October 12th 2024

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The world this week
Politics
Business
The weekly cartoon
This week’s cover
The world this week

Politics
October 10th 2024

More than 5.5m people in Florida were told to evacuate ahead of Hurricane
Milton, the state’s second giant storm in two weeks. Milton was recorded as
the strongest hurricane to cross the Gulf of Mexico since 2005. It lost some
of its punch by the time it hit Florida’s west coast but still packed winds of
120mph (193kph). The biggest threat to coastal towns came from storm
surges, predicted to reach 12 feet (3.7 metres) in some places.

Donald Trump held a campaign rally in Butler, Pennsylvania, returning to

the site where he was hit by an assassin’s bullet in July. He was joined on
stage by an over-animated Elon Musk, who backs the Republican. Kamala
Harris still retains a small lead in the polls.

America’s Environmental Protection Agency toughened the rules on

exposure to lead in water, including more rigorous testing of drinking
water. The EPA wants all lead piping across America to be replaced within ten
years.

The iron lady

Claudia Sheinbaum, Mexico's new president, unveiled her strategy to tackle
violent crime. She plans to focus on improving intelligence and investigation
capabilities, as well as co-ordination between security forces, much as she
did as mayor of Mexico City. But tackling well-armed criminal gangs across
the country will be a far harder task.

Near-starvation conditions in Haiti are forcing more young boys to join the
criminal gangs that in effect control the country, according to Human Rights
Watch. Its report came a few days after the UN said that an attack by the
notorious Gran Grif gang on the town of Pont Sondé had killed 70 people.

Meanwhile, the Haitian government roundly criticised the decision by the

neighbouring Dominican Republic to send Haitians who live there illegally
back across the border. The Dominicans plan to deport 10,000 migrants a
week. Haiti’s foreign minister described scenes of Haitians being rounded up
as “brutal” and “an affront to human dignity”.

Brazilians elected over 5,500 mayors and tens of thousands of city

councillors in local elections. Centre-right and right-wing parties were the
winners, with incumbents being re-elected in most municipalities. Though
local concerns dominated the elections, the results are considered a
bellwether for national sentiment. The party of the left-wing president, Luiz
Inácio Lula da Silva, did poorly.

The first legislative election in a decade in the Indian area of Jammu &
Kashmir was won by the National Conference, a regional party aligned with
Congress, the main opposition party at federal level. An election in the state
of Haryana was won by the governing Bharatiya Janata Party, a much-
needed boost for the prime minister, Narendra Modi. Its victory was a
surprise; polling had put Congress well ahead.

Two Chinese engineers were killed in a suicide-attack in Karachi. The

Balochistan Liberation Army, which wants to separate the province from
Pakistan, claimed responsibility. In the past it has attacked Chinese
nationals who work on development projects, claiming locals are not being
fairly compensated.

Russia attacked Ukraine’s Black Sea port of Odessa again, damaging two
ships in separate strikes. Ukraine said Russia was trying to “disrupt the
successful work” of its grain-exports corridor. Russia also targeted Kyiv
with a barrage of drones, most of which were shot down. Meanwhile,
Russian forces closed in on Toretsk, another front-line town in east Ukraine,
a week after the fall of Vuhledar.

Russian-intelligence agents have been trying to cause “mayhem” across

Britain and Europe, according to Ken McCallum, the director-general of
Britain’s MI5. Around 750 Russian diplomats have been expelled from Europe
since the start of Russia’s invasion of Ukraine in February 2022, most of
them spies. Mr McCallum said Iran had also stepped up its attempts to cause
disruption. As well as terrorism, MI5 now contends with “state-backed
assassination and sabotage plots”.

In a video address directed at the Lebanese people Binyamin Netanyahu,

Israel’s prime minister, said they should free their country from Hizbullah
to avoid “destruction and suffering like we see in Gaza”. Meanwhile,
fighting between Israel and the Iranian-backed militia intensified, and Israeli
air strikes on Beirut and southern Lebanon continued. Lebanon says more
than 1.2m people have been displaced.
Israel marked the first anniversary of the Hamas attacks of October 7th
2023. The government produced a pre-recorded broadcast. Families of the
victims of the attacks and the hostages in Gaza, many of whom had refused
to take part in the government event, held their own memorial.

Kais Saied, the president of Tunisia, won re-election in a landslide with

more than 90% of the vote. Only two candidates were allowed to stand
against him and only 29% of the electorate turned out. Mr Saied’s nearest
challenger was sentenced to 12 years in prison for falsifying documents just
five days before the poll.

Taye Atske Selassie was appointed Ethiopia’s president after Sahle-Work

Zewde, Ethiopia’s first female head of state, resigned. She had reportedly
fallen out with the prime minister, Abiy Ahmed. It is the latest sign of
disquiet within the government. Ms Sahle-Work’s appointment in 2018 was
seen as evidence of the prime minister’s liberal instincts. However, creeping
authoritarianism has since stained his record.

Counting began in Mozambique’s election to choose a successor for

President Filipe Nyusi, who is stepping down after two terms. The most
likely winner is Daniel Chapo, Mr Nyusi’s hand-picked successor, of the
Frelimo party, which has ruled Mozambique since independence from
Portugal in 1975.

Britain’s prime minister, Sir Keir Starmer, lost his chief of staff just three
months after taking office. Sue Gray was a senior long-serving civil servant
before joining Sir Keir’s team. Her resignation came after weeks of
headlines about controversial donations from a Labour peer, the level of her
salary and briefings that her management style was delaying government
decisions.

The British government was criticised by opposition politicians for its

decision to hand sovereignty of the Chagos Islands to Mauritius. Under the
agreement Britain retains a lease of the military base on Diego Garcia, a
vital hub in the Indian Ocean for far-flung American operations. But critics
question how secure that arrangement will be once Mauritius takes over.

Ayes to the right

The race to become the Conservative Party’s new leader was whittled
down to Kemi Badenoch, an outspoken anti-wokeist, and Robert Jenrick,
who takes a hard line on immigration. Tory MPs discarded other, more centrist
candidates. Conservative rank-and-file members get to choose between the
final two, with a result on November 2nd.
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The world this week

Business
October 10th 2024

America’s Department of Justice laid out its proposals for how to deal with
Google, after a court in August found that the company had acted illegally to
maintain a monopoly in internet search. In a filing to the court the
government said the options it is considering include “behavioural and
structural remedies” that would stop Google from using products such as
Chrome, Play and Android to give it an advantage in search over rivals—in
effect, a break-up of Google. Another option is forcing Google to share
users’ search data with rivals. Google said the proposals were a threat to
American competitiveness. The judge in the case won’t issue his
recommendation until August.

What goes up…

Chinese stockmarkets fell back to earth with a bang, when a meeting of
economic officials produced no additional stimulus on top of the measures
that were recently rolled out. The blue-chip CSI 300 and Shanghai Composite fell
by roughly 7% in a day, their biggest daily declines since the start of the
pandemic. Investors are hoping that a briefing from the ministry of finance
on October 12th will provide clues about any further stimulus.

X was restored in Brazil, after Elon Musk relented in his fight with the
country’s Supreme Court and agreed to remove content that the court has
deemed to be extremist from his social-media platform. X is paying millions
of dollars in fines, while the court is unfreezing assets belonging to X and
Starlink, Mr Musk’s satellite-based internet provider.

Rio Tinto agreed to buy Arcadium Lithium for $6.7bn, the biggest
takeover to date of a lithium miner. The deal will make Rio Tinto one of the
world’s largest producers of the metal, which is an important element in the
manufacture of electric cars. Arcadium’s customers include Tesla and
General Motors.

Chevron said it was selling its assets in Canada’s tar sands to Canadian
Natural Resources for $6.5bn. Deal-making has been rife in Canada’s oil-
rich western regions since operations in the expanded Trans Mountain
pipeline began in May, boosting shipments of Albertan oil along the west
coast and to Asia.
American employers added 254,000 jobs to the payrolls in September, a
higher number than markets were expecting. That caused investors to bet
that the next interest-rate cut from the Federal Reserve will be smaller than
September’s half a percentage point reduction, as it glides the economy
towards a “soft landing”.

New Zealand’s central bank cut its main interest rate by half a percentage
point, to 4.75%, following a quarter-point reduction in August. The
economy contracted in the second quarter. An even bigger rate cut is
expected next month.

Oil prices remained volatile amid speculation that Israel may strike at Iran’s
energy infrastructure and worries about hurricanes in America’s oil-
producing Gulf region. Brent crude surged above $80 a barrel, its highest
price since August, before pulling back.

Germany’s economy is now expected to shrink by 0.2% in 2024, according

to the government, which would be the second consecutive year of
contraction. It is forecast to grow by 1.1% in 2025.

Talks between Boeing and striking workers at its west-coast factories turned
sour, as the company withdrew its pay offer and accused the union of not
taking the negotiations seriously. The month-long strike is hampering
Boeing’s recovery from a series of production setbacks. It delivered 33
aircraft in September, down from 40 in August.

Ports on America’s east and Gulf coasts opened for business again, after
dockworkers ended their strike. Employers reportedly increased their pay-
rise offer from 50% to 62% to get the workers to return.

China imposed anti-dumping measures on imports of brandy from the

European Union, a tit-for-tat move in reaction to the EU’s planned tariffs on
Chinese electric vehicles. The share prices of LVMH, which owns Hennessy
cognac, and other brandy-makers fell sharply. The EU’s member states have
voted to move ahead with the tariffs, despite the objections of Germany.
China has described the duties as “unfair, non-compliant and unreasonable
protectionist practices”.

Tributes were paid to Ratan Tata, one of India’s most high-profile

businessmen, who died at the age of 86. Mr Tata became chairman of Tata
Group in 1991, expanding the conglomerate’s ambitions abroad, buying
Jaguar Land Rover in 2008. He was one of the drivers behind the Tata Nano,
a cheap microcar, but it was a flop in India. Mr Tata once lamented the
business environment in his home country, saying “I’ve often felt that the
Indian tiger has not been unleashed.”

Dear valued investors

Samsung Electronics issued a public apology for not meeting expectations
on performance and for the sense of crisis gripping the company. The South
Korean firm has fallen behind the likes of Micron and SK Hynix in supplying
chips for artificial intelligence. Its estimate of profit for the third quarter has
come in well below forecasts. “Respected customers, investors, and
employees,” Samsung said in an open letter, “these are testing times.”
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The world this week

The weekly cartoon

October 10th 2024

Dig deeper into the subject of this week’s cartoon:

The Sue Gray saga casts doubt on Keir Starmer’s managerial chops
The sinking feeling caused by Labour’s clumsy start
Inside the chaos machine of British politics

The editorial cartoon appears weekly in The Economist. You can see last
week’s here.
This article was downloaded by zlibrary from https://www.economist.com/the-world-this-week/2024/10/10/the-weekly-cartoon
The world this week | The Economist

This week’s cover

How we saw the world
October 10th 2024

THE CHOICE facing America in less than a month will not be made by
voters weighing rival sets of policies. Kamala Harris’s plans lack detail;
Donald Trump’s are sometimes untethered from reality—and in any case
divisions over culture motivate voters more than tax policy. Yet the choice
matters hugely in policy terms, for America and the rest of the world. This
aspect of the election has been under-covered relative to fantasies about
what Haitian migrants in Ohio have for lunch. In our worldwide cover this
week, we look at the areas where we think the election will make the most
difference. In a series of eight policy briefs, we find that whoever gets to 270
electoral-college votes on November 5th, Mr Trump’s ideas will win. He,
not Ms Harris, has set the terms of this contest. From immigration to trade
and energy, American policy has become thoroughly Trumpified.
Leader: The Trumpification of American policy

Policy briefs:

Trade
Tax
Immigration
Energy and environment
Defence spending
Ukraine
The Middle East
China
This article was downloaded by zlibrary from https://www.economist.com/the-world-this-week/2024/10/10/this-weeks-cover
Leaders
The Trumpification of American policy
How Florida should respond to Hurricane Milton
How high could the oil price go?
The front line of the tech war is in Asia
Britain should not hand the Chagos Islands to Mauritius
Leaders | An echo and a choice

The Trumpification of American policy

No matter who wins in November, Donald Trump has redefined both
parties’ agendas
October 10th 2024

THE CHOICE facing America in less than a month will not be made by
voters weighing rival sets of policies. Kamala Harris’s plans lack detail;
Donald Trump’s are sometimes untethered from reality—and in any case
divisions over culture motivate voters more than tax policy. Yet the choice
matters hugely in policy terms, for America and the rest of the world. This
aspect of the election has been under-covered relative to fantasies about
what Haitian migrants in Ohio have for lunch. Our current issue, which
contains eight concise policy briefs on the areas where we think the election
will make the most difference, is intended as an antidote to that.

Our list is selective: we have left out subjects where the contrast between the
two candidates is stark, but which have no direct bearing on public policy.
These include the candidates’ characters, what the election would mean for
institutions and even for American democracy. Nor have we included
abortion, where the candidates’ different views are unlikely to translate into
markedly different policies thanks to a Congress that neither party is likely
to dominate. Strip those things out, important as they are, focus on policies
that are in the president’s gift instead, and the result is surprising. Whoever
gets to 270 electoral-college votes on November 5th, Mr Trump’s ideas will
win. He, not Ms Harris, has set the terms of this contest. American policy
has become thoroughly Trumpified.

Take Ms Harris’s domestic platform. Her immigration policy is to endorse

the most conservative bipartisan reform proposal this century. Its provisions
include shutting down asylum applications when the flow of irregular
migrants is high. Her trade policy involves keeping, in modified form, most
of the tariffs Mr Trump imposed in his first term. On tax, Ms Harris would
keep most of the cuts Mr Trump signed in 2017 (raising rates only for those
who earn over $400,000). On energy, she has become a convert to fracking
and has been part of an administration that has seen America pump more oil
and gas than ever before. Because America is so partisan, and Mr Trump is
such a polarising figure, Ms Harris has been able to borrow parts of Mr
Trump’s first-term agenda without most people noticing.

Read our eight policy briefs on the consequences of the 2024 election:

Trade
Tax
Immigration
Energy and environment
Defence spending
Ukraine
The Middle East
China

This policy-poaching makes political sense. Mr Trump moved onto

Democrats’ turf first, love-bombing trade unions and scrapping Republican
plans to trim public spending on pensions and health care. Because the
election will be fought in six or seven swing states, all of which were a
couple of percentage points more Republican than the national average in
2020, Ms Harris’s quiet adoption of Trumpier positions could help her win.
Yet the result is that a candidate who lost the last election, whose party was
trounced in the 2018 midterms—a candidate who has never won the popular
vote and probably never will—has remade American policy in his image.

The same is true in foreign policy. The two candidates have different
approaches: one is built on values and alliances; the other on asking what the
world can do for America. If Mr Trump wins, nervous speculation over
America’s commitment to NATO will come back; with Ms Harris it is not in
doubt. Yet there is surprising overlap. Mr Trump adopted a more
confrontational approach to China than any recent president, even if his
policies were in practice less scary than they sounded. The administration
Ms Harris has been part of has been less verbally antagonistic but tougher in
practice, banning technology exports to China and placing huge tariffs on
imports of Chinese electric vehicles. On the Middle East, Ms Harris has not
let Mr Trump outflank her on the right, despite pressure from within her own
party to cut arms supplies to Israel. Nor does she seem in a hurry to revive
the deal with Iran that Mr Trump tore up; this week she called the Islamist
regime America’s greatest adversary. Here too, Mr Trump has set the terms.

Support for Ukraine is where the gap seems widest. Ms Harris has been part
of an administration that has led the Western effort to help Ukraine defend
itself against Russia’s unprovoked invasion. She would continue to supply
Ukraine with arms and cash, as long as Congress let her do so. Mr Trump’s
policy is extraordinarily vague: he says only that the war would not have
broken out on his watch and that he would end it swiftly. He does not say
how, and his refusal to say which side he would like to win adds to fears that
he would urge Ukraine to settle on Russia’s terms. Such a catastrophic
betrayal is not certain, however. Even Mr Trump may worry that letting
Russian tanks roll over more of Ukraine would make him look weak.

A choice and an echo

The second thing that is clear from our policy briefs is that while Ms Harris
has moved towards the Donald Trump of the first term, Mr Trump has
become more extreme, even compared with his prior self. On trade he said
earlier this year he favoured a 10% universal tariff on imports and has now
upped that to 20%. He wants a tariff of 60% on all Chinese imports. On tax
he now wants to cut everything in sight, making all the 2017 cuts permanent
and reducing corporate taxes further. The Committee for a Responsible
Federal Budget reckons that his plans would add twice the amount to the
national debt that Ms Harris’s would (and hers are hardly restrained). On
immigration, 2024 Trump is more extreme than 2016 Trump. He always
needs a new big promise, and this time it is not merely a wall but mass
deportation. Some of his policies are extreme by omission: he has no
discernible plan for reducing CO2 emissions, or for helping the country adapt
to climate change.

Next week we will look more closely at how the two candidates’ policies
might affect the economy. For all Mr Trump’s claims that President Joe
Biden has “destroyed” it, America’s economy is currently the envy of the
world. Yet it is striking how little faith either candidate places in the things
that made it great, such as openness to trade, talent and competition .
Clearly, Ms Harris would not seek to shut America off as vigorously as Mr
Trump would. But whoever wins in November, the Trumpification of
American policy seems likely to continue. ■

For subscribers only: to see how we design each week’s cover, sign up to our
weekly Cover Story newsletter.
This article was downloaded by zlibrary from https://www.economist.com/leaders/2024/10/10/the-trumpification-of-american-policy
Leaders | Paradise lashed

How Florida should respond to Hurricane Milton

Storms like it raise uncomfortable questions about the state’s future
October 9th 2024

The number of deaths caused by Hurricane Milton, which struck the west
coast of Florida on October 9th, will not be tallied until days after the storm
has swept over the peninsula and headed out into the Atlantic. The amount
of damage done will not be clear until well after the waters subside from the
areas it flooded. How Florida and other storm-prone places will adapt to
climate change is also unclear. But adapt they must.

Global warming is not making hurricanes more frequent. It is, however,

adding to what makes them destructive. Experts see evidence of human
influence in the fact that their winds are more often exceeding 208
kilometres per hour (112 knots), the speed at which a storm graduates to the
fourth of the five levels on the Saffir-Simpson scale, which is used to give a
sense of the damage in store. And the speeds often pick up at a breathtaking
rate. On October 7th Milton went from not being a hurricane at all to having
wind speeds of over 250kph in under 25 hours.

The physics behind the dangers posed is simple. A warmer world has
warmer seas; more heat stored in those seas means there is more energy
available to drive hurricanes. A warmer world also has warmer air; warmer
air can absorb more water vapour, which means heavier rains on the land
over which hurricanes pass. And a warmer world has less ice, and thus
higher sea levels; higher sea levels worsen the storm surges pushed inland
by a hurricane’s winds.

There are differences of opinion over the degree to which these trends are
already discernible. But the waters of the western Gulf of Mexico, over
which Milton formed, are at a remarkable 31°C (88°F). Helene, which hit
the Florida panhandle as a category 4 hurricane on September 26th before
going on to cause deadly floods in Georgia, the Carolinas and southern
Appalachia, underwent a striking intensification as it passed over very hot
water in the Gulf shortly before landfall. The damage its torrential rains did
inland was not unprecedented; the floods which wrecked Asheville, North
Carolina, in 1916 were also due to a hurricane (in fact, to a pair of them).
But the sheer amount of water that fell from the sky this time was biblical:
something like 100 billion tonnes.

Most Americans are not insured against such hammer blows. Private
companies do not offer flood insurance, and few homeowners buy the
coverage on offer from the federal government unless they are required to by
dint of living on a flood plain. That is why, though the damage done by
Helene has been estimated at $250bn, insurers are on the hook for less than
6% of that amount.

More people are insured against flooding in Florida; Milton will cost the
government scheme a lot. The damage done by winds can be insured against
privately. Premiums, as you might expect, are pricey; that said, the number
of insurers that go out of business suggests they are not pricey enough. The
result is that the state government both offers its own subsidised insurance
and ends up bailing out those affected when other insurers go broke.
Proper insurance coverage, coupled with a firm adherence to the relevant
hurricane-aware building codes (descended from those laid down when
Herbert Saffir of Saffir-Simpson-scale fame was a county engineer in South
Florida) could help make Florida more resilient. They would cost a lot. But
if those costs are not borne by Floridians through a mixture of premiums,
taxes and mandatory renovations to bring buildings up to code, they will
either be passed to the federal government or they will not be paid, and the
situation will deteriorate. It would be fairer if those who enjoy the delights
of living in Florida shoulder the bulk of the costs. Those who do not want to
may opt to live somewhere else. Hard choices like this will proliferate as the
world keeps warming. ■

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which brings together the best of our leaders, columns, guest essays and
reader correspondence.
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hurricane-milton
Leaders | Shock horror

How high could the oil price go?

Geopolitical risk is rising. But so is the supply of oil
October 10th 2024

All around the world consumers, motorists and politicians are nervously
eyeing the oil price. The conflict between Israel and Hamas that began a
year ago is spreading. If all-out war erupts between Israel and Iran, the threat
to the Middle East, a region that produces a third of the world’s crude, is as
obvious as it is scary. Few commodities affect the global economy as much
as oil does. And, as America’s presidential candidates are keenly aware, few
are as likely to sway an election. The past two years of inflation have shown
just how much voters hate sticker shock.

The price of oil rose by 10% in a week, as Israel attacked Hizbullah, a

Lebanese militia backed by Iran, and Iran retaliated with around 200
missiles fired directly at Israel. On October 7th it reached $81 a barrel,
before falling. Two and a half years ago Russia’s invasion of Ukraine sent
oil prices surging beyond $120, as the West imposed sanctions on Russia
and fears intensified of disruptions to the supply from the world’s second-
biggest exporter. What could happen this time? If the fighting gets worse, a
serious oil shock is possible. But a glut of supply means the oil market is
less vulnerable to such a shock than it was in 2022.

As we published this, Israel had yet to retaliate against Iran. On October 3rd
Joe Biden, America’s president, jolted the market when he hinted that Iran’s
oil infrastructure might be in Israel’s cross-hairs. However, that is only one
of many possible targets. And even if Iran’s oil output were disrupted, it is
not as big a producer as Russia. It exports nearly 2m barrels per day (bpd),
about 2% of the global supply. By comparison, Russia exports nearly 5m
bpd.

The global picture, too, is markedly different from 2022. When Russia
invaded Ukraine oil was in short supply and demand was roaring back, as
the world’s economies came out of covid lockdowns. The market was ripe
for an upset. Today the world is swimming in oil. The Organisation of the
Petroleum Exporting Countries (OPEC) and its allies, spearheaded by Saudi
Arabia, had sought to keep prices high by pumping less. But that plan has
failed, fuelling indiscipline and cheating by other members. Now it is being
abandoned, with the cartel promising to increase output in December.

Even Saudi Arabia, which is desperate for higher prices to finance its gaudy
spending plans at home, is throwing in the towel. It has reportedly dropped
its price “target” of $100 a barrel, so that it can at least shore up its market
share. OPEC and its allies have spare capacity of more than 5m bpd; Saudi
Arabia alone could ramp up production by 3m.

’s squabbles mask a more fundamental shift. Nearly 60% of the world’s

OPEC

oil now comes from countries other than the cartel and its allies, up from
44% in 2019. America’s shalemen have become the biggest producers in the
world by far. Brazil, Canada and Guyana have all increased their output in
recent years. According to the International Energy Agency, production by
non-OPEC countries will grow by 1.5m bpd next year.

At the same time, demand for oil has been tepid. After their post-pandemic
bounce-back, the economies of America and Europe are slowing down as
past interest-rate increases start to bite. China’s economy is struggling under
the weight of its property slump. On October 8th America’s Energy
Information Administration revised down its forecast for global oil demand
in 2025 as a result of weakening manufacturing activity around the world.
Before the latest escalation in the Middle East, oil traders had expected a
glut in 2025 as a consequence of weakening demand growth and expanding
supply, pushing prices below $70 a barrel.

Today’s ample supply provides a shield against geopolitical shocks, but not
an impregnable one. If Israel were to hit Iran’s own oil infrastructure, Iran
could attack oil producers that have signed economic accords with Israel,
such as Bahrain or the United Arab Emirates. Or it could block the Strait of
Hormuz, through which much of the Gulf’s oil travels. That might push the
oil price close to its highs of 2022.

Iran’s theocratic rulers would be foolish to take such actions, which could
draw America into the conflict and infuriate Iran’s few remaining friends,
such as China, the world’s biggest oil importer. But in the Middle East,
nightmare scenarios can never quite be ruled out. Because oil production is
still concentrated in a handful of countries, the supply remains vulnerable to
the reckless decisions of a few autocrats. Thanks to rising global production
and weakening demand, however, the market is better cushioned than it has
been before. ■

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which brings together the best of our leaders, columns, guest essays and
reader correspondence.
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Leaders | A sting in the tail

The front line of the tech war is in Asia

The two superpowers are vying for influence. China will not necessarily
win
October 10th 2024

A TECHNOLOGY tussle between the two superpowers is never far away. This week
the Wall Street Journal reported a breach of American telecoms networks by
a Chinese hacking group known as “Salt Typhoon”, which was seemingly
intended to glean knowledge about American wiretapping activities. In both
countries, deep mistrust has led to a policy of shunning the other’s digital
infrastructure. Uncle Sam bars Huawei, a Chinese firm, from installing its
telecoms kit in America; China discourages the sale of Silicon Valley’s
servers and cloud-computing products within its borders.

Yet in much of the world American and Chinese infrastructure—the data

centres, undersea cables and wires that underpin the internet—sit side by
side, as the two countries compete for market share, profits and geopolitical
clout. The fiercest contest is in Asia. There the presence of Chinese digital-
infrastructure firms is already substantial. Some 18% of all new subsea
cables worldwide in the past four years have been built by a single mainland
firm, many criss-crossing Asia. Alibaba’s cloud operation is active in nine
Asian countries and Huawei has built many mobile networks.

China’s success partly reflects a government plan. Its Digital Silk Road
strategy, a branch of President Xi Jinping’s Belt and Road initiative, aims to
dominate the region’s internet plumbing. It helps, too, that Chinese firms are
innovative and cheaper than American ones, though some are aided by
hidden subsidies from the government. By one estimate Chinese cloud
services cost 40% less than American-run ones.

If China came to dominate Asia’s digital infrastructure, the consequences

would be profound. Its ruling Communist Party wants to set the norms that
govern data and the internet. China’s pull within the world’s technical
standard-setting bodies has grown and it has promoted a vision of “data
sovereignty”, under which governments control information and make sure
it is stored locally, so nothing can escape the state’s grasp.

Digital dilemma
Worse, Chinese-run digital infrastructure could expose Asian countries to
the risks of snooping and sabotage. Some governments are complacent about
this. They should not be. Chinese hackers have stolen intelligence on the
South China Sea from the Philippines, and have targeted Malaysia’s
Kasawari gasfield, which is in waters that China claims.

When mobile-telecoms networks were being built in the 2000s, two Chinese
firms, Huawei and ZTE, soundly defeated their American and European rivals
in Asia. But that does not mean Chinese firms will necessarily win the battle
to supply the next generation of digital infrastructure. The investment cycle
has barely started. Tech firms will be investing tens of billions of dollars
annually in data centres in Asia for years to come. And the picture is far
from uniform. One study finds that China dominates cloud-computing hubs
in five of 12 Asian countries, America leads in five and they are neck and
neck in two. Some countries, including India, have recently grown warier of
the security risk posed by Chinese firms.

To prevail, America should focus on three priorities. The first is to get

tougher with its treaty allies which have become wholly reliant on China, in
particular Thailand and the Philippines. The latter is intensifying its military
links with America even as its digital infrastructure is vulnerable, which
makes little sense. Some countries, such as Pakistan and Cambodia, have
ceded digital sovereignty to China and are lost causes.

Second, America should aim to develop an Asian alliance for cyber-security

and artificial intelligence. In 2017 Donald Trump abandoned an ambitious
regional trade deal, the Trans-Pacific Partnership, that would have governed
digital commerce among many other things. Reviving that will be
impossible, due to America’s protectionist turn, but a narrower agreement
could plausibly be struck with some countries, giving them access to
American technology in return for assurances of heightened caution over
Chinese security risks.

Last, America’s intelligence agencies could shed more light on Chinese

cyber-shenanigans. Public knowledge about the scale of Chinese snooping
and hacking is limited. It is time to raise awareness that cheap Chinese
digital infrastructure has a sting in its tail. ■

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asia
Leaders | A bad deal

Britain should not hand the Chagos Islands to

Mauritius
Once again, the Chagossians have been denied a say
October 9th 2024

The Chagos Islands are the site of one of the shabbier episodes from the
period when Britain gave up its empire. Their 1,500 or so inhabitants, the
Chagossians, were forcibly expelled in the 1960s and 1970s to make way for
an American military base on the atoll of Diego Garcia. British authorities
blocked families returning from trips, cut off the supply of teachers and
doctors, gassed the islanders’ dogs and eventually deported anyone still left.

The British government unsurprisingly wants to draw a line under that sorry
history. On October 3rd it announced plans to cede sovereignty over the
islands to Mauritius. But the deal is a mistake. It mishandles Britain’s
historical obligations and the West’s future military needs in favour of a
debatable territorial claim.

A proper reckoning would start with the Chagossians themselves. Initially

they were deported to Mauritius and the Seychelles, where they faced
poverty and racism. Britain eventually offered them citizenship. Today many
live in Crawley, near Gatwick airport. Little attempt has been made to
formally canvass Chagossian opinion, but Peter Lamb, the local MP, says he
has not heard a single voice in favour of Mauritian sovereignty.

Mauritius itself has suggested that only Chagossians with Mauritian

passports will be able to resettle, locking out those now in Britain or the
Seychelles. Some Chagossians in Mauritius may well support the deal, but
knowing for sure is impossible: Mauritius has criminalised questioning its
claim to sovereignty over the islands. This saga began by disregarding the
wishes of Chagossians; it looks set to end that way, too.

Mauritius’s case is hardly watertight. The crux of its claim is a non-binding

opinion by the International Court of Justice (ICJ) saying that Britain violated
international law in separating the Chagos Islands from Mauritius before its
own independence. That principle may be sound in general but it is weak in
this instance. Britain administered the territories together between 1903 and
1965, but they share no other history.

Backers of the deal in Britain say the status of the Chagos Islands was
becoming a diplomatic headache. America was worried that the ICJ could one
day issue a binding ruling, throwing the future of the base on Diego Garcia
into doubt. But a binding decision would require Britain to agree to ICJ
adjudication (Britain’s blanket ICJ consent does not apply to current or former
Commonwealth members like Mauritius). As for the argument that ceding
the islands will help win over the global south to worthy causes such as
backing Ukraine, that requires a heroically naive belief in soft power.

Giving away sovereignty over Diego Garcia is a bigger risk. The base will
remain in British hands and under American control for the term of a 99-
year lease struck with Mauritius; America would not have signed off on the
agreement without safeguards against immediate threats of espionage. But
Diego Garcia will be hostage to the whims of future Mauritian governments.
Though far from a Chinese proxy, Mauritius has substantial trade links with
China. It also is an ally of India, whose foreign policy could diverge
materially from the West’s in the coming decades. Britain’s experience with
Hong Kong, where China has flagrantly disregarded its post-handover treaty
commitments, should give some pause.

At a minimum, Britain should use its remaining leverage—like the payments

it has agreed to make to Mauritius—to guarantee resettlement rights on the
islands for non-Mauritian Chagossians and to firm up guardrails against
interference with Diego Garcia. Better still would be for members of
Britain’s Parliament to vote against this deal and push instead for a
settlement that would maintain sovereignty over Diego Garcia and lay the
ground for a referendum among the Chagossians on the future of the other
islands. This agreement manages to worsen the West’s military position
while compounding a colonial-era wrong. Britain should think again. ■

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islands-to-mauritius
Letters
Letters to the editor
Letters | On Ukraine, policing, food chains, European reforms, kindness, the
Labour government, martinis

Letters to the editor

A selection of correspondence
October 10th 2024

Letters are welcome via email to letters@economist.com

More support for Ukraine

Regarding Ukraine’s “declining fortunes” in the war with Russia, (“Crunch
time”, September 28th), Europe and America could do much more to
support the country’s military objectives. Ukraine’s offensive in 2023 was a
disappointment, but we should remember that it was delayed by the West’s
failure to supply weapons and ammunition to Ukraine in a timely manner,
giving Russia time to dig in.
Ever since Russia’s initial invasion in 2014, the West has been half-hearted
in supporting Ukraine. For eight years we demonstrated our spinelessness.
Russia may have been surprised by the extent of the West’s sanctions in
2022, but was vindicated by the weakness of our military response.

By failing to ensure total Ukrainian victory we are abetting Russian

imperialism.
KENNETH AFFLECK

New Westminster, Canada

When I was in NATO’s headquarters in Kabul, a belief emerged that negotiations

with the Taliban would inevitably produce a lasting peace deal. It never
emerged. The very hope that a deal was possible and just required a bit more
pressure on the Taliban’s leadership distracted us from recognising that the
militants had completely undermined the state apparatus in rural
Afghanistan. The Taliban knew they had the momentum and negotiations
just served as a tool for their final victory.

Hoping for negotiations is not a strategy. We are long past the age of limited,
cabinet wars. For over a century, large wars have ended either with a return
to the status quo or a decisive victory. Unless Mr Putin clearly faces defeat
he will not be pressed into a reasonable peace. Any deal he would accept
would serve only as a means for the eventual subjugation of Ukraine. He
needs to see that continuing the conflict with Ukraine will exhaust Russia
and risk the collapse of his regime. Attempting half-measures will just give
him succour, prolong the conflict and enable his dreams of imperial
conquest.

There is no substitute for victory.

MAJOR ROBERT ROSE

Adviser Team Leader

United States Army
Karlovo, Bulgaria
The police can matter
Concerning the decline of murder in Boston (“Wicked safe”, September
14th), the close relationship between the police and “violence-interruption”
groups that work with young men and women, leading to successful crime
reduction, is no fluke peculiar to the city. Five decades of rigorous policing
research confirms that approaches that are proactive and preventive, place-
based, bespoke and problem-oriented, and that engage the community, can
significantly reduce crime without damaging community-police relations.
This is especially so when laser-focused on crime hot spots and high-risk
individuals. The devil is in the detail.

How police implement and institutionalise high-quality, evidence-based

approaches into everyday patrol and investigative activities matters to
achieving both public safety and police legitimacy. As with medical science,
policing research does have some solid specifics about how to achieve these
goals. More attention should be paid to this than unproven best guesses
about police reform.
PROFESSOR CYNTHIA LUM

Director
Centre for Evidence-Based Crime Policy
George Mason University
Fairfax, Virginia

Taking control of our food

Bill Gates is entirely correct in saying that “feeding children properly” is
crucial for our future (By Invitation, September 17th). Human time, energy,
talents and capacity are a scarce resource that we need to nurture to tackle
the multiple crises our societies face. But the solution does not lie with
supplements or “fortifying bouillon cubes”. Rather it demands fixing our
broken food system, ending the dominance of a handful of giant companies
across the food chain, restoring local food systems and crop diversity, and
ending the food waste and environmental disaster that is factory farming.

You could call it food sovereignty, or food democracy.

NATALIE BENNETT

Green Party
House of Lords
London

COP29 in Azerbaijan
The suggestion that hosting the biggest international event in Azerbaijan’s
history is somehow aimed at distracting attention from our government is
farcical (By invitation, September 26th). On the contrary, by hosting the
world’s leading international UN climate summit, Azerbaijan is inviting more
international scrutiny to our country than ever before, and we welcome it.

Equally farcical is the suggestion that Azerbaijan updating its infrastructure

in advance of such an enormous event is somehow akin to a “Potemkin
village”. Of course, every country that has ever hosted a COP summit has done
precisely the same.

Our hosting of COP29 was not planned. It was the unexpected outcome of
unprecedented bilateral peace talks with Armenia, which had previously
publicly announced that it would veto our bid.

This is why we are calling for a COP truce based on the Olympic truces. That
may sound ambitious given what is going on in the world, but after our
hosting of COP occurred through an agreement few ever thought possible it
would be a mistake for us not to try.

Readers of The Economist should also know that freedom of speech and
expression will be encouraged, and on display in full at COP29. No agreement
that is reached without its spirit can be worthy of its name.
RAMID NAMAZOV

Member of the National Assembly of Azerbaijan from the New Azerbaijan

Party
Baku
Pushing for European reform
Since the publication of Mario Draghi’s report on Europe’s future
competitiveness much of the analysis has focused on his call for an
additional €800bn ($878bn) annual investment to drive the strategy
(“Mario’s mixed message”, September 14th). But it would do the author a
disservice and jeopardise Europe’s economic revival if policymakers were to
concentrate solely on this aspect. The reality is even grimmer.

Europe is in its worst position relative to other regions of the world since the
late 1960s. To facilitate investment the elusive capital-markets union project
must become a priority in order to boost the large-scale ventures that Europe
needs. Enabling the easy flow of private capital across the European Union
will help enormously.

The European Commission should also tackle the cumulative stockpile of

overlapping regulatory requirements, many of which originate from ill-
conceived or poorly implemented EU legislation. Environmental, social and
governance goals are laudable, but the additional regulatory burden is
unacceptable to smaller-sized companies. Making a start on minimising this
burden would offer swift relief.
Political commitment is a crucial factor if the Draghi report is to evolve into
the competitiveness strategy that it purports to be, rather than just a wish-list
of ideas that is dispatched to the same dusty archive as many other well-
intentioned EU reports. The stakes have never been higher for Europe. The
very foundations of post-war integration are under threat.
VLADIMÍR DLOUHÝ

President
Eurochambres
Brussels

Considerate colleagues
As a student of human behaviour, I appreciated Bartleby (mostly) promoting
the benefits of kindness in the workplace (September 21st). As Dr Johnson
noted, “Getting money is not all a man’s business: to cultivate kindness is a
valuable part of the business of life.”
KURT ELA

Clinical associate professor of psychiatry

Georgetown University Medical Centre
Washington, DC
“Don’t You Want Me”?
I have never seen a new government make such a series of public-relations
gaffes so quickly as Sir Keir Starmer and his Labour ministers (“That
sinking feeling”, September 28th). The Tony Blair era played out to the song
“Things Can Only Get Better”. The Starmer era has started with “Anarchy in
the UK”. Though I think it is unlikely that this government will ever move
from punk to New Wave.
DAVID DOE

Oxted, Surrey
The cocktail hour
You cited James Thurber on the thorny topic of what is the optimal number
of martinis (World in a Dish, September 21st). I have always held this quote,
often mistakenly attributed to Dorothy Parker, to be authoritative on the
matter:

I like to have a martini,

Two at the very most.
After three I’m under the table,
After four I’m under my host.
COLIN HUGH BUCKLEY

London
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By Invitation
Lebanon needs a new army in the south, says Yair Lapid
The framework that ended Lebanon’s war in 2006 could help end this
one too, says Tarek Mitri
By Invitation | The Israel-Hizbullah war

Lebanon needs a new army in the south, says Yair

Lapid
Israel’s opposition leader sees a way to turn war into a much-needed reset
for the country
October 8th 2024

THE ONGOING war between Israel and Hizbullah is a chance, perhaps the
last, for Lebanon to become a normal state again. What is needed is
wholesale defeat of Hizbullah, and a new administration and army in the
country’s south.

By any accepted criteria Lebanon is no longer truly a state. Its economy is

ruined and food inflation rampant. According to UNICEF 90% of children do not
receive regular meals. Electricity and water are available only a few hours a
day. Lebanon has no president, only a perpetual caretaker. Corruption has
dismantled all its institutions and its weak army lives in fear of Hizbullah, a
ruthless terror organisation that is run by Iran.

This is what happens to a country overtaken by an Islamist terrorist group,

and what happens wherever Iran has a presence: countries become weaker,
poorer, more divided. When Iran turns a country into a basis for its proxies,
that country is left in ruins. Lebanon, Syria, Yemen and Iraq are the most
notable examples.

Israel did not go to war with Hizbullah to save Lebanon but rather to remove
the threat from our northern border. One year ago today, Hizbullah began
relentlessly bombarding Israeli civilians. Entire communities have been
evacuated and we have dozens of fatalities from these attacks. No country in
the world would ignore drones and missiles hitting it on a daily basis. It took
time—too much of it—but eventually Israel launched a counterattack. From
that moment, the international community began discussing when it would
stop. The right question is how it will stop.

If the world wants to save Lebanon, it needs to set a single goal: the
elimination of Hizbullah’s military power. This is not only an Israeli
ambition; it should be a Lebanese one. As long as Hizbullah controls
Lebanon, the country will never recover. For Hizbullah, the shattered
economy and weakening of the central government are key components in
its takeover. It funds, with money from Iran and the drug trade, a state within
a state aimed at imposing violent and extreme Islamic fundamentalism.

The current war could be more than just another disaster in Lebanon’s long
line of them. It could be used as a chance to choose a different future.

To begin with the world must support Israel in its war, without reservations
and without fear. This is not a symmetric war. Israel is much stronger than
Hizbullah, and with the appropriate support can shatter its military power
and the intimidation effect it creates within Lebanese society. At the same
time the world needs to invest the necessary resources in reorganising
Lebanon’s political structure and, importantly, rebuilding its army.

Lebanese soldiers currently earn $120 a month, and even this money does
not always arrive. With investment that would be negligible in international
terms a South Lebanese army can be built, positioned south of the Awali
River, acting as a buffer between Israel and Hizbullah. In the past the South
Lebanon Army that existed in this area was of a totally different and more
limited nature. Crucially, it was a completely separate entity from the
Lebanese Armed Forces, the official army of Lebanon, and acted without co-
ordination or instruction from the country’s government. It must be different
this time.

If each soldier in a new army were to earn $500 a month there would be a
flood of new recruits who could be trained by French, Emirati and American
military officers. They would be motivated not only by this higher salary but
also by a patriotic call to young Lebanese people to seize the opportunity for
a better future for their country.

Alongside this investment the international community will need to appoint

a sort of oversight committee for Lebanon to manage its civilian life for a set
period until elections can be held and a new government can take control.
This group would help set Lebanon on a path to fiscal responsibility,
implement serious anti-corruption reforms and undertake the kind of
institution-building needed to create a viable Lebanese state. It will need to
include the four major Lebanese communities: Christians, Sunnis, Shias and
Druze. Above all it would need to do what has not been done in Lebanon for
a long time: to work for the benefit of Lebanese citizens and not for the
violent terrorist organisation that has taken over the country. ■

Yair Lapid was the 14th prime minister of Israel and is currently the leader
of the opposition.

