Tirne's up for TikTok

lnside Putin's Russia

Crazy rich lndians
A special report on the oíl industry
MARCH 16TH-22ND 2024

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 5

The world this week United States

7 A summary of political 19 America's slipping
and business news schools
21 Unorthodox ways
Leaders
21 Choo choo choices
g America's economy
Purnped up
22 Recriminalising drugs
22 Troops on xvc's su bway
10 Inside Putin's Russia
The nature of the menace 23 Health-care research
11 TikTok 24 Lexíngron On "Dune"
Tirne's up
11 The Gulf and Africa The Americas
The promise and the peril 25 Mexico's trade triangle
12 Young, angry and male 26 Haiti's dead state
Onthecover Why are young men and 28 Semicond uctors in Latín
America's growth keeps women drifting apart? Ame rica
defying the pessimists. Can
that last? Leader, poge 9. Letters
Against the odds, the country 14 On skiing, defence,
has escaped a hard landing, mining, Blackpool, the
but there are still pitfalls Asia
Moon, office meetings,
ahead: briefing, poge16. Share 29 Crazy rich Indians
Twitter
prices are su rging. 1 nvestors 30 lndia's citizenship law
are delighted-but also Briefing 31 Australian spooks
ne rvou s, page 61
,6 America's economy 31 Indian missiles 1
Who's afraid of 32 Banyan Rot in Pakistan
Time's up for TikTok To stay on
Wi le E. coyote?
Western screens, the video app
must cut its tiesto China: leader,
Special report: China
page 111 and analysis, page 53
The oil industry 33 Is china aclimate saint
lnside Putin's Russia The West The long goodbye or villain?
doesn't have a strategy for A/ter page 40 35 Tariffs on wine from Oz
d ealing with a resilient rogue
state. 1 t needs one, fast: leader,
page 10. Russians go to the polis
in a sham election, page 41.
A window into wartime Russia.
How the invasion of Ukraine is Middle East & Africa
transforming Vladivostok, 36 cazas grim stalernate
page42 37 A shadow war economy
38 A sacred rnask stokes
Crazy rich India ns The country's conflict in Congo
new wealthy elites are younger
and more adven tu rous, pagc 29 39 Gulf states in Africa

A special report on the oíl

industry For the past 50 years
the business and poli tics of oil
have been dominated by Bartleby svery location
matching supply to ever- has got worse for actual
increasing demand. The next 50 work, page 57
years will look different, argues
Vijay Vaitheeswaran, after
ooge so

--? The digital element ofyour

subscription means that you
can search our archive, read
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, " .. Contents continues ovcrlcaf
6

Europe Finance & economics

41 Russia's sham election 61 The bu 11 market
42 lnside Vladivostok 62 China's optimistic city
45 Portugal swi ngs right 63 Sand markets surge
45 Ukraine's southern front 64 Saudi investrnent
46 Charlemagne Europe's 65 Buttonwood Private
so-so economy eq uity's cash problem
66 Russia's economy
Britain 67 Freeexchange �IMBYs
47 The Barcia y twi ns
49 Bagehot Tory militants Science & technology
68 Water harvesti ng
69 Fat labradors
70 Training LLMS
71 Speaki ng freely
lntemational 71 Rogue scaffolding

so The gu lf between young

men and wornen Culture
72 Si 1i con Valley books
73 The start of true crime
74 Archaeology and climate
change
74 Literary retellings
Business
75 Ru ssians' cod ed language
53 TikTok in America
76 Maastricht's art fair
54 Can lorries go electric?
56 Ararnco's spending plans Economic & financial indicators
56 China's anti-China n Statistics on 42 econornies
boycotts
57 BartlebyWorking frorn Obituary
nowhere
78 Toriyarna Akira, probably manga's greatest master
60 Schumpeter De laware v
Nevada

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The world this week Politics The Economist March 16th 2024 7

of fasting.Joe Biden suggested Russia was gaining the upper England's health service
that an i nvasion of Rafah, the hand in the war in Ukraine, confirmed that it would no
ciry in southern Gaza where had increased its production of longer routinely prescribe
many Palestinians are now artillery shells and secured a puberty blockers following a
sheltering, was a "red line" and supply of drenes. The officials review of a number of studies.
seerned to imply that America said that an American aid lt concluded rhat there was
could lirnit its supply of weap- package to Ukraine, which is not enough evidence to allay
ons i f Israel crossed i t. stalled in Congress, would safety concerns. It has decid-
enable it to hold the front line. ed that access to the blockers
Mr Biden announced that far children and young people
América will build a pier off with gender dysphoria should
the coast of Gaza to enable the be available only in research
Ariel Henry agreed to step delivery of far greater quanti- prograrnmes.
down as prime minister of ties of humanitarian aid.
Haiti once a new governi ng separately a boat bri nging 180
council is in place. Mr Henry tonnes of food left Cyprus. It is A move backwards
has been out of th.e country for the first shi p authorised to Thailand's Election cornmis-
several weeks. In his absence deliver aid to Gaza since sion took the first legal step
Haiti became even more chaot- Harrias took control of the towards banning Move For-
ic, with armed gangs, who now coastal strip in 2007. ward, a reformist party that
wield the real power, roarning can1e first in last year's elec-
at will. Jimmy "Barbecue" Alrnost 3m children in Sudan tion but was blocked from
Chérizier (above), a prominent are acu tely malnou rished and Portugal took a turn towards taking power by the royalist
gang leader, had called for Mr nearly 230,000 children, preg- the right ata general election. establishment. The commis-
Henry to go. Earlier Arnerica nant women and new rnothers The centre-right Democratic sion bases its reasoning on a
evacuated most of its embassy may die in the coming months Alliance won the rnost seats in ruling by the Constitucional
staff from Port-au-Prince. without urgent aid, according parliament but fell short of a Court, which held that Move
to Save the Children. A civil majority. The Socialists lost 43 Porward's aim of changi ng the
The Venezuelan government war that erupted last April has seats, pushing thern into country's iése-maiesté laws,
announced the arrest of anoth- caused the world's biggest second place. Chega, a right- which forbid any criticism of
er prorninent opposition humanitarian crisis, with 8m wi ng pop u list party formed in the monarchy, was illegal.
member. It clai nis that Erni II Sudanese forced frorn their 2019, carne thi rd with 18o/o of
Brandt Ulloa had taken part in homes, according to the UN. the vote, giving it 48 deputies. The government in India
violent protests and insulted Luís Montenegro, the DA's implernented a controversia!
an official. Maria Cori na More than 300 pupils have leader, has said he will not ask law that eases the path to
Machado, the main opposition been abd ucted from schools in Chega far help in forming citizenship for rnembers of
leader, who has been banned Nigeria in re cent weeks. In ali a government. sorne religious minorities
frorn running in july's presi- more than 1,400 pupils have from neighbouring countries
dential election, said Mr been ki d.napped si nce 2014. Geert Wilders conceded that he but excludes Muslims. Hin-
Brandt had been "kidnapped", would not become prime dus, Si khs, Christians and
Groups of fighters who are minister of the Netherlands as others who fled to India from
based in Ukraine but claim to talks continued to form a Afghanistan, Bangladesh or
A foxguardingthe hen house be Russian said they had con- government, four months after Pakistan before 2015 will be
Juan Orlando Hernández, d ucted raids across the border an election. MrWilders's far- granted citizenship. Rohingya
president of Honduras from into Russía to draw Kremlin right Party for Freedom (Pvv) Muslims from Myanmar, for
2014 to 2022, was found guilty troops away frorn the front won the most seats in the poll exarnple, cannot apply. The
by a court in New York of traf- line. The fighters say they and still wants to be part of a government denles that the
ficki ng cocaine. Mr Hernán- oppose Vladimir Pu tin-his newright-wing coalition. law is discriminatory.
dez's election campaign prorn- government said it had
ised to crack down on narcotic repelled the assault. Russia Voters in Ireland overwhelm- Joe Bid en and Donald Tru mp
gangs. While he was in office also had to defend itself ingly rejected two arnend- both won enough delegares
Honduras received more than against a wave of Ukrainian rnents to the constitution on in the latest batch of prima-
$5om frorn America towards drone attacks, sorne of which family and the role of wornen, ries to secure their partí es'
his war on drugs. His wife is targeted oi I reñ neries. The first amendrnent sought to norni nation for presiden t. Mr
running for president in 2025. change marriage as the basis Trump's takeover of the
Meanwhi le the head of the on which a family is founded Republican Party was formal-
Israel and Hamas failed to Russian navy was reportedly to one that includes "durable ised with the election of his
reach a deal that would have sacked. Ukraine's offensive relationships" The second charnpions to leadership roles
seen the release of sorne of the against Russia's Black Sea fleet wanted to scrap a reference to a on the Rep u bli can N ati o nal
rernaining hostages in Gaza in has been highly effective, woman providing care within Committee. Michael Whatley,
exchange for a temporary America thinks Ukraine has the home. Opponents to both a key ally, is the party's new
ceaseñre and the freeing of su nk 15 Russian shi ps over the amendments maintained that chairman. Lara Trump, the
hundreds of Palestinian pris- past six rnonths alone. the replacernent wording to wife of EricTrump, one of Mr
oners. Negotiators had hoped the constitution was confus- Trump's sons, is his depury,
that an agreement could be N evertheless, the head of the ing, and would have excluded Around 60 RNC staff were
finalised befare the start of CJA and the director of us non-family members in a new purged immediately after the
Ramadan, the Muslim month national intelligence said that definition of "caregivers" appointments were rnade,
ª The world this week Business The Economist March 16th 2024

Arnerica's House of Repre- that he acknowledges are Reddit, a social-inedia plat- behind most other interna-
sentatives passed a bill wh.ich painful. UNJCEF has warned forrn, will float its shares in tional carriers in returning to
would req ui re ByteDance, the that 70% of Argentine children New York on March zist, ac- post-covid profitability be-
Chinese firrn that owns Tik- could be living in poverty. cording to Bloomberg. Reddit cause of the pandernic mea-
Tok, either to sell the platform Meanwhile, the govemment hopes to raise nearly $75om, su res that the city li fted at only
orto stop operating in Amer- rolled over $5obn-worth of which could be one of the the end of 2022. It expects to
ica, TikTok's biggest market. debt that was to mature this biggest IPOs so far this year. return to providing 100% of its
The bill's supporters worry year forsecurities that are due pre-pandemic flights in the
that China could lean on Tik- next year, the largest debt- Apple said it would allow first q uarter of next year.
Tok to massage content to its swap in Argentina's history. developers to sell apps in the
liking. TikTok became popular And the central bank cut its European Union for download By contrast, Adidas posted its
with its quirkyvideo clips, but benchmark interest rate from onto an iPhone without having first annual net loss in 30
has morphed into a big provid- 100% to 8oo/o. to use its App Store. It is a big years. Sales in North América

-
er of factual media. A thírd of concession to European reg- dropped by 16o/o, in part be-
American adults under 30 use u lators; a new Digital Markets ca use of the "negative Yeezy
it to catch up on the news. The Biggest arms exporters Act carne into force this impact", according to the
2019· 23, o/o of wor1d teta I
bi 11 now goes to the Senate. month. Developers will still German sportswear company.
O 10 20 30 40
have to comply with Apple's Adidas cut its ties with Ye,
UnitPd �, ates
France
stringent safety standards, and formerly Kan ye West, over his
All's well that ends well Russta be a "mernber of good stand- antisernitic remarks in 2022.
Sam Altman was resto red to China ing" in its developer pro- But it has been selli ng off its
the board at openxr. Mr Alt- Geunany gramme for at least two years. inventory of Ye-branded pro-
man was sacked as chief exec- ll,1ly ducts, which are still popular.
8rit.alr1
utive by the previous board One of Chi na's biggest smart-
5p<iln
last Novernber but swiftly Israel
phone-rnakers accelerated its
reinstated in that job following South Korea
move into the electric-vehicle Marketdemand
a revolt by ernployees and Source; S PRI
business. Xiaomi is launching Britain 's office of National
investors. An i ndependent its sur sedan on March zsth, Statistics updated the basket of
review into those events has France increased its share of with the first deliveries taking goods and services that it uses
concl uded that there was a the global arrns-export mar- place soon after. The car will be to calculate inflation. Reflect-
"breakdown in the relation- ket to no/o in 2019-23 from 7.2% available only in China. It will ing the changing tastes of
shi p and loss of trust" between in 2014-18, accordingto the join a crowded market: exist- consumers, new additions
the prior board and Mr Altman. stockholm Jnternational Peace ing sv-makers have started include vinyl albums ("a
Research lnstitute. France another round of price cuts to record revival" according to
Saudi Arameo reported a net gained by selling more weap- entice buyers. the normally hu mourless
profit of $121bn for 2023, more ons to countries such as India, nurnber-crunchers), air fryers
than the combined profits of the world's biggest arms Cathay Pacific reported an (which are "cooki ng upa
the west's five biggest oil importer, taking sorne of Rus- annual net profit of HK$9.8bn storm" in sales) and gluten-
cornpanies. Arameo increased sia's business. Russia's share of ($1.25bn), its first since 2019 free bread. Out go such things
its dividend pay-out to $98bn, the global market dropped to and its biggest since 2010. The as hand sanitisers, sofa beds
a big so urce of income far the 11% from 21%. Hong Kong airline lagged and roasting tins.
Saudi state, and prornised even
higher payments this year.

Arnerica's annual rate of

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 Leaders 9
The
Economist

Pumped up
Ame rica 's growth keeps defying the pessimists. Can tha t last?

ou HAVE to marvelatAmerica's econorny. Notlongago itwas trade than srnaller rich economies do. Because the shale boom
Y widely thought to be on the brink of recession. Instead it
ended 2023 nearly 3% larger than 12 months earlier, having en-
of the 201os made América a net energy exporter, it has in aggre-
gate benefited rather than suffered frorn the high energy prices
joyed one of the boomier years of the century so far. And it con- that hit the wallets of Europeans.
tinues to defy expectations. At the start of this year, econornists The trouble is that each of the ingredients for growth can no
had been forecasting annualised growth in the first quarter of longer be relied upon. It may be ternpting for politicians to
1%; that prediction has since doubled. The labour market is in extrapolare from Arnerica's recent success and juice the econ-
rude health, too. The unemployment rate has been below 4% for orny with furtherstimulus. Butthat is becoming unsustainable.
25 consecutive months, rhe longest such spell in over 50 years. Official forecasts show that America will this year spend more
No wonder Uncle Sam is putting the rest of the world to shame. on debt interest than national defence. More borrowing risks
Since the end of 2019 the economy has grown by nearly 8% in building up financial perils in the future.
real terrns, more than twice as fastas the euro zone's and ten At the same time, both Mr Trump and Mr Biden harbour pop-
times as quickly as Japan's. Britai n's has barely grown at ali. ulist and protectionist instincts that will only harrn America's
America's expansion is all the n1ore striking when you con- growth potential. The sugar-rush of stimulus helped mask the
sider the many things that could have killed it. As the Federal Re- damaging effects of such policies during each president's first
serve has fought inflation the econorny has endured the sharp- terrn. This time, however, the damage will not be disguised.
est rise in interest rates since Jimmy Carter was in the White Mr Trump poses the graver threat. He has entertained a blan-
House. The covid-is pandemic, an intensifying trade war with ket 10% tariff on írnports, which sorne of his advisers see as a
China and the fight agai nst clirnate change have together re- mere starting-point. That would triple Arnerica's existing levies
shaped supply chains, labour markets and consumer prefer- on goods imports, worsen inflation and raise the cost of import-
ences. Wars in Ukraine and Gaza have aggravated geopolítica] ed parts for manufacturers. At the same time, Mr Trump has
tensions and worsened the strains on the global trading system. promised the mass deportation of illegal imrnigrants. This goes
Can America's remarkable strength persist? Threats to well beyond trying to secure the border against new unautho-
growth still hang over the economy. The longer rised entrants-a reasonable goal-and poses a
interest rates stay high, for instance, the more risk to the labour supply: in 2021 Arnerica's
damage they could do. Although inflation has 10.5m irregular rnigrants made upan estimated
fallen, it remains sticky above the Fed's 2o/o tar- 5% of its workforce.
get, meaning that the Fed may be unable to ful- A Trump presidency would also threaten the
fil investors' hopes for interest-rate cuts start- Fed's independence. Mr Trump says he would
ing in June. Geopolitical tensions, rneanwhile, not reappoint its chairman, Jerome Powell,
look likely to spur economic fragmentation. Yet whose term expires in 2026, and whom he often
the biggest threat of ali stems from Novernber's criticised when in office. A pliant Fed ata time
presidential election. Neither Joe Biden nor Donald Trump of big deficits-which Mr Trump might increase with more tax
seems likely ton urtu re the economic expansión should they re- cuts-could threaten America's macroeconomic stability.
turn to the Wh íte House. Instead, their plans would endanger it. A second Biden term prornises nothing as potentially cata-
To understand this, consider the reasons for the econorny's strophic. Mr Biden has let the Fed get on with fighting inflation,
extraordinary performance (see Briefing). A key plank was gen- and wants to raise taxes to reduce deficits. Yet he is also an eco-
erous pandemic stimulus, which at 26% of GDP was more than nomic nationalist. His State of the Union address on March 7th
double che rich-world average. This largesse fuelled inflation was littered with protectionist promises that the government
but also ensured fast growth: consurners have yet to spend ali would "Buy American", and statist ideas about controll ing the
the cash they received in "stimrny" cheques. Even as the covid price of everything from housing to Snickers bars.
crisis passed, the government continued to borrow away. The
underlying deficit over the pastyearwas nearly 8% of GDP. That Muscle memory
supported demand even as rates went up. Both Mr Biden and Mr Trump harbour a misplaced nostalgia for
Strong demand has been met by growi ng supply. Ame rica has the 195os and 'sos, and justify their poticies by paintíng today's
4% more workers than it did at the end of 2019, thanks in part to economy asweaker than it is. MrTrump thinks trade and immig-
rising workforce participation. bue rnainly owing to higher irn- ration have made the country poorer; Mr Biden is deeply dis-
migration. The foreígn-born population is up by 4.4m, a figure trustful of bíg business. And where they do acknowledge Amer-
which may undercount those who arrived illegally, And the ex- ica's strengths, both men attribute it to their own misguided in-
panding workforce is being put to productive use. America's terventionism. In fact, they are chipping away at the free mar-
flexible labou r market has almost certainly made it easier for the kets which are the ultima te so urce of the country's wealth.
economy to adapt fast to a changing world. The truth is America has thrived as its companies and work-
Other long-standing strengths have made América enviably ers have innovated and adapted to a rapidJy changing world. If
placed to cope with geopolitical tumult. Its vast interna} market the next president does not recognise that, Arneríca's pumped-
encourages innovation and means it depends less on foreign up economywill eventually deflate. •
10 Leaders The Economist March 16th 2024

Beyond U kraine

Inside Putin's Russia

The West doesn't have a strategy for dealing with a rogue but resilient Russia. lt needs one, fast
IKE THE tsar he models himself on, Vladimir Putin is about to confusion. This malign combination has destabilised countries
L be anointed as Russia's ruler for another six years. The elec-
tion he will win on March rzth will be a sham. But it should
in the Sahel and propped up despots in Syria and central Africa.
It could also sway sorne of the plethora of elections the world
nonetheless be a wake-u p call for the West. Far from collapsing, will see this year. Many in the global south believe Russia's false
Russia's regime has proved resilient. And Mr Putin's ambitíons na.rrative: that 1V1r Putin is saving Ukraine from Nazis, that NATO
pose a long-term threat that goes far beyond Ukraine. He could is the real aggressor and that the West seeks to foist its decadent
spread more discord in Africa and the Middle East, cripple the social norms on everyone else. Russia's ability to hobble the glo-
UN and put nuclear weapons in space. The West needs a Jong- bal institutions established after 1945, not least the UN Security
term strategy for a rogue Russia that goes much further than Council, should not be underestimated. It has morphed into a
helping Ukraine. Right now it doesn't have one. It also needs to nihilistic and unpredictable foe of the liberal world order, bent
show that its enemy is Mr Putin, not 143m Russian people. on disruption and sabotage. It is like North Korea or Iran on ste-
Many in the West hoped that Western sanctions and Mr Pu- roids, armed with thousands of nuclear warheads.
tin's blunders in Ukraine, including the senseless sacrifice of le- What should the West do? América and Europe have bet on
gions of young Russians, mightdoom his regirne. Yet it survived. two strategies: defend ing Ukraine a nd sanctions. Arming and fi-
As our study this week of life in Vladivostok shows (see Europe na nci ng ukraine's defenders remains the most cost-effective
section), its resilience has several foundations, Russia's econ- way to thwart kussían aggression, yet the West's resolve to keep
orny has been re-engineered. Oil exports bypass sanctions and doing so is scandalouslywavering.
are shipped to the global south. Western brands from BMW to sanctions, meanwhile, have been less effective than hoped.
H&M have been replaced with Chinese and local substitutes. In They can be counter-productive, and an excuse to avoid hard
textbooks and the media a seductive narrative of nationalism choices. over 80% of the world, measured by population, and
and Russian victimhood is promulgated. Dissent at home has 4oo/o by GDP, is not enforcing them, letting Russia trade freely
been strangled. l\1r Putin's most charismatic political rival, Alex- and undermining the sanctions' perceived legitimacy. If the
ei Navalny, was murdered in the gulag in February. So far the West rried to use secondary sanctions to force the world to com-
Kremlin has had no difficulty controlling the ply, itwould backñre, leading sorne countries to
brave crowds mourning him. abandon the Arnerican-led financia! systern. In
Over time the regime will face new vulner- the long run the most plausible path is more
abilities. The curnulative effects of being cut off modest: rnaintaining targeted sanctions on
from Western technologies will be a drag on Kremlin-linked individuals and ensuring that
productiviry: think of wear-and-tear on Boeing advanced tech, which still tends to be Western,
planes, or having to rely on pirated software. is expensive or impossible for Russia to obtain.
Russia's increasing dependence on China rnay That means an effective Russia strategy
become a weakness. The militarisation of the needs to put more weight on two other pillars.
economy will hurt living standards. The population will shrink The first is a military build-up to deter further Russían aggres-
by a tenth or so in the next two decades. Andas the 71-year-old sion. In Europe the weakness is glaring. Annual defence spend-
Mr Putin ages, a succession struggle will loom. It is always hard ing is less than 2% of GDP, and if Donald Trump wins back the
to predict when a tyrant will fall. However, a prudent working White House, Arnerica's commitment to NATO may wither.
assu mption is that Mr Pu tin will be in power for yea rs. Europe needs to spend at least 3% of its GD Pon defence and pre-
During the cold war, the Soviet Union posed both a rnilitary pare for a more isolationist Uncle sam.
andan ideological threat to the free world. The West successful-
ly contained it and, after it collapsed, welcomed its democratic A struggle of ideas
and market reforms. Mr Putin, who took over in 1999, has rolled The West also needs to deploy one of its most powerful weapons:
back Russian democracy, slowly at first, bu t more rapidly after universal liberal values. It was these, as well as Star Wars and
young, urban Russians staged mass protests in the 201os. He dol lars, that helped bring down the Soviet regime by exposing
blames the West for challenges to his rule, and seeks to safe- the inhumanity of its totalitarian system. Western diplornacy
guard his regime by trying to shutoutWestern influenceand un- must seek to counter Russian disinformation across the global
i te the Russian people in a struggle against a caricature of Arner- south. It also needs to address Russian citizens rather than treat
ica and NATO. Today, Russia has only a medium-size economy them as pariahs. That means highlighting human-rights abuses,
and no coherent ideology to export, Yet it poses a global threat. supporting dissidents and welcoming Russia ns who wan t to flee
The immediate danger is a defeat of Ukraine and, after that, at- their country. It mea ns backing the forces of modernisation by
tacks on neighbouring countries such as Moldova and those in promoting the flow of real news and information into Russia.
the Baltics; but that is not where Mr Putin's ambitions end. And it mea ns ensuring that there are hurnanitarian exceptions
Consider new or unconventional weapons. Russia is report- to sanctions, from medical kit to educational materials. In the
ed to be experimenting with putting nuclear warheads into short term there is I ittle chance that Russia's elite or its ordinary
space. Its drones and cyber-warriors allow it to project force be- citizens will boot out Mr Puti n's regí me. But in the long ru n Rus-
yond irs borders. Its misinformation industry spreads líes and sia will stop being a rogue nation only if its people want it to. •
 The Economist March 16th 2024 Leaders 11

TikTok

Time's up
To stay on Western screens, the video app must cut its tiesto China
IKTOKS VIDEOS keep its users up late into the evening. Now this week that it will ban foreign governments from awning Brit-
T the app's links to China are causing politicians to lose sleep,
too. On March ijth Arnerica's House of Representatives passed a
ish publications. Yet TikTok is fast becoming more influential.
It is time for governments to apply the sarne logic to new me-
bill that would force TikTok's Chinese owner, ByteDance, to sell dia as they do to old. If anything, the new platforms require
the app toan owner of another natíonality, or else face aban in greater vigilance. A newspaper's editorial line can be seen in
América. If the Senate follows suit, the world's most download- black and white; by contrast, every TikTok user gets a different
ed app, by one measure, may start disappearing from screens. feed, and the company does not provide adequate tools to exam-
Sorne fears about TikTok are overblown. True, it hoovers up ine its output in aggregate. Even if studies suggest bias-sorne
users' data. But there is no evidence that it takes more than it allege a skew in TikTok's Gaza coverage, for instance-it is im-
claims (or indeed more than rivals such as Facebook). If Chinese possible to know whether TikTok's algorithm is responding to
spies want to find out about Americans, the cou ntry's lax data- users' preferences, orto manipulation from Beijing.
protection laws allow them to buy such information from third TikTok admits it once blocked videos on subjects Jike Tianan-
parties. Banning Chinese apps that gather per- men Square, but insists it has changed. It has
sonal data would mean outlawing many more, made expensive efforts to sepárate American
cutting off Western consumers from sorne of users' data from others' and opened its code for
the world's most dynamic digital services. inspection. But it has undermined itseJf, too. It
TikTok has also injected welcorne competi- argues that selling its American operations
tion into the social-media market. six of last would be impractical, since they are so closely
year's ten most-downloaded apps carne from linked to the rest of the business-thus casting
Meta, Faceboolcs owner. TikTok, which beat doubt on its clairns of strict separation frorn
them to the top spot, has brought in a wave of Beijing. It has rallied users to its cause, pinging
innovation. Consumers everywhere are the winners. sorne last week to contact Congress. That only emphasised its
Yet there is one reason why Arnerica's crackdown is justified. potential political clout; sorne wavering representatives report-
TikTok has evolved into a broad media platform with rzorn users edly flipped againstTikTokafter their switchboards blew up.
in América alone. A third of American adults under 30 consider The best outcorne is one in which TikToksurvives. lt provides
Til<Tokasource notjustof entertainmentbutof news. Itis there- competition and innovation, as well as fun. The bill before Con-
fore a real concern that it has links to China, whose government gress allows ByteDance to sell up, rather than simply shut down.
is in deep ideological conflict with the west and sees the media If it is unwilling to do so-or if China does not let it-ByteDance
as a tool of propaganda. could float TikTok as a public cornpany. Americans and others
Most countries place sorne restrictions on foreign ownership benefit from freedom of choice. But it is time the same standards
of old media (ask Rupert Murdoch, who becarne an American were applied to new media as old. That requires separating a
citizen befo re taking over Fox). A bid by Abu Dhabi's rul ing fam- platform as large and influential as TikTok from the sway of a
ily for the Teíeqtapii newspaper prompted Britain to announce country as manipulative and ideological as China. •

The Gulf and Africa

Promise and peril

The Gulf's scramble for Africa brings economic rewards and geopolitical risks
cold war African leaders often sided with the dollars of investment. Even that is dwarfed by the UAE, which in
D
URING THE
West or the Soviet Union, extracting from them aid, arrns, 2022 made investment pledges in Africa worth seven times
investment and other things they desired. After it ended, those those of American firms. In the previous ten years it was the
wanting to build roads and ports generally did deals with China. fourth-Iargest foreign direct investor in Africa, behind China,
Today African politícians are like customers in a geopolitical ba- the EU and America. DP World, a Dubai-based ñrrn, runs ports in
zaar as middle powers-incJuding Brazil, India and Turkey-ex- nine African countries. Masdar, a renewables ñrrn, says it will
tend their economic and dip1ornatic reach. Yet it is the rise of the splurge siobn in Africa. In 2020 and 2021 the UAE traded more
United Arab Emirates (UAE)-and to a lesser extent Saudí Arabia with sub-Saharan Africa than America did. Dubai, with its se-
and Qatar-that is the most striking. The Gulfs scramble for Af- cure property rights and light (somewould say lax) financial reg-
rica promises great economic benefits, but also threatens to fue! ulation, is home to over 26,000 African businesses.
horrific wars. Diplomacy comes in concert with the money. The UAE and
Gulf influence stems frorn cash. In November Saudi Arabia Saudi Arabia were invited to join the BRICS at the bloc's summit
held its first Africa summit, at which it announced billions of lastyear inJohannesburg. Qatarand the UA:E increased the num- ..
12 Leaders The Economist March 16th 2024

., ber of their embassies in sub-sanaran A frica five-fold and nearly tions. The UAE, by contrast, is a loose cannon that arms war-
three-fold, respectively, from 2012 to 2022. Saudi Arabia has lords, spreads chaos and provides a haven for corrupt elites.
promised to open a dozen or so more posts. One-third of all new Exhibit A is Sudan, where the UAE has backed the Rapid Sup-
embassies opened globally in 2022 were in the Gulf, driven port Forces (RSF), a genocidal mili tia, which is waging a civil war
largely by reciproca! African diplomacy. against the national army. It is the world's largest humanitarian
The attention will bring benefits to African states facing a crisis, with about 25m people in need of aid. The UAE, which de-
funding squeeze. New Chinese loans granted to Africa slumped nies arming the RSF (the UN deems the allegations "credible"),
by 80% in the four years to 2022 over the preceding four. Africa's seems to be courting a network of strongmen-sometimes with
share ofWestern aid has declined beca use of the war in Ukraine. arms-as part of a contest for influence in the region between
Sorne Western officials hope Gulf countries can fill the gap and the Gulf states. Among the UAE's friends are Muhammad ("He-
help them see off their main geopolitical rival by channelling in- rnedti") Dagalo, the RSF's leader; Khalifa Haftar, a warlord in Lib-
vestment into mines that rnight otherwise end up in Chinese ya; Mahamat Déby, who took power in a coup in Chad; and Abiy
hands (see Middle East & Africa section). Ahmed, who has led Ethiopia into a bloody civil war in Tigray.
Oíl and natural-gas wealth mean that the UAE, Saudi Arabia
Too many warlords and Qatar will be enticingly rich partners for years (see Special
Yet turning Africa into an arena for the arnbitions and rivalries report). But the ripples of rnayhern spreading from Sudan and
of Gulf powers carries huge risks. The Gulf's dynastic autocra- Libya offer a warning: the West m ust see the danger of ou tsou rc-
cies are neither champions of African democracy nor of human i ng its Africa policies to countries that do not share its values;
rights. Nor is China, though it at least tends to prize stability and and African countries should know the risks of letting them-
has been a big financia) supporter of UN peacekeeping opera- selves be used as pawns in someone else's geopolitical games. •

Angry young men

Young men and women are drifting apart

It's complicated. But better schooling for boys might help

EN AND women have different experiences, so you would educated brothers who are struggling in the workplace and the
M expect them to have different worldviews. Nonetheless, dating rnarket are more likely to be resentful, and to blame
the growing gulf berween you ng meo and women in developed wornen for their loss of relative status. And young women, by
countries is striking. Polling data from 20 such countries shows and large, are glad of past progress but are keenly aware that real
that, whereas two decades ago there was little difference be- threats and unfairness remain, from male violence to the diffi-
tween the share of men and women aged 18-29 who described culty of juggling careers and children. In short, most young
themselves as liberal rather than conservative, the gap has women and worryingly large numbers of young men complain
grown to 25 percentage points. Young men also seem more anti- that society is biased against their own sex.
feminist than older meo, bucking the trend for each generation You ng wornen tend to vote for parties of the liberal left. Angry
to be more I iberal than its p redecessor. Poi ls from 27 European young meo, sometimes dismissed as toxically masculine by
countries found that meo under 30 were more likely than those those parties, are being shrewdly wooed by politicians from the
over 65 to agree that "advancing women's and girls' rights has right and the far right. In South Korea their support helped an
gone too far because it threatens men's and overtly anti-ferninist president win power. In
boys' opporrunities", Similar results can be América polls are muddy but sorne pollsters
found in Britain, South Korea and China. Young think young menare souring on the Democrats.
wornen were likely to believe the opposite. In Europe, where many countries offer a kalei-
Unpicking what is going on is not simple doscope of political choices, young male votes
(see International section). A good place to start have helped fuel the rise of reactionary outfits
is to note that young wornen are soaring ahead ·l. such as the AfD in Germany, Confederation in
of their male peers academically. In the Euro- l� Poland and Chega, which surged at Porrugal's
pean Union fully 46o/o of them earn degrees, ._ �t. . . .&. ------i election on March ioth.
versus 35% of young meo, a gap that has doubled since 2002. There is no easy solution to any of this. But clearly, more
One consequence is thatyoungwomen are more Likely than men should be done to help boys lagging behind at school to do bet-
to spend theirearlyadulthood in a cocoon of campus liberalism. ter. Sorne policies that might work without harrning their fe-
Meanwhile, boys outnumbergirls at the bottom end of the scho- male classmates include hiring more mal e teachers (who a re ex-
Iastic scale. Across rich countríes, 28% of them fail to learn to ceptionally scarce at primary schools in rich cou ntries), and al-
read to a basic level. That is true of only 18% of girls. lowing boys to start school a year later than girls, to reflect the
Another big change is that, to varying degrees across the de- fact that they mature later. Better vocational training could en-
veloped world, immense progress has been made in reducing cou rage young meo to consider jobs they have traditionally
the barriers to women having successful careers. College-edu- shunned, from nursing toadministration. Schoolingboys better
cated menare still thriving, too-often as one hatf of a double- would not only help boys. Increasing the supply of educated and
h igh-i ncome heterosexual couple. Ma11y meo welcome these (one hopes) less angry men would be good for the women who
advances and argue for more. However, those among their less- must share the same world. •
Executive focus 13

Deputy Head Th 8 S supports e nrrat n�s pur u t of ry nd nd contr1b t to th over ti d s on m ng 1 t BIS m mber of
of Monet ry no, 1 st b1líty through rntemauon I coo t uon nd me Ban s ent rg d wt Comm n Vou II o ha h hty w1bl
serves s ban IOf ntr b To pur u rs nússlon. pron I mally. th • pons 1ty for rep, r e S t sen I Is n
& Economic th e
S provtd s cerur ba wlth in·d pth natysis nd forums
Department nsrghts on co policy su s and torum f ore ogu nd
(MEO) and He d of bro d lnt u I coo tlo Th � o ry nd Econom e
O panment ( .1EO) nu or the BIS's nomk
Economic An lysls nd co r t EO und n s res rch lys1s ot macro conom cs. meoet ry
& Statlstlcs nú tysrs on cor poi provld s In u na v t ty of t0tums
cr t s pport ror ti : nd
Basel, Switzerland cll t t k of nior e n I bi n rs nd offia Is • lop1ng nd
exoert el I rtrn t
d of Economic AnalySis capa to
San lor tnte tJor Stac cs. of 1h n rl rsh p of rs t th tu ,
ttl m n (B SI MEO prOV!dl drctonn
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a d Ji o ,al stab I 'Y thro h nd St usacs, n r turn.. offcr th opportun1 y ro work t th h b for G , tr
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cofl u s írom mor; u n 60 countr h com utiv mp11'1Vn14'
O adlin or s n or m m r of ED's man ns B S uDy comm d ro qu I opportu ry mpto·"'"""
rol In th m nag ment of stov tor d rs11y mon s tnff
ppllc nons:
1 th April 2024

INTEANATIONAL
ENERGY
FORUM

The Executive Board of the IEF invites applications

for the position of SECRETARV GENERAL

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Recognising their interdependence in the field of energy, the

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framework of the Forum to foster greater mutual understanding and
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towards the climate and sustainable development goals they share.

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to: SGrecruitment@ief.org

Application deadline: 30 April 2024

Ion don c.n 44 (0)20 7256 5085
Please note that only short-listed candidatas will be contactad.
14
Letters The Economist March 16th 2024

Paci ñc, the arrny's new doc- decades the industry has over reporteé in 2015 that on Octo-
Ski someday trine envisions vague ca11.1- invested, res u lting in falling ber 5th 1960, America's nuclear
Climate change is a business paigns of island-hopping real mineral prices and the command centre received
risk for the ski ind ustry that is rather than deterring the actu- ind ustry barely meeting its signals from its early warning
not mentioned in your article al limited objective of China, cost of capital. radar indicati ng that a massive
("Stoked", March znd). By which is to seize Taiwan. You Mineral markets are Soviet nuclear attack was
selling season passes before quoted a Pentagon official who remarkably self-correcting. underwaywíth a certainty of
the first snow, crafty corporate wasn't su re where else to fire a Although higher prices ,�11 be 99.9%. The warning was found
rnoguls have moved most of 155n1m round in the Pacific a conseq uence of rnining to be a false alarm minutes
the financial risk of abad "other than the water". The companies reinvesting a befare the president would
winter onto individual skiers. chinese infantry who land on smaller proportion of their have been required to issue
If climate change shortens the limited suitable beaches of free cashflows, new supply counter-attack orders. The
future ski seasons, this pricey Taiwan, unable to dig into will eventually be incentiv- culprit was a rising Moon,
pastime will become more flooded rice paddies as they try ised. The mining ind ustry will which reflected radar waves
elitistas skiers crowd moun- to assernble forces to seize then be able to generare higher back to the early-warning
tains across fewer potential Taipei, would fear rnassed returns far shareholders and stations in Greenland.
powder days. There's still time arti llery barrages far more than rnake larger tax and other The radar system was
for the American ski industry costly hyper-sonic missiles payrnents to host regions and correct in concluding that it
to learn from Europe about or cyber-attacks. countries. With the right was seeing something big
how to move more skiers sus- ROBERTROSE governance, this should go coming from the precise
tainably to the slopes, protect- Fort Carson, Colorado sorne wayto help the industry direction that a Soviet attack
ing winter sports for ail. tackle the many real ESG would have been launched, but
KRISTOFER PETERSON (envi ronmental, social, go- it was not detecting missiles,
Edinbttrgh What exactly are you digging? vernance) pressures i t faces. only rnoonbearns.
Let's not forget that large NEAL BREWSTER ROBERT CHECCHIO
Skiing recently in Brecken- mining operations are Mining consultant Dunellen, New Jersey
ridge, Colorado, I enjoyed your financia! specu lations foc u sed London
reflections on the dynamics of on mineral assets rather than
the ski-resort business. Unlike mineral production ("In a Dogmatix speakers
your correspondent I was hole", February zath). Big Real levelling up Bartleby's ode to listening
. .
lucky to have bought my "Epic mmmg cornparues rernam lt is worth mentioning that the (Pebruary rrth) struck a chord,
Pass", offering unlimited fixed on accessi ng sizeable single biggest boost to Black- but in reality nobody in the
ski ing, well in advance. This deposits, even when the grades pool could come from the jobs office meeting wants to be the
made the experience a bit less of the deposits are notably low. and tax revenues that flow one who didn't contribute, so
expensive, but it required a Such large, Iow-grade deposits from fracking for gas in the silence is rare. Juniors feel they
leap of faith about weather and necessitate substantial area ("Lifting sands", February must speak, to come across as
snowpack severa! months in investrnents in infrastructure zath). Unfortunatelythe intelligent. Seniors try to
advance. The price increases and capital, generating signif- middle-class eco-warriors who sound casual as they drene on.
have not dented dernand. The i cant waste in the form of large campaign against fracking Those in the rniddle, the doers,
slopes seemed busier com- storage facilities fortailings have little concem for these perform a delicate verbal
pared with tTI)' first trip there (the by-prod ucts of a mine). things. With a serious fracking ballet, insightfu l yet careful
in the 199os. It will be interest- Conseq uently, these projects ind ustry higher gas prices after not to outshine the seniors. As
ing to see how the Epi e concept become mired in intricate the Ukraine invasion would Laurensolivius said to Obelix
will play out in Europe, where permi tti ng processes. have bankrolled the Treasury, when he suffered from stage
there has been much less We need a paradigm shift to As for emissions, more gas fright in "Asterix and the Caul-
consolidation arnong resorts. embrace the concept that typically results in less coal dron": "say somethingt Con1e
Skii ng has beco me more responsible mining extends consumption. And had Britain on, anything! Whatever comes
expensive, srraining family beyond environmental and not been forced to get into so into your head !" And so we do.
budgets, especially si nce larger social considerations. This much debt to buy fracked gas ZUBIN AIBARA
resorts have swi tched to means adopting a new from América then Labour Bt1lach, Switzerland
"dynamic pricing" But the lifts corporate visión prioritising might have been able to keep
in Breckenridge haven't been prod uction over asset its f28bn ($36bn) ayear green-
upgraded much, no seat warm- speculation. What if the future energy plan. Far many towns TheX factor
ing or protective bubbles on of mining pivoted towards across the north of England Please stop, in1mediately,
chairlifts that we have come to srnaller, more manageable this opportunity remains ripe using the phrase "for1nerly
appreciate in Europe. deposits, rather than a handf ul for exploitation. known as Twitter" ("Ali in the
THOMAS MEYER of massive ones? MATIH EW LEES E family", February 17th).
Basel, Switzerland DR DAVI DE ELMO Slieffield BOB HUSTEAD
Profes sor of rock engineering Everg lades Ci ty, Florida
University of British Columbia
Artillery rounds Va11couver Moon shadows
Arnerica's defence establish- Bouncing radar off the Moon Letters are welcome and shoL1ld be
ment continúes to focus on You bernoan the fact that may be an incredible achieve- addressed to the Editor at
. . . The Econom1st, The Adelph1 Building,
capabilities and not on the rrunmg comparues are ment ("Reflections of realiry", 1-11 John Ada n, Street, london WC2N 6HT
speci fic context of a poten ti al investing insufficiently in new February zath), but it almost Emaíl: letters@econom1st.con1
war ("Mission in flux", Pebru- capacity, putting the energy caused a third world war. The More letters ate avaílabte at:
Economist.com/letters
ary zath). When it co111es to the transition at risk. Yet for Union of Concerned Scientists
16

•
•
•• •
•

•
•

That's not ali, folks! ing about the American economy at pre-
sent is not its deceleration but its contin-
ued mornenturn. On February 26th the Na-
tional Association for Business Economics
published its quarterly survey of profes-
sional economists. Three months ago the
median forecastwas for growth of 1.3% this
WASHINGTON, DC
year; now it is 2.2o/o, just short of last year's
Against the odds, America has escaped a hard landing,
2.5% growth. Yet the steady expansion has
but there are still pitfalls ahead
not stopped in flation from fal ling: the
HICH CARTOON character does the page). During that same time, the euro area same economists see it receding toan an-
W American economy most resemble?
The consensus view in recent years, as pro-
has expanded by only 3%, Japan a piddling
1% and Britai n not at ali. América is the
nual rate of 2.1o/o by the end of 2024 (using
the Fed's preferred gauge), almost bang on
pou nded by a former Treasu ry secretary, a only big econorny that is back to its pre- the central bank's target of 2%.
former president of the New York Federal pandemic growth trend. It is not just econornists who are up-
Reserve and the chief econornist of a big Alan Blinder of Princeton University beat. America's stockmarkets keep hitting
asset manager, is Wile E. Coyote, the has examined the 11 previous episodes over new records. Corporate earnings are set to
dogged but hapless adversary of Road Ru n- the past six decades in which the Fed raised rise strongly this year, Ordinary folk, too,
ner. They were referri ng to the unfortunate interest rates to quell inflation. Most end- are growing more optimistic.
predator's tendency to careen off a cliff, de- ed at the bottorn of the metaphorical can-
fying gravity for a few moments befare yon, in recessions. The Fed did manage to Meep, meep
plunging into the canyon below. Arnerica's guide the economy through a couple of How exactly has America done this? One
run of heady growth, the analogy implied, less harmful descents, but has only once way of looking at i ts run of strength is to fo-
could not persist amid rarnpant i nflation: a previously achieved a painless one, in cus 011 dernand. Every elernent of it-con-
reckoning was inevitable. But in fact, since 1994-95. Mr Blinder thinks its current sumption, investment, foreign trade-
late 2022, it is inflation that has plunged, steering is the most impressive, however, added to growth last year, and may well do
whereas the economy has pulled off some- given the starting point: the economy was so again this year. Three factors have un-
thing that the coyote never rnanaged and gripped by rnuch higher inflation this time derpi nned this broad-based strength: buff-
leapt across the canyon. around, forcing the Fed to raise in- ers, fiscal catalysts and diversification.
since the end of 2019-a period that in- terest rates rapidly. "we're there. We've had When the Fed jacked up rates in 2022, it
eludes the covid-is pandemic and its after- the soft Ianding," he says. seerned inevitable that the abrupt tighten-
math-America's economy has grown by Calling ita soft landing may in fact be ing would hobble the economy. That, after
about So/o in real terms (see chart 1 on next an understatement, for what is most strik- ali, was the point: to bring down inflation ..
 The Economist March 16th 2024 Briefing America's economy 17

� by slowing growth. The median projection

of Fed officials at the end of 2022 was that -
Ándale, arriba!
"These policies are starting to show up in
the data. It delays the tirning of a cyclical
the unernployment rate would rise by a G7 countries, GDP, 2019=100 slowdown," says Satyam Panday of s&P
percentage poi nt last year: man y others as- 110
Global, a credi t-rati ng agency.
sumed the darnage would be rnuch worse. Fi nally, América, as a big prod ucer of oíl
Instead, ít barely budged, remaining below 105 and gas, is benefiting from high prices
4 o/o, el ose to a 50-year low. elsewhere wi thout su fferi ng as much from
That is because both consurners and 100 them itself. Natural gas costs about a quar-
businesses have been insulated to sorne ter of what it does in Europe, for example
degree frorn the chill of higher rates. The 95 (see chart 2 on next page). Last year Ameri-
insulation is partly a product of the giant ca became the world's biggest exporter of
Rest of G7
stimulus doled out by both the Trump and 90 the liquefied sort (LNG). No wonder that
Biden administrations at the height of the foreign trade added about o.6 percentage
pandernic. This rnarked America out ar the 85 points to Arnerica's growth rate last year.
time: in 2020 and 2021 its government d ef- 2019 20 21 22 23* 24t
Strong dernand is, however, only half
icit averaged 14% of GDP. In the euro area !l h.e: IMI *(stnnat,; 1 Forecast
the story. Were it not for a similar expan-
the average was 6o/o. Both directly (hand- sion of supply, all of the spending would
outs) and indirectly (a quicker economic have simply translated into more upward
recovery) this support padded Americans' Yet not ali deficits are equally stimula- pressure on prices. That inflation has in-
bank accou nts. tive. Unlike the gusher of spending when stead eased markedly is a sign of growth in
Those savings have lasted a surprising- covid struck in 2020, last year's deficit America's productive capaciry, At its most
Iy long time. Researchers with the San stemmed in part frorn weak revenues (tax- basic an econorny's a bi lity to su pply goods
Francisco Fed have estimated that house- es on capital gains took a hit) and technical and services is limited by how many of its
holds' excess savi ngs (compared with the factors (high rates red uced the Ped's pay- people are working and how productive
pre-pandemic trend) peaked at $2.1trn in ments to the Treasury). Scholars at the they are. Both of these factors have in-
August 2021. Early last year they thought Brookings Institution, a think-tank, find creased strongly in América of late.
this stash would be used up in a matrer of that the federal governrnent's fiscal stance Start with the labour force. América
months. But after data revisions towards only modestly boosted growth last year. now has about 158m workers, nearly 4%
the end of 2023, they concluded that Yet in another way fiscal policy has more than at the end of 2019. In part that is
households were sitting on an extra been an economic engine, and may still be because a higher share of working-age
$4oobn, enough to last through the first revving up. Three big spending packages adults are employed. Yet by far the biggest
half of this year. passed by Congress (on infrastructure, driver of the expanded workforce has been
clean tech and semiconductors) are i ncen- irnmigration. The American-boro labour
Suffering succotash no more tivising prívate firms and state govern- force is a bit smaller than it was on the eve
As time has gane on, the distribution of the ments to spend lavishly as well. Construc- of the pandemic. The foreign-born labour
excess savings has skewed towards richer tion of faetones is booming as makers of force, in contrast, has swollen by more
Americans. They normally spend a smaller electric vehicles and semiconductors ex- than 4m, or16%, since the end of 2019.
proportion of thei r i ncome than the poor. pand operations in América: altogether, in- While most of those entering via Amer-
But Ellen Zentner of Morgan stanley, a vestrnent in manufacturing added about ica's southem border end up in blue-collar
bank, calculates that the top fifth of the 0.4 percentage points to GDP growth last jobs, there has also been an increase in irn-
population by income has recently ac- year. Investment in infrastructure has migrants destined for white-collar work.
counted for 45o/o of consumption, up frorn been slower to rise but seems to be clímb- Student visas have rebounded strongly
39o/o before covid, thanks in part to "re- ing now, too, with state and local govern- since the pandernic, with the total last year
venge" spending on travel and luxury ments piggybacking on federal funding for four times higher than in 2020. That has
goods. "Wealthy consumers have drawn highways, power grids, airports and more. created a big reservoi r of young, ed ucated �
down the.ir excess savings much more ag-
gressively than their historical behaviour
would have suggested," she says. This
prodigality, in turn, has helped to propel
the economy.
Another layer of insulation has come
from fixed-rate lending. Home-buyers, far
example, often obtain 30-year fixed-rate
mortgages. The average interest on the
stock of these is now about 4 %, less than
befare the pandemic and well below the
8% rate on new mortgages last year. That
has drawbacks: in order to keep their inex-
pensive mortgages, people who might
otherwise have moved are staying put. But
it does mean that many Americans do not
feel the full force of higher rates.
Fiscal policy has also added to Arneri-
ca's economlc rnornentu 111. The govern-
ment is running a gaping deficit. After nar-
rowing to about 4 % in 2022 it was back to
7.5% of GDP last year, a level typically seen
only duringwars or recessions.
18 Briefing America's economy The Economist March 16th 2024

