate the annu of the old days. Goldman Sachs, a bank, reckons that Spain and
al rate. Strip out food and energy prices, and inflation in Ger Italy have twice as much economic slack as Germany.
many was only about 1% in April. Some temporary countryspe The ecb sets monetary policy for the currency union as a
cific issues are also in play. A carbon charge has pushed up pric whole, not its largest member alone. And so Germany must seek
es, and an emergency cut to valueadded taxes last year will ar to keep its economy humming along while the others catch up
ithmetically boost inflation later this year. Look along the and the stimulus is withdrawn. That is the price of being one of
supply chain and you might take fright at Germany’s producer the strongest members of a currency union. After a lost decade,
price inflation, of more than 5% in April. But this should ease as the euro zone has learned from some of the mistakes of the past
factories and suppliers respond to a surge in orders. crisis. The pursuit of balanced budgets and austerity has been
Perhaps the biggest reason why Germany should tolerate a abandoned for the time being. The eu is on the verge of issuing
period of abovetarget inflation is that the euro area’s health de common debt to finance its recovery fund. Both shifts were pos
pends on it. Activity is resuming across the zone, as vaccines are sible because of a change of thinking in Berlin. A recognition
administered and lockdown restrictions lifted (see Finance sec that the German economy must run hot is the missing link in re
tion). Germany has less lost ground to make up than most. It suf storing confidence throughout the euro zone. n
Ventilation
Fresh thinking about fresh air

It is time to clean up the air in buildings
I n 1842 edwin chadwick, a British social reformer, published

his “Report on the Sanitary Condition of the Labouring Popu
lation”. By documenting evidence of social and geographic in
on aerosol particles from people’s lungs that can linger in the air
of an illventilated room (see Science section).
Indoorair quality has attracted little government attention.
equalities in health, Chadwick showed that poor sanitation was But achieving clean, pathogenfree air in buildings and indoor
associated with poor health. The report eventually led British public spaces is possible. The first step is to give people more in
cities to organise clean water supplies and to centralise their formation on how wellventilated their air is. Carbondioxide
sewage systems, in turn reducing the prevalence of infectious concentrations are a good proxy for ventilation, and cheap sen
diseases, in particular cholera. Similar reforms around the sors to detect this gas in rooms could provide occupants with
world in the 20th century tackled food safety and outdoorair useful data on when to open windows or upgrade their aircon
pollution. Now a new publichealth priority is becoming appar ditioning systems. National indoorairquality standards would
ent: making indoor air cleaner. help. One way to enforce them could be through ventilation cer
Take schools. They are “chronically underventilated”, ac tificates for buildings, similar to foodhygiene certificates that
cording to the Lancet covid19 commission. A already exist for restaurants.
study of 100 American classrooms found 87 The bill for all this need not be huge. A recent
with worryingly low ventilation rates. Across study found that raising the standard of ventila
Denmark, France, Italy, Norway and Sweden, tion in all American elementary and secondary
researchers found that indoorair quality in schools to the minimum level would cost less
66% of classrooms fell short of healthy stan than 0.1% of the country’s typical public spend
dards. In America nearly one child in 13 has ing on education. President Joe Biden’s Ameri
asthma—a condition triggered by allergens of can Rescue Plan assigns $123bn to improving
ten found in schools. Outdoorair pollution can school infrastructure and mentions ventilation
penetrate inside buildings—childhood exposure can affect neu as a priority. Other countries should follow suit.
rodevelopment and academic performance, and cause cancer. More investment would be money well spent. Better indoor
The problem extends well beyond classrooms. Many people air boosts academic performance—maths and reading scores go
spend more than 90% of their time indoors. Researchers have up, and pupils are measurably more attentive in class. Office
linked underventilated spaces in buildings to a range of ail workers benefit, too. Researchers have found the cognitive
ments—headaches, fatigue, shortness of breath, coughs, dizzi scores of people in wellventilated offices are 61% higher than
ness, nausea, and irritation of eye, nose, throat and skin. Poor those of workers in conventional office setups.
ventilation has been blamed for increased absences from work, Ventilation is the forgotten part of the agenda for improved
decreased productivity and asthma. public health. Chadwick’s report on sanitation lifted people’s ex
The pandemic has brought a new urgency to the matter. The pectation that the water coming out of their taps would be clean.
virus which causes covid19 spreads between people less by Covid19 should lead policymakers to ensure, belatedly, that the
close contact and infected surfaces and more by hitching a ride same is true for the air in people’s buildings. n
012
12 Leaders The Economist May 29th 2021
Mexico
The false messiah

Andrés Manuel López Obrador pursues ruinous policies by improper means
I n a world plagued by authoritarian populists, Mexico’s presi

dent has somehow escaped the limelight. Liberals furiously
condemn the erosion of democratic norms under Hungary’s Vik
enlists the army to build his railway, run ports and fight crime.
In other countries, inviting the men with guns to handle huge
sums of public money with scant supervision has proved cata
tor Orban, India’s Narendra Modi and Brazil’s Jair Bolsonaro, but strophic, as any Egyptian or Pakistani could warn him. But Mr
barely notice Andrés Manuel López Obrador. This is partly be López Obrador is notorious for not listening to advice. His catch
cause he lacks some of the vices of his populist peers. He does phrase in cabinet meetings is “Cállate!” (Shut up).
not deride gay people, bash Muslims or spur his supporters to His disdain for expertise has made government less compe
torch the Amazon. To his credit, he speaks out loudly and often tent. His treeplanting scheme has encouraged farmers to chop
for Mexico’s havenots, and he is not personally corrupt. None down old trees so as to be paid to plant new ones. His policy of
theless, he is a danger to Mexican democracy. “hugs, not bullets” for gangsters has failed to reduce a strato
Mr López Obrador divides Mexicans into two groups: “the spheric murder rate. For all his railing against graft, Mexicans re
people”, by which he means those who support him; and the port as many demands for bribes from officials as before.
elite, whom he denounces, often by name, as crooks and traitors He was woefully slow to respond to covid19 and spent far too
who are to blame for all Mexico’s problems. He says he is build little on cushioning its economic effects. According to The Econ-
ing a more authentic democracy. It is an odd creature. He calls a omist’s estimates, Mexico has suffered 477,000 excess deaths
lot of votes, but not always on topics that are best resolved by from the pandemic, one of the worst rates in the world; and its
voting. For example, when legal objections are raised to one of gdp shrank by 8.5% last year. The country should be poised for
his pet projects—moving an airport, building a pipeline, block galloping growth. Multinationals are eager to diversify their
ing a factory—he calls a referendum. He picks a small electorate supply chains away from China, and Mexico is a manufacturing
that he knows will side with him. When it does, he declares that hub next to the United States, which is entering a stimulus
the people have spoken. He has even called for a national refer stoked postcovid boom. Yet investors are wary.
endum on whether to prosecute five of the six living expresi They fear the uncertainty of rule by presidential whimsy. Mr
dents of Mexico for corruption. As a stunt to remind voters of the López Obrador is undermining checks on his power. He leans on
shortcomings of previous regimes, it is inge advertisers not to support faultfinding media.
nious. It is also a mockery of the rule of law. He cuts the budgets of watchdogs, or stuffs
The president’s scorn for rules is one reason them with his supporters. Last week he said he
the elections on June 6th matter (see Briefing). would replace the centralbank governor with
He is not on the ballot; his single sixyear term someone who favours “a moral economy”. He
expires in 2024. But the national legislature is has threatened the body that runs elections.
up for grabs, as are 15 of 32 governorships, most The next three years will determine the
state assemblies and thousands of local posts. depth and duration of the damage he does to
Voters have a chance to rein in their presi Mexico and its democracy. He is barred from
dent by rejecting his party, Morena. It is not clear that they will. seeking reelection, but is trying illegally to extend the term of a
Most are dissatisfied with the way the country is being run, but friendly supremecourt judge. Critics fear he wants to set a pre
61% approve of Mr López Obrador himself. Many feel that he cedent for himself. Mexico’s institutions are strong, but may
cares about ordinary people, even if he has not materially im buckle under sustained assault by a zealot with popular support.
proved their lives. The opposition parties have failed to offer a The country escaped de facto oneparty rule in 2000. Given the
coherent alternative. Morena is slipping in the polls, but may re risk, voters on June 6th should support whichever opposition
tain its majority in the lower house, with the help of its allies. party is best placed to win, wherever they live. The opposition
The more levers he controls, the further Mr López Obrador can parties should work together to restrain the president.
pursue his plan to transform Mexico.
He has done good things, such as bumping up pensions and Learn from your mistakes
subsidising apprenticeships for the young. Though a leftist, he They should learn from him, too. He is popular partly because
has kept spending and debt under control, so Mexico’s credit rat they did a poor job of helping those left behind during the long
ing remains tolerably firm. But he suffers from what Moisés boom that followed economic liberalisation in the 1980s; and al
Naím, a Venezuelan journalist, calls “ideological necrophil so because much of the ruling class really is corrupt. Mr López
ia”—a love of ideas that have been tried and proved not to work. Obrador’s ad hoc, lawless approach has not made Mexico clean
He has fond memories of the 1970s, when a government er, but he has highlighted the need for a cleanup.
owned oil monopoly spread largesse around his home state. He The United States needs to pay attention. Donald Trump did
is trying to recreate something similar, by all but banning priv not care about Mexican democracy. President Joe Biden should
ate investment in hydrocarbons and forcing the grid to buy pow make clear that he does. He must be tactful: Mexicans are under
er from state sources first, no matter how costly and filthy they standably allergic to being pushed around by their big neigh
are. He likes railways, so he is ploughing $7bn into a diesel bour. But America ought not to turn a blind eye to creeping au
burning boondoggle in his home region. Frustrated with offi thoritarianism in its backyard. As well as sending vaccines, un
cials who fuss about rules and putting contracts out to tender, he conditionally, Mr Biden should send quiet warnings. n
012
Executive focus 13
012
14 Executive focus
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012
Letters The Economist May 29th 2021 15
from their mobile phones. The ingly challenging job, especial Laramie and Sheridan, as well
E-taxes government also issues cost ly as China has blurred the line as the even smaller towns in
Mike Godwin's law of Nazi free debit cards linked to their between the private sector, between.
analogies states that as an myGov to make payments. As a government and the army. The one exception is
online discussion grows result many people on welfare The Trump administration Jackson. Jackson is a beautiful,
longer, the probability of a no longer need a bank account. added some 330 Chinese gov expensive playground for the
comparison involving Nazis or shann turnbull ernmentaligned companies to coastal elite. Jackson is insular.
Hitler approaches one. A corol Principal the Entity List. The Biden Jackson does not interact with
lary adage might be that as an International Institute for administration has added the economy in the rest of the
economic discussion grows Selfgovernance another seven to that blacklist, state. Most Wyomingites don't
longer, the probability of creat Sydney signalling a continuation of identify with Jackson. Its
ing a new form of taxation the policy against the Chinese elitism is foreign to us. We
approaches one. Your leader How worrying to read your Communist Party’s military spend our vacations in the
on the rise of emoney violated article on govcoins in the same civil fusion strategy. The true Wind River and Big Horn
this proper economic dis week that an important oil test of whether this adminis mountain ranges.
cussion by creating no new tax pipeline was shut by a cyber tration has a “real plan” on I still question why Ms
(“The digital currencies that attack. One cannot even China will be whether Joe Cheney decided to move there.
matter”, May 8th). In fact, tax fathom the effect of such an Biden’s nominee understands When she was elected to Con
got no mention at all. attack on a digital currency its ambitions to steal and gress she was characterised as
You summed up well the issued by a central bank, an exploit Americanmade tech a carpetbagger. Yet, in the
positive aspects of central event that would immediately nology and is willing to put the words of my father, you could
bank digital currencies freeze all financial activity, United States’ longterm be born in Jackson and still be
(cbdcs). Yet government from corporate transactions to nationalsecurity interests a carpetbagger. She could have
issued fiat currencies are buying groceries. ahead of shortterm corporate moved to Cody or Sheridan.
deeply entwined with tax (fiat peter prasthofer profits. It is not relevant I anticipate that Ms
currencies are arguably just tax The Woodlands, Texas whether the nominee has a Cheney's popularity will keep
credits). cbdcs provide new legal credential, is an outsider, declining in Wyoming; she
taxcollection powers. Com Your special report on banking or is a Washington veteran. will continue to be portrayed
plex taxation algorithms can mentioned whaling “sloops” The appointment should be as an eastcoast elitist who is
be applied to any cbdc trans that sailed out of Nantucket made on substance, capability out of touch with the state. I
action in real time. Once peo (May 8th). A sloop is a vessel and an understanding of the laud her courage in opposing
ple realise the power of cbdc designed for speed. Whaling issues and the stakes—not Trumpism. I still can't forgive
systems to support various vessels of the 1800s, especially whether an individual fits the her for moving to Jackson.
taxation initiatives at low from Nantucket, were more mould of a bureaucrat. jason despain
transaction costs, we should likely to be brigs, brigantines, roslyn layton Casper, Wyoming
expect avalanches of propos or shiprigged with multiple Cofounder
als: town taxes, childnoise masts and wide hulls to hold China Tech Threat
taxes, sugar taxes, alcohol supplies and whale oil for a Naples, Florida Slapshot
consumption taxes, foreign three or fouryear voyage. The casual reference to “Amer
visitor taxes, and so on. Only the Native American ica’s National Hockey League”
In 2016 I gave an example of tribes of the Pacific northwest Jackson, Wyoming in “The puck stops here” (May
such a cbdcbased tax to the or Alaska would venture out in Lexington’s column (May 15th) 15th) must have caused your
House of Lords. Given wide a narrow hull to go whaling, on Liz Cheney’s political de Canadian readers to choke on
spread sentiment that London which those “coarse” sailors mise was excellent, and I share their Labatt beer. The nhl was
is too overweening, imagine a from New England would Ms Cheney’s concerns about founded in Canada and the
populist redistribution tax think to be foolhardy. Donald Trump’s detrimental nation referenced in the name
whereby transaction taxes rise gregory sanial impact on democracy. How is Canada. Sadly, however,
in wealthy districts. To bring Grand Rapids, Michigan ever, as a proud Wyomingite, I Canadians have long lost
about levelling up, politicians still resent Ms Cheney for control of their national sport,
increase the taxation rate as committing one cardinal sin with 24 of the 31 nhl teams
you approach Trafalgar Square, Technology and China against the people of Wyo located in America.
up to 99.9% beside Nelson’s You reported on the important ming: she moved to Jackson. Adding insult to injury,
Column, or spend your money role of the American govern You have to understand many of the newer teams are
in the Outer Hebrides at 0.1% ment’s Bureau of Industry and Wyoming's smallscale geo located in southern cities such
tax. Technology cuts two ways. Security in writing the rules on politics to understand this. As as Tampa, Las Vegas or
professor michael mainelli trade in technology with China a former governor said, the Anaheim that rarely, if ever,
Executive chairman (“Assuming the position”, May state is just one small town see natural ice.
Z/Yen Group 8th). It is misguided, however, with long streets between alistair bryden
London to suggest that the appoint neighbours. Most of it is rural, Comox, Canada
ment of an “outsider” to lead desolate and windy. Small
Some countries, such as Aus the bis would indicate a lack of communities rely on drilling,
tralia, have already digitalised a “real plan” on China. The mining and ranching to sur Letters are welcome and should be
their currency independently agency is responsible for vive. We are interconnected at addressed to the Editor at
The Economist, The Adelphi Building,
of their central bank. Since ensuring that sensitive tech the State Fair, county rodeos 1-11 John Adam Street, London wc2n 6ht
2013 most Australians have nologies do not reach ad and highschool sporting Email: letters@economist.com
opened costfree myGov ac versaries that would use them events. We all know someone More letters are available at:
Economist.com/letters
counts that can be operated for harm. That is an increas from Cheyenne, Cody, Gillette,
012
16
Briefing Mexico’s populist president The Economist May 29th 2021
The puritan from Tepetitán Obrador’s party, Morena, or clip its wings.
Mr López Obrador has attracted far less
global attention than other populist lead
ers. But look closer and he appears aston
ishingly similar to them (see table on the
next page). In his eyes, Mexicans fall into
two groups: the people, whose authentic
TE PETITÁN
will he represents, and the elite, who are to
Few outsiders have noticed how radical Mexico’s president is. Elections on June
blame for all Mexico’s ills. He sees himself
6th will determine how deeply—and ruinously—he can transform his country
as on a historic mission to sweep away the
T he plaque beneath a bust of President

Andrés Manuel López Obrador in his
home town proclaims him “the face of
fected areas a fridge, a mattress, a stove, a
fan, some pans and a blender, plus 8,000
pesos ($400). Some had received 10,000
rotten habits of the past and establish a re
public of virtue.
If he is on a mission from God, his op
hope” and a “tireless fighter for the rights pesos after earlier floods. ponents must be working for the other
of Mexicans”. That is certainly how the Mr López Obrador is not a convention side, and he lets them know it. Mr López
people there see him. ally skilled orator. He rambles and repeats Obrador’s predecessor, Enrique Peña Nie
“Andrés Manuel is different,” says He himself. But he connects with Mexico’s to, is a “spineless, immoral, unpredictable
berto Priego Colomé, a pensioner sitting in havenots and makes them feel seen and sycophant”. Others he has called “appren
the shade in Tepetitán, a settlement of respected. Rarely has a Mexican president tice pickpocket” or “reverend thief”. In his
2,000 souls in Tabasco state in southern attracted such adulation—and loathing. To daily two to threehourlong press confer
Mexico. “He’s normal. He’s sincere. He his supporters, who are largely rural, hard ences, he blasts individuals, such as criti
talks to the people.” He has also “sent lots up or old, he is the first national leader cal journalists. Some have received death
and lots of help”. The old man gestures to a since the 1930s who truly cares about them. threats from his supporters.
fancy new plaza with a basketball court To his detractors, he is an incompetent He is ostentatiously austere. On assum
and a diving board from which younger demagogue who could drag Mexico back to ing office, he halved the presidential salary
folk can plunge into a river. When the pres its predemocratic past. and put the presidential jet up for sale; he
ident visited, he threw a party on the plaza. At elections on June 6th Mexicans will flies economy class. The poor applaud
Mr Priego Colomé ticks off other bene have a chance to endorse one or other of such gestures. But by cutting his own pay,
fits Tepetitán’s favourite son has brought: these views. Mr López Obrador is not on he also cut that of top civil servants; no
bigger public pensions, a training pro the ballot—he is not halfway through his government employee may earn more
gramme for the young, a scheme whereby sixyear term. But they will be voting for than the head of state. Many of the best
old rural folk are paid to plant trees, and a the lower house of the national legislature, qualified quit. “Mexico was building a civil
new refinery that will bring jobs to Tabas 15 state governorships, 30 out of 32 state as service that was professional and serious.
co. When the river flooded last year, the semblies and thousands of local posts such That’s now broken,” says Montserrat Rami
president sent every household in the af as mayor. Voters can either boost Mr López ro, a former energy regulator. On May 25th
012
The Economist May 29th 2021 Briefing Mexico’s populist president 17
the United States downgraded its rating of

the safety of flying over Mexico, citing reg Slipping a little
ulatory laxity. A buyer has yet to be found Mexico, chamber of deputies, seats
for the presidential plane. 2021
Few would quarrel with Mr López Obra RULING PARTY AND ALLIES Independent
dor’s diagnosis that too much of Mexico’s Current Morena PT PES PAN PRI MC
political class was corrupt and ignored the
vast majority of Mexicans. His goals are
good: to raise incomes, improve public ser Projected* PVEM PRD
vices, cut crime and eliminate corruption. 0 100 200 Majority 300 400 500
But criticisms that he selects the wrong Sources: National Electoral Institute; SIMO Consulting/El País *For June 6th election
policies to achieve them, implements
them ineptly and tries to nobble any insti
tution that gets in his way hit the mark. bellbottoms, he is trying to revive a ques posed tougher punishments for bribetak
tionable old fashion. He has all but banned ing officials and clamped down on firms
Not his finest hour foreign investment in Mexican oil and is that sell facturas (bills that can be used for
Consider his record on covid19. The offi pouring cash into an $8bn refinery in Ta tax deductions). However, fewer govern
cial death toll is 220,000, which is bad basco, to be run by Pemex, the megaloss ment contracts are put out to tender than
enough. The Economist’s excessdeath making national oil firm. in the past. Mexicans tell pollsters they are
model estimates that as of May 10th, Mr López Obrador has ordered cfe, the asked to pay bribes as much as before.
477,000 more Mexicans had died than state electricity provider, to buy stategen The president’s vow to curb violence
would normally be expected—a rate 68% erated power first, rather than the cheapest has proved hollow, too. The murder rate,
higher than in Brazil, a bungler too. option. This is often from dirty oil—so five times that of the United States, has
The toll is partly down to Mexico’s high in sulphur that its use is banned in barely budged. Gangs control huge
crowded cities and overweight population. most ships. Cheaper, cleaner options exist, swathes of territory, corrupt the police and
But a panel commissioned by the World but these are usually produced by private pull the strings of local mayors.
Health Organisation also found “major de and often foreign firms, which Mr López
ficiencies in decisionmaking” by the gov Obrador distrusts. His policies have raised Could try harder
ernment. Mr López Obrador was slow to questions about $26bn of private invest It is not Mr López Obrador’s fault that drugs
act, set aside too little money and slashed ments already made in solar and wind en are illegal in the United States, nor that this
research funding. He failed to wear a mask ergy in Mexico. This deters investors. generates vast profits for Mexican crimi
in public and said Mexicans could curb the Fed up with bureaucratic delays, Mr Ló nals. Nonetheless, his efforts to stem the
spread of the virus by not lying or stealing. pez Obrador has turned to the army, which mayhem have been limp. He blames pover
The infection rate is falling, but the hu follows orders promptly. It now watches ty for crime, and promises to create more
man cost has been immense. Gregoria, the border, runs ports, helps catch crimi jobs for the young. But at the same time he
who sells single cigarettes and tamales in nals, distributes textbooks and vaccines, has replaced the federal police with a more
Mexico City, says two of her brothers died and is building 2,700 branches of “the Bank militarised outfit, the National Guard, un
of covid19, aged 52 and 62. She adds that of Wellbeing”, a staterun bank to disburse der command of the army.
the pandemic has driven away her custom cash to the needy. Men in uniform are also Under the slogan of “hugs, not bullets”,
ers; the government has given her no help. building a hopelessly uneconomic $7bn he has taken a soft approach to gangs. In
Mr López Obrador has done little to mit railway loop around his home state, paid 2019 he freed a drug kingpin’s son, hoping
igate the economic impact of the pandem for by the taxpayer. On completion the ar to buy a respite from the killing. He did not
ic because he is terrified of debt. A curren my will own it and pocket the income. For get one. The implied message to the gangs
cy crisis in 1994 taught him that too much now the army is relatively clean—and re has been “You can do what you like and we
debt can cripple the government and let spected. That may change if its leaders are won’t ask for anything in return,” says
foreign creditors boss Mexico around. So tempted by the vast sums of money they Jorge Castañeda, an exforeign minister.
his fiscal response to covid19 has been suddenly control. For many, Mr López Obrador’s gravest
among the most parsimonious in Latin Mr López Obrador’s crusade against cor flaw is disregard for the rule of law. He can
America. Mexico’s credit rating remains ruption has been selective. He has im celled a halfbuilt new airport for Mexico
tolerably firm. But more than 1m Mexican
businesses went bust in the past two years.
The economy shrank by 8.5% last year. The populists’ checklist
Even as bars remain open, schools have Traits of selected heads of government
been closed for 14 months (some are re Andrés Manuel
opening as teachers get jabbed). Teachers’ López Obrador Jair Bolsonaro Narendra Modi Viktor Orban Donald Trump
unions have strained to keep them shut. Mexico, 2018- Brazil, 2019- India, 2014- Hungary, 2010- US, 2017-21
They are very powerful: in one state, Oaxa Claims to represent
ca, a union controls the distribution of fed will of the people
eral funds to the state government. Mr Pe Insults opponents
ña Nieto tried to curb the unions’ power. in colourful ways
Mr López Obrador has restored it.
Sows hatred of ethnic/
The president’s policies are an eclectic religious minorities
mix of statism, nationalism and nostalgia
Undermines institutions
for the 1970s. Take energy. Back in the
1970s, oil prices were high and Mexico’s Fails to respect law
state oil monopoly was a mainstay of the Ignores science
economy, especially in Mr López Obrador’s Source: The Economist
home state. Like a boutique that stocks
012
18 Briefing Mexico’s populist president The Economist May 29th 2021
City. After the decision was challenged in learning anything. Some employers de The campaign has been dirty. The oppo
court, he called an unlawful referendum, mand kickbacks. The handouts are por sition say it is no coincidence that, when
in which a tiny electorate gave him a green trayed as personal gifts from the president. Morena’s candidate for governor of the rich
light. Claiming that the people had spoken, His economic record is dismal. Some northern state of Nuevo León flagged in the
he pressed ahead. economists predict real gdp per person polls, the attorneygeneral opened crimi
This has become a habit. He used a sim will be lower at the end of his term than at nal cases against the two leading opposi
ilar plebiscite to “approve” a gas pipeline, the beginning. Mexico should be doing far tion candidates. More than 30 candidates
and another to halt construction of an better. Joe Biden’s stimulus should turbo have been murdered.
Americanowned brewery. Such shenani charge Mexican exports, even as Mexican Nonetheless Mr López Obrador is ex
gans appal business folk. “We have lost cer emigrants send chunks of their stimulus pected to keep control with the help of al
tainty for investment, and for the future of payments back home. The country’s eco lied parties (see chart on previous page).
Mexico as a democracy,” says one. Foreign nomic sluggishness is the fault of “covid, The opposition—the Institutional Revolu
direct investment (fdi) should be boom not our policies”, says Claudia Sheinbaum, tionary Party (pri), which ruled Mexico for
ing, as firms scramble to diversify their the rulingparty mayor of Mexico City. On seven decades until 2000, and the National
supply chains away from China. Mexico May 21st Mr López Obrador said he planned Action Party (pan)—are a mess. Given Mr
has a sophisticated industrial base and the to replace the respected centralbank gov López Obrador’s record, they should be do
world’s biggest national market on its ernor with an (unnamed) economist ing far better. But neither has worked out
doorstep, where demand for manufac “strongly in favour of moral economics”. why the president is so popular. (It is be
tured goods has been strong in the past On a collapsed overpass in Mexico City, cause previous regimes were so selfserv
year and which is starting a postlockdown someone has scrawled: “Was it worth the ing and out of touch.) Neither offers a com
boom. Yet fdi has fallen under Mr López bribe?” At least 26 people died when a train pelling vision. A newer party, the centre
Obrador. A rise in the first quarter of this fell off it in May. Bystanders speculate that left Citizens’ Movement (cm), shows more
year included few new projects. “Firms are someone took a backhander to ignore promise. It controls Jalisco and may win
investing only to maintain existing pro shoddy construction or maintenance. “It Nuevo León; together, these big industrial
jects,” says Luis Rubio, an economist. had cracks. You could see them,” fumes Ga states generate 15% of gdp.
briel Gonzáles, a local taco seller. He com
A bad way to run things plains about rising prices, the baleful ef Going rogue
Mr López Obrador is trying to inject the fect of covid19 on his business, and the The opposition’s greatest fear has been that
“people’s will” into criminal justice, too, lack of government support. The presi Mr López Obrador might win enough pow
proposing a referendum on whether to dent’s party, Morena, “is as bad as the rest er to change the constitution. For that, he
prosecute five of his predecessors for cor of them,” he grumbles. would need twothirds of both houses of
ruption. He has also pressed an indepen The election on June 6th may not deliv the legislature and a majority of state legis
dentminded judge to resign and signed a er as big a blow to the president’s party as it latures. That seems unlikely: he does not
law extending the term of the friendly deserves. To oversimplify, it hinges on have a majority in the upper house, whose
chief justice of the Supreme Court. The whether Mr López Obrador’s personal pop seats are not in play in this election. But his
court will rule as to whether this is legal— ularity outweighs his woeful record. His critics now worry that if he does badly at
which it plainly is not. Mr López Obrador’s approval rating is a healthy 61%, yet polls the polls, he may double down on extra
critics fear he is trying to set a precedent. show most Mexicans are unhappy about legal means of transforming the country.
For a Mexican president to stand for a sec the economy, public safety and corruption. His party will dominate the poorer
ond term is taboo. But what if he were Morena is less popular than the presi states of the south. The opposition will
merely to extend his first term, perhaps dent. It is ahead of its rivals in the polls, but dominate the richer north. More than ever,
claiming that the people demanded it? its lead is slipping. A few months ago its there will be two Mexicos: one, a dynamic
Mr López Obrador assails institutions leaders said they expected to win a two and integrated part of North America; the
as eagerly as children thwacking a piñata. thirds majority of the 500 federal deputies, other, remote, backward and resentful.
He stifles the media by leaning on busi a dozen of the 15 governor races and the And one charismatic politician, sure of his
nesses not to advertise in critical outlets. vast majority of the local congresses. Now own righteousness, will be stirring up rage
He cuts the budgets of recalcitrant agen they are tempering expectations. for at least three more years. n
cies. He wants to abolish inai, the transpa
rency agency, arguing that such a body is
unnecessary when the president is an hon
est fellow like himself. He has threatened
the institute that oversees elections, too.
Critics fear he will do away with it and have
elections run by the presidential office.
His social programmes have done some
good. His pensions rises and the minimum
wage have helped many. His schemes to
support young and rural people are well
meaning. Some 330,000 Mexicans aged 18
29 get 4,310 pesos a month through year
long apprenticeships. Over 420,000 old ru
ral folk are paid to plant trees.
Yet both programmes are badly de
signed. Some farmers chop down trees so
they can be paid to plant more. Some plant
species that wilt in the local soil. The youth
programme is chaotic. No one checks if the
young people receiving cash are actually Money doesn’t grow on trees
012
Asia The Economist May 29th 2021 19
Myanmar after the coup Many other Asian firms are packing
their bags, although relatively few tie their
Quaking money-makers move explicitly to the coup. Some 11% of
the more than 180 Japanese firms surveyed
in April by a group of foreign chambers of
commerce said they had terminated their
operations in Myanmar. The country has
become an extremely difficult place to do
SEOUL , SINGAPORE AND TOKYO
business (see next article). Internet shut
Regional investors are having doubts about the military regime
downs, staff shortages and random vio
W hen tanks rumbled into Naypyi

daw, Myanmar’s capital, on February
1st, the man who sent them there, Min
gungho as they used to be.
In response to the coup, several firms
are cutting ties with two big conglomerates
lence meted out by the security forces have
forced many workplaces to close. More
than twothirds of the firms surveyed said
Aung Hlaing, the commanderinchief of owned by the army. Lim Kaling, a promi they had curtailed their activities; income
the armed forces, tried to offer the public nent Singaporean businessman, has said had declined for nearly half.
reassurance. Though the civilian leader he will sell his stake in a tobacco joint ven Many of these companies are staying
ship had been supplanted by men in fa ture with one of the conglomerates, Myan put, nonetheless. In fact, the junta insists
tigues, the coup, he suggested, would be ma Economic Holdings Limited (mehl). that Myanmar will attract $5.8bn in foreign
good for the economy. Kirin, a Japanese brewer, has said that if it investment this year. That may be fanciful,
It was not an absurd claim: the previous cannot find a partner to buy mehl’s stake but several of the countries that are the big
militarybacked government, in power in its joint venture in Myanmar, it will have gest sources of investment are not them
from 2011 to 2016, was considered more so to consider leaving the country. The Asian selves democracies, including China,
licitous and efficient by many business Development Bank has suspended new Thailand and Vietnam. Companies from
men than the democratically elected one grants and loans while Japan, Myanmar’s these places would not necessarily be put
that followed it. And although previous biggest donor in 2019, has put new aid pro off by the coup alone.
stints of military rule had seen America jects on hold. Some firms draw a distinction between
and other Western countries impose sanc doing business with the government and
tions, many Asian investors had ignored with the Tatmadaw, as the armed forces are
them and piled into what had seemed a → Also in this section known, even though the two are now one
promising market. Some 90% of the total and the same. The Korea Land and Housing
20 Disorder in Myanmar
stock of foreign investment in Myanmar Corporation is a South Korean government
comes from other Asian countries. If busi 21 Islamists in Bangladesh agency that formed a joint venture with the
nesses around the region could be per construction ministry in 2019 to build a
21 Australia’s frisky whales
suaded to keep funnelling money to the new industrial park near Yangon, the com
country, the general’s boosterism could 22 India’s covid-19 crisis eases mercial capital. Kwak Hwangun, who
conceivably prove correct. But the initial runs the agency’s operations in Myanmar,
23 Banyan: China loses the Philippines
evidence suggests they are not quite as rejects the idea that, owing to the coup, the
012
20 Asia The Economist May 29th 2021
state’s share of any profits will flow to the Business in Myanmar People wait past dusk to get money, even
army. “I don’t know where you heard that though being out after dark increases the
the military benefits from this but it’s to General disorder risk of running into trouble with soldiers
tally fake news,” he insists. By the same to patrolling the streets. In May an official
ken, Kang Hobin of Sun&l, a South Korean from the central bank said that frightened
firm that has a transport business with rt, citizens trying to withdraw their savings
a stateowned firm, insists that some gov were in fact aiming to “disturb the country
YANGO N
ernment departments have managed to and create mistrust”. The junta has asked
The junta struggles to restart
evade the generals’ clutches. banks to send it cdroms containing re
Myanmar’s stalled economy
Some businesses take their cue from cords of all deposits and withdrawals.
their home government. For decades the
Japanese authorities have argued that eco
nomic and diplomatic engagement can
I n mid-january Thaung Tun, who was
then Myanmar’s minister of investment,
promised local and foreign business folk a
The army had earlier threatened to fine
or nationalise banks that did not get strik
ing employees back to their posts. Quite a
nudge the generals in the right direction. swift recovery from damage wrought by few have now returned. But the persistent
State agencies and investment firms have covid19. Plans for whizzier internet and threat of violence from security forces
forked out billions of dollars of grants and renewable energy, he said, would bring op means many workers are frightened to be
loans to support Japanese businesses ven portunities they could once “only have out and about for long. A Burmese employ
turing into Myanmar. Some Japanese dip dreamed of”. Two weeks later the army ee of a South Korean bank was killed in
lomats admit that the coup shows that the launched a coup, bundling Mr Thaung Tun Yangon on March 31st after soldiers fired
government needs to think again. Yet Ja and other members of Aung San Suu Kyi’s on a company van that was taking her
pan frets that if it abandons its projects, cabinet into detention. Some analysts now home after her shift.
China will swoop in, says Kitaoka Shini think the economy could shrink by as Internet restrictions are making online
chi, the president of Japan International much as 20% this year. commerce difficult. The junta started
Cooperation Agency, the state aid agency. Businessfriendly technocrats of the blocking all mobile internet in midMarch,
Debate about how exactly businesses type who once advised Thein Sein, the re in an effort to stymie demonstrations. In
should respond rages in South Korea too. tired general who served as president until recent weeks it has started allowing access
Some firms argue that withdrawing alto 2016, hold little clout in the new regime. to selected online services, though social
gether would hurt ordinary Burmese. Pos The army has shut companies it believes media sites remain off limits. Investors
co International, an affiliate of Posco, a are harbouring opponents, including ma were once keen on Myanmar’s digital econ
South Korean steelmaker, has operated an ny media firms, while also trying to force omy, which grew particularly swiftly dur
offshore gasfield in Burmese waters in a businesses it deems essential to stay open. ing lockdowns imposed to control the
consortium with Myanmar’s state oil and The army is frightened by rolling strikes spread of covid19. They had previously
gas company since 2013. The National Un that have been organised in protest against piled money into local firms such as Fron
ity Government (nug), a governmentin the coup and the hundreds of killings its tiir, an internet service provider. Not any
exile composed of mps unseated by the soldiers have carried out while putting more. Telenor, a Norwegian mobile opera
coup, has asked Posco International and down demonstrations. In March authori tor that began rolling out its service in
other foreign energy firms to suspend pay ties in Yangon, the commercial capital, Myanmar almost a decade ago, has written
ments to the government until democracy briefly detained branch managers from su off the full value of its business in the
is restored. Oil and gas is the single biggest permarkets across the city so they could re country, at a cost of $782m.
source of revenue to the state. But Posco In mind them to stay on the job. Restaurants and shops in the posher
ternational argues that halting production Four months after the takeover long bits of Yangon have reopened, but custom
would turn off the lights for many ordinary queues continue to form at cash machines, ers remain sparse. A fruitmerchant in the
Burmese. Twofifths of the country’s pow which frequently run out of banknotes. city’s Chinatown says that although it is
er came from gas in 2019—although just getting much easier than it was to tran
20% of the gas from Posco’s business is for sport produce around the country, “there
domestic consumption. are far fewer buyers than before”. A for
There are no easy answers. The nug eigner who runs a consumergoods busi
suggests that gas companies should press ness in the city says he has yet to restart op
on with production but should forward erations since deciding to down tools in
any money owed to the government to an February, in part because of worries about
escrow account, to be handed over when the safety of staff. “We are waiting to see
democracy is restored. Total, a French en what happens in the coming months, but it
ergy company, has said that would put is hard to be optimistic.”
their local employees at risk of prosecu Activists would like more businesses to
tion and reprisals from the security forces. take a stand against the regime. On May
But on May 26th Total and Chevron, an 12th Tom Andrews, the un’s rapporteur on
American energy company, said they were human rights in Myanmar, said companies
suspending dividend payments to a Bur “should exert the maximum leverage on
mese pipeline company in which the state the military”. More than 200 firms, local
oil and gas group has a 15% stake. (They are and foreign, have backed a joint statement
still paying taxes for extracting gas.) Some calling for democracy and the rule of law.
lawmakers in America, meanwhile, want But the army has a history of violence
to take such decisions out of energy com against the staff of businesses that upset it,
panies’ hands by making it difficult for says an executive at a big foreign company.
them to do business in Myanmar, wherever “Even as part of what appears to be civil di
they are from. Far from creating an eco alogue with authorities, in official letters
nomic boom, the coup could result in an and phone calls, the threats are there: ‘or
implosion. n It cannot dispense confidence else there will be consequences’.” n
012
The Economist May 29th 2021 Asia 21
Politics in Bangladesh the League to signal that “we’re against Ja those who received them eligible for good
maat, but not against Islam”. government jobs.
Back in line The government has adopted some of The unlikely partnership has brought
Hefazat’s rhetoric and granted many of its about a swift Islamisation of Bangladeshi
demands. In 2015, when a string of atheist society, says Mr Riaz. More children are
writers were murdered in the street, Awa schooled in madrassas. Religious leaders
mi League politicians implied that they are growing less tolerant of interpretations
had deserved it. Two years later the govern of Islam that differ from their own. Not
The government cracks down on a big
ment revised school textbooks to remove long ago few people discussed which
Islamist group
poems and stories written by people whom school of Islamic jurisprudence they be
T he mood was supposed to be jubilant

