[Jan 11th 2025]

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The world this week

Politics
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The weekly cartoon

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The world this week

Politics
None
1月 09, 2025 02:50 下午

After weeks of intense political pressure, Justin Trudeau

announced his resignation as prime minister of Canada and
suspended Parliament until March 24th. His Liberal Party will
now start the process of choosing a new leader. Chrystia
Freeland, whose resignation as finance minister in
December triggered the current crisis, is one of the front-
runners. Mark Carney, a former governor of both Canada’s
and Britain’s central banks, is considering a bid. Support for
the Liberals has dropped to around 20% amid rocketing
immigration, inflation and housing costs. Under the
leadership of Pierre Poilievre, the Conservatives have surged
in the polls.

Back to his old tricks

Donald Trump repeated his warning to put “very serious

tariffs” on Canada and Mexico, and suggested he would shut
off Canadian car exports to the United States. He also
threatened to use military force to place the Panama Canal
under American control and implied that he could use force
to take Greenland, claiming that America needs it for
national security. Donald Trump junior visited the island for a
“personal day-trip”. Greenland is an autonomous Danish
territory. Mette Frederiksen, Denmark’s prime minister,
reiterated that it was not for sale, and that Greenlanders
may opt for independence in the future.

The certification of America’s election results in Congress,

confirming Mr Trump’s victory, was a more sedate affair
compared with four years ago, when his supporters
rampaged through the Capitol trying to overturn the result
of his loss in 2020. Mike Johnson was re-elected as the
speaker of the House of Representatives, but only after Mr
Trump arm-twisted a few wavering Republicans. The
Republicans hold the narrowest majority in the House for
nearly 100 years.

Fast-moving wildfires fuelled by dry high winds tore though

parts of Los Angeles, causing fatalities. The Hollywood Hills
were ablaze; wealthy neighbourhoods, such as Pacific
Palisades and around Sunset Boulevard, were evacuated.
Firefighters bulldozed abandoned cars that were clogging
the roads.

Edmundo González, whom many consider to have won

Venezuela’s presidential election in 2024, met Joe Biden at
the White House, just days before Nicolás Maduro was set to
be sworn in for another term. Mr González, who fled to Spain
after the election, also met Mike Waltz, Mr Trump’s pick for
national security adviser.

A contingent of 150 troops from Guatemala joined the UN-

backed security force in Haiti that has been tasked with
trying to restore order in the country. The force has so far
failed to quell the gang violence that has wracked Haiti,
such as the recent murders at an event to reopen a hospital.

Hamas released a list of 34 hostages that the Palestinian

Islamists in Gaza say they would release in the first stage of
a possible ceasefire deal with Israel. It is not known
whether they are all still alive. The names include two
Israelis held in Gaza for a decade. The body of a hostage
was found in a tunnel in south Gaza by Israeli forces. The
man’s son, another hostage, is also feared dead.

The UN reported that Iran executed at least 901 people last

year, up by 6% compared with 2023. About 40 were put to
death in a single week in December. Most of the executions
were for drugs-related offences, but some of those put to
death were dissidents or connected to the wave of protests
against the regime in 2022.

Iran freed an Italian journalist who was detained in

December. The authorities said that Cecilia Sala was
arrested for violating the country’s laws, but foreign
diplomats think there is a link to Italy’s detention of an
Iranian engineer suspected of supplying drone technology
that led to the deaths of American soldiers.

Fighting in eastern Congo has displaced at least 100,000

people recently, according to the UN. M23, a rebel group
supported by Rwanda, has stepped up its activities in the
country’s North Kivu region since the collapse last month of
talks over a peace deal.

America said that the paramilitary Rapid Support Forces,

one of the participants in Sudan’s civil war, had committed
genocide. It imposed sanctions on Muhammad Hamdan
Dagalo, who is the group’s leader, members of his family
and several companies that the RSF owns in the United Arab
Emirates.

Ukraine launched a new offensive in Russia’s Kursk

region. Russia claimed to have beaten back the attack,
though reports suggested its forces had come under heavy
fire. A spokesman for the Ukrainian government said “Russia
is getting what it deserves.” At least 13 people were killed in
a Russian attack on Zaporizhia. And Russia claimed to have
taken the town of Kurakhove, though Ukraine said it had not
entirely fallen.

Following an inconclusive election in September that failed

to produce a government, Austria’s president asked the
hard-right Freedom Party (FPÖ) to try to form a ruling
coalition for the first time. The FPÖ got the most seats at the
election, but the president gave the incumbent conservative
People’s Party (ÖVP) a chance to form another government.
Those talks collapsed recently, and the new leader of the
ÖVP, Christian Stocker, has said he is willing to work with
the FPÖ.

Nicolas Sarkozy went on trial, again, in Paris. The

conservative former French president is accused of receiving
illegal funding for his campaign from Muammar Qaddafi, a
notorious Libyan dictator who was executed during an
uprising in 2011. Mr Sarkozy denies the charges. A judge
recently upheld another conviction for corruption. He has
avoided prison in that case by agreeing to wear a tracking
device.

An earthquake of magnitude 7.1 struck Tibet, killing at least

126 people. Rescue workers searching for survivors had to
cope with freezing conditions, as overnight temperatures
plunged to -18°C (-0.4°F).

In South Korea a court issued a new arrest warrant for the

president, Yoon Suk Yeol, after he thwarted a previous
attempt to haul him in for questioning by an anti-corruption
agency. Mr Yoon, whose brief declaration of martial law in
December has thrown the country into political turmoil, is
surrounded by hundreds of bodyguards at his official
residence.

Building BRICS

Indonesia formally joined the BRICS club of developing

countries that was created as a counterweight to the G7.
Founded by Brazil, Russia, India and China the organisation
also includes Egypt, Ethiopia, Iran, South Africa and the
United Arab Emirates.
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this-week/2025/01/09/politics

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The world this week

Business
None
1月 09, 2025 02:50 下午

Mark Zuckerberg announced that Meta would end the fact-

checking system on its Facebook and Instagram platforms,
and instead allow users to verify the accuracy of posts with
something akin to the community notes that X has
implemented. Meta ramped up its fact-checking after
Donald Trump’s first election win in 2016, but Mr Zuckerberg
accepts that it was responsible for “too many mistakes and
too much censorship” and that the new policy marks a
return to free-speech principles. Some saw the timing of the
rethink as bending the knee to Mr Trump.
Meanwhile, Meta added three new directors to its board,
including Dana White, an influential media executive and
vocal supporter of Mr Trump. The other two new directors
are John Elkann, the boss of Exor, which part-owns The
Economist’s parent company, and Charlie Songhurst, who
advises Meta on artificial intelligence.

Jensen Huang, the chief executive of Nvidia, unveiled a new

range of products and partnerships, and promised that his
company would be at the forefront of the revolution in
robotics. Nvidia has developed software that allows
businesses to train robots, including humanoid ones. He also
announced a venture with Toyota in autonomous cars.
Nvidia’s share price fell sharply, however, as investors bet
that the returns from all the shiny new investments are
years away.

Joe Biden’s decision to block a takeover of US Steel by

Nippon Steel of Japan was contested in a lawsuit filed by
both companies. The firms argue that Mr Biden’s order
sidesteps the “constitutional guarantee of due process” and
came about through “unlawful political influence”. Steel
unions in America are against the deal. The companies
pointed out that “No transaction involving a Japan-based
company of any kind has ever been blocked by the
president on national security grounds.” US Steel faces an
uncertain future without the merger.
https://t.me/+NA8muckncd4yNDUx

Going out with a bang

Proving that he’s not done yet despite his imminent

departure from the presidency, Mr Biden also banned
offshore drilling along most of America’s coastline, though
drilling in most of the areas covered by the ban is already
restricted and the western Gulf of Mexico is not included.
Donald Trump says he will reverse the order “immediately”
upon taking office.

Continuing the flurry of activity in the Biden administration

the Pentagon added CATL, the world’s biggest maker of
electric-car batteries, and Tencent, a tech giant, to its list of
Chinese companies that it suspects of having military links.
Both described their inclusion on the list as a mistake, and
Tencent said it would make no difference to its business. The
share prices of both companies swooned, however.

Ahead of the incoming change of government in America

Michael Barr is to step aside from his role at the Federal
Reserve as vice-chairman for banking supervision, but
will stay on as one of the central bank’s governors. Mr Barr
has rubbed up against Wall Street’s titans with his stricter
regulatory proposals, but he was forced to water down new
capital requirements in 2024 after robust opposition from
the likes of JPMorgan Chase and Goldman Sachs. As Mr Barr
is staying at the Fed, Mr Trump will have to name another of
its governors as the new banking supervisor.
The new year kicked off with turbulence in global bond
markets, as investors fretted about high levels of
government borrowing. The sell-off was worst in Britain,
with the yield on ten-year government bonds touching 4.9%,
the highest since 2008, during the financial crisis. Higher
yields threaten the government’s fiscal-stability rules, which
could result in yet higher taxes or reduced public spending.
China saw the exact opposite, as bond yields plunged to
their lowest level on record.
Higher energy prices helped push up the euro zone’s
annual inflation rate to 2.4% in December. Inflation has
been steadily rising in the currency bloc since September,
when it stood at a more than three-year low of 1.7%.

Getty Images agreed to merge with Shutterstock, which

will create the dominant player in the business of supplying
photographs and other visual content to the media. Both
companies are grappling with the rise of generative AI, and
both offer services that allow users to create their own AI
imagery.

Ready to rumble

A host of wrestling stars turned up in Netflix’s first

broadcast of WWE’s “Raw” programme. John Cena, The
Rock, Hulk Hogan and the Undertaker all made appearances
at Netflix’s latest foray into live streaming. It hopes to knock
out other competitors vying to dominate the streaming of
sports.
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this-week/2025/01/09/business

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The world this week

The weekly cartoon

None
1月 09, 2025 02:50 下午

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

Leader: Mark Zuckerberg’s U-turn on fact-checking is

craven—but correct
Business: Will Mark Zuckerberg’s Trump gamble pay off?
Science & technology: Training AI models might not need
enormous data centres
The editorial cartoon appears weekly in The Economist. You
can see last week’s here.
This article was downloaded by calibre from https://www.economist.com/the-world-
this-week/2025/01/09/the-weekly-cartoon

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Leaders
The capitalist revolution Africa needs
Free markets :: The world’s poorest continent should embrace its least
fashionable idea

Donald the Deporter

Immigration :: Could a man who makes ugly promises of mass expulsion
actually fix America’s immigration system?

The Putinisation of central Europe

Herbert Kickl and the hard right :: Austria could soon get its most extreme
chancellor since the 1940s

Just because Indonesia has nickel, doesn’t

mean it should make EVs
From nickel to pickle :: Economic nationalists are making a reckless bet

Pete Hegseth’s culture war will weaken

America’s armed forces
Women and the armed forces :: Donald Trump’s nominee for defence risks
driving away talent

Health warnings about alcohol give only half

the story
Thinking about the demon drink :: Enjoyment matters as well as risk

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Free markets

The capitalist revolution

Africa needs
The world’s poorest continent should embrace its least
fashionable idea
1月 09, 2025 02:50 下午
IN THE COMING years Africa will become more important
than at any time in the modern era. Over the next decade
its share of the world’s population is expected to reach 21%,
up from 13% in 2000, 9% in 1950 and 11% in 1800. As the
rest of the world ages, Africa will become a crucial source of
labour: more than half the young people entering the global
workforce in 2030 will be African.
This is a great opportunity for the poorest continent. But if
its 54 countries are to seize it, they will have to do
something exceptional: break with their own past and with
the dismal statist orthodoxy that now grips much of the
world. Africa’s leaders will have to embrace business,
growth and free markets. They will need to unleash a
capitalist revolution.

If you follow Africa from afar you will be aware of some of its
troubles, such as the devastating civil war in Sudan; and
some of its bright spots, such as the global hunger for
Afrobeats—streams on Spotify rose by 34% in 2024. Less
easy to make out is the shocking economic reality
documented in our special report this week and which we
call the “Africa gap”.

In the past decade, as America, Europe and Asia have been

transformed by technology and politics, Africa has, largely
unnoticed, slipped further behind. Income per person has
fallen from a third of that in the rest of the world in 2000 to
a quarter. Output per head may be no higher in 2026 than it
was in 2015. Two giants, Nigeria and South Africa, have
done atrociously. Only a few countries, such as Ivory Coast
and Rwanda, have bucked the trend.

Behind those figures lies a depressing record of stagnant

productivity. African countries are experiencing disruption
without development. They are going through social
upheavals as people move from farms to cities but without
accompanying agricultural or industrial revolutions.
Services, where ever more Africans find work, are less
productive than in any other region—and barely more
productive than in 2010. Poor infrastructure does not help.
For all the talk of using digital technology and clean energy
to leapfrog ahead, Africa lacks the 20th-century kit needed
to thrive in the 21st. Its road density has probably fallen.
Less than 4% of farmland is irrigated and almost half of sub-
Saharan Africans lack electricity.

The problem also has another, under-appreciated,

dimension. Africa is a corporate desert. In the past 20 years
Brazil has spawned fintech giants and Indonesia e-
commerce stars, while India has incubated one of the
world’s most vibrant corporate ecosystems. But not Africa. It
has fewer firms with at least $1bn in revenues than any
other region and since 2015 the number looks to have
declined. The problem is not risk so much as the fragmented
and complex markets created by all the continent’s borders.
For investors, Africa’s balkanised stock exchanges are an
afterthought. Africa accounts for 3% of world GDP, but
attracts less than 1% of its private capital.

What should Africa’s leaders do? A starting-point is to ditch

decades of bad ideas. These range from mimicking the
worst of Chinese state capitalism, whose shortcomings are
on full display, to defeatism over the future of
manufacturing in the age of automation, to copying and
pasting proposals by World Bank technocrats. The earnest
advice of American billionaires on micro-policies, from
deploying mosquito nets to designing solar panels, is
welcome but no substitute for creating the conditions that
would allow African businesses to thrive and expand. There
is a dangerous strand of development thinking that
suggests growth cannot alleviate poverty or does not matter
at all, so long as there are efforts to curb disease, feed
children and mitigate extreme weather. In fact in almost all
circumstances faster growth is the best way to cut poverty
and ensure that countries have the resources to deal with
climate change.

So African leaders should get serious about growth. They

should embrace the self-confident spirit of modernisation
seen in East Asia in the 20th century, and today in India and
elsewhere. A few African countries such as Botswana,
Ethiopia and Mauritius have at different times struck what
Stefan Dercon, a scholar, calls “development bargains”: a
tacit pact among the elite that politics is about increasing
the size of the economy, not just a fight to divvy up who
gets what. More of those elite deals are needed.

At the same time governments should build a political

consensus in favour of growth. The good news is that
powerful constituencies are keen on economic dynamism. A
new generation of Africans, born several decades after
independence, care a lot more about their careers than they
do about colonialism.

Narrowing the Africa gap calls for new social attitudes

towards business, similar to those that unleashed growth in
China and India. Instead of fetishising government jobs or
small enterprises, Africans could do with more risk-taking
tycoons. Individual countries need much more
infrastructure, from ports to power, more free-wheeling
competition and vastly better schools.

Another essential task is to integrate African markets so that

firms can achieve greater economies of scale and attain an
absolute size big enough to attract global investors. That
means advancing plans for visa-free travel areas,
integrating capital markets, plugging together data
networks and finally realising the dream of a pan-African
free-trade area.

Free to get rich

The consequences for Africa of simply carrying on as usual

would be dire. If the Africa gap gets bigger, Africans will
make up nearly all of the world’s very poor, including the
most vulnerable to climate change. That would be a moral
disaster. It would also, through migration flows and political
volatility, threaten the stability of the rest of the world.

But there is no reason to catastrophise or give up hope. If

other continents can prosper, so can Africa. It is time its
leaders discovered a sense of ambition and optimism. Africa
does not require saving. It needs less paternalism,
complacency and corruption—and more capitalism. ■

Read our special report:

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 calibre from
https://www.economist.com/leaders/2025/01/09/the-capitalist-revolution-africa-needs

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Immigration

Donald the Deporter

Could a man who makes ugly promises of mass expulsion
actually fix America’s immigration system?
1月 09, 2025 02:50 下午
NOTHING SCRAMBLES the mind like a Trump press
conference. On January 7th, at his winter palace in Florida,
the president-elect mused on annexing Canada, Greenland
and the Panama Canal—as well as tilting at offshore
windmills for supposedly killing whales. It was a mix of free
association, gleeful provocation and serious, world-changing
intent.
Less noticed on January 7th, the House of Representatives
passed the Laken Riley Act, which makes it easier to deport
unauthorised immigrants for minor crimes such as
shoplifting. Immigration is where the next administration is
likely to direct its first efforts after the inauguration on
January 20th. And here, too, Donald Trump promises that
same mind-scrambling cocktail. Illegal immigration is a
problem that lends itself to wild, crowd-pleasing and
destructive policies, as well as presenting opportunities for
beneficial reform. The path Mr Trump chooses will not only
say something about his presidency, it could also cause
ripples in the many other rich countries that have political
problems over immigration.

Under President Joe Biden chaos erupted at the border, at

least for a while. To their cost in the election, many
Democrats responded by blaming voters for being cross
about it. In the most recent numbers the Census Bureau
records a net increase of 2.8m immigrants in 2023. The
share of foreign-born residents in America has been higher
since 1885, when Frederick Trump left Germany for New
York, but it is the highest in a century. Although most
Americans welcome legal migrants and the country is good
at assimilating them, they resent it when immigrants claim
asylum and then disappear into a shadow labour market
while awaiting a court hearing.

Mr Trump takes office with a mandate to tighten controls. In

the campaign he extended the abhorrent rhetoric that
marked his first term, talking about immigrants “poisoning
the blood” of America. The contrast with that first term,
when fewer people were actually deported than under
Barack Obama, is that this time he seems to want the focus
on immigration to be real. His deputy chief of staff is
Stephen Miller, who yearns to restrict legal as well as illegal
migration. His border tsar is Tom Homan, one of the
inventors of the family-separation policy in his first term.
And he has threatened to deploy the National Guard to help
with deportations, where previous presidents used soldiers
just for logistical support.

Mr Trump will not be able to carry through his threat to

deport 15m people. Shipping out such a huge number would
be extraordinarily expensive and would shock the labour
market, raising the prices of goods and services that illegal
immigrants help provide. Research suggests that
deportations under Mr Obama slowed housebuilding by
throwing out so many plasterers and bricklayers. And mass
expulsions would be unpopular, because over half of all
irregular migrants have been in America for more than a
decade. They have jobs and families, and often live in blue
states that will not co-operate.

Instead Mr Trump is likely to look for a more practical policy.

The temptation will be to dump the problem on Mexico.
When deporting people, a big obstacle is finding
governments to take them. Mr Trump might therefore simply
turn back those who arrive via the southern border,
threatening Mexico with tariffs unless it lets them in. Yet it is
not in America’s long-term interest to destabilise its poorer,
southern neighbour. Mexico’s president, Claudia Sheinbaum,
recognises that helping America with immigration
enforcement is a high card in any negotiation with the
Trump administration and has signalled a willingness to
help. He should meet her halfway.

Another temptation will be to focus on theatrical cruelty as a

substitute for real action. Expect workplace raids with
camera crews in tow, harsh internment in border states and
ICE agents surging in sanctuary cities. As with the
Conservative Party’s plan to outsource Britain’s asylum
system to Rwanda, the point is partly to deter would-be
migrants. It is also to persuade voters that the government
is serious.

Cruelty for its own sake is wrong. By denying migrants’

humanity, it coarsens American values. It may also prove
unpopular. In the first Trump term Americans reacted
against splitting up families and caging children; support for
immigration rose. As soon as Mr Biden took office, support
for immigration fell. That dynamic creates room for Mr
Trump to accomplish something less harsh and more
enduring.

The first step is to beef up the border. Mr Trump is lucky,

because irregular crossings have already fallen sharply from
their peak in 2022, after the Biden administration made
deals with Mexico and other Latin American countries to
help curb the flow. Mr Trump may build on this by surging
immigration officials to the border, to make quick rulings on
whether claims are valid. He could also oblige asylum-
seekers to remain in Mexico until their cases are decided, as
he did in his first term. The second step is to focus
deportations on criminals, as his chief of staff has suggested
he will.

That could create consent for a third step that has long been
obvious yet unattainable politically. Both as a practical
matter and as an exercise in justice, America cannot deport
every unlawful migrant. Doing nothing means that around
11m people will spend their whole lives in America without
ever acquiring the right to live there. But unless immigration
flows are under control, amnesty for those already in the
United States risks attracting another wave to try to enter
illegally. The only solution is a deal that combines effective
border enforcement with a right to stay for law-abiding
migrants.
Deal of the century

Such a compromise is possible. No Republican politician can

outflank Mr Trump on immigration, and Democratic alarm
helps him appear tough. The chances are that he will want
to keep immigration as a wedge issue, pick fights with
Democratic governors and mayors, and leave things broadly
as he found them. But the conditions are there for him to do
a deal that has eluded the past five presidents—if he wants
to. ■

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Herbert Kickl and the hard right

The Putinisation of central

Europe
Austria could soon get its most extreme chancellor since the
1940s
1月 09, 2025 02:50 下午

HOW CONCERNED should Europe be at the rise of Herbert

Kickl, the leader of Austria’s hard-right Freedom Party, the
FPÖ? Following the collapse of attempts by the country’s
centrist politicians to keep him out of power after his party
came top at an election last September (though with only
29% of the vote), Mr Kickl now seems likely to become
chancellor. The FPÖ has been in government before, as a
junior partner. This time, it looks as though Mr Kickl will get
the top job. That is bad news for the country: he has called
for a “Fortress Austria” free from asylum-seekers and
employs rhetoric with Nazi overtones. And it consolidates a
worrying pattern of Russia-sympathisers gaining power
across central Europe.

Mr Kickl may not get everything he wants from a coalition.

With only 31% of the seats in parliament, he now hopes to
form a government with the support of the centre-right
People’s Party (the ÖVP), which refused to go into coalition
under his leadership until its attempts to construct an
alternative failed. It is now up to the ÖVP to see if a coalition
agreement can be struck. The hope is that some of Mr
Kickl’s more extreme positions can be negotiated away. If
not, the ÖVP should refuse to go into government with him.
That would probably prompt a fresh election, in which the
Freedom Party, polls suggest, would do even better. But that
may shock the centrist parties, who would still together
have more votes, into trying once again to form a moderate
governing coalition.

One possible conclusion is that Mr Kickl’s elevation is a

harbinger of far-right advances in Germany, which faces an
election in February. In fact, the two countries are very
different. The FPÖ has taken part in five national
governments, the first as far back as 1983, and in many
more state ones. The hard-right Alternative for Germany
(AfD), which polling suggests is on for its best-ever national-
election result of around 20%, has never been included in
any federal or state government, and the “firewall” that
excludes it shows no sign of breaking. The AfD came top in
the election in the state of Thuringia in 2024, but the other
parties kept it out of power.