-
I tawt I taw Putin attack
in place to varying degrees. Buffers far
businesses and households are, by defini-
able, America's success has engendered
another difficulty: how to unwind the rate
Natural-gas prices*, $ per million BTUst tion, thinner than two years ago, befare the rises of the past two years, No one knows
80 Fed jacked up rates. But the cheap loans with any certainty what the perfectinterest
that consurners and businesses took out rate is for the economy=the neutral Jevel
Euro pe befare inflation struck will continué to which is neither a spur to economic activi-
60 shield thern from higher interest rates for ty nora drag on it. But it is clear that the
sorne ti me to come. Economists wi th Gold- central bank's current range for short-term
40 man Sachs, a bank, have calculated that the rates of 5.25-5.5%, the highest in more than
average rate on corporate debt will rise 20 years, will weigh on growth. The q ues-
20 from 4.2% in 2023 to just 4.5% in 2025. "At tion for the Fed is when to begin to cut, and
United States
sorne point higher rates will start to bite. how quickly.
But 111y take is that we may sti 11 have a little In this sense, declarations that America
o
bit more runway," says Mr Panday of S&P. has achieved a soft landing look prerna-
2005 10 15 20 24
The government's investrnent splurge ture. It is true that growth has been rernark-
\u u, conlr I í1>rrh rlC'c1r i11v,1lli 18111 h thcmul uuüs
S urce: ISf G V-/, ,rkspJGe
in manufacturing and infrastructure is far ably resilient and that inflation has soft-
from over. Indeed, as procedures for allo- ened. But the final stretch of squeezing out
cating the rnoney are established, the fiscal inflation may prove arduous given that
� workers far cornpanies to hire. Looking at stirnulus 111ay well accelerate. The Depart- prices are still rising atan annual pace of
data that i ncl ud es asyl u m-see kers, Tiffany ment of Commerce hasjuststarted approv- about 3%, above the Fed's 2% target. At the
Wilding of P11v1co, an investment firm, es- ing big grants far chipmakers, such as a same time, the central bank must start act-
timares that about 3m imrnigrants arrived $1.5bn award forGlobalFoundries in Febru- ing soon to bring rates back to a more nor-
in America last year, u p frorn un in pre- ary. Meanwhile, more LNG export terrni- mal level. Until both are achieved, things
pandemic years. nals are coming online, which shou Id li ft could yet go awry. Worriers often focus on
Even so, expansion of the labour force American energy exports yet higher. a possi ble resurgen ce in prices. But the big-
does not in itself account for the econ- On the supply side, imrnigration may ger danger may be that the Fed overpre-
omy's overall growth. Consider the final slow as the political climate turns harsher, scribes its tough medicine. It is in this con-
quarter of last year: GDP rose by 3.2% atan bu t man y recent arrivals are still joining text that rising consurner debts and slow-
annual rate but total hours worked in- the labour rnarket. The Congressional Bud- ing labour markets look troubling.
creased by just o.6%. This is only possible get Office estirnated in February that the Jerome Powell, chairman of the Fed, has
thanks to a surge in productivity. Workers current wave of immigration would, even said that to deliver the ideal glide path far
in non-farm business were about 2.6o/o as it slows, add about 0.2 percentage points the economy, the central bank should start
more prod uctive than ayear ago, accordi ng to annual GDP growth from 2024 to 2034. reducing rates befare inflation hits 2%.
to official estimares. To be clear, no serious As far as productivity goes, it is notoriously The Taylor rule, a formula far gauging the
econornist thinks such productivity difficult to observe in real time but opti- appropriate leve) of interest rates, suggests
growth is sustainable. since the end of 2019 mists think the improvements may soon that the Fed may be waiti ng too long. Gi ven
labour productivi ry has grown by 1.6% a becorne more evident. "This is potentially that the rule irnplied, correctly, that the Fed
year, Jess than a tenth of a percentage point going to give usa stronger foundation far was being slow to raise rates as inflation
faster than its pace from 2007 to 2019. growth than we had in the last economic surged in 2022, Mr Powell might want to
Nonetheless the jump in productivity cycle," says Ms Coronado. pay it more heed now.
over the past year is notable. The si mplest "Higher rates are like terrnites on the
explanation is that pandemic frictions Debt-rackin' varmints econorny," says Mark Zandi of Moody's An-
have disappeared as supply chains have re- It is not al] roses. The labour rnarket is alytics, a research cornpany. "With each
turned to normal, and that this has shown showing a few cracks, Hiring has trended passing day, they dig deeper into the foun-
up in the data asan improvement in pro- down since early 2022. Fewer workers are dations, and at sorne point a wind is going
ductivity. Sorne economists, though, are changing jobs (see chart 3). The main rea- to blow the building over." America's post-
tempted to conclude that fundarnentals son that unemployrnent has remained so panden1jc econo111y has been a n1arvel, es-
may also be changing. One possibility is low is that lay-offs have been modest. Yet pecially in comparison to other countries.
that increased competition in the labour that may be a sign not of confidence, bu t of But it will not be impervious to high inter-
market is engendering a reallocation of concern. Cornpanies may be hoarding est rates far ever. •
workers to higher-paying firms, which are workers, afraid to fire them after struggling
potential ly more prod uctive, according to
research by David Autor of MJT and Arin-
mightily to hire thern, What is more, A111er-
ica's doughty consumers may at last be los- -
What's down, doc? El
drajit Dube and Annie McGrew of the Uni- ing stearn. Delinquencies on credit cards United States
versity of Massachusetts Amherst. and auto loans soared last year, rising
Julia Coronado of MacroPolicy Perspec- above pre-pandernic levels, according to Quit rate, o/o of �ages*,o/oincrease
tives, a research firrn, notes that the rela- the New York Fed. "It's concerning to see employed people on ayear earliert
tive scarcity of workers has also prornpted that even befare the unemployment rate 4 8
firms to invest in labour-saving technolo- increases," says Ms Wilding.
gy, ata time when businesses software has The finance industry, too, has sorne ob- 3 6
been getting better. "It's possible that like vious vulnerabilities. Commercial proper- 2 4
the 199os we're in the middle of a stronger
prod uctivity cycle, but that this time it is
ty threatens to blow a hale in loan books, a
problern that will be particularly acute for , 2
more focused on technology far business- smaller lenders. And rnany banks, big and
o 1,,,,,111, o
es rather than consurners," she says, small, are sitting on hefty paper losses on 111111111,
2015 20 24 2015 20 24
Can the good times roll on? The factors their bond-holdings because of the rise in
• Mediar1 hourly \•1<1ges • T nr � rn inrJ1 mov111g av"rdge
that have Jed to Arnerica's strong perfor- interest rates. OlllCCS: Atl,111ta F �l BLS
inan ce overthe past couple of years rernaín Even if these problems prove manage-
 19

Education leased a landmark report, "A Nation At

Risk", which warned of a "rising tide of me-
Soft bigotry diocrity" in the country's schools. The re-
sponse was swift. Within five years 45
states had raised grad uation requirernents:
and more than two dozen had introduced
other reforrns, incl uding more compre-
American high schools are dropping academíc standards. hensive curriculums and higher salaries
for teachers. Sorne states also started re-
Low-achieving pupils may suffer the most
q ui ring grad uates to pass "minimum-corn-
this period pupils notched up gains in petency" exarns, standardised tests intro-
S seem an improbable setting for an edu-
PRINGFIELD, IN MASSACHUSETTS, might
course credits and grade-point averages. d uced in the 197os that evaluated pupils'
cation miracle. The city with a population Yet SAT seores fell (see chart ion next page). ability to do eighth- or ninth-grade level
of 155,000 along the Con necticut river has a Results from the latest Programme far In- English and maths.
median household income half the state ternational Student Assessment (PISA), an But as graduation requirements were
average; violent crirne is comrnon. Yet international test of 15-year-olds, show toughened u p, coursework was watered
grad uation rates at the city's high schools that maths and reading literacy are flat or down. A survey conducted in 1996 by Pub-
are surging. Between 2007 and 2022 the down. An analysis by 'the Economist sug- lic Agenda, a policy research group, found
share of pupils at the Springfield High gests that schools are lowering academic that just half of public high-school stu-
School of Science and Technology who standards in arder to enable more pupils to dents felt that they were being challenged
earned a diploma in four years jurnped grad uate. And the trend is hurting low-per- acadernically. Another survey in 2001
from 50% to 94 %; at neighbouring Roger forrning pupils the most. found that only a quarter of pupils thought
Putnam Vocacional Technical Acaderny it América has fretted about academic that their teachers had high expectations
nearly doub]ed to 96%. standards at its public schools for decades. of thern. Even the federal governrnent ac-
Alas, such gains are not showing up in In 1983 the Department of Education re- knowledged again that academic stan-
other academic i ndicators. At Springfield dards were falling short. A report by the De-
High seores on the SAT, a college-adrnis- partment of Education found that more
7 Also in this section
sions test, have turnbled by 15% over the than a tenth of rnaths coursework taken by
same period. Meas u res of English and 21 Unorthodoxways the class of 2005 consisted of primary- and
maths proficiency are down, too. The pass middle-school-level material. Only a third
21 Choo choo choices
rate on advanced-placement exams has of algebra 1 stu den ts anda fi fth of geometry
fallen to just 12% cornpared with a national 22 Recriminalisingdrugs students received "rigorous" instruction.
average of 60%. Grading got easier, too. The best evi-
22 Troops on NYC's subway
The trend at Springfield High is ali too dence far this comes f rom comparisons of
common. Between 2007 and 2020 the aver- 23 Health-care research classroom grades with performance on
age grad uation rate at pub]ic high schools state exams taken at the end of the school
24 Lexington: On "Dune"
in America leapt frorn 74 % to 87o/o. During year. A study by Seth Gershenson of Amer- ..
20 United States The Economist March 16th 2024

� ican University found that between 2005

and 2016, 36% of North Carolina public-
-
Graduation inflation a passed in 2002. It req ui red states to track
the share of students grad uating in four
school studenrs who received Bs in their United States years and set annual targets for irnprove-
algebra i courses failed their end-of-course High-school ment. Schoo)s that .fai led to hit their tar-
Average SAT seo re gradua tion rate", �ii
exarns. Pupils with Cs failed 71% of the 1,250 90 gets faced sanctions, i ncl uding possi ble
time. Another study, by Chris Clark of closure. Although such policies were well-
Georgia College & srate University, ana- 1,200 _ -
85 intentioned, they had perverse ourcornes.
lysed maths courses at Georgia public high 1.150 80 To keep graduation rates up, teachers de-
schools in 2007 and yielded similar re- vised creative ways of raising grades: al-
1,100 75
sults. "So111e schools and school systerns lowing students to retake exams, removing
appear to be inflating course grades," Mr 1,050 penalties for late assignments, adjusting
Clark concluded, "while others appear to grading seales. "We're doing what I call
65
hold their students to higher standards," 'grading gyrnnastics'," says Eric Welch, a
Such evidence suggests that acadernic 1' 1 1, 1, 1 ji social-studies teacher in Fairfax County,
standards atAmerican high schools are too 1970 80 90 2000 10 23 Virginia. "There's a lot of pressure to hit the
'-1 our yt::ar ra e
low. But are they getting worse? To answer Sourt s: U DC'J�1rt1ncri1 of Edu�tlo11, Collegc Board
metric, regardless of how you do it," ex-
this, The Economist assembled data on plains Peter VanWylen, a data consultant
graduation rates and standardised test and former teacher in Memphis, Termes-
seores at 3,000 high schools across six composition changes over time in ways see. "Nobody wants to lose their job and so
states-Colorado, Georgia, 11 li nois, Massa- that probably bias seores downward." Such there's this pressure to get the number
chusetts, Michigan and North Carolina- "cornpositional effects" do not appear to where it needs to be."
for school years from 2007 to 2022. explain ou r results, however. The share of Other concerns are also at work. "The
students taking the ACT or SAT in our sam- push for educational equity, and in partic-
Doing the maths ple actually fell from 78% in 2007 to 68% in ular racial equiry, has been used in a lot of
We found that four-year graduation rates 2022. This would suggest that, if anything, places to push against higher standards far
in our sample inereased during this per- our estimares of graduation-rate inflation high-school grad uation," says Morgan Po-
iod, even as test seores fell. Gains were may be too low, rather than too high. likoff of the University of Sou thern Califor-
greatest in high schools with the lowest You might expect policyrnakers to be nia. When New Jersey debated new testing
test seores. In 2007 schools with seores on scrambling to shore up academie stan- benchmarks last year, one board-of-educa-
the SAT or ACT, another college-adrnissions dards. In fact, they are doing the opposite. tion mernber argued that a higher standard
exam, in the bottom tenth of our sample In May last year New Jersey's board of edu- would be "unfair" to black and Latino stu-
grad uated half of their pu pi ls; in 2022 they cation voted to lower the passing score on dents in urban districts. Oregon's deeision
graduated two-thirds. As low-performing the state's high-school graduation test, to drop its graduation exan1 in November
schools have passed more pupils, the rela- saying the current standards had "adverse was based in part on a report by the educa-
tionshi p between test seores and gradua- impacts" on students. In November Ore- tion department whicl1 concluded that the
tion rates has weakened (see chart 2). gon ed ucation officials scrapped its "es- test produced "ineq uitable outcomes" for
Just how far has the acadernic barbeen sential skills" grad uation exams in maths, "historically marginalised" groups.
lowered? To quantify this, we conducted a read i ng and wri ti ng. At least four more
regression analysis of graduation rates be- states-Florida, Massachusetts, New Jer- Must try harder
tween 2007 and 2022 that controlled for av- sey and New York-are considering doing Lowering standards, it is thought, can help
erage ACT or SAT seores, dropout rates and awaywith their own exit exams. TnJanuary narrow such achievement gaps. Yet it may
sehool year. If academic standards were Alaska's board of education voted to lower have the opposite effect. A recent working
consistent over time, we would expect no proficiency standards for the state's read- paper by Brooks Bo\vden, Viviana Rodri-
underlying trend in graduation rates from ing and maths exams. guez and Zach Weingarten of the Universi-
year to year. Tnstead, we fou nd that grad ua- The trend towards weakening stan- ties of Pennsylvania and Texas at San Ant-
tion rates drifted upward, even after eon- dards can be blamed in part on No Child onio analyses how a more lenient grading
trolling for changes in test seores and Left Behind, an education-reform law poHcyintroduced by North Carolina public
dropout rates, high schools in 2014 affected effort and ac-
Our analysis suggests that high schools
are graduating thousands of students who,
-
UnSATisfactory El
ademic performance. The authors found
that after schools implemented the new
not long ago, might not have made the United States, setected states= grading scale, which led to more As and
grade. So111e states have lowered the bar fewer Fs, students with low test seores
High-school
more than others. In Illinois grad uation • 2007 • 2022 graduation ratet, % showed up to class less often and put in
rates are about one percentage point high- ====s=��===.===.====v====,c====;¡==cs¡===;-==
100 less effort. The attendance of high-scoring
er than we would expect based on acadern- 90 students did not change. Although the
ic performance alone; in North Carolina policy led to slightly higher graduation
80
they are nearly eight points higher. Overall, rates, it also eontributed to wider gaps in
\Ve found that public high schools in our 70 G PAS and standardised test seores between
sarnple are inflating graduation rates by 60 l1igh- and low-achie,,111g students.
roughly four percentage points compared so This suggests that policies that lower
with 15 years earlier. 40
the bar may harm the very students they
Scepties will point out that the test-tak- are meant to help. "I don't thi nk we're help-
ing population is significantly different to- zso aso sso toso 1, iso 1.250
ing anybody by handing out higher grades
SATscore*
day than it was 15 years ago, and that this or giving out graduation certifieates," says
*Col, uado, Georgia, l hr l(.u, � ,o;,.;x1cnuseltsi
may be making test seores look worse than M1 hlgan ,111tl North C,1rol111a lt our year rare Dr Bowd en, one of the au thors of the study.
they actually are. "If more and more stu- �f or srate lhat ,1dn1111lslered the ACl, seores Better instead to set expectations high,
dents are sitting for these tests," says v..ere, cnverted to equlvalem SAT seores reekons Dr Polikoff. "People rise to the ex-
ourLes: State doparun sus of «lu (1t1011; 111( fconorntst
Thomas Dee of Stanford University, "the pectations you set." •
 The Economist March 16th 2024 United States 21

Orthodox Judaism tage: according to the organisation for the Passenger rail in America
Resolution of Agunot, a non-profit group,
Sister Lysistrata there has been a sharp rise in the n u mber Choo choo choices
filing nuisance lawsuits claiming that
women demanding gets are harassing or
defaming thern.
The intractability of it all rnade the
WASHINGTON, DC JUST SOUTH OF CHAMPAIGN
American wives finally go for the nuclear
Ultra-OrthodoxJewish women Is Amtrak's investment and
option. Those who keep i llicit smart-
are staging a sex-strike ridership boom sustainable?
phones tucked away in underwear draw-
N ARISTOPHANES's PLAY Lysistrata", a ers-internet is largely forbidden among T 7PM ON A Friday night, the Illini ser-
I A
u

young Athenian woman persuades the the ultra-Orthodox-passed along the vice, a train that runs frorn southern Il-
women of warri ng Greek states to deny plan. The idea was simple: withhold sexto li nois to Chicago, ought to be pulling into
their lovers sex in protest at an ongoing get your man tocare enough to press other the college city of Champaign. When your
war. Together they vow not to raise their rnen to act. In a cornrnunity where wornen correspondent was on it in early March, it
"slippers to the roof" or crouch down be- are expected to shave and cover their heads stopped short after the trai n coming in the
fore a man "like a lioness on ali fours". for modesty and to marry near-strangers as opposite direction broke down. For three
Soon bitter conflict erupts between the teenagers, sorne are sayi ng no to sex for the hours, passengers were trapped roughly
sexes and an angry chorus of rnen declares first time since they can rernember. 200 yards south of the station. At sorne
that there is no wild beast harder to tame Many women however, including Ms point a student who had been loudly corn-
than the wornan. serkowitz, don't quite know what to make plaining to the conductor quietly opened
More than two millennia later women of rhe protest. Louder voices are agai nst it. the <loor and walked off into the night. A
in Kiryas Joel, an ultra-orthodox Jewish Herschel Schacter, a prominent rabbi who li ttle after iopm the trai n finally shu nted
enclave an hour outside New York City, are runs the rabbinical school at Yeshiva Uni- its way to the platform and the rest of the
carrying out a similar strike. According to versity, declared the strike to be a violation passengers alighted. The next morning
their leader, Adina Sash, 800 wornen re- of Jewish law and warned it could wreck your by now rather grumpy correspondent
fused to sleep with their husbands last Fri- marriages. Sorne young Orthodox menare proceeded to Chicago by bus.
day night, a time when intimacy is consi- calling Ms Sash a stuksa, a derogatory Yid- Such stories of travelling by train in
dered especially holy. More have since dish term for a gen ti le wornan, America are sadly common. The world's
joined the cause. Unlike the Greeks they In the story of Aristophanes's "Lysistra- biggest econorny has fewer miles of elec-
are not protesting against war but rather a ta" the carnal deprivation q uickly becomes trified railway than Iran. Only in the North
religious system in which men can shackle too much for the Greek men to bear. The East Corridor (NEC) between Boston and
women to unwanted marriages. play concludes with a lustful bunch of Washington, oc, do intercity trai ns run
Under Jewish law a divorce is not final- blokes brokering a truce between Athens even vaguely like trains in other rich coun-
ised until a man gives a woman a qet, a 12- and sparta, justas the women demanded. tries. Elsewhere, Mennonites, who do not
line letter written in Aramaic that declares Ms Sash hopes for her own sort of peace use cars or fly, make upa remarkable share
her no longer bound to him. Three rabbis deal-that Ms serkowitz be freed befare of passengers, And yet as bleak as it can
must sign off on it. That has led to a global the Sabbath sets in at d usk on Friday. seern, Amtrak, the national rail carrier, is
scandal where abusive men leverage gets Asked if she plans to use this tactic in in fact recovering well from the pandemic.
for money and custody of children or with- the fu tu re, she says she does not in tend to In the latter half of last year, ridership was
hold them to force chastity and singlehood incite more "ferninist terror". The point is just 3% below its levels in 2019-previously
on past partners. instead to teach the next generation of reli- the firm's best-ever year. And through his
In Kiryas joel, an insular place where a gious girls that if conventional methods of infrastructure law of 2021 President Joe Bi-
woman must ask perrnission from her rab- protest fail, they can find new ones. • d en, an Amtrak superuser as a senator, has
bi to report domestic violence to the cops, put aside $66bn for investment in passen-
29-year-old Malky Berkowitz has begged ger-rail infrastructure. Is a new golden age
for a get for four years. Her husband Volvy of train travel down the tracks?
has refused despite petitions from reli- Tl1e biggest recovery at the rnornent is
gious authorities. She is just one of many. on the NEC, an electrified track largely-
"Malky is the face of every wornan who has owned and rnaintained by Arntrak directly.
fought and gane through the systern like a In 2023 trains there carried 12.7m people, a
docile, dernure, obedient sheep," says Ms record high, and about 43o/o of ali Amtrak
Sash. Estimates of the number of "chained" passengers in total. The trains are well
wornen around the world, known as aqu- used in tl1e north-east because they con-
nor, range from hundreds to thousands. nect dense city centres and are nicer than
Their advocates have tried to get secular the alternati,res. ''It's n1ore enjoyable and
courts to recognise get-refusal as abuse. In more comfortable" than flying, says Miles
Britain a zozi amendrnent to the legal cede Stanley, a regular passenger between Bos-
deerned the practice criminally "ccercive": ton, New York and Wasl1jngton. Ticket rev-
ene year later the first man was jailed for it enues on the corridor easily cover the cost
for 18 months. But in America change is of operating the trains, and generate a sur-
coming more slowly. pl us used for maintenance.
Crirninal-justice reforrners, who police Elsewhere, rail is either directly subsi-
over-policing, have pushed back on vic- dised by Congress (for the long-distance
tims'-rights groups that want to increase lines) or by state governments (for the
penalties and make egregious cases felo- rest), and trains travel on tracks owned by
nies. MeanwhiJe recalcitrant men are freight companies, ali too infrequently.
working the legal systern to their advan- Getting gets got Passenger nu1nbers are recovering on ..
22 United States The Economist March 16th 2024

� those trains too, but far less fast than on fewer loss-rnaking long-distance trains. erates in 46 of the lower 48 states, and in
the N EC. It <loes not help that ageing rolling Yet as Jim Mathews, the president of the 251 congressional districts. "It is a little
stock means those journeys are often get- Rai 1 Passengers Association, a lobby group cynical," Mr Mathews admits.
ting worse. Derailments are absurdly com- far riders, is keen to point out, Amtrak is Far now, there is so much money
mon, as are crashes at level crossings. Your more Iike a govemrnent agency than a around that the firrn can invest in both. On
correspondent was once delayed severa! company. Its bosses are appointed by the the NEC, a civi l-war-era tunnel near Balti-
hours on the City of New orleans. a long- president and each year it has to be funded more where trains have to slow to a crawl is
distance train, by a frozen whistle. by Congress. And so the firm has generally being rebui lt, something that ought to
If Amtrak were a normal cornpany, it tended to spread money around the coun- have happened decades ago. On the long-
would pour rnoney into the NEC and run try to win polltical support. Already it op- distance lines, new trains are being pro-
cured. But investment spending must be
re-authorised in 2026, notes Yonah Free-
mark, of the Urban Institute, a think-tank.
Moving the needle Another risk is that infrastructure-act
rnoney by law can be spent only on invest-
ment, not operationaí costs. Last year
NEW YORK
House Republicans proposed a 64 % cut to
Time is called on Oregon's decriminalisation experiment
Arntrak's day-to-day budget-which if car-
usually cheerful places. passed a measure recrirninalising the ried outwould makeinvestment pointless.
F
LORISTS ARE
But Gifford's Plowers, in downtown possession of drugs. The governor, Ti na Sorne rail boosters have bigger ideas.
Portland, has been going through it of Kotek, has said she will sign it. On March 8th Seth Moulton, a congress-
late. It's been broken i nto three ti n1es and Overdose deaths have spiked in Ore- man frorn Massachusetts, filed a bill pro-
ernployees have been attacked and even gon, increasing by 42% in the year to posing $205bn in investment in high-
bitten, saysJim Gifford, who has been septernber 2023 (cornpared with a na- speed rail. He worries that Arntrak is "try-
running the store far half a century. Mr tional increase of 2%). Researchers dis- ing to recreate services from the 193os". In-
Gifford blarnes oregon's decrirninalisa- agree on how rnuch decrirninalisarion stead, he says it ought to build a brand-new
tion of the possession of drugs, which, versus the spread in fentanyl is to blarne, fast train Iine, of the sort the japanese or
he says, has led to more "people in drug bu t non e thinks that the state's experi- French have. This, he says, should be in
episodes" corning to his shop. "A blue ment managed to decrease deaths. Ore- Texas. "Showing that high-speed rail can
city in a blue state should be leading," the gonians are frustrated. Open-air drug use succeed in a red state and get a lot of Re-
lifelong progressive Dernocrat says. "But has become particularly blatant. publican support would change the con-
also not forgetting about the people that The replacement law makes the pos- versation," he says. Indeed Amtrak is work-
work hard and play by the rules." session of a srnall arnount of drugs a ing on a proposal to do just that, in partner-
In 2020 Oregonians voted to decrirni- misdemeanour crirne punishable by up ship with a firm Mr Moulton u sed to work
nalise the possession of small amounts to 180 days in jail. It <loes provide paths to for. It's certainly a platforrn. •
of hard drugs, including fentanyl, meth- addiction care, by offering drug offend-
amphetarnine and heroi n. It was the first ers the chance to go d irectly to detox
(and so far only) state in the country to facilities instead of jai l (and to try i t New York City
do so. The change was a massive experi- again if the first time doesn't work). "It's
ment in treating addiction as a public- time to reset our guardrails," Andy Men- Tunnel troops
health problern. But the state has now denhall, the head of Central City Con-
concluded that the experirnent failed. cern, an addiction-services provider in
This month, in the face of ever-increas- Portland, told lawmakers, He pointed to
ing overdose tates and public complaints people who found choosing berween
THE 7 TRAIN
such as Mr Gi fford's, the Democratic- prison and treatrnent to be a "powerf ul
What to make of a military show
controlled legislature overwhelmi ngly part of their pathway of recovery'.
of force on New York's subway
Praising the bi 11, Paige Clarkson, the
dístrict attorney in Marion County, be- have seen it ali in the sub-
N
EWYORKERS
lieves that the new provisions will aJlow way. They watch in appreciation as a
prosecutors to focus on drug dealers rat carries a slice of pizza down a staircase.
while prioritising treatmenr for addicts. They feel powerless when someone in the
"Police, sheriff's deputies, district at- throes of a mental-health crisis shouts and
torneys, we don't want to criminalise staggers on a subway platform. They are
addiction," she says. "We want to use the u plifted or perhaps annoyed when "Show-
criminal laws to motívate those individ- ti me" dancers backflip and hang fron1 car
uals to get healthy," Oregon's new regirne handles and pales. Yet the recent arrival of
would still be quite enlightened. armed soldiers near subway turnsti les has
But its drug experirnent is likely to been unnerving.
becorue a cautionary tale anyway, says Last week Kathy Hochul, New York's
Floyd Prozanski, the state senator who Democratic governor, deployed 750 men1-
led the charge in enacting it. Although he bers of the National Guard as well as 250
still believes in the mission, Mr Prozan- state poi ice to assist New York City's poli ce
ski recognises that advocates are going to (NYPD) in searching bags at sorne subway
"have to rebui Id the confidence of peo ple stations. It is part of a plan ai n1ed at i m-
not only in oregon, but around the coun- proving subway safety, along with adding
try. And realise that when we imple- n1ore cameras and in1plementing a pilot
Oregone mented it, v..re did it wrong." scheme to treat those suffering severely
from n1ental illness. ..
 The Economist March 16th 2024 United States 23

� Violent cri rne in the city has decli ned so Dr Sanghavi, frorn over 75 institutions
far this year, but crime on the subway is a across America have signed a letter in prot-
different story: it rose by 47o/o in January, est. They clairn that the new restrictions
year over year. Most of that was down to will jeopardise ground-breaking research.
more thefts. The vast majority of the sys- América does not have a national
tern's 4n1 daily riders travel without inci- health-records systern, so the CMS nurn-
dent. However, the abundance of individ- bers are the best data available, Overa third
uals in crisis, coupled with sorne high-pro- of Americans are covered by CMS, and over
file attacks, has raised alarms. A conduc- rbn medica} clairns a year are processed
tor's neck was recently slashed. A woman through the agency. This makes it a trove
lost her feet after a man pushed her onto for researchers studying anything from
the tracks. A teenager fatally shot a man in health-care privatisation to the causes of
a Bronx station. Eric Adams, the city's the opioid epidemic.
mayor, deployed 1,000 cops to the subway, The agency says it is changing the rules
at great expense and with some success. over concerns for data security. On the face
Ms Hochul decided ir wasn't enough. of it, that sounds reasonable. CMS had a da-
There is a long history of political point- ta breach just last year. sensitive personal
scoring between New York City mayors information, such as social-security num-
and state governors. In this case Ms Hochul bers and mailing addresses, was compro-
may have been motivated partly by labour mised for over 600,000 people. Last month
concerns and cost. After the attack on the Change Healthcare, a health-care payment
conductor sorne employees staged what company bought by UnitedHealth Group, a
looked like a work stoppage that cau sed de- Suboptimal large private insurer, was also targeted.
lays. The union asked for more transit po- Under the current model of data-shar-
lice. The governor chose sol di ers, who are other cities are regarding Ms Hochul's de- ing, researchers can receive physical
cheaper. The backlash was irnmediate and cision to send in the troops with curiosity. copies of the CMS data. They are then re-
carne from ali sides. "Our transit systern is Transir unions in Chicago and Philadel- sponsible for keeping the data secure, ex-
nota 'war' zone!" John cnen, NYPD's chief phia are calling on the National Guard to be plains Alice Burns, a researcher at KFF, a
of patrol, wrote on X. Others are worried deployed on their troubled systems. Che- health-policy think-tank. Unlike the ci<ts
about civil-rights violations. relle Parker, Philadelphia's new mayor, has data that were hacked, the data for re-
When Henry smart of John Jay College prornised to beef u p poli ce patrols. So far, searchers do not contain individual narnes
of Criminal Justice first heard about the she and other local lawmakers do not want and social-secu ri ty n umbers.
National Guard being activated in New the National Guard involved. They are However, they do contain sensitive in-
York, he wondered, "did sornething really right to be wary. The theatrical use of soJ- formation such as health diagnoses and a
bad happen?". The National Guard is a diers does not stop crime. • person's age, race and zip code. In sorne in-
state-based military unit. Members are stances a determined hacker could be able
part of the arrny's reserve and can be de- to identify an individual, but it is highly
ployed overseas, as they were regu larly Health research unlikely, says David Maimón of Georgia
during the wars in Afghanistan and Iraq, State University, who studies cyber-securi-
but these days they are typically activated Number blocks ty. The proposed policy requires research-
by state governors in an emergency. Dur- ers to switch instead to a virtual centre
ing the covid-is pandernic they assisted hosted by CMS.
with testing. During blizzards they clear This is about balancing riskand benefit,
snow and rescue people in danger. "We are says Haywood Talcove of LexisNexis Risk
WASHINGTON, OC
efficient and task-orientated," says Mr Solutions, a firm that sells fraud-preven-
The best dataset on American health
srnart, a 15-year veteran of the Maryland tion services. rn this case the calculus
care will soon be harder to access
National Guard. No better crew can fill a seerns lopsided. Sin ce CMS has been
sandbag. But this is far from an emergency. RACHI SANGHAVI, a health-policy re- hacked before, hoarding the data there
And the National Guard is not a camou-
flaged crirne-fighting force. It is not even
P searcher at the University of Chicago,
studies whether ambulances that provide
doesn't rnake it secure.
The researchers say that the benefits of
perrnitted to make arrests. medica! care at the site of the ernergency the current model far outweigh the securi-
Militarising crime fighting is seldom a are better than basic ones that sirnply rush ty risks. The protesting scientists claim
good idea. "Deploying troops to the sub- a patient to the hospital. (They are not.) She that less-establi shed researchers and those
way indicates we've lost a battle that we ac- also studies whether the federal govern- at poorer academic institutions could lose
tually are winning," says Danny Pearlstein, menr's rati ng system for n u rsi ng home access. "Why wouldn't we invite the best
of Riders Alliance, an advocacy gro u p. It quality is any good. (Thar's a no, too). Her public-health experts in the world to look
tells New Yorkers that we are in a "dire state research helps Americans evaluate the at the sarne data that we have?" asks Paul
of affairs", adds Donna Lieberrnan, head of country's health-care practices. Unfortu- Mango, a forrner chief of staff at CMS und er
the New York Civil Liberties Union when, nately her work is now at risk. t he Tru 1n p ad nu nistrati on.
in fact, the city rernains one of the safest of Dr Sanghavi 's research u ses data pro- Ali is not lost. The changes have yet to
its size in América. jurnaane Williams, the vi d ed by the Centres for Medicare and go into effect, and the agency is accepting
city's ombudsman, wrote on X that given Medicaid Services (CMS), the federal feedback from researchers until May 15th.
the political consensus against the deploy- health-care agency that adrninisrers Arner- But for now, the researchers would like to
ment, "you would think there would be at ica's public-health insurance. CMS an- keep the status q u o. Si nce the vast rnajori ty
least a rethinking." So far Ms Hochul is nounced plans in February to change its of older adults are on Medicare, these
holding firm, though she has at least data-sharing practices. The proposal raises nurnbers give "a beautiful longitudinal
stopped soldiers carrying long-rifles. the fees for data and makes access less con- view of a person's li fe11, says Dr Sanghavi.
Rather than looking on aghast, sorne venient. Nearly 400 researchers, including It's hard to puta price on that. •
24 United States The Economist March 16th 2024

Lexington I Castle made of sand

A new blockbuster film, "Dune", offers a warning about political tieroes and their tribes
petrol with the properties of Adderall and Ozempic. It is the most
precious stuff in the u ni verse.
The young hero, Paul Atreides, arrives on Arrak.is when his fa-
ther, ad uke, is award ed control there. lt is a trap set by the ernperor
and a rival house. His father dead and his surviving allies scat-
tered, Paul flees with his mother into the desert and finds haven
among its fierce people, the Prernen. As the spice unlocks latent
mental powers in Paul, the natives recognise him as their messiah
and-spoilers!-he Jeads them not just to avenge his father but,
via control of the spice, to seize the i mperial throne. Then comes a
bit of a burnmer, galactic jihad. More on that in a moment.
Herbert was thinking partly of T.E. Lawrence, oil, colonial pre-
dation and Islam, and the success of the novel may owe also to
those echoes (along with the giant sandworms). But the novel's
enduring popularity suggests more tirneless resonances. There
are nifty gizmos in Herbert's galaxy, but clever conceits keep them
from stealing the show and making his future either too alien or,
like other decades-old visions of the fu tu re, amusingly outdated.
Personal force-fields have rendered projectile weapons harmless.
soldiers and nobles alike fight with swords, knives and fists.
A more provocative garnbit by Herbert was to set his tale thou-
sands of years after the "Butlerian Jihad" or "oreat Revolt", in
the author of the science-fiction novel "Dune" which hurnans destroyed ali forrns of artificial intelligence. (Her-
F
RAN K H ERBERT,
on which a new blockbuster film is based, would have been bert once worried toan interviewer that "our society has a tiger by
arnused to learn that ecologists along the Oregon shore are ri pping the tail in technology.") "Thou shalt not make a machi ne in the
invasive European beachgrass out of the ground. As a youngjour- likeness of a human rnind," has become acore injunction, result-
nalist in the late 195os, Herbert derived his inspiration far a tale ing in a race to develop the rnind's potential. Paul's mother is a
about a desert planet from watching ecologists plant the grass to mernber of a fernale sect, the Bene Gesserit, whose own hubristic
control encroaching sand dunes. The scherne worked, maybe too enterprise is to manipulare the imperium's politics, and who for
well: residents of the coastal towns that the grass helped prosper seores of generations have conducted a breeding prograrnme to
now long for the beauty of the dunes and regret the unintended engender a superhuman intelligence-which, to their consterna-
consequences for native flora and fauna. tion, arrives in the form of Paul, whom they cannot control.
"They stopped the moving sands" was the title of the article The new Dune rnovie is the second of two in which the director,
Herbert never wound up publishing about the Oregon dunes. He Denis Villeneuve, has told the story with breathtaking imagery
adrnired the ecologists and their project. But as rnuch as he prized and, for the most part, with fidelity to the novel. The filrns deal el-
human intelligence he feared human hubris, credulousness and liptically with Herbert's themes of technological, economic and
other frailties. One character in "Dune" is a planetary ecologist, ecological change to zero in on his main matter, the dangers of po-
who, for cornplicated reasons-the novel has no other kind-finds li ti cal and religious power and of faith itself, secular or spiritual.
himself overcome by natural processes he has been trying to ma-
nipulate, to help the native population by changing the climate. Dread Kennedys
"As his planet killed hirn," Herbert writes, the ecologist reflects Paul's powers allow him to see many futures, and though he re-
that scientists have it ali wrong, and "that the most persistent sists his role as messiah and the bloodlust he knows will come
principies of the universe were accident and error." with it, he embraces that path in the end. Herberr, who died in
The persistence of "Dune" itself is a rnarvel. Sorne 20 publish- 1986 told an interviewer in 1981 that he thought J ohn F. Kennedy
1

ers turned the manuscript down before a company known for au- was among the most dangerous leaders of his times, "not because
to-repair manuals, Chilton, released it in 1965. The editor who the man was evil, but because people didn't question hirn" In
tookthe risk was fired because sales were slow at first. But popular "Dune", the bad guys are sobad, and the good guys have so many
and critical acclaim began to build, eventually making "Dune" virtues and face such tragic choices, it can be hard to recognise
among the best-selling and most influential of science-fiction they are not so great, either. Herbert ser out to Jure readers into
novels, sorne of its irnaginings, with their edges filed down, sur- rooting for a tyrant. He wanted to leave them wary not only of the
faci 11g in "star Wars" wilJ to domínate but of the longing to submit.
No doubt the novel's endurance owes in part to Herbert's suc- Here the film lets the audience off the hook. A Fremen leader,
cess, like Tolkien's, in wrapping an epi e yarn within a spectacu lar strong-rninded in the novel, becomes a clownish fanatic frantic to
vision given substance by countless interlocking details. He pub- believe in Paul, in counterpoint to Paul's Fremen lover, Chani.
lished appendices to his novel: a glossary, a guide to the feudal Contrary to the novel, she emerges as the voice of democratic re-
houses that jostle over his imperium, a study of the galactic reli- sistance to Paul's megalomania. Chani is ali too easy for the audi-
gions and, of course, a paper on the ecology of his desert planet, ence to identify with. Of course they would resist, too. Of course
Arrakis, known as Dune. That ecology yields a substance called they would never credulously identify with any tribe, never fall for
spice that prolongs life and also supplies psychic powers, en- any charismatic leader. Maybe at least sorne will leave the theatre
abling navigators to guide ships among the stars: think potable asking thernselves if that is really the case. •
 25

The China-Mexico-US triangle whether deliberately or not. The suspicion

is that México turns a blind eye to i rnports
stuck in the middle from China, and that those are then re-ex-
ported to the United States.
Steel and aluminium are the main con-
cern. In February Katherine Tai, the United
States Trade Representative (USTR), noted a
"lack of transparency regarding Mexico's
ME.XICO CITY
steel and alurninium irnports from third
Could Chinese trans-shipments spark a US-Mexico trade war?
cou ntries" In December Mexico i mposed
EXICAN ANO us officials were cheered centives were created for companies to tariffs of up to 8oo/o on sorne steel irnports
M by trade data released in February. It
showed that Mexico overtook China in
look beyond its shores. They have been
pushing into the same markets where the
frorn China, but us officials remain f rus-
trated. Setting tariff levels is one thing; ac-
2023 to become the number-one exporter us aims to supplant China, including Mex- tually enforcing them is another.
to the United States (see chart on next ico. This means many Chinese exports are "What we've seen is that USMCA has
page). The valué of goods sold has been ris- sirnply taking "a slightly longer road to get really become a us, China and Mexico deal,
ing steadily, and reached almost $476bn to the same place", says Ana G utiérrez of where China is trans-shipping a Iot of pro-
for the year: the equivalent figure for Chi- IMCO, a think-tank in México Ci ty. d uct through Mexico," says J eff Ferry of the
nese goods fell sharply, frorn $536bn in China appears to be prornoting this Coalition for a Prosperous América. a
2022 to $427bn in 2023. strategy. In December the counrry's leaders gro u p that represents man ufactu rers.
The last time Mexico overtook China, in said it was a priority to export prod ucts Electric vehicles are a Ioorning concem.
2002, it was a blip (and Canada held the top that are used to make finished goods, rath- The price of the average EV in China is
spot). Today its rise has the whiff of a new er than the finished goods themselves. roughly half that in the United States, and
arder for global trade. Data for January Mexico is an attractive beachhead into the China produces more than half the world's
2024 show the trend rernains strong. Unit- United States because USMCA gives tariff- output. Without hefty tariffs in place, Chi-
ed States' efforts to decouple from China free access for goods made with enough nese EV sales in the United States would
and bring supply chains closer to home are Norrh American content. probably boom, much as they have in other
intensifying, pushing trade through other Mexico's official custorns data show no countries. President Joe Biden's adrninis-
countries. An updated free-trade agree- sustained influx of goods from China. But tration is mulling raising tariffs on the ve-
ment berween the United states, Mexico sorne us officials and industrialists believe hieles above their current level of 25°A>.
and Canada, known as USMCA, has been in Chinese inflows are being undercounted, USMCA has rules against unfair subsi-
force since 2020. It supports Mexican ex- dies and rnarket practices, which are com-
ports of car parts, medical supplies and ag- mon arnong Chinese companies. But in
'7 Also in this section
ricu ltu ral prod ucts to the Uni ted States. many cases no law or rule is being
But the third side of this trade triangle, 26 Haití's dead state breached. Mexico offers Chinese autornak-
between Mexicoand China, is creating ten- ers a path around the tariff wall because
28 Semiconductors in Latin America
sion. china's ñrrns did not sit idle while in- USMCA's rules of origin contain what one ..
26 The Americas The Economist March 16th 2024

� us official calls "loopholes" that allow far

the integration of Chinese components.
-
A new trade line-up
successive governments has dogged Haiti's
u.6m people far decades. The country has
An importer can assernble Chinese cornpo- United States, imports from nota single elected official. Its legislature
nents in Mexico and label Mexico as the selected countries, $bn sits empty. Haiti has been in freefall since
country of origin, obscuring chinese in- 600 July 2021, when Iovenel Morse, who was
volvement. "New tools may be needed," president at the time, was murdered.
says the official. 500 Mr Henry, who was appointed prime
There is airead y a large car-man ufactur- 400 minister two days befare the assassina-
ing industry in México, and Chinese mon- tion, made things worse. He argued, with
ey is pouring in, especially to northern Ca nada 300 sorne good reason, that elections were not
states that are the biggest exporters to the 200 possible while Hai ti was so insecure. Bu t
United States. In February BYD, China's he also seerned keen to cling to power. His
most successful EV manufacturer, said it 100 governrnent's i mpotence left a vacuum to
Germany
would make 150,000 vehicles a year in o be filled by the gangs. Even before they
México. BYD says that prod uction will jliiiJiililiillllliillli

2000 05 10 15 20 23
blockaded Mr Henry's return, the UN reck-
serve the local market, but many compa- Sourre: usc�r,sus Bureau
oned they controlled 80% of the capital.
nies are eyeing the larger, wealthier market Mr Henry's resignation is, in theory, the
north of the border. first step on the path to long-overdue elec-
chinese foreign direct investrnent in whether to extend USMCA's validity by an- tions. Leaders at the jarnaica sumrnit pro-
Mexico hit $2.5bn in 2022. Margaret Myers, other 16 years, to expire in 2052 instead of posed a "rransitional presidential council"
of the lnter-American Dialogue, a think- 2036. Mr Trump signed usMcA, but that is of nine members drawn from political fac-
tank in Washington, notes the "rernarkable no guarantee that he would not scrap it, or tions, the private sector, civil society and
growth" of sophisticated manufacturing use its extension as leverage to extraer con- religious groups. That council would ap-
by Chinese companies in Mexico. cessions from Mexico. He has already point an interim prime rninister, who
talked of a 10% import tariff on goods from would rule while elections are organised.
o China in the chain all countries, which is not possible far Yet, as is comrnon in Haiti, squabbling
What mighr the United States do about Mexico and Canada under usxicx's rules. started within hours of the announce-
this? ln the case of steel and alurninium México seems unprepared, says Mr rnent. Multiple factions have made a claim
imports, it could copy its approach with Dussel. ClaudiaSheinbaum, who is expect- to power. The "National Awakening far the
the EU and Japan, where there are lirnits on ed to be elected Mexico's next president in Sovereignty of Haiti', a coalition. issued a
the vol u mes that can be imported at lower elections on June znd, is promoting "near- statement saying that ít was irnrnediately
tariff rates. Higher tariffs kick in after shori ng" to raise Mexico's econornic installing a presidential council of three
those lirnits have been reached. When the growth to 5% of GDP annually. "México has rnernbers in the National Palace. The co-
Trump adrninistration lifted steel and alu- an enormous sign reading 'Welcome Chi- alition is led by Guy Philippe, a former sen-
mini urn tariffs on Mexico in 2019, it was on na'," says Mr Dussel, ator who led an uprising in 2004 that oust-
the condition that Mexico restrain export The question confronting Mexico is the ed President Jean-Bertrand Aristide. Mr
surges into the United States. extent to which it is willing to risk its vital Philippe returned to Haití last year after
Electric vehicles are trickier. Sorne relationship with the United States, to serving time in an American prison far
would like new rules to cut China out of keep that welcorne sigo shining. • laundering drug money.
supply chains entirely. "If you want to be a He is not the only one with ambition.
trading partner with the United States, Jimmy Chérizier, a Haitian warlord better
we're not going to allowyour countryto be Haiti's dead state known as "Barbecue" who leads a grott p of
a stopping point far goods frorn China," gangs called cg, warned that decisions
says Mr Ferry. That wou ld mean restrictive Infinite regress made outside the country would plunge
rules of origi n and a tighter enforcement Haiti into "further chaos". He said that his
regirne. It would also raise thorny ques- group would "figure out how to get Haiti
tions about howto treat production by Chi- out of the misery it's in now". Both menare
nese-owned faetones in Mexico. disqualified from sitting on tl1e Jamaican
PORT ·AU PRINCE
Robert Lighthizer, who was the lead summit's version of the council: Mr Phil-
A new government is unlikely to free
trade negotiator during Donald Trurnp's ippe far his crin1inal record and Mr Chéri-
Haiti from insecurity and illegitimacy
presidency; has said that a first step would zier far being under UN sanctions. But re-
be to strip China of its most-favoured-na- AITIANS HAVE been demanding the f usi ng to give tt1e gangs a seat at the table
tion status. That would automatically
ratchet up tariffs on Chinese products
H resignation of Ariel Henry (pictured
on next page), their unelected prime rnin-
risks them overturning it. Politicians and
political elites, who have long paid the
across the board. Enrique Dussel of UNAM, ister, since almost the n10111ent of his ap- gangs to do their bidding, n1ay well use
a university in Mexico City, says this would pointrnent in July 2021. On March uth, un- the1n to spoi 1 an agreement they don't like.
unmoortheworld trade system. "The Unit- der pressure from foreign government of- This bodes ill far a transítional go,,ern-
ed States [would be] saying 'adopt my rules ficials gathered at a summit in Jamaica, ment, and for the UN-authorised security
or you're against me'." and with the gangs that control Port-au- n1ission that is in the works. The Jan1aican
If Mr Trump wins in November, he is Prince, the capital, blocking his return to roadmap calls for the mission to go ahead.
likely to adopta harder stance toward Mex- Haití, Mr Henry finally said he would stand It bars anyone who opposes it from the
ico. As well as Chinese trade, there is also aside. Stranded in Puerto Rico, he was re- transitional council. On March 11th the Un-
the issue of migration. But perhaps most duced to delivering the message viaa video ited States pledged an extra $1oom to the
importantly Mr Trump loathes trade im- posted on social media. cause, bringing its total donation to
balances. The United states' trade deficit Haitians celebrated in the streets, but $3oom. But rroops are still in short supply.
with Mexico rose to $152bn in 2023, up 17o/o their country needs rebuilding, A combi- On March 12tl1 Kenya, which has agreed to
from 2022. In 2026 Mexico and the United nation of gang violence and the contested lead the mission, said that its deployment
States, along with Canada, have to discuss legitimacy, irnpotence and unpopularity of of 1,000 police officers cannot be sent until ..
 • •

Pet homelessness is not a subject that dominates the news .. animal welfare organisations, policymakers and academics
headlines, but new research released by Mars shows that the to better understand the issue [and] support the most
issue is an urgent and global one-without a straightforward impactful interventions".
fix. The State of Pet Homelessness Project highlights that
The report identifies multiple strands to what is clearly
362m cats and dogs are homeless across the 20 countries
a complex issue-each of which requires its own specific
studied, including Japan, the UK, France, the US, South
combination of actions to improve outcomes for pets.
Africa and Brazil, with several common themes emerging.
On the policy side, Mr Moutault believes that, when
PAWS FOR THOUGHT drawing up legislation, it would help to recognise the
benefits pets bring ... Pets can play a positive role in tackling
"Pets bring great benefits to our llves, but they also face
challenges policymakers are facing today from a public
challenges and can't advocate for themselves," says totc
health perspectiva," he explains. "Both for physical health
Moutault, global president, Mars Petcare. "When we talked
and mental health, there is significant research showing
to non-governmental organisations and animal welfare
pets bring enormous benefits to peo ple." He therefore
experts, it was clear that to address the root causes more
advocates establishing policies that recognise the benefits
effectively, data and insights were critica!." This sentiment of the human-animal bond.
is underlined by Jeffrey Flocken, president, Humane
Society lnternational, who confirms that data will help Pet-friendly housing policies could help improve the
situation. "Alrnost one in five people who are considering
glving up their cat or dog say lt's because they are movíng
and cannot take their pet, dueto non-pet-friendly housing
Key dm points from M•r• State of Pet Homeleanen Project contracts." Mr Moutault explains.

Ahnon CREATING BETTER OUTCOMES

1 in 3 1 in 2 Understanding the challenges facing pets is the first step

to driving change, says Mr Moutault. Is a complete end to
peta •eros• the 20 re•ponclent• hacl lo•t a pet
countrf• atudl•d
wm• ho11.elen
In the P••t, whh
belng reunlted.
'°" n•ver pet homelessness a realistic goal? Maybe not, he concedes.
"What we are talking about is better life outcomes: one pet
adoptad, one pet reunited with an owner, one pet given
preventative care. Making an impact one pet ata time."