when Narendra Modi, India’s prime
minister, visited Dhaka at the end of March
Hefazat accused of promoting secularism.
Authorities also declared that degrees
handed out in Islamic schools were to be
longed to, let alone which submovement,
says Mr Riaz. That has changed.
Attacks on religious minorities are
to celebrate Bangladesh’s 50th birthday. In considered equivalent to masters qualifi growing more common, according to an
stead 13 people died in clashes with police cations from public universities, making American government report that was
after thousands took to the streets to de
nounce Mr Modi, whose treatment of Mus
lims at home is unsurprisingly unpopular Conservation in Australia
among Bangladesh’s Muslim majority. Au
thorities have since arrested hundreds of
Humpback comeback
supporters of HefazateIslam, the Islamist
SYD NEY
movement behind the demonstrations.
Australia’s whales are breeding like rabbits
The crackdown marks a change in strategy
for Bangladesh’s ruling party, the Awami
League. It had spent most of the past de
cade courting this puritanical group.
L ook out from a clifftop in Sydney
around this time of year, and you may
witness one of nature’s great migrations.
HefazateIslam, which means “Protec Between May and November some
tors of Islam”, formed in 2010 after Islamic 40,000 humpback whales commute
teachers from the city of Chattogram (for along Australia’s eastern coast. It is a
merly Chittagong) united against plans to highway from their feeding grounds in
make inheritance laws more favourable to Antarctica to the Great Barrier Reef,
women. Before then the job of promoting where their calves are born.
Islam in politics had largely fallen to reli They were once much harder to spot.
gious parties such as JamaateIslami and Europeans started slaughtering whales
its mainstream ally, the Bangladesh for their oil and bone soon after arriving
Nationalist Party. This changed after in Australia, and did not stop for nearly
Sheikh Hasina Wazed, Bangladesh’s prime two centuries. By the time hunting
minister, took power for a second time in humpbacks was banned in the 1960s,
2009. Her government dragged senior there were scarcely 200 left in eastern
members of Jamaat—who in 1971 had sup Australia. Another population, off the
ported Pakistan during the conflict that led continent’s west coast, had dwindled to
to Bangladesh’s independence—through a about 800.
warcrimes tribunal. Fortunately humpbacks are “the Leaps and bounds
Hefazat’s influence increased enor rabbits of the ocean”, says Olaf Meynecke
mously in 2013, when judges on that tribu of Griffith University. They have bred populations”, says Wally Franklin of the
nal declined to sentence a highranking prolifically since people stopped butch Oceania Project, an ngo which studies
member of Jamaat to death. Hefazat’s lead ering them. Lately the number swim them. Humpbacks get caught in nets and
ership decided that some of the Bangla ming near Australia has risen by more struck by boats. Oceans are growing
deshis who protested against this verdict than 10% a year. Joshua Smith of Mur noisier and more polluted. So far this
had insulted Islam. Hundreds of thou doch University says this rate of growth does not seem to have curbed their num
sands of Hefazat’s supporters marched on is “almost biologically implausible”. The bers. But scientists worry about climate
the capital to demand the hanging of athe creatures may now be as numerous as change, which threatens the krill the
ist bloggers and the introduction of a new they were before commercial whaling. whales feed on. They say the government
law on blasphemy. Instead of sending The federal government thinks it is should promise to monitor their pop
them packing, the government rushed to time to remove humpback whales from ulations, in case a crash comes.
placate the mob. It brought charges against Australia’s list of threatened animals. Compared with other Australian
several writers accused of upsetting reli “No other whale species has recovered as creatures, however, the whale looks
gious folk. It also set up a panel to police strongly,” notes the environment depart lucky. By one estimate Australia is flat
commentary on Islam. ment. Threatened creatures get extra tening a stadiumsized area of forest and
The episode helped forge an unofficial funding and attention, and there is only bushland every two minutes, threat
alliance between Sheikh Hasina’s govern so much of that. The government says ening creatures such as the koala. Three
ment and Hefazat. Appearing to rub along that even if they are “delisted” whales billion animals were killed by enormous
with the group has lent the prime minister will still be guarded by an environmental bushfires 18 months ago. All told, Austra
some credibility among the very religious law that protects migratory species. lia is losing mammals faster than any
(her father, Sheikh Mujibur Rahman, Whalewatchers worry that this is too other country, says the World Wildlife
founded the Awami League as a secular hasty. Lots of threats are “about to bear Fund, a charity. Not many get a come
party). Ali Riaz of Illinois State University down on these beautifully recovered back like the humpback.
says that indulging Hefazat has allowed
012
22 Asia The Economist May 29th 2021
published in May. Earlier this year a mob Tamil Nadu in the far south, are only just
ransacked a Hindu village in Sylhet, in Over the top beginning to peak. “We can’t really be san
northeastern Bangladesh. The gang in India, covid-19, daily new confirmed cases guine because it’s like an agglomeration of
cluded supporters of Hefazat and members Seven-day moving average, ’000 peaks,” says Ambarish Satwik, a surgeon in
of the Awami League’s youth wing. 400 one of Delhi’s biggest hospitals. “It’s going
Lately Hefazat had come to believe that to move centrifugally from cities to villag
it was “indispensable” to the government, es, so it’ll drive on for a bit.”
300
says Niaz Asadullah of the University of Across India’s poor, crowded Gangetic
Malaya. Yet drumming up demonstrations plain, where doctors and statistics are
against Mr Modi now seems to have been a 200 most sparse, anecdotal evidence suggests
miscalculation. The group’s leaders appear that the grim reaper has come, snatched
to recognise that Sheikh Hasina, whose 100 lives in every village and mostly then
rule has become increasingly authoritar marched on again. It has left whole com
ian, has always had the upper hand. In 0 munities emotionally and economically
stead of encouraging supporters to protest 2020 2021
shattered. A team of reporters from Dainik
against the arrests of its members, Hefa Source: Johns Hopkins University CSSE
Bhaskar, a Hindilanguage daily, counted
zat’s chief, Junayed Babunagari, has merely more than 2,000 corpses hastily disposed
called on the government to release all of along a 1,100km stretch of the Ganges.
those in custody. positive in April reached a frightening The victims are not only the very poor.
Unlike the crackdowns which Sheikh 36%. This has tumbled below 2%. The cor A teachers’ union in Uttar Pradesh, India’s
Hasina has launched against other rivals, responding national “positivity rate”, most populous state, says no fewer than
the goal on this occasion is probably not to heavily weighted towards cities where 1,621 out of the 800,000 teachers who work
eviscerate Hefazat but instead to bring it to more tests are performed, has fallen from in its public schools died in the past
heel. Factions keen to repair ties with the 24% to less than 10%. month. At a recent conclave of stateowned
government are already gaining promi In the main cities at least, the desperate banks, which employ more than half a mil
nence within it. The incident has demon fight to get oxygen to gasping patients has lion people, managers said that around
strated that Hefazat can be tamed, says Mr been won. Daily demand for liquid medical one in five staff had contracted covid, and
Riaz. “But the ethos it has created is not go oxygen (lmo), which reached some 9,000 that more had died of the illness in the past
ing to go away.” n tonnes—three times the demand during six weeks than in the preceding year of the
India’s first peak in September—has now pandemic.
begun to drop, according to a government The wave has left scars. While India’s
Infections in India taskforce. poorest, perennially battered by droughts,
Jokers point to another indicator of im floods and capricious governments,
The other side proving fortunes. Leaders whose visibility among other plagues, have been forced to
faded as the tragedy mounted have sud bear the calamity with stoicism, its middle
denly grown less camerashy. “You know class has been made to feel vulnerable as
cases are going down because...Modi has never before. Even the most privileged
reappeared,” jested one tweet, referring to found themselves locked out of over
D E LHI
the prime minister, Narendra Modi, who whelmed hospitals, or obliged to queue for
India’s covid-19 crisis is finally
recently appeared to choke with emotion vaccines along with hoi polloi. Their suf
beginning to ease
during a televised Zoom call with doctors fering continues. On social media, urban
I n late may India passed two sad mile

stones in the struggle against covid19.
The official number of deaths from the
in his parliamentary constituency.
But if panic is beginning to recede, the
crisis is far from over. The wave started in
Indians are no longer messaging desperate
pleas for oxygen, or for drugs that were
widely and wrongly prescribed for co
pandemic crossed 300,000. Daily fatalities the west of the country, broadly speaking, vid19. Now the demand is for medicine to
topped a record 4,500. Sadder still was the and has still not finished sweeping east fight mucormycosis or “black fungus”, a
certainty that on both counts the true toll wards. Infections in Chennai, capital of deadly infection that has particularly aff
was many multiples higher. Across vast
stretches of the country’s interior there is
little testing for the virus, and therefore
few “official” cases or deaths. Epidemiolo
gists agree that a full tally would put India
far ahead of America and Brazil in the dis
mal rivalry for the country with the most
people killed by covid19.
Yet even India’s faulty government
numbers now give reason for hope. The
parts of the country where counting is fair
ly reliable show a clear trend. The virus’s
vicious second wave is rolling back almost
as fast as it rolled in. In early May India was
recording some 400,000 new cases a day.
This has now fallen below 250,000. The
daily number of new cases in Mumbai, the
country’s commercial capital and one of
the first places to see a surge, is about an
eighth of its peak. In Delhi, the hardhit
capital, the share of covid19 tests proving Pretty graphic
012
The Economist May 29th 2021 Asia 23
licted diabetics who were too liberally when or whether they will receive a sec dia’s overburdened courts.
dosed with steroids during treatment. ond. Many millions more—some 89% of In cities, where more people are able to
Public frustration over the scale of the India’s 1.4bn people—have received no get a jab, the vaccination campaign may
tragedy might have been soothed if the dose at all. Their wait may be long: the imf have helped bend the current wave. But the
government’s vaunted campaign to vacci predicts that by the end of this year fewer main cause of the decline in numbers,
nate Indians had been a success. Instead it than 35% of adults will have received a jab. aside from the virus’s own natural trajecto
has failed spectacularly. During the height The government, belying its own talk of ry, has been the imposition of tough local
of the surge in infections the number of determination to secure more vaccines, lockdowns. Mr Modi’s government, wary
people receiving shots did not rise to meet still will not license proven foreign ones of hurting India’s badly wounded economy
the threat, but instead withered from 3.5m such as those of PfizerBioNTech and Mo even more, had delayed these measures as
a day to barely 1.5m because the govern derna. Bureaucrats refuse to waive indem long as possible. But in the end it was strict
ment had failed to plan properly or to se nity clauses, as dozens of other countries curfews, enforced by public fear of the
cure enough vaccine. Millions of Indians have done, leaving the companies to face rampaging disease as much as police mus
who received a first dose now wonder the risk of endless, costly litigation in In cle, that have saved most lives. n
Banyan Beached
As China grabs more of the South China Sea, it is losing the Philippines
T he discovery in March of 200odd

Chinese vessels around a reef in the
“exclusive economic zone” that extends
Duterte tilted strongly towards the great
power to the north. He refused to press a
ruling in the Philippines’ favour from an
Fishermen say they are frightened to
return to Scarborough Shoal, given past
rammings by Chinese vessels. Maritime
200 nautical miles from the Philippines’ international tribunal, which rubbished tensions preventing exploration for oil
shores has brought neardaily protests China’s sweeping claims in the South and gas, Mr Batongbacal argues, have
from its foreign and defence ministries. China Sea. On his first trip to Beijing as influenced energy policy, leading to an
Whitsun Reef, which the government president to meet his counterpart, Xi overemphasis on coal. A flood of Chinese
calls the Julian Felipe Reef, is one of Jinping, he declared that it was “time to nationals to Manila’s offshore gambling
many that make up the Spratly Islands in say goodbye” to the United States. For industry has brought a host of social
the middle of the South China Sea. It is good measure he announced a military problems in its wake.
three times closer to the Philippines than “separation” from the Philippines’ ally and Mr Duterte’s insistence that relations
to China, which lays wild and unsup former colonial power. remain good is motivated by hopes of
ported claim to nearly the whole sea. At the time, Mr Duterte was quick to deliveries of Chinese vaccines, on which
The swarming of Whitsun, led by boast of the fruits of his proChina tilt: his legacy now rests (he steps down next
“grey zone” militia vessels masquerading promises of big investments in the Philip year). To date, supplies have been paltry.
as fishing trawlers, is the latest move in pines’ decrepit infrastructure as part of And despite the pandemic’s ravages—
China’s expanding occupation of con China’s Belt and Road Initiative (bri); the more than 20,000 dead—Filipinos are
tested specks in the South China Sea. return of Filipino fishermen to the waters sceptical of Chinese jabs.
This time, most of the Philippine govern around Scarborough Shoal, into which The president must realise that his tilt
ment appears determined not simply to China had muscled in 2012; and the pros towards China has been a failure. The
roll over. As the defence secretary, Delfin pect of Chinese help in exploring for reverse of the coin is a renewed tilt to
Lorenzana, put it: “While we acknow hydrocarbons in Philippine waters. Yet, wards America. A year ago Mr Duterte
ledge that China’s military capability is says Jay Batongbacal of the University of announced the cancellation of the bilat
more advanced than ours, this does not the Philippines, it has nearly all come to eral Visiting Forces Agreement (vfa),
deter us from defending our national naught. bri projects are either small (a which enables American troops to be
interest, and our dignity as a people, with couple of bridges in Manila, the capital) or deployed in the Philippines. Yet twice
all that we have.” The foreign secretary, controversial (dams in nature reserves). since then he has granted an extension
Teodoro “Teddy Boy” Locsin, who has a allowing the vfa to continue, while Mr
notorious trigger thumb on Twitter, went Lorenzana and Mr Locsin argue for its
further. “China, my friend,” he wrote, permanent retention. Meanwhile, Mr
“how politely can I put it? Let me see… Duterte has at last begun to champion
O…GET THE FUCK OUT.” the arbitral ruling against China’s claims,
Strikingly, the member of govern including to Scarborough Shoal.
ment most reluctant to criticise China is The Philippines is repairing its rela
the president, Rodrigo Duterte. After Mr tionship with America. In reality, it was
Locsin’s outburst, the coarsetalking Mr never sundered—foreign and security
Duterte declared that, within his cabinet, ties run deep. Still, the administration of
only he had a licence to curse. He also President Joe Biden has signalled sup
found ways to praise China, including for port. It has increased joint military exer
the supply of muchneeded vaccines cises and has made clear that its mutual
against covid19. defence treaty covers coming to the
On paper, says Julius Trajano, a politi Philippines’ aid, even in the event of an
cal analyst, the president is the chief attack by China’s unofficial militias.
architect of foreign policy in the Philip China may have won Whitsun Reef. But it
pines. After he took office in 2016, Mr has lost the Philippines.
012
24
China The Economist May 29th 2021
Inequality in education outside the capital, according to state tele

vision. More students from Beijing are ad
Serve the rich mitted to Tsinghua every year than the
combined number of successful appli
cants from Guangdong and Shandong. The
population of those two provinces is ten
times bigger than Beijing’s.
In a paper published in 2015, scholars
HONG KO NG
from Tsinghua and Stanford University
It is becoming even harder for poor students to get into a good university
said students with hukou in the poorest
A fter xiong xuan’ang gained the

capital’s best score in China’s universi
tyentrance exam in 2017, he was inter
the hukou system, which makes it very dif
ficult to gain free access to stateprovided
services outside the place where one’s
fifth of counties were seven times less like
ly than their urban counterparts to get a
university place and 14 times less likely to
viewed by Beijing’s media. The son of dip household is registered. This means that in attend an elite one. In those counties, the
lomats, Mr Xiong acknowledged that his cities, the children of migrants from the odds were even more stacked against girls
upbringing had been privileged. “All the countryside are usually shut out of local and ethnic minorities. “It is really, really
top scorers now come from wealthy fam state schools. They have to attend shoddy clear that it is now much, much harder for
ilies,” he said. “It is becoming very difficult private ones that charge fees, or go to their a poor, rural kid to get into a good universi
for students from rural areas to get into parents’ village for an education that is free ty,” says Scott Rozelle of Stanford. He esti
good universities.” His honesty drew much but also barebones. mates that around 75% of urban children
praise online. The situation is made worse by the way go to university compared with 15% of rural
Since 1998, when China began a huge that university places are allocated. The ones. Nearly 80% of children under 14 have
expansion of university enrolment, the best universities are concentrated in the rural hukou. But writing in 2017, Wu Xiao
number of students admitted annually has biggest and richest cities such as Beijing gang, now of nyu Shanghai, a SinoAmeri
quadrupled to nearly 10m. About one third and Shanghai. They offer a disproportion can jointventure university, said less than
of highschool students now proceed to ate number of places to students with local 17% of students in elite universities had
undergraduate courses. Data are patchy, hukou. China’s two most prestigious uni rural householdregistration before taking
but experts agree that the share of rural versities, Peking University and Tsinghua, up their places. The pattern has not
students at China’s best universities (the are in Beijing. Their acceptance rate is changed since then, says Mr Wu. “If any
top 1%) has shrunk. Only 0.3% of rural stu around 1% for local students but only a thing, it may be even worse now.”
dents make it into them, compared with tenth of that for applicants from places That is because inequalities in society
2.8% of urban ones. Most other tertiary in are becoming more pronounced. The chil
stitutions are far inferior. dren of wealthy families have access to the
→ Also in this section
Around the world, students from poor best schools as well as to afterschool tu
backgrounds struggle to compete with 25 Hazing at weddings toring and extracurricular activities. Their
their richer counterparts. In China the di parents can afford homes in good catch
26 Chaguan: Cautious about Afghanistan
vide is particularly stark. The main cause is ment areas. China offers nine years of free,
012
The Economist May 29th 2021 China 25
compulsory education, but fees are levied Wedding rites The custom has faded in big cities but
at staterun senior secondary schools. In remains popular elsewhere. In the NetEase
poor areas, charges can amount to more Will you mortify sample, the provinces of Shandong and
than 80% of net income per person, one of Yunnan accounted for 60% of cases. The
the highest such burdens in the world. me? practice upsets the government, which
Some students prefer to start work: a typi wants to create “civilised cities”. Last year it
cal unskilled factory hand can earn in a called for an end to “unhealthy marriage
DALI
month what a poor farmer earns in a year. practices”. These included naohun, “extrav
Officials are trying to curb an old
The national universityentrance exam agance and waste” at parties and “sky
custom that has got out of hand
was suspended for the final decade of Mao high” caili—cash given by the groom to the
Zedong’s rule. Since its relaunch in 1977,
universities mostly have relied on test
scores for admission. In 2003 China began
N erves are common in the runup to
nuptials. Couples in some parts of Chi
na must brace for torment. In a ritual called
bride’s family. In April the central authori
ties designated 15 areas in ten provinces as
pilot zones for wedding reform.
to allow some universities to recruit stu naohun, or “disturbing the wedding”, Local governments have responded
dents with special talents such as in sports guests haze them. Often this involves forc with a flurry of directives. In Inner Mongo
and arts. Again, the wealthy have been the ing the man to strip to his underwear and lia, in the north, weddings must now be
main beneficiaries: only they can afford to don stockings or a bra. Friends then tie him hosted by local “redandwhite councils”
pay for the training needed. to something and slather his body with run by Communist Party branches (red
For decades statefunded feeder sticky substances such as soy sauce and stands for weddings, white for funerals). In
schools in poorer areas played a vital role eggs. Firecrackers, taped to flesh, are some provinces, newlyweds must sign a
in offering good students from the coun sometimes set off; injuries ensue. Women pledge to eschew “uncivilised” naohun. A
tryside a chance to get into university. But can be targeted, too. Naohun allows people county in Henan province has capped caili
many have closed as a result of migration to kiss the bride and bridesmaids and even at 30,000 yuan ($4,600)—less than a third
into cities. Meanwhile, competition has to grope them. of the going rate. Others have limited the
grown for places in good senior secondary Naohun rites were not always intended size of banquets to 30 tables. Fines have
schools. Ma Hang attended primary school to humiliate. They began centuries ago been specified for rulebreakers.
in his home village. But the best junior with the aim of helping to put newly Even before the central government be
high school in the county would not accept weds—who often barely knew each other— gan its campaign, the city of Dali, a popular
village students unless they paid extra fees at ease. Relatives would gently tease the wedding spot in Yunnan, had begun sta
or had powerful connections. His parents couple in their bridal chamber, alluding to tioning urbanmanagement officers at
managed to use such a connection to get intimate acts. This served as a form of sex wellknown naohun locations. Yang Pin
him into the school. He says that set him education. Rituals involving the groom’s kang, a 26yearold local who got married
on a path that led him to a feeder high father, such as making him carry his in October, had no naohun. “My friends
school and then to university. daughterinlaw on his back, were once were disappointed,” Mr Yang says. “But am
Rural children in China face obstacles cheered as a sign that she would be well I not meant to look my best for my wife on
at every stage of development. Babies are treated by her husband’s family. my wedding day?” He says residents have
more likely to be undernourished and lack But in recent times, naohun has become gone cool on naohun since the drowning of
parental attention. By the time they enter an excuse to be rowdy, lewd or even physi a groom who was thrown into a lake. Mr
primary school, many have ailments such cally abusive. In 2017 NetEase, an internet Yang recalls how his uncle set his aunt’s
as anaemia, poor vision and worms. giant, found 142 cases in the previous five wedding dress on fire after friends dared
Around 60% of students from the poorest years of hazing so outrageous that it had him to crawl under it and light matches.
counties suffer from at least one of these featured in stories in China’s media. Half No more such recklessness in Shan
afflictions, says Mr Rozelle. of the incidents involved binding and beat dong province, officials hope. “Let us all be
Those who, despite the odds, make it to ing. In 80% of them, grooms were the vic more polite,” one city there, Zouping, de
elite universities often feel socially isolat tims. Only five involved hazing of the creed in March. “Help weddings go back to
ed. In 2020 a student from the countryside bride, but cases of sexual harassment may being warm and romantic.” Consider it a
took to social media to describe being “lost often go unreported. marriage demand, not a proposal. n
and confused” at university after leaving
the “straightforward environment” of
school, where passing tests was the focus.
More than 100,000 students, many with
rural backgrounds, weighed in, sharing
their own experiences of feeling like mis
fits and lamenting their job prospects.
They coined a new term in Chinese: xiao
zhen zuotijia, meaning “smalltown swot”.
Wang Jianyue, a countryborn physics
whizz, can relate to their complaints. He
chose to study finance at university, think
ing it would be easier to find a job with
such a specialism. It was only after he saw
several of his classmates get internships at
big financial firms using their parents’
connections that he “truly understood the
gap” between himself and them. Mr Wang
changed his focus to computer science.
Unlike some other smalltown swots, he
has, to his relief, got a job offer. n A part of tying the knot the government wants to bin
012
26 China The Economist May 29th 2021
Chaguan China’s revealing Afghan strategy
A suspicious China prepares for America to pull out of Afghanistan

ghanistan: to prevent that unhappy country from sliding into cha
os and becoming a haven or transit corridor for Uyghur militants
who, China is sure, lurk in the region. Those fighters, China be
lieves, include some with combat experience in Syria, some
trained by Iran, and others who hope to enter Xinjiang through
lawless tribal regions of Pakistan.
It would have been reasonable, too, for China to have asked
Pakistan to help stem the bloodshed. Pakistan is the Taliban’s pa
tron, and has prodded the Afghan militants to establish ties with
China. Pakistan likes to be useful to China, its most important
sponsor. But the ministry chose a different response. After deplor
ing the murder of the schoolgirls in Kabul, its spokeswoman, Hua
Chunying, singled out America for blame. She charged that the
“abrupt” announcement of America’s exit from Afghanistan had
“led to a series of explosive attacks throughout the country”. She
called on foreign troops “to pull out in a responsible manner and
avoid inflicting more turmoil and suffering on the Afghan people”.
This is a new criticism. Chinese scholars and state media have
spent years accusing American forces of straying beyond their
original mission to eradicate alQaeda and of spreading turmoil
with their naive dreams of Westernstyle nationbuilding. More
recently, they have asserted that America will surely leave behind
O n may 9th China’s foreign ministry was asked to comment on

an atrocity in the Afghan capital, Kabul. Terrorists had deto
nated a car bomb outside a girls’ school, then two more bombs to
covert operatives after its troops leave, in part to make trouble for
China. In short, China believes that America has stayed too long in
Afghanistan, is departing too hastily and is not really leaving at all.
kill pupils running for safety. At least 68 people had died, most of That line of argument is tangled enough. Making it more so,
them children. The attack was aimed at girls from a Shia minority Chinese officials now call Afghanistan an area of possible cooper
that is often targeted by Sunni Islamist groups, which have ation with America, along with climate change and efforts to curb
brought much misery to Afghanistan. Today such groups are jos nuclear proliferation. When pressed for detail, including at a re
tling for bloodsoaked advantage ahead of a full withdrawal of cent meeting with American counterparts in Anchorage, Chinese
American forces, at the latest by September 11th this year, as or envoys are vague. A few years ago China and America did jointly
dered by President Joe Biden. China’s diplomats could have re train Afghan diplomats and police. These days China stresses the
sponded to the latest violence in several plausible ways. importance of its Belt and Road Initiative: how the infrastructure
It would have been reasonable for the foreign ministry to tell building scheme can promote Afghan development and thus sta
the largest militant group, the Taliban, to rein in the mayhem, for bility, such as by connecting the country to the sea via Pakistan.
China enjoys growing leverage over the Taliban’s leaders. That Afghanistan once saw remarkable cooperation. Early in the
may seem counterintuitive. China’s foreign minister, Wang Yi, has war on terror, President George W. Bush’s administration desig
expressed hope that future Afghan governments will embrace nated a Uyghur group, the East Turkistan Independence Move
moderate Islam: an apparent rebuke of Talibanstyle zealotry. ment (etim), as terrorists. Chinese agents were allowed to interro
Across the border, in China’s northwestern region of Xinjiang, gate Uyghurs detained in Guantánamo Bay. They told one Uyghur
officials have demolished mosques and banned young people he was lucky to be in American hands, since “as soon as they got
from public prayers. In all perhaps a million Muslims, most of him back to China, he was dead”, his lawyer later told Congress.
them from the Uyghur minority, have passed through reeduca Such joint action is unthinkable now: the two sides are so far apart
tion camps in Xinjiang, set up to cure them of excessively reli on Xinjiang. In 2020 the Trump administration delisted etim as a
gious or “backwards” thinking, and to turn them into biddable terror group, expressing doubts that it still existed. China says it is
workers, loyal to the Chinese motherland. a grave menace.
But the Taliban can be both fanatical and pragmatic, it turns
out. Their leaders hope to rule Afghanistan soon, a quarter of a To China, nothing matters more than stability
century after they first subjected the country to a reign of pious China sees its positions as coherent. Singling out America as a
terror. Especially over the past three years, say scholars and dip troublemaker is logical. It also distrusts the Taliban, Pakistan and
lomats in Beijing and other capitals, links between the Afghan Iran, but those actors have reasons to bow to China’s will, so do not
Taliban and China have grown remarkably. Anxious for political need public scolding. In contrast, America is a dangerous rival
recognition and economic backing from their giant neighbour, that has made bad mistakes, so is an ideal target for criticism. Chi
Taliban delegations have approved of Chinese plans to build na may support regional or un peacekeeping missions in Afghani
motorways between Afghan cities. They claim to support a Chi stan, if its neighbour seems on the brink of civil war. But it will not
nesefunded project near Kabul to create one of the world’s largest send its own troops to keep order, at least under a Chinese flag, be
copper mines, which has been stalled for years by concerns about cause its neighbour is a “graveyard of empires”. Afghanistan’s case
ancient Buddhist ruins on the site and by fears of militant attacks. is revealing. China is emerging as a great power that—to an excep
Privately, it is said, the Taliban have signalled that they do not tional degree—trusts in cold, hard economic and security inter
care about Xinjiang. That relates to China’s main interest in Af ests alone. To China, selfinterest is wisdom. n
012
United States The Economist May 29th 2021 27
Texas politics approach to historical racial bias) in

schools. One preventing transgender stu
Red-faced dents from joining school sports teams
that match the gender with which they
identify narrowly missed a deadline. An
other bill being considered would require
sports teams that do business with the
state to play the national anthem at every
DALLAS
game. “Just when you think Texas couldn’t
Why the Texas legislature is becoming more radical
go further to the right, here we are,” says
T exans prize efficiency. They like to

elide “you” and “all” into a singlesylla
ble word, and instead of the state govern
to carry a handgun with them in public
without going through training, finger
printing or a background check, has also
Mark Jones of Rice University.
This rightwardstep took many by sur
prise, because the last time legislators con
ment meeting annually, its citizen legisla passed the legislature and will soon be vened the bills they passed were more con
tors are in session only every other year to signed into law. What once seemed a fringe cerned with governing than signalling.
discuss the budget and pass new laws. preoccupation of a few lawmakers is now That session had followed Democratic
(This is despite Texas boasting the ninth mainstream among Texas Repulicans. gains in 2018, when Beto O’Rourke ran for
largest economy in the world, ahead of Bra The same is true of a new voting bill, the us Senate. In response Republicans
zil’s.) May 31st marks the end of the current which puts restrictions on polling places adopted a strategy of selfpreservation,
legislative session in Austin, but the im and their hours of operation, and was ex mostly avoiding polarising social issues
pact of the past few months will be felt for pected to be signed into law as The Econo- and focusing instead on priorities for
longer. “This was the most conservative mist went to press. The session also under mainstream voters, such as increasing
session I’ve seen in 30 years,” says Evan lined where the frontline in the culture funding for public education and capping
Smith of the Texas Tribune, which keeps wars is now: there was a bill banning the property taxes.
tabs on the state capitol. teaching of critical race theory (a particular Since then, the 2020 election has em
If Texas is dancing the twostep, it is do boldened Republicans, who see selfpres
ing so with two right feet. Bills that might ervation rather differently now. After
not have even been given a hearing in pre boasting that they could well take control
vious legislative sessions are passing both 28 Assessing the George Floyd Act of the state House, Democrats failed to
Republicancontrolled chambers of the make inroads, both because campaigning
29 Migration and foreign policy
state legislature and being signed by the was constrained by covid19 and because
Republican governor, Greg Abbott. This in 29 It’s infrastructure year national progressive rhetoric did not play
cludes one of the most restrictive abortion well in Texas. Republicans have seized on
30 The Sagebrush Rebellion, contd.
laws in the country, which bans the proce this, and are using this legislative session
dure as early as six weeks and makes no ex 31 New York’s new island to establish their credentials ahead of next
ception for rape or incest. “Permitless car year’s midterm elections, when all 31
32 Lexington: The Kamala dilemma
ry”, which enables those over the age of 21 members of the Senate are up for election.
012
28 United States The Economist May 29th 2021
Members of the legislature fear Demo autumn for a special session on redistrict
crats less than losing to a conservative rival ing. Because the Democrats did not win
in the primary. “Nobody cares about No control of the House, Republicans will
vember any more,” says Jason Sabo of Fron have unchecked power to redraw districts
tera Strategy, a lobbying firm. “The only to favour them. It will be hard to draw dis
thing that matters is March, and the only tricts that last for more than a couple of
way to lose a Republican primary is if election cycles, predicts Ed Emmett, a Re
someone makes you look too liberal.” Mr publican who was county judge and lost to
Abbott, too, is using this legislative session Ms Hidalgo. “If Republicans don’t start
to fend off conservative primary challeng talking about issues that the general public
ers next year, when he is up for reelection. cares about, we’re not going to be compet
He is believed to have presidential aspira itive,” he says. Yet similar pleas from mod
tions, and views the state’s fame for some erate Texas Republicans have been heard
of its more Trumpian laws as thoroughly before, and ignored.
good for his own national brand. Right now the headlines are focused on
Texas may be a bellwether for national the bills being passed, but the session may
politics. It is also a showcase for the linger be remembered just as much for what was
ing influence of Donald Trump and his ac ignored. This includes devising a plan for
olytes. Dan Patrick, the lieutenantgover Texans who lack healthcare coverage and
nor, twice chaired Mr Trump’s campaign in shoring up the state’s electricity grid, after
Texas. The state’s voting bill panders to the the February storm left millions without
former president’s false claims of electoral electricity and killed around 200. The leg
fraud. “The only people who were at the islature has not developed a substantive Smile for the camera
Capitol in Austin were legislators and older bill to prevent the grid from failing again,
white male lobbyists in pinstripe suits and even though experts have warned that the of officer misconduct, requiring federal of
cowboy boots,” says Mr Sabo. “I have seen summer heat could cause widespread ficers to wear cameras and limiting quali
more Americanflagwear in the last 25 blackouts. Their elected representatives fied immunity (a judicial doctrine that
days than I have in the last 25 years,” he may leave them without electricity, but at shields officers from civil liability). Would
adds. “It’s like a Trump rally.” least Texans will not need a gun permit. n it actually improve policing?
Meanwhile, plenty has been left un A largescale study by the Becker Fried
done. Consider Dallas Independent School man Institute at the University of Chicago
District (disd), the state’s secondlargest. Policing found that body cameras reduce the num
Michael Hinojosa, the superintendent, ber of police misconduct complaints by
says his biggest priority was to see that Body of evidence 17%. They also probably reduce the use of
funding promised in the last session was force. But in 2020 only about 8,000 depart
not cut, a worry eased by the federal stimu ments (about 45%) used such cameras and
lus. But now, on top of trying to ensure that just seven states required them. The Floyd
pupils catch up with the learning lost dur Act, as currently written, requires federal
WASHINGTO N, DC
ing the pandemic and the huge snowstorm uniformed officers to wear body cameras,
The George Floyd Act is a police-reform
in February, he will have to eliminate all and requires state and local law enforce
smorgasbord. Would it work?
black and MexicanAmerican studies ment to buy them with federal funds.
courses at disd’s 37 high schools and rede
sign professional training for all 22,000
employees, because of a bill (which will
A ccording to initial reports from the
Louisiana State Police, Ronald Greene
died in a car crash. This was in May 2019,
Much of the Floyd Act applies only to feder
al officials: the Federal Bureau of Investiga
tion, United States Park Police, officers in
probably pass) banning modish talk about one year before the murder of George the various federal departments, and oth
accommodating people of different ethnic Floyd. Mr Greene’s family was suspicious, ers. They account for only about onefifth
or racial backgrounds. Republicans enjoy so they pressed the police to release foot of America’s 700,000 lawenforcement of
bossing teachers around. Mr Abbott an age from the cameras worn by six of the of ficers. But the bill could nevertheless serve
nounced that public schools and other ficers on the scene. Not all the devices were as a standard for other departments, says
government entities can no longer require switched on, and it took a 17month wran Mark Levin, a lawyer at the Council on
masks on their campuses from June 5th. gle before they could watch the footage Criminal Justice, a thinktank.
The trend of state government exerting (the public did not see it until the Associat Just putting cameras on officers is not
power over local—largely liberal—cities ed Press leaked it, seven months after that). enough, as shown by Mr Greene’s death.
and counties is playing out across Texas. It showed the troopers repeatedly stun North Carolina requires a judge’s approval
The voting bill is another instance of the ning Mr Greene with a taser, punching to release video footage, as does Louisiana,
state trying to “micromanage” by telling him, and leaving him moaning facedown where Mr Greene was killed. Eleven other
counties where to put polling places and on the road for nine minutes; he died on states also restrict public access to body
how long they can stay open, says Lina Hi the way to hospital. The assault was re camera footage. By contrast, when Ma’Khia
dalgo, the Democratic county judge of Har corded on body cameras. Bryant, a black teenager, was shot and
ris County, which covers Houston. Other After the murder of Mr Floyd a year ago, killed by an officer in Ohio, the video foot
examples include new laws to stop local a policereform bill named after him was age was released publicly in a few hours.
governments from allowing homeless en introduced in Congress. It was passed by Ohio’s bodycamera policy, signed by a Re
campments and to prevent them from de the House of Representatives but is pend publican governor, John Kasich, in 2019,
funding the police (which they are not ac ing in the Senate. The House version en makes the footage part of the public re
tually doing). “We can finally retire the compasses a range of policies, including cord. As currently written, the Floyd Act re
idea that local control is a conservative val restrictions on the use of force (any appli quires federal agencies, in most cases, to
ue,” quips Mr Smith of the Texas Tribune. cation of physical restraint other than release any footage showing a death or se
Legislators will be back in Austin this handcuffing), creating a national database rious injury in police custody within five
012
The Economist May 29th 2021 United States 29
days of being asked to do so. Yet working with centralAmerican