The real worry is that Austria exemplifies the Putinisation of

central Europe. First came Viktor Orban, the strongman of
Hungary. Mr Orban has repeatedly delayed (though not
successfully blocked) European sanctions on Russia, refuses
to let weapons destined for Ukraine pass through Hungary,
and denounces Brussels and pro-democracy outfits like
George Soros’s Open Society Foundation. He has a like-
minded neighbour in Robert Fico, prime minister of Slovakia.
And later this year Andrej Babis, another Eurosceptical pro-
Russian could return to power in the Czech Republic. The
parties are already discussing how to maximise their
collective influence. It does not help that, under the hard
right, corruption may well flourish.

The contrast with those former Soviet-bloc countries on or

near the front line of Russia’s war is striking. Poland and the
Baltic states see Vladimir Putin for exactly what he is: a
murderous revanchist who invades his neighbours,
sabotages infrastructure across Europe and interferes with
democratic elections everywhere. Those a little farther away
seem content to gloss over his enormities, and to applaud
him instead as a defender of “traditional” values and a rival
to Western institutions in which they do not quite sit
comfortably. Mr Kickl’s FPÖ, for instance, is an official sister
party to Mr Putin’s United Russia.

Austria is a small country of 9m. It is not a member of NATO.

The drift to the hard right there matters a lot less than it
would in France or Germany. But it still matters. As Donald
Trump prepares to take office and the war in Ukraine enters
its fourth year, European unity is needed more than ever.
Another leader bent on fighting Brussels and opposing
collective action in the face of autocracy will delight only the
autocrats. ■

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new Opinion newsletter, which brings together the best of
our leaders, columns, guest essays and reader
correspondence.
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From nickel to pickle

Just because Indonesia

has nickel, doesn’t mean it
should make EVs
Economic nationalists are making a reckless bet
1月 09, 2025 02:50 下午

NOTHING EMBOLDENS politicians like defying the world’s

advice and being proved right. Such is the case in
Indonesia. In 2014 the country moved to ban exports of
unprocessed ores. The idea was to force companies that
crave its abundant minerals to refine them inside the
country, capturing valuable investment and creating jobs.
Multilateral institutions were sceptical. So was The
Economist. Falling ore-export earnings could widen the
current-account deficit and weigh on the shaky currency,
the rupiah, we warned at the time.

For one commodity, however, the arm-twisting has worked.

Indonesia has the world’s largest reserves of nickel, a crucial
ingredient in certain electric-vehicle (EV) batteries. Since
2020, when the export ban came into full force, it has come
to dominate the nickel market. Dozens of nickel smelters
have opened since 2020, as investors submit to the
government’s rules in order to lay hands on the metal.
Indonesia’s share of the world’s refined-nickel production
has doubled since 2020, to nearly half the total. In 2023
Indonesian exports of processed nickel were $22bn, or 9%
of the country’s total exports, up from 2% in 2019. The
nickel bonanza lifted Indonesia’s trade surplus to a record
high in 2022.

Indonesia’s resource nationalism has overwhelmed other

producers. Nickel mines are going bust from Australia to
Brazil; perhaps half are unprofitable. Indonesia’s, by
contrast, have been buoyed by a surge of investment from
Chinese mining giants such as Tsingshan. Chinese smelters
in Indonesia have been innovative. Because of Indonesia’s
geology, it was once thought that its nickel-ore deposits
were too expensive to refine at scale. But Chinese
companies have found a way.

Now Indonesia’s elite, led by Prabowo Subianto, the new

president, wants to go further. His government may soon
curtail supply to prop up prices, as if it were a one-country
OPEC for nickel. Those around Mr Prabowo dream of building
a top-to-bottom electric-car supply chain, from raw mineral
extraction and processing to battery-making and vehicle
assembly. Indonesia has nearly all the natural resources
necessary to build EVs, they reason. Why should anyone
else capture the value? The government is now trying to
pump up domestic demand for EVs with subsidies, and is
courting EV supply-chain investments from the likes of BYD
and Hyundai.

Yet Indonesia’s gung-ho industrial policy is wrong-headed.

Market power in nickel does not imply similar power over
the whole EV supply chain. Raw materials are only a small
part of the cost of the average EV. And when it comes to
other factors that determine where carmakers produce,
such as logistical capacity and local know-how, Indonesia is
less attractive than neighbours such as Vietnam and
Thailand. Indonesia is expanding supply during a period of
brutal competition in both the EV and battery markets, with
muted demand worldwide and overcapacity in China.
What’s more, the pricey nickel-based batteries Indonesia is
best-equipped to make are not what local consumers want.
They prefer vehicles made with cheap lithium-iron-
phosphate batteries. So far, domestic EV sales have been
paltry.

In short, Indonesia’s nationalistic approach is likely to be a

costly failure. In contrast to nickel processing, where its grip
on the ore gave it power over miners, in EVs it is trying to
subsidise its way to market share. Though its public finances
are sound, the fiscal toll of so many giveaways will be
heavy.

Given enough money and political attention, some sort of

supply chain will surely end up being created. But the costs
to Indonesia could vastly exceed the benefits. Officials
argue that foreign carmakers will train Indonesians, but this
seems unlikely on a large scale. The tally of planned
investments looks modest. And a lack of local expertise will
tempt firms to import foreign high-skilled labour.
A different approach is needed. Indonesia could specialise in
parts of the EV supply chain, such as nickel-battery
precursors, rather than trying to do everything. And if Mr
Prabowo wants to promote prosperity, he should focus on
broader reforms, such as curbing corruption, cutting red
tape and fixing a leaky tax system. If Indonesia must
subsidise something, then improving primary health care or
inefficient ports would be a better use of the cash than a
reckless bet on EVs. ■

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Women and the armed forces

Pete Hegseth’s culture

war will weaken America’s
armed forces
Donald Trump’s nominee for defence risks driving away
talent
1月 09, 2025 02:51 下午

FOR MILLENNIA war has been a largely male undertaking.

Women may have sparked conflict—think of Helen of Troy—
or in countless numbers been its victims. They have also
conducted daring missions behind enemy lines as spies and
saboteurs. But until recently most Western armies barred
women from serving in “ground close combat”. Over the
past decade, in America and Europe, many of those
restrictions have been lifted. Pete Hegseth, Donald Trump’s
nominee to run the Department of Defence, believes that
was a mistake. He is wrong. His effort to import the
country’s culture wars into the Pentagon will weaken
American military power.

The American and British armed forces opened all combat

positions to women a decade ago. Canada and some
European states did so before that. Many countries had long
resisted these steps. They worried that women would not be
up to the physical demands of being in the infantry, which is
tasked with closing with and killing the enemy; that they
would be more susceptible to injuries; and that the presence
of women would affect the cohesion of small units, a vital
factor in combat.

Some of those concerns were reasonable. Female recruits

do tend to be at greater risk of injury. Infantry combat
remains physically demanding. Technology has not entirely
changed that—even drone operators in Ukraine still lug
heavy equipment over difficult terrain under fire. An
experiment by the US Marine Corps showed that all-male
crews tended to be faster or better at key tasks, such as
loading artillery guns, moving ammunition and evacuating
casualties, compared with units that included women. In
practice, only tiny numbers of women will seek out infantry
roles. Even fewer will meet the requisite standards. In
Canada, which opened infantry roles to women 36 years
ago, women make up 4% of that branch. In America it is
1.4%. Even in Ukraine’s war of survival, there are
vanishingly few women serving in assault units.

But war is not just about ground close combat. Women

serve daily as fighter pilots and aboard warships. Moreover,
the soldiers at the front rely on support from the rear. That
includes logistics, intelligence and engineering. Almost 9%
of American field-artillery crews are women. In Afghanistan
and Iraq, where the distinction between rear and front line
often blurred, nearly 300,000 women served in America’s
armed forces with distinction. The range and precision of
modern missiles mean that women doing those ostensibly
non-combat jobs are at considerable personal risk. Western
armies, struggling to fill their ranks, need these women.

One problem is that armies have long accorded the greatest

prestige to combat branches, recruiting commanders and
generals disproportionately from them, assuming that only
those with direct combat experience will have the authority
to lead forces in battle. That need not be so. The Royal Air
Force recently appointed an engineer, rather than a pilot, as
a chief for the first time. The head of Finland’s army, one of
Europe’s most capable, served in a signals regiment. The
danger is that ambitious female soldiers, seeking promotion,
will feel compelled to pursue combat roles for which they
are typically less well suited. Modern armies that want to
maximise the talent in their ranks should reflect on the
pathways for promotion and the status accorded to different
roles.

Sisters in arms

The next administration is likely to do the opposite. Mr

Hegseth’s antipathy to women in combat is rooted in a
belief that the Pentagon has gone “woke”. He and others in
Mr Trump’s orbit believe that diversity, equity and inclusion
initiatives have infected the armed forces, undermined
combat effectiveness and eroded the warrior ethos. They
have no evidence.

It is true, for instance, that the US Army did change

standards for its basic fitness tests in 2022, allowing women
to lift less weight and to take more time to complete runs.
But studies conducted at the behest of the army showed
that scores on the older, sex-neutral tests did not predict
performance in combat or rates of injury. Female soldiers
who want to serve in combat positions must still pass more
demanding and specialised tests, which remain the same for
men and women.

Mr Hegseth has vilified General Charles “CQ” Brown, the

chairman of the joint chiefs of staff, and Admiral Lisa
Franchetti, the chief of naval operations, suggesting that
one got his job because he is black and the other because
she is a woman. These attacks are not just baseless, but
harmful and dangerous. America is at risk of losing its
military edge over China. Mr Hegseth’s crusade risks driving
out talented women and minorities from a force that needs
them more than ever. ■

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our leaders, columns, guest essays and reader
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Thinking about the demon drink

Health warnings about

alcohol give only half the
story
Enjoyment matters as well as risk
1月 09, 2025 02:50 下午

FOR MANY people, the new year brings both a banging

hangover and a solemn resolution never to get drunk again.
More than a decade ago Alcohol Change UK, which
campaigns to cut drinking, launched its “Dry January”
campaign. This year it reckons a third of British men will try
to stick to it.
In America Vivek Murthy, the surgeon-general, is also keen
to discourage drinking. Dr Murthy has recommended placing
warnings on alcohol to highlight the fact that it raises the
risk of some cancers, including breast and bowel cancer. If
so, America could become the third country, after South
Korea and Ireland, to require labels.

Drinking a lot is indisputably bad for you. Boozing has long

been associated with heart attacks, liver disease, stroke and
obesity. Drunks are more likely to get into fights or
accidents. Alcohol is addictive, and the World Health
Organisation (WHO) blames it for about one death in 20
around the world. The link with cancer is less familiar to
most people. Dr Murthy’s statistics suggest that women who
drink occasionally have about a 16.5% lifetime risk of
several common cancers, whereas those who have one
drink a day—America’s recommended maximum—have
about a 19% chance.

As the evidence of alcohol’s harms has piled up, the public-

health messages have become starker. The WHO says flatly
that there is “no safe level” of alcohol consumption.
America’s guidelines say that those who do not drink should
not start “for any reason”. In 2023 Canada published
guidelines recommending two drinks (roughly two cans of
beer) a week for those who want to remain in the “low risk”
category, down from 15 a week for men and ten for women.

It is all very sobering. But over-zealousness can be counter-

productive. Taken literally, the WHO implies that it is unsafe
to have even a sip of communion wine. If one bit of public-
health advice seems absurd, people may start to doubt
other bits, too.

And although there is unanimity that heavy drinking is very

bad for you, there is less agreement around light
indulgence. In December America’s National Academies of
Science, Engineering and Medicine concluded, with
“moderate certainty”, that moderate drinking (up to two
cans of beer a day for men or one for women, as per official
American advice) was associated with benefits rather than
harms. Benefits in heart health appeared to outweigh the
risks from cancer and other ailments, though the effect
disappeared quickly with extra quaffing.

Many scientists think that the benefits of light drinking are a

statistical mirage. But even if the WHO is right, and no
amount of alcohol is safe, that is only half the picture. After
all, there is no completely safe level of almost anything,
from flying to going on a date. Walking is good for you, and
touted at book length by the surgeon-general (“Step It
Up!”). But 7,500 American pedestrians were killed by cars in
2022.

People balance the dangers of an activity against the

benefits it brings. These days, suggesting that drinking
might have any benefits at all feels faintly heretical. But
many enjoy the taste of a good beer or wine, appreciate the
buzz it provides, or take pleasure in the social rituals, like a
pub visit or a dinner party, which it lubricates. That is why
the world is willing to spend $1.8trn a year on drink. All that
enjoyment belongs on the scales with the (equally real)
harm.

Some perspective: Canada’s new guidelines define “low

risk” as a one-in-1,000 chance of premature death owing to
alcohol. Boosting consumption from two to six drinks a week
raises the odds to one in 100. With walking, the lifetime risk
of being run over in America is about 1 in 470.

What to do in 2025? If you are a heavy drinker, almost

everyone would agree that it would be wise to cut down. For
all but the most risk-tolerant, the middle-class habit of
downing half a bottle of wine with dinner is worth
examining. But if you fancy a pint or two with friends every
now and then, you will be trading a tiny risk of harm for an
evening of warmth and good company. That is a trade many
rational people will be happy to make—especially amid the
cold and gloom of January. ■

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our leaders, columns, guest essays and reader
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Letters
Letters to the editor
On Africa, Germany, sulphur, Biden, Jimmy Carter, machine translation,
nicknames :: A selection of correspondence

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On Africa, Germany, sulphur, Biden, Jimmy Carter, machine translation,

nicknames

Letters to the editor

A selection of correspondence
1月 09, 2025 02:50 下午

Letters are welcome via email

to letters@economist.com

Africa’s debt burden

Your article about the World Bank struggling to serve all 78

poor countries was right to call out the debt crisis that
developing states face (“Stretched thin”, December 14th).
African governments pay much higher interest rates on
loans than Western governments and can pay sky-high
yields on government bonds, whereas the average for
Europe and North America in 2021 was 1.1%. Developing
countries paid a staggering $1.4trn in foreign-debt servicing
in 2023. Of Africa’s 35 low-income countries, 19 are in debt
distress.

This burden of external sovereign debt is a barrier to

achieving sustainable development and climate resilience,
diverting resources away from critical investments in health,
education and infrastructure.

The recent $100bn replenishment of the World Bank’s

International Development Association fell short of the
$120bn that African leaders called for, but it is nonetheless
an important step forward in addressing the crises the
continent faces and should be celebrated. The IDA must
now be leveraged to achieve an even greater impact,
prioritising African-led initiatives and addressing the climate
needs of the most vulnerable on our continent.

William Ruto
President of Kenya
Nairobi
Elon Musk is half right

Although Elon Musk’s electoral recommendations in

Germany are flawed, his article in Welt correctly articulated
the feelings of many Germans that the four main centrist
parties have proved that they are not up to the enormous
task of getting the country back on track economically and
geopolitically (“Muskular intervention”, January 4th). The
centre-left is hooked on unsustainable welfare spending, a
ballooning bureaucracy that sucks up ever more of
Germany’s precious talent and an economic doctrine based
on subsidies. The centre-right is religiously wedded to the
debt brake, which stifles badly needed public investment in
infrastructure and education, and still has not understood
that German industry is struggling with new technologies
precisely because it has constantly been mollycoddled and
“protected” from change.

Although the conclusion Mr Musk draws is hopelessly

illogical and inaccurate, it reflects the justified exasperation
of the German public with centrist parties and much of the
country’s media for being infuriatingly unwilling to face the
music. Exhibit A is the op-ed editor who resigned over the
publication of Mr Musk’s piece. The childish reaction of Olaf
Scholz and Friedrich Merz unfortunately confirms not only
populists’ claim that free speech is under attack, but worse,
that Mr Musk may be right after all in calling for a radical
political shift. Should it stick, the blame is on them.

Veit Ulbricht
Düsseldorf

Sulphur pollution

Cleaning up the air reduces sulfate pollution and this

unmasks hidden warming (“Of clouds and Crutzen”,
December 21st). As Paul Crutzen noted, the best way to
slow warming is to limit all climate pollutants. Indeed, four
times more warming can be avoided over the next two
decades by cutting methane and other short-lived climate
super pollutants compared with the targeting of only
carbon-dioxide emissions.

The Montreal Protocol, an international treaty to protect the

ozone, is already eliminating hydrofluorocarbons, one of the
climate super pollutants, illustrating how similar sectoral
strategies could cut other super pollutants. The protocol was
catalysed by Crutzen, Mario Molina, and Sherwood Rowland,
co-recipients of the Nobel prize in chemistry. Thanks to their
efforts, the protocol has put the stratospheric ozone layer
on the path to recovery by mid-century, while avoiding the
warming that could have been equal to what carbon dioxide
causes. The protocol’s current science team is studying the
risk to the ozone layer of injecting sulfates into the
stratosphere to cool the planet, a strategy that may yet be
needed.

Durwood Zaelke
President

Gabrielle Dreyfus
Chief scientist
Institute for Governance and Sustainable Development
Washington, DC
The unsaid factor in 2024

I find it amazing that your leader on “What to make of

2024” (December 21st) did not mention Joe Biden, even
though you squeezed in your endorsement of Kamala Harris.
The Democratic Party and most of the media covered up the
senility of Mr Biden and told us that he was at the top of his
game until they could no longer perpetuate that lie. Mr
Biden had a profound impact on the presidential election.
And his lack of leadership contributed to the course of wars
and actions taken by dictators around the world.

Frank Haimbach
Delray Beach, Florida
Carter was no rube

I enjoyed your obituary on Jimmy Carter (January 4th), but it

was wrong to characterise him as “unintellectual…whose
formation had been in the navy, not university”. This was a
man who graduated in the top 10% of his class from the US
Naval Academy (surely a university by anyone’s standards)
and who briefly worked in the department designing
America’s first nuclear-powered submarines. He furthermore
devoted much of his long life to serious thought about the
solutions to society’s big problems. Does one have to attend
Georgetown and Yale Law to be considered an
“intellectual”?

Alan Supple
Fort Lauderdale, Florida
Lost in AI translation

“The Babel wish” (December 14th) repeated a company’s

claim that its machine-translation software is better than
human translators. I would be cautious about that, since
such claims have been made in the past and then
debunked. You also said that human checking of AI machine
translation adds little value. But remember that AI systems
can go off the rails and make serious errors, so that even if
human checking does nothing in 90% (or even 99%) of
cases, it still is important for the remaining 10% (or 1%).

Ehud Reiter
Professor of computing science
University of Aberdeen

The adage goes that translations can be good, fast and

cheap, but you can only ever pick two of the three. AI
currently has the last two covered, but what’s to stop
providers jacking up prices once they have a stranglehold
on the market? A similar AI takeover and subsequent supply
shrinkage has already happened in the transcription
industry, and now users who have been hit with extortionate
increases in licence fees are looking to rehire human
transcribers, only to find that they have long since moved
on.

I have yet to see a single piece of raw machine output that

hasn’t required complete rewriting. I recently received a
request to “tidy up” a machine translation, yet there were a
number of issues that would not have been present in a
human translation, such as missingspaces betweenwords,
full stops in strange. places, medical terminology translated
differently from one line to the next, and nonsensical
sentences talking about “establishing the abdomen” (the
correct translation was “establishing pneumoperitoneum”).

Admittedly this was a technical document, but as you say,

even the simplest of tasks can trip the machine up. If even
that proves problematic, would you be comfortable leaving
your legal contract, nuclear-safety testing procedures,
medical-device instructions or marketing campaign to a
machine? The sad reality of all this is that more than half
the freelance translators questioned in a recent survey are
considering leaving the industry, and can you blame us?

Lee Anderson
Co-founder
Word of Mouth Translations
London
The real Top Gun

Bartleby’s column on nicknames (December 21st) made me

think of my career as a fighter pilot in the navy. The fighter
squadron is a tight-knit group that trains, deploys, fights,
and in some cases, dies together. As a result, each pilot
carries a call sign with them throughout their career. Unlike
the movies, the call sign is given to you and is rarely as cool
as “Maverick” or “Iceman” (unless you are in the air force, in
which case you will meet many “Vipers” and “Killers”).

Some of my favourites were acronyms, such as SYPHIN,

which stands for Shut Your Pie Hole Ignorant Nugget
(Nugget is the term for a new aviator). This is given to
someone who tries to “fix” the squadron five minutes after
joining it. And there were simple plays on last names, such
as NOTSO Swift. Some think this tradition is demeaning and
exclusionary. In fact, as Bartleby pointed out so well, when
done properly it does just the opposite. If the call sign is
given from the bottom-up and not the top-down, it makes
one feel part of the group faster. Everyone has endured a
call sign that may not be to their liking. The only thing
worse is the group not giving you one at all.

Mark Swinger
Retired commander, US Navy
Springfield, Virginia

After reading Bartleby’s nicknames for buildings I recalled

the acerbic description of the Transamerica building by Herb
Caen, the supreme arbiter of all things San Franciscan. The
beloved columnist labelled the new triangular pyramid
arising from San Francisco’s financial district in the 1970s,
as the world’s greatest dunce cap. City fathers were not
amused.

Linda Nakamura
San Francisco
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By Invitation
Time is not on Russia’s side, argues
Finland’s foreign minister
Russia and the West :: Elina Valtonen calls for a lower oil-price cap and
tougher measures against Russia’s shadow fleet

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Russia and the West

Time is not on Russia’s

side, argues Finland’s
foreign minister
Elina Valtonen calls for a lower oil-price cap and tougher
measures against Russia’s shadow fleet
1月 09, 2025 02:50 下午

The audio version of this story is available in our app. It

has been produced using an AI voice. Learn more.

RUSSIA IS FAR from an unstoppable force of nature. The

autocrats who run it rely on a war economy that is
unsustainable and shows serious cracks. Democracies
should take advantage by increasing the economic pressure.
It is we who have the momentum.

Contrary to Vladimir Putin’s narrative, and some people’s

belief, sanctions do work. Even when they do not prevent
certain goods and technologies from entering or—in the
case of oil and gas—leaving Russia, they certainly make
logistics more cumbersome. That increases costs.

Witness the rise in Russian consumer prices, which are up

by more than a third since the end of 2021. This is due
mostly to the rise in import costs and the country’s labour
shortage translating into high nominal wage inflation.

Owing to a low birth rate, high mortality and an exodus of

Russians who oppose Mr Putin or just want a better life
elsewhere, Russia’s population is shrinking, ageing and
losing its best talent. The senseless war in Ukraine, with
hundreds of thousands of casualties, is not helping.

To combat inflation and capital flight, the central bank has

raised its key interest rate to 21%. Double-digit interest
rates push up the interest expense of the public sector,
incentivise businesses to place liquidity in deposits rather
than in investments, and eat into profits. Yields on BBB-
rated corporate bonds have climbed to levels that point to a
surge in bankruptcies.

In 2024 Russia’s GDP grew by around 3.5%. This relatively

strong performance came almost exclusively from sectors
directly related to the war. Most forecasters expect barely
any growth in 2025 as Russia runs out of labour and other
resources. Despite all this, Russia can maintain the current
level of military production, even if it means cutting back on
everything else.
Military spending is eating up the budget and Russia has to
fund its deficit through borrowing. With little to no access to
international capital markets, Russia borrows domestically.
New debt is absorbed by domestic banks, which place the
government bonds at the central bank for cash. Essentially,
the central bank is printing money to finance the
government’s spending on the war.