14% 15% 1 in 5
ofrNpandenta werwCOMld•ln1 ,-ople who.,. ca 1kl•ln1
W.N COMfd1rfng Nhomfng I cat glvka¡ up I pet AY lt'• du•
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contrec:ta

To flnd out more vislt:

www.stateofpethomeles1nea1.com
Produced by El Studíos for Mars
28 The Americas The Economist March 16th 2024

� Haiti's new government is in place. It China alone holds 28% of the market.
seerns unlikely that rhe Haitian police can This is where Latin América can help,
maintain secu rity u ntil that happens. They and be helped. Relatively low wages rnake
are outmanned and often outgunned by ATP investments viable; shared time zones
the gangs, des pite the United States' assur- make co-ordination with United States
anees that it is supplying the police with firms easier. Even a sliver of an industry
equipment, resources a.nd arnrnunition. projected to be worth Sitn a year by 2030
The United States says polis indicare would be a boon to struggling economies.
that "the vast majority" of Haitians support True, most of the val ue in the chip i nd ustry
the Kenya-led security mission. But it faces is in design and fabrication. But as chip-
resistan ce, not least beca use it was initially making becomes ever more expensive,
requested by Mr Henry. He was largely seen firms are turning to more advanced ATP to
to be doing so to prop up his rule. The last keep seeking out improvements. Asian
mission, run by the u N between 2004 and econornies found it to be a good way to
2017, inadvertently introduced cholera and climb the value chain. Replicating the suc-
became notorious for reports of sexual ex- cess of South Korea and Taiwan is unlikely,
ploitati on and abuse agai nst Haitians. Hai- but countries with no chip industry rnust
ti wil l turn i nto "a Somalia in the Cari bbe- start somewhere.
an" if the force arrives, reckons Georges Intel's ATP facility in Costa Rica now
Duperval, a 58-year-old entrepreneur in When all other lights go out employs sorne 4,000 workers. Panama is
Port-au-Prince, who opposes it. working with Atizona State University to
Many Haitians say they want to throw bloody revolution in the country because improve the skills of its semiconductor
off the shackles not only of foreign powers this system is an apartheid system, a wick- workforce. These developments are en-
but of the elite Haitians who, they say, do ed system," he said this week. Many Hai- couraging, but countries like Panama and
their bidding. Unsavoury as he is, support tians agree with this sentiment, says Mr Costa Rica "probably lack the scale far a
for Mr Philippe is strong in Port-au-Prince Duperval. "Prorn 2004 to today, elections majar chip ecosystern", notes Chris Miller,
and sorne áreas around it. have been controlled by the Haitian oli- the author of Chip War, a book about the
Meanwhile Mr chérizier seerns in no garchs," he says. "Now the Haitian people's semiconductor industry. If chipmaking is
mood to lay down arrns. "We are making a eyes are open to this." • to transforrn Latin Arnerica, bigger fish
must get involved.
But the big fish are floundering. Mexico
Semiconductors in Latín America has much to gain from the re-ordering of
the semiconductor supply chain thanks to
A tempting package its free-trade agreernent with the United
States. It has a long history of assembling
electronic components. Chipmakers
should be piling in. They are not.
One issue is that chipmaking consumes
a lot of water, and Mexico is dangerously
The chip wars have created opportunities for high-tech growth that are slipping
parched. Another is Ieadership. "In South-
by Latin Ameríca's biggest economies
East Asia and India, there is high-level po-
ATIN AMERICA is farnous for many To see why, consider how chips are Iitical su pport far semiconductor invest-
L things, frorn rnagical realism to the Am-
azon rainforest. Semiconductor manufac-
made. First they rnust be designed. Silicon
Valley dominates this bit of the business,
rnents," says Mr Miller. Lack of that in Mex-
ico blunts the effectiveness of otherwise
turi ng is not one of them. But that cou Id be through companies like Apple, Nvidia and supportive policies. In October México in-
changing. In July last year the United Sta tes AMD. The second phase sees those designs troduced tax breaks of up to 83% on sorne
and Costa Rica announced they would etched into silicon wafers, creating electri- ATP investments. That was enticing to chip
work together to "diversify and grow the cal circuits which do the mathernatics thar firms, but it did little to reduce uncertain-
global semiconductor ecosystern" Days draw Instagram feeds on phone screens, or ty. Chipmakers are left to hope that Mexi-
later the us unvei leda similar partnership manage the batteries of electric vehicles. cans will electa more chip-friendly presi-
with Panamá. Intel, a us chip manufactur- Here, Asían countries dominare. During dent when they go to the polis in June.
er, then said it would invest $1.2bn in Costa the final phase chips are assernbled togeth- Brazil is also wishy-washy on sernicon-
Rica over two years, Mexico and Brazil, the er into an electronic cornponent, wrapped ductors. Its officials, absurdly, talk up
region's biggest econornies, claim to have in protective casing, and tested to ensure semiconductor "self-reliance", impossible
ambitions in silicon. that they work. for any country, rather than trying to get a
Growing Latin American interest in The us government is doling out bil- mere toehold in the supply chain. Presi-
chipmaking is driven by us atternpts to lions in subsidies to entice chip compa- dent Luiz Inácio Lula da Silva has spent
loosen Asia's grip on the business. About nies to set up man ufacturing facilities on nearly a year talking chips with China,
75% of the world's chips are made inJapan, its soil. As of last August, those blandish- with nothing to show Ior it thus far.
South Korea, China or Taiwan. This irks us ments had attracted $166bn in capital in- While he and other Latin American
policyrnakers, partly because they covet vestment. But assembly, testing and pack- leaders dither, the coffers of ATP operations
manufacturingjobs for discontented blue- aging (ATP) is too labour-intensive to be in Asia spill over. Jntel and Infineon, a Ger-
collar workers, and partly because they profitable in the high-wage us economy. man chipmaker, are spending sorne $22bn
worry about relying on countries within Making chips in Texas and Atizona only to build new chip packaging facilities in
China's potential sphere of influence for partially solves the problern of Asían reli- Malaysia. Vietnam and India have also
products as vital as chips. The protection- ance if they rnust still be shipped across won big projects. "Latín America is n1iss-
ism these concerns have prompted may the Pacific befare they are used. More than i ng a big opportunity," says Mr Miller. ''The
well end u p boosting Latin América. 95% of ATP facilities are located in Asia. window for action is closing rapidly." •
 29

. . ,.
•••
' 1·•

Wealth in India out to provide a decent picture of a coun-

try's wealthy people.
Crazy rich Indians By that definition, India had around
850,000 dollar millionaires in 2022, a net
addition of 473,000 from a decade earlier,
according to research by Credit suísse, a
Swiss bank. Between 2012 and 2022 the
MUMBAI
nurnber of dollar millionaires grew ar an
annual rate of 8.5%, outpacing average GDP
Indía's new wealthy elites are younger and more adventurous
growth of 5.6%. The economy is rebound-
LLOF INDIA was transfixed, as February have an outsize influence, relative to their ing even n1ore strongly now. As a result,
A turned to March, by the spectacle of
Anant pre-wedding celebrations
Arnbani's
numbers, on patterns of consurnption, in-
vestment and growth. They tend not to
wealth managers expect the number of
dollar millionaires to expand by 15-20%
in Jamnagar, an unlovely industrial town make headlines or advertise theirwealth. per year. These are the new rich. No data-
in western India. Mr Ambani is the son of There is no fixed definition of "rich" sets exist delineati ng the demographics of
Mukesh Ambani, India's richest man and used by the businesses that cater to them. this cohort. But it is possible to draw broad
boss of Reliance, a giant conglomerare. Bi 11 But one commonly accepted threshold far trends from the people who manage their
Gates, Mark Zuckerberg and Rihanna being a "high-net-worth individual" is money, one unifying therne emerges: ln-
turned up, as did hordes oflndian business possession of net assets of $1m or more, in- dia's new rich are nothing like the old.
tycoons, cricket legends and Bollywood A- cludi ng the value of primary homes. That First, they are more spread out. No lon-
listers. The government ternporarily con- could inflate nurnbers by counting some- ger do Indians need to live in top-tier cities
verted the local domestic airport into an one who works far a modest wage but in- like Mumbai, Delhi or Bangalore to get
international one. For hundreds of mil- herits a large seafront flat in Mumbai=-sim loaded. Jaideep Hansraj, who ran wealth
lions of Indians following the lavish pro- buys 1,100 square feet (100 square metres) managernent for 15 years at Kotak Mahin-
ceedings on TV, social media and in the pa- of prime property in the city. But it does not dra, a big bank, and now heads the securi-
pers, the festivities stood as shorthand for account far those who hold illicit cash, de- ties business, says the surge in investors
the tastes and power of India's rich. pressing the real figure. Experts assume from small cities is phenomenal. They
The Arnbanis and their fellow pluto- that these thi ngs rough ly cancel each other come frorn "Indore ar Bhopal or Lucknow
crats are household names in India. But ar Kanpur. l mean ... Barei lly. Ir cornpletely
they are not representative of India's bamboozles me," he says, referring to the
7 Also in this section
wealthy, Billionaires, almost by definition, sorts of cities an earlier generation of
are a select few. According toForbes, a corn- 30 lndia's controversial citizenship law bankers would have sneered at. Rakesh
piler of Iists, there are just 186 of them in singh of HDFC, India's biggest bank by mar-
31 Chinese influence in Australia
India. Far more consequential to-and rep- ket capitalisation, says he has seen half-
resentative of-India's econornic story are 31 Souped-up lndian nukes million-dollar investments corning from
the legions of dollar millionaires, whose places likeJorhat in Assarn, which most Jn-
32 Banyan: Pakistan's rotten election
ranks are expanding year by year. They dians wou ld struggle to loca te on a map. ..
30 Asia The Economist March 16th 2024

� Driving this geographic diversification has seen robust growth in its luxury-goods Henley and Partners, a high-end irnrnigra-
of wealth is India's improving infrastruc- and five-star hotel businesses, especially tion ñrrn, reckons that 7,500 Indian mil-
ture. This has lowered transport costs and frorn srnaller cities. lt is planning to open lionaires moved abroad in 2022. Many
sped up industrial shipments. It includes a 25 hotels this year, many of them high-end. more have quietly acquired second homes
big expansion in air connectivity, the An international airport due to open in in Dubai, London or Singapore, as well as
spread of high-speed internet, and invest- Murnbai next year will have a fifth of its the right to move there as a way of keeping
ment incentives from state governrnents parking spots reserved for private jets. their options open. Most hope to send their
keen to grab a piece of India's growing Two risks cou Id stal l the growth of Tn- children to foreign universities. Profes-
economy. Wealth managers, too, are ex- dia's new class of wealthy. The first is polit- sionals with international firms are also
panding their operations to serve custorn- ical, regulatory or tax changes. Risk-taking highly mobile, ternpted by higher quality
ers where they are. in investment and free-spending con- of life, better schooling for their children
A second change is in the average age of sumption are driven by confidence among anda cleaner environrnent.
the wealthy. Where lndia's rich might once the ri ch that they will on ly get richer. Poi it- lndia's new rich, like the previous elite,
have had a median age above 50, now 40- ical instability could prornpt a retreat to are a patriotic group. Many are keen to give
and 30-son1ething millionaires are corn- safer investrnents and lower spending. back and help improve the lives of other
mon. Sorne have benefited from govern- And although they are mostly immune to Indians-while also having a good time.
ment land acquisition for infrastructure domestic inflation they are particularly But even as they change, they wou]d like
projects, reaping big sums from previously sensitive to changes in taxation, especially India to change too. As one banker puts it,
unproductive holdings. Many are first- on incorne and luxury spending. "ss rich as you get you cannot do anything
generation businessmen making consum- The other risk is that the rich might flee. about the pollution." •
er staples such as wafers (potatoes, not sil-
icon), clothes or poppadorns, or unsexy
but essential goods necessary for a grow-
ing economy, such as rebar or ball bear-
ings. A huge chunkare salaried profession-
A controversy over citizenship
als with company stock options or prudent
personal investments. These are first-gen-
The govemment finally implements a contentious law
eration millionaires with "strong middle-
class values", says Chethan Shenoy of ARENDRA MODI prides hirnself on Yet sorne Indian Muslims worry the law
Anand Rathi Wealth, which manages
$6.6bn far nearly 10,000 clients.
N getting things done. Yet when it
carne to implernenti ng the Citizenshi p
could end up being used to challenge
their own citizenship. Its exclusion of
The third major shift is in what the new Amendment Act (CAA), a campaign Muslims has certainly made it popular
rich do with their riches, i11 terms of both pledge of his BharatiyaJanata Party (BJP), with the BJP's Hind u-nationalist base.
investment and consumption. They are his government dragged its feet. The There is a suspicion its implementation
much more comfortable with capital mar- rules for implernenting the law, which was timed to rally Hind u voters ahead of
kets than their parents were. "Earlier I offers persecuted religious minorities a general election due by May.
could go and have one standard conversa- from sorne neighbouring countries an The act allows for applications by
tion with 9oo/o of my clients," says Nitin accelerated route to Indian citizenshi p, refugees from Bangladesh, Pakistan and
Chengappa, who heads private banking at were published on March nth, four years Afghanistan, as long as they are Hind us,
Standard Chartered, an international after it passed parliarnent. Sikhs, Buddhists, jains, Parsis or Chris-
bank. Today "diversification is the key. trs The law is controversial because it tians and arrived in India before the end
not just mutual funds. It's private equity, <loes not include Muslirns. The govern- of 2014. Within India, critics have chal-
social causes, venture capital, what can I ment says that is because they are nota lenged the CAA for explicitly linking
do in listed [companies], what can Ido in minority in any of the relevant countries. citizenship and religion, which they say
non-listed?" The rich still buy plenty of violares lndia's secular constitution. The
gold and second homes, in India and fear that it could be used against Indian
abroad. But their interest in markets and Muslims was exacerbated by another
their appetite for risk have increased, too. scherne, since suspended, to compel
That does not mean they shy away from Indians to preve their citizenship in
consumption. Foreign holidays are a corn- order to be included in a national regis-
rnon indulgence, as are extravagant wed- ter. The governrnent denies that the law
dings and fancy cars. (Mercedes-Benz ex- is discrirni natory.
pects India to become its third-biggest The opposition suspects the timing of
rnarket outside Gerrnany in three years, up the announcernent. A Congress party
frorn fifth.) European luxury brands and spokesrnan said it was designed to dis-
hotels are an increasi ngly common sight tract frorn a suprerne Court ruling, earli-
in lndia's cities. Last year Dior held a show er the same da)', which rejected a plea by
in Mumbai, and in 2022 the swiss watch the state Bank of India to be given more
ind ustry enjoyed a record year for exports time to publish details about donors in a
to India. Tata, a big Indian conglomerare, controversial BJ P-d esigned carnpaign-
fi nance scheme. lt also followed the
We are hiring a senior correspondent to
sud den resignation of an election corn-
cover India The job will be based in India and missioner over the weekend, days befare
involve travel. Extensíve experience in India the election date was expected to be
is helpful but not essential. Applicants should announced. So far, the renewed debate
send a cv, a cover letter and an unpublished
article of 600 words suitable for publication in
over the CAA has taken oxygen away f rom
The Economist to indiawriter@economist.com. Concerned citizens these stori es.
The deadline is April sth 2024
 The Economist March 16th 2024 Asia 31

Australia the A-team's bosses to know its cover is China has long courted influence with
blown," he said. Underlying that may be a Australian politicians. ASIO now says that
Spooked concern about complacency over China. the "x-team" is grooming well-connected
Since Australians elected a Labor gov- Australians online, with offers of "consult-
ernrnent, led by Anthony Albanese, in 2022 ing" jobs. An unnarned "nation-state" is
the bilateral relationship has improved. Mr using "top-notch tradecraft" to probe criti-
Albanese's government has not made ma- cal infrastructure networks for weakness,
SYDNEY
jar concessions to China and backs AUKUS, according to Mr Burgess. Meanwhi]e, his
An Australian spy chief triggers
a submarine-building pact with America job will only become harder. Australia's
a debate about China
and Britain. However, it avoids calling out role in the Indo-Pacific power contest
AST MONTH Mike Burgess, Australia's China publicly. As a result, China has lifted makes it a target. Under AUKUS, America
L chief dornestic spook, sent shockwaves
through Can berra when he declared that a
most of the trade restrictions it imposed
on Australia in 2020, and may lift tariffs on
will be shari ng prized n u clear-propu lsion
technology with it. Foreign agents are al-
former Australian politician had been re- wine shortly (see China section). Exports ready probing for information. •
cruited by a foreign spy ring and "sold out have boorned frorn A$147bn ($97bn) in
their country'' The ring was later revealed 2020 to over szoobn in 2023. Most strare-
to be Chi nese. The politician rernains un- gists agree that this is good news. But the M issiles in India
named. The claim triggered fierce specula- ugap between what the government says
tion, anda debate about whether Mr Bur- and what it knows is big and getting big- Hydra-headed
gess was stoking paranoia. Australian in- ger," says Rory Medcalf at the Australian
telligence agencies "will do anything to Nacional University in Canberra. nukes
destabilise any rneaningful rapproche- sorne intelligence officials worry that
ment" with China, said Paul Keating, a for- Australians may miss the nuance, and that
mer Labor prime minister, on March 5th. a "stabilised" relationship mighr be taken
Mr Burgess rarely pulls his punches. He as a sign that the Chinese threat is abating.
India is souping up Its nuclear míssíles
has warned of similar threats in speeches The share of Australians who say China is
for his Australian Security Intelligence Or- "more of a secu ri ty threat than an econom- o AN IDLE observer on Abdul Kalam Is-
ganisation (ASIO) since 2020. He often
flags foreign rnedd Ji ng. Last year at the fi rst
ic partner" fell from 63% in 2022 to 52o/o last
year, according to polling from the Lowy
T Iand, an Indian territory in the Bay of
Bengal, the missile that shot into the sky
public meeting of the Five Eyes, an intelli- Institute, a think-tank in Sydney. on March nth was little different frorn
gence-sharing group of América. Australia, On the other side, the governrnent is seores of similar launches that have oc-
Britain, Canada and New Zealand, he said under fire from a small but vocal group of curred there si nce the 198os. A more dis-
that "the Chinese government is engaged former Labor politicians. They are critical cerning bystander might have noted that it
in the most sustained ... and sophisticated of what Mr Keating calls Australia's "rnind- was the tenth test of the Agni v, India's first
theft of intellectual property and expertise less pro-American stance .. and accuse in- intercontinental ballistic rnissile (ICBM),
in human history," telligence heads of tub-thumping over capable of reaching any part of China. But
Declassifying the information last China. successive governments have given even the most astute rnissile-watcher
month served two rnain goals, accordingto "free rein in security policymaking to would not have known the significance of
Mr Burgess. The first was to educate Aus- hardliners in the defence and inrelligence the launch, which lay insid e the nose con e.
tralians about the growing threat of both comruuniry", wrote Gareth Evans, a former This rnonth's launch is thought to be
espionage and foreign interference (which Labor foreign minister, in December. the fi rst time that India has tested a mis si le
involves a foreign government secretly in- However, according to John Blaxland, with multiple independently targetable re-
f] uenci ng peo ple and politics). The second the author of an ofñcial history of ASIO, entry vehicles, known as MI RVs, first devel-
was to senda rnessage to China: "We want "the threat of foreign interference is real," oped by America in the 196os. These are
small warheads, crammed atop a single
missile, each capable of striking targets
hundreds of kilornetres apart from one an-
other. The test is a technological tri umph
for Indian scientists. It "marks a signifi-
cant development far lndia's nuclear pos-
ture, and faster than we anticipated justa
few years ago", write Hans Kristensen and
Matt Korda, experts at the Fed eration of
American Scientists, a research group. It
could also affect nuclear dynarnics in Asia.
MIRVS have three advantages for India.
One is that they give the country greater as-
surance that its nuclear warheads would
getthrough any future Chinese missile-de-
fence system. Another is that, even if Chi-
na (or, less likely, Pakistan) were to destroy
a portion of Ind ia's missi les in a bolt from
the blue, a small number of surviving 111is-
si les wou ld sti 11 carry enough firepower to
inflict existential damage in return.
The third is that MIRVs allow India to
substitute accuracy for firepower. The
The name's Burgess, Mike Burgess country's test of a therrnonuclear bornb in ..
32 Asia The Economist March 16th 2024

� 1998 is thought to have fai led. M TRVs al low against an enerny's nuclear forces. Con- "counterforce". Its missiles are probably
it to use a larger n umber of less powerfu 1 versely, in stuffing many warheads into a not accurate enough for that anyway, he
fission bombs to deliver the same effect as single rnissile, they are also attractive tar- notes. India will need rnany more tests to
one large H-bomb. And there is another up- gets far an enerny's first strike. That can en- have confidence in its MIRV capability.
side, says christopber Clary of the Univer- courage countries to build larger arsenals, N onetheless, Mr Kristensen and Mr
sity at Albany in NewYork. "Missiles, espe- and to launch thern more quickly in a cri- Korda are concerned. China has dep)oyed
cially long-range ones, typically cost quite sis. When América and the usss began MJRVS on some rnissiles, they point out,
a bit more than warheads," he says. "So the MIRVing their missiles in the 197os, the while Pakistan tested them in 2017. In
cost saving far an equal number of war- technology contributed toan arms race. América and Russia, there is talk of re-
heads on target could be substantial." That Ashley Tellis, an expert ar the Carnegie MIRVing missiles that were downgraded to
wi ll appeal to India: its defence spendi ng is Endowment, a think-tank in Washington, single warheads. "A world in which nearly
vastly lower than China's. has argued that India has little interest in ali nuclear-armed countries deploy signif-
All this has drawbacks. r-.1 I RVs make it using MJRVs for targeting Chinese or Paki- icant MJRV capability", they conclude,
easier to launch a "disarrning" first strike stani nuclear míssiles, a practice known as "looks far more dangerous." •

A rig too far

A fraudulent election will not keep Imran Khan 's fans at bay
AWAZ SHARIF S Pakistán Muslim
1
candidate by13,500. Mr Sharif's party turn of the whee 1 is whether the arrny
N League party (PML-N) is back in
power. Following elections last monrh,
would otherwise have faced oblivion. As it
is, it won only75 of 264 seats. lt cobbled
can maintain control. There are two
reasons to thi n kit cou Id struggle. The
the thrice forrner prime rninister's youn- together a majority by striking a deal with first is Mr Khan. Perhaps unwittingly,
ger brother, Shehbaz, has been installed the Pakistan Peoples Party, which is run by given his erstwhile cornpliance with the
in the ruling post. His daughter, Maryam, another fading dynasty, the Bhu ttos. arrny, he has channelled Pakistanis'
is the new chief n1i nister of pop u lous This might seem like Pakistaní busi- long-standing despond into anger at the
Pu njab. So why is Mr Sharif so gl um? The ness as usual. The country has been ruled rnilitary establishment. This has put
74-year-old "lion of Punjab" has said by the arrny, directly or at varying degrees Pakistaní politics on new terrai n. Had
little publicly since the vote. Bunkered of rernove, throughout its history. In a the army chief, General Asim Munir,
down in his mansión outside Labore, he cycle that Mr Sharíf has been through responded to the vote count by calling a
is said to be depressed. several times, the generals puta biddable state of ernergency, as his predecessors
He has reason to be. The PML-N's civilian in power then, after he or she rnight have, he would have risked an
success is much less than Mr Sharif was dares to act independently, switch to a uprising. "There is this sense that the
prornised when he returned home last different proxy or army rule. Thereby gravy train needs to stop," says Mr Raja,
year. He had spent fouryears in exile in Pakistán has had four army dictators and an old acq uai ntance of Banyan. "We can't
London because Pakistan's generals- non e of i ts 20 civilian prime minisrers has be forever governed by two fami líes in
stage managers of its democracy-were completed a five-year term. This helps cahoots with the powers that be.';
against him. Theyrigged an election in explain why it is so badly governed. Hav- The second factor endangering the
2018 in favour of his main rival, Imran ing little prospect of a full term, Pakistan's status q uo is a protracted econornic
Khan. But then they fe)l out with Mr civilian regimes abjure long-term deci- crisis. The inflationary shocks experi-
Khan and reverted to the lion. A forrner sion-making in favour of popu list give- enced in many countries have in Paki-
cricketinggod, Mr Khan is nowinjail on aways and graft. As recently as 2006, stan combined with the effects of long-
graft charges. His Pakistan Tehreek-e- Pakistanis were better-off than Indians; standing malgovernance to deliver
Insaf (PTl) party has been dismantled. now the average i11co111e in India is 6oo/o chronic inflation, joblessness and bal-
PML-N was therefore expected to sweep higher than that in Pakistán. ance-of-payment problems. Mr Khan's
the election and Mr Sharif to becorne A big question arising from this latest ousting in 2022 now appears well timed
prime minister for a fourth time. Jnstead, for hirn. Mr Sharif''s decisión to let Sheh-
sornething unprecedented happened. baz lead an is-monrh-Iong replacernent
Despite the arrny's myriad ploys to government instead of calling early
prevent Pakistanis voting far Mr Khan, it elections looks like a majar blunder. It
seerns most did so. Standing as indepen- has hung the crisis around his party's
dents, candidates linked to his party neck. With Pakistan's 24th JMF bail-out
swept the country. Early counting put set to expire this n1onth, anda bigger
thern on track for two-thirds of Punjab's loan urgently required, the new govern-
seats andan overall majority. At which ment will need to take measures that will
point the army intervened to a degree 111ake it even n1ore unpopular than it is.
that rnight make a tin-pot tyrant blush. lts prospects-and Mr Sharif's hopes of
Army agents were allegedly sent into rebuilding his party-appear dire.
counting stations with alternative tallies. The same could be true for the army-
salman Akra111 Raja, a suprerne Court run establishment that Mr Sharif has
lawyer running as a de facto PTI candi- un happi ly rejoined. It n1ay have got away
date in Labore, had been inforrned that with its latest election heist. But in the
he had won by 95,000 votes. And then- process Mr Khan's supporters have made
whoops-that he had Jost to the PML-N the army look desperate and vulnerable.
 33

Global warming It has ambitions to do so. China has in-

stalled more renewable power than any
Climate saint or villain? other country. Governn1ent subsidies en-
courage the manufacture and purchase of
green products, such as EVS. These policies
have coincided with other big changes.
After decades of building road s and rail-
ways-and producing masses of carbón-
BEIJING
intensive steel and cement-China is mov-
China is supercharging the green transitíon=whíle burning mountains of coal
ing into a less dirty phase of development.
M01'G THE words mentioned rnost of- Another third or so bel ch out offactories, As a result, china's emissions are expected
A ten by Li Qiang in his "work report"-a
sort of state-of-the-nation address-on
particularly steel foundries (last year Chi-
na prod uced ibn tonnes of the metal, over
to peak in the next few years and certainly
by 2030, which is the goal China has com-
March 5th was "green", His predecessor as half the world's total). Cars and Iorries are mitted itself to in cli mate negotiations.
prime minister used it nine times in last the other big contributor, spewing nearly a But experts are worried about what hap-
year's speech; Mr Li nearly dou bled that tenth of China's ernissions. To keep its ve- pens next. There is a riskthat china's ernis-
(see chart 1 on next page). This is hardly hieles running, China consumes more oil sions plateau, rather than fall. Its goal of
surprising. China is a green-technology than any country bar América. eliminating net emissions (or becoming
powerhouse: its batteries, solar panels and Defensive Chi nese officials note that "carbón neutral") by 2060 seems in doubt.
electric ve hieles (svs) lead the world. Chi- Western cou ntries, which started ind ustri- Climate Action Tracker, a watchdog, calls
nese ofñcials want such industries to spur ali si ng long before China did, are responsi- china's policies "highly insu fficient". Most
future economic growth and China's own ble for the bulk of emissions over the past cou o tries, including China, have pledged
pursuit of energy self-sufficiency. century. Today these countries outsource to keep global warming since the Industri-
Yet for ali the talk of "harrnony between much of thei r manufactu ring-and, there- al Revolution well below 2°c. Cli mate Ac-
hurnaniry and nature', as Mr Li put it, Chi- fore, emissions-to China. Yet, the defence tion Tracker reckons that china's level of
na emits more than a quarter of the world's continues, China's emissions per person arnbition, if matched by ali countries,
greenhouse gases each year (see chart 2). are still only two-thirds of the level in would lead to as much as 4 ºe of warming
Over the past three decades it has released América (which has less than a q uarter of cornpared with the pre-industrial average,
more carbon dioxide into the atmosphere, chína's population). This is all fair enough, a potentially catastrophic outcome.
in total, than any other cou ntry. That ali bu t non e of it changes the fact that for the Drive across China and it is not un usual
adds up to a big question: is China a villain world to meet its clirnate goals, China will to see carbon-spewing faetones or belch-
ora saintwhen it comes to clirnate change? have to drastically reduce its ernissions, ing smokestacks in proximityto enorrnous
The case for villainy is straightforward. wind turbines or rows of solar panels.
Already the world 's leadi ng pollu ter, Chi- (Your car is likely to be electric, too.) This
na's emissions rose by about 5o/o last year. � Also in this section paradox lies at the heart of China's climate
About half come from the power sector, policy. The world's largest emitter of car-
35 Tariffs on Australian wine
which is dominated by coal-fired plants. bon dioxide is also its top source of green ..
34 China The Economist March 16th 2024

� technology. Chinese companies make goo/o

of the world's solar cells (the building -
Chinese exceptionalism El
another dangerous greenhouse gas. China
is responsible for around 10% of ali hu-
blocks of solar panels), 60% of its Lithium- CO: emissions, annual, gigatonnes man-caused rnethane ernissions.
ion batteries and over half of its electric ve- 12 Renewable power might seern li ke a sol-
hieles. These industries are known as the ution to ali this. But it doesn't provide Chi-
"new three" in China. 10 na's leaders with the same sense of securi-
For nearly two decades the cornrnu nist China ty as coal. For a start, green energy depends
Party has focused on the new three as driv- 8 on nature's co-operation, whereas coal-
ers of economic growth. A stimulus pack- 6 fired power plants can be ramped up and
age to cushion the impact of the global fi- United Sta tes down at will. Officials were spooked in re-
nancia} crisis in 2008 showered billions of 4 cent years when droughts disrupted hy-
dollars in subsidies on green-tech manu- India dropower supplies, leading to blackouts in
Russia 2
facturers. They have since received billions sorne areas. When Russia invaded Ukraine
more, while benefiting frorn China's con- Japan o in 2022, sending oil and gas prices soaring,
trol of many of the raw materials (such as t China doubled down on coal.
1950 60 70 80 90 2000 10 22
li thi u m) that go into such prod ucts. Today Sourt . Our woríd tri Data
According to sorne observers, though,
the party calls clirnate techa "new produc- China has reached an inflection point. En-
tive force", a buzzword for the high-value- ergy generation frorn renewable sources is
added industries that it favours. intense competition. There are around 150 growing faster than electricity dernand in
China hopes the new three wi 11 keep its carmakers in China, including foreign the country, according to the International
econorny humming as it moves away from brands. EVS made in the country cost about Energy Agency (JEA), an intergovernmen-
its old model of growth, which relied on in- a fifth less than those made in Europe. Sim- tal organisation. A rebound in hydropower
vestment in low-end manufacturing, in- ilar dynamics are at work in other green- availability is expected after a two-year
frastructure spending and the property tech industries. Far exarnple, LONGi Green low. The growth in wind and solar capacity
market. Last year clean-energy industries Energy Technology, a big solar manufac- is accelerating. And China is building nuc-
accounted for 4oo/o of chinas GDP growth, turer, says the average lifetirne cost per un- lear power stations faster than any other
according to the Centre for Research on En- ir of energy generated by its solar panels country. These changes are "laying the
ergy and Clean Air (CREA), a think-tank in fell by 60% between 2015 and 2021. foundation for coal consumption to de-
Finland. Rising green-tech exports (see While much of this technology is cline from 2024 onwards", says the I EA.
chart 3) rnake u p an increasing share of shipped abroad, China's case for sainthood
China's trade with the world. Last year the depends in large part on its renewable-en- Faster is better
new three accounted for 4.5% of China's ergy roll-out at home. In this area, things The hope is that China moves even more
total exports, up from 1.5o/o in 2020. are moving quickly. China added 293 giga- quickly to roll out clean energy at home.
watts (GW) of wi nd and solar capacity in There are two grou nds for optirni srn, start-
Driving progress 2023, more than doubling its previous re- ingwith technology. China has become the
In sorne cases, thi s has led to a backlash cord in 2022. (For comparison, Britain's to- laboratory for the world on green tech. Last
from foreign governments. Take zvs, an in- tal power capacity is less than 100Gw .) over year $676bn was i nvested in rhe field in
dustry China has boosted with cheap a quarter of the new cars sold in China last China, accounting for 38% of the world's
Ioans, equity injections, purchase subsi- year were electric or hybrid, according to total and more than double the amount
dies and state contracts. Chi nese firms Xinhua, the state news service. The wide- that was invested in América, according to
have also coercively transferred technolo- spread adoption of EVs has led analysts to BloombergNEF, a research firm. Tt is also
gy frorn joint ventures with foreign car- conclude that the dernand for petrol in the ahead on nuclear technology. In December
makers, Rich-world policyrnakers are thus country may have already peaked. it began operating the world's first "fourth
considering how to protect their carrnak- china, then, might seem to be on its generation" nuclear reactor, designed to
ers from this state-backed competition. ,vay to a green future. But there is a big pro- use fuel more efficiently than previous
But Chinese firms have also displayed blem: coal. Over half of China's energy models. severa! other experimental reac-
hard work, foresight and innovation. comes from burning the black rock. That tors are also being developed in china,
Economies of scale have helped them to has fallen from about 70% in 2011. In total, which aims to produce 10% of its electrici-
keep costs low. That has led to low prices, though, more coal is bu rned every year as ty from nuclear power by 2035.
which have been driven down further by China's overall demand for electricity in- Another area to watch is hydrogen, a�
creases. Last year 47Gw of new coal capaci-
-
Climate-friendly words
ty went into operation, up from 28GW in
2022. Officials approved an average of two -
The new three El
China, mentions of selected words new coal-fired power plants a week. China, selected green exports, $bn
in government work report* Given the declini ng utilisation rates of 150
existing coal plants, sorne of the planned
-
Green
-
Ecology ones may never be used. But for local gov- Electric vehicles
120
20 20 ernments, building a coal plant (needed or • Photovoltaic cells
not) is a way to boost econornic growth. • Lithium-ion batteries
90
The coal ind ustry supports about 2.7m
jobs. That makes it difficult to tame. 60
Coal suits Chinese leaders in another
way, too. Their first priority is to ensure a 30
reliable power supply. China has relatively
little oil and gas, depending on imports of o
1990 2010 24
each. But it has vast reserves of coal. Last 2019 20 21 22 23
·�1..111úcttdt I Lv clverdge repon 11 1ig h
50111 es: N itl011.1I Prople's ro, ,gr "SS; 1 llf fcrn10111{'.';i year China dug upa record 4.7bn tonnes of
the stu ff, a process that releases methane,
 The Economist March 16th 2024 China 35

� vast potential so urce of clean fuel. A giant

machine called an electrolyser is often
u sed to strip hyd rogen f ro111 oxygen in wa-
ter. Therein líes the rub: that process eats
Vino vinci
up energy and is expensive. But as electro-
HONG KONG
lysers become more efficient and the cost
A toast to the possible end of Chinese tariffs on Australian wine
of low-carbon energy declines, so-called
"green" hydrogen might become economi- OMUCH WJNE hasgurgled up in Aus- such as barley and beef. later Australian
cal. The 1 EA says the cost of producing hy-
drogen from renewable electriciry could
S tralia in recent years that analysts
have been rneasuring the surplus in
wine was hit with tariffs that now range
fro111116% to 218%. China did not link the
fall by 30% over the course of this decade. terms of Olympic-size swimming pools. meas u res to the di plomatic spat, bu t they
china is already playinga big role in the in- The last reading suggests the plonk were widely seen as retaliation.
dustry. It makes about 40% of the world's would fil l hu ndreds. Sorne 4,oookm Until then, Chi na's thirst for Austra-
electrolysers. Several provinces have away, in Hong Kong, something similar lian wine had seerned unquenchable.
launched pilot projects airned at produc- is now happening. Cases of Australian Business took off after the two countries
ing green hydrogen and state-owned firms wine are sitting in the city's warehouses, signed a free-trade agreement in 2015. In
have pledged to bui ld a s.oookm pipeline much more than Hong Kongers can 2019 China drank up 40% of Australia's
network to transport it by 2050. imbibe (safely). Grudge-holding officials wine exports. Used to baijiit, a strong
Unexpected breakthroughs (call thern in Beijing are fermenting this trouble- liquor, Chinese boozers like the bold
miracles) in other areas, such as nuclear but perhaps not for much longer. flavours and high alcohol content of
fusión. might qualify China for sainthood. China's case of sour grapes dates to Australian wine, say sorne observers.
But more rnundane developments could 2020, when Australia's governrnent Others point to the quality, But price may
also have a big impact at home. For exam- called for an international probe into the be the biggest factor. In 2020 chinese
ple, making the power grid more flexible origins of covid-is. Tensions between the winernakers cornplained that low-price
would allow China to better utilise the re- countries had already been rising. For Australian wine ,1vas hurting them.
newable energy it already has in place. At China, this was a tipple point. It placed The new tariffs ca u sed the trade to
the mornent, a surplus in one spot often trade restrictions on Australian products "vanish overnight", says Eddie McDou-
goes to waste. But ofñcials are making pro- gall, an Australian wine producer. Sales
gress. They have bui lt a network of power of Australian wine to China were 99%
lines to help move renewable power from lower last year com pared wi th 2019.
western China, where there are lots of Man y of the bottles originally des ti ned
wind and solar resources, to industrial for China are gathering dust.
centres in the east. And although China has At last China looks set to uncork the
less total energy storage in its grid than flow, as part of an effort to de-escalate its
América, it is adding storage faster. punitive trade war against Australia. The
The other reason to hope that Chi na's election of a new Australian government,
shift to renewables happens faster than ex- led by Anthony Albanese, in 2022 gave
pected is its scope for better policies. Here, China cover to back down. Tariffs on
too, the grid provides an exarnple. Provin- other goods were lifted last year. In a sign
cial governrnents have much control over of irnproved relations, Mr Albanese 111et
thei r porti ons of it, They don't li ke relyi ng Xi [inping, China's leader (pictured), in
on each other for energy. So sorne prov- Beijing in Novernber.
inces prefer to use their own coal plants China is expected to wrap upa review
rather than cleaner sources located else- of the wine tariffs this month. Australian
where. Reforrns might allow renewable en- prod ucers are optimistic, which explains
ergy to be added to the grid faster. the gl ut in Hong Kong. They are stori ng
Tighter rules on ernissions wou Id also wine there so that it can swiftly enter the
help. At the moment China's carbon mar- mainland if the tariffs go. Hopefully the
ket covers around 40% of the country's Is that an Australian shiraz? saga won't have a long finish.
ernissions. Fines for breaki ng the rules are
paltry. But that may ali change this year, re-
ports Bloomberg, citing an unpublished cracked down on environmental NGOs a11d consurnption. Another was cutting carbon
government plan. seven industries are ex- activists.) But opinions can shift quickly. A intensity-a measure of emissions gener-
pected to be added to the market by 2030. decade ago public complaints about air ated per unit of economic output-by 18%.
These include big carbon-emitting sectors pollution grew so loud that the state was China is "severely off track" for ali of these
such as aluminium, cement and steel pro- torced to act. It qu ickly im posed anti-pol- goals, says Lau ri Myllyvirta of the CREA.
duction. The government is also planning I ution measures, though not the type of Nevertheless, Chinese officials contin-
to in crease penalties this year. Such efforts bread reforms that wou ld lead to greater ue to talk a big game about creating a green
are increasingly necessary owing to pres- progress on the cli mate. Those rnay come if economy and achieving carbon neutrality.
sure from abroad. From 2026 the EU will the effects of climare change becorne more "We will advance the energy revolution,
start taxing imports based on how much tangible. china's coastline is vulnerable to tighten control over fossil-fuel consump-
carbon was emitted while making them. flooding as sea levels rise. The arid north tion and work faster to develop a new ener-
Whether Chinese officials will face lacks drinking water. Last year droughts gy systern," said Mr Li in his state-of-the-
pressure at home is another question. Few darnaged crops across the country. nation speech, But he added: "We will see
people in china express much concern So far, though, the government is strug- that coal and coal-fired power play their
about clirnate change. Most think the gov- gli ng to change. Take the six targets China crucial role in ensuring energy supply."
ernment is doing a good job when it comes set for itself in 2021 to be met by 2025. One
1 Until that changes, China's case for climate
to renewable energy. (Since 2012 it has was "strictly controlling" growth in coal sainthood will be weak. •
The lsrael-Hamas conflict is for talks. They hoped to secure a six-
week pause in the fighting. Hamas would
A bleak outlook have released roughly 40 Israeli hostages
d uring that time, in exchange for hundreds
of Palestinian prisoners. Israel was ada-
mant that it would resume fighting once
the deal expired. Still, it agreed in principie
toa pause (a final deal would have required
OUBAI
cabinet approval).
Hopes for a troce in Gaza are giving way to fears of a long stalemate
Yahya Sinwar, the leader of Hamas in
AMADAN, TH E Muslim month of fast- was a symbolic deadline, not a final one. Gaza, did not agree. His emissaries strug-
R ing, was never going to be ajoyful time
in Gaza this year, but it was at least meant
But the.ir failureto rneet it raises questions
no one had wanted to answer. First is
gled to reach hirn during the talks (he is
thought to be hiding underground some-
to be a hopeful one. For weeks Western and whether Israel will go ahead with a long- where in southern Gaza). When they did,
Arab officia)s laboured to strike a truce bet- threatened offensive in the southern city just days before Ramadán. he insisted on a
ween Israel and Hamas before it began on of Rafah, where rnuch of Gaza's population perrnanent ceasefire, a dernand he knew
March ioth. Palestinians in Gaza would is now sheltering. Next, arnid repeated that Israel would reject. Negotiators from
have had a respire from five months of warnings of looming famine, is how to in- Hamas grew obstinate. Asked to provide Is-
near-constant war. Dozens of Israeli hos- crease the flow of humanitarian aid with- rael with the names of surviving hostages,
tages would have returned home. Dip- out a truce. Last is whether the war will they ref u sed.
lomats hoped they could then turn the now drag on for further rnonths, with nei- No one can say exactly what Mr Sinwar
temporary ceasefire into a permanent one. ther side able to declare victory nor willi ng is thinking. Diplomats in the región, how-
It was not to be. The talks failed, and the to cut thei r losses. ever, believe he is gambling on two things:
war continues. The death toll in Gaza has In the run-up to the holiday, negotia- that continued scenes of death and depriv-
passed 31,000, a majority of them civilians, tors shu ttled between Cairo, Doha and Par- ation in Gaza will increase international
including 67 people who were found dead pressure on Israel, and that Ramadan will
on the first day of Ramadan. Families are be a trigger for violence in Jerusalem and
struggling to find food for iftar, the nightly 7 Also in this section the Israeli-occupied West Bank. Both
fast-breaking meal. The more than 130 re- would push Israel to end its war for good,
37 Gaza's shadow economy
maining hostages have now entered their sparing Harrias the need to make conces-
sixth month of captivity, and dozens of 38 Restitution gone wrong in Congo sions for another temporary lull.
them are thought to be dead already. The prospective offensive in Rafah has
39 Gulf states in Africa
Negotiators are still talking. Ramadan unnerved even Israel's closest allies. Joe ..
 The Economist March 16th 2024 Middle East & Africa 37

� Biden, the American president, has Buildi ng it will betheeasypart, though. Gaza's wareconomy
warned Israel not to proceed without a The maritime route could bring thousands
plan for protecti ng the 1.4n1 civilians dis- of tonnes of aid to Gaza each day, the equiv- Shadowland
placed to the city. "[We] cannot have alent of around 200 lorri es. It wi 11 probably
30,000 more Palestinians dead," he told arrive in the northern half of the enclave,
MSN"BC, a cable-televisión channel, on which is largely in ruins and slipping into
March ioth. His phrasing was sornewhat anarchy. The 300,000 Palestinians who re-
RAMALLAH
garbled, but he called an invasion of Rafah mai n there have been worst affected by the
Clans, gangs and dodgy businessmen
a "red line" and seemed to imply that he lack of food. Once on land, supplies will
prosper while Israel clobbers Gaza
might withhold shipments of offensive have to be stored and distributed around
weapons if Israel crossed it (though Jake Gaza. Aid workers are vague when it comes FTER THE trauma of repeated displace-
Sullivan, his national securiry adviser, was
later careful to play down the idea).
to the details of how ali this will work-it is
not yet clear where they will find the nec-
A ment from her home in Gaza city, suha
Alam felt there was little left to lose. Hav-
As he has forweeks, Binyamin Netanya- essary warehouses and trucks, or how they ing fled to Gaza's southernrnost city of Ra-
hu insísts Israel wíll press forward. Rafah will secure thern. fah, she messaged a friend still in the north
is Hamas's last redo u bt, he argues, and Is- Still, if Israel does delay its Rafah opera- to check on the family home, only to be
rael rnust attack its rernaining battalions. tion, and if sorne combination of air- told that looters had got through a hale in a
"we'll go there. We're not going to leave drops, ships and lorries ease the worseni ng broken wall and stolen everything.
thern," the Israeli prime mi nister said in an hunger in Gaza, the international pressure Numerous displaced Palestinians say
interview with Axel Springer, a German Hamas is hoping for may not materialise. their homes in the north have been ran-
media conglomerare. on the ground, how- Violence may not, either: tensions are sacked while they sought shelter in caza's
ever, there are still no signs of an irnmi- high, but jerusalern and the West Bank south. Everythi ng from te levisions and
nent offensive. Israel has withdrawn many have been unexpectedly calm since Octo- kitchen appliances to fu rniture has been
of its troops to Gaza's periphery, and to a ber. It wou ld not be the first ti me Mr Sinwar taken by Palestinian gangs, which aid
corridor that bisects the enclave. Unless it miscalculated. He believed that Iran and workers say have been i ncreasingly well
rernobilises sorne of the reservists it has its proxies in the "axis of resistance" would organised in the north, even as Israel's ar-
sent home over the past two months, it join the fray after Harrias assaulted Israel my claims to be in full control of the area.
lacks the rnanpower for a major offensive on october 7th and was disappointed by M uch of the loot is then offe red for sale
in a densely populated city. the tepid response from his allies. in makeshift rnarkets, where the victirns of
With no truce and no climactic battle, robbery have sometimes been able to buy
Watching and waiting the alternative is stalernate. Israel will not back their own stolen goods, including fur-
Hamas has kept upa drizzle of rocket ñre be able to defeat Hamas absolutely or free ni tu re. These flea markets are part of an
on southern Israel, to demonstrate that i t j s ali of the hostages, its stated goals for the ernerging patchwork economy where
not vanquished, but it is too battered to war. It cannot even find Mr Sinwar, despite clans, local mafias and established busi-
pose a serious threat. Israel's generals are a months-long manhunt. What remains of nessmen can use their know-how and
thus in no rush to en ter Rafah: they want Harrias. for its part, can hope for nothing muscle, in sorne cases abetted by links to
time to allow their troops to rest and re- more than to endure, at horrific cost to its Jsrael and Egypt, to fill a vacu um.
group, and may also want to avoid an of- own peo ple. Arnbitious plans for a new Gaza's clans have long been power-bro-
fensive during Ramadán. which has been a government in Gaza and post-war diplo- kers. They never went away under Hamas,
catalyst for violence in the past. Clashes macy will gather dust. That may suit Mr whose cannier leaders learned not to pick
between Israelí poli ce and Palestinian wor- Sinwar, who sees mere survival as victory. quarrels with the larger families, prefer-
shippers at Ierusalern's al-Aqsa mosque lt may also work for Mr Netanyahu, who ring to operate in tandem or alongside
during the holiday in 2021 helped fuel a fears that ending the war will also end his them rather than in opposition. Aid offi-
round of bloodletting across Israel and the time as prime minister. Bu ti t is a bleak sce- cials and observers say the clans are in-
occupied territories. nario for everyone else. • volved in both types of crookery: in sorne
On March izth a tugboat hauling 180 cases they offer NGos safe warehouses and
tonnes of food left the Cypriot port of Lar- merchants protection f or their goods-for
naca for Gaza. Organised by José Andrés, a afee; in others they arrange the theft of aid,
spanish-American chef and philanthro- which they later sell at extortionate prices.
pist, it is the first ship authorised to deliver In January reports that lsrael's security
aid to Gaza since Harrias seized the enclave chiefs favoured the idea of using Gaza's
in 2007. It was dueto arrive as The Econo- clans to help temporarily administer the
mist went to press. smaller boats wi 11 prob- strip drew widespread international criti-
ably ferry its cargo to shore, since it has no- cisn1. Yet it is already begi nning to happen.
where to dock (the fishing port in Gaza city NGOs are i ndi rectly employi ng the services
was bombed early in the war). of southern Gaza's biggest fa111ilies to pro-
It is a tri al run of sorts far a more ambi- tect and help distribute aid to the lawless
tious plan to deliver aid. In his state-of- territory's desperate people. Videos circu-
the-union address on March 7th, Mr Biden lating on social n1edia depict 1nen armed
announced that América would construct wich sticks, sometimes with guns, riding
a temporary pier on Gaza's coast to receive on top of humanitarian convoys. Israel has
larger vessels. A warshi p Ieft Virginia two cited this as evidence of Hamas stealing
days later carrying equipment; at least aid. But aid workers say in many cases
three others have embarked as well. It will 1nen1bers of powerful fan1ilies have been
take severa! weeks for them to reach the hired to protect goods from desperate
eastern Mediterranean, and several more crov.rds that migl1t ransack the lorries.
to build the dock. The pier is unlikely to be The rise of these families is "a recipe for
operational until May. What lies ahead? interna! strife", sa)'S Mkhajn1ar Abusada, a�
38 Middle East & Africa The Economist March 16th 2024

Belgium and Congo

Restitution gone
wrong
The return of a sacred mask stolen by
Belgium stokes violence in Congo
HENEVER A BELGIAN king takes an
W interest in the Congo, history looms
large. In the late 19th century King Leopold
II turned the territory into a giant slave
plantation, murdering, raping and slicing
off limbs in a ruthless bid to profit from its
resources. So when Phi li ppe, Belgiu rn's
current king, visited the Democratic Re-
public of Congo in June 2022, he did so in
the spirit of atonement. He wanted to open
a "new chapter" in the two countries' rela-
Making a racket tions, he said, and handed overa precious
wooden carving known as the Kakungu
� professor of politics at Gaza's al-Azhar Uni- America's plans for a floating pier off mask, one of thousands of cultural arte-
versity (now destroyed) who has fled to Gaza's coast may well allow more supplies facts looted from Congo that Belgi um has
Cairo. "These big clans will try to rnonopol- into the strip, but NGos and the UN repeat- promised to give back.
ise and dictare the lives of other Palestin- edly say that aid alone cannot stave off a Alas, violen ce seems to have followed
ian farnilies," he warns, noting that sorne famine. To tackle the crisis, privare Gazan Philippe into the Congo like Leopold's
more established familieswere involved in businesspeople must be given their head. ghost. In the sanie month that he visited,
extrajudicial killings during past periods Yet cornrnercial imports rernain rninus- ethnic conflict broke out in Kwamouth, a
of turmoil. One of them, the Dughmush, cule. Private business in Gaza has virtually district just north of Kinshasa, the capital.
was involved in the kidnapping of a BBC collapsed sin ce october 7th. But an aid offi- It pitted the local Teke people against their
journalist, Alan Johnston, in. 2007. u� offi- cial remarks: "With su pplies so short, there neighbours, the Yakaand the Suku. The Ka-
cia)s say that lorries trying to reach central is plenty of money to be made," kungu mask is venerated by both the Suku
Gaza have been stopped at makeshift road- A handful of Israeli-vetted Palestinian and Yaka as an ancestral syrnbol of war.
blocks and ransacked by organised groups. businessmen with old ties to Israel have T.hey believe it confers magical powers on
One aid worker said that, if the flow of been able to bring goods into Gaza privare- their fighrers, making them invulnerable
food and medicine remains clogged, thus ly. But this can have disastrous conse- to bullets and giving thern the ability to
pushing up prices, "you are going to en- quences, as in February when 112 people disappear. These attributes had helped
courage these gangs and families to con- were killed trying to get to aid in lorries their ancestors resist colonisation.
solidate and then they simply become part brought in by Palestinian merchants. And According to the UN Group of Experts
of the landscape." traders uncertified by the Israelís have to on the Congo, the return of the Kakungu
A Western diplomar involved in trying co-operate with the clans or farnilies to do mask has ernboldened Suku and Yaka mili-
to arrange emergency su pplies says he is the same. corruption is inevitably rife. tias, who call thernselves "Mobondo", to
exasperated. In Decernber, he says, lorries "You are allowing these six ar seven indi- carry out vicious attacks on Teke cornmu-
owned by Palestinian businessmen with viduals to control the econorny," says a for- nities. At least 300 people have been killed
links to Israel carrying cornrnercial goods mer official of the Palestinian Authority. and sorne 160,000 have been forced to flee.
were allowed through a crossing from Isra- "What is developing is warlordism-and The true death toll is probably far higher,
el at Kerem shalom, days before any hu- it's Israel who decides." • though no one knows for sure because the
manitarian aid was let in. "The Israelis Congolese arrny has sealed off the worst-
have a big hand in making the selections
and creating these crazy prices," he adds. - MEd1terranean Sea
',, .... Erez .
' ...,cross,ng
. ......
affected áreas. Humanitarian groups cite
u nconfirmed figures of 1nore than 3,000
As prices soar and so much aid is stolen ..... , deaths. "Wait a fe�, years and we'll start
and sold on, access to cash has becorne vi- ,, finding mass graves," says a journalist
,,
tal. The Palestinian Monetary Authority, .... ,
based in Kinshasa.
,,,,--
based in Rarnallah in the West Bank, is the .,, Although the return of the Kakungu
Gaza Strip ,,,
closest thing the Palestinians have to a ,, ;' mask may well have inflamed the violence,
,
,
central bank. It has scrarnbled to put cash
,.,,
.. , the conflict has deeper roots. It began with
into the stri p's few ATMs. Just six of Gaza's a disagree111e11t over land rights. The Yaka
91 are working, Pleas to get perrnission ,,,,' ISRAEL and Suku had for years paid taxes to Teke
,J
from Israel for engineers to fix the broken 1
l
1
customary chiefs in return for permission
machines have fallen on deaf ears. 1
1 to farm the Iand. An attempt by those
,
1

Jamie McGoldrick, the ux's humanitar-

-: chiefs to in crease the customary tax in ear-
1

,, I

ian co-ordinator in Gaza, has said that one I hn • ly 2022 was the trigger for the initial clasl1-
way to combar the growing anarchy, espe- ,.,,' .----------- es, which have spiralled into something
lsraeli military operations
Rafah •
,......
cially in the north, is to "flcod" Gaza with ,,'
crossing • Kere,n
At March 12th2024 verging on etl1nic cleansing. The Mobondo
aid so that it is not used for extortion or Shalom Sourccs tnsutun ív1 ch !:,luJy ot appear to be trying to drive out the Teke
\'\lor; AEl's Cnrir:al r hreats Pr, ijoo
sold on the black market. from Kwa1nouth and nearby areas. ..
 The Economist March 16th 2024 Middle East & Africa 39