Some departments allow officers to de governments goes against another of Mr
cide themselves when to switch them on. Biden’s impulses: fighting corruption. Ov
Others have strict protocols for when a er the past decade the rule of law has erod
camera must be activated (at the start of ed in the Northern Triangle, according to
any call, for example). Others use cameras Transparency International, a watchdog.
activated automatically by sirens or draw The Universidad de las Américas Puebla
ing a gun from its holster. Such details ranked Honduras and Guatemala among
matter. One study found that among offi the worst countries for impunity (Mexico
cers systematically recording incidents on trailed not far behind). Both scrapped in
arrival, rather than using their discretion, ternational commissions that investigated
useofforce incidents decreased by 37% in and prosecuted crooked officials.
comparison to officers not using body Finding a balance now falls to Ms Harris
cameras. Among those who chose when to and Mr Zúñiga. The vicepresident has
turn their cameras on and off, useofforce conspicuously avoided criticising Andrés
incidents increased by 71% against this Manuel López Obrador despite some of his
control group. Limiting discretion protects autocratic inclinations, in part because his
officers, too, argues Chad Marlow of the cooperation on immigration is necessary.
American Civil Liberties Union. “In the cli Meanwhile the Mexican president has re
mate that we live in nowadays, if police of buked America for giving aid to an ngo
ficers have discretion and make the wrong that has criticised his administration.
call, a malevolent motive is going to be as Mr Zúñiga has had a rocky start with El
signed to that officer.” Potential Americans Salvador’s president, Nayib Bukele, who
Some other parts of the bill are strongly has bristled at criticisms of his govern
supported by the evidence. Deescalation ly known—may have been encouraged by ment’s tightening grip on power. And the
training—teaching officers techniques Mr Biden’s promise of a “fair and humane Biden administration has given a wide
that require less frequent and less severe immigration system”, most leave their berth to Juan Orlando Hernández of Hon
uses of force—was found to reduce useof homes for other reasons. Central America duras, who stands accused in a court case
force incidents by 28%, decrease citizen has the highest poverty rate, and some of in New York of taking bribes from drug
injuries by 26% and lower officer injuries the worst homicide and domestic violence traffickers. The us-Northern Triangle En
by 36%. This sort of training, though effec rates, in Latin America. Families who have hanced Engagement Act empowers the De
tive, is required in only 16 states. But not all the means to legally move abroad do so, partment of State to identify corrupt offi
aspects of the Floyd Act are supported by while those who do not will often take the cials and deny them entry into America.
rigorous evidence. Implicitbias training, long route north. Worsening natural disas Several names have been added to the list,
teaching officers about their unconscious ters, such as backtoback categoryfour including Mr Bukele’s cabinet chief. The
biases, has been implemented in 69% of hurricanes in 2020, also displace people. problem, warns Andrew Selee of the Migra
police departments. Yet the University of Mr Biden is no stranger to the Northern tion Policy Institute, is that “in contexts
Chicago Crime Lab reckons that, as cur Triangle’s woes. As Barack Obama’s vice where corruption is required to get things
rently implemented, it is ineffective. n president he oversaw an effort to reduce done, no one has clean hands.” n
migration by dealing with its root causes, a
job he feels compelled to finish, says Paul
Central America Angelo, from the Council on Foreign Rela Infrastructure year
tions, a thinktank. He has requested $4bn
Foreign domestic in aid for the Northern Triangle and cho Build back under
sen vicepresident Kamala Harris to lead
policy talks there. Ms Harris will visit Mexico and budget
Guatemala in June, her first official trip
abroad. And he appointed Ricardo Zúñiga,
LOS ANGE LES
a senior member of the foreign service, as
The Northern Triangle poses a High construction costs will be a drag
special envoy to the Northern Triangle.
migration trilemma on planned infrastructure investments
Donald Trump froze aid in the hope of
H ad the protest not been on the Mexi

can side of the border, it could have
been mistaken for a rally for Joe Biden. Mi
forcing governments to detain north
bound migrants. This may have contribut
ed to a dip in arrivals. Mr Biden hopes to ac
“T his is a unique opportunity,” says
Bent Flyvbjerg, an economic geogra
pher who studies infrastructure projects.
grants sported white tshirts emblazoned complish something similar with pro “There hasn’t been anything like it in the
with the president’s campaign logo and the grammes to reduce crime and poverty. history of the United States.” He is refer
message “Biden Please Let Us In”. Critics Some have met success: according to ring to the Biden administration’s $1.7trn
say the president’s folksy manner is to usaid, in 20142017 community violence infrastructure plan. A group of Senate Re
blame for a surge in arrivals at the border prevention schemes helped to lower mur publicans have countered with a $1trn of
that his administration is scrambling to der rates by 45% across 50 municipalities fer. Whatever the final number, how can
contain. That may be unfair, but it reflects in El Salvador and 36% nationally in Hon lawmakers make sure the money goes as
the discontent many Americans feel over duras (other experts point to a crackdown far as possible?
his handling of immigration. It is one of in prisons and rumoured negotiations be The need to build new projects and re
the few policy issues where a majority dis tween gangs and politicians). Mr Biden has pair old ones is not in dispute. Poor infra
approve of the president’s performance. not abandoned harder options, however. structure costs trillions in foregone
While some migrants—particularly His administration struck an agreement growth. A third of America’s bridges are
from the “Northern Triangle”, as Guatema with Mexico and the Northern Triangle to structurally deficient. New structures,
la, Honduras and El Salvador are collective beefup their border security. such as seawalls and storm barriers, are
012
doesn’t even consider outside ideas for

long enough to reject them.
What can be done so that projects like
the imaginary Wilson line do not go off the
rails? State and federal agencies can ensure
that teams have enough capacity to review
multiple projects and to manage contrac
tors. Being too punctilious can backfire,
though: New York’s exacting requirements
are partly responsible for the astronomical
costs of subway construction there.
More advanced construction practices
can also help. Standardisation of compo
nents like railway cars and subway stations
can reduce variation, thereby shortening
timelines and lowering costs. Transparen
cy and accountability are vital as well. The
Army Corps of Engineers, which is respon
sible for maintaining more than $300bn
Pressing forward worth of dams and levees, records cost data
but does not make them public. Ms Brooks
needed to help mitigate the effects of cli increased the ability of citizens to sue ex says it should. To mitigate the effects of
mate change. But productivity in public ecutive agencies. The National Environ citizen voice, she also suggests a statute of
sector construction has stagnated for de mental Policy Act (nepa), a landmark piece limitations on litigation for some infra
cades and high costs abound, particularly of legislation passed in 1969, delivered structure projects.
where transport is concerned. The money valuable environmental protections. Com Donald Trump implemented nepa re
needed to construct a mile of interstate bined with a Supreme Court decision that forms which he said would speed con
highway rose threefold in real terms be enhanced citizens’ ability to sue the gov struction, but which also did away with
tween the 1960s and the 1980s. American ernment, nepa provided a “judicial toe some valuable environmental protections.
subway lines often cost between two and hold” from which to oppose new construc The Biden administration is considering
four times as much as typical projects in tion—whether or not the challengers’ con rolling back these changes. nepa has been
Europe or Asia. cerns are genuinely motivated by a desire used to challenge not just polluting indus
Consider the James Wilson line, a hypo to protect the environment. trial facilities but renewable energy pro
thetical rail project named after The Econo- It is now time for a contract to be award jects as well, and the threat of environmen
mist’s founder and paid for with an influx ed for construction of the Wilson line. Best tal lawsuits adds to infrastructure costs.
of Biden bucks. Even before ground is bro practice is to give out contracts on the basis Mr Biden is free to roll back Mr Trump’s
ken, the cost forecasts are wildly inaccu of cost, speed, and a technical score deter changes— but he should consider making
rate and prospective benefits dramatically mined by an inhouse oversight team. But some of his own. n
inflated. A costbenefit analysis is done, unfortunately the agency drawing up the
but elected officials discard its results in contract does not have enough qualified
favour of political considerations. Mr staff to conduct a full review of construc
Flyvbjerg argues that this all leads to the tion proposals. The lowest bidder wins the Conservation
projects that look best on paper being im job, as is typically the case in America.
plemented, “and the projects that look best After winning, however, the contractor Wildlife wars
on paper are the projects with the largest quickly tacks on additional costs, and the
cost underestimates and benefit overesti government is again in over its head. Un
mates, other things being equal”. able to manage such a big project, it ends
Soon, a press release goes out announc up relying on contractors and consultants
ing the construction of the Wilson line. who botch key segments of the Wilson D E NVE R
Immediately vocal pressure groups de line, requiring expensive doovers. Inter The Sagebrush Rebellion never ended
mand expensive changes. By insisting on agency turf battles and coordination pro
additional features like walls to contain
noise and paths for pedestrians, this stir
ring display of participatory democracy
blems worsen the situation.
For the Wilson line’s underground sec
tions, its builders choose to do things the
B ACK IN February, Montana’s Republican
governor killed a wolf without a proper
permit. Greg Gianforte, who is bestknown
adds new costs. Spooked by the response, hard way. Its stations, like those of New for bodyslamming a reporter on the cam
the government takes expensive, preemp York City’s recently built Second Avenue paign trail in 2017, trapped the creature
tive steps to reduce the likelihood of litiga subway, are unnecessarily large. And in after it strayed out of Yellowstone National
tion. A recent paper argues that such exer stead of digging the stations out from Park and onto a private ranch owned by
cises of “citizen voice”—and governments’ street level in a socalled “cutandcover” one of his political donors—the director of
fear of them—are a big cause of soaring approach, which is the (cheaper) norm in Sinclair Broadcast Group, whose 191 local
highwayconstruction costs. sensible places like Denmark , the Wilson tv stations might not frown on trapping
Leah Brooks, one of the paper’s authors, line’s builders choose to mine them from liberals. A satirist could be proud of this
argues that legal and social changes in the within a tunnel. Alon Levy, who studies Western. It also exemplified what Chris
1970s set the stage for this situation. That transit infrastructure costs, says such mys Servheen, a wildlife biologist in Missoula,
decade saw the rise of homeowners’ asso tifying choices come about because Amer describes as a new bout of “antipredator
ciations, as well the introduction of legis ica has failed to copy other countries. Mr hysteria” in state legislatures in the north
lation requiring more consideration of Flyvbjerg goes further: America has such ern Rocky Mountains.
citizens’ concerns. New judicial doctrines an “island mentality”, he claims, that it Lawmakers in Montana and Idaho have
012
The Economist May 29th 2021 United States 31
recently passed a slew of measures to re federal land flare up whenever the inter
duce the number of bears and wolves in ests of westerners in extractive industries,
their states. In Idaho one law allows wolf ranching or state government clash with
hunting from snowmobiles and allterrain those of conservationists and, lately, cli
vehicles. It devotes money to private con mate scientists.
tractors tasked with hunting the animals More recently, Donald Trump’s rollback
down and removes limits for the number of environmental laws gave wouldbe re
of wolves one person can kill. The law says bels something to cheer. The Trump ad
that wolves can be killed so long as their ministration took grey wolves off the en
number still exceeds the state’s recovery dangered list and reduced the size of pro
goal of 150 animals. That means 90% of the tected lands. State parties have kept it up.
Gem State’s 1,500 wolves are at risk. Next Republicans in Montana enjoy a trifecta,
door in Montana, Mr Gianforte has signed which means the party controls both
bills that, among other things, will extend chambers of the legislature and the gover
the wolfhunting season and reimburse nor’s mansion. Steve Bullock, the state’s
hunters and trappers for their expenses. previous governor and a Democrat, would
Wolves are not the only predators in probably have vetoed the predator laws.
legislators’ crosshairs. Grizzly bears are Conservation once had bipartisan sup
still protected in the Lower 48 under the port. That consensus, argues Mr Isenberg,
Endangered Species Act (esa). But two new We’re going on a bear hunt broke down during the oil crisis in the
laws in Montana increase the likelihood 1970s when the environment took a back
that they will be killed, by banning state gers, oilmen, local officials and western seat to the pursuit of energy indepen
employees from moving bears that wander politicians—fought to pass bills that dence. Perhaps that calculation will shift
out of protected zones, and allowing peo would transfer the management of public again. Meanwhile, the wildlife wars rage
ple to kill a bear if they think it is threaten lands to the states. Ronald Reagan famous on. “It’s like watching a car wreck in slow
ing livestock. Republican senators from ly told Utahns to “Count me in as a rebel” motion,” Mr Servheen says about Mon
Idaho, Montana and Wyoming have also on the campaign trail in 1980. The Gipper’s tana’s new bear laws, “when it’s your car
introduced a bill to remove grizzlies election quieted the rebels, but fights over and your family in it.” n
around Yellowstone from the endangered
list. Mr Servheen, who led the Fish and
Wildlife Service’s grizzlybear recovery New York
programme for 35 years, says the laws
amount to the biggest attack on the re
Island mentality
gion’s large predators since they were near
THE HUDSON RIVE R
ly wiped out by settlers in the 19th and early
New York’s newest island reflects the city’s spirit
20th centuries.
The laws’ proponents argue that the an
imals hurt ranchers and human hunters by
preying on livestock and big game, such as
D epending on tide levels, New York
City is made up of 40odd islands.
Some are famous, like Ellis Island, where
tious. The project faced several legal
challenges: its creator almost gave up on
what had become known as Diller’s folly.
elk. The data say otherwise. The number of 12m immigrants officially entered Amer Then Andrew Cuomo, New York’s go
cattle and sheep killed by wolves amounts ica. Hart Island is where the city buries vernor, intervened to keep it afloat.
to an insignificant fraction of Idaho’s live its poor. Rikers Island is a penal colony. Mr Diller’s and his wife Diane von
stock, and ranchers are compensated for But mostly, as former mayor, Michael Furstenberg’s foundation spent $260m
their losses. There are also more elk today Bloomberg once noted, “New York City’s on Little Island. It will continue to main
than when grey wolves were brought back smaller islands are our secret treasures.” tain the island for the next 20 years. He
to the state in 1995. Governor’s Island is a carfree park. City says he understands people who say,
Why, then, are Republicans eager to kill Island is a fishing village. As of May 21st, “Why should somebody with money
the West’s big predators? The impulse be New York has a new, manmade, one: dictate what public places are like?” But,
hind these laws is not new. Andrew Isen Little Island. he says, that misses the point. Having the
berg, a historian at the University of Kan Little Island rests on 132 concrete resources means he can “braze it
sas and author of “The Republican Rever “tulips” of different heights, which through” while public officials delay.
sal: Conservatives and the Environment create rolling hills and winding foot The island opened just as the city
from Nixon to Trump”, says the threat paths over 2.4 acres (1 hectare). Designed begins to lift restrictions. Dan Doctoroff,
wolves pose to ranchers is largely symbol by Thomas Heatherwick, a Brit with a Mr Bloomberg’s deputy mayor, who
ic. The esa was passed in 1973 and signed talent for eyecatching public designs, steered the city’s tilt toward the west
into law by Richard Nixon. The law called the island is a whimsical delight. Like its side, sees Little Island as a catalyst for
for the protection of threatened animals neighbour the High Line, an obsolete New York’s recovery. It is also part of the
and, crucially, the ecosystems they inhab freight track converted to public space west side’s rebirth, which includes the
it. But those protections were viewed by which (in the before times) drew 8m High Line (Mr Diller and his wife were
many westerners as overreach by the fed visitors a year, it will be much visited. early champions of that too) and Hudson
eral government, which, they argued, It is also characteristically New York, Yards, a huge redevelopment project.
should have little say over how western a city enlivened by madcap projects. This Google has leased some of the pier next
lands are managed. one was the brainchild of Barry Diller, a door. To the south a garage for rubbish
The animosity towards the esa and oth billionaire media mogul. Mr Diller was lorries is being converted to a sports field
er federal regulations on land use in the asked to help rebuild a pier destroyed by and a sandy beach. “The key,” Mr Docto
West boiled over in the form of the Sage Hurricane Sandy. He was keen to do roff says, is to “create conditions where
brush Rebellion in the late 1970s. The re something more architecturally ambi people want to do extraordinary things.”
bels—a coalition of ranchers, miners, log
012
Lexington Veep stakes
Is Kamala Harris a gift to the Republicans?

tioned race unprompted. Ms Harris is a different case. She is the
daughter of South Asian and Jamaican immigrants, brought to
gether by the civilrights movement, who brought her up as black.
Though nothing like the vindictive racewarrior of Mr Carlson’s fe
vered imagining, she leans into black identity politics more than
the former president did.
This is a good way to win elections in California. It would be a
disastrous generalelection strategy, as shown by the white back
lash to Mr Obama, notwithstanding his carefulness, and by Ms
Harris’s failure to impress even black voters during her hapless
presidential bid. AfricanAmericans tend to support the Demo
cratic candidate who seems likeliest to appeal to white voters, on
which basis they preferred Mr Biden. And her Hail Mary effort to
turn things round by accusing Mr Biden of racial insensitivity dur
ing a televised debate (“I do not believe you are a racist [but]…”) on
ly confirmed them in their choice. Polls suggested that black vot
ers found it cynical and insincere.
The coverage of her current job has also been mixed. She has
been accused of failing to carve out a welldefined “Veep” role or
hire a sufficiently politically savvy staff. This is probably unfair.
Her pressing need is to do whatever Mr Biden (with whom she had
some making up to do) wants in order to make his administration
H ere is what the millions of Americans who take their opin

ions from Fox News and related outlets have been hearing
about Kamala Harris. The vicepresident was put in charge of the
successful. And she appears to be doing that. She was involved in
the recent MiddleEastern diplomacy. She is due to visit Mexico
City next week. Though inexperienced in foreign policy, she is a
southern border because she “has brown skin”. Her picture book, polished frontwoman who espouses Mr Biden’s internationalist
“Superheroes Are Everywhere”, was issued to migrant children, views. The criticism of her seems rather to reflect not only the un
maybe corruptly. (“Is she profiting from Biden’s border crisis?” derlying anxiety about her ability to succeed him, but also the un
tweeted Republican supremo Ronna McDaniel.) Metropolitan usual nature of her position.
elites worship her; Vogue, which ignored lovely Melania Trump, Ever since Walter Mondale upgraded the vicepresidency in the
put her (her!) on its cover. Her entrepreneur niece, Meena Harris, late 1970s, most of its occupants have spent four years trying to
is an antiwhite racist queen of cancel culture. make themselves useful; then a second term, if it transpired, lay
In other words, while the mainstream media soberly cover Ms ing the groundwork for a presidential run. The carping suggests
Harris’s efforts to win Joe Biden’s trust and master her portfolio Ms Harris is expected to do both things at once, which is unrealis
(which includes Mexico and Guatemala but not the border, where tic; and indeed she would be castigated if she tried to.
her book has not been issued to anyone), she is being relentlessly There is one political task she cannot delay, however. That is to
defined on the right as a dishonest member of the corrupt elite understand why her presidential campaign failed, which was not
with an agenda alien to white America. Tucker Carlson—who dur mainly to do with her race or gender, however much of an electoral
ing the election campaign refused to pronounce Ms Harris’s Hin burden they may be. Her stump speech sounded like groupwrit
du name correctly—has neatly synthesised these two slanders. ten marketing spiel (something about wanting to “prosecute the
“She’s a globalist superhero. Just like Voldemort, you can’t really case against Donald Trump”). Her promise—quickly rescinded—
know how to pronounce her name.” to scrap private medical insurance suggested a politician who had
So far, so predictable, you might say. But Ms Harris is no ordin no clear idea where or what she stood for: whether on the left, with
ary vicepresident. As the first nonwhite, female vicepresident an emphasis on expanding the government, or towards the centre,
of a party that has made diversity an organising principle, she is with more focus on enterprise and opportunity. This was why the
the presumptive next Democratic presidential nominee. It is hard, pundits and donors who at first flocked to her quickly moved on. It
even at this early stage, to imagine her being denied. Given the 78 was in turn why she resorted to playing the race card against Mr Bi
yearold Mr Biden’s age, her elevation could be only three years off. den. No wonder she makes some Democrats nervous.
And the election that would ensue—the Republicans’ worsening
derangement suggests—may well be as crucial as the one just past. Kamala chameleon
This raises the question of whether she has what it takes to rise She should reflect on the fact that the centrist Mr Biden won as Mr
above the rightwing slanders and appeal to middle America, as Obama had before him: by promising hope, opportunity and to
Barack Obama did, or whether she will be destroyed by them, as getherness for all. There is no evidence that Democrats can get
Hillary Clinton was. And it is making senior Democrats nervous. round Americans’ mistrust of government and vexed racial poli
“Everyone is saying, ‘Oh God, Kamala is next and then we’re in tics any other way (however they may hope to govern). Mr Obama,
trouble’,” says a Democrat close to the White House. a big admirer of Ms Harris, must believe she can pull off the same
Oratory aside, Mr Obama’s success was based on an ability to trick. Talking up her vicepresidential credentials was one of his
reassure white Americans that was rooted in his intimate knowl two big political calls last year. The other was his initial dismis
edge of them. The son of a white woman, brought up by his white siveness of Mr Biden. It would be a terrible shame if the former
grandmother, he promised better times for all and rarely men president turned out to be wrong on both counts. n
012
The Americas The Economist May 29th 2021 33
Brazil’s politics explains Sylvio Costa of Congresso em Fo

co, a watchdog site.
Losing traction Brazil’s political system, known as “co
alition presidentialism”, is a hybrid be
tween the presidential model of the United
States and Europeanstyle parliamentary
government. The president directs policy
making and drafts the budget but cannot
S ÃO PAULO
get much done without Congress, where
As his popularity fades Jair Bolsonaro turns to patronage
his or her party rarely has a majority. Most
T here are many ways to describe pork

barrel politics in Brazil. They include
tomá lá dá cá (give and take), troca de favores
reais were funneled through the develop
ment ministry to congressmen to fund
public works and purchase farm equip
of Brazil’s 30 or so political parties lack
ideological platforms; they back presi
dents in exchange for patronage. This fa
(trading favours), corporativismo (corpora ment at inflated prices, sometimes vours votewinning projects like paving
tism) and velha política (old politics). In through companies owned by relatives. roads or painting schools, rather than
2018, on the campaign trail, Jair Bolsonaro The scandal, which the press has longterm planning, says Élida Pinto, a
used these and far ruder insults to dispar dubbed tratoraço (roughly, “tractorgate”), professor of public finances at Fundação
age his fellow politicians, especially ones is the clearest proof yet of Mr Bolsonaro’s Getulio Vargas (fgv), a university.
from the leftwing Workers’ Party (pt), participation in porkbarrel politics. It is In 1994 six congressmen lost their posts
which governed from 2003 to 2016 and was unfolding alongside an even bigger public as a result of a votebuying scandal involv
roiled by two big corruption scandals. As relations disaster: a parliamentary com ing fake ngos. In 2005 a centrão lawmaker
president, he vowed to advance his agenda mission of inquiry (cpi) into the govern admitted that the PT was funnelling
without distributing cargos (jobs) or emen- ment’s handling of the pandemic. The two 30,000 reais per month to congressmen in
das (amendments: ie, pork). crises demonstrate how Mr Bolsonaro has exchange for legislative support. (He was
The first sign he had given up on this become increasingly weak and how Con kicked out of Congress but is now an ally of
“new politics” came in mid2020, when he gress, which is known for viruslike oppor Mr Bolsonaro.) In 2014 prosecutors
formed an alliance with a bloc of selfserv tunism, has used his vulnerability to launched a probe called Lava Jato (“Car
ing parties known as the centrão (big cen strengthen itself. “The more fragile the Wash”) which revealed a vast kickback
tre) in order to shield himself from im president, the higher the cost of support,” scheme among construction firms, politi
peachment petitions, of which there are cal parties and the state oil firm.
now 117. Centrão support is never free. A re In response to protests, Congress
cent investigation by Estado de S. Paulo, a → Also in this section passed a series of constitutional amend
newspaper, showed that last year Mr Bolso ments aimed at reducing corruption while
34 All change in Chile
naro’s government forked over 20bn reais keeping congressmen sweet. Most emen-
($3.9bn) through emendas do relator, or 36 The Shining Path returns das became in effect an automatic allow
“chairman’s pork”, a reference to the chair ance (not at the president’s discretion) for
36 Canada’s Buttergate
man of the budget committee. At least 3bn lawmakers to spend in their constituen
012
34 The Americas The Economist May 29th 2021
cies. They had to follow new rules, such as president whose popularity has recently eans used the ballot box rather than the
providing receipts. But such restrictions increased. One poll suggests that if a runoff street to express their rage. Independent
made it harder for presidents to cobble to election were held tomorrow, 55% would candidates (some, confusingly, affiliated
gether a coalition. When Dilma Rousseff, a pick him against just 32% for Mr Bolsonaro to party lists) grabbed 88 of the 155 seats in
PT president, was impeached in 2016, it (the rest said neither). When Brazilians see the convention to draft a new constitution.
was technically because she had hidden Europeans and Americans getting vacci With the seats reserved for indigenous
the size of Brazil’s budget deficit; but also nated, they realise “our president is a cari people, roughly 68% of participants will be
because she struggled to manage an cature,” says Ciro Gomes, a former gover independent, more than the twothirds
increasingly unruly Congress. She expand nor who also plans to run. majority needed to approve the wording of
ed her cabinet to 39 ministries in order to Mr Bolsonaro could recover before next the new constitution. Mr Piñera’s coalition
dole out patronage, but a recession in 2014 year’s election. Vaccination is at last pro failed to win the third of seats it expected,
16 limited her scope. gressing and the economy is doing better depriving it of a veto.
Mr Bolsonaro is experiencing some than feared. The economy minister, Paulo Corruption scandals and anger about
thing similar. Brazil has had one of the Guedes, has urged Congress to reform tax inequality caused the landslide. “People
worst covid19 outbreaks in the world, with es and the public sector. This would free up can’t stand it any more,” says Cristina Do
an official death count of more than money for votewinning programmes, he rador, a biologist elected as an indepen
450,000. His strategy of downplaying the argues. But lawmakers want handouts too. dent for Antofagasta region, the country’s
pandemic seemed to work last year, when a “The centrão is not loyal,” warns Rebeca Lu mining heartland. “People wouldn’t talk to
third of Brazilians received emergency aid. cena of bmj, a consultancy. “If the ship is us about our campaign until we said we
But this year a second wave has coincided sinking, it will jump to another.” n were independents.”
with rising inflation, slow vaccination and For decades, Chileans benefited from a
a reduction in handouts. Mr Bolsonaro’s strong economy and falling rates of pover
approval rating has fallen from 40% to be Chilean politics ty, thanks to freemarket policies. But ma
low 30%. The speaker of the lower house, ny felt left out. Pensions and health care
Arthur Lira, the only person who can open New faces galore are most generous for those with good
impeachment proceedings, warned of “bit jobs. Those in informal work, 27% of the la
ter political remedies”. bour force, are much worseoff. Other pub
But impeachment is unlikely, partly be lic services are often mediocre.
cause Mr Bolsonaro in effect reinvented Only 2% of Chileans trust political par
S ANTIAGO
chairman’s pork at the end of 2019. Most of ties, according to a recent poll by the Cen
An electoral surprise in Chile may
the new allowances went to lawmakers tre for Public Studies, a thinktank in San
produce a left-wing constitution
who voted for Mr Lira and the centrão’s pick tiago, the capital. The members of the new
to head the Senate, Rodrigo Pacheco, in
leadership elections in February. Docu
ments on government sites account for on
I n chile the covid19 pandemic has had
many victims, but for a while the govern
ment was not among them. In late 2019 and
ly elected convention include midwives, a
mechanic, teachers and students. By law,
half are women—unlike Congress and the
ly around 1bn of the 3bn reais spent by the early 2020 the country was rocked by prot top ranks of the main political parties,
development ministry. The budget chair ests in which 30 people died. It seemed which are dominated by men. “The con
man, Domingos Neto, sent 110m reais to a likely that the unrest would topple the cen vention is a much better reflection of Chile
city of 59,000 people of which his mother treright government of President Sebas than Congress,” says Juan Pablo Luna, a po
is the mayor. The ministry agreed to pay tián Piñera. But he held on by agreeing to litical scientist at the Catholic University.
500,000 reais apiece for tractors listed as draft a new constitution to replace the one It is also more leftwing. Many of the in
costing 200,000. It insists that there were introduced in 1980 by Augusto Pinochet, a dependents’ manifestos called for a consti
no irregularities. military dictator who ruled Chile from 1973 tution that requires a more generous wel
A bigger threat to Mr Bolsonaro’s popu to 1990. Mr Piñera was helped by the pan fare state and limits the privatesector’s
larity is the CPI, which began hearing testi demic, which took people off the streets role in providing public services. Most
mony in the Senate this month. Its daily and caused the protests to fizzle. Chileans seem to want more protection for
sessions are broadcast live on tv, creating On May 15th and 16th, however, Chil the environment, too. This may lead to
a macabre oral history of Brazil’s pandemic
disaster. Two former health ministers said
that the government’s initial strategy rest
ed on herd immunity and hydroxychloro
quine, an antimalarial drug promoted by
Donald Trump. A Pfizer executive said that
the government ignored six offers to sell
Brazil vaccines. The health minister at the
time, Eduardo Pazuello, a general who was
also in charge when the city of Manaus ran
out of oxygen, tried to skip testifying by
saying he might have covid19 himself.
Mr Bolsonaro “is becoming a prisoner
of his unpopularity”, says Alessandro Mo
lon, the leader of the opposition in the low
er house. The latest polls show the presi
dent’s support falling in nearly every con
stituency, including among his strongest
backers, such as evangelical Christians.
His top rival in the 2022 election is likely to
be Luiz Inácio Lula da Silva, a former PT Party time is over
012
ADVERTISEMENT
THEIR OWN MEDICINE

Biotech entrepreneurs are building on Thailand’s robust industry
ecosystem to make advanced health care more accessible
Three decades ago, when Professor Suradej Hongeng was a STRENGTHENING BIOTECH SUPPLY CHAINS
newly minted paediatrician in Khon Kaen, a large inland city in Sustained growth in Thai biotech will require an increasingly
Thailand’s north-east, he was brought to treat a 14-year-old girl robust supply chain. Also set to be part of this is KinGen Biotech,
with leukaemia. “The treatment was not as good as now,” he which has been spun out of the National Biopharmaceutical
says. After a dream trip to visit the beach for the first time, “she Facility (NBF) at King Mongkut’s University of Technology
died with her wish fulfilled,” says Prof. Hongeng. Thonburi, in a joint venture with Korean biotech firm Genexine.
Such experiences drove the doctor to travel to the United KinGen’s GMP-compliant manufacturing will be able to locally
States and train in techniques to improve the prospects of other produce not only biopharmaceuticals and vaccines, but also
young patients. And despite opportunities to stay in America, he many of the materials used by makers of cell and gene therapies
stuck by his commitment to bring home what he learned. Today, like Genepeutic. To start with, KinGen will focus on manufacturing
he has helped co-found a new venture, Genepeutic Bio, that is related to its Korean partner’s plasmid DNA and fusion protein
commercialising a homegrown version of an advanced treatment technologies.
for leukaemia and related diseases. For Genexine, the attractions of investment in a Thai venture
included the country’s strength in medical research and clinical
PIONEERING ADVANCED THERAPIES trials, a living environment that is easy for foreigners to adjust to,
In the past half century, “survival for paediatric leukaemia and the substantial corporate tax holiday of up to 13 years granted
has gone from 10% to more than 80%,” says Prof. Hongeng. by the Thailand Board of Investment. Access to the ASEAN market
Genepeutic will contribute to improving treatment even further of well over 600m consumers is another huge drawcard.
with the CD19 CAR T-cell therapy it has licensed from Mahidol KinGen’smanufacturing ability will even support efforts to contain
University, which genetically engineers a patient’s own immune covid-19, as the firm is working with Thai start-up Baiya Phytopharm
cells before returning them to the body. While making this on a new vaccine based on proteins generated in genetically
product, Genepeutic will also act as a contract development and manipulated tobacco plants. “This represents a tremendous
manufacturing organisation (CDMO). This will contribute to the chance to bring agriculture closer to the pharmaceutical sector,”
goals of a five-year strategic plan from the Thai government that says Dr Panit Kitsubun, the COO of KinGen.
focuses on the “bio, circular and green” economy to promote
equitable and resilient economic development in line with the CAPITALISING ON THE ADVANTAGES OF BIOTECH
Sustainable Development Goals. INVESTMENT
The company’s chief executive, Nares Damrongchai, says Local and foreign investment in biotech ventures like Genepeutic
government backing is especially helpful in the field of advanced and KinGen will help boost Thailand’s health security and
therapies. “Support from the Thailand Board of Investment and economic development. And as they participate in building
funding agencies gave us the necessary credibility to work with Thailand’s biotech industry and supply chains, investors will enjoy
regulators even before our drug is registered,” he says. the advantages of a robust ecosystem, strategic positioning
Currently, similar treatments available in ASEAN are made within ASEAN and a supportive government and regulatory
outside the region. That means patients’ cells have to be frozen environment. Meanwhile, people throughout South-East Asia will
and transported back and forth across the ocean. Genepeutic’s experience the benefits of biotech investment more personally,
manufacturing facility at the Thailand Science Park in Pathum as they tap more effective and accessible medical treatments
Thani, north of Bangkok, is compliant with the GMP standards enabled by the commercialisation of new discoveries.
required for regulatory approval around the world and will allow The Thailand Board of Investment supports investment in
patients to have their cells processed nearby. Genepeutic could Thailand through a range of programmes and incentives open
even reduce the cost by up to 80%, bringing the therapy within to local businesses and foreign investors. To learn more and
reach of many more patients. make contact, visit www.boi.go.th.
012
36 The Americas The Economist May 29th 2021
curbs on mining such things as copper and

lithium. Chile’s private, inherited water Buttergate
rights are widely disliked as well. Whether
the new constitution will create more
Udder absurdity
entitlements than taxpayers can pay for re
VANCOUVE R
mains to be seen.
Canadians are in a flutter about butter
Though the independents have a super
majority, they are not united. Those elect
ed on party lists may toe party lines. A pleb
iscite to approve the new constitution is
I t was at the beginning of Canada’s
lockdown last spring that Julie van
Rosendaal, a pastry chef in Calgary in
demand soars. Somehow, they had to
make each cow produce more milk.
Hence the palm oil.
expected to be held in the second half of Alberta, first noticed that her room With lockdowns now easing, Canadi
next year. Chileans will be obliged to vote. temperature butter was not as soft as it ans may start baking less. But the farm
Yet even if the convention founders, should be. At first she thought she was ers have other problems. In the usMex
Chilean politics will have been shaken up. imagining it. But she tracked her obser icoCanada Agreement, a trade deal
Presidential and parliamentary elections vations across the year. In December she which took effect last July, Canada agreed
are due in November. Political parties will reached a conclusion. The consistency to reduce certain barriers to American
include more independents in their lists of and texture of Canadian butter had exports of dairy products. In December
candidates. Some independents may even changed. In February she aired her find American dairy farmers filed an enforce
form their own political parties in order to ings on social media. ment action, claiming that quotas re
run. Everything is up for grabs. n Ms van Rosendaal believes that butter main a problem. If Canadians can buy
has become harder because farmers are more American dairy products, they will
feeding more palmoil products to cows. surely be better off. But as ever with trade
Peru’s election (Palmitic acid can help them produce deals, the benefits are thinly spread
more milk.) Thousands of Canadians across millions of households. The losers
Commies, crooks share her suspicion. The media have are few, but require endless buttering up.
dubbed it “buttergate”. The Dairy Farmers
and bloodshed of Canada, an industry group, at first
tried to palm off critics with denials. But
under pressure it switched to grovelling.
LIMA
It called an expert panel to assess the
A massacre in the jungle adds more
claims, and urged farmers not to use
misery to an already awful election
palm products. It is not just bakers who
A s omens go, it was a bad one. On May

23rd, less than two weeks ahead of Pe
ru’s presidential runoff election, 16 people
are cheesed off. The British Columbia
Milk Marketing Board has also noted
complaints from coffee shops about
were massacred in a remote village in an “nonfoaming milk”.
area known as “vraem”, the valley of the Lockdowns are partly to blame. Like
Apurímac, Ene and Mantaro rivers, where people everywhere, Canadians trapped at
coca is grown. The area has been under a home by covid19 have taken to baking.
state of emergency since 2003. Demand for butter soared by 12% last
The motive of the killers remains un year, according to the farmers. However
clear. The authorities in Lima rushed to in Canada the dairy industry is protected
blame remnants of the Shining Path, a rad by high tariffs, so imports could not fill
ical leftwing insurgency. Leaflets justify the shortfall. Farmers also must stick to a
ing the murders were left behind with the “supply management” policy, meaning
bodies. In the 1980s and 1990s the Shining they cannot simply buy more cows when
Path was responsible for tens of thousands
of deaths. However, the mayor of Vizcatán
del Ene district, where the massacre took and 13% respectively, putting them Ms Fujimori has problems of her own.
place, told reporters that he thought drug through to the final vote. She has been arrested three times and
traffickers were more likely to be responsi Ms Fujimori had already been making spent more than a year in prison in pre
ble (though both could be true). The vio much of Mr Castillo’s supposed Marxism. trial detention on charges of accepting ille
lence throws a grenade into Peru’s already Billboards across Lima encourage people gal campaign donations. She was released
tumultuous election. to vote against communism. On May 25th, a year ago as part of a scheme to curb the
On one side is Pedro Castillo, a rural after the massacre, she accused him of hav spread of covid19 in jails. The Castillo
school teacher who briefly shot to fame in ing ties to the militants she considers re campaign argues that Ms Fujimori would
2017 when he led a long teachers’ strike. He sponsible, and thereby of threatening her turn the state into a patronage machine to
is the candidate of Free Peru, a hardleft father’s legacy. Mr Castillo denies any such benefit the rich and wellconnected. Ms
party. On the other is Keiko Fujimori, the connections. His supporters say he is not a Fujimori says that she is innocent and the
daughter of Alberto Fujimori, who as presi communist. But a newly elected congress victim of political persecution.
dent in 19902000 defeated the Shining man from Free Peru, Guillermo Bermejo, is Whoever wins on June 6th will face a
Path, but who has been serving a 25year on trial for terrorism for collaboration with mistrustful population and a fractured
sentence for corruption and other abuses the Shining Path 13 years ago. (He calls the Congress, with ten parties splitting the 130
since 2009. Mr Castillo and Ms Fujimori accusations “pure fantasy”.) He has been seats in the unicameral legislature. Thanks
were never expected to reach the runoff. taped saying that if his party takes power, to a series of scandals and political feuds,
Neither polled well in the first round cam “we’re not going to give it up...we prefer to Peru has rattled through four presidents in
paign. But in a crowded field of 18 candi stay to establish a revolutionary process in the past five years. This election may not
dates on April 11th, they came top, with 19% Peru.” Mr Castillo has not rebuked him. end the instability. n
012
Middle East & Africa The Economist May 29th 2021 37
Israel and Palestine rigueur to urge them back to the negotiat

ing table. But such rhetoric obscures why
A process in pieces the peace process has failed. Decades of
meetings produced a mountain of maps
and policy papers. The outline of a two
state solution is well known to all. The pro
blem with the peace process is not a lack of
process, it is that process became a substi
JE RUSALE M
tute for peace.
The failing peace process has left the Holy Land looking like one unequal state
To continue that process in hope of a
B y the standards of the peace process,