For another view on achieving peace in Lebanon, see the By Invitation by

Tarek Mitri, a former Lebanese foreign minister.
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south-says-yair-lapid
By Invitation | The Israel-Hizbullah war

The framework that ended Lebanon’s war in 2006

could help end this one too, says Tarek Mitri
Lebanon’s former foreign minister says any Israeli plan to reshape the
country is a recipe for more chaos
October 10th 2024

FOR ISRAEL, Lebanon is once again a killing field. Air strikes and now an
ever-growing ground incursion have exacted an enormous price from
Lebanese civilians. But to see Israel’s stated goal of the complete destruction
of Hizbullah as a way toward peace is misguided, because it views
Hizbullah through too narrow a lens. Instead there is hope, conditional on
American pressure, for a durable ceasefire drawing on the plan that put an
end to the war with Israel in 2006 and embodied in UN Security Council
Resolution 1701.
A conservative government estimate suggests that in the current conflict
1.2m Lebanese people—nearly a quarter of the population—have been
displaced. As targeted air strikes decimated military and political leaders of
Hizbullah, more than 2,000 have been killed and 10,000 injured. Never in
any war in Lebanon have military operations killed so many rescue workers,
firefighters and paramedics. In southern Lebanon several villages have been
emptied and flattened. As in Gaza, the Israeli army has proved its disregard
for international humanitarian law, specifically the notions of proportionality
and distinction between combatants and civilians.

What, at this stage, remains of Hizbullah and its capabilities? Its leadership
is probably disorientated and facing debilitating communication and co-
ordination problems. But it is not just a military organisation, and thus in
any event it will not disappear. It has been a grave mistake for Israel and
other enemies of Hizbullah to cast it as merely a part of Iran’s surrogate
network. In addition to its military structure, it is a strong Lebanese party
with a highly influential political representation. It runs a constellation of
civil and community efforts, such as a large web of educational and health
institutions. Its considerable popular following—crucially, not only among
the country’s Shia Muslims—is undeniable.

Many Lebanese therefore do not think that the defeat of Hizbullah is

necessarily a gain for them. To be clear, plenty of people, perhaps a majority,
disputed the group’s decision to risk dragging Lebanon into all-out war.
They now blame it for drawing Israel’s fury. Nevertheless, most Lebanese
do not see the Israelis as their liberators.

The rhyming of history matters here. An Israeli invasion in 1982 aimed at

Palestinian militants led to war and an 18-year occupation in the country’s
south, and the creation of a buffer zone in the border area. This occupation
was the crucible in which Hizbullah was formed: militants mostly from
southern towns and villages fought relentlessly, achieving a total Israeli
withdrawal in 2000.

No less a rhyme is the war in 2006. Israel’s objective, then as now, was to
degrade Hizbullah’s capabilities. But the wider destruction was severe.
Fierce resistance, Lebanese diplomatic efforts and the belated displeasure of
America helped prevent even more devastation. What formally ended the
war was Resolution 1701, which called for a cessation of hostilities and
Israeli withdrawal; for respect of the “Blue Line”, a provisional border; and
for UN troops, alongside the Lebanese Armed Forces, to deploy south of the
Litani river, about 30km north of the border.

For 17 years, the resolution was largely respected. Although Hizbullah did
not pull out of the area south of the Litani, its presence was not visible, and
the cessation of hostilities was not significantly violated. That changed in
October last year, and I believe that today the implementation of Resolution
1701 by all parties is a necessary condition—but perhaps not a sufficient one
—for a durable ceasefire.

Peace in southern Lebanon is inseparable from the restoration of Lebanon’s

state sovereignty over its territory. It will require the establishment of an
area between the Blue Line and the Litani river, free of any armed personnel,
assets and weapons other than those of the Lebanese government. The UN
force must be enhanced and affirm its authority to “take all necessary
action” where it is deployed. Most importantly, the national army must play
a more robust role in exerting the authority of the Lebanese government.
That will require considerable international support to the Lebanese Armed
Forces—beyond limited American assistance, which is often vulnerable to
American domestic politics and Israeli wishes.

Israel’s declared military objectives may, as they were in Gaza, be revised on

the ground, foreshadowing an absolute war of annihilation. However, a total
defeat of Hizbullah, like a total victory over Hamas, will remain elusive; for
now, there are no clear political objectives in sight. Even if many Lebanese
have not supported Hizbullah and its military activity against Israel, they are
almost unanimously appalled by the collective punishment imposed on
them. They are united in their call for an end to this war.

The Israeli illusion of building a new Lebanon and reshaping the Middle
East, exemplified by many declarations of officials and opposition figures,
sparks memories. It evokes the deceit that became apparent after the war on
Iraq in 2003, and the talk, during the 2006 war in Lebanon, of the “birth
pangs of a new Middle East”. But since that time, we have seen nothing but
more violence, more desolation, more anarchy. It is time for a ceasefire and
diplomacy, and ultimately for securing the strict implementation of the
international resolution already on the table—for the good of not just
Lebanon.■

Tarek Mitri was a foreign minister of Lebanon in 2006 and held several
ministerial posts between 2005 and 2011. He is the president of St George
University of Beirut.

For another view on achieving peace in Lebanon, see the By Invitation by

Yair Lapid, Israel’s opposition leader.
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lebanons-war-in-2006-could-help-end-this-one-too-says-tarek-mitri
Briefing
Who will control the next Congress?
Briefing | Shrinking coattails

Who will control the next Congress?

The new president is much less likely than usual to see allies take charge
on Capitol Hill
October 10th 2024

AMERICANS are fixated on whether Kamala Harris or Donald Trump will

win the presidency on November 5th. But what the victor will actually be
able to achieve depends in large part on which party controls Congress. Most
new presidents have long coattails: not since George H.W. Bush was
inaugurated in 1989 has one taken office without his party also controlling
both chambers of Congress. But this year the race for congressional control
looks as close as the presidential one, putting the normal outcome in doubt.
If the election of 2024 is as much of a nail-biter as expected, the prospect of
divided government—and with it the shelving of much of the new
president’s agenda—looms large.
This week we launched The Economist’s forecast of the congressional
elections, to complement our presidential-election model, which we first
published in June and currently gives Ms Harris a 51% chance of victory. It
finds that, taken individually, each chamber is more likely than not to see a
change in partisan control. The Republicans’ chance of flipping the Senate is
66% and the Democrats’ of winning the House of Representatives is 61%.

However, this does not mean that the two parties are likely simply to trade
places on Capitol Hill. If Republicans do manage to win the Senate, their
House candidates will probably exceed expectations as well, and vice versa.
After accounting for these correlations, our model finds that the two most
probable outcomes remain the typical presidency-House-Senate “trifecta”
for either Republicans or Democrats, with both parties having around a one-
in-four shot of securing one. The next-likeliest scenarios are those with a
Republican Senate and a Democratic House, either during a Harris
presidency (a 16% chance) or a Trump one (15%) (see chart).

Chamber musing
The model’s most eye-catching result is probably the relatively high chance
it gives the Democrats of hanging on to the Senate, given the difficult races
several of their incumbents face. The party holds 51 of the 100 seats
(counting four supportive independents), but is guaranteed to lose one owing
to the looming retirement of Joe Manchin, a Democrat-turned-independent
from heavily Republican West Virginia. As a result, it cannot afford to lose
any more seats—or the presidency, since the vice-president is the tie-breaker
if the chamber is evenly divided. Of the 34 Senate seats up for grabs this
year, 23 are held by Democrats.

Three factors account for the model’s insistence that Democrats have a
plausible path to victory in the upper chamber. One is that the party’s
candidates in many races expected to be competitive—including those in
places where Mr Trump and Ms Harris are neck-and-neck, such as Arizona,
Michigan, Nevada, Pennsylvania and Wisconsin—enjoy surprisingly large
leads in polls. If Democrats do well enough overall that Ms Harris and the
two Democratic incumbents seeking re-election in red states (Jon Tester of
Montana and Sherrod Brown of Ohio) all win, the party holds on in the
Senate 89% of the time.

The second reason the Democrats may hold the Senate is that the model is
not yet ready to write off Mr Tester. Although recent polls have put him
down by 6-8 percentage points, relatively few non-partisan surveys of the
race have been published. Historically, incumbents have enjoyed unusually
large advantages in states with small populations, like Montana. Moreover,
Mr Tester’s fundraising within the state—a good predictor of electoral
performance—far exceeds that of his opponent, Tim Sheehy, an entrepreneur
and political novice. If fresh polls confirm that Mr Tester is trailing badly,
the model will probably lower his chance of victory from 38% to somewhere
in the 20s—and possibly drag his party’s probability of winning the Senate
down into that range as well.

The final reason for hope for Democrats in the Senate is that a loss in
Montana or Ohio is not necessarily the end of the story. Recent surveys put
the party’s challengers to Republican incumbents in the pale-red states of
Florida and Texas just a few points behind. And in a scenario that seems less
outlandish with every poll, Deb Fischer, a Republican incumbent in
Nebraska, appears to be in a remarkably tight race against Dan Osborn, a
former union leader running as an independent.
The Democrats have not fielded a candidate in the contest, and Mr Osborn
has rejected their endorsement—probably a wise move in a staunchly
Republican state. But he is a fan of Bernie Sanders, a left-wing senator, and
our model assumes that he would support a Democrat for majority leader.
The past six polls of the race have all shown results between a slim two-
point lead for Ms Fischer and a stunning five-point edge for Mr Osborn.
Five of them were sponsored by Mr Osborn or groups supporting him, but
an independent survey also showed him trailing by a single point. Our model
gives Mr Osborn a 29% chance of victory—which is 29 percentage points
more than Democrats would have expected earlier this year. That, in turn,
gives Democrats a large boost in our forecast. If the model ignores partisan
polling from Nebraska, the Republicans’ chance of controlling the Senate
rises to 70%.

Nonetheless, our model’s most confident prediction is that some Senate race,
somewhere, will deliver a surprise. Large polling errors are common in
Senate races. In 2020, for instance, Susan Collins of Maine, a Republican
who trailed by around three points in polling averages, won re-election by
ten points. There is a good chance, therefore, that a single surprising result
could determine control of the chamber. Although Democrats’ probabilities
of victory in Florida, Missouri, Nebraska and Texas are fairly low, ranging
from 11% to 29%, the party pulls off an upset in at least one of these states
in just over half of our simulations. Moreover, they do so in 47% of the
scenarios in which either Mr Tester or Mr Brown loses, compensating for
what would otherwise be a fatal defeat.

The contest for the House, where Republicans currently outnumber

Democrats by just 220 to 212 (with three seats vacant), is even tighter.
Democrats have a narrow lead of around two percentage points in “generic-
ballot” surveys, which ask respondents which party they plan to support.
They have also performed extremely well in special elections to replace
departing House members, a strong indicator for normal elections that is not
affected by polling biases. That gives them a slight edge, but one so slender
that control of the lower chamber will probably come down to the specifics
of particular districts.

Gerrymandering, which used to give Republicans a big advantage in the

House, is becoming more of a tie. On average, our model concludes that
Democrats need to win the national popular vote only by a single point to
secure a majority in the House. Although Republicans recently redrew
districts to thwart three Democrats in North Carolina, they are expected to
lose a seat in both Alabama and Louisiana, after the Supreme Court ordered
redistricting to prevent the “packing” of black voters into a single district.
Moreover, Democrats are on the offensive in New York. Even though the
Democratic-controlled state legislature chose to enact only a mild
redistricting following the party’s disastrous showing in the midterm
elections of 2022, four Republican incumbents, all running in districts that
voted Democratic in the presidential election of 2020, face tough races. On
average, our model expects Democrats to win 19 of the state’s 26 seats, up
from 15 two years ago.

In the past, centrist House candidates have tended to fare better than other
factors would suggest and ideologically extreme ones worse. But since the
start of Mr Trump’s presidency, this pattern appears to have faded. At any
rate, several prominent moderates are trailing in local polls, including Jared
Golden, a Democrat in a rural seat in Maine that Mr Trump carried in 2020,
and Don Bacon, a Republican who represents a seat in Omaha, Nebraska,
that plumped for Joe Biden. Our model is sceptical that enough voters will
split their tickets for either to survive this time. In contrast, the model is
more sanguine about Mary Peltola of Alaska and Marie Gluesenkamp Perez
of Washington, both down-to-earth Democrats in red districts who enjoy
comfortable fundraising advantages.

The battle for the House is most likely to be determined in California.

Although America’s most populous state is reliably Democratic overall, a
non-partisan commission draws its districts, ensuring that Republicans get a
fair shake. Six of the nine House races that our model calculates are most
likely to deliver the decisive 218th seat for the victorious party are in
California: four in the urban sprawl surrounding Los Angeles and two in the
Central Valley. Of these, five are majority-minority with large Hispanic or
Asian populations, and are held by Republicans. If the gains Mr Trump has
made in polls with non-white voters translate into support for Republicans
lower down the ballot, House Democrats will probably meet their Waterloo
in deep-blue California. But if Ms Harris, who is herself a Californian of
both Jamaican and South Asian descent, can claw back some of these voters
en route to the presidency, Republicans will probably lose the House, too.
A president can do a lot by fiat, without Congress’s approval. And if the
president’s party controls the Senate it can push through judicial
nominations, even if the House is more hostile territory. Even so, the
congressional toss-up compounds the uncertainty of this year’s dead-heat
presidential election. ■
This article was downloaded by zlibrary from https://www.economist.com/briefing/2024/10/10/who-will-control-the-next-congress
United States
What America’s presidential election means for world trade
The US tax code will change next year; the presidential election will
determine how
Donald Trump is preparing an assault on America’s immigration
system
On energy and climate, Trump and Harris are different by degrees
Both candidates pledge to fortify America. How big will they go?
America’s presidential election marks a fork in the road for Ukraine
Will the next president follow Israel into war with Iran?
The next American president will be a China hawk
Shirley Chisholm is still winning
United States | Policy brief

What America’s presidential election means for

world trade
The first in a series of eight concise briefs on the consequences of the 2024
election
October 6th 2024

In the 1990s presidential hopefuls fought over how much America should
open itself up to commerce with other countries. Nowadays, the trade debate
revolves around how much America should close itself off. Donald Trump is
the more radical of the two candidates, with a vision for tariffs that would
turn the clock back nearly a century on economic strategy. Kamala Harris is
less extreme but still sees a world in which America is best served by soft
protectionism, featuring subsidies for favoured industries.

For Mr Trump the direction of travel is absolutely clear. In his first term in
the White House he called himself a “tariff man”, arguing that levies on
foreign countries were a way to maximise American economic power. He
started with tariffs on washing machines and solar panels, then turned to
steel and aluminium, before finally getting into a trade war with China. And
that may have been a mere prelude for what he would do in a second term.

This is one of a series of briefs about the policy implications of

America’s election. Read the others here:

The US tax code will change next year; the presidential election will
determine how
Donald Trump is preparing an assault on America’s immigration
system
On energy and climate, Trump and Harris are different by degrees
Both candidates pledge to fortify America. How big will they go?
Will the next president follow Israel into war with Iran?
America’s presidential election marks a fork in the road for Ukraine
The next American president will be a China hawk

He has vowed to slap a tariff on all imports into America. Earlier in the
campaign he said this universal tariff might be 10%; recently he has upped
the ante to 20%. But his fiercest statements are focused on China,
threatening tariffs of up to 60% on made-in-China goods. He has also
mooted stripping China of its most-favoured-nation status, a decision that
would strike at the foundations of the already weakened World Trade
Organisation.

From a legal perspective, Mr Trump ought to have a fairly easy path to

putting higher tariffs on China. He could deem China to be in violation of
the trade deal signed during his first term (China’s imports from America
have fallen far short of unrealistic targets) and then increase tariffs as
punishment. The path to a universal tariff is more fraught, however. Some
experts think that Mr Trump might declare America’s trade deficit to be a
national emergency, allowing him to invoke the International Emergency
Economic Powers Act, which would give him the authority to implement his
desired across-the-board levy. Companies would be likely to challenge that
in court, and may well end up successfully overturning the tariff. But the
legal process would take months, giving Mr Trump plenty of time to throw
the global trading system into chaos.

Many Republicans remain sceptical—rightly—about the economic effects of

tariffs. Yet Mr Trump will have one argument that will appeal to them:
tariffs would help to pay for the tax cuts they want. America imports about
$3trn-worth of goods a year, so a 10% tariff would, in theory, generate
roughly $300bn of federal revenue. The trouble is that tariffs would weigh
on American growth, especially as other countries retaliate. Mr Trump’s
trade policies would take the economy on a contentious and risky path.

Ms Harris’s views on trade, as on many other topics, are cloudier. She is

certainly not a champion of free trade. When Mr Trump renegotiated
America’s trade deal with Mexico and Canada in 2020, she was one of only
ten senators to vote against it, arguing that it was especially weak in its
environmental protections. And like Mr Biden, Ms Harris displays no
enthusiasm for traditional trade negotiations. At the same time she is most
definitely not a “tariff woman”. She regularly describes Mr Trump’s
universal-tariff idea as a national sales tax, and has made it the focal point of
her criticism of Mr Trump’s economic plans, citing estimates that it would
raise prices for the typical family by about $4,000 per year.
As for what she would do, Ms Harris’s positions appear to largely build on
President Joe Biden’s approach to trade on two fronts. First, she is calling
for subsidies to build up the country’s manufacturing muscle. In her platform
she has called it the “America Forward” tax credit, saying it would direct
tens of billions of dollars to help America succeed in the industries of the
future, including clean energy—potentially similar to the industrial subsidies
in Mr Biden’s Inflation Reduction Act that have worried other countries.

The second front is a willingness to take punitive trade actions against China
“when it breaks the rules”, as she puts it. The implication is that she would
continue to support tariffs on China, similar to the increases recently
implemented by the White House against Chinese electric vehicles and
semiconductors, among other things. To her mind, the distinction is that her
tariffs are strategic, whereas Mr Trump’s reflect a blunderbuss approach.
Many economists are less sanguine: a little protectionism is better than a lot
but it still is harmful to growth.

All this should leave the world with a rather discouraging view of where
America is headed on trade. Under Mr Trump America would build up its
tariff walls. Ms Harris is less keen on walls but she is not about to build
bridges. ■

Stay on top of American politics with The US in brief, our daily newsletter with
fast analysis of the most important electoral stories, and Checks and
Balance, a weekly note from our Lexington columnist that examines the state
of American democracy and the issues that matter to voters.
This article was downloaded by zlibrary from https://www.economist.com/united-states/2024/10/06/what-americas-presidential-
election-means-for-world-trade
United States | Policy brief

The US tax code will change next year; the

presidential election will determine how
Donald Trump promises cuts galore, while Kamala Harris would target
the middle-class
October 7th 2024

NOT ONLY are taxes one of the only certainties in life, they are also one of
the only certainties in this presidential election. That is because of the
looming expiration of tax provisions passed in 2017, the main legislative
accomplishment of Donald Trump’s term in the White House. This presents
a fiscal cliff. By the end of 2025 whoever is president must sign new rules
into law, or most Americans will see sharply higher income taxes.

Tax negotiations are thus guaranteed to occupy much of Kamala Harris’s or

Donald Trump’s first year in office, giving them a chance to put their stamp
on America’s tax code. Mr Trump favours broad, sweeping cuts that he
believes would energise investment and innovation, whereas Ms Harris
hopes to use tax changes to reduce inequality.

This is one of a series of briefs about the policy implications of

America’s election. Read the others here:

What America’s presidential election means for world trade

Donald Trump is preparing an assault on America’s immigration
system
On energy and climate, Trump and Harris are different by degrees
Both candidates pledge to fortify America. How big will they go?
Will the next president follow Israel into war with Iran?
America’s presidential election marks a fork in the road for Ukraine
The next American president will be a China hawk

Mr Trump, unsurprisingly, hopes to keep many of his original cuts in place.

These include: reductions to most individual income-tax rates; a doubling of
the exemption on estate taxes, paid after death; and rules that make it easier
for businesses to expense more investments. Simply enacting these
extensions would cost the federal government about $4.6trn in lost revenue
over the next decade, according to the Congressional Budget Office, a
nonpartisan scorekeeper.

This would just be the starting point for Mr Trump. As the election has
turned more competitive, the former president has pledged more tax cuts. In
2017 he slashed the corporate tax rate from 35% to 21%. Now he wants to
take it even lower, perhaps to 15%. Another promise is to exempt employees
such as waiters from taxes on tips. Mr Trump has also said that he would
make Social Security benefits tax-free in order to help retirees. And he has
promised to reverse one measure from his 2017 law: he would let residents
of high-tax states resume deducting more of their local taxes from their
federal tax bills.
Added together Mr Trump’s tax platform is eye-wateringly expensive,
running to as high as $10trn over the next decade, according to Andrew
Lautz of the Bipartisan Policy Centre, a think-tank based in Washington, DC.
Mr Trump has proposed some offsets, including higher tariffs (see trade-
policy brief) and scrapping the Biden administration’s green-energy tax
credits. These would be insufficient to plug the fiscal holes, however, which
means the federal deficit—already expected to reach 6% of GDP—may expand
to 8% or so under Mr Trump. His plans could add $7.5trn to America’s debts
over a decade, says the Committee for a Responsible Federal Budget (CRFB), a
non-profit group.

Ms Harris’s tax plans draw heavily on Joe Biden’s budgets. She has vowed
to extend Mr Trump’s expiring tax cuts for individuals earning less than
$400,000 per year. For those above that line, the tax rate would revert to its
pre-2018 level of 39.6%. She also wants to partially undo Mr Trump’s
corporate-tax cuts, taking the rate on companies up to 28%. Most
controversially, she wants to tax unrealised capital gains for the wealthiest
Americans—a useful revenue source but hard to administer and possibly
detrimental to growth.

At the same time Ms Harris has proposed a range of tax cuts, largely in the
form of targeted credits. She wants to nearly double the tax credit for
families with children to $3,600 per year, in addition to giving a $6,000 tax
credit to families with newborns. For lower-income Americans, she would
like to expand the earned-income tax credit (EITC), a kind of reverse income
tax. She has proposed downpayment assistance of $25,000 for first-time
homebuyers and a deduction of up to $50,000 for business startups. And like
Mr Trump, she has pledged to exempt taxes on tips (indeed, Mr Trump has
mocked her for copying this idea).

Totted up, Ms Harris’s proposals would generate nearly $2trn in federal

revenue over the next decade. But the higher taxes—especially the increased
corporate levy—would weigh on growth. The Tax Foundation, another
Washington think-tank, estimates that her plans would reduce GDP by about
2% over the next decade. The result would be a continued increase in the
deficit, but probably not as great as under Mr Trump. Her plans may add
$3.5trn to the national debt, according to the CRFB. Ms Harris would at least
succeed in her aim of making the tax system a little better at redistributing
income from the wealthy to the poor.

So long as Congress is divided, neither Mr Trump nor Ms Harris will be able

to deliver on their full plans. But this is why the expiration of the 2017 tax
provisions is so important. Both the House and the Senate will be highly
motivated to find a way to extend the cuts, at least in part. That will give the
president leverage to push for a new bill along the lines of what he or she
pledged while campaigning. Voters therefore have a real choice between
different visions of who should pay taxes, and how much they should pay. ■

Stay on top of American politics with The US in brief, our daily newsletter with
fast analysis of the most important electoral stories, and Checks and
Balance, a weekly note from our Lexington columnist that examines the state
of American democracy and the issues that matter to voters.
This article was downloaded by zlibrary from https://www.economist.com/united-states/2024/10/07/the-us-tax-code-will-change-
next-year-the-presidential-election-will-determine-how
United States | Policy brief

Donald Trump is preparing an assault on

America’s immigration system
The divide between the two candidates on migration is stark, but it has
narrowed
October 8th 2024

PART OF BEING Donald Trump is saying outrageous things. Yet what was
outrageous in 2011 (suggesting that Barack Obama was born in Kenya)
seems almost quaint in 2024. His rhetoric has turned darker. Immigrants are
no longer just criminals and rapists, they are “poisoning the blood of our
country”. Chants of “Build the wall!” have been replaced by “Send them
back!” In MAGA world, legal immigrants from Haiti are threatening to eat the
pets of the good people of Springfield, Ohio.

Mr Trump’s obsession with immigration has shaped this presidential

campaign—and American politics for the past nine years. A chasm yawns
between Mr Trump’s and Kamala Harris’s immigration policies, but his
dominant focus on the issue has forced her to tack to the right to avoid
looking weak on border security. Voters’ concerns (61% of registered voters
say immigration is a priority for them in this election, according to the Pew
Research Centre) mean that action on immigration will be at the top of the
next president’s to-do list, no matter who wins.

This is one of a series of briefs about the policy implications of

America’s election. Read the others here:

What America’s presidential election means for world trade

The US tax code will change next year; the presidential election will
determine how
On energy and climate, Trump and Harris are different by degrees
Both candidates pledge to fortify America. How big will they go?
Will the next president follow Israel into war with Iran?
America’s presidential election marks a fork in the road for Ukraine
The next American president will be a China hawk

Both Mr Trump and Ms Harris would be constrained by Congress, which

has not meaningfully reformed immigration law since 1990. The result is a
creaking, inflexible system ill-equipped to find the workers America needs.
That is unlikely to change, no matter which party wins control of the Senate
and the House. But, as Mr Trump and Joe Biden have shown in recent years,
presidents can find ways to exercise immense power to affect policy.

J.D. Vance, Mr Trump’s running-mate, claims that 25m “illegal aliens” are
living in America, and has said that a mass-deportation scheme could begin
by removing 1m people, implying that more could follow. Yet his numbers
seem plucked out of thin air. The Department of Homeland Security (DHS)
suggests that 11m unauthorised immigrants lived in the country in 2022,
most of whom arrived before 2010. A second Trump administration will not
get the funding from Congress it needs to carry out that many removals, but
even rumours of raids or botched attempts to round up immigrants can do
harm. Studies suggest that children of migrants get more anxious and
depressed during periods of increased immigration enforcement. Police
departments have noticed that immigrants become more hesitant to report
crimes against them.

Mr Vance has not ruled out bringing back the family-separation policy of Mr
Trump’s first administration, which tried to use the possibility of removing
children from their parents to deter illegal border crossings. (In March, the
DHS reckoned that roughly 1,400 children had yet to be reunited with their

families.) He wants to restart the “migrant-protection protocols”, a policy

which would force some asylum-seekers to wait in Mexico while their
claims are adjudicated. Whether that happened would depend on how well
Mr Trump gets along with Mexico’s new president, Claudia Sheinbaum.

Under Mr Trump, increased vetting requirements and fees for visa

applications could slow them down. Presidents have the power to decide
how many refugees the country will accept each year; that number would
plummet. Mr Trump may again try to end DACA—a programme that protects
from deportation immigrants brought to the country as children—if the
courts do not decide it is illegal first. Court challenges are likely, but a
second Trump administration will have learned from the first. Regulations
will be more rigorously written, and a friendlier bench may be more
deferential to presidential authority.
Ms Harris’s immigration policy would largely be one of continuity. Mr
Biden adopted a carrot-and-stick approach: opening up new legal pathways
for migrants where possible while restricting asylum at the southern border.
This combination has proved successful in recent months. In 2023, monthly
migrant encounters at the border reached record heights. They have since
fallen to the lowest level since 2020, when Mr Trump was in charge.

Ms Harris wants to revive a bipartisan border-security bill that Mr Trump

kiboshed so he could campaign on chaos. But Republicans would have little
incentive to work with a President Harris on immigration. A daughter of
immigrants, she alludes to finding ways to protect from removal
unauthorised migrants who have lived in America for years. This could
resemble the visa programme Mr Biden proposed for undocumented spouses
of citizens, which is tied up in the courts.

Yet some daylight has emerged between Ms Harris and her boss. She has not
only endorsed the limits placed on asylum at the border, but suggests she
would make them harder to lift. Her rightward lurch is an admission that Mr
Trump has been winning on the issue. It is also a calibrated response to the
fact that Americans increasingly favour tougher border security. A YouGov
poll from January suggests that 32% of Democrats support building a border
wall, up from 20% in 2022.

Events could change either candidate’s agenda. If the economy weakens,

fewer migrants will try to come. Unrest or economic collapse in Haiti or
Venezuela, say, could push more people towards the border. Immigration is
at the very centre of American politics. That is not about to change.■

Stay on top of American politics with The US in brief, our daily newsletter with
fast analysis of the most important electoral stories, and Checks and
Balance, a weekly note from our Lexington columnist that examines the state
of American democracy and the issues that matter to voters.
This article was downloaded by zlibrary from https://www.economist.com/united-states/2024/10/08/donald-trump-is-preparing-an-
assault-on-americas-immigration-system
United States | Policy brief

On energy and climate, Trump and Harris are

different by degrees
Green subsidies will probably survive Mr Trump’s re-election, and Big Oil
will probably do just fine under Ms Harris
October 10th 2024

The next president will inherit the most ambitious climate policies in
American history. Under Joe Biden a trio of laws—the CHIPS and Science Act,
the Bipartisan Infrastructure Law and especially the Inflation Reduction Act
(IRA)—have put in place a sweeping industrial policy that seeks to subsidise
an ambitious decarbonisation of the economy. Left-wingers, who think the
investments are not ambitious enough, hope that a President Kamala Harris
will go further. Conservatives are confident a re-elected President Donald
Trump will tear it all down.
It is worth setting aside campaign rhetoric to ask: would a President Harris
go much greener than Mr Biden? And could a re-elected President Trump
really kill Mr Biden’s clean-energy policies?

This is one of a series of briefs about the policy implications of

America’s election. Read the others here:

The US tax code will change next year; the presidential election will
determine how
What America’s presidential election means for world trade
Donald Trump is preparing an assault on America’s immigration
system
Both candidates pledge to fortify America. How big will they go?
Will the next president follow Israel into war with Iran?
America’s presidential election marks a fork in the road for Ukraine
The next American president will be a China hawk

Consider first the Biden energy legacy. Goldman Sachs, a bank, reckons
that, if kept in place, the IRA alone will generate over $3trn in public and
private investment in clean technologies by 2030. But Mr Biden has also
presided over a fossil-fuel boom. His administration encouraged
hydrocarbon production to offset the impacts on energy markets of war in
Ukraine and the Middle East, so America is now the world’s biggest oil-and-
gas exporter.

Ms Harris cast the deciding vote for the IRA and has raised hopes on the left
because of her past greenery. As California’s attorney-general she sued
energy companies over pipeline leaks and offshore oil development. During
her failed presidential bid in 2019 she supported a ban on shale fracking and
the Green New Deal. Some environmentalists dream that, if elected, she
might declare a national “climate emergency” to promote even more
ambitious action than Mr Biden did.
Yet there are clear indications that Ms Harris will embrace both clean energy
and fossil fuels. She now explicitly supports domestic oil-and-gas
production and fracking, and she openly endorses such green bugbears as
nuclear power and reform of the permit process (which would allow all
types of new energy infrastructure to be built more quickly).

If a Harris presidency is likely to offer continuity, could a Trump presidency

represent a radical reversal? When he was in the White House Mr Trump
embraced fossil fuels and tried to roll back environmental regulations. He
might again launch an assault on the Environmental Protection Agency and
its regulation of exhaust-pipe and power-plant emissions, but his record in
the courts last time was poor, and a recent Supreme Court ruling curtailing
the interpretive powers of agencies like EPA will complicate matters. During
this year’s campaign Mr Trump’s energy mantra has been “Drill, baby,
drill!” and he has mocked climate science and electric vehicles (EVs). Big Oil
bosses have openly endorsed him. Thanks to Mr Trump’s earlier success in
appointing conservative judges, courts may look more favourably on his
agenda. Yet experts agree that the wholesale scrapping of the IRA is highly
unlikely.

The most likely impact, says Jeff Navin of Boundary Stone, an energy
consultancy, would be on IRA tax breaks. But except for credits for buying EVs,
most of these look secure. Nearly four-fifths of credits are flowing to
Republican districts, which explains why 18 Republican congressmen
declared in August that they opposed IRA repeal. Big Oil loves its subsidies
for hydrogen and carbon capture. A former Trump energy secretary now
running the top utilities lobby has said his priority is defending credits for
his industry.

The picture is less clear on spending. If money has not yet been disbursed,
Mr Trump could make it harder for agencies to do so. However, officials are
rushing to get remaining funds out of the door. The third category,
discretionary money, is easier to gum up. The Department of Energy has not
spent much of a $300bn-plus kitty meant to help scale up novel climate
technologies. Mr Trump could in theory quash this lending, though in
practice energy-industry lobbies would oppose this, too.

The Trump administration’s withdrawal from the Paris Agreement on

climate change did not notably retard international efforts. Mr Trump might
undermine pledges by the Biden administration to reduce methane
emissions, but such acts of self-isolation would hardly come as a shock
abroad. At home, a Trump victory would not mean a collapse in climate
efforts either, but it would still give Wall Street pause. Wood Mackenzie, a
consultancy, reckons a Trump presidency would reduce investment in
America’s energy transition by $1trn by 2050, to roughly $6trn. So the
choice voters will make in November will either hold steady America’s
current pace of decarbonisation or slow it. Either way, the direction of travel
will remain largely unchanged.■

Stay on top of American politics with The US in brief, our daily newsletter with
fast analysis of the most important electoral stories, and Checks and
Balance, a weekly note from our Lexington columnist that examines the state
of American democracy and the issues that matter to voters.
This article was downloaded by zlibrary from https://www.economist.com/united-states/2024/10/10/on-energy-and-climate-trump-and-
harris-are-different-by-degrees
United States | Policy brief

Both candidates pledge to fortify America. How

big will they go?
Hawks in Congress want to raise America’s defence budget dramatically,
but the next president will decide
October 10th 2024

Presidential elections don’t often turn on debates about defence spending, in

part because funding the armed forces is one of the few bipartisan traditions
left in American politics. Donald Trump and Kamala Harris have both
issued vague commitments to strengthen the army, yet neither has offered
much detail. The terms of debate are already being set on Capitol Hill,
however, and the next president could negotiate with Congress to reshape
the Pentagon’s future.

The vehicle for such decisions is typically the National Defence

Authorisation Act (NDAA), which sets an annual baseline for military
expenditures. Haggling usually drags on for months before a bill passes with
strong majorities in both houses of Congress. The most recently approved
NDAA authorised $874bn, and Congress is currently wrangling over Joe Biden’s

$884bn request for fiscal year 2025.

This is one of a series of briefs about the policy implications of

America’s election. Read the others here:

The US tax code will change next year; the presidential election will
determine how
What America’s presidential election means for world trade
Donald Trump is preparing an assault on America’s immigration
system
On energy and climate, Trump and Harris are different by degrees
Will the next president follow Israel into war with Iran?
America’s presidential election marks a fork in the road for Ukraine
The next American president will be a China hawk

The main question facing the next president will be how much to increase
spending. Roger Wicker, the senior Republican on the Senate Armed
Services Committee, has called for the country to spend 5% of GDP on
defence, up from around 3% today. Republican hawks in Congress and the
broader national-security establishment have coalesced around a similarly
massive increase, and some have even called for the outright doubling of
military outlays. Many Democrats oppose such measures, but still agree that
Mr Biden has not been aggressive enough. This year, despite Democrats
holding the Senate and the White House, Mr Wicker pushed his committee
to authorise $25bn more than Mr Biden requested.

A handful of lawmakers seek cuts in defence spending, but they lack

influence. The real debate is between spending maximalists and those who
want higher funding but don’t believe that 5% of GDP is politically or fiscally
feasible. Jack Reed, the Democratic chairman of the Senate Armed Services
Committee, opposed the bill that came out of his own committee because it
would violate spending caps agreed in separate fiscal negotiations. Mike
Rogers, Mr Reed’s Republican counterpart in the House, called the Biden
request inadequate to restore deterrence but acquiesced to “the hand that was
dealt to us”.

Once this year’s fight is resolved, the next president will be able to offer a
new opening bid. The question facing a Trump presidency would be whether
to embrace the generational investment Mr Wicker advocates or replicate the
more modest increases of Mr Trump’s first term. Ms Harris would have to
decide whether to maintain Mr Biden’s policy of after-inflation spending
reductions. Her preferences, as on much else, are hard to predict.

America’s post-cold-war military forces—built for short, sharp conflicts—

do not appear ready for the challenges of today’s disordered world:
maintaining deterrence in the Middle East, supporting Ukraine in an
attritional conflict, adapting to new forms of warfare, and keeping pace with
China’s rapid military build-up and its growing belligerence.

Russia’s invasion of Ukraine exposed America’s inability to speed up

production of munitions and other equipment. The country’s defence
industrial base has made progress, but there is more work to be done. The
next president must decide not only how much to spend but what to
prioritise. How much should America dedicate to procurement of weapons
rather than research and development? Should it shift focus to producing
greater volumes of simple weapons over more exquisite kit? Which supply
chains need to be diversified to avoid dependence on adversaries?

Consider one fiscal fight. Mr Biden requested $166bn for procurement this
year, a cut of nearly $3bn. He also wants America to buy just one attack
submarine costing nearly $5bn, a critical platform in a conflict over Taiwan,
instead of two. The House and the Senate have moved money around to fund
two attack submarines—and the White House has countered that this would
mean slower progress on developing the next generation of fighter jets.
More money in theory might mean fewer trade-offs, but the Pentagon’s
demand for weapons is limitless. What is needed is strategic coherence.

Refitting America’s conventional forces is not the only task. China has been
energetically modernising its nuclear forces with the goal of eventually
becoming a peer to America and Russia. Nearly every existing arms-control
agreement between Washington and Moscow has collapsed, and there is no
plausible chance for trilateral arms-control agreements in the near future.
The next president will face difficult and expensive questions about how to
prepare for the new nuclear race. The Congressional Budget Office
estimated in 2023 that modernising America’s nuclear forces would cost
$756bn over the next decade.

Throughout his presidency Mr Biden has spoken about defending Taiwan,

staying the course with Ukraine and remaining a steadfast ally to Israel.
Across four years in office his rhetoric was not accompanied by ambitious
investments. This election will probably be decided on issues such as the
economy, abortion and immigration, but the choices voters make could also
have lasting consequences for America’s hard power and fiscal health. ■

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fast analysis of the most important electoral stories, and Checks and
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of American democracy and the issues that matter to voters.
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fortify-america-how-big-will-they-go
United States | Policy brief

America’s presidential election marks a fork in the

road for Ukraine
If Republicans take power, Kyiv will feel a chill: the latest of our policy
briefs
October 9th 2024

Volodymyr Zelensky, the president of Ukraine, visited America in

September to speak at the United Nations and present a “victory plan” to his
American patrons. The trip did not go well. Mr Zelensky criticised Donald
Trump and enraged Republicans by appearing alongside Democrats at a
munitions factory. And Biden administration officials were underwhelmed
by his proposal to end the war.

Mr Zelensky did hold seemingly positive meetings with both Kamala Harris
and Mr Trump. The outcome of their race is likely to have a big impact on
Ukraine’s future. Talk of an endgame is gathering, including thorny
questions about whether America’s next president might be willing to invite
Ukraine to join NATO. Yet neither candidate has offered clarity about strategy or
presented a credible plan to change the dynamic on the ground.

This is one of a series of briefs about the policy implications of

America’s election. Read the others here:

The US tax code will change next year; the presidential election will
determine how
What America’s presidential election means for world trade
Donald Trump is preparing an assault on America’s immigration
system
On energy and climate, Trump and Harris are different by degrees
Both candidates pledge to fortify America. How big will they go?
Will the next president follow Israel into war with Iran?
The next American president will be a China hawk

That dynamic is grim. As Ukraine slogs to the end of its third year of war, its
army has made virtually no progress since retaking the capital of the
Kherson region in 2022. Russia has been making slow, grinding gains, at
high cost. More than half a million Russians have been killed or wounded,
America estimates.

The prospects for peace seem remote. Mr Zelensky insists that his goal
remains re-establishing Ukraine’s 1991 borders—including Crimea, which
has been in Russian hands for more than a decade. Vladimir Putin’s strategy
is to wait out the West, and he has shown no interest in ending the war on
anything other than his terms. Yet neither the Russians nor the Ukrainians
have demonstrated the military strength to achieve the outcomes they seek.

Ms Harris has mostly echoed Joe Biden’s rhetoric on Ukraine, saying she
will stand with the country and seek continued military aid. She has said
little about whether or how she might depart from Mr Biden’s policy, which
has been tempered by his fear of an escalating conflict between NATO and
Russia. Mr Trump has been inconsistent but also vague—promising to end
the war immediately and urging both Russia and Ukraine to come to the
negotiating table.
Tough choices will be unavoidable after the next president takes office.
America has provided Ukraine with about $174bn in support, most recently
through a $61bn assistance bill in April. The Pentagon can stretch aid
packages, and Mr Biden may cajole Congress to pass more legislation
between the election and his successor’s inauguration. But the next president
will have to decide whether to provide more aid—and what caveats to attach
to it.

Republicans, particularly in the House of Representatives, where they are in

the majority, have become notably cooler towards Ukraine. If Democrats
win back the House and the presidency, aid to Ukraine is likely to keep
flowing, even if control of the Senate shifts to Republicans, as is probable,
according to The Economist’s forecast model. Full Republican control in
Washington would prove more difficult for Mr Zelensky. If Mr Trump is
elected, another uncertainty is whether he will empower internationalists like
Mike Pompeo, the former CIA director and secretary of state, or ideological
isolationists like J.D. Vance, his vice-presidential running-mate.

No one in Mr Biden’s White House believes that Ukraine could retake

Crimea by military means. That implies that some endgame negotiation with
Russia would be required, eventually. Mr Trump’s promise to end the war
quickly is implausible. Yet there is wide recognition that talks may be
necessary sooner rather than later and that Ukraine’s beleaguered population
may be open to certain trade-offs. Polling shows that more than half of the
country would accept losing the Donbas and Crimea in exchange for
regaining sovereignty over the occupied parts of Zaporizhia and Kherson.
Some 38% of Ukrainians say they would be willing to accept current
territorial boundaries if the country was admitted into the European Union
and received funding to rebuild. That figure rises to 47% if Ukraine is
welcomed into NATO—which is perhaps the most sensitive question for the
next president.

In a joint statement, NATO’s 32 members said in July that Ukraine was on an

“irreversible” path to joining the alliance. So far Mr Biden has been
sceptical of offering a formal invitation of membership, which Kyiv
desperately seeks. Doing so would come with a host of problems, given that
the country is at war. But creative thinking on how to use the possibility of
NATO membership as leverage against Mr Putin and as backing for Ukraine’s
recovery could help stabilise the conflict and perhaps end or reduce its
intense violence.