� The Congolese government has made ly brokered by Mr Kavabioko, sorne were annual average trade between sub-Saharan
things worse. It appointed a "pacification drafted into the Congolese army and sent Africa and the UAE was less than half of
comrnission" to defuse the conflict in Sep- to fight against M23, a Rwanda-backed re- that between the region and América. But
tember 2022, led by a member of the Suku bel group active in the country's far east. since 2020 the sum of imports and exports
royal farnily, Fabrice Kavabioko, who is "The lack of accountabilíty for alleged per- between the UAE and sub-Saharan Africa
also known as Ki ng Min i-Kongo, But, ac- petrators deepens mi strust among com- has been larger. Over the past decade the
cording to a UN report, Mr Kavabioko is one munities," says Thon1as Fessy, a Congo re- UAE has been the fourth-largest foreign di-
of the figureheads of the Mobondo and searcher at Human Rights Watch. rect investor in Africa, behind China, the
"was accused of having been an instigator Congo's army may have also been hea- EU and América. It has come to the rescue
of the conflict" Many Teke thus felt that vy-handed with Yaka and Suku cornmuni- of African states running short of hard cur-
the government had sided with their rivals. ties suspected of harbouring Mobondo rency, for instance bailing out Sudan in
Mr Kavabioko has reportedly said he was militants. Pive soldiers have been convict- 2019 and Ethiopia in 2018. Recently it
"entrusted with the mission ... of restoring ed of rape or extrajudicial killings. Sorne pledged to invest $35bn in Egypt. The mil-
peace" and that he had done so. reckon the government is blocking jour- lions of Africans in Gulf countries are a vi-
Nearly joo suspected Mobondo fighters nalists and aid workers from entering Kwa- tal source of rernitrances back home.
have since been detained, according to Hu- mouth for fear they will unearth evidence The UAE has been particularly active in
man Rights Watch, an international moni- off urther abuses by the arrned forces. The logistics and energy. It is China's main rival
tor. Yet over 1,000 more faced no punish- Mobondo, rneanwhile, continue to attack for African ports. DP World, a Dubai-based
ment at all. Instead, under a deal apparent- soldiers and civilians alike. • firm, runs ports in nine African countries
and in October won a new concession in
Tanzania. The Abu Dhabi Ports Group runs
The Gulf and Africa several more. These bolster the UAE's posi-
tion as the hub between Africa and Asia, a
Out of Arabia role boosted by the Emirates airline.
The UAE is also helping Africa develop
oi l and gas projects ata time when sorne in
the West are Vlary of falling foul of clirnate
agreernents. In Decernber Morocco and the
UAE agreed to build a pipeline that could
ADDIS ABABA, CAPE TOWN ANO KIGALI
take gas frorn Nigeria to the Mediterra-
Gulf countríes are becoming major players in Africa
nean. At the same time, Brnirati investors
INING INDABA, Africa's biggest min- That on-off relationship has become are among the biggest spenders on renew-
M j ng conference, is a geological jarnbo-
ree. But the latest bash, held in Cape Town
more consistent as Gulf countries assert
themselves as middle powers in a multipo-
ables projects in Africa. Masdar, a state-
owned firm, says it will invest $1obn to in-
in February, was also a geopolitical specta- lar world. Though their approaches differ, crease sub-Saharan Africa's electricity-
cle. For as well as the usual Chinese and they share a belief that African countries generation capacity by 10Gw-a big boost
Western firms there were arrivistes from are neglected by other states-and that be- given that, excluding South Africa, the re-
the Gulf. Manara Minerals, a state-backed cause they are poor, influence is cheap. gion's i nstalled capacity is 89Gw, roughly
Saudi Arabian fund., has u p to $15bn to Sub-Saharan Africa has more than 20 times the same as Mexico's. "They want to show
spend on foreign rnines. Also browsing is the population of the Gulf Co-operation that they can do these projects better than
the International Holding Company, an Council countries (Saudi Arabia, UAE, Qa- the West, and they want Africans to love
Emirati conglomerate with a market capi- tar, ornan, Kuwait and Bahrain), but a thern," says an adviser to Abu Dhabi.
talisation of $24obn, around that of Black- smaller GDP. Novernber saw the first Saudi-African
rock and BP combined; in November its Economic ties are the clearest evidence surnrnit, the latest "Africa-i" event in-
minerals arm bought a 51% stake in a Zam- of closer Gulf-Africa relations. In the 201os spired by China's triennial gatheri ngs. Sau- �
bian copper mi ne.
Gulf interest in African rnining is part
of a broader trend. The United Arab Emir-
ates (uA E), Sa udi Arabia and Qatar are
increasingly influential in Africa. The con-
tinent is a destination for their capital, an
arena for their rivalries and a test of their
global ambitions. Dubai has becorne the
crucial financia! hub for African elites. As
African leaders seek alternatives to dwin-
dling Chinese loans and Western aid, the
Gulfs rise is reshaping geopolitics on the
continent, with effects good and bad.
Gulf-Africa relations go back centuries;
archaeologists have found Arab coins at
Great Zimbabwe, a medieval city-state. The
Horn of Africa, separated from the Arabian
península by the Gulf of Aden and the Red
Sea, has long been seen by Arabs as in thei r
neighbou rhood. Interest in the rest of Afri-
ca has focused on supporting Muslim
charities and buying agricultura] land, yet
waxed and waned with the oíl price. Copper-bottomed investment
40 Middle East & Africa The Economist March 16th 2024

� di Arabia announced it would invest more terms of investrnent, the way it stealthily financial regulation, African business and
than $25bn in Africa by 2030, and give a builds a network of strongmen is equally political elites-often the same thing-
further $5bn in aid. Having helped bail out suggestive of Russia's Afri ca strategy. have turned to Dubai. In 2021 there were
Sudan and, reportedJy, the Central African The UAE has used economic might and more than 26,000 African companies in
Republic (CAR) in recent years, Saudi Ara- supplies of weaponry to stitch together a Dubai, an increase of around a third frorn
bia has since pledged help to Ghana and web of clients in north-east Africa. These four years earlier, according to the Dubai
other countries with debt crises. include Khalifa Haftar, a Libyan strong- Chamber of commerce.
Qatar's role in Rwanda shows how man; Muhammad Hamdan Dagalo, a Suda- Most capital flows from Africa into Du-
small investments (by Gulf standards) go a nese warlord better known as Hemedti: bai are perfectly legal-and rational, for
long way in Africa. The Qatar Investment and Chad's president, Mahamat Déby. The elites keen to keep their cash. "Many Afri-
Authority (QIA), a $5oobn sovereign- UAE's support for Hernedti's Rapid Support cans don't trust their own economies," ar-
wealth fund, has been a co-investor in a Forces in sudan's year-long civil war-dur- gues Ricardo Soares de Oliveira of Oxford
pan-African fund with the Rwandan Social ing which his paramilitary force has been University. And in contrast to Chinese or
Security Board, a dornestic fund. QIA also accused of genocide-has cornplicated Indians using Caribbean tax havens or
has a 6oo/o share in a project to build a new Saudi- and American-led peace talks and is Mauritius before bringing the money back
airport to the south of Kigali, the capital. encouraging his opponent, the Sudanese home, "Africans don't do much round-trip-
The Gulf states' appeal to Africa is Armed Forces, to seek weaponry frorn Tran. pi ng: i t's rnostly one-way"
three-fold. First, they have money to spend (The UAE denies arming the force.) Yet various reports suggest a more wor-
when others are pulling back. In the 202os In addition, the UAE has forged a close rying side to Dubai. In 2020 a report by the
annual new Chinese lending to Africa is on relationshi p with Abiy Ahmed, Ethiopia's Camegie Endowment for International
average ioss ofwhat it was during the 201os prime minister, funding infrastructure Peace, a think-tank, argued that "Dubai 's
($1.4bn per year versus $14bn). In 2022 the projects and supplyi ng drenes u sed in the property market is a magnet for tai nted
share of Western aid to Africa was at its civil war in Tigray. Eritrea and Somalia money," lt identified 34 Nigerian gover-
lowest si nce at least 2000. Second is speed: have sought Saudi Arabian support in op- nors, seven senators and 13 ministers with
Gulf autocracies are seen as much faster posing what they see as a UAE-backed plan Dubai properties, the cost of which it says
than the West or the World Bank. In Janu- by landlocked Ethiopia to recognise sorna- would seem to "exceed what their official
ary Uganda picked an Emirati firm to build liland, a breakaway part of sornalia, in ex- salaries should perrnit" Also in 2020 the
a $4bn refinery having ended a deal with change for a leas e of land on the coas t. sentry, a watchdog, claimed that Dubai im-
an American group it said was taking too "We're aware we don't have enough of an ports around 95% of the gold coming from
long. Third, the Gulf is seen as sornething understanding of the UAE dynarnics," says conflict hotspots such as Sudan, South Su-
of a model for African countries seeking to a Western diplomat in Ethiopia. dan, Congo and the CAR. Last year a report
diversifyaway from natural resources. And by Al-Jazeera, a Qatari news outlet, alleged
"like the Chinese it does not hurt that they With friends like these that Zimbabwean elites have smuggled bil-
are courteous and roll out the red carpet, The effects of Emirati adventurism are a re- lions of dollars in cash and gold to Dubai.
even for leaders of small countries," adds minder that the Gulf is hardly going to Hemedti has become rich, in part, by sell-
an adviser toan African presiden t. champion African democracy. The Saudis ing Sudanese gold via Dubai, says the UN.
The Gulf's economic push is coupled have welcomed juntas that took power via Last month the UAE celebrated its re-
with a diplomatic one. From 2012 to 2022 coups. In sornalia, Qatar and the UAE have moval from an official money-laundering
Qatar and the UAE more than dou bled the accused each other of bribing rival politi- "grey list" Yet Dubai rernains home to
number of ernbassies they have in Africa. cians, América has imposed sanctions on man y peo ple accu sed by African and other
Saudí Arabia plans to increase its dip- firms based in the UAE for their alleged states of graft, such as Isabel dos Santos,
lomatic posts to 40 (frorn 28). African lead- connections to al-Shabab, the somali jiha- the daughter of Angola's ex-president.
ers have joined it in condernning Israel's dist group, and to Wagner, the Russian South Africa has for several years struggled
invasión of Gaza. It is hard to imagine mercenary force that had el ose links to He- to extradite from the UAE two of the Gupta
South Africa bri nging its case at the Inter- med ti and other strongmen. brothers who aJlegedly orchestrated "state
national Court of Justice alleging genocide Then there is the role that Dubai, in par- capture" under Mr Ramaphosa's predeces-
by Israel in Gaza without the support of ticular, may play in enabling African cor- sor. They ali deny wrongdoing.
Gulf countries including Qatar, which Cy- ru ption. Over the past decade, as European Dubai's openness-in ways good and
ril Ramaphosa, south Africa's president, countries have at least pledged to tighten bad-is not designed with Africa in mind.
visited in November, about six weeks be- But its role as a one-way ticket for rich Afri-
fare he launched the application.
- cans and their money has a disproportion-
Gulf attention to African problems has,
at times, been effective. Qatar mediated be- Morocco ··� �
e UAE
ate irnpact back on the continent. "África
may be small fry for Dubai but Dubai is
tween America and Rwanda over the re-
lease from prison last year of Paul Rusesa-
Algeria
Egypt Qatar- l huge for Africa," says Mr Soares de Oliveira.
The rise of the Gulf presents African
In d s
bagina, the hero of the ñlrn "Hotel Rwan- "e e:1- S. Arabia leaders with a familiar choice. Do they use
Chad Sudan Eritrea
da". And in 2018 Saudí Arabia and the UAE partnerships with outside powers for their
helped broker a rapprochement between Nigeria
CAR
••
Ethiopia self-interest or to benefit their citizens?
Ethiopia and Eritrea. Both Gulf states have Somalía Por the West tl1ere is another challe11ge.
contributed money to the fight against ji- America and European powers want to se-
hadists in the Sahel. e Tanzania cure more African minerals, reduce the in-
Yet Gulf states can also destabilise Afri- fluence of Russia and China, and promete
ca, underrnining Western airns in the pro- Angola Zambia good governance. The Gulf countries 1nay
cess. That is especially true of the UAE, help witl1 son1e of these goals sorne of the
which is the most risk-taking in pursuing • DP World ports/ time, but are not reliable means to Western
its geostrategic interests on the continent. inland terminals ends. As in other parts of the world, the as-
So much so that for all Africans' talk about March 2024 cendant petrostates have their o\vn ambi-
�r ur« OP Wvr d
South Africa
the UAE becorning the "new China" in tions-and will pursue them ruthlessly. •
 SPECIAL
REPORT:
The oil industry
� March 16th 2024
3 A dangerous climate
S Supply shocks
7 Demand
9 The future of OPEC
11 Oil companies without oil
A ee ive into t e wor
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 3

Oil in a dangerous climate

For the past 50 years the business and politics of oil have been dominated by matching supply to ever-increasing demand.
The next so years will look different, argues Vijay Vaitheeswaran
LY WEST ACROSS the United Arab Emirates from Pujairah, a tank- ic sorne hoped that it would never return to its previous heights.
F er-filled port on the Gulf of Ornan, towards the Persian Gulf and But it has since surpassed them. In 2023 the world produced
you get a sense of the vulnerability arid lands have to climate 101.8n1 bpd, according to the International Energy Agency (1 EA).
change. The farrns around Dhaid provide a splash of green, but Carbon-dioxide emissions from oil in that year are estimated to
homegrown food is scarce, homegrown staples next to non-exis- have reached 12.1bn tonnes ayear, according to the Global Carbon
tent. Drinkable water comes mostly frorn desalination plants. The Project, an academic consortium, representing 32% of ali indus-
heat is growing inhurnane: outside work is banned during the hot- trial ernissions. Any attempt to keep the increase in average global
test hours of summer afternoons. ternperature since the isth century "well below 2°C [3.6ºFl", as re-
The Emiratis know their predicarnent. The glearni ng cities of quired by the París agreernent of 2015, has to see those erníssions
Abu Dhabi, Dubai and Sharjah are fully aware of the threats of sea- red uced both sharply and soon.
level rise. As you reach the Persian Gulf you can see a coast-pro- No one is being forced to buy oil (though in man y places people
tecting carbon-sequestering ribbon made up of rnillions of man- receive subsidies to help them do so). And every econorny needs it.
groves, their seeds planted by drene. At the same time those Nevertheless, many of those pushing far emission cuts have a
gleaming cities are built on oil. The UAE produces about 3m barreis deep distrust of the industry which provides it to the world. That
of oi I per day (bpd) and the state-owned producer, the Abu Dhabi the oil industry has an interest in self preservation is hardly sur-
National Oil Company (ADNoc), hopes to increase its production prising. But it also has a history of attempting to underrnine cli-
capacity to 5m bpd by 2030. The UAE is a major force in OPEC, the mate science so as to encourage climate-change denial even while
cartel of oil-producing nations. It is a hub for oil traders, too. In its own scientists have known full well what was going on. It
2021, the Intercontinental Exchange, a comrnodity exchange with wields huge lobbying powerwhich frequently (infuriatingly so, to
big operations in Europe, América and Asia, started trading a new opponents) prevails when climate action threatens its future pro-
oil futu res contract far regional crudes delivered in Fujairah. fits. Oil cornpanies which try to seern like clirnate goody-goo-
The emirates are thus the world in microcosrn. The disastrous dies-witness the attempt by BP, a British oil rnajor, to rebrand ít-
hazards of climate change are manifest. The oil industry has never self as Beyond Petroleurn in the zooos=-rouri nely revert to type
been bigger. When dernand slumped during the covid-is pandem- when the associated business strategies Iail to deliver the goods. ..
4

If that is true, it is not necessarily to the disadvantage of the

Goingwith the flow UAE. The country sees itself as being able to keep goi ng until the
end of the end, if necessary. The best of the reserves around the
Brent crude, $ per barrel, 2022 prices Persian Gulf are both vast and relatively cheap to exploít. What is
US recesstons more, for the most part working them does not, in itself, emitas
-----------------
Ira ni a n Dotcom Covid-19
200
much carbon dioxide as does production in other places. Other
revolution bubbe pandemic things being equal a world reducing its dependence on oíl will
begins 150 abandon higher-cost producers first.
But transitioning away still means a change in the fundarnen-
Arab oil First Gulf
boycott war tal dynamic of the oil industry, one which has shaped it and its re-
100 Iationship to the world economy for 50 years. In October 1973, in-
furiated by Arnerica's support for Israel in the Yorn Kippurwar, the
Gulf nations in OPEC placed an embargo on sales to América and
50
its aJlies. Before that embargo a barrel of oj 1 costa bit more than $3.
Global
financia! By March 1974 it cost $13. Before the embargo the oil price had been
crisis o stable for decades. Since 1973 it has been persistently, sornetimes
1963 70 75 80 85 90 95 2000 os 10 15 20 24 remarkably, volatile (see chart).
"tr's hard to overstate the shock to the American psyche from
the seemingly overnight skyrocketing of prices, stations running
Global oíl production and consumption, millions of barreis per day
out of fuel and long lines," says Jason Bordoff, an energy policy ex-
• United States • Arab OPEC Other OPEC • Russia" Other pert whose father's petrol station in Brooklyn was besieged by an-
100 gry custorners. Now head of the Centre on Global Energy Policy at
columbra University, he remains convinced that the oil shock of
1973 and its successor, the shock which followed che Iranian revo-
50
lution of 1979, "frarned energy policy for half a century",
1'
Production
The 197os showed what a range of econornic, poli ti cal and geo-
o poli tical effects oil-supply shocks can have. In developed coun-
Consumption tries the increases in prices and the central-bank reactions to
.,l,
50
them drove up inflation and stifled the economy. That set the
scene far the rise of free-rnarket politicians li ke Margaret Thatcher
and Ronald Reagan in the years which followed.
100 Because many of the OPEC countries had little to invest in at
liijiiilliiiilililiilliiillijiillliiilfflilllillili
1972 80 85 90 95 2000 os 10 15 22 home, the "petrodollars" they were raki ng in ended up invested in
SOurc.� World Ba11 · Refiii.ti', Oataslrt�d111, ul1MJ1krg; HP !>tan:iti\.dl R1::,i1e.v, IEA "US�R u 11111 1981"1 international banks, making thern keen to lend. Developing coun-
tries, keen to borrow, sawtheirdebt climb quickly, The IMF calcu-
lates that 100 developing countries saw their foreign debt rise by
., Oil-prod ucing countries have worked to lower the arnbitions of 150% between 1973 and 1977. The1979 shock then sent interest rates
the annual conferences, known as COPS, held by the UN Frame- soari ng, triggering the th ird-world-debt crisis of the 198os-some-
work convention on climate Change (UN rece) ever sin ce the cors times called the lost decade of international development.
began in 1995. They are a large part of the reason why, for decades,
the cors never specifically acknowledged the need to reduce the Two score years and ten
use of fossil fuels. When, in Novernber 2023, thousands of dip- Pifty years on is often a good ti me to look back on a radical change.
lomats, politicians, scientists, entrepreneurs, lobbyists and jour- rt fits well with a human lifespan. It lets people born after the
nalists arrived in Dubai for coP28 many did so itching for a fight change understand better what is special about the world they
about this, their indignation whipped up by the UAE's decisión to have always known, what is necessary and what conringent.
appoint Sultan al-jaber, the boss of ADf':OC, as the cors president. Those towards the end of life can provide first-hand accounts of
But COP28 ended in December with a significant, though syrn- the change and its aftermath.
bolic, step forward. Its final communiqué called on the countries That wou Id be reason enough for taking stock of the world
of the world to contri bu te towards a transition "away from fossil which the oil shock of 1973 created. But the turn acknowledged in
fuels in energy systems ... accelerating action in this critical de- Dubai last December makes the task more urgen t. The post-1973 oil
cade, so as to achieve net zero by 2050." rnarket has always been a tussle between the rate at which sup-
To "call on" is not to require: to "contribute to" is not to whole- ply-sporadícally co-ordinated by OPEC-and dernand have
heartedly pursue. "Transitioning away" is grown. In a climate-constrained world that growth must end.
not the "phasing out" many of the dele- Sorne imagine it plateau ing; sorne insist i t must fall far and fast. If,
gares would have preferred. In all those oras, that happens, the questions of the past-where will new
ways, the agreement was weak beer. But it In October 1973, supply come from, and how secure will it be-become fu rther
still marked a historie turning point in cli- before OPEC complicated by new worries: who will stop supplying, and what
mate negotiations: a declaration from the effect will that have. When demand is rising, overestimating the
heart of the oil establishment that demand
imposed its trend can lead to over-investment. When demand is falling, un-
for the defining res o urce of the zoth centu- embargo, a barrel der-investment may be a bigger risk.
ry should start to fall. Though "we didn't of oil costa bit This special report will assess how oíl consurners could come
turn the page on the fossil-fuel era in Du- more than $3. to demand Iessand the effects thatshift can be expected to haveon
bai," Sirnon stiell. the head of the uxrccc both OPEC and on the West's big oil companies. Pirst, though, it
secretariat, said afterwards, "this outcome By March 1974 will look at how much more resilient the oil world has grown to
is the beginning of the end." a barrel cost $13 upsets since the shocks of the 197os. •
 5

I Supply s hocks j
middlemen in rerouting Russian oil away from its usual custom-
ers. Traders based in Dubai and Singapore have rejigged tanker
fleets to send vast quantities of discounted oíl through Indian re-
Crisis and after fmers, changing established routes with astonishing agility.
Badr Jafar, head of Crescent Group, an Emirati firm with natu-
ral-gas operations in Iraq and Egypt, says he has seen a big rise in
"grey-zone trading" of sanctioned crude, often through rniddle-
men in the UAE. He says the lack of "secondary sanctions on Rus-
Supply shocks are more easily handled in a world where
sia that would actually stifle this trend" shows a tolerance frorn
America has a lot of oil and markets have many players
the West. The success in getting Russian oil to market may see
N JANUARY 2022 Brent crude, the benchmark against which the more grey-zone trading from other sanctioned countries, too.
I majoriry of crude oil is priced, soared above $87 per barrel for the
first time since 2014. By early March, after Russia's invasion of Uk-
Even when sanctions leak they still have an effect on the price
the sanctioned country can get, and thus its income. And they
raine, the price had jumped another 50%. The markets were afraid erode future capacity. Sanctions airned at stopping oil cornpanies
that sanctions on. Russia, one of the world's three largest oil pro- frorn getting the technology they need have holes of their own, but
ducers, would sharply reduce worldwide supply. they still have an effect. Arjun Murti , a veteran market-watcher
Governments were worried about gas, too; if Russia turned off who writes about energy ata site called "Super-Spiked" says Iraq,
the taps what wou Id happen to the Euro pean economies reliant on Iran, Libya and Venezuela have never fully recovered the produc-
the stuff? The "World Energy outlook" published that auturnn by tion levels they had before América sanctioned them. sorne in the
the JEA, an intergovernmental organisation which brings together industry are impressed by howwell Russia's resourceful oil sector
big energy-consuming countries, proclaimed that the invasion's has kept production going in the tace of such sanctions; it remains
impact on oil and gas markets had brought about the world's "first to be seen, though, how long it can do so.
truly global energy crisis, with impacts that will be felt for years to
come". The shock of 1973 (which had, among other things, led to Give me a shale play anda place to stand ...
the creation of the I EA) was focused on oil alone and had its And then there was a third factor. Over the course of the 198os and
prompt effects in developed countries. The post-February 2022 199os a small nurnber of American entrepreneurs pursued an ap-
energy crunch was felt more widely more quickly. parently q uixotic interest in using high-pressure water laced with
But if more of the world was vulnerable than it had been in the chemicals and grit to break up recalcitrant rocks. They believed
197os, the energy system was also more robust. In response to the that this hydraulic fracturing, or "fracking", an approach which
shock of 1973 consurner nations set up petroleum reserves, co-or- had been the subjecr of government research in the 197os, might
dinated by the IEA, with which they could counter sudden supply get gas out of rocks that were too "tight" to yield it up under nor-
shocks. March and April of 2022 saw the Iargest-ever releases from mal conditions. They were right. In rhe early zocos fracking, cou-
those reserves, including rnajor withdrawals from America's Stra- pled with advances in horizontal drilling, saw previously untap-
tegic Petroleum Reserve (SPR). pable shales produce gas in abundance.
Opening reserves offers sorne respite; America's treasury de- sornetirnes, in the oil business, geopolitics drives technology,
partrnent calculated that the withdrawals from the SPR in the first as when the closing of the Suez canal in 1956 brought the super-
part of 2022 lowered petrel prices at the pump by between 17 and tanker into being. On other occasions new technology drives geo-
42 cents a gallon. But it is necessarily a short-term response. A politics. That is what has happened with fracking.
greater so urce of resilience was the market itself. In the 197os the Shale-gas prod uction quickly rose to the point where the
oil market was a brittle, secretive enterprise. Over the decades American market was glutted. Liq uefied natural gas (LNG) terrni-
which followed it grew into a sophisticated and largely transpar- nals originally intended for imports were thus reconceived as a
ent market worth over $2trn-bigger than the markets for the next way for shale-gas producers to access the higher prices offered on
ten commodities combined. world markets. Between 2016, when the first American export ter-
Edward Morse, who until recently ran cornrnodities research at minal opened, and 2022 the volurne of the world's LNG trade rose
cítigroup, a bank, says the developrnent of new ways of trading by 56%. Further growth in American LNG exports should see the
contracts and futures has, along with a much more liquid market, trade overtake pipelines to becorne the main modality for cross-
come to "provide an alternative world to border natural-gas sales.
the beggar-thy-neighbour approach that Because of this, the winter of 2022-23
lay at the core of the Arab boycott and was nothing like as bad for Russian-gas-
which has characterised OPEC poli tics New rush deprived Europe as had been feared. The
since" As a senior figure ata trading house United States, crude-oil production continent reduced demand through va-
puts it: "We now have a much more global, Millions ofbarrels perday rious measures and increased LNG i rnports
interconnected systern that responds to --------------- 14 by more than 5on1 tonnes, or 66%. sorne
price. If an arbitrage opens up in crude or 12
44% of that carne from America, with cus-
products ... you'll see ir happen," With Rus- tomers in Asia selling their contracts to
sia's export markets restricted, in practice, Alaska 10 customers in Europeas the ships involved
to China, India and Turkey, the market 8 were at sea, re-routing the flow almost in
adapted to the new realities. Shale real time. The spike d uring that period in
Thisdid notjustmean theefficientreal- 6 LNG prices around the world, a serious
location of supplies frorn countries other 4 blow not just to poor and natural-gas-de-
than Russia. It also meant that the sane- pendent countries such as Bangladesh and
2
tions were notas effectíve as those impos- Pakistán but also to middle-income coun-
ing them had hoped. Saad Rahirn, chief o tries such as India and Brazil, was part of
economist of Trafigura, a cornrnodities- 1970 80 90 2000 10 23 what the JEA had in mind when signalling
trading goliath, points to the role played by Sourc . DA 'u1n-.1 nuonal drilllng, loc lu.Jrng ufls,,ore the global nature of the crisis. ..
6

of the age, Arnerica's response was a "piv-

ot" to East Asía-and thus away from the
Middle East. That change in focus was put
on clear display when, on septernber iath
2019, two oil-processing hubs owned by
Saudi Arameo, the country's national oil
cornpany, were crippled by missile and
drone attacks staged, at least in part, by Ira-
nian-backed Houthi rebels in Yemen.
Ararnco's production fell by 5.7m bpd.
In 1990 a fall in prod uction of sm bpd
caused by the Iraqi invasion of Kuwait saw
prices spike to a once-in-a-decade high-
followed, six months Jater, by an Arneri-
can-led war. In 2019 America offered a to-
ken in crease in the nurnber of troops it had
in the Gulf and sorne upgrades to their kit.
If attacks on Saudi assets had continued or
threatened stability, rnuch more would
surely have been done. But the American
response, or lack of it, was keenly felt. "Ab-
qaiq got attacked and the United States
didn't raise a finger," says Jasan Bordoff of
Columbia; it marked a turning point.
Yet the change in America's priorities is
hardly abandonment. And if it has created
even a partial void, it is not one others are
keen to fill. The increased role Asían econ-
omies play in the Gulf is plain far ali to see.
Chinese state enterprises are the leading
investors in lraq's oil sector and have in-
� The blunting of Russia's gas weapon is just one of the ways in vested in one of the biggest Saudi refineries. Chinese solar ñrrns
which Arnerica's new drilling technologies changed the world. have made i nroads into the UAE. On a state visit to the UAE in July
The fracking which worked far gas also worked, mutatis murcndís, 2023 Narendra Modi, India's prime minister, persuaded his hosts
far oil. Between 2005 and 2015 petroleum production in America to start trade settlement in local currencies, not the dallar.
rose from Bm bpd to 15m bpd and the country's oil imports fell These economic ties do not, however, mean that Asían coun-
from 14m bpd (an all-tirne peak) to 9m bpd. Having lost its long- tries are keen to take on a role in ensuring the region's stability.
held crown as the world's largest oi 1 prod ucer in the 197os, falling Robín Milis of Qamar Energy, an advisory firm in Dubai, says rela-
first behind the Soviet Unión and then Saudi Arabia, in 2018A1ner- tions between China and the Middle East are broad but shallow,
ica regained it. It is now not just the world's largest producer and with little attention paid to security. The deal normalising rela-
consurner of both oil and gas but a net exporter of thern, too. tions between Saudi Arabia and Iran that China brokered in 2023
This does not mean America has complete sway over the ener- suggests deeper engagernent is possible, but it is likely to be slow.
gy world. In oil it is a price-taker, nota price-rnaker: its shale sec- The current turmoil in the region makes the case. For ali its at-
tor cannot rarnp production up and down in the way that Saudi ternpted pivot, América rernains deeply involved and implicated
Arabia can. But it does mean that the world's most powerful coun- in the conflict which began with the Harrias atrocities of october
try no longer faces crippling worries about energy security. In the zth. Asia's majar oil consumers are not. They do not share Ameri-
future protracted high prices will see the shale sector expand. ca's interest in containing Iran, which in 2023 sold more than 90%
of its crude to China. Few are committed to the support of Israel, or
... and I will move the world to backing America's effort to keep the Red Sea safe frorn the at-
The geopolitical implications go beyond keeping Europe warm. tacks Houthis are launching in support of Hamas.
America's lessened irnports meant its worries about the flow of oil Things would doubtless be different if it were transit out of the
frorn the Gulf, a constant fron11973 through the Gulf war of 1991 Gulf, rather than through the Red Sea, which was at risk. sorne-
and into the zocos, began to wane. They also made it possible far thing like a fifth of the world's oil flows through the Strait of Hor-
more of the Gulf's oil to flow east. In the zocos China's economy muz at the mouth of the Gulf. Since 1980 America has been corn-
was growing atan unprecedented rate, and with it the country's mitted to opposing outside influences in the Gulf, including by
thi rst far oil. The addi tion of America's shal e oj l to the global su p- force of arrns if necessary; assuring free passage through the strait
ply thus came at an opportune moment. "us-China cornpetition is at the heart of that "Cárter doctrine".
far resources ... seemed inevitable in the mid-zooos", says Meghan Despite its shale-oil wealth América still has a clear interest in
O'Su llivan, director of the Bel fer Centre at Harvard's Kennedy staving off the shock to the world econorny, not to mention the
School of covernment. But despite the fact that China's demand blow to its own prestige, which would ensue if the strait were
drove prices up, that cornpetirion did not become the flash point closed. And Iran has every reason not to jeopardise the 1111 bpd that
many feared, she says, because "energy was abundant'' In 2013, the it exports to China through the strait. lt would take a big shift to
year after Xi Ji n pi ng took power, China overtook An1erica to be- change things. But that big shift is not unthinkable, If China
come the world's largest cn1de-oil importer. mounted a blockade of Taiwan, or invaded it, America's response
With China's rise becoming the para1nou11t geopolitical factor might include atternpts to try and shut off china's supply of oil at ..
 7

� the Strait of Hormuz or the Strait of Malacca, between Malaysia project in Colorado demonstrated the fea-
and Indonesia. It would be ene of the rnany ways in which such a sibility of "rnassive hydraulic fracturing"
conflict could preve disastrous fer the world economy. "We are quite as a \Vay of re leasing hyd rocarbons frorn
Absent such greater global conflict, tu rmoil in the Middle East good planning shales-would in the long ru n nave an
seems no longer enough, in itself, to roil oil markets which are so- even greater impact.
phisticated and global, and in which America can operare with the the supply but But if Mr Carter's long-term view was
confidence of a rnajor prod ucer. The rise of LNG fu rther stabilises a lways wrong wrong, the mixture of policy and innova-
the energy picture. But there are two caveats. on demand" tion that he championed still had a big ef-
One is that clirnate poli tics rnight see countries try to restrict -Patrick fect overthedecadewhich followed.And it
supply. It would be a hard task. To shut down another country's is also central to today's attempts to bring
fuel exports is both hostile and difficult, as Russia's ability to keep Pouyanné about a world without oil by design, rather
exporting oil shows. To shut down your own exports penalises do- than stumble into ene catastrophically.
mestic industry and, in a world with large and liquid markets, is The approach was based on two preven ways to reduce depen-
unlikely to do much to lower overall ernissions. dence on a fuel: use a different so urce of energy in its place; or irn-
Take the "ternporary pause" in the granting of permits for new prove the efficiency with which the fuel is used. Faced with much
American LNG terrninals which the Biden adrninistration an- more expensive oil, utilities in America and elsewhere in the de-
nounced in January, citing the need to better understand the cli- veloped world took the substitution route and gave up on the fuel
mate impact of increased gas exports. The pause is widely seen as as a way of making electriciry. In sorne places, such as France, Ja-
a rnove to placare young voters for whom clirnate is a big issue and pan and Sweden, governrnent-controlled utilities switched to nu-
to whom the idea that America can at the same time be a leader on clear power instead. ln América the market-driven response was
climate and the world's biggest oíl and gas producer makes no to switch to coal, in part because of arnple supplies, in part be-
sense. It will certainly not stand if Mr Biden loses the election. cause of the higher costs of n uc]ear energy.
Nor is it clear what an audit of the net clirnate effects would The American governrnent took a rnore active role when it
show. To che extent that less growth in American LNG exports is carne to efficiency. Corporate Average Fuel Economy (CAFE) stan-
not simply offset by more from Qatar and Australia, consumers dards wete mandated by Congress in 1975. When they carne into
who might otherwise have used LNG might be tempted back to force in 1978 they required an average fuel efficiency of 18 miles per
coal. In América natural gas kept cheap by being shut off from the gallon (13 litres per 1ook11.1) across carrnakers' prod uct lines; by
world market rnight displace renewables. 1985 that was up to 27.5n1pg. There were other efficiency pro-
The other caveat is that, fer the moment, the oil market is quite grammes, too. And consumers economised off their own bat.
slack. Though demand is atan all-time high, it is notas high as It
might have been, in part because of China's economic woes. Efficiency sufficiency
Stocks are robust, and the countries of OPEC have spare capacity. All told, American oil consumption tell by 17% frorn 1977 to 1985,
Were the rnarket to tighten, though, supply-side signals would even as the country's GDP rose by 27o/o. Coupled with similar re-
then take on new meaning. And how tight the rnarket ends u p de- sponses elsewhere this led to a glut that almost destroyed OPEC by
pends not just on dernand but also, crucially, on what producers heightening the fundamental tension within any such cartel. In
expected demand to be coday when they made their investrnents the long run the cartel as a whole stood to gain if its mernbers lim-
yesterday. When it comes to the prediction of demand, concerns ited production enough to raise prices: in the shortrun each mem-
about climate change have a much bigger role. • ber hadan incentive to try and circumvent such lirnits.
As the swing producer. Saudi Arabia had the job of rnatching
supply to dernand. In 1985 it becarne sufficiently fed up with re-
I Demand I ducing its own output to try and constrain supply while other
OPEC members broke their quotas that it turned on the taps. The
oil price fell like a stone. With the exception of a spike when Iraq
The end of oil, then and now invaded Kuwait in 1990 it rernained at its lowest post-1973 levels
until the second half of the 199os.
The response to the oil shocks was thus an example of the old-
est adage in the oil market, that high prices are the cure fer high
lt is possible to cut oil demand. That does not mean it
prices. What followed in the late 198os and 199os was an example
is easy, or will be done well
of a less storied corollary: low oil prices erode policies designed to
lower oil consurnption. In a world of cheap oil, measures aimed
1977 JIMMY CARTER told the American people it was time for specifically at increasing the efficiency of its use fell by the way-
I
N'
"an unpleasant talk" about the energy crisis. The off-putting side. In 2005 the total-fleet CAFE standards for American cars were
subject matter=the greatest peacetime "threar our country will the same as they had been in 1985.
face in our lifetimes"-was notjust the need to import more oil ar Bu t even wi thou t active encou ragement one crucial measure of
higher prices than almost ever before as a result of America's fall- efficiency continued to improve long after oil prices took their
ing dornestic oil production. It was the idea that America's falling downward slide: the amount of oil it takes to produce a given
production was a harbinger of reserves running out everywhere. lt amount of econornic output (see chart on next page). Research on
was time to think of a world without oil. the oil intensity of GDP conducted by Christof Rühl of CGEP and Tit
His belief in a fundamental constraint preved wrong both Erker of the Abu Dhabi Investment Authority shows that from 1984
globally and within the United States. Increased prod uction frorn to 2019 the fraction of a barrel of oil required to produce $1,000 of
Alaska's North Slope, made possible by the trans-Alaska pipeline incon1e (at 2015 prices) fell by alt11ost exactly 1% ayear.
system which the federal government had approved in response This does not mean less oil was u sed. It is possi ble to t1se son1e-
to the shock of 1973, saw a moderate bounce-back in American pro- thi11g more efficiently and also to increase the amount you are us-
duction in the years that followed. Another government measure ing. Jndeed, using something more efficiently can help drive such
taken in response to the embargo=i n 1977 a Department of Energy increases, beca use it raises the value of what you can do with the �
8

� stuff. But lowered oil intensity does show preconceptions unlike the IEA's to imagine
that economic growth is not tightly cou- More from less oil dernand growing into the 203os, and
pled to oi J use, which is an important proof Barreis of oil consumed per $l,OOO of GDP a fter that declini ng only slowly. Ar] un
of principie far decarbonisation. And be- 2015 prices Murti of Super-Spiked is truly bullish: Glo-
cause it happened without significant in- 20 bal oíl demand is "on track to obliterare
terventions, it suggests that with the right peak demand concerns fuelled by the JEA's
policies the trend cou ld be steepened. --------- 1.5 infamous 'Net Zero by 2050' report ...The oil
On a beautiful summer day last year, industry is nowhere near being in its sun-
dozens of energy ministers, company io set phase." Daniel Yergin, a Pulitzer-prize-
bosses and international policymakers winning chronicler of oil's effects on the
gathered at a conference a stone's throw 05 world as well as vice-chairman of S&P cío-
frorn the palace of Versailles for an energy- European Union bal, a financial-data firrn, observes that "a
effíciency summit hosted by the IEA. Fatih united States
O
quarter-century is a very short time to
Birol, the agency's executive director, was --.--...--r--......---.----.--...--.---.---.--...-"T-r--- change a $1ootrn global econorny,"
keen to tel1 them that the adoption of ener- 1965 so 90 2000 10 22 That said, sometimes a long-marginal-
gy -efficiency 111easu res was both necessary Sourc s, inr º"
·ri�lty. th < ur 15
rt:lc1ll' C .,oshrr tw
and GDf>", uy C: fl.uhl anJ 1. L,J�er, Col11n1bl,1 Centre 011
n º 11 ised technology can make a su dden and
and achievable. Countries representing Gk,b.11tn,.,rgyP,)llcy,7021:Vi1ortdBank dramatic difference. Fracking did it far
sorne 70% of the global econorny, he said, supply: is it irnpossible that something
introduced efficiency policies in 2022. And else will do it far dernand? It used to be
that year's rate of improvement turned out to be much higher than quitewidely accepted that hau lagewou ld not fall to electrification
the historical average. Later in 2023 many of the nations attending in the way passengervehicles seem likely to. Today that once-con-
coP28 in Dubai signed a renewables and energy-efficiency pledge ventional wisdom seems much less of asure thing. A sustainable
which cornrnitted thern to doubling the average rate of energy-ef- substitute for jet fuel seerns unlikely, but the right incentives
ficiency improvements over the rest of the decade from the cur- could see a fair bit of shípping rnove to rnethanol instead of bun-
rent 2% ayear to over 4 o/o a year. ker fuel. And if technology is hard to predi et, so is policy. Could in-
These measures are airned at energy efficiency in general. For tensifying climate impacts speed things up at sorne point? Or will
oil, in particular, there is also a new interest in substitution. For voters reward politicians who slowthings d.own?
the first time since electricity utílities abandoned it in the 197os
and 198os, a large oil-consuming ind ustry has a new alternative. lt goes to show you never can tell
In 2016 annual worldwide sales of electric vehicles (svs) were Such divergent views might seem like cause far despair. They are
still below im. In 2022 they surged past the iorn mark. In 2023 sales not, though, all that un usual. Forecasts of demand far oi l are fre-
of EVs and plug-in hybrids reached almost 14m. This growth, origí- g uently all over the place. In "Energy at the Crossroads" (2005) Va-
nally driven by subsidies (though good engi neeri ng helped), is clav Smil, a poJymathic Canadian professor who wields what may
getting close to self-sustaining as economies of scale drive down be the most influential pocket calculator in the world, forswears
prices. With EVs rnaki ng u p more than 10% of new-car sales world- all atternpts at forecasting. Among his justifications are the fore-
wide, it is now plausible to imagine scenarios in which oil de- casts he himself and others made atan JEA meeting in 1983. As ever
mand begins dropping faster than it has grown. the predictions ranged widely; yet in a nurnber of cases the whole
Perhaps the most influential of these scenarios is frorn the .. Net range ended up missing the mark. One of the all-too-high cases
Zero by 2050" report the IEA published in 2021, which featured a was oil demand in 2000; the experts had underappreciated the irn-
scenario in which radical action red uced net ernissions to zero by provernents in efficiency that were already under way. "The only
mid-century. It saw oil demand drop by more than a quarter by small consolation that I can d raw", Dr smi l says about that partic-
2030 and by three-quarters by 2050. Scenarios sirnilarly con- ular set of predictions, "is that my... forecast was less ridiculous
strained by net-zero targets produced by BP and BloombergNEF, than that of the World Bank's chief economist."
an energy-research firm, produce similar res u lts (see chart). And back then oil demand was still concentrated in a relatively
Sorne forecasters assumed that demand would never fully re- small number of developed economies. This century, as the latest
cover from the zom bpd drop experienced at the nadir of the co- of the World Energy OtLtlooks prod uced by BP points out, has seen a�
vid-is pandernic, that peak oil demand was in the past. The IEA's
original scenario fell at the first hurdle. But the agency rnaintains
that even under today's policies oil use wi 11 peak this decade, and
with more aggressive policies it could fall by a quarter by 2030. Pay your money, take you r choice
Under Dr Birol the JEA is an openly partisan reasoner. It knows World oil demand, millions of barreis per day
the world needs demand to drop fast i f warmi ng is to be kept any- Forecast -�
120
thi ng like in check. Others reach different conclusions. sorne see OPEC
the potential of svs as overblown. Yes, sales have been peppy, but
1 • 1 1

Historical ----�"'- _
their share of the fleet is still only 2% worldwide. What is more, � " Others 90
cars lasta long time these days. Ben Dell of Kimrneridge, a11 ener-
gy-investrnent ñrrn, says that without policy interventions fleet BloombergN EF 60
turnover takes a couple of decades, with older petral vehicles be- Net zero scenario
IEA
ing sent to poorer countries rather than simply being scrapped. Netzero
Rystad, an energy-research firm, notes that passenger vehicles ac- by2050 30
count for not rnuch more than a quarter of global oil demand.
Other sectors like aviation and shípping, which lack cornpetitive BP
Netzero
alternatives to petroleurn, may see increased efficiency but are •••• ,,,,,,,,,,,,,11111111111111111,,,,,,, •••••••• ,1 o
less amenable to outright substitution. 2000 os 10 15 20 25 30 35 40 45 50
Such considerations allow OPEC, ExxonMobil and others with !)our Blwm ,rgN F, BP, Lctum,Jr; wonMvbo, ,EA. r EJ, 0.-·c�
Q.
 9

� "shift in the centre of gravity of global oil markets" In al] three of harm to producers whose costs are higher than the kingdorn's=-
its scenarios the developing-world share of global dernand, 55o/o in that is, to alrnost all the rest of the cartel.
2021, reaches 70% í n 2050, and the factors i nfluencing its oil-rele- That clout <loes not come cheap. In 2022 Saudi Arameo posted
vant policies vary greatly frorn econorny to economy. China re- proñts of $161.bn, the largest ever seen ata publicly listed firm. The
mains a huge consurner, but becomes less irnportant wíth time as lollipop was one reason that the quarterly profits it reported in No-
a marginal buyer. Its very aggressive electrification means its de- vember 2023 were nearly a quarter loweryear-on-year. Production
rnand could soon start dropping. By 2030 it will be India which capaciry is costly. Spare capacity is, in the short rerrn, rnoney left
contri bu tes most to global dernand growth; consurnption in Afri- on the table. Saudí Arabia's post-lollipop sm bpd leaves it 3m bpd
ca and sourh-sast Asia is set to follow fast. below what it cou ld be prod ucing-roughly equivalent to the en-
The sheer range of scenarios en sures that most of thern are not tire production of Kuwait.
accurate. Indeed, it is quite possible that uncertainty will remain sorne. such as Badr Jafar of Crescent Group, an Emirati busi-
notjust high, but becorne even higher than it has been in the past. ness, think the Saudis use this power to keep things on an even
When i t comes to increasing su pply, the oil ind ustry has a fairly keel, They act "as a kind of beneficia} central bank for oil supply",
good sense of what is possible at what price. The only time since he says, "with price stability [the] pri rnary objective." Others are
the 198os when demand consistently pushed prices up in spite of less charitable. Saudí Arabia has twice flooded the market to lower
this was during the unprecedented rise of china. Patrick Pouyan- prices, in 1986 so as to punish the cartel mernbers who were not
né, the CEO of France's TotalEnergies, recalls how that ended the adhering to the cartel's production quotas, and in 2014 to hurt us
doldrums of rhe 199os: "The lesson is that we are quite good plan- shale-oi l prod ucers. In its attempt to sq ueeze a recalci trant Russia
ning the supply but always wrong on demand," into cutting production in 2020, when covid lockdowns were
If the oil market is tight, changes in policy by big consurners crashing dernand, it kept its taps so open that oil prices became
could roil it. Jasan Bordoff worries that a "jagged" energy transi- negative; fora short while trad ers had to pay for the stu ff to be tak-
tion might see new instabilities driven by policies affecting de- en off their hands. Edward Morse, forrnerly of Citibank, argues
rnand. "could policy in consurning econornies be a source of in- that on balance the Saudis are "a very disruptive entity in the mar-
stability and policy shocks, both with climate policies and how ket despite claims of being a force for stability"
clean energy is d eployed?" he asks. It is hard not to answer "Yes". • Adnan Shihab-Eldin, who was acting secretary-general of OPEC
in 2005, sees the stability Mr Jafar praises and the disruption Mr
Morse deplores as natural pales for a strategy that inevitably "os-
cillates between going far market share and going for stabilisation
OPEC and the national oil companies
in a comfortable price range far both prod ucers and consumers".
He says he wou Id grade OPEC's stabilising of oíl markets at be-
Last men standing tween a B+ anda B-. But he adds that he would give it an A far its
surprising end urance: "People have written it off every decade."
In 1960 OPEc's founders-Iran, Iraq, Kuwait, Saudi Arabia and
Venezuela-were seeking collective bargaining power in their ne-
gotiations with the international oil cornpanies=the "Seven Sis-
The petro-states of the Gulf will grow more powerful as the
ters"-over the amount of oil revenue that should revert to the
world consumes less petroleum
country in which the oil was produced. Daniel Yergin, author of a
HE RUN-UP to a special OPEC symposium held in Vienna last magisterial history of the oil business in the zoth century, "The
T July saw concerted efforts to show the cartel to be effective and
united. Pressure frorn Russia, one of ten countries that aligo
Prize", says the shocking impact of the grou ping's entry into geo-
poli tics in 1973 carne from three conditions being met at once.
themselves with OPEC;s policies to form what is known as OPEC+, The first was the blow dealt to the pride of the Arab members by
far a higher productíon quota was faced down in ApriJ, when it the defeat of forces they had bankrolled in the war against Israel.
agreed instead to cut production along with the rest of the cartel. A The second was an America with its eye off the ball. As the Water-
squabble between saudí Arabiaand the UAE, which had demanded gate scandal neared its endgarne Richard Nixon was becorning
an increase in its quotas to accommodate a planned big expansion increasingly erratic and distracted. The third was that the seven
in production capacity, was resolved in Ju ne. sisters had been underinvesting in capacity ata time when de-
Then, in a surprise move, Saudi Arabia announced a further, mand was growing quickly. The n1arket was very tight.
unilateral 101 bpd cut in its own oil production frorn july. This "lol- The effect on the fortunes of the oil producing states was re-
Iipop", as it was terrned by Prince Abdulaziz bin Salman, the self- n1arkable. Jin1 Krane of Rice University's Baker Institute calcula tes
confident saudi energy minister, was intended to further shore up that by1975 Saudi oil revenues were $26.7bn, 40 times higher than
prices to the benefit of its fellow cartel mernbers. It was a welcorne they I1ad been ten years befare. The revelation of what oil could
sweetener. 2022 had been a bumper year with OPEc's net oil ex- mean led to 111ore countries deciding that the share of oil revenues
ports totalling $888bn, a real increase of 31% over the pre-pandern- they desen1ed was 1ooo/o. The share of oil
ic figure three years earlier. But soft demand, especially from Chi- reserves controlled by the Seven Sisters
na, and lower oil prices were taking the edge off. In the end OPEc's and other private-sector fi rms fell from
net oil export revenues in 2023 dropped to $656b11. "The only thing 85% in 1970 to u% in 1980.
"Saudí Arabia has played its cards very well," Christyan Malek worse tha n o PEC Beyond state coffers, the longer-term
of JPMorgan Chase, a bank, observed at the time. With OPEC+ con- results were more mixed. In 2010 Sheikh
trolling 40% of the world's oil production, the card sense of the controlling the Zaki Yamani, who as the energy minister of
cartel's dominant power rnatters a lot. saudí Arabia's clout within world oi I ma rket Saudí Arabia becan1e a global figure in the
the cartel comes not so much frorn the level of i ts prod uction (Rus- is OPEC not 197os, said the en1bargo's aim had been
sia produces roughly as much), but more from its singularwilling- controlling it"-a "not to hurt the economy, just to attract in-
ness to allow significant capacity to sit idle. As the swi ng producer ternational public opinion" to the plight of
it can stabilise or raise prices by reducing prod uction or soften the former adviser to the Palestinians. On that basis, hardly a
market by increasing it. Lower prices cause disproportionate George W. Bush st1ccess. So that wou Id be zero for two. And �
10