if not international law, Oranit is not a
terribly contentious Jewish settlement.
Instead it remains under Israel’s control—a
single state in which Jewish Israelis and
West Bank Palestinians living a stone’s
breakthrough is to indulge a fantasy. It pre
tends that conditions on the ground—the
steady growth of Israeli settlements, Isra
The Palestinians previously accepted that throw from each other hold very different el’s evermore entrenched control of Jeru
this hilly town of lowslung homes in the rights and face very different prospects. salem, the schism between the West Bank
occupied West Bank would remain part of Almost three decades have passed since and Gaza—are merely obstacles to negoti
Israel in a future twostate solution. In one Yasser Arafat, the late Palestinian leader, ate around rather than insurmountable
negotiating session their disagreements and Yitzhak Rabin, Israel’s prime minister roadblocks. And it ignores shifts in politics
amounted to an area of about 400 square at the time, shook hands on the White and public opinion. Most Palestinians and
metres. It has grown into a commuter House lawn in 1993 after signing the Oslo a plurality of Israeli Jews oppose the two
town, half an hour by motorway from Tel accords. That hopeful moment cemented a state solution, as do two of the three gov
Aviv, and rates nine out of ten on Israel’s formal peace process that would create a ernments between the river and the sea.
“socioeconomic index”, a measure of edu Palestinian state and end half a century of It is time to admit the landforpeace
cation, wealth and employment. conflict. It was meant to happen within paradigm has failed. Moreover, it has often
Look east across the sunbaked hills five years. Hope, alas, gave way to despair. been unhelpful and counterproductive.
and one sees Azzun Atmeh, an impover It has now been more than five years since The theoretical existence of a peace pro
ished Palestinian village. No easy com the parties even sat down to talk. cess gave Israel cover to entrench an occu
mutes for its residents: it is almost fully Each time there is a bout of bloodletting pation that looks permanent, and contrib
encircled by settlements and the imposing between Israelis and Palestinians, it is de uted to the rot in Palestinian politics. What
separation barrier. This is theoretically exists today, and will exist for the foresee
part of a future Palestine, but right now it is able future, is really just one state.
Israel, with most of its land designated as → Also in this section The Palestinian Authority (pa), the self
“Area C”, where Israel holds civil and mili governing edifice set up after the Oslo ac
40 Gay Muslims in history
tary jurisdiction. cords, was meant to exist “for a transitional
The question of how to divide this land 40 Mali’s coup within a coup period not exceeding five years”. That
has been more or less answered, yet the deadline came and went, but the parties
41 A vicious jihadist is dead, probably
parcelling out to two states has not come. came close to a deal in 2000 at the Camp
012
38 Middle East & Africa The Economist May 29th 2021
David summit, two weeks of sequestered today they did not hold back then. Five par Mr Abbas rules by decree, but he has no
talks between Ehud Barak, then the prime ties in the Knesset (Israel’s parliament) are legitimacy to speak on behalf of Palestin
minister of Israel, and Mr Arafat. Conven ideologically committed to expanding set ians, half of whom are outside his remit
tional wisdom at the time blamed the latter tlements deep in the West Bank. Together anyway. The community in East Jerusalem
for walking away; subsequent assessments they hold 56 seats, five shy of a majority. feels adrift and leaderless, caught between
offered a more muddled picture. Even members of the Labour party have the pa, which has no authority there, and
Regardless, the failure at Camp David urged Israel to annex large chunks of the the Israeli government, which most Pales
gave way to the brutal second intifada, or West Bank and end the fiction of “tempor tinians are ineligible to vote for. The 2m in
Palestinian uprising, which soured many ary” settlement. A poll conducted last year Gaza live under the rule of Hamas, which
Israelis on making peace. Still, more nego by the Israel Democracy Institute found offers, at best, a lengthy truce with Israel.
tiations followed: the “road map for peace”, that just 30% of Israelis opposed doing so.
the summits at Taba and Annapolis and Mr Trump’s peace plan was widely Out of mind
Sharm elSheikh. mocked. But the map it offered, an archi In Israel, meanwhile, the peace process is
For the past decade these efforts have pelago of Palestinian territory connected no longer a salient political issue. That is
been listless. Barack Obama’s two attempts by roads and tunnels and pockmarked largely thanks to the longserving prime
at peacemaking lacked even memorable with Israeli enclaves, was probably a realis minister, Binyamin Netanyahu. He tepidly
names. The second segued into a brutal 51 tic vision of how a peace agreement would endorsed a twostate solution in 2009, but
day war between Israel and Hamas, the look. (It still did not satisfy the settler has spent much of his career working to
violent Islamist group that rules Gaza. movement, for which the very existence of prevent it. Foreign diplomats often say the
There have been no direct talks since 2014. a Palestinian state is anathema.) occupation is unsustainable. In the short
Donald Trump’s “deal of the century” was a His plan did not offer even the pretence term, Mr Netanyahu has proved them
curious effort to solve the conflict without of a capital for the Palestinians in East Jeru wrong. The security situation is fairly
input from Palestinians. salem, which they have long sought (the calm, the economy hummed before the
His successor, Joe Biden, seems disin area is largely Palestinian). Instead they pandemic and Israel’s diplomatic position
clined even to try. He played at best a sec would house their future government in is better than ever. Last year it established
ondary role in broking a ceasefire between dismal suburbs on the far side of Israel’s overt ties with four Arab states.
Hamas and Israel when they fought earlier concrete separation barrier. That too re With no pressure to resolve the conflict,
this month. Then he dispatched Antony flects current trends in Israeli politics. No most Israeli parties either oppose the two
Blinken, his secretary of state, for a round big party accepts the city’s division. state solution or ignore it. The Labour par
of talks. The focus was to be aid for Gaza. Jerusalem is now ringed with settle ty, once the beating heart of Israel’s peace
The peace process was not on the agenda. ments, home to more than 200,000 Israe camp—it held a 44seat plurality at the
lis, making it impossible to give the Pales time of the Oslo accords—won just seven
Unsettling tinians a contiguous capital and difficult seats at the last election.
In 1968 one of Mr Blinken’s predecessors, even to connect the northern and southern A poll of Palestinians in March found
Dean Rusk, sent a sharp memo to the Israe halves of the West Bank. Rightwing Israeli that just 40% still support the twostate
li embassy in Washington. He noted re groups are using courts to try to expel Pal solution, down from 51% in 2016 and 56%
ports that Israel was establishing civilian estinians from their homes in Arabmajor in 2011. Support among Israeli Jews
settlements in the newly occupied West ity neighbourhoods. The settler movement dropped from 53% in 2016 to 42% last year.
Bank. This not only violated the Geneva is not shy about its objectives. Each hill it Five years ago 82% of Israeli Arabs backed
Conventions, Mr Rusk wrote, but also claims in the West Bank, each home it seiz the idea; today 59% do.
“creates the strong appearance that Israel… es in East Jerusalem, makes it harder for Is Yet Israelis and Palestinians are not
does not intend to reach a settlement in rael to cede the occupied territories in a fi sure what they do support (see chart).
volving withdrawal from those areas”. nal agreement with the Palestinians. Some desire a single, binational state, oth
Today more than 440,000 Israelis live The settlers’ spoiling is working, but ers an apartheid state. There are Palestin
in West Bank settlements, a figure that has they need not worry, anyway: there is no ians who hope to throw all the Jews into
grown roughly fourfold since the Oslo ac Palestinian leader to strike such a deal. the sea and Jews who hope to throw all the
cords were signed. The world has done Mahmoud Abbas has been president since Palestinians into Jordan. The most popular
nothing to halt their growth. Diplomats 2005, serving an endless fouryear term. choice after a twostate solution is to be
have accepted the fiction that the settle Twothirds of Palestinians are unhappy lieve there is presently no solution.
ments are temporary, a claim belied by bil with his performance; 68% want him gone. It need not be a binary choice between
lions of shekels invested in homes and in
frastructure over decades. Some settlers
have now lived in the West Bank for two We can’t work it out
generations. Israelis and Palestinians, % supporting
Negotiators insist that big settlement
“blocs”, which house about threequarters By category Israeli Jews Palestinians Two-state solution
of the settlers in the West Bank, are no ob 2018 80
0 10 20 30 40 50
stacle to a peace deal. Yet one of the largest,
Two-state solution 70
Ariel, sits almost halfway across the width
Israelis*
of the West Bank. The blocs carve ribbons 60
One democratic state
and punch holes in the outline of a Pales 50
tinian state (see map on next page). More One unequal state
where the other group Palestinians
than 100,000 Israelis live outside them, in 40
is denied the same rights
isolated communities that would need to Transfer/expulsion 30
be evacuated—more than 12 times the of the other group
number removed from Gaza during Israel’s Other/don’t know 2010 12 14 16 18 20
disengagement from that territory in 2005. Source: Palestinian Centre for Policy and Survey Research *Includes Jewish Israelis and Arab Israelis
Settlers wield a level of political power
012
The Economist May 29th 2021 Middle East & Africa 39
one state and two. Some Israelis and Pales East 20 km Jordan it overcrowded hospitals. Close to a billion
tinians talk of a confederation that would West Jerusalem River dollars is thought to have vanished during
split the difference. Both communities Jerusalem Mr Arafat’s rule. Today Mr Abbas is more
could fulfil their national aspirations, but interested in prosecuting anticorruption
with shared institutions and a porous bor Old City activists than pursuing corruption. As long
der. Both Mr Abbas and Reuven Rivlin, the West as his security forces keep the West Bank
outgoing Israeli president, have expressed Bank quiet, though, the world gives him a pass.
openness to such an arrangement. Palestinian built-up areas The endurance of Hamas and Fatah, Mr
It would face obstacles, not least that it Israeli settlements Azzun Atmeh Abbas’s party, is indicative of how the Oslo
requires creating a system of governance Oranit era warped Palestinian politics. Majorities
that does not exist in the world today. A bi Tel Aviv Ariel in the West Bank and Gaza think their lead
JORDAN
national state would have to overcome a Mediterranean ers corrupt and authoritarian. But Fatah
century of hostility. Such challenges are of Sea Pre-1967 border Ramallah enjoys a measure of international legiti
ten cited as a reason to support the status “Green line” macy because it accepts a territorial com
quo: a twostate solution is desirable be Jerusalem promise that is now a mirage; Hamas
cause the alternatives would be hard. After (municipal boundary) claims popular legitimacy by rejecting
three decades of failed negotiations, compromise and promising liberation,
though, this argument sounds hollow. ISRAEL which is just as illusory.
Dead
In his final weeks as secretary of state, S ea To discard the landforpeace frame
Gaza City
in 2016, John Kerry warned that Israel was work would mean a sea change in Palestin
heading for a permanent occupation, a re Gaza
Strip
ian politics, reflecting a stark disjuncture
ality he described as “separate but un between generations. Older people have
equal”. His choice of words, a reference to West Bank, May 2021
spent a lifetime dreaming of an indepen
Jim Crow in America, was meant to jolt lis Separation dent state. Asked why they do not abandon
Palestinian areas Israeli areas barrier
teners. Yet it was less a prediction of the fu Built-up Settlements Built
that dream and push for equality, they re
ture than a description of reality. The four Civil control Municipal boundaries Planned
ply that Israel would never accept it. Many
groups of Palestinians in the Holy Land all Sources: Peace Now Military/civil
younger Palestinians disagree. The call for
face formal and practical discrimination statehood, they argue, lets Israel frame the
compared with Israeli Jews. conflict as a struggle between two nations
Start with Arab Israelis, as Israel calls protests in the West Bank. In quieter times, on a more or less equal footing. A battle for
them, or Palestinian citizens of Israel, as though, Palestinian leaders are happy to equal rights would put the onus more
many (though not all) call themselves. help perpetuate divisions among their squarely on Israel.
They hold full citizenship, if not quite full people in order to preserve their fiefs. The twostate paradigm turned the con
rights. A “nationstate law” passed in 2018 Several years ago your correspondent flict into a land dispute. If negotiators
reserved the right of “national selfdeter met Mahmoud Zahar, one of the founders could simply find the right path for a bor
mination” for Jews alone. The poverty rate of Hamas, in Gaza. In the West Bank, he der, the weary parties could retreat to their
for Arabs, 36%, is double that of Jews; their said, Palestinians faced the routine threat respective sides. But this is also a conflict
average monthly income in 2018 was 34% of having their homes demolished by the over how two peoples should live together
lower. The Supreme Court has upheld the Israeli army, often for failing to obtain on an uncomfortably small patch of land.
right of small towns to screen residents for building permits that are nigh impossible
“social suitability”, a practice that has been to get. Not so in Gaza: “Since Hamas took Delusions and reality
used to bar Arabs from moving in. power,” he said, “there has not been a sin Some on both sides cling to fantasies.
Palestinians in East Jerusalem exist in a gle house demolition.” Rightwing Israelis persist in believing
sort of limbo. Most refuse to seek Israeli That would come as a surprise to Pales that the Palestinians can be persuaded to
citizenship, waiting for a solution that tinians who recently endured 11 days of leave or be consigned to live as second
never comes. They risk losing their Israeli conflict. The fighting displaced more than class noncitizens, a cheap labour pool
residency cards if they leave the city; more 70,000 people; some have no homes to re content to cross teeming checkpoints each
than 14,000 have been revoked since 1967. turn to. A longer war in 2014 left an esti day to till fields and swing hammers.
A Palestinian born a few kilometres to mated 17,000 families, more than 100,000 Groups such as Hamas still insist they can
the north, in Ramallah, cannot visit Jerusa people, homeless. In fact, Mr Zahar was outlast Israel, that one day the Jews will
lem without a permit. Life in the West Bank one of them: his home was destroyed by an pack up and “go back to Europe”, never
is largely confined to the onethird of its Israeli air strike. mind that most of them are nativeborn
territory under a measure of Palestinian Such is the emptiness of Hamas’s rheto (and often descended from Middle Eastern
control. Hundreds of checkpoints restrict ric. To the extent that it remains popular, Jews rather than European Jews, to boot).
freedom of movement. that is largely in contrast to the superannu Here and there in Israel one sees a
Then there is Gaza. To be born there, ated Mr Abbas. At 85, he is old enough to re phrase in graffiti on walls in Hebrew and
since 2007, is to be born in a place one can member a time before Israel existed; most Arabic: ain lanu eretz aheret; la watan lanna
not easily leave. Israel permits only select of his constituents are not old enough to badeel. “We have no other country.” The Ar
categories of Palestinians to cross its bor remember a time before he was president. abs and Jews must decide how to share it;
der, while Egypt allows only a few thou The pa he oversees was meant to form the the world cannot dictate a solution. That
sand travellers a month (and some months nucleus of a future state. With no state on will require a new peace process, a genuine
none at all). Almost half of Gazans are un offer, today it serves mostly to distribute one, with legitimacy and popular support
employed and 80% need help from aid publicsector salaries and conduct securi on both sides. It is hard to envision such a
groups to survive. ty coordination with Israel. process sprouting soon from such poi
These divisions occasionally collapse America alone has provided more than soned soil. But to acknowledge reality
during times of trouble, as they did this $5bn in aid to the Palestinians since 1994. would be a start. What came before has
May, when unrest in Jerusalem led to rock Many in the West Bank wonder where it failed, and what comes next will need to
et fire from Gaza, riots inside Israel and went, as they drive on rutted roads and vis talk less of partition and more of parity. n
012
40 Middle East & Africa The Economist May 29th 2021
Mali
Coup within a coup
BAMAKO
The leaders of Mali’s most recent
coup do it yet again
“I t’s political chaos,” says Kevin, a 32

yearold teacher in Bamako, the capi
tal of Mali. The country, he laments, “has
absolutely no future”. There was at least
some cause for hope in September, when
Bah Ndaw, the president, and Moctar
Ouane, the prime minister, were appoint
ed to prepare for elections after a military
coup the month before. But Assimi Goita,
Islam and homosexuality who led that coup and then became vice
Muslim pride president, is at it again. Messrs Ndaw and
Ouane did not respect the transitional
charter or consult him about a cabinet re
shuffle, claimed Colonel Goita. They were
Gay people are reclaiming an Islamic heritage
detained on May 24th, then stripped of
F or decades regimes in the Middle

East have alleged that homosexuality
is both morally unacceptable and a West
man poetry features male lovers, gay
groups are discovering lesbian poetry
from the past. “How much have we
their powers and forced to resign.
Malian politics have long been tumul
tuous. Last year Ibrahim Boubacar Keita,
ern import. Many gay activists disagree grinded sister, ninety pilgrimages/ More the president at the time, faced big protests
on both counts. Homophobia is the delightful and invisible than the entries led by an opposition alliance called the m5
Western import, they claim, introduced of the penis head,” reads a couplet. rfp and a charismatic imam called Mah
by puritanical Europeans. “Ban the colo Gay poetry is not the only art form moud Dicko. Some of the protesters wel
nial law,” cried campaigners in Tunisia in undergoing a renaissance. Muhammad comed the coup that ensued and hoped the
December, referring to a law criminalis Issaoui, who calls himself “a queer dan army would clean up politics before hand
ing gay sex written by the French more cer”, adapts the traditions of male belly ing over to civilians. After much wrangling
than a century ago. “All these homo dancers once common in Cairo and between the junta and ecowas, a regional
phobic laws in the Middle East were Beirut. He performs in Tunisia’s clubs bloc, an 18month transition to elections
brought in by colonialism to undermine and theatres clad just in feather boas and was planned, led by a nominally civilian
Islam’s permissive civilisation,” says underpants. “It was natural for men to government. The junta, though, took four
Ramy Khouili, a Tunisian activist. express their feminine sides before,” he plum cabinet posts, including minister of
History is complicated, and prejudice says. “It was just pleasure and art.” defence and minister of security. The m5
has ancient roots. Nonetheless, activists Some activists are examining old rfp received little.
can point to periods of the Islamic past legal texts—and finding contradictions. The transition had not been going all
when Arab rulers were more liberal about Classical jurists upheld the Koran’s clear that smoothly even before the latest coup.
sex. They relate how the Caliph Amin in prohibition of sodomy, yet debated how Frustration with the armed forces is grow
ninthcentury Baghdad had a male lover deep the penis must penetrate to be ing, as they not only dominate the govern
and feted gay poets. They read poems deemed a violation. (Up to the line of ment, but are colonising the rest of the
from a classical genre called mujun, or circumcision, according to a standard state, too. For example, a military doctor
hedonistic smut. And they recall that the work written by Shia Muslims.) The was recently installed as head of one of Ba
Ottoman Turks, who ruled most of the presentday jihadists of Islamic State mako’s largest hospitals. Meanwhile, pro
Middle East in the 19th century, decrimi throw gay people off rooftops, citing a gress on reforms and preparations for elec
nalised homosexuality a century before reported saying of the Prophet endorsing tions have been sluggish. In midMay the
America and Britain. Back then, “you the practice. But scholars have struggled main trade union went on strike. Under
could be with a man or a woman,” says to find historical cases of anyone taking pressure from the m5rfp for a fresh start,
the transgender founder of north Africa’s this verse literally. Mr Ouane’s government resigned on May
first gay movement, the Abu Nawas This gay reengagement with Islam 14th. Mr Ndaw immediately reappointed
Association, named after a great Arab has its critics. Many feminists are secular him and consultations began to establish a
poet, who was gay. “There were men and see Muslim clerics as part of the more inclusive government, which was
dressed as women and living as wom patriarchy they want to topple. Still, most duly announced on May 24th. A few hours
en—and it was normal.” are willing to lend their support to gay later the president and prime minister
“A Promenade of the Hearts”, a col people now facing arrest, torture and were detained.
lection of stories and poems compiled by censorship by Arab rulers. “The problem The changes to the government were
Ahmad alTifashi, a 13thcentury Arab isn’t Islam,” says Rasha Younes, a Leba not dramatic. The army retained control of
sexologist, is experiencing a revival in nonbased researcher for Human Rights the same number of ministries, including
Beirut’s libraries. The penis, he claims, is Watch, a monitoring group. “It’s the defence and security. But different men in
better shaped for anal than vaginal pene oppressive regimes who want to control uniform, not members of the junta, were
tration. While much classical and Otto us and the Middle East in its name.” put into those jobs. That seems to have pro
voked the arrival of soldiers at the houses
012
The Economist May 29th 2021 Middle East & Africa 41
of Messrs Ndaw and Ouane (who have Abubakar Shekau tacked village leaders, schools, the police
since been released). President Emmanuel and government buildings.
Macron of France, which has troops in Ma Sixth time unlucky Vast swathes of Nigeria’s arid north
li, called it “a coup d’état within a coup east fell under Boko Haram’s control. At
d’état”. Western countries threatened sanc tacks extended to Niger, Chad and Camer
tions; America suspended security aid. oon. Nigerian authorities say at least
Colonel Goita is now clearly in charge— 10,000 boys have been abducted by the
ABUJA
and mainly looking out for the army. group and rifles forced into their hands. In
Boko Haram’s vicious leader is dead.
The leaders of the putsch may have 2014 the group won global notoriety by kid
Probably
been emboldened by the willingness of napping some 276 schoolgirls in Chibok.
ecowas and Western countries to accept
the government’s dubious civilian creden
tials. ecowas had called for a 12month
O ne can understand why Nigeria’s gov
ernment has been slow to confirm the
death of Abubakar Shekau. It has an
Celebrities shared the slogan #BringBack
OurGirls. Mr Shekau said the girls had con
verted to Islam—or would be sold into slav
transitional period, but acquiesced to 18. nounced it five times before, between 2009 ery. He became the most wanted African in
The soldiers’ sense of impunity was proba and 2016. Each time Mr Shekau, the leader the world, with a $7m bounty on his head.
bly also fortified by the limp response from of Boko Haram, a jihadist group, turned up Yet it was his fellow jihadists, not boun
the African Union, which is supposed to very much alive and ready to continue ter ty hunters, who laid him low. In 2015 he
have a “no coup” policy, to a coup last rorising his compatriots. The war between crushed a breakaway faction and pledged
month in nearby Chad. Ignoring Chad’s Boko Haram and modernity has left more allegiance to Islamic State (is). But is,
constitution, Mahamat Idriss Déby took than 30,000 people dead and 3.2m dis based out of the Middle East, came to view
over after his father, the president, had placed across four countries. Mr Shekau Mr Shekau’s relentless killing of civilians
been killed in battle. made zany videos to taunt the government and use of child suicidebombers as
A French military spokesman called the that failed to kill him. In them, he would counterproductive. It first tried to replace
events in Mali “a political episode” and wave a gun, chew on a stick and let derision him. When that failed, in 2016, iswap
said it would not affect French military op froth from his mouth (see picture). broke away from Boko Haram.
erations against jihadists linked to alQae But this time it seems he is not coming It has the same stated goals: the cre
da and Islamic State, who threaten swathes back. On May 19th, according to trusted re ation of an Islamic state in northern Nige
of Mali, Burkina Faso, Niger and Nigeria ports, Mr Shekau detonated an explosive ria and the eradication of “Western influ
(see next story). France has 5,100 troops in vest to avoid capture by Islamic State West ence”. But it prefers taxing civilians to
the region. More than 13,000 un peace Africa Province (iswap), a splinter group murdering them, and tends to focus its at
keepers patrol Mali itself. The eu has a that was attacking Boko Haram’s strong tacks on military targets rather than
large mission training the Malian army, hold in Borno State in northeast Nigeria. schoolgirls. In 2018 it called Mr Shekau a
too. Despite this, violence across the re His death marks the end of a bloody career. “tumour” that needed removing.
gion has been rising sharply since 2016. It also reflects the shifting power dynamics It is unclear whether iswap intended to
Last year the conflict in Mali, Burkina Faso among west Africa’s jihadists. kill Mr Shekau. Regardless, his death will
and Niger claimed about 6,200 lives. The son of a local imam, Mr Shekau was have knockon effects. iswap will probably
born in a remote village near the border absorb hundreds of Boko Haram fighters,
A boon for the bad guys with Niger, sometime between 1965 and making it even more of a threat to the Nige
The turmoil in Bamako will not go unno 1975. He left home as a child for Maiduguri, rian armed forces, which are reeling from
ticed among jihadists. Jama’at Nasr alIs the capital of Borno State, where he was en the death in a plane crash on May 21st of the
lam wal Muslimin (jnim), an alQaeda trusted to the care of an itinerant Koran army commander.
linked group which operates across much teacher. As a young man he met Muham Mr Shekau’s demise also bolsters is’s
of the Sahel, is not just a bunch of terror mad Yusuf, the founder in 2002 of the sect claim that, although it has lost ground in
ists. It also holds out the promise of a dif that became Boko Haram. When Yusuf was the Middle East, its affiliates in Africa,
ferent form of governance, says Yvan Gui killed in police custody in 2009, Mr Shekau whether in the Sahel, Congo, Mozambique
chaoua, an expert on the Sahel at the Uni took the group underground. But it soon or Nigeria, are in the ascendant. A jihadist
versity of Kent. The endless machinations resurfaced as an army of zealots who at is most likely dead. His cause endures. n
in Bamako will, he says, benefit jnim.
With the Malian military leadership
squabbling over power in the capital, “who
is actually fighting on the ground?” asks
Ornella Moderan of the Institute for Secu
rity Studies, a panAfrican thinktank. In
the chaos that ensued after an earlier coup,
in 2012, separatists and jihadists swept to
wards Bamako, prompting France to inter
vene the following year.
The 18month transition period since
the coup in August was meant to end with
elections in February 2022. Confirming
that schedule will be a priority for a delega
tion from ecowas that came to Bamako in
the wake of the latest coup. Colonel Goita
himself claimed in his statement that
those elections will go ahead as planned.
But only the supremely credulous would
believe a man who has staged two coups in
nine months. n The deadly departed
012
42
Europe The Economist May 29th 2021

43 Russia’s Czech problem
44 A Turkish mobster speaks out
44 Preserving Norwegian folk music
45 The geography of Paris voting
46 Charlemagne: Europe’s lucky farmers
Belarus and Russia closed European airports to Belarus’s state

airline and advised their own carriers to
An ever deeper union avoid its airspace. So did Britain. The most
politically significant step came from
neighbouring Ukraine, which banned the
import of electricity from Belarus, placing
itself squarely in the Western camp.
Britain, the eu and America are now
working on new economic sanctions
Having hijacked a Ryanair plane, Belarus has only one friend to turn to
against Mr Lukashenko’s regime. Belaru-
B elarusian dissidents expect to be ar-

rested in Belarus. But until May 23rd
they thought they were safe in the West.
part organised those protests. He now fac-
es a 15-year jail sentence. In a video “con-
fession” Mr Protasevich, with a bruise on
sian opposition leaders who live in exile,
as those who are not in prison tend to, say
it should include a boycott of Belarusian
That was when Roman Protasevich, a 26- his forehead and part of his neck apparent- potash and petrochemicals, the country’s
year-old Belarusian journalist and activist, ly covered by make-up, said he was being main exports, as well as many more travel
boarded a Ryanair jet that was due to fly treated fairly. A similarly distressing video bans and asset freezes on named individ-
from one eu country (Greece) to another was aired of Ms Sapega, who is now being uals and state-controlled entities. Getting
(Lithuania). To his horror and the world’s charged with instigating “mass disorder”. 27 eu members to agree on lists is likely to
astonishment, Belarus’s autocratic govern- Western governments competed to ex- take time. But if Western leaders once held
ment hijacked it. press their fury. The eu’s leaders demand- back because they reasoned that such
The plane was passing through Belaru- ed the release of the two young people, moves would push Belarus closer to Rus-
sian airspace and about to cross into Lithu- sia, Mr Lukashenko’s actions have made
ania, where Mr Protasevich had been living FR4978 flight path their concerns less salient: his outrages
in exile. Suddenly, the pilots were told SWEDEN from Athens have locked him firmly into Russia’s orbit.
there was a bomb on board. A mig-29 fight- ESTONIA The Kremlin is delighted. Margarita Si-
er jet was scrambled to intercept the plane monyan, the boss of rt, Russia’s state pro-
ea
and escort it to Minsk, Belarus’s capital, RUSSIA paganda channel, praised Mr Lukashen-
c S
LATVIA
lti
though this was not the nearest airport. On Moscow ko’s piratical skills: “Never thought I would
Ba
arrival Mr Protasevich was arrested, along LITHUANIA be jealous of Belarus. But now I am jealous.
with his Russian girlfriend, Sofia Sapega. The old man has done it beautifully.” Rus-
Vilnius Minsk
No bomb was found. The alert was Kaliningrad sian tv channels disseminated the Belaru-
plainly a ploy. Alexander Lukashenko, (Russia)
BELARUS sian dictator’s lies about the bomb threat
Belarus’s dictator, has been rattled by mass having come from Hamas, which the eu
POLAND
protests against his theft of an election last designates as a Palestinian terrorist group.
year. Mr Protasevich co-founded Nexta UKRAINE Sergei Lavrov, Russia’s foreign minister,
(“someone” in Belarusian), an internet 300 km provided the rationale. “Russia will never
EU members
channel that covered, galvanised and in leave Belarus in trouble…and will always
012
The Economist May 29th 2021 Europe 43
come to the rescue of our neighbour and collaboration with Russia, and was per since expelled dozens of each others’ dip
strategic ally. We have common history haps also intended to secure Belarus finan lomats. Relations are now as sour as at any
and spiritual values.” cial assistance in the event of harsher sanc time since the Soviet Union collapsed
The main commonality between the tions; a cynical deal indeed. (though not as bad as in 1968, when Mos
two regimes, however, is a fear of popular Belarus is testing new limits to what cow’s tanks rolled into Czechoslovakia to
uprisings that might drive both from pow Freedom House, an American ngo, calls overthrow a reformist government).
er. Last summer, as protests engulfed Bela “transnational repression”. Authoritarian That is inconvenient for the Kremlin. It
rus, it seemed that another “colour revolu regimes such as those in Russia, China and needs friends inside the eu to stave off fur
tion” in a former Soviet state might topple Rwanda have long targeted domestic dissi ther sanctions over its latest misdeeds. Al
another dictator. Vladimir Putin, who dis dents beyond their borders. Some will now though most Czechs distrust Russia, it has
approves of such things, stepped in, offer be tempted to copy Mr Lukashenko’s novel long been able to count on the Czech presi
ing economic help and pledging to provide tactics. Exiled dissidents of every national dent, Milos Zeman, a cantankerous popu
security cadres to prop up Mr Lukashen ity will be more nervous about boarding list who likes to set off explosions of a rhe
ko’s forces in case they wobbled. He also planes. Belarusian dissidents will wonder torical kind. Mr Zeman questioned his own
dispatched a team of Russians to take over if they are safe flying over Russia, which is country’s intelligence agencies for blam
parts of the Belarusian propaganda mach much harder to avoid than their home ing the blast on Russia. During a visit by
ine if necessary. The aim was not to em land. When Mr Biden meets Mr Putin in Serbia’s president on May 18th he abruptly
power Mr Lukashenko, whom he distrusts, three weeks’ time, the democrat and the begged forgiveness for nato’s bombard
but to secure his grip on Belarus, which he despot will have even more to discuss. n ment of Belgrade in 1999, clearly trying to
sees as an essential battleground in his suggest that the Russians are not the only
confrontation with the West. ones who go around blowing things up.
For years Mr Lukashenko had cleverly Central Europe Mr Zeman also called Russia’s enemy
played Russia against the West, blackmail list “silly”, and his powers as president are
ing both to extract money. When Mr Putin The spirit of ’68 limited. But the government of Prime Min
pushed for a deeper union between Russia ister Andrej Babis is hanging by a thread.
and Belarus two years ago, so that he could The Czech Communist Party, an unre
preside over a new empire, Mr Lukashenko formed Russiafriendly outfit that has 8%
resisted, taking on the unlikely role of of the seats in parliament, stopped backing
champion of Belarusian independence. the coalition in April, depriving it of its
Russia puts the Czech Republic on an
But by stealing the election and then order majority. If Mr Babis falls, Mr Zeman could
official enemies list
ing the mass arrests, mass beatings and decide who will run a caretaker govern
mass torture of those who objected, he has
destroyed the last speck of legitimacy he
had at home and alienated the foreign
U nlike teenagers, countries rarely
write down lists of their enemies. But
Russia does. On May 14th it published a list
ment until an election in October.
The biggest consequence of the feud in
volves an upgrade to the nuclear power
powers that had previously tolerated him. of “unfriendly countries”. Oddly, it had on plant at Dukovany, originally built by the
Now he has only one possible ally left, a ju ly two names on it: the United States and Soviet Union. The state power company
do enthusiast in Moscow. the Czech Republic. The latter was unex plans to build at least one new reactor by
The melding together of Russia and a pected, but explicable. In April the Czech 2036 for €6bn ($7.3bn), though analysts
oncereluctant Belarus continues. Mr Pu government revealed that a deadly explo fear the cost may be twice as high. After the
tin met Mr Lukashenko on April 22nd and sion in 2014 at an ammunition depot in the Vrbetice affair the government announced
praised progress in deepening the “union town of Vrbetice, previously thought acci that Rosatom, the Russian nuclear consor
state” between the two countries. A few dental, was set off by Russian agents. tium, had been excluded from bidding.
days earlier, Russia’s fsb, the security ser (Some of the ammunition was destined for However, experts say that Russian com
vice that now plays a dominant role in Rus Ukrainian forces fighting Russianbacked panies have only been kicked out of the
sian politics, said it had cooperated with rebels.) The Czechs and Russians have initial phase, and could end up winning
the Belarusian kgb (as it is still called) to contracts later. Having built Dukovany,
uncover a Western plot to assassinate Mr they have an advantage over their compet
Lukashenko. Whichever country came up itors, France’s edf, South Korea’s khnp
with this conspiracy theory, Mr Putin cited and the JapaneseAmerican firm Westing
it last month in a telephone conversation house. “If you ask Czech engineers, they
with Joe Biden, whom he is to meet in Ge mostly say they would be for the Russians,”
neva on June 16th. says Martin Jirusek, an energy industry ex
In Belarus the plot was instantly turned pert at Masaryk University.
into a propaganda film, “To Kill the Presi Czech views of Russia have often see
dent”. In the words of Nikolai Karpenkov, sawed. Last spring the two countries tus
one of Mr Lukashenko’s generals, it “clearly sled over the removal of a statue of a Soviet
showed that this soft, kind opposition general, Marshal Konev, hailed for liberat
fighting for peaceful changes are in fact ing the country from the Nazis in 1945 but
bloodyminded dogs preparing a military then reviled for planning the invasion in
coup, murder and kidnapping.” The Bela 1968. But views of the West can be wary as
rusian security services claimed they were, well. A survey in 2020 by cvvm, a pollster,
in fact, fighting terror, rather than propa found that by a twotoone margin Czechs
gating it: “We are ready to act. As soon as are glad that their country is a nato mem
the order comes, we will find and purge ber, but they are split almost evenly on
them…we will make the world freer.” Hi whether that is a guarantee of indepen
jacking the Ryanair flight to arrest Mr Pro dence or a form of subjugation to foreign
tasevich was part of the “counterterrorist” powers. Enemies list or no, some Czechs
operation that stems from this deepening Not a friendly act are still reluctant to take sides. n
012
44 Europe The Economist May 29th 2021
Turkey
The untouchables
ISTANBUL
A convicted mobster’s allegations rock
the government
S edat Peker, the man at the centre of

one of Turkey’s biggest political scan
dals for many years, makes an unlikely
YouTube celebrity. He slurs his words, pos
sibly as a result of too many Botox injec
tions, wears an unbuttoned shirt, and sits
behind a desk adorned with prayer beads,
pages of notes and an empty lantern. Over
the past month, however, Mr Peker, a con
victed mobster, has had millions of Turks
glued to their screens as he has settled
scores with President Recep Tayyip Erdo Saving Setesdal
gan’s government.
His allegations, which are unproven,
Fiddlers of the fjords
are explosive. In a series of videos, Mr Pek
er has accused the son of Mr Erdogan’s for
Norwegian folk music is worth preserving, says the un
mer prime minister of drug trafficking and
a rulingparty mp of involvement in the
death of a young woman. He claims to have
had another politician beaten up for in
S etesdal, a winding valley to the
north of Kristiansand in southern
Norway, was once a place of traditions
Setesdolen, the local newspaper, has
started printing stever, fourline ditties
sung in a callandresponse fashion.
sulting the president and takes credit for little changed since medieval times. These are common at weddings and
an attack on the offices of one of the coun Chief among these were song and dance other celebrations. Ms Lien says there is
try’s biggest newspapers. He also claims marked by improvisation and a beat as now talk of permitting them in local
the country’s interior minister, Suleyman visceral as the blues. Birth, death and council business. This would certainly
Soylu, offered him police protection. every step in between happened to mu liven up dull planningcommittee meet
The seven videos have been viewed at sic. But over the years radio, tv and then ings. From this autumn schools will
least 55m times. More of them seem to be the internet wormed their way into its incorporate traditional music and dance
on the way. Opposition politicians and hamlets. Now only a handful of stalwarts into the curriculum, and those who teach
even some members of the ruling Justice know the old tunes and dances. Fearing these skills will earn good wages.
and Development (ak) party have called for that they might disappear, unesco, the The children seem keen. Given the
an inquiry. What the allegations show, said un’s culture agency, gave Setesdal a electronicalike pulse of a typical Setes
Kemal Kilicdaroglu, the leader of the main listing at the end of 2019. dal session, it’s easy to see why. But their
opposition party, is that the mafia has be A UN convention on safeguarding enthusiasm, and that of the wider pop
come the government’s coalition partner. “intangible cultural heritage”, agreed in ulation, may also reflect a craving for
“If even a thousandth of these claims are 2003, requires states to act to preserve community, especially after the tor
true, this is a disaster,” said Cemil Cicek, an whatever is listed within their juris ments of lockdown. “People want to
ak heavyweight. diction within six years. “For us, this was know who they are, where they’re from,
Mr Soylu, meanwhile, denies the allega an alarm bell,” says Annbjorg Lien, who what they’re about. Only a soulful experi
tions. He has swatted away calls for his res has the job of reviving folk traditions in ence can provide that insight,” says Ms
ignation, demanded that Mr Peker should the Setesdal municipality. Lien, a keen fiddler herself.
be charged with slander and dared him to
return home. He also called the allegations
part of “an international operation” and ac Scores were killed. Some of that era’s unsa against him.
cused America and the United Arab Emir voury characters have now resurfaced, in The videos are also embarrassing Tur
ates (uae) of attempting to overthrow Tur part thanks to an amnesty last year. key’s media and judiciary, which no longer
key’s government. Mr Peker, who fled Tur Until recently, Mr Peker had been in the dare to look into highlevel corruption or
key two years ago, is believed to be living in government’s good graces. The mobster, probe top officials, much less members of
the uae. who has served time for leading a crime Mr Erdogan’s family. A reporter for Tur
Mr Soylu has not been helping his syndicate, extortion and kidnapping, met key’s state news agency who asked a minis
cause. Late on May 24th a crowd of suppor Mr Erdogan on at least one occasion, or ter a pointed question about Mr Peker’s
ters swarmed around the minister outside ganised rallies in support of him, and claims lost his job the next day. The biggest
a television station, breaking curfew rules earned an award as Turkey’s “most bene previous corruption scandal in the Erdo
Mr Soylu had personally signed into law. volent businessman”. When a group of aca gan era was largely the work of bureaucrats
He warmly thanked them. demics penned a letter criticising a gov loyal to a religious sect, who dug up evi
The scandal has revived memories of ernment offensive against Kurdish insur dence of bribery and moneylaundering by
the 1990s, when the state regularly teamed gents, Mr Peker swore to “shower in their government ministers. Today, the task of
up with criminal groups to go after oppo blood”. He fell out of favour, he claims, holding the powerful to account seems to
nents, from journalists to Kurdish leaders. when Mr Erdogan’s soninlaw turned have fallen to a mafioso. n
012
The Economist May 29th 2021 Europe 45
Greater Paris Valérie Pécresse, the sitting centreright re

gional president, is the favourite. All can
Beyond the fringe didates with more than 10% go through to a
runoff, where she may face both Mr Bar
della and a candidate on the left, possibly
the Greens’ Julien Bayou (the candidate of
President Emmanuel Macron is polling
LA CHAPE LLE-E N-VEXIN AND MARINES
fourth). Ms Pécresse, who moved the re
Why Paris is so disconnected from its semi-rural outer rim gion’s headquarters from Paris to the sub
urbs, has distanced herself from Parisian
C utting through farmland in a re

gional nature park, the approach to La
ChapelleenVexin is dominated not by its
crete symbol of the capital’s division from
its suburbs. Life on the lotissements on the
region’s outer fringe has more in common
politicians. She opposes the pedestrianisa
tion of parts of central Paris, as it has
pushed congestion and pollution out to
12thcentury chapel but by newly built with the villages and towns across France the periphery. The fashionably bearded Mr
twostorey homes. With their dormer win than it does with central Paris. Bayou, meanwhile, got into trouble last
dows, sloping tiled roofs and neatly Divergent geographical interests also month for posters aimed at young voters,
hedged gardens, houses on such lotisse- help explain why efforts over the years to which hinted that “hunters” and “boom
ments offer a French version of American merge the overlapping and competing ad ers” were not interested in climate change.
suburban life: play space for children, a ministrative structures governing Paris Greenery is at the heart of this tension,
deck for the barbecue, and—crucially—off and the region have come to little. As it is, and competing interests are complex. In
street parking. In this village of just 333 in the capital seems quite happy not to run Marines, a small town with a cobbled cen
habitants, an offplan threebedroom the troubled banlieues, with their brutalist tral square, residents cherish the environ
house with a garage is on sale for €260,000 housing estates, which ring Paris itself. ment as well as their cars. Daniel Her
($320,000)—the same as a gloomy bedsit The semirural communes are more ne mand, who works at the town hall, says he
in central Paris. glected still. “For 30 years the capital’s quit Paris for a calmer life close to nature
Only 65km (40 miles) separate La Cha growth has benefited the nearer suburbs, and forests. If the pandemic and conse
pelleenVexin from the cobbled boule but it has also reinforced the contrast with quent homeworking push more families
vards of the French capital. Both belong to the outer periphery,” says Aurélien Delpi out, they may bring their hobbies and poli
the greater Paris region, ÎledeFrance. Yet rou, of the École d’Urbanisme de Paris. tics with them. So Ms Pécresse has taken
daily concerns could not be more different. care to sound ecofriendly too. She has
The suburban rer express line does not The other Marine launched an electricbike rental scheme,
reach this far. Fully 85% of residents drive The fringes of greater Paris carry a political and promises a network of bicycle routes
to work. Villagers worry about pollution. A warning too. At elections to the European to match those of the rer train lines.
big local issue is an effort to get a bypass Parliament in 2019, the Greens’ vote was “Of course it’s good for people to use bi
built to divert heavy traffic from driving concentrated in central Paris. A big swathe cycles,” says Othman Nasrou, Ms Pé
through the centre. But roads sustain daily of the outer fringe, however, voted for Ma cresse’s deputy. “But environmental policy
life. Shopping is done by car at a hyper rine Le Pen’s populist National Rally. Stud can’t be to the detriment of those who need
market. Nobody in the village uses a bicy ies by Hervé Le Bras, a geographer, show to use their cars.” Mr Macron learned this
cle to get to work. “We don’t feel close to that the National Rally’s vote tends to rise the hard way when gilets jaunes (yellow
Paris at all,” says Joëlle Valenchon, the with distance from a railway station. Isola jackets) launched huge protests against a
mayor: “We are a bit forgotten.” tion and fear of crime play a part, as does a rise in tax on motor fuel. It is not fashion
The French capital, with 2.2m people, is sense that government ignores rural vot able politics to listen to car owners, nor to
dwarfed by its region, home to 12.2m. Some ers’ problems. At regional elections next the quiet concerns of those on the fringes.
3m4m of them live on its semirural edg month, the National Rally’s candidate, Jor But the lotissements of greater Paris and
es. Such places, where 87% of trips are dan Bardella, is Ms Le Pen’s young deputy. their voting habits suggest that policy
made by car, feel a world away from the The campaign for the ÎledeFrance cap makers who unthinkingly punish the car
capital’s concerns. Politics in Paris, gov tures the rift between Paris and its region. dependent do so at their peril. n
erned by Anne Hidalgo, a Socialist backed
by the Greens, is increasingly about bike
Oise
sharing, pedestrianisation, the végétalisa- La Chapelle-en-Vexin
tion (greening) of concrete spaces and roof Marines
FRANCE
top microfarming. Paris aspires to be a “15 Val-d’Oise Aisne
minute city”, a concept developed by Car Eure
Seine-
los Moreno, an urban planner. The idea is Saint-
that everything—school, work, shops, Hauts- Denis
Yvelines de- Paris
sport, cafés—should be within 15 minutes Seine Val-de- Marne
from home on foot, or five minutes by bike. Marne
“Mine is actually more like a twominute
city,” says a Paris citydweller, who rents an ÎLE-DE -F RAN CE Seine-et-
Marne
electric bike for more distant excursions. European Parliament
The disconnect between Paris and the Essonne election results
outer reaches of its region has political im 2019, by commune
Eure-et-Loir S ein e
plications. One is that Ms Hidalgo, who is La République
seen as an anticar crusader and could run en Marche
National Rally
for the French presidency next year, may Greens
find it hard to appeal far beyond the péri- Yonne Others
Loiret
phérique. The Paris ringroad, built half a 20km
Source: French
Interior Ministry
century ago, has turned into a gigantic con
012
46 Europe The Economist May 29th 2021
Charlemagne How farmers rule Europe
Politicians are still afraid to touch their exorbitant privileges

withered. Coalminers in Germany and Poland will have cash
thrown at them as their industries are phased out as part of the
plan for a “just transition” to a green economy. But this amounts to
a free bar at a wake. By contrast, farmers remain as powerful as ev
er. Partly this is down to the nature of food. People care more about
what they put in their mouths than how they heat their homes or
the bodywork of their Audis. Unlike coal or steel, food is not truly
fungible. An Italian may spurn a tomato from Spain, never mind
one flown in from Morocco, or a genetically modified American
one. For a continent without a common tongue, snobbery about
domestic produce provides a universal language.
The way the eu cooks up agricultural policy helps farmers keep
their outsized power. Normally, policymaking in Brussels is a ba
zaar, with everything for sale at the right price. Officials from
countries haggle with each other, surrendering on one topic to get
what they want on another file. As a system it is opaque, but it
works. By contrast, farming is insulated from the other subjects of
haggling, sealed off in its own special committee. The result is that
governments try to grab as much cash as they can, rather than
question whether it should be there in the first place.
For all the talk of the eu’s democratic deficit, agriculture is an
area where the eu suffers from a surplus of democracy. Deadeyed
A rmed with a device designed for throwing tennis balls for

dogs, it is possible to launch an egg a very satisfying 60 metres.
Head to the Quartier Leopold in Brussels on the right day and you
technocrats would happily chop farming subsidies. European pol
iticians will not let them. In France any selfrespecting presiden
tial candidate must spend time sniffing cheese at agricultural
can see farmers from across Europe firing a wide range of produce fairs. Farming generates barely 1% of European gdp. But its fate
an impressive distance at Belgian riot police. It is during these reg has outsized importance. Rather than left or right, the political
ular protests at the European Union’s headquarters that the inge battleground across much of Europe is a fight between urban cen
nuity, bravery and diligence of the European farmer truly shows it tres and the rural periphery. Britain’s exit removed one of the few
self. In one episode a pair of tractors slowly drove through a big governments that was less neuralgic about the future of farm
barbedwire barricade, as cops scattered. When an armoured po ing (as its current enthusiasm for freetrade deals with agricultur
lice van turned up, the farmers drove into that too. It took two wa al powerhouses like Australia attests). For most of the eu, slashing
ter cannons at full blast to make the tractors retreat. Over the subsidies would be an assault on a politically potent rural hinter
years, grumpy farmers have covered stoic Belgian riot police in land. It is a fight few want to have.
hay, eggs, and milk direct from the udder.
A riot can be the voice of the unheard. It can also be a tantrum Farmers versus Swedish teenagers
of the ludicrously privileged. European farmers are politically Luckily, some do. Greta Thunberg, a young Swedish climate activ
powerful in the same way that the sky is blue: it is a fact so univer ist, has joined a cabal of ngos hammering the eu for not doing
sally acknowledged that it is usually not worth mentioning. This enough to curb agriculture’s environmental effects. At the mo
power was apparent this week in the final negotiations between ment, whatever ambition the eu has for climate policy melts away
diplomats, members of the European Parliament and officials ov when it comes to farming, even though its emissions rival much
er the terms under which farmers will receive €270bn ($330bn) in heavier industries. Farmers can no longer brush off the concern.
202327. That the farmers will get the cash is a given. The debate is Environmental policy has gone from the hobbyhorse of sandal
about how many conditions will be attached, with the options wearers to an existential policy debate. From now on, the farmers
ranging from not a lot to very few indeed. will have a fight on their hands. Things can get better. After all, the
The Common Agricultural Policy (cap) is a tumour in the eu’s cap used to be even worse. The days when European taxpayers
body politic. Sucking up a third of the group’s budget, it is a neat il paid to overproduce products that were then dumped on poor
lustration of its struggle to change itself for the better. What began countries are over. But it took years of concerted campaigning to
six decades ago as a quid pro quo between France and Germany shift the butter mountains and the wine lakes.
(farming bungs in exchange for market access) is still in place. It is It is too late to make a difference this time, as talks over the
an odd form of redistribution. About 20% of farms get 80% of the €270bn come to a close. A slow grinding fight led by the likes of Ms
money. Aristocrats, agrigiants and the Catholic church all take a Thunberg is necessary if the cap is to be overhauled. Ensuring that
juicy cut. Companies linked to Andrej Babis, the billionaire Czech farmers do their bit for the climate, and stopping the transfer of
prime minister, got €34m ($42m) one year. Money is shifted from cash to those who do not need it would be a start. The story of
European taxpayers to landowners, in a frankly feudal farce. Usu European policymaking is one of path dependency in which er
ally, there is a pretence that things will improve. This time, the rors take years (and usually a big crisis) to unpick. Until then, the
European Commission has given up. “We have to acknowledge cap will remain a scar on the eu, a visible reminder of how hard it
that there will be no revolution in the cap,” said Frans Timmer is to undo past mistakes. Should it ever look like being fixed,
mans, the commissioner tasked with making Europe greener. though, it will be wise to avoid the eu quarter in Brussels. Imagine
History is littered with oncemighty interest groups that have how grumpy the farmers will be if they actually lose for once. n
012
Britain The Economist May 29th 2021 47