The reality is that Mr Zelensky and his allies in Europe and Washington
have yet to articulate a realistic plan for how to win the war. Mr Putin’s
Russia, on the other hand, is weaker than Ukraine and the West together, but
hopes to outlast his enemies. Mr Zelensky remains a stalwart figure of
Ukrainian resilience, but his popularity at home is ebbing. He can only hope
that the next American president is devoted to developing a plausible vision
of success. ■

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fast analysis of the most important electoral stories, and Checks and
Balance, a weekly note from our Lexington columnist that examines the state
of American democracy and the issues that matter to voters.
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marks-a-fork-in-the-road-for-ukraine
United States | Policy brief

Will the next president follow Israel into war with

Iran?
Kamala Harris is likely to maintain Joe Biden’s awkward policy, while
Donald Trump’s belligerent words mask a record of caution
October 10th 2024

MANY AMERICAN presidents have dreamt of bringing peace to the

Middle East. Some could claim successes: Jimmy Carter oversaw the Camp
David accords between Israel and Egypt in 1978; Bill Clinton the Oslo
accords with the Palestinians in 1993 and a peace treaty with Jordan the next
year; Donald Trump the Abraham accords with Bahrain, the United Arab
Emirates and Morocco in 2020.

The next president will almost certainly be grappling with war, inheriting the
multi-front conflict between Israel and Iran’s “axis of resistance” that has
raged for the past year. How to prevent a regional cataclysm, and how to
avoid being dragged into another “forever war”?

This is one of a series of briefs about the policy implications of

America’s election. Read the others here:

The US tax code will change next year; the presidential election will
determine how
What America’s presidential election means for world trade
Donald Trump is preparing an assault on America’s immigration
system
On energy and climate, Trump and Harris are different by degrees
Both candidates pledge to fortify America. How big will they go?
America’s presidential election marks a fork in the road for Ukraine
The next American president will be a China hawk

Kamala Harris would probably hew to President Joe Biden’s awkward

policy: support Israel’s right to defend itself, try to restrain its most
dangerous actions, mitigate the humanitarian impact, seek ceasefires and
keep alive the idea of Palestinian statehood. Mr Trump suggests that Israel
should be given carte blanche. After Iran rained more than 180 ballistic
missiles on Israel on October 1st, Mr Biden urged the Jewish state not to
strike at Iran’s oil facilities or its nuclear sites. Mr Trump mocked such
caution: “Hit the nuclear first and worry about the rest later.”

American presidents of all stripes have said Iran will not be allowed to
acquire nuclear weapons. Yet none has bombed Iran’s sites; nor has any
given Israel the green light to do so. That is because the costs of further
inflaming the region are easy to imagine, and the rewards in terms of setting
back Iran’s nuclear programme would be temporary and hard to reckon.

Neither Ms Harris nor Mr Trump has shown a desire to use US forces to bomb
Iran. In office Mr Trump abandoned a nuclear deal with Iran, imposed
“maximum pressure” through sanctions and in 2020 ordered the killing in
Iraq of Qassem Suleimani, Iran’s supremo for foreign military operations.
Then as now, hawks urged him to seize a rare opportunity to defeat Tehran’s
regime. But Mr Trump hoped for a deal with Iran’s clerics. Notably, he held
back from striking Iran even when it shot down an American drone and
helped to bomb Saudi oil facilities sites in 2019.

A subtler question is whether or how an American president might enable an

Israeli attack. Israel acting alone can probably inflict only limited damage.
The greater America’s involvement, the greater the military blow. Help
could range from sharing intelligence on targets to rescuing downed Israeli
pilots, providing air-to-air refuelling, or actually taking part in bombing
raids. In one of these scenarios, President Trump or President Harris might
give Israel the nod for military action and, in the ensuing mêlée, feel
compelled to finish the job or at least help its ally.

However the conflict with Iran evolves between now and January, the next
president will almost certainly have to grapple with the aggravating Israeli
prime minister. According to a forthcoming book by the journalist Bob
Woodward, Joe Biden has privately referred to Binyamin Netanyahu as “a
fucking liar”. To judge by her interview this week with CBS News, Ms Harris
shares similar feelings. Mr Trump has at times been critical of Mr
Netanyahu, not least because the Israeli prime minister recognised Mr
Biden’s victory in 2020, but has also lined up with Republicans who think
Israel can do no wrong.

Sympathy for Israel runs deep in American politics, as does antipathy for
Iran. Asked which foreign country was America’s greatest adversary, Ms
Harris unexpectedly replied: “Iran has American blood on their hands.”
Nevertheless, Mr Biden has struggled to restrain Mr Netanyahu, who has
played hardball in negotiations to secure a ceasefire in Gaza and shrugged
off entreaties not to open another front in Lebanon. America has armed
Israel and helped to shoot down missiles fired at it.

With his initial success against Hizbullah—killing its leader, Hassan

Nasrallah, and much of its military command—Mr Netanyahu feels
vindicated. He now speaks of the “opportunity to change reality” in Lebanon
and the region. He has urged the Lebanese people to cast off Hizbullah and
even hinted at regime change in Iran, saying freedom “will come a lot
sooner than people think”.
What about peace? Assuming the wars somehow die down, Ms Harris has
expressed concern for Palestinians’ suffering but has set out no plans to
achieve statehood. Mr Trump cares little for their cause; his officials have
been supporters of Israeli settlement in the occupied West Bank. Both will
doubtless pursue an elusive Israel-Saudi normalisation deal. But the longer
the wars go on, the higher the price the Saudis will demand. ■

Stay on top of American politics with The US in brief, our daily newsletter with
fast analysis of the most important electoral stories, and Checks and
Balance, a weekly note from our Lexington columnist that examines the state
of American democracy and the issues that matter to voters.
This article was downloaded by zlibrary from https://www.economist.com/united-states/2024/10/10/will-the-next-president-follow-
israel-into-war-with-iran
United States | Policy brief

The next American president will be a China hawk

Donald Trump may seek to decouple America’s economy, while Kamala
Harris favours more targeted pressure
October 10th 2024

ALTHOUGH BRITAIN still claims to have a “special relationship” with the

United States, no country could contest China’s claim to have the most
important one. America’s next president will have to take stewardship of the
bilateral relationship at a time when mutual animosity and distrust are high.
He or she will have to steer carefully to avoid fracturing the global economy
or, much worse, plunging two of the world’s military superpowers into an
armed conflict.

Raja Krishnamoorthi, a Democratic congressman who is the party’s highest-

ranking member on the influential House Select Committee on the Chinese
Communist Party, identifies three top issues in the next president’s China
portfolio. First, how to deter conflict, “especially in the South China Sea and
Taiwan area”. Second, China’s “use of technology to surveil, to hack and to
pre-position malware in our critical infrastructure”. And third, China’s
“economic aggression”, particularly “overcapacity in the green-goods
sector”, such as in the country’s export-driven solar and electric-vehicle
industries.

This is one of a series of briefs about the policy implications of

America’s election. Read the others here:

The US tax code will change next year; the presidential election will
determine how
What America’s presidential election means for world trade
Donald Trump is preparing an assault on America’s immigration
system
On energy and climate, Trump and Harris are different by degrees
Both candidates pledge to fortify America. How big will they go?
America’s presidential election marks a fork in the road for Ukraine
Will the next president follow Israel into war with Iran?

A hardline stance towards China is firmly bipartisan. No matter what the

election result is, that will not change. Mr Krishnamoorthi says Xi Jinping,
China’s president, does not grasp “the depths of people’s anger” towards the
Chinese Communist Party “for any number of reasons”. Inside America, the
anger flows not just from the loss of jobs to unbalanced trade but also from
fentanyl deaths—“the fact that the vast majority of fentanyl precursors come
from China, and they’re not doing anything about it.”

As a result of a law championed by congressional China hawks, ByteDance,

a China-based company, will be forced to sell TikTok, the social-media
company it owns, to an approved owner by January 19th 2025 or else it will
be banned in America. The company is contesting the legality of the forced
sale in court.
Eyck Freymann, a China scholar at the Hoover Institution, a think-tank, also
puts the next president’s China problems into three groupings. Handily, these
are alliterative: “trade, tech and Taiwan”. On trade, “China’s overcapacity
problem is getting worse,” Mr Freymann says, but the government cannot
abide mass unemployment in its outward-facing economy. Donald Trump’s
solution is broad-based tariffs of 60% on Chinese goods. Kamala Harris
opposes these, but she would still have to manage frictions with Mexico,
Europe and countries in South-East Asia if they become even larger conduits
of Chinese goods into America than they already are.

On technology, neither candidate would ease President Joe Biden’s

expansive export controls for sensitive goods such as advanced
semiconductors. Ms Harris would perhaps make technocratic adjustments to
the “small yard, high fence” approach that Jake Sullivan, Mr Biden’s
national security adviser, has touted. The policy is supposed to ensure not
just American military supremacy but also command of the technologies of
the future, including artificial intelligence and quantum computing. Ms
Harris would probably remain an adherent of the other China-policy slogan
of the Biden administration, “derisking, not decoupling”.

A Trump administration could be quite different. Robert O’Brien, a former

(and perhaps future) national security adviser under Mr Trump, wrote in an
article in Foreign Affairs published this summer that “Washington should, in
fact, seek to decouple its economy from China’s,” which he said Mr Trump
had actually begun to do “without describing it as such”. Mr O’Brien is one
of several “superhawks” in Republican circles—including Matt Pottinger
and Mike Pompeo, other former senior Trump-administration figures—who
are likely to rile Chinese officials more than the Democrats. Whether Mr
Trump will actually listen to them, or will instead choose a more
transactional approach with Mr Xi, of whom he has spoken admiringly, is a
very different matter.

Such nuances involving Washington’s China factions will matter hugely

when it comes to the most vexing challenge of all: continuing to deter China
from a military invasion of Taiwan. Arms sales to Taipei have increased
considerably, even as the formal policy remains “strategic ambiguity”—
deliberate uncertainty over how extensively America would intervene if
China attacked. A military conflict in the Taiwan Strait between two
nuclear-armed superpowers would be harrowing. It would also be an
economic calamity and would probably trigger a global recession.

And these are not the only tensions that need managing. Elsewhere in the
South China Sea, Chinese coastguard vessels, often backed by navy ships,
have repeatedly rammed and harassed coastguard ships from the Philippines,
with which America has a treaty alliance. Japan and South Korea are willing
to shade themselves under America’s nuclear umbrella for now. If in doubt,
they have the industrial and scientific ability to construct their own.

It is no wonder then that America’s allies, especially those in Asia, are

waiting for the election results with gritted teeth. If the next president
mishandles relations with China, it will have dire consequences for them all.
■

Stay on top of American politics with The US in brief, our daily newsletter with
fast analysis of the most important electoral stories, and Checks and
Balance, a weekly note from our Lexington columnist that examines the state
of American democracy and the issues that matter to voters.
This article was downloaded by zlibrary from https://www.economist.com/united-states/2024/10/10/the-next-american-president-
will-be-a-china-hawk
United States | Lexington

Shirley Chisholm is still winning

The first black woman to run for president taught a lesson in making
political change
October 10th 2024

A CYNIC MIGHT gaze at the photograph and sigh that nothing changes in American
life: a black woman, a candidate for president, stands before a crowd with a
determined look on her face, above a poster extolling a woman’s right to
choose abortion. “Defend the Right,” it reads in part. The photograph, in
black and white, is from 1972. It hangs in an exhibition at the Museum of
the City of New York about Shirley Chisholm, the first black woman to seek
the nomination of a major party.

An idealist, however beleaguered, might instead see an image that captures

what it takes to make change in American life. Unlike this year, when
Kamala Harris, as the Democratic nominee, is running neck-and-neck with
former President Donald Trump, no one had any hope then that Chisholm,
the first black woman to serve in Congress, had a chance of winning the
Democratic nomination, let alone the presidency. Even she didn’t. Instead,
she saw herself, as she put it, as “a catalyst”, pushing against sexism and
racism to expand Americans’ idea of what was just and what should be
possible. “I ran”, Chisholm wrote in “The Good Fight”, her account of the
campaign, “because someone had to do it first.”

She lost that race, but more than half a century on is still gaining ground in
the one she really cared about. “She opened up a portal for many to follow,”
says Yvette Clarke, a congresswoman whose district in Brooklyn, New York,
contains part of Chisholm’s old one, and who can remember, back when she
was seven, the excitement in her home about Chisholm’s candidacy. “If she
didn’t have the courage to take on the battle”, Ms Clarke adds, “who knows
when we would have come to this day.” A documentary about Chisholm
from 2004 captures her philosophy and her fierceness. “Don’t forget to study
hard,” she instructs a group of black children. “I’m paving the way for you.
So don’t disappoint me.” In 2019 Ms Harris told the Grio, a news site, that
she stood on Chisholm’s shoulders, and that her example taught that “you
claim that podium as yours. And you don’t ask anybody permission.”

Ms Harris has not stressed the precedent-setting nature of her candidacy,

emphasising Americans’ needs rather than her (and their) chance to make
history. Chisholm, who died in 2005, did not have the option. “A new hat—
rather, a bonnet—was tossed into the Democratic presidential race today,”
Walter Cronkite said on CBS when she declared that she was running. For her
part Chisholm said she was “the candidate of the people of America”.

Like Ms Harris, whose father is from Jamaica, Chisholm, born in Brooklyn

100 years ago next month, had Caribbean roots. Her mother was a native of
Barbados and her father of British Guiana. He worked as an unskilled
labourer and she as a seamstress, and to save enough to house and educate
their growing family they sent young Shirley and her two sisters off to
Barbados in 1928 to live with family for seven years. Chisholm ascribed her
success partly to the strict British education she received there. It also
accustomed her to the idea of black people in authority, and probably
accounted for her rat-a-tat elocution, her habit of speaking of herself in the
third person and, though she never weighed much more than a hundred
pounds, her intimidating, regal bearing. Gloria Steinem, an ally, once said
her decision to wear a dress rather than blue jeans to the first press
conference of the National Women’s Political Caucus (NWPC), which Chisholm
co-founded, was “entirely due to Shirley Chisholm”, of whom she was
always afraid.

Chisholm graduated from Brooklyn College and became a nursery-school

teacher, then director of a nursery school. She involved herself in
Democratic politics, dominated in Brooklyn by white, Irish-American men,
and eventually helped found an insurgent group to elect black candidates. In
1964 she became the second black woman elected to the New York State
Assembly, and then, in 1968, the first elected to Congress. Her legislative
experience turned Chisholm into “a militant” who saw American politics as
“a beautiful fraud”. Political organisations protected the powerful, she
concluded, and, white or black, male or male (alternatives were scant),
politicians put their party first.

Don’t call me “surely”

“Of my two ‘handicaps’, being female put many more obstacles in my path
than being black,” she wrote in her memoir, titled after her slogan,
“Unbought and Unbossed”. She saw America as “racist all the way
through”, a place where a mere “accident of pigmentation” carried terrible
weight. “I can feel in myself sometimes an anger that wants only to destroy
everything in its path,” she wrote. Yet she believed the American system was
so flexible there was almost no limit to its possibility for reform: “I love
America not for what she is,” she wrote in “The Good Fight”, “but for what
she can become.” In her era, whose echoes seem to be growing louder even
as it recedes in living memory, young Americans—newly conscious of racial
inequities, anxious about economic dislocation brought on by new
technology, radicalised by war abroad, disappointed in their elders—seemed
certain to demand profound change, even as they aged. That’s what she
thought, anyway.

The Democratic field was crowded with white men, ranging from stalwart
liberals such as Hubert Humphrey to the segregationist George Wallace.
Chisholm ran a shoestring campaign that relied almost entirely on
volunteers. Shut out of a debate, she got a court order for equal time on
television. She beat several serious contenders, and though she accumulated
152 delegates that was not enough to extract the policy commitments she
hoped for from the nominee, George McGovern. Most of the otherwise male
Congressional Black Caucus chose not to support her, and even the NWPC
deserted her for McGovern, though in the end he did not deliver the
abortion-rights plank they wanted in the party platform. That struggle would
continue into the future, too. ■

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winning
The Americas
The beating of Argentina’s former first lady fits a shameful pattern
American women go to Mexico for abortions
The drug lords’ side-hustle: smuggling macaws, jaguars and frogs
The Americas | Stubborn brutality

The beating of Argentina’s former first lady fits a

shameful pattern
Progress against the scourge of violence against Latin American women
has been patchy
October 10th 2024

On October 1ST Mexico’s first female president, Claudia Sheinbaum, was

sworn into office. Flanked by female soldiers, she declared that it was “time
for transformation” and “time for women”, before sending a raft of bills to
Congress designed to improve their lot. Meanwhile, at the other end of the
continent, Argentina’s former president, Alberto Fernández, has been
accused of domestic abuse in a case which has shocked the region. Photos
found on his secretary’s phone showed his former partner, Fabiola Yañez,
with bruises on her face and body. Leaked audio files appear to capture Mr
Fernández telling the former first lady to “go to hell, you and all your
offspring, you dumb bitch”. Mr Fernández denies all charges.
This pair of events illustrates the gap between rhetoric and reality in Latin
America when it comes to the treatment of women. Countries across the
region have passed laws against domestic violence in recent decades.
Shelters for abuse victims have popped up; hotlines to report crimes have
become more common. Yet the outcome is disheartening. While the killing
of women has decreased somewhat, the murder of women in their homes
rose by 9% in the decade to 2020. Domestic abuse in some Latin American
countries remains unusually common for their level of development. The
region has more laws on the books that specifically criminalise femicide—
the killing of women—than anywhere else in the world. But this rebranding
has helped little, if at all. In Mexico, where nine women are killed on an
average day, just 1% of femicides end in a conviction (the rate is similar for
all murders).

According to the World Bank, almost one-third of women around the world
have been physically, psychologically or sexually assaulted at least once
during their lifetime (the share is around a fifth in rich countries). The vast
majority of assaults are committed by current or former intimate partners.
The regions with the highest levels of gender violence are sub-Saharan
Africa, South Asia and Oceania, but some countries in Latin America stand
out. Some 60% of women in Bolivia say they have been physically abused
by their partner at least once. In Ecuador, 40% say the same. In Mexico and
Honduras nearly six women per 100,000 are murdered every year. The
global average hovers around two per 100,000.

The impunity enjoyed by abusers is one of the main factors behind

continued violence. In some cases perpetrators get away with it thanks to
connections with politicians, lawyers or drug gangs. Wendy Figueroa
Morales, the director of Mexico’s network of shelters for women, reckons
that more than a third of those who have sought refuge in her havens have
been abused by men with links either to organised crime or politicians. In
one case which reached Mexico’s Supreme Court in 2015, the murderer,
who worked at the office of a state attorney-general, was initially able to
pass his wife’s death off as a suicide. Bolivia’s former president, Evo
Morales, who wants to run for office again next year, is being investigated
for allegedly raping a 15-year-old girl, who subsequently gave birth to his
child. Mr Morales calls the allegations “political persecution”.
Sexism is rampant. In a study of almost 5,000 young men and women in
Latin America conducted in 2017 by Oxfam, almost two-thirds of boys aged
15-19 said that when a woman says no to sex, she really means yes. In a poll
last year, nearly 40% of Peruvians agreed that a woman should obtain her
partner’s permission before leaving the house to see family or friends. In
another survey, almost a third said that a woman is somewhat to blame if she
goes to a party alone and is raped.

These attitudes appear to cause foot-dragging and indifference from the

authorities when responding to crimes against women, granting further
protection to abusers. Disdain reaches the top level of power. When Eyvi
Agreda, a 22-year-old Peruvian woman, was killed in 2018 by her stalker,
Carlos Hualpa—he doused her in petrol and set her on fire on a bus—the
then president, Martín Vizcarra, initially responding by saying, “We feel
very sad but sometimes that’s the destiny of life and we have to accept it.”

Measuring machismo
The violence is not evenly distributed, either geographically or
socioeconomically. Poverty, alcohol consumption and lower levels of
education are all associated with higher levels of violence against women.
Women moving along migration routes are particularly vulnerable. Diego
Battistessa of Carlos III University in Madrid has documented the death,
killing or disappearance of at least 500 Venezuelan women along migration
routes since September 2019. The real number is probably much higher.
Many others are raped.

Charities operating near the Darién Gap, a treacherous stretch of jungle

between Colombia and Panama which many Venezuelan migrants cross to
reach the United States, say that the level of sexual violence they have seen
in recent years is comparable to that observed in war zones.

Murky data, and the reality that many women do not report abuse, mean that
it is difficult to discern which interventions are working to reduce violence.
Government investment in reporting hotlines and awareness campaigns at
least lead to more abuse being reported. In Brazil, after President Luiz Inácio
Lula da Silva came to power in January 2023, he boosted funds for the
women’s ministry by 400m reais ($70m) over four years. Among other
things, the money is being used to employ more people on a domestic-abuse
hotline and to spread awareness about its existence. Calls increased from
82,000 in 2022 to 114,000 so far in 2024, according to Denise Motta Dau,
Brazil’s national secretary for combating violence against women.

But these reports rarely inform investigations into murder or abuse. Just
three out of 19 countries in Latin America use data from previous
complaints of violence when investigating femicides. Those that do show
that complaints often precede more serious violence. In Uruguay in 2022
some 37% of women who were murdered had made formal complaints
before their partner killed them.

What would do most to reduce violence against women would be a

combination of better-trained prosecutors who can achieve even moderate
conviction rates, and education that deters machismo. Unfortunately, that
transformation is likely to be a long time coming. ■

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The Americas | Not the end of it

American women go to Mexico for abortions

They are more readily available than in the past but no less controversial
October 10th 2024

Mexico HAS long been a popular destination for Americans seeking nose jobs
or dental work. But since 2022, when the United States’ Supreme Court
overturned Roe v Wade, thereby removing the constitutional right to
abortion, American women have started heading south to terminate
unwanted pregnancies. That they can do so is testament to a recent
expansion of the right to an abortion in Mexico, a trend that is mirrored
across Latin America.

The number of Latinas who are able to obtain an abortion legally has grown
dramatically in recent years. In December 2020 Argentina, the region’s
fourth-most populous country, made abortion legal. In 2023, after several
Mexican states had removed their prohibitions, the country’s Supreme Court
ordered the rest to follow suit. (Mexico City, the trailblazer, has allowed
abortion since 2007.) In 2022 Colombia’s constitutional court made abortion
legal up to the 24th week of pregnancy, just as it is in Britain.

But the trend is not universal. Latin America still has notably strict rules.
The Centre for Reproductive Rights, an NGO in New York, notes that two of
the four countries in the world that have rolled back abortion rights recently
are in Latin America: Nicaragua and El Salvador (Poland and the United
States are the other two). Both of those Central American countries impose
harsh penalties on women who get abortions and the doctors who assist
them.

In Brazil, the right-wing opposition is proposing a law that would equate

abortion—which is already allowed only with very heavy restrictions—to
murder. Argentine women could see their newfound freedoms removed too.
Their firebrand president, Javier Milei, has said that he would hold a
referendum on the right to abortion.

Where abortion is allowed, it is often permitted only in extremely limited

circumstances. Some countries restrict it to the first trimester, or to those
pregnancies which are the result of rape. Nor does mere legality necessarily
mean abortion is available in practice. For example, many Mexican states
have yet to reform their state constitutions or to ensure that services are
available.

Criminalising abortion makes no sense: it still happens, but in more

dangerous conditions. What’s more, legalising abortion doesn’t necessarily
increase its use. As access to abortion in Latin America has expanded over
the past 30 years, the share of women who get an abortion in a given year
has declined from 35 per 1,000 to 32, according to estimates by the
Guttmacher Institute, a research outfit in New York. (Central America is an
exception; there it has risen despite harsh prohibitions.) One reason is that
Latin America has done well at reducing unplanned pregnancies. They fell
by 27% over the same period. Better reproductive services are a win-win
proposition.■

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abortions
The Americas | Conservation in Latin America

The drug lords’ side-hustle: smuggling macaws,

jaguars and frogs
Illegal trade in wildlife thrives in the world’s most biodiverse region
October 10th 2024

Hyacinth macaws, blue and vast, a metre long from tail to beak; the jaguar,
stocky and muscular, whose ancestors crossed the Bering Strait a million
years ago; sloths, the slow, weird-looking tree-dwellers. Latin America is
home to a dazzling array of creatures. Some 40% of the world’s species are
found between Mexico’s deserts, the Amazon rainforest and the mountains
of Patagonia.

But as the United Nations Biodiversity Conference assembles in Cali,

Colombia, in late October, the trafficking of the region’s biological riches
has become a big business for Latin America’s sprawling organised-crime
groups. The US Department of Homeland Security (DHS) ranks wildlife-
trafficking (including fisheries and timber) as the fourth-largest source of
criminal earnings after drugs, counterfeiting and human-trafficking. This
booming trade is burning through Latin America’s biological resources. One
study found the average size of wildlife populations had shrunk by 95%
since 1970 in Latin America and the Caribbean—more than in any other
region of the world.

Demand for creatures takes many forms. They can be sold as pets, status
symbols, delicacies and the components of traditional remedies. At ports
customs officials find birds in bottles and jaguar fangs in jacket linings.
There is a lively local market, too. Mexican mafia bosses keep big cats. In
Peru, giant frogs from Lake Titicaca are blitzed into “frog juice”, an
allegedly aphrodisiac smoothie. China is the biggest market for many
species. The Wildlife Conservation Society, an NGO in New York, estimates
that wildlife trade between South America and Asia has doubled over the
past decade.

The Convention on International Trade in Endangered Species of Wild

Fauna and Flora (CITES) has proved no match for gangsters with machine guns.
Signed by almost every country, it requires a licence to trade some 40,000
species across borders. But it is up to member countries to enforce CITES rules.
Many do not.

Criminal groups tend to handle the work of moving creatures across borders.
People from local communities do the poaching. The traffickers make the
real money, with mark-ups of 20-fold or more. Sentences are light, but such
crimes are rarely prosecuted at all. This makes wildlife-trafficking a
tempting additional business for groups that already run supply chains from
jungles to ports.

The growing involvement of criminal groups has pushed law-enforcement

agencies to take wildlife-trafficking more seriously. Some countries have set
up specialised enforcement units, aiming to nab gun-runners and drug-
smugglers who get sloppy with their wildlife-trafficking sideline. Keith
McKinney, who heads one such unit of the DHS, calls wildlife trafficking “the
soft underbelly of organised crime”.
Earth League International, an NGO, hopes the organised-crime connections
lead to harsher and more consistent penalties for the wildlife-traffickers it
tracks. It has infiltrated gangs moving jaguar fangs in Bolivia and totoaba
fish in Mexico. In both cases Chinese traffickers were arrested. The group
has identified hundreds of “persons of interest” across Latin America, the
vast majority of whom are also involved in crimes such as money-
laundering and human-trafficking, which keeps officials in the United States
keenly interested.

Colombia has taken the strongest stand of any Latin American country
against wildlife-trafficking. Culprits face prison sentences of up to 12 years,
and fines of up to $12m. The country has a specialised police unit, the
Carabineros, partly devoted to combating wildlife crime.

But the idea that such supply-side interventions could halt the trade is a
pipe-dream. Police forces in Latin America often lack the resources needed
to curb the most disruptive gang activities, let alone the niche of wildlife-
trafficking. Police officers may not know which species are illegal to trade.
Corruption is widespread, and convictions for trafficking are even rarer than
prosecutions. Some governments are either disengaged or complicit.

That means traffickers will always find a way to meet the strong and
growing demand for wildlife. Curbing demand is not much easier. In Brazil,
NGOs run educational campaigns in an attempt to change cultural habits of

consuming wild animals as a culinary delicacy or keeping them in cages. A

Chinese commuter might be met with clips of Jackie Chan warning them off
shark fin and big-cat bones. But such campaigns probably work better for
iconic species than for orchids or sea horses. And there always will be a hard
core of consumers who are unmoved.

Squawking supply chains

A more radical idea is the creation of a regulated supply of wildlife.
Licensing the limited and managed capture of wild creatures, or captive-
breeding programmes, could reduce the pressure on wild populations.
Various breeding farms already sell exotic birds across the region. But
illegally caught wildlife often ends up being laundered through the legal
supply. And it also muddles the message to consumers, when a black-and-
white ban might work better.

Ideally, investigators could evaluate interventions to figure out what works.

But the most critically endangered species, like the vaquita porpoise, of
which there are only ten known individuals remaining, have little time left.
Conservationists and law enforcement need to hit both supply and demand,
hard and fast. ■

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dquo;
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smuggling-macaws-jaguars-and-frogs
Asia
America v China: who controls Asia’s internet?
Asia is weighing data-centre ambitions against sustainability
Kazakhstan’s referendum on nuclear energy could benefit Russia
Is India’s economy slowing down?
New railways could transform South-East Asia
Has Narendra Modi lost his mojo?
Asia | Digital domination

America v China: who controls Asia’s internet?

Amid an explosive data and AI boom the superpower contest hots up
October 8th 2024

Nusajaya Tech Park looks like any other construction project. Cranes and
building materials sit scattered around this industrial site in Johor, Malaysia,
just 15km from the border with Singapore. But appearances are deceptive.
Nusajaya is at the heart of an enormous data-centre boom that is taking place
in one of the world’s fastest-growing regions. From here you can see the
digital war between America and China unfold before your eyes. For
America the view isn’t pretty. Even as it builds up its military presence in
Asia, it risks falling behind in the digital contest.

The competition is being fought over the control and ownership of the data
centres, undersea cables and wiring that form the physical underpinnings of
the internet. America has dominated communications infrastructure since the
second world war. But its grip has slipped. China has become far more
technologically autonomous in the past decade, according to a composite
index of “digital dependence” that assesses hardware, software and
intellectual property, put together by two analysts, Maximilian Mayer and
Yen-Chi Lu.

In Johor the two superpowers’ infrastructure sits side by side, in open

competition. Down the street from Equinix, an American data-centre host,
are the facilities of GDS, a Chinese rival and the “preferred vendor” of Alibaba
and Tencent, two Chinese tech giants. Across Asia, superpower affiliation
and the degree of overlap vary by country. Among big cloud firms, China
controls all of the cloud-computing clusters in Thailand and the Philippines,
despite the fact that America views both as “major non-NATO allies” (see
chart). Of a selection of 12 Asian countries, seven have most of their cloud
clusters run by Chinese firms. At the other end of the spectrum Australia,
India and South Korea have largely American-run systems, according to a
study in 2023 by Vili Lehdonvirta and colleagues at the Oxford Internet
Institute.

China’s firms already have big footprints. Alibaba has data centres in nine
Asian countries, for example. And the contest is set to intensify. Over 500
mid-sized to large data centres have been launched in Asia since 2021, and
another 270 could come online next year. Spending on the servers that
populate them will rise by 39% this year, forecasts Gartner, a consultancy.
Mobile-data traffic in Asia is expected to quadruple by 2030, according to
GSMA, a trade body. New computational needs for AI applications have further

stoked data-centre demand.

Commercial imperatives cannot be easily divorced from security. China’s

planning ministry views data as a “factor of production” alongside land,
labour and capital. Early internet evangelists thought data would flow freely
through a decentralised network. Instead there are four choke points:
“internet exchange points” (IXPs), which let internet firms cut costs by routing
traffic down the hallway rather than across the world; data centres; undersea
fibre-optic cables; and telecoms firms. All are vulnerable to espionage.
Tapping undersea cables has been a trick of spooks since the cold war.
Landing stations are hubs for data interception. Back doors can be installed
in infrastructure. America’s government has warned that Chinese presence at
IXPs creates “the capability to misroute traffic and, in so doing, access and/or

manipulate that traffic”. Even if the data flowing through IXPs are encrypted,
some experts think metadata could be exposed.

Doubts over supposedly secure data centres in Asia are swirling. In 2019
Papua New Guinea found that a Chinese-subsidised data centre in Port
Moresby used “openly broken” encryption methods that exposed
government data to interception. Governments can compel their tech firms
to fork over data. As Abraham Newman and Henry Farrell show in their
book “Underground Empire”, American intelligence has forced cloud firms
and companies such as AT&T to surveil allies and enemies. China does the
same. No sharp distinction exists between Chinese tech firms, the state and
the Chinese Communist Party. Chinese law gives the state broad authority to
make companies turn over data. This power is not absolute: Alibaba and
Tencent have refused government requests for customer data before. But
where there are data of interest, China expects to be told.

Live wire
American and some regional officials worry that in a crisis China might shut
off data centres or telecom services. Short of that, China could combine
cyber-espionage with its legions of state-linked hackers to harass countries
that anger it. According to a former American cyber-security official, this is
easier to do if networks do not have to be reverse-engineered from afar.

Chinese firms’ high market share partly reflects an overt Chinese

government plan. Its Digital Silk Road strategy, an offshoot of the Belt and
Road Initiative, combines infrastructure rollout with an attempt to reshape
data governance. But Chinese companies are also good value, offering cut-
price cloud services that compete at the technological frontier. Since 2023
Alibaba Cloud has slashed its prices three times. Huawei, a telecoms-
equipment firm, has become known for its aggressive tactics to poach
customers.

As well as wires and servers, China’s values are being built into Asia’s
digital boom. China has promoted “data sovereignty” at home and abroad,
while increasing its heft at global technical standard-setting bodies. Control-
obsessed governments like Vietnam’s have taken inspiration from China’s
stringent data-localisation laws, which require data created in China to
physically reside there while curtailing outbound transfers. These laws have
wrenched Chinese data out of the hands of American companies such as
Apple and Tesla. Put together, argue Emily De La Bruyère and Nathan
Picarsic, two researchers, China’s strategy amounts to a drive for
“asymmetric dominance”, seeding its data infrastructure in other countries
while guarding against outside interference.

American efforts to curb Chinese digital influence have notched up some

successes. American restrictions on high-tech chips are probably holding
back China’s AI data-centre ambitions. Authorities have blocked several
transpacific cable projects from landing in Hong Kong, re-routing them
through friendlier places like the Philippines. In 2022, brandishing grants
and sanctions threats, America ousted HMN Tech, a Huawei spin-off, from
running a cable network linking South-East Asia to Europe. Direct
American-Chinese cable links have fallen away; only one has been built in
the past 15 years, notes Richard Sun of OMS Group, a cable-builder.

Some American allies have pivoted against China’s digital build-out. Japan
and Australia have cracked down on Chinese firms, citing risks to their
sovereignty. They have banned Huawei and ZTE 5G infrastructure. In
September, Japan and Australia launched a joint programme to build digital
infrastructure in Pacific Island nations; the prime minister of Tuvalu,
Taiwan’s strongest supporter in the Pacific, told Nikkei Asia, a newspaper,
that he was worried about Chinese cyber pressure.

India has gone further, banning hundreds of Chinese apps and probing
several Chinese firms, including Alibaba and Xiaomi, a phonemaker.
Alibaba Cloud closed down its data centres in India and Australia this year.
Some American officials want to create a new kind of digital trade pact in
Asia that offers access to AI and cyber-security technologies and standards, in
return for assurances on keeping some Chinese technologies out.

Until then many countries are hedging their bets. Warnings about the risks of
Chinese digital infrastructure fall on deaf ears: China may spy, but so does
everyone else—America most of all. “Everything is a risk,” replies a
Malaysian official, asked about using Huawei’s kit. That attitude may prove
a mistake. Weaker countries look particularly exposed. Chinese hackers have
penetrated governments from Vietnam to Indonesia, and broken into
telecoms to spy on Uyghur travellers in Malaysia and Thailand. In the
Philippines, where at least one big telecom network runs on Huawei 5G, the
cyber-defence bureau is woefully underfunded. As Asia’s digital build-out
accelerates, countries’ allegiance is being baked into their cables and data
centres whether they realise it or not. ■
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internet
Asia | A glitch in the matrix

Asia is weighing data-centre ambitions against

sustainability
Malaysia and Singapore illustrate the region’s resource balancing act
October 10th 2024

The jungles of Johor, a Malaysian state, were cleared to grow pepper in the
1800s. After that came rubber and oil-palm plantations, followed by
factories making electronics. Today data centres are thriving there, and are
embroiled in a geopolitical tussle between America and China. But in Johor,
other concerns are on people’s minds: how to make the data-centre boom
sustainable.

Johor’s boom stems from a decision made by its neighbour. Singapore has
long been South-East Asia’s data-centre hub, meeting the region’s surging
demand for digital services. But it began to fret about how much water, land
and energy the sites use. So in 2019 it became the first Asian country to
pause new construction. Firms then built more in Johor, which is well
connected to Singapore. Now Malaysia is grappling with similar problems.

The neighbours illustrate how considerations can differ. Tiny Singapore has
little appropriate land free for new data centres. They already guzzle 7% of
its electricity, most of which is generated from natural gas. Officials worry
unfettered growth will threaten net-zero goals. Though the government
began approving some new data centres last year, it did so at a much slower
pace. It has also introduced new water and energy-efficiency guidelines.

Johor, by contrast, has lots of cheap land and power. Malaysia’s government,
keen to attract foreign investment, has introduced tax incentives for data-
centre developers. It hopes the new digital infrastructure boosts its existing
tech industry and attracts AI startups.

Malaysia still has some constraints. Johor has long faced episodic water
shortages. If these worsen, data centres “could become the villain”, says
Francis Hutchinson of ISEAS-Yusof Ishak Institute, a Singaporean think-tank.
Lee Ting Han, a local politician who chairs a new state committee
monitoring data centres, thinks their growth is “just too fast” for existing
infrastructure. Some also worry the boom will create few jobs. Once
operational, data centres usually require few staff on-site. High-tech parts,
like chips, are often imported. Mr Lee says Johor “understands the potential”
of data centres but is not yet seeing “tangible benefits”. The carbon cost is
also a downside. Most of Malaysia’s electricity, like Singapore’s, is
generated by burning fossil fuels. Extra demand from data centres will
probably increase emissions. In South-East Asia’s tropical climates, more
water and power are needed to cool servers.

Two things could help. One is if the digital boom speeds up Asia’s energy
transition. Google, for instance, is investing in solar power in Taiwan. The
second is to learn from Singapore. Malaysia is already doing so. Chang Lih
Kang, Malaysia’s minister of technology, says the government is referring to
Singapore’s efficiency guidelines while writing its own.

Though this will help, data centres’ demands will grow. Excluding China,
they will consume 8% of Asia’s power by 2030, up from 4% today, predicts
Morgan Stanley, a bank. The sites have become critical infrastructure, like
ports or airports, and no government wants to be left behind. Policymakers
will continue to balance digital ambitions with resources. ■
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against-sustainability
Asia | Going nuclear

Kazakhstan’s referendum on nuclear energy could

benefit Russia
The opposition have been barred from campaigning or locked up
October 10th 2024

“Vote for a nuclear power station!” So said the slogan plastered on

billboards as Kazakhstan voted on October 6th in a referendum on whether
to embrace atomic energy. The government went all out to win a “yes” vote,
despite the country having a devastating history as a Soviet testing ground
for nuclear bombs. Officials argued that building an atomic power station is
vital to ensure Kazakhstan’s energy security and reduce reliance on fossil
fuels to meet net-zero targets in 2060. Nuclear energy, they pointed out, is
cleaner than the coal-fired plants that currently generate 70% of power in
Kazakhstan, which is the world’s largest uranium producer.
Opponents countered that it would be safer and greener to expand
renewables. Nuclear sceptics aired concerns about the environmental impact
around the planned site at Lake Balkhash in the south-east, where water
levels are already falling. Critics also questioned whether the government of
a country where corruption often dogs big-ticket projects could be trusted to
build a nuclear plant safely without money going missing. And looming
large over the debate was Kazakhstan’s history as a nuclear testing ground.
Between 1949 and 1989, the Kremlin exploded 456 nukes at the
Semipalatinsk range in north-eastern Kazakhstan, where locals are still
suffering the consequences.

But the naysayers’ voices were drowned out by the officially backed “yes”
campaign, which monopolised public hearings. In Semipalatinsk, one vocal
anti-nuclear activist was arrested during an event. The pro-nuclear lobby
swamped the media and dominated the streets with billboards.

Almassadam Satkaliyev, the energy minister, framed the referendum as a

“patriotism” test, neatly turning opponents into traitors. Officials prevented
“no” campaigners from holding anti-nuclear rallies. A dozen activists were
arrested, accused of plotting to foment unrest (six have been released on
bail). The referendum was “political theatre” to lend the government’s
nuclear ambitions a veneer of legitimacy, thinks Dosym Satpayev, an
analyst.

Unsurprisingly, Kassym-Jomart Tokayev, the president, comfortably won.

Official results show that 71% of voters cast their ballots in favour of
building a nuclear power station. Companies from at least four countries are
now in the running to construct it, including Russia’s state-owned Rosatom.

The inclusion of Kazakhstan’s bellicose neighbour and ally on that list has
raised hackles with many Kazakhs. Russia already controls the export routes
for 95% of Kazakh oil. Many fret that granting it even more leverage over
Kazakhstan’s energy sector would be foolhardy. ■
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could-benefit-russia
Asia | A quieter tiger?

Is India’s economy slowing down?

New data highlight old problems
October 10th 2024

Speaking at a conference on India’s economy this week, Narendra Modi, the

prime minister, was typically bullish about his country’s prospects. The
world, he suggested, is living through an “Indian era”. Rapid growth,
favourable demography and an emerging tech industry have put the country
at a “sweet spot”, he said.

Recent data, though, suggest that some sourness is creeping in. After roaring
growth in recent years, the economy seems to be losing momentum.
According to the latest official figures, the annual GDP growth rate eased to
6.7% between April and June, down from 7.8% in the previous quarter. That
is the slowest expansion in more than a year.
Data released in the past fortnight suggest that the slowdown has continued.
An index tracking output in eight core industries, such as coal, oil and
electricity, fell in August for the first time in more than three years. In
September car sales, a proxy for consumption, fell by 19% year on year.
Growth in collections from the goods-and-services tax, another indicator of
economic health, also fell to its lowest level in more than three years. Even
India’s stockmarkets, which have been on a tear recently, suffered losses for
six consecutive days.

Things could get worse if the conflict in the Middle East escalates and oil
prices keep rising. More than 85% of India’s oil consumption is sourced
from abroad, making it vulnerable to oil-price shocks. Estimates suggest that
a $10 increase in the price of an oil barrel could shave up to 0.4% off India’s
GDP. The inevitable rise in fuel subsidies would also crowd out other

government spending.