� not much more than a decade after the fi rst Commission. OPEc's distinction lies in the
shock the cartel carne a cropper when sau- AII roads lead to Riyadh endurance Dr shihab-Eldin points out-
di Arabia's atternpt to discipline the market OPEC, market share of global oil supply, % and in the fact that its interests are not al-
in 1986 sent the price plurnmeting to a Byscenario ways aligned with rhe west's,
third of what it had been. Only with Chi- Forecast 70 What <loes this endurance look like in a
nese demand in the zocos did OPEC begin world with a structural decline in demand
to take on sorne fraction of its forrner glory. 60 driven by climate policy? Far the Gulf
Accelerated
It is not all-powerful. Its members decarbonisation- states the outlook is rosy. They produce a
cheat on their quotas as they always have. so lot of oil cheaply and have the capital need-
But the results of its perpetual and imper- Historical 40 ed to produce more. Predictions of future
fect trade-off between rnarket share (and Business su pply see more of it coming from thern,
as usual
with it, influence) and high prices (and 30 and the faster the world decarbonises the
with them, income) matters. This should further their concentration goes.
be an affront to ali free-rnarketeers. But 20 Saudi Arabia and the UAE are reducing
many have made their peace with it. The � domestic oil usage to allow more exports.
cartel is part of the furniture of geopolitics. 2000 10 20 30 40 so The Saudis are following the UAE towards
Robert McNally, who was President Source: UP nuclear energy. Both are deploying renew-
George W. Bush's energy adviser, says ables at home and looking to export them
studying oil's painful price cycles shows overseas. Masdar, an Emirati green-energy
that "the only thing worse than OPEC controlling the world oil company run by Sultan aJ-Jaber befare he moved to ADNOC, its oil-
market is OPEC not controlling it." Meghan o'sultivan, who also producing part-owner, plans to install ioocw of renewable capac-
worked in the Bush White House and is now an adviser to the sec- ity around the world by 2030, a plan which if achieved would make
retary of state, Antony Blinken, points to the boorns and busts it one of the world 's biggest operators of wi nd and solar power.
which have bedevilled the oíl ind ustry frorn its early days and sug- Gulf oil has the advantage of being less carbon-intensive than
gests the market "seerns to require sorne kind of interrnediary" other oil: low in carbon content and easy to extract. The UAE is
Befo re OPEC, the oil market was tightly controlled by the Seven Sis- leaning into this. A DNOC has committed $23bn to decarbonisation
ters in the 195os and 196os and in the 193os by the Texas Railroad projects, including sabn for shipping onshore carbón-free elec-
tricity to power its offshore operations.
The same money could be used to expand
prod ucti on. The erni rates e hose j nstead to
produce more cleanly. Western oil majors
are pursuing decarbonisation strategies
because investors demand them. As with
hosting the ux's coP28 climate conference,
the UAE's aim is to be seen as supplier of
choice in a climate-concerned world.
Other members of OPEC+, and national
oi l companies (xocs) beyond the cartel,
cannot or do not want to be part of this
trend. Many have reserves that are expen-
sive to access (what the trade calls "high
lifting costs") or have greenhouse-gas-in-
tensive operations. Sonatrach, the Algeri-
an NOC, ernits three to four ti mes as rnuch
carbon-dioxide-equivalent per unit of oil
and gas prod uced as do the goliaths of the
Gulf. Whereas the oil majors in the West
put about 15% of their capex inro decarbo-
nisation, Wood. Mackenzie, a consultancy,
finds that on average state firms spend less
than 5% of their capital that way, despite
the efforts of outliers like the UAE and Ma-
laysia, where Petronas plans to devote 20%
of its capex to decarbonisation. Sorne do
not need to. But those which must seek
capital in international markets will find it
increasingly difficu lt if they do not.
Firms like Indonesia's Pertarnina, An-
gola's Sonangol and Mexico's Pernex will
struggle as reserves dwind le and prod uc-
tion costs rise. But the investments that
might keep thern in business look unlikely
to pay off if demand were to drop substan-
tially. A recent analysis by the Natural Re-
sources Governance Institure, a11 Ameri- ..
 11

� can watchdog, suggests that, of the $1.8trn that xocs plan to invest mand when lockdowns ended and Russia invaded Ukraine. Up-
over the next decade, si.ztrn is in projects which would not break strearn investrnent rose to $5oobn in 2022, halfway back up to its
even un.der the lEA's net-zero scenario. 2014 peak of $7oobn. For worries about supply beingjeopardised
Even if the real decline in dernand is slower than that, rnany by und er-investment, in the near terrn it now makes more sen se to
xocs still have an incentive to produce as muchas they can with look at the high-cost nationa] oíl companies (see previous story).
the kit they already have at hand, a strategy known as "purnp and Nevertheless, a recent survey by BCG, a consultancy, found that
slurnp", If they do so too blatantly, though, they rnay attract the ire 84 % of investors worldwide thought it important for oil and gas
of Saudi Arabia and see prices fall beneath their feet. companies to demonstrate profitable growth from low-carbon in-
The rnassive investments the Gulf countries' sovereign-wealth vestrnents by 2025. Over half the investors based in Europe said
funds are making in private-equity and venture-capital funds they felt pressure to divest from fossil fuels.
abroad and in sectors like tourism, sports and finance at home A sen se that this reluctance will only strengthen has shortened
means that their incentives are to keep the oíl price frorn doing the ñrrns' outlook on investments in their core business. "They
und ue harm to the world economy. That does not mean a low are not going into ten-year projects," says Edward Morse, forrnerly
price. The IMF believes Saudí Arabia needs $80 a barrel to cover its of Citi. Instead they want "short-cycle" projects with the lightest
lavish spending. A bit more is always welcome; you never know carbon footpri nt and lowest cost per barre l. A prime exarnple is
when it might be nice to supersize a football league. But pushing ExxonMobil's massive recent find in Guyana, which moved frorn
prices sharply up for short-term gain looks unlike]y, as does any deepwater discovery to production injusta couple of years. Every-
atternpt to use the price politically. "The oil weapon is not on the one knows such low-hanging fruir is rare.
agenda," says DrYergin.
The logic is sound. But Ieaders of countries can change, and Enhancing old rationales
priorities change with thern. Another geopolitical crisis could put In a sector that will have to shrink there is much to be said for get-
the oíl weapon back in play. The world economy is more resilient ting out. This is certainly the view among sorne of the NOCs. In
than 50 years ago, but what rernains true now is that the power to electrification-mad China cxooc says decarbonised energy will
wield such a weapon is in the hands of so few. As Fatih Birol, the make up over half of its total prod uction by 2050. Colombia's Eco-
IEA's boss, puts it with admirable restraint, "Concentration in one petrel and Thailand's PTT are also moving into renewables. Sorne
or two countries is risky-even if they are the most i nnocent." • European oil companies have tried similar shifts. Unfortunately,
as a study by the Oxford sustainable Finance Group points out, the
project developers and utilities which dominare the renewables

I Oil companies without the oíl j

business typically pay less for their capital than oil companies,
and so can make do with lower returns. It is in part beca use of their
turn towards renewables that shares in European oil cornpanies
Thefork are trading ata hefty discount against their American peers.
Both BP and Shell have been back-peddling on their embrace of
green electrons. BP is making investrnents in fossil fuels of which
there was no inkling in its forecasts of a few years ago. Its hydro-
carbon output in 2030 will be just 25o/o below the 2019 leve 1, rather
lf the oil age is destined to spend its last days in the Gulf,
than the 40% it once touted. shell's Mr Sawan told an i nvestor day
what is Big Oil to do?
last year that the company is "not particularly differentiated" in
AEL SAWAN, the boss of shell, is not planning to cede the the renewables sector. Instead, he is positioning Shell to be a "pre-
W world of oil production to the advantaged countries of the
Gulf in the immediate future. He says the company hopes to com-
111i urn player for molecu lar energy today and into the future".
Molecular, here, is a bit of jargon which can cover both estab-
pete with the Gulf "to the point of discomfort", But he also ac- lished fossil-fuel businesses and new ventures which involve
knowledges that "there is no· chance for any of the investor-owned other energy-related gases and liquids: biofuels, hydrogen and
cornpanies to be the last man standing." carbon dioxide itself. Again, sorne Nocs are interested in this. sau-
As of today, those oil companies look in reasonably good di Arabia has plans for both hydrogen production and carbon-di-
shape. in the late 201os the industry spent a lot less than usual on oxide sequestration. Tengku Muhammad Taufik, the boss of Ma-
ensuring future prod uction, with bosses grumbling about how laysia's Petronas, wants to use the firrn's many depleted oil fields
clirnate-based regulations, anti-oil activisrn and environmental, to sequester carbon dioxide from across South-East Asia. But Big
social and governance (ESG) concerns made their lives impossib]e. oil's technological acurnen may offer ita real advantage.
When it further cut capex during the pandemic demand slump, Ata massive refining and petrochernical complex in Baytown,
Daniel Yergin of s&P was one of those publicly worrying about a Texas, ExxonMobi I is building what it says will be the world's first
new era of "pre-ernptive underinvestrnent" bui lt on the mistaken full-scale natural-gas-fired clean-hydrogen plant. It will turn
assumption that "sufficient alternatives to oil and gas would al- methane and water (in the form of stearn) into 281n cubic metres
ready be in place at scale by now." (ibn cubic feet) of hyd rogen a day anda srnaller but sti II substan-
In truth, investors hada simpler reason for withholding their tial flow of carbon di oxide. The hydrogen will be used elsewhere
cash in the pre-pandernic years: the industry's pathetic returns. in the plant or sold on while an underground repository receives
The oil and gas ind ustrywas the worst performing sector of Amer- iorn tonnes of carbon dioxide ayear.
ica's benchmark s&P 500 share index from 2010 to 2020, in large Those 1om tonnes ayearon their own would make the Baytown
part dueto the money-sucking shale boom. Since then the inves- plantone of the largest carbon capture and storage (ces) projects
tor-owned firms have boosted efficiency, slashed costs and in the world. But there are a lot of other instal]ations in the greater
ditched assets. Natasha Kaneva of JPMorgan Chase has calculated Houston area that 111ay soon be required to clea11 up their acts. Ex-
that $un spent on upstream capex in América in 2023 yielded xonMobil hopes to get the total amount of carbon dioxide it dis-
twice as much oil as did the same arnount spent in 2014. poses of up to som tonnes ayear by 2030 and twice that by 2040. In
Investors have taken note of this more efficient use o.f capital, the long term, che company reckons that carbon-capture services,
and also of the burnper profits which followed the return of de- which it could sell to industry, and low-carbon businesses like hy- �
12

� drogen and biofuels could becorne a mar- When Ms Hollub says that "we're not going to rnove away from
ket i11 the "trillions of dollars". oil and gas," those who believe that ni uch of the push i nto ces, DAC
ExxonMobil and its peers are confident Pumping carbon and fossil-fuel-derived hydrogen is íntended merely as cover for
that they can make the storage bit of ces dioxide into fossil-fuel business-as-usual no doubt feel vindicated. Even cli-
work beca use they have a lot of relevant ex- mate hawks generous enough to overlook the oíl industry's
perience, Pumping carbon dioxide into de-
depleted oil wells shameful history of promoting climate denialism it knew to be
pleted oil wells can be a way of squeezing a can be a way of nonsense will be disturbed by the idea of using DAC to produce
•
lot more oil out of them, a process called squeezmg more "green" gallons of petral, rather than to offset ernissions from pro-
enhanced oil recovery (EoR). If the carbon oil out of them cesses where avoiding thern is very much harder.
di oxide can be shown to stay down the well You do not need to buy into Oxy's plans, though, to think that
after the oil comes out, the companies in- the best way to decarbonise sorne industrial plants will be through
volved can get a tax credit for carbon se- ces, that hydrogen rnay be a good solution for sorne problems or
q uestration on top of the valué of the oil recovered. that DAe has sorne sort of future role. Oil firms have the balance-
Last July ExxonMobil paid $5bn to acquire Denbury, which sheets, project-management skills and engineering know-how
owns a large pipeline network far getting carbon di oxide to wells needed to do that. Such businesses look like a better fit for them
that need their recovery enhanced. In August Occidental Perro- than renewable electriciry (other than in offshore developments,
leurn, which is something of an EOR specialist, paid $1.1bn far Car- perhaps, where Big Oíl has relevant expertise).
bon Engineering, a Canadian startup which has developed tech-
nologies to extract carbon dioxide frorn thin air, a process called A surplus of stones
direct-air capture (DAC). Vicki Hollub, the chief executive of Oxy, The idea that the oil age will come toan end is not new; nor is the
as the company is known, has grand plans for this DAC technology. idea that it will end because of alternatives rather than shortages.
Oxy has received a grant from the American government worth u p "The stone age did not end for lack of stones," Sheikh Yamani, Sau-
to $6oom towards the sibn-or-more req uired to build a commer- di Arabia's energy minister d u ring the first two oi 1 shocks, told his
cial-scale DAe facility in Texas-one capable of rernoving irn counterparts at OPEC oil ministries, "and the oil age will end long
tonnes of carbon dioxide from the atrnosphere every year. befare the world runs out of oil," When he said it, it was a warning
Oxy plans to bui Id over ioo plants at this scale so as to allow the about high prices encouraging the search far alternatives. Now,
cornpany to offer barrels of oil attached to "veriñed decarbonisa- with global warrning perilously close to 1.5ºC above the pre-indus-
tion credits" These credits would guarantee that an amount of car- trial level, the rneaning is different-and more urgen t.
bon dioxide equivalent to that produced when the oil in the barrel Demand is not set to wither organically in the face of better al-
is burned has been sucked back out of the atmosphere at one of ternatives oras a response to high prices. Its putative decline will
oxy's plants. Ms Hollub says the ability to sell net-zero-emission follow a policy-driven trajectory. But that trajectory is not set, and
oil of this sort would give her firm the "social licence to operare" it will not rernain steady. In the face of such uncertainty it makes
needs to stay in the oil business. sense for sorne to try and get ahead and move on to other things
while others double down, insisting that dernand will last. Sorne
will win, some will lose, and the spread of options may mean that
supply shocks are minimised in a way that could not be guaran-
teed if everyone was getting out.
But there is a second concern. The end of the stone age did not
mean that, after bronze-orientation day was over, stone was done.
The world still uses a great deal of stone. So111e in the oil industry
seern to think that the sarne will apply to them; road transport may
escape thern, as electricity generation has, but with hard-to-dis-
place products like jet fuel still needed and sorne DAe to clean up
its products and image the industry will endure. Such die-hards
will lobby ferociously for policies that slow the transition away
from them, justas the boosters of renewables argue their opposite
case. The difference is that those lobbying far survival will do so
more ferociously than those who simply fancy a bit more growth.
The shock of october iszj showed both suppliers and consurn-
ers that they did not fully understand how far into the oil age the
world had passed, and how that had made possible a remarkable
geopolitical u pset. Today's crisis is one of consurners not knowing
how to get where they have to go, and prod u cers not knowing how,
if at all, they can survive the journey. It is notas dramatic. The
prospect of a ruined clirnate makes it yet more important. •

ACKNOWLEoGME.NTS A hst of acknowledgments and sources rs mduded m the onltne versen

of thtS speoa I report

UCENSING ouR CONTENT For ínfcrmanon on reusing the articles featured m thrs special report,
or for copynght queries. contact The Econom,st Synd1c.atton and Lícensmg Team.
Tel: ,;,,44 (0)2075"16 8000; email: rightsaeconomist.com

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Economrst.corn/speoalreports
 41

Russia political philosopher and research fellow

at Princeton University, Mr Putin's presi-
A plebiscite anda funeral dential election is a forrn of acclama-
tion-a ritual public expression of approv-
al towards imperial officials that goes back
to the time of ancient Rome. (Moscow, it
should be recalled, once saw itself as the
"Third Rorne") lts role is not to change who
Russians go to the polls in a sham election for their president
is in power, but to give an injection of le-
after the murder of his main rival
gitimacy toan ageing dictator . "The deci-
TTHE END of this week mi llions of Rus- has been designated a "foreign agent" and sions are already rnade by the leader; the
A sians wilJ take part in the re-election of
President Vladimir Putin, the country's
its co-founder is in jail. Yet the inevitabil-
ity of the result will not make the ritual of
role of the people is to say yes-to acclairn,"
says Mr Yudin.
longest-serving dictator since Stalin. In a voting for Mr Putin redundant. Por his re-
land where opposition politicians are gime it is crucially important. A murderous tsar
dead, in prison or in exile, where speaking The Soviet leaders who also held fake Ever since Mr Putin carne to power in 2000,
truth to power is a criminal offence and elections, sornetirnes with only one candi- his regime has cultivated passivity, turn-
where a paranoid autocrat is happy to kill date on the ballot, could still rely on the ing people off from active poli tics and call-
hundreds of thousands of his own people legacy of the Bolshevik revolution and vic- ing on them only for the purpose of such
and his neighbours in order to assert and tory in the second world war. Mr Puti n's ty- public acclamations. As Alexander Selik-
mainrain his power, an election seerns en- ranny is both n1ore personal and less ideo- hov, a celebrated Russian footballer, said
tirely unnecessary, a strange charade ora logical. rr derives i ts legitimacy from its after casting his first-ever ballot paper in
quaint anachronism. use of violence and the carefully main- the 2018 presidential elections, "l've voted
The three-day voting exercise that will tained appearance of popular support. The forthe tsar."Just such a ritual is depicted in
begin on March 15th is not an election in spectres of external enemies=the West "Boris God unov", the great tragedy by Alex-
the way most people in the Western world and Ukraine-and interna} ones (foreign ander Push kin. Godunov, a Iate isth-centu-
understand one. Had Russia been a democ- agents) are invoked to buttress it. ry courtier who was elected tsar by an as-
racy, Mr Putin would have left power in In essence, says Greg Yudin, a Russian sembly of servicernen and clergy, is greet-
2008, when his second and constitutional- ed by the people, who are gathered in front
lylast terrn in office expired. Butwhere war of the Kremlin. They duly display their ap-
7 Also in this section
is peace, ignorance is strength and free- proval, while privately discussing rumours
dom is slavery, the essence of this election 42 1 nside Vlad ivostok that Godunov had rnurdered the legitimare
is the absence of choice. heir to the throne.
45 Portugal swings right
With no viable alternative or proper one person who u nderstood the es-
ser u ti ny, Mr Pu tin is certai n to get the re- 45 Ukraine's southern f ront sence of this ritual acclarnation, and who
su lt he wants. Russia's only independent tried to reclaim elections as true political
46 Cha rlemagne: The so-so economy
election-monitoring organísation, Golos, expressions, was Alexei Navalny, Russia's ..
42 Europe The Economist March 16th 2024

� recently slain opposition leader. Though Those who attended the funeral were tal n this protest and "to use election day to
he knew that power in Russia could not be srruck by the atrnosphere not only of per- show that we are there and we are many,
changed through the ballot box, he saw sonal grief but also of solidarity. People we are real living people and we are against
elections as a way of registering dissent. shared food and tea, and embraced each Putin." Mr Putin plainly fears her. On
His call in 2011 to vote for any other party other, well aware that this might be the last March izth Leonid Volkov, Navalny's chief
than Mr Putin's United Russia mobilised time they could protest in such large n um- of staff before his death, was attacked out-
both voters and observers, forcing the bers. And not just in Moscow. over the past side his home in Lithuania and beaten with
Kremlin to rig that year's parliamentary two weeks spontaneous "flower memori- a hammer. It bore ali the hallmarks of a Pu-
vote so blatantly that it prompted the larg- als" and shrines to Navalny have sprung up tin-ordered atternpt at intimidation.
est protests in Russia's post-Soviet history. in more than 230 Russian cities, where Turning up at midday on March rzth
people have laid flowers and lit cand les at will not lead to a change of power in Rus-
Voice from the grave monurnents to victims of past political re- sia. But in a country where symbols and
Though Navalny was i ncarcerated in one of pression, in courtyards and entrances to gestures carry more weight than state-
the harshest penal colonies in the Arctic buildings. "Funeral tradition [hasJ merged rnenrs, Navalny's funeral protest has alrea-
and charged with extrernisrn, while his or- with political protest," wrote Alexandra dy casta shadow over Mr Putin's acclarna-
ganisation was outlawed and sorne of his Arkhipova, a social anthropologist. tion. As the holy fool in "Boris Codunov"
allies flung in jail, he continued to chal- Yulia Navalnaya, the widow who has says when urged to pray for Godunov by
lenge Mr Putin and mobilise people. Rath- stepped up to carry on her husband's lega- the Kremlin churches, "No prayer for the
er than telling his followers to ignore the cy, has called on his supporters to main- Herod-Tsar ... Our Lady won't allow it," •
fake election, he urged them to turn it into
an event where peo ple could manifest
their agency, even though they did not Vlad ivostok
have their own candidate. Two weeks be-
fore his death, he called on millions to turn A window into wartime Russia
up at midday on March tzth=the last day of
the three-day voting period-to vote for
anyone but Mr Putin, to spoil their ballot
papers, or simply just to gather and talk.
"If they decide to ki 11 me, it means that
we are incredibly strong," Navalny said Vladimir Putin's ínvasíon of Ukraine is transforming the far-eastern city
shortly before returning to Russia in 2021
and bei ng arrested the moment he landed. N RUSSIA THE day begins not in the capi- Vladivostok is a good place to observe how
But even in harsh so1itary confinement he
continued, in court appearances and let-
I tal, but in the far east. When Vladirnir Pu-
tin announced his "special military opera-
the impact of the war has rippled across
Russia. The country has become more re-
ters, to support people who believed that tion" against Ukraine on February zath pressive at home, and more isolated
his version of Russia as a modern Euro- 2022, much of Moscow was asleep. But in abroad. But its economy and society have
pean nation was still possible. vladivostok, on Russia's eastern border, proved resilient, and Vladivostok dernon-
By murdering Navalny a month before many people were already having lunch. strates that. As Ilya Lagutenko, the front
his "election", Mr Putin wanted to show When Russia votes in presidencial elec- man of Mumiy Troll, the ciry's most farn-
that there was no alternative to hirnself tions from March 15th to rzth, Vladivostok's ous rock band, puts it on a recent alburn,
and his older, irnperialist version of Rus- res u lts wi 11 be among the first to be tabu- the city has always been one that "made
sia. Unable to contest them at the ballot lated. Mr Putin will win the sham contest. historical zigzags with the ease of a hitch-
box, Navalny continues to do so frorn his Yet the country he will rule is a different hiking teenager".
grave. His funeral on March ist became a one from when his current terrn began. Founded in 1860, Vladivostok served as
visible act of defiance. Perched at the edge of Mr Putin's would- the Russian empire's outpost in its vast far-
Despite threats and intirnidation, tens be ernpire, sorne 7,oookm frorn Ukrai ne, eastern territories, which had once been �
of thousands of people in Moscow and
across the country have come together to
grieve and pay tribute to him. According to
Moscow public transport data, between
March ist=the day of the fu neral-and
March 3rd 27,000 more people than usual
used the metro station nearest to the cem-
etery. Many more people carne on foot or
by car. They queued for hours, holding
candles and photographs of Navalny, sing-
ing psalms and chanting "Navalny", "No to
war" and, wi th rernarkable bravery, "Pu ti n
is a murderer",
They covered his grave with a mound of
flowers. Young and old, well-heeled and
poor, they d id not hide their faces from the
pervasive surveillance carneras and the
many masked policernen. The soundtrack
from "Terminator 2'\ one of Navalny's fa-
vourite films, and Frank Sinatra's "My
Way", which were played at his funeral,
have now become tunes of resistance. Ruling the east
 The Economist March 16th 2024 Europe 43

plan on next page). In sorne cases Russian

CHINA RUSSIA ª1ssth Marine partners continued operating foreign
lnfantry brands' shops. "I can go to the store and
•Vladivostok Brigade Base
buy a new rPad, there's no problern," one
NORTH Vladivostok Vladivostok shopper scoffs.
KOREA
• School Numt>er 14 Putin's history lessons
SOUTH
KOREA JAPA I • Kalina Mall While daily life carries on muchas before,
the government has sought to alter the un-
•
Vf adivostok derlying fabric of society. Schools across
B port the country are now mandated to hold
Monday morning lessons airned at incul-
cati ng traditional values. At Vladivostok's
Russky Bridge School Number 14, which serves students
fro111 prirnary school to high school, these
"lmportant Conversations" have included
Russky lsland
Far Eastern benign topics, such as volunteering and
Federal Universíty
mums, but also patriotic fare, such as the
• 3 km
Russian spetstiaz (special forces). School
Number 14 was even renamed in honou r of
� partly under Chinese control. The city was "Sea Cucumber Cliffs".) settlers arrived by Yevgeny Orlov, a soldier with the Wagner
off-limits to foreigners during the Soviet ship, including many Ukrainians who mercenary group who was killed on the
era, but carne to symbolise a new openness boarded steamers from Odessa, enticed by battlefield in eastern Ukraine.
after the Soviet Union collapsed. Russian prornises of free homesteads, High schools have also been su pplied
and Western politicians ali ke spoke of a The ships filling the port today are tes- with new history textbooks that portray
"Eu rope from Lisbon to Vladivostok", Such tament to the growi ng irnportance of trade Russia as under constant threat frorn con-
talk largely stopped after Russia annexed with Asia. The trend began long before the niving forces in the West that seek its de-
Crimea and fornented a war in eastern Uk- full-scale invasión of Ukraine and it has mise. The war in Ukraine is descríbed as
raine in 2014. Relations with the West helped Russia weather the irnpact of West- defensive. School Nurnber 14 marked the
soured and the Kremlin renewed its focus ern sanctions. Two-way trade with China arrival of the "truthful" new books with a
on a "pivot to the east". reached a record high of szaobn last year, cheery post on its social-media accounts.
The latest phase of the war has changed up by 64% from 2021. In Vladivostok, Chi- Sorne lap u p the new material. Others
fates across the city. For sorne, it has been a na alone accounted for three-q uarters of go through the motions, muchas many did
tragedy; for others, an opportunity, Take imports through the port. with mandatory classes in "scientific
Vladivostok's former mayor, who was con- But the window to Asia is not wide cornmunism" for university students d ur-
victed of taki ng bribes from an undertaker enough. Getti ng goods to and from the port ing the Soviet era. Those who resist the
and sentenced to 16 and a half years in pri- is expensive and tirne-consuming. De- state openly face harsh consequences.
son in 2023. Late last year he was given an mand for f reight on the cou ntry's eastern When Mr Putin announced the tuü-
early release to serve in the armed forces. railways is nearly twice as high as capaci- scale invasion of Ukraine, Alexei Galimov
By and large, Russians, as they have ty. And China is extracting a price: it has be- thought it was fake news. Born and raised
done throughout history, have adjusted to gun using Vladivostok, with Russian per- in Vladivostok, Mr Galimov belongs to the
their new realities. As one scholar in Vladi- rnission. as a dornestic terrni nal to ferry Seventh-Day Adventist Church, and has
vostok puts it: "Have there ever been easy goods frorn landlocked provinces in its many friends who visited a church college
times in Russia? We're u sed to this, we're north-east. Sorne locals jokingly call the in Bucha, a small town north of Kyiv.
adaptive," To get to know Vladivostok in port Haishenwai again.
2024, The Economist analysed open-source Sorne goods coming through the port Fightye not
íntormation, crunched nurnbers, and rnay end u p at the Kalina Mall. When it In February 2023 he wrote a Bible verse or1 a
spoke with residents by phone and over opened in February of 2019 it billed itself as poster-"Do not kill"-and walked onto
the Internet. The journey begins where the the biggest shopping centre in Pri morye, Vladivostok's Central Square. The first
city itself began. with a supermarket, an IMAX cinema and person he saw raised a fist and smiled.
Western fashion boutiques. Others patted hi m on the sho11ld er. "Many
The gateway to China Western sanctions targeted Russia's people don't support what's happening in
On any given day, dozens of ships bob in war machine, not shopping malls. But the country," he recalls. Police soon bun-
Vladivostok's port, which has become a some politicians also hoped that disru p- dled Mr Galin1ov into a freezing bus.
lifeline for Russia. Whi le container shi p- tions to daily life would fuel popular resis- Vladivostok �,as long a hotbed of oppo-
ments fell sharply after the invasion, those tance to the war. Ukraine called on con- si tion to the authorities in Moscow. But in
coming through Vladivostok recovered sumer brands to leave Russia. At Ieast 373 recent years those networks have been
quickly (see chart on next page), big Western firms have cornpletely severed uprooted, part of a broader campaign of re-
The port has been the centre of life ties, according to the Kyiv School of Eco- pression. Son1e 80-9oo/o of forn1er staff and
along the Golden Horn Bay since 1859, nornics (KSE), a Ukrainian universiry. Yet volunteers at the Vladivostok office of the
when Nikolai Muravyov, the governor of plenty of others-more than 2,000, by the late opposition leader Alexei Navalny's
tsarist-era eastern Siberia, arrived to sur- KSE's count-decided to stay. foundation have left the city, reckons Yuri
vey the region aboard a corvette built in In Kalina there were 36 shops bearing Kuchin, who used to run it. "The political
New York. The following year the Russian foreign brands when it opened in 2019; oppositi on is afraid and in hi di ng," he says,
imperial flag went up above a settlernent there are 26 now. While sorne big names speaking from exile in Europe.
that Muravyov's team called Vladivostok, left, in their place are analogues that ped- That fear did not deter Mr Galin1ov, at
meaning "Rule the East" (China kept refer- dle sirnilar wares, such as Limé, an up-and- least not initially. On the first anniversary
ring to the city bythe narne Haishenwai, or coming Russian fashion brand (see floor of the invasion, he made a new sign, ,¡¡ith a�
44 Europe The Economist March 16th 2024

-
Rebranding
quested asylum. This time his signs read:
"Krernlin Killers Belong in The Hague" and
-Rising in the east
Floor two of the Kalina Mall in Vladivostok "PUTIN IS ADICKHEAD". On March 13th po- Russia, shipping container loads*, '000
li ce arrested the head of the Vlad i vostok of- By selected port
C Western brands" 0 Russian C Other
fice of the would-be presidential candi date 5
2019 Boris Nadezhdin.
4
H&M
Marchíng orders Vladivostok 3
Russia's Pacific Fleet is tasked with defend- St Petersbu rg
ing the country's eastern flank. An early
sign that Mr Putin's invasion plans were
1
CJTI serious carne when sorne of these units ap-
t[toile peared near the border with Ukraine. Novorossiysk o
M&S i 1 1
... Among them was the elite 155th Marine I i
F M A M J J A S O
1
N D
InfantryBrigade, based on the hilly north- 2022
2024 ern side of Vladivostok. Ukraine's intelli- Souice K1°1 Trade íudlcator --1e11 clay rnovmg aveiagP
I írné
gence services allege that it ended up in
Bucha and took part in the massacre and
MMG torture of civilians. presidency in 2012, after a four-year hiatus
The fighting has taken a toll. According as prime rninister, the city was one of his
to BBC Russia and Mediazona. indepen- first stops. That year's Asia-Pacific Eco-
1 1 tJ dent media that monitor Russian cornbat nomic Cooperation (APEC) summit took
t[LOile
Vilet Dub l-cru
deaths, 237 mernbers of the 155th Brigade place at the spiffy new campus of the Far
have been confirmed dead. The outlets Eastern Federal University there. The as-
reckon that their cou nts, which rely on an- sembled leaders pledged to promete "pros-
'Sorne shops are opeated by Russa.111 owners
lndeperidentlyúf theü l riglnal West.irn brands
nouncements of funerals or memorials, perity in the corning years" Eighteen
miss at least half of the true total. months later, Mr Putin annexed Crimea
Yet despite the losses the 155th has and instigated a war in eastern Ukraine.
� new Bible verse, from the second book of managed to rernain an effective fighting The Russian government launched a
Chronicles: "Fight ye not ... for ye shall not force. High salaries have enticed many new gathering, the Eastern Economic Fo-
prosper." Several days later, officers broke men to fight. others believe in the cause ru rn, in 2015, at the sarne location as the
into his apartment at 5.3oam, pinned him they are purportedly fighting for. As Tatia- APEC summit. In 2018 the plenary session
to the floor and charged hirn with "discred- na (not her real narne) explai ns, her late featured Mr Putin alongside Xi Jinping,
iting the Russian arrny", son enlisted with the brigade because he China's president: Abe shinzo, Japan's
As he awaited his court case, he and his felt a threat from NATO and frorn "open Na- prime minister: Lee Nak-yon, South Ko-
family fled, justas hundreds of thousands zism" in Ukrai ne. "We all know that NATO is rea's prime minister; and Khaltmaagiin
of other Russians have done. When Naval- a source of evil," she says. "He died a hero Battulga, Mongolia's presiden t.
ny was pronounced dead in an Arctic pri- in every sense of the word." Few are now wil li ng to share the stage
son on February isth, Mr calirnov joined a Vladivostok's fate could have been dif- with Mr Putin. The most prorninent visitar
small protest in América, where he has re- ferent. When Mr Putin returned to the during last year's event was Kim Jong Un,
North Korea's leader, who inspected Rus-
sian military wares and toured an aquari-
C) Read the full story u m on the university campus. He did not
join the forum on stage-in fact, no heads
Toread much more of our exploration of howVladimir Putin's war in Ukraine has of state did. Far the plenary session in
changed Vladivostok, and to take advantage of its maps and other interactive features, 2023, Mr Putin had just one guest: Pany
please visir economist.com/vladivostok Yathotou, Laos's deputy prime minister.
Far those looking to leave Vladivostok,
the airport offers the q uickest ,-,.¡ay out. Mo-
dernised ahead of the APEC surnrnit, the
airport was serving more than 3m passen-
gers ayear by 2019. In January that year-
before war and pandernic disrupted tra-
vel-international flights accounted for
more than half those corning or going from
Vladivostok airport, according to data
from Plightradarza, a website that tracks
air traffic in real ti me.
That has since changed. This January
over 8oo/o of ali flights to or frorn the airport
were domestic. International flights were
available only to China, Thailand and Uz-
bekistan. (A fourth destination may soon
be added: plans are afoot to restart direct
flights to and frorn Pyongyang.) The new
routes may not be convenient. But as with
much of wartime life, says one Vladivostok
resident, "people find ways". •
 The Economist March 16th 2024 Europe 45

Portugal's election Portugal can congratulate itself on its live feed a shell can be watched plummet-
past half-century. Unlike next-door Spain, ing straight towards hirn. When the smoke
The surgeof whose dictator died in tus bed, it over- clears there is no body. Maybe the soldier
threw its dictatorship and dealt more heard the d ron e and scrambled under the
the hard right straightforwardly with its legacy. Perhaps vehiclejust in time to save his life.
partly for this reason, the two centrist par- In the wake of Avdiivka's fall, Russian
ties are closer to each other in policy and in forces have captured outlying villages and
temperament; politics has been reassur- attacked severa] other small eastern. towns
ingly boring much of the time. such as Kostiantynivka and Pokrovsk. To
A once-boring democracy receives a jolt
Portugal has had one of Europe's stron- Avdiivka's south the front line slopes gent-
EXT MONTH the Portuguese will cele- gest economies, so Chega's rise may look ly towards the Dnieper river, just below the
N brate 50 years since their "Carnation
Revol ution" overthrew the right-wi ng di e-
odd. But its citizens may not vote with
mere GDP growth in mind. Sorne may be
industrial city of Zaporizhia. Last summer
Ukraine had high hopes its troops would
tatorship that had run the country for de- discomfited by the growing nurnber of im- punch through the Russian lines here and
cades. It will be a reflective rnornent for rnigrants, many frorn forrner colonies, drive on through to the Sea of Azov. The
many reasons. Portugal has mostly been a So one of the few countries in western counter-offensíve failed, but not before
model of democratic transition and stabi 1- Europe that has held off the hard right now the Ukrai nians captured the vi llages of Ro-
ity since 1974. Now it faces a period of polir- has such a party with a strong presence in boryne and Piatykhatky. Since Avdiivka's
ical turrnoil after an election on February parliarnent, and ali the attendant problems fali, Russian troops have sought to recap-
ioth gave no party a clear path to govern. of governabi lity. The centrist Portuguese ture Robotyne, whose fall would be sym-
The elections carne early. Portugal had spi ri t that has kept extremism at bay for bolic because of its earlier liberation.
voted only two years ago, when voters gave decades will strive to retain stability. • In the Orikhiv basement bunker, Ukrai-
one of their traditional centrist parties, the nian men, back from the front, are sleeping
centre-left Socialists, a sol id majori ty. An- and scrolli ng on mattresses. Ou tsid e, ernp-
tónio Costa, in office since 2015, returned Ukraine's southern front ty artillery-shell cases pile up. The sound
as a strengthened prime minister. of shelli ng frorn Robotyne to the south is
That was until prosecutors brought Not so quiet constant. The commander, who goes by
down ttis govemment by arresting an aide the call sign Chief, says his menare d esper-
in an influence-peddling case. Mr Costa a te for more Soviet-calibre artillery shells
was not directly accused-and has denied but still have a stock of f':ATO-standard
anywrongdoing-but stepped back to fight ones. A,,diivka fell not just becat1se of a
ORIKHIV
the allegations. The president, Marcelo Re- shell shortage but because of the sheer
The Russians are being held off,
belo da Sousa, called an election, rather mass of n1en and n1unitions the Russians
so long as the ammunition Iasts
than allow a successor to Mr Costa to run threw at it, he says. Despite his lack of
the Socialist govern ment. RUSSIAN SOLDIER pops up beside his shells, he does not expect the line to crun1-
The centre-right Democratic Alliance,
led by the conservative (and odd ly named)
A infantry-fighting vehicle which was
hit bu t not destroyed, He makes a dash for
ble here. He concedes that the Russians, by
sacrificing a lot of men, have in places nar-
Social Democratic Party, carne a narrow another one, then starts digging beside it. rowed the no-n1an's land between then1.
first, giving its leader, Luís Montenegro, He is 15km away, close to Roboryne, where Above ground Orikhiv is a ghost town.
the first shot at forrning a govemment. The there has been fierce fighting si nce Russia Every building has been damaged or de-
Socialists Jost seats and their leader, Pedro captured the eastem Ukrainian town of Av- stroyed. There is no gas, electricity or
Nuno Santos, said they would not try to re- diivka on February rzth. The man's every mains water. Soldiers say there may be
constitute a rickety multiparty coalition of movernent is being scrutinised on screens 1,000 civilians left out of a pre-jnvasion
the kind the party led after 2015. in the basernent of a block in Orikhiv. Now popu lation of almost 14,000 ..
But the big news was the rise of Chega, a an attack drone hovers over him. From its In a secret location elsewhere on the
populist right-wi ng party of the kind pro- front, Cartel, an artillery commander's call
liferating across Europe. In 2022 it went 50 km sign, sits at three large screens. One shows
1 I
frorn 1% of the vote to 7%; this time it took nine live drone-st1rveillance feeds. His
18o/o, and wi 11 have at least 48 depu ties in o men have 12 howitzers, ali ofwhich use so-
,r
the 230-seat National Assembly. With the Kostiantynivka ...:
r .,. viet-calibre shells. He says he would feel
Social Democrats and Socialists at just 79 • ..· "comfortable" if he had 150 shells a day at
and 77 respectively, neither can reach a go- U K R A I N E D o n e t Sr k .. ...···· .· his disposal but often l1as only 20 or 30.
,,, ;
verning majority. But both have refused to Dn ep« Pokrovsk • ... Cartel says his Russian opposite num-
negotiate with Chega. ..�-�Avduvka bers have also had fewer shells to fire re-
•
<.••
•••

Led by André Ventura, Chega started as Donetsk cently, perhaps since they used so many in
•
:
an undisciplined right-wing splinter frorn their tussle to take Avdiivka; but they still
....rt
••
••

the centre-right. It began by bashing Roma 0�1khiv _/ ., ••

have more than he does. ln the last few
people and crime, but over time began to • Area controlled by\ .. days, he says, the Russians sprayed 40
Piatykhatky • Robotyne Russian-backed i .• .
focus on immigration and corruption. Its forces before
•
t shells rando111ly at tl1e D11ieper river e11d of
slogan, "Portugal needs a cleaning", could Feb 24th 2022 {
. .........,...,....._,
· the front. Cartel hada delivery of shells on
refer to all of the above. "This is the night Zaporizhia March 3rd and u sed ten of them to take out
that the two-party system in Portugal end- two Russian artillery positions near Robo-
ed," said Mr Ventura to cheers. He also re- tyne. Like Chief, he sounds unruffled by
ferred to Chega as the "central pi ece" of the March 13th 2024 Avdiivka's fall. But asked what will happen
legislature, implying that he wanted Mr Russ1an-controlled Russian operations* if the shell shortage continues indefinite-
Montenegro to call upan him for support. • Claimed as Russian-controlled • Ukrainian advancest ly, he says calmly: "We will die and, after
In other words he seerns to want power, ·-v-� 1. � 1 L l. . r . - - that, Europeans will die." Far now though,
u� e ln·t une rrhe tudy fWa !:.. '· ritl al hreats P - ·
not to make a racket in opposition. the southern frontis "tense but stable". •
46 Europe The Economist March 16th 2024

Charlemagne I Hanging in there

Europe's economy is a cause for concern. not panic

America's using market exchange rates. This is largely irrelevant:
GDP per head in euros looks smaller in dollars when the greenback
is strong, but the baguette bought with that euro is also worth few-
er dollars, leaving Europeans no worse off. Even on a like-for-Iike
basis, however, sorne Euro-gloom may be warranted. America's
econorny has been on a tear of late, while every EU data release is
an exercise in figuring out which bits are in recession.
Europe is in the midst of a "cornpetitiveness crisis", in the
words of Isabel Schnabel, a grandee at the European Central Bank
(ECB). As if to underline the seriousness of the situation, the EU
has appointed not one but two forrner Italian prime ministers to
opine on the future of its economy. En rico Letta will soon re)ease a
report on the single market. Mario Draghi, also a former ECB boss,
will follow with an opus on "the future of European cornpetitive-
ness" due in June. Many of their recornrnendations will be copy-
pasted from a report written by Mario Monti, yet another Italian
former prime minister (how the slowest-growing big country in
Europe cornered the market in economic advice is anyone's
guess), which the EU published in 2010. Then as now, Et1rope often
knows what it needs to do-deepen the single market, make cross-
border financing easier and so on-yet not howto do it.
But getting the diagnosis right is the first step. For are things
EU ROPE DEBATED a single currency three decades ago, its really so grirn? Europe is back to having a trade surpl us anda fiscal
A s
politicians hoped to reverse a worrying trend: America's econ-
omy was growing faster, poised to leave Europe in its wake. In 1994
deficit that looks a lot better than Arnerica's these days, points out
Sander Tordoir of the Centre far European Reforrn, a think-tank.
the 27 countries now in the EU had a combined GDP just shy of What growth it can eke out is more equally spread, resulting in
their transatlantic rival's, adjusted for purchasing parity. Two more social mobility. Carbon emissions are falling faster than in
spurts of frothy growth in América followed by one spectacular América. Unemp)oyment is pretty low just about across Europe
bust in 2008 conveniently left the European economy back where these days; an ageing society means concerns will soon turn to a
it began-at around 97% of Arnerica's size. More surprisingly, the shortage of workers, not jobs.
protracted euro crisis culminating in the early 201os, which hob- "competltiveness" is a nebulous term used by lobbyists to
bled Europe justas América discovered how to frack vast oil de- push their favoured policies. Often the suggested cure is worse
posits, also did little to change the situation: by 2016 the ratio was than the supposed disease. Europe could jack up its growth rate by
still 97%. Surely the America-first bombast of Donald Tru111p, co- borrowing rnoney and showering subsidies on ñrrns, as America
vid-era turmoil, the ernergence of trillion-dollar tech ñrrns in is doing, but has mostly avoided it, sensibly, European industry
Ame rica and the return of war on the Euro pean continent (with an could become more cornpetitive by slashing wages, or firing lots
energy crisis to boot) would consigo the near-parity to the annals of workers: this is not the outcorne policymakers will hope for.
of econornic history? Not so. The EU finished 2022 with annual Corporate chieftains think Europe could boost this elusive corn-
output a little over 96% of America's. It is at the sarne level in the petitiveness by easing green rules, another dead end. Importing
age of ChatG PT as it was at the time of cassette tapes. lots of migrants would boost GDP but has political implications.
The comparison is both worse and better than it looks for
Europe. Its overall economic growth has been juiced by poor ex- Economy class
cornmunist countries such as Poland and Romania as they caught There is much for Europe to fret about, of course. The continent
up with the rich world, while western European ones including has few corporate giants, and many old firms with little to fear
France and especially ltaly have flagged. The EU is home to many from new entrants and so little incentive to innovare. A strength-
more people than América, so its citizens are on average about ened single market, which would provide cheaper capital and lots
30% worse off than New Yorkers or Texans. But as Arnerica's pop- of custorners, would help. Europe seems to be investing less in
ulation has risen by a q uarter sin ce 1994, while agei ng Europe,s has building prod uctivity-enhancing AI models but also in deploying
grown far less, the two economies are in fact somewhat closer in thern, says Guntram Wolff of Bruegel, another think-tank. The
terrns of in come per person than theywere at the time of Bill Clin- continent is the world's most open big economy in a time of geo-
ton and Jacques Delors. Factoring i11 working hours, which are political tension. If cheap Russian gas rernains offline for years,
both shorter and on a steady decline in the EU, leaves European sorne energy-intensive European industries may never recover.
workers with even less to blush about. Put very simply, the Prench Economists speak of societies having to pick between making
and their neighbours toil a third less than Arnericans, earn a third guns or butter-a question that has resurfaced as the need for de-
less, and are a Jot more tanned by the end of August. fence spending has beco me apparent. Europeans have long for-
In the absence of creating tech giants, one boorning industry in saken both to spend time ar the beach instead. Sorne have argued
Europe is that of fretting that the continenr is falling behind. The this was foolish, that social goodies like heavily subsidised health
naysayers thi nk this ti me the old con ti nent's economic goose real- care or retiring early would not be possible fer long without more
ly is cooked. One culprit is the strong dollar, which leaves Europe economic growth. Perhaps now they are right. But it would not be
looking beleaguered when its economic output is cornpared with the first time Europe's resilience had been underestimated. •
 47

I nvestigation brothers and their businesses, drawing on

over 10,000 pages of docurnents, including
The ancient deal that saved the Barclays official papers unsealed between 2003 and
2018 under government secrecy rules. Our
investigation goes back to the 197os, when
Sir Frederick, who is 89, and his twin, Sir
David, who died in 2021, were on the vergé
of insolvency. At the time the brothers
faced personal ruin beca use almost all
was the twin brotners' business empire built on a fraud?
their companies were unlimited=rnean-
ijth Britain's governrnent more likely, itwill walkaway. If so, a range ing that they had no protection frorn their
O said that it will introduce frorn
N MARCH
a new law to of bidders could be interested, including creditors. lf theywere to survive they need-
prevent foreign governments owning the owners of the Daily M ail, the Murdoch- ed to resort to desperate measures.
Bri tish newspapers and periodicals, The owned News Corp or Sir Paul Marshall, a A 50-year-old deal is ancient history,
law will take a "bread defmition" of what hedge-fund boss and big shareholder in GB but there are reasons why it is still relevant
counts as srate influence. Foreign officials N ews, a right-leaning television channel. A today. The Barclay family is best known in
will be excluded, even if they are using bid from any of these could lead to another Britain for their media interests, but they
their own wealth. Only small passive investigation. As the process drags on, the also own property and an online retailer.
stakes will be allowed. Barclays wi 11 rernain on the scene. The Thanks to these, they feature in the Sunday
The law is all about the Spectator and great irony, we have found, is that Sir Fred- Times·s latest rich list in zzth place, with a
the Telegraph, two pillars of Britain's right- erickand Sir David Barclay, who bought the fortune put at f6.42bn. They got rich by
wing press. They are up for sale because Spectator and the Telegraph without any trading assets using borrowed rnoney. Had
last year Lloyds Banking Group threatened irnpediment two decades ago, also de- they gone spectacularly bankrupt in the
to bankrupt the cornpanies controlling served a proper inquiry of their own. 197os, nobody would have been willing to
thern, over debts worth about f1.1bn The Economist has investigated the twin lend them the cash they needed to buy the
(si.abn). The Barclay farnily, which is the Telegraph Group in 2004. Without that
ultirnate owner, refinanced these loans deal in the 197os, today's billion-pou nd
with funds from RedBird lMI, an American 7 Also in this section conglomeratewould never have existed.
outfit backed by sovereign money from the Another reason to delve into history is
49 Bagehot: Tories as trade unions
United Arab Emirates. The second stage of that the 197os was the last moment in
the deal envisaged the business being tak- 7 Read more at: Economist.com/Britain which an outsider can gain an understand-
en over by íts white knight, raising the i ng of the workings of one of Britain's high-
Northem lreland's new govemment
prospect of the Spectator and the Telegraph est-profile business grou ps. This transac-
belonging toan Arab government. Capital-markets protectionism tion transferred a lot of Barclay assets off-
Those plans are now in disarray. Red- shore. After it, the family empire became
Listed buildings
Bird IMl may settle for a minority stake; or, increasingly cornplex and impenetrable ...
48 Britain The Economist March 16th 2024

� Our digging provides a unique insight into Owed !105.2m to Barclays hotel. This was initially financed
the cornplexity and subtlety with which by the Barclays, not the Bolsoms. After it
the brothers juggled their assets. Crown had lost f1.8r11, the Barclays paid the Bol-
Barclay twins
It also reveals how secrecy goes hand in Agents soms f.941,000 for it, and promptly closed
1 1
glove with knowing the right people. At the 1 1 it down. As part of this generous deal Ai-
1 1
start of thei r careers the brothers worked Owned
1

Secretly
•
dan Barclay, who was then 22 years old,
w.ith business associates who could help controlled
Oct 1976 joined the nightclub's board.
. . Sold the debt
them raise capital and find l ucrative d eals. If the Barclays did indeed control Tren-
Later, as their right-wing media interests
'
\
\
\
for f 27.4m to
port through the Bolsoms, they were
\
show, their connections involved Tory pol- \
\ breaching the terrns of the statutory decla-
itics, too. In 1991, within ayear of resigning '' -, rations-at least as the civil servant de-
as prime minister, Margaret Thatcher
<, ..... __ .... scribed thern. That is a criminal offence,
moved into a house in Chester Square in The second transaction in December
London recently vacated by Sir David. She 1978 involved the Barclay twins buying
lived there until her last months, when she Dec 1978 Trenport. For this they used another of
1
moved into the Ritz hotel, which was then l Sold itselí for their cornpanies, called Russet Invest-
owned by the Barclays. ''\ f3.7m to ments. This bought f.3.7m-worth of new
\
A third reason our investigation mat- \ shares issued by Trenport, giving it control
ters is that we have found strong grounds ' ',\
of the company. At the time Trenport had
to believe that this ancient deal may have ' -,....... ... ...,. Russet f.8.2m of cash on its balance-sheet, as well
involved fraud. We also have cause to sus- ,njerse¡ as the Barclays' remaining debts, which by
pect the brothers of avoidi ng or even evad- then stood every chance of being repaid in
ing taxes on profits worth tens of millions f ull. In addition f 2.6m of dividends that
1 Apr1979
of pounds in today's money. Over the years, 1 Trenport had awarded to the Bolsoms had
many journalists have dug into Sir Freder- '\\ Sold Trenport
still not been paid out. The Bolsoms lost
\ for !35.Sm to
ick and Sir David. So far as we know, our in- \
\ their claim on that money, too.
\
vestigation is the first to ask whether the \ If the Bolsorns were really Trenport's
brothers commi tted a criminal off en ce
',', owners, why would rhey sell their claim to
originally punishable by prison.
<,
--------------. Gestplan
Hotels assets worth many tens of millions of
The business that the Barclay twins Figures have been converted lo December pounds for just f3.7n1? The answer is that
built has since passed to their children. Ai- 2023 príces, uslng a retall price mciex they had no choice. Trenport had an "irrev-
dan, Sir David's oldest son and the head of ocable" option requiring the new shares to
the family today, was a director of one of the buyer of the debt. Although we do not be issued. On that basis, the Bolsoms were
the farnily's companies involved in the have the original statu tory d eclarati ons, not the true owners of Trenport and proba-
transactions we have investigated. Al- we believe these descriptions are accurate bly never had been-a breach of the statu-
though that gave him a legal responsibility and complete and can think of no reason tory declarations.
for the business, there is no suggestion why they may not be. In the third transaction in April 1979,
that he was aware of its role. However, our research suggests that the the twins openly bought Trenport off Rus-
We put our findings to Sir Frederickand brothers secretly controlled the buyer, a set using one of their British cornpanies,
rnernbers of his farnily. They offered no company called Trenport Investments, us- called Gestplan Hotels. Gestplan paid al-
comment. However, given that the rules ing a pair of frontmen, two brothers called most ten times what Russet had just four
governing who is a fit and proper newspa- Leslie and Harold Bolsorn. We do not know months earlier. Because Russet was based
per owner are once again under debate, our how the Barclays and Bolsoms first met but in Jersey, which is a separate financia! ju-
questions are more relevant than ever. both owned or had owned hotels in west risdiction from the mainland, this moved a
Born in 1934, the Barclay twi ns ran London. Trenport was supplied with finan- large pot of Barclays money offshore.
small businesses in the195os, la ter branch- cial, legal and business services by loyal We have looked into the tax status of the
ing into property, buying hotels using Barclays people, not Bolsoms people. The brothers and their wives, and we believe
money borrowed frorn the Crown Agents, a fees for the loan Trenport took out to buy that they were probably resident as UK tax-
governrnent-backed tender. The Arab oil the Barclays' debt turned up in the ac- payers at the ti me. If we are right abo u t the
embargo in 1973 led to a property crash and counts of the Barclays' hotel group. Tren- statutory declarations, the Barclays may
a banking crisis. In 1976 the Barclays' debts port's third director, who sat alongside the have worried that advertising their owner-
were growing by f 963,000 a month, peak- solsorns, was the father-in-law of the man ship of Ru.sset was an unnecessary risk. If
ing at f105.2m (ali the figures in this article who for decades provided the Barclays so, and if these offshore profits belonging
have been converted to December 2023 with business services. to Russet were not declared, the Barclays
prices, using a retail-price index). The We have identified what looks like the were gui lty of tax evasion, which is a crime.
pressure to call in the receivers was be- Bolsorns' pay-off for their efforts. In April Taxpayers may have lost in a second
coming irresistible. 1977, five months after Trenport bought the sense, too, because the original owner of
The story revolves around three tran- Barclays' debt, they started a business that the Barclays' debt had been the Cro,;vn
sactions (see diagrarn). The first, in Octo- was to run a nightclub called Le Privé in a Agents, \Vhich was owned by tl1e Britisl1
ber 1976, staved off bankru ptcy by buying government. The sale was a terrible deal
out the Barclays' biggest creditor ata steep for the taxpayer. Of the Barclays' other
discount, in effect slashing their debts and C) Read the full story creditors, National Westminster Bank, the
interest payments. As part of this transac- Norfolk Capital Group and City and Coun-
tion, the brothers signed statutory declara- The Eco11omist's full investigation into try Properties ali received full payment on
tions, formal oaths under a legally binding the Barclays, including sorne of the loans totalling f17.4m. Keyser Ullmann, a
pledge. A civil servant recorded at the time documentation we uncovered as part bank, received an estimated 85-90 pence in
that the brothers had vowed they "had no of our research, is online now. Visit the pound for its loans of f48.5m. The
present or future interest in the eq uity" in economist.com/barclaytwins Crown Agents received just 26 pence. •
 The Economist March 16th 2024 Britain 49