48 Free-trade deals
49 Bagehot: Mr Levelling Up
Read more from this week’s Britain section:

Economist.com/Britain
The BBC impartiality and diversity of opinion”. To

avoid “groupthink”, he said, “cultural
A colossus quietly crumbles change must be a focus”.
Conservative politicians have long sus-
pected the bbc of closet liberal leanings.
Boris Johnson’s government uses the
“Brexit-Bashing Corporation” as a punch-
bag, as part of a strategy of drawing cultural
The corporation can cope with a hostile government and angry royals,
dividing lines rather than economic ones.
but not with Mickey Mouse
But the real danger posed by political skir-
R elations between the British Broad-

casting Corporation and the govern-
ment have always been delicate. Stanley
poration earlier this month citing ill-
health. Two former executives, including
Lord Hall, have quit their new jobs. Prince
mishes such as that over Mr Bashir is one
of distraction. The more the bbc focuses
on government assaults, the less it is able
Baldwin bridled at the bbc’s coverage of the William declared the revelations proof that to cope with bigger threats emanating
General Strike of 1926. Margaret Thatcher the interview “established a false narra- mostly from America.
was infuriated by its reporting from the tive” about his mother. The government is More than six out of ten British homes
Falklands. Hugh Carleton Greene, the cor- drawing broader lessons. Oliver Dowden, now subscribe to an American video-
poration’s boss in the 1960s, confessed the culture secretary, wrote in the Rupert streaming service. The result is more com-
that, when dealing with Harold Wilson’s Murdoch-owned Times newspaper that the petition for eyeballs. In the past decade
government, “I found my experience as bbc needed “a new emphasis on accuracy, Britons have gone from watching four
head of psychological warfare in Malaya in hours a day of broadcast television to just
1947 extremely useful.” under three. Among under-35s, broadcast
The latest spat pits the bbc against not A lot to take in tv accounts for less than a third of video
just Downing Street but the royal family, as Britain, viewing per day by method, April 2020, % viewing (see chart).
well as many viewers. An independent in- The bbc is good at new media. Its web-
TV and recorded playback Broadcaster VoD*
quiry released on May 20th found that one site is Britain’s fourth-most visited after
Subscription VoD* YouTube
of its most famous scoops, an interview in Google, YouTube and Facebook. The
Games console Other
1995 in which Princess Diana claimed that iPlayer streaming service, which the bbc
“there were three of us in this marriage”, All Daily minutes 386 launched in 2007 (the same year Netflix be-
was secured partly by deception. Martin gan streaming) is used by more people in
Bashir, the interviewer, forged documents 55.7 3.1 18.4 12.4 4.9 5.4 Britain than any subscription platform. It
to persuade the princess that she was being is not enough. In 2019 under-35s spent less
spied on. A bbc probe at the time led by To- than an hour a day consuming BBC output,
ny Hall, who later became director-gener- 16- to 34-year-olds Daily minutes 382 across television, radio and the internet,
al, covered it up. 27.5 3.1 31.4 22.3 11.3 4.5
down by 17 minutes in just two years.
The bbc promises a review of its edito- The compulsory licence fee through
rial practices and another report into its Source: Ofcom *Video on demand
which it is funded is not cheap: at £159
dealings with Mr Bashir, who left the cor- ($225) a year, it would be enough for a basic
012
48 Britain The Economist May 29th 2021
subscription to both Netflix and Disney+, Free-trade deals ported some 560 tonnes of beef and veal
with money left over for popcorn. But the from Australia. Were that number to rise
bbc is limited to about 25m feepaying Trussed but verify tenfold, as Australian producers hope, it
households and cannot borrow. Streaming would still be less than 3% of more than
companies have the world to fish in—Net 200,000 tonnes imported from the eu
flix has over 200m subscribers, Disney+ each year. Ms Truss also promises a 15year
100m—and are willing to lose money for transition before tariffs and quotas are lift
years in the pursuit of market share. ed in full. A more justifiable fear for British
Rows over a trade deal with Australia
Whereas the bbc commissioned £2.8bn of farmers, suggests Sam Lowe of the Centre
show a need for greater transparency
content in 2020, Netflix and Disney+ have for European Reform, a thinktank, is that
a combined budget this year of more than
$20bn. Amazon recently earmarked nearly
half a billion dollars for a single “Lord of
C abinet splits always excite Westmin
ster. So it proved after the Financial
Times reported a bustup between Liz
the deal becomes a model for bigger future
ones with Latin America and the United
States. Yet such deals are far off and could
the Rings” series. Truss, the trade secretary, and George Eus be debated on their merits.
Commercial media outfits are rushing tice, the environment secretary, over a The argument has revealed the absence
to bulk up. WarnerMedia, creator of “Game planned freetrade deal with Australia. At of a trade strategy. Brexiteers say they want
of Thrones”, “Harry Potter” and other hits, issue was Ms Truss’s desire to offer Austra free trade everywhere. Yet they remain
has announced plans to merge with Dis lian beefproducers unlimited tariff and shtum about the barriers erected with Brit
covery. France’s largest and thirdlargest quotafree access to the British market, up ain’s biggest trading partner, the eu. Al
channels, tf1 and m6, will also try to setting Mr Eustice’s farmers. Minette Bat most all the trade deals done by Ms Truss so
merge, to provide une réponse française to ters, president of the National Farmers’ far have been rollovers of those formerly in
the Americans. The bbc has teamed up Union, said such an agreement would place through Britain’s eu membership.
with itv, Britain’s biggest commercial throw British family farms “under a bus”. Australia would be the first significant new
broadcaster, to run BritBox, an interna Boris Johnson eventually came down on one. But why is the focus of such deals so
tional streaming service. With 2.6m sub Ms Truss’s side after invoking the free much on farming (or in some cases fish),
scribers it is a minnow. trade heritage of another Conservative which are tiny shares of a gdp that is 80%
prime minister, Robert Peel. composed of services? How is Britain going
The last stronghold The prime minister is right to have to lead the charge towards greater liberal
No big streamer does news, an area where done so. Brexit has created an opportunity isation of services trade around the world?
the bbc remains strong. Last year 70% of to escape the European Union’s costly sys Indeed, argues David Henig of ecipe, a
Britons with internet access said they had tem of farm protection (see Charlemagne) thinktank focused on trade, it seems as if
absorbed its reports in one medium or an and to strike more adventurous trade deals the only postBrexit strategy is to sign free
other during the past week, according to with third countries. The Australians in trade deals as quickly as possible. That fos
the Reuters Institute at Oxford University; sisted on far more generous access for beef ters a sense of desperation, which puts
among 18 to 24yearolds the figure was and lamb as the price of any agreement. Britain in a weak bargaining position
51%. This represents a drop since 2015, And, as Ms Truss asked rhetorically: if Brit against some of the world’s toughest nego
when 79% of all adults and 68% of young ain cannot strike a freetrade deal with an tiators. The latest deal appears to be of
people tuned in. But the bbc remains “un old friend like Australia, who can it do greater benefit to Australia than it is to Brit
doubtedly, and by a massive margin” the deals with? ain. Just wait for the battle that is likely
main source of news in Britain, says Ras For all the noisy opposition of farmers with the Americans, who take no prisoners
mus Nielsen of the Reuters Institute. (especially in Northern Ireland, Scotland in trade talks.
The corporation is at least stronger than and Wales) the quantities involved are That points to another concern over the
other national broadcasters, which have small. Ms Truss’s trade department esti deal: the lack of transparency in negotiat
seen similar declines in reach. Fully 86% of mates that the entire deal with Australia ing it. Public support for free trade is often
Britons say they are satisfied with their would add a maximum of just 0.02% to fragile, because producers who lose out
publicservice media, versus between 50% gdp in the long term. Last year Britain im shout louder than consumers who gain.
and 61% of French, German, Spanish and Protests from special interests, greens and
Italian viewers. For all his complaining others have often sunk freetrade negotia
about the bbc, “Boris is intelligent enough tions, ranging from Seattle in 1999 through
to see that shutting it down would back Doha in 2008 to a planned transatlantic
fire,” says one senior Tory. The elderly, who trade and investment partnership in 2016.
make up the core of the Conservative vote, Yet the British government conducts its
remain bbc addicts. And Mr Johnson’s negotiations, including those affecting
healthy poll ratings mean he owes no fa controversial foodsafety standards, large
vours to Mr Murdoch, who has long lob ly in secret. Parliamentary scrutiny is al
bied for the corporation to be trimmed. lowed only after trade deals are signed.
Still, as the variety of entertainment The risk of this triggering a popular
from streamers grows, a compulsory levy backlash against freer trade is all the great
to fund comedy, drama and the like looks er because of the government’s reputation.
odd. In the age of linear viewing, public Ms Batters’s adverse reaction to the Austra
service broadcasters had to combine news lian trade deal was so strong partly because
with lighter fare to get people to tune in. she claims that Mr Johnson promised he
The ondemand era has decoupled the two, would die rather than sell farmers down
making it harder to argue that everyone the river in order to secure trade deals. She
should pay for “Strictly Come Dancing”. Ex is not the first, and will not be the last, to
pect a smaller, newsier bbc in future—and discover that the prime minister has a hab
direct the blame, or credit, not to Westmin it of making promises that he does not in
ster but to Hollywood. n Power steering tend to keep. n
012
The Economist May 29th 2021 Britain 49
Bagehot Mr Levelling Up
Neil O’Brien tries to make sense of the government’s signature philosophy

the “woke revolution rolling through western institutions”. But he
has also fought a feisty Twitter war against professional culture
warriors such as James Delingpole who have tried to extend the
war on woke to a war on masks and lockdowns.
Mr O’Brien started thinking about “levelling up” when the rest
of his party was obsessed with Notting Hill Man and Woman. In
2014 he wrote a paper, “Northern Lights”, arguing that the Tories
should venture beyond their southern comfort zone. In his years
with Mr Osborne he was involved with the Northern Powerhouse
project. Since becoming an mp he has formed a Levelling Up Task
force with 40 others and has written a column for the Conserva
tive Home website in which he often returns to the subject.
His fascination is rooted in personal experience. During his
formative years he was surrounded by reminders of fading north
ern might. His parents were from Glasgow, one of the industrial
engines of the British empire; he grew up in Huddersfield, a for
mer Victorian boom town; and his brother moved to Liverpool,
Britain’s leading example of economic decline.
Even the talented Mr O’Brien will struggle to make sense of his
new portfolio. The prime minister wants him to think about the
subject in the broadest possible terms. It is not just about promot
ing economic development in Britain’s poorer regions or spread
E ver since he stood on the steps of Downing Street the day after
his 2019 election triumph and promised to “unite and level up”
the country, Boris Johnson has been tormented by the question of
ing opportunities more evenly, but also about tackling inequal
ities in the provision of public services (particularly education,
transport and law and order) and improving “pride in place” by
what “levelling up” means. What exactly is being “levelled up”— sprucing up high streets and civic buildings. The job could easily
individual opportunities or entire regions? How can anybody tell spiral out of control or fall between the cracks in Whitehall. It is
if it is happening? Isn’t “levelling up” from Westminster and notable that other successful examples of driving change from
Whitehall a contradiction in terms? It is “a slogan without a pur Downing Street, such as Mr Blair’s education reforms, have fo
pose”, one Downing Street insider recently complained. cused on one department.
Lost in the recent fuss about Carrie Symonds’s overthetop Moreover, Mr O’Brien’s most innovative ideas don’t mesh well
wallpaper and Dominic Cummings’s acid reflux is the fact that Mr with the orthodoxy in his party and in the Treasury. He believes in
Johnson is at last attempting to make sense of levelling up. He has the power of manufacturing (“the view that manufacturing is a
appointed a new adviser on the subject and given him the job of relic of the past is itself a relic of the past”). Manufacturing pro
producing a “landmark” white paper later this year. Mr Levelling vides a larger proportion of the betterpaid and more productive
Up will head a small team in the Cabinet Office and work closely jobs in Britain’s poorer areas than in its richer ones: in the north
with Michael Gove, the Chancellor of the Duchy of Lancaster and a east the median wage in manufacturing is 22% higher than the av
fount of ideas about rebalancing the country, and Sir Michael Bar erage, for example. He is also a fan of the state’s ability to encour
ber, a former adviser to Tony Blair. age innovation, citing the example of the Asian tigers, which have
It would be tempting to dismiss this as just another empty ges avoided many of Britain’s destabilising inequalities, and calls for
ture were it not for the man who has been appointed to do the job. more investment in the “d” rather than just the “r” side of re
Neil O’Brien is as close to the perfect candidate as you could get. search and development. It is easy to imagine Treasury officials
He has been thinking about the subject for years, knows his way blocking, diluting and otherwise subverting any such policies.
around the corridors of Westminster, Whitehall and, to a lesser ex
tent, local government, and manages to be both optimistic and re Our friend in the south
alistic. If anybody in today’s Tory party deserves to inherit David Yet Mr O’Brien will not be an easy man to sandbag. He knows his
(now Lord) Willetts’s old title of “two brains”, it is Mr O’Brien. subject better than the Treasury mandarins or the party stickin
When he received his last big promotion, to cochairman of the themuds: read him in Conservative Home debating precisely how
Conservative Party’s internal thinktank, the Policy Board, the to measure household income or running through the demogra
Yorkshire News described him as “a previously obscure mp whom phy of the party’s new seats in the north. He has lots of levers to
even political obsessives would have struggled to identify”. In fact pull, from special grants (such as the Towns Fund and the Level
he has been a big figure within the Tory political machine for ling Up Fund) to business funds. Many of his longterm passions,
years. He directed the Policy Exchange thinktank and was a spe such as increasing infrastructure spending, raising capital allow
cial adviser to George Osborne (as chancellor) from 2012 to 2016 ances and shifting resources from the bloated university sector to
and then to Theresa May (as prime minister). He has been mp for the underfunded vocational sector are now mainstream in his
Harborough in the Midlands since 2017. party. And much levelling up can be achieved not by spending
He gets on well with all factions in the party. He voted to leave more but by stopping giving preferential treatment to the south
the eu in 2016 and cofounded the hawkish China Research Group, east, as Britain does in spending on research, transport infrastruc
but also keeps in touch with his old boss and pandahugger, Mr ture and housing. At the very least, the government’s “slogan with
Osborne. He believes that the Tories should fight harder to contain out a purpose” is now a slogan with a powerful champion. n
012
50
International The Economist May 29th 2021
Where covid-19 came from among politicians and policy elites and in
the mainstream media, as well as in influ
Looking again ential blog posts by science reporters. This
is in part because of the departures of Mr
Trump and Mike Pompeo, his secretary of
state, who promoted the theory with gusto.
To be able to consider the possibility with
NEW YO RK
out giving them succour will have made it
How can the world prepare for a future pandemic when it does not know
easier for some.
for sure where the current one came from?
But the resurgence is not a purely politi
I n march, President Joe Biden asked his

spooks how the covid19 pandemic had
started. Contradicting claims made last
viruses conducted at the Wuhan Institute
of Virology (wiv) or another nearby lab. In
early 2020 this idea, sometimes conflated
cal phenomenon. On May 13th Science, a
journal, published a letter from a group of
senior scientists who had not previously
year by Donald Trump, who said the intelli with the idea that the virus had been devel weighed in on the matter arguing that “the
gence services had shown him very strong oped as a biological weapon, was publicly ories of accidental release from a lab and
evidence on the matter, they told him that dismissed by eminent scientists. In Febru zoonotic spillover both remain viable”. In
that they did not know. So on May 26th he ary 2020 a number of them used the pages this they were taking the same position as
asked them again, publicly this time, ad of the Lancet, a medical journal, “to strong Tedros Adhanom Ghebreyesus, the who’s
monishing them to try harder and to report ly condemn conspiracy theories suggest boss, who refused to rule out the pos
back in 90 days. ing that covid19 does not have a natural sibility of a laboratory origin after the who
This is a direct rebuke to China’s secre origin”. Most in the media followed their mission in January and February was
tive government. When experts convened line. By far the most plausible account of stonewalled, and has since called for fur
by the World Health Organisation (who) covid19’s origins, they reported, was “zoo ther inquiry (see following story).
travelled to Wuhan, the city where covid19 notic spillover”—that is, a virus jumping This is not going down well in China.
was first identified, in January and Febru unaided from animals to humans, as is tak On May 21st, at a Global Health Summit
ary this year their hosts refused to share en to have been the case for sars, a disease convened by the eu and g20, Xi Jinping,
crucial data. A senior Biden administration caused by a different coronavirus, in 2002. China’s president, urged world leaders to
official said recently that he found those Lableak theories were widely dismissed as “firmly reject any attempt to politicise” the
efforts to “undermine serious investiga conspiracymongering. covid19 pandemic. On May 25th China’s
tions” into the pandemic’s beginnings par In the past few months, though, discus representative at the World Health Assem
ticularly troubling, and that they left “ma sion of lableakery has gained currency bly, the who’s decisionmaking body, said
ny more questions than answers”. the country considered the inquiry into
At the crux of this distrust is the pos the origins complete and that the focus
sibility that sars-cov2, the virus which → Also in this section should shift to other countries, strongly
causes covid19, may have emerged acci suggesting that it would not accommodate
51 The likelihood of a laboratory origin
dentally from research on animal corona further investigation.
012
The Economist May 29th 2021 International 51
High on the assembly’s agenda were re The lab-leak hypothesis

sponses to the current pandemic and the
prevention of future ones. Felicity Harvey, Possible, but far from proven
chair of an oversight committee for the
who’s Health Emergencies Programme,
said that new virus threats must in future
be handled with more transparency, better
datasharing and an ability to give infor
The theory that sars-cov-2 originated in a laboratory is gaining adherents, but it
mal early warnings to the world. Earlier in
has yet to find evidence beyond the circumstantial
May a who panel of experts recommended
that countries be placed under a greater ob
ligation to report new outbreaks and that
the who’s authority to seek out and share
I t is possible that the chain of infections
which spread sars-cov2 around the
world began, like most new diseases do,
es from each other as they make the jour
ney to restaurant or market; there is no rea
son to think Chinese supply chains more
relevant information with the world be when an animal virus found its way unaid salubrious. In February last year China an
strengthened. ed into humans, whether in field or farm, nounced a ban on wildlife consumption
It would be surprising if China (and, in cave or market. It is also possible that the and trade in recognition of the risks in
deed, some other countries) were to accept chain began in a Chinese government lab volved. It was a big step, and a costly one.
all these ideas. Its leadership has consis oratory. These two possibilities have been The first flutterings of lableak concern
tently fought to deny international bodies recognised by many of those studying the were prompted by simple geography. That
the right to stick their noses into the affairs covid19 pandemic for a long time. But the market is just 12km away from the Wuhan
of sovereign countries, and it does not al fact that two things are both possible does Institute of Virology (wiv), a global centre
ways welcome the who’s attentions. In not mean they are equally likely. for coronavirus research. The Wuhan Cen
2018 it declined requests from American For most of 2020 scientists and the me tre for Disease Control and Prevention
officials, made under who guidelines, for dia tended to treat the likelihood of a leak (cdc), which also worked on bat corona
lab samples of the h7n9 strain of avian flu. from a lab as a very small one, with every viruses, is closer still: a mere 500 metres. A
China has instead recently indicated it day contact—“zoonotic spillover”—over worker or workers in one of these labs
will reform its own publichealth system. whelmingly more probable. That has now could have been infected with a coronavi
On May 13th the authorities announced a changed. Tedros Adhanom Ghebreyesus, rus being used in research, thus providing
reorganisation of the national public directorgeneral of the World Health Orga that virus with passage to the outside
health bureaucracy under a new entity, the nisation, said in March that assessment of world. A related idea is that the virus came
National Administration of Disease Pre the laboratory hypothesis had not yet been directly from a bat, or another animal, ei
vention and Control. A priority in the extensive enough. On May 26th President ther inside a lab or as part of researchasso
shakeup is to improve topdown control, Joe Biden ordered America’s intelligence ciated field work. An avid collector of wild
so that lowerlevel officials have more in agencies, which have not as yet reached a bat viruses works for the cdc.
centive to report new publichealth threats conclusion either way on the subject, to go If one of these possibilities were to
up the chain of command. away and try harder (see previous story). prove true it would be deeply and disturb
Chinese authorities tried to deal with a ingly ironic. Ever since the outbreak of
similar issue after the sars outbreak of the The escape artists sars, a respiratory disease caused by an
2000s, in part to tackle the problem that The place most strongly tied to the emer other coronavirus, in the early 2000s, co
national health officials were outranked by gence of sars-cov-2 is a fish and animal ronaviruses have been seen as having a
provincial authorities who had covered up market in the Chinese city of Wuhan. Chi worrying propensity for pandemics. That
the early spread of that coronavirus in na’s wildlife markets and the trade which is what made them of particular interest to
southern China. They made the monitor supplies them with their civets, rats, pan the researchers in Wuhan; their work on
ing of new threats more systematic, raised golins and badgers are viral melting pots coronaviruses was carried out in the name
their game with the who and even cooper brimming with opportunities for zoonotic of reducing the threat they posed.
ated with America’s Centres for Disease spillover. In the 2010s a study in Vietnam Pathogens escape from institutions
Control and Prevention, the model for Chi showed that animals acquire coronavirus working on them with depressing frequen
na’s own cdc—the Wuhan office of which
is now being mentioned in the context of a
possible laboratory origin.
There is as yet no evidence in the public
domain that a laboratory leak actually took
place; just evidence that the possibility is
real. Mr Biden’s request suggests anything
the secret world can currently add to that is
pretty weak stuff. His statement says that,
at present, two “elements” within the in
telligence community lean towards the
zoonotic explanation, one prefers the lab
oratory origin, and no one has high confi
dence in any of these assessments. With
out help from China, a harder look will not
necessarily change this. But it is still worth
taking, even given the risk of a confronta
tional response which will make the en
hanced transparency and cooperation
talked about at the World Health Assembly
unlikely to blossom any time soon. n
012
52 International The Economist May 29th 2021
cy. The last known death from smallpox where the virus was amplified. That speaks
was the result of a laboratory leak in Britain to the need to look at other possible sourc
in 1978. sars-cov1, the virus which causes es, and that requires individualised data
sars, escaped from labs twice as it spread on every early case. The lack of such data
round the world in 2003, once in Singapore meant that the who team was unable to do
and once in Taiwan; it leaked out of a Bei a standard epidemiological investigation,
jing lab on two separate occasions in 2004. Dominic Dwyer, an Australian microbiolo
In December 2019 more than 100 students gist, told the Wall Street Journal at the time.
and staff at two agricultural research cen These early cases of covid19 could point
tres in Lanzhou were struck with an out clearly in the direction of either an animal
break of brucellosis, a bacterial disease or laboratory source.
usually caught from livestock. Excitement about the latter possibility
Most alarmingly, the h1n1 strain of in has been stoked by the reemergence of
fluenza which started spreading around claims that three workers from the wiv got
the world in 1977 is now known to have sick with something a bit covidlike in No
been released from a northeast Asian vember 2019, claims first aired by the state
lab—possibly in China, possibly in Russia. department in the dying days of the Trump
Some Western observers suspected this at administration. But these reports lack cor
the time, but they made little fuss about it, roboration, sources or details of where in
perhaps afraid that doing so would lead to the lab the people involved actually
China and/or Russia pulling out of interna worked. That means they do nothing to
tional flusurveillance efforts, or spark a fectious to humans. This “furin cleavage move the story along.
backlash against virology. site” is not found in other closely related The evidence to date shows that the cir
Biosecurity at the wiv was known to be viruses; perhaps it was put there, they say. cumstantial assumptions on which the
spotty. American diplomats who visited it There are various counterarguments to idea is based—that there was coronavirus
in 2018 reportedly flagged issues of con the specifics of these speculations. There research and that it could have leaked—are
cern, making specific mention of corona is also a more overarching caveat based on true; it does not provide direct insight into
viruses and pandemic risk. In February the insights of Charles Darwin: natural se the outbreak proper. As Ralph Baric, an
2020 the Chinese ministry of science and lection can come up with all sorts of American researcher who helped set up the
technology issued new rules requiring lab subtleties which look like irrefutable evi wiv’s coronavirus work, told the Wall Street
oratories to improve their biosafety, indi dence for intelligent design to those who Journal, “more investigation and transpa
cating unease with the status quo. start off believing in a designer. rency are needed to define the origin”; he
What of evidence from the spread of the himself continues to see zoonotic spill
Charles Darwin, detective disease? According to the Guardian, a Brit over as the more likely possibility.
The idea of a laboratory leak was apparent ish newspaper, when the who sent scien Ideally, China would help such investi
ly not unthinkable to those involved. tist Peter Ben Embarek to China in July gations unearth new evidence. That can
When Shi Zhengli, a coronavirus research 2020 his subsequent report to the agency hardly be counted on. It is possible that the
er who is the director of the wiv’s Centre stated that the Chinese had done “little…in dogged work of America’s intelligence ser
for Emerging Infectious Diseases was in terms of epidemiological investigations vices may turn up compelling arguments
terviewed for Scientific American in early around Wuhan since January 2020”. Some for or against regardless, or that the many
2020, she said one of her first concerns was infer that China is not looking because it scientists poring over details of the virus’s
whether the virus could have come from knows, or perhaps just fears, the answer. genome and structure may come up with
her own lab. After searching records of all That lack of zeal adds to lableak suspi something. But there is no guarantee that
the viral sequences that they had worked cions. One of the reasons offered for the in the question will be solved soon.
with, she concluded it had not. Yet the Chi creased interest in such ideas is that only
nese government has rarely been hesitant limited further evidence for zoonotic spill Was it worth it?
to suppress any information that does not over has come to light; no one has found For observers such as Filippa Lentzos, a
suit it, and Dr Shi may not be able to say anything close to a “smoking bat”. When biosecurity expert at King’s College Lon
otherwise. It is also possible that the virus the lableak story seems to have momen don, the uncertainty underlines the need
came from work outside her purview. tum and the zoonotic story appears to just for more discussion about the risks that
Dr Shi’s group at the wiv has spent years sit there it is natural for people to get the the world is willing to take in the name of
trying to understand mutations that would feeling that the lab hypothesis is becoming science. More facilities for pathogen re
allow bat viruses to spill over into human more likely. But it is not strictly logical. It is search are being built around the world,
populations. In the pursuit of such ques also important to remember that the rela and even the most sophisticated biosecur
tions they conducted research designed to tively quick progress made on the origin of ity measures may sometimes leak.
make coronaviruses more infectious to sars in 2003 is not necessarily a reliable That means the research needs to be
humans. In work published in 2015 they re guide to how fast such sleuthing normally carried out in ways that allow scrutiny and
ported a chimera created from a bat coro gets results. accountability, that the knowledge sought
navirus and a mouse coronavirus that was While some data are absent, others are needs to be worth the risks, and that that
able to replicate efficiently in human air simply not being shared. During the who knowledge, once gained, should be used
way cells. visit early this year the Chinese authorities and made useful. There is no compelling
Some proponents of the lab theory have refused requests to provide key epidemio evidence that the presence of the wiv in
speculated about what other animals the logical data on the 174 earliest known cases the city where the covid19 pandemic be
laboratory might have used in this work. of covid19 in the city in December 2019. gan was anything other than a coinci
They point out that the virus looks very These data are crucial. Not all the early dence. But neither is there evidence that
much like a cross between a pangolin virus cases of covid19 were from the market. the wiv’s coronavirus research, justified in
and a bat virus with an additional genetic Rather than being the source of the out the name of pandemic preparedness, did
sequence that makes the virus far more in break, it could simply have been a place anything to lessen this pandemic’s toll. n
012
Business The Economist May 29th 2021 53
The future of Big Oil elect even one dissident director, let alone
two or three. Even one dissenting voice can
The little Engine that could make a big difference, says Charles Elson, a
corporategovernance expert at the Uni
versity of Delaware who has served as a
courteous rebel on various boards. The re
sult is thus an unprecedented attack on
ExxonMobil’s carbonaddiction, which is
NEW YO RK
greater than any other supermajor’s (see
ExxonMobil’s defeat by green investors is just the beginning
chart 1 on next page).
“T he stone age did not end for lack of

stone, and the oil age will end long
before the world runs out of petroleum.”
on the board to promote a lowercarbon
strategy of the sort espoused by European
supermajors such as bp, Royal Dutch Shell
The campaign succeeded thanks to the
backing of powerful allies. Calpers and
Calstrs, pension funds representing, re
That battle cry animates critics of Big Oil, and Total. As The Economist went to press spectively, California’s public employees
who dream of phasing out hydrocarbons in the fate of a third activist nominee had yet and its teachers, have between them over
favour of cleaner fuels and technologies. to be determined. $700bn in assets under management. Two
Their bête noire is ExxonMobil, long the Engine No.1 didn’t quite get its way: it giant funds representing New York’s state
richest and mightiest of Western oil super had put forward four candidates. But as Da and city employees, with another $300bn
majors—and the most unrepentant in its vid Larcker of Stanford’s Graduate School or so in assets, joined them in supporting
defence of crude. Lee Raymond, a formida of Business observes, it is “extremely rare” Engine No.1’s effort. Together they hold
ble former boss of the Texan titan, once for a company the size of ExxonMobil to less than 1% of ExxonMobil’s shares. But as
told your correspondent to get out of his large asset managers, their actions sent a
office after being challenged over his fla strong signal to the broader market.
grant denial of climate science. The market received it. Institutional
Darren Woods, who currently does Mr 55 China’s great logistics race Shareholder Services (iss) and Glass Lewis,
Raymond’s old job, does not deny that cli a proxyadvisory duopoly which counsels
55 Chinese tech’s online binge
mate change is real. And he must now con investors on such matters, recommended
tend with the biggest rebuke to the firm’s 56 A rare DAX mega-merger the election of three and two of Engine
management in living memory. At his No.1’s directors, respectively. In a report
56 Refloating the cruise industry
company’s shareholder meeting on May published on May 14th iss declared that the
26th a coalition of activist investors led by 57 Bartleby: Why you need more breaks hedge fund “made a compelling case that
Engine No.1, a small hedge fund, managed additional board change is needed to pro
58 Schumpeter: Strategic U-turns
to put at least two greentinged directors vide shareholders with sufficient confi
012
54 Business The Economist May 29th 2021
dence” in ExxonMobil’s prospects. The ma

jority of shareholders agreed, almost cer Texas hold ’em, but for how long? 2
tainly including some big asset managers.
The vote itself was as odd as the result. ExxonMobil, % Oil majors, total returns, Jan 1st 2020=100
ExxonMobil’s management refused to an 40 120
nounce the results, which should already Return on capital FORECAST
have been tabulated, at the scheduled 30 100
hour, instead declaring a recess “to ensure
20 Chevron Total 80
all of our shareholders have the opportuni
ty to express their views”. This unusual
10 60
move fuelled rumours that the firm was BP
trying to persuade large institutional in ExxonMobil
Weighted-average 0 Shell 40
vestors to reverse votes cast for the dissi cost of capital*
dent directors, especially those with the -10 Brent crude 20
greenest profiles. If true, that would be a 2001 05 10 15 20 23 2020 2021
departure from ExxonMobil’s habitually Sources: ExxonMobil; JPMorgan Chase; Engine No. 1; Refinitiv Datastream *Estimated from debt and equity
strong corporate governance.
Whatever actually went on during the
unscheduled break, the result was still a 26th ordered the AngloDutch giant to cut slipped. Indiscipline has replaced histori
bombshell. When the meeting resumed, emissions between 2019 and 2030 by 45%, cally prudent capital spending. The firm
the firm announced that two of Engine in keeping with global climate accords; has torched billions in shareholder value
No.1 candidates, Gregory Goff and Kaisa Shell is expected to appeal. in the past few years. The most eyepop
Hietala, had been elected. It said it needed Now carbonbashing is spreading be ping chart in Engine No.1’s 80page mani
more time to determine whether a third, yond treehugging Europe. Earlier this year festo shows its return on capital languish
Alexander Karsner, would join them. activist badgering had already prompted ing at or well below its weightedaverage
ExxonMobil’s proxy defeat is the latest ExxonMobil to unveil plans for a new “low cost of capital since 2015 (see chart 2).
sign that outside pressure for the oil busi carbon solutions” division, which will de Whereas Chevron spent less than
ness to embrace the transition to a lowcar velop technologies to capture carbon and $70bn on capital expenditure in total over
bon future is mounting. On May 18th the store it underground. It has also pledged to the past five years, ExxonMobil splurged
International Energy Agency (iea), an in cut the carbon intensity of its own explora nearly $100bn, even as oil prices swooned.
ternational forecaster not known for tion and production operations by 1520% Its net debt has nearly doubled since 2015
alarmism, warned that investments in all by 2025. The same day as the ExxonMobil to over $60bn. A mistimed and overpriced
new fossilfuel projects must stop now if vote, shareholders of Chevron, its Ameri acquisition of xto Energy, a gas firm, led it
the global energy sector is to achieve car can rival similarly bullish on oil, voted for in November to write off $17bn20bn—and
bon neutrality by 2050. President Joe Biden a proposal to reduce emissions from the s&p Global, a rating agency, to entitle a
wants America’s power sector to stop add end use of its products. scathing analysis of the incident “How not
ing greenhouse gases to the atmosphere 15 ExxonMobil’s new directors will now to do m&a”. “Board refreshment is neces
years earlier than that. push for more aggressive emissions cuts. sary due to the longterm financial under
So far it has been Europe’s oil giants that Engine No.1 points to the firm’s plans to performance at ExxonMobil,” says Anne
were pushed harder to go greener—by ac spend merely $3bn or so in total over the Simpson of Calpers.
tivists, consumers, regulators, investors next five years on its lowcarbon effort, Last summer, as ExxonMobil’s share
and courts. Last year bp vowed to slash the compared with around $20bn a year on price headed to a twodecade low and the
carbon intensity of the products it sells by dirtier traditional investments. Unlike company was knocked out of the Dow
50% in the next 30 years. This month Shell Shell, the company has promised only to Jones Industrial Average after nearly a cen
won shareholder approval for its plan to reduce emissions from its own operations, tury in the bluechip index, Ms Simpson’s
create a carbonneutral business by mid not the vastly greater ones produced when argument would have sounded incontro
century, including emissions from the fuel its products are used by consumers. vertible. To many it remains compelling.
burned by endusers. Though ambitious The big reason such arguments no lon But deep down many investors may still
by industry standards, this was not enough ger fall on deaf ears is ExxonMobil’s once worry that the green shift will destroy
for a judge in the Netherlands, who on May mighty reputation for being tightly run has shareholder value. Thanks to dearer oil
ExxonMobil has clawed back $110bn in
market capitalisation since October, hand
In need of a low-carb diet 1 ily besting the European giants whose
Oil majors, greenhouse-gas emissions, tonnes, m promised wind and solar projects are years
away from profitability and could mean
Total emissions from operations Emissions including end-use of fossil fuel while eat into their dividends.
150 2020 or latest available Crude prices are, of course, cyclical by
ExxonMobil nature. They will fall again at some point,
120 0 200 400 600 800 in contrast to the carbon dioxide relent
BP Chevron 90
ExxonMobil lessly accumulating in the air as more oil is
Shell
burned. Mainstream investors now view
Shell
60 climate risk as “a core component of long
Chevron term value”, notes Timothy Youmans of
Total 30
eos, which offers stewardship services to
BP
0 owners of $1.5trn in assets and supports
2005 07 09 11 13 15 17 20 Total Engine No.1. This week’s shareholder battle
Source: Bloomberg
is proof of that. Mr Woods and his succes
sors should brace for more such fights. n
012
The Economist May 29th 2021 Business 55
E-commerce logistics but a large chunk of its revenues now services—and taken investments from
comes from orders outside the group. By them as well. Alibaba, for its part, has
Formula races owning much of its technology, lorries and bought minority stakes in several large op
warehouses, and directly employing staff, erators as a means of exerting more influ
the firm has been able to ensure faster de ence over the industry. Cainiao is not pub
livery times while monitoring quality. It licly listed and does not disclose many op
HO NG KONG
operates China’s largest integrated logis erational details or, for that matter, how ex
When it comes to delivery, Chinese tics system, covering a good’s entire jour actly it makes money.
tech titans take divergent routes ney and including a fully autonomous ful In terms of revenues, both jd Logistics
filment centre in Shanghai and driverless and Cainiao trail sf Express. Similarly to jd
I n 2019 richard liu told couriers work