The rouble has weakened significantly and would be on the

floor were it not for central-bank support through
emergency buying and capital-control mechanisms. The
central bank is unable to use most of its international
reserves to prop up the currency, as roughly half of the
reserves are frozen overseas and most of the remainder is
physical gold, which, because it sits in Russia, is not as
liquid in international transactions as it would be if it were in
London or New York. In the past six months the rouble has
fallen by more than 20% against the Chinese yuan, driving
up import costs.

With the economic outlook so bleak, time is not on Russia’s

side. So far Mr Putin has prioritised his war against Ukraine
over the welfare of his own people. To achieve just and
lasting peace in Ukraine, he must be made to understand
that the cost of his illegal campaign is getting too high, even
for his tolerance.

To this end, we need to increase the economic pressure on

Russia and reduce the possibilities for dodging sanctions,
including the use of a shadow fleet. Russia uses rusting,
non-insured tankers to covertly carry Russian oil around the
world, undermining the EU and G7 oil-price cap on Russian
crude and petroleum products.

Following the latest damage to undersea cables in the Baltic

sea, affecting several coastal states, Finland recently seized
a Russia-linked oil tanker. The vessel appears to be part of
Russia’s shadow fleet and is suspected of intentionally
damaging undersea infrastructure.

Several measures for limiting the use of the hazardous fleet

are in the works. In December, 12 European countries,
including my own, announced that their maritime
authorities will start requesting proof of insurance from
suspected shadow vessels as they pass through the English
Channel, the Danish Straits of the Great Belt, the Sound
between Denmark and Sweden and the Gulf of Finland. Non-
compliant vessels will be placed under sanctions, which, in
the EU’s case, would ban them from the bloc’s ports and
maritime services.

Across Europe, decoupling from Russian energy is well under

way. Direct and indirect gas and oil imports need to be
further constrained. The oil-price cap, currently at $60 per
barrel, should be lowered further and enforcement of the
cap strengthened in conjunction with international partners.

In parallel with increasing economic pressure on Russia,

Europe, America and their partners must continue
supporting Ukraine militarily and economically. As Donald
Trump prepares to take office for a second time, Europeans
must stand ready to shoulder greater responsibility for their
own security, and make the required financial investments.

Under President Joe Biden, America has been a strong

backer of Ukraine’s fight for independence and democracy—
underlined by Mr Biden’s recent announcement of an
additional $2.5bn in security assistance. Early indications
from the incoming American administration are
encouraging. Although Mr Trump and his team have made it
abundantly clear that they expect Europeans to do more for
the continent’s security, I do not expect America to walk
away from helping Ukraine, or from Europe as a whole. Such
a move would diminish America’s global influence and
undermine its ability to compete strategically with China
and others.

The war is far from lost. With determined support from its
partners, Ukraine will get through this winter in a position to
enter peace talks on its own terms and timeline. Ukraine’s
international partners need to keep up their joint measures
until Russia starts to engage with the world in a peaceful
manner, respecting the UN Charter and international law.■

Elina Valtonen is Finland’s foreign minister.

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Briefing
How far will Donald Trump go to get rid of
illegal immigrants?
Deportation fixation :: It is his signature policy, but the obstacles are
daunting

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Deportation fixation

How far will Donald Trump

go to get rid of illegal
immigrants?
It is his signature policy, but the obstacles are daunting
1月 09, 2025 02:50 下午 | STORM LAKE, IOWA

“WE’LL GET National Guard, and we’ll go as far as I’m

allowed to go, according to the laws of our country,” said
Donald Trump in November, explaining his plan to rid
America of illegal immigrants to Time magazine. “Whatever
it takes to get them out.”
Of all the policies the president-elect has promised to
pursue in his first days back in office, none seems as
important to him as deportation. Immigration is the topic,
he told Time, that secured his re-election. Even by his own,
histrionic standards, his rhetoric on the subject has been
heated. Undocumented immigrants, he has said, are
“poisoning the blood of our country”. They come “from
prisons and jails, insane asylums” and “savage gangs”.
They have “occupied” parts of America; their strongholds
are a “war zone”. There may be 21m of them, he has
claimed—an “invasion” that justifies the deployment of the
army to round them up. The only solution, he insists, is “the
largest deportation operation in American history”.

Mr Trump has long been exercised about immigration. He

made building a wall along America’s border with Mexico a
central theme of his election campaign in 2016. He duly
issued a flurry of executive orders on immigration within
weeks of taking office in 2017, including a ban on visas for
applicants from various largely Muslim countries and
instructions to federal agencies to expedite the construction
of the border wall and to detain more illegal immigrants.
Those initiatives quickly lost momentum, however, owing to
legal setbacks, institutional resistance and a public
backlash. Mr Trump has signalled that a similar policy
whirlwind can be expected after his inauguration on January
20th. How far will he go this time to keep his campaign
pledges?

In 2017 Mr Trump appointed sober institutionalists to senior

posts, who then tried to restrain his nativist impulses. In the
new Trump administration, MAGA warriors will hold the top
jobs on immigration. Stephen Miller, his deputy chief of
staff, is an America First, anti-immigration hawk who has
been fighting against bipartisan immigration reform in
Congress since 2013. “As God is my witness,” he declared
last year, “you are going to see millions of people rapidly
removed from this country who have no right to be here.”

Travel agents

Mr Miller’s comrade-in-arms will be Tom Homan, who led

Immigration and Customs Enforcement (ICE), the agency
that carries out deportations, during Mr Trump’s first term
and is set to become “border tsar” in his second. He can
sound as doctrinaire as Mr Miller, threatening local officials
who resist mass deportations with jail time. He used to
champion the separation of undocumented children from
their parents as a way to deter illegal immigration. Yet Mr
Homan has a pragmatic streak, too, having worked in the
immigration bureaucracy since the 1980s under Democratic
and Republican presidents alike. Officials who know him say
he understands what the federal government is and isn’t
capable of.

The task before them is daunting. It is not even clear how

many illegal immigrants there are in America. Mr Trump
likes to claim that Mr Biden has let in 15m or 20m and that
all of them must go. But these numbers seem to be plucked
from thin air. The Department of Homeland Security (DHS)
estimated that there were 11m unauthorised migrants in
America in 2022. Since then Border Patrol agents have
apprehended millions more, mostly near the Mexican
border. Many of these have promptly claimed asylum, which
allows them to stay in America while their claims are
assessed. Oxford Economics, a consultancy, has tried to tot
up the number of asylum-seekers, “gotaways” (people who
evade Border Patrol) and those who have overstayed
legitimate visas and has concluded that 8.3m unauthorised
migrants have entered the country since the beginning of
2022, although the asylum-seekers account for more than
half of these and are not technically illegal immigrants. A
common estimate puts the current number of
undocumented at more than 13m. Most live in the most
populous states: California, Texas, Florida and New York.

Counting deportations is tricky, too. When an immigrant

caught by Border Patrol opts to turn back into Mexico rather
than be arrested, that is a “return”. These were common
during George W. Bush’s presidency, when many of those
crossing were Mexicans looking for seasonal work. But
returns have fallen as the number of migrants from farther
afield has risen and the asylum trick has grown popular.
“Removals”, when the authorities issue a formal deportation
order, leapt under Barack Obama, but then fell back again,
including under Mr Trump (see chart 1).
The big question is what the “mass” in Mr Trump’s promise
of “mass deportation” really means. His acolytes know that
legal, logistical, financial and political obstacles make
deporting many millions of immigrants in four years a
fantasy. But they speak admiringly of “Operation Wetback”,
a deportation drive in 1954 in which as many as 1.1m
people were ejected. J.D. Vance, Mr Trump’s running-mate,
has suggested that their administration could “start with
1m…and then we can go from there”. Even that is more
than twice as many people as ICE deported in 2012, the
recent peak. And even deportations on that reduced scale
could hobble America’s economy and prompt a political
backlash.

Incoming officials say they will prioritise dangerous criminals

and threats to national security—as most recent
administrations have done. But John Sandweg, an acting
director of ICE under Mr Obama, points out that there simply
are not that many criminals among the undocumented.
Since 2017 just 1.4% of new immigration-court cases were
based on a migrant’s alleged criminal activity, not including
entering the country illegally. Of those deported who do
have criminal records, the most common offence other than
illegal entry is driving under the influence. If Mr Trump’s
crusade starts and ends there, it would vindicate people like
Jeh Johnson, who ran DHS for Mr Obama and dismisses
“mass deportation” as a hollow slogan for bumper stickers.

To run up the numbers Mr Trump would need to widen the

net. After criminals, the obvious next target is migrants
already ordered deported who have not actually left. ICE
reckons 1.4m such people remain in the country. Many are
in jail. Some others are monitored with technology like ankle
tags, but not all: last year nearly 38,000 people awaiting
deportation fled.

Mr Trump’s penchant for shows of force means workplace

raids are likely. An analysis of census data by the Pew
Research Centre suggests that unauthorised immigrants
made up nearly 5% of America’s labour force in 2022, or
roughly 8.3m people. Their numbers will have grown since.
Although some migrants use forged documents to obtain
work, government schemes that allow employers to check
workers’ immigration status have curbed this practice. In
some industries, such as farming and construction, many
employers simply look the other way. “We know that
employers are going to be upset,” Mr Homan recently told
the Washington Post.

Communities that depend on immigrant labour are worried.

The centre of Storm Lake, a town of 11,000 in north-west
Iowa, features a Vietnamese noodle joint, a shop selling
quinceañera gowns and an African grocery. Spanish lyrics
blare from pickup trucks idling at traffic lights. Storm Lake
has experienced several waves of migration, from Laos,
Mexico, Central America and most recently Micronesia,
reflecting where Tyson Foods, which runs the town’s two big
meatpacking plants, happens to be recruiting.

In a state like Iowa, which is 90% white, this has brought

tension. “I had people come into the police station and say,
‘It’s your job to remove these people,’” remembers Mark
Prosser, the town’s former police chief. These days most
Storm Lakers are proud of its diversity. Yet the surrounding
county is deeply conservative. Mr Trump won it in November
by 33 points despite, or perhaps because of, his pledge to
deport millions.

Punching packers

Mr Prosser argues that raids make headlines (which Mr

Trump will like) but not much difference. In 1996 he helped
plan one himself, to catch migrants using fake papers to
work in packing plants. But it took weeks of joint planning
with federal agents to secure only dozens of arrests and
deportations. “We spent a lot of money and a lot of time
thinking this would be some sort of effective investigation,”
he recalls, “but…we tore up the relations between the city
and our immigrant community.” Many locals hope Mr Trump
will be too scared of raising meat prices to harry packing
plants. Tyson anyway maintains that it does not employ
illegal immigrants.

The most radical step would be for ICE to start hunting for
illegal immigrants going about their daily business. In 2022
nearly 80% of unauthorised migrants had lived in the
country for more than a decade. Some 5.7m Americans,
most of them children, lived with an undocumented parent.
At a recent immigration-court hearing in Dallas, the
American wife and adult children of a Mexican man arrested
for drunk driving waited to testify about how his deportation
would up-end their lives. He had first come to America in
1998. Even in the absence of a mass deportation campaign,
migrants like him are split from their families every day.

Mr Trump suggests that instead of separating families, the

American spouses or children of immigrants could just
leave, too. He also says he would like to end automatic
citizenship for everyone born in America, even though it is
enshrined in the constitution. Former Trump administration
officials speculate that he may ban the issuance of
passports to children of unauthorised migrants. Although
such a decision would be challenged in court, it would prove
Mr Trump’s determination to shake up the immigration
system.

It is possible that Mr Trump’s tough talk is the point: that his

harping on about mass deportation is meant to deter more
immigrants from coming to America illegally and to
persuade those already here to leave. He could make it
harder for migrants to travel or open a bank account
without proof of citizenship, which might encourage recent
arrivals without roots to up sticks. Officials in Storm Lake
say residents have started asking whether they should
leave. Some studies attribute much of Operation Wetback’s
success to self-deportation. But the border was so porous in
the 1950s that workers could return to Mexico, wait for the
fuss to die down, and then cross back over. That is not true
anymore.

Whatever approach Mr Trump takes he will face the same

constraints that have bedevilled previous presidents. The
most obvious is the legal system. The backlog of
immigration courts has more than doubled since 2021, to
3.7m cases (see chart 2). At the beginning of 2023
immigrants could expect to wait an average of nearly three
years for a decision. People who lose their cases can appeal.
There are two main ways Mr Trump might try to get round
the court system. During his first term he expanded
“expedited removal” for those who do not claim asylum or
cannot stake a credible claim to it. Whereas deportations
had previously been streamlined only for migrants who were
arrested within two weeks of arrival and 100 miles of the
border, Mr Trump targeted people anywhere in America who
had arrived within the past two years. Expect that policy to
make a comeback soon after inauguration day.
A more extreme plan involves invoking the Alien Enemies
Act of 1798, which allows the president to detain and deport
citizens of countries at war with America. It was most
recently invoked by Franklin Roosevelt during the second
world war to detain Germans, Italians and Japanese. Mr
Trump argues that the presence of foreign criminal gangs is
tantamount to an invasion, so America is, in fact, at war. It is
doubtful the courts would agree with him, but they might
take some time to stop him.

Texas hold ’em

Logistical problems will also constrain the president. Mr

Homan says he needs 100,000 detention beds, more than
double the current total. Mr Trump could declare a national
emergency, allowing him to use defence funds to build
detention centres at military bases. He used the same
process in 2019 to help fund the border wall. Mr Miller has
floated the idea of building tent camps in Texas to serve as
a kind of purgatory between arrest and deportation. The
state’s land commissioner has even bought a 1,400-acre
plot near the Rio Grande and offered to lease it to Mr Trump.

Transporting migrants to their home countries is also hard.

Only Canadians and Mexicans can be driven across the
border. Other repatriations require flights. In 2023 the head
of ICE told Congress that an average removal flight cost
about $17,000 an hour. And not every country wants to take
its citizens back, although Claudia Sheinbaum, Mexico’s
president, has signalled that Mexico might consider
accepting non-Mexicans, perhaps as a way to avoid being
slapped with tariffs.
 Together for now

All this is expensive. Republicans in Congress are planning

to boost spending on enforcement. But it is not clear how
much or how quickly they will stump up. The American
Immigration Council, an advocacy group, estimates that
deporting 1m people a year would cost at least $88bn a
year. That is almost three times the combined budgets of
ICE and Customs and Border Protection in 2024.

Politics will also temper Mr Trump’s ambitions. A successful

mass-deportation campaign would require states and cities
to hand unauthorised migrants to federal agents. According
to records collected by Syracuse University, roughly three-
quarters of ICE arrests between 2014 and 2017 involved
hand-offs from local law enforcement. But many
jurisdictions run by Democrats decline to co-ordinate with
ICE. Mr Trump may try to compel these “sanctuary” states
and cities to co-operate by threatening to cut federal
funding. In the meantime it will be much easier to focus on
willing spots.
As border-crossings surged under Mr Biden, Denver
absorbed more migrants per person than any other big city.
But Mike Johnston, its Democratic mayor, still rejects mass
deportations. “We’ll partner on [deporting] violent
criminals,” he says, “but what we don’t want to see is the
101st Airborne be sent into Denver to pull a seventh-grade
girl out of history class.”

Mr Johnston’s concern stems from Mr Trump’s talk of using

the army to conduct deportations. The armed forces are
barred from enforcing civilian law. The president could,
however, deploy the National Guard to help with logistical
tasks like transport, surveillance and paperwork, while
leaving the arresting to the Border Patrol. “The 800-pound
gorilla in the room is the Insurrection Act,” says Joseph Nunn
of the Brennan Centre for Justice, a think-tank. It allows the
president to use the army to put down rebellions or restore
order—something Mr Trump might argue the circumstances
require.

How Americans react to Mr Trump’s deportation campaign

will depend on how aggressive it is. Last year Pew found
that 56% of registered voters favoured mass deportations.
Yet 58% also supported allowing unauthorised immigrants to
stay if they are married to an American citizen. During Mr
Trump’s first term photos of children in cages sparked
national outrage, forcing the administration to stop
separating families. Messrs Miller and Homan were
architects of that policy. Perhaps they have learned what
Americans are willing to tolerate in the name of border
security—or perhaps they have not. ■
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Asia
Indonesia nearly has a monopoly on nickel.
What next?
Back to the future :: Prabowo Subianto, the new president, wants to create
an electric car supply chain

Pakistan’s army puts a former intelligence

chief on trial
Spy games :: General Faiz Hameed is an ally of Imran Khan, who is
currently behind bars

What a 472-year-old corpse reveals about

India
Incorruptible :: St Francis Xavier is both venerated and despised

AUKUS enters its fifth year. How is the pact

faring?
Ambitious but expensive :: It has weathered two big political changes.
What about Donald Trump’s return?

Joe Biden’s mixed legacy on Japan

What are friends for? :: Security co-operation flourished, but a scuppered
steel deal leaves a sour taste

By resisting arrest, South Korea’s president

challenges democracy
Banyan :: His attempt to impose martial law failed. But Yoon Suk Yeol is still
causing trouble

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Back to the future

Indonesia nearly has a

monopoly on nickel. What
next?
Prabowo Subianto, the new president, wants to create an
electric car supply chain
1月 09, 2025 02:50 下午 | JAKARTA

IN 1996 TOMMY SUHARTO, the youngest son of Indonesia’s

dictator, set out to build the Timor, a national car. The plan
was to import models manufactured by Kia Motors, a South
Korean carmaker, and rebrand them. Kia would teach
Indonesians carmaking; strict local-content requirements
would ensure the economy benefited. But as a financial
crisis in 1997 battered Indonesia’s car market, 15,000
Timors sat idle in a car park. By 1998, as riots in Java
brought down the Suharto regime, embarrassed Indonesians
who owned the national car tore off their “T” logos. Under
pressure from furious trade partners, the Timor was
withdrawn.

Yet the economic-nationalist spirit that infused the Timor

has never quite gone away. Today, it animates Indonesia’s
programme of “downstreaming”, or moving towards higher
value-added activity. The policy is being championed afresh
by Prabowo Subianto, the new president.

One mineral is the linchpin of this policy: nickel, a crucial

material for electric vehicle (EV) batteries. A nickel-ore
export ban came into force in 2020. Now, Indonesia
dominates global nickel-mining and smelting. It produces
nearly half the world’s refined nickel and two-thirds of its
mined nickel. Both shares have doubled since 2020. In 2023
Indonesian exports of processed nickel amounted to $22bn,
or 9% of total exports, up from 2% in 2019.

As Indonesia’s market share has multiplied, so too has the

grandeur of its politicians’ ambitions. With local content
requirements as a stick and lavish tax incentives as a carrot,
the idea is to create a complete EV supply chain on
Indonesian soil. So far, only China has managed to do this.
Even so, politicians are bullish. Luhut Pandjaitan, the
architect of downstreaming, thinks Indonesia could be a top-
three producer of both batteries and EVs by 2027.

Such estimates are not mere hyperbole. The country has

reserves of nearly all the necessary raw materials to build
EVs, from copper to cobalt. Moreover, virtually no one
foresaw Indonesia’s abrupt takeover of the nickel market,
powered by new smelting technology and investment from
Chinese mining firms. At a conference in Jakarta, the capital,
on November 26th, the mood was defiant. “For us, this is a
matter of survival,” Mr Luhut told investors.

Electric dreams

What are downstreaming’s aims? First is Mr Prabowo’s

ambitious target for Indonesia’s GDP to grow by 8% each
year, which officials hope to achieve by supercharging
export-oriented foreign direct investment (FDI). (The
average growth rate has been around 5% over the past two
decades.) Another goal is to boost growth beyond Java.

An additional motive is that Indonesia’s policy wonks,

haunted by the rupiah’s plunge during the Asian financial
crisis of 1997, want to bolster the currency by exporting
more. They also want to reverse premature
deindustrialisation. Since 2002 Indonesia’s manufacturing
value-added share of GDP has nearly halved. Finally, as part
of Mr Prabowo’s drive for energy security, he wants to foster
a domestic EV market. Once a member of OPEC, an oil
cartel, Indonesia became a net oil importer in 2004 after a
decade of declining production. (It is still declining.)
So far, downstreaming has had some successes. Since the
nickel-ore export ban, FDI has surged, largely into industrial
sites away from Java (see map). In Central Sulawesi, home
to a nickel-smelting complex, exports have risen from
$5.9bn in 2019 to around $21bn in 2024. The province, just
a third as rich as Java in per-person terms, has become
Indonesia’s second-most favoured FDI destination. In the
poorer province of South-East Sulawesi, which hosts several
smelting operations, manufacturing has grown at twice the
rate of regional GDP in recent years. (FDI boomed in 2020-
21 but has since slowed.) Nickel exports helped Indonesia’s
trade surplus reach a record high in 2022.

But efforts to boost reindustrialisation have been less

impressive. Indonesia’s realised foothold in the EV supply
chain is tiny. It is on track to produce 10GWh of battery
capacity this year, with another 25-45GWh in the pipeline
through 2027, reckons Putra Adhiguna of the Energy Shift
Institute, a think-tank. By contrast global capacity was
2,600GWh in 2023. Indonesia hosts just two of the world’s
over 400 planned or operational battery giga-factories,
according to Benchmark Mineral Intelligence, a research
service. This pattern holds for “midstream” investments in
battery ingredients, too. Indonesia’s FDI boom has created
“shallow industrialisation”, says Mr Adhiguna. Vast sums are
flowing into building one stage of the EV supply chain
(nickel processing), with a small sprinkling of investment
everywhere else.

Danger! High voltage

Officials counter that deployment takes time. “If you build

upstream [ie, minerals processing] and downstream first,
midstream investments will come,” says Septian Hario Seto,
Indonesia’s deputy minister of investment co-ordination. In
the meantime, hundreds of thousands of good-paying jobs
are being created in nickel smelting.

However, even this job creation is less impressive than it

seems. Patchy data makes the aggregate effect hard to
measure. But smelting is a capital-intensive investment. The
FDI surge has created temporary construction jobs that will
last only as long as the industrial sites are expanding. A
typical smelting plant initially employing 30,000 people only
generates a few thousand long-term jobs, says a mining
bigwig in Jakarta.

Regions that have experienced runaway export growth are

not seeing accompanying reductions in unemployment or
poverty. In Konawe, a rural area of 250,000 in South-East
Sulawesi that hosts an industrial park owned by Tsingshan, a
Chinese steel and nickel company, unemployment is above
pre-export ban levels, find Hilman Palaon and Robert Walker
of the Lowy Institute, an Australian think-tank. Workers’
associations report that mid-skill roles are being filled by
workers brought in from Java, while locals fill lower-level jobs
such as janitors, says Mr Palaon, who visited the area earlier
last year.

Indonesia is also failing to cultivate a demand base for

electric cars. It has rolled out a bewildering array of tax
nudges to lower the cost of electric two- and four-wheelers.
A recent paper by Siwage Dharma Negara, an Indonesia
expert, counts 12 distinct incentives or exemptions. A
charging-station network is being built; over 1,500 are in
operation. Even so, a low-cost gas guzzler remains 40%
cheaper than the equivalent EV. As a result, just 12,000
electric cars were sold last year, compared with overall car
sales of 1m.