The finance ministry has acknowledged these developments, describing

them as “incipient signs of strains”. Nevertheless, few policymakers believe
that the new data are more than temporary blips in India’s trajectory. At its
latest meeting on October 9th, the Reserve Bank of India chose to leave
interest rates unchanged and retain its growth forecast of 7.2% for the
current fiscal year. The central bank governor insisted that “India’s growth
story remains intact.”
As Mr Modi routinely reminds Indians, their country is the fastest-growing
big economy in the world. And even if growth were to fall, it is in no danger
of losing that title (see chart). The Congress party, the main opposition
group, is sceptical of the government’s “bombastic” talk. Jairam Ramesh of
Congress warned that “three dark clouds” loom over the economy: weak
private investment, stagnant manufacturing and falling real wages.

These criticisms have some merit. Most concerning for Mr Modi will be the
state of manufacturing. Boosting the sector is the centrepiece of his
economic agenda for his third term. But growth in factory output is slowing.
In September an index tracking manufacturing activity expanded at its
slowest rate in eight months. In Tamil Nadu a strike by workers at a
Samsung plant, which has now entered its second month, has cast a cloud
over Mr Modi’s ambitions to make India an electronics hub.

The country’s labour issues, however, extend beyond pay disputes. Too
many people still work on farms. Official data released last month revealed
that 46% of the country’s labour force worked in agriculture in 2023-24, up
from 43% in 2018-19—an influx of 68m workers. During the same period,
the share in manufacturing fell from 12% to 11%. Unemployment is also a
big issue. According to the Centre for Monitoring Indian Economy, the
jobless rate was 7.8% in September, and has remained around that level for
over two years, even as the economy has grown.

A slumbering beast
Mr Modi’s government wants to fix this. In its budget earlier this year it
splurged on new schemes, such as an apprenticeship programme, and
extended existing ones. But more is needed. Too much of the government’s
subsidy pot is directed towards capital-intensive sectors rather than labour-
intensive ones, says Abhishek Anand, an economist at the Madras Institute
of Development Studies in Chennai. And policymakers should make it
easier for firms to scale up operations. In a new study, Mr Anand and
colleagues document the growing trend of firms operating multiple small
factories within a state to diversify risk and comply with regulations—but
these firms tend to be less productive. ■

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Asia | Doing the locomotion

New railways could transform South-East Asia

China is keen to assist
October 10th 2024

Few better ways exist to see Vietnam than to travel on its north-south
railway. It was originally built by French colonialists, and its trains pass rice
paddies, verdant mountains and spectacular coastlines as they go from
Hanoi, the capital, to Ho Chi Minh City. However, the trains move at a
leisurely 30 miles (50km) per hour. Rather than spend 36 hours on the train,
most people take a two-hour flight.

All across South-East Asia railways are old and slow, and tend not to
connect with one another. The region has only 24,000km of railway lines—
roughly the same as Mexico, which has a land mass half its size. For decades
bigwigs at the Association of South-East Asian Nations, an
intergovernmental forum that aspires to increase trade, have talked up the
goodies that might flow from laying a lot more track. Wheels are slowly
starting to turn.

One accelerant has been the completion, in 2021, of a semi-high-speed line

from Kunming in southern China to Vientiane in Laos. The idea for a long
time has been that this could become the first stretch of a line that would run
all the way to Singapore (see map). Its inauguration has generated
momentum elsewhere, says David Lampton of Johns Hopkins University.
Thailand has said it is speeding up construction of a high-speed railway into
Laos; Malaysia is reviving long-stalled plans to build a $25bn line south to
Singapore; Vietnam has just announced plans for two railways that will run
from Hanoi to the Chinese border. Last year Indonesia launched its first
high-speed service between the cities of Jakarta and Bandung.

To expand their networks, South-East Asian countries need expertise and

money. China is offering both. Though it now talks much less than it did
about its Belt and Road investment initiative, China remains by far the
biggest foreign provider of finance for South-East Asian infrastructure. As
of 2022 it was involved in two dozen of the region’s 34 biggest projects
(those costing more than $1bn), reckons the Lowy Institute, an Australian
think-tank. Six of them, equivalent to 60% of total commitments, were
railways.
Foreign fields are attractive to Chinese rail companies, which have mostly
finished rigging up their own country’s high-speed network. And South-East
Asia is a particular priority for the government. Improving freight there
would benefit Chinese companies that are moving factories to the region.
Last year Chinese firms coughed up a third of all the foreign investment that
went into South-East Asia’s manufacturing sector, up from 18.5% in 2019.

Delays doubtless lie ahead. Infrastructure projects that are backed by China
tend to fall through a lot more often than others, notes the Lowy Institute. It
reckons that between 2015 and 2021 only a third of the funds China said it
was committing to infrastructure in South-East Asia actually ended up
flowing into something that got finished. This is in part because China likes
to get involved in the most ambitious projects, which are most vulnerable to
slippage or downsizing. But it is also because big Chinese investments are
controversial, and tend to get re-examined when governments change.

A Chinese-backed rail line that is due to connect Malaysia’s east and west
coasts has caused no end of rows since it was announced in 2016. Its plans
have been reconfigured several times. Last year the Philippines, which has
only a few hundred kilometres of railway, said it would no longer seek
Chinese help to construct three new rail lines (fear of getting in hock to
China, and anger over disputes in the South China Sea, may have played a
role). Yet it insists it has other options: officials said they would instead seek
funding from India, Japan or South Korea. Perhaps one day South-East
Asia’s stunning vistas will whizz past travellers—in the blink of an eye.■
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asia
Asia | Banyan

Has Narendra Modi lost his mojo?

Two state elections suggest that India’s prime minister is no longer such a
vote-winner
October 10th 2024

Pity India’s pollsters. They have never been much good at predicting
election results. In June, they suffered a humiliating setback when India’s
ruling Bharatiya Janata Party (BJP) unexpectedly lost its majority in a general
election. Pradeep Gupta, the head of Axis My India agency, was so upset
that he burst into tears on live television.

Promising to do better, pollsters soon turned their attention to the first two
regional elections of Narendra Modi’s third term. (India’s prime minister
pulled together a coalition government.) Their exit polls mostly predicted a
crushing defeat for the BJP in the northern state of Haryana and a hung
parliament in the union territory of Jammu & Kashmir. When results were
announced on October 8th, the pollsters were confounded again: the BJP won
easily in Haryana and an opposition alliance gained a majority in Jammu &
Kashmir.

There are three conclusions to be drawn—apart from the fact that Indian
elections are hard to predict. First, the BJP electoral machine appears to have
found its feet again, despite Mr Modi’s weakened mandate. His new
government has struggled to adapt to unfamiliar pressure from allies,
opposition parties, courts and activists. It has also faced a rift with the
Rashtriya Swayamsevak Sangh (RSS), the Hindu nationalist movement from
which it grew.

The BJP faced additional challenges in Haryana, a largely agricultural state

where it has been in power since 2014. Many farmers there worried that Mr
Modi might reintroduce agricultural reform laws that he was forced to repeal
in 2021 after massive protests. The party’s reputation also took a hit in 2023
when several female wrestlers from the state accused a BJP legislator of sexual
harassment. In the general election, the BJP won only five out of ten seats in
Haryana, half its tally in 2019.

Yet, in the state poll, the BJP took 48 of 90 local assembly seats. A decisive
factor was the RSS. It took a back-seat role in the general election because of
disagreements with BJP leaders. But the group launched a farmers’ outreach
scheme in Haryana in September, deploying 150 volunteers to each district.
It also helped that the BJP decided to appoint a new chief minister from a mid-
tier caste in March and to choose dozens of new candidates.

A second conclusion is that the Congress party, the BJP’s main national rival,
has much work to do. Congress won half the seats in Haryana in the general
election, but only 37 of 90 in the state poll. Party insiders blamed
complacency in its leadership, a dearth of fresh blood among candidates and
over-reliance on a local party chieftain from the upper-caste Jat community.
That alienated many lower-caste voters. Congress also failed to negotiate a
seat-sharing pact with one of its own partners in an opposition alliance.

The BJP may be heartened, too, by its performance relative to Congress in

Jammu & Kashmir. Opposition leaders portrayed the result as an indictment
of Mr Modi’s move to strip the mostly Muslim region of its semi-autonomy
in 2019. The result will no doubt increase pressure on Mr Modi to restore its
statehood. Yet the BJP still won 29 of 90 seats (all in mostly Hindu Jammu).
Congress won just six; its partner, the National Conference, took 42. BJP
leaders cite that as further evidence that, in a straight fight, they easily
outgun Congress. They also argue that the election’s peaceful conduct
proves that Mr Modi has brought stability to the region.

Yet, cheery as this might all seem for the BJP, it is less so for Mr Modi. A third
conclusion is that his party appears to be growing less dependent on him to
win votes. In Haryana, he held just four rallies during the election campaign,
compared with ten in 2014 and six in 2019. In Jammu & Kashmir, he held
four. And BJP candidates in both polls focused more on local issues than on
his image as a muscular, infallible leader. That could spell trouble for him if
rivals in the BJP launch a leadership bid in the future.

The big question now is how the results will affect the next state elections,
especially one in Maharashtra due by November 26th. Regional factors will
probably dominate there, too, but the results from Haryana and Jammu &
Kashmir could strengthen the BJP’s hand in seat-sharing talks with coalition
partners while weakening Congress’s bargaining power. The outcome in
Maharashtra will determine whether the BJP can consolidate its apparent
comeback from the general-election upset. The race will be tight, according
to polls. But don’t bet on it. ■

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China
How to escape from China to America
China | Immigration

How to escape from China to America

We travel with Chinese migrants on the deadly journey to America’s
border
October 8th 2024

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america
Middle East & Africa
Israel has these four options for attacking Iran
Iran’s leader must choose how to fight his war with Israel
The threat of an Israeli attack is reviving Iranian nationalism
Israel’s invasion of Lebanon may bolster support for Hizbullah
How to send a cake from New Jersey to Accra
South Africa’s coalition government has improved the vibes
Middle East & Africa | War in the Middle East

Israel has these four options for attacking Iran

Its politicians, and some generals, are gung-ho that the moment has come
October 10th 2024

At least twice in the past, in 2010 and 2011, Israel’s generals have been
ordered by the prime minister, Binyamin Netanyahu, to prepare for
imminent strikes on Iran. In both cases the security chiefs questioned the
legality of the order, given without the necessary cabinet authorisation. In
neither instance did Israel go to war with the Islamic Republic.

Today Israel is once again on the verge of thumping Iran. This time Mr
Netanyahu will have no problem getting approval from a cabinet which if
anything is even more gung-ho than he is. Nor are the leaders of Israel’s
armed forces as opposed to such action as before. And this time Israel
believes the odds are in its favour.
Read all our coverage of the war in the Middle East

Israel’s leaders reckon that the 181 ballistic missiles fired by Iran at Israel on
October 1st leave them with little alternative but to hit back. What form the
retaliation takes could have wide-ranging implications for the Middle East
and beyond.

Four types of targets are being considered. Mr Netanyahu has long favoured
bombing the sites where Iran enriches uranium and carries out research for
its nuclear programme. But these are dispersed around the country (see map)
in heavily fortified locations deep underground. Doing significant damage
would require large numbers of bunker-busting missiles launched from
dozens of aircraft operating at least 1,200km (750 miles) away from Israel.
Israel’s air force is the most powerful in the region but it may be difficult for
it to set back Iran’s nuclear programme by more than a few months.

A more vulnerable strategic target would be Iran’s main ports, specifically

the oil terminals which provide most of Iran’s foreign-currency income.
Israeli strategists believe that destroying them would deal a severe blow to
Iran’s already shaky economy. This, they hope, might provoke further unrest
within Iran. Some dream that it could even lead to the regime’s downfall.
A third choice would be to target the country’s leaders directly, just as Israel
has attacked the leaders of Iran’s proxies and allies, Hizbullah in Lebanon
and Hamas in Gaza. This would be tricky, as Iran’s most senior figures
would almost certainly retreat to secret protected locations if an Israeli strike
looked imminent. And the impact of such attacks is always uncertain. The
question of who will replace Iran’s ageing supreme leader, Ali Khamenei, is
already a subject of much deliberation there.

Israel’s most obvious military response would be a tit-for-tat strike on Iran’s

missile bases. This option would arguably be the least likely to provoke yet
another missile salvo from Iran. But Mr Netanyahu believes that Israel has a
historic chance to reshape the region. And this time some of his generals,
though not all, agree. They think that the fact that Israel has withstood two
major salvoes of Iranian missiles (the first in April) with barely any
casualties or serious damage proves that Israel can withstand whatever Iran
throws at it.

Those in favour of hitting Iran’s nuclear programme and economic

infrastructure also believe that Israel has a rare momentum behind it, having
in the space of weeks decapitated the main leaders of Hizbullah, Iran’s most
powerful client militia in the region, and having destroyed a large proportion
of its missile arsenal, too. Those missiles were supplied to Hizbullah by Iran
to act as a deterrent against Israel attacking the Islamic Republic. Much of
that deterrent has gone up in smoke.

So why, more than a week after Iran’s missile attack, has Israel not yet
struck back? Not everyone in Israel’s security circles is in a rush to change
the Middle East. Several of the country’s generals are counselling caution.
For a start, they believe that Israel cannot afford to launch a campaign of this
magnitude without co-ordinating with its main ally, the United States. But
President Joe Biden has publicly spoken out against an Israeli attack on
Iran’s oil infrastructure, since that risks causing global energy prices to soar
on the eve of America’s elections. So far the president has also been against
an Israeli attack on Iran’s nuclear facilities.

Despite the support worth nearly $18bn that America has given Israel in the
past year, and although American planes and warships played a big part in
intercepting Iran’s missiles, Israel has yet to share its plans with its closest
ally. Mr Netanyahu even vetoed a proposed trip by Yoav Gallant, the
defence minister, to Washington to discuss the options. Meanwhile, in
televised statements Mr Netanyahu has promised the Iranians they will be
free of their regime “a lot sooner than people think” and has exhorted the
Lebanese to “free your country from Hizbullah”.

On October 9th Mr Netanyahu spoke by phone with Mr Biden for almost an

hour. They spent most of the call discussing the possible strikes but did not
seem to reach any kind of agreement.

There are Israeli defence officials who worry that provoking an all-out war
with Iran, while Israel is still fighting Hamas in Gaza and has launched a
ground invasion against Hizbullah in southern Lebanon, would stretch
resources dangerously thin. Some generals warn of squandering the gains
already made.

But since the disaster of October 7th 2023, the credibility of Israel’s military
and intelligence chiefs in standing up to the prime minister has diminished.
Like Mr Netanyahu, they seem ready to risk a devastating conflagration in
order to transform their legacy from having overseen Israel’s greatest
debacle to becoming the victors of a regional war. Like him, they may yet
fall victim to their own hubris. ■

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options-for-attacking-iran
Middle East & Africa | Tehran’s calculus

Iran’s leader must choose how to fight his war

with Israel
Hardliners may force the supreme leader to escalate the conflict with
Israel
October 10th 2024

SAFE TO say it is not how he pictured his dotage. Ali Khamenei, Iran’s
supreme leader, wanted to spend his final years shoring up his creaky
dictatorship. Instead he has spent 2024 burying his hand-picked president
and approving risky strikes on Israel: hardly a recipe for stability.

Mr Khamenei, 85, is a reluctant wartime leader. Critics also charge he is an

inept one. Now he must decide whether the biggest threats to Iran—and,
perhaps, to his own rule—come from within or without.

Read all our coverage of the war in the Middle East

To one side are hardliners in the clergy and the Islamic Revolutionary Guard
Corps (IRGC) who think Mr Khamenei has been dangerously passive amid
months of Israeli attacks on Iranian interests. He did approve a barrage of
drones and missiles in April as retaliation for an Israeli air strike on the
Iranian embassy compound in Damascus. But it was telegraphed so far in
advance that it was widely seen as an embarrassment, more likely to
embolden Iran’s enemies than deter them.

Sure enough, Israel kept up an audacious campaign of assassinations and air

strikes. By the end of September it had decapitated Hizbullah, Iran’s most
valuable proxy militia. Hardliners began to insist that Binyamin Netanyahu,
the Israeli prime minister, would come next for the Islamic Republic too,
unless Iran showed Israel that it could fight back.

When Mr Khamenei approved a ballistic-missile attack on October 1st, it

was not only meant to deter Israel. It was also meant to reassure the
hardliners seething about his inaction. It does not seem to have worked.
People close to the IRGC still grumble about how the doddering old man has
destroyed Iranian deterrence.

Hawks are already pushing for an even harsher response, if Israel retaliates.
Kayhan, a newspaper whose boss is appointed by Mr Khamenei, called for
strikes on Israeli gasfields and oil refineries. Some have also called for Iran
to build and test a nuclear weapon (Mr Khamenei has long preferred to stay
just below the nuclear threshold). To that end, dozens of MPs have urged the
national-security council to review Iran’s defence doctrine.

Yet these are not the only voices in Mr Khamenei’s ear, even if they are the
loudest. Masoud Pezeshkian, elected as president in July, still seems keen on
pragmatism. He has called for new talks with the West over Iran’s nuclear
programme. That will be impossible if Iran keeps exchanging missile
barrages with Israel.

Iran’s neighbours are also urging restraint. On October 3rd Abbas Araghchi,
Iran’s foreign minister, met his counterparts from the Gulf Co-operation
Council, a club of six Arab monarchies. It was the first time an Iranian
foreign minister has been invited to meet a body that is usually suspicious of
Iran, if not downright hostile.
Today, though, Gulf states are keen to avoid a bigger war that could see
them caught in the crossfire. They promised Mr Araghchi that they would
remain neutral, urged his government to lower tensions with Israel and
dangled the prospect of trade and investment as an incentive.

Mr Khamenei fears a public that has risen up repeatedly. Many Iranians are
furious that the regime has spent billions of dollars arming proxies that were
meant to deter Israeli attacks on Iran but have instead invited them. Some
might well cheer if Israel struck the IRGC. Yet others might rally around the
regime (see next article).

Some analysts in Iran argue that Mr Khamenei still wants to avoid war with
Israel. That is a fallacy: he has been at war with Israel for decades. Until this
year, though, he chose to fight that war indirectly. That may still be his
preference, and with good reason—but it may not be acceptable to the
hardliners who increasingly hold sway. ■

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choose-how-to-fight-his-war-with-israel
Middle East & Africa | Waiting for war

The threat of an Israeli attack is reviving Iranian

nationalism
Iranians fear their country is being dragged into war
October 10th 2024

In a teahouse in southern Tehran, the poorer half of Iran’s capital, a female

storyteller regales a roomful of shisha-puffing men with tales from Persia’s
ancient epic, Shahnameh. “He didn’t want war,” she tells them of its warrior
hero, Rostam. “He did everything to avoid it, but they kept provoking, and
then they forced him to fight.”

For years the ayatollahs’ critics in Iran called on America and Israel to
rescue them from their oppressor, the Islamic Republic’s clerics and guards,
only half in jest. Their anger has not subsided. But the looming threat from
Israel has turned the mockery to foreboding. For the first time in over three
decades, Iranians worry that their country, like Rostam, is being dragged into
war.

The regime is trying to quell such fears. There has been no mass call-up or
testing of air-raid sirens. But state radio and TV are playing martial music.
Nationalist symbols are replacing religious ones. Iranian flags and the slogan
“For Iran’s honour” are on the streets.

Many had recently hoped a shift in the regime’s tone might ease tension with
the West and perhaps mollify Israel. But Israel’s attacks on Iran’s proxies
have cast doubt on that. More Iranians seem convinced that war is
inevitable. “Just a few months ago, we were worried about the economic
crisis,” says a female university graduate in Khorasan, an eastern province.
“Now we’re asking whether we’ll even survive tomorrow.”

Some are looking for salvation from outside the country. Satellite channels
led by Iran International in London hail news of Israel’s victories and mock
Iran’s supreme leader, Ayatollah Ali Khamenei. “Netanyahu is the one who
can save Iranians from the regime,” says the same university graduate.

But they are probably a minority. Many take pride in the regime’s riposte to
Israel. And Iranian nationalism may revive in the face of foreign
intervention. “There was an arrogance I didn’t like,” says a university
lecturer and erstwhile critic of the regime, referring to Binyamin
Netanyahu’s address to Iran. “I think he must learn a lesson so he won’t
speak like that ever again.” Faced with the prospect of humiliation by the
Jewish state, an Islamist tinge colours the nationalism of poor Iranians. Days
after Iran’s attack on Israel, a vast crowd heard Mr Khamenei deliver his
first public Friday sermon in four years.

The shisha-smokers take comfort from the reluctant Rostam’s victory over
his enemies. Iran’s leaders must not only defend their regime from foreign
attack but must also hold their fort from within.■

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israeli-attack-is-reviving-iranian-nationalism
Middle East & Africa | Hizbullah’s role in Lebanon

Israel’s invasion of Lebanon may bolster support

for Hizbullah
The group is deeply embedded in Lebanese politics and society
October 7th 2024

THE BRIGHT yellow flags of Hizbullah that line the highway leading south
out of Saida, a port city in southern Lebanon, seem like the standards of a
floundering kingdom. Head farther south, where Hizbullah, the Shia militia,
holds sway, and the streets grow ever emptier. The only fighters visible are
the dead ones staring down from posters. The decapitation, almost
overnight, of the Hizbullah’s military leadership, and the assassination of its
charismatic leader, Hassan Nassrallah, have shocked everyone, not least the
Shia group’s own supporters.

Over a week after more than 80 Israeli bombs obliterated Nasrallah’s

headquarters in southern Beirut, the group has yet to hold a funeral (reports
suggest that he was secretly buried at a temporary site). Nor has it named a
replacement; the surviving leadership is in disarray. The group’s military
response to Israel’s aerial onslaught so far has been underwhelming.

Read all our coverage of the war in the Middle East

As a fighting force Hizbullah has been bloodied. The obvious damage to its
military strength is prompting questions about its ability to defend the
Lebanese and its legitimacy as a political actor in Lebanon. But the group’s
domination of Lebanon is based on far more than its military strength. It has
spent decades embedding itself within Lebanon’s sectarian system, while
simultaneously building a parallel state, neither of which will be destroyed
by Israel’s current campaign.

In the early years of Hizbullah, its stated aim was to declare a Shia Islamic
state in Lebanon, like that of Iran. It soon abandoned that goal, however.
Instead it elected to play the Lebanese political system, like the country’s
many other parties. But Hizbullah was arguably better at it than the rest. The
group has the legitimacy of a state without the accountability, writes Lina
Khatib of Chatham House, a think-tank in London.

Hizbullah cemented its influence by winning seats in parliament, inserting

its supporters into key positions in ministries, fostering pacts with the
country’s corrupt elites and extracting vast sums of money from the trade in
captagon, an amphetamine mainly produced in Syria. Shia recruits were
given the answers for exams which propelled them into sensitive roles in the
military. Hizbullah’s people dominated elections to local councils which had
an important role in overseeing the distribution of international development
funds. When the group’s demands were not met, it turned to violence and
intimidation. It is believed to be behind the assassination of the former prime
minister, Rafik Hariri, in 2005, who had called on Syria to take its troops out
of Lebanon (Syria was, at the time, a key patron of Hizbullah).

At the same time, it built a parallel social-welfare system, using money from
Iran and from the group’s drug trade in Syria. A party membership card was
more useful than a social-security number in gaining access to the best
doctors. Scholarships sponsored by Hizbullah made education at Lebanon’s
American universities affordable for bright children from impoverished Shia
communities. Grants provided startup funds to Shia businesses.

Support for Hizbullah was based on more than the benefits it provided,
however. The group’s armed resistance to Israel found particular salience
among Lebanon’s Shias, long regarded as the country’s underclass. It
claimed its first major victory in 2000 when Israel withdrew its troops after
facing almost two decades of guerilla warfare. In the 34-day war in 2006
Hizbullah was battered but survived. That, said Nasrallah, was a victory in
itself. Many saw in Hizbullah a force in Lebanon at last strong enough to
stand up to Israel.

Its growing clout also came from the lead it took in reconstruction
throughout much of the south after the 2006 war. Almost everything was
rebuilt within five years. Because it wielded so much power in local
government, Hizbullah was able to channel huge sums of money from
foreign donors into rebuilding its communities. “We knew it was all going
through Hizbullah, but we did it anyway. If we hadn’t the south would never
have been rebuilt,” said one Gulf diplomat who was involved in the efforts.
The world paid while Hizbullah took the credit, a victory on top of a victory
for Nasrallah’s cadres.

The group established an effective social contract with many of the country’s
Shia: absolute loyalty to Hizbullah in exchange for security and stability.
Over the years, opposition from within the Shia community has been
minimal, and even Hizbullah’s doubters often stop short of criticising its
resistance to Israel. In part, that was because Hizbullah offered Shias, long
marginalised within Lebanon, a different vision of themselves. “They
wanted to transform the victimhood into a steadfast and proud community,”
says Mona Harb, a professor of politics at the American University of
Beirut.

And yet over the past month, Hizbullah has been unable to protect Lebanon
or its Shia constituents. Of the 1.2m that have been displaced, many come
from areas where sympathy for Hizbullah is strong. Lebanon’s weak
government and its other political parties are taking care of those who have
been affected by the war, not the Party of God.
But Israel’s ground invasion has offered the movement a lifeline. In fighting
Israeli troops, it can reclaim the mantle of resistance. The need for post-war
reconstruction will present new opportunities to regain its legitimacy. “Don’t
underestimate Hizbullah’s ability to claim victory; if the war is over and they
can lift the flag, that is enough,” says Ali al-Amine, a Lebanese journalist.
The beginning of this was a disaster for Hizbullah. Its escalation may offer a
reprieve. ■

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lebanon-may-bolster-support-for-hizbullah
Middle East & Africa | Family matters

How to send a cake from New Jersey to Accra

A Ghanaian app hints at the potential and problems of Africa’s diaspora
October 10th 2024

Some years ago Christian Kofi Adu Vanlare wanted to buy a “really big
birthday cake” for his uncle, the family patriarch, who was turning 88. But
there was a problem. Mr Vanlare lives in New Jersey on America’s east
coast. His uncle lives in Accra, Ghana’s capital. Icing and sponge do not
travel well, and simple things like organising a cake can be onerous in a
bustling African city. Various cousins said they were too busy to procure a
gateau.

Eventually he had a slice of luck when a friend relented and went to the
shops. The big uncle got his big cake. But making a meal out of buying a
dessert was a reminder of the challenges of being abroad while having
commitments back home. “For those of us who live in the diaspora this is
our daily problem,” says Mr Vanlare.

So he came up with a solution. Somafour (“One who is sent” in Akan, a

language spoken by most Ghanaians) is an app that connects Ghanaians in
the diaspora with those in Ghana who can run errands on their behalf. Mr
Vanlare’s startup is unlikely to attract the attention of venture capitalists in
the near future. But its very existence reflects the growing number of
Africans living overseas and their economic importance to the continent. It
also offers a lesson in the role of trust in getting things done.

Africans account for a fraction of immigrants in most rich countries but their
numbers are rising. More than 2m immigrants from sub-Saharan Africa
lived in America as of 2019, a 16-fold increase since 1980, according to the
Migration Policy Institute, a think tank. By one estimate in 2022, there were
roughly 500,000 Ghanaians living in OECD countries.

That is a fraction of the 34m in Ghana itself, but their money matters. In
2023 the $4.6bn in remittances to Ghana was more than the country received
in aid and FDI combined. In addition, hard currency goes a lot further these
days. The Ghanaian cedi has lost about two-thirds of its value against the US
dollar in the past five years. This has encouraged some in the diaspora to
buy land while their dollars are worth more. One Somafour agent says he
was asked to visit the land a customer had bought to check the quality of the
plot. Dealing with bureaucrats at the land register office can also be part of
the job.

Other errands can be more personal, such as taking elderly relatives to the
doctor or delivering drinking water to clients’ parents. Another agent recalls
the funerals she has attended on behalf of friends of the deceased. She
delivers donations to the bereaved families. (These may help with the cost of
custom coffins that are popular in the west African country. Ghanaians have
been known to be buried in coffins shaped as cars, cocoa pods and fish.)

Mr Vanlare admits, however, that business has been slow so far. Many
Ghanaians are wary of using an app rather than asking family for help, even
if their kin are unreliable. In a global survey of values, albeit from a decade
ago, just 5% of Ghanaians agreed with the statement “most people can be
trusted”, a standard result for a poor country. “In the African context it is
very difficult to break into family networks,” says Mr Vanlare. It is not a
piece of cake. ■

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from-new-jersey-to-accra
Middle East & Africa | Off to a good start

South Africa’s coalition government has improved

the vibes
Now for the hard part
October 7th 2024

For most of its modern history South Africa has been governed by a single
dominant party. The National Party, architects of apartheid, was in charge
from 1948 to 1994. After white rule ended the African National Congress
(ANC) became the hegemon. Following years of corruption and economic
stagnation its pre-eminence was finally checked at general elections in May.
The ANC lost its parliamentary majority for the first time, forcing it to form a
coalition government to stay in power.

That arrangement, known as the Government of National Unity (GNU), is a

seismic shift for the fledgling democracy. Some 100 days on—the cabinet
was sworn in on July 3rd—it has boosted confidence. Nearly three times as
many South Africans think the GNU is doing well (58%) as think it is doing
poorly (21%), according to a poll conducted in September by the Social
Research Foundation (SRF), a think-tank. The rand has risen against the dollar;
the Johannesburg stock exchange has recorded record highs. There are
palpably lekker (nice) vibes for the first time since Cyril Ramaphosa
replaced Jacob Zuma as president in 2018. Yet if the fillip from the GNU is to
last longer than the fleeting “Ramaphoria” did, the government must fix the
chronic problems holding back sub-Saharan Africa’s largest economy.

On paper the GNU is made up of ten parties. In practice only two matter: the ANC
and the erstwhile official opposition, a liberal party known as the
Democratic Alliance (DA). They have 20 and six ministers respectively of the
32 in cabinet, and 41% and 22% of the seats in parliament. The
government’s success and survival depends on the big two, not the myriad
minor parties mostly brought in by Mr Ramaphosa in an effort to placate
those in the ANC who are angry that the party of black liberation has teamed up
with the DA, seen by many of them as a “white party”.

The GNU is not cohesive. It has no systematic way of taking decisions. Ad hoc
is its modus operandi. One senior figure describes working in government as
a bit like fighting with a jellyfish. The civil service, hollowed out by the ANC,
lacks effective bureaucrats. Yet the vacuum that is the South African state
creates a chance for those with the vim to fill it. For the most part this has
meant DA ministers. Leon Schreiber, the home-affairs minister, has reduced
the backlog of visa applications from around 300,000 to about 100,000. He
has announced a new visa for remote workers and a simpler system for
skilled migrants that has delighted firms, some of which had stopped
bringing in staff because of the Kafkaesque hassle. Other DA ministers are
working on sweeping reforms that will expand internet access in poor rural
areas and sell off unused state-owned land, among other things.

South Africans have noticed these early successes. In the SRF poll 62% of
black voters say the DA is doing well in the GNU, an impressive tally given that
the party probably won less than 5% of the black vote at the recent elections.
Some ANC bigwigs seem affronted by such good governance, complaining in
internal party meetings that they are being made to look bad by the DA.
Mr Ramaphosa is unlikely to be too bothered. His own legacy depends on
the GNU. He generally backs the reforms the DA ministers are pushing;
Operation Vulindlela, an initiative run by the presidency and the finance
ministry, had identified visa reform as a priority, for instance. The
president’s allies in the cabinet, such as Ksogientsho Ramokgopa, the
electricity minister, and Enoch Godongwana, the finance minister, share
some of these reformist instincts.

Crucially—and perhaps naively—ANC strategists do not see the DA as a threat to

their base. “They’re fishing in different ponds,” says Frans Cronje of the SRF.
He describes the GNU as an arrangement between the established middle class
and the aspirational middle class: between the mostly DA-voting white
suburbs and the mostly ANC-voting black areas on the urban outskirts. By this
logic both parties have strong electoral incentives to make the arrangement
work.

Two big challenges loom, however. The first is that there are those in each
party who remain sceptical of the GNU. The DA will need to show it is a brake
on the ANC’s worst ideas, like the proposal for catastrophically expensive
state-run health insurance. Some in the ANC want the GNU to fail because they do
not agree with its reforms and fear that it will make it harder to make money
from public office—or both. If an anti-GNU candidate replaces Mr Ramaphosa
as party leader at the ANC’s elections in 2027, the coalition could crumble.

A mountain to climb
The second is the sheer scale of South Africa’s problems. At a meeting
between Mr Ramaphosa and business leaders last week there was talk of a
“stretch goal” of GDP growth of more than 3% per year (it has averaged less
than 1% since 2012). But that will require more than small-bore reforms by
the odd minister. It needs urgent efforts to overcome the main barriers to
growth, including pervasive corruption and crime, unreliable electricity,
irregular and frequently contaminated water supplies, and clogged railways
and ports that make it hard for exporters.

The stakes could barely be higher. The GNU has given South Africa another
chance to become the prosperous, liberal and united giant that the continent
desperately needs. If it fails to seize the opportunity, populist alternatives
stand waiting to take advantage of another false dawn. ■

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coalition-government-has-improved-the-vibes
Europe
France stares into a “colossal” budgetary abyss
Turkey’s long hard struggle with inflation
Delays on Italy’s spruced-up trains have got worse
Russia continues to advance in eastern Ukraine
The search for Ukraine’s missing soldiers and sailors
Europeans are facing the prospect of Trump like a deer caught in
headlights
Europe | The French budget

France stares into a “colossal” budgetary abyss

A fragile new government must try to plug the hole. Fast
October 9th 2024

When A FRESH-FACED Emmanuel Macron swept into presidential office for the first
time, in 2017, he hoped for a grand European bargain. France, which had not
balanced a government budget since 1974, would fix its public finances and
restore its credibility with its thrifty neighbour. In return, Germany, the euro
zone’s biggest economy, would cede ground on French ideas for European
integration, such as joint borrowing. Initially the bargain worked. In 2018
and 2019 France cut its annual deficit to below the EU’s limit of 3% of GDP. In
2020, nudged by the need to respond to the pandemic, the EU issued its first
big joint bond.

Now, however, that bargain is falling apart. After snap legislative elections
in July returned a hung parliament, a new minority government is trying to
keep a coalition together that, awkwardly, relies for its survival on the tacit
support of Marine Le Pen’s hard right. Michel Barnier, the new conservative
prime minister, is confronting a fiscal crisis. France’s “colossal” deficit and
debt, he declared on October 1st, is a “sword of Damocles” hanging over the
country. In 2024, he said, the deficit will exceed 6% of GDP (next to 5.1%
forecast earlier this year) and remain at 5% in 2025. It will fall back to 3%
only by 2029, two years after Mr Macron’s previous government had
promised. Government debt could reach 115% of GDP by the end of 2025.

France needs a squeeze. In the budget for 2025, which Mr Barnier was due
to present to cabinet on October 10th, he was expected to unveil a massive
€60bn ($66bn) in savings, or 2% of GDP: two-thirds in spending cuts, a third in
tax increases.

On spending, Mr Barnier wants to delay raising public pensions in line with

inflation for six months (saving €3bn) and impose widespread cuts on
government departments (saving some €20bn). Other savings will come
from local government, business subsidies and other measures. On the
revenue side, proposals will include a temporary super-tax on firms with
more than €1bn in turnover (raising €8bn) and on households earning over
€500,000 (raising €2bn-3bn from some 65,000 households). Without these
efforts, says Laurent Saint-Martin, the new budget minister, the deficit could
reach 7% next year.

France’s neighbours are watching with a mix of weary familiarity and

sharpening dismay. When asked this week about France’s deficit, Christian
Lindner, Germany’s finance minister, replied drily: “We should all realise
that the credibility of public finances vis-à-vis the capital markets is not to
be trifled with.” On September 26th, for the first time since 2008, the yield
on France’s ten-year government bonds exceeded Spain’s, usually
considered riskier by investors. Mr Barnier knows he cannot get this
moment wrong.

This year’s swollen deficit is partly the result of economic weakness, which
depresses tax revenues and increases benefit costs. The underlying cause,
though, is the overhang of generous state spending linked to covid-19 and
the inflation surge prompted by Russia’s invasion of Ukraine. When the
pandemic broke, Mr Macron vowed to protect the French “whatever it
costs”. This became a guiding principle. Small firms were kept afloat after
lockdowns ended. Untargeted caps on energy-price rises are still being
phased out.

France spent a bigger share of GDP on such measures than Germany or Spain.
The French did benefit. When Germany went into recession in 2023 the
French economy kept growing, albeit by only 0.9%. But the fiscal cost of
support just for households came to €69bn in 2022 and 2023 combined, says
the Bank of France. And at 59% of GDP in 2021, the state already claimed a
greater share of spending in France than any other OECD country.

Mr Barnier now needs to make his eye-watering budget savings while

running a precarious minority government. The left will reject almost
anything it tries. This puts the government’s ability to manoeuvre in Ms Le
Pen’s hands. Parliament must approve the budget by December.

Paradoxically for a conservative, Mr Barnier will have less trouble getting

new taxes through. Despite France’s unhappy record as the OECD country with
the highest tax take as a share of GDP, tax increases on profits and the rich
always go down well. “He’s doing a Hollande,” says a Macronist figure,
referring to the previous Socialist president, François Hollande. Mr Macron
used tax stability to make France more investor-friendly; many of his
centrist deputies are now worried.

Nobody, however, will relish spending cuts, even if in reality some of the
“savings” are in fact slower increases in spending. IFRAP, a think-tank,
calculates that the €40bn of savings will actually result in year-on-year cuts
to budgets of closer to €15bn. Already Ms Le Pen has called the planned
delay to raising pensions “stealing” from the elderly. Mr Barnier’s plans also
rely, flimsily, on some classic but largely empty fallbacks, such as a
clampdown on fraud. If he cannot secure parliamentary approval, he may
have to resort to forcing the budget through using emergency measures,
which would put his government’s survival on the line.

France is under close scrutiny. The European Commission has already put
the country on formal watch, and will want evidence that it is not only
serious about fixing public finances but intends to continue with reforms.
France needs the commission’s permission to delay obeying EU rules until
2029. Three ratings agencies are also each due to report on France’s credit
rating this month and in November.

The more Mr Barnier takes over domestic policy, the more Mr Macron will
turn to European and foreign affairs. The president has lost none of his
ambition to reinforce European “strategic autonomy”. Yet this agenda, and
his hopes of fresh joint borrowing and a bigger EU budget, depends on his
credibility. As Mujtaba Rahman, European head of Eurasia Group, a
consultancy, puts it: “If your own house is in disrepair, it is difficult to ask
your neighbours to raise more debt.” Mr Macron is still one of Europe’s
main thinkers about how to face up to the continent’s fragile future. But
France’s perilous finances undermine his ability to do much about it. ■

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budgetary-abyss
Europe | Struggling back

Turkey’s long hard struggle with inflation

High interest rates are starting to do the trick
October 10th 2024

SETTING interest rates in Turkey is like skiing in pre-lift days. Going down
is the easy part. Climbing back up is gruelling, and takes ages. The country’s
central bankers have been doing so since the summer of 2023, and they still
need more time.

They do have something to show for their pains. Interest-rate increases that
have totalled a whopping 41.5 percentage points have started to unwind
Turkey’s inflation spiral, the result of earlier, reckless cuts. Annual
consumer-price growth has dipped from 71.6% in June to 49.4% in
September. For the first time in three years, the benchmark interest rate, now
50%, exceeds the inflation rate.
Only recently, this had invited speculation that Turkey’s tightening cycle
was nearing its end, and that the bank would begin to cut rates as soon as
November. But easing may have to wait. Monthly price growth, which
reached 3% in September, continues to be too fast for comfort. “We will stay
tight until the underlying trend of monthly inflation comes down on a
sustainable basis,” the bank’s deputy governor, Cevdet Akcay, says over
coffee in Istanbul. “There’s no other way.”

Such patience is in short supply among Turks. Over a year has passed since
Turkey’s president, Recep Tayyip Erdogan, gave the central bank a mandate
to undo the damage his earlier policies had wrought on the economy. But
ordinary consumers complain they have the worst of both worlds. Prices
continue to rocket and credit has become unbearably expensive. The longer
this continues, the weaker the country’s growth prospects become.

The state of the economy already cost Mr Erdogan dearly, when his Justice
and Development (AK) party was bested by the opposition in local elections
this spring, the party’s first overall defeat since it took power in 2002.
Turkey’s next big election is due in 2028, which suggests the government
has enough time to set the economy right. But a snap vote, even as early as
next year, is not out of the question. That could spell big trouble for the new
economic programme. To avoid losing power, Turkey’s leader, or an
anointed successor, would probably revert to handouts and deep interest-rate
cuts: inflation be damned.

One reason why inflation in Turkey has proved exceptionally sticky is the
imbalance between monetary discipline and government largesse. The
budget deficit is expected to reach 4.9% of GDP this year, according to the
government’s own figures, before dipping to 3.1% next year. “The central
bank is pressing the brakes,” says Hakan Kara, the bank’s former chief
economist, “but the government does not want to take its foot off the gas
pedal.” Mr Erdogan’s belated conversion to economic orthodoxy has played
a role too. Tightening in Turkey began only after inflation had neared triple
digits, and only once Turkey’s leader had secured his re-election.

The economic team he appointed has won back the trust of foreign investors,
who have bought some $14bn in Turkish bonds since the start of the year.
Ordinary Turks, sobered by the experience of the past five years, which saw
the national currency plunge, prices soar and Mr Erdogan replace four
different finance ministers and five heads of the central bank, are less
optimistic. The central bank expects annual inflation to dip to 38% by the
end of the year; households see it at around 70%. This too is putting pressure
on prices. Turks who expect the value of their money to erode over time will
continue to spend rather than save, making inflation that much harder to
bring down.

But the bank has at last offered them an incentive to save, and to do so in
local currency. Sky-high deposit rates have lured Turks back to their own
lira, reversing years of dollarisation. The share of lira deposits, which stood
at 31% of the total in August last year, has reached 53%. The currency is
still losing value against the dollar, but much more slowly. This has helped
defuse a ticking time-bomb, in the form of a programme that insured
deposits against currency shocks that Mr Erdogan’s previous cabinet had
placed under the budget. In just over a year, depositors have withdrawn
some $100bn from the scheme.

Not everyone is a fan of a relatively strong lira. Turkish exporters are

pleading with the bank to devalue the currency. Mr Akcay says this would
put new upward pressure on prices, and that using a weak currency to seek a
competitive edge has proved to be a dead end. “We keep policy tight to tame
inflation, and that may lead to further real appreciation,” he says, “not by
design, but as a consequence.” ■

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inflation
Europe | A tale of a nail

Delays on Italy’s spruced-up trains have got worse

Matteo Salvini is making feeble excuses
October 10th 2024

Britain’s former railway monopoly, British Rail, never truly recovered from
the explanation one of its executives gave for disruption to its services in
early 1991. He blamed it on a “different kind of snow”, which repetition
transformed into a trope: the “wrong kind of snow”. British Rail was broken
up and fully privatised six years later.