ing for jd.com that the Chinese ecom
merce giant he founded would cancel their
vehicles. The system can also flip into re
verse, sending customer feedback to pro
duct designers that, jd Logistics claims,
Logistics, that firm operates its own net
work. It still leads the market in “timedefi
nite” delivery, a service that requires couri
base pay after a 2.8bn yuan ($438m) loss helps it produce better products and bol ers to pick up and drop off parcels on a rap
the previous year, its 12th consecutive one ster brands. id, predetermined timetable. Like FedEx in
in the red. Riders would make only a com Contrast that with Cainiao, in which America but unlike jd and Cainiao, it did
mission on deliveries. If the company did Alibaba has a controlling stake. It does not not emerge from the tech industry, so lacks
not cut back on spending, Mr Liu warned, it own many of the logistics assets in its net its rivals’ technological chops.
would go bust in two years. work. Instead it allows around 3,000 logis Which model emerges victorious will
Far from collapsing, two years on jd Lo tics companies employing some 3m couri ultimately depend on which best controls
gistics, jd.com’s delivery division, is on a ers to plug into its platform. Its aim is to in costs, thinks Eric Lin of ubs, a bank. jd Lo
roll, fuelled by a boom in Chinese ecom tegrate and streamline the vast delivery re gistics may have to lower prices further as
merce (see chart). Its parent company’s sources that already exist across China, it tries to get more business beyond
revenues jumped by 39%, year on year, in rather than build its own. The company jd.com. Analysts predict it could lose a
the first quarter, to 203bn yuan. On May has teamed up with most large logistics combined 12bn yuan over the next three
26th Pinduoduo, an upstart rival that also
offers customers delivery by jd Logistics
couriers, reported quarterly sales of 22bn
Splash the cash
yuan, 239% higher than a year ago.
$bn
The State Post Bureau expects logistics
companies to deliver more than 100bn par
cels this year, twice as many as in 2018. Re-investible cashflow*, Q2 2020-Q1 2021 Acquisitions†
12
Overall spending on logistics in China is -5 0 5 10 15 20 25
projected to hit 16trn yuan in 2021 and sur Tencent 10
Alibaba
pass 19trn yuan by 2025. That would make Alibaba 8
it the world’s largest market. The logistics JD.com JD.com
6
business has also avoided the worst of the Meituan
crackdown against Chinese big tech, which Tencent 4
has seen firms such as Alibaba and Tencent 2
Pinduoduo
(which owns a large stake in jd.com) taken
0
to task by the Communist authorities over Meituan
2020 2021
their growing power.
Domestic and foreign investors have
been pouring money into the industry, say Research-and-development spending Sales-and-marketing spending
lawyers working on deals involving such 4 4
businesses. jd Logistics has attracted in Alibaba
vestments from big privateequity groups 3 3
such as Sequoia China and Hillhouse Cap
ital. The market buzz around the firm is as Alibaba
2 2
frenetic as the pace at which its 190,000
workers fulfil and ferry orders. On May 21st Tencent
it raised $3.2bn in Hong Kong’s second 1 Tencent 1
largest initial public offering this year. Its Pinduoduo JD.com JD.com
Meituan
shares are scheduled to begin trading on Pinduoduo Meituan
0 0
May 28th. The company’s backers are bet
ting that its Amazonlike approach of cre 2018 19 20 21 2018 19 20 21
Sources: Bloomberg; Bernstein; *Gross profit plus net change in working capital, less administrative and R&D expenses
ating a fully integrated delivery network The Economist †Excluding Pinduoduo which did not make any acquisitions
has more mileage than a similar offering
from sf Express, a stodgier incumbent
Money for something
similar to FedEx, or a rival model champi
oned by Alibaba, which has plumped for a Chinese tech giants, like those elsewhere, have thrived as covid-19 forced consumers to
more distributed system. get their necessities and leisure online. This month Tencent, China’s most valuable tech
jd Logistics is the only large Chinese de firm, reported another stellar set of earnings. Operating profit grew by 20% year on
livery service to grow out of an ecom year in the first quarter, to $6.5bn. Rather than sit on this money (or fork it out to
merce parent. It became a separate entity shareholders), it has pledged to ramp up investments in its business. It isn’t alone. As
from jd.com in 2017, in part so that it could they vie for users, China’s tech titans are spending more on research and development.
take orders from other online retailers. It Even after those expenses and administrative costs, they are awash with re-investable
still delivers the bulk of jd.com’s packages cashflow. A slug goes on marketing. But expect more to flow into new services.
012
years, and turn a profit only in 2024. sf Ex illstarred. They tend to be met with fierce Cruise ships
press is spending heavily to try to match opposition from unions, which appoint
jd’s and Cainiao’s tech prowess. Its share half the members of supervisory boards of Cabin fervour
price has fallen by around half since it is listed companies with more than 2,000
sued a profit warning in April; it is expect employees. Vonovia placated workers’ rep
ed to record a net loss of at least 900m yuan resentatives with a promise of no job cuts
in the first quarter. Jefferies, an investment at least until the end of 2023.
bank, points to sf Express’s troubles as a Unions were not the main obstacle to
An early victim of the pandemic seeks
clear sign of an ongoing price war. this particular corporate tieup, however.
to refloat
In the long run Cainiao’s assetlight Although rumours of the takeover began
model may enable it to keep spending in
check. But for the time being it, too, is
thought to be having trouble containing
circulating last year, to proceed it needed a
favourable ruling by Germany’s constitu
tional court regarding an experiment with
T he latest addition to the fleet of Carni
val, the world’s biggest cruise operator,
is the Mardi Gras. This oceangoing play
costs. Like its rivals it must fend off new rent control in Germany’s capital, Mr Buch ground for 5,300 passengers comes com
specialist competitors offering cutprice admits. In February 2020 Berlin’s local gov plete with six different zones, including a
services in areas like coldchain and last ernment, run by a coalition of Social “French Quarter”, two dozen restaurants
mile delivery. Average delivery prices in Democrats, Greens and Die Linke, a hard and a rollercoaster. It is set to arrive at its
America have increased by about 5% annu left party, imposed a fiveyear rent cap. base in Florida in early June. That is a year
ally in recent years, according to Bernstein, Since more than 110,000 of dw’s 160,0000 behind schedule—but possibly just in time
a broker. In China they have been falling at flats are in Berlin, such a policy would per for a revival of the industry, which has
an average rate of 10% for the past decade. manently hurt the value of its portfolio. been hit harder than just about any other
As China’s online shoppers get their goods Last month the court declared the rent by the pandemic.
ever more quickly, investors may need to controls unconstitutional. That removed Holidays afloat gave an early hint of
brace for longer waiting times before their the biggest hurdle to the deal. But there are covid19’s damage to international travel.
logistics returns finally arrive. n others that Messrs Buch and Zahn must Images of passengers stranded aboard
still overcome. For one thing, competition modernday plague ships prefigured lock
authorities are likely to take a close look, downs on land. Most pundits reckon cross
Property deals warns Marcel Fratzscher of the German border tourism will not fully rebound until
Institute for Economic Research, a think 2023. Yet cruising may steam ahead before
Second time lucky tank. Although the new behemoth would then. “Where else can you go to bed at
own only about 2.5% of German flats, the night and wake up every morning in a dif
share would be much higher in poorer ferent, new, exciting place?” ventures Ar
neighbourhoods of big cities such as Ber nold Donald, Carnival’s boss.
lin, Kiel and Leipzig. A break at sea is a small niche of the glo
BE RLIN
Even if regulators bless the deal, as bal tourist industry. Of the 800m or so for
A rare German mega-merger creates a
seems likely, grassroots opposition will eign holidaymakers in 2019, only around
giant landlord with political baggage
persist. A twoyearold campaign is gather 30m ascended a gangway. It was, though,
R olf buch, chief executive of Vonovia,

Germany’s biggest residentialproperty
company, says he has learned a lot since he
ing signatures to force a citywide referen
dum on September 26th, the day of federal
elections, on whether to oblige firms that
growing fast, adding over 10m more sea
faring tourists in a decade. And before the
pandemic drowned the business in red
tried and failed to buy Deutsche Wohnen own 3,000 properties or more to sell them ink, it was lucrative. The three companies
(dw), the secondbiggest, in 2015. Back (at market rates) to the city, which could that transport threequarters of all passen
then Mr Buch’s hostile bid was an attempt rent them out more cheaply. Messrs Buch gers—Carnival, Royal Caribbean and Nor
to prevent dw from combining with third and Zahn have tried to appease the cam
ranked leg. Neither deal came to pass. paigners by promising to sell 20,000 flats
On May 24th Vonovia said it is having in the city to the local government and
another go, with the acquiescence of dw’s boost the housing stock by building an
management. “This time we will do better,” other 13,000 for sale to Berliners. They also
Mr Buch promises. If the €18bn ($22bn) all promised to cap annual rent increases at
cash deal wins the approval of dw’s share 1% in the next three years and link them to
holders, it will create by far the biggest res inflation in the subsequent two years.
identialproperty firm in Europe. Rouzbeh Taheri, a spokesman for the
The duo’s combined market capitalisa campaign, calls these concessions “white
tion is €45bn. The enlarged Vonovia will wash”. He is confident of securing the
manage 550,000 flats in all big German cit 175,000 signatures needed by June 25th to
ies with a total value of some €90bn. Mr put the question on the ballot. Even if the
Buch and dw’s boss, Michael Zahn, who vote takes place, and succeeds, it is non
will become his deputy, say it would save binding. And were Berlin’s local authori
€105m annually in costs, thanks to cheaper ties to enact it, Vonovia would challenge it
sourcing of materials and other economies in court, where the firm has a good chance
of scale, and free up money for investment of prevailing. Mr Buch clearly thinks the
in things like better insulation, helping to risk of becoming a political punching bag
meet Vonovia’s goal of making all its build is worth it. Vonovia is offering to pay 25%
ings virtually carbonneutral by 2050. over dw’s volumeweighted average share
Mergers between members of the dax price in the past three months (which was
30 index of Germany’s bluest chips are admittedly depressed by the rentcap epi
rare—and mostly, like the takeover in 2001 sode), roughly equivalent to the book value
of Dresdner Bank by Allianz, a big insurer, of its portfolio after stripping out debt. n Anchors aweigh
012
The Economist May 29th 2021 Business 57
wegian Cruise Line—raked in combined bookings for 2022 are back at the higher Mr Donald hopes that will change soon.
operating profits of $6.6bn on revenues end of historical trends, its boss reports. Big cruise firms are trying to move things
of $38bn in 2019. The industry continues to expand long along by lobbying governments to allow
With fleets mostly idle in the past year, term capacity. Over 100 vessels are on or vaccinated passengers who test negative
cruise operators have been burning cash. der; none has been cancelled during the for covid19 to come onboard. That makes
Only a few of the world’s 270 large cruise pandemic. Perhaps the biggest headwind recent efforts by lawmakers in Florida to
ships are at sea with paying passengers. is countries’ fastchanging rules for inter ban companies from using vaccine pass
Luckily for Mr Donald, investors seem to national travel, especially in America. Half ports rather unhelpful. The Sunshine State
share his belief that the industry will roar of all tourist seafarers are North American, is home to not just the Mardi Gras but also
back fullsteam ahead. Carnival has had lit double the number of Europeans, the next to America’s largest cruise ports. n
tle trouble raising $24bn of debt and equity largest group, with China and other emerg
over the past 12 months to tide it over; its ri ing markets far behind for now. Since the Listen to our interview with the CEO of
vals have also been able to tap the market. pandemic no ship has been allowed to set Carnival Corporation at economist.com/
Now demand is returning. Carnival’s sail from an American port. cruiseindustrypod
Bartleby The dangers of decision fatigue
Why breaks are actually good for productivity
“H ave a break” is a slogan associat

ed with the popular chocolate
snack, KitKat. But it may be pretty good
rejections, actually cost the bank money;
around $500,000 over the course of a
single month.
needs to roam free. Kevin Cashman of
Korn Ferry, a consultancy, and author of a
book, “The Pause Principle”, reports that
advice for any manager or worker, minus Similar patterns have been seen in executives say their best ideas often
the calories. The longer the shift, the less other situations. A muchcited study of come when exercising, taking a shower
effective the employee may become. Israeli judges found they were less likely or commuting.
In a new paper for Royal Society Open to grant parole as lunch approached, but Taking a break by leaving the work
Finance, “Quantifying the cost of deci became more lenient once their stomachs place, if only to go to the coffee shop,
sion fatigue: suboptimal risk decisions were full again. Other research found that may be the sole practical way for workers
in finance”, Tobias Baer and Simone doctors grew steadily more likely to pre to recharge mental batteries. Many peo
Schnall examine the credit decisions of scribe antibiotics, even when these might ple have hobbies—puzzles, crosswords,
loan officers at a leading bank over the not be necessary, over the course of their knitting—that are enjoyable because
course of their working day. The academ shift. In some areas of work, breaks are they engage only part of their conscious
ics write that decision fatigue “typically seen as a vital matter of safety. In the eu, minds but still stave off boredom.
involves a tendency to revert to the ‘de lorry drivers are expected to take a 45 However, such pastimes are regarded
fault’ option, namely whatever choice minute break after 4 hours 30 minutes as impermissible at the office. This is
involves relatively little mental effort”. In behind the wheel. ironic since they are unlikely to disturb
other words, as you become tired, you get Mental activity can result in physical anyone else, whereas chatting with a
mentally lazy. exhaustion, as anyone who has spent a colleague, which is all too likely to do so,
The study looked at proposals to day in successive meetings can attest. In is seen as a perfectly acceptable diver
restructure loans, with each credit officer the middle of a business trip, nothing can sion. One of the nicest elements of work
analysing 46 requests per day. The ap seem more enticing than the solitary ing from home during the pandemic has
proval rate was around 40%, so the de silence of a hotel room, with no clients to been the ability to take breaks at the
fault decision was rejection. Officers amuse or placate in sight. Breaks can also time, and in the style, of the employee’s
tended to start work between 8am and boost creativity. It is easy for the brain to choosing (subject to the tyranny of the
10am, took lunch between 1pm and 3pm, develop tunnel vision when it is working Zoom conferencing calendar).
and tended to leave at 6pm. hard. There are times when the mind The lesson for managers is that what
The researchers found that the ap seems like “slacking” is actually a useful
proval rate declined significantly be device for maintaining productivity. And
tween 11am and 2pm, as lunch ap the study of credit officers indicates that
proached, then picked up again after 3pm companies should look for ways to pro
before declining in the last two hours of tect workers against decision fatigue.
work. The applications were distributed One approach would be to give em
to credit officers by the bank’s automated ployees more breaks, of course. But
system, so they were in effect allocated another might be to monitor decisions at
randomly. There is no sign that the loans certain times of the day. The bank that
assessed at lunchtime were of a different was the subject of the study could have
quality from those in the rest of the day. ensured that loan decisions made just
What makes this study ingenious is before lunch, or at the end of the day,
that the authors were able to see whether were subject to review. Software could be
or not the loans were subsequently paid used to “nudge” employees with a mes
back. They found that rejecting a restruc sage like: “Your decisionmaking seems
turing request made it less likely that the to have changed, maybe you want to take
loan would be repaid. So they calculated a break and reconsider.” A pause should
that decision fatigue, by causing more win applause.
012
Schumpeter AT&T in a spin
Not all u-turns are bad. How to make sense of corporate cock-ups
Then there is speculation. Some firms make a living by buying
and selling other companies, often using flimsy rationales to jus
tify the purchases. uturns are an occupational hazard. Head
lining this group is SoftBank, a Japanese tech conglomerate,
whose twists and turns can cause motion sickness. It has flipped
Sprint, an American mobile operator, and is in the process of do
ing the same with Arm, a British chip designer. Son Masayoshi, its
billionaire founder, once portrayed both as strategic acquisitions.
Even Warren Buffett, the nofrills chairman of Berkshire Hatha
way, a bigger, less techy conglomerate, occasionally pirouettes.
Last year Berkshire dumped its holdings of airlines in America as
the pandemic raged, just months after increasing its stakes. Air
lines have rallied since. “I don’t consider it a great moment in
Berkshire’s history,” Mr Buffett conceded recently, “but we have
more net worth than any company on Earth.”
Acquisitions are not the only danger zone. Sometimes a firm’s
longterm strategy implodes, requiring a big rethink. ge, an in
dustrial group, boasted that ge Capital, its financial arm, was a
profitmaking machine before discovering that it was also a risky
liability when the subprime crisis hit. Airbus, a European aero
space company, halted production of its a380 superjumbo after re
alising, 12 years into the programme, that airlines did not want it.
“S orry” is not a word you hear often in business. Japanese

miscreants may bow in shame. But in the West even archi
tects of some of the world’s most spectacular strategic blunders
Intel, no longer the world leader in chipmaking, will rent out
some of its production facilities to others, as a foundry. These fall
into the category of course corrections, not fullscale flipflops.
struggle to express remorse. It took Gerald Levin, boss of Time The screeching handbrake turn is in a different league. at&t is
Warner, a decade to apologise for what he finally admitted was not the only stodgy firm to have tried—and spectacularly failed—
“the worst deal of the century”—the $165bn merger of the media to reinvent itself overnight. Under its flamboyant boss J6M (Jean
giant with aol, an internet firm, in 2001, during the dotcom crash. Marie Messier Moi Même, Maître du Monde), Vivendi, born out of a
It was unravelled, ignominiously, eight years later. French waterandsewage company, sought 20 years ago to re
Who knows when—or indeed if—Randall Stephenson and his fashion itself as a global entertainment giant, becoming one of
former lieutenant, John Stankey, will acknowledge how wrong France’s biggest corporate casualties in the process. European
they were to mastermind the $110bn acquisition of Time Warner lenders, as well as Japan’s Nomura, an investment bank, have lost
by at&t, which they completed in 2018. The combination created fortunes trying to become racier by buying Wall Street firms. Still,
a company weighed down by huge debts, a high dividend and none compares to at&t and Time Warner for the number of u
onerous investment demands. A mere three years later it, too, is turns running through their combined corporate history.
being dismantled, with the media business spun out and merged It is worth watching out for three danger signs. First, be alert
with Discovery, another media firm. Mr Stankey, who took over when deals are billed as transformative. Looking through the fine
from Mr Stephenson as the telecoms giant’s boss last year, has print of at&t’s purchase of Time Warner, the main justification, to
bowed not in shame, but to the inevitable. It was uturn or bust. track customers to sell advertising, was flimsy; it did not warrant
What to make of such strategic reversals? It is usual to see them the cost. Yet shareholders blithely gave it their blessing. Second, it
all as an indictment of megalomaniacal empirebuilders and was no small experiment: the whole company was put on the line.
moneygrubbing bankers, at the expense of staff and longsuffer Third, it produced big opportunity costs. The acquisition of Time
ing shareholders. And yet business, by its nature, is full of death Warner and Directv, a satellitetv company, in 2015, turned at&t
traps. Risks must be taken. Wrong turns happen. Course correc into America’s biggest nonfinancial corporate borrower. That
tions are inevitable. Not all aboutturns merit the equivalent of constrained it when it needed to spend on 5g mobile spectrum
hara-kiri in the csuite. Here is a rough guide to when they should and the Hollywood streaming wars. Even with the Discovery deal
and should not be tolerated. and its first dividend cut in decades, it is not out of the woods.
Start with experimentation, the essence of business in a world
of constant flux. Most mergers and acquisitions are small, incre u-turn, you pay the price
mental bets. The payoffs can be large. When they go wrong, they The moral of the story is that when deals go wrong, the faster they
cost shareholders money and generate bad headlines, but are for are unravelled the better. But when they are so big that they jeop
givable if placed in a spirit of trial and error. Take Verizon, at&t’s ardise the future of the firm, accountability is vital, too. Mr Ste
telecoms rival. The firm, now valued at $235bn, spent less than phenson pocketed $90m from at&t between 2018, when the Time
$10bn on aol and Yahoo, its fellow internet pioneer, in the Warner deal was completed, and the end of 2020, when he left the
mid2010s, hardly breaking the bank as it sought to build a media post of executive chairman. Mr Stankey has earned $60m. Mr Ste
arm. Their sale, for $5bn plus 10% of shares in May, though embar phenson is gone. Mr Stankey should go, too, if nothing else than to
rassing, marked a retreat, not a rout—certainly compared with the serve as a deterrent against future acts of m&a madness. There
tens of billions of shareholder value that analysts believe at&t may be no apologies in business. But failure on such a grand scale
torched on its media binge. Call it misadventure, not madness. should at least carry a price tag. n
012
Finance & economics The Economist May 29th 2021 59
Business investment global economy will not face a repeat of the

2010s, when growth in productivity and
The coming capex carnival gdp stayed stubbornly below precrisis
trends. Investment in new products, tech
nologies and business practices is, after
all, the foundation for higher incomes and
a better quality of life. So what is behind
the capex cheer—and could it last?
To understand why analysts are so up
Companies across the world are spending big. We analyse their investment plans
beat, consider the firms included in the
A s lockdowns lift across the rich

world, people are going out and spend
ing. Australia’s restaurants have been
ment will rise by more than 6% this year.
Today’s optimism marks quite a change
from the prepandemic norm. In America
s&p 500, America’s main stockmarket in
dex. Together they account for about one
dollar in seven of total richworld cor
crammed for months. America’s shopping gross domestic business investment, as a porate capital formation. In a recent report
malls are filled with people splurging stim share of gdp, had been sluggish since the Bank of America analyses these compa
ulus cheques. Cinemas in Britain, which early 1980s. After the financial crisis of nies’ earnings calls since 2006, and con
were allowed to reopen in midMay, are 200709 it took more than two years for cludes that executives are at their most
packed once again. Yet behind the scenes global investment, in real terms, to regain bullish about capex. The Economist has
another, potentially more significant, its previous peak. By contrast, although in looked at the biggest 25 nonfinancial
spending bonanza is just beginning. vestment fell more steeply at the start of firms in the s&p 500 and found that an
Businesses are starting to invest in the pandemic, it has been quicker to alysts’ expectations for capex in 2021 have
huge numbers. In America capital spend bounce back this time. The prospect of risen by 10% in the past year.
ing (or capex) by companies is rising at an surging capex holds out promise that the For now the investment recovery is
annual rate of 15%, both on the hard stuff, concentrated in a few industries. We find
such as machines and factories, and intan that global tech firms are expected to boost
gibles, like software. Firms in other parts of → Also in this section capex by 42% this year, relative to 2019. Ap
the world are also ramping up spending. ple will invest $430bn in America over a
60 Europe’s unequal recovery
Forecasts for business investment have fiveyear period, an upgrade of 20% on pre
never looked so rosy. Analysts at Morgan 61 Buttonwood: The crypto-fiat divide vious plans. Taiwan’s tsmc, the world’s
Stanley, a bank, predict a “redhot capex largest semiconductormaker, recently an
62 The best public investment ever?
cycle”. Overall global investment, they nounced that it would invest $100bn over
reckon, will soar to 121% of prerecession 62 America’s hot housing market... the next three years in manufacturing. An
levels by the end of 2022 (see chart 1 on next alysts reckon that Samsung’s capex will
63 ...and morbid property deals in France
page). Oxford Economics, a consultancy, rise by 13% this year, having gone up by
argues that “the time looks right for a boom 64 Chasing Chinese assets 45% in 2020.
in capex”, while ihs Markit, a research Tech companies are spending so freely
65 Free exchange: Inflation fears
firm, forecasts that global real fixed invest in part because the pandemic has created
012
60 Finance & economics The Economist May 29th 2021
new demands. More shopping happens The euro zone

online. Remote work is on the rise. New Feeling flush 2
equipment and software is needed for S&P 500 non-financial firms, cash holdings Dividing lines
these to run smoothly. Recent research by $trn
Nicholas Bloom of Stanford University and 1.5
Steven Davis and Yulia Zhestkova of the
University of Chicago finds a big rise in the 1.2
share of patent filings for workfrom
0.9
Activity is surging as lockdowns end.
home technologies. ubs, another bank,
But the recovery will be unequal
reckons that shipments of computers for
0.6
commercial use will rise by nearly 10% this
year, an acceleration even over the last.
Tech firms are not the only enthusiastic
0.3
K nocked back by several bouts of co
vid19, Europe’s economy is now find
ing its feet. Its vaccination drive is charg
spenders. Firms in the s&p 500 that focus 0 ing ahead, and lockdown restrictions are
on discretionary consumer spending 2000 05 10 15 21
easing. On May 17th Italy’s curfew moved
boosted capex by 36% yearonyear in the Source: Bloomberg
from 10pm to 11pm, and on May 19th Pari
first quarter. Companies such as Target and sians were allowed to return to their be
Walmart, two retailers, are trying to keep loved cafés, after six months without. Ger
up with the online giants that are eating they expect it to be a while before people man companies are at their most optimis
their lunch. Marks & Spencer, an august can travel freely again. Many executives, tic in two years, according to figures re
British retailer, recently announced that it including those from rawmaterials and leased on May 25th, and wider economic
had launched 46 new websites in overseas industrialgoods firms, continue to preach sentiment is surging. The relief is wide
markets from Iceland to Uzbekistan. capital discipline. It may be quite a leap for spread. The recovery will be less so.
Other retailers are spending frantically them to go from a decade of austerity to Europe went into the covid19 crisis
to expand capacity, having been caught out boom time. with scars still unhealed, as northern
by the surge in household spending. Every Another worry is the trend towards countries, such as Germany, outperformed
thing from sofas to hot tubs is in short sup greater consolidation in industries from southern ones, such as Spain and Italy. The
ply. Earlier this year Peloton announced hotels to mining, which seems unlikely to pandemic rubbed salt in the wounds. Be
“substantial incremental investments” in have been reversed by covid19. Research tween the final quarter of 2019 and the sec
expediting the transport of its exercise by the imf suggests that companies with ond quarter of 2020 household consump
bikes from Taiwan. Maersk, a shipping market power may be less keen on invest tion in Spain and Italy fell by 30% and 20%
firm, recently said it would buy more con ing. In the five years before the pandemic, respectively, compared with just 11% in
tainers to ease bottlenecks. The global or for instance, American business invest Germany. Punishing lockdowns and a
derbook for enormous container ships ment in hotels was barely higher than it drought in tourist revenues have pro
has risen from 9% of the existing fleet, in was in the five years before the financial longed the pain. By the end of 2020, con
October, to over 15% in April. crisis, even though demand was far higher.
The big question is whether the emerg Set against that, though, economic con
ing capex boom augurs a broad and lasting ditions today could convince reluctant On the mend
shift away from the weakness of the 2010s, companies to loosen the pursestrings. In
or is simply an enthusiastic but temporary contrast to the postfinancialcrisis per Job openings, February 1st 2020=100
response to reopening. Not everyone is iod, households have a lot of savings to 120
boosting capex: our analysis suggests that spend. A more decisive fiscal and mone Italy
about half of the companies in the s&p 500 tary response this time has also allowed 100
are not expected to invest more in 2021 firms to load up on cash (see chart 2). Bond Germany
France 80
than they did in 2019. Global oilandgas issuance by investmentgraderated Amer
firms are cutting back by a tenth relative to ican companies jumped to a record $1.7trn Spain 60
prepandemic levels, possibly in response in 2020, up from $1.1trn in 2019, according 40
to lower expected demand for their planet to s&p Global Market Intelligence, a re
F M A M J J A S O N D J F M A M
warming fare. Airline operators are also search outfit.
2020 2021
dialling down spending, perhaps because Moreover, the economic reallocation
provoked by covid19, and its investment
implications, will be felt for some time. Excess household saving, extra saving in 2020
On a spending spree 1 Managers in certain industries, especially compared with 2019, % of disposable income in 2019
Global real investment* semiconductors, already accept that they 0 2 4 6 8
Quarter before start of recession=100 went into the pandemic with too little Spain
Italy
130 spare capacity, and are promising multi
France
Covid-19 recession year projects to make up for it. Perhaps
120 Germany
Forecast
most important, the pandemic is leading
110 to an era of greater technological opti
mism. The rapid deployment of entirely Planned consumer spending*, % increase
100
new business models when covid19 post-pandemic compared with April 2021
Global financial crisis 90
struck, not to mention vaccine discovery, 0 3 6 9 12 15
80 may have reminded bosses of the payoff to Spain
-8 -5 0 5 10 15 20 25 investing. All that might explain why the Italy
Quarters before/after start of recession expectations for capex by s&p 500 firms in France
Sources: Haver Analytics; 2022 are even more ambitious than those Germany
Morgan Stanley Research *Average weighted by Sources: Indeed; OECD; *Based on survey responses,
forecasts; national statistics purchasing-power parity
for this year. The investment boom may UBS Evidence Lab weighted by income
only be getting started. n
012
The Economist May 29th 2021 Finance & economics 61
sumption in Italy and in Spain was more ployers in Italy is well ahead of those in The second factor is the extent to which
than a tenth below its precrisis peak, com France and Germany, let alone Spain (see consumers spend their accumulated cash.
pared with a shortfall of 6% in Germany chart on previous page). Their larger piles of “excess” savings could
and 7% in France. Beyond the immediate bump associat help harderhit countries catch up. Com
Some indicators suggest that the worst ed with fewer restrictions at home, three pared with the French and the Germans,
hit countries are bouncing back faster. Mo factors will influence the evenness of the Italians and Spaniards stashed away much
bility data from Google from midMay sug recovery. The first is the extent to which ex more in 2020 than they did in 2019. That
gest that travel for recreation and retail was ternal constraints ease. Looser travel re does not mean they will spend all of it,
returning to normal more quickly in Italy strictions are important for Spain, where though. A survey of 5,000 European con
and Spain than in France and Germany, revenues from tourism made up 12% of sumers by ubs, a bank, suggests Spanish
perhaps because they reopened earlier. gdp before the pandemic. The strength of consumers plan to splurge less than oth
Others indicate divergence. Figures from Germany’s industrial boom, meanwhile, ers. Given the sorry state of the labour mar
Indeed, a jobsearch platform, suggest that relies on bottlenecks along the supply ket, that caution is hardly surprising. In
the recovery in vacancies posted by em chain being resolved. March the unemployment rate was 15%,
Buttonwood The antifiat punto
The boundary between crypto and fiat money is more permeable than you think
F inance has its squabbling tribes,

much like the rest of society. A contest
that attracts a lot of attention just now is
without explicitly agreeing to do so. For
instance, if asked to pick a positive num
ber, people will offer a variety of respons
The latest gyrations seem to confirm
that crypto is a walled garden unconnect
ed with the rest of finance. But if you
the demographiccumdigital divide es—one, seven, 100 and so on; but if asked look more closely a different pattern is
between crypto kids and fiat dinosaurs. to choose a number that others will also emerging. There is already a pathway
The crypto kids believe that blockchain select, there is a preponderant choice: the linking crypto prices with gold. Flows
based finance is the future and a haven number one. into exchangetraded funds (etfs) that
from the inevitable degradation of fiat This insight applies to certain assets invest in gold started to revive just as
money. In the opposite corner are the that lack intrinsic value. The investment money was flowing out of bitcoin futures
titanosaurs of the fiat world, the central case for gold, said Schelling, can best be and etfs, according to a recent analysis
bankers. “I’m sceptical about crypto explained as a solution to a coordination by Nikolaos Panigirtzoglou of JPMorgan
assets, frankly, because they are danger game. Gold bars have value because Chase, a bank. That suggests that in
ous,” said Andrew Bailey, the Bank of enough people tacitly agree that they do. stitutional investors are shifting back
England’s boss, this week. Their value is bolstered by their scarcity, into gold after a flurry of interest in
This is a good moment for the dino and their longevity. Willem Buiter, a crypto, because bitcoin prices had risen
saurs. The dollar price of bitcoin, the prominent economist, once aptly called too quickly. Viewed this way, the fall of
mainstay of crypto assets, fell from gold the “sixthousandyearold bubble”. bitcoin and the revival of gold are a rela
$58,000 or so in midMay to around Bitcoin is newer, but similar. Yes, the tivevalue trade within the broader set of
$33,000 in the space of a couple of weeks. technology behind it is ingenious (al inflation hedges.
The steepest part of that decline came though Ethereum, the nextmostvaluable Furthermore, it is hard to shake off
after Tesla’s chief executive, Elon Musk, crypto asset, arguably has the more com the feeling that cryptocrashes now
said his firm would suspend its policy of pelling user case). And, yes, bitcoin is used matter. This is the third bear market in
accepting bitcoin for purchases of its in transactions, if no longer for Tesla’s four years, but a lot more money is now
cars. A pledge by Chinese regulators to cars. But its selling points are scarcity and involved. The market capitalisation of
crack down on the mining of bitcoin gave fame. It is a natural focal point. As with cryptocurrencies tracked by a specialist
the selloff additional impetus. gold, you can make a theoretical case that website, coingecko.com, was more than
The consequences have so far been it is proof against papermoney inflation. $2.5trn in midMay. A fortnight later it
few. Because there has been no visible had fallen to $1.5trn. That is a big loss in
collateral damage, crypto has been wide anyone’s money. Crypto prices are creep
ly seen as a sideshow in financial mar ing up again, so those losses are already
kets. This view is too dismissive, though. being eroded. But at each new peak, the
Crypto, like gold, is built on a collective asset class looms ever larger. And a dollar
belief about its value. But so to an extent lost in crypto investing is the same as a
are all asset prices. And crypto is moving dollar that was once earned or bor
past the point where it can be considered rowed—even if, at present, it is hard to
its own selfcontained world. know precisely who bears the loss.
To understand bitcoin’s ascent it There is something else to consider.
helps to go back to the work of Thomas Cryptocurrencies are highly speculative
Schelling, a Nobelprizewinning econo assets. It is thus hard not to think of their
mist and game theorist. Schelling con prices as a signal of shifts in risk appetite
tended that people are often able to act more broadly. Beliefs matter for all sorts
tacitly in concert if they know that others of asset prices, whether in dollars or
are trying to do the same. Many situa bitcoin. You might be able to dismiss this
tions throw up a clue, a “focal point”, cryptocrash. But the next one will be
around which people can coordinate harder to ignore.
012
three times that in Germany. as many as 11.1bn doses this year, enough to counterproductive bans on exports of vac
The third factor influencing the recov inoculate more than 75% of the world’s cines and materials. If poor countries do
ery is the strength of governments’ fiscal population aged over five. The manufac not know when vaccines will arrive, they
response. A fear of divergence has already turers themselves say they will produce will find it harder to prepare a successful
motivated the eu’s recovery fund. This will many more. rollout. And slow vaccination will make
direct more cash to Italy and Spain, and Some of this capacity is already spoken new variants more likely.
could boost growth there by more than for. But rich countries have hogged less of Conversely, an early end to the pandem
twice as much as in France and Germany, it than many people fear. Mr Agarwal and ic could add as much as $8trn (at market
reckons s&p, a rating agency. But at a meet Mr Reed calculate that rich countries have exchange rates) to global gdp spread over
ing on May 21st22nd economists from placed advance orders for about 2bn cours the next few years, according to the imf,
Bruegel, a thinktank, warned European fi es (many of which comprise two shots). At and raise tax revenues in the rich world by
nance ministers that they might need to go the same time, the developing world alrea $1trn. “Funding this proposal”, the authors
further. Given that many forecasters ex dy has dibs on more vaccines than some argue, “may possibly be the highestreturn
pect the eu not to reach its prepandemic people assume, thanks to deals struck by public investment ever.” Glory, indeed. n
level of output until 2022, another round organisations like the African Union and
of stimulus could help tackle the other in covax, a vaccinesharing initiative. Mr
equalities that have arisen during the pan Agarwal and Mr Reed calculate that 91 de Inflation
demic, such as the extra burdens borne by veloping countries (with a combined pop
the young and the less educated. ulation of over 2.5bn people) need to order House on fire
Look beyond the immediate recovery, only another 350m courses between them
and the prospects for convergence seem to vaccinate 60% of their population. India
limited. Support from the recovery fund faces a bigger shortfall. But it also has the
notwithstanding, the imf’s latest forecasts dollars and domestic manufacturing ca
suggest that Italy’s economy will shrink by pacity to reach the target eventually.
What America’s hot housing market
0.1% between 2019 and 2023, while Spain’s Mr Agarwal and Gita Gopinath, the
means for consumer prices
expands by a paltry 1.9%. France and Ger imf’s chief economist, have now turned
many, meanwhile, are expected to grow by
2.9% and 3.5% respectively. Without more
support, the economies that were lagging
this insight into a broader $50bn “proposal
to end the covid19 pandemic” (see chart).
Only $4bn of the headline total is neces
T he american economy last year may
have suffered its deepest downturn
since the Depression, but you would not
behind even before the pandemic will see sary to buy the 350m extra vaccination know it from house prices. The CaseShill
their recovery slow to a crawl. n courses. The rest is earmarked for other er national houseprice index is rising at
tasks, such as helping countries get vac an annual rate of 13%, its fastest for more
cines into people’s arms, keeping a lookout than 15 years (see chart on next page). Low
Covid-19 for new variants, expanding testing and er interest rates have encouraged people to
treatment, and adding another1bn doses of take out bigger mortgages, and trillions of
The best public vaccinemaking capacity next year as in dollars of fiscal stimulus have let people
surance, in case anything goes wrong. Not spend more on housing.
investment ever everything on their wishlist is costly. The Yet as prices have breezed ahead, rental
two economists reckon the developing growth, which usually follows suit, has
world could vaccinate almost 40% of its sharply slowed. And whether rents catch
population by the end of 2021 if rich coun up or not matters, because they play an
HO NG KO NG
tries donated even half of the surplus vac outsize role in America’s consumerprice
What will it cost to end the pandemic?
cines they are likely to amass this year. inflation statistics. In a recent note an
O n may 2nd thousands of masked nur

ses, doctors and others who have bat
tled against covid19 watched Jennifer Lo
The proposal is ambitious. But circum
spection will only make the problems
posed by the pandemic harder to fix. With
alysts at Goldman Sachs, a bank, ranked
housing costs among their three main “up
side” risks to inflation, together with wag
pez and other stars perform in the flesh at out firm commitments to buy vaccines, es and inflation expectations. Alan Det
the “vax live” concert in Los Angeles. Out manufacturers will have less reason to re meister of ubs, another bank, went fur
side the venue, visitors could get their jab solve any bottlenecks in their supply ther, arguing that “it is only a small exag
from the comfort of their own vehicles, chains. A scarcity of shots will encourage geration to say that there is no single
while watching H.E.R., a singersongwrit variable on which global financial markets
er, perform the song “Glory” in the car depend more this year than us rents.” The
park, surrounded by schoolkids stomping The shopping list behaviour of rental inflation could influ
their feet. A live concert was possible only IMF proposal to end the pandemic ence the Federal Reserve’s decision to
because many Americans (50% of adults) Funding gap, $bn withdraw its support for the economy—
are now vaccinated. But a charity event of which would in turn affect everything
this kind was necessary only because most 20 Extra testing, treatments and protective equipment from the strength of America’s recovery to
of the world is not. 8 Adding vaccine capacity in 2022 the valuations of an array of assets.
What would it take to close the gap? In a 6 Preparing for vaccine roll-out America’s statisticians, like those
paper published in April, Ruchir Agarwal 4 Extra money for COVAX to buy vaccines across the rich world, do not include house
of the imf and Tristan Reed of the World 4 Strengthening public-health systems prices in inflation metrics: the thinking
Bank argued that it might be possible to 3 Checks for new variants and supply-chain shocks runs that house purchases are in large part
end the “acute phase” of the pandemic ear 3 Other measures an investment, rather than purely a con
2 Evaluating dose-stretching strategies
ly next year by vaccinating 60% of the pop sumption good. Instead they focus on two
nil Ensuring free trade in vaccines and materials
ulation of every country. Will there be other measures of housing costs. One is
nil Donating surplus vaccines
enough shots to go round? In principle, the rents actually paid by tenants. The oth
Source: “A proposal to end the covid-19 pandemic”, by
yes. According to Airfinity, a lifesciences Ruchir Agarwal and Gita Gopinath, IMF, May 2021
er is an estimate of what homeowners
data firm, vaccinemakers could produce would need to pay in order to rent their
012
Suburban sprawl Property in France