Even among the EVs that have been sold, the vast majority
use non-nickel batteries. Nickel’s energy density gives
batteries superior range, but it is more expensive and less
durable than the main alternative, lithium-iron-phosphate
(LFP) batteries. Indonesia is better suited to cheap,
lightweight electric vehicles powered by the LFP type.
Moreover, the global EV battery market is already
oversupplied. The amount of batteries made last year in
China alone could fully satisfy global demand, according to
BloombergNEF, a research service. And other countries in
South-East Asia are competing hard for investment, such as
Thailand and Vietnam.

Finally, there are negative consequences of downstreaming.

Much nickel ore is situated under rainforests; extracting it
has led to huge deforestation. Smelting is a dirty business. A
drumbeat of harrowing industrial accidents has sullied the
industry’s reputation. America has put Indonesian nickel on
its “forced labour” list. Fishermen in islands off North Maluku
complain that heavy metal pollution is poisoning their catch.
The government has begun a clean-up effort. In October,
North Maluku-based Harita Nickel said it would undergo an
audit by IRMA, a Western mining-standards body. But the
chief environmental concern remains untackled: lethal air
pollution from burning coal (which powers two-thirds of
Indonesia’s electricity generation). The nickel-smelting
boom has led to even more burning; many of the new
industrial parks have dedicated coal plants on-site.

Indonesia will probably develop some sort of EV supply

chain thanks to downstreaming. But what is missing is a
judicious weighing of costs and benefits. The risk is that
Indonesia is spending vast state resources to grab a tiny
share of an oversaturated industry, creating a modest
number of factory jobs at a serious cost to the environment.
Tommy Suharto’s efforts were not totally in vain; tens of
thousands of Timor cars were sold. But, in the end,
Indonesians were no richer for it. ■
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Spy games

Pakistan’s army puts a

former intelligence chief
on trial
General Faiz Hameed is an ally of Imran Khan, who is
currently behind bars
1月 09, 2025 02:50 下午 | Islamabad

THE ROLE of director-general of Pakistan’s Inter-Services

Intelligence (ISI) is the second-most powerful job in the
country. In terms of its clout it is behind only the army chief
and ahead of the nominally elected prime minister. It is also
now a stop on the way to jail. On December 10th General
Faiz Hameed, head of the spy agency until late 2021, was
court-martialled by the Pakistan army.

General Hameed, who has been in custody since August, is

accused of, among other things, “engaging in political
activities” and violating secrecy laws. He is also being
investigated for “fomenting instability” alongside “vested
political interests”. A trial is under way and could last
several more weeks, according to Mian Ali Ashfaq, General
Hameed’s lawyer. His client has pleaded not guilty and
“categorically denies” all charges, he says. (Secrecy laws
prevent the defence from revealing the punishment General
Hameed faces.)

It is a dizzying fall. As spy chief, General Hameed browbeat

parliament, recalcitrant judges and dissident journalists. His
predecessors have been sacked, replaced and censured
before. But he is the first former director-general of ISI to be
put on trial. His alleged crimes are many but his sin is
singular: he is a close ally of Imran Khan, the jailed former
prime minister. General Hameed remained aligned with Mr
Khan even after a new military leadership soured on him.
“General Faiz thought he could become [director-general]
again if Imran Khan became prime minister again,” says
Faisal Vawda, a senator.

The trial of Mr Khan’s enforcer-in-chief signals further

trouble for the Pakistan Tehreek-e-Insaf (PTI), Mr Khan’s
party. In December military courts sentenced 85 of its
supporters, including a nephew of Mr Khan, to prison for
smashing up military sites in protests in 2023. America,
Britain and the EU have criticised the use of military trials
for civilians. On January 13th an accountability court is
scheduled to announce its verdict in the latest corruption
trial of Mr Khan and his wife.
Under pressure, the PTI is changing tack. Having failed to
win Mr Khan’s release through street protests, the party is
negotiating with Shehbaz Sharif, the prime minister. Two
rounds of talks have been held in parliament. The PTI wants
its prisoners released. The modest demands indicate the
PTI’s weak position.

There is an additional factor this year, too: Donald Trump,

the president-elect. A handful of pro-Khan tweets by Richard
Grenell, the incoming Trump administration’s envoy for
special missions, has sparked fervent speculation that the
next president may take an interest in Mr Khan’s plight. (Mr
Khan claims, falsely, that Joe Biden’s administration
orchestrated his ousting as prime minister in 2022.)

Meanwhile, trouble is growing outside the country. On

December 24th Pakistan launched air strikes inside
Afghanistan, targeting hideouts of the Pakistani Taliban.
Nearly 50 people died in the raids. On December 28th the
Afghan Taliban struck back across the border, killing a
Pakistani soldier. More violence is likely. It is a far cry from
September 2021, when General Hameed sipped tea in
Kabul, the capital of Afghanistan, and said, on the back of
America’s withdrawal from Pakistan’s neighbour: “Don’t
worry, everything will be okay.” So far it has not worked out
—for him or for Pakistan. ■
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Incorruptible

What a 472-year-old
corpse reveals about India
St Francis Xavier is both venerated and despised
1月 09, 2025 02:50 下午 | VELHA GOA

SOME BOW. Others halt in their tracks. But every person in

the queue reaches out, palm open, to touch the glass-
panelled casket, supplicating before the body and spirit of St
Francis Xavier. Reverence for departed religious figures is
not uncommon. What is unusual, is that the body of St
Francis Xavier is 472 years old. Roughly once a decade, the
Archdiocese of Goa organises an exposition of his relics. This
is the 18th exposition since 1752, which ended on January
5th. Nearly 8m pilgrims visited it. That is double the number
of visitors who came last time, says Father Barry Cardozo.
Christians, Hindus, Muslims and others asked for the saint’s
grace.

Born in Spain, St Francis Xavier was the most influential

member of the Society of Jesus (or the Jesuits), second only
to Ignatius of Loyola, its founder. He arrived in Goa in 1542
and spent the next ten years evangelising in India, Malacca
and Japan. On his way to China in 1552, he contracted a
fever, died and was buried on the island of Shangchuan. His
grave was opened on two occasions, once for transfer of his
remains to Malacca and again some months later. Both
times the body was found to be miraculously preserved. He
was brought to Goa in 1554 and canonised in 1622.

Today St Francis Xavier is the patron of Goa. His feast day

on December 3rd is a public holiday. He is beloved by locals
and is known as “Goencho Saib”, or the Protector of Goa.
But his influence extends further. In the age of empire,
“every year a sizeable number of Jesuits would write to the
Superior General in Rome [the leader of the Jesuits], asking
to be sent to India,” says Fr Charles Borges, a historian at
Loyola University in Maryland. “The only reason given was
Francis Xavier.” Jesuits in India spread agricultural
knowledge, popularised the printing press and set up
schools.

The most recent census, in 2011, found that 2.3% of Indians

are Christians—roughly 32m people today, or half an Italy.
Yet they have been increasingly targeted by Hindu-
nationalist groups, sometimes violently. In Goa last year a
local group installed Hindu idols outside a Goan church,
claiming that it had been built on the site of a razed temple.
In October a former senior member of a prominent Hindu
group caused a fuss by demanding a DNA test of Francis
Xavier’s relics. Right-wingers portray him as a tormentor of
Hindus for his role in the Goa inquisition.

It is undeniable that the inquisition was particularly bloody.

But if “for 450 years nothing happened, why now?” asks
Mario Monteiro, who has attended every exposition since
1984. Today Francis Xavier is a symbol of Goa’s—and India’s
—syncretism. That is the true target of the new holy
warriors. ■

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Ambitious but expensive

AUKUS enters its fifth

year. How is the pact
faring?
It has weathered two big political changes. What about
Donald Trump’s return?
1月 09, 2025 02:51 下午

The urge to submerge

FOUR YEARS ago America, Australia and Britain sent

shockwaves through the world of defence. The three allies,
working for months in secret, hatched an audacious plan.
Australia would cancel a deal to buy diesel-electric
submarines from France. Instead it would build nuclear ones
with the help of America and Britain in what would turn out
to be the most ambitious defence project for a generation.
How is it going?

The AUKUS deal, as it is known, is a multifaceted

megaproject. In “pillar one”, Britain and Australia will jointly
design and build an advanced nuclear-powered submarine,
SSN-AUKUS. Australia’s first boats will be built in Adelaide in
the 2030s. To plug the gap until then, it will buy American
Virginia-class submarines, ploughing cash into American and
British industry to smooth things along. In “pillar two”, the
countries are collaborating in advanced technologies.

The deal has already survived changes of government in

Australia and Britain. Australian submariners are training
aboard British and American attack subs and graduating
from the US Navy’s nuclear-power school. Technical colleges
are springing up in South Australia. And $5bn is being
poured into HMAS Stirling, a naval base in Perth, which will
host American and British subs from 2027. But in any multi-
decade scheme with so many moving parts, much could go
awry.

There are broadly four major risks to AUKUS. The first and
most immediate one is that Donald Trump refuses to sell
Virginia-class submarines to Australia. Mr Trump is thought
to support the deal, but some of his advisers worry that
America is building too few Virginias—1.2 or so a year, far
short of a target of 1.5 by the end of 2024—to spare any. “It
would be crazy for the United States to give away its single
most important asset for conflict with China over Taiwan
when it doesn’t have enough,” argued Elbridge Colby, Mr
Trump’s choice as the Pentagon’s top policy official, last
year.

A second risk is that Australians change their mind. Federal

elections are looming. The ruling Labor Party supports
AUKUS but it is divided within. If it limps on to a minority
government, it could depend on support from the Greens,
who oppose the pact. The risk is that the enormous cost of
AUKUS—between $166bn and $228bn over its lifetime—
could hollow out Australia’s armed forces, absent big rises in
defence spending. It remains popular for now. Last year fully
65% of Australians were somewhat or strongly in favour,
according to polling by the Lowy Institute, a think-tank.

The third hurdle is that British or Australian shipyards prove

unequal to the task. The Australian Submarine Agency, set
up in 2023, is already being reviewed amid claims of low
morale and the departure of key staff. In Britain Stephen
Lovegrove, a former national security adviser, recently
submitted a sweeping review of AUKUS. He is thought to
have warned that the project risks losing momentum, with
SSN-AUKUS being delayed, because of a lack of top-level
focus in London and Canberra and inadequate investment in
facilities.

The fourth challenge is that pillar two, the collaboration on

advanced tech, is going too slowly. The basic problem is that
it covers a dizzying range of activity, from deep-space
radars to quantum sensors. Many would like it to focus more
narrowly on a handful of areas with the greatest promise,
including submarine drones and hypersonic missiles. A
milestone came last year when America lifted its draconian
International Traffic in Arms Regulations, known as ITAR, to
let sensitive technology flow to Australia and Britain.

Despite these issues, the fact that AUKUS is alive and

ticking over after four years is encouraging enough for
people familiar with the fate of many multinational defence
projects, let alone ones that involve a country with no
nuclear experience building perhaps the world’s most
complex pieces of military hardware. “Pillar one is in okay
shape,” says an American insider closely involved in AUKUS.
That keeps alive the hopes of its authors: that, in two
decades’ time, five new cutting-edge subs will be prowling
the Pacific. ■
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What are friends for?

Joe Biden’s mixed legacy

on Japan
Security co-operation flourished, but a scuppered steel deal
leaves a sour taste
1月 09, 2025 02:50 下午 | TOKYO

WITHIN 24 HOURS on January 6th, two events took place

that encapsulate the mixed legacy Joe Biden will leave in
America’s relationship with Japan. That afternoon North
Korea tested an intermediate-range ballistic missile, and
America shared data about the launch in real time with
Japan and South Korea; such co-operation is the fruit of the
Biden administration’s efforts to foster closer ties between
allies in the Indo-Pacific. Later that day, Nippon Steel, a
Japanese steel firm, sued the American government over Mr
Biden’s recent decision to scupper its acquisition of US
Steel, an American one.

Under Mr Biden, security co-operation with Japan has

flourished. America and Japan have ramped up joint
exercises, deepened intelligence sharing and better
integrated their armed forces; the two have also worked in
closer concert with other American allies in the region. This
has all unfolded with the clear aim of deterring China. Rahm
Emanuel, America’s outgoing ambassador to Japan, argues
that the alliance is “better prepared” to do so than it was
four years ago.

That was hardly a given. Japanese officials met Mr Biden’s

victory in 2020 with some apprehension. Ahead of the
election that year, one senior Japanese foreign ministry
official even wrote an anonymous article praising Donald
Trump’s confrontational strategy towards China and
lamenting a possible return to engagement with China
under a Democratic administration. Those fears proved
unfounded. Mr Biden accelerated America’s hard turn on
China and made alliances central to his approach. “The
Indo-Pacific is a home game for China; it’s an away game for
the United States,” Mr Emanuel says. Allies like Japan help
to “level the playing field for us”.

Tighter security ties became possible because of changes in

Japan, which moved to accelerate its defence build-up in the
wake of Russia’s invasion of Ukraine. There was a realisation
that “things have to be moved into the second and third
gear by the Japanese for the Japanese,” says Mr Emanuel.
That spurred America to undertake long-discussed reforms
of its own, such as restructuring its command-and-control
systems in the region. Japan pushed America to “rip the
band-aid off and do something that we all knew had to get
done,” he reckons. The armed forces of the two allies have
never been closer.

Yet Mr Biden will leave office on a sour note with Japan. One
of his last acts as president was killing the Nippon Steel
deal, on the grounds that such investment from a Japanese
firm poses a national security threat to America. Japanese
reactions have been unusually sharp. Ishiba Shigeru, the
prime minister, demanded that America “clearly explain
why there are security concerns”. Japanese business leaders
expressed surprise and dismay; many say it may impact
future investment decisions. “This is a one-off case, but it
will still carry major ramifications,” argues William Chou of
the Hudson Institute, an American think-tank.

Japan and America have weathered frequent bouts of

economic friction in their decades-long alliance. No single
commercial transaction is big enough to throw the whole
relationship off-course. But the affair is indicative of
America’s broader protectionist turn. Japan’s biggest gripe
about Mr Biden’s approach to the Indo-Pacific has long been
the absence of a trade policy. One response for Japan may
be to seek closer economic ties with China; plans to host a
state visit for Xi Jinping, China’s leader, are reportedly in the
works. Mr Emanuel, for his part, calls for America to develop
a “more nuanced position” on trade, between “ignoring, as
we did over 30 years, all the downsides of trade” and “the
position that all trade is bad regardless of the benefit”.
Nuance, alas, is unlikely to be a hallmark of Mr Biden’s
successor. ■
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Banyan

By resisting arrest, South

Korea’s president
challenges democracy
His attempt to impose martial law failed. But Yoon Suk Yeol
is still causing trouble
1月 09, 2025 02:50 下午

AFTER YOON SUK YEOL’S attempt in early December to

impose martial law on South Korea failed, two stories
emerged. One was a tale of vulnerability: an assault on
democracy by the president himself is worrying, even if it
falters. The other was about resilience: South Korea’s
democratic institutions rose to the challenge, with citizens
rallying and lawmakers taking action to stop the self-coup
and, eventually, to impeach the president. In the
immediate, bleary-eyed aftermath, the resilient parts of the
country seemed dominant.

In recent weeks, however, vulnerability has come to the

fore. The constitutional crisis has only deepened and
partisan warfare has only become more bitter. That
culminated in the sorry spectacle of a stand-off on January
3rd between the country’s police, who sought to arrest Mr
Yoon on insurrection charges, and the presidential security
service, which chose instead to protect him. Ostensibly an
arm of the same state, the president’s bodyguards
barricaded the road to his residence to prevent his
detention. Mr Yoon and his lawyers contend that the criminal
proceedings against him are themselves illegal. On January
7th a court granted an extension of the arrest warrant;
investigators are gearing up for a second attempt to enforce
it.

Mr Yoon, ironically, first made his name as a defender of the

law, rising through the ranks of South Korea’s prosecutorial
service before launching his political career. He pledged to
“not avoid legal or political responsibility” for his declaration
of martial law. But he has done exactly that—and in so
doing has only brought more shame upon himself and his
country. The president’s residence is not a foreign embassy,
a sovereign island unto itself; it is subject to the laws of the
land it sits on. Mr Yoon is surely familiar with that principle.

Resolving the stand-off might be easier if South Korea’s

interim leaders had more authority. But the country is now
on its third president in as many weeks. Following Mr Yoon’s
impeachment, Han Duck-soo, the prime minister, took over
as acting president on December 14th. Just two weeks later
the National Assembly, led by the main opposition force, the
Democratic Party (DP), impeached Mr Han as well. DP
leaders contend that Mr Han played a role in the
insurrection; they were also peeved that he refused to
appoint new justices to the constitutional court, which is
hearing Mr Yoon’s impeachment case. Yet by rushing to oust
the caretaker president, a career technocrat, the DP has
hardly helped restore stability.

Choi Sang-mok, the deputy prime minister and finance

minister, took over from Mr Han. Mr Choi has ably led the
response to the crash of Jeju Air Flight 2216 on December
29th, the deadliest air disaster to occur on the country’s
soil. But he has largely stayed silent on the matter of Mr
Yoon’s arrest. The acting president says he is pursuing a
principle of non-intervention in political affairs. He may also
fear that he lacks the political capital to assert control.

The erosion of the rule of law and the chain of command

comes at a worrying moment. On January 6th, with Antony
Blinken, the outgoing secretary of state, visiting Seoul to
reiterate America’s commitment to its ally, North Korea
tested an intermediate-range ballistic missile. Although the
test was mostly a message to Donald Trump, ahead of his
inauguration later this month, it also serves as a reminder
that the turbulent world around South Korea will not wait for
it to resolve its own crises.

And a resolution remains months away. Impeachment

proceedings against the president, which are separate from
the criminal charges against him, have only just begun: the
first full hearing at the constitutional court will take place on
January 14th. While some two-thirds of South Koreans
believe that Mr Yoon should be impeached, even attitudes
on that question have split sharply along partisan lines.
According to a recent poll by KBS, the national broadcaster,
fully 96% of DP supporters believe Mr Yoon should be
impeached, whereas among supporters of Mr Yoon’s party
84% believe the case should be dismissed.

Mr Yoon has encouraged his base’s basest instincts. During

one rally outside his residence last week, a lawyer
representing Mr Yoon cast the struggle in existential terms.
“We are at war,” he railed. “You are the fighters in the war
to set the Republic of Korea back on track.” South Korea’s
democracy may have survived the initial assault, but the
battle for its future is far from over.■

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China
Does China have the fiscal firepower to
rescue its economy?
Debt, deficits and depressed consumers :: There is a fierce debate over
whether it can afford to keep spending

Militant Uyghurs in Syria threaten the

Chinese government
Hot TIP :: How much does China have to fear?

A pay rise for government workers sparks

anger and envy in China
Grains for the iron rice bowl :: The effort to improve morale has not had the
intended effect

A big earthquake causes destruction in

Tibet
The roof of the world shakes :: Dozens are dead, thousands of buildings
have been destroyed

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Debt, deficits and depressed consumers

Does China have the fiscal

firepower to rescue its
economy?
There is a fierce debate over whether it can afford to keep
spending
1月 09, 2025 02:51 下午 | HONG KONG

MAASTRICHT IS A small Dutch city that casts a big

economic shadow. European leaders gathered there in 1992
to sign the treaty that led to the euro. Serenaded by a
marching band, they vowed to keep their budget deficits
below 3% of GDP and their government debt below 60%.
The numbers made little sense; one prominent economist
has dismissed them as “fiscal numerology”. But they came
to define what counts as a respectable, squared-away fiscal
policy—even far beyond Europe. China, for example, has
taken pride in meeting these norms through thick and thin.
In 2009, at the height of the global financial crisis, its official
deficit was less than 2.8%.

It is striking, therefore, that China has breached the

Maastricht limit three times in the past five years (see
chart). “Special measures are required for special
circumstances,” the finance ministry said in 2020 after the
covid-19 pandemic struck. Five years later, what was special
is becoming routine. China plans to increase its deficit to 4%
of GDP in 2025, according to Reuters, a news agency.
With household confidence low, property investment
shrinking and exports threatened by tariffs, the economy
needs the extra fiscal push. By spending more itself, the
government hopes to encourage others to do likewise. On
January 8th China’s planning agency said it would enlarge
two “trade-in” schemes which offer financial help to firms
and households replacing old kit for new. Consumers can
now be offered subsidies of up to 500 yuan ($68) for new
smartwatches, phones and tablets. The scheme will also
encompass dishwashers, rice cookers and home decoration.
China’s government has long insisted that homes are for
living in, not for speculation. Now they’re for renovation,
too.

In November the finance minister, Lan Fo’an, insisted China

can afford such generosity, claiming it has plenty of fiscal
“room”. Is he right? One reason to worry is that the official
deficit covers only a fraction of public borrowing. If you add
the government’s three other accounts—covering social
insurance, land-financed infrastructure spending and
transactions with state-owned enterprises—the deficit was
probably 7.1% of GDP in 2024, according to Fitch, a ratings
agency. Even broader measures are possible. The IMF
calculates an “augmented” deficit, which includes a lot of
red ink that does not appear in the budget. One example is
borrowing by local-government “financing vehicles”, which
invest in infrastructure and other ventures. By this measure,
the IMF thinks China’s deficit this year could exceed 13% of
GDP and its debt could reach almost 129%.

When plugged into the IMF’s models, these figures suggest

China’s risk of debt stress is “high” in the medium term.
Credit-rating agencies have also taken note. China’s (on-
budget) deficit is more than double that of the median
country with a similar A credit rating, Fitch points out. In
April it said China was at risk of a downgrade. That could
make borrowing more expensive for the many state-owned
banks and enterprises whose ratings are tightly linked to the
sovereign’s.

China’s public finances also face longer-term strains. With

an ageing population, the share of GDP devoted to pension
spending will increase by about nine percentage points by
mid-century, estimates the IMF. The erosion of China’s
government revenues appears persistent. They began to
decline even before the pandemic, notes Jeremy Zook of
Fitch, falling from about 30% of GDP in 2018 to roughly 23%
in 2024. And China has yet to find a source of revenue to
replace land sales, which have suffered from the property
slump. In light of such difficulties, Rhodium Group, an
American research firm, has argued that China’s “fiscal
space” is a myth.

But a government’s room to borrow and spend partly

depends on what else is going on in the economy. The space
available depends on who else wants to fill it. If the private
sector is in an expansive mood, government deficits get in
the way, pushing up borrowing costs and inflation. China,
sadly, has the opposite problem. Households and private
entrepreneurs are in retreat, reluctant to spend and all too
eager to accumulate safe financial assets instead. That has
left the economy short of demand and prone to deflation:
consumer prices rose by only 0.1% in December, compared
with a year earlier. The rest of the economy’s eagerness to
save, not spend, has also made it extraordinarily cheap for
the central government to finance itself. It can now borrow
for ten years at yields of about 1.6%, a record low. The rest
of the economy is, in other words, making plenty of room for
the state to extend itself.