On October 2nd similar ridicule was heaped on Italy’s hard-right

infrastructure minister, Matteo Salvini, after a day in which more than 100
trains were cancelled or delayed. Mr Salvini attributed the chaos to a badly
placed nail. A maintenance worker, he said, had hammered it through an
electric cable.
Something like that did happen. Power was cut off to the control room in
Rome on which the network depends. But a carelessly inserted nail did not
explain why a back-up system failed to engage. Bouts of widespread
disruption have become frustratingly common in recent months, and it
seems unlikely that skilful hammering can avert more.

In part, railway transport in Italy suffers from its own recent popularity. The
plush new high-speed services run by publicly owned Trenitalia and a
private concern, NTV, have poached much of the domestic air traffic. A surge
in tourism has made a difficult situation even more so.

The geography of Italy—long and thin with mountains in the middle—

makes it vulnerable to failures of any kind along the main route from Milan
to Salerno. But a long-term solution would involve building a second high-
speed route from Milan to Rome, and the physical challenges of that are
immense.

In 1936 an American journalist inspired another railway trope when he

noted that Italians often credited their dictator, Benito Mussolini, with
making the trains run on time. But, he observed, Mussolini did not. And 88
years later, there is still a way to go.■

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have-got-worse
Europe | Holding on

Russia continues to advance in eastern Ukraine

But it is encountering growing problems
October 10th 2024

Now that the excitement of Ukraine’s incursion into Kursk two months ago
has faded, the prevailing narrative has reasserted its grip. Ukrainian forces
are retreating in the face of steady, if costly, Russian advances across the
front line in the Donbas, thanks to Russia’s vast superiority in troop numbers
and firepower.

The Ukrainian decision last week to pull its forces out of Vuhledar, a
staunchly defended bastion that lies on the hinge of the eastern and southern
fronts, has added to the gloom about the country’s prospects. The retreat was
ordered to prevent their encirclement by the Russians. President Volodymyr
Zelensky praised the decision, saying that protecting the lives of the soldiers
who had given “heroic service” was “more important than any buildings”.
Not that there were many buildings left. Vuhledar, like other towns Russia
has taken, is a sprawling, shattered ruin.

Read more of our recent coverage of the Ukraine war

A similar situation appears to be developing to the north in Toretsk, a front-

line city that Russian forces have been advancing towards, village by
village, since August, pulverising everything in their path with glide bombs.
On October 8th, a spokeswoman for the Ukrainian forces in the city reported
that “The fighting is taking place in Toretsk itself, the situation is unstable,
literally every entrance is being fought for.” Though Vuhledar was not of
great strategic significance, Toretsk, which is on a hilltop, could be used to
obstruct Ukrainian supply routes behind the lines.

On the other hand Russia has not made much progress in taking Chasiv Yar,
some 40km to the north of Toretsk, and appears to be stuck by the canal on
the eastern side of the city. It is also making heavy weather of its bid to take
control of Pokrovsk, a key logistics hub that sits on a triangle of road and
rail links and which is the main focus of its offensive efforts. In August there
was much talk of the imminent fall of Pokrovsk. But the pace of the Russian
advance has noticeably slowed, with few territorial gains in the past three
weeks.

Nico Lange, a former chief of staff in Germany’s ministry of defence who

has close links to the Ukrainians, says that although Russian troops are now
in artillery range of the city, they lack the force numbers to make a concerted
attack. While taking Pokrovsk would give Russia a launch-pad for attacks
deeper into central Ukraine and would worsen Ukraine’s logistical position
in southern Donbas, Mr Lange believes the operation, even if successful,
will take many months and inflict extremely heavy losses on the Russians.
Despite fears expressed in some quarters of a Ukrainian collapse, there is no
sign of one. Ukraine’s approach is to concede some ground while inflicting
maximum casualties and equipment losses on Russia and preserving its own
forces to fight from newly fortified lines. It is also questionable how much
longer Russia can continue to lose more than a thousand men a day, despite
huge signing-on bonuses for new recruits. The seemingly inexhaustible
stocks of mainly Soviet-era armoured vehicles and tanks it has been able to
draw on could be running low by next year. The Institute for the Study of
War in Washington reckons that in the Pokrovsk region alone Russia has lost
at least five divisions’ worth of tanks and armoured vehicles in the past year.
Without sufficient armour, dismounted Russian soldiers are easy prey for
increasingly capable Ukrainian FPV drones.

There are also signs that Russia’s advantage in artillery has been declining,
even as it increasingly depends on unreliable North Korean munitions.
Earlier this year Russia was firing ten times as many shells as the
Ukrainians. But according to Ukrainian sources, the gap has now closed to
2.5:1. Ukraine is receiving more shells from its allies; its own production has
speeded up; and strikes on Russian ammunition storage depots have been
both effective and spectacular. However, Ukraine, still forbidden to use
long-range Western missiles against targets in Russia, has no answer to the
deadly glide bombs launched by aircraft from Russian airspace that have
become its adversary’s most potent battlefield weapon.

For all the current despondency about Ukraine’s prospects, Russia is far
from achieving its main aim: of gaining control over Donetsk and Luhansk
provinces, which make up the Donbas region, by the end of this year. And
despite setting the goal of driving Ukrainian forces from Kursk by the start
of this month, it now looks as if that will take much longer and require
substantially greater forces than Moscow has so far been able to commit.

The battle where Russia is unambiguously succeeding, says Mr Lange, is in

the “information space”. The notion that Ukraine cannot win, he argues, is
becoming a self-fulfilling prophecy and an excuse for Western leaders to
withhold from Ukraine what it needs to prevail. A pattern has emerged in
which promised military support arrives late or not at all. As Phillips
O’Brien, an American commentator, has noted, American aid actually
disbursed to Ukraine so far this year is sharply down on the amount sent in
2023. ■

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ukraine
Europe | Alive or dead?

The search for Ukraine’s missing soldiers and

sailors
The families of missing loved ones are trying to find them, alive or dead
October 10th 2024

IN A NONDESCRIPT office in a nondescript building in Kyiv, with no sign

on its door, four middle-aged men are trawling through gruesome films and
photos on the internet. Often they are looking at Russian Telegram channels
that specialise in parading captured Ukrainian soldiers. In pictures taken in
the past few days one man’s face is running with blood; another has his
hands tied but a cigarette is in his mouth. A third, seemingly wounded, is
being pushed in a wheelbarrow. These Ukrainian policemen are cyber-
hunters searching for Ukraine’s missing soldiers, of whom there are tens of
thousands.
Oleh zooms in on a face in a video, takes a screenshot, then drops it into
facial-recognition software which scours the internet for a match. Within
seconds he has seven possibles. Oleh quickly discards most of them and
rapidly finds photos of a happy young man with his wife, his friends and his
child. With another click he has matched his name against a list of missing
soldiers. “Aha! It’s Vytali,” he says, before dispatching his find to the
security services, who in turn can inform the family. In one year, says Oleh,
his team have found some 600 missing Ukrainians in this way.

Read more of our recent coverage of the Ukraine war

As of September 20th Artur Dobroserdov, Ukraine’s commissioner for

missing persons under the Ministry of the Interior, had a list of 48,138
people who were still missing. Since Russia’s full-scale invasion in February
2022, some 7,548 people who had earlier been on the missing list have been
accounted for. They comprise 3,632 living Ukrainian POWs and civilian
prisoners who have been exchanged with the Russians; and 3,916 identified
bodies, some of which were also returned. Mr Dobroserdov also has custody
of 2,552 bodies that have not yet been identified.

Thanks to evidence from exchanged POWs and from the Red Cross, the
Ukrainians know of another 6,000 or so Ukrainians who are being held as
prisoners. But that still leaves more than 40,000 unaccounted for. Some are
reckoned to be dead but cannot be recorded as such, because no body has
been recovered. Mr Dobroserdov says that about 20% of the living POWs
whom Russia has returned were not on any list and had often been assumed
to be dead. He thinks that more than half of those whose fate is unknown are
still alive.

The Russians are not sending full lists of the men they have captured to the
Red Cross. Mr Dobroserdov believes the main Telegram channels which his
colleagues are following are run by Russia’s security services. They are
trying to lure desperate families to get in touch. If they do, they demand
money or intelligence in exchange for some contact with the prisoner. Some
of the sites are simply run by scammers.

Anastasiia Savova runs Always Faithful, an organisation helping the

families of missing Ukrainian sailors. Her father was captured when
Azovstal, a steel plant that was the last Ukrainian redoubt in the city of
Mariupol, fell in May 2022. She had no clue whether he was dead or alive
until January this year when he showed up on a Red Cross list. Through the
organisation she has sent messages but does not know if he got them. She
says she has just had “discouraging news about his health” from newly
exchanged prisoners. There have been cases of POWs believed to be still alive
who have been returned dead.

Solomiya Khoma, a founder of the Ukrainian Security and Co-operation

Centre, a think-tank, says the issue of missing persons is “a really sensitive
topic” in Ukraine. The Russians deliberately leave families in the dark about
whether their loved ones are alive or dead. It is done, she says, to “create
social tension”. A Ukrainian Facebook group for people appealing for any
information about missing soldiers has almost half a million followers.

Close to parliament in Kyiv a dozen people stand with banners and pictures
of their missing ones, all of them sailors who went missing after Mariupol
fell. No one knows if they are still alive. Some regiments and units have
strong lobbies that work hard to get their missing onto lists for possible
exchange; but others, such as Ukraine’s tiny navy, do not. All they can do is
stand there in the hope that nobody forgets about them. ■

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soldiers-and-sailors
Europe | Charlemagne

Europeans are facing the prospect of Trump like a

deer caught in headlights
A second dose of MAGA will put the EU in a pickle
October 10th 2024

Europeans never really took to George W. Bush, whose conservative views,

folksy Texan shtick and penchant for ill-advised wars most of them found
unappealing. They somewhat warmed to him in January 2017 when, eight
years after leaving office, a stray microphone relayed his unfiltered insights
into the inauguration speech of a presidential successor. “That was some
weird shit,” is roughly how Europeans came to remember not just the
rambling address by Donald Trump that January day (huge crowd!), but the
four years of bluster and contradiction that ensued. When the mogul-turned-
president failed to get re-elected in 2020, relief among Europeans at having
survived Trumpism in one piece was palpable. Come 2024 the fear they may
yet endure another bout of it is even more so. Vague and belated attempts at
“Trump-proofing” Europe have fallen short, as they were bound to. Like a
deer caught in a lorry’s headlights, European leaders are left hoping the MAGA
juggernaut coming their way swerves, lest they become geopolitical roadkill.

A Trump victory is no sure thing; polls suggest that the vote on November
5th is a coin toss. Whatever its outcome, the election will matter first and
foremost to Americans. But Europeans may feel they come a close second.
Through NATO, America is the guarantor of the continent’s security. America
and Europe share the world’s largest trade relationship, with over $1trn-
worth of goods and services zipping between them every year. Together,
they make up the bulk of “the West”, a fuzzy notion of global norms of
which the European Union is the epitome. To have in the White House an
isolationist president who exudes protectionism and thinks of security
alliances as protection rackets is never ideal. To have one in office while
Ukraine is still at war, the European economy is fragile and its leaders are
embroiled in domestic politicking makes it all the more unwelcome.

Would a second dose of Mr Trump really be that bad? A contrarian take,

sometimes heard in EU circles, is that his first bout in office jolted Europe to a
better place. On the economic front, the selective tariffs Mr Trump imposed
on imports were an irritant—but by running the American economy hot, he
helped European firms sell even more stuff across the Atlantic. Vague
threats that America would withdraw from NATO (France’s president,
Emmanuel Macron, went so far as to declare it brain-dead) resulted in a
much-needed rise in defence spending, which turned out to be useful in view
of later events. Mr Trump’s repeated warnings that Germany was
dangerously dependent on Russian gas for its energy and on cosying up to
China for its prosperity were studiously ignored in Berlin, yet are now
conventional wisdom.

Perhaps, some hope, a fresh dose of Trump would also nudge Europe to an
even better place. Not likely. The first concern is Ukraine. Unlike eight years
ago, America is not merely upholding historical security commitments, it is
actively helping Ukraine in a war many Europeans view as a precursor to
further Russian expansionism. Yet Mr Trump promises to end the war
“within 24 hours”, presumably on terms that would favour the Kremlin.
Would he accept extending NATO membership to Ukraine as part of a putative
peace agreement, which many think will be necessary? Would such a
guarantee mean anything, given Mr Trump’s habit of denouncing the
alliance as a bad deal for America? In Mr Trump’s first term he relied on a
cabal of experienced advisers who tempered his wilder ideas. Not so, this
time round.

The second stumbling block is the economic relationship. Europe has a large
trade surplus with America, known in Trump-speak as “stealing our jobs”.
The roaring American economy has hoovered up even more European-made
stuff, not least as tepid growth depressed European consumption. That
accentuates the downside if Mr Trump constrains imports (he has said he
wants across-the-board tariffs of up to 20%). Trade frictions, notably with
China, which were sparked by Mr Trump and then fanned by his successor,
Joe Biden, have put Europe in an even worse spot. As Chinese exports to
America have been throttled, some have found their way to the still-open EU
instead. A trade war on that front is now brewing; on October 4th the EU
ratified tariffs of up to 45% on Chinese electric vehicles. Should Mr Trump
win, expect much more of the same: MAGAnomics in America could lop 1% off
Europe’s GDP, according to Goldman Sachs, a bank.

Dr Strangelove and Mr Trump

Could Europe have done anything differently? Under the banner of
“strategic autonomy” Mr Macron has pushed for Europe to become less
reliant on outsiders, whether economically or militarily. But plenty of fellow
EU leaders (who will be meeting in Brussels from October 17th) are sceptical

of his agenda, which they see as serving French interests, for example by
replacing American-made weapons with French kit. To central Europeans
even a temporarily unreliable America is still a better security bet than a
permanently unreliable “old Europe” led by France and Germany.

A final dollop of dread hangs over Europe, should Mr Trump win: that it
will end up being divided. Viktor Orban, Hungary’s autocratic prime
minister, has announced he will pop the champagne if his old chum Mr
Trump returns. Whatever unity Europe mustered in dealing with Mr Trump
from 2017 was thanks notably to the leadership of Angela Merkel, the
seasoned German chancellor. She is gone now; her successor Olaf Scholz
commands no such respect and will in all likelihood be gone in a year or so.
Mr Macron has lost authority after being forced to share power at home. EU
institutions are still in transition mode following elections in June, and will
be until at least December. Even if Mr Trump fancied calling Europe to hurl
abuse, it is not clear who would be on hand to pick up the phone. ■

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Britain
The story of one NHS operation
The Sue Gray saga casts doubt on Keir Starmer’s managerial chops
Britain has agreed to cede the Chagos Islands to Mauritius
The biography of a British recycling bag
Can software help ease Britain’s housing crisis?
Britain’s obsession with baked beans
Britain’s last imperialists
Britain | Scalpel, please

The story of one NHS operation

And what it says about how to improve the productivity of Britain’s health
service
October 8th 2024

“WHAT WOULD you like to see?” asks the scrub nurse as a surgeon beside
her feeds a wire through a patient’s urethra. It is a Friday afternoon in
Theatre 2 at Huddersfield Royal Infirmary in West Yorkshire, and the
surgical team is showing your correspondent their equipment. There are
tweezers “to take out the specimen”; sponge rollers to soak up the blood.
There is the resectoscope, an electrified half-moon wire to burn through bad
bladder tissue. “But obviously you can’t see it because it’s in the patient,”
she says.

That patient—call him Mr Jones—can count himself comparatively lucky to

live where he does. Calderdale and Huddersfield Trust has climbed the
ladder for hospital waiting lists in recent years: 72% of patients are seen
within the target time of 18 weeks compared with 59% in England overall.
Mr Jones’s path through the system shows how the National Health Service
(NHS) could use its resources better.

Wonks and politicians alike agree that productivity—the ratio of treatment

the NHS provides to its inputs, such as labour, equipment and drugs—is a
pressing problem. Hospitals have more staff than ever (see chart), yet they
are doing less than they were before the pandemic. Between 2019 and 2023,
the amount of surgery carried out by each surgeon decreased by 12%; the
numbers are almost as bad for outpatient appointments and significantly
worse for emergency care.

A paper published for an NHS England board meeting in May identified some
reasons for this. Chief among them was industrial action, which since late
2022 has led to the cancellation of more than 1.4m appointments and
operations. Other factors included an increased use of agency staff, longer
hospital stays, maintenance backlogs and rising prices of new branded
medicines and technology. That still left a mysterious productivity gap
whose likely cause, the authors concluded, was a lack of “discretionary
effort” from staff. Some of this may be temporary: the new Labour
government has settled pay disputes with some NHS workers, for example. But
many problems pre-date the pandemic.

To understand more, rewind to before Mr Jones reaches the operating table.

His first interaction with a doctor would have been when he went to his
general practitioner (GP), complaining of weight loss and bleeding from his
rectum. It may well have taken Mr Jones a while to get an appointment:
Britain has almost 16% fewer fully qualified GPs per person than other rich
countries. But those symptoms were enough for his GP to refer him to
hospital.

In the NHS in England only 57% of patients start urology treatment within the
target time of 18 weeks (it is 69% for Huddersfield’s trust). One problem is a
lack of diagnostic capacity. Britain’s number of CT scanners is among the
lowest in the OECD, a club of mostly rich countries. The NHS also has a measly
number of radiologists. And trusts need to be able to track and triage
thousands of patients. This should be “100% automated”, says Tim Ferris,
who until recently oversaw digital transformation in the NHS. But some trusts
still rely on “lots of people filling out spreadsheets”. In the year to March an
estimated 20,000 operations were cancelled on the day because of
administrative errors.

Mr Jones is, on both counts, relatively lucky. A timely CT scan showed a

thickening of the lining of his bladder; a separate test, a colonoscopy, also
found polyps in his rectum. Huddersfield’s analytics are some of the most
advanced in Europe: clinicians use speech-to-text software to dictate their
notes, freeing more time to spend with patients. After consultation it was
determined that both procedures could be done together—“front and back”,
as Jonathan Cowley, a colorectal surgeon, puts it. That means a quicker
recovery, too.

Around three to four weeks before the operation comes a pre-assessment

with a nurse. This appointment should help reduce the risk of complications,
which happen in 10-15% of operations. If a patient has diabetes, for
instance, a surgeon cannot operate until it is properly controlled. Yet an
estimated 1m adults in England who live with the condition have not been
diagnosed. The Calderdale and Huddersfield trust works with local GPs to
identify and control cases of diabetes; across the , such collaboration
NHS

remains rare.

Non-clinical reasons cause the last-minute cancellation of 80,000 NHS

operations each year. One problem is a shortage of beds, particularly in
winter. Huddersfield has got round this by ring-fencing beds for elective
procedures, says Tom Strickland, the trust’s director of operations.
Equipment failures are another constant headache. In a corridor a man
wearing scrubs and a badge reading “theatre co-ordinator” explains that
there is a slight delay in Theatre 2, caused by a problem with the ventilation
system. On average, issues caused by the crumbling NHS estate disrupted
services in 13 hospitals a day in the year to March 2023. Clearing the NHS’s
overall maintenance backlog would cost £11.6bn ($15.2bn), about 6% of the
NHS’s annual budget.

A lot of the time “you’re sitting in tea rooms, not operating”, says one
former NHS surgeon who now works in the private sector. This is particularly
wasteful since, with outpatient clinics, on-call duties and administrative
tasks, most surgeons are actually in theatre for only one day a week. More
capital investment would help, but so would better management. There are
24% fewer managers per NHS employee than 15 years ago; doctors are often
not predisposed to listen to those that remain. Huddersfield’s answer is for a
clinician to focus solely on theatre productivity.

Back in Theatre 2 the ventilation system has been fixed, and Mr Jones is
unconscious. The lights darken. Someone runs through a final checklist on a
touchscreen: “Antibiotics given? Hair removal? Is he diabetic?...” Once it is
complete, the procedure can finally begin. Next door, in Theatre 1, the
surgical team is using a Cambridge-made robot; its upfront costs are a cool
£1.2m, but urologists already do twice as many nephrectomies as before.

After his surgery Mr Jones will be wheeled into the post-op recovery room.
During the covid-19 pandemic, all elective procedures were stopped so this
bay could be converted to a spillover intensive-care unit. In Huddersfield, as
elsewhere, this was when the trust’s productivity plummeted. A lot of the
staff redeployed to covid wards ended up taking sick leave for issues such as
burnout, says Saran Ahmed, the theatre’s day-to-day manager. To get
through the resulting backlogs, Huddersfield now runs theatre lists on
Saturdays, paying staff a fixed cost per case to incentivise them. But “it’s a
marginal gain, not a silver bullet”, says Mr Strickland.

It does not help that patients are staying longer in hospitals than they used
to. That may be because less experienced managers are still learning the
ropes of discharge planning. But it is also because of problems in social care.
In Huddersfield 120 beds are filled by people with no one to look after them
when they leave. A shortage of district nurses and physiotherapists makes it
more likely that patients like Mr Jones will be readmitted.

With investments in tech, a focus on efficiency and partnerships in

community care, Huddersfield has done well since the pandemic. Between
March 2021 and July 2024 it leapt from the bottom quartile of trusts for
patients waiting more than a year for treatment into the top. But there is still
room for improvement. Getting a patient through all the steps in a surgical
pathway is “like a relay”, says Mr Strickland. “There are so many hand-
offs…it’s all about making sure they come together.” ■

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Britain | Grayday! Grayday!

The Sue Gray saga casts doubt on Keir Starmer’s

managerial chops
Faith in the prime minister’s technocratic credentials has been tested
October 7th 2024

THE CASE for Sir Keir Starmer as prime minister ran something like this.
He may not be a great orator and he might not have a grand vision for how
to remake Britain, but he does know how to run a public-sector bureaucracy.
Before the election in July he traded on his record as a one-time director of
public prosecutions who focused on “getting the boring stuff right”—
digitising old documents, say, or listening to the junior staff who knew
where efficiencies could be made. After the showboating and internal
warfare of successive Conservative governments, in a country with creaking
public services, a super-administrator in Downing Street would be worth
having.
Faith in this story of Starmerism has been sorely tested. On October 6th, just
93 days after becoming prime minister, Sir Keir parted ways with Sue Gray,
whom he had appointed as his chief of staff. Ms Gray was a hire in his own
image: a former senior official in the Cabinet Office recruited in 2023 to
ready the party’s embryonic plans for government.

Those plans turned out to be extremely patchy. To take one notable example,
having campaigned for office on a promise to clean up Westminster, the new
government’s own ethics reforms have been conspicuously absent (even as
Sir Keir and his colleagues have been accused of accepting inappropriate
gifts of concert tickets and clothes from party donors). Labour’s thinking on
education policy, health-care reform and taxation appears undernourished.
Perhaps the most elementary day-one task—fixing the contracts and pay of
the dozens of special advisers who serve as ministers’ eyes and ears in
Whitehall—was mired in infighting between Ms Gray and Sir Keir’s other
aides.

Sir Keir has now acted. Ms Gray has been replaced as chief of staff by
Morgan McSweeney, a long-time aide who orchestrated first his campaign
for the Labour leadership and then the party’s landslide election victory in
July. Two deputies, Vidhya Alakeson and Jill Cuthbertson, will report to Mr
McSweeney.

The decision to change a faltering team is right. But the churn in personnel
raises doubts about Sir Keir’s managerial competence. Successful
premierships are characterised by stability at the top: Jonathan Powell, Sir
Tony Blair’s chief of staff, served him continually in opposition and
government from 1995 to 2007; Edward Llewellyn, David Cameron’s
bagman, served for a similar 11-year tenure. In contrast, Mr McSweeney is
returning to a job he performed in 2020-21, before being succeeded by Sam
White and then Ms Gray.

Other positions in Downing Street are in limbo or unfilled. On September

30th Simon Case, the cabinet secretary—the country’s most senior civil
servant—said that he would be stepping down for health reasons. The
replacements for the outgoing national security adviser and ambassador to
America have yet to be found; a promised minister for inward investment
has still not been announced.
The government’s shaky beginning also invites questions about its ability to
improve the wider machinery of government. Sir Keir’s theory of
management held that a calmer, less conflictual approach to the civil service
would work wonders. Since coming into office, ministers have reset
relations. Controversial headcount caps were publicly ditched. Mandates to
work in the office 60% of the time were relaxed: new job adverts from
several departments now suggest 40% attendance is acceptable. Pay deals
awarded above-inflation rises of an average of 5%.

Improving relationships was necessary in order to get more out of civil

servants, thinks Alex Thomas of the Institute for Government (IfG), a think-
tank. But if winning over Whitehall hearts was a good priority for the new
government, it is not sufficient. There are plenty of signs that the civil
service is struggling.

One is the damaging level of churn. Over one in ten civil servants quit or
swapped departments in 2022-23, higher than at any point since 2011 apart
from immediately after the covid-19 pandemic. The resulting loss of
institutional knowledge and confidence shows up in rising dependence on
outsiders: the government spent £3.4bn ($4.2bn) on management consultants
in the last financial year, 57% higher than five years earlier, according to
Tussell, a data company. Central-government departments used more than
the rest of the public sector combined.

There is an awful lot of low-hanging fruit in Whitehall for the government to

pick. The IfG has listed 20 “essential” civil-service reforms it would like
Labour to undertake—things as jaw-droppingly simple as giving hiring
managers access to performance reviews of internal candidates or ensuring
new starters don’t wait months for security clearances and laptops.
Efficiencies of this sort once seemed tailor-made for a technocrat like Sir
Keir. Perhaps they still are. But the government has had a very wobbly start.
How the new Downing Street team does will show how much the blame for
that lay with Ms Gray or with the prime minister himself. ■

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starmers-managerial-chops
Britain | Oceans apart

Britain has agreed to cede the Chagos Islands to

Mauritius
The Chagossians seem set to benefit less than China
October 4th 2024

Few places in the world are quite so remote as the 60 or so islands that make
up the Chagos Archipelago. Africa sits 3,000km to the west, Indonesia
3,000km to the east; the nearest large land mass is Sri Lanka, 1,700km to the
north-east. More than 50 types of shark live in its pristine reefs. But the
archipelago’s main resident is much more lethal: a military base on Diego
Garcia, the largest island, leased to America by Britain since the 1970s.

The case of Diego Garcia pulls together Britain’s troubling colonial legacy,
modern concerns about human rights and international law, and the hard
realities of geopolitics. Its location—midway between the Middle East and
Asia—is strategically important; American planes flew sorties from it during
both Gulf wars and the war in Afghanistan. Britain set up the base for
America in the late 1960s and early 1970s, forcibly expelling the
archipelago’s inhabitants—the Chagossians—and holding on to the islands
as the British Indian Ocean Territory after Mauritius, another colonial
possession in the ocean, had gained independence. America granted Britain
a discount on a nuclear-weapons deal in return.

On October 3rd the British government announced a preliminary deal to

cede sovereignty of the islands to Mauritius. Under the agreement the Diego
Garcia base will remain in British hands and under American control for the
term of a (renewable) 99-year lease. Britain will also pay Mauritius to build
infrastructure and, eventually, resettle some of the smaller Chagos islands.
The deal is clearly good for Mauritius, and soothes a diplomatic irritant for
Britain. But it doesn’t much help the Chagossians themselves. And the real
beneficiary may well be the government in Beijing.

The Mauritian government has argued that the deal marks the return of
Britain’s last African colony and the righting of a historic injustice. That
perspective has caught on internationally; the United Nations General
Assembly voted in support of Mauritius’s claim. The reality is much
messier. The link between Mauritius and the Chagos islands is fairly flimsy;
the two territories are 2,000km apart and share no pre-colonial history. They
were governed together as a single colony only between 1903 and 1965,
when Britain paid Mauritius £3m (then $8.4m) to renounce its claim.
Although the islands’ economic value is limited, claiming them allows
Mauritius to greatly expand its territorial waters, as well as charge Britain
and America for the Diego Garcia base.

In 2019 the International Court of Justice issued a non-binding opinion

determining that Britain’s separation of Mauritius and the Chagos Islands
was unlawful, on the basis that international law forbade a colonial power
from dividing a territory prior to independence. Although unenforceable,
that decision galvanised international outrage and became an increasing
diplomatic headache for Britain.

Mostly left out of the negotiations leading up to this week’s announcement

have been the Chagossians themselves. Initially taken, after expulsion, to the
Seychelles or Mauritius, where many faced marginalisation and racial
discrimination, they were eventually offered British citizenship; a sizable
community now lives in Crawley, near Gatwick Airport. “The majority of us
feel stabbed [in the back] by the UK government: unhappy, disappointed,
frustrated,” says Pascalina Nellan, one British-based Chagossian. “We don’t
want a change in sovereignty without consulting us. We were never
consulted.” Peter Lamb, the MP for Crawley, said he has not heard a single
local Chagossian voice in favour of ceding the islands to Mauritius. Pravind
Jugnauth, the Mauritian prime minister, has used language that may mean
only Chagossians with Mauritian citizenship would be eligible to resettle on
the islands, leaving many in Britain or the Seychelles excluded.

Publicly, the American government has been supportive of the deal. “Clearly
the Americans can live with this deal enough to sign off on it, because it’s
happened,” says David Blagden, of Exeter University. But “they may well
retain some significant security concerns that they’ve voiced privately to the
British and will have sought to get the Mauritians to mitigate.”

One particular worry is the prospect that China may have an easier time
snooping if the archipelago is in the hands of Mauritius, which has
substantial investment and trade links with the government in Beijing. The
reason that Britain had previously opposed Chagossian resettlement, even
outside Diego Garcia, was out of concern that a permanent local population
could jeopardise the security of the base. Another option for espionage
would arise if Mauritius allowed China’s fishing fleet into its waters; vessels
with surveillance equipment could be easily mingled with legitimate fishing
boats.

Further out, the loss of sovereignty means future Mauritian governments

could also call the lease into question. Backers of the deal argue that ending
legal ambiguity about the base puts it on a firmer footing. But the
Philippines closed an American naval base in Subic Bay in 1992 after the
Senate in Manila rejected an extension. Libya shut British and American
bases in the 1970s, after Muammar Qaddafi took power. “Mauritius can
always renege. When you have sovereignty you can get away with almost
anything really,” says Yuan Yi Zhu, a legal academic at Policy Exchange, a
think-tank. “Sovereignty is very powerful; a lease isn’t.”

For Britain the upside is a diplomatic boost and the end to an embarrassing
narrative about a remnant of the British Empire. But just how much cachet
Britain has bought remains uncertain. One former foreign secretary, opposed
to the deal, is sceptical. “You won’t get the global south on board. This
won’t do it. There will be another demand,” he says. “It is naive. Once you
do something, you cannot reverse it. You’ve lost it for ever.” ■

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islands-to-mauritius
Britain | Modern life is rubbish

The biography of a British recycling bag

Do you really have to wash yogurt pots before throwing them away?
October 10th 2024

Modern life offers many troubling questions. Is AI conscious? How do you

stimulate economic growth? And do you really have to take that funny bit of
paper at the bottom of the salmon packet out when you put it in the
recycling? Also: do you have to wash your yogurt pots before recycling
them? And is any of this stuff actually reused anyway? AI and growth are
rather tricky. But the answers to the micro-worries are: no, no and yes,
definitely.

The average Westerner produces more than 1.5kg of rubbish a day, or half a
tonne a year. Britons recycle 44% of their household waste, better than
before though not as good as it might be. According to a study by Eunomia,
an environmental consultancy, Austria is the best in the world at recycling;
England is in 11th spot. Better separation at source would help but the
problem with rubbish is that it is “disgusting”, says Oliver Franklin-Wallis,
author of “Wasteland”, “and therefore people don’t want to look at it”. Few
pay much attention, says Ed Conway, author of “Material World”, as
recycling is not a “sexy sector”.

It is, however, an interesting one. Few things are more telling than a rubbish
heap. They are “the great treasure troves of archaeology”, says Neil
MacGregor, an art historian and former director of the British Museum.
Discarded objects and food get you so “close to how [people] lived”. They
still do. To understand a modern city you could go to its concert halls or
cathedrals or coffee shops. But you would be better off visiting its recycling-
processing plants.

Massive as cathedrals—the Southwark plant in London, which recycles the

rubbish of 2m people, is almost twice as long as St Paul’s—but far less
lauded, they provide the coda to modern capitalism. They are where every
empty bottle of theatre-interval wine and every coffee cup drained of its
fancy flat white goes to be reborn. Few pause to think about this. The essay
“I, Pencil”, which offers the autobiography of a pencil, notes that it is “taken
for granted by those who use” it when it in fact merits “wonder and awe”.
This is truer still of the recycling bins those pencils might eventually be
thrown into.

To understand why, consider the biography of a full recycling bag—though

given what happens to it, “autopsy” is arguably a better term. Mere hours
after it is collected by binmen, steel-toe-capped and speedy, from outside
your house, its contents emerge from the plant within compressed bales of
plastic, metal and card. In between, each bag is first disembowelled by a
mechanical bag splitter, its rotting contents pouring—a ghoulish
supermarket—onto a conveyor belt. To see it is strangely shaming. There is
an awful egalitarianism to rubbish; each crumpled Coke can and each
discarded magazine might easily have been yours.

It is also redemptive. These plants are not pretty: inside is a midden-like

stench and an oceanic roar of machinery. But they are magnificent: the 12-
metre-wide nave of the plant in Southwark is criss-crossed by a tangle of
conveyor belts and machines of which Heath Robinson would be proud. The
process begins with an initial sorting of the materials by hand: in a glass-
windowed cubicle people—gloved and goggled—weed out the more
egregiously non-recyclable objects from the belt.

Then the machines take over. Cardboard crowdsurfs over twisted and
turning poles which separate small pieces of card (which fall between them)
from the big (which don’t). Farther on, massive magnets cause soft-drinks
cans to leap like salmon from a conveyor belt. Farther on still, a machine
broods over the belt and then, like a heron fishing, darts down to pluck
boxes and cartons from the line. The whole process is over in barely 15
minutes. A compressor then squashes these various materials into neat
cubes. Baled metal and cardboard are sold on; plastic is taken to be
processed further.

Watch this process and the recycling strictures, which can seem random
from outside, start to make sense. Wet card slops about and doesn’t separate.
Pizza stuck to pizza boxes starts to rot the fibres of the card. The washing of
plastic isn’t necessary, but it does make life a bit nicer for the people who
sort it. Clothing is loathed: tights turn any machine into an intractable
Gordian knot.

The astonishing thing is less that there are so many rules, more that there are
so few. The plant and its workers cope with almost anything. To the side of
one conveyor belt, idiom incarnate, sits a kitchen sink. This the processing
facility cannot manage. Though if you want to be a thoughtful person, you
should use one to wash your used yogurt pots. ■

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bag
Britain | Property and technology

Can software help ease Britain’s housing crisis?

Some tech utopians think so
October 10th 2024

House-hunting is a favourite British pastime. The country’s three most

popular property portals—which aggregate listings from 25,000 estate
agencies—attract around 10m people each month. Actually buying and
selling homes is a lot less fun. Conveyancing is still almost entirely paper-
based; solicitors regard email as cutting-edge technology; many social
landlords lack good digital records; and so on. That creates an opportunity
for property-tech (“prop-tech”) entrepreneurs to improve the efficiency of
the market.

To take one example, Land Registry records show that there are 5.4m
leasehold homes in England but that 1.2m of them are unmortgageable
because their leases are shorter than 80 years. To extend a lease,
homeowners must navigate a thicket of legal paperwork, negotiate with
solicitors and freeholders, as well as find funds that typically range from
£8,000 ($10,490) to £46,000. Zero Down Lease, a startup, wants to roll all
that hassle into one process, allowing homeowners to borrow the funds
against their property, which are then repaid once it is sold.

It is one of 576 prop-tech firms operating in Britain, according to a tally by

PitchBook, a research firm. The industry has attracted some £3.5bn of
venture-capital funds over the past five years—not a particularly large
number but double the amount invested in the previous five-year period. The
value of prop-tech firms has approximately doubled in that time frame, too,
to around £20bn. They are involved in commercial property, but it is the
notoriously sclerotic residential side that offers the most promise. Gavriel
Merkado, the founder of Realyse, which provides property investors with a
range of appraisal tools, reckons Britain’s market is especially innovative
thanks to decent data, sufficient scale and a host of problems to fix.

In recent years two government agencies, the Land Registry, the custodian
of property records, and Ordnance Survey, the country’s mapping service,
have provided open access to many of their data sets. That gives prop-tech
firms plenty of raw materials to work with. The government has set an
ambitious goal of building 1.5m homes over the course of this parliament,
for instance, which involves developers finding more viable land. Jonny
Britton, the co-founder of LandTech, says that site selection used to be “pot
luck”. His firm provides data and technology that allow housebuilders to
appraise a potential site—for the proximity of listed buildings, say, or the
existence of pending planning applications—within a matter of minutes.

Prop-tech has also been buoyed by the entry of institutional investment into
the housing market. Over the past decade some £32bn has been invested by
large private-sector landlords in 100,000 “built-to-rent” homes; another
55,000 are under construction. These landlords are demanding better data
and tools to manage their assets. Lavanda, another startup, provides services
to landlords to ensure properties have as few vacancies as possible.

Net-zero emissions targets also increase demand for information. The

Labour government has reiterated that it wants rental homes to meet a
minimum energy-efficiency standard by 2030. Parity Projects, another
startup, has produced an energy model of each of the country’s notoriously
draughty homes, which can help landlords to plan necessary renovations.
Russell Smith, its founder, says that “unless you’ve got the data, there’s no
way you can convince people to retrofit.”

Prop-tech startups are not going to solve every problem. Although a lot
appears to have been achieved by simply joining up disparate databases, Mr
Wasinski of Zero Down Lease cautions that “you’re not going to make
housing cheaper with an API.” But more established prop-tech businesses have
already changed the way people look for houses; Rightmove, the most
popular portal and Britain’s 12th-most visited website, recently rejected a
£6.2bn bid from an Australian company controlled by Rupert Murdoch, a
media mogul. If a new wave of businesses can make other bits of the
industry less maddening, that would be in many people’s interests. ■

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housing-crisis
Britain | The pulses quicken

Britain’s obsession with baked beans

Health trends and gourmet beans are driving demand for other varieties
October 10th 2024

WHEN Henry J. Heinz lugged five cases of tinned baked-bean samples to

Fortnum & Mason, a luxury department store in London, in 1886, he cannot
have imagined the impact he would have on British diets. Back then the
American dish of haricot beans cooked with tomato sauce and pork (the
meat was later dropped during wartime rationing) was a delicacy.

Britons today get through over 2m cans of the stuff a day—more than the
rest of the world combined. Both Princess Diana and Queen Camilla have
claimed it as a favourite meal. But this singular obsession has crowded out
other forms of pulses, reckons Professor Eric Holub of Warwick University.
“We’ve become canned in by that.”
Changing food trends mean that other types of bean are now getting a look
in. In 2022 meat consumption in Britain was at its lowest level since records
began in the 1970s; pulses are cheap, filling and healthy alternative sources
of protein. Rising awareness of gut health is helping their case, too. Fewer
than one in ten Britons get enough fibre, which is essential for digestion;
beans are rich in it. Some local authorities have pledged to serve more beans
in canteens at hospitals, schools, government buildings and prisons.
Scientists from the University of Oxford have conducted trials of pulse-
heavy menus at schools in Leicestershire.

These can also be seen as arguments for Britons to eat even more baked
beans. But less-processed beans are healthier still, and more aspirational.
Amelia Christie-Miller, the founder of Bold Bean Co, a British startup, says
she wants to change the perception that beans are “dull, uninspiring and
associated with poverty”. Her company sells supersize chickpeas and butter
beans in sleek glass jars. They are marketed as the centrepiece of meals
rather than a side—which helps justify the price. Sales are forecast to reach
2m units this year; that would be a tenfold increase on 2022, the year in
which the firm made its supermarket debut.

Ms Christie-Miller is now working on her second cookbook. A number of

other recipe volumes, published in September and October, increasingly
extol pulses for their flavour, not just their function. Paul Newnham of
Beans is How, a UN campaign to double global bean consumption by 2028,
says that it helps to link pulses with heritage and identity. “It becomes about
being proud of who I am, where I am from,” he says.

If beans really are about identity, Britain’s baked-bean juggernaut will be

hard to stop. According to Kantar, a market-research firm, in the year to
January 2024 beans were the only big canned-food categories to grow in
sales volume. But baked beans grew by 1.7% whereas other types grew by
only 0.2%. Many shoppers still don’t quite know what to do with canned
pulses. But everyone knows how to eat baked beans, be it hot on toast or—if
you’re weird—cold out of the can.

Even gourmet brands like Bold Bean have accepted that familiarity matters.
In September the company added baked varieties (with “tangy” notes of
tamarind) to its plain-cooked range. Professor Holub is working on the
country’s first home-grown baked bean, with the eventual aim of replacing
imported navy beans from America, Canada, China and Ethiopia. After a
successful trial in Lincolnshire last year, he hopes that his canned beans will
hit supermarket shelves by 2026. Then baked beans can claim to be truly
British. ■

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Britain | Bagehot

Britain’s last imperialists

The core of the British state still believes it can lead by example
October 9th 2024

In the 1950s the Campaign for Nuclear Disarmament (CND) became a

fashionable cause among the who’s who of Britain. Public intellectuals from
Bertrand Russell to J.B. Priestley argued forcefully that the country should
unilaterally lay down the bomb. “Our bargaining power is slight,” wrote
Priestley. “The force of our example might be great.” A.J.P. Taylor, the first
celebrity historian and a fellow initials lover, was another supporter of this
cause. It was, he later realised, a futile endeavour: “We thought that Great
Britain was still a great power whose example would affect the rest of the
world. Ironically, we were the last Imperialists.”

Taylor was right about CND’s failure but wrong on another score: the
imperialists are still going. Like Taylor’s band of peaceniks, today’s
imperialists know that Britain can no longer rely on the force of arms.
Instead, it must rely on the force of its example. Such thinking pervades
British foreign policy, whether it be its approach to aid, climate change or
what to do with the remaining few fragments of its empire. In a world
where, increasingly, might is right, Britain, increasingly, relies on a strategy
of right is might.