United States, housing-cost measures
% change on a year earlier
Terminal value
15 PARIS
Price-of- Case-Shiller
shelter house-price 10 A ghoulish financial product gets a fresh lease of life
index* index 5
Goldman Sachs
0 W ho has not dreamed of owning
a pied-à-terre in Paris, or perhaps
overlooking the Mediterranean? How
income to boot. That appealed all the
more as covid19 began to spread, and
death rates in retirement homes soared.
-5
Shelter Inflation about betting on the timing of a perfect Specialist brokers reported a surge in
Tracker† -10 stranger’s death? In France you can com enquiries as elderly people sought to
-15 bine the two. In sales of property en remain in their homes for longer.
2005 07 09 11 13 15 17 19 21 viager a buyer pays upfront for a resi Even then, the estimated 5,000 viager
*Component of personal-consumption-expenditure inflation dence while getting the keys only when deals signed in France every year repre
†Weighted average of four rent measures the current owner dies. Covid19 has sent less than 1% of all property sales. But
Sources: S&P Global; Goldman Sachs;
Bureau of Economic Analysis
revived interest in the morbid scheme. the scheme’s longexpected demise
The concept of viagers is nearly as old never seems to come. Authorities pro
as property; rules laying out its modal mote it as a taxefficient way for pension
house. Despite boomy prices, rents are ris ities go back over a thousand years. ers to cash in on rising property prices.
ing at just 2% a year, about half the pace Typically the seller gets cash for around a Viagers also allow buyers to invest in
seen just before the pandemic. third of the value of the home at the time property without a mortgage—the lender
Economists puzzle over this diver of the sale. Monthly payments from the is, in effect, the sellercumtenant for
gence. Americans’ growing fondness for buyer should add up to something nearer life. The discount on properties sold for
homeownership means more competition the full value of the property—assuming occupation at an unspecified time in the
for owneroccupied properties but less for the seller dies at the time suggested by future is also an attraction.
tenancies. Renters are more likely than actuarial tables. Buyers of viager properties have to
homeowners to have lost their jobs in the For sellers not afraid of tempting fate, guess how long the kindly old grand
past year, and may thus have negotiated viagers offer the chance to cash in on father on the other side of the deal has
rent holidays or discounts. Some landlords their homes yet stay in them, with an left. Ads for such sales come with de
in San Francisco are so desperate for new scriptions of the place in question—and
tenants that they are even offering bonuses details of the age of the seller. Canny
to people who sign a lease. widows looking to cash out are known to
Over the long run, however, economic light cigarettes ahead of visits by poten
theory suggests that rents and prices tial buyers to hint at their unhealthy
should move in tandem (ie, the ratio of lifestyles. All parties are aware of the
house prices to rents should be stable). If industry’s freak event. In 1965 a 47year
rental growth catches up with prices, that old notary bought a home en viager from
could have a big effect. Rents make up one a frail 90yearold lady. He died 30 years
fifth of the basket used to calculate “core” later, but his widow kept making annuity
personalconsumptionexpenditure (pce) payments, as the seller, Jeanne Calment,
inflation, which excludes food and ener lived on to the worldbeating age of 122.
gy—the gauge most closely watched by the Fans of viagers point out that betting
Fed. If annual rent inflation rose to 4% a on death is hardly unusual in finance:
year—not far off where it was shortly be just look at the lifeinsurance industry.
fore the pandemic—overall core inflation But the sinister undertones of such
would rise by 0.5 percentage points. arrangements are hard to shake off. Some
Could this happen? As the economy re buyers have been suspected of hurrying
covers, landlords may hope to make up for nature along. In at least two murders
lost time. “We expect a rentalmarket re currently in front of courts, authorities
surgence in 2021,” said Zillow, a property allege buyers did away with their tenants
firm, in a report in December, “with rents Don’t bet on it to gain possession of viager properties.
increasing...and demand for rental hous
ing strengthening.” A recovery in lowwage
employment should boost rents: housing stream of income. American pricetorent worse at building new houses, in part be
cost inflation tends to rise when the unem ratios are higher today than in the 1980s, cause of tougher landuse regulations.
ployment rate falls. A survey by the New which coincides with declines in real in American pricetorent ratios could of
York Fed in April found that households terest rates. course adjust in another way—through
expected rents to rise by 10% in the coming A slower pace of housing construction prices falling, rather than rents rising. Just
year, up from expectations of 5%, on aver may also keep pricetorent ratios higher, as share prices are more volatile than divi
age, in 2020. suggests a new paper by Christian Hilber of dends, house prices are more upand
Rental inflation is thus likely to rise in the London School of Economics and An down than rents. And Mr Detmeister’s his
the coming months. But by how much is dreas Mense of the University of Erlangen torical analysis suggests that twothirds of
another question. There are reasons to Nuremberg. In thriving areas where the any adjustment in pricetorent ratios
think the pricetorent ratio could settle at supply of housing is constrained, buyers tends to fall on prices. In other words,
a permanently higher level. When interest may be willing to bid up prices in the ex America might be able to have either a
rates are so low, for instance, people are pectation of strong rental growth in the fu strong housing market or quiescent infla
willing to pay more for the right to a given ture. In recent years America has become tion—but not both. n
012
Investing in China The scope for the test is narrow. Claim

ants must prove that the company’s “centre
The cross-border chase of main interests” is in Hong Kong. This
could be tricky; most Chinese firms listed
in Hong Kong are incorporated in offshore
centres such as the Cayman Islands. Over
HONG KONG
time, though, as courts on both sides of the
Foreign investors have long had little recourse when Chinese firms go bust. border become more familiar with each
That could be changing other, it could “potentially break down the
high barrier” between mainland China and
D issidents, smugglers and rogue ex

ecutives have been hiding out on ei
ther side of the 40km border between
rong, a default by the group would force as
set managers and hedge funds to rethink
how they invest in state companies.
Hong Kong, says Look Chan Ho, a barrister
in Hong Kong who helped design the pilot.
That could take years, warns another law
Hong Kong and China for generations. De One question is whether keepwell yer, who sees the pilot as largely symbolic.
spite being part of the same country since deeds live up to their name. In January ad Nevertheless, crossborder recognition
1997, the two jurisdictions have separate le ministrators in Beijing rejected creditors’ for insolvency cases has taken on a new ur
gal systems with limited interaction. Chi crossborder claims on Peking University gency for Chinese courts. It is not just for
nese companies have crossed the border in Founder Group, a tech company linked to eign investors who are anxious for re
droves since the 1990s to access global cap one of China’s top universities, because its course. In recent years Chinese groups
ital markets. Investors, trusting in Hong keepwell deeds were based on English, not have fanned out across the globe, hoover
Kong’s independent legal system, have met Chinese, law. The decision does not bode ing up flashy assets. Many, notably hna, an
them there, cash in hand. But when Chi well for Huarong’s creditors. Investors fear airlinestofinance conglomerate, have
nese groups struggle to repay their debts, that any restructuring will prioritise on fallen on hard times. State creditors are ea
investors seldom attempt to chase them shore bondholders over those sitting just ger to recover their losses by making
back over the border, where the bulk of the south of the Chinese border. “Keepwells claims on foreign assets, but may need rec
companies’ assets are located. Enforcing will either go away or be redefined,” says ognition from foreign courts to do so. Reci
crossborder claims has been excruciating Alaa Bushehri of bnp Paribas Asset Man procity could help the Communist Party
ly difficult and often futile. That could now agement. Huge losses stemming from clean up the corporate mess.
be changing, with important consequenc Huarong could even damage Hong Kong’s China has not adopted the un’s frame
es for creditors both at home and abroad. reputation. “Crossborder investors may work on crossborder insolvency, which is
Global investors have long accepted the not find enough protection in Hong Kong, widely used for international restructur
tenuous links between their money and which may hurt its role as a fixedincome ing. But its courts are seeking recognition
Chinese assets. Take, for example, the legal offshore centre for Chinese firms,” Natixis, abroad. In 2019 a bankruptcy case under
structures known as variableinterest enti a French bank, noted in a research report. Chinese law received recognition by an
ties (vies) that have been used to connect Keepwells may not be a ticket across the American court for only the second time.
hundreds of billions of foreign investors’ border. But a parallel test of the legal fire That ruling stopped other claims on the
dollars with Chineseissued shares, de wall between China and Hong Kong is also Chinese firm’s assets in America. In 2020, a
spite having scant legal recognition in Chi playing out this year. On May 14th courts Hong Kong court recognised a Chinese in
na. In the debt markets socalled keepwell on both sides of the border said they could solvency case concerning cefc Shanghai
deeds have thrived as a way of keeping off begin to mutually recognise some insol International, part of a failed conglomer
shore investors’ nerves under control. vency cases. The pilot project will help ate that had gone on a spree in former Sovi
They are a type of promissory note that ob courts in Shanghai, Shenzhen and Xiamen et republics. Both cases show that traffic
liges parent groups to help pay back inves acknowledge restructuring or liquidation between China and the rest of the world is
tors should an offshore subsidiary default. orders from Hong Kong courts that involve increasingly twoway—leaving troubled
But no investor has ever successfully used assets in the three mainland cities. executives with nowhere to hide. n
these notes, which back some $90bn in
dollardenominated bonds, to force on
shore companies to pay offshore debts.
Creditor committees have been used to re
structure debts that span the border. But
more broadly it is rare that a Chinese court
dealing with an insolvency case has recog
nised proceedings launched outside the
mainland, including in Hong Kong.
The recent turmoil unleashed by Hua
rong Asset Management, a stateowned
Chinese financial firm with $22bn in off
shore debts, could cast a harsh glare on the
disconnect between courts in China and
Hong Kong. Huarong is the largest Chinese
issuer of dollardenominated debt, and the
largest user of keepwell deeds. The Beijing
based group has not published its financial
statements for 2020, leading to specula
tion that it will be restructured. Its troubles
have sent yields on other statebacked debt
soaring. Given the size of its borrowings
and the scope of investors exposed to Hua
012
Free exchange Hot stuff
When does transitory inflation become sustained? Some lessons from the 1970s
persistent problem of too much demand, overlaid by short bursts
of supplyside pressures. Shocks to food and energy markets led to
dramatic spikes in inflation in the 1970s. But Messrs Blinder and
Rudd point out that inflation quickly dropped when these shocks
abated. Headline inflation in America rose by nine percentage
points from 1972 to 1974, but by 1976 had fallen by seven percentage
points. That suggests that supply pressures today should ease
when disruptions are resolved.
An economy that is operating beyond its capacity could per
haps create more enduring inflation problems. Here again history
is instructive. Inflation had been creeping up in America well be
fore the 1970s, rising from less than 2% in the early 1960s to nearly
6% later in the decade. That was the result of a policy error: the Fed
consistently let demand exceed productive capacity. Why it did so
remains the subject of debate. It may have failed to grasp that pro
ductivity growth was slowing, thereby overestimating the econ
omy’s potential. Or it may have been reluctant to incur the social
or political costs of inducing unemployment to rein in inflation. It
took the grim determination of Paul Volcker, who became the
Fed’s chairman in 1979, to expunge this inflationary inertia.
Some economists worry that today’s stimuluspowered growth
could lead to a repeat of the errors of the past. Employment in
A t nearly 43 years old, the median American worker has never

in her career experienced an annual rate of “core” inflation,
which excludes volatile food and energy prices, above 3%. That
America remains nearly 8m short of its prepandemic level, point
ing to plenty of spare capacity. But even the Fed reckons that this
might quickly be hoovered up, with unemployment falling below
will soon change. Core consumer prices in America rose by 0.9% its longrun rate by the end of 2022. Yet though the disappearance
monthonmonth in April, the highest jump since 1982, practically of slack could add to inflation pressures, it may not do so by very
guaranteeing that the annual rate will exceed 3% in the near fu much: shifts in unemployment seem to have had smaller effects
ture. Some economists sense the first stirrings of an outbreak of on inflation in recent decades. In fact, research by Jonathon Hazell
sustained high inflation, like that which afflicted many countries of Princeton University, Juan Herreño of Columbia University and
in the 1970s. But prevailing theories of inflation suggest that, for Emi Nakamura and Jon Steinsson of the University of California,
now at least, this threat remains remote. Berkeley, suggests that this phenomenon may not be new. They
The Great Inflation, as the episode in the 1970s is often called, find that the relationship between unemployment and inflation
led to radical revisions in macroeconomic thinking. Until then has been fairly weak across American states since at least the late
Keynesian economists believed that a permanently lower rate of 1970s. The drop in inflation that occurred on Volcker’s watch owed
unemployment could be achieved by accepting higher inflation. less to high unemployment, they argue, than to a profound shift in
Critics of this view, like Milton Friedman and Robert Lucas of the the public’s inflation expectations.
University of Chicago, thought differently. In the long run, they ar
gued, the unemployment rate was determined by an economy’s What to expect when you’re not expecting
structural features. A government using easy money to push job Expectations are the trickiest piece of the inflation equation. Mea
lessness below this “natural” level would fail. Instead, inflation surement is one problem. A survey by the University of Michigan
would accelerate as people learned to expect faster price growth. suggests that consumers expect average annual inflation of 3.1%
The Great Inflation lent credibility to the critics. But Fried over the next five years; marketbased measures imply a rate of
man’s monetarism—the view that inflation in the long run was de about 2.6% over the same period, before falling to about 2.2% over
termined by growth in the money supply—also proved inade the subsequent five years. That is above the Fed’s 2% target but still
quate. Central banks that tried to target money growth found its well short of a 1970sstyle rerun. Perhaps punters are less worried
relationship with inflation to be unstable. They have since been about price pressures. Or perhaps they trust in the Fed’s commit
guided by a hybrid “New Keynesian” framework, where inflation ment to price stability. Mr Hazell and his coauthors posit that in
is determined by three main factors: the effects of supply shocks; flation expectations dropped dramatically in the early 1980s be
the extent to which the economy is operating above or below ca cause the public perceived a “regime shift” at the Fed. A repeat of
pacity; and people’s expectations of inflation. The debates around the Great Inflation, then, might require another big change to cen
the probable trajectory of inflation today hinge on these variables. tral banks’ frameworks, and time for the public to perceive it.
Start first with supply shocks. The current inflation spike is Is such an aboutface imminent? The Fed recently amended its
clearly rooted in disruptions relating to the messy process of re approach, and says it will accept periods of abovetarget inflation
opening. Supply shocks featured prominently in the Great Infla to offset past undershooting. Whether this represents a “regime
tion as well, which might suggest that a shortterm problem can shift” is another question. The Fed still promises inflation of just
quickly become entrenched. But a closer examination of that epi 2% on average. It has not dropped its commitment to keep control
sode provides some reassurance. Work by Alan Blinder of Prince over prices, nor does the public believe it has. Middleaged Amer
ton University and Jeremy Rudd of the Federal Reserve suggests icans may get a taste of modestly high inflation this year. But they
that the Great Inflation in fact reflected two distinct phenomena: a are hardly returning to the economy of their parents. n
012
Subscriber-only live digital event
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Our journalists will examine President Jair Sarah Maslin
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012
Science & technology The Economist May 29th 2021 67
Covid transmission time. More than 2,000 cases of it have now

been recorded—in places as varied as
Surface to air slaughterhouses, megachurches, fitness
centres and nightclubs—and many scien
tists argue that it is the main means by
which covid19 is transmitted.
In cracking the puzzle of superspread
ing, researchers have had to reevaluate
their understanding of sarscov2’s trans
Improving the ventilation of buildings will help curb the spread of sars-cov-2
mission. Most documented superspread
O n january 24th 2020 three families,

together numbering 21 people, came
independently to eat lunch at a restaurant
while breathing that are more than five mi
crons across—cannot travel more than a
couple of metres after they have been ex
ings have happened indoors and involved
large groups gathered in poorly ventilated
spaces. That points to sarscov2 being a
in Guangzhou. It was the eve of the Chinese haled. And some of those who became in virus which travels easily through the air,
New Year. Extra seating had been squeezed fected during the lunch were farther than in contradistinction to the early belief that
in to accommodate more patrons than that from the “index” patient. shortrange encounters and infected sur
usual, and these families were crowded It made no sense. How could a single in faces were the main risks. This, in turn,
onto neighbouring tables along one wall of fected person transmit the virus to nine suggests that paying attention to the need
the windowless room (see plan on a fol others in just an hour when there had been for good ventilation will be important in
lowing page). The largest of them—a party no direct contact between them? managing the next phase of the pandemic,
of ten who had arrived the day before from as people return to mixing with each other
Wuhan—sat around the middle table. Later Current thinking inside homes, offices, gyms, restaurants
that day, one of their number developed fe The outbreak at the Guangzhou restaurant and other enclosed spaces.
ver and a cough and, at a hospital, was di was the first recorded “superspreading” It has taken a long time for public
agnosed with covid19. Within two weeks, event of the pandemic. Superspreading is health experts to acknowledge that co
ten of the 21 were confirmed as being in loosely defined as being when a single per vid19 routinely spreads through the air in
fected with sarscov2. son infects many others in a short space of this way. Social distancing and maskwear
The families involved had never met ing were recommended with the intention
and video footage showed they had no of cutting direct, closerange transmission
close contact during the lunch. An initial → Also in this section by viruscarrying droplets of mucus or sa
analysis by the Guangzhou Centre for Dis liva breathed out by infected individuals.
70 Eunuch GM mosquitoes
ease Control and Prevention proposed that The main risk of spreading the illness indi
the infection had spread via respiratory 70 Autonomous weapons’ problems rectly was thought to come not from these
“droplets”. But medical lore has it that such droplets being carried long distances by air
71 A better fog trap
droplets—defined as particles expelled currents, but rather by their landing on
012
68 Science & technology The Economist May 29th 2021
nearby surfaces, on which viruses they then transported through the air. not stay airborne, but rather settle close to
were harbouring might survive for hours, She demonstrated that received medi their source, is a dodgy foundation on
or even days. Anyone who touched such an cal wisdom is wrong. Because exhaled which to build publichealth advice. Ac
infected surface could then transfer those breath is a moist, hot, turbulent cloud of cording to Dr Jimenez, physicists have
viruses, via their fingers, to their mouth, air, a fivemicronwide droplet released at shown that any particle less than 100 mi
eyes or nose. This makes sense if sars a height of one and a half metres (about the crons across can become airborne in the
cov2 spreads in the same way as influen distance above ground of the average right circumstances. All of this matters be
za—which was indeed the hypothesis in mouth or nose) can easily be carried doz cause handwashing and social distanc
March 2020, when the World Health Orga ens of metres before settling. Also, the gen ing, though they remain important, are not
nisation (who) declared the start of the co eration of respiratory particles is not re enough to stop an airborne virus spread
vid19 pandemic. Hence the advice to dis stricted to medical settings. Liquid drops ing, especially indoors. Masks will help, by
infect surfaces and wash hands frequently. of all sizes—including those defined as slowing down and partially filtering an in
Doctors did know at the time that not all aerosols—are continuously shed while fectious person’s exhalations. But to keep
respiratory particles fall fast. Those small people are breathing, talking, sneezing or offices, schools, hospitals, care homes and
er than five microns can become aerosols, singing (see chart on this page). so on safe also requires improvements in
staying aloft for hours and potentially trav In July 2020 Dr Morawska wanted to their ventilation.
elling much farther than droplets, or sim bring this work to the attention of public
ply accumulating in the air within a closed health agencies. She assembled a group of Fan-tastic
room. Anyone inhaling these aerosols 36 experts on aerosols and air quality to Under pressure from physicists, the who
could then become infected. But this was write an open letter outlining their evi recently acknowledged that better ventila
assumed not to matter, because aerosols dence for infection by smaller liquid drops tion should be used to help prevent co
were thought to be relevant only in special and calling on the who to change its tune vid19’s spread—and in March it published
ist medical settings, such as when patients on airborne transmission. “We appeal to a “roadmap” to that effect. But the docu
are attached to a ventilator in an intensive the medical community and to the rele ment fell far short of properly recognising
care unit. Intubation, as this process is vant national and international bodies to the hazard of airborne transmission and,
known, does indeed create aerosols, as the recognise the potential for airborne spread therefore, the need to control it. Despite
breathing tube is forced down a patient’s of coronavirus disease 2019 (covid19),” overwhelming evidence that it happens,
trachea. But a wider risk was not perceived. they wrote in Clinical Infectious Diseases. the agency still maintained that sars
The who therefore played down the risks “There is significant potential for inhala cov2 “mainly spreads between people
of aerosols, issuing guidance via its Twitter tion exposure to viruses in microscopic when an infected person is in close contact
and Facebook pages at the end of March respiratory droplets (microdroplets) at with another person”.
2020 that the general public need not wor short to medium distances (up to several Others, though, are acting on the new
ry. “FACT: #COVID19 is NOT airborne,” it metres, or room scale), and we are advocat knowledge. Martin Bazant, a chemical en
said, adding that any claims to the contrary ing for the use of preventive measures to gineer, and John Bush, a mathematician,
were “misinformation”. mitigate this route of airborne transmis both at the Massachusetts Institute of
sion.” More than 200 other researchers Technology, have devised a way to calcu
Physics envy from 32 countries also signed the letter. late how long it would be safe to stay with
Researchers outside the medical world, One signatory was JoseLuis Jimenez, in a room that contains an infected person.
however—especially those who study the an atmospheric chemist at the University The pair described their model in a paper
physics of particles in the air—felt the evi of Colorado, Boulder. He says that the con in a recent issue of the Proceedings of the
dence pointed in a different direction. The fusion in health circles over whether or not National Academy of Sciences.
Guangzhou restaurant outbreak was an airborne transmission of sarscov2 is im Applied to a typical American school
early warning. Around the same time, portant can be traced back to medical text class of 19 pupils and a teacher, the safe
1,300km across the country in Ningbo, 23 books that still contain outdated descrip time after an infected individual enters a
of 68 passengers on a bus fitted with an air tions of how respiratory particles are pro classroom that is naturally ventilated (that
recycling system had been infected during duced and move. is, how long before the risk of infection is
a oneandahalfhour journey. But the But the widespread assertion, still stub unacceptably high) is 72 minutes. This per
worst known case of superspreading early bornly promulgated by the who, that dro iod can, though, be extended in two ways.
in the pandemic was American. This hap plets above five microns in diameter do One is by mechanical ventilation of the
pened at a choir practice in Skagit Valley, room, which increases the safe time to 7.2
Washington State, in March 2020. Of the 61 hours. The other is by everyone wearing
people present during a twoandahalf A problem of aerosols masks. In the absence of mechanical venti
hour meeting, 53 became infected. In all Distribution in sizes of particles emitted by a lation, maskwearing increases the safe
these cases, investigation showed that single infectious person, parts per quadrillion time to eight hours. But the real benefit
those infected were not necessarily the 250 comes from combining these approaches.
people closest to the index patients, as Singing
That pushes the safe time up to 80 hours—
might be expected if transmission had 200 almost 14 days if a school day is six hours
been by droplet or surface contact. long. Add in intervening weekends and a
150
None of this surprised Lidia Morawska, class wearing masks in a school room with
a physicist at the Queensland University of 100 adequate ventilation would thereby be safe
Technology, in Brisbane, Australia. She had Singing softly for longer than the time it takes to recover
Speaking 50
spent much of her career studying how from covid19, which is typically between
Whispering Mouth breathing Nose breathing
pollution caused by socalled particulate one and two weeks. School transmissions
0
matter, such as dust and smog, affects air would thus be rare.
0 1 2 3 4 5
quality. After the original sars outbreak, A caveat is that the modelling assumed
Droplet radius, microns
which happened in 2003, she began ex a classroom with minimal talking, physi
Source: “A guideline to limit indoor airborne transmission
periments to show how respiratory parti of covid-19”, by M.Z. Bazant and J.W.M. Bush, PNAS, 2021
cal activity or singing by the pupils. But
cles are generated in people’s throats and games lessons would usually be outdoors
012
The Economist May 29th 2021 Science & technology 69
and singing lessons could be. As to too world. (An exception is passenger aircraft,
much talking, teachers might welcome an which refresh cabin air frequently.)
unimpeachable reason to tell pupils to In situations where it is not possible to
keep quiet in class. reduce health risks by ventilation alone—
Infection risk will not always be distri for example, places like nightclubs, where
buted evenly around a room. Jiarong Hong, there are lots of people crowded together,
a mechanical engineer at the University of or gyms, where they are breathing heavi
Minnesota, Minneapolis, therefore used ly—air filtration could easily be incorpo
computer models to study how aerosols rated into ventilation systems. Air could
would spread in a classroom, according to also be disinfected, using germicidal ultra
the location of an infected individual and violet lamps placed within aircondition
the position of nearby fans or air filters. As ing systems or near ceilings in rooms.
suming the teacher was infected, and so
was releasing virusladen aerosols at the All change
front of the class, Dr Hong’s modelling And then there is public awareness. “Be
shows that placing an air cleaner or extrac fore this pandemic it was completely so
tor fan at the front of the room sets up an cially acceptable to come to the office
airflow which prevents the movement of coughing, sneezing, spreading viruses
such aerosols towards the pupils. An even around,” says Dr Morawska. “No one would
better aerosolcleansing effect is achieved say anything—even people educated to un
when the fans and filters are elevated are seen only in crowded spaces with poor derstand how infections are transmitted.”
above the people in the room. This takes airflow. To keep the risk of covid19 low, That insouciance must be corrected,
advantage of the rising air plumes created CO2 levels should be well below 700ppm. she says. The who must acknowledge the
by body heat, which mean that exhaled When Dr Morawska conducted her ex need to control airborne pathogens and
aerosols tend to float upwards. Dr Hong’s periment, the restaurant had ten people in governments must agree and enforce com
modelling shows that even small, cheap it—far fewer than would normally be al prehensive standards for indoor air quality
box fans mounted in this way would do a lowed—and the CO2 concentration was al that keeps people healthy. One way to en
good job of keeping classrooms safe and ready 1,000ppm when she arrived. Within sure compliance might be to issue ventila
preventing aerosols from building up to an hour it had jumped to 2,000ppm. “We tion certificates for buildings, similar to
dangerous levels. continued sitting during the dinner for an the foodhygiene certificates which alrea
Dr Hong has also modelled the air flow other hour or so,” she says. “So if there was dy exist for restaurants. Occupants should
in the Guangzhou restaurant outbreak of someone infected there, well this could also be given information about air quality
January 2020. As the plan shows, he found have been a problem.” routinely, she adds, through the use of
that the movements of virusladen aero Though anecdotal, that tale indicates a monitors and sensors that can display a
sols around the three affected families of serious risk—and one which resonates be room’s carbondioxide levels or other rele
diners matched the seating positions of yond covid19. All sorts of symptoms, from vant measures.
the people who eventually became sick. headaches, fatigue and shortness of breath For new buildings this should not cost
The outbreak occurred because there was to skinirritation, dizziness and nausea, much extra, though replacing exiting ven
no source of external fresh air and a nearby are linked to poor ventilation. It has also tilation systems might be costly. But not as
recirculating air conditioner redistributed been connected with more absences from costly as covid19 has been. And if im
aerosols from the infected person to the work and lower productivity. provements in indoor air quality also re
other tables, creating a contaminated bub The ventilation measures needed to duced absenteeism and improved produc
ble of air that was increasingly burdened deal with all this are not difficult, but exist tivity, those gains might cover that cost.
with viruses over the course of the lunch. ing regulations and design standards often “Although detailed economic analyses re
The risk, then, is real. But how can the have different objectives—particularly, main to be done,” wrote Dr Morawska in a
occupants of a room know whether it is these days, conserving heat and thus re recent edition of Science, “the existing evi
wellventilated? Just because a room feels ducing energy consumption. That often dence suggests that controlling airborne
spacious and an air conditioner is operat means recirculating air, rather than ex infections can cost society less than it
ing does not mean the air inside it is clean. changing it with fresh air from the outside would to bear them.” n
Here, Dr Morawska has a suggestion. In
a (nonscientific) experiment last year, she
took a carbondioxide meter into a large, Spreading risk
highceilinged, airconditioned restaurant Suspected airborne transmission of SARS-CoV-2 in a restaurant in Guangzhou, China
near her home. CO2 concentrations can be Modelled airflow
a useful proxy for clean air. Outdoor air Door Empty table
contains around 400 parts per million Exhaust fans closed
(ppm) of the gas, and people’s exhaled
breath contains around 40,000ppm. Ex Patrons on
haling into a room therefore gradually rais January 24th 2020 Column
Closed-circulation
es its CO2 concentration unless the ventila Catering bubble around
tion is good enough to remove the excess. Index case
index case
Became infected Toilet
According to experts on air quality, any
thing below 500ppm in a room means the No infection
ventilation is good. At 800ppm, 1% of the Air con.
air someone is breathing has already been Lift units
exhaled recently by someone else. At
4,400ppm, this rises to 10%, and would be Source: “Probable airborne transmission of SARS-CoV-2 in a poorly ventilated restaurant”, by Y. Li et al., Building and Environment, 2021
classed as dangerous. These sorts of levels
012
70 Science & technology The Economist May 29th 2021
Pest control Autonomous weapons
Cas-9-trated Fail deadly
Genetic engineering may help control The fog of war may confound weapons
disease-carrying mosquitoes that think for themselves
E very year, hundreds of millions of

people catch mosquitoborne diseases
like malaria and dengue fever. Hundreds of
T he skies of Israel have lit up in recent
weeks with the sinuous trails of inter
ceptors colliding with thick volleys of
thousands die. Drug treatments are imper rockets fired from Gaza. These spectacular
fect. And, despite decades of effort, vac aerial duels show autonomous weapons at
cines have, for many of these diseases, work. For, though each launcher of Iron
proved tricky to develop. Dome, Israel’s missiledefence system, is
Better, then, to stop those infections manned by soldiers, only a computer can
happening in the first place, by extermi keep up with the most intense barrages.
nating—or at least suppressing—the mos “Sometimes in large salvos, you can't have
quitoes that carry the diseases. In a paper Father of none men in the loop for every rocket,” says one
just published in the Proceedings of the Na- Israeli soldier. It is largely an algorithm
tional Academy of Sciences, a team of re to mate with females in the laboratory. that decides where and when to fire.
searchers led by Craig Montell, of the Uni Although the details are not fully un Iron Dome is a defensive system that at
versity of California, Santa Barbara, de derstood, says Dr Montell, once female tacks physical objects (the incoming rock
scribe how crispr-cas9, a new and power mosquitoes have mated a few times, they ets) in an aerial battletheatre devoid of
ful geneticengineering process, could become less receptive to doing so again. immediate civilian bystanders, albeit that
help to do just that. Mating with an infertile male is therefore falling debris could injure or kill someone.
Dr Montell and his colleagues used not only fruitless in itself, but should also But one day similar latitude might be given
crispr to boost an existing control meth leave a female less interested in unmodi to offensive weapons which fire at human
od called the sterile insect technique (sit). fied males in future. Sure enough, a series enemies on the ground, in more crowded
This involves releasing lots of sterilised of experiments conducted in cages sug places. A new report by the United Nations
males into the wild. Females that mate gested that releasing between five and six Institute for Disarmament Research (un-
with these males produce no offspring. Re genetically modified males for each wild idir), a thinktank, explains why that will
peated releases can reduce populations male was enough to cut the number of re be far harder than knocking rockets out of
dramatically. sit has been used in North producing females by half. Upping that ra the sky.
America to eliminate screwworm flies, an tio to 15:1 dropped it by 80%. Autonomous systems rely on artificial
agricultural pest, and to suppress several There is more work to do before field intelligence (ai), which in turn relies on
species of cropmunching fruit flies. trials, says Dr Montell. But having estab data collected from those systems’ sur
It has been tried on mosquitoes, too, lished the principle, he is excited to see roundings. When these data are good—
but with less success. One reason seems to where the work might lead. That the target plentiful, reliable and similar to the data
be sideeffects of the procedure. To steril gene is found in both fruit flies and Aedes on which the system’s algorithm was
ise them, males are zapped with radiation suggests it is likely to exist in other dis trained—ai can excel. But in many circum
or exposed to toxic chemicals. This works, easecarrying mosquitoes, too. And that stances data are incomplete, ambiguous or
but it damages them in other ways, too. the engineered males leave no offspring overwhelming. Consider the difference be
The result can be sickly individuals that means fewer worries about any unintend tween radiology, in which algorithms out
struggle to compete in the mating game ed consequences which might arise from perform human beings in analysing xray
with their wild counterparts. releasing millions of genetically modified images, and selfdriving cars, which still
Dr Montell and his colleagues hoped organisms into the environment. struggle to make sense of a cacophonous
that crispr might offer an alternative. More speculatively, the team is ponder stream of disparate inputs from the out
Their first step was to look for genes which, ing whether it might be possible to create side world. On the battlefield, that problem
when disabled, would render male mos males which can outplay their unengi is multiplied.
quitoes infertile. They began their hunt in neered cousins at the mating game, de “Conflict environments are harsh, dy
fruit flies, a stalwart of genetic research. spite being infertile. Improving on mil namic and adversarial,” says unidir. Dust,
They focused on a gene that, when re lions of years of evolution would usually smoke and vibration can obscure or dam
moved, made male fruit flies sterile—and be hard. Even if researchers could find an age the cameras, radars and other sensors
which was present in a similar form in alteration that improved a male’s attrac that capture data in the first place. Even a
their target mosquito species, Aedes aegyp- tiveness, it would probably reduce the ani speck of dust on a sensor might, in a partic
ti, which is the vector of, among other ill mal’s overall fitness. Such a genetic tweak ular light, mislead an algorithm into clas
nesses, yellow fever, dengue and Zika vi would ordinarily be winnowed out by nat sifying a civilian object as a military one,
rus. Disabling the equivalent gene in male ural selection over subsequent genera says Arthur Holland Michel, the report’s
Aedes likewise left them infertile. tions. But because each generation of author. Moreover, enemies constantly at
Crucially, the genetic tweak involved males is created anew in a laboratory, says tempt to fool those sensors through cam
did not appear to hinder the modified mos Dr Montell, there is no long run to worry ouflage, concealment and trickery. Pedes
quitoes in any other way. On every measure about. If the team can find the right muta trians have no reason to bamboozle self
of healthiness they performed as well as tion, such genetically engineered hommes driving cars, whereas soldiers work hard to
their wild counterparts. And even though fatales could give mosquitosuppression blend into foliage. And a mixture of civil
they were firing blanks, they were still able efforts an even bigger boost. n ian and military objects—evident on the
012
The Economist May 29th 2021 Science & technology 71
ground in Gaza in recent weeks—could Water supply

produce a flood of confusing data.
The biggest problem is that algorithms A better fog trap
trained on limited data samples would en
counter a much wider range of inputs in a
war zone. In the same way that recognition
software trained largely on white faces
struggles to recognise black ones, an au
tonomous weapon fed with examples of
A clever upgrade of a humble but useful technology
Russian military uniforms will be less reli
able against Chinese ones. “ai systems
tend to be very brittle against anything that
wasn’t covered in their development or
E very night, air cooled and moistened
by the Humboldt current blows over
Chile’s northern coast and across the Ata
trons can move about within them. Un
even distribution of these electrons means
some parts of a molecule are positive and
testing,” says Mr Holland Michel. An au cama desert. The billowing banks of fog some negative. That fact might be exploit
tonomous system effective against one thus created might look insubstantial, but ed to give the outside of each thread in a
country might be unusable against a foe there is water here to be captured—and in mesh one electrical polarity (either posi
with superior camouflage, for instance. this, the driest place on Earth, capture it tive or negative) while burying the other
Despite these limitations, the technolo people do. Fogharvesting will never be big polarity in the thread’s interior. Just as stat
gy is already trickling onto the battlefield. business, for it needs particular conditions ic electricity will attract a balloon to a wall,
In its war with Armenia last year, Azerbai to operate well. But in zones like the Ataca a surface charge created in this way will at
jan unleashed Israelimade loitering mu ma, where moistureladen breezes bring tract water droplets from the air.
nitions theoretically capable of choosing fog but no rain, the invention in the 1960s Previous attempts to do this have coat
their own targets. Ziyan, a Chinese compa of traps which can pluck that moisture ed the threads with metal. But that is ex
ny, boasts that its Blowfish a3, a guntoting from the air has helped sustain settle pensive. As they describe in acs Nano, Dr
helicopter drone, “autonomously per ments otherwise on the brink of drought. Stachewicz and her student Daniel Ura
forms...complex combat missions” in Fog traps are polymermesh screens have done it by changing the way the
cluding “targeted precision strikes”. The mounted in metal frames (see picture). As threads are spun, which is cheap.
International Committee of the Red Cross misty zephyrs blow through them, drop At the moment, those threads are creat
(icrc) says that many of today’s remote lets of water adhere to the mesh. These ab ed by a process called meltspinning. This
controlled weapons could be turned into sorb others until the result breaks free and involves melting the polymer and pushing
autonomous ones with little more than a runs down the screen, as a raindrop runs the resulting liquid through a hollow nee
software upgrade or a change of doctrine. down a window pane, into a collector. A dle, out of a hole in the needle’s tip and on
typical trap, with a 40squaremetre col to a spinning drum, where it cools and so
The limits of autonomy lecting area, yields about 200 litres a day. lidifies. Dr Stachewicz and Mr Ura propose
On May 12th the icrc published a new and That is enough to supply around 60 people instead to use a technique called electro
nuanced position on the matter, recom with drinking water. Such a collector costs spinning. This also involves a hollow nee
mending new rules to regulate autono $1,000 or so, and will last a decade. dle. But instead of being melted, the po
mous weapons, including a prohibition on A simple idea, then. But even simple lymer is dissolved in a solvent, and instead
those that are “unpredictable”, and also a technology can be upgraded. And that is of being propelled from the needle’s tip by
blanket ban on any such weapon that has exactly what Urszula Stachewicz of the pressure from behind, it is attracted to the
human beings as its targets. These things agh University of Science and Technology, drum by the creation of an electrical poten
will be debated in December at the five in Krakow, Poland, proposes to do. tial difference between the drum and the
yearly review conference of the un Con Her upgrade relies on giving the mesh a needle. As the stream of dissolved polymer
vention on Certain Conventional Weap slight electrical charge. Overall, the mole travels through the air, the solvent evapo
ons, originally established in 1980 to ban cules in it are electrically neutral. But po rates, leaving behind a solid thread.
landmines and other “inhumane” arms. lymer molecules are large, and their elec One consequence of electrospinning is
Government experts will meet thrice over that the voltage attracting the thread from
the summer and autumn, under un aus needle to drum also attracts or repels, ac
pices, to lay the groundwork. “There is mo cording to their polarity, the charges on the
mentum now towards a decision,” says molecules within. This reorients those
Neil Davison, a scientific and policy advis molecules, aligning them (and thus their
er at the icrc. Even among states who op charges) in a way that does not happen in a
pose new rules, he says, there is greater meltspun thread. That can create the sort
discussion of the limits that might need to of polarity difference between the interior
be placed on autonomous weapons. and the exterior of a thread the two re
Yet powerful states remain wary of ced searchers were looking for.
ing an advantage to rivals. In March a Na Dr Stachewicz and Mr Ura experiment
tional Security Commission on Artificial ed with different potential differences be
Intelligence established by America’s Con tween needle and drum and eventually
gress predicted that autonomous weapons found one that resulted in meshes able to
would eventually be “capable of levels of collect 50% more water than commercial
performance, speed and discrimination versions, at no extra cost of production. At
that exceed human capabilities”. A world the moment these are just prototypes, but
wide prohibition on their development they expect soon to have a practical version
and use would be “neither feasible nor cur which can be made available for sale. And
rently in the interests of the United States,” that will certainly improve the lives of peo
it concluded—in part, it argued, because ple who rely for their survival on drawing
Russia and China would probably cheat. n The mellow fruitfulness of mists water not from a well, but from thin air. n
012
72
Books & arts The Economist May 29th 2021
Literature and memory “Everyone else’s ancestors had taken part

in history, but mine seemed to have been
Secrets and lies mere lodgers in history’s house,” Ms Stepa
nova writes, confessing “embarrassment”
at how seemingly banal their lives were.
Her relatives had bit parts in the grand nar
ratives of the 20th century, skirting its
catastrophes. And the archive raises as ma
ny questions as it answers; her attempts to
A Russian author explores her family’s past and the meaning of history
fill in the lacunae leave her with only “the
A s a child, Maria Stepanova adored a