The demand for the government’s paper is helped by

China’s capital controls, which make it harder for domestic
investors to seek safe havens abroad. Many government
bonds are held by banks that the government happens to
own. Indeed, just as China’s tentacular state has liabilities
scattered all over the economy, it has a sprawling collection
of assets, too. W. Raphael Lam and Marialuz Moreno-Badia
of the IMF estimate that fiscal deposits in the banking
system amounted to about 18% of GDP in 2019 (excluding
money earmarked for payments for services). The
government’s equity holdings in state-owned firms and
financial institutions totalled another 68%. The social-
insurance funds also held assets exceeding 2% of GDP.

Whatever the long-term risks, the central government

therefore has the wherewithal to rescue the economy from
its immediate predicaments. The IMF has urged Beijing to
end China’s property crisis by providing more of the
financing required to complete pre-sold, but unfinished,
buildings (or to compensate their buyers).

The likely aim of China’s fiscal push is to bolster the

confidence of households, according to Mr Zook. The more
of their income households spend, the less the state will
have to do to prop up demand.

A revival in private borrowing and spending could make

government deficits more expensive and harder to sustain.
But it will also make deficits less necessary. The government
can then cut back without jeopardising the recovery. “The
boom, not the slump, is the right time for austerity at the
Treasury,” said John Maynard Keynes during the Great
Depression. His budgetary maxim is many decades older
than the Maastricht treaty. It deserves to cast an even
longer fiscal shadow. ■

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Hot TIP

Militant Uyghurs in Syria

threaten the Chinese
government
How much does China have to fear?
1月 09, 2025 02:50 下午

AS REBELS STORMED across Syria late last year, eventually

toppling the country’s dictator, Bashar al-Assad, some were
accompanied by fighters from a foreign militant organisation
—one with ambitions that extend far beyond Damascus.
These men had roots in the Chinese region of Xinjiang and
were members of the Turkistan Islamic Party (TIP), a group
which aims to establish an Islamic state spanning Xinjiang
and other parts of Central Asia.

The history of the TIP is fuzzy, including name changes,

alleged ties to jihadist organisations and assertions of
responsibility for attacks on Chinese targets. The group was
established by Uyghur refugees from Xinjiang in Pakistan in
1997. Over the next decade it developed links to the Taliban
and al-Qaeda. China and several other countries, such as
Britain, view the TIP as a terrorist organisation. Leaders in
Beijing have used its actions to justify their repression of the
Uyghurs and other Muslim minorities in Xinjiang.

China’s abuses in Xinjiang, where it is accused of arbitrary

detention and forced labour, have caused tens of thousands
of Uyghurs to flee the country. In the 2010s many travelled
to Turkey, where they struggled. Across the border in war-
torn Syria, rebels in control of the area around Idlib offered
the Uyghurs a haven. It is not known exactly how many
went. Most were civilians. But in 2017 Mr Assad’s
ambassador to China said that between 4,000 and 5,000
Uyghurs were fighting in Syria.

Some of these Uyghur militants joined Islamic State. The

majority, though, are associated with the TIP. When Hayat
Tahrir al-Sham (HTS), the dominant rebel group in Syria,
took Aleppo in a surprise attack on November 29th, it rolled
into the city with TIP fighters. A week later, with Mr Assad
about to fall, Abdul Haq al-Turkistani, the TIP’s leader,
released a statement. “The Chinese disbelievers will soon
taste the same torment that the disbelievers in [Syria] have
tasted, if God wills,” it read.

The Chinese government has long expressed concern about

the TIP’s presence in Syria. In 2016 it began holding
monthly talks with the Assad regime to share intelligence on
the group’s movements, reported the AP. On December 31st
a Chinese foreign-ministry spokesperson called on all
countries to “recognise the violent nature” of the TIP and
“crack down on it”.

But other countries may have little to fear from the group.
Like many jihadists, the TIP used to wave a black flag with
the shahada, or Muslim profession of faith, written in white.
Now, though, it sports a version of the flag of East
Turkestan, the Uyghur name for Xinjiang. “The TIP has no
real interest in global jihad, nor gripes against the West,”
says Sean Roberts of George Washington University. “Their
focus is the independence of their homeland.” As the group
has come to seem less Islamist, it has gathered support in
Xinjiang, according to Uyghur activists.

How much does China have to fear from the TIP? The group
has claimed attacks inside the country, and been officially
blamed for many more, but it is not clear how many of these
were actually its doing. And though three of its members
were recently promoted to the Syrian army’s upper ranks,
the TIP will probably not be allowed to use Syria as a staging
ground for action abroad. The country’s new government,
desperate for cash, will want to please China. The TIP is
expected to be subject to any disarmament programme.
Ahmad al-Sharaa, the leader of HTS, has made his stance
towards the Uyghurs clear: “I sympathise with them, but
their struggle against China is not ours.” ■

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Grains for the iron rice bowl

A pay rise for government

workers sparks anger and
envy in China
The effort to improve morale has not had the intended
effect
1月 09, 2025 02:51 下午

IN CHINA’S PRIVATE sector, many complain that jobs and

wages are being cut as the country’s economy flounders. So
as news spread online in late December that people on the
government payroll were being given a salary increase,
some netizens were outraged. “Reminds me of a famous
Soviet joke,” wrote one. “Brezhnev on stage says, ‘Our lives
will get better and better.’ A worker in the audience asks,
‘What about ours?’” Life can be tough as a state employee,
but envy of them is growing.

The government is keeping typically quiet about the pay

rise. On social media, however, users have been confirming
their pay packets are bigger (though some say they have
not been notified). Those affected include civil servants as
well as others paid by the government, such as teachers.
The raise is hardly massive: a few tens of dollars per month,
backdated to July, according to examples cited on the
internet. It would amount to an increase of a few percent on
their basic pay. But it appears to be the first hike since
2021. After several years of urging by the government that
officials tighten their belts, it signals a little easing. Reuters,
a news agency, reckons it could involve a one-off injection
of between $12bn and $20bn into the economy.

That is handy as the government tries to boost consumption

as a way of reviving growth. But China’s roughly 50m
government workers may not be overjoyed. In recent years
there have been widespread reports of cash-strapped local
authorities delaying or cutting payments of other benefits.
These extra remunerations usually exceed employees’ basic
salary, says Alfred Wu of the National University of
Singapore. Staff woes may abate as local governments
benefit from a national campaign, launched last year, to
stimulate the economy. It has involved allowing lower-tier
administrations to refinance their crippling debts by issuing
bonds worth up to 10trn yuan ($1.4trn) over the next five
years. For now, though, morale appears patchy.

For the Communist Party, this is a problem. Government

workers are the party’s backbone: more than 80% of
government employees are party members, noted China’s
leader, Xi Jinping, in 2016. They play a vital role in
maintaining the party’s legitimacy. Ill-motivated ones are
unlikely to perform it with vigour. Pay—even when received
on time and in full—has often failed to reflect the amount of
effort put in. So workers are putting in less effort. In 2022
two scholars from a party academy wrote of a growing
tendency among officials to “lie flat” rather than work. State
television, not known for its gibes at the bureaucracy,
lampooned the lying-flat phenomenon in 2023 in its much-
watched “Spring Festival Gala”, an annual programme on
the eve of the lunar new year. Thousands posted approving
comments on social media.

Mr Xi’s relentless anti-corruption campaign may have

helped to improve the image of officials, but it may have
also contributed to their lack of motivation. Opportunities
for kickbacks have become scarcer. Fearful of being accused
of graft, officials avoid getting involved in projects that
might be linked with it. Morale has not been improved either
by Mr Xi’s stepping up of political indoctrination among
cadres. In recent years they have had to spend more time
attending mind-numbing meetings to study his
pronouncements and, out of hours, using a smartphone app
that drills these lessons in. Points scored on the app can be
reviewed by superiors and used to determine bonuses.

To make matters worse, in the past couple of years the

party has been making it harder for government employees
to travel abroad, even for private purposes. Now a wider
range of people in non-sensitive jobs, such as academics
and even primary-school teachers, have to hand their
passports to officials for safekeeping. Getting the document
back requires submitting a detailed explanation of the
reason for travel. The tightening appears to relate to efforts
to stop corrupt officials fleeing, and to prevent the leaking of
secrets and contacts with overseas dissidents.
Government jobs remain coveted. In December a record
3.4m people sat the annual civil-service exam, about
400,000 more than in 2023. Fewer than one in 80 applicants
were expected to succeed. It is clear why so many are keen:
high youth unemployment and the increasing
precariousness of work in private firms. But scorn is
rampant, too. On January 8th much was vented at a district
party leader in the south-western region of Chongqing who
suggested that officials take the lead in reviving consumer
spending by buying new clothes and taking their families
out to meals. “Who wouldn’t spend money if they had it?
Spending requires earning first,” said one. “The first big joke
of the year,” another chimed in. Censors scrambled to stem
the flood of cynicism. ■

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The roof of the world shakes

A big earthquake causes

destruction in Tibet
Dozens are dead, thousands of buildings have been
destroyed
1月 09, 2025 02:50 下午

A 7.1 MAGNITUDE earthquake struck Tibet on January 7th,

killing at least 126 people. The quake’s epicentre was in
Dingri county, some 50 miles from the base of Mount
Everest and near the holy city of Shigatse. The rumbling
was felt in Nepal and parts of India. According to an initial
survey, over 3,600 buildings were destroyed. Thousands of
rescue workers have descended on Tibet to look for
survivors. More than 400 people have already been pulled
from the rubble, report Chinese state media. Survivors and
rescuers face many challenges, such as freezing
temperatures and more seismic activity. Since the initial
quake, there have been hundreds of aftershocks, some
exceeding a magnitude of 4.0.■

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United States
Los Angeles against the flames
A perfect storm :: Always vulnerable, the city is increasingly susceptible to
fire

America’s bet on industrial policy starts to

pay off for semiconductors
Going big :: Trump will not reverse the chip subsidies, but will he reinforce
them?

Mike Johnson has his old job back, for now

Walking the line :: But the GOP has the tightest House majority in nearly a
century

When treating snakebites, American

hospitals turn to zoos
Snakes on a list :: The zookeeper will see you now

Most Americans think moderate drinking is

fine
Alcohol guidelines :: They are unaware of the cancer risk

The US Army needs less good, cheaper

drones to compete
Against expensive excellence :: It seems obvious. So what is stopping it
from happening?

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A perfect storm

Los Angeles against the

flames
Always vulnerable, the city is increasingly susceptible to fire
1月 09, 2025 02:51 下午 | Pasadena

THE FIVE fires that on January 9th were still blazing in and
around Los Angeles were already among the most
destructive in California’s history. The scale is staggering,
even for a state accustomed to natural disasters. Roughly
130,000 people were told to leave their homes; 2,000
buildings have been destroyed. Because wildfires have
come to seem more like a certainty than a risk here, a lot
will not be insured. State Farm, an insurer, decided not to
renew 70% of its policies in Pacific Palisades, one of the
worst-hit areas. ABC Los Angeles reckons this has left 1,600
homes there uninsured. Fire crews faced an uneven fight: in
the small hours of the morning the neighbourhood fire
hydrants ran dry.

People abandoned their cars and fled on foot as the flames

approached. Firefighters then bulldozed their vehicles to
reach the blaze. Workers evacuated patients in wheelchairs
from a nursing home. The sky above the Pacific Coast
Highway turned orange and thickened with smoke. Palm
fronds smouldered. Extreme winds sparked several
firestorms across Los Angeles beginning on January 7th.
Nine months without measurable rainfall had primed the
city to burn.

By January 9th, two large fires were burning at opposite

ends of LA County, home to 10m people. One razed the
Pacific Palisades, a wealthy neighbourhood on the coast,
and swept into Malibu. Another was burning in the foothills
above Pasadena, north-east of LA. Ash fell like snowflakes
over the city’s downtown. Flames glowed crimson on the
peaks when they were not obscured by black smoke,
southern California’s own Mount Doom.

Los Angeles is particularly vulnerable to fire. Its rich

neighbourhoods and exurbs are where cities meet nature,
stretching into the region’s rambling mountain ranges: the
Santa Monicas, the Verdugos, the San Gabriels. Climate
change is causing more extreme and more frequent fires,
but ever more people are moving into these areas to find
cheaper housing or, for LA’s well-heeled, that perfect
mountain view. Until recently, January wouldn’t have been
considered part of fire season. But planet-warming
greenhouse-gas emissions have also increased the number
of days each year with fire-starter weather conditions.

On this occasion, north-east winds with gusts reaching

almost 100mph (160kph) in some places swept over the
mountains that cradle the city. These are the Santa Anas,
also known as the “devil winds”. In cooler months they blow
warm, dry air from the vast desert of the Great Basin
towards the coast. The winds can dry out plants already
parched by the drought that has set in after two unusually
wet years. But they can also carry embers great distances,
breeding new fires as they blow.

It did not take long for a natural disaster to become a

political one. Donald Trump blamed California’s Democratic
governor, Gavin Newsom, arguing that he diverted water
from Californians to protect an endangered fish, a reference
to a new plan to manage water in the Colorado river delta,
which has no bearing on firefighting in LA. “One of the best
and most beautiful parts of the United States of America [is]
ashes”, he wrote on Truth Social, “and Gavin Newscum
should resign.” It is a reminder of Mr Trump’s version of
leadership and an ugly prelude to what will be a strained
relationship between him and the governor at a time when
the state will need federal assistance.

The ordeal reminds Angelenos of their vulnerability. At any

given time Los Angeles is at risk of fire, flood, extreme heat,
mudslides and earthquakes. “Los Angeles weather is the
weather of catastrophe, of apocalypse” wrote Joan Didion in
1969, in an essay about the Santa Anas. The violent winds
“affect the entire quality of life in Los Angeles, accentuate
its impermanence, its unreliability. The wind shows us how
close to the edge we are”. ■

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Climate Issue, our fortnightly subscriber-only newsletter, or
visit our climate-change hub.

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Going big

America’s bet on
industrial policy starts to
pay off for semiconductors
Trump will not reverse the chip subsidies, but will he
reinforce them?
1月 09, 2025 02:50 下午 | WASHINGTON, DC

She took care of business

IN THE FINAL days of Joe Biden’s presidency, most parts of

his administration are winding down. Not so the top brass in
the Department of Commerce: on an almost daily basis,
they are signing giant funding contracts with chipmakers,
racing to dole out cash before Donald Trump enters the
White House. When all is said and done, they will have
awarded nearly $40bn to semiconductor makers in little
more than a year—arguably the biggest single bet on
industrial policy by the government in decades, and one
that could end up as Mr Biden’s most lasting economic
legacy.

The rush to disburse cash has invited questions about

whether the funding commitments—the cornerstone of the
CHIPS and Science Act, passed in 2022—are at risk under Mr
Trump. On the campaign trail, he called CHIPS a “bad” deal,
saying the government could have just slapped tariffs on
imported semiconductors.

Gina Raimondo, commerce secretary in the Biden

administration, is not fretting about a rollback by Mr Trump
or Howard Lutnick, nominated as her successor. In an
interview with The Economist, she notes that support for the
law is bipartisan, with both Republicans and Democrats
keenly aware that a capacity to make chips, a critical
component in every electronic device, is needed for national
security. Moreover, she adds, people forget that it was Mr
Trump who got things started by urging TSMC, a Taiwanese
firm that is the world’s most advanced chipmaker, to build a
semiconductor factory (or fab) in America.

She also rejects the notion that Commerce is rushing money

out the door. The stated plan had always been to complete
allocations by the end of 2024, and the due diligence began
much earlier. “I see it as getting the job done efficiently with
taxpayer money,” says Ms Raimondo.

In fact, the recent concern about the frenetic pace is the

exact opposite of the criticism that previously dogged the
CHIPS programme—namely, that it was moving too slowly
because of conditions attached to deals, including
requirements that chipmakers ensure access to childcare for
their workers. Much of the initial slowness also reflected
basic prudence on the part of the commerce department as
it built up its CHIPS office from scratch, recruiting a mixture
of semiconductor veterans and Wall Street dealmakers. It
was charged, in effect, with implementing a major departure
from the usual distaste for industrial policy on Capitol Hill
(apart from when it comes to weapons). “There are large
numbers of congressional staffers just waiting for the first
mistake so they can denounce the investment,” says
Charles Wessner of Georgetown University.

Could the CHIPS programme yield a more durable change in

America’s attitudes towards industrial policy? The other part
of Mr Biden’s industrial policy—the Inflation Reduction Act
(IRA), focused on clean-tech spending—is bigger but much
more diffuse, covering everything from hydrogen production
to electric-vehicle charging stations. Climate wonks had
hoped that the IRA would be politically protected from a
future Republican Congress because so much of its
spending goes towards Republican states. But given a
choice between keeping green tax credits associated with
the Biden administration and cutting voters’ taxes, most
Republican lawmakers know which they would prefer.

In the case of CHIPS, by contrast, funds have already been

promised to companies contractually, provided they hit
specific production milestones. Early returns are impressive:
the programme has catalysed about $450bn of private
investments. And this money is spread across much of the
industry, from high-tech packaging to memory chips. One
marker of success is the production of the most advanced
chips, measuring less than 10 nanometres in size. In 2022
America made few such chips. By 2032 it is on track to have
a share of 28% of global capacity, according to the
Semiconductor Industry Association, a trade group. “That is
not chopped liver,” says John Neuffer, its CEO.
The subsidies have helped to shrink a gap of roughly 30% in
the cost of building and operating fabs in America compared
with in Asian countries. In part costs are lower in Asia
because Asian governments lavish handouts on companies.
But Asian producers have also reaped the benefits of dense
manufacturing clusters, with well-trained workforces and
plenty of suppliers nearby. The hope is that CHIPS has
started this process in America. “It’s enough to get the
flywheel going,” says Ms Raimondo.

But neither she nor just about anyone in the industry thinks
that it will ultimately prove to be enough. It can take five
years to build a cutting-edge fab, while the CHIPS Act itself
runs for just five years. TSMC alone spends more than
$30bn annually on expanding and upgrading its
manufacturing operations, and China is throwing multiples
of that at its companies. “I think we should be sober about
how challenging it will be to keep the investment going,”
says Chris Miller, author of “Chip War”, a book about the
industry. The question facing the Trump administration thus
will not be whether to repeal CHIPS but how to build on it.
For starters it is likely to come under pressure to extend a
25% tax credit for manufacturing investment that is due to
expire in 2027.

Mr Trump will also have to decide what to do with the newly

muscular Department of Commerce. The department’s
headquarters in Washington, DC, was the largest office
building in the world when completed in 1932, a measure of
its institutional importance at the time. But over the
decades it faded into the background, mainly handling trade
missions. Over the past few years its labyrinthine corridors
have pulsed with energy again, with the department leading
not just the semiconductor push but also much of the effort
to restrict exports of advanced technology to China. “This
shouldn’t be a blip for the commerce department,” says Ms
Raimondo. “This is where the world is today.” ■

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Walking the line

Mike Johnson has his old

job back, for now
But the GOP has the tightest House majority in nearly a
century
1月 09, 2025 02:50 下午 | WASHINGTON, DC

THE FIRST week of the 119th Congress, which convened on

January 3rd, revealed some important truths about how
power will be exercised in Washington over the next two
years. Donald Trump won’t always get his way on Capitol
Hill, though any Republican opposing his preferences will
also usually claim to be supporting the president. And even
though Mr Trump isn’t all-powerful, it will be hard for
anything to happen without him.
First consider the uneasy re-election of Mike Johnson as
House Speaker. Mr Johnson won near-unanimous support
from his party on the first ballot, an improvement over the
15 rounds of voting it took for his Republican predecessor
two years ago. But the win required months of lobbying, and
uncertainty prevailed until a few minutes before he secured
the gavel—with last-minute help from Mr Trump.

Conservative hardliners had brought a range of complaints

about the House leadership. They see the Speaker,
implausibly, as a spendthrift who does not cater enough to
the needs of their slash-and-burn wing of the party. After the
election several insurgents signed a public letter declaring
that they backed Mr Trump’s choice for Speaker “despite our
sincere reservations”. The letter outlined policy demands
and desired procedural changes. These were broadly in line
with Mr Trump’s goals, but some, such as attaching strings
to an increase in the debt limit or rapidly balancing
America’s budget, would certainly irk him. The dissidents
made clear that, unless their demands are met, Mr Johnson
might soon lose his grip on power.

Such fights matter in a year filled with important legislative

deadlines. Republicans have defence spending to approve, a
government budget to pass by March 14th, and a debt
ceiling to raise or suspend by around June. And that is a
bare minimum aside from ambitious immigration and
energy legislation and a complex renewal of Mr Trump’s
first-term tax cuts. All of these challenges contain plenty of
opportunities to alienate conservatives and moderates alike,
meaning that every big vote could be as fraught as Mr
Johnson’s investiture.

Yet Republicans spent their first days in Washington

confused about how they would even approach passing the
legislation. The Senate, led by John Thune, prefers a two-
track process, whereby Congress notches an early victory
with a bill covering immigration, energy and other priorities
before beginning tax negotiations. Mr Johnson and other
prominent figures in the House want one massive bill as
leverage against restive Republicans unhappy with specific
tweaks to the tax code.

Either strategy is fraught given that Republicans won the

House by the slimmest majority since the 1930 election.
This sort of impasse is designed to be resolved by
presidential leadership. “I like one big, beautiful bill,” Mr
Trump said on January 7th. “But if two is more certain, it
does go a little bit quicker because you can do the
immigration stuff early.”

A paradox of Mr Trump’s second term is that while he has

become more politically formidable, Republicans have less
room for error in the House. The quick election of Mr
Johnson, and the days of confusion around strategy that
followed, showed the difference Mr Trump can make simply
by taking an interest. Whether he can sustain that
involvement to see his legislative agenda through is less
certain. ■

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Snakes on a list

When treating snakebites,

American hospitals turn to
zoos
The zookeeper will see you now
1月 09, 2025 02:49 下午 | BRONX ZOO

Ticket to Brooklyn

AT SPACE FARMS, a family-owned zoo and museum in rural

New Jersey, Parker Space keeps African puff adders, cobras,
copperheads, rat snakes, pythons, boa constrictors, “a
bunch” of cottonmouth moccasins and eastern massasauga
rattlesnakes. “I’ve been slinging a rattlesnake since I was
12,” says Mr Space, who is also a Republican state senator.
On December 30th, aged 56, he sustained his first bite. His
local hospital injected 14 vials of antivenom, but his bitten
hand remained stubbornly swollen. So he was flown to the
Bronx, where snake-bite specialists and exotic-snake
antivenoms abound.

The Jacobi Medical Centre is a short drive from the Bronx

Zoo. The hospital’s toxicologists, working in a dedicated
snake-bite unit, are experienced. (Given that just 7,000-
8,000 people in America sustain venomous snake bites
annually, most physicians are not.) They also have easy
access to the Bronx Zoo’s impressive collection of
antivenom, which it stocks for all of the species in its Reptile
House, plus more. That policy can be traced back to 1916,
when a zookeeper survived a rattlesnake bite with an
experimental antivenom supplied by an expert from Brazil,
who happened to be travelling through New York. “There is
no reason why the men who work in the Reptile House
should be in danger of death every time a poisonous snake
‘goes bad’,” declared Raymond Ditmars, the zoo’s first
reptile curator.