Take the case of the Chagos Islands, an archipelago in the Indian Ocean,
almost empty but for a remarkably important Anglo-American airbase. A
grubby deal in the 1960s separated the Chagos Islands from Mauritius,
which, owing to colonial bureaucracy rather than any shared history, would
have expected to control the islands upon gaining its own independence. On
October 3rd Britain agreed to hand over the islands to Mauritius while
retaining rights over the base on a 99-year lease.

The main reason for surrendering the islands was realist. Without a deal,
Britain faced years of legal wrangling over the status of the base; that
threatened mundane day-to-day operations such as flying in the Filipino
contractors who keep things ticking over there. But a secondary benefit was
progressive. It staved off accusations of hypocrisy when Britain invokes
international law elsewhere, whether over China’s “gimme, gimme” attitude
in the South China Sea or Russia’s invasion of Ukraine. Seen from this
perspective, giving up the Chagos Islands was ultimately for the greater
good of British influence.

Leading by the force of example has its limits, however. Not all countries
share Britain’s willingness to help turn Russian conscripts in eastern Ukraine
into dust. If the status of a British atoll in the Indian Ocean stops providing
other countries with a pretext to deny even diplomatic support to Ukraine,
you can be sure that another excuse will take its place. And although double
standards are bad, is it really better to equate a peaceful disagreement over
sovereignty of an uninhabited archipelago with the invasion of an entire
country? Maybe single standards are no better.

Britain has nonetheless been forging a new role for itself as a geopolitical
goody-two-shoes. This is a far-from-universal strategy among the ranks of
the world’s middle powers. Some are sticklers for international law (think
Canada) but others have a much more casual relationship with it (think
Turkey or Saudi Arabia). The new Labour government is determined to
uphold the international system, even if its Tory predecessor had some
doubts about it. “It is hugely important that we are a country that plays by
the rules,” says David Lammy, the foreign secretary. Call it unilateral
multilateralism: following the rule book even if few others do.

What price this belief in “soft power”? About £15bn ($20bn) in 2023, which
was the size of Britain’s foreign-aid bill. Helping the world’s destitute is a
noble cause. Yet British aid is justified almost entirely through the prism of
British influence. Lord Cameron, a former prime minister, declared that
Britain must remain an “aid superpower”, protecting the development
budget—set at 0.7% of gross national income—while slicing other
departments. It took the pandemic for the budget to be snipped, temporarily,
to 0.5%. That triggered outrage among elite opinion, not because of the
increase in suffering in developing countries but because of the dip in British
prestige. Sir Keir Starmer, the prime minister, has said he aspires to undo
this cut, at which point Britain “will lead again”. The country would regain
its place at the top table of those in the 0.7% club, among the likes of
Luxembourg, Norway and Sweden.

Tackling climate change has become another monument to British role-

modelling. Ed Miliband, the energy secretary who oversees Britain’s green
transition, has pledged nothing less than “global leadership”. Where Britain
leads others will follow, runs the innately imperial logic. Even climate
scepticism is justified by the force of example. Claire Coutinho, Mr
Miliband’s Conservative predecessor, has argued Labour is going too far, too
fast when it comes to net zero. Since Britain is such an influential player
when it comes to climate, it must not be seen to screw it up. Where Britain
leads others follow, even if it is into a ditch.

Campaign for New-found Delusions

A shibboleth of the Brexit years was that Leavers suffered from delusions of
imperial grandeur. Proponents of quitting the EU were dismissed as trying to
forge “Empire 2.0”, with Britain telling others what to do. But Remainers
are just as prone to a progressive version of similar bombast. Turn up to a
panel titled something like “Global Britain?” and it will be filled with
Remainers lamenting Britain’s loss of clout. In an era without gunboats,
staying in the EU was a means of projecting British power.

The last imperialists want an empire built not on hard power but on
persuasion, with British ideas about aid, climate and international law
spreading around the world just as common law and cricket did in the 19th
century. Instead, they risk the fate of Taylor and his accidental imperialists.
“If you believe that Britain must lead, march with us,” read one CND leaflet in
1958. “Let Britain lead the world!” What was delusional then is delusional
now. ■

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International
Over a billion have voted in 2024: has democracy won?
International | Elections everywhere

Over a billion have voted in 2024: has democracy

won?
Half the world has had elections so far this year
October 6th 2024

In little less than a month, when Americans go to the polls to choose their
next president, democracy will face its most important test in a year in which
it is being put through its paces like never before. What happens in America
—a superpower that embodies liberty for many people—could sway
perceptions of the health of democracies around the world. A messy or
violent outcome would inspire autocrats everywhere and undermine faith in
the ideal of rule by the people. Conversely, a well-run election in which the
loser gracefully concedes would strengthen the green shoots of a democratic
recovery evident in some countries amid the biggest year of elections in
history.
No fewer than 67 countries with a total population of about 3.4bn people
have already held national elections this year. Those with another 440m
people will let their citizens have their say before the end of 2024. At the
start of the year The Economist suggested this “vote-a-rama” would be a “a
giant test of nerves”. After all, when looking at areas such as voting, the
press and repression of minorities, the number of countries where freedom
has declined has been greater than the number where it has improved in each
of the past 18 years, according to Freedom House, an American think-tank.
One in three people voting in 2024 lives in a country where the quality of
elections has measurably deteriorated in the past five years.

So what is evident so far, given that almost 90% of votes around the world
have been cast and tallied? Democracy has proved to be reasonably resilient
in some 42 countries whose elections were free, with solid voter turnout,
limited election manipulation and violence, and evidence of incumbent
governments being tamed. Yet there are signs of fresh dangers, including the
rise of a new generation of innovative tech-savvy autocrats, voter
fragmentation and departing leaders trying to rule from beyond the political
grave.

Start with the good news. Voter turnout has risen for the first time in two
decades, based on the average for all countries that have held elections,
signalling engagement by citizens in the political process (see charts 1 and
2). Among those categorised as “full democracies” by our sister company,
the Economist Intelligence Unit (EIU), turnout held steady; in “flawed
democracies” it rose sharply, by three percentage points. Turnout rose in
many countries, including France, Indonesia, South Korea and Mexico, and
even in the world’s dreariest poll, the European Parliamentary election,
which had the highest participation rate since 2004.

A second reason for optimism is that efforts to undermine elections often

failed. Going into 2024, many observers worried that disinformation
campaigns fuelled by social media and artificial intelligence might dupe
voters. “I don’t see a lot of evidence for that,” says Kevin Casas-Zamora, of
the International Institute for Democracy and Electoral Assistance, an
intergovernmental organisation. Subversion by hostile states seems to have a
limited effect. In Taiwan voters chose William Lai Ching-te to be president,
despite Chinese intimidation. Moldova has been busy countering Russian
subversion ahead of its presidential election and a referendum on whether to
include the goal of EU membership in its constitution, both scheduled for
October 20th. It recently exposed a $15m Russian vote-buying scam.

Independent institutions often stood up for liberal values. In Senegal a

strongman’s ambition to rule indefinitely was rebuffed by the country’s top
court, its sinews stiffened by pro-democracy protesters. After a poll
eventually took place, voters made Bassirou Diomaye Faye Africa’s
youngest democratically elected leader, aged 44. In most places elections
became more peaceful. Demonstrations and violence have fallen on average,
compared with the previous election, across a sample of 27 countries for
which data exist, according to an analysis by The Economist (see chart 3).

The third reason for optimism is that voters held leaders accountable, either
by removing them from office or by eliminating their parliamentary
majority. There was a swing against incumbents in well over half of the
democratic elections held so far this year (excluding those for the European
Parliament). In Britain the opposition Labour Party won the largest majority
of parliamentary seats since 1997. In South Korea the incumbent People
Power Party was given a drubbing in April amid corruption allegations.

Moscow rules
In several huge emerging economies where the health of democracy had
been in question, incumbents were emphatically rebuked by the electorate.
South African voters, fed up with corruption and incompetence, stripped the
ruling African National Congress (ANC) of its parliamentary majority for the
first time since the end of apartheid in 1994, forcing the once dominant party
to form a coalition to remain in government. Narendra Modi, India’s
strongman prime minister, lost his parliamentary majority in June, despite
stoking Hindu nationalism and enjoying the support of a pliant media
outlets. He, too, must now rule through a coalition. Even Turkey’s autocratic
president, Recep Tayyip Erdogan, who won re-election last year in a poll
marred by intimidation and rule-bending, was humbled this March when his
party was defeated in local elections in the major cities.
Even as democracy has triumphed in some respects, both familiar and new
dangers loom. Old-school dictators prevented or rigged polls in some
countries. Juntas in Burkina Faso and Mali indefinitely postponed the
elections—and transitions back to civilian rule—that had been scheduled for
this year.

Other regimes held sham elections. Amid a war that has killed or injured
500,000 Russians, Vladimir Putin won a mere 88% of votes in elections in
March, the biggest victory in post-Soviet Russia. The death of his most
credible political opponent, Alexei Navalny, in prison before the vote, was
an “unfortunate incident”, Mr Putin said. Paul Kagame, who has called the
shots in Rwanda since 1994, walked away with 99% of votes in a rigged
presidential election in July.

The charade was so brazen in Algeria that even Abdelmadjid Tebboune, the
incumbent president, was surprised to have won 95% of the votes. He issued
a statement with his opponents accusing the election authority of
“inaccuracies, contradictions, ambiguities and inconsistencies”. In
Venezuela Nicolás Maduro, the ruling dictator, fabricated election results
and later forced his opponent to flee.
Ballot-stuffing in rigged elections means that in some autocracies, the
official turnout rose. Intriguingly, in regimes that the EIU classifies as “hybrid”
(those that sit somewhere between flawed democracies and outright
dictatorships) turnout fell sharply, by an average of four percentage points.
This suggests that voters are disillusioned. In Bangladesh, for example, the
paltry turnout rate of 42% amounted, in effect, to a vote of no confidence in
Sheikh Hasina, the longtime ruler who was later forced to flee the country in
August after massive protests.

Alongside old-school autocrats arresting opponents and Putin-style vote-

rigging, there are signs of novel threats to democracy. One is that even
where incumbents leave office, they still seek to control their successors.
Indonesia had a free election in February and Joko Widodo, the president, is
set to leave office in October (despite speculation that he wanted to govern
beyond his term limit). But there are signs that he wants to hold sway over
the next administration through his son, who was elected as vice-president,
and through his influence over Indonesia’s dominant parties. In Mexico a
free election was won by Claudia Sheinbaum, a protégée of the outgoing
strongman president, Andrés Manuel López Obrador. Yet many Mexicans
suspect he may try to exert power from behind the throne because he
crushed judicial independence just weeks before he is due to leave office in
October and he still has huge influence over his party’s congressional
caucus.

Authoritarian innovators are also on the rise: populists who command vast
fanbases. El Salvador’s ruler Nayib Bukele has come up with a new formula
for Latin American electoral success: social-media savvy plus the mass
incarceration of suspected gangsters. He has subverted the constitution,
bypassing presidential term-limits, stacking the high court and appointing
his secretary as the interim president. Yet he is also genuinely popular, with
his draconian-but-effective crackdown winning him 85% of the vote in
February.

Old continent, new problems

A final, growing, concern is the splintering of parties and voting patterns in
Europe, which has become the dominant pattern on the continent. Although
a free and fair expression of democratic intent, it is making the job of
governing harder. Germany’s unwieldy ruling coalition is racked by internal
conflicts. In France, it has taken more than two months to form a functional
government after a polarised parliamentary election in July that saw hard-
right and hard-left parties gain support at the expense of the centre. In the
Netherlands a technocrat had to be sworn in as prime minister in July
because the ruling parties were unable to agree on who would lead them.
The poor performance of coalition governments may in turn fuel voter
cynicism and boost support for disruptive outsider parties. In Germany
support for the hard right and hard left surged in three state elections in
September.

So far democracy has—just about—passed the giant test of nerves it has

faced in 2024. A lawful, peaceful transfer of power in America would
further boost confidence around the world in the enduring resilience of
political freedom. Sadly, that is not guaranteed. ■
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2024-has-democracy-won
Business
Big tech is bringing nuclear power back to life
Can Mytheresa make luxury e-commerce a success?
Can Israel’s mighty tech industry withstand a wider war?
Ratan Tata, a consequential and beloved figure in Indian business
China is writing the world’s technology rules
When workplace bonuses backfire
Masayoshi Son is back in Silicon Valley—and late to the AI race
Business | Power couple

Big tech is bringing nuclear power back to life

Artificial intelligence needs clean and reliable energy sources
October 9th 2024

“Nuclear nightmare”, screamed the headline in Time magazine on April 9th

1979. One of the two reactors at a nuclear-power plant at Three Mile Island
in Pennsylvania had suffered an accident. The governor ordered an
evacuation of all vulnerable people within five miles of the plant as
radioactive gas escaped.

In the end, the accident resulted in no injuries or loss of life. Two decades
later The Economist visited the Pennsylvania hinterlands and found the
second, unproblematic reactor still running well and enjoying strong local
support. It cranked out power until it was mothballed in 2019 owing not to
safety concerns but to competition from cheap shale gas.
Now Three Mile Island is coming back from the dead. On September 20th
Microsoft, a tech giant, and Constellation Energy, the utility that
decommissioned the trouble-free reactor, signed a deal to return it to service.
The utility will spend about $1.6bn to restore the plant by 2028. Microsoft
will then buy its carbon-free power for the next 20 years.

Having plunged through the 1990s and 2000s, the share of global nuclear
power generated by new plants is now rising again (see chart 1). Although
America is home to 94 conventional nuclear reactors, about a fifth of the
world’s total, it has built few in recent decades. There are, however, over
five dozen nuclear reactors under construction worldwide, mostly in China
and Russia but increasingly in other places, too (see chart 2). In July, for
instance, the Czech Republic finalised plans for a $17bn nuclear project.
And interest in small modular reactors (SMRs), which are cheaper and quicker
to build, is surging everywhere. Is a new age for nuclear power dawning at
last?

Demand from tech giants such as Microsoft, Amazon and Google, all of
which are racing to find sufficient clean power to feed the data centres
underpinning the artificial-intelligence (AI) boom, is turbocharging the
nuclear revival. Brad Smith, president of Microsoft, explains that even
before AI came along, his firm’s promise to remove more greenhouse gases
from the atmosphere than it has contributed during its entire history was
ambitious. Now, thanks to AI, he reckons Microsoft will consume five to six
times as much electricity by 2030 as it anticipated when it set the goal in
2020.

Nuclear power is well suited to data centres because it provides a reliable

source of clean energy around the clock, unlike wind and solar, notes David
Victor of the University of California at San Diego. The vast scale of
nuclear-power plants also makes them attractive: running an AI data centre
can require as much as a gigawatt (GW) of power. That could be provided by
millions of solar panels—or just a single nuclear plant.

Unfortunately, there are relatively few decommissioned nuclear reactors

across America, Europe and Japan that would be suitable for big tech to
resurrect. New plants will therefore need to be built. These projects absorb
enormous amounts of capital and are sensitive to interest-rate fluctuations
and long delays. What is more, the risk of overruns is higher today because
the supply chains and expertise needed to build nuclear power have
atrophied, at least outside China and Russia. A case in point is the recently
opened Vogtle nuclear plant in Georgia, America’s first in decades. It cost
$35bn, more than double the initial estimate, and was completed seven years
late.
One way for tech giants to mitigate the risk of these projects is to bring in
outside investors. Last month Microsoft teamed up with BlackRock, an asset
manager, and other investors to launch a $30bn infrastructure fund devoted
to AI. Mr Smith, who says the fund’s firepower could rise to $100bn once
debt is added, expects it to finance nuclear projects, among other things. He
also expects three or four such funds led by other tech firms to emerge, and
suggests that Microsoft “may participate in all of them”.

At the same time, tech titans have taken a growing interest in SMRs. Currently
there are only two in operation, in China and Russia. But Western
manufacturers of power equipment such as GE Vernova and Rolls Royce have
been busily developing models of them, as have numerous startups.
TerraPower, an SMR startup backed by Bill Gates, broke ground on its first
plant in Wyoming in August. Oklo, another startup which counts Sam
Altman, the chief executive of OpenAI, among its backers, intends to deploy
several small nuclear plants by 2030. Earlier this year it signed an agreement
to provide Equinix, a data-centre operator, with 500 megawatts of nuclear
power that includes a prepayment which should help it fund construction.

There are more SMRs planned or under construction in America than anywhere
else in the world, thanks in large part to enthusiasm from the tech industry.
Last month Oracle, a software giant, unveiled plans for a GW-scale data centre
to be powered by three SMRs for which the firm has already secured permits.
On October 3rd Sundar Pichai, the boss of Google, confirmed that his
company is also looking into SMRs to power its data centres.

Chain reaction
Still, the technology behind SMRs remains unproven at scale. Meanwhile, the
hefty and uncertain price tag of building conventional nuclear-power plants
will continue to weigh on the industry’s growth—and on big tech’s hopes of
powering the AI revolution without spewing vast amounts of carbon into the
atmosphere. Chris Womack, the chief executive of the Southern Company,
which owns the nuclear plant in Georgia, reckons that public support would
help. “The government must provide some cost-overrun insurance,” he
argues. Streamlining lengthy permitting processes would be even better.
Governments certainly seem to be warming towards nuclear power, after
decades of frostiness. At an event held during UN Climate Week in New York
last month, officials lined up to reaffirm a commitment made by over 20
countries at the COP climate summit in Dubai last year to triple the global
output of nuclear power by 2050. Fourteen big banks also said they are
ready to finance new nuclear projects. Pointing to the surge in demand from
AI, Mohamed Al Hammadi, head of the Emirates Nuclear Energy
Corporation, declared: “We have witnessed a step change in momentum
across the nuclear sector.” For it to continue, a mix of technical ingenuity,
financial wizardry and supportive policy will be needed. ■

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back-to-life
Business | A digital makeover

Can Mytheresa make luxury e-commerce a

success?
It reckons it can succeed where Richemont has failed
October 10th 2024

Not long ago, as consumers emerged from pandemic lockdowns, it seemed

the moment for luxury e-commerce had arrived. Cashed-up shoppers, now
accustomed to buying almost anything online, were hunting for new outfits
to parade in. Online purchases of luxury goods hit €73bn ($80bn) globally in
2022, up from €33bn in 2019, outpacing the already rapid growth of in-store
luxury sales, according to Bain, a consultancy (see chart).

Since then the sparkle has dimmed. Last year growth in luxury e-commerce
stalled, and its share of total luxury sales fell. Farfetch, a pricey e-emporium,
was rescued from the edge of bankruptcy by Coupang, a South Korean e-
commerce firm, which swooped in to acquire it for $500m—far from the
$23bn valuation it reached in 2021. Matches, another luxury site, was also
snapped up from the bargain bin but soon went bankrupt anyway.
Richemont, a luxury conglomerate, wrote off vast sums from Yoox Net-a-
Porter (YNAP), the e-commerce unit it assembled through acquisitions, which
includes Net-a-Porter and Mr Porter, two high-end sites, as well as Yoox and
the Outnet, two online luxury discounters. An earlier proposal to sell it to
Farfetch fell through amid the would-be acquirer’s own troubles last year.

On October 7th Richemont announced it would instead offload the division

to Mytheresa, a German luxury e-commerce firm, in return for a third of its
shares. The consolidated business will have €3bn in annual sales plus YNAP’s
€555m cash pile and a €100m revolving credit facility courtesy of
Richemont. By keeping a stake in the combined venture, the Swiss giant is
betting that the new owner will succeed where it and others have failed.

Mytheresa has lately outperformed other multi-brand luxury sites. Last

month it was the only big one to have more visitors than it did the year
before, according to figures from SimilarWeb, a data provider. As rivals rack
up losses, it is forecasting gross-profit growth of 8-13% this year.

Mytheresa differentiates itself from its rivals in various ways. To appeal to

rich shoppers tired of sifting through countless products, it offers a carefully
curated selection of 250 brands; Net-a-Porter has over 1,000. Although it
cannot offer customers the champagne treatment they enjoy in a physical
store, it pampers loyal ones with picnics in Italy and boat trips on the French
Riviera. And its operations are slick. Last year it opened a 55,000-square-
metre distribution centre at Leipzig-Halle airport, allowing it to get late-
night orders on to planes that depart first thing, so as to arrive earlier at
customers’ doorsteps.

Michael Kliger, Mytheresa’s boss, says the company aims to expand sales to
€4bn in the next four to five years while improving profit margins. That is
ambitious. McKinsey, a consultancy, reckons growth in global luxury
fashion will slow to 3-5% this year, down from 5-7% last year. Shoppers do
not seem inclined to shift more of their pricey purchases online. And luxury
brands, fed up with swallowing discounts from online retailers, have been
investing heavily in their own digital offerings, says Claudia D’Arpizio of
Bain.

Mr Kliger remains confident. He reckons costs can be cut by combining

operations including logistics, payments and customer service for
Mytheresa, Net-a-Porter and Mr Porter. He also plans to run the two
discount sites, Yoox and the Outnet, separately, arguing that Richemont was
mistaken in mixing businesses with different customers and order sizes.
“They created a fridge that does heating and washing too,” he says. “And in
the end the fridge was not even good.” Germany is known for making top-
notch household appliances. It might just excel at selling fancy shoes and
handbags, too. ■

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a-success
Business | Under fire

Can Israel’s mighty tech industry withstand a

wider war?
Its resilience is being tested
October 8th 2024

Soon after Hamas attacked on October 7th last year, around a third of
workers at Elsight, an Israeli maker of drone communications systems, were
called up to fight in Gaza. A similar exodus took place across Israel’s tech
sector, which accounts for over half of the country’s exports, a fifth of GDP—
and a fifth of the reservists in the Israel Defence Forces (IDF).

In the circumstances, Israel’s tech sector has been remarkably resilient.

Venture-capital (VC) funding slumped when the war began, falling to $2.1bn
in the last three months of 2023, the worst quarter in five years (see chart).
But it has since surged, reaching $4.4bn in the second quarter of this year,
according to Startup Nation Central, an Israeli non-profit organisation.
Israel’s tech industry is accustomed to conflict—it emerged relatively
unscathed from shorter bouts of fighting in 2006 and 2014—and many firms
have benefited from a boom in defence spending both at home and abroad
over the past year. Nonetheless, Israel’s widest and longest war in years may
leave lasting scars if it is not resolved soon.

Read all our coverage of the war in the Middle East

Israel’s tech prowess dates back decades. The government has long sought to
boost industrial research and development (R&D) through grants, fund-
matching arrangements and schemes such as the Magnet Program, which
brings together companies and universities to develop technologies. That
government policy has drawn private capital into the high-tech industry, says
Avi Hasson, the chief executive of Startup Nation Central and a former chief
scientist of the country. The upshot is that Israel spends more on R&D, relative
to GDP, than any other country in the world, and more than double the average
among members of the OECD.

Israeli tech has also been helped by its close ties to the country’s armed
forces, which have not only been buyers of its whizzy products but also
suppliers of entrepreneurs. For instance, former members of Unit 8200, the
IDF’s renowned signals-intelligence group, have gone on to set up many

prominent cybersecurity firms, including Wiz, which Google unsuccessfully

tried to buy for $23bn in July, and Palo Alto Networks. These ties help
explain why Israeli tech firms tend to focus less on things like mobile apps
and more on cutting-edge innovations that may come out of, or be useful for,
the armed forces.
Increased defence spending over the past year, both at home and abroad,
thus offers one explanation for the resilience of many Israeli tech firms.
Elsight has morphed into a defence-focused firm: it now makes more than
half its revenue from military contracts, up from less than 5% before
October 7th, according to Yoav Amitai, its boss. XTEND, an Israeli firm that
makes software for drones and robots that inspect buildings and other
infrastructure, has been signing contracts with the IDF. It raised $40m in
funding in May.

Israeli tech firms in other buzzy areas of tech have also continued to do well.
The country’s 460 or so cybersecurity firms are in high demand from
companies wanting to boost their defences against hackers. Earlier this year
Nvidia, a chip behemoth, is said to have spent $1bn on two Israeli artificial-
intelligence startups, Deci and Run:ai. Medical technology is another bright
spot. In August Johnson & Johnson, an American pharmaceutical giant, said
it would purchase V-WAVE, an Israeli maker of heart implants, for up to $1.7bn.
In July Alcon, a Swiss eye-care company, bought Belkin Vision, an Israeli
startup that has developed laser-based technologies for treating glaucoma.

Yet other tech firms are increasingly showing signs of strain. Those dealing
directly with customers have been hit harder by the conflict. Last month One
Zero, an Israeli fintech firm, announced it would fire 6% of its workers after
a deal with Generali, an Italian financial-services group, to establish a digital
bank in Italy was put on hold. In a letter to employees, Gal Bar Dea, One
Zero’s boss, blamed “uncertainty around the war situation”. Aleph Farms, a
startup developing lab-grown meat, laid off a third of its staff in June.

Even in areas of tech that have done better, bosses note that the war is
undermining morale and productivity. What is more, foreign tech firms such
as Dropbox, a cloud-storage company, and Verily, a biotech firm owned by
Google, have been shutting their operations in Israel.

That is a problem for the wider economy. About a quarter of the

government’s tax take comes from tech companies and their employees. At
the end of September Moody’s, a rating agency, downgraded Israel’s
government bonds by two notches, pointing to “high uncertainty around the
high-tech sector’s capacity to keep growing”. The longer the conflict
continues, the worse the damage. ■

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withstand-a-wider-war
Business | A titan departs

Ratan Tata, a consequential and beloved figure in

Indian business
He reshaped one of India’s most successful conglomerates
October 10th 2024

Two things are often said of Ratan Tata, former head of the Tata Group, one
of India’s mightiest conglomerates: he was a giant of Indian business, and
among its most virtuous figures. For a society as fractious as India, the
esteem in which he was held was remarkably wide.

That admiration was clear from India’s response to Mr Tata’s death in a

Mumbai hospital on October 9th, at the age of 86. Police soon blocked
traffic to the southern tip of the city and queues were established to allow a
final viewing of Mr Tata at the National Centre of Performing Arts, an
institution co-founded by J.R.D. Tata, his predecessor as Tata’s chairman.
Some 60,000 people were expected to attend. Narendra Modi, the country’s
prime minister, issued a gushing statement calling Mr Tata “a visionary
business leader, a compassionate soul and an extraordinary human being”.
The opposition Congress party praised Mr Tata as “a titan of Indian industry
and a philanthropist who shaped India’s corporate landscape”.

Despite his family name, Mr Tata’s successful business career was not pre-
ordained. His father had been adopted into the Tata family and became an
executive at the company. Although Ratan began his education in Bombay
(as Mumbai was then called), he finished high school in New York and went
to college at Cornell University, where he studied architecture. For a time he
considered staying in America.

When he eventually returned to India, he worked at a succession of Tata

entities including a steel mill, a locomotive operation and an IT outsourcing
operation that went on to become the group’s most valuable business, Tata
Consultancy Services.

J.R.D. Tata retired in 1991, just as India was opening up to the world,
leaving behind a decentralised company whose businesses were run by
powerful, independent leaders. Intense rivalry between them contributed to
Ratan Tata’s subsequent elevation to the top of Tata Sons, the group’s
umbrella entity. The succession was acrimonious; the heads of Tata’s
chemicals, steel and power units soon left.

In the years that followed Mr Tata reshaped the conglomerate. Many

businesses were sold, including its cement, textiles, cosmetics and
pharmaceutical operations. A new strategy was put in place to bring in half
of all revenues from overseas. That resulted in a string of acquisitions,
particularly of British firms, including Tetley Tea in 2000, Corus (then
British Steel) in 2007 and Jaguar Land Rover in 2008. At home, Mr Tata’s
effort to manufacture an affordable car for Indians resulted in 2009 in the
Nano, which cost just 100,000 rupees ($1,350) at the time.

By 2012, when Mr Tata stepped down, the conglomerate’s revenue had

soared to over $100bn, up from around $4bn when he took over. Yet his
tenure was not an unmitigated triumph. The Nano failed owing to production
problems and marketing failures. One of the big acquisitions, that of Corus,
was a financial disaster. An effort to build a mobile-telecoms business was
abandoned following vast losses. And the succession to Mr Tata himself, to
Cyrus Mistry, was troubled. Mr Tata ousted Mr Mistry in 2016 following
years of acrimony between the two, and briefly returned to lead the
conglomerate before handing over to Natarajan Chandrasekaran, its current
boss, in 2017.

Nonetheless, Mr Tata’s record is widely celebrated in India. Even in difficult

times, the Tata Group under his leadership was seen as a uniquely benign
employer. It did not swindle, it paid its debts, it stood behind its products—
and it was largely, if not entirely, free from scandal. It also placed a
tremendous effort on philanthropic activities. It established several cancer
hospitals with subsidised treatment, a research institute and veterinary
clinics, among various other charitable endeavours. Mr Tata, a polite man,
rarely spoke publicly but had an active Instagram account that often sought
help for abandoned or injured dogs. The Economic Times, an Indian
newspaper, wrote that in retirement he was seen as “an adorable old uncle”.
That is an unusual encomium for a business titan—but an especially
affectionate one. ■

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beloved-figure-in-indian-business
Business | The standards war

China is writing the world’s technology rules

It is setting standards for everything from 6G to quantum computing
October 10th 2024

A SMARTPHONE IS a testimony to the power of standardisation. Comprising

components from hundreds of suppliers, it can find a signal almost anywhere
in the world and connect to a wide array of ancillary devices all because
countless companies have subjected themselves to a common set of
technical specifications.

How such rules are set is a mystery to most people. Global bodies such as
the International Organisation for Standardisation (ISO) and the International
Telecommunication Union (ITU) periodically convene companies and
technology wonks to thrash out agreements. For decades that process has
been dominated by America, Germany and Japan, whose companies have
benefited handsomely from the system. IBM, an American computing firm that
holds over 100,000 patents, earned a handy $366m last year from licensing
its intellectual property. Qualcomm, an American semiconductor firm whose
technology is ubiquitous in wireless devices, makes around a quarter of its
gross profit from licensing.

Governments have long recognised the value in setting standards. Britain

and Germany once tussled over the specifications for telegrams. Today the
battle over standards is between China and the West. At stake is the future of
technologies ranging from wireless communication to quantum computing
and artificial intelligence (AI).

In recent years China has been growing more assertive in the standard-
setting process. Last month the ITU approved three new technical standards
that will be embedded in sixth-generation (6G) mobile technology. The rules
relate to how networks integrate AI and produce immersive experiences in
areas such as virtual reality. They were developed by the Chinese Academy
of Sciences (CAS), which is controlled by the central government, and China
Telecom, a state-owned firm.

Despite the efforts of America’s government to keep Chinese equipment out

of mobile networks in as many countries as possible, wireless technology
has continued to become steadily more Chinese. Thanks in part to the uptake
of its standards abroad, Huawei, a Chinese maker of telecom gear, has made
more money since 2021 licensing its technology to companies than it has
paid them for theirs.

China’s growing role in standard-setting extends well beyond mobile

networks. Chinese companies such as Xiaomi, a maker of smartphones, and
BOE Technology, the world’s biggest producer of LED screens, also appear to be

benefiting from royalties linked to technical standards. Hikvision, a Chinese

maker of surveillance technology backed by China’s government (and
blacklisted in America), has been increasingly involved in standard-setting.
China has even been playing a leading role in shaping early global standards
for quantum technology.

Unlike the West, which has tended to defer to private companies and
industry associations in the standard-setting process, China’s approach is led
by its government. In 2018 it set out a plan for the country to be at the
forefront of technical standards in areas ranging from telecoms to drones and
AI by 2035. Chinese standards are developed within institutes established

under government ministries. Efforts are co-ordinated by the Standards

Administration of China (SAC), which organises most of the country’s
interactions with global standards bodies.

Standards officials from the West are envious of such lavish attention. On
visiting China, one was amazed to discover that there were tens of thousands
of people focused on standards development across the country, and that
senior members of China’s bureaucracy had a strong grasp of complicated
technical rules. The Chinese government has also made a concerted push to
have its officials appointed to international standards bodies. They have held
senior positions at a number of top organisations and have filled the
technical committees where decisions are made. Many meetings on global
standards now take place in China.

China’s government has sought to alter how standards are set as well. It has
tried to shift attention away from company-led confabs towards the ITU, a UN
body where it has greater influence. It has also arranged more than 100
bilateral standards agreements, mostly with countries in the global south.
During a conference with African leaders last month it added new deals with
Benin and Niger.

Double standards
Such agreements give China greater backing for its preferred technical
specifications at bodies such as the ITU, notes Alex He of the Centre for
International Governance Innovation, a Canadian think-tank. Even if that
fails, China could still benefit from the adoption of its standards in countries
with which it has established bilateral agreements. Western firms that refuse
to adopt Chinese standards may find themselves locked out of those markets.

For China’s government, more than company profits is at stake. Standards

can encode social values deep within a technology. Many features of the
Western-designed internet, for example, have tended to promote individual
privacy over centralised control, thereby irking China’s authoritarian
government.
In recent years it has thus been campaigning to rewrite the standards that
underpin the internet. In 2019 and 2022 Huawei proposed alternative
internet protocols at the ITU that would have enabled a far greater level of
government control. Neither was successful, but they did receive support
from member states such as Iran, Russia and Saudi Arabia. In April the
Trade and Technology Council, a forum for co-operation between America
and Europe on economic issues, released a statement saying that
democracies must remain the vanguard of emerging technologies, including
by setting the standards that underpin them.

China’s growing clout in the global standard-setting process has not been
missed by policymakers in America and Europe. Like China, they are
beginning to interfere more in the standard-setting process, says Tim Rühlig
of the European Union Institute for Security Studies, another think-tank.
America’s CHIPS and Science Act, signed into law in 2022, gave the National
Institute of Standards and Technology, a government body, the job of
developing standards for AI and cybersecurity, and expanded its role in co-
ordinating America’s engagement with international standards bodies.
Across the Atlantic, some policymakers want the European
Telecommunications Standards Institute (ETSI) to play a bigger role in
countering China’s growing influence at the ITU and other global bodies.

In the process, the West has been abandoning its commitment to a bottom-
up, market-based approach to setting technical standards. “We are being
forced to undermine a system that has been very effective and that we have
profited from for a long time,” laments Mr Rühlig. In more ways than one,
China is making the West play by its rules. ■

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technology-rules
Business | Bartleby

When workplace bonuses backfire

The gelignite of incentives
October 10th 2024

“If you have a dumb incentive system, you get dumb outcomes.” The late
Charlie Munger was endlessly quotable, but this pearl of pith from the
famed investor is one that every manager should remember.

There are plenty of dumb examples to choose from. Some are apocryphal:
the Soviet nail factory that produced a single, uselessly gigantic nail to meet
its tonnage quota. Others are not. Wells Fargo, a previously well-regarded
American retail bank, was notoriously embroiled in scandal after blunt
cross-selling targets pushed its employees to open unauthorised deposit
accounts and issue unwanted debit cards. Silly financial incentives in health-
care systems can help explain everything from once-elevated rates of
Caesarean-section births in Iran to woefully inadequate dental treatment in
Britain.

The trouble is that it is not always easy to work out what dumb looks like. A
study published in 2017 by David Atkin of the Massachusetts Institute for
Technology and his co-authors found that many football manufacturers in
Sialkot, Pakistan were oddly slow to adopt a new technology that reduced
the amount of synthetic leather wasted during their production. The reason?
Workers who were paid by the ball were not keen to spend time that could
otherwise have been used to earn money on learning new techniques. In
theory, a piece-work incentive scheme makes perfect sense for this kind of
repetitive activity; in practice, it was the firm that paid their workers by the
hour which quickly embraced the new technology.

A couple of recent studies underline the risk that incentives will have
unintended consequences. One, from Jakob Altifian and Dirk Sliwka of the
University of Cologne and Timo Vogelsang of the Frankfurt School of
Finance and Management, tested the effect of paying an attendance bonus on
levels of absenteeism. They did so by randomly assigning apprentice
workers at a German retailer to two groups which offered a financial reward
or some extra holiday, respectively, for a perfect attendance record. Neither
reward reduced absenteeism, and the monetary bonus had precisely the
opposite effect: it actually increased rates of absenteeism by 50% on
average.

To work out what was going on the researchers surveyed employees after the
experiment had ended. They found that the introduction of a bonus shifted
workers’ perceptions of what counted as acceptable behaviour. The message
that attendance warranted a reward made people feel less obliged to come in
and less guilty if they threw a sickie. The effect was particularly pronounced
for the most recently hired employees, and higher rates of absenteeism
persisted even after the bonus had been removed. The power of incentives to
change social norms can be helpful: an attendance bonus has been shown to
work in circumstances where widespread absenteeism is a real problem. But
the starting-point matters.

A second study, by Luan Yingyue and Kim Yeun Joon of the Cambridge
Judge Business School, tested the effects of making co-operativeness a
formal job requirement. Expectations of being helpful to colleagues were
added to the job descriptions and performance appraisals of engineers
working in a research-and-development (R&D) centre at a chemicals company
in East Asia. (A second R&D centre in the company acted as a control.)

Surveys of affected employees found that the motivation to help changed

once it was part of the job, from an intrinsic drive to be co-operative to a
desire to show off to the higher-ups. The type of help that people offered
their colleagues changed as a result: there were more frequent instances of
helpful behaviour but the quality of assistance that people actually gave each
other went down. “How can I help as long as it doesn’t involve too much
effort?” is a very watery form of collaboration.

These examples confirm both the wisdom of Munger’s aphorism and the
difficulty of anticipating how incentives will play out. Dumbness may
become apparent only over time, so pilot schemes and rigorous review
processes are essential. As Stephan Meier, an academic at Columbia
Business School, argues persuasively in “The Employee Advantage”, a new
book, people are motivated by many more things than moolah. Rewarding
people for doing things they would anyway can easily backfire. As Munger
might have said, incentives should be approached like gelignite—with
enormous care. ■

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Business | Schumpeter

Masayoshi Son is back in Silicon Valley—and late

to the AI race
This isn’t the first time the Japanese tech investor has missed the hot new
thing
October 10th 2024

MASAYOSHI SON is a man of contrasting superlatives. At the height of the

dotcom bubble in early 2000 the Japanese technology mogul was briefly the
world’s richest person, before losing $77bn in paper wealth, more than
anyone before. In 2021 SoftBank Group, his telecoms-and-software
conglomerate turned investment powerhouse, reported the biggest annual net
profit in the history of Japan Inc, followed a year later by the second-biggest
loss. His $20m wager in 2000 on Alibaba, a tatty online marketplace that
grew into China’s mightiest e-emporium, counts as one of the best in the
annals of venture capital (VC); his later $16bn punt on WeWork, an office-
rental startup with tech pretensions, is an all-time dud. He has been called a
“genius” and “dumb money”.

Such wild swings of fortune would wear anyone out. And in November
2022 they exhausted even the indefatigable Masa, as the billionaire is
known. On an earnings call the then 65-year-old announced that though he
would remain in charge, future updates on SoftBank’s finances and strategy
would be presented by his chief financial officer. This was out of character
for a hyperactive bundle of vanity who has unironically likened himself to
Napoleon. And, like the Corsican’s periodic retreats, it did not last. In June a
re-energised Mr Son told an audience of SoftBank’s shareholders that all his
past wagers were “a warm-up for my great dream to realise artificial
superintelligence”.

To get the main act going, on October 2nd SoftBank splurged $500m on a
tiny stake in OpenAI, in a $6.6bn funding round that valued the world’s
leading generative-AI model-maker at $157bn. Earlier Mr Son put a similar
sum in Wayve, a self-driving car startup, a smaller one in Perplexity, a gen-AI
search engine, and talked of raising much larger amounts—perhaps $100bn
—to build a rival to Nvidia, the champion of AI chips. After mentioning AI
more than 500 times in earnings presentations between 2017 and 2020, Mr
Son is getting down to business. He looks hopelessly late.

That seems odd for someone who tends to gaze far into the future. Aged 19
he drew up a 50-year plan to build a corporate empire; in his 50s he
stretched the horizon out to 300 years. Throughout his life, chronicled in
“Gambling Man”, an engaging new biography by Lionel Barber, former
editor of the Financial Times, looking ahead was often preferable to
contemplating the there and then. His earliest memories are suffused with
the stench of pigs his family reared to make ends meet. Disdain from native
Japanese, in whose eyes ethnic Koreans like him were second-class citizens,
lingered long after his father turned pork profits into a thriving gambling
business, which bankrolled young Masa’s desire to complete high school
and university in California. Even a brush with death, from hepatitis in the
mid-1980s, and two with bankruptcy—in the dotcom crash and the financial
crisis of 2007-09—did little to elevate the here and now in Mr Son’s
estimation.
At times inveterate futurism paid off. It alerted him early to the promise of
software, the internet and smartphones, each of which made him a fortune
and, more deliciously given the discrimination his family endured, shook up
Japan’s stolid corporate establishment. On these big things he has been
“spectacularly right”, says Alok Sama, a former Morgan Stanley banker who
worked for Mr Son between 2014 and 2019. Yet a fixation on the future can
obscure aspects of the present, over which he keeps tripping up.

One blind spot is politics. His $22bn takeover in 2013 of Sprint was
predicated on a merger with T-Mobile, another wireless provider, which the
Obama administration blocked. Though the deal went ahead under Donald
Trump, Mr Son called his misreading of the regulators “one of the biggest
mistakes of my life”.

If so, he did not learn from it. In 2020-21 he was caught out by a crackdown
on tech in China, where SoftBank is the biggest foreign venture investor.
Bets on firms like Didi, a ride-hailing giant, soured. Its stake in Alibaba lost
two-thirds of its value. In 2022 trustbusters blocked the $40bn sale of Arm, a
chip-designer SoftBank bought in 2016 for $32bn, to Nvidia. The rift
between China and the West is engulfing TikTok and could hurt the $230bn
valuation of its Chinese parent, ByteDance, in which SoftBank is a
shareholder. America, where SoftBank makes a lot of its investments, may
look askance at a firm that is teaming up with Alat, a Saudi industrial-
automation venture that also has ties to a blacklisted Chinese maker of
surveillance gear.