Bagehot I The enemy within

How the Conservative Party carne to resemble the trade unions

nearly 3o/o ayear. Yet much of the Tory party ducks this looming
crunch, much as the unions of the 197os ref used to engage with
post-war governrnents' trilemma of combining full employment,
low inflation and high wage growth. Fiftyyears ago J oseph wanted
to convince Tory MPs to take on the Labour-backing unions. Mr
Colvile wants thern to reckon with their core vote.
"our role in society is to look after our mernbers, not run the
• • • country," shrugged Joe cormley, a miners' leader from the 197os.
The same attitude prevails among Tory MPs at budget time. The
public finances are fragile: Jeremy Hunt's promise to reduce Brit-
ain's debt as a share of GDP in ñve years' time rests on heroicas-
sumptions about spending restraint. Rather than confront that
challenge, each year backbenchers present the Treasury with lists
of tax cuts for their favoured groups (inheritors of large estates,
pub landlords, motorists, dog-owners and so on) and pleas for
"levelling up" cash for their areas. Their rhetoric is Thatcherite;
their behaviour is clientelist. To his credit, at the budget on March
6th, Mr Hunt favoured tax cuts that will benefit workers and re-
ward firms that invest. A smart party wou ld have cheered them as
proof they were grappling with intergenerational justice. Instead,
sorne Tory M Ps moaned that their older voters had been neglected.
Keeping a lid on taxation (due to hit 37.1o/o of GDP by 2029, the

T March 6th was a swish affair. Rishi Sunak, the prime minister,
HE 50TH birthday party of the Centre for Policy Studies (CPS) on highest share since 1948, according to Britain's official fiscal
watchdog) meaos tackling productivity. Yet when productivity-
and seores of Conservative MPs tucked into champagne and pork enhancing meas u res threaten the well-bei ng of the core Tory elec-
in the gothic splendour of the London Guildhall. There was rnuch tora te, M Ps go on strike. The CPS wants sweeping liberalisation of
to celebrate. Founded by Margaret Thatcher and Keith Joseph in Britain's planning rules; successive governrnents have caved to
1974 to "think the unthinkable" about Britain's stalling post-war Tory backbenchers who have fought like picketing miners to re-
econorny, its ideas and po]icies had powered her administration. strict building. Britain's housing shortage is the Conservative
The think-tank's principies rernain the government's lodestars, equivalent of the "closed shop", which shielded unionised work-
Mr Sunak declared. "In no small part, we live in the world created ers from pay cornpetition. Insiders, who own homes, benefit from
by the Centre f or Policy Studies." rising asset prices: outsiders pay the price.
But triurnphalisrn was mixed with gloom. It fell to Michael Restraining spendingwouJd also mean reinventing the welfare
spencer, chairman of the CPS, to share the bad news. Lately the state. Over 14 years in governrnent, several schernes to fund adult
Thatcherite revolution has not been going so well. Britain has social care+arnong thern duties on property, payroll taxes and in-
strugg]ed to produce growth that would have been the norm 20 surance schemes-have been proposed and then strangled. Like
years ago, he said. It is saddled with high debt and high taxes. the carworkers' unions that fought off rnodernisation, a desire to
The government is in parta victim of externa! shocks in the see off short-term pain has prevailed over the long-run benefits of
forrn of covid-is and the war in Ukraine. But much of the blarne a retorrned social-care systern.
lies with Conservative backbenchers, whose approach to govern-
ing has come to resemble that of the trade unions whose strikes Which síde areyou on, boys?
drove inflation, blackouts and shortages 50 years ago. Back then In 1974 the unions appeared unstoppable. Yet they were sowing
the czs gave Thatcher her blueprint for breaking the shop stew- the seeds of their own de mise. Many unión leaders knew their pay
ards. Now the Tories themselves are the problem. dernands were unsustainable but they spurned repeated pleas
Sorne Tory MPS see thernselves less as part of a project of na- from sympathetic Tory and Labour governments to reform labour
tional government, more as delegates sent to negotiate with it. relations. The government becarne "a gigantic Las Vegas slot
Their job is to extract benefits for their voters and to see off re- machi ne that had suddenly got stuck in favour of the customer",
forms that threaten them. Leaders of Tory factions issue dark said Tom Iackson, a postrnen's leader at the time. As the nurnber of
threats of industrial action in the form of "vote strikes" ora calen- losers from inflation grew, Thatcher could reap the electoral re-
dar of sabotage they terrn the "grid of shit" (a phrase of which Ar- wards of taking on the "enerny within". The unions failed to corn-
thur Scargill, a rniners' leader frorn the 198os, would have been prornise when they had the upper hand, and paid the price.
proud). ln the 197os trade-union leaders ambled up Downing Therein líes the lesson for Tory trade unionists. Demography
Street to extract bumper pay deals over beer and sandwiches; to- and sluggish growth are straining the post-cold-war model of low-
day backbenchers arrive for breakfast rolls to exert pressure on be- ish taxes anda generous welfare state. But when their electorate
half of their constituents and su pporters. faces hard choices, Tory backbenchers protect their voters' short-
Those Tory supporters are disproportionately found a111011g terrn interests. In failing to forge new settlernents on taxation,
the old. That is a problem. Britain's most pressing challenge, says public services and Britain's ability to get things built while they
Robert Colvi le, the crs's current head, is demography. As the pop- have enjoyed influence, the Tory militants are set to hand the ini-
ulation ages, keepi ng spending on the over-sgs at its current 10% tiative to a future Labour government. They have left it to their op-
share of GDP would req uire the econorny as a whole to expand by ponents to think the unthinkable. •
so

26% of young men backed it; only 6% of

their fe mal e peers did.
Young Polish men have their own set of
complaints. Perninisrn has gone too far,
say two firemen in their aos in a small
town. Lukasz says he used to be able to go
to a village dance party and "the women
there were wife material." Nowadays
"they're all posting sharneless pictures of
themselves on social media," he laments.
The inedia are "all biased and pushing the
culture to the left", complains Mateusz
(neither man wou ld give a surname). Peo-
ple no longer adrnit that men and wornen
often want to do different kinds of work.
In much of the developed world, the at-
titudes of young meo and women are po-
larising. The Economist analysed polling
data frorn 20 rich countries, using the
Eu ropean Social survey, Arnerica's General
Social Survey and the Korean Social Survey.
Two decades ago there was little difference
between roen and women aged 18-29 on a
self-reported scale of 1-10 from very liberal
to very conservative. But our analysis
found that by 2020 the gap was 0.75 (see
chart i on the next page). For context, this is
roughlytwice the size of the gap in opinion
between people with and without a degree
in the same year.
Put another way, in 2020 young men
were only slightly more li kely to describe
thernselves as liberal than conservati ve,
with a gap of just two percentage points.
Young women, however, were much more
likely to lean to the left than the right, with
a gap of a massive 27 percentage points.
/ In ali the large countries we. examined,
young roen were more conservative than
young women (see chart 2 on the page after
next). In Poland the gap was 1.1 points on a
scale of 1-10. It was a hefty 1.4 in Ame rica, 1
Young men and women in France, 0.75 in Italy, 0.71 in Britain and
0.74 in South Korea. Men and wornen have
Divided in youth always seen the world differently. What is
striking, though, is that a gulf in poli ti cal
opinions has opened up, as younger wom-
en are beco mi ng sharply more liberal
whi le their mal e peers are not.
ATLANTA. BEIJING ANO WARSAW
For young women, the tri u mphs of pre-
vious generations of ferninists, in vastly
Diverging worldviews berween the sexes could affect politics, familíes and more
increasing wornen's opportunities in the
N A TRENDY food rnarket in Warsaw, Po- chores and child care were women's work, workplace and public life, are in the past.
I land's capital, two female engineers are
discussing how hard it is to meet a nice, en-
and that wornen could not be leaders. They
did nt have a second date.
They are concerned with continuing injus-
tices, frorn male violence to draconian
lightened man. Paulina Nasilowska gota Typically for young Polish wornen, Ms abortion laws (in sorne countries) and gaps
big pay rise a few years ago. Her boyfriend Nasilowska and Ms Walczak support par- in pay to wornen shouldering a dispropor-
asked: "Did you have an affair with your ties of the liberal left, which take wornen's tionate share of housework and child care.
boss?" He is now an ex-boyfriend. issues seriously and prornise to legalise Plenty of menare broadly in their cerner.
Ms Nasilowska's friend, Joanna Wal- abortion. Young Polish men, they com- But a substantial portion are vocally not.
czak, recalls a man she met on Tinder who plai n, hew more to the right, or even to the Young wornen's avid liberalism may spring
revealed that he was a "red-pill" guy (a ref- far right. Consider last year's election. from a feeling that there is much work still
erence to "The Matrix", a fil 111, meani ng Then the top choice for 18- to zs-year-old to be done, and that opposition to doing it
someone who sees reality clearly. In the men was Confederation, a party that touts will be sti ff.
"manosphere", a global online community free-rnarket economics and traditional so- The gap does not translate straightfor-
of angry men, it means realising that men cial values. ("Against ferninists. In defence ward ly into voting patterns, but it is visi-
are oppressed.) He thought household of real wornen" is one of its slogan s.) sorne ble. One poli found that 72o/o of young ..
 The Economist March 16th 2024 I nternational 51

� American women who voted in House

elections in 2022 backed the Democratic -
Pulling apart
than men earn a bachelor's degree.
Differences in education lead to differ-
candidate; 54 % of young men did. In 2008 Self-identified position of ences in attitude: people who attend col-
there was barely any gap. In Europe, where 18- to 29-year-olds on political spectrum* lege are more Iikely to absorb a liberal,
many elections offer a wide array of par- O=very liberal, 10=very conservative egalitarian outlook. The ed ucation gap
ties, young wornen are more li kely to sup- 5.0 also leads to differences in how men and
port the most left-wing ones, whereas 4.8
wornen experience life, work and ro-
young men are more li kely to favo u r the -

mance. To si rnplify: when a woman leaves

right or even the radical right. 4.6 university in a rich country, she is likely to
In France in 2022 young men were 4.4 find a white-collar job and be able to sup-
much keener than young women on Eric 4.2 port herself. But when she enters the dat-
Zemmour, a presidential candidate who ing market (assurning she is heterosexual),
4.0
wrote a book rebutting Simone de Beau- ->y
she finds that, because there are many
voir, Prance's best-known feminist. Ger- 1 1 1 1 1 1 1 1 1 1 more fernale grad u ates than rnale ones, the
many's election in 2021 saw the largest ever 2002 04 06 08 10 12 14 16 18 20 supply of liberal, educated men does not
left-right gap between the votes of young � Luru , ,-'111
Hl. :>.. aal Su, �y: *Average of 20 match demand. CharelJe Lewis, a zs-year-
General Social Survey; f'orean odal Sur,e·y 1ich countnes
wornen and men, according to Ansgar old health-care worker in Washington, oc,
Hudde of the Universi ty of Cologne. In Por- complains that rnen her age have "a little-
tugal, where the far-right chega party Medicine and Health sciences looked at boy mindset"
surged in an election on March ioth, sup- survey data for 35,000 Chinese people. In The dati ng scene can also be bleak for
port for i t is concentrated among voters their analysis they found that young men men who did not go to universiry. Upward-
who are young, male and less educated. were much more likely than youngwomen ly mobile women reject them. Michal Paz-
And South Korea in 2022 elected an overtly to agree with statements such as "roen ura, a young Polish dairy farrner, takes a
anti-femi nist president; more than 58o/o of should put career ñrst, whereas women break from inflating tractor tyres and re-
men in thei r zos voted far him. Sorne 58% should put family first" and "when the calls a girl fri end who "di dn't Ji ke the smell"
of wornen in their zos backed his rival. economy is bad, female ernployees should of the farm and left hirn to live in a town. "I
be fired first." wanted a traditional, stable lifestyle. she
Young and cranky Young Chinese rnen's views were not wanted fun." Male farrners have such a
The attitude gap between the sexes is also much different from those of older men, hard time fmding spouses that a reality
visible in how they view each other. People whereas young wornen's views were far show called "Parrner Wants a Wife" is one
in 27 European countries were asked more egalitarian than their mothers'. of the most popular on Polish televisión.
whether they agreed that "advancing worn- Claire, a market researcher in Beijing (who "lt's hard to say what young women want
en's and gi rls' rights has gane too far be- uses an English name to preserve her ano- in. a man these days," says Lu kasz, the Pol-
cause it threatens men's and boys' oppor- nyrnity), says shewants a partnerwho will ish fireman. Previously, they just wanted a
tunities." Unsurprisingly, men were more treat her as an equal and share the house- man with "a stable incorne, who could fix
likely to concur than women. Notably, work . .,I think most Chinese men would things in the house ... and who had adriving
though, young men were more anti-ferni- fail that test," she sighs. Dr Qian notes that licence", he recalls.
nist than older men, contradicting the when Chinese parents go to "matchmaki ng Will the gulf in attitudes affect how
popular notion that each generarion is corners" in parks, they brag about their many of today's young people eventually
more liberal than the previous one. Gefjon sons' jobs and degrees, but hide their cou ple u p and have kids? It is too soon to
Off, Nicholas Charran and Amy Alexander daughters' achievements, fearing they wi 11 know. But far those who thin k the rich
of Gothenburg University use a Dutch put off potential suitors. world's tu111bling birth rates are a problen1,
analogy to illustrate the difference be- What is going on? The most likely caus- the early signs are discouraging. In An1eri-
tween you ng (18-29) and old (65+) Euro- es of this growing division are education ca, Daniel Cox, Kelsey Hammond and Kyle
pean men. It is as great, on this q uestion, as (young rnen are getting less of it than Gray of the Survey Centre on American Life
the gap between the average su pporter of young women), experience (advanced find that Generation z (typically defined as
Geert Wilders's radical-right Party fer Free- countries have becorne less sexist, and tl1ose born between the late 199os and early
dom and the Liberal Democrats. men and women experience this different- 2ooos) have their first romantic relation-
A similar pattem holds in other ad- ly) and echo chambers (social media aggra- ship years later than did Millennials (born
vanced countries. Although a higher share vate polarisati on). Also, in democracies, between 1980 and the late 199os) or Gener-
of young British men think it is harder to many politicians on the right are deftly ation X (boro in the decade or so to 1980),
be a wornan than a man than think the op- stoking young male grievances, while and are more likely to feel lonely. Also, Gen
posite (35% to 26%), they are likelier than many on the left barely acknowledge that Z ,vomen, unlike older women, are dra-
old British men to say it is harder to be a young rnen have real problerns. matically more likely than their male peers
man than a woman. Young British wornen But they do, startingwith education. Al- to describe the111selves as LGBT (31% to
are more likely than their mothers to be- though the men at the top are doing fine, 16%). It remains to be seen whether this
lieve the opposi te. Nearly 80% of South Ko- many of the rest are struggli ng. In rich mismatch will last, and if so, ha,� it will af-
rean men in their zos say that menare dis- countries, 28o/o ofboys but onty isss of girls fect the formation of families in the future.
criminated against. BareJy 30% of men ov- fail to reach the 111ini111u1n level of readi ng The backlash against fen1jnis111111ay be�
er 60 agree, making their views indistin- proficiency as defined by PISA, which tests
guishable from those of women in their high-school students. And women have We are hiring a global correspondent The job will
be London-based and involve travel. The successful
zos or 6os. overtaken men at university (see chart 3 on candidate will provide ambitious coverage of global
In China pollsters do not ask about vot- the next page). In the EU, the share of men trends in policy, economics and politics. A
ing intentions, but they find a similar di- aged 25 to 34 with tertiary degrees rose knowledge of economics is essential; familiarity with
vergence between young men and women from 21% to 35% berween 2002 and 2020. data analysis would be helpful. Applicants should
send a cv, a cover letter and an unpublished article
when it comes to gender roles. Yue Qian of For wornen it rose faster, from 25% to 46%. of 600 words su ita ble for publication in The
the University of British Columbia and In America, the gap is about the same: ten Ecanamist to globalcorrespondent@economist.com.
Jiaxi ng Li of the Shanghai Universi ty of percentage points more young women The deadline is April sth 2024.
52 1 nternationa I The Economist March 16th 2024

� especially strong arnong young rnen be-

cause they are the ones who feel most -
Space between us El
afraid to get rnarried because they hear a
cautionary tale: woman cheats, files for di-
threatened by wornen's progress. Better Self-identified position of 18- to 29-year-olds vorce and takes everythi ng he worked for."
jobs far women need not mean worse ones on political spectrurn, 2022 orla test Women see a different world online.Ju-
for rnen=but many men think it does. Old- O=very liberal, lü=very conservative lia Kozi k, a stu dent in Warsaw, follows a ti p
er men are less bothered, sí rice they are • Female • Male
she saw on TikTok. When she rides in a cab,
more likely to be established in their ca- J\r- 3.5 4.0 4.5 5.0 5.5 6.0 6.5 she tears out a strand of hair and puts it un-
reers or retired, Younger men, by contrast, Australia der the seat in case she is abducted and the
are just starting out, so they "are most like- ltaly
police need DNA evidence. "I avoid men at
ly to perceive wornen's competition as a ali costs, mostly," she says.
Potand
potential threat to their future life course", The political left has done a fair job of
argue Dr Off, Dr Charran and Dr Alexander. France persuadingwomen thatit cares about their
In a recent study, they found that young Uruted States problems. But it has not figu red out how to
European men are especially likely to re- Spaín talk to rnen, argues Richard Reeves, a liber-
sent women (and feel that feminisrn has South Korea al scholar, in "of Boys and Men". Progres-
gane too far) if unemployment has recent- sives often assume "that gender inequality
Bntam
ly risen in their area, and if they perceive can only run one way, that is, to the disad-
their society's insti tutions to be unfair. An- Germany vantage of wornen" And they apply labels
ti-ferninist views, they add, are a fair pre- s 1rr� Ausu.d1a11 s i 11 Sur" ·r, l uropean S ial Survey¡ like "toxic masculínity" so indiscriminate-
General Social Survey. Korean Social !:iurvey
di ctor of right-wing authoritarian ones. ly as to suggest that there is something in-
Not all male grumbles are groundless. trinsically wrong with being male. Rather
In sorne countries, divorce courts tend to strong. Benjami n, a student in Washing- than drawing irnrnarure boys and men into
favour the mother in child-custody dis- ton, oc, says he used to be a "red-pill guy a dialogue about their behaviou r, this "is
putes. In others, pension rules are skewed. ...working as a janitor, eating McDonalds much more likely to send then1 to the on-
Men enter the labour market earlier and and wallowing in self-pity" He'd watch line manosphere, where they will be reas-
die younger, but the retirernent age for classes online about how to boost his self- sured tl1ey did nothing wrong and that lib-
women in rich countries is on average confidence and pickup women. When he erals are out to get then1".
slightly lower, In Poland it is five years low- quit the rnanosphere, his friends taunted
er, so a Polish man can expect to work three him as a "blue-pill" (someone fooled by the Making America vi rile again
times longer than he will live post-retire- establishment) ora "cuck" (a weak man). Sorne politicians on the right, by contrast,
ment, while far a Polish wornan the ratio is Second, algorithrns hook users with have found ways to connect with disgrun-
1.4, notes Michal Culczyúski of Bocconi content that terrifies or infuriates, making tled males. Donald Trump is an obvious ex-
University. This strikes many menas un- the world seern both more frightening and an1ple. He cultivates "an i1nage of virility
fair. Mateusz, the Polish firernan, recalls more unjust than it is. Wornen who click and manliness", argues Mr Cox of the Sur-
when a left-wing lawmaker was asked. if on #MeToo stories will see more of them; vey Centre on American Life. He appealed
she was so keen on equal rights, what ditto formen who click on stories of men to young men who don't follow the news
abo u t eq uali sing the pensión age? "she being falsely accused of rape. Each may by showing up at an Ultimare Fighting
changed the subject," he scoffs. gai n an exaggerated idea of the risks that Championshi p event. He also tends "to
Another factor that particularly affects they personally face. sidewith men in cultural co·nflicts". In 2018
young men is conscription. They are the "When you go into a gyrn to work out he decried what he said was a shift in the
first to be called up; women are often ex- anda woman's in your line of vision, you burden of proof in cases of rape and sexual
empt. In South Korea, where milítary ser- look at her and all of a sudden you're fam- assault: "It's a very scary tin1e for young
vice is universa) for men and notoriously ous on TikTok far being a sexual harasser men in A111erica when you can be guilty of
gruelling, it fuels male resentment. In or sornething," says Kahlil Rose, a zs-year- son1ething you may not be guilty of...That•s
Europe conscription is no longer comrnon, old conservative man in Atlanta. This has one of the very, very bad things that's tak-
but Russia's invasion of Ukraine has made not happened to anyone he knows. But he ing place right now." Progressives may dis-
young rnen in neighbouring countries, has seen it on his phone, so it looms large miss this as the self-interested griping of a
such as Poland, more scared they may be in his consciousness. Benjamin, the stu- serial abt1ser. But there's reason to believe
drafted, says Mr culczynski. dent in Washington, offers a similarly that Mr Trump's macho behaviour "reso-
Social media, the lens through which gloomy perspective: "Men my age are nates with young men", says Mr Cox.
young people increasingly view the world, What neither side has done well is to
may have aggravated polarisation. First,
they let people form echo chambers. When -
Top of the class B
tackle the underlying problems that are
driving young men and women apart. Most
hornogenous groups of like-rninded peo- OECD countríes, students graduatíng* as% important, poljcyn1akers could think
ple discuss an issue, they tend to becorne of population of typical graduation age harder about rnaking schools work for un-
more extreme, as individuals vie for affir- so derperfor1ni ng boys. Mr Reeves suggests
mation by restating the in-group's core po- Fema le
hiring more mate teachers, and having
sition in ever-stronger terrns, and de- 40 boys start school a year later, by default,
nouncing those who dispute it. since they 111att1re n1ore slowly than girls
30
When groups of frustrated young men ,::::------_.,-;Mal e do. Also, sin ce "the desegregation of the la-
link up online, the conversation often de- 20 bour market has been almost entirely one-
scends into misogyny. In male-dominated way", the state could beef up vocational
Chinese chatrooms the phrase "terni nist 10 training to prepare young men for occupa-
whore" is cornmon, along with a pun that tions they currently shun, such as those i11-
inserts the character for "fist" into "ferni- .. , ....2005, .... , .... , ... ,,,,
20 22
o volving health, education or administra-
nist" to make it sound more aggressive. 1998 10 15 tive tasks. If such reforms help n1ore boys
.�°'
Once a man joins an angry online "Btl• helor stMaster's and roen adjust to a changing world, that
Sou: e: \W.11 Id B mk tlcgr cqwv.11 11l
group, the pressure to rernain in it is would be11efit both 1nen and won1en. •
 53

TikTok in America the bill failed spectacularly. On March 6th

it sent a notification encouraging users to
Tick, tock lobby Congress against the legislation.
That seerns to have backfired: sorne un-
decided lawmakers were persuaded that
TikTok does indeed hold sway over voters.
In the event 352 of them backed the bill;
only 65 were opposed.
But befo re President J oe Bid en can sign
Congress starts the clock on a TíkTok ban. Now what?
the bill into law, which he says hewill do, it
ISTEN CLOSELY and you can hear the in- If it becomes law, the bill would compel must first pass the Senate. Given its bipar-
L fluencers wail. On March 13th America's
House of Representatives passed a bill bar-
ByteDance either to sel] TikTok's American
operations within six months or to shut
tisan popularity you might thi nk this was a
formality. Not so. Donald Trump, who as
ring app stores and internet providers thern down. Pressure far such a move has president almost forced TikTok into a sale
frorn distributing "foreign-adversary-con- been building since TikTok's boss, Shou Zi in 2020, has changed his tune. On March
trolled applications". The target is clear: Chew, was hau led before Congress last 8th he complained that banning TikTok
Ti kTok, a hit short-video app to which March. The firrn was nevertheless caught would benefit Meta, the social-media co-
rzorn Americans are glued far an average of off guard by the speed with which Ameri- lossus which owns Facebook and Insta-
56 minutes a day. ca's typically sleepy lawmakers have acted. gran1-and which, unforgivably, exiled Mr
TikTok's position in América has long The propasa] gained momentum partly Trump from its platforms after his suppor-
been precarious. Although the firrn is as a conseq uence of disquiet over the app's ters storrned Congress in Jan uary 2021. The
based in Los Angeles and Singapore, it is a handling of rnisinforrnation and anti- rnotivation far his intervention 111ay not be
subsidiary of ByteDance, a Chinese tech semitic content following Harnas's attack entirely public-spirited. A week earlier Mr
darling. That has fed bipartisan fears that on Israel in October. TikTok's efforts to stall Trump met Jeff Yass, a hedge-fund billion-
the Chi nese government could use it to spy aire and prospective donar whose invest-
on American citizens or shape public opin- rnent firm, susquebanna, happens to own
ion. TikTok has denied that the Chinese 7 Also in this section a stake in ByteDance.
government wields any influence over it, Republicans in the Senate may follow
54 Can lorries go electric?
and has sought to assuage concerns by en- Mr Trump's cue-he has, after ali, just
listing Oracle, an American software giant, 56 Aramco's big spend ing plans sealed their parry's nornination far the
to fence off the data of American users into presidential election this November. Lind-
56 China's anti-China boycotts
local servers and inspect its source code. It sey craham, who is both vociferous in his
points out that American investors, such 57 Bartleby: Workingfrom nowhere criticisms ofTikTok and sycophantic in his
as Carlyle and General Atlantic, are among adulation far Mr Trurnp, said on March
60 Schumpeter: Delaware v Nevada
ByteDance's biggest shareholders. ioth that he was u nsu re how he would vote ...
54 Business The Economist March 16th 2024

� If the bill does beco me law it is likely to sounding out a sale in 2020, could recon- gressive in expanding its business than it
face a challenge in the courts, probably on sider, given slowing growth in iPhone sales could have been, as it sought to keep a low
free-speech grounds. Still, there is a rea- and streaming su bscriptions, respectively. profile. It could do more to link its servers
sonable chance that Ti kTok wou Id have to Back then Oracle teamed u p wi th Walmart, with those of advertisers-the better to
shut up shop in Arnerica. Ayear ago the a retail behernoth, to buy mi nority stakes track the efficacy of their spendi ng, as Me-
Chinese governrnent said it would oppose in TikTok. But that deal fell through after ta has done-and to speed up the roll-out
a sale. Hours befare the House vote it de- Mr Trun1p left office. After its szsbn acqui- of TikTok Shop, its e-cornrnerce platform.
nounced America for "resorting to hege- sitien in 2022 of Cerner, a health-records In less than a decade a Chinese-linked Ti k-
monic moves when one could not succeed business, Oracle is probably now too in- Tok has managed to upend the social-me-
in fair competí tion", Byte Dance, which re- debted to mount a bid. dia business in América and beyond. An
portedly generated $uobn of revenue last Microsoft, another American tech ti tan, untethered one would keep being disrup-
year, is beli eved to rnake aro u nd fou r-fifths could weigh in. Its own bid four years ago tive-if it is allowed to exist. •
of that in China, where it operates TikTok's to acquire TikTok's business in America,
sister app, Douyin, and Toutiao, a news ag- Australia, Canada and New Zealand ended
gregator. Although its investors would lob- after ByteDance balked at giving it full con- Commercial vehicles
by to allow a sale, China's government trol of the app's data and source code. But
could prove intransigent, doorning the the company has long coveted a greater A freighted
American business. It could also feel the presence in consumers' lives, which may •
need to retaliate agai nst American firms bring it back to TikTok-if ByteDance were questíon
operating on the mainland. to loosen its terms. Other mashups have
Were advertisers forced to shi ft thei r also been suggested. Bobby Kotick, former
spending frorn TikTok, Arnerica's home- boss of Activision Blizzard, a video-game tornes and vans are
grown social-media companies would be studio which Microsoft acq uired last year,
electrifying-sl uggishly
in far a windfall. Not ali will benefit equal- has reportedly pitched the idea of a bid for
ly. According to Kepios, a research firrn, TikTok to various partners, including Sam ou MAY think that if you splashed out
82% of global TikTokers use Facebook, 8oo/o
scroll Instagram and 78% watch YouTube,
Altman of OpenAI, rnaker of ChatGPT.
However, as the artiñcial-intelligence
Y $100,000 for a vehicle you would take
delivery of something flash-a Porsche,
which is owned by coogle's corporate par- race heats up, it seerns doubtful that China say. In fact, man)' such buyers care less
ent, Alphabet (see chart). Only 53% use X, would want to hand TikTok's data or clever about the badge on the bonnet and more
the debating forum formerly known as algorithm to any American interests. An about how much load the thing can carry.
Twitter, anda mere 35% are on Snapchat, a alternative would be to sell off TikTok as a Far this is also the price of a large lorry.
messaging app. lf Americans redirect the standalone business rather than merge it Commercial vehicles such as lorries
roughly 3trn minutes of attention they lav- with an existing one. This would dodge and vans keep supply chains humming
ished on TikTok last year to other apps antitrust concerns. But the deal's size and deliveries moving. They also make lots
already on their phones, Meta and Alpha- could again be a problem. The largest of money for thei r makers. In 2023 vans ac-
bet, the dorninant duo in online advertis- amount ever raised in an initial public coun ted far a third of the €19obn ($207bn)
ing, will be the winners. offering was for a $26bn stake in Saud i in sales at Stellantis (whose largest share-
His grudge against Meta notwithstand- Arameo, a state oi 1 leviathan, in 2019. The holder, Exor, part-owns T11e Economist's
ing, Mr Tru1np may have a poinr when he largest leveraged buy-out in history was parent company). Dairnler Truck, the
grumbles that the ñrrn will be the biggest that of TXU, a utility, far $45bn in 2007. The world's biggest n1anufacturer of medium-
beneficiary. Reels, a Ti kTok-li ke offering value of TikTok would exceed even that, sized and large lorries, earned revenues of
embedded into Instagram, has gained though it helps that ByteDance's American €56bn last year. Ford Pro, the An1erican car
more traction than similar ones from You- investors could swap their stakes for a slice giant's con1n1ercial arn1, made a net profit
Tu be and Snapchat. Many TikTok influenc- of the new company. of $7.2bn on sales of 1.41n units, compared
ers already repost their content on Meta's Assuming it can be untangled from \Vith $7.5bn at Ford Blue, its car division,
app. After India banned TikTok (and doz- Bytedance, an independent TikTok would which sold twice as many ve hieles. Lorries
ens of other chinese apps) in 2020 follow- need to hire plenty of techies to replace the made by Volvo and Dai111ler rake in n1ar-
ing a skirmish on its border with China, ones in Beijing. Still, a separation could gins typical of an upmarket carmaker.
Instagrarn su rged in the country. In 2019 it pay off. Mark Shrnulik of Bernstein, abro- Given both the already high upfront
was the sixth-rnost downloaded app in ker, reckons that the firm becarne less ag- cost and the attention buyers pay to oper-
India. By 2021 itwas top of the charts. ating expenses, you mighr expect co1nmer-
Meta will not be so lucky if ByteDance's
investors succeed in persuading China's -
What if it's gone for Reels?
cial vehicles to go electric fast-not least
because they are also disproportionately
governrnent to allow a divestiture. The TikTok users", % who use other sele<:ted l1eavy e1nitters (lorries and buses spew
American firrn would doubtless be barred social-media platforms, Q3 2023 overa quarter of the carbon on EU roads).
frorn snapping up TikTok on antitrust o 20 40 60 80 Business buyers value this total cost of
grounds, as would Alphabet. The Iist of ownership n1ore than individual motor-
other potential suitors is limited by Tik- Facebook ists, who may paya premi um to salve their
Tok's price tag, which could run to u fig- lnstagram
cli111ate co11science. Alas, far n1a11y busi-
ures if ByteDance, fearing knock-en crack- nesses the calculation continues to favour
downs elsewhere, throws in TikTok's oper- YouTube petral and diesel. Can that change?
ations in other countries. Even in China, which in 2023accounted
Amazon, America's e-cornrnerce cham- X (Twitter) far 85o/o of global sales of hea,ry-duty e-lor-
pion, may take a look, given Tikfok's grow- ries (the largest sort), just one in 25 sucl1
Snapchat
ing focus on incorporating shopping into ve hieles was green, compared with one in
its app (though it, too, would face push- Reddit three ne\v passenger cars. In Europe the
back from trustbusters). Apple and Netflix, Sou r 1.. • K plos
figure is one in 70, and one in seven for
which both passed when Ti kTok was passenger cars. When an E u ban on sale of ..
 The Economist March 16th 2024 Business 55

� cars with internal combustion engines 1 •

comes into force in 2035 only three-quar- 1 1
ters of lorries 11-1ay be electric, according to It
'1 (
BCG, a consultancy. 1 oTechEx, another
consultancy, forecasts that zero-emission
lorries will make up 13o/o of sales in Arneri-
ca by 2030, far short of President joe Bi- 1(
den's goal for 50% of car sales.
In the next six years electrification is 1
....
likeliest for smaller vehícles operating
111
over shorter routes, such as last-rnile de-
livery services, thinks Alexander Krug of 1IIIIIC
Arthur D. Little, one more consulting firm.
The econornics of small e-vans look corn-
pelling. Batteries can be srnaller and vehi-
eles can be recharged overnight at depots.
Electric vans that travel relatively short -
distances in a day but cover lots of miles in
ayear could have a 1oo/o cost advantage over
conventional ones, calculate consultants
-
at McKinsey. Uwe Hochgeschurtz of Stel-
lantis notes that going electric can also in- •
sure against ever tougher emissions rules Life in the slow lane
in cities, Lars Stenqvist, Volvo's technology
chief, sees no reason why ci ties in Eu rope hardest to wean off internal combustion. Nikola, which launched to great fanfare in
should not run electric bin lorries. Volvo shifted 6,000 electric ones last year, 2014 and in 2019 struckajointventure with
Even if they are not yet cheaper, going just 2% of its total sales. Iveco to develop zero-ernission lorries, has
electric allows delivery firms such as Fed- Even if the cost disadvantage can be struggled. Its founderwasjailed in 2023 for
Ex and DHL to help merchants they serve overcorne, that Jeaves the problem of in fra- misleading investors, Jts market val u e has
rneet carbon-cutting pledges which rnany structure. Van fleets can recharge over- crashed from $29bn in 2020 to around
shoppers demand. FedEx has set a target night at depots and lorries on shorter $9oon1. Last year its joint venture with Ive-
for half its parcel-delivery vehicles to be routes can be charged at either end, while co was disbanded and it sold just 35 hydro-
electric by 2025. DH L wants the sarne for they are loaded or unloaded. However, Ion- gen-f uel-cell vehicles. It has paused pro-
60% of its last-rni le ve hieles by 2030. Arna- ger routes will require public charging sta- d uction of i ts battery lorries.
zon has 10,000 electric vans on American tions. And dedicated fast chargers for lor- Startups eyeing last-rnile delivery vans
roads and hopes to have 100,000 by 2030. ries need farmorepowerthan for cars, plus have had similarly rnixed fortunes. Ramp-
The econornics are a heavier lift for lots of parking space. The fastest chargers ing up production and raising capital is
heavy-duty vehicles. optirnists note that that top up cars in a few minutes would proving tough. Lordstown, an American
plenty of routes are well within current e- take around 90 minutes f ora lorry. firm, and Volta Trucks of Sweden have
lorries' range. Arnerica's Departrnent of A few "rnegawatt chargers", which are gone bust. Arrival, a British one, is teeter-
Transportation reckons that last year the ten times faster, are in operation in Germa- ing on the brink, des pite an arder of 10,000
distan ce travelled by three-q uarters of ali ny and the Netherlands. But a Europe-wide vans from UPS, a rival of FedEx and DHL.
goods ferried by road in the country was charging network requires ínvestrnents of Rivian, which in 2019 signed a deal to sell
less than 250 miles (aookrn). Volvo calcu- up to €36bn, estimates PWC, a consultancy. 100,000 vans to Amazon, and Canoo,
lates that 45% of goods in Europe travel One to refuel lorries with hydrogen-a which counts Walrnart among its custom-
less than 3ookm. Marco Liccardo, head of zero-ernissions alternative to batteries- ers, are struggling to make vehicles at scale
technology at Iveco, an Italian Iorrymaker would not be cheap either. Cash-strapped and are burning cash. Other rnanufactur-
(also part-owned by Exor), expects electric governments are unlikely to want to foot ers, such as REE and Tevva, which make
lorries to reach totaJ-cost parity with con- the bill. On March izth the Biden adrninis- battery-powered vans and lorries in Brit-
ventional lorries in zookrn runs between tration unveiled a strategy to build public ain, or Harbinger and Workhorse, which
logistics hubs in a couple of years. charging for lorries. But even if the plan make mediurn-sized trucks in America, are
Regulators are trying to speed things works, it will not happen overnight. hopeful but have even further to go.
along. In America they have proposed re- The threat to legacy lorrymakers from
quiring that half of sales of new buses and Watch out for speed bumps China is also far less acute than in the mar-
a quarter of new heavy-duty lorries be all- Vehicle makers thernselves are another ket for passenger cars. As with electric cars,
electric by 2032. Buyers of such clean vehi- problem. Moving swiftly toan all-electric China has stolen a march on everyone else
eles can also count on tax credits. The EU is world would "write off seven or eight years in commercial svs, thanks to its world-
requiring cuts of 15% to the average emis- of profit", says Robert Falck, boss of Ein- beating battery industry (and strong gov-
sions of carrnakers' fleets by 2025 from ride, a Swedish commercial-vehicle start- ernment incentives). Maxus, a British
their level in 2019, and of 43% by 2030. u p. Whereas legacy carrnakers were fcreed brand acquired by SAIC, a Chinese carmak-
So far this is having little effect. Only a into electrification first by Tesla and then er, is sellingvans across Europe; one model
fe\V electric models are on sale. The large by cheap but decent Chinese models, the was Britain's best-selling electric van in
and bulky batteries they require drive up lorry business has faced less disruption. December. BYD, China's biggest electric-car
the purchase cost. Electric trucks set busi- Tesla unveiled the semi. i ts e lectri e lorry, cornpany, has exported a handf u l of large
nesses back between two and three times in 2017 bu t started shi pping it on ly in late battery-powered lorries to América.
as rnuch as a diesel one does, and have lim- 2022 and has a fleet of around 100 on the But China's lorrymakers will find life
i ted range. The largest trucks, of whi ch zrn road. Its plans to produce 50,000 ayear by harder in foreign markets even than its
or so were sold worldwide in 2023, are the the end of 2024 look wildly optimistic. carrnakers, which are viewed with suspi- ..
56 Business The Economist March 16th 2024

� cion by many Western governrnents. One that Arameo is indeed less gung-ho about tasked with diversifyi ng the economy (see
car executive calls Europe's strict regula- its oily future. Except that the rich divi- Finance & economics section). This leaves
tions far lorries "the equivalent of tariffs", dend was accompanied by two develop- the PIF with 16% of Arameo, cornpared
addi ng that this makes Chinese commer- ments that point in the opposite direction. with the 2%orso that is owned byminority
cial EVs uncornpetitíve on the continent. Pirst, Arameo is rumoured to be preparing shareholders (the rest rernains directly in
Mr Falck hopes to shake u p the market a secondary share offering that could raise the governrnent's hands).
w.ith a new business model, which he calls perhaps szobn .in the corning months-a Saudi Arabia's plans to suspend the ex-
"Uber far freight", Volvo and Iveeo are try- move typically associated with expansion pansion of production eapacity do not,
ing to increase the appeal of their electric rather than contraction. Second, more tan- then, reflecta u-turn away from hydrocar-
lorries with a financing deal that sidesteps gibly, it is ramping up capital spending. ln- bons. Rather, the pause is born of a hard-
high upfront costs in favour of custorners vestments rose from less than $4obn in headed assessment of market realities: a
paying by use. Einride goes a step f urther, 2022 to sorne $5obn last year. In a call with surge in oil production in the Arnericas,
awning its own fleet of vehicles (built by analysts on March nth Arameo confirmed soft demand in China and cuts to output
partners and financed by investors) and that suspending the planned capaciry ex- frorn the OPEC cartel (of which Saudi Arabia
províding the lugging of goods as a serví ce. pansion will save around saobn in capital is a mernber). As Amín Nasser, Ararnco's
The company already operares fleets far spending berween now and 2028. But, it chief executive, sumrned it up in the re-
Maersk, a shipping giant, AB InBev, a brew- added, this does not mean it is not invest- su lts presen tation, "Oi I an d gas wi1 l be a
er, and Lidl, a supermarket chain. That is ing. On the contrary, the airn is to spend be- key part of the global energy rnix forman y
an interesting path to electric freight. But tween sasbn and $58bn in 2025, and may- decades to come, alongside new energy
it, too, looks long and winding. • be more in the few years after that. solutions." And so will Arameo. •
A bit of that moneywill go to clean pro-
jects such as hydrogen, carbon capture and
Saudi Arameo renewables. Sorne will go to cleanish ones, Business in China
such as expanding Ararnco's natural-gas
Notbeyond production by over 60% from its leve! of Domestic strife
2021 by 2030, and backing liquefied-natu-
petroleum ral-gas ventures abroad. But most is aimed
at ensuring that Arameo can rnaintain its
ability to pump up to izrn b/d of crude. Giv-
NEW YORK SHANGHAI

The world's oil colossus isn't en its actual ou tput of aro u nd 9n1 b/d (see China's online nationalists turn
chart), this <loes not hobble its ability to
cooling on crude just yet on Chinese brands
move markets. If anything, it strengthens
AS SAUDJ ARABIA stopped believing in Ararnco's position, far it implies spare ca- CHINESE netizens have long
H E
XCITABLE
a future far petroleum? In reeent pacity of jrn b/d-above the firm's historie inveighed against foreign brands' per-
weeks the question has hung over Saudí average of 21n-2.5m b/d, according to Wood ceived insults of Chinese culture. Nike, an
Arameo. The desert kingdom's national oil Mackenzie, a consultancy. Arameo is, in American shoernaker, was once attacked
goliath has a central posi tion in the world 's other words, cornmitted both to pumping far depicting a man beating a dragon in a
oil markets. Its market value of $2trn, five oil and to preserving Saudí Arabia's role as game of basketball. Marriott, an American
times that of the second-biggest oil ñrrn, the marker's swing producer. hotel chain, was hit with an online carn-
ExxonMobil, is predicated on bountiful re- That is in part because it is also corn- paign after it listed Taiwan and Tibet as
serves of crude anda peerless ability to tap mitted to purnping money into the eco- cou ntries, Do lee & Gabbana, an Italian
thern cheaply and, as oíl goes, cleanly. So nomicvision far Saudí Arabia charnpioned fashion la bel, got an earf ul in 2018 o ver an
the Saudi energy ministry stunned many by Muhammad bin Salman, the kingdorn's ad that showed a Chinese model clumsily
ind ustry-watchers in January by suspend- crown prince and de facto ru ler. This be- eating Italian food with chopsticks.
ing the firrn's plans to expand oil-produc- ca me more evident on March 7th, when Now China's online nationalists are
tion capacity from 12m to 13m barreis per Arameo announced the transfer of 8% of its taki ng aim ata new target. In the past two
day (b/d). Did the kingpin of crude finally shares, worth $164bn, out of the hands of weeks they have besieged Nongfu, a bottler
accept that oil demand would soon peak? the government and into the Public Invest- of spring water whose founder, Zhong
For an anwser, all eyes turned to Aram- ment Fund (PIF), a vehicle for Saudi sover- Shanshan, is China's richest man. lts sin?
co's results for 2023, reported on March eign wealth which Prince Muharnrnad has Typography. The Chi nese character for tea
ioth, No ene expected a repeat of the year used on Nongfu's new beverage includes
befare, when high oil prices and surging
demand propelled its annual net profit to -
Locked stocks a nd barreis
four brushstrokes resernbling plus signs.
To the online nationalists, the stylisation
$161bn, the highest ever far a listed firrn. Oíl resembles the Yasukuni shrine in Tokyo,
But analysts and investors were still inter- Saudí Arameo production, Brent crude prlce,
where Japanese generals who cornrnitted
ested in the extent of the decline in rev- míllion barreis per day $ per barre! war crimes in China are commen1orated.
en ue and profit, in any changes to capital- ,2 120 It takes a \.Vild in1agination to spot the
spending plans and, possibly, in the un- likeness. But Nongfu's critics are, it seems,
10 100
veili ng of a11 all-new strategy. a wildly in1aginative bunch. They have un-
Profits did fall, to $121.bn, though that 8 80 earthed other pro-Japanese symbolism. A
was still the second-best tally in Aramco's 6 60 mountain on its water bottles, one of Chi-
history, Thanks to a recently introd uced na's most recognisable lagos, is Mount
40
special dividend, the ñrrn paid nearly Fuji, supposedly. Set against a white back-
$1oobn toshareholders lastyear, 30% more l 20 drop, No11gfu's red plastic bottle cap be-
than arnid the bonanza of 2022, and prom- o o comes, unn1istakably, the Japanese flag.
ised to hand over even more in 2024. 2022 23 24� What is more, the name ofMrZhong's son,
Shovelling a larger chunk of a smaller "for, ast
Zhong Shuzi, sure sounds Japanese (in a
haul to owners could, on its own, imply worse betrayal, he is an American citizen) ...
 The Economist March 16th 2024 Business

� A few local brands have been accused of And Nongfu is not the only firrn in the homegrown semiconductors Kirin in Eng-
mimicking japanese style in the past. Min- nationalists' sights. Li-Ning, a Nike rival lish. The word is a Japanification of Qilin,
iso, a horneware retailer, was pilloried in known for tracksuits with "China" ernbla- the chips' chinese narne, which refers to a
2022 for selling figurines in Chinese garb zoned in Chinese characters on the back, mythical beast.
and labelling thern as geishas. But the lar- has drawn criticisrn over the su pposed State media have told the self-appoint-
est furore looks both more severe and likeness between a new line of jackets and ed culture police to calm down. One prorn-
broader. The Nongfu imaginings are airea- Japanese military uniforrns frorn the sec- inent nationalist, Hu Xijin, has called for
dy doing real damage. Dai ly sales of the on d world war. One netizen wrote on Chi- an end to the madness. That only infuriat-
springwater fell by more than 30% over the nese social media that if he were caught ed man y of his erstwhi le supporters, who
past fortnight. A few 7-Eleven convenience wearing one, his grandfather would shoot turned on hirn instead and now call him a
stores have vowed to stop carrying the pro- him dead. Even Huawei, a technologygiant "traitorous running dog" on social sites. As
ducts. The cornpany's market value is that in che West is synonymous with Chi- Mr Hu is finding out the hard way, nation-
down by about 5% since the drama began, nese patriotisrn and pride, has come under alism, both online and in the real world, is
casting shareholders son1e sabn. fire. Its transgression was to call its new easier towhip upthan it is to contain. •

Working from nowhere

Every location has got worse for actual work

ORK WOULD be so much better if pandernic. It was nevera great place for is finding it hard to concentrate has had
W you could get work done. Tt has
always been hard to focus amid the
concentrating (the periods of lockdown
were glorious exceptions). But it has be-
exactly the same id ea of headi ng to a
third location.
staccato rhythms of meetings, the relent- co111e even less suitable now that the office Second, online meetings have rnade it
less accumulation of messages or the is seen as the place where collaboration acceptable to reach everyone every-
simple distraction of colleagues th un- and culture-building happen. where, lt u sed to be said that you are
deri ng past. But since the covid-is pan- Before yo u might have been a ble to sit never more than six feet away from a rat;
demic, every single place of work has in a cubicle, fenced off frorn other people: now the same is true of a Zoo1n call.
becorne less conducive to concentration. now openness is in vague, which meaos Wherever you are-homes, offices, cafés,
Start with the home office. The pro- fewer partitions and greater visibiliry, libraries, monasteries-someone is
mise of hybrid worki ng is that you can Befare you might have had a normal chai r within earshot, yapping away about
now choose your location depending on anda desk; now you will be asked to wob- somethi ng that manages to be both
the task at hand. If yo u need to focu son ble awkward ly on a tall stool ata charn- tedious and irnpossible to ignore: the
work, you can now skip the cornrnute, pagne bar. Befare you were interrupted: plight of local papers in Maine, the risk
stay home and get your head down. This now you are being given an opportunity to calculations behind Solvency 2 or why
tactic would have worked well in 2019, interact. There is rnuch more ernphasis on Denise is so impossible to work with.
when no one else was ever at home. N ow meetings, brainstorming, drinking, eat- There are ways around the concentra-
there are likely to be other people there, ing, bouncing around on space-hoppers or tion problern. One is to become richer:
too, grabbing the best spot for the Wi-Fi, whatever appalling activity builds team everything is so much easier if you have
rnerri ly eating your lunch and talking spirit. There is rnuch less ernphasís on anotherwing of the house, or indeed
loudly to a bunch of colleagues in their si ngle-rni nded attention. another house. Another is deliberately to
own workplaces. Home has becorne a Home is heaving, the office is off- swim against the hybrid tide: if Monday
co-working space but without any of the putting. What about other places, li ke is the day when most peo ple work from
common courtesies. co-working spaces and coffee shops? home in arder to focus, the office is going
Even if non e of your family or flat- These too have got worse si nce the pan- to be a better place to work that day. The
mates is at home, they now know you demic, for two reasons. First, there is more most common and least healthy answer
might be. That spells disaster, Parcels are competition for spaces. Everyone else who is to defer focused work until the eve-
delivered with monotonous regularity; nings and weekends.
large chunks of the day are spent being This is nota Iarnent for the pre-pan-
photographed on your own doorstep demic world. Just beca use each location
holding intriguing packages that are not has got worse as a place todo focused
for you. Children who want food or work does not mean that things have got
money knowwhere to trackyou down. worse overall. Hybrid workallows people
Worst of ali, jobs that once required a to pick the most appropriate locations
day off can now be done at no personal for specific tasks. The option of occa-
cost by booking them in for days when sionally staying ar home, even i f home is
sorneone else is at l10111e. "Are you going noisier than it was befare 2020, is still
in today?" might sound like an innoc- better for many workers and employers
uous q uestion. lt should put you on high than the pre-covid norm of corning into
alert. lt mea ns that a bu nch of peo ple the office every day. But wherever you
with dril Is will storrn the house justas are, other peopJe are more likely to be
you settle down to the laptop. there orto have a greater expectation of
one natural response ís to head to the interacring with you. The ability to con-
place you were trying to avoid-the centrate is soldas a benefit of flexibility.
office. But its role has changed since the lt can be the price yo u pay for it.
 '
The British winners of the first Spogomi World Cup approached
the event with a sporting mindset and carne away with a heightened
environmental awareness.
The first rule of Spogomi is you should talk about Spogomi. The foundation became interested in Spogomi because
"We would love to be involved in spreading the fun and see it is an entertaining way of f1ghting pollution that is
more people getting involved in such a great sport" says accessible to a diverse audience, including those currently
Jonny Winship, a member of the British team that won the indifferent to environmental issues. "I felt that this could
inaugural Spogomi World Cup on November 22nd 2023. become a movement with great potential to spread in
lnvented in 2008 by Kenichi Mamitsuka, Spogomi gets Japan and worldwide" says Mr Unno.
its name from "sports gomihirot', the latter word meaning Promotion of Spogomi began with an annual
to pickup rubbish in Japanese. Teams collect litter in competition for high-school students in 2019, followed by
designated areas within a strict time limit, scoring points a national tournament for adults. An animated video of the
for the weight of collected items with a multiplier for competition helped attract the parent company of global
particular categories. One gram of cigarette butts is worth fast fashion brand Uniq lo as a sponsor for the eventual
three points versus only 0.1 per gram for burnable rubbish. world championships. Two million dollars in funding
Competitors lose points for rule breaches such as running, enabled the hosting of qualifiers in 21 countries as well
going out of bounds or collecting bulky items. as the world championship. ''Thanks to this support, we
managed to turn Spogomi into a worldwide sports event,
''Spogomi is an entertaining sport that raising awareness of the issue of ocean pollution."

can generate great interest and be Tackling litter by the tonne

Teams collected around 4.5 tonnes of litter in preliminary
easily accessible by people indiff erent events held in 47 Japanese prefectures, and another 3.9
to environmental issues. 1 felt that tonnes in the international qualiñers. At the final round in
Shibuya, competitors picked up 548kg.
this could become a movement with Sarah Parry, along with her partner, Alex Winship, and his
brother Jonny, made up the winning British team. They beat 20
great potential to spread in Japan and other national teams to take home gold meda Is, collecting just
worldwide:' over 57kg for a score of 9,046.1 points, close to 3,000 points
ahead of runners-up Japan, with ltaly in third place.
Unno Mitsuyuki, executive director Spogomi is a family affair for the victors-it was Sarah's
Nippon Foundation older brother, Stephen, himself a winner of the qualifying
round in Brazil, who first introduced them to the sport.
Working towards the ñrst world cup He even shared sorne successful tactics and inspired the
Spogomi built up to its first world cup with the support of tearn's hopes of winning a trip to Japan for the final.
the Nippon Foundation, a non-profrt organisation dedicated The sport is "physically demanding", Sarah says. 'lt
to social innovation. "We have been undertaking initiatives requires fast-paced speed walking while carrying severa!
related to the ocean for almost 60 years," says Unno kilos of litter overa distance of one to two miles at a time,"
Mitsuyuki, the foundation's executive director. Since 70-80% in two 45-minute sessions. There is also a lot to think about:
of marine litter comes from land sources, the foundation's team members work as their own timekeepers and must
"Change for the Blue" initiative encourages all kinds of contend with the hazards of traffic and pedestrians as well
people to take action against the problem. as with competing teams.
 Alex emphasises the value of having a diverse group in
winning at Spogomi. "Someone small, nippy and agile, like
Sarah, someone who can be loaded up like a donkey to
carry the weight, like myself, and if possible someone with a
mix of strength and speed, like Jonny." Sarah has run more
tha n 30 marathons, Alex runs and goes to the gym, and
Jonny plays football.