In “modern history”, however, no Bronx Zoo employees

have required the antivenom, according to Kevin Torregrosa,
the current curator. Instead it is being doled out, most often,
to pet owners. The Bronx Zoo is a “one-stop shop” for
patients in the Northeast, says Mr Torregrosa; and in fact,
the system is replicated across the country.

Most hospitals stock two brands of antivenom, which are

federally approved and work against indigenous snakes. But
a run-in with a black mamba or king cobra prompts a call to
a regional poison-control centre, which consults an index of
antivenoms in stock at accredited zoos. Niche antivenoms
are classed as “investigational new drugs”, and zoos pay for
permits to import and store them. Leslie Boyer of the
University of Arizona, who helped organise the index, says
that a poison-control call is often routed to a zookeeper’s
private number. ■

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Alcohol guidelines

Most Americans think

moderate drinking is fine
They are unaware of the cancer risk
1月 09, 2025 02:50 下午 | WASHINGTON, DC

THIS TIME of the year is when people make resolutions they

may struggle to keep. One reason for that is confusion.
According to Gallup, a pollster, three in five adults drink
alcohol. About 45% think drinking even in moderation is bad
for their health, while 43% think it has no effect. Americans
drink more spirits (or hard liquor) now than during the Civil
War—a time period so filled with drunkenness that some
historians say it sparked the temperance movement. This is
despite something that has long been known by public-
health researchers.

The nerds got their way on January 3rd, when Surgeon

General Vivek Murthy, America’s top doctor, issued an
advisory on the link between drinking alcohol and cancer.
He wants the labels on alcoholic drinks to carry a cancer
warning. Alcohol, the advisory notes, is the third leading
preventable cause of cancer in America, after tobacco and
obesity. It accounts for nearly 100,000 cancer cases a year.
But while 89% of Americans know that tobacco can cause
cancer, less than half are aware that alcohol does too.

That is partly because the risk from alcohol is smaller, but it

is not trivial. According to the surgeon-general’s report, 17%
of women who drink occasionally will be diagnosed, at some
point in life, with one of the seven cancers for which
alcohol’s causal effect has been established. For women
who have two drinks a day the cancer rate goes up to 22%.
Among men, the cancer rate goes up from 10% among
occasional drinkers to 13% among those having two drinks a
day.
The link between alcohol and cancer is not scientific news.
The World Health Organisation classified alcohol as a
carcinogen in 1988. Yet nearly 10% of Americans today say
that drinking is good for health. Some of the confusion
stems from studies that have found, over the years, that
moderate drinkers live longer than non-drinkers. This result
is explained mostly by a seemingly protective effect of
moderate drinking against heart disease.
But what scientists have learned over the years is that plain
comparisons of drinkers and non-drinkers make alcohol
seem healthier than it may be. Many abstainers have given
up alcohol because they are too unwell; some are former
alcoholics. How researchers account for these “sick quitters”
matters. Some exclude all non-drinkers from the analyses
and only measure how risks of disease change with the
amount of drinking; others group ex-drinkers with current
drinkers. With such adjustments, the protective effect of
moderate drinking on longevity and heart disease nearly
disappears; the increased cancer risk chalked up to drinking
goes up.

Newer studies that use genetic tolerance to alcohol to

mimic randomised trials of drinking have found no health
benefits from alcohol. This study method mitigates biases:
people who drink are richer, more educated and healthier
than those who do not. That may explain why red wine, rich
people’s drink of choice, has seemed particularly heart-
healthy. Most scientists now see the idea of alcohol being
beneficial in moderation as “either exaggerated or
completely false”, says Tim Stockwell from the University of
Victoria in Canada.

Americans are bombarded with headlines about the benefits

of alcohol (“Wine may be good for the heart, new study
says”). Occasionally, a headline gives them pause (“Even a
little alcohol can harm your health”). The surgeon-general’s
message may clear the air—and make resolutions to drink
less stick better. ■

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political news, and Checks and Balance, a weekly note from
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Against expensive excellence

The US Army needs less

good, cheaper drones to
compete
It seems obvious. So what is stopping it from happening?
1月 09, 2025 02:50 下午

IN UKRAINE BOTH sides are deploying millions of low-cost

drones, which play a role in combat as both scouts and
weapons. The US Army, long considered a leader in this
field, has been following events in Ukraine closely. But the
Pentagon is acquiring only small numbers of drones at high
cost. Why are American drones so expensive, and can prices
be brought down?
A typical FPV (“first-person view”) attack drone costs
Ukraine’s army less than $500. Based on racing
quadcopters, these are typically made by small suppliers.
Some are assembled at kitchen tables through a
government initiative which shows people how to make
drones at home. Though rough and ready, they can knock
out a Russian tank, artillery piece or bunker from several
miles away.

The nearest American equivalent is the Marine Corps’ new

Bolt-M made by Anduril. This is a slicker, more polished
quadcopter with more on-board intelligence and requiring
less operator skill, but it performs the same basic task of
hitting a target with a 1.5kg warhead. The cost though is
“low tens of thousands” of dollars. The similar Rogue-1
comes in at an eye-watering $94,000 apiece. In Ukraine,
FPVs are so numerous that two or more may pursue each
Russian footsoldier. The US cannot issue drones quite so
lavishly when each costs as much as a sports car.

Critics accuse American companies of “gold plating”, adding

unnecessary expenses to push prices up, or of excessive
profits. Certainly there have been cases of gross
overcharging, such as when the Pentagon has bought
hammers for $48 apiece when the same hammers cost $9
from another supplier. But the situation with drones is more
complicated.

One issue is sourcing. Ukrainian drones are typically

assembled from cheap components made in China. The
Pentagon has banned its forces from acquiring Chinese
drones, both because it worries about security and because
it does not want its supply chain to be controlled by a
potential future adversary. Higher specifications also quickly
push prices up. Most Ukrainian drones only have daylight
cameras; a few are fitted with thermal imagers for night
operations, which add hundreds of dollars to the price. All
American military drones come with far more expensive
high-resolution imagers.

For reconnaissance, Ukrainian operators typically use the

Chinese DJI Mavic 3 Pro, which sells for around $3,000. The
US Army’s new Short-Range Reconnaissance quadcopter will
carry out similar missions. The current version costs around
$20,000. The difference is partly accounted for by the need
to meet US military requirements such as resistance to
shock and vibration, extreme temperatures and radio
interference. New capabilities, including better GPS, higher-
resolution thermal imaging, automated target tracking and
obstacle avoidance are pushing the price up to around
$40,000. Experience suggests this type of cost spiral keeps
going. And the more expensive such drones become, the
less expendable and less useful they are.

And while Ukraine maintains a fleet of about 40,000

reconnaissance quadcopters, the Pentagon is acquiring
about 1,000 a year, so economies of scale are not kicking in.
Chinese drone-maker DJI has dominated the consumer
drone market since the 2010s and produces several million
drones each year. In the 2010s commercial drone-makers
were forced out of business in America, or into supplying the
niche market for government drones. Teal and Skydio, which
supply the US Army reconnaissance drones, both followed
this route.

George Matus, the boss of Teal, believes America needs to

build up its drone infrastructure. An ecosystem of
companies making flight controllers (the brains of the
drone), cameras, communications and other components
could enable drone manufacture at prices and quantities to
rival China. Mr Matus believes this could all be achieved for
the cost of a single high-tech jet fighter. Some companies
are also drawing on alternate supply chains in Europe and
Taiwan.

Since 2023 a Pentagon initiative called Replicator has been

exploring how to produce large numbers of small drones
rapidly at low cost, and how to learn from the Ukrainian
experience. Replicator faces a deeply entrenched culture of
expensive excellence. The American way has been to make
world-beating systems, like the F-35 fighter jet and the M1
Abrams tank, regardless of cost. Making “good enough”
hardware in bulk is a departure which faces resistance. In
June, Replicator announced a contract to buy SwitchBlade
loitering munitions, exactly the sort of expensive legacy
drones that it was expected to replace.

Going on and on

Russia’s drone industry is ramping up. Vladimir Putin

estimated Russia would make 1.4m drones in 2024.
Meanwhile China has reportedly placed an order for almost
1m attack drones from one supplier (some experts dispute
this). The low cost of this technology, and the fact that
drones and their components can be bought easily, mean
the technology is rapidly proliferating. Small drones played
an important role in aiding Syria’s rebel offensive in
December, for instance. Elon Musk, the tycoon tapped by
Donald Trump to find government savings, has drawn
attention to the wastefulness of America spending $100m
on a manned jet in lieu of cheap, expendable drones. In
truth, the two platforms perform wildly different tasks. But
unless the Pentagon succeeds in rebalancing its arsenal,
America could be heavily out-droned in any future conflict.
■

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The Americas
Justin Trudeau steps down, leaving a
wrecked party and a divided Canada
Crisis in Canada :: Mark Carney and Chrystia Freeland are among those
tipped as the next Liberal leader

Canada and America have been fighting

about timber for 40 years
Wood wars :: As Donald Trump takes office, the chances of a lumber deal
look slim

Does made in Mexico mean made by China?

Caught in the middle :: Donald Trump believes Mexico is a trojan horse for
Chinese mercantilism

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Crisis in Canada

Justin Trudeau steps

down, leaving a wrecked
party and a divided
Canada
Mark Carney and Chrystia Freeland are among those tipped
as the next Liberal leader
1月 09, 2025 02:50 下午 | Ottawa

ON JANUARY 6TH Justin Trudeau, Canada’s prime minister,

announced his resignation after weeks of speculation and a
mounting political crisis. The Liberal Party has won three
successive elections under his leadership. But over the past
year he has become an isolated and polarising figure as
supporters abandoned his party, angry that it had failed to
deal with inflation, growing housing costs and strains
caused by high levels of immigration which have driven the
fastest population growth since 1957.

His party is now gripped by a leadership struggle. Canada

faces an election which must be held by October. It will be
fought over Mr Trudeau’s flawed legacy, the right response
to a looming trade war, geopolitical risks and a sluggish
economy. “This country deserves a real choice in the next
election,” said Mr Trudeau. “It has become clear to me that
if I am having to fight internal battles, I cannot be the best
option in that election.”

He joins a growing list of progressive leaders done in by

their failure to assuage the anxieties of ordinary voters,
many of whom are shifting to populist parties. Among those
crowing over his exit was president-elect Donald Trump. His
contempt was laid bare recently in a stream of social-media
posts, dismissing Mr Trudeau as the “governor” of “the
Great State of Canada” and urging Canadians to consider
becoming the 51st member of the United States. The
rampant Conservative Party, led by Pierre Poilievre, will be
watching who the Liberals pick next and eyeing a landslide
election victory.

Whoever is chosen must face down Mr Trump while leading

an enfeebled and unloved Liberal government. The
president-elect is threatening to put tariffs of 25% on all of
Canada’s exports to the United States immediately after his
inauguration on January 20th. Pile that onto an already
anaemic economy and the double-digit lead that Mr
Poilievre has held in national polls for more than a year, and
that landslide looks very likely.
That Mr Trudeau has said he will go so near the end of his
term means his party is missing an essential ingredient for
success: time to recover. Whoever succeeds him will
probably have only a few weeks as prime minister. The
election must be held by October, but will almost certainly
come this spring. Opposition parties in Canada’s parliament,
which the Liberals control as a minority, have all vowed to
bring down the government at the first opportunity through
a vote of no confidence.

The starting gun

Parliament was due to return from holiday on January 27th,

but Mr Trudeau has managed to “prorogue” it, aborting the
current session and leaving the legislature suspended until
March 24th. That triggers a ten-week sprint to choose a
successor, appoint a new cabinet and develop an electoral
blueprint. The successor must then either face that no-
confidence vote or he or she must call for an election that
would probably take place in May.
Mr Trudeau’s arc has been vertiginous (see chart). He took
his party from third place to a majority mandate in 2015 by
winning over a wide swathe of the electorate, including
working-class, indigenous and first-time voters. He
championed the causes that animated progressive politics a
decade ago, such as climate change and minority rights. He
won praise in his first term for reducing child poverty and
successfully negotiating with a truculent first-term President
Trump to clinch a new free-trade agreement.

In elections in 2019 and 2021 Mr Trudeau won with less

support and minority mandates. Much of his political capital
was squandered as his Liberals failed to recalibrate in the
wake of the pandemic, and as the public’s priorities shifted
to inflation, housing and immigration. He and his party
offered pious sermons that railed against their Conservative
rivals’ coarser tactics, rather than pragmatic solutions to the
problems that bedevilled anxious voters.

Party’s over

Support for the Liberal Party has crashed. A recent survey

by the Angus Reid Institute, a pollster, suggests it is now
backed by just 16% of voters, compared with the 45% who
support Mr Poilievre’s Conservatives. That represents a new
low for one of the world’s most successful political
organisations: the Liberals have been in power for 93 of the
past 129 years. When Michael Ignatieff led them to their
first (and so far only) third-place finish in 2011, they had the
backing of 19% of voters.

The Liberals’ meagre support is mirrored in its bank

accounts. The party raised one third of the C$29m ($20m)
pulled in by the Conservatives in the first nine months of
2024. This feeble fundraising has shown up in the paltry
number of advertisements for the Liberals on television,
radio and the web. Every hockey game or home-renovation
show seems to be flooded with Mr Poilievre’s face, or his
voice intoning Conservative slogans.
Despite these formidable challenges, several aspirants to be
the Liberal leader have been quietly assembling campaign
teams for months. Those being urged to run by fellow
Liberal MPs include Chrystia Freeland, whose surprise
resignation as finance minister on December 16th
precipitated the crisis that saw much of Mr Trudeau’s caucus
abandon him. Mark Carney, who governed the Bank of
England and before that the Bank of Canada, may jump into
the race if the party does not opt to choose a new leader
from among existing Liberal MPs. Mélanie Joly, the foreign-
affairs minister, and François-Philippe Champagne, the
industry minister, are also weighing their prospects.

Whoever becomes leader must prepare to fight an election

campaign that will turn in part on which party is best placed
to confront the challenge of Mr Trump. Trevor Tombe, an
economist at the University of Calgary, estimates that the
president-elect’s proposed tariffs would shave 2.6% off
Canada’s GDP and tip the economy into recession. But the
election will also be a battle over Canada’s identity. A
decade of progressive liberalism has ended in widespread
disillusionment. Far more than the Liberal Party’s fortunes
will be at stake when it selects its next leader. ■
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Wood wars

Canada and America have

been fighting about timber
for 40 years
As Donald Trump takes office, the chances of a lumber deal
look slim
1月 09, 2025 02:50 下午 | Vancouver

WHEN THE boss of the US Lumber Coalition took the podium

at the Global Wood Summit in Vancouver in October, he did
not have to tell his mostly Canadian audience to hold their
applause. “I’m not going to make a lot of eye contact,”
Zoltan van Heyningen said, standing before the frosty room.
Canadian wood used to flow into the United States at quite
a clip (see chart). Exports are now running at levels last
seen in the 1970s, thanks to the fact that softwood lumber
is the subject of the longest-running trade dispute between
the two countries. Since the 1980s the lumber industry in
the United States has maintained that Canadian producers
receive unfair subsidies in the form of low “stumpage fees”
set by provincial Canadian governments, which own most
forest land. The United States has periodically placed duties
on Canadian imports to “level the playing field”.
Canada’s federal government says the duties are “unfair
and unwarranted”. In September it filed a challenge under
the United States-Mexico-Canada Agreement (USMCA) after
the US Department of Commerce increased duties from
8.1% to 14.5%. If Donald Trump is true to his word these will
rise to 25% this year, before the challenge is heard. “The US
has always worried there will be a flood of Canadian wood
going across the border, a stream of cheap Canadian
products,” said Harry Nelson of the University of British
Columbia.

Trade war aside, Canada’s lumber industry is suffering,

thanks to wobbling prices during the pandemic, and
wildfires and insect infestation that have led to mill closures
and job cuts. Canfor, a Vancouver-based forestry company,
says shipments and production are both down due to high
duties and weakness in the North American lumber market.
The firm has closed ten of its 13 mills in British Columbia
over the last decade. The number of people working in
forestry in British Columbia has fallen by more than half this
century.

Canadians want a new softwood-lumber agreement. The

United States was in no hurry to give them one, even before
the election of Mr Trump. Austria, Brazil, Germany and
Sweden have all recently increased their lumber exports to
the United States, which itself is set to become a net
exporter by 2027. The most recent US-Canada deal expired
in 2015. Under that one, some $5bn in collected duties were
returned to Canadian producers by the United States
government. Canadian industry hopes a new agreement
would see collected duties returned once again, up to $10bn
by some estimates—not likely under the new Trump
administration. Kevin Mason, an analyst with ERA Forest
Products Research, takes the long view. “This is a battle
going back to the early 1800s,” he says. “It’s not going to
change.” ■
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Caught in the middle

Does made in Mexico

mean made by China?
Donald Trump believes Mexico is a trojan horse for Chinese
mercantilism
1月 09, 2025 02:51 下午 | Mexico City

IN 2018 United States President Donald Trump started a

trade war with China. Mexico benefited; companies seeking
to avoid tariffs by diversifying production out of China saw
the country as a good option thanks to affordable labour,
decent infrastructure and, most importantly, its free-trade
agreement with the United States.
As Mr Trump’s second term approaches, that logic is
souring. Chinese companies looked to Mexico more than
most. Their investment in the country has surged. Mr Trump
(who has already threatened to apply a tariff of 25% to
Mexican imports “on day one” unless it stops migrants and
drugs from illegally crossing the border) believes those firms
are using Mexico as a tariff-free gateway to the United
States. His conviction may end up blowing apart the United
States-Mexico-Canada Free Trade Agreement (USMCA).

Concerns about Chinese activity in Mexico are bipartisan

and long-running. In 2019 American officials worried that
Chinese exporters were simply using Mexico as a route to
the United States market, especially for steel and
aluminium. This has largely been dealt with by Mexico
imposing tariffs on imports of the metals from China, and a
“melt and pour” rule that requires steel to be “substantially
transformed” in Mexico before it is exported to the United
States. Outright fraud—where products are imported from
China, relabelled as Made in Mexico, then exported to the
United States—is probably rare.
Today the focus is on Chinese firms assembling or
manufacturing products in Mexico for sale in the United
States. There is plenty of this happening. In 2023 Mexico
overtook China to become the leading exporter of goods to
the United States; meanwhile, Chinese exports to Mexico
have boomed (see chart 1). In 2002, Mexican exports to the
United States contained less than 5% Chinese components
by value. By 2020 that number was 21%.
Electric-vehicle (EV) production is the big issue. Most of the
EVs sold worldwide are Chinese-made, usually at a lower
price than those made by American firms, and of equivalent
or higher quality. In September President Joe Biden raised
tariffs on imports of EVs from China to 100%; without them,
sales would boom. But the tariffs do not apply to vehicles
made in Mexico.

Mr Trump claims that Chinese carmakers are constructing

“monster” factories south of the border. That is false. Just
one Chinese joint venture makes EVs for the Mexican and
regional market. BYD, China’s leading EV manufacturer, has
said it will build a factory in Mexico to churn out 150,000
vehicles a year, but it has yet to materialise. This month
Solarever, a smaller producer, announced it would build a
factory in northern Mexico.

The areas where Chinese firms really are expanding tend to

be further down the supply chain. Eight Chinese auto-parts
manufacturing companies operated in Mexico in 2018. By
the end of 2023 there were at least 20. They make trims
and battery casings as well as high-tech elements such as
software to assist drivers. Many cars made in Mexico with
Chinese components meet the USMCA requirement that
75% of a car must be made in Mexico, whether by Chinese
companies or otherwise, to qualify for free trade. But it
doesn’t matter if it is legal, says Joshua Meltzer of
Brookings, a think-tank in Washington: “Political tolerance
[for China] is going down.” Anything with a whiff of China is
seen as suspicious. “Made by China is the new Made in
China,” says Jorge Guajardo, a former Mexican ambassador
to China.

Today the free trade that USMCA enshrines is subordinate to

the China concern, says Enrique Dussel Peters, who runs the
Centre for Chinese-Mexican Studies at the National
Autonomous University of Mexico. The issue looms over a
review of the deal in 2026. In September Marco Rubio, Mr
Trump’s nominated secretary of state, warned of “China’s
rampant exploitation of Mexico as an intermediary,” and its
“manipulation of USMCA”. Politicians in Canada have
suggested booting Mexico out of USMCA and drawing up a
bilateral free-trade agreement.
Mexican officials complain that the focus on Chinese
investment in Mexico is hypocritical; Chinese FDI into
Mexico is small compared with the billions China invests in
the United States every year. But in Mexico Chinese FDI has
been growing sharply, while its FDI into the United States
has fallen. It does not help that Mexico’s official FDI figures
seem to undercount Chinese investment by a factor of six
(see chart 2), according to the Rhodium Group, a research
firm, which finds that $13bn has been invested cumulatively
since 2013. Mexico is paying the price for “being slow to
read the writing on the wall”, says a North American
diplomat.

Claudia Sheinbaum, Mexico’s president, has read it. Her

government is scrambling to please its northern neighbour,
setting up a body to screen foreign investments that apes
those in the United States and Canada. It has plans to
substitute imported Chinese components with ones made in
Mexico. Marcelo Ebrard, the economy secretary, says
Mexico must start making microchips and lithium batteries.
Other Trump-pleasing measures are coming thick and fast.
“Mexico wants to be a team with Canada and the United
States,” says Luis Rosendo Gutiérrez, an official with
Mexico’s economy ministry.
Yet the discussion is detached from the reality of the
complex nature of trade, says Mr Dussel Peters. Foreign
companies in Mexico, predominantly American ones,
account for 70% of the exports to the United States.
American car makers like General Motors and Ford are
among those that have integrated Chinese companies into
their supply chains. Some encouraged Chinese suppliers to
set up shop in Mexico.

Import substitution takes time and requires incentives.

Mexico’s cash-strapped government cannot offer the kinds
of subsidies that are available for domestic production of
chips and batteries in the United States. And some items
simply can’t be sourced outside China. “We haven’t
developed supply chains in the region for items like
batteries for EVs,” says Odracir Barquera of the Mexican
Automotive Industry Association.

Meanwhile Mexico has another reason to fret. In the early

2000s it lost out to China in exports to the United States.
Now, if Chinese companies start displacing Mexican ones in
North American supply chains, Mexico will suffer again,
notes Margaret Myers of the Inter-American Dialogue, a
think-tank in Washington. Here American and Mexican
officials see eye-to-eye. “The message to the United States
is ‘how do I help you make what you import from Asia?’”
says Mr Gutiérrez. “Because it will help us, too.” ■

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Middle East & Africa

Lebanon tries yet again to elect a new
president
Thirteenth time lucky? :: But it will not be easy to convince its corrupt
politicians to reform

The West is making a muddle of its Syria

sanctions
No easy fix :: Outsiders should be much clearer about how and when they
will be lifted

From inside an obliterated Gaza, gunfire not

a ceasefire
All talk and no truce :: In north Gaza the IDF is now facing “a bitter guerrilla
war”

America concludes genocide has been

committed in Sudan—again
Certifiably genocidal :: The move highlights the magnitude of Sudan’s civil
war but does little to end it

Mozambique’s opposition leader flies home

into chaos
Halfway to revolution :: Will Venâncio Mondlane’s arrival on January 9th
deepen or ease political crisis?