Mr Son is likewise inattentive to profitability. Growth, his idée fixe, is all

well and good. But a business needs steady returns if it is to be a going
concern, let alone last three centuries. In their absence SoftBank relies on
borrowed money. Despite paying down a chunk of this lately with proceeds
from the sale of Alibaba shares and the flotation of Arm, it still ranks as the
world’s 11th-most-indebted non-financial firm—and has stakes in two of the
top ten, Deutsche Telecom and T-Mobile. The gyrating price of SoftBank
stock, against which some debt is secured, could mean margin calls
whenever markets wobble. This ties Mr Son’s hands precisely when he
could be buying up stocks and startups on the cheap.
The curse of long-sightedness
Instead, he often mistimes bets and overpays. SoftBank’s $100bn Vision
Fund, the biggest in VC history and stuffed with money from the Gulf, went
shopping in the late 2010s when valuations of startups like WeWork were
especially frothy. In 2019 the vehicle sold its entire 5% stake in Nvidia for
$3.6bn; today it would fetch $160bn. SoftBank backed OpenAI in the same
round as Fidelity, a lumbering asset manager. “Tells you everything,” sneers
a VC veteran. Investors in SoftBank are scathing in their own way. Its shares
trade at more than a 50% discount to the net value of its assets, implying a
lack of faith in Mr Son’s futurology. Minding your feet can be as important
as admiring the horizon. ■

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valley-and-late-to-the-ai-race
Finance & economics
How America learned to love tariffs
Could war in the Gulf push oil to $100 a barrel?
Europe’s green trade restrictions are infuriating poor countries
Can markets reduce pollution in India?
Why have markets grown more captivated by data releases?
China’s property crisis claims more victims: companies
How bond investors soured on France
Can the world’s most influential business index be fixed?
Finance & economics | The other wall

How America learned to love tariffs

Protectionism hasn’t been this respectable for decades
October 10th 2024

ALTHOUGH HIS bill has no chance of becoming law, Jared Golden, a

congressman from Maine, delivered an important message last month when
he introduced legislation to impose a 10% tariff on all imports into America.
It is not just that Mr Golden is the author of the first formal attempt to act on
Donald Trump’s proposal for a universal tariff. It is that Mr Golden is a
Democrat. His bill is an indication of how tariffs, long seen as an obsolete
tool of economic policy, have gained respectability across much of the
political spectrum in America.

Mr Golden is, to be sure, an outlier within the Democratic Party. A rather

more consequential Democrat, Kamala Harris, has derided Mr Trump’s
universal tariff as a “national sales tax”. But the inconvenient truth for Ms
Harris is that she, too, has endorsed tariffs, albeit of a more limited sort. In
fact, the day after Mr Golden published his bill, higher tariffs on a number of
Chinese imports, drawn up months earlier by the Biden-Harris
administration, went into effect. A levy of 100% will, for instance, now
apply to any Chinese electric vehicle (EV) entering America.

As American politicians resort ever more readily to tariffs, the range of

rationales they offer has grown. To make sense of their thinking, it is useful
to examine their justifications in turn. There are five in all—and each of
them is flawed.

Start with the most aggressive defence of tariffs: that they encourage more
manufacturing at home and thereby strengthen the economy. “America must
once again become a nation of producers, not just consumers,” says Mr
Golden. Or as Mr Trump puts it: “Under my leadership, we’re going to take
other countries’ jobs.”

But there is scant evidence of general tariffs providing such a lift to

manufacturing. The share of factory jobs in the American economy has
actually fallen since Mr Trump first introduced tariffs as president in 2018.
One explanation is that although tariffs may have discouraged some imports,
they have probably also weighed on American production. To the extent that
domestic firms replace foreign counterparts, tariffs draw scarce resources—
both capital and labour—away from competitive firms and push them
towards more protected ones. These downsides would be more extreme in
the case of universal tariffs, especially if Mr Trump opts for one as high as
20%, as he has suggested, taking America back to Depression-era tariff
levels (see chart).

A second justification for tariffs is that they can serve as a big revenue
stream for the government. As Mr Trump is fond of saying, tariffs “will
bring in billions of dollars”, which can be used both to pay down the federal
deficit and lower income taxes. Strictly speaking, that is true: customs duties
do generate revenue. America imported about $3trn-worth of goods last
year. A simplistic conclusion would thus be that Mr Trump’s 20% tariff can
raise about $600bn per year—enough to pay for many of the tax cuts that he
wishes to make.

The trouble is that this is a static picture. When tariffs are increased, imports
fall, lowering potential government revenue. Besides, retaliation from
foreign governments would add to the headwinds for domestic producers
now facing higher input prices. An analysis by the Penn Wharton Budget
Model, a non-partisan research group, found that an all-out trade war would
lead to a 5% decline in American GDP within a couple of decades—a recipe
for lower government revenue.

A third rationale is that tariffs bolster America’s clout in trade negotiations.

This is an argument that Robert Lighthizer, United States Trade
Representative (USTR) under Mr Trump, made when hammering out a deal
with China in 2020. It is also one that Katherine Tai, USTR under Joe Biden,
has cited as a reason for keeping the tariffs on China in place.

But the leverage from tariffs is not what it is cracked up to be. Consider the
results from six years of tariffs on Chinese products: China has only become
a more formidable exporting power during that time. More philosophically,
the tariffs-as-leverage claim is contradicted by the arguments that they boost
both manufacturing and government revenues. If tariffs are just used as
negotiating leverage, the implication is that America ought to reduce them
when trade deals are reached. But if tariffs are in place because American
officials truly believe they are good, why would they ever lower them?
Another justification, which has more credibility among policy types in
Washington, DC, is that, if well targeted, tariffs can meet national-security
needs. When it recently increased levies on Chinese EVs, semiconductors and
solar modules, the Biden administration said that China’s clout in such
industries created unacceptable risks for America’s economic security.

America and other countries do have reason to fret about Chinese

dominance of critical technologies, not least because of China’s willingness
to block exports during international spats. But using tariffs for national-
security goals poses problems. Invoking security becomes a convenient
excuse for protectionism, as when the Trump administration placed tariffs on
steel and aluminium imports from the EU and Japan. Moreover, a tariff is not
exactly a robust defence against a true security threat. “If something is really
dangerous, you should probably ban it rather than tax it,” says Ed Gresser of
the Progressive Policy Institute, a think-tank.

A final defence of tariffs is a more limited version of the first supposed

rationale. Rather than saying that tariffs benefit the economy as a whole,
advocates say they are needed to support the growth of specific sectors. The
Biden administration has, for instance, argued that its new China tariffs are
protecting the very sectors that the government has been trying to cultivate
through its big investments.

That may sound sensible, but at its core this is an empirical question. A
recent paper by two economists at the Federal Reserve found that Mr
Trump’s targeted tariffs did not work as intended. Looking at manufacturing
industries such as household appliances and car parts, they found a small
jobs boost from the import protection conferred by tariffs. But this was more
than offset by drags from both retaliatory tariffs and higher input costs.

An expensive fling
It would be a mistake to assume that all American politicians are seduced by
the fallacious logic behind tariffs. Jared Polis, the Democratic governor of
Colorado, has criticised the tariffs on China as a regressive tax on
consumers, though that is a rare view nowadays given widespread concerns
about China. More common is opposition to Mr Trump’s universal-tariff
proposal, even within his own party. Several prominent Republicans have
signalled their disagreement with the idea.

Ultimately, though, Congress has ceded tariff authority to the White House.
A victorious Mr Trump ought to be able to crank up tariffs by executive fiat,
with only courts to stand in his way. Republicans in Congress would instead
focus on delivering tax cuts. “As long as they’re getting wins in other places,
that’s where they’ll put all of their attention,” says Paul Winfree of the
Economic Policy Innovation Centre, a think-tank. America’s love affair with
tariffs may end up being as much about convenience as conviction. ■

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Finance & economics | Worst-keg scenario

Could war in the Gulf push oil to $100 a barrel?

Missiles are flying over a region that supplies a third of the world’s crude
October 7th 2024

EVER SINCE Hamas’s attacks on Israel a year ago, the biggest fear in oil
markets has been that tensions would escalate into a full-blown regional war
pitting Israel against Iran, the world’s seventh-largest producer of crude.
Until recently both countries seemed keen to avoid it. That explains why
initial jitters on oil markets after October 7th last year soon gave way to the
low and stable prices that have prevailed for much of this year.

But on October 1st Iran fired missiles at Israel in response to Israel’s

pounding of Hizbullah and other Iranian proxies. Now the world is
anxiously waiting for Israel’s response. Oil markets are nervous. Last week
crude prices rose by 10%, to $78 a barrel, their biggest weekly gain in
almost two years (see chart). As we published this, they were bobbing
around $77. When the last war involving a major petrostate broke out, in
Ukraine in 2022, crude surged past $100 a barrel. Could that happen again?

To understand how high prices might go, look first at Israel’s options for
retaliation. If it struck only military targets, such as missile-launch sites—
and Iran responded moderately—then some of the geopolitical premium
boosting oil prices would evaporate. But Israel could choose to escalate by
bombing Iran’s civilian infrastructure, oil and gas facilities or nuclear-
enrichment sites. Whichever Israel chooses, Iran may feel forced into a
robust response, triggering a cycle that ends up turning Iran’s petro-
industrial complex, the regime’s lifeline, into a target. So oil assets need not
come under fire first for global markets to fret.

If Israel attacks Iran’s oil facilities, it may target assets that transform Iran’s
crude into petroleum products. One possible choice is the Abadan refinery,
which provides the domestic market with 13% of its supply of petrol. The
pain would remain local; such strikes may even boost the global crude
supply as they could free up more of Iran’s unrefined oil for export.

If Israel wanted to deal a severe blow to Iran’s energy exports, it could go

after the oil terminals on Kharg Island in the Persian Gulf—from which
nine-tenths of all barrels of Iranian crude are shipped—or even the oilfields
themselves. That would come at a diplomatic cost. The Biden administration
would be annoyed that it might cause petrol prices to jump less than a month
before America’s presidential election. China, the destination for nearly all
Iran’s oil exports, would also be cross.

Israel might still deem the cost worth bearing, and opt for hitting the
terminals. A successful strike would instantly take a decent pool of oil off
international markets: last month Iran exported a record 2m barrels per day
(bpd), equivalent to nearly 2% of world supply.

Even then, the global fallout would probably be contained. Unlike the
situation after Russia’s invasion of Ukraine, when the world was pumping
oil at full tilt and demand was rebounding after the pandemic, supply today
is plentiful and demand sluggish. After a series of production cuts, the
Organisation of the Petroleum Exporting Countries and its allies,
collectively known as OPEC+, have more than 5m bpd in spare capacity—more
than enough to make up for the loss of Iranian crude.

They probably wouldn’t wait long before raising output. OPEC+ members,
angered to see their market share sliding in recent months, have been
waiting for just such an opportunity to unwind their cuts. Last week they
confirmed plans to lift output by 180,000 bpd every month for a year,
starting in December. The Saudis are so determined not to cede further
ground that they are said to have dropped their target of returning oil to $100
a barrel, the level required to balance the kingdom’s books as it launches
several megaprojects.

Production is rising in America, Canada, Guyana, Brazil and elsewhere. The

International Energy Agency expects non-OPEC output to grow by 1.5m bpd
next year, more than enough to cover any rise in global demand. And
demand is slowing on account of tepid economic growth in America, China
and Europe and a race to ditch petrol cars for electric ones. Before the latest
escalation in tensions in the Middle East, traders expected an oil glut in
2025, pushing prices below $70 a barrel. Today crude inventories in the OECD
are below their five-year average. So a strike on Kharg Island would no
doubt jolt markets. But prices would probably settle only $5-10 above their
current levels.
Things could get much wilder if Iran lashed out at other Gulf states it sees as
supporting Israel. In recent years relationships between Iran and its
neighbours have been stabilising, and in recent days officials from Gulf
Arab states have met Iranian counterparts in Qatar to try to reassure them of
their neutrality. Still, with few options available, Iran may seek to target the
oilfields of its neighbours—starting perhaps with smaller states such as
Bahrain or Kuwait.

The other tool Iran could use to create global chaos would be to close the
Hormuz Strait, through which 30% of the world’s seaborne crude and 20%
of its liquid natural gas must pass. That, however, would amount to
economic suicide, since it would leave Iran unable not just to ship out any
oil or other exports but also to bring in many imports. And it would greatly
annoy China, which gets about half its crude from Gulf countries.

It is hard to guess how the market would respond to such scenarios, if only
because Iran’s actions would trigger further reactions from Israel, America
and others. America and China, for example, would probably send their
navies to reopen the Hormuz Strait. Still, assuming disruptions are big
enough to cause shortages of crude that last for a while, then oil prices
would probably climb to the point where they curbed appetite for oil, after
which they would start falling. Analysts believe such “demand destruction”
would occur once crude hit $130 a barrel—roughly the level it peaked at in
2022.

If oil markets believed such a scenario even remotely likely, their fears
would start to be reflected in the current price. Traders who had bet on oil
prices falling in the near future would be rushing to unwind their positions.
Zoom out a little, however, and the recent rise in prices does not look
striking, even by the relatively sedate standards of the past 18 months. Last
year oil averaged $82 a barrel; in 2022, $100. The one-year-old conflict in
the Middle East has confounded many expectations. But for oil prices to
reach triple digits again, a lot of things still have to go very, very wrong. ■

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push-oil-to-100-a-barrel
Finance & economics | C-BAM!

Europe’s green trade restrictions are infuriating

poor countries
Only the poorest can expect help to cushion the blow
October 10th 2024

WHEN AID donors helped fund the Mozal aluminium smelter in

Mozambique, the goal was to help that southern African country build up its
economy after a civil war. In a country with income per head of just over
$600, the Mozal smelter is the largest industrial employer. Yet now the lofty
aim to help poor countries grow risks falling foul of rich countries’ urge to
decarbonise their economies and protect domestic manufacturing.

More than half of Mozambique’s aluminium exports head to the EU. From
2026 the bloc’s importers of the metal will have to pay a levy under its
carbon border adjustment mechanism (CBAM), a scheme designed to ensure that
certain energy-intensive imports to the EU pay the same carbon price as
industry within it. At present CBAM is at a pilot stage in which importers have
to submit reports on the embedded carbon in their imports, but do not yet
have to buy permits. Eventually they will have to pay the difference between
any carbon price paid at home and the cost of a permit in the EU’s own
emissions-trading system (ETS), currently priced at €62 ($68) per tonne of
carbon-dioxide equivalent.

The levy pits the development of poorer countries’ industrial capacity

against the EU’s decarbonisation goals. The scheme is linked to the removal of
free emissions allowances for heavy industry in the ETS. CBAM seeks to prevent
“carbon leakage”: businesses will no longer gain a competitive advantage
from importing goods from outside the bloc that do not pay a carbon price,
or from moving production elsewhere. Poorer economies object that such
measures are unfair trade barriers that put the onus of decarbonisation on
countries that have contributed little to the problem. South Africa and India,
among others, are considering complaints to the World Trade Organisation
about CBAM.

CBAMis just one way in which European environmentalism is extending its

reach. Exporters will eventually have to contend with a deforestation
directive, under which firms must prove their products were not produced on
land that was forest before 2021, and a corporate-sustainability directive,
forcing businesses to disclose emissions through their supply chains.

In aggregate, the hit to poorer countries from CBAM is small. A study by the
African Climate Foundation and the LSE Firoz Lalji Institute estimates that the
scheme would lower African GDP by just 0.91%, as most of the affected goods
would find their way to other markets.

Yet some countries would be hit hard. Around 90% of Zimbabwe’s iron and
steel exports, for instance, go to the EU. A World Bank study suggests that
India, Russia and Ukraine are likely to have the greatest exposure, based on
a combination of the carbon-intensity of their exports and their dependence
on trade with the EU. Ukraine may be exempt from the charges under force-
majeure clauses because of the Russian invasion.

Carbon border taxes are not limited to the EU. Britain and Australia are among
those considering something similar. Several proposals for such taxes are
making their way through America’s Congress. A proposed Foreign
Pollution Fee Act would make importers pay a fee based on the difference
between the average carbon intensity of a product made in the exporting
country and in America. Another, known as the Clean Competition Act,
would combine a carbon border adjustment with a domestic price.

Poorer countries argue that CBAM and the like fail to account for the
requirement under the Paris climate-change agreement for rich countries to
do more to decarbonise than poor ones. The logic for this is that carbon is a
production input that should be priced differently in different contexts. An
aluminium smelter in Sweden ought to pay a higher price than one in
Mozambique, as Swedes have already used up more of the world’s carbon
budget.

The EU is still wondering how to respond to poorer countries’ criticisms.

Pascal Lamy, a former EU trade commissioner, has suggested a bespoke aid
package for Mozambique. The country relies heavily on low-carbon
hydroelectric power, but the Mozal smelter must import electricity through
South Africa’s coal-heavy grid. European development assistance could be
used to ensure that Mozal is CBAM-compliant. Another option may be to
recycle a portion of the revenues into international climate finance.

Middle-income countries may just have to cope. Any repatriated revenue

will be far smaller than the funding needed to offset the lost trade. Some are
launching their own emissions-trading systems—such as Turkey, which
exports electricity to the EU. China recently added steel, aluminium and
cement to its own carbon market, mirroring CBAM. India, meanwhile, is
considering taxing high-carbon exports destined for the EU, keeping for itself
revenue that the bloc would otherwise collect. Many Europeans will cheer
that outcome, even if they have to pay higher prices. Workers in the
developing world will not.■

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Finance & economics | When the smoke clears

Can markets reduce pollution in India?

An experiment in Gujarat yields impressive results
October 10th 2024

India’s battle with pollution has gone literal. To clean up Delhi’s filthy air,
officials now routinely deploy “anti-smog” guns across the capital. The
band-aid solution reflects desperation: air pollution, India’s public-health
enemy number one, kills around 2m people a year. Recent research,
however, suggests that it may be vulnerable to a more abstract weapon:
market forces.

For five years the Gujarat Pollution Control Board (GPCB), a regulator in the
western state of Gujarat, has run an emissions-trading scheme in the city of
Surat. The programme is modelled on environmental cap-and-trade markets
in the West, but instead of carbon, pollution permits are traded. A company
that wants to exceed the regulator’s threshold for particulate-matter
emissions needs to purchase a permit from one that hasn’t yet reached it.
The mutually beneficial trade is meant to cut overall pollution.

A new study suggests the strategy is working. Nicholas Ryan of Yale

University and his collaborators have used a randomised controlled trial to
measure whether the mechanism reduces pollution. They find that plants that
have taken part in the trading scheme have emitted 20-30% less than those
that have not. The programme, which is proving popular, has given firms
clarity and flexibility, says Mr Ryan.

The study also exposes the failures of the previous “command and control”
regulations, which remain in place in most of the country. Under these,
plants are required to install equipment that abates pollution. They are then
inspected periodically by officials who check if their emissions fall below
the limit.

But the system is ineffective. Before the launch of the emissions-trading

market in Surat, around 30% of the city’s firms were breaching the pollution
threshold. Monitoring was sporadic and enforcement weak. Regulators
across India are understaffed and find it difficult to track factories, especially
smaller ones. Many companies struggle to meet the cost of technology
needed to limit their emissions.

The market is more efficient. Bigger firms have found it cheaper to buy
permits than to invest in reducing emissions. All told, the researchers
estimate that the decrease in pollution yielded longevity benefits worth at
least 25 times the costs. The findings are especially encouraging for
policymakers grappling with the Indian economy’s fundamental dilemma: it
needs more factories for growth and job creation, but much less pollution.

Can Surat’s success be replicated? Unlike carbon, particulate matter is a

localised emission and so trading can only happen in industrial clusters, of
which there are hundreds across India. But there is no reason why similar
markets cannot be established in them, says Chirag Bhimani, who helped
launch Surat’s market. Last year a pollution market was launched in
Ahmedabad. The researchers are also working with the regulator in
Maharashtra, a neighbouring state, to introduce a market for sulphur dioxide,
another pollutant.
In order to take off, those markets will require reliable data. In the years
leading to the launch of Surat’s scheme, the regulator helped install what are
dubbed Continuous Emissions Monitoring Systems (CEMS) in the city’s
factories. These devices, placed in ducts and chimneys, can track emissions
concentrations in real time. The national pollution regulator has now said
that highly polluting firms must install similar systems.

The sensors and improved data address a weakness in existing regimes by

making it easier to monitor emissions. But setting up a market and enforcing
its conditions also requires more bureaucratic capacity. In Surat the process
took years, as GPCB officials and plant managers were trained up. The same
will be needed wherever new markets are launched, requiring investment
and legislation, says Karthik Ganesan of the Council on Energy,
Environment and Water, a think-tank. Nor can markets alone defeat air
pollution, of which industry emissions account for only 30%. For Indian
taxpayers, however, they seem to deliver rather more bang for their buck
than those anti-smog cannons. ■

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Finance & economics | Buttonwood

Why have markets grown more captivated by data

releases?
Especially when the quality of statistics is deteriorating
October 10th 2024

EIGHT-THIRTY in the morning on the first Friday of every month is a

special time for bond traders: it’s when America’s Bureau of Labour
Statistics usually releases its monthly jobs data. Despite the vast sums that
some hedge funds spend on alternative data, landmark releases like the
employment report or the consumer-price index (CPI) can still convulse
markets. When the September payrolls numbers, released on October 4th,
blew past expectations, bond yields jumped by eight basis points (0.08
percentage points). Stocks spiked, too, though the move was short-lived.

News has always driven markets, but curiously the importance of big data
releases has grown substantially in recent years. Analysis by The Economist
finds that, over the past year, bond-market moves in America have been
twice as large on days with major data releases or Federal Reserve decisions
as on other days, while equity-market moves have been two-thirds larger
(see chart). In both cases, these were substantially above the historical norm.

Why, then, have markets decided to take hard facts much more seriously?
Part of the story is probably that the global economy has been so bizarre in
recent years: a pandemic, vast fiscal stimulus, a war-fuelled spike in
commodity prices. When events are so far outside the historical norm, the
impulse to latch on to the certainty of new data is understandable.

Another spur has been higher inflation. Inflation is easy to ignore when it is
bouncing around 2% or so, as it was for most of the 2010s. Doing so is
harder when it has only just come down from a 40-year high. That puts more
attention on data directly related to inflation, such as CPI releases or wage
numbers, but also changes how all other data is interpreted. Over the past
few years markets have see-sawed between seeing strong jobs and growth
numbers as reassuring indicators of a strengthening economy, or as troubling
signs of an overheating and inflation-prone one.

Another, more recent shift has been growing recession angst. Over the
summer America triggered two well-known indicators of recession: the
Sahm Rule (a sharp rise in unemployment) and the un-inversion of the yield
curve (when the interest rate on short-term bonds falls back below the rate
on long-term bonds). The differences between decent and underwhelming
economic news, often fine, start to matter a lot more to those looking closely
for early signs of a crash. Those fears have abated slightly as some firmer
growth numbers in America have come through more recently.

One irony is that markets have decided to lean harder on economic data just
as the quality of statistics has started to fall. Response rates to many
government surveys have been plummeting since the pandemic. In America,
high and disputed rates of illegal migration have messed with the quality of
some jobs numbers. Britain’s data problems may be even worse. Some of its
central bankers, in more candid moments, admit to largely ignoring the
unemployment data; it’s now simply too choppy to be helpful.

If Buttonwood had to guess, markets’ current obsession with totemic data

releases probably won’t last. The most plausible route for the American
economy over the next year or so is a gradual normalisation to a dull, slow
but still-growing baseline. That’s the sort of environment in which fine
gradations in economic news tend to matter less.

There are other reasons to expect interest in big data drops to fade. Third-
party data is often already nearly as good as the official stuff, and released
much faster. There are a few exceptions—the jobs numbers from ADP, a
payrolls manager, have tended to be a pretty poor guide to the real thing—
but the quality of alternative data is generally getting better. For the moment,
though, traders are stuck waiting at their Bloomberg terminals for the
8.30am news. Late risers in America can at least take solace that they don’t
live in Britain, which puts out economic data at 7am. ■

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Finance & economics | Hammered

China’s property crisis claims more victims:

companies
Unsold homes are contributing to a balance-sheet recession
October 10th 2024

THE FORECLOSURE and court auction of 87 flats in the southern city of

Changsha last month underlines many of the problems with China’s property
sector. The homes were owned by one woman, flouting the controls that
Changsha and other cities have on the number of housing units urban
dwellers can buy. The fact that one person was able to acquire so many
highlights the backroom dealings that occur frequently. In the past, such
speculative activity helped drive up prices and make China’s big cities some
of the world’s most unaffordable. The situation, which is under
investigation, also shows how rich Chinese often have had few investment
options other than apartments. And even these investments now seem
shoddy: most of the homes being auctioned in Changsha have gone unsold.
China’s leaders face seemingly endless property-related problems. But
foreclosures have drawn little attention in recent years. This is surprising,
given their importance as a gauge of the geography and severity of property
busts. Evictions of those who couldn’t pay their mortgage became the
central focus of the real-estate crisis that erupted in America in 2007.

In China, foreclosures have been rising rapidly. Courts foreclosed on nearly

800,000 properties in 2023, according to an estimate from Enhance
International, a consultancy. That is an increase of more than 50% on 2020,
when new rules were brought in to cool the overheating market. The
government does not publish official data but another estimate shows a year-
on-year increase of 12% in the first half of 2024, with rises of over 40% in
several large cities. Fuzhou, in China’s south-east, notched up a 63%
increase in foreclosures in the first half of the year.

As courts put these properties under the hammer, fewer and fewer are
selling. Enhance reports that just 15% of foreclosed and auctioned homes
found buyers last year, down from around 25% in 2019. This is despite an
average discount of around 33%, according to state media.

If each foreclosure meant another family getting booted out of a home,

China’s property crisis would be causing dramatic social instability, as
America’s did after 2007. But the foreclosure wave in China is different.
Household foreclosures have been kept to a minimum. Many banks are
giving buyers extensions on mortgage payments or lowering interest rates.
City officials worry about foreclosures causing homelessness. Whereas local
courts once took less than three months to rule on foreclosure cases, this
year many have chosen to delay filing cases for at least six months to give
buyers time to catch up.

So whose homes are being repossessed? In China the main holders of

properties subject to foreclosure are not households but companies. Just like
average punters, firms in China often struggle to find good investments and
therefore plough cash into commercial and residential property. They also
frequently mortgage properties they own for bank loans, as the analysts at
Enhance note. Local media reports suggest that the cluster of homes owned
by the woman in Changsha were connected to a company she controls.
Rising foreclosures are evidence that China’s companies face a “balance-
sheet recession”—debt so high that their spending is reserved for paying
down debts instead of making investments. Net bank lending turned
negative in July for the first time since 2005 as corporate borrowing cooled
and households repaid loans early.

Chinese officials may have avoided a wave of household evictions similar to

that experienced in America more than a decade ago. But they should also
fear the rising distress among companies. ■

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Finance & economics | Keeping up with the neighbours

How bond investors soured on France

They now regard the euro zone’s second-largest economy as riskier than
Spain
October 6th 2024

Something unusual is going on in European bond markets. A fortnight ago

the yield on French ten-year government debt surpassed that of Spain,
suggesting investors see the euro zone’s second-largest economy as riskier
than its southern neighbour’s (see chart 1). That is quite the turnaround. In
January Spanish yields were 0.4 percentage points higher than their French
equivalents; at the worst of the euro-zone crisis, the gap was nearer five full
percentage points. French borrowing costs are now well above the levels of
Portugal and closer to those of Greece and Italy than they are to Germany’s.

Investors were once willing to give France the benefit of the doubt, even as
it racked up debt. What has spooked them is the political turmoil following
President Emmanuel Macron’s decision to hold snap elections in July and
the precarious minority government that has resulted. Government debt
stood at 111% of GDP at the end of March, well above the European
Commission’s recommendation of under 60%. On October 10th, after we
published this, Michel Barnier, the new prime minister, was due to unveil a
budget that included tax rises and spending cuts. But his government faces
an uphill task getting the budget passed.

The reversal in French and Spanish yields also reflects developments south
of the Pyrenees. Spain’s economy grew by 2.7% in 2023, boosted by a
strong job market and a booming tourism industry, well above France’s
sluggish 0.7% expansion.

Spain also lacks a majority government. Oddly, though, European bond

managers have in recent years seen this as a fiscal strength. Rather than
haggling over budget-setting, Pedro Sánchez’s minority left-of-centre
government has taken to rolling forward previously passed fiscal plans. This
has helped keep a lid on spending.

Despite the diverging fiscal and economic outlook, France retains a higher
credit rating than its southern neighbour. That makes French bonds look
cheap relative to their current rating (see chart 2). But some investors
believe the gap probably reflects expectations of a downgrade. Fitch and
Moody’s, two rating agencies, are due to review their ratings for France on
October 11th and 25th, respectively. S&P, another agency, will follow suit on
November 29th.

For the past 15 years France has benefited enormously from the fact that the
euro zone’s southern members were in a bad way. International investors
wanted exposure to euro-denominated public debt. But the fiscally prudent
northern member states, such as Germany and the Netherlands, issued too
few bonds to satisfy them, and Greek, Portuguese and Spanish debt was
deemed too risky. French bonds became attractive by comparison.

Since then, however, Greece, Portugal and Spain have undertaken painful
fiscal adjustments. France’s weak growth, high debt levels and volatile
politics are not an attractive offer for investors now that other options are
available.■

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Finance & economics | Free exchange

Can the world’s most influential business index be

fixed?
Two cheers for the World Bank’s new global business survey
October 10th 2024

Everybody loves a league table. Across areas as varied as sports, education

and consumer goods, competitive rankings have a magnetic appeal. The
question of what or who rose, fell or clinched the top spot can lend a sense
of drama to even the most strait-laced subjects.

The World Bank’s “Doing Business” reports, published each year from 2003
to 2020, are a case in point. The annual check-ups gave countries a single
score based on various measures, including the ease of registering property,
access to credit and enforcing contracts, to determine which were most
business-friendly. The index became a gold standard for policymakers and
analysts all over the world. Higher spots were fiercely protected by those
who had them, and coveted by those who did not.

The project was engulfed in scandal and put on ice in 2021. World Bank
staff had come under pressure to fiddle with some countries’ data. An
internal probe eventually determined that scores given to China, Saudi
Arabia, the United Arab Emirates and Azerbaijan had been manipulated
improperly, and judged that the work culture of the team assembling the
reports was toxic.

The replacement for the index, Business Ready (B-Ready), was revealed on
October 3rd. Gone is the single beguiling table. In its place are three lists,
covering regulation, public services and operational efficiency. The report
this year covers just 50 economies, owing to the increased burden of
assessment, including surveys of almost 30,000 businesses around the world.
The number of economies covered is set to rise to around 180 in two years’
time. The report now covers big businesses as well as small and middling
ones. And it goes beyond the more focused measurement of how easy it is to
operate a business: the assessment now includes a range of “social benefits”,
from collective-bargaining rights for workers to various measures of
environmental sustainability.

Is the new effort an improvement? Beyond the scandal which killed it,
Doing Business faced three main areas of criticism. The first was the ability
of governments to game it. Countries made small and cosmetic changes to
climb up the table. Some even had government units responsible for
improving their position. The ranking became a powerful example of
Goodhart’s law: once a measure becomes a target, it ceases to be a good
measure.

The second problem was the survey’s methodological pitfalls. Doing

Business scores were sometimes wildly out of step with other evidence. A
study by Mary Hallward-Driemeier and Lant Pritchett of Georgetown
University and the London School of Economics, respectively, noted that
scores in Doing Business often bore no relation even to the bank’s own
surveys of enterprises. Doing Business, for example, suggested that the
median time to receive a building permit around the world was 177 days,
whereas the bank’s own survey suggested it was 30 days.
The third flaw, and the most difficult to resolve, was the ranking’s inherent
subjectivity. In creating any index, decisions must be made on what matters,
and why. How important is the uninterrupted supply of electricity, or the
enforcement of intellectual-property rights? Other issues are even thornier:
how should an international institution like the World Bank approach
questions of minimum wages, labour rights or the taxation of capital? These
things matter when it comes to running a company, but are subject to fierce
political debate, too.

The scorecard in resolving the first two challenges is clearly positive. The
data available from the new surveys will be far richer. Whereas many of the
Doing Business indicators were based on rules and regulations, B-Ready
scores will be more informed by survey data indicating the reality on the
ground. Previously, data collection in each country focused on one or two
large cities; India’s score was based on results from Delhi and Mumbai. B-
Ready will cast a wider net. The change not only makes the evidence
collected more likely to reflect reality, but makes it more difficult to game
the rankings.

When it comes to subjectivity, the World Bank has opted for a fudge that
some will find unsatisfying. In creating three separate indices, it has
removed the monomaniacal attention on the single ranking that undermined
the former reports. But by combining various social goals (worthy or
otherwise) with the bread-and-butter questions about the ease of establishing
and running a business, the question of what the aggregates actually seek to
measure has become muddier.

Nevertheless, the benefits of the new approach outweigh its flaws. The
stronger evidence offered by B-Ready’s extensive surveys is of more value
than the World Bank’s own judgment as to which elements are most
important. The bank contributes more by collecting and publishing its ample
supply of data for free than by deciding how it should be interpreted.

Doing the business

The higher-quality information now available will also be used by all
manner of index-builders, from think-tanks to charities, that do not face the
same political constraints as a multilateral institution. External indices of
everything from economic freedom and tax competitiveness to corporate
social responsibility and corruption will be improved by the better evidence
the survey provides.

There is another reason to welcome the new approach. Under the old one,
the relentless focus on fiddling index rankings may have reduced the
appetite for real reforms. Indeed, research by Tamanna Adhikari of the
Central Bank of Ireland and Karl Whelan of University College Dublin
suggests that an increase in a country’s Doing Business score actually
seemed to have at least a short-term negative impact on GDP growth.
Eliminating such pernicious incentives alone would make for a substantial
upgrade. ■

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influential-business-index-be-fixed
Science & technology
AI wins big at the Nobels
Meet Japan’s hitchhiking fish
Noise-dampening tech could make ships less disruptive to marine life
Science & technology | The 2024 Nobel prizes

AI wins big at the Nobels

Awards went to the discoverers of micro-RNA, pioneers of artificial-
intelligence models and those using them for protein-structure prediction
October 10th 2024

The scientific Nobel prizes have always, in their way, honoured human
intelligence. This year, for the first time, the transformative potential of
artificial intelligence (AI) has been recognised as well. That recognition began
on Tuesday October 8th, when Sweden’s Royal Academy of Science
awarded the physics prize to John Hopfield of Princeton University and
Geoffrey Hinton of the University of Toronto for computer-science
breakthroughs integral to the development of many of today’s most powerful
AI models.

The next day, the developers of one such model also received the coveted
call from Stockholm. Demis Hassabis and John Jumper from DeepMind,
Google’s AI company, received one half of the chemistry prize for their
development of AlphaFold, a program capable of predicting three-
dimensional protein structure, a long-standing grand challenge in
biochemistry. The prize’s other half went to David Baker, a biochemist at the
University of Washington, for his computer-aided work designing new
proteins.

The AI focus was not the only thing the announcements had in common. In
both cases, the research being awarded would be seen by a stickler as being
outside the remit of the prize-giving committees (AI research is computer
science; protein research arguably counts as biology).

Boundary-pushing
Such flexibility is not unprecedented. In 1973, for example, three pioneering
students of animal behaviour, who worked on honeybees, geese and
sticklebacks, were shoehorned into the physiology category. The award to
Drs Hinton and Hopfield, however, recognises achievements with more
profound consequences.

Both researchers did their crucial work in the early 1980s, at a time when
computer hardware was unable to take full advantage of it. Dr Hopfield was
responsible for what has become known as the Hopfield network—a type of
artificial neural network that behaves like a physical structure called a spin
glass, which gave the academy a tenuous reason to call the field “physics”.
Dr Hinton’s contribution was to use an algorithm known as backpropagation
to train neural networks.

Artificial neural networks are computer programs based loosely on the way
in which real, biological networks of nerve cells or neurons are believed to
work. In particular, the strengths of the connections (known as weights)
between “nodes” (the equivalent of neurons) in such networks are plastic.
This plasticity grants a network the ability to process information differently
in response to past performance; or, in other words, to learn. Hopfield
networks, in which each node is connected to every other except itself, are
particularly good at learning to extract patterns from sparse or noisy data.
Dr Hinton’s algorithm turbocharged neural networks’ learning ability by
letting them work in three dimensions. Hopfield networks and their ilk are,
in essence, two-dimensional. Though they actually exist only as simulations
in software, they can be thought of as physical layers of nodes. Stack such
layers on top of one another, though, and train them by tweaking the weights
as signals move both backward and forward between the layers (ie, back-
propagated as well as forward-propagated) and you have a much more
sophisticated learning system.

Dr Hinton also, for good measure, tweaked Dr Hopfield’s networks using a

branch of maths called statistical mechanics to create what are known as
Boltzmann machines. (Statistical mechanics, which underlies modern
understanding of the second law of thermodynamics, was invented by
Ludwig Boltzmann, a near contemporary of Alfred Nobel.) Boltzmann
machines can be used to create systems that learn in an unsupervised
manner, spotting patterns in data without having to be explicitly taught.

It is, then, the activities of these two researchers which have made machine
learning really sing. AI models can now not only learn, but create (or, for
sceptics, reorganise and regurgitate in a most sophisticated manner). Such
tools have thus gone from being able to perform highly specific tasks, such
as recognising cancerous cells in pictures of tissue samples or streamlining
mountains of particle-physics data, to anything from writing essays for lazy
undergraduates to running robots.

Dr Hinton, whom the academy’s detectives tracked down to a hotel in

California to deliver the glad tidings, and who gamely agreed to answer
questions from the press, despite the time difference, seemed both worried
and proud about his achievements. He fretted, as many in the field do, about
how machine intelligence that outstripped the human variety would then go
on to treat its creators. But he also mused that by assisting mental labour, AI
might have as big an effect on society as the Industrial Revolution’s
assistance of physical labour has had.

Such musings were timely. Not 24 hours later, the academy would recognise
research conducted, with the help of AI models, on the structure of proteins.
Return to the fold
Proteins are the main chemical building blocks of life. They are made up of
smaller molecules called amino acids, arranged in long chains which fold in
highly complex and specific ways. A protein’s final folded form determines
its biological function. In other words, to understand proteins—and, by
extension, biology—one must understand their structure.

Dr Baker achieved such understanding through doing. In a landmark paper

from 2003, he succeeded in designing a completely new protein. Using a
computer program he had named Rosetta, he found an amino-acid sequence
capable of folding in ways not seen in nature. Once the sequence was
recreated in the lab and the protein formed, he determined its final structure
using a technique called X-ray crystallography: it was a close match to what
he had set out to make. Rosetta, now called Rosetta Commons, has
subsequently become a software package used by protein chemists around
the world, and computational protein design has assisted in everything from
vaccine development to the detection of toxic chemicals.

Going the other way, and predicting a protein’s structure from its amino-acid
sequence, is a problem that took even longer to crack. Given the near-
limitless number of configurations into which a protein can fold—by some
estimates, as many as 10300 for a single complex protein—even computers
had limited success. DeepMind’s AlphaFold 1 and 2 (both artificial neural
networks), made public in 2018 and 2020 respectively, were the first to even
get close. AlphaFold 2 now has a database of more than 200m protein
structure predictions, with a prediction accuracy approaching 90%.
Though Sir Demis and Dr Jumper have featured on various contender lists
this year, many wondered if it was too soon for AlphaFold to be recognised.
Yet it has already had real impact: DeepMind says that some 2m scientists
already use it in their research. AlphaFold 3, released in May, goes beyond
proteins to predict the structure of a host of other biomolecules, such as DNA,
as well as small molecules that might function as drugs. It can also predict
how different molecules with different structures fit together, such as how a
virus’s spike protein might interact with antibodies and sugars found in the
body.

By choosing, for the first time, to honour work performed with an AI model,
the committee has opened the door for more such prizes in the future. That is
just as well; AI has been seeping into all areas of science for some time now,
as Dr Baker illustrated when he was phoned up during the committee’s press
conference. He said that AlphaFold has inspired him to make generative-AI
models that can design new proteins. “Our new AI methods are much more
powerful,” he said.

Mega-important
The prize for physiology or medicine, for its part, eschewed any mention of
AI. It was also immune to charges of genre-bending, continuing the
academy’s trend of increasingly recognising the smallest advances at the
molecular and cellular level—rather than work on physiology or organs—
because it is on these microscopic scales that the most exciting scientific
frontiers are to be found.

The joint winners were Victor Ambros at the University of Massachusetts

Medical School and Gary Ruvkun at Massachusetts General Hospital for
their discovery of micro-RNA (miRNA) and its role in “post-transcriptional gene
regulation”. These are a class of small molecules composed of only 20 to 24
nucleotides (the A, C, G, U letters of the genome), and they play a key role in
how cells work.

Inside the nucleus of every human cell is a full set of instructions—the

genome—for creating a person. A key question in biology is how the same
set of genes and instructions can lead to such different types of cells in the
body, from muscle to liver cells by way of the neurons found in the brain.
The answer is that not all the genes within a nucleus are translated into
protein. Different types of cells follow their own developmental pathways by
using only those genetic instructions relevant to their growth and
development. The selection necessary for each cell type is controlled in part
by the miRNA molecules discovered by Drs Ambros and Ruvkun.

They work primarily by binding to target parts of another molecule within

cells, known as messenger RNA (mRNA)—which carries information from the DNA
of the genome to the protein-making factories within cells. By interfering
with mRNA molecules, miRNA can alter or prevent the production of proteins.
Underscoring the growing importance of this area of molecular biology, mRNA
was itself the subject of the Nobel prize last year.

Finding miRNAs, in 1993, paved the way to the understanding, today, that there
are over a thousand of these small molecules within our cells. The discovery
has had far-reaching implications in biology. Abnormal regulation by miRNA
molecules can contribute to cancer and epilepsy. Mutations in genes that
code for miRNA molecules have been found to cause conditions such as
congenital hearing loss and are thought to be involved in the pathology of
many eye disorders, such as cataracts, glaucoma and macular degeneration.
The miRNA molecules are also thought to be important in numerous bone
diseases, such as osteoporosis, osteosarcoma and bone metastasis.
Drs Ambros and Ruvkun—who worked at the same lab in the late 1980s at
the Massachusetts Institute of Technology—discovered miRNA molecules
using a key tool of biological inquiry: the roundworm Caenorhabditis
elegans. They were studying two mutant strains of worms that had defects in
the genes that dictated how the animals developed and worked. In doing so,
the researchers showed that a gene called lin-4 produced an unusually short
RNA molecule that did not code for any proteins and which seemed to inhibit

the activity of another gene.

In awarding the prize, the Karolinska Institute’s Nobel committee noted that
when the scientists published their results, they met an “almost deafening
silence from the scientific community”. The unusual mechanism of gene
regulation in C. elegans was assumed to be a peculiarity of that organism,
not relevant to humans or other more complex organisms. That view
eventually shifted, as it became clear that genes that encode for miRNAs were
found throughout the animal kingdom.