A sport that wins hearts to conservation

Though the winners' interest in sports and fitness played a
part in their victory, Spogomi is in tended to be a ga me that
anyone can participate and succeed in. Alex highlights how
the rule against running levels the playing ñelc for people of
different ages and abilities. Teamwork, strategy and tactics
are im portant enough that he is reluctant to share tips.
"We're hoping to win again, so I don't want to water down
our competitive advantaqe" he says.
Bearing out Mr Unno's hope that Spogomi could attract
people who are not yet engaged with environmental
issues, the winners had not previously been involved with
conservation. "I felt a little guilty after we won" Alex says.
"A good chunk of the teams at the final were involved in
initiatives where they were litter-p.icking on a regular oasis.'
But the experience of competing has made the team
advocates for the activity. "As a team, we have been invited
back to Japan in 2025, for the next World Cup, by the
Nippon Foundation," says Sarah. "We are excited to see
what we can achieve between now and then for the sport
and to benefit the environment."

Visit the otñcial Spogomi World Cup page at https://

spogomi-worldcup.org/en/, and follow the winning team
on lnstagram @spogomi_teamuk

E14' THE NIPPON

� mi FOUNDATION
60 Business The Economist March 16th 2024

Schumpeter I Casino capitalism

Elon Musk is not alone in having Delaware in his sights. so does Sin City
West: How to fix Nevada's business courts", from 2016, pointed to
three problems. Business judges did not publish their opinions,
which made the system unpredictable. They were forced to work
on business and non-business cases, which made it slow. And Ne-
vada had two business-court districts, Las Vegas and Reno, which
meant sorne laws were interpreted differently. Nevada, the paper
concluded, hada lot to fix before taking on Delaware. It still does.
You do not find such soul-searching in Wilmington. When
your columnist last visited, the sense of entitlement for setting
the de facto corporate law of the land was palpable. He di ned, with
obligatory tie, at the Wilmington Club, a place for corporate law-
yers to eat, drink and discuss the business rulings of the day over
brandy and cigars. Read sorne of the erudite judgments that have
emerged recently from the Court of Chancery, interspersed with
discussion of the "soritical paradox" and Shakespeare, and they
leave little doubt that business law is as prized in blue-blooded
parts of Wilmington as slot machines are in red-blooded Vegas.
Delaware's pre-erninence is seldorn questioned.
Now is one of those rare times. A flurry of rulings has been a
cause for disquiet, The most prorninent critic has been Mr Musk,
who attacked Delaware in January after the Court of Chancery
voided his $56bn pay package as boss of Tesla. In response, he re-
T THE TURN of the zoth century the prime state to register incorporated Neuralink, his brain-implant ñrrn, in Nevada, and
A businesses in América was Newjersey, home to America's big-
gest trusts such as Standard Oil. Other states, including its dirnin-
has filed to move Spacex, his rocketry business, to Texas. Trip-
Advisor, an online travel firm chaired by Greg Maffei, a media
utive next-door neighbour, coveted the spigot of easy money that baron, is decamping to Nevada-to save rnoney and spare the
carne from business incorporation. "Little Delaware, gangrened board "unrneritorious litigation', it says. A Court of Chancery
with envy at the spectacle of the truck-patchers, clam-diggers and judge recently ruled that Delaware could not stop the rnove,
mosquito-wafters of New Jersey getti ngall the money in the coun- though he allowed shareholders to sue for compensation.
try into her coffers, is determined to get her little tiny, sweet, Delaware's defenders insti nctively dismiss its critics. Ata gath-
rou nd, baby hand into the grab-bag of sweet things," the American ering this month at the Tulane Corporate Law lnstitute in New
Law Review, ajournaJ, wrote at the time. orleans, panellists noted that in the past sorne of Delaware's loud-
It succeeded. As New Jersey tightened its laws in response to est antagonists, such as Conrad Black, a publisher, were later con-
the anti trust fervour of the isios, businesses realised the grass was victed of fraud (Lord Black was pardoned by Donald Trump when
greener across the Delaware river. The resulting corporate migra- he was president). Yet law professors say recent rulings-not just
tion has turned Delaware into Arnerica's incorporation capital. In Mr Musk's case but also Delaware's efforts to push back against
2022, 1.9m firms were incorporated in the state, almost two for agreernents through which controlling stockholders, such as priv-
every one of its citizens. More than two-thirds of the Portune 500 ate-equity firms, govern their listed subsidiaries-have raised
list of America's biggest ñrrns by revenue are registered there (as concerns aboutthe unpredictability of Delaware judgments. sorne
are a few entities linked to T11e Economist). In Wilmington, its big- bu y-out firms are said to be thinking of moving to Nevada.
gest city, office towers stand as their faceless business domiciles. Francisco Aguilar, Nevada's secretary of state, highlights its
Business taxes and fees generated about $2bn for the state in 2022, selling points. Nevada leans in favour of controlling shareholders
a big part of its annual budget. in their "constant tension" with minority investors, he says. He
No surprise, then, that now other states are keen to get their points to the "accessibility" of state lawmakers to business-own-
own sweet, round mitts on the spigot by offering businesses even ers who want to influence corporate statutes-highly unDela-
juicier incentives. Sorne aggrieved tycoons, such as X's troll-in- ware-like behaviour. But Mr Aguilar also acknowledges local
chief, Elon Musk, are helping make the anti-Delaware case for shortcornings. Nevada's low fees partly reflect poor service. lts
them. To assess their chances, your columnist visited Nevada, business-filing system has been "duct-taped together" for too
which has long wanted to make itself as amenable to business reg- long, he says, and is in the midst of a $15m upgrade. Faced with
istration as it is to nuptials. As Benjamín Edwards, a law professor such constraints, firms looking for an alternative to Delaware
at the University of Nevada, Las Vegas, puts it: "There is dreary have often preferred Wyorning or North Dakota, he adrnits.
Wilmington and the Texas wasrelands. Or there is fabulous Vegas."
Las Vegas's business courts are a far cry from Wilmington's Stick or rwíst
Court of Chancery. They are in the general courthouse, so you are lf Nevada offers loose shareholder protections in order to woo
checked for weapons before you enter. Their location on the isth businesses, the danger is that investors will val u e firms that rnove
floor provides a sense of being high above the hurly-burly. Yet the there less highly, This rneans that Delaware has little to fear frorn
first case schumpeter heard was down to earth, concerning mould Nevada-ar any other state-for the time being. But the competi-
in a rental property, A paper on the desk of Mark Den ton, thejudge tion could still turn out to be healthy, even if it involves rivals of-
in that case, is a reminder of the state's long battle to be taken seri- fering laxer corporate standards, by keeping Delaware on its toes.
ously. "Transforming Nevada into the judicial Delaware of the It may even make the First State less i nsufferably srnug. •
 61

Share prices For many, the parallel that springs to

mind is not the most recent bull market
From bull market to bubble? but that of the late 199os, when the dotcom
bubble inflated. Then, as now, new tech-
nology prornised to send producrivity and
profits to the moon, the innovation in
q uestion being the internet rather than ar-
tificial intelligence. Bulls in the 199os were
right that advances in telecommunication
Stockmarkets are surging. Investors are delighted-but also nervous
would transforrn the world and spawn new
YEARS ago, pretty much everyone weeks. The value of Nvidia, a maker of corporate giants. Yet plenty stilt ended up
T
wo
agreed that one of the great bubbles was microprocessors essential for artificial in- losing their shirts-even by betting on
bursting. An era of rock-bottorninterest telligence (Al), has risen by more than $1trn ñrrns that went on to be wildly successful.
rates was corning to a close, shaking the in the space of a few months. Bitcoin hit The canonical example is Cisco, which,
foundations of just about every asset class. another record on March iath. Disorient- like Nvidia, made hardware crucial for the
Share prices were plunging, government ingly for those who blarned the previous new age. Although in the most recent fiscal
bonds were being hammered, crypto mar- manía on near-zero interest tates, this year its net profit was $u.8bn, up from
kets were in freefall. Wall street's prophets comes after a brutal campaign by central sa.abn in 2000 (both in today's rnoney),
of doom were crowing with delight. The ban kers to yan k them back to more normal those who bought shares at their peak in
consensus of the previous decade-tl1at in- levels. Once again, every conversation March 2000 and are still holding today
flation was dead and cheap money here to about markets veers unerringly back to the have taken a real-terrns loss of nearly 66%.
stay-looked as Iudicrous as the group- sarne question: is this a bubble? Cisco therefore illustrates the defining
think of any previous financial mania. feature of bubbles. They inflare when in-
Thus the pendulum was about to swing: vestors buy assets at prices that are entirely
� Also in this section
from exuberarice to scepticisrn, risk-taking unrnoored frorn econornic f undarnentals
to cash-hoarding and greed to fear. lt 62 A warning from China's optim istic city such as supply and dernand or future cash
would take a long time to swing back. flows. The question of what the asset is
63 Soaring high-quality sand prices
Or not. The trough in American stocks "worth" goes out of the window; all that
carne in October 2022. Less than 18 rnonths 64 Saud i Arabia's post-oil ambitions matters is whether it can later be sold for
later stockmarkets around the world are more. That in turn depends on how rnany
65 Buttonwood: Privateequity's problem
back at all-time highs (see chart 1 on next people the speculative frenzy can pull in
page). Arnerica's in particular is on an eye- 66 Russia's defiant economy and how long it can last-in other words,
popping run, with the s&P 500 index of how mad the crowd becomes. Once buyers
67 Freeexchange: NIMBYsandemissions
large firms having risen in 16 of the past 19 run out, the craze dissipates and there is ..
62 Finance & economics The Economist March 16th 2024

� nothing holding prices up. Predicting the

size of the subsequent fall is as much of a
-Forget about Apple
Global trade

fool's game as trying to time the top. Market capitalisation, October 12th 2022*=100 God bless America
The good news is that this sort of mania 250
is sorne way off. Researchers at Gold man Big four"
Sachs, a bank, have analysed the valua- 225
tions of rhe ten biggest stocks in Arnerica's 200
NINGBO
s&P 500 index, around which much of the 175 China's economíc bright spots reflect
AI hype has revolved. With prices atan av-
150 the success of the country's rival
erage of 25 times their expected earnings
for the coming year, they are on the expen- 125 begins to deterio-
I
F AMERICAS ECONOMY
sive side. But they are cheaper than they 100 rare, people in Ningbo will be among the
were last year, and a bargai n com pared Russell 2000 75 first to know. The eastern Chinese port,
with the peak of the dotcom bubble, when 1 1 1 1 1 j 1 1 1 1 1 1 j 1 1 1 1 ji home to 9.6n1 residents, contains a sprawl-
2� 23 �
prices were 43 times earnings, ing industrial district. Its goods are pre-
�rv,'UO lrougil tA,nazc, 1, M IJ, Mino lt and Nv1di.a
There are other tell-tale signs that, in Sour es: Bloornberg; Ibe Ec0t101•:1si
pared for export, and are shipped abroad
spite of soaring share prices, euphoria is via a deepwater harbour, which is one of
absent. Bank of America's latest rnonthly the world's busiest. The coast of Zhejiang
survey of fund managers finds thern more pect thern to start betting on riskier cor- province is dotted with similar entrepóts,
bu llish than they have been for around two porate minnows as well as on giants-es- where thousands of mostly family-owned
years, but not particularly so by long-terrn pecially those that manage to shoehorn the firms have built upa diverse manufactur-
standards. Their average cash holdings are letters AI" into their annual reports.
0
ing base over the past 40 years. They make
low, bu t not extremely so, meaning that A corollary is that the pipeline of initial everything from textiles and car parts to
they have not piled i nto the market wíth public offerings (mos) ought at last to start electronics and machi ne components.
everything they have (and are also not gushing. In both 1999 and 2021 it got going, Ningbo is also a city of political impor-
hoarding cash in anticipation of a plunge, with rising share prices and ebullient in- tance. Although private industry, rather
which they were in the late 199os). Among vestors proving irresistible to bosses than state-backed enterprise, has thrived
retail investors, the crowd that typically searching for capital. A puzzling feature of in the región, it has nevertheless been held
sustains the final and most dangerous the current bu 11 market is that it has taken upas a model of "cornrnon prosperity't=Xi
stage of a bu bble, there has been no repeat place amid an IPO drought. EY, a cónsul- Jinping's way of dealing with wealth in-
of the starnpede into tech funds and 111en1e tancy, estirnates that firms going public in equality. And amid a gloomy overall out-
stocks witnessed in 2021. America raised just $23bn in 2023, com- look, with much of the country mired in a
pared with $156bn in 2021. It might be that property crisis and suffering frorn weak
Manic episodes bosses are sirnply more worried about eco- consurner demand, surprisingly strong ex-
What, then, wou ld it look like if things nomic headwinds than investors are. In a ports and fading fears of a recession in
were to take a euphoric turn? A strong sig- euphoric market such level-headedness America have combined to make Ningbo
nal would be for gains that have so far been becomes impossi ble to maintain. one of China's most optirnistic cities.
concentrated in a few mega-cap stocks to Similar dangers stalk professional Official data released on March 7th
spread through the market more broadly. money-rnanagers, whose job is to beat the showed that China's exports surged by7.1%
The winning streak of the past few months market whether or not they think i t is mov- year on year in the first two months of
has been dominated not by America's i ng rationally. When pockets look danger- 2024. This is especially i mpressive given
"rnagniñcent seven" tech giants, but by ously overval ued, i t makes sense to avo id that sorne analysts had expected growth of
just four of thern. Amazon, Meta, Micro- thern. But in a bubble, avoiding overvalued less than 1o/o. Even exports to Arnerica
soft and Nvidia have left the other 496 stocks-which, after ali, are the ones risi ng climbed 5% year on year, after having tum- �
stocks in the s&P 500 in the dust. Those the most-starts to look suspiciously li ke
others, in turn, have recovered from the routine mediocrity. As the dotcom frenzy
shellacking of 2022 far better than the reached its peak, Julian Robertson, one of
smaller firms represented in the Russell the zoth century's most revered hedge-
2000 index (see chart 2). lf investors really fund managers, stalwartly refu sed to buy
do start throwing caution to the winds, ex- tech stocks. His investors eventually re-
volted and withdrew their money, forcing
-
Fear is the mind killer a
his fund to close right as the crash was
about to start. Hence another sign that a
Stockrnarket índices, January 3rd 2021=100 bubble is about to pop: sorne of the mar-
S terms ket's gloornier voices are fired.
110 Investors do not yet seern excitable
enough for any of this to take place. But as
100 in 2021, cheaper debt could help get thern
i11 the rnood. Lenders are shovelling mon-
90 ey in the direction of risky high-yield (or
"junk") corporate borrowers, narrowing
80 the spread they pay above the yield on gov-
M SCI all-country world ernrnent debt. When the Federal Reserve's
70
officials rneet on March zoth, any hint that
Euro Stoxx 600 rate cuts are imminent cou Id be exactly the
60
1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 ,,
sort of high for which i nvestors are look-
2022 23 24
ing. Just have sorne paracetamol on hand
for the cornedown. • Behind the iron curta in
 The Economist March 16th 2024 Finance & economics 63

� bled by nearlyvss in December. The figures

were sufficiently encouraging that policy-
rnakers at china's annuaJ congress in Bei-
jing disclosed a versión of them a day
ahead of the expected release date.
Li ttle surprise, then, that the atmo-
sphere in Ningbo is more cheerful than in
other Chinese cities. Part of this, locals say,
can be attri bu ted to i ts relatively easy co-
vid-is years. In 2022 rnany large chinese
cities were locked d own for months on
end. Ningbo, perhaps by dint of luck,
avoided a full-city lockdown and closed
few faetones. When Shanghai was shut
down in April and May that year, halting
lorries bound for its port, sorne traffic was
rerouted to Ningbo's busy harbour.
The good cheer has li mi ts, though,
which suggests that cities such as Ningbo
may not drive China's recovery. A down-
turn in foreign demand would be devastar-
ing f or the region. Local factories experi-
enced a brief taste of this as China re-
opened in early 2023. Emptycontainers be-
gan stacking up in Ningbo's port,
Life's a beach
indicating a lack of overseas purchases. An
official who visited the city last March says
How Chinese solar-panel production is upsetting sand markets
he anticipated a disaster far the city and
other export hubs. Fortunately, part of the ANO IS EVERYWHERE. Yet only a cer- sand used for regular glass, which tends
phenornenon was explained by excess
shipping containers returning to China far
S tain sort can be used to rnake the
ultra-clear glass required for smart-
to be 99.5o/o silica. The problern is that
doing so is itself expensive.
the first time si nce the srart of the pandem- phones and solar panels. It must have a Miners, both legitimare and other-
ic. The drop in demand was a blip. silica concentration of more than 99.9%, wise, therefore spy an opportunity. The
Ningbonese factory bosses have other against less than 80% for construction black market, estimated to be worth
concerns. The family-controlled nature of material. This high-quality sand is h undreds of billions of d ollars a year, is
their firms makes financing from banks scarce: of the 5obn or so tonnes extracted likely to grow. Australia and Brazil are
more difficult to secure. As larger manu- each year, less than 1% can be used to perhaps best placed to profit from the
facturers in southern cities such as Shen- produce regular glass. A tiny fraction of legal boom, accordi ng to Brian Leeners of
zhen enjoy governrnent support for tech- that is pure enough f or solar panels. Homerun Resources, a miner. Although
nology upgrades-involving robotics and As China's leaders seek to revive the these countries are best known far their
the internet of things-local companies country's econorny, and to rebalance it sparkli ng white beaches, they also have
are fi nding it tough to keep pace. away from properry, they are throwing significant reserves of industrial sand.
And although the most recent export cash at rnanufacturi ng firms. The result These reserves are often farther frorn
data beat expectations across the board, is li kely to be a surge in prod uction, human settlements than those else-
thi ngs i rnproved from a very low base. An- especially in sectors that Xi Jinping sees where, making extraction sirnpler. Min-
alysts at HSBC, a bank, expect trade uncer- as important to China's future, such as ing companies report that until recently
tainty to persist. Meanwhile, dernand is Iithi urn-ion batteries, electric cars and the price of sand was not high enough to
shifting: that from poorer markets, such as solar panels, many of which require vast cover shi pping costs. Soaring prices have
África and South América, is surging, ac- amounts of sand. As a result, demand changed the equation.
cording to the most recent data; that from will probably rise higher still. Prices are Neither country is in China's sphere
América rernains strong; but that frorn already hovering near record highs; last of influence. As such, they may help
Australia, the EU and Japan is falling. year they carne to around $55 a tonne. make Western supply chains rnore resil-
How well will Ningbo adapt? Many The market is opaque and fragment- ient. Mr Leeners points out that Brazil's
manufacturers got their start supplying ed. But Crux Investor, a data firm, notes shipping lanes are also less prone to
foreign brands. More recently, they have thatthe price of high-quality sand has disruption, since they avoid the drought-
begun selling directly to custorners in the risen twice as much as that of lower- hit Panamá Canal and the Red Sea, which
rich world through Amazon, an online quality stuff over the past five years, is under bombardment by Houthi rebels.
rnarketplace, and Temu and shein. two owing to the expansión of green manu- orher comrnodities essential for the
Chinese e-comrnerce si tes, notes Hing Kai facturing and the growing popularity of green transition, including cobalt, nickel
Chan of the University of Nottingham srnartphones. Prices are buoyed by the and lithium, have seen prices jurnp, only
Ningbo China. They are unlikely to have fact that most Asían countries control to fall subsequently when new supplies
developed similar channels in the markets exports so as to prevent environrnental or cheaper alternatives are discovered.
now growing strongly. If rich-world de- degradation. In América. where fine sand Once permits have been acq uired for
mand fizzles out, Ni ngbo's happy days is mostly found in freshwater rivers, extraction, high-quality sand could be
could come toan end. Instead of develop- tough regulation rnakes extraction hard. the next to follow this path. The wair
ing a new path to prosperity, China's opti- sorne manufacturers are now looking will, however, be an uncornfortable one
mistic city is riding on the coat-tails of the for alternatives. One option is to refine for many man ufacturers.
cou ntry's geopolitical rivals, •
64 Finance & economics The Economist March 16th 2024

The post-oíl economy meani ng this wi 11 strai n its budget. Bosses

at dornestic firrns, many part-owned by the
Princely demands PIF, now talk of cost-cutting. And since the
fund has eagerly tapped debt markets, in-
terest payments are growing. Its cash
dropped to $15bn at the end of September,
from a.round $5obn at the end of 2022.
RIYAOH
The PI F's d esi re to boost growth across
the Saudi economy also means it i nvests in
Saudi Arabía's investment fund has been set an impossible task
firms at various stages of evolution, corn-

A
BOUT A DECADE ago, a flashy, deep-
pocketed investor made an appear-
-
Black gold
plicating efforts to sustain consistent re-
turns. over the past five years the fund has
ance. Saudi Arabia's Public Investment Public investment funds, capital deployed, $bn establi s hed 93 companies. Over the 13 "stra-
Fund (PI F) had a mandare to go big, and 2023 tegic" sectors that the PIF has been tasked
was ready to: it picked upa $3.5bn stake in o 10 20 30 with developing, from health to sports and
Uber, placed $45bn in the world's largest tourism, returns vary wídely. Portfolio
Saudi Arabia (PIF)
technology-i nvestrnent fund, SoftBank's companies range frorn ROSH N, a property
Vision Fund, and provided half the capital Singapore (GIC) developer, to NEOM, a vast smart-city un-
for a $4obn infrastructure f und run by UAE (Mubadala) der construction, and Riyadh Air, an air-
Blackstone, a private-equity giant. It has UAE (ADIA) li ne yet to beco me operational.
since bought stakes in everything from Canada (CPP) All of this leads to the PIF's second chal-
Heathrow Airport and Nintendo to Holly- Canada (BCI)
lenge: boosting returns. Since 2017, when
wood studios and French hotels, Last year the fund was tasked with implementing
it deployed more than $3obn of fresh capi- Smgapore (Temasek) visión 2030, its investments have returned
tal, making it the highest-spending wealth Qatar (QIA) about 8% ayear. This is just above its mini-
fu nd in the world (see chart). UAE(ADQ) mum target of 7o/o, but far below the priv-
Yet even as the PIF splurges abroad, its Canada (OTPP) ate-equity-style returns it really airns to
mandare at home is becoming more im- �r1 e; 5u-.�, 1gr1 Vv alth Fund lnstttute
achieve, admits one executive, Such arnbi-
portant. That is because of crown prince tions are loftier than those pursued by
Muharnrnad bin salman's plan to trans- most sovereign-wealth funds, which are
forrn Saudi Arabia's econorny, known as ready raised another $5bn this year. On top more reserved owing to the difficulties of
"visión 2030", in which the PJF is expected of this, the fund borrowed at least $ubn in making big returns with diversified hold-
to play a vital role. It has been instructed to long-term loans last year. In the past, the ings and such large pools of money. So far
invest at least 15obn riyals ($4obn) at home central bank's foreign-currency reserves the PI F has been able to pick assets that
each year. The intention is also to raise its have been transferred to it, too. prornise both economic development and
holdings from 3.5trn riyals to 7.5trn riyals Many of these sources will come under strong returns, while tapping dividends
by the end of the decade, with luck creating pressure. Not only is the f und expected to from these holdings. As its role expands,
millions of jobs as the economy moves keep spending more, but as dernand for oi l thatwill become increasingly difficult.
away from oil. After a strong 2022, the slows the Saudi government will become Moreover, private-equity-sryle valua-
kingdorn's GDP fell by o.9o/o last year-its less munificent. By 2030 millions more tion rnerhods, which depend on past per-
worst performance since 2002, aside from Saudis will have entered the workforce. formance and projections of future cash
years of pandemic or financia) crisis- The state ernploys many locals on higher flows, are tough to apply to many of the
making the task more urgent. wages than the privare sector, with salaries companies and projects in which the PIF is
The PI r's role as a fulcrum of the Saudi counting for 40% of its total spending, now investing. NEOM, for instance, is ex- ..
economy means it is unli ke any other
sovereign-wealth or public-pension fund.
Norges Bank Investrnent Management,
Norway's sovereign-wealth fund, has tasks
and governance that are distinct from the
cou ntry's pension fund and finance minis-
try. singapore's GIC has to replenish its
governrnent's budget, but its investrnents
are focused on profits. In Qatar the state
fund mainly invests abroad. As the PIF at-
ternpts to meet the ambitions of its poli ti-
cal masters, it fa ces three challenges.
The first concerns funding. The PIF cur-
rently receives most of its capital through
asset transfers and capital injections f rom
the governrnent. On March 7th the Saudi
govemment revealed that 8% of Saudi
Ararnco's equity, worth about $164bn, had
been transferred to the fund, doubling its
stake in the state oil giant. The fund also
receives dividends from investments and
holdings, and can tap debt markets. It
raised $11bn by issuing bonds on interna-
tional capital rnarkets last year, and has al- Electrifying Riyadh
 The Economist March 16th 2024 Finance & economics 65

� pected to cost around $5oobn. But how and the World Bank. As the PJF expands, anoth- exit sorne of its investrnents, which wou]d
when it will begin to offer consistent cash er problem is emerging: portfolio firms of- push the private sector to fend for itself.
flow is up for debate, making the invest- ten overlap and compete with one another, But last year, after an IMF-approved da-
ment more akin to aventure-capital one. cannibalising returns. In effect, this means ta revisión, Saudí Arabia attracted just 53bn
In other áreas, such as health and infra- taking money from your left pocket to put riyals in foreign direct i nvestrnent j n the
structure, the fund's role has the air of irn- in your right, the executive sighs. fi rst three quarters, an amo u nt eq uivalent
pact investing, where rhe goal is to achieve The final challenge is attracting foreign to 2o/o of GDP. The aim is to entice over dou-
certain social ends as well as secure pro- investment into Saudí Arabia. As the fund ble that by 2030. "We can wait for investors
fits. This sort of investment is normally grows bigger, foreign money would assist but it will take time, so let's go and do it
characterised by returns that deteriorate its ambitions. It would also enable domes- I ourselves J," says a Saudi minister, "while
with scale and perform better when held tic firms to expand their horizons and ac- being inviting to others." It could be a very
for a long time, according to researchers cess new rnarkets, thereby reducing the long wait. So far, global investors seern
from Harvard Business School and the In- chances of ending up in competition with happier to take Saudi Arabia's money than
ternational Finance Corporation, part of one another. And it would allow the PIF to to put their own rnoney into the cou ntry, •

The private-equity industry has a casti problem

ow MUCH MON EY are your private- are growing impatient. lt is now possible private equity-to make payments to
H equity investments making? The
question is easy to answer far other asset
to buy jurnpers and T-shirts ernblazoned
with the slogan "DPI is the new I RR" on
retirees. A decade or two ago, a lean year
from prívate equity might not have rnat-
classes, such as bonds or publiclytraded Amazon, an online retailer. According to tered much. Now things are different.
stocks. Ali that is required is the price Bloomberg, a news service, an investor second, previous lean periods coin-
paid at purchase, the price now and the recently showed up to a private-equity cided with there being few other in-
time that has elapsed between the two. It firm's annual meeting wearing one. vestrnent opportunities for pensión
is less obvious how returns for private- It is u nderstandable that DPI has fallen. f unds and university endowments, and
eq ui ty investments should be cal cu lated. As interest rates clirnbed, eq uity val ua- plentiful ones for private-equity manag-
Capital is earmarked for such invest- tions dropped. Private-equity managers ers. Sorne of the best returns private
rnents, but it is only "called" once the get to choose when to sell their portfolio equity has posted have come after crises
investment firm has found a project. companies. Why would they sell in a down or the popping of bubbles, when rnanag-
There is little information about value rnarketz Possible paths for rhern to exit ers could pickup firms for a song. But the
once invested. Cash is returned in lurnp investments, such as takinga firm public past rwo years have offered few such
sums at irregular intervals. or selling it to another cornpany, have opportunities. With interese rates high,
An alphabet soup of measures are been ali but shut off. In the years following arranging financing has been difficult;
supplied to investors, which are known che dotcom bubble, which popped in although valuations fell, they did not
as "lirnited partners'' There is IRR (the 2000 and the global financial crisis of
1 plurnrnet. The result is that firms are
internal rate of return, calculated frorn 2007-09, distributions from privare in- sitti ng on a record $2.6trn-\vorth of "dry
returns to a specific project), MoM (the vestrnents dropped similarly. powder"-capital cornrnitred by in-
estimated value of a fund, as a "multiple Still, this slurnp might prove more vestors, but not yet invested. At the same
of money" paid in) anda dozen more damaging than previous enes, for a couple time, pensión funds are itching to buy
besides. All have flaws. Sorne rely on of reasons. First, allocations to private more bonds, owing to the high yields
prívate valuations of assets, which might equity have risen. Pension funds rely on that are now on offer.
be flattering: others do not take into incorne srreams=dívidends frorn cornpa- How might this situation resolve
account the cost of capital. But nirpick- nies that they own, coupon paymenrs itself? Stockmarkets are reaching all-
ing seerns pedantic so long as one mea- from bonds and, now, distributions from time highs, and valuations in prívate
s u re stays high: cash distributions mea- markets tend to folJow those in public
sured as a share of paid-in capital, ones. The initial-public-offering pipeline
known as "nrr". This concerns the mon- is filling up nicely. Exits are beco111ing
ey that private-eq uity firms wi re to the possible. If ali this carries on, distribu-
pension funds and university endow- tions might well begi n to flow. Yet this is
ments that i nvest in thern each year, as a just one future scenario. Much of the
share of the cash those investors have market's recent strength reflects the
paid in. Unlike I RR or MOM it is hard to success of the biggest technology firms,
game and takes into account the meaty which have been pumped up by excite-
fees charged for access to f unds. 111ent about what artificial intelligence
over the past q uarter of a century, will do to profits. And private-equ ity
private-equiry firms have churned out f unds tend to own health-care and
distributions worth around 25% of fund home-maintenance firms, rather than
valúes each year. But according to Ray- software ones. Moreover, A111erican
111011d james, an investment bank, dis- inflation looks worryingly stubborn,
tributions in 2022 plunged to just14.6%. auguring higher rates. lnvestors in prív-
They fell even further in 2023 to just ate equ ity '1vill only be a ble to relax when
u.2%, their lowest since 2009. Jnvestors they have their cash in hand once again.
66 Finance & economics The Economist March 16th 2024

lnflation success with its pre-invasion trend; GDP grew in

real terrns by more than 3% last year (see
Bullet dodged chart). Unernployrnent remains ata record
low and there is little evidence of corporate
distress. Indeed, the rate of business clo-
sures recently fell to its lowest in eight
years. Meanwhile, the Moscow Exchange is
hoping to see more than 20 initial public
offerings this year, up from nine last year.
Russia's economy once again defies the doomsayers
And the latest "real-time" data on econom-
N THE TWO years following Vladimir Pu- ic activity are reasonably strong. Consen-
I tin's invasion of Ukraine, Russia's econ-
omy has repeatedly defied the doomsay-
sus forecasts for GDP growth this year of
1.7o/o therefore look too pessi mistic.
ers. A financia! collapse, widely predicted Russia's economic resilience is in part
in the spring of 2022, never carne to pass. the consequence of past stirnulus. In re-
The economy fell into recession, bu t it was cent years corporations and households
less severe than expected and passed have built up large cash balances, allowing
qu ick1y. In flation was the most recent them to continue spending even in the face
scare. Last year prices accelerated rapidly; of high inflation, and avoid default in the
economists believed they could spiral out face of high borrowing costs. As in other
of control. Even Mr Putin was worried. In parts of the world, falling demand for la-
February l1e urged officials to give "special bour has rnostly resulted in a decline in
consideration" to rising prices. unfilled vacancies rather than in a lower
Once agai n, however, the Russian econ- number of people in employment. Figures
omy seems to be proving the pessimists from HeadHunter, a recruitment site, sug-
wrong. Data released on March 13th gest that the ratio of open positions to job-
showed that prices rose by 0.7% month- seekers has stopped rising. Having strug-
on-month in February, down from 1.1% at gled to find workers in recent months,
the end of last year. The annual rate of in- bosses are reluctant to Jet people go unless
flation is stabilising at around 7.5%. Fore- they absolutely must.
casters expect it to fall to just 4 o/o befare Sanctions-busting has also juiced the
long; household expectations of future in- economy. Russian prod uction facilities
flation have flattened. Russia's presiden- A proud pariah forrnerly owned by Westerners have re-
tial electi on was d ue to begi n on March opened under new rnanagement, as the
15th, after we went to press. The res u lt is a know-nothings who mess with markets at central bank points out in a recent report.
foregone conclusion. If it was cornpetitive, thei r peri l. They believe thei r policy-of At the start of the war, sancti ons made i t
these figures would do Mr Putin no harm. more than doubling interest rates since Jtt- hard for Russian firms to source inputs,
Russian inflation surged last year ow- ly 2023-should take the credit for the in- delaying production. Now, though, com-
ing to a fiscal splurge Iarger than the one flation slowdown, and they are probably panies have set up durable supply chains
implemented duringthe covid-is pandem- right. Higher rates have encouraged Rus- with "friendly" countries. Well over half of
ic. As Mr Putin doubled down on his inva- sians to put money in savings accounts goods irnports come from China, twice the
sion of Ukraine, he increased spending on rather than spending it. Tighter rnonetary share frorn before the invasion.
everything from transportation equip- policy has also curbed lending. In Decern- As new trading relationships have bed-
ment and weapons to soldiers' salaries. To- ber retail lending grew by o.6% month on ded in, Russian exporters have dared to
tal governrnent outlays rose by 8% in real month, down from 2% far most of 2023. raise prices, supporting revenues and pro-
terms. Demand for goods and services Fewothercentral banks have been quite fits. The discount on oil Russia offers to
soared beyond the economy's capacity to as tough. Yet Russia still seerns to be head- Chinese custorners, for instance, has fallen
provide them, prompting sellers to raise ing for a "soft landing", in which inflation from more than 10% in early 2022 to about
their prices. Workers becarne particularly slows wi thout crushing the economy. The 5% today. And it is not just oil. Mr Putin
di fficult to find, not least because hun- performance of the economy is now in line boasts about soari ng ice-cream exports to
dreds of thousands were called up and tens China, noting lastweek that he "treated my
of thousands fled the country. By October
last year nominal wages were growing at -
Whatwar?
friend, President Xi jinping" to a lick.
As every Russian knows, inflation is
an annual pace of 18o/o, up from 11% at the Russia, GDP, 1995=100 never truly defeated. Central-bank officials
start of the year. This provoked price infla- Local currency continue to fret that i nflation expectations
tion in Iabour-intensive services such as 225 remain too high. The biggest worry is that
health care and hospitality. the rouble may depreciare, either because
Who deserves credit for the turna- 200 of lower oil prices, another round of seri-
round? The finance ministry is advancing 175 ous sanctions or if China loses interest in
its claim. Last year its offícials successfully su pporting Mr Pu tin. These are serious
lobbied for exchange-rate controls, which 150 concerns. Nevertheless, the pariah econ-
compel exporters to deposit foreign cur- 125 omy is once again back on track. •
rency in the Russian financial systern. The
wheeze has probably supported the rouble, 100 lnternship We invite promising journalists and
which has appreciated in recent months, would-be journalists to apply for our Marjoríe
75 Deane internship. The successful candidate will
red ucing the pri ce of i mports. jiiiiliilijililllliijiiillili

1995 2000 05 10 15 20 23" spend six months with us writing about finance and
Central-bank officials think that their �11 • , 1, 1ver An, ly'l 1. tI na; ,'l economics, and receive payment. For more details
peers in the finance ministry are econornic visit: economist.com/marjoriedeane2024
 The Economist March 16th 2024 Finance & economics 67

Free exchange I Anti-environmentalists

NIMBYs often oppose new buildings on green grounds. In doing so, they increase carbon emissions
tion to ask is a sirnpler one: is itworth using the remaining carbón
budget to refurbish a building or is it better to knock it down?
Choosing between these possibilities requires thinking about
the unseen. It used to be said that construction emitted two types
of emissions. As well as the embodied sort in concrete, glass and
metal, there were operational ones frorn cooling, heating and pro-
viding electricity to residents. The extra embodied-carbon cost of
refu rbishing a building to rnake it rnore energy-efficient can be
justified on the grounds of savings from lower operational-carbon
costs. Around the world, buildings account for 39% of annual
ernissions, according to the World Green Building Council, a char-
ity, of which 28 percentage points come from operacional carbon.
These two types of emissions might be enough for the archi-
tects designing an individual building. But when it comes to
broader questions, econornists ought also to consider how the
o o o o o o o o o o placernent of bulldings affects the rnanner in which people work,
shop and, especially, travel. The built environrnent shapes an
economy, and therefore its emissions. In the same way as the
ernissions from foot-dragging over the green transition are in part
the responsibility of climate-change deniers, so NIMBYs are in
part responsible for the ernissions of residents who are forced to
live farther from their work in sprawling suburbs.
smashes a window, causing a crowd to To most f':TMBYs, the residents who are prevented frorn living
A
SHOPKEEPER's SON
gather. Its mernbers tell the shopkeeper not to be angry: in in new housing are an afterthought. Yet wherever else rhey live,
fact, the broken window is a reason to celebrate, since itwill create they still have a carbón footprint, which would be lower if they
work far the glazier. In the story, the crowd envisions the work in- could rnove to a city. Density lowers the per-person cost of public
volved in repai ring the window, but not that involved in every- transport, and this red u ces car use. It also means that more land
thi ng else on which the shopkeeper cou Id have spent his money- elsewhere can be given over to nature. Research by Green Alliance,
unseen possibilities that would have brought him greater happi- a pressure group, suggests that in Britain a policy of"demolish and
ness. The parable, written by Frédéric Bastiat, a 19th-century econ- densify"-replacing semi-detached housing near public transport
ornist, sought to draw attention to a common form of argument, with blocks of flats-would save su bstantial emissions over the
which has come to be known as the broken-wi ndow fallacy. so-year lifespan of a typical building. Without such dernolition,
lf the windowwere to be broken today, the crowd might have a potential residents would typically have to move to the suburbs
different reaction, especially if they were N IMBYs who oppose lo- instead, saving money on rent but consuming more energy, even
cal construction. Their cancero might be with the "ernbodied car- if the government succeeds in getting more drivers into electric
bon" the shopkeeper's son had released when breaking the win- vehicles. Although green infrastructu re, pylons and wind turbi nes
dow. The production of a pan e of glass can require ternperatures of all come with embodied carbón, not building thern cornes with
more than 1,oooºC. If the furnace is fuelled by, say, coal, the re- ernissions, too, from the continued use of fossil fuels.
placement windowwould carry a sizeable carbon cost. Similarly,
the bricks, concrete and glass in a building are relics of past emis- Compromising on quality
sions, They are, the logic goes, lumps of embodied carbon. Deciding such choices on a case-by-case basis makes little sense.
Conserving what already exists, rather than adding to the Britain's planning system, in which the government considers
building stock, will avoid increasing these embodied emissions- whether ene particular department store will derail the nacional
or so NJMBYs often suggest. The argument is proving to be an ef- target to reach net-zero ernissions, is especially foolish. The more
fective one. On March izth the EU passed a directive requiring sensible approach is to use a carbon price, rather than a central
buildings constructed after 2030 to produce zero ernissions over planner's judgment. Putting a price on the remaining carbon bud-
their lifetime. The city of San Francisco directs would-be builders get that can be used for new physical infrastructure, as well as the
towards an "en1bodied-carbon-reduction-strategies checklist" services that people use in their homes, means that the true cli-
which starts with the suggestion that they should "build less, re- mate cost of each approach has to be taken into account. Under
use more". Last month the British government attempted to quash such a regime, energy-efficient homes close to public transport
proposals frorn Marks & Spencer, a department store, that wou Id would be worth more. Those with less ernbodied carbon would be
involve rebuilding its flagship shop in London, on the grounds de- cheaper to build. Developers that demolished and den si fied
rnolition would release 40,000 tonnes of ernbodied carbon. would therefore often be rewarded with larger profits.
At theirworst, such rulings are based on a warped logic. Green- Targeted subsidies, especially far research and developrnent
house gases that have been released by the construction of an ex- into construction materials, as well as minimum-efficiency stan-
isting building will heat the plan et whether the building becomes dards, could bolster the impact of carbon prici ng, speeding up the
derelict, is refurbished or is knocked down. The ernissions have pace at which the built environrnent decarbonises. What will nev-
been taken out of the world's "carbón budget", so treating thern as er work, however, is allowing the loudest voices to decide how to
a new debit rneans double counting. Even when avoiding this er- use land and ignoring the carbon emissions of their would-be
ror, ernbodied ernissions must be treated carefully. The right ques- neighbours once they are out of sight. •
68

De-dese rtifi catio n pines have come to be known as "fountain

trees" for their association with fog har-
Uncharted waters vesting. People dwelling in the arid moun-
tains of Ornan have long built cisterns un-
der trees for the sarne reason.
Modern atmospheric water harvesting
follows many of the sarne principies. In-
stead of using leaves as condensation
New technologies could harvest much-needed moísture
from the planet's atmosphere traps, however, which drip over an imprac-
tically large area, rnodern traps instead
VEN IN THE most speculative reaches of crease these levels by 27% o,rer the course consist of sheets of very fine polymer
E science fiction, there is no escaping hu-
manity's dependence on liq uid water. Luke
of the next 50 years.
Tapping this invisible reservoi risa pri-
mesh. As fog flows through the sheets, tiny
droplets of water stick to the polymer fi-
Skywalker, the hero of the original "star oriry. As Earth's temperatures rise and its bres. These droplets grow until gravity
Wars" trilogy, grows up on his uncle's population grows, ever more people are pulls them i nto a compact trough and,
moisture farm, extracting water from Ta- likely to run short of water. More than thence, a reservoir. While collectors vary in
tooine's arid atmosphere. The residents of z.jbn are currently living j n water-stressed size, a ao-rnetres-square collector in a rea-
the desert world Arrakis, accessi ble to any- countries and analysts predict that further sonably foggy area yields around 200 litres
one wi th a copy of Frank Herbert's novel droughts will force roughly a third of these a day, enough to supply 60 people with
"Dune" (or with three hours to kill at their to rnove from their homes by 2030. drinking water.
nearest cinema), likewise use windtraps to Collecting water from the aj r is nothi ng Further improvernents are possible. A
steal precious liq uid frorn the ai r. new, The Inca, who are widely thought to tearn led by Urszula stachewicz at AGH
Engineers on Earth, too, are increas- have invented the technique, placed buck- University of Krakow in Poland found that
ingly looking to the atmosphere for water. ets under trees to collect the condensation the sheet cou Id be made even more pro-
They have good reason to do so. Even in the from heavy fog drifting in off the sea. On d uctive by changing the way in which its
depths of Chile's Atacama Desert, often the Canary Islands laurels, junipers and polymer threads were rnanufactured. Dr
called the driest place on Earth, estimares Stachewicz theorised that careful manu-
suggest that f og and dew can generate facture via a process known as electrospin-
� Also in this section
sorne zoornl of water per square metre. ning could lend the sheet a slight electrical
Elsewhere, the atmosphere is even more 69 Labradorobesity charge that would prove attractive to water
genero u s. Worldwide, it is esti rnated to droplets in fog. In experiments cond ucted
70 HowtotrainyourLLM
contain 12,900 cubic kilornetres of water, in 2021 she anda tearn of colleagues found
roughly the volume of Lake Superior. 71 Restoring lost voices that such sheets yielded 50% more water.
Moreover, models indicare that evapora- This past August, she and Gregory Par-
71 Scaffolding gone rogue
tion driven by global warrning will in- isi, a Pho student at Rensselaer Polytech- ..
 The Economist March 16th 2024 Science & technology 69

� nic Institute in New York reported yet fur- perhydrophobic coating to the surface of could capture more than double their
ther improvements by adding titaniurn di- the charnber, forcing water droplets off the weight in water vapour frorn arnbient air
oxide (Ti02) to the mesh. Previous work surface and making it possible for the de- when relative hurnidiry was below 60%.
had shown that titanium dioxide could be vice to function without electricity. Similar techniques using other salts have
rendered superhydrophilic (intensely ar- Such technology is indeed affordable, proved capable of gathering water in hu-
tractive to water) u pon exposure to ultra- with the prototype itself casting less than midity levels as low as too/o.
violet light-a hindrance under extremely $50. But in rnany regions where water is The findings are prornising, but the
foggy cond itions, as water wou Id stick to desperately needed, hurnidity levels are technology has yet to advance beyond the
the mesh rather than trickle into the cis- too low for dew harvesting to be feasible. In prototype stage. The problem is inefficien-
tern. When fog was light, however, Dr Sta- places like these, the most promising op- cy; even Dr Wang's world-leading capsules
chewicz and Mr Parisi found that a Ti02- tions are those that make use of super- can only produce i.s litres of water per kilo-
enhanced mesh becarne 30% more effec- absorbent materials. gram of lithium chloride over the course of
tive. Her fog collectors are now being used Many salts, chernical cousins of the fa- ten hours in very arid conditions. Better
at si tes on three continents. miliar sodiurn chloride, will readily snatch than nothing, but inadequate for sustain-
Further inland, where fog is scarce, water out of the air. With this in mind, an ing a cornmunity,
other solutions are needed. one effective engineering team led by Peng Wang ar King Between thern, though, these technol-
approach involves harnessi ng the water al- Abdullah University of Science and Tech- ogies suggest a brighter future is possible.
ready present in the air. When the tern- nology in Saudi Arabia studied the effec- Areas so dry as to have gane without rain-
perature d rops, the water-carrying-capaci- tiveness of hollow nanocarbon capsules fall since módem records began rnay one
ty of air decreases with it. This leads to ex- filled with lithium chloride. In 2020 the re- day yield enough water to sustain settle-
cess water condensing onto surfaces, a searchers reported that these capsules ment. And not just on a fictional plan et. •
process most often seen as dew. It is corn-
mon in water-saturated places like Britain,
but anywhere with little wind andan aver- Dogs
age relative hu midi ty of 70% or greater can
cajole water out of the air. Puppyfat
A key way to do this is with radiative
cooling, a phenornenon that occurs at
night when certain materials (like alurni-
niu m) radiare enough heat to cool below
the arnbient ternperature of their sur-
roundings. After sunset, water condenses A gene mutation predisposes sorne Labradors to obesity
on these materials, forms droplets and
tri ckles off. Chambers bui Jt of these radia- UCH lIKE their human owners, dogs journal Science Advances, has identified
tive rnaterials sornetimes include adsor-
bent inner surfaces to which water in the
M are experiencing an obesity epidem-
ic. One recent study of British pooches
one reason why-a genetic quirk makes
sorne Labradors prone to obesity.
air readily sticks, When humid air drifts found that one in 14 is too pudgy, putting The study, led by Eleanor Raffan, a vet-
into such chambers, it loses its water u pon them at higher risk of conditions like ar- erinary geneticist at the University of cam-
exposure to the cool conditions before thritis, shortening their lifespan and mak- bridge, focused on a gene known as Poi1c,
drifting out. One big benefit is that such ing walks more of a drag. Certain breeds, which is found in humans as well as dogs.
techniques work best in places like de- like Labradors, are particu larly prone to In a previous study, published in 2016, Dr
serts, with clear skies, high daytirne tern- fatness. Purebred Labs are around 70% Raffan and her colleagues found that obese
peratures and cool nights. more likely to be overweight than mixed- Labradors were much more likely than
An irnportant limitation of radiative breed mutts. A new study, published in the slimmer dogs to be missing a small section t+
cooling has long been its relative ineffec-
tiveness by day. That changed in 2021 when
Di111os Poulikakos and his then-doctoral-
student Iwan Haechler, ar ETH Zurich,
crafted a piece of glass with a layer of silver
at the bottom anda layer of silicon polym-
er, sandwiched berween layers of chromi-
um, at the top. The silver layer reflected
away the incoming sunlight while the
sandwiched polyrner allowed the device to
shed heat in the form of infrared radiation.
This cooled the glass by u p to 15ºC below
ambient temperatures, driving condensa-
tion even during the heat of the day. Paired
with a heat shield, a condensation cl1a111-
ber built with this glass helped produce 1.2
litres of water per square metre a day.
Another challenge posed by radiative
cooling systerns is that water needs to be
wiped off the surface of the collection
chambers. This requires power, typically
from nearby turbi nes or solar panels,
which can be expensive. To cut costs, Dr
Poulikakos and Dr Haechler applied a su- The Lab assistant will see you now
70 Science & technology The Economist March 16th 2024