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Thirteenth time lucky?

Lebanon tries yet again to

elect a new president
But it will not be easy to convince its corrupt politicians to
reform
1月 09, 2025 02:50 下午 | DUBAI

IT IS RARE that a presidential palace stays empty for long:

politics abhors a vacuum. But the one in Baabda, in the hills
above Lebanon’s capital, Beirut, has been vacant since
October 2022, when Michel Aoun finished his six-year term.
Lawmakers have failed to select his successor a dozen
times. The last attempt was in June 2023, but as The
Economist went to press on January 9th, they were trying
again.
Expectations were rising in the weeks before the vote. The
faction led by Hizbullah had been weakened by the Shia
militia’s war against Israel and the collapse of Bashar al-
Assad’s regime in neighbouring Syria. It seemed as if MPs
might be able to break their deadlock, with the army chief,
General Joseph Aoun (no relation to the former president),
favoured to win.

Yet on the eve of the vote, people close to the general

cautioned that he may not have enough support. The Middle
East has been through dramatic change over the past year
—but Lebanon’s venal politics may prove stubbornly rigid.

Though Lebanon’s presidency is mostly symbolic, it has a

few important powers, like approving prime ministers and
cabinets. In a country still haunted by the memory of civil
war, symbolism is important too: how the head of state is
chosen says much about the balance of power in Lebanon’s
factious politics.

The first 12 votes in parliament were desultory; many MPs

abstained or plumped for ineligible write-in candidates such
as Salvador Allende. After the last failed vote, they settled
into two camps. Hizbullah and its allies endorsed Suleiman
Frangieh, an undistinguished politician who was close to the
Assad regime. Their foes backed General Aoun. Neither side
had the support for its candidate to win.

That began to change after the war with Israel, which ended
on November 27th with a shaky ceasefire. It left Hizbullah
less popular than ever, resented by many for dragging the
country into conflict. The group’s charismatic leader, Hassan
Nasrallah, was dead. So was his heir apparent. Its interim
boss, Naim Qassem, is a colourless functionary. For now,
Hizbullah seems incapable of imposing its will on Lebanon.
Less than two weeks later, Mr Assad made his unexpected
flight from Damascus. Mr Frangieh’s close ties with the
Assad regime ceased to be an asset. Syria’s interim
government was in no position to meddle, even if it wanted
to. “We have no plans to get involved in Lebanon’s affairs,”
Ahmad al-Sharaa, Syria’s de facto leader, told journalists
last month. He said he had no objection to General Aoun (or
any other candidate) being president.

Then Wafiq Safa rose from the dead. Not literally, of course.
While Mr Safa, a feared Hizbullah enforcer, was thought to
have been killed in an Israeli air strike in October, he in fact
survived. In early January, in his first media appearance
since the war, he too said Hizbullah would not “veto”
General Aoun’s candidacy. Instead, he said, the party had
just one proscription: it would not accept the nomination of
Samir Geagea, the head of the Lebanese Forces, a right-
wing Christian party.

That red line was something of a red herring. Almost no one

had previously considered Mr Geagea a serious candidate. A
ruthless warlord during the civil war, his nomination for
president would be deeply divisive. Indeed, he was one of
General Aoun’s earliest supporters.

Trying to veto a candidate who had little chance of winning

anyway says much about Hizbullah’s diminished power. It is
nervous about General Aoun, who has the support of
Lebanon’s Western and Arab allies. Saudi Arabia openly
backs his candidacy, and America sees the general as a
force for stability.

Many Lebanese are relying on their own army to enforce the

ceasefire, which demands that Hizbullah withdraw its
fighters and weapons from the country’s south. The pull-out
is meant to happen before January 26th, a deadline that
seems likely to slip. Israel also appears to be in no rush to
withdraw its troops.

Hizbullah is in no position to be defiant. It knows that

Lebanon is desperate for money to rebuild after the recent
war with Israel, which caused an estimated $9bn worth of
damage and economic losses. It also knows its Iranian
patrons cannot provide it. The only source of reconstruction
aid will be rich Gulf states, which Hizbullah must not
antagonise. On January 8th Mr Frangieh dropped out of the
race.

None of this guarantees that General Aoun will win the job.
He has powerful opponents, among them Gebran Bassil, a
Christian MP who wants the presidency for himself. And
even if he does win, a reform-minded president may not
ensure that Lebanon will reform. Hizbullah has long been a
malevolent force in the country’s politics—but it is far from
the only one. ■

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No easy fix

The West is making a

muddle of its Syria
sanctions
Outsiders should be much clearer about how and when they
will be lifted
1月 09, 2025 02:51 下午 | DUBAI

Where does my help come from?

FOR MANY Syrians, the past month has been bewildering.

They have watched one Western envoy after another rush to
Damascus to celebrate the fall of Bashar al-Assad, the
longtime dictator deposed in December. Yet as they depart,
those same envoys insist it is far too early to ease the web
of sanctions on Syria’s economy. America and Europe seem
eager to meet Syria’s new rulers, but not to help them.

On January 6th America’s Treasury Department announced a

small but welcome change. It issued a licence that allows
companies to do business with the new Syrian government
and to provide the country with electricity and fuel. The
licence, valid for six months, does not remove any
sanctions. Still, it should allow more humanitarian aid to
reach the country. It seems to have had immediate effects.

A day after the Treasury announcement, a Syrian official

said that Qatar and Turkey would send floating power plants
to the Syrian coast. The barges are expected to generate
800 megawatts, which would boost Syria’s electricity output
by 50%, welcome relief in a country where the state
provides fewer than four hours of power a day. Gulf states
are also in talks to finance a 400% rise in public-sector pay,
an early promise of the interim government—but one it
cannot afford without help.

This is a good start, but if Syria is to recover from a decade

of civil war, it will need more than piecemeal exemptions. So
far, though, that is all that many Western policymakers
seem prepared to offer.

America’s sanctions on Syria date back to 1979, when it

labelled the country a state sponsor of terrorism. In the
subsequent decades it added a heap of other measures to
punish the Assad regime for sending jihadists to Iraq,
meddling in Lebanon’s politics and massacring countless
Syrians. Some of those restrictions ought to remain in place:
Mr Assad and his cronies should stay pariahs indefinitely. It
is harder to argue that the whole country should, too.
Proponents of a take-it-slow approach believe that America
and Europe should use sanctions as leverage to push for an
inclusive government in Syria. Lifting them would not forfeit
that leverage, though: they can always be reimposed. And
while inclusion is a laudable goal, it is a squishy one. Mr
Assad often appointed women and religious minorities to his
cabinet. He also gassed his own people. If Western
policymakers want the new government to be inclusive,
they will need to spell out exactly what that means.

One American diplomat offers a procedural argument: Joe

Biden has just days left in office, and weighty decisions
about Syria should be left to his successor. But Donald
Trump will need time to nominate officials and get them
confirmed by the Senate—and Syria may not be a priority. It
could take months for America to deliver meaningful relief.

Europe may move faster. On January 3rd the French and

German foreign ministers met Ahmad al-Sharaa, Syria’s de
facto ruler, in Damascus. Annalena Baerbock, the German
foreign minister, said it was premature to lift sanctions. In
private, though, German diplomats are circulating a
proposal which would do just that.

The EU would probably start by dismantling sanctions on a

few key sectors, such as Syrian banks and the national
airline. Reconnecting banks could make it easier for Syrians
in Europe to send remittances, a lifeline for many inside the
country. The bloc is expected to discuss the German
proposal at a meeting of foreign ministers later this month.

There will be a separate debate around Hayat Tahrir al-

Sham (HTS), the Islamist rebel group which led the offensive
that toppled Mr Assad. America, Britain and the EU all label
it a terrorist organisation, as does the United Nations. Some
of these prohibitions date back more than a decade, to a
time when HTS was still known as Jabhat al-Nusra, al-
Qaeda’s affiliate in Syria. It has since ditched the jihadists
and moderated its views.

But unwinding the sanctions will be tricky. The secretary of

state could revoke America’s designation, but that is
politically fraught. The EU’s 27 members would all have to
agree. Delisting the group at the UN could take more than a
year. Even if HTS dissolves itself, as Mr Sharaa has promised
to do, lifting sanctions on it will not be straightforward.

Western governments should make all this a priority. A six-

month exemption might allow donors to send power barges,
but investors will need stronger assurances before they
promise to build new power plants. If sanctions remain in
place, Syria could remain a charity case. ■

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All talk and no truce

From inside an obliterated

Gaza, gunfire not a
ceasefire
In north Gaza the IDF is now facing “a bitter guerrilla war”
1月 09, 2025 02:50 下午 | JABALIA

ONCE HOME to nearly 200,000 residents, Jabalia, the main

town in northern Gaza, is a deserted wasteland of destroyed
buildings and churned-up mud. But the soldiers of the Israel
Defence Forces (IDF), now on their third offensive there
since the war in Gaza began in October 2023, have no idea
when they are leaving.
“We still have a mission here,” insists Major Omer,
commander of an infantry company, who accompanied The
Economist on a brief visit to Jabalia. “There are still Hamas
snipers hiding, carrying out ambushes. It is now the most
basic and bitter guerrilla war.” The young soldiers and
officers may still believe in the mission, but their former
commander, Yoav Gallant, the defence minister who was
fired in November, has admitted in private that the IDF no
longer has a military purpose in Gaza. Occasionally, the
major’s men encounter civilians, whom they force towards
the seething mass of misery of around 1.5m displaced
Gazans huddled in southern Gaza. The operation in Jabalia,
which is in its fourth month, could drag on indefinitely. Or it
could end in days, if a ceasefire being negotiated in Cairo
and Doha is agreed.

Read all our coverage of the war in the Middle East

Only a few thousand civilians remain in Gaza’s northern

quarter. Some right-wing Israeli politicians and generals
want to prevent those who lived there ever returning.
Others insist that Israel’s military presence is temporary,
until a deal is reached with Hamas, the Islamists behind the
October 7th attacks. But that remains elusive.

The odds of a ceasefire have little to do with the situation in

Gaza, where at least 45,000 people, well over half of them
civilians, have been killed in the war. Policy is driven neither
by Israel’s military objectives—or lack thereof—nor the
immense suffering of most Gazans, now entering a second
winter in a cramped “humanitarian zone” where several
babies have died of hypothermia. The main considerations
of both sides are political.

The basics of the notional deal supposedly on the table have

not changed since May, when they were first laid out: Israel
would withdraw fully from Gaza, in stages, in return for the
release of 98 Israeli hostages, around half of whom are
assumed to be alive. But in public Binyamin Netanyahu,
Israel’s prime minister, insists Israel will fight on until it
achieves “total victory” over Hamas, whatever that means.
Hamas, despite its shattered state, is showing little
flexibility, refusing to release hostages before Israel
guarantees a withdrawal.

Mr Netanyahu is under pressure from his far-right allies, who

talk of building settlements in Gaza. Ending the war could
bring down his government and bring on the public
reckoning he has been evading. Hamas leaders are anxious
to retain some control over the rubble of Gaza and keep
some hostages as bargaining chips.

America’s secretary of state, Antony Blinken, insisted on

January 8th that “we’re very close to a ceasefire and
hostage agreement.” But those close to the talks believe a
deal to end the war and free all the hostages is extremely
unlikely before Donald Trump takes power. It is more likely
that a smaller number of hostages will be released in return
for a truce of a few weeks. For now, even a short respite for
Gaza seems too much to hope for. ■

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Certifiably genocidal

America concludes
genocide has been
committed in Sudan—
again
The move highlights the magnitude of Sudan’s civil war but
does little to end it
1月 09, 2025 02:50 下午

Seeking safety

FOR MONTHS America has been criticised for not doing

enough to help end the catastrophic civil war in Sudan that
began nearly two years ago. It took ten months for President
Joe Biden to appoint a special envoy to Sudan, and then
another nine for his top emissary to pay the country a visit.
An American-led push for ceasefire talks fizzled in August
after the Sudanese Armed Forces (SAF), the regular national
army, did not show up.

Just days before leaving office Mr Biden appears to be trying

to save face. On January 7th Antony Blinken, America’s
secretary of state, said that the Rapid Support Forces (RSF),
a brutal paramilitary force fighting the SAF for control of
Sudan, had committed genocide in the western region of
Darfur. Mr Blinken slapped sanctions on the RSF’s leader,
Muhammad Hamdan Dagalo (better known as Hemedti),
and on seven companies owned by the RSF in the United
Arab Emirates (UAE). America’s Treasury says the firms have
supplied the group with arms and money.

It is the second time America has concluded that a genocide

has been carried out in Sudan. The first was two decades
ago, when Mr Blinken’s predecessor, Colin Powell, told
Congress that the rape and slaughter of black Africans in
Darfur by government-backed Arab militias known as the
Janjaweed (“devils on horseback”) amounted to genocide.
Mr Powell’s speech helped turn Omar al-Bashir, Sudan’s
dictator at the time, into a global pariah.

This time, Mr Blinken’s statement adds weight to what many

observers, including this newspaper, concluded within
months of the war’s eruption. The RSF, a descendant of the
Janjaweed (which were also led by Mr Dagalo), launched a
campaign of ethnic cleansing in West Darfur in the first
months of the war in 2023. As many as 15,000 members of
the Masalit, a black African ethnic group, were killed in the
city of el-Geneina alone. Hundreds of thousands fled to
neighbouring countries.
Back in the 2000s the authors of a report to the UN Security
Council questioned whether Mr Bashir’s military campaign in
Darfur included “the crucial element of genocidal intent”.
Today there are fewer voices of dissent. “The US
government has had all the information it needs for a
genocide determination for months now,” says Kholood
Khair of Confluence Advisory, a Sudanese think-tank.

What took so long? Apart from bureaucratic hold-ups, some

inside the Biden administration worried that the move might
weaken America’s ability to act as a mediator. Others were
concerned about angering the UAE, an American ally that
stands accused of supplying the RSF with weapons (a
charge the UAE denies in the face of plentiful evidence). Yet
in the end, “I think they realised this is a real stain on their
legacy,” says Cameron Hudson, a former American diplomat
now at the Centre for Strategic and International Studies in
Washington. The last-minute announcement serves as a
salve on their conscience.

Will it do more than that? By sanctioning the leadership of

the RSF but not that of the SAF—whose continued blocking
of aid has contributed to a famine that could kill millions—
the Biden administration appears to have abandoned its
policy of cautious evenhandedness. Yet the timing of the
decision makes its strategic value questionable, argues
Jonas Horner of the European Council on Foreign Relations.
The incoming Trump administration is likely to be motivated
less by protecting human rights in Sudan than by advancing
American interests in the Horn of Africa. It will probably
have little interest in alienating the RSF or, more crucially,
the UAE.

Twenty years ago, the American genocide designation

galvanised an international campaign to “Save Darfur”,
helped to bring war-crimes charges against Mr Bashir and
spurred the deployment of a joint UN and African
peacekeeping force three years later. There seems little
prospect of a similar effort today. ■

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Halfway to revolution

Mozambique’s opposition
leader flies home into
chaos
Will Venâncio Mondlane’s arrival on January 9th deepen or
ease political crisis?
1月 09, 2025 02:50 下午 | Maputo

Hurtling into the unknown

IT HAS BEEN three months since a rigged election in

Mozambique in which Venâncio Mondlane, the popular
opposition candidate, says he was cheated of victory by
Frelimo, the party that has ruled the country for half a
century. For most of the past few months he has been in
self-imposed exile, choreographing from afar protests that
security forces have met with brutality. Ahead of the
inauguration of the official winner, Daniel Chapo, on January
15th, Mr Mondlane is raising the stakes. He returned on
January 9th and has said he will informally swear himself in
as president on the day Mr Chapo takes office.

Mr Mondlane’s return is the latest twist in a saga that has

rocked the country of 35m people. Last month the
constitutional court confirmed the election results,
reallocating a few percentage points here and there, but
declaring Mr Chapo the winner with an implausible 65% of
the vote. Upon arrival at the airport, Mr Mondlane said he is
open to talks. How the government responds will determine
whether Mozambique resolves its crisis, or continues its
plunge into chaos.

Protests against the election result have turned into a

popular uprising against Frelimo. The streets echo to
whistles and shouts of “the people in power”. Angry crowds
have burned courts, police stations and Frelimo party
offices. Others have looted shops, raided factories and
attacked mines, complaining that their land has been stolen
or that promises of development have been broken. After
months of protest from farmers, an Australian-owned
graphite mine suspended operations and secured a waiver
on loans owed to the American government. One of the
world’s biggest ruby mines closed for days after informal
miners invaded its site, wanting to dig for gems themselves.

The state no longer maintains basic order. On Christmas day

thousands of inmates escaped from four different prisons in
murky circumstances. Local civil-society groups allege that
more than a hundred of them were executed after being
recaptured. “Mozambique is moving towards the
institutionalisation of anarchy,” warned Carlos Martins, the
president of the bar association. Some speculate that
Frelimo has been instigating chaos as an excuse to crack
down.

Security forces have killed around 300 people since the

protests began, including 176 in the final week of December
alone, according to local rights groups. Tens of thousands
have fled to neighbouring countries. Many more feel like
Lídia, a shopkeeper in the capital Maputo, who does not
know if her business will survive a new wave of protests.
The economy is shrinking, reckons Standard Bank.

So far there is no sign of compromise. The outgoing

president, Filipe Nyusi, is “in the exit lounge”, says Borges
Nhamirre of the Institute for Security Studies, a South
African think-tank, meaning the initiative for talks with the
opposition now lies with Mr Chapo. Once he is sworn in, he
could offer to meet some of Mr Mondlane’s demands in
return for the opposition leader calling off the protests. That
might involve trimming presidential powers and giving Mr
Mondlane the opportunity to make good on his promises to
build houses and finance small businesses.

The Southern African Development Community, a regional

bloc, has made half-hearted offers to help broker an
agreement. Its leaders are loth to back change, for fear of
giving their own people ideas. The most serious effort has
come from South Africa, which worries about economic
spillover from the crisis. But the envoy it dispatched was
given a cool welcome by Mozambique’s government.

Instead of trying to negotiate, Mr Chapo could wait it out,

hoping the unrest eventually dies down. Tomás Queface, a
security consultant, thinks that Frelimo will try to “eliminate
Venâncio Mondlane politically” by pursuing criminal cases
against him. Politicians from the Podemos party, which is
allied with Mr Mondlane, have said they will take up their
seats in parliament, which he considers a betrayal. Once
ensconced within the state, they will have less incentive to
overthrow it.

The government could have arrested Mr Mondlane on

arrival. That it did not is a hopeful sign. But there are tense
days ahead. Supporters of Mr Mondlane clashed with police
on the morning of his return. Further breakdown is possible
if protests continue. Those who have taken to the streets in
recent months may worry about the opposite danger: that
politicians compromise too readily, and the uprising against
a broken system changes nothing much at all. ■

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Europe
Austria could soon have a first far-right
leader since 1945
A Volkskanzler in the offing :: Herbert Kickl of the Freedom Party could be
the next head of government

Olaf Scholz still thinks he can win re-

election as chancellor
The true believer :: Someone has to

Europe has lots of lithium, but struggles to

get it out of the ground
Mining muddle :: Its targets for strategic autonomy look hard to meet

Spain’s government marks 50 years since

Franco died
Remembering a dictatorship :: Opponents say it is the birth of democracy
that should be commemorated

A dispute over old war crimes strains Polish-

Ukrainian relations
Bones of contention :: The beneficiary is Russia

How extremist politics became mainstream

in France
Charlemagne :: Jean-Marie Le Pen paved the way for his daughter, Marine

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A Volkskanzler in the offing

Austria could soon have a

first far-right leader since
1945
Herbert Kickl of the Freedom Party could be the next head
of government
1月 09, 2025 02:50 下午 | VIENNA

HUNDREDS OF PROTESTERS gathered on January 6th in

front of Vienna’s imperial Hofburg palace. These days, as
well as being a vast museum, it is the residence and office
of Austria’s president, and the protesters were crying “Nazi
Raus!” and “Van der Bellen, kick him out!” In one of its
resplendent rooms, adorned with patterned red fabric
wallpaper and a prominently displayed portrait of Empress
Maria Theresa, Alexander Van der Bellen, Austria’s
president, was meeting Herbert Kickl, the leader of the hard-
right Freedom Party (FPÖ), to ask him to try to form Austria’s
next government.

Mr Van der Bellen, a former leader of the Green party, said

he had not taken the decision to turn to Mr Kickl lightly. But
he had been left with no choice. For three months after
parliamentary elections at the end of September, Karl
Nehammer, the incumbent chancellor, strove to form a
coalition consisting of his centre-right People’s Party (ÖVP),
the centre-left Social Democratic Party (SPÖ) and the small
liberal NEOS party to keep the FPÖ out of power. The FPÖ
had won more seats than any other party at the election,
with 31% of MPs; the ÖVP had come second with 28% and
the SPÖ third with 22%. Talks between the three parties
broke down on January 3rd owing to disagreements over
economic and fiscal policies. The next day Mr Nehammer
announced his resignation.

Is Mr Kickl now a shoo-in for the chancellorship? Although

the centrist parties tried to exclude him, his party has in the
past taken part in five governments as a junior partner and
is in government in five of Austria’s nine states. Despite
vowing not to govern with Mr Kickl during the election
campaign, the ÖVP is now willing to try. Christian Stocker,
who has taken over as the interim ÖVP leader, used to be
one of his party’s harshest critics of the FPÖ strongman. “Mr
Kickl, nobody in this house wants you. Nobody in this
republic needs you either,” said Mr Stocker in parliament in
December.

Mr Kickl is anti-immigration, anti-Islam, strongly Eurosceptic

and dismissive of Austria’s LGBT community. In his party’s
election programme, “Fortress Austria”, he has called
for the “re-migration of uninvited foreigners” and for a halt
to accepting new asylum-seekers via an emergency decree,
which would breach EU rules. He is credited with inventing
the most controversial FPÖ slogans, such as
“Daham instead of Islam” (Daham is Austrian dialect for
“home”).

An accidental party leader, Mr Kickl was meant to be the

power behind the throne rather than the man seated on it.
Short, bespectacled and dull, he failed to complete his
philosophy degree and his military service. Rather than
knocking back beers and tucking into a schnitzel in a pub,
the stick-thin Mr Kickl prefers to drink water. More a lone
wolf than a team player, he has competed in extreme
triathlons such as “the Celtman” in Scotland and “the
Evergreen” in Chamonix.

Most Austrian commentators assume that Mr Kickl is close

to achieving his goal of becoming Volkskanzler (the people’s
chancellor), a term he insists on using even though critics
point out that Adolf Hitler used to campaign as a
Volkskanzler too. “It is very likely that Kickl will be
chancellor,” says Laurenz Ennser-Jedenastik of the
University of Vienna. On economic policy, social policy and
immigration, the campaign platforms of the two main right-
wing parties largely converge. Both would cut corporate
taxes and social contributions by employers, and reduce
benefits for asylum-seekers and migrants. Both would also
ban the Muslim headscarf in public.