Novo Nordisk, a Danish pharmaceutical giant, is one of the firms trying to

make medicines using miRNAs. This year it acquired Cardior, a German firm,
whose lead drug candidate, CDR132L, works by blocking a particular miRNA in
the hope of helping patients with chronic heart failure and cardiac
hypertrophy (thickening and stiffening of the walls of the heart).

This year’s prize highlights the continuing trend of recognising discoveries

at the molecular level. Recently, several Nobel prizes have been awarded to
technologies that have had obvious clinical applications, such as cancer
immunotherapy (in 2018) and gene editing (in 2020). It is perhaps no
surprise that, as the technology for molecular and genetic research has
improved, scientists are gaining ever more insight into cellular function, and
are therefore able to make more profound and useful discoveries with them.

Nobel pursuits
For the growing number of researchers around the world who rely on AI in
their work, the lasting message of this year’s awards may be a different one:
that they, too, could one day nab science’s most prestigious gongs. For his
part, said Dr Jumper, “I hope...that we have opened the door to many
incredible scientific breakthroughs with computation and AI to come.” ■

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nobels
Science & technology | Flying fish

Meet Japan’s hitchhiking fish

Medaka catch rides on obliging birds, confirming one of Darwin’s
hunches
October 10th 2024

THE JAPANESE picture book “Soratobu medaka” tells the extraordinary

tale of tiny stream-dwelling fish called medaka hitching a ride on an
obliging bird to a far-off freshwater pool. The story has delighted children in
the country since 1999, when it was first published, but now comes an even
more delightful twist: it is true.

Researchers have long been baffled by fish that turn up in isolated ponds and
lakes far from other bodies of water. Even Charles Darwin was puzzled by
the problem. In “On the Origin of Species”, published in 1859, he postulated
that the larvae of aquatic creatures might stick to the feet of unwitting
waterbirds. But his bright idea remained little more than a theory.
In 2019 Yao Akifumi, then a biology student at the University of Tsukuba,
wondered if he might have been right. Mr Yao had observed that many fish-
hunting birds commonly walked around in shallow waters dense with plants.
As a number of fish species laid eggs on these aquatic plants, he further
wondered if some egg-bearing plants might stick to the birds’ feet as they fly
off for puddles new.

Eager to test his theory, Mr Yao and his colleagues set up two ponds one
metre apart, placing 36 artificial aquatic plants in one and none in the other.
Both were stocked with baitfish to attract birds and had camera traps set to
trigger when birds landed. By the time the experiment ended, six months
later, some of the plants had switched ponds. The researchers were able to
catch a bird in the act. One of their camera traps showed a heron flying off
with plants snagged on one of its feet.

The next step was to determine whether fish eggs could survive being
carried out of the water. Mr Yao focused on medaka, paper-clip-size fish that
live in shallow water and attach their eggs to aquatic plants. When the lab-
reared medaka laid their eggs on strips of vegetation, the researchers took
the plants out of the water for between zero and 24 hours—at conditions
favourable to the unhatched eggs—before returning them.

In a new paper in Science of Nature, Mr Yao and his colleagues report that
the medaka eggs can successfully hatch after enduring up to 18 hours out of
the water attached to a plant leaf. (Eggs without a plant leaf to cling to rarely
survived for more than a few hours.) The big drop in survival was at 16
hours and 20 minutes, when half the eggs became unviable.

Given that a heron’s average flight-speed is around 39kph (with top speeds
of 96kph), the hardiest medaka eggs could travel quite a distance. Whether
any could actually survive the full 16.3 hours of travel at 39kph is doubtful,
says Mr Yao, since wind exposure during such a long journey would dry
them out.

Shorter journeys, however, are certainly possible. And since there are dozens
of other medaka-like fish species found throughout Asia, the chances are
high that hitchhiking explains how so many species have ended up in ponds
and lakes with seemingly no connection to other water bodies. Yet again, it
would seem, Darwin’s theories turn out to be correct. ■

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hitchhiking-fish
Science & technology | Still waters

Noise-dampening tech could make ships less

disruptive to marine life
Solutions include bendy propellers and “acoustic black holes”
October 10th 2024

MORE THAN 1,000 metres below the surface of the oceans, darkness
reigns. For animals living in this perpetual twilight, vision is irrelevant;
acoustic signals, instead, are how they navigate, communicate and search for
food.

That way of life has come under threat from decades of increasing human
noise. A leading culprit is shipping, contributing to a rise in underwater
volume of approximately 3.3 decibels per decade. The trend shows little sign
of levelling off. By one estimate, shipping-noise emissions double every
11.5 years.
With roughly 90% of traded goods travelling by sea, quieting the ocean
through reductions in shipping itself is untenable. Efforts to make ships
more efficient, and therefore less polluting, are also likely to reduce noise.
But experts say those measures will not do enough to restore quiet. That is
why a range of technologies are being developed—from modified propeller
designs to noise-dampening metamaterials—that could allow humans and
other animals to co-exist in the ocean.

Much of the underwater noise a ship produces comes from its propeller. As
the blades spin, areas of low pressure are formed in their wake which cause
the water to boil and produce bubbles, a process known as cavitation. When
those vapour cavities collapse, a low-frequency noise is produced. Such
noise can travel thousands of metres underwater without losing strength,
disrupting the movements of blue and humpback whales which use these
frequencies to communicate.

One solution, being developed by researchers at the University of British

Columbia (UBC), incorporates flexible polymers into the metal propeller
blades, allowing their tips—one of the main sites of cavitation—to bend and
twist. This movement prevents bubbles from forming and thereby reduces
the noise the blades produce, says Rajeev Jaiman of UBC.

Based on simulations, the design could reduce cavitation noise by 20

decibels. In air, this reduction would make a sound seem one-quarter as loud
(since the decibel scale is logarithmic, every ten decibels lost roughly
equates to a reduction by half in volume). Dr Jaiman says researchers are
working closely with marine biologists to understand how deep-sea life
would perceive the difference. The researchers intend to start testing a
prototype in tugboats next year.

Cavitation can also be mitigated by increasing the number of bubbles, rather

than reducing them. Researchers at MARIN, a Dutch research institute, have
blown bubbles onto a propeller’s blades, filling the vapour cavities left
behind, cushioning their collapse and dampening the resulting noise. Model-
scale tests of this system in a wave basin showed a 12-decibel decrease in
low-frequency noise at average container-ship speed.
But shipping noise does not come only from the propeller. Roughly 20%
comes from the vessel itself, as engines and generators chug and the ship’s
components vibrate. At low speeds, this percentage rises. To mitigate this,
MARIN researchers have experimented with a bubble screen generated from

ducts positioned in belts around the outside of the hull. These deploy a skirt
of air bubbles around the rear of the ship, where most machinery sits,
preventing noise from spreading.

Such bubble screens have been used before, says Johan Bosschers of MARIN,
but only for secret military ships—which meant there were few data
available about how well they worked. Now that others want quiet travel
too, researchers need to validate their effectiveness. Model tests have shown
that frequencies around 1 kilohertz (the preferred bandwidth of seals and
toothed whales) can be reduced by up to 22 decibels, at slow speeds.

More avant-garde ideas are also on the table. Some use acoustic
metamaterials—a class of materials engineered to have surprising effects not
commonly found in nature. Giovanni Rognoni, a marine-engineering
researcher at the University of Trieste, is investigating whether a so-called
acoustic black hole can help.

Such an object, which aims to trap sound the way cosmological black holes
trap light, can be built by welding steel beams that taper to a thin point to the
inside of the ship’s hull. As the vibrational waves travel towards the point,
they slow down. Once slowed, those waves can then be transferred from the
vibrating tip to a rubber cushion, where the wave—and the noise—dissipate.
Laboratory tests show this can reduce vibrations by as much as the best
currently available alternatives, without any of the added weight, fire risk or
toxic fumes these often involve.

Tom Smith, a researcher in naval architecture at University College London,

says that technological solutions for reducing ocean noise abound. What is
missing, however, is funding to test them at sea, and a willingness on the
part of shipbuilders and owners to commit to using them. Refitting ships to
be quieter is complex and costly, and not seen as a priority at present.

That may change. Some seaports, such as the Vancouver Fraser Port
Authority, now offer discounts equivalent to thousands of dollars for ships
that meet the highest level of noise reduction. And, says Dr Bosschers,
quieter ships may also turn out to be more efficient. Now that the
International Maritime Organisation has pledged to reduce carbon emissions
from international shipping by 70%, relative to 2008 levels, by 2040, this
may prove too good a deal to resist. ■

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could-make-ships-less-disruptive-to-marine-life
Culture
How humans invented good and evil, and may reinvent both
How complicated is brain surgery actually?
Why you should read Mohamed Mbougar Sarr
Boris Johnson shows how not to write a political memoir
Americans are chuffed as chips at British English
Is TV’s next sure-fire hit, “Disclaimer”, a must-watch or a dud?
Culture | From witchcraft to woke

How humans invented good and evil, and may

reinvent both
Over thousands of years humans domesticated themselves
October 4th 2024

The Invention of Good and Evil. By Hanno Sauer. Translated by Jo

Heinrich. Oxford University Press; 416 pages; $29.99. Profile; £25

TRIAL BY BOILING water was not as bad as it sounded. In medieval Europe, those
accused of grave crimes might be ordered to plunge an arm into a bubbling
cauldron to retrieve an object. If they were scalded, that was God’s way of
revealing their guilt. The chance of acquittal would seem to be zero, but
60% of those who underwent this ordeal got off. How come?

The answer is that defendants believed in divine judgment. The guilty,

convinced that God knew all, confessed to avoid the extra punishment of
scalding. The innocent assumed they would be acquitted, so they refused to
confess. The priests who prepared the cauldron knew this, and did not want
to undermine their own authority by condemning someone who might later
prove innocent. So they did not heat the water as much as they pretended to.

Hanno Sauer of Utrecht University has made a heroic effort to chart how
morality has changed since the first humanlike animals began to populate
Africa 5m years ago, and to predict how it might change in the future. It is a
rich, complex narrative, full of unexpected twists like the inquisitors’ tale.
His book is as sweeping as Steven Pinker’s “The Better Angels of Our
Nature” or Yuval Noah Harari’s “Sapiens”. He is less optimistic than Mr
Pinker, who describes a dramatic reduction in violence over millennia, and
more tightly focused on ethics than Mr Harari. He blends insights from
evolutionary biology, cognitive science and anthropology to ask what makes
people good, evil, or a bit of both?

Much of his argument hinges on a trait that sets humans apart from other
animals: the extraordinary complexity of their social relations. People’s early
ancestors lived in an unstable environment, the African savannah, and
developed “an unusually spontaneous and surprisingly flexible capacity for
co-operation”.

Since a hunting party might be successful one week but return empty-
handed the next, rules emerged about sharing meat with the wider group, to
maximise every member’s chance of survival. Competition with other bands
of hunter-gatherers over territory swiftly turned violent, however. “Inwardly,
our ancestors were family-centric pacifists, but outwardly, they were gangs
of murderers and plunderers,” the author writes.

Wars ravaged hunter-gatherer societies yet involved great individual

altruism. When each person’s survival depends to a large degree on the
clan’s, people have an incentive to co-operate selflessly to defend it. From
an evolutionary perspective, such self-sacrifice made sense only if the
beneficiaries were closely related.

Early hunter-gatherer bands probably included no more than 150 or so

people. To collaborate in larger groups, people needed new rules, vigorously
enforced. This is perhaps why all human societies have devised
ostentatiously nasty punishments. Cave paintings from 20,000 years ago
depict ritual garrotting; in ancient Greece torturers roasted victims in a
hollow bronze bull, their screams being amplified by the bull’s horns.

“A species that kills its most [aggressive] members over hundreds of

generations creates a strong selection pressure in favour of peacefulness,
tolerance and impulse control,” reckons Mr Sauer. In effect, “We
domesticated ourselves.” When it is socially required, humans can show
enormous restraint and consideration; unlike, say, chimpanzees, which if
crammed together on an aeroplane for a long flight would undoubtedly kill
each other. Humans “are to chimpanzees as golden retrievers are to wolves”,
argues Mr Sauer.

Back to the future

Rules against killing strangers allowed people to co-exist in much larger
societies. This, in turn, fostered the development of sophisticated cultures.
Just as science depends on the steady accumulation of thousands of small
innovations, so culture evolves over time, with ideas accumulating and being
refined from one generation to the next. This process yields plenty of rotten
customs, such as female genital mutilation, but also the benefits of
everything from reading and music to cities and double-entry book-keeping.

For millennia, the kinship group was the most important social unit, and
morality was understood largely as the duties owed to one’s relatives. But in
Europe the Roman Catholic church blew this system apart with a series of
reforms that ended around 500 years ago. It banned cousin marriage and
changed inheritance rules, encouraging people to choose their own spouses
and bequeath assets as they pleased. This weakened kinship groups (which
relied on cousin marriage to keep property within the clan) and fostered a
more individualistic morality. People became more likely to feel guilt (at
having done something wrong) than shame (because their aunts
disapproved). The effects of these reforms can still be measured in Italy:
people in the provinces that were under stronger papal control 500 years ago
are more likely to donate blood even today.
The rise of individualism paved the way for modernity, with contract-based
business, participatory politics, impersonal bureaucracies and the pursuit of
science unconstrained by religious dogma. This has made the world richer,
and richer countries are happier than those that remain poor.

The idea that rules can govern a society has spread far beyond Europe, albeit
unevenly. Fully 70% of Norwegians say they trust strangers, whereas only
5% of people from Trinidad and Tobago agree. Mr Sauer thinks universal
norms will probably keep spreading but is unsure. As the Holocaust proved,
humankind’s ancient suspicion of out-groups has not vanished, and skilful
demagogues can harness it in catastrophic ways. Examples are too numerous
to list.

Looking at the past five years, the author finds much to worry about.
“Morality seems to be boiling over” in the West, he writes. People’s moral
vocabulary has become “mangled”. Woke activists describe words as
“violence” and use this claim to try to justify restrictions on free speech.
They also divide the world simplistically into “oppressors” and “oppressed”,
sometimes ascribing original sin by skin colour. And political tribes of left
and right have come to see the other lot not merely as misguided, but evil.

Yet despite the fury of the culture wars, Mr Sauer sees “an enormous…
unrealised potential for reconciliation”. After hundreds of thousands of years
of evolution, people share more moral values than they think, and this could
help them cast off the identity politics that tells them they are enemies.
“Between the extremes of ‘being on time is white supremacy’ and ‘we must
revitalise Western Christianity’s cultural hegemony,’ there is a silent
majority of reasonable people,” he concludes. He is surely right. ■

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Culture | Missives from a neurosurgeon

How complicated is brain surgery actually?

A doctor reveals the myths and realities of his profession
October 10th 2024

Gray Matters. By Theodore Schwartz. Dutton; 512 pages; $32. Oneworld;

£25

NEUROSURGEONS ARE typically portrayed in one of two ways in popular culture. One
is as a brilliant, if arrogant, boffin. These doctors are intellectuals (it is brain
surgery, after all) who have very little social life. Think of Dr Jack Shephard,
the protagonist of “Lost”, a television series, or Doctor Strange, a Marvel
character. The other common depiction is as a mad scientist. At best, these
characters perform unethical surgeries and, at worst, become cannibalistic
serial killers, such as Hannibal Lecter.
But these portrayals miss much of what modern neurosurgery really is,
argues Theodore Schwartz, a neurosurgeon and professor at Weill Cornell
Medicine in New York. “Gray Matters”, an engrossing new book, goes on a
tour through different types of brain surgery, from seemingly crude
emergency treatments for traumatic injuries to high-precision surgeries to
implant electrodes that provide relief from obsessive compulsive disorder.
For each, Dr Schwartz skilfully weaves explanations of procedures together
with personal and historical anecdotes and real-life case studies. These
include his own patients, as well as notable people, such as John F. Kennedy
and Joe Biden, who found themselves on neurosurgeons’ operating tables.

The result is a satisfying and varied insight into an intriguing profession.

There are points when the book reads like a page-turner—in discussing
Kennedy’s assassination, for example—with occasional detours through a
medical textbook (“To better understand…whether this supports a second-
shooter hypothesis, we’ll first need to review some basic anatomy of the
brain and the skull.”)

To the uninitiated, the details of surgeries are gory. Prepare to imagine the
sound of drilling through skulls and picture the sight of macerated brain
tissue. But in Dr Schwartz’s telling, the impact of these grisly procedures on
patients and their families is also dramatic and touching.

Most of the book documents the history and practicalities of brain surgery,
starting with the work of Harvey Cushing, an American pioneer, in the early
20th century. At that time every procedure was a journey into the unknown.
Now, a century later, surgeons have precise maps of patients’ brains thanks
to MRI and CAT scans, and are equipped with high-tech kit to make their work
ever more accurate and less invasive.

Dr Schwartz is most interesting when he muses on issues where his field

intersects with society. What does a neurosurgeon think should be done
about head injury in sports? Not that much, it turns out. As long as athletes
are aware of the risks and are appropriately compensated, then they should
be allowed to smack their heads together if they wish. Are certain brain
injuries a sure sign that a baby has been abused? In Dr Schwartz’s opinion,
yes, until proved otherwise.
He also ponders how a career spent rooting around in brains changes how
you think about the mind. “Gray Matters” argues against the notion of free
will, using evidence from scientific studies and stories of patients whose
surgery has changed how they consciously perceive their surroundings.
Instead of people having a unified self that controls their actions and
thoughts, Dr Schwartz believes that most of these feelings arise
spontaneously or in response to triggers from the outside world. The brain
then generates a plausible rationale post hoc for why a movement was made
or a thought conjured.

The brain is increasingly lodged in the centre of the tech world. One of Elon
Musk’s companies, Neuralink, is trying to develop a sophisticated brain
implant that can record and transmit neural signals, allowing paralysed
patients to control a computer cursor. Meanwhile, a desire to improve the
artificial “brains” that power artificial-intelligence software is driving many
techies to look for inspiration in real ones. Even society’s brainiest are still
intent on better understanding the mysteries of the human brain. ■

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actually
Culture | Song of myself

Why you should read Mohamed Mbougar Sarr

The Senegalese novelist is one of the boldest writers working today
October 10th 2024

The Silence of the Choir. By Mohamed Mbougar Sarr. Translated by

Alison Anderson. Europa Editions; 372 pages; $18 and £14.99

WHAT IS IN a name? Quite a lot, actually, for Mohamed Mbougar Sarr. The
writer’s first name is a nod to the majority faith in Senegal, where he was
born. His last name reveals that he comes from its third-biggest ethnic
group, the Serer. His middle name means “unloved”. By Serer tradition,
children often get tagged with ugly names as a trick to fool evil spirits.

Perhaps that precaution, along with Mr Sarr’s talent, worked. In his teens he
won a full scholarship to study in France. He published a first novel at the
age of 24 and three more by the time he was 31, scooping a stack of awards
on the way. In 2021 he became the first sub-Saharan African to win France’s
top literary prize, the Goncourt. That was for “The Most Secret Memory of
Men”, his most ambitious and playful book so far, about a young Senegalese
writer living in Paris. It was also the most successful: readers in France
bought over half a million copies in its first year in print.

“If the folks in Stockholm are alert, Sarr has got to be on their minds,” says
Adam Shatz, a critic and writer on post-colonial France. It may be premature
to speak of a Nobel prize, but Mr Sarr, now 34 years old, is celebrated far
beyond the Francophone world. (The Nobel prize in literature was due to be
announced on October 10th, after The Economist went to press.)

Such praise is noteworthy since his books are not easy. “The Silence of the
Choir”, newly translated into English, tells the story of 72 refugees from
Africa in Sicily. As the characters push forward with their asylum claims,
the timely tale unspools with multiple voices and a touch of magical realism.
In “Brotherhood” and “De Purs Hommes” (“Of Pure Men”), which has yet
to be published in English, Mr Sarr digs into such testy issues as Islamist
extremism and homophobia in west Africa.

His writing is bold, but his characters’ motives are subtle. In “Brotherhood”,
a deftly drawn internal monologue reveals how the Islamist police chief of a
west African city justifies his cruelty with a disturbingly convincing process
of logic. In a fictional Sicilian town, by contrast, hostility to African
migrants spreads insidiously through what Mr Sarr calls “intellectual
laziness…the mother of all deadly sins”.

Mr Sarr is, like his complex creations, both lightly ironic and dead serious.
His own convictions come through powerfully in his books. Many of his
female characters are strong, faithful and principled. His men are often
absent as fathers, fickle as lovers and wobbly in their opinions. Power
corrupts, for sure, but “the people” do not hold the answers, either. European
acceptance of others, such as Africans, remains largely contingent and
ultimately self-serving. But the West’s power is real, and its conventions,
such as language, are necessary tools in the modern world.

Including English, Mr Sarr speaks four languages well. But though he writes
in crystalline literary French, the voices in his work use a stunning array of
registers. There is intimate pillow talk, plenty of frank sex and angry lovers’
quarrels. There are letters, diaries, philosophical discourses, curt text
messages and news bulletins. There are rival narrators in a single paragraph,
and sometimes page-long sentences. Yet it all somehow makes sense.

Mr Sarr admits that fame has been distracting. Solitude, he has said, is the
beginning of creation, and it has been a couple of years since his muses have
spoken. He finds writing difficult, painful and even sometimes a catalyst for
despair. But at the same time it can be “a form of liberation”. Even his
simplest descriptions, like this of dawn, soar: “A few stars lingered in the
firmament, as if they’d lost their way during some cosmic pilgrimage.” ■

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sarr
Culture | “Unleashed” and mildly unhinged

Boris Johnson shows how not to write a political

memoir
His new book is full of revelations, but none of the sort readers actually
want
October 4th 2024

Unleashed. By Boris Johnson. Harper; 784 pages; $40. William Collins;

£30

IT WAS 2008, during the global financial crisis. Boris Johnson was mayor of
London. The political situation was tense; scrutiny was intensifying. Or, as
Mr Johnson puts it in his memoir, “POW POW POW!”—first some people
criticised his team. Then “BIFF!” the press were mean. Then “SOCKO!” a
civil servant left him. Then “DOOOF!” a deputy mayor did. Then
“THUDDEROO...” You get the idea.
What makes a good political memoir? Alan Clark, a great political diarist,
swore by the four “I”s: a good memoir must be indiscreet, intimate,
immediate and (while in note form, to discourage prying eyes)
indecipherable. “Phooey!” as Mr Johnson might say. “Unleashed”, the
former prime minister’s autobiography, dispenses with such effortful artistry.
Instead its pages offer only one “I”: the great overweening ego of one
Alexander Boris de Pfeffel Johnson.

“Unleashed” is less an autobiography than a nearly 800-page staircase

argument. It is a testy and frequently tedious defence in which Mr Johnson
rambles on about the many and varied villains who have ever dared to doubt,
slight or fight him—ranging from journalists to socialists, Remainers,
Vladimir Putin and a rather laudable-sounding girl called Tracy who
punched him in primary school. After a few hundred pages, however, the
book starts to feel less “Unleashed” than unhinged and, even worse,
uninteresting.

This is a surprise: “Boring Boris” feels like an oxymoron. For the past 30
years, first as a journalist, then as editor (of the Spectator), then mayor (of
London), then prime minister (of Britain), Mr Johnson had a ringside seat at
some of the world’s most notable events, from the late queen’s final months,
to Brexit, covid-19 and the war in Ukraine.

Moreover, at his best, Mr Johnson—a man who called Sir Keir Starmer
“Captain Crasheroonie Snoozefest” and said that his policy on cake was
“pro having it and pro eating it”—is a gifted rhetorician. This book should
have been excellent.

“Unleashed” does have good moments: readers learn that the queen served
him a picnic from Tupperware boxes and that covid left him afraid to go to
sleep “in case they decided to perform some stealthy tracheotomy without
letting me know”.

But most of it is not good at all. Part of the problem is the writing. Mr
Johnson’s style has often been parodied, but here he seems to be pastiching
himself. It’s not just the absurd “POW”s and “BIFF”s and “SOCKO”s and
CAPITAL LETTERS with which this text is LITTERED. Far too much of
this reads like the work of a schoolboy. This is worse than unamusing. It
feels, for a former prime minister, embarrassing and inappropriate. David
Cameron is a “girly swot”; a tricky moment is the “stickiest wicket”. He
likens himself to Evel Knievel, a daredevil motorbiker, while a chapter on
international relations is titled “Gøing Gløbal”. Gød help us.

His style is also oddly uneven. At times he is the spiffing, biffing, Billy-
Bunter Boris; at others the prose is more pulp fiction than prime ministerial.
He writes about having “planes and helicopters and a trillion-pound budget”
and drinking “Crémant d’Alsace” on a terrace with Angela Merkel. In
places, this sounds less like Boris than like Barbara Cartland, a famous
romance writer. Then suddenly he switches and you find yourself reading
sentences such as, “We went to the JCB factory at Uttoxeter”, which is a bit of
a comedown.

However, the worst parts are not the bad ones but the good ones: when self-
justifying Boris fades and funny, clever Boris appears instead. Because he
can be wonderful, for example, when he (surprisingly lyrically) describes his
policies for fighting regional inequality or talks about how knife crime—
about which he clearly cares—is one of those oddly intimate assaults in
which your assailant is close enough for you to smell their body and feel
their breath. Yet that, too, is also awful: because you realise that this book—
by a man whose hot breath was on the body politic of Britain for a decade—
might have been brilliant, too. But, much like the man himself, it is not. ■

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Culture | Johnson on language

Americans are chuffed as chips at British English

Why doesn’t the affection run both ways?
October 7th 2024

Gobsmacked! By Ben Yagoda. Princeton University Press; 288 pages;

$24.95 and £20

BRITISH INTELLECTUALS enjoy bewailing the influx of Americanisms into the language
of the mother country. The BBC once asked British readers to send in the
Americanisms that annoyed them most and was flooded with thousands of
entries, including “24/7”, “deplane” and “touch base”. Matthew Engel, a
writer who had kicked off the conversation with an article on unwanted
Americanisms, even turned the idea into a book, “That’s the Way It
Crumbles”, in 2017.
The furore—which Americans would call a furor—seemed to die down. But
in September Simon Heffer of the Daily Telegraph revived it with a column
and book exploring Americanisms, a trend he situates “in the past 15 years”.
His language evokes violence, bemoaning American words’ “poisoning”,
“linguistic assault”, “conquest” and “penetration”. In the end, though, even
the hyperbolic Mr Heffer concedes that Brits are, in fact, “willingly
adopting” these words, especially via two channels associated with America:
digital technology and “corporatespeak”. He just wishes his countrymen
would stop.

But linguistic exchange can also be seen in a more upbeat way. This is the
approach of Ben Yagoda, emeritus professor of English at the University of
Delaware, in “Gobsmacked!” The trend is older and more extensive than
many think. Mr Yagoda describes Britishisms like “it’s early days” and
“gone missing” taking hold in America almost entirely below the radar in
the 1980s and 2000s, respectively.

Mr Yagoda identifies the intensifier “awfully” (as in “awfully tired”) as the

first Britishism, having been noticed (disapprovingly) by an American
commentator in the 19th century. The early 20th century saw many more
Britishisms take hold, especially via military contact: “gadget”, “cushy”,
“scrounge”, “bonkers”, “dicey” and “shambolic” all made their way from
the British Tommy to G.I. Joe, and thence to the wider American public.

The internet has spread English in both directions. Being able to read the
Guardian and to binge “The Crown” on Netflix has probably speeded up the
passage of British terms into American speech. Mr Yagoda has compiled a
“top 40”, including “brilliant” (merely “OK, good”), “chat up” and “ginger”.
Each term gets a rating on a five-notch adoption scale, from “outpacing”
(signifying Americans now use the term more than its coiners in Britain do)
to merely “on the radar”, meaning only a few newspaper columnists are
using it.

American Anglophiles tend to be part of a media elite who holiday in

Europe (and might even use “holiday” as a verb), whereas American slang is
seen as passing to Britain through less rarefied channels. Lynne Murphy, a
linguist at the University of Sussex, notes that “Friends”, an American
comedy show, is often blamed wrongly for the rise of “Can I get…?” at
coffee shops in Britain. In her study of online lists explaining British terms
to Americans and vice versa, she found the ones about Britishisms for
Americans were often framed positively (for example, “a guide to the best
Britishisms”), whereas for Brits Americanisms were more often negative
(“41 things the Americans say wrong”).

Which Britishisms tickle American fancies? A few sounds recur, such as

adjectives ending in “y”, from “cushy” and “smarmy”—Britishisms but no
longer seen as such in America—to more recent ones like “cheeky” and
“dodgy”. B- and p-sounds also feature, including in made-up words
(“bumbershoot” is not, as some Americans believe, a British word for an
umbrella). The Oatmeal, a web comic, summed up how British English
sounds to Americans: “I remember my days at Oxford, we’d often dabble in
a little rumpy-pumpy before dingbangling a fresh todger, haha!” That hints
at another source of Britishisms making their way west: insults and “naughty
bits” like “shag” and “wanker”. A spirit of playfulness pervades Americans’
use of these British words; they may even tend to overuse them and
underestimate their rudeness, because the sounds are so silly.

It is possible that the British need “Gobsmacked!” more than their American
cousins. The Americanisation of British English is well known; the
Britishisation of American English, not so much (as a Californian teen might
say). A country not sure what influence it still has in the world might like to
know that the superpower across the ocean still fancies the mother country
and its culture. ■

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Culture | Back Story

Is TV’s next sure-fire hit, “Disclaimer”, a must-

watch or a dud?
The glitzy new thriller is both
October 8th 2024

Read the early reviews of “Disclaimer” and you may be confused. Write-ups
of the seven-part thriller, which debuts on Apple TV+ on October 11th, lurch
between two stars and five. Is the lavish series, directed by Alfonso Cuarón
and starring Cate Blanchett (pictured), a must-watch or dud? Whom should
you trust, the boosters or carpers? The answer is both. The show is an
example of what might be called good-bad art, and a lesson in evaluating it.

Ms Blanchett is Catherine Ravenscroft, a British documentary-maker. She

and her husband Robert (Sacha Baron Cohen) have a sumptuous pad in
London and a troubled adult son. The title alludes to a note in a novel that
arrives in the post: in this case, any resemblance to real people is not, in fact,
a coincidence. The people in question are Catherine herself and a young
man, Jonathan (Louis Partridge), whom she met long ago on the Italian
coast.

Jonathan drowned. But how? The roman à clef is part of a spiralling

vendetta by his father, Stephen (Kevin Kline), which also relies on intimate
photos taken in Italy and a social-media account that resurrects the dead. In a
two-way pursuit, Catherine must track Stephen down as he methodically
destroys her.

To say a work of art is flawed or uneven is tautologous. None is perfect, not

even “Hamlet” or “Some Like it Hot”. But the flaws in “Disclaimer” are not
the glitches inevitable in all mortal endeavours. They are glaring.

The plot crumbles under scrutiny: characters know things they couldn’t and
behave inexplicably. You might expect some synergy between Catherine’s
job (unearthing the truth) and her urgent personal mission (ditto). Nope.
“You are so cancelled, Catherine!” yells a colleague in one of many clunky
lines.

Then there is the voice-over. Meant to relay inner thoughts, it sounds

distractingly like Alexa. The graphic sex scenes seem gratuitous as they
unfold; they seem more so after a twist drastically recasts the story’s gender
politics. That twist feels like a hustle—less a coup de théâtre than an adult
version of “And then they woke up.”

Mr Cuarón, who adapted the script from Renée Knight’s novel, has won five
Oscars, including a clutch for “Roma”. At the Venice Film Festival, where
“Disclaimer” had a warmly received premiere, he said he thought of it not as
television but as “seven films”. In an age of prestige TV, this is as grand as it
gets. On some measures, it is a let-down. On others, it is very good: not in a
“so bad, it’s good” sort of way, nor merely good enough to be diverting, but
hauntingly excellent.

The acting, like the dialogue, is mixed, but Ms Blanchett shines and, as
Jonathan’s bereaved mother, Lesley Manville is heartbreaking. In a
flashback, she wades into the fatal sea like a figure in ancient myth.
Sequences and tableaux live up to the show’s pedigree. As the police inform
Jonathan’s parents of his death, the living-room telly stays on, a relic of
normality. Visiting his own son (Kodi Smit-McPhee) in his squalid digs,
Robert Ravenscroft focuses, as a father might, on a hole in his sock. Foxes,
cats and a cockroach have memorable cameos.

Above all, “Disclaimer” reaches boldly for big themes, such as grief, erotic
jealousy, marriage and its secrets, what parents do to children and vice versa.
It dramatises the fragility of even the cushiest lives, and asks whether, in
revisiting old traumas, you salve the wound or prod it. In the end, this
tricksy narrative makes viewers ponder the stories people tell about the past
and each other. Some characters deludedly believe the best of loved ones.
Others too readily think the worst, particularly of women.

For all the differences in genre, era and setting, the artist whom this melange
of pulp and profundity most recalls is Dostoyevsky. His good-bad yarns can
seem histrionic and unkempt; but they offer immortal moments of drama and
stare, unblinkingly, into the darkest recesses of the heart. “Disclaimer” has a
seam of Dostoyevsky’s reckless honesty and shares his interest in the
calibration of guilt. If, for powerful reasons, you wish a dreadful thing to
happen, how guilty are you when it does?

All of which raises another set of questions, about art rather than morals.
Which is a better measure of an artwork, its quality on average or its peaks?
How should ambition be weighed against execution, jolting insight against
missteps, the good against the bad? In Back Story’s book, good-bad art that
lingers in the memory is worth more than the blandly palatable kind, read or
watched serenely and instantly forgotten. ■

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a-must-watch-or-a-dud
Economic & financial indicators
Economic data, commodities and markets
Economic & financial indicators | Indicators

Economic data, commodities and markets

October 10th 2024
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data-commodities-and-markets
Obituary
Yoshioka Masamitsu saw Pearl Harbor from the air
Obituary | Two towers of white spray

Yoshioka Masamitsu saw Pearl Harbor from the

air
The last of the attackers on the “day of infamy” died on August 28th, aged
106
October 9th 2024

As he SLID into his bunk in the aircraft-carrier Soryu, on the night of

December 6th 1941, Bombardier Yoshioka Masamitsu was struck by a
thought. He didn’t have much time left, because tomorrow he was likely to
die. He would die in Hawaii, because that was where Japan had decided to
hit America. Such an attack would unleash a gigantic war. Of course it was
an honour to be chosen for this mission, and his parents would be proud of
him if he died that way. But he was 23, and the thought made all the blood
drain from his head. Other crewmen and bombardiers might stoically turn on
themselves the pistols they had been issued with, in case they were captured
by the enemy. He had a pistol himself. But death did not appeal to him at all.
For weeks the Imperial Japanese Navy had been building up to attack.
Besides the Soryu, five other aircraft-carriers had gathered in the Kuril
Islands with more than 300 warplanes. Emperor Hirohito had ordered on
November 5th that if talks with the Americans broke down, America should
be attacked by the end of the month. The talks concerned an oil embargo by
the Americans on Japan, to deter it from military adventures in Asia. Two
years before Yoshioka had been deployed on the Soryu against the Chinese
Nationalists, who were resisting Japanese conquest. But that was a regional
war. What threatened now was something even bigger.

Before dawn, having slept at least a little, he went out on deck to watch the
torpedo being loaded onto his plane. It was still dark, but the missile
gleamed silver. That made him realise it was the real thing. In training,
because torpedoes were scarce and expensive, they had used wooden
canisters with a warhead filled with water, not explosives. After every drop,
they fished them from the sea again. The torpedoes themselves were much
less important than learning how to fly fast, flat and low above the sea,
sometimes as low as 12 metres, getting the angle just right, before releasing
them.

Now they would be dropped on America: specifically on the Pacific Fleet

moored at Shinjuwan, or Pearl Harbor. That information had filtered to him
and his comrades extremely slowly. Just before they sailed from the Kuril
Islands, on November 26th, they were told to pack shorts. That seemed to
mean they were going south. But then the pipes were lagged with asbestos,
which suggested somewhere colder. In the bar and at deck smoking-breaks
he and his comrades speculated constantly. He himself had been switched
quite suddenly, that year, from navigation to torpedo training. So
deployment was imminent, somewhere. But it couldn’t be America, because
America, up until recently, still supplied the petrol for their planes.

Just after dawn, with a stiff east wind and choppy seas, he climbed into his
craft. It was a Nakajima B5N2, much better than the rickety old biplanes he had
spent his time repairing when, at 18, he first joined up. Day after day he
would enviously watch as the airmen flew off in newer models. The
Nakajima, though, was no more airtight than most of the planes of the time.
Gaps all over the body let in the disgusting firework-smell of gunpowder or
anti-aircraft fire. Roaring engine noise and the echoing wind drowned out
almost all other sound—except the worst of all, the bang! of his plane being
hit. Added to all this, the 800kg weight of a real torpedo made his plane tip
to the rear. He was so burdened on take-off that he sank at first two metres
below deck-level, before he could get the nose up and away.

He, his pilot and his rear-gunner flew steadily to the east. They were in radio
silence, with him as navigator calculating the route by the flight time (110
minutes), distance (220 nautical miles) and the position of the Soryu as they
left. Otherwise, they flew into the glare of the sun. That glare changed to
towering white cumulus clouds; then to billowing black smoke from
American ships that had already been hit. He sent his torpedo down and,
looking back, saw two slim columns of spray shoot 30 metres from the
water. A direct hit! Right on target!

Then he saw something else. The battleship, which was already listing, had
no barrels on the gun-turrets. It was the USS Utah, a training ship which had
been stripped of its weapons a decade before. During torpedo training he and
his comrades had been told to memorise the silhouette of the Utah, so that
they could avoid it. Somehow—sun-dazzle, perhaps—he had not. His
elation turned in an instant to horror at his mistake.

He got back safely that day. War had now started between Japan and
America, and would last for four years, but he had a lucky one. When the
Soryu was sunk at the Battle of Midway in 1942, he was on shore leave.
When fighting became intense round the Palau Islands, he was recovering
from malaria. His plane was grounded, short of parts, when kamikaze tactics
came in. Enemy bullets streamed towards his plane once, heading for his
face, but passed by on either side. His plane was pierced by cannon-fire, but
it hit none of the crew, and the fuel tank it struck was empty. He never took
such luck for granted, nor stopped being scared.

He increasingly felt shame, though, that he had survived. And not merely
survived, but to a great age, still straight-backed, lucid, mobile and dapper.
For decades he worked in the Maritime Self-Defence Force, the post-war
version of the emperor’s proud navy. And he remained unceasingly, though
silently, aware of all who had died around him. His brothers in arms, of
course. But also the sailors they had killed, young men like him, faithfully
carrying out their orders. Fifty-eight crew had died when he torpedoed the
Utah. If he ever visited Pearl Harbor—which he doubted he would, as he
wouldn’t know what to say—he wanted to visit their graves to pay his
respects. As it was he added them to his prayers at the Yasukuni shrine, with
the fervent hope that there would be no more wars. ■
This article was downloaded by zlibrary from https://www.economist.com/obituary/2024/10/09/yoshioka-masamitsu-saw-pearl-harbor-
from-the-air
 Table of Contents
The world this week
Politics
Business
The weekly cartoon
This week’s cover
Leaders
The Trumpification of American policy
How Florida should respond to Hurricane Milton
How high could the oil price go?
The front line of the tech war is in Asia
Britain should not hand the Chagos Islands to Mauritius
Letters
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By Invitation
Lebanon needs a new army in the south, says Yair Lapid
The framework that ended Lebanon’s war in 2006 could help end this
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Briefing
Who will control the next Congress?
United States
What America’s presidential election means for world trade
The US tax code will change next year; the presidential election will
determine how
Donald Trump is preparing an assault on America’s immigration
system
On energy and climate, Trump and Harris are different by degrees
Both candidates pledge to fortify America. How big will they go?
America’s presidential election marks a fork in the road for Ukraine
Will the next president follow Israel into war with Iran?
The next American president will be a China hawk
Shirley Chisholm is still winning
The Americas
The beating of Argentina’s former first lady fits a shameful pattern
American women go to Mexico for abortions
 The drug lords’ side-hustle: smuggling macaws, jaguars and frogs
Asia
America v China: who controls Asia’s internet?
Asia is weighing data-centre ambitions against sustainability
Kazakhstan’s referendum on nuclear energy could benefit Russia
Is India’s economy slowing down?
New railways could transform South-East Asia
Has Narendra Modi lost his mojo?
China
How to escape from China to America
Middle East & Africa
Israel has these four options for attacking Iran
Iran’s leader must choose how to fight his war with Israel
The threat of an Israeli attack is reviving Iranian nationalism
Israel’s invasion of Lebanon may bolster support for Hizbullah
How to send a cake from New Jersey to Accra
South Africa’s coalition government has improved the vibes
Europe
France stares into a “colossal” budgetary abyss
Turkey’s long hard struggle with inflation
Delays on Italy’s spruced-up trains have got worse
Russia continues to advance in eastern Ukraine
The search for Ukraine’s missing soldiers and sailors
Europeans are facing the prospect of Trump like a deer caught in
headlights
Britain
The story of one NHS operation
The Sue Gray saga casts doubt on Keir Starmer’s managerial chops
Britain has agreed to cede the Chagos Islands to Mauritius
The biography of a British recycling bag
Can software help ease Britain’s housing crisis?
Britain’s obsession with baked beans
Britain’s last imperialists
International
Over a billion have voted in 2024: has democracy won?
Business
Big tech is bringing nuclear power back to life
 Can Mytheresa make luxury e-commerce a success?
Can Israel’s mighty tech industry withstand a wider war?
Ratan Tata, a consequential and beloved figure in Indian business
China is writing the world’s technology rules
When workplace bonuses backfire
Masayoshi Son is back in Silicon Valley—and late to the AI race
Finance & economics
How America learned to love tariffs
Could war in the Gulf push oil to $100 a barrel?
Europe’s green trade restrictions are infuriating poor countries
Can markets reduce pollution in India?
Why have markets grown more captivated by data releases?
China’s property crisis claims more victims: companies
How bond investors soured on France
Can the world’s most influential business index be fixed?
Science & technology
AI wins big at the Nobels
Meet Japan’s hitchhiking fish
Noise-dampening tech could make ships less disruptive to marine life
Culture
How humans invented good and evil, and may reinvent both
How complicated is brain surgery actually?
Why you should read Mohamed Mbougar Sarr
Boris Johnson shows how not to write a political memoir
Americans are chuffed as chips at British English
Is TV’s next sure-fire hit, “Disclaimer”, a must-watch or a dud?
Economic & financial indicators
Economic data, commodities and markets
Obituary
Yoshioka Masamitsu saw Pearl Harbor from the air