game called sekretiki, or “little secrets”.
She would dig holes in the ground, line
In Memory of Memory. By Maria
Stepanova. Translated by Sasha Dugdale.
tonguetwister of my aunts’ names Sanya,
Sonya, Soka, a lot of photographs of the
nameless and the noteless, some ethereal
them with foil, fill them with special ob New Directions; 400 pages; $19.95. and unattached anecdotes and the familiar
jects, cover them with glass and bury them Fitzcarraldo Editions; £14.99 faces of unfamiliar people”.
in the dirt, to be found by friends in the In other hands, such material might fall
know. As she grew up to become one of documentary and travelogue. The book flat. Ms Stepanova’s learning and lyricism
Russia’s most celebrated contemporary po won several literary awards in Russia; on bring it to life. She hears stories about her
ets, writing came to play a similar role in reading it, thinks Yury Saprykin, the foun greatgrandmother Sarra that have “the
her life. “I begin to love someone or some der of Polka, a Russian literary website, laurelleaf taste of legend”. She sees hills
thing, information accumulates of its own “You immediately feel that you are en “the colour of dark copper, rising and fall
accord, and I want to write about it, to put countering a great work of art.” In Sasha ing as evenly as breath”, and blackened vil
that material into a storehouse, to find its Dugdale’s supple English translation, it is a lages where new churches gleam “white as
unexpected rhythms,” she explains from contender for this year’s International new crowns on old teeth”.
Moscow. “I want to make a sekretik.” Booker Prize, to be awarded on June 2nd. Little escapes her meditative gaze. “I
Ms Stepanova’s deepest love is for the The story of the author’s RussianJew wanted to create a book with many entry
past, in particular her own family’s, and ish family is not the stuff of headlines. ways and exits,” Ms Stepanova says. She
her luminous book “In Memory of Memo muses on everything from vintage cloth
ry” is a sekretik devoted to them. After in ing to the selfie, from the French philoso
heriting an archive of her ancestors’ photo pher Jacques Rancière to the American art
graphs, letters and ephemera, she set out to 73 Satirical fiction ist Joseph Cornell to the Russian poet Gri
make sense of the family’s history, traips gory Dashevsky. In a particularly thought
74 The denizens of Prague
ing from Paris to Saratov on the Volga and provoking chapter, she brings the Russian
roaming across art, literature and philoso 74 A history of censorship writers Osip Mandelstam and Marina Tsve
phy. Eschewing the traditional quest narra taeva into conversation with the German
75 Streaming Persian music
tive, she blends memoir, criticism, essay, author W.G. Sebald. She tests out meta
012
The Economist May 29th 2021 Books & arts 73
phors for memory and methods for enliv country, Ms Stepanova says, has long had Ms Stepanova makes the dissonance
ening archival material, weaving excerpts competing channels for memory: an offi between these ways of thinking clear in a
of relatives’ letters throughout the book. cial, stateendorsed narrative, and family poignant chapter about the siege of Lenin
Some readers may choke on this allusive stories, which “like lace, have more holes grad. A distant relative of hers perished in
style, as if drinking from a dusty old glass. than threads”. Vladimir Putin has made a battle there, writing quaint letters home
Many will find it intoxicating. glorious version of the past, in particular until his death. She quotes Lydia Ginzburg,
victory in the second world war, a pillar of a critic who noted from behind the Nazi
Speak, memory his statist ideology. Last week, in a meeting blockade how the Soviet system “dehu
The myriad references to other thinkers with senior officials, Mr Putin declared manised the individual to such an extent
serve a purpose: to weave Russia back into that “all kinds of Russophobic individuals that he had learnt to sacrifice himself with
the wider Western cultural fabric. As Ms and unscrupulous politicians are trying to out even realising it”.
Stepanova sees it, in the 19th and early 20th attack Russian history”. He promised “to By contrast, Ms Stepanova imbues indi
centuries Russian culture was part of a ensure the continuity of historical memo vidual lives with meaning independent of
shared dialogue and exchange of ideas. Her ry in Russian society, so that decades and the collective fate. For her, writing “is al
search for traces of her greatgrandmother centuries from now, future generations ways a rescue operation”. Her family’s rel
leads her to Paris, where Sarra studied will cherish the truth about the war”. ics are safely preserved in their sekretik. n
medicine in the 1910s—as Franz Kafka and
Amedeo Modigliani were roaming the
same city’s streets. Satirical fiction
But from the late 1930s an “invisible
curtain” divided Russian culture from the
The hard sell
West, Ms Stepanova says, and the country
became an “exporter of a kind of borderline
experience”. Its literature, from Alexander
Solzhenitsyn to Varlam Shalamov, came to Black Buck. By Mateo Askaripour. industry—and of the intersection be
be seen primarily as “confessional or re Houghton Mifflin Harcourt; 400 pages; $26. tween capitalism and American racial
portorial material”. By linking writers from John Murray; £14.99 politics—will appeal to fans of Paul
across that curtain, she aims to refute the Beatty’s Bookerprizewinning novel “The
idea that the Russian experience is sep
arate and unique. A passage in which she
visits a museum in New York evokes this
T rue to his name, Darren Vender is a
salesman. In the opening pages of
“Black Buck”, Mateo Askaripour’s
Sellout” and Jordan Peele’s film “Get Out”.
When Darren joins Sumwun—a startup
hawking online therapy to big compan
sense of connection. Coming upon an im sprightly yet savage debut novel, Darren ies that want to be seen as caring em
age of autumn woods, “I begin to cry, very is doling out Grasshopper Frappuccinos ployers—he is immediately renamed
quietly, under my breath, because it’s the at a Starbucks in Manhattan. After four Buck. “If he does his job, he’ll make us
very same Moscow wood where I used to years he has earned the black apron of a each a million bucks,” explains Rhett’s
walk with my parents once, many thou coffee master; but as former valedictori colleague Clyde, winkingly.
sands of miles ago, and we are now looking an of his class at a prestigious high But Darren is the only black person in
at each other again.” As Mr Saprykin puts it, school in the Bronx, he knows that a job the team, and the nickname also sug
the book “returns us to the sensation of pulling shots doesn’t amount to much. gests a dehumanising racial stereotype.
Russia being a part of world culture”. Then he upsells a new drink to Rhett, a Colleagues tell him that he resembles
Struggles over memory, Ms Stepanova regular customer—and is invited to work Sidney Poitier or Martin Luther King or
notes, are not exclusive to Russia. In essays at Rhett’s company. “Once you learn how Malcolm X. Mr Askaripour’s white char
elsewhere, she reflected on the appeals to to sell, to truly sell, anything is possible,” acters are terrifyingly comfortable in
past greatness that, in 2014, fuelled Rus Darren says. But is it? their privilege. “I knew you looked famil
sia’s war with Ukraine; her observations Mr Askaripour’s satire of the tech iar,” says Clyde, “but I wasn’t sure if it was
could just as well apply to the rhetoric of in the way most black people look alike.
Trumpera America and Brexit Britain. Not in a racist way, of course.”
“The virus has somehow spread around the Every day Darren—who comes to call
world,” she laments. (Her output is formid and think of himself as Buck—rides the
able. She is editorinchief of Colta.ru, an subway in from BedfordStuyvesant in
online cultural journal; a collection of her Brooklyn. Perhaps the novel maps the
essays and verse has been published this psychic distance between the narrator’s
year as “The Voice Over”; another book of old and new lives too bluntly, but that is
poetry is out in English as “War of the the nature of raw satire such as this. In
Beasts and the Animals”.) their earnestness, the selfimprovement
When the past is prosecuted in this way, aphorisms that salt the text in bold type
suggests Ms Stepanova, it becomes an op help to humanise Darren’s striving:
portunity “for settling scores, for a kind of “Reader: No matter how much it hurts,
conversation about the present that for never let shortterm frustration disrupt
some reason cannot happen in real time”. longterm gain.” The denouement is
This seepage across time is the underlying unexpectedly shocking.
theme of “In Memory of Memory”, says It would be wishful thinking to find
Stanislav Lvovsky, a Russian poet and crit Mr Askaripour’s take on the world totally
ic: “It’s not a story about history, but about incredible. “I know. The turns in this
how the past lives on in the present.” story are half absurd, half jawdropping,
These disparate battles over memory and a whole heaping of crazy,” Darren
may be part of the same war, but in Russia Tales of the city says. The other half is all too real.
they tend to rage at a higher pitch. Her
012
74 Books & arts The Economist May 29th 2021
Urban life icsounding Karl Zapp. Mr Bryant threads Censorship

such ironies through his book, describing
Czechs and people on the fringes of Prague society who And be damned
stumbled towards belonging. In the inter
balances war years, when the city was becoming
thoroughly Czech, Egon Kisch, a German
speaking Jewish journalist, explored soup
kitchens and dive bars that recalled the
cosmopolitan mood of earlier decades. Ha
Prague: Belonging in the Modern City. By na Frejkova found peace as an actor in Dangerous Ideas. By Eric Berkowitz.
Chad Bryant. Harvard University Press; 352 Czechoslovakia’s theatres after her father Beacon Press; 320 pages; $29.95. The
pages; $29.95 and £23.95 was condemned in a Stalinist show trial. Westbourne Press; £20
Vignettes evoke the city’s changing for
S he was in many ways a quintessential

local. She had Czech friends, read Czech
books and ate that Bohemian staple, pota
tunes. In Kisch’s day Prague had official
dogcatchers, one of them boasting an 18th
century proclamation from Empress Maria
T his lively and wideranging history of
censorship opens with a wise remind
er. “The compulsion to silence others”,
toes. But Duong Nguyen Jiraskova, a stu Theresa confirming his family’s hereditary writes Eric Berkowitz, an American lawyer
dent who in 2008 began blogging about life profession. By the 1970s Prague was a striv and author, “is as old as the urge to speak.”
in Prague, was also untypical. Brought up ing socialist city, complete with tower As a firm believer in free speech, Mr Berko
in the Czech Republic by Vietnamese par blocks and a new metro system. When the witz views censorship through the ages as
ents, she straddled two worlds. She cele first line opened, officials hired women mostly futile, perverse or wrong. Yet he
brated Christmas—and Tet. She used cut workers to help Praguers navigate an unfa grasps that neither side in this ancient
lery, but taught friends to handle chop miliar technology—escalators. contest is pure or simple. Nor, in his en
sticks. “Whenever someone asks me where As Mr Bryant makes clear, Prague has grossing account, do either free speech or
I feel at home,” she wrote, “I never give a for centuries been a city in flux, each new its opponents ever win final victories.
oneword answer.” ruler chiselling his politics into its institu Mr Berkowitz focuses chiefly on the Un
Oneword answers do not feature in tions and infrastructure. That could make ited States and Britain, with glances at oth
this subtle, lyrical book. Like the denizens it hard for residents, marginalised or oth er European countries—such as 17th and
of many other cities, Praguers have juggled erwise, to keep up. In his most moving 18thcentury France, famous for libelles,
identities for centuries, even if they have chapter, Mr Bryant recounts the life of Voj scurrilous and usually sexual attacks on
only recently chronicled their efforts on tech Berger, a carpenter and communist. royalty, clergy and other notables. He brief
line. Chad Bryant concentrates on five His views were mistrusted between the ly widens the field at the end for a discou
fascinating individuals, guiding readers wars; but after Czechoslovakia became a raging look at enemies of free speech in
through Czech history along the way. communist state in 1948, Berger seems to less liberal or less democratic places.
He begins in the mid19th century, have been lost: “One wonders if, as a young Silencers of speech operate directly and
when Prague was a Habsburg city and Ger man, this is what Berger had had in mind.” indirectly. The most obvious direct kind is
man dominated high culture. That was in By the end of the book, readers might state censorship. It may forbid speech un
tolerable for Slav patriots such as Karel Zap, conclude that standing outside or against less cleared in advance (precensorship),
who saw Prague as a kind of Czech Rome; the mainstream—as a Czech nationalist or punish it after the event (criminal libel) or
Zap advocated the use of the Czech lan radical carpenter or Vietnamese immi burden publishers and media with undue
guage and highlighted the glories of Czech grant—is what lends characters like these regulations or taxes. Speech here includes
culture. He thought only those with a their strength. An upbringing that spans not just voicing or disseminating words
“heightened sense of religiosity and na two communities is many things, Ms but proclaiming your faith as you wish,
tional feeling” should enter St Vitus Cathe Nguyen Jiraskova has noted, but never bor campaigning for your chosen causes and
dral, final resting place of Bohemian kings. ing. As Mr Bryant observes, cities the world making art without interference.
Yet for all his zeal, Zap sometimes wrote over help people like his subjects find and Precensorship has often proved self
in German—and once went by the Teuton make homes in their own image. n defeating. With the coming of print, books
as a rule needed licence before publica
tion. In Britain, where licensing was out
sourced to the printers’ guild, prior control
proved ineffective and corrupt, and was
abandoned by the end of the 17th century.
The papal Index of Forbidden Books (1559
1966), backed by the law in many Catholic
countries, gave publicity to works that
would otherwise have remained obscure.
The harder Soviet censors worked, the
stronger grew underground papers, politi
cal jokes and public disbelief.
Criminal libel, which replaced precen
sorship in commonlaw countries, might
be seditious, obscene or blasphemous.
That threefold division tracked the silenc
ers’ chief preoccupations: political dis
sent, fascination with sex and disregard
for religion. Prosecutions continued even
late into the 20th century. Especially be
A view from the bridge fore juries, they could backfire, as Mr Ber
012
The Economist May 29th 2021 Books & arts 75
kowitz recounts with relish. In 1817 Wil Navahang, a Persianmusic streaming ser
liam Hone was charged in Britain with vice. “I didn’t choose them,” Mr Rasouli
blasphemy for parodying church liturgy. says of this last outlet. Rather, after Nava
In defence, Hone read out passages of his hang began posting his music of its own
parodies that so reduced the courtroom to accord, he sent it more. He receives no pay
laughter that acquittal was assured. Ob ment in exchange.
scenity trials have commonly stumbled on Based in Finland, Navahang was set up
the prosecution’s dilemma as to whether to in 2015 by Siavash Danesh, a refugee, with
say the unsayable or primly allude to it. an app built in India. With roughly 2m us
Entertaining as they are, court pratfalls ers, it is a small outfit that focuses on the
were the exception. Mr Berkowitz stresses Iranian underground scene and female art
that suppression had the upper hand until ists. The service is free; registration is not
recently. Free speech’s most eloquent required. It carries advertising, but its size,
modern champion, John Stuart Mill, pub and the fact that many listeners are in un
lished “On Liberty” in 1859; but in Europe profitable Iran, mean revenues are modest.
and America state censorship weakened To survive, Navahang flips the tradi
only in the 1950s60s. Then and at other tional business model of streaming. “Un
times, the law responded to public opin like other services like Spotify where you
ion. That is the second, indirect means by are getting subscriptions and paying art
which speech may be silenced—or freed. ists,” says Mr Danesh, “we get money from
Pressure may come from the majority view the artists themselves.” Since Iran is not a
or (as now) from the sensitivities of ethno signatory to assorted copyright treaties,
religious minorities. platforms like Navahang can use some Ira
In America, where the First Amend nian work without paying. Many musi
ment bars the government from limiting cians, including Mr Rasouli, are delighted
speech save on exceptional grounds, Persian music with the exposure. Those in the diaspora
courts have tended to strike down who want Navahang to promote them, for
post1945 laws controlling “hate speech”. Stream of example on the homepage, pay for the
In Europe, by contrast, such laws are com privilege. Navahang also produces music
mon and accepted even by freespeech lib consciousness for some Persian artists based outside Iran.
erals. Thus American courts are often said Mr Danesh reckons 90% of its income
to be more “absolutist” about free expres comes from these two sources.
sion. Mr Berkowitz corrects that halftruth, Navahang is a relatively new entrant on
Niche streaming services help Iranian
noting that American courts have upheld the Persianmusic streaming scene. The
musicians find their audience
speech bans on pacifists in wartime and biggest and bestknown service is Radio Ja
communists during the cold war.
Another indirect control turns on op
portunities to speak. Even if all should be
T he work of Mim Rasouli, a musician
based near Tehran, is rich in Persian
and Western influences. In “Fastalgia”, one
van, set up in Washington, dc in 2004. Its
app has been downloaded more than 5m
times on Google’s Play Store, many more
free to do so, must everyone be given a of his bestknown tunes, Mr Rasouli mash than Navahang’s. Running a service aimed
platform, a newspaper, an audience? To ap es up songs by Seyyed Javad Zabihi, a muez- at Iranians is expensive, confirms Hamed
proach the question differently, does the zin from the time of the shah; Mohammad Hashemi, Radio Javan’s founder. Not only
gatekeeping power of media and web Reza Shajarian, one of Iran’s greatest cul are most users in Iran, but the lack of copy
giants distort public argument? tural treasures; Archive, an altrock band right protection cuts both ways. His com
Governments have stepped in at times based in London; and Arms and Sleepers, a pany has a production arm, too, but it is
to make the giants share their megaphones triphop group from Boston. The result is a hard to pursue claims when its music is
and refrained from interfering at others. dreamy, nostalgic track meant to evoke a bootlegged in Iran. Radio Javan alighted on
Recently American regulators and courts time when the Ramadan fast began with the same strategy as Navahang. “We are a
have favoured the giants. Requirements for Zabihi’s call to prayer and the iftar, or fast promotional company,” says Mr Hashemi.
fairness in political broadcasting were breaking evening meal, was accompanied “We promote music.”
dropped in the 1980s. A law of 1996 deemed by Shajarian’s thundering voice. Think of it as targeted advertising. Per
web providers not to be publishers, hence Zabihi was murdered two years after sian musicians want to reach Persian
protected from civil suits over material the revolution of 1979; before he died last speaking listeners to secure record deals
posted. The Supreme Court ruled in 2010 year Shajarian boycotted state radio to and gig bookings, in Tehran or elsewhere.
that corporations enjoy freespeech pro show support for prodemocracy protes The likelihood of being discovered or mak
tection, making limits on political spend ters. Listeners can still stream their music ing much money on a mainstream ser
ing, among other things, harder to enforce. on Spotify and similar services. But “Fas vice—Spotify carries over 1m artists and
Different social silencers, those now called talgia” itself is not available. Nor is any pays a fraction of a cent per stream—is low.
noplatforming and “cancel culture”, make thing else by Mr Rasouli, or indeed any Ira For musicians in Iran, it is impossible. Pay
up in stridency what they lack in formal nian musicians living and working in Iran. ing for promotion on Navahang or Radio
clout (though Mr Berkowitz thinks their The reason is simple. Sanctions prevent Javan is a way to reach the right audience.
significance is exaggerated). Western companies from engaging in But the benefits go wider. Iranian artists
Without always diving deep or giving commercial relationships with Iranian en have long engaged with overseas music, as
clear answers, “Dangerous Ideas” shows tities or individuals. Mr Rasouli (pictured) Mr Rasouli’s shows. Free Persian stream
that conflicts between free speech and cen says he would love to be on Spotify (itself ing services let the curious in the rest of the
sorship are rarely simple or settled for not formally available in Iran), but instead world discover culture originating in Iran.
long. Above all, Mr Berkowitz grasps how puts his music online for nothing. His “As an artist, I like my work being seen and
quarrels over free speech are often, at bot songs can be found on his personal web heard,” says Mr Rasouli. The rewards, he
tom, fights for control of the argument. n site, YouTube, SoundCloud, Telegram and adds, are spiritual rather than material. n
012
76
Economic & financial indicators The Economist May 29th 2021
Economic data
Gross domestic product Consumer prices Unemployment Current-account Budget Interest rates Currency units
% change on year ago % change on year ago rate balance balance 10-yr gov't bonds change on per $ % change
latest quarter* 2021† latest 2021† % % of GDP, 2021† % of GDP, 2021† latest,% year ago, bp May 26th on year ago
United States 0.4 Q1 6.4 6.0 4.2 Apr 2.7 6.1 Apr -2.9 -13.5 1.6 89.0 -
China 18.3 Q1 2.4 8.5 0.9 Apr 1.6 5.1 Apr‡§ 2.7 -4.7 2.9 §§ 69.0 6.39 11.7
Japan -1.9 Q1 -5.1 2.2 -0.5 Apr 0.1 2.6 Mar 3.0 -9.4 nil -8.0 109 -1.3
Britain -6.1 Q1 -5.9 5.3 1.5 Apr 1.5 4.8 Feb†† -4.2 -12.1 0.9 69.0 0.71 14.1
Canada -3.2 Q4 9.6 5.4 3.4 Apr 2.2 8.1 Apr -2.0 -8.9 1.4 90.0 1.21 14.1
Euro area -1.8 Q1 -2.5 4.1 1.6 Apr 1.4 8.1 Mar 3.1 -6.6 -0.2 23.0 0.82 11.0
Austria -5.7 Q4 -5.6 3.4 1.9 Apr 1.7 5.6 Mar 3.4 -7.1 nil 10.0 0.82 11.0
Belgium -1.0 Q1 2.4 3.9 1.2 Apr 1.5 5.8 Mar -0.8 -7.5 0.1 3.0 0.82 11.0
France 1.5 Q1 1.8 5.4 1.2 Apr 1.3 7.9 Mar -1.8 -9.0 0.2 27.0 0.82 11.0
Germany -3.1 Q1 -7.0 3.5 2.0 Apr 1.9 4.5 Mar 6.8 -3.6 -0.2 23.0 0.82 11.0
Greece -5.9 Q4 11.1 2.5 -0.3 Apr nil 15.8 Dec -5.8 -5.9 0.9 -81.0 0.82 1
Italy -1.4 Q1 -1.6 3.4 1.1 Apr 0.7 10.1 Mar 3.0 -10.5 0.9 -64.0 0.82 1
Netherlands -2.8 Q1 -1.8 2.9 1.9 Apr 2.0 3.4 Apr 10.8 -3.4 -0.2 12.0 0.82 1
Spain -4.3 Q1 -2.1 5.6 2.2 Apr 1.3 15.3 Mar 1.3 -8.9 0.5 -14.0 0.82 1
Czech Republic -4.8 Q4 -1.2 3.7 3.1 Apr 2.2 3.4 Mar‡ 2.1 -5.5 1.7 95.0 20.8 1
Denmark -1.4 Q4 -5.9 3.0 1.5 Apr 0.7 4.5 Mar 7.4 -1.3 0.1 36.0 6.09 1
Norway -1.4 Q1 -2.5 2.6 3.0 Apr 1.6 4.6 Feb‡‡ 2.4 -1.7 1.5 96.0 8.35 18.3
Poland -2.7 Q4 3.6 4.1 4.3 Apr 3.2 6.3 Apr§ 2.0 -6.9 1.9 44.0 3.68 9.5
Russia -1.0 Q1 na 3.2 5.5 Apr 5.3 5.2 Apr§ 3.6 -1.7 7.3 162 73.6 -4.0
Sweden -0.8 Q1 4.5 3.3 2.2 Apr 1.4 9.4 Apr§ 4.1 -2.6 0.4 45.0 8.31 15.9
Switzerland -1.6 Q4 1.3 2.6 0.3 Apr 0.3 3.1 Apr 7.0 -2.3 -0.2 29.0 0.90 8
Turkey 5.9 Q4 na 3.9 17.1 Apr 14.5 13.1 Mar§ -2.0 -2.8 17.6 543 8.45 5
Australia -1.1 Q4 13.1 3.4 1.1 Q1 2.1 5.5 Apr 1.9 -7.3 1.6 68.0 1.29 3
Hong Kong 7.9 Q1 23.5 4.9 0.7 Apr 1.6 6.4 Apr‡‡ 3.6 -4.1 1.2 51.0 7.76 1
India 0.4 Q4 42.7 10.4 4.3 Apr 5.2 8.0 Apr -1.0 -7.0 6.0 1.0 72.8 0
Indonesia -0.7 Q1 na 3.3 1.4 Apr 2.8 6.3 Q1§ -0.3 -6.4 6.4 -79.0 14,328 0
Malaysia -0.5 Q1 na 4.4 4.7 Apr 2.4 4.7 Mar§ 4.6 -6.0 3.2 25.0 4.14 5.6
Pakistan 4.7 2021** na 1.7 11.1 Apr 9.0 5.8 2018 -1.7 -6.9 9.7 ††† 134 154 4.0
Philippines -4.2 Q1 1.2 6.6 4.5 Apr 4.0 8.7 Q1§ -1.0 -7.4 4.0 77.0 48.1 5.0
Singapore 1.3 Q1 13.1 4.8 2.1 Apr 1.8 2.9 Q1 16.7 -4.1 1.5 79.0 1.32 7.6
South Korea 1.7 Q1 6.6 3.2 2.3 Apr 1.5 4.0 Apr§ 4.3 -4.7 2.1 80.0 1,117 10.5
Taiwan 8.2 Q1 12.9 6.2 2.1 Apr 1.6 3.7 Apr 15.5 -0.5 0.5 -4.0 27.8 7.8
Thailand -2.6 Q1 0.7 2.9 3.4 Apr 2.2 1.5 Dec§ 4.5 -6.6 1.6 54.0 31.4 1.7
Argentina -4.3 Q4 19.4 6.2 46.3 Apr‡ 46.8 11.0 Q4§ 1.7 -6.0 na na 94.5 -27.8
Brazil -1.1 Q4 13.3 3.2 6.8 Apr 6.7 14.4 Feb§‡‡ 0.5 -7.9 9.4 235 5.31 0.9
Chile 0.3 Q1 13.4 6.2 3.3 Apr 3.6 10.4 Mar§‡‡ -0.2 -7.2 4.0 201 734 8.9
Colombia 2.0 Q1 11.9 4.8 1.9 Apr 2.6 14.2 Mar§ -3.3 -8.9 7.3 199 3,743 -0.5
Mexico -3.6 Q1 3.1 5.7 6.1 Apr 4.5 4.4 Mar 2.0 -2.8 6.7 58.0 19.9 12.0
Peru 3.8 Q1 8.3 10.5 2.4 Apr 2.6 12.6 Apr§ -0.3 -5.6 5.0 121 3.83 -11.0
Egypt 2.0 Q4 na 2.9 4.1 Apr 5.7 7.4 Q1§ -3.3 -8.1 na na 15.7 1.1
Israel -1.2 Q1 -6.5 4.0 0.8 Apr 1.3 5.4 Apr 3.4 -8.8 1.1 41.0 3.25 8.0
Saudi Arabia -4.1 2020 na 2.9 5.3 Apr 2.4 7.4 Q4 2.8 -3.2 na na 3.75 0.3
South Africa -4.1 Q4 6.2 2.4 4.5 Apr 3.7 32.5 Q4§ 1.5 -9.2 8.9 -17.0 13.8 26.0
Source: Haver Analytics. *% change on previous quarter, annual rate. †The Economist Intelligence Unit estimate/forecast. §Not seasonally adjusted. ‡New series. **Year ending June. ††Latest 3 months. ‡‡3-month moving
average. §§5-year yield. †††Dollar-denominated bonds.
Markets Commodities
% change on: % change on:
Index one Dec 31st index one Dec 31st
The Economist commodity-price index % change on
In local currency May 26th week 2020 May 26th week 2020 2015=100 May 18th May 25th* month year
United States S&P 500 4,196.0 2.0 11.7 Pakistan KSE 46,812.3 2.5 7.0 Dollar Index
United States NAScomp 13,738.0 3.3 6.6 Singapore STI 3,146.1 1.3 10.6 All Items 194.5 181.7 -1.8 69.9
China Shanghai Comp 3,593.4 2.3 3.5 South Korea KOSPI 3,168.4 -0.1 10.3 Food 139.5 134.5 -3.9 44.1
China Shenzhen Comp 2,380.6 2.3 2.2 Taiwan TWI 16,643.7 3.2 13.0 Industrials
Japan Nikkei 225 28,642.2 2.1 4.4 Thailand SET 1,568.6 0.4 8.2 All 245.8 225.7 -0.6 88.7
Japan Topix 1,920.7 1.3 6.4 Argentina MERV 56,599.0 1.1 10.5 Non-food agriculturals 167.9 171.8 -1.2 97.5
Britain FTSE 100 7,026.9 1.1 8.8 Brazil BVSP 123,989.2 1.1 4.2 Metals 268.9 241.7 -0.5 86.9
Canada S&P TSX 19,745.5 1.7 13.3 Mexico IPC 49,103.5 -0.6 11.4
Sterling Index
Euro area EURO STOXX 50 4,031.7 2.4 13.5 Egypt EGX 30 10,369.6 -4.0 -4.4
All items 208.9 196.2 -3.3 48.6
France CAC 40 6,391.6 2.1 15.1 Israel TA-125 1,773.9 2.9 13.1
Germany DAX* 15,450.7 2.2 12.6 Saudi Arabia Tadawul 10,471.6 1.0 20.5 Euro Index
Italy FTSE/MIB 24,778.0 1.2 11.4 South Africa JSE AS 66,108.3 0.4 11.3 All items 176.5 164.6 -3.1 52.4
Netherlands AEX 711.2 2.5 13.9 World, dev'd MSCI 2,969.5 2.0 10.4 Gold
Spain IBEX 35 9,196.9 1.4 13.9 Emerging markets MSCI 1,352.0 1.8 4.7 $ per oz 1,868.1 1,892.0 6.3 10.7
Poland WIG 64,427.8 2.6 13.0
Brent
Russia RTS, $ terms 1,590.6 2.4 14.6
$ per barrel 68.8 68.7 3.2 89.3
Switzerland SMI 11,348.7 2.7 6.0 US corporate bonds, spread over Treasuries
Turkey BIST 1,427.1 -2.2 -3.4 Sources: Bloomberg; CME Group; Cotlook; Refinitiv Datastream;
Dec 31st
Fastmarkets; FT; ICCO; ICO; ISO; Live Rice Index; LME; NZ Wool
Australia All Ord. 7,331.6 2.3 7.0 Basis points latest 2020
Services; Thompson Lloyd & Ewart; Urner Barry; WSJ. *Provisional.
Hong Kong Hang Seng 29,166.0 2.0 7.1 Investment grade 119 136
India BSE 51,017.5 2.2 6.8 High-yield 365 429
Indonesia IDX 5,815.8 1.0 -2.7 Sources: Refinitiv Datastream; Standard & Poor's Global Fixed Income For more countries and additional data, visit
Malaysia KLSE 1,577.8 -0.2 -3.0 Research. *Total return index. Economist.com/indicators
012
Graphic detail Politics and demography The Economist May 29th 2021 77
→ Educated voters have switched their political leanings from right to left. Rich ones remain conservative
Difference in political parties’ vote share between top 10% of voters Difference in left-of-centre parties’ vote share
(most-educated or highest-earning) and bottom 90% between top 10% and bottom 90% of voters
Selected Western democracies, % points Australia
By income Selected Western democracies, % points
20 10
Britain By education
Norway Sweden
Right-of-centre Ger. ↑ Higher vote share among most-
In 1970 educated or highest-earning voters
parties France
US 10 0
Canada
By income
More support from highest-
Italy -10
earning and most-educated voters 0
More support from lower-earning Italy
and less-educated voters -20
Canada -10
1955 65 75 85 95 2005 15
Germany France Left-of-centre
Britain US parties
Sweden Norway
-20
Australia
Average vote share by political-party groupings
Selected Western democracies, %
-20 -10 0 10 20 100
By education Conservative/Christian democratic
20 75
Sweden
Germany Norway
Right-of-centre
In 2010 Britain Australia Nativist
parties
10 Other
France Communist 50
Green
More support from highest- Canada Italy
earning and less-educated voters Liberal
US 0
US Italy
25
Britain Canada
-10
France
Australia
Left-of-centre Socialist/Social democratic
Germany 0
parties Norway More support from lower-
Sweden earning and most-educated voters
-20 1950 60 70 80 90 2000 10
Source: “Brahmin Left versus Merchant Right”, by Amory Gethin,
-20 -10 0 10 20 Clara Martínez-Toledano and Thomas Piketty (working paper, 2021)
60-year-old international trend. peers. The gap has only grown since then.
Brahmins v In a paper in 2018 Mr Piketty noted that This trend is strikingly consistent. It
elites in Britain, France and America were developed just as fast in the 20th century
merchants split between intellectuals who backed as in the 21st, and appears in almost every
left-of-centre parties—he dubbed them the Western democracy studied. This includes
“Brahmin left”—and businesspeople who both two-party systems and proportional
preferred right-wing ones (the “merchant ones, in which green parties now lure edu-
Educated voters’ leftward shift is
right”). His new work expands this study cated voters, and nativist parties attract the
surprisingly old and international
from three Western democracies to 21. It less educated. Such breadth and regularity
Y ou could fill a small library with books

on right-wing populism. Some authors
argue that these movements emerged in
combines data on parties’ policy positions
with surveys that show how vote choices
varied between demographic groups.
make the rise of right-wing populists like
Mr Trump—and of left-of-centre techno-
crats like Emmanuel Macron or Justin Tru-
reaction to relatively recent events, such as The paper finds that income and educa- deau—look like a historical inevitability.
the financial crisis of 2007-09 or the ad- tion began diverging as predictors of ideol- Although the authors do not identify a
vent of social media. Others look to longer- ogy long ago. In 1955 both the richest and cause for this trend, the simplest explana-
lasting regional trends, like European inte- the most educated voters tended to sup- tion is that it stems from growing educa-
gration or racial politics in America. port conservative parties. Conversely, both tional attainment. In 1950 less than 10% of
Thomas Piketty, an economist, became poorer and less-educated people mostly eligible voters in America and Europe had
famous for a book that analysed 200 years chose labour or social-democratic ones. graduated from college. Any party relying
of data on wealth inequality in a wide Today, wealthy people still lean to the on this group for support would have had
range of countries. This month he pub- right. In contrast, the relationship between scant hope of winning elections. In con-
lished a paper, co-written by Amory Gethin education and ideology began to reverse as trast, more than a third of Western adults
and Clara Martínez-Toledano, which ap- early as the 1960s. Every year, the 10% of today have degrees, which is enough to an-
plies a similar approach to the relationship voters with the most years of schooling chor a victorious coalition. And once can-
between demography and ideology. Its gravitated towards left-wing parties, while didates and parties began catering to edu-
findings imply that the electoral victories the remaining 90% slid the other way. By cated voters—who often put living in a lib-
of Donald Trump and the Brexit campaign 2000, this had gone on for so long that, as a eral society above lowering their tax bills—
in 2016 were not an abrupt departure from group, the most educated voters became rival politicians could start winning elec-
precedent, but rather the consequence of a more left-wing than their less-educated tions by taking the opposite position. n
012
78
Obituary Yuan Longping The Economist May 29th 2021
For this he won the Medal of the Republic, China’s highest, and
the World Food Prize. An asteroid was named after him. There was
talk of the Nobel, too. All that seemed just smoke to him. Though
he was rich, from his shares in a seed company that used his name,
he looked like a peasant, wiry as a twig, with his face leathered by
sun and his big hands rough from “playing in the mud” all day. He
was far happier in his shortsleeved workshirts, out in his rice, or
stripped off swimming in any wild river he could find, than in a
tang suit in some conference hall. At social gatherings, he would
offer round the first cigarettes and the nimblest jokes. When he
lost at mahjong, no one was more delighted to pay the penalty of
creeping through under the table.
Why he had become an agronomist was tricky to explain. His
mother, whom he adored, did not want him to do it. He was a city
boy anyway, born in Beijing, though he enjoyed the countryside
and the thought of growing luscious things, like the grapes Charlie
Chaplin could pick at his kitchen door in “Modern Times”. As he
made his way to the Anjiang agricultural school, in a charcoalfu
elled bus struggling through the mountains, he had doubts him
self. What settled his vocation was famine.
In 1949, at the founding of Communist China, he had first met
hunger on the roads. Between 1959 and 1961, in Mao Zedong’s Great
Leap Forward to collectivise farming, he saw country people fall
ing down dying in the fields. They had been driven to eating tree
bark, fernroots, even white clay. At the college, too, there was so
little to eat that he barely had energy to dig. He dreamed of bowls
of steamed fat pork, but woke to chew on rice bran. From that
To feed the world point his mission was to make sure people were fed.
Before the famine he had worked on grafting, because that was
the Soviet model and Mao’s command. Crossbreeding of plants
was forbidden and genes, ludicrously, were dismissed as “meta
physical”. So he grafted moonflowers on sweet potatoes, tomatoes
on potatoes and a watermelon on a pumpkin (grotesque fruit, in
Yuan Longping, developer of hybrid rice, died on
describable taste!), but found that any inherited traits vanished in
May 22nd, aged 90
the second generation. Secretly then he read Gregor Mendel on
H e was wandering in a ricefield of dreams. The plants were

tall as sorghum, taller than a man. Their panicles hung full as
brooms, and each grain was as big as a peanut. After walking a
plant genetics, hiding him under the People’s Daily, and after 1960
he turned his full attention to China’s staple, rice.
He loved it in any case. As a boy he was enraptured by the deli
while he lay down in the leafshade with a friend, quite hidden. A ciousness of xiaozhan rice from Tianjin, said to be the best in Chi
rest was a good idea, because the wonderplants went on and on. na. Around Anjiang, what the peasants wanted was quantity: mir
In fact, they covered the world. acleyields from their fields. They would cross the mountains to
Then Yuan Longping woke up, laughing. The rice plants he had get better seeds, so he did the same, traipsing round China to find
tended for decades at Anjiang and then Changsha in Hunan prov the strong wild malesterile plants he needed. Once he found
ince, sowing and nurturing them, visiting daily on his motorbike them, in that unlikely spot in Hainan, it took three years to perfect
to inspect them, were not quite there yet. But they still deserved the hybridising and another three to get his super rice into com
their name of super rice. The leaves were straighter and taller than mercial production. Then, in a steep curve, yields soared away.
ordinary, and the grains plumper. They had all the vigour of the The Communist Party applauded him, but he never joined. He
wild strain that he and his team had found, after much searching, worried that, not understanding politics, he might say the wrong
beside a railway line in Hainan in 1970 and had crossbred, over thing. In the Mao years at Anjiang he left indoctrination to other
careful years, with the domesticated variety. Sceptics told him he teachers, while he taught sports and how to sing Russian songs.
was wasting his time, since rice was a selfpollinator. He believed The only concession he made to the Cultural Revolution was to
that crossbreeding was universal and, besides, that it always give up his precious, then “decadent”, violin. Party officials called
made the offspring stronger. him “Comrade”, but he was no comrade of theirs, only of his agro
The figures spoke for themselves. With his new hybrid rice the nomist colleagues and, he hoped, all hungry people. For their sake
annual yield was 2030% higher. This meant that at least 60m he kept on working to make rice better: salttolerant to grow by the
more people could be fed every year. In Yunnan province more coast, crossbred with maize to be more nutritious, enriched with
than 17,000 kilograms had been produced per hectare. China’s rice Vitamin A to improve people’s eyes. He fizzed with the thought
crop had risen from 57m tonnes in 1950 to 195m in 2017; from food that if just half of the 160m hectares of ricefields in the world were
deficiency, to food security. Higher riceyields allowed farmers to planted with his hybrid rice, an increase in yield of two tonnes per
turn more land to other uses—fruit, vegetables, fishponds—so hectare would feed 500m more people every year. And he still
that people not only ate more, but ate well. And this message was talked, impishly, of plants taller than a man.
for the world, as well as China. Once his rice grew well, he sent Outside the funeral home in Changsha on the day after his
seeds to the International Rice Research Institute in the Philip death, crowds came to lay a mountain of yellow and white chry
pines. Then he travelled widely, all across Asia and to Africa and santhemums. Several of the mourners said that whenever they sat
America, as well as inviting foreign students to the Hunan Hybrid down to a meal, or merely smelled the fragrance of rice, they
Rice Research Centre in Changsha to instruct them. A fifth of all would remember “Grandfather Yuan”. Among the flowers were the
rice grown globally now comes from hybrids that were his. traditional bowls of boiled rice, superfood for his journey. n
012
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Two states or one?

The world this week Asia

→ Activating the digital

Europe Finance & economics

Volume 439 Number 9247

of the coronavirus. A foreign agency said he was very con­

Germany’s two biggest proper­

Two states or one?

H ave more time and eﬀort ever been devoted to peace to so

The euro zone

Take one for the team

I nflation in germany exceeded 2% in April. If the Bundes­

Fresh thinking about fresh air

I n 1842 edwin chadwick, a British social reformer, published

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The African Export-Import Bank (Afreximbank) is a pan-African multilateral financial institution

Senior Manager, ACMA (Capital Markets)

Current To apply, contact Robin at ROBOTHA@CAGLOBALINT.COM

T he plaque beneath a bust of President

the United States downgraded its rating of

W hen tanks rumbled into Naypyi­

T he mood was supposed to be jubilant

I n late may India passed two sad mile­

T he discovery in March of 200­odd

Inequality in education outside the capital, according to state tele­

A fter xiong xuan’ang gained the

Chaguan China’s revealing Afghan strategy

A suspicious China prepares for America to pull out of Afghanistan

O n may 9th China’s foreign ministry was asked to comment on

Texas politics approach to historical racial bias) in

T exans prize eﬃciency. They like to

days of being asked to do so. Yet working with central­American

H ad the protest not been on the Mexi­

doesn’t even consider outside ideas for

Lexington Veep stakes

Is Kamala Harris a gift to the Republicans?

H ere is what the millions of Americans who take their opin­

Brazil’s politics explains Sylvio Costa of Congresso em Fo­

T here are many ways to describe pork­

THEIR OWN MEDICINE

curbs on mining such things as copper and

A s omens go, it was a bad one. On May

Israel and Palestine rigueur to urge them back to the negotiat­

B y the standards of the peace process,

Coup within a coup

“I t’s political chaos,” says Kevin, a 32­

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Greater Paris Valérie Pécresse, the sitting centre­right re­

C utting through farmland in a re­

Charlemagne How farmers rule Europe

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I n late may India passed two sad mile

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Inequality in education outside the capital, according to state tele

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H e was wandering in a riceﬁeld of dreams. The plants were