� of DNA in the gene, a so-called deletion times over. This data set is then used to
mutation. In the latest study the research- train a second LLM to, in effect, stand in for
ers set out to identify how this genetic var- the human bei ng. This so-called reward
iant, which is present in a quarter of Labs, model, designed to assign higher seores to
might cause thern to gain weight. responses a human would like, and lower
Their first finding was that dogs with seores to everythi ng else, is then used to
the rnutatíon seerned to be hungrier than train the original LLM. As a final touch, a
dogs without it. This conclusión rested on machine-learning technique called rein-
the results of a "sausage-in-a-box test". Ex- forcement learni ng tweaks the knobs and
perirnenters recorded the Labs' reaction to levers of the original LLM to help reinforce
a meaty treat that they could see and smell, the behaviours that earn ita reward.
but couldn't eat. On average, dogs with the This way of doing RLHF is quite in-
POMC mutation spent almost twice as long volved-using two separate LLMS takes
looking at, or playing with, the tantalising time and money, and the algorithrn used
box than did those without. for reinforcement leaming is, to quote Ra-
The POMC mutation seerned to boost fael Rafailov at Stanford University, "quite
how much the dogs wanted food, but not painful" This has meant that, outside of
how much they liked it. Dogs with and OpenAJ, Google and thei r rivals, nobody
without the mutation were justas likely to has really exploited its full potential.
be put off their kibble if it had been slath- lt now tu rns out that the sarne results
ered with lime juice, and justas likely to can be achieved for a fraction of the effort.
bi nge at mealtirnes. The authors suggested Dr Rafailov and his colleagues, including
that Labs with the mutation may be more Archit Sharma and Eric Mitchell, present-
inclined to snack between meals. Machine learning ed this alternative in December 2023 at
The mutation also slows metabolism. Neurrss, an AT conference. Their method,
In another experirnent, dogs were encour- Albootcamp Direct Preference Optimisation (DPO), re-
aged to sleep in a res pi ratory chamber lies on a satisfying mathernatical trick.
which meas u red the vol u me of oxygen and This trick hinges on the observation
carbon di oxide breathed in and out. The re- that for every reward model there is aspe-
sults suggested that Retrievers with the cific theoretical LLM that would get f ull
POMC mutation burned 25o/o fewer calories marks, and every LLM likewise has a theo-
New techníques are speedíng up how
at rest than those without, indicating that retical reward model that would give it fly-
large language models are traíned
hungry dogs may need to stick to a particu- ing colours. (lust as, more prosaically, eve-
larly light diet to stay slirn. T IS NO secret that building a large lan- ry pair of trousers has a theoretical person
Many other factors are likely to influ-
ence canine obesity, The authors have only
I guage model (LLM) requires vast
amounts of data. In conventional training,
on whorn theywould sit perfectly, and eve-
ry person has a theoretical pai r of trousers
found the POMC deletion in Labradors and an LLM is fed mountains of text, and en- that would best fit.) This observation that
Flat-Coated Retrievers, des pi te tes ti ng for couraged to guess each word before it ap- each LLM conceals an irnplicit reward rnod-
it in other portly breeds. But in these dogs pears. With each prediction, the LLM el allowed the researchers to tinker with
the mutation is probably here to stay, as se- makes small adjustments to improve its this model directly. In the old regime, the
lective breeding to eliminate it wou Id re- chances of guessing right. The end result is LLM learned from the reward model, which
quite a huge reduction in an already lirnit- sornething that has a certain statistical learned from the data. Now, the LLM can
ed gene pool. The scientists also suspect "understanding" of what is proper lan- learn directly frorn the data.
that the variant may make dogs easier to guage and what isn't. According to the authors, removing the
trai n-i t is present in around three-quar- But an LLM that has on ly undergone this middleman makes DPO between three and
ters of Labrador assistance dogs. so-called "pretraini ng" is not yet particu- six times more efficient than RL.H F, and ca-
Dr Raffan's work also provides insights larly useful. When asked for ajoke to cheer pable of better perforrnance at tasks such
into POMC mutations in humans. People your correspondent up, for instance, the as text summarisation. Its ease of use is al-
with these rare mutations report extreme pretrained model GPT-2 just repeated the ready allowing srnaller cornpanies to rack-
hunger and many become obese as chil- question back three times. When asked le the problem of alignment, says Dr Shar-
dren. Scientists investigating the effects of who the American president was, it re- ma. A year ago only a few world-leading
genes typically study rats and mice, but in sponded: "The answer is no. The presid ent models, such as coogle's oemini and ope-
the case of POMC there are important ge- is not the president," Clearly, teaching an nxr's GPT-4, could afford to use RLHF. But
netic differences between rodents and LLM to do what hu mans want requires as of March izth eight out of the ten high-
other mamrnals. The authors identified a somethi ng more. est-ranked LLMS on an industry leader-
protein which is affected by POMC muta- One way to aligo such models with us- board used DPO. Mistral, the French start-
tion in the Labradors, but is not present in ers' expectations is through reinforcement up seeking to rival OpenAT, uses it. Meta, a
mice. They think it may be involved in hu- leaming from human feedback (RLHF). social-media giant, has integrated it into a
man weight control too. OpenAl, an American startup, introduced home-grown LLM.
Medication targeting the faulty human this techniq ue in a preprint pu blished in Further irnprovernents are sure to
POMC pathway has already been developed. March 2022. lt was a major ingredient in its come. For one thing, the consensus view is
In 2020, setmelanotide, a drug that mimics recipe for ChatGPT, which was released that the big AJ labs have made improve-
one of the proteins POMC produces, was eight rnonths later. ments to their proprietary algorithms
approved for human use. It is unclear RLH F normally involves three steps. since they stopped publishing details in
whether it would work in dogs, and with a First, human volunteers are asked to 2022. But the problem of getting an LLM ro
daily price tag of at least f240 in Britain choose which of two potential LLM re- do what a hun1an wou Id want and expect is
($330 in America), it is unlikely to be pre- sponses might better fit a given prompt. far from done and dusted. After all, even
scribed to even the rnost parnpered pets. • This is then repeated many thousands of other hun1ans occasionally struggle. •
 The Economist March 16th 2024 Science & technology 71

Sound engineering

So to speak Construction sights

New York City is covered in illegal scaffolding. Al could help bring it down
H E CITY that never sleeps is also, it side-effects. (Or in this case, sidewalk
A flexible patch could help those with
voice disorders be heard once more T seems, unable to take down scaffold-
ing. New Yorkers have grown so sick of
effects.) Shocked by deaths from falli ng
masonry, officials in 1980 introduced
HE HUMAN voice, with ali its power to the ugly structures, and the accompany- compulsory facade inspections every
T mesrnerise audiences, woo loved ones
and irritate neighbours, is a delicate thing.
ing ground-level cages in place to protect
and divert pedestrians, that Eric Adams,
five years,
As a result, city records show more
Each person's distinctive sound is pro- the mayor, last year launched a campaign than 8,000 current perrnits for scaffolds,
duced when air from the lungs causes the to clear thern from the streets. which often include what New Yorkers
vocal cords, folds of muscle tissue in the Now cornputer scíentists in the ciry call "sheds==dark and claustrophobic
larynx, to vibrare. These vocal cords can have made a hit list of possible targets. street-level tunnels. Many remain in
easily get damaged by stress, infections, or Using A 1 to si ft through thousands of place long after the perrnit expires be-
overuse. It is notjust overzealous perforrn- hours of dashcam footage, the research- ca use building owners find it more con-
ers who are at risk of straining thei r voi ce- ers identified sorne 5,000 scaffolding venient to 1eave the scaffolding in place
boxes-according to a 2005 study, 30% of si tes a cross ali five boroughs, of which between inspecrions, As part of his ongo-
the population will experience a voice dis- 500 were found to have no permit. "This i ng war on sheds, Mr Adams celebrated
order at sorne pointin their Iife. city is the best but also kind of a disas- the removal of zi-year-old scaffolding
In a study pu blished in the journal Na- ter," says Wendy Ju, a computer scientist fron1 a Harlern street that had beco me a
rure Commur1icatior1S this week, a group of at Cornell Tech in Manhattan, who local landmark in its own right.
bioengineering researchers frorn the Uni- worked on the project. To get a street-level view of the pro-
versity of California, Los Angeles, have put N e,'fv York's steady su bmergence blem, the Cornell scientists trained an
forward an attractive solution. They have beneath scaffolding is a classic exarnple algorithm to find scaffolding in images
designed and tested a soft patch that can be of a well-meaning policy producing bad and then set it loose on a huge data set
stuck onto a person's neck, where it will collected berween August 2023 and
pickup muscle movements and, with the January 2024 by cameras fitted to ride-
help of machine-learning algorithms that sharing vehicles. They then asked the
process the signals, translate thern into au- computer to find all the sheds in a colos-
dible speech. sal 29,156,833 geotagged images.
Even though the tearn's device is anear- The researchers went on to cross-
ly prototype, it has the potential to offer a reference scaffolding identi fied by the AJ
substantial improvement on current alter- with récords of approved projects. The
natives. When a person loses their voice 500 or so unperrnitted sheds discovered
today, the easiest fix is to resort to typing, don't necessarily contravene the rules, as
texting, or writing notes to communicate. city regulations do allow sorne without
Typing can be slow and inconvenient, says permission (for emergency work, for
Jun Chen, the paper's lead author, and writ- instance). But they would seern a good
ing legible notes is only possible in good place to start investigating.
lighting. More sophisticated solutions The scientists are waiting until the
such as electrolarynxes, external devices results are accepted for an upcomi ng
held against the throat to produce the vi- conference before sharing them with city
brations necessary for speech, can require officials. They also want to convert the
special training to use, and surgical inter- data into an interactive map that will
ventions are often off-puttingly invasive. A show residents the location of scaffold-
patch would theoretically be able to clear i ng, tell thern how long it's been there
all these hurdles. and reveal whether or not it has a perrnit.
The rnechanisrn behind Dr chen's de- Soon, NewYorkers will be able to sleep
vice is a principie known as the magneto- Hoppi ng on the tube easy once agai• n.
elastic effect. When magnetic nanoparti-
eles are embedded into soft materials like
elastic or silicone polymers, their rnagnet- field variations can also be converted into in silence-with more than 9oo/o accuracy.
ic properties can change as the material is electrical signals. In a test with eight par- The design of the patch brings addition-
stretched. That's beca use each deforma- tici pants, the researchers captured the sig- al benefits. In addition to stretchiness, the
ti on causes the particles either to rotate or nals arising as the subjects spoke and lip- patch rernains sticky on sweaty skin, and
move relative to one another, changing the synched five different sentences (includ- can be used continuously for 40 minutes
magnetisation of the material. When em- ing: "Hope your experiments are going without heating up.
bedded in a patch wi th a hem of copper well!", "Merry Christmas!" and "I love There is a v.,ay to go yet. For now the de-
coils generating a background magnetic youl"). Theythen trained a machine-Iearn- vice can only recognise the five phrases it
field, the movements of the particles can ing model to recognise the distinct shapes was trained on. Plus, individual differ-
be accurately captured as variations of the electrical signals associated with ences in vocal folds rneans the algorithm
against this background. each sentence. This algorithm was then has to be personalised to each user. To
When the throat muscles move under able to predict which of the five sen ten ces make it practica! at scale, the researchers
the silicone patch, the resulting magnetic- the partici pants spoke-whether aloud or will need to collect a lot more data. •
72

Silicon Valley scribbles the case for a while. When John Battelle
was wri ti ng "The Search" (2005), about
Bonfires of vanities online quests for information, he spent
overa year asking to interview coogle's co-
founder, Larry Page. The firm tried to im-
pose conditions, such as the right to read
the manuscript in advance and add a foot-
note and possible reburtal to every men-
tion of Google. He decli ned. Google ended
Why is it so hard to write a good book about the tech world?
up granting the interview anyway.
HE!':' PEOPLE ask Michael Moritz, a Journalists who rnanage to finagle
W forrner journalist and prorninent
tech investor, what book they should read
Burn Book. By Kara Swisher. Simon &
Schustcr; 320 pages; $30. Piatkus; [25
access can feel they owe a cornpany and its
executives and, in turn, write rneek and
to u nderstand Si li con Val ley, he always rec- Filterworld. By Kyle Chayka. Doubleday; sympathetic accounts rather than pene-
ommends two. "They are not about Silicon 304 pages; $28. Heligo Books; [22 trating prose. Or they cannot break in-or
Valley, but they have everything to do with do not even try-and write their book from
Silicon Valley," he says. alised account ("The Bonfire of the vani- a distance, without an insider's insights.
one is "rhe Studio" (1969) by John Greg- ties") that popu larised the terrn "masters of Two new books demonstrate how hard
ory Dunne, an American writer who spent the universe". it is to write well about Silicon Valley.
ayear inside z oth Century Fox watching Why not the masters of Silicon Valley? "Pilterworld" is an outsider's account of
films get made and executives try to bal- Part of the problem is access, as is often the the Valley's irnpact, which reads as if it was
ance creativiry with profit-seeking. The case when writing about the powerful. entirely reported and written in a coffee
other, "Swirnrning Across" (2001) by Andy Tech executives may let their guards down shop in Brooklyn. The book larnents how
Grave, a former boss of Intel, a chiprnaker, at Burning Man, but they have been pain- u culture is stuck and plagued by sarneness"

is a memoir about surviving the Holocaust. stakingly trained by public-relations staff and blames Silicon Valley's algorithms,
Tt shows how adversity can engender grit, not to get burned by writers. This has been "the technological spectre haunting our
which every entrepreneur needs. own era of the early zist century"
That Sir Michael does not suggest a This is the sort of tirade against tech
book sq uarely abou t the tech business says � Also in this section that has spread as widely as silicon valley's
a lot. Silicon Valley has produced sorne of apps. It is not wrong, but nor is it insight-
73 A different sort of witch trial
the world's most gargantuan companies, ful. The author, Kyle Chayka, who is a jour-
but it has not inspired many written 74 Archaeologyand climate change nalist for the New Yorker, never reconciles
accounts with a long shelf life. Wall Street, the tension between the cultural "sarne-
74 "James" and literary retellings
by contrast, claims a small canon that has ness" he decries and the personalisation
stood the test of time, from chronicles of 75 Coded language in Russia everyone experiences, with online users
meltdowns ("Too Big to Fail"), to corporate possessing individual feeds and living in
76 MaastrichtJ a window on art collecting
greed ("Barbaria11s at the cate") to a ñction- separate inforrnation bubbles. Nor is this a ..
 The Economist March 16th 2024 Culture 73

� wholly new phenornenon. People have scene"-she played a leading role.

been complaining about globalisation Of course, journalists are not the only
eroding local culture since "recorded civi- ones who deal with personal conflicts that
lisation" began, the author concedes. In affect how and what they write about tech.
1890 Gabriel Tarde, a French sociologist, la- Too many in the Valley pursue books to
rnented the "persistent sameness in hotel bu ttress thei r personal brand, 1 ike a web-
fare and service, in household furniture, in site or résurné that just happens to have a
clothes and jewellery, in theatrical notices spine (but reads as spineless). This ex-
and in the volumes in shop windows" that plains why so many venture capitalists
spread with the passenger train. have ventured into book-writing. The best
"Bu rn sook" is a better, though imper- of the lot is ºZero to One" (2014) by Peter
fect, read. Kara swisher, a veteran chroni- Thiel, an early investor in Facebook, and
cler of Silicon Val ley, is both an insider and Blake Masters, a student who took a class
an outsider. She has attended baby show- taught by Mr Thiel at Stanford. However,
ers for tech billionaires' offspring and even explaining how to build a monopoly, as it
hosted coogle's top brass for a sleepover at does with welcorne and rare frankness, is
her rnother's apartment. But she has a dis- probably sornething Mr Thiel and his peers
taste for the Valley's "look-at-rne nar- regret, considering the scrutiny Silicon
cissists, who never met an idea that they Valley has since elicited frorn regulators.
did not try to take credit for" Monopolies are not so in vague these days.
In delicious detail, she offers her ver- Yet the sirnplest explanation for why it Bodine, who casta spell on the press
dict on the techies who have becorne is so hard for a book about Si licon Valley to
household names, such as Facebook's hit the mark is probably the rnost obvious: was thought to be the last person to see the
founder: "As sweat poured down Mark ti ming. The snai l's pace of research and victims alive. When word reached Bodine
Zuckerberg's pasty and rou nded face, I publishing is badly suited to Silicon Val- that vi llagers were starting to pin responsi-
wondered if he was going to keel over right ley's speed. Today's pressi ng book idea is bility for the rnurders on her, she fled, but a
there at my feet," That was in 2010, before next year's stale one. Innovation cycles and couple of days later she turned herself in to
he had gane through rnedia-training cornpanies' futures often pivot too quickly. the authorities.
galore. Muchas Truman Capote, an Ameri- Take Ada111 Lashi nsky, a jou rnalist who "The Witch of New York" reconstructs
can writer, was willing to skewer the wrote a book about Uber. He watched as the the events and subsequent trials in great
socialite swans of New York, Ms Swisher company faltered and tried to keep his text detail. Alex Hortis, a crirne historian, can
delights in prodding sorne of her subjects up to date. His aptly titled "Wild Ride" was do so because the press seized on the case
to rnake readers smile and squirm, such as published in 2017, a month befare the dra- and delighted in recounting its grisly de-
media rnogul Rupert Murdoch ("Uncle matic firing of Uber's boss, Travis Kalanick. tails. Journalists for the en1erging "penny
satán") and Amazon's Jeff Bezos (who has Mr Lashinsky has since sworn off writing press"-cheap newspapers that special-
"a gen u inely infectious maniacal laugh''). about tech. His next book is about Wi lliarn ised in the lurid and schlocky-shuttled to
Ms Swisher does not nave Capote's élan, Safire, a dead newspaper columnist. It is a and from New York wi th dispatches from
but her book succeeds where many fail subject that will not go out of date-and the crime scene.
because she explores the relationship not try to control the narrative. • Bodine turned out to be the perfect sub-
between subject and writer, which lurks in ject, for not only was she a suspected rnur-
the background of most tech books. In deress and arsonist-she had a colourful
detailing her interactions with tech bosses Media sensations personal life, too. She had fled an abusive
over three decades, she shows how the in- marriage and returned to live with her par-
dustry became more furtive and destruc- True crime's ents; her husband was in prison for biga-
tive, less free and f un. my. Yet Bodine was no lonely spinster. She
While Ms swisher uses her memoir to first crime had taken a lover in the city and ,�as eight
hold up a mirror, unfortunately she does months pregnant when the 1nurders were
not gaze at it long. Afrer chronicling the in- committed. She became a lightning rod for
ternet for the Washingto11 Post, Wall street her contemporaries' feelings abo u t sex.
ioumal and her own outfit, Recode, she The printing presses ran hot for years,
moved frorn the Valley to the swamp- The Witch of New York. By Alex Hortis. publishing sensationalist stories and deni-
Washington, DC-acknowledging that "I Pegasus Ctttne; 336 pages; $29.95 and f22 grating illustrations. If facts could not be
had beco me too mu ch a creatu re of the had, wild invention sufficed. (The rumours
place" and "part of the scene in a way that T WAS CHRISTMAS DAY in 1843, and men covered everything from her supposed
was starting to feel uncornfortable"
still, she declines to tease out sorne of
I were gathered in a tavern on Staten
Island for a festive drink. They set down
abortions to other n1urders she might have
com1nitted.) So fervid was the press cover-
the more complicated aspects of covering their pi nts when they heard shouting. age of Bodine that it made due process im-
the Val ley, such as the thin Ji ne between After extinguishing the flames engulfing possible. After an initial mistrial in Staten
source, friend and adviser, and exactly how George Housernan's home, they inspected Island, a retrial there had to be abandoned,
she covered the Valley dispassionately the wreckage, ln a cerner of the kitchen, as three days of jury selection failed to
when her then-wife was a Google execu- they found the charred remains of his wife proffer 12 unbiased men.
tive. Despite her journalistic ferocity, the and young daughter. A post-mortem re- A new trial took place in Manhattan, but
reali ty was that Ms Swisher could not evis- vealed evidence of blunt trauma. after a guilty verdict was delivered, the
cerate rnany of her subjects, because she Houseman, an oysterrnan, was at sea. Supreme Court ruled that Bodine had been
depended on them accepting her invita- People soon started to direct blarne at his denied a fair hearing. Afterwards potential
tion to speak at her annual conference, one sister, Polly Bcdine (pictured). She had ju rors were q uizzed extensively abo u t
of her major sources of incorne, and on her slept at the house on December zjrd, as she their impressions of the case, and selec-
podcast. She was not just "part of the often did when her brother was away, and tion carne close to i111possible. After three ..
74 Culture The Economist March 16th 2024

� weeks and severa) thousand prospective At Vindolanda, in the north of England, the Lazare Eloundou Assorno, the head of
jurors, the third and final trial was moved waterlogged soil that preserved Reman ux ssco's World Heritage Centre.
to Newburgh, sorne 60 miles (97kI11) away. tablets for rnillennia is drying out. In Iraq, Given the nurnber of sites under threat
There Bodine was found not guilty. an ancient city is being buried under and limited resources available, many will
It is an engaging story, skilfu lly told. tonnes of sand. And in the Arctic, indige- be lost. As si tes are damaged or disappear,
The case pulled stars into its orbit. Both nous artefacts are being destroyed as the historical knowledge and tourism may
Edgar Allan Poe and Walt whítman wrote permafrost thaws. also go away. According to Mairi Davies of
about the trials: James Fenimore Cooper On the climate change to-do list, ar- Historie Environment Scotland, which
fictionalised the grim tale in a novel. P.T. chaeological preservation is, understand- works on preservation, communities must
Barnurn exhibited a hideous witchy wax- ably, nota top prioriry. The International con1e to terrns with changing landscapes-
work of Bodine in his American Museum. Council on Monuments and Sites declared and adapt accordingly. Sites such as swan-
(He comes across as a rather less genial fel- a climate emergency only in 2020. Archae- dro are tu rning to laser scanning and other
low than "The Greatest Showman", a rnusi- ologists complain of shallow co-ordina- technologies to capture a digital record for
cal film, would have you believe.) tion efforts arnong clirnate policyrnakers, f uture generations. "We have to have con-
Mr Hortis says Bodine "probably" did Funding is the rnain problern. Archae- versations about loss and what people val-
commit the crirnes: the reader will finish ology tends to be bankrolled by land devel- ue," Dr Davies says. In the end, what sur-
the book with reasonable doubts. Guilty or opers. But when it comes to climate vives will be determined by what people
not, Bodine's case set a dangerous prece- change, there is "no one to pay for it", says "can come to terms with losing" There is
dent, ushering in an age of "tabloid j ustice" Jorgen Hollesen frorn the National Muse- not enough money to save thern ali. •
that "underrnines legal justice and ob- um of Denmark. Moving sites and other
scures truth", It also established a pattern mitigation efforts, such as building protec-
of public shaming and lewd speculation tive arrnour, is costly. Many just have to Literary retellings
about female defendants. Interest in sor- wai t and see what happens.
did, violent crimes has not abated in the Digging deeper, it is not ali doom and Onceupon
years since: to read "The Witch of New gloom. Changi ng weather patterns and ris- • •
York" is to understand the ancestry of the i ng ternperatures have brought sorne unex- a time, again
current true-crirne craze, The reporters co- pected benefits. Severa! of the most excit-
vering Bodine's case showed that justice ing discoveries of recent years, from Nazi
was less irnportant than entertainment. • warships in the Danube to ancient rock
carvings in the Amazon, were revealed
after severe drought. Storms can also ex- James. By Percival Everett. Doubleday;
Archaeologica I sites pose hidden gems. Skara Brae, a Neolithic 320 poges, $28. To be publishcd in Britain by
• site also in orkney, was concealed by sand Mantle in April; f20
In ruins dunes until disturbed by a storrn in 1850. A
centuries-old shipwreck reappeared under night in Hannibal,
O
N A MOONLIT
similar circumstances this year. Missouri, a slave called Jim watches
Archaeologists and heritage institu- two white boys hiding in the grass. The "lit-
tions must answer two pressing q uestions, tle bastards" think he cannot see thern.
RO USA Y
says Dr Hollesen: "Which sites should be "They were always playing sorne kind of
Climate change is u nearthing and
saved, and which sites should be allowed pretending game where I was either a vil-
erasing history ali at once
to decay?" In poor countries, payi ng for lain or prey, but certainly their toy," [irn
T LOOKS, AT first glance, like a pile of rub- preservation can be hard to justify, though thinks. Huck and his friend, Tom Sawyer,
I ble. But hidden beneath the sandbags
and tarpaulin is the Knowe of Swandro, an
UN ESCO provides funding to its designated
World Heritage sites. (Sub-Saharan Africa
rustle and giggle: "Those boys couldn't
sneak up on a blind and deaf man while a
archaeological site that contai ns the re- has 103; Italy has 59 .) Countries with fewer band was playing," [im decides to indulge
mains of Iron Age and Norse settlements resources will get priority in funding, says them anyway-because "it always pays to
(pictured). Every su mmer a tearn of archae- give white folks what they want." Stepping
ologists descends on Rousay, one of the into the yard, he calls out into the night,
Orkney Islands, off the north coast of seor- "Who dat dere in da dark lak dat?"
land, to sift through the evidence. So begins "James", a novel by Percival
Time is not on their side. Rising sea Everett that reimagines Mark Twain's
levels and more frequent storms are wash- "Adventu res of Huckleberry Finn" from
ing away sediment where the site sits. jim's perspective. Mr Everett, a professor of
Scotland now experiences more winter Engllsh literature at the University of
rain fali than had been predicted for 2050, Southern California, is known for produc-
according to a study by the James Hutton ing genre-defying works, ranging from a
Tnstitute, which conducts environmental satire of the publishing industry that in-
research, Coastal erosion has destroyed spired the film "American Fiction" to a
most of the Knowe's crown jewel, a dwell- murder mystery about lynchings i11 the
ing from the lron Age. "The final third" wi 11 American South. {"The Trees" was shor-
break apart and disappear "wi thi n the next tlisted for the Booker prize in 2022.)
cou ple of years", predi cts Stephen Dockri ll, In retelling Twain's classic American
who co-Ieads the excavation. tale with a twist, Mr Everett joins a long
UN ESCO, the cultural arm of the United tradition of writers who have dragged
Nations, estimates that one in six cultural rnarginalised characters into the centre of
heritage sites is threatened by clirnate new (old) tales. The modern trend began
change. Hundreds of si tes on the Scottish with "Wide Sargasso Sea" (1966), when Jean
coastline face threats similar to Swandro. A hole lot of trouble Rhys gave a voice to Mr Rochester's wife, ..
 The Economist March 16th 2024 Culture 75

� the "madwornan in the attic", from "Jane slaves, but reverts to "lawdy, lawdy" when a that read li ke they are destined f or re-
Eyre" by Charlotte Bronté. white person appears. "White folks expect enactment on the big screen. "My name is
Two types of retellings have been popu- us to sound a certain way and it can only James," jirn declares at one point. "I'rn go-
lar recently, One involves feminist revi- help if we don't disappoint thern," he ing to get my farnily." (You can almost hear
sions of books focused on men. "Circe" explains. He advises slave children to the d rarnatic seo re that will accornpany
(2018) by Madeline Miller retold the "odys- rnurnble, sound stupid and use "correct these lines and rnight wonder which actor
sey" from the perspective of Circe, a minor incorrect gramrnar". Making whites feel will play jim.)
goddess; Pat Barker's "The Silence of the safe and superior is a matter of survival. Whether or not "James" is a commercial
Girls" (also 2018) imagi ned the "Iliad" from When Jim and Huck are separated, Mr success, the trend of retellings is only like-
the viewpoint of a Trojan queen taken as a Everett invents new trials for jirn that are ly to continué. Writers have always looked
slave by Achilles. Last year "[ulia" by San- darker and bloodier than anything in to classic tales to comment on contempo-
dra Newrnan retold George orwell's "1984", Twain's text. The central thread, however, rary times. shakespeare's "Hamlet" adapt-
offering meat and mind to a previously rernains the relationship between the run- ed the Danish legend of Amleth. Mi lton's
scrawny character. away slave and the boy. Huck protects [irn "Paradise Lost" rewrote the Bible's Book of
"Ja111es" is an exarnple of another sort of in the wilderness, but Iirn also feels re- Genesis. Readers love the comfort of a fa-
retelling, which gives prorninence to non- sponsible for Huck, who grows increas- miliar story rernixed with surprising twists
white characters frorn tales previously fo- ingly uncomfortable with slavery. Toward and provocative insights. For publishers.
cused on white ones. This is not enti rely the end, Mr Everett introduces a twist, as that rnakes retellings a good bet-easy to
new: in "The Wind Done Gone" (2001), Al- well as action-packed scenes of revenge market and sure to sell. •
ice Randall rewrote Margaret Mitchell's
"cene With the Wind" from a slave's per-
spective. As readers dernand fresh perspec-
tives, more authors are trying their hand at
adaptations. Successful ones do not just
The duck and the dissident
tweak familiar stories but create some-
thing entirely new, therefore reading as
Hidden memorials to Alexei Navalny reveal the long afterlife of Aesop's fables
original and defiant.
The shift from Huck's perspective to N LATE FEB RUARY 2024, rubber d ucks
[irn's is such an act. Consider the opening
scene, In Twain's original novel, first pub-
Iwasstarted landing in unlikely places. One
spotted peering through roses in St
lished in America in 1885 (and banned in Petersburg; another was illurninated by
Massachusetts shortly afterwards because plastic torches next to a tributary of the
of irs bad language), the boys sneak up on Volga river. When Alexei Navalny,
jim to "play something on him", They see Russia's most prorninent opposition
him as durnb and superstitious. (The N- leader, was alive. rubber ducks symbol-
word appears around 200 times in the nov- ised his fight against corruption. Since
el, which has made the book a frequent his death on February isth, they have
flashpoint in schools.) played a di fferent role: to protest agai nst
The brilliance of Mr Everett's retelling is the regirne that rnurdered him, while
to imagine [irn's interiority while main- evading censorship.
taining the integrity of Twain's scene. Jim Aesop, a slave in Ancient Greece, is
sees the boys in the grass but pretends not credited with invoking talking animals
to. His narration is intelligent and witty, to tell tales about rnorality. In Russia,
but when he speaks aloud, he plays dumb. images of animals carry ceded meaning.
With a few lines, Mr Everett has turned There is a herd of exarnples, such as
Twain's tale on its head. stickers of a goose cawing. (The sound
"james" u nfolds in this fashion, rnak- made by a goose is written as "ga-ga-ga", Duck and cover
ing familiar scenes feel startling and new, similar to "Ha-aga", che Russian pro-
You do not need to read the original to en- nu nciation of The Hague, where Vladi- vik, Vladimir Lenin, resented that he had
joy the revision, however: Mr Everett's tale mir Putin, Russia's president, should be to use Aesopian language (before he
stands on its own. As in Twain's novel, [im tried for war crin1es in Ukraine.) Graffiti seized power and censored other peo-
runs away to avoid being sold to a new of a crossed-out fish is another allusion ple). In 1917 Lenin lamented that he \vrote
slave-owner and separated from his fam- to Ukraine: net voine (no to war) in Rus- "with an eye to the tsarist censorship
ily. Huck fakes his death to get away from sian has a sin1ilar n un1ber of letters to net ...with extren1e caution, by hints, in an
his abusive father. The u nli kely pair escape voble (no to salt-cured fish). allegorical language-in that accursed
by raft down the Mississippi river, encoun- ''You need to avoid your censor, and Aesopian language".
tering all kinds of dangers and obstacles on you know that censor is watching you al] It would be preferable for ceded lan-
their journey. the ti me," explai ns Alexandra Arkhi pova, guage not to be needed in the first place.
Iirn, who has secretly taught hirnself to a social anthropologist i11 Paris. She But cloaked expression is better than no
read and write, finds paper and ink. "I am refers to these anonymous Russian expression. Ahead of Russia's shan1
called [im," he writes. "I have yet to choose symbols as ''Aesopian language", a tern1 election on March 15th-17th, Dr Ark-
a name." He discusses morality with Huck, that origi nated in the late 19th century. hipova is monitoring government voting
who wonders if he's "doin' wrong" by help- (Many credit Mikhail Saltykov-Shche- posters. A recent one in Moscow had
ing [irn escape. "If'n ya need surn kinda drin, a satirist, for popularising it, "Navalny" scrawled across it. A11other
God to tells ya right from wrong, den you though he preferred the phrase "the appeared norn1al, with official red, blue
won't never know," jirn advises wisely. language of slaves".) and \.Vhite. A closer look reveals the
In Mr Everett's telling, [irn's slave dia- The Soviet Union's founding Bolshe- phrase "for Russia \\rithout Putin".
lect is a put-on. He drops it around other
76 Culture The Economist March 16th 2024

Art with h istory says Christophe van de Weghe, a contem-

porary-art dealer. Old Masters do not
Where museums shop photograph as well, and, given the paint-
ings' age, buyers need to check their condi-
tion in person. So dealers of Old Masters
are trying to become more masterful at
marketing. "We're trying to sell more
blood, sex and mythology," says Patrick
MAASTRICHT
Williams of Adam Williams Fine Art, a gal-
A fair in a small Dutch city offers perspective on taste and collecting trends
lerist based in NewYork. (However, images
HE PAIKTINGS are spotlighted, so you especially hard to ensure their offerings of bloody Christ on the cross are not in
T can see every brushstroke and crack.
Next to each work is a placard, outlining its
can withstand scrutiny. This gives confi-
dence to buyers, including museums,
vague: secular works are more popular
among you nger collectors and those from
history and to whom it once belonged. whose acquisition committees want to be the Middle East and Asia.) People at Maas-
Here is an elaborately frarned painting, confident they are buying the real deal. tricht talk about "wall power": images that
probably offered by the King of Naples to As well as being a destination to ogle can catch the eye and spark conversations.
Pope Benedict XIV in the isth century (pi c- breathtaking art, Maastricht offers a win- Who pai nted the canvas matters, too.
tured). Nearby is a 470-year-old portrait of dow on the art world and current col lec ti ng The "biggest trend in the current market is
a sibyl wearing errnine, once owned by trends. The fair is best known for Old Mas- wornen," says Alexander Bell, co-chairman
Paul Newman and Joanne Woodward, two ter pai ntings, but the number of contem- of the Old Masters painting department at
American actors. The artwork on display in porary dealers in attendance has been Sotheby's, an auction house. Should any-
Maastricht is rerniniscent of a museum ex- growi ng-because that is where most of one doubt it, one stand at Maastricht dis-
hi bition, except for one catch. Here, every- the activity in the art market is. Last year played three paintings by female artists
thi ng is for sale. European Old Masters (defined as work adorned with a large sigo: "Wall of Ladies"
Every March since 1988 the European produced by artists born between 1250 and Museums are avid buyers, as they seek to
Fine Art Foundation (TEFAF) has put on a 1820) accounted for less than 4 o/o of the val- expand the works and backgrounds of the
fair in the small Dutch city, best known as ue of sales at auction globally, according to artists they exhibir. But there are not many
the birthplace of the modern-day Euro- a new report by Arts Economics, a research to cho ose from. "It's a bit of a frenzy" for fe-
pean Union (the treaty that created it was firm. In 2003 it was 16%. male artists, says Mr Williarns: "Any time
signed here in 1992). Nowthis is where mu- Masterpieces by historically significant we get thern, we sell them immedíately"
seurns and art aficionados come to shop. artists still do well, In 2021 a painting by The reali ty is that there is less and less
"Maastricht", as art-world i nsi ders call it, is Sand ro Botticelli, the Italian artist of for sale by both women and men from by-
"the most important fai r by a mi le for clas- Venus-on-the-half-shell fame, sold for gone centuries. Unlike contemporary art,
sical pai ntings and works of art", says Jona- $92m, for exarnple. But the midd le has fall- more of which is created every day, the
than Green, a gallerist based in London. en out of the market, owing to changes in su pply from dead artists is-for obvious
The eight-day fair opened on March zth, aesthetics and interior design. Many of reasons-limited. More is disappearing
Maastricht is not the only fair where today's art collectors favour large, colour- into museurn collections or being given by
expensive art is sold, but it probably boasts ful canvases by living or recently living art- donors to institutions. "The trade is be-
the largest concentration of rnuseum cura- ists, to complernent their minimalist coming more challenging, because of a
tors on the hunt for their next acquisition. furniture and large, whire walls. ("Park scarci ty of high-qualiry paintings available
Among this year's 50,000 visitors were Avenue" taste is how one dealer describes to sell," says Mr Green. To optimists this
sorne 300 rnuseurn directors-including an old Dutch landscape he has for sale, suggests that Old Masters as a category are
Laurence des Cars, who runs the Louvre in which is now out of favour.) u ndervalued. At least, that's what buyers at
Paris-and 650 curators. lt is the prernier Social media have changed what sells, Maastricht like to think. •
destination for old art, as opposed to the
contemporary paintings that fairs like Art
Basel in Switzerland and Miarni favour.
Maastricht is the "Met of art fairs, and Art
Basel is MOMA", says Eric Lee, director of
the Kimbell Museum in Fort Worth, Texas.
What happens befare the fair begins is
also un usual. Dealers set up their stands,
only to be forced to leave, For a day and a
half 230 specialists come in to vet works'
authenticity, as well as their descriptions
and stated provenance, bringing x-rays
and other technical machines with them.
The specialists have the right to ask for
descriptions to be changed. Objects can be
removed if the experts believe they are in-
authentic; they are locked in a cu pboard
until after the fair, "You come back in and
hope to God that nothing has been thrown
out," says one dealer, who calls Maastricht
"the best-vetted fair in the world"
Each year "tens" of objects are removed,
according to Will Korner of TEFAF. But the
strict vetting process means dealers work What you see is what you can get
 n
Economic & financial indicators The Economist March 16th 2024

Econom ic data

Gross domestic product Consumer prices Unemployment Current-account Budget lnterest rates Currency units
�o change on year ago ",() change on ye-ar ago rate balance balance 10 yr gov't boods changeon per S �change
la test quarter" 2023t latest 2023t °'b % of GDP, 2023t , o of GOP, 202 3t la test,% yearago,bp Mar l 3th onyear ago
Uníted States 3.1 3.2 2.5 31 4.1 3.9 -3.0 -6.3 4.2 64.0
China 5.2 4.1 5.2 0.7 F 0.3 5.2 ni, -3.8 2.3 � -44.0 7.19 -4.0
Japan 1.2 0.4 1.9 2.1 3.3 2.4 n -5.2 0.8 43.0 148 -9.9
Bntain ·0.2 • 1.4
4 0.2 4.0 a 6.8 3.9 11 -3.9 4.0 36.0 0.78 5.1
Cana da 0.9 4 1.0 1.1 2.9 3.9 5.8 -1.2 3.4 64.0 135 LS
Euro a rea 0.1 -0.2 0.6 5.4 6.4 an -3.3 2.4 12.0 0.91 2.2
Austria -1.7 4 o.2* -0.7 41 7.7 5.0 n -22 2.8 -11.0 0.91 2.2
Belgium 1.5 Q,c 1.4 1.4 3.6 F 23 5.5 n -4.5 2.9 -3.0 0.91 2.2
.
France 0.7 0.2 0.9 3.1 5.7 7.5 n -4.9 28 -25.0 0.91 22
Germany -0.2 -1.1 -0.1 2.7 6.0 3.1 n ·2.2 2.4 120 0.91
Greece 1.1 4 0.6 2.2 3.1 4.2 10.4 -2.1 - 3.2·- -105 0.91
ltaly 0.6 Q4 0.7 0.7 0.9 © 5.9 7.2 fl -7.2 3.6 -59.0 0.91
Nether1ands -0.5 13 0.1 2.7 4. t 3.6 n ·2.1 2.6 ·2.0 0.91
Spain 2.0 4 25 2.5 2.9 3.4 11.6 díl 2.1 -4.0 3.1 -48.0 0.91
Czech Republic -0.2 4 1.0 -0.4 2.0 10.7 3.0 ni -0.6 -3.9 3.8 -85.0 23. l -4.2
Denmark 3.2 .)4 82 0.9 3.3 29 n 10.5 22 -11.0 6.81 1.9
Norway 0.5 4 6.2 0.8 5.5 3.9 1 15.6 16.0 3.5 40.0 10.5 0.4
Poland 1.0 Q4 n1I 0.5 11.4 5.4 F� 1.7 -4.7 5.4 -58.0 3.91 11.5
Russia 5.5 na 3.6 7.7 5.9 29 n� 2.4 -1.8 12.7 196 91.3 -17.7
Sweden -0.1 -0.2 n1I 5.4 a 6.0 8.5 5.6 -0.2 2.3 -11.0 10.2 3.4
º'
Switzerla nd 0.6 L2 0.8 12 2.1 22 . b 10.0 --0.7 0.7 -40.0 0.88 3.4
Turkey 4.0 3.9 4.5 67.1 Fdl 53.9 9.8 nS -4.0 -5.0 25.3 1,441 32.1 -40.9
Australia 1.5 1.0 1.9 4 5.6 4.1 n 1.2 0.7 4.0 25.0 1.51 -0.7
Hong Kong 4.3 1.8 3.2 2.1 29 n;t 8.6 -3.4 3.7 16.0 7.82 OJ
India 8.4 8.0 6.9 5.1 5.7 8.0 b -0.6 -5.8 7.0 -33.0 82.9
Indonesia 5.0 na 5.0 2.8 3.7 5.3 QlS 0.4 -25 6.6 • 18.0 15,575
Malaysia 3.0 .. na 3.8 1.5 2.5 3.3 n 1.5 -5.1 3.9 -19.0 4.69
Pakistan nil na nil 23.1 30.8 6.3 21 0.2 -8.0 14.2 ttt -151 280
Philíppfnes 5.6 8.7 5.6 3.4 6.0 4.5 ¡ -2.8 -6.3 6.2 5.0 55.4
Singapore 2.2 Q4 4.8 1.1 2.9 4.8 2.0 4 19.8 -1.6 3.0 -8.0 1.33
South Korea 22 4 25 1.3 3.1 3.6 3.2 23 -2.9 33 -6.0 1,314
Taiwan 4.9 4 9.7 1.4 3.1 2.5 3.4 on 13.2 -0., 1.2 5.0 31.5 -2.7
Thailand 1.7 -23 1.9 -0.8 1.2 1.1 1.3 -2.7 2.8 35.0 35.7 -3.2
Argentina -0.8 113 -1.6 276 Fe> 133.5 5.7 -3.3 na na 850 -76.4
Brazll 2.1 -0.1 2.9 4.5 4.6 7.6 n �* -13 10.7 -223 4.98
Chile 0.6 1.3 nll 3.6 © 7.6 8.4 in\1; -3.4 5.7 14.0 943
Colombia 03 ..• 0.1 1.1 7.7 11.7 127 -3.4 -4.2 9.9 -255 3,908
Mexlco Q4 03 3.2 4.4 C'b 5.5 28 n -0.8 -3.3 9.2 28.0 16.7 12.2
Peru 0.9 -0.6 3.3 6.3 8.5 0.6 -2.8 6.9 -111 3.68 3.3
º'
Egypt na 3.8 33.9 6.9 � -6.4 na na 48.5 -36.2
Israel -4.6 � -20.7 1.7 2.6 4.2 3.2 n -4.1 4.2 49.0 3.64 -0.6
Saudi Arabia -0.8 202 na -0.9 23 5.1 Q3 -2.1 na na 3.75 n1I
South Africa 1.2 0.2 0.6 5.4 6.1 321 -2.0 -5 2 10.2 18.0 18.6 -2.0
�111 lt?: •10.,.r.>1 Art,dyl k:s.. •% cha11g on ¡,t vt 11.. <JU a, ter, ,11111ual rare, 11 hc• I conomíst lntel igerKr· Urut estimate/fc11ecast. lNol seaso11<1lly adjusted, � N,\w senes. ... Yc,\t end111g June. t 1t ,1tbl J months, 1!3 mouth mov111g
av1?rage. §§5 ) ear y, Id t 11 l)olla, denornínared bonds, Note E u ro area consume, pr ices are harmonlsed,

Markets Com mod ities

(,ló t ha11ge ou: % , ha11gP 011:
lnd � 011(> Dt..><: 2901 Ir ,d,• 01,e Dec79rh The Economlstcommodity-price index n cha11ge or,
In local currency M r1�lh woek 202! M1r 1 �rh w�k 202:\ 2020=100 M.ar 1 11 Mar 1llh' month year
United States S&P 500 5, 1653 1.2 8.3 Pakistán KSE 64,048.4 -2.4 26 Do llar lndex
U nited States NAScomp 16,177.8 0.9 7.8 Singapore STI 3, 160.7 0.8 -25 All ltems 126.4 1263
China Shanghai Comp 3,043.8 0.1 2.3 South Korea KOSPI 2,693.6 2.0 1.4 Food 132.4 134.8 1.0
China Shenzhen Cornp 1,768.6 2.7 Taiwan TWI 19,928.5 2.2 11.1 Industria Is
Japan Nikkel 225 38,696.0 .3.5 Thailand SET 1,384.5 1.0 -22 AII 121.5 1192 -3.0 -7.6
Japan Topix 2,648.5 -3.0 Argentina MERV 1,050,711.0 5.1 13.0 Non-food agnculturals 134.4 135.5 2.5 4.3
Britain FTSE 100 1,n2.2 1.2 Brazil 8VSP* 128,006.1 -0.7 -4.6 Meta Is 118.2 115.1 -4.6 -10.7
Canada S&P TSX 21,970.1 1.7 4.8 Mexko IPC 55,848.7 1.0 -27
Sterling lndex
Euro a rea EURO STOXX SO 5,000.5 1.7 10.6 Egypt EGX 30 31,013.9 43 24.6
Ali rtems 127.6 126.9 -2.5 -10.9
France CAC 40 8, 137.6 23 7.9 Israel TA-125 1,934.5 -2.7 2.5
Germany DA><* 17,961.4 1.4 7.2 Saudi Arabia Tadawul 12,723.2 tJ 63 Eurolndex
ltaly FTSE/MIB 33,885.4 1.6 11.6 South Afrlca JSE /J.5 74,258.6 0.9 -3.4 Ali iterns 1329 1322 -2.9 -7.8
Netherlands AEX 860.3 0.4 9.3 Wortd, dev'd MSCI 3,396.2 1.2 7.2 Gold
Spain IBEX35 10,560.5 3.6 4.5 Eme in markets MSCI 1,046.5 1.8 22 $ peroz 2,127.1 2, 163.1 8.4 13.6
Poland WIG 81,647.3 1.1 4.1
Brent
Russia RTS, $ terms 1, 1424 -0.8 5.4
$ per barrel 829 826 -0.5 6.5
Switterland SMI 11,790.5 2.1 5.9 US corporate bonds, spread over Treasunes
Turkey BIST 8,910.2 1.9 19.3 Dec 291h Sources: Hloo1111.J€rg; CM 1: úroup; Fasunarl.els; F1; LSEG Wo,t!>pace;
Australia Ali Ord. 7,989.5 n1I 2.0 B.1sls r, 11n1 s l,1t�I 202, LME; NZWoolSc1vires, S&P <;loba! Cornn1rxf1ty lnslghts; Th rnpsoo
lloyd & Cwart; Urner B.1rry; %J. �Provisf011al.
Hong Kong Hang Seng 17,082. 1 0.2 lnvestment grade 111 154
India BSE 72,761.9 -1.8 0.7 High-yield 360 502
Indonesia IDX 7,421.2 1.2 2.0 So líl . l!>t\.l vVorkspace; �tandard & Po r s GI bal ít1,ed lnc,11n" For more countríes and addltiooal data, visit
Malaysia KLSE 1,538.1 0.4 5.7 R�s are h. *'Total return 1ndP..x. economist.com/economic-and-financial-indicators
ª Obituary Toriyama Akira
1 The Economist March 16th 2024

time they were ali collected, the dragan granted one wish. Then it
scattered the balls again.
There was no reason why such a story shou Id ever end, and i t
hardly did. It ran for ten years in Shonen]ump, ñlling 42 volumes,
befare migrating to 153 anime TV episodes and to film. As it ran it
changed. Goku aged, becarne a father, acq uired greater powers and
took on more and more snarling enemies. He lost, even died, but
was revived, sti 11 wi th his orange gi and his shock of black hair,
whích turned blondas his power level rocketed to over 9,000 and
electricity blazed from his hands. The earlier volumes had part-
Iikeable villains and fights staged as tournaments, but by "Dragan
Ball Z" in 1989-96 ali-in brawls were exploding from almost every
page. Críes of Haya!!! Arghh!!! and HWOOOl! spiralled out of the
trames as the characters sprang to destroy each other. That crazed
action was what teenage boys in América, reading the comic
books or watchi ng on Toonami, especially seemed to go for.
His new fame and new wealth astonished Mr Toriyarna. Dr
slump's success was surprising enough, when the main star was
not the genius inventor with his crazy machines but Arale-chan, a
plurnp, shortsighted robot girl in blue dungarees. Now the whole
world had apparently gone mad for "Dragón Ball", which he had
thought up only to make Japanese boys happy. Fans of his work
found grand thernes there of friendship, kinship and hard work,
but he went only for fun, gags and kung-fu fighting, and seldom
sat down to draw with any idea of where the plot was going. He
made it upas he went along. The surest part of the exercise was the
perfect fit of the pen-holder in his hand, perfectly conveying to the
From strength to strength blank page his characters' next expression.
Manga had not been his first idea of how to spend his life. He
went into design, but it didn't suit hirn. By his early zos he was
broke, reduced to begging 500-yen notes from his mother. Since
that could not go on, and he was good at drawing, he tried manga.
On one level he loved it, letting his imagination rip unconfined.
But it was really rough, too. Working on Dr slurnp, he once pulled
Toriyama Akira, master of manga, died on March ist, aged 68
four all-nighters in a row to meet his relentless deadlines at Sl10-
E HAD LOST it again. It must have slipped down sornewhere, nen jump, even calling on his family to ink in the black bits. He
H between his papers and the low table he liked to work at. He
was so careless with his stuff-all his stuff. But this was urgent.
scarcely believed it was possible to do so rnuch drawing. That part
got easier: the colouring was soon done digitally, and eventually
With steadily rising anxiety, he rummaged through his office. No the characters left the page for the screen. But then new characters
sign. And yet he couldn't draw properly, therefore couldn't func- would come into his head to be thrown into even wilder adven-
tion, without ír. tures, into other universes, or through time. Goku's great wish was
It was his pen-holder he was looking for. His old wooden pen- to defeat ever-stronger enernies, one-on-one, so his creator pro-
holder, pinkish-cream and black. Nothing to look at. Over the vided them in numbers. None pleased hirn more than the Great
years he had worn it down with sharpening, sandpapering and Demon King Piccolo, Goku's first arch-enemy. Piccolo went
simply drawing manga, Japan's dynamic version of the graphic swathed in a white cloak, white turban and terminally brooding
novel. He had customised it, cutting the business end so that the look, but he carne good in the end, and saved the Earth.
nib went in deeper. Whenever it broke, he had fixed it. Of course Plenty of other projects flowed first from that peri-holder, in-
he had tried others, bu t he could n't get on with them. over thou- cluding "chrono Trigger" and designs for the video garue "Dragan
sands of pages, with that little scratching sound it made (he often Quest" Each anime or film (22 were based on his characters) was
used the worst paper), it had becorne his beloved and his friend. overseen by him. lt was hardly surprising, given his workload,
Toriyarna Akira's whole career was mapped out by it. He was 14 that he was a recluse. But that was his temperament anyway. With
when he bought it, randornly, sornewhere. It drew the first story friends he would laugh, joke and talk nonsense, but he had very
accepted by Weekly Shonen]ump, the best manga magazine, when few. Most were manga artists, as his wife Yoshimi was. Living out
he was 23, and the first one Shonen [ump serialised, "Wonder Is- in Kiyosu City, where he was born. rather than Nagoya, where he
land", For f ou r years from 1980 the pen-holder worked overti me on had his studio, he liked to play the rural hermit. His author por-
"Dr Slurnp", his first colour cornic, which when printed as a sepa- trait was a cartoon, usually smoking; his public persona becarne
rate vol Lime sold 35m copies in Japan. But far greater things were .. Robotoriyama", "Tori" for short, a cartoon cyborg with a gas mask
to come. In 1984, having retired Dr Slurnp, he introduced a charac- and grabber arrns. sometimes Tori would wear Goku's orange cos-
ter who, for the first time, carried manga successfu lly to the West tume, the sarne one that now graced a statue on a street in Tokyo,
and then across the globe. toyshops from Shanghai to Paris and Macy's Thanksgiving Parade.
That character was Son Goku, the greatest hero on Earth, and At other times he wore green coveralls, like a workman.
his story was "Dragan Ball". The plot was simple enough, based As a workman, he needed his special tools. Fans noticed that
loosely on a classic Chinese novel, "J ourney to the West", Goku was after he mislaid his old, precious pen-holder while finishing the
a human boy, but with oddities: a monkey's tail and extraordinary serial "sand Land" in 2000, losing it for good this time, he drew
strength. Rather than keep failing at his martial arts lessons, he manga much less. He explained the tragedy as his excuse for being
teamed up with a girl, Bulrna, who was on a quest to collect seven lazy. Yet perhaps it was a sign, nonetheless, that together they had
magic balls scattered over the Earth by a terrifying dragan. Each fought, and yelled, and leapt, and saved rnankind, just enough. •
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 THERE IS A BEAUTY THAT REMAINS
11

WITH US AFTER WE'VE STOPPED

LOOKING.'' CORYRICHARDS,
PHOTOGRAPHER ANO EXPLORER, WEARS THE
VACHERON CONSTANTIN OVERSEAS.

+ ONE OF
VACHERON CONSTANTIN NOT MANY.
GE NEVE