But serious sticking-points remain, especially in foreign and

security policy. These include Austrian aid for Ukraine (which
Mr Kickl wants to stop), EU sanctions against Russia (which
Mr Kickl would vote against) and the European Sky Shield
initiative, a German-led air-defence procurement plan, which
the ÖVP backs but which Mr Kickl sees as a threat to
Austria’s neutrality. Other scratchy areas are compensation
payments related to policies during the covid-19 pandemic
(Mr Kickl opposed covid-19 vaccinations) and the public-
broadcast licence fee, which Mr Kickl wants to abolish.

The worst problem at home is the poor health of Austria’s

public finances. The ÖVP and the FPÖ will need to find €6bn
($6.2bn) in annual spending cuts by mid-January if Austria is
to avoid the humiliation of being placed under close
supervision by the European Commission through its
excessive-deficit procedure. (Eight countries are already
under such scrutiny.) The EU forecasts a budget deficit of
3.7% of GDP for Austria this year, well above the 3%
prescribed by the union.

Kathrin Stainer-Hämmerle of the Technical College in

Kärnten thinks it is still possible that talks between the ÖVP
and FPÖ will fail, and that new elections will have to be
called. She found the tone of Mr Kickl’s statement to the
press on January 7th to be far from conciliatory. He warned
the ÖVP to employ “no games, no tricks, no sabotage and
no obstructionism”. Moreover, Mr Stocker is a wily
negotiator who will not easily give ground over his party’s
fundamental foreign and security policies.

Even so, according to polls, the FPÖ will do still better if

snap elections are held. Kronen Zeitung, Austria’s largest-
circulation tabloid, published a poll on January 5th that put
the FPÖ at 37% of the vote, which would give them around
40% of the seats in parliament. That should focus the minds
of the ÖVP’s negotiators. ■

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The true believer

Olaf Scholz still thinks he

can win re-election as
chancellor
Someone has to
1月 09, 2025 02:51 下午 | BERLIN

SOON AFTER Olaf Scholz defied the odds to win election as

German chancellor in 2021, his jubilant party colleagues
exulted over the coming “decade of social democracy”. Now
he is set to fall having served barely a third of that. In the
run-up to an election on February 23rd, polls give 16% to Mr
Scholz’s Social Democrats (SPD), placing them a distant
third behind the centre-right Christian Democratic Union and
its Bavarian ally, the Christian Social Union, or CDU/CSU
(31%), and the hard-right Alternative for Germany (20%).
Germany’s economy is in the doldrums, war and uncertainty
stalk the land, and voters are anxious. Yet as the SPD
prepares to anoint Mr Scholz its candidate on January 11th,
the chancellor’s camp think their man can pull it off again.
“It’s going to be hard but there’s absolutely a chance,” says
Dorothee Martin, an SPD MP from Mr Scholz’s home town of
Hamburg.

The case proceeds like this. First, consider the previous

election. Written off in 2021 as he is today, Mr Scholz
executed a perfectly pitched campaign and led the SPD to
overcome the CDU/CSU’s double-digit lead in its final weeks.
Where pundits see only opinion polls, argue Mr Scholz’s
aides, he retains a deeper instinct for the subterranean
currents of German politics. Slow and steady wins the race.

Second, look at the opposition. Mr Scholz may be the most

unpopular chancellor of modern times. But his main
opponent, Friedrich Merz, the CDU/CSU candidate, fares
little better (see chart), and he is prone to gaffes. Crucially,
notes a Scholz aide, the more voters see of Mr Merz the less
they like him; and many are only now tuning into the
election, after a snap vote precipitated by the demise of the
three-party coalition in November. Anyway, say his team, Mr
Scholz’s unpopularity has more to do with that detested
government than his own deficiencies. Expect a
personalised campaign: the cool-headed Mr Scholz v the
irascible, untested Mr Merz.
Third, peer ahead. The last month of Germany’s campaign
will be the first of Donald Trump’s presidency, and Mr Trump
will surely give voters reason to notice. A campaign now
focused on wages, industry and immigration may in part
turn on who can best respond to American tariffs, a
proposed peace deal in Ukraine or demands to triple the
defence budget. So far the SPD campaign has been about
unflashy reassurance: pay, pensions, investment and
energy costs. This modest approach seems out of kilter with
the scale of Germany’s challenges. But party strategists
hope it will leave Mr Scholz well placed to present himself as
the rock in whatever storm Mr Trump unleashes after
January 20th. “Today ‘change’ and ‘progress’ sound like
threats,” says Armand Zorn, an SPD MP from Frankfurt.
“Voters want stability and security.”

Can this really work? Mr Scholz may well make up ground in

the campaign; the SPD usually does when trailing the
CDU/CSU. Although the chancellor’s governing style is
plodding in the extreme, he enjoys playing the underdog
and can be surprisingly effective on the stump, notes Daniel
Brössler, author of “A German Chancellor”, a biography of
Mr Scholz. As for Mr Trump, to risk-averse Germans Mr
Scholz’s safety-first approach could prove more appealing
than Mr Merz’s more macho style.

Yet for all that, the odds against a Scholz re-election look
almost insurmountable. The lessons from 2021 are limited,
says Peter Matuschek, of Forsa, a pollster. Mr Merz is more
popular than Armin Laschet, the previous CDU/CSU
candidate, and Mr Scholz is both better known and less liked
today. Just 8% of Germans think the SPD is best placed to
manage the country’s problems. Unlike in 2021, when Mr
Scholz was an electoral asset for his party, today he is a
drag on its support. Seen in that light, the SPD’s decision to
plaster his visage all over its posters may seem bold.

So, for some, was the choice to run with Mr Scholz in the
first place. Last year the SPD flirted with the idea of
replacing him with Boris Pistorius, the popular defence
minister, whose decision to withdraw from contention in
November hurt the morale of some SPD foot-soldiers who
did not relish the prospect of a winter campaign canvassing
for a weak candidate. The chancellor himself appears to
have inexhaustible reserves of self-belief. Someone has to:
62% of the SPD’s own supporters believe he will lose to Mr
Merz. ■

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Mining muddle

Europe has lots of lithium,

but struggles to get it out
of the ground
Its targets for strategic autonomy look hard to meet
1月 09, 2025 02:50 下午

EUROPE MAY not be as well endowed when it comes to

lithium as Australia, China and Chile, but it is still home to
an estimated 5% of the world’s reserves of the rare white
metal. Yet it currently produces next to none of the stuff,
which is crucial for making electric-vehicle (EV) batteries
and energy-storage systems. It still relies on imported
refined lithium that usually comes from China.
The EU wants to change that, in the name of autonomy. The
EU’s Critical Raw Materials Act, which came into force last
May, aims to ensure that at least 10% of the EU’s lithium
needs, as with other critical raw materials, are met from
home-grown sources by 2030. It also specifies that no more
than 65% of annual consumption of these products should
be sourced from any single country. At first glance these
targets appear eminently achievable, given Europe’s
untapped reserves. If anything, the 10% production goal
seems modest. European lithium could potentially meet half
of the region’s demand, or even more.

But the job of getting lithium out of European ground is not

easy. The metal is mostly found in hard-rock deposits. Open-
pit mines are large, polluting, water-intensive and noisy.
Planned projects are opposed by the not-in-my-backyard
crowd and also by environmental groups.

Take Serbia, home to huge lithium deposits in the Jadar

Valley, in the west of the country. Rio Tinto, a mining giant,
has been trying to advance a project there for over 20
years, but progress has been stop-start. A wave of protests
in 2021-22 forced the government to revoke Rio’s licence; it
was reinstated in July 2024 after fresh assessments. The
government has hinted that the firm may be able to start
construction in 2026. But that will inevitably spark another
public backlash, which may put the brakes on the project
again.

A project in Portugal’s northern Barroso region risks meeting

a similar fate. A British mining firm, Savannah, wants to
open four open-pit mines that it estimates could produce
enough lithium for 500,000 EV batteries each year. But most
of the land it needs to purchase belongs to local
communities, which do not want to sell. Little wonder that
investors are treading carefully, not just there but in the
Czech Republic, Finland, France and Spain, which also boast
hard-rock lithium deposits.

Open-pit mining is not the only game in town. Lithium is

also found underground in hot, salty water. Companies like
Vulcan Energy, which has 17 licences in Germany’s Rhine
valley, pump brine from geothermal springs to the surface
and filter out the lithium before sending the rest back down.
That is less damaging to the environment, because water
loss is minimal and the above-ground facilities are smaller
and cleaner than open-pit mines.

The elephant in the room is China. It was quick off the mark
to develop huge domestic capacity in the 2010s, thanks to a
raft of subsidies and tax breaks. It has flooded markets with
refined lithium. Prices have plummeted as a result, which
has eliminated a lot of the competition. Only a few European
projects are viable at the current rock-bottom prices. But
that should not be an excuse for inaction. Prices will not stay
low forever. Projects across Latin America, Asia and Australia
are being scaled back, which will whittle away at the world’s
lithium surplus.

Europe’s challenge is two-fold. If for strategic reasons it is

serious in its resolve to produce more (expensive) lithium, it
will have to provide more support to firms that are trying to
do so. Public funding is available, but in a myriad of places,
usually co-ordinated by national governments and arguably
in insufficient quantities.

The second challenge is equally daunting. Securing the

paperwork to advance these projects is fiendishly complex
and time-consuming. Streamlining the process would help.
But unless Europe addresses these obstacles, lithium
projects currently on the drawing board will stay there, and
autonomy will remain a fantasy. ■
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Remembering a dictatorship

Spain’s government marks

50 years since Franco died
Opponents say it is the birth of democracy that should be
commemorated
1月 09, 2025 02:50 下午 | MADRID

Still divisive

AS HISTORIC turning-points go, it was squalid. On November

20th 1975 Francisco Franco, who had ruled Spain for almost
40 years, was declared dead, his body already rotting. That
eventually ushered in a transition to democracy under King
Juan Carlos.

Today, most Spaniards give no thought to Franco. But Pedro

Sánchez, the Socialist prime minister, thinks they should.
Not long after becoming prime minister in 2019 Mr Sánchez
organised the exhumation of Franco’s remains from the
Valley of the Fallen, the dictator’s grandiose monument to
his victory in the Spanish civil war, and their reburial in a
quiet cemetery. Many cheered.

To commemorate the 50th anniversary of the dictator’s

death, on January 8th Mr Sánchez launched a government
plan that will see events in schools, universities and public
places under the slogan “Spain in Liberty”. Officials note
that polls find that a quarter of young Spanish men think
that in some circumstances authoritarian government can
be preferable to democracy. “Those who sing the praises of
authoritarianism want us to forget…that Spain was
governed by an autocratic and repressive minority,” Mr
Sánchez said.

Some question why the government has chosen to mark the

dictator’s death in his hospital bed, rather than the arrival of
democracy—by commemorating, say, the 1977 election or
the 1978 constitution. The conservative opposition People’s
Party (PP) sees in that choice an attempt to divide Spaniards
and a smokescreen to distract attention from corruption
scandals.

Mr Sánchez knows that discussing the dictatorship makes

the PP queasier than it should, partly because it looks over
its shoulder at Vox, a hard-right party. But his critics argue
that he is using the past to fight today’s political battles—
precisely what the leaders of the transition renounced. ■

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Bones of contention

A dispute over old war

crimes strains Polish-
Ukrainian relations
The beneficiary is Russia
1月 09, 2025 02:50 下午 | KYIV AND WARSAW

All must be remembered

HANNA PETRIVNA, now 91, was a schoolgirl when she saw

lorries packed with dozens of Poles from nearby villages pull
up near her home in Vishnevets. Ukrainian Insurgent Army
(UPA) fighters herded them into the basement of a church,
“threw some hay inside and burned them alive.” Hannah
recalls the Christmas carols she learned from her Polish
friends, and sings one.
Up to 100,000 ethnic Poles died at the hands of the UPA and
Ukrainian villagers across Volhynia and Galicia, in what is
now western Ukraine, in 1943, in a cycle of genocidal
violence that engulfed the region in the second world war.
Other mass graves include those of Volhynia’s Jews,
murdered wholesale by the Nazis and their local
accomplices, and of Ukrainians executed by Soviet agents.
They scar the region to this day. Some have been
discovered; many have not.

As today’s war rages in Ukraine’s east, a row over the

graves is tearing at the country’s relations with Poland, one
of its key allies in Europe. Poland has long accused Ukraine
of playing down the scale of the massacres, impeding the
search for victims, and so denying them a proper burial.
Ukraine says the killings were part of a wider conflict going
back to the 1920s, with death and displacement on both
sides.

A potential breakthrough came on November 24th, when

the Polish and Ukrainian foreign ministers said there would
be “no obstacles” to exhumations in Volhynia and next-door
areas. Ukraine says the digging can begin in the spring. But
many Poles doubt such assurances. Politicians of all stripes
are upping the stakes. In December the far-right Law and
Justice (PiS), Poland’s main opposition party, asked
parliament to consider making the “glorification” of UPA and
Stepan Bandera, the group’s chief ideologue, a crime
punishable by up to three years in prison. Poland’s defence
minister, Wladyslaw Kosiniak-Kamysz, had caused an even
bigger stir in October, warning that Poland would block
Ukraine from joining the EU unless the exhumations took
place. Opinion polls suggest most Poles agree.

Historians from each country have locked horns. Konrad

Nawrocki, head of Poland’s Institute of National
Remembrance (INR), a body set up to investigate Nazi and
Soviet war crimes, has accused Ukraine of acting in bad
faith. He says Polish teams could begin exhumations “in 24
hours” and champions the idea of a museum to honour the
victims in Volhynia. “For various forces in Poland the past
has become a tool for obtaining certain political dividends,”
says Volodymyr Tylishchak, deputy head of Ukraine’s own
INR. Others fear the issue may be exploited ahead of
Poland’s presidential race this spring. Mr Nawrocki, backed
by PiS, is a candidate.

Reopening old wounds

The row began in 2017, when Ukraine blocked exhumations

in response to vandalism against monuments to UPA
soldiers killed by the Russians in Poland. The issue
disappeared from the headlines once Russian tanks rolled
into Ukraine in 2022. Poland raised its support for Ukraine,
called for a path to EU membership, and became the West’s
main hub for military aid to Ukraine. Nearly a million
Ukrainian refugees made Poland their home. In the face of a
common enemy, Russia, the legacy of the massacres, of the
reprisals by Polish resistance fighters who killed thousands
of Ukrainians, and of the later deportations of some 150,000
Ukrainians by Poland’s communist regime faded away.

Or so it seemed. The dispute simmered again in 2023 and

boiled over last September, after Dmytro Kuleba, then
Ukraine’s foreign minister, fumbled a question about
Volhynia at a conference in Poland. An outcry ensued; Polish
politicians and historians accused him of refusing to
confront past Ukrainian wrongs. Ukrainians do not know
enough about Volhynia, admits Mr Tylishchak, but he says
Poles need to appreciate Ukrainian suffering too.
The controversy, along with Poland’s earlier decision to ban
grain imports from Ukraine, spells the end of the
honeymoon between the two countries. The share of Poles
who back new military aid to Ukraine has dropped from 87%
as the war began to 63% in October. Poland’s prime
minister, Donald Tusk, has since suggested he wants no part
of a plan floated by France’s Emmanuel Macron to send
peacekeepers to Ukraine in the event of a ceasefire with
Russia. The share of Ukrainians who have a positive view of
Poles has halved, to 41%, in only two years.

Versions of history compete. Poles see the UPA as war

criminals seeking an independent Ukraine through ethnic
cleansing, whereas many Ukrainians see them as a symbol
of resistance to Soviet rule and Russian aggression,
especially since the full-scale invasion in 2022. According to
one survey, the share of Ukrainians who view Bandera
favourably reached 74% in 2022, up from only 22% ten
years earlier.

Russia has pounced on the row, hoping to drive a wedge

between the two countries. To whip up anger in Ukraine,
Russian social media are airing old photos of damaged UPA
monuments in Poland. Officials in Warsaw suspect Russian
involvement in some of the attacks on the monuments.
Ukrainian and Polish historians and diplomats say the way
forward for both their countries is to focus on the
exhumations and set aside history. “What we agree on, each
time we meet,” says Piotr Lukasiewicz, the Polish
ambassador to Ukraine, “is that Russia wins whenever we
argue”. ■

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polish-ukrainian-relations

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Charlemagne

How extremist politics

became mainstream in
France
Jean-Marie Le Pen paved the way for his daughter, Marine
1月 09, 2025 02:49 下午 | PARIS

HE LIVED HIS life in lurid colour. But it often felt as if Jean-

Marie Le Pen, who died on January 7th at the age of 96,
belonged to an era of black and white. There was Indochina
(where he served as a paratrooper); French Algeria (where
he fought for the homeland, and admitted to torture); the
French Fourth Republic (during which he was first elected to
the National Assembly, in 1956, two years before Charles de
Gaulle wrote the modern constitution). Even Mr Le Pen’s
19th-century mansion, perched magnificently on a ridge
overlooking Paris, appeared to be the product of decades of
neglect; its walls were dark brown, furniture shabby and it
“stank of death”, noted Yann, his middle daughter. Like Mr
Le Pen’s unapologetic extremist politics, the far-right
leader’s formative moments seem to belong to history. Yet
his influence on French politics could hardly be more
current.

Little about Mr Le Pen’s life was tempered. With his broad

frame and bombastic manner, the son of a Brittany
fisherman thundered through life without a filter. He relished
public provocation, which often landed him in court, just as
he did belting out Breton sea shanties at the family mansion
after a boozy dinner. Given a platform Mr Le Pen would rant
against anything—fists punched into the air, articulation
precise—even the country’s winning multi-ethnic football
team (too many “foreigners”). An apologist for Pétain’s
collaborationist regime, he was periodically convicted: for
hate speech, antisemitism and denying crimes against
humanity, the latter after claiming that the Nazi gas
chambers were a “detail” of the history of the second world
war.

In two respects in particular, Mr Le Pen was also a precursor

for today’s nationalist-populist right. In the 1950s he was
first drawn into politics by Pierre Poujade, a proto-populist
whose movement represented shopkeepers, tradesmen,
artisans and “the little people”. His was the politics of the
“downtrodden” against the elite, which finds a wide echo
today. As co-founder of the National Front in 1972, Mr Le Pen
was also a proponent of “great replacement” thinking, long
before it became a fashionable theory for the far right. From
his study in the mansion above Paris, filled with nautical
memorabilia, it was almost as if he imagined himself to be
single-handedly commanding the country’s maritime
defences. There, beside brass-mounted binoculars and
model frigates, Mr Le Pen once held forth to this columnist
about the upcoming “submersion” of France by an
“invasion” of “all the miserable populations of the world”.
“We lived through German military occupation, but
afterwards they left,” he roared at her; “immigrant
populations have no intention of leaving.”

Ultimately, Mr Le Pen’s unfiltered approach was too much

even for his own daughter, Marine Le Pen, who took over
the party in 2011. Four years later she expelled her father,
and then changed its name, to the National Rally. It was a
seminal political moment, and a brutal, humiliating personal
disavowal. Ambition triumphed over affection; rivalry
overrode filial duty. All his life, Mr Le Pen thrived on conflict;
Ms Le Pen sought to appear respectable. He swaggered
about on the untouchable fringes of polite society; she dines
coolly at upscale Parisian restaurants. He never really
sought political power; she wants to govern France.

The trace that Mr Le Pen left on French politics was noxious

and incremental, but not as linear as it appears in some
telling—and not all of his own making. The political cynicism
of his adversaries also played a part. The lepénisation of
French minds, or the spread of his core discourse, began to
take hold in the 1980s. But it was François Mitterrand, then
the Socialist president, who changed the electoral rules to
favour small parties, in an attempt to split the right. In 1986
Mr Le Pen and his group of assorted extremists, nativists
and colonial apologists secured a record 35 parliamentary
seats, before losing all but one when the rules changed
again two years later. Indeed the very toxicity of Mr Le Pen’s
extremism served the left, prompting an anti-racism
movement that bred a new generation of politicians and
helped Mitterrand to win re-election. A serene debate about
controlled immigration in France has been difficult ever
since.

Le Pen is mightier

For Ms Le Pen the moment has never seemed so favourable.

The best Mr Le Pen ever managed in his five runs for the
presidency was 18% in 2002, when he shocked France by
making it into the second round against Jacques Chirac.
Twenty years later, in the run-off against the centrist
Emmanuel Macron, Ms Le Pen scored 41.5%. The judges
may yet keep her from running for office, when they decide
on March 31st whether to rule her ineligible in a trial over
the misuse of public funds. Barring this, she looks better
placed than ever. Mr Macron, who has twice kept her from
power at the ballot box, cannot run again at the next
presidential election, due in 2027; no clear successor has
yet emerged. If he calls fresh parliamentary elections this
summer, Ms Le Pen’s party could enter government earlier
still.

In the end, Mr Le Pen’s legacy is also hers: the normalisation

of anti-immigrant nationalist politics. Mr Le Pen may have
belonged to the toxic fringe. But he also laid the foundations
for a form of politics which, purged of its extreme imagery
and elements, has become mainstream, in France and
Europe. Today its champions hold power (Italy, Hungary,
Slovakia), or share it, in over half a dozen countries. The
lepénisation of minds has spread even to places, such as
Germany, once thought immune.

Two decades ago Mr Le Pen’s brand of xenophobic politics

was rejected by a majority of French, and European, public
opinion. Today Ms Le Pen is one of the most popular
politicians in France. Ms Le Pen had to turn on her father to
get to where she is today. But she would not be there if he
had not come first. ■

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Britain
What Elon Musk’s tweets about sex abuse
reveal about British politics
Offline Keir, online Kemi :: An offline prime minister faces an online leader
of the opposition

Rolls-Royce cars pushes the pedal on

customisation
Driving up the price :: Be your own Bond villain

A much-praised British scheme to help

disabled workers is failing them
Apple watches and wobble boards :: It lavishes spending on some, and
unfairly deprives others

Britons are keener than ever to bring back

lost and rare species
Conservation :: Immigrants that everyone can get behind

The decline in remote working hits Britain’s

housing market
End of the space race :: A return to the office means a return to town

The phenomenon of sexual strangulation in

Britain
Dangerous liaisons :: A survey suggests the risky practice is more common
than you might think

How means conquered ends

Bagehot :: British politics has become a prisoner of process

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Offline Keir, online Kemi

What Elon Musk’s tweets

about sex abuse reveal
about British politics
An offline prime minister faces an online leader of the
opposition
1月 09, 2025 02:50 下午

ELON MUSK’S barrage of posts about sexual-abuse scandals

in Britain tells you a lot about the temperament of the
owner of X, a man with the ear of America’s president-elect.
The predation by largely Pakistani gangs on girls in English
towns was first seriously reported on in 2011. Sir Keir
Starmer, the prime minister (who was chief prosecutor back
then), was “complicit in the rape of Britain”, Mr Musk wrote;
he mused about whether America should “liberate” the
British people.

But the reaction to Mr Musk’s rant also reveals something

about the prime minister and his principal political
opponent. The most important biographical difference
between Sir Keir and Kemi Badenoch, the new leader of the
Conservative Party, is not that she was brought up in Nigeria
and he in Surrey; nor even that he is a self-declared socialist
and she a Thatcherite. It is that he came of age
professionally before social media transformed politics, and
she afterwards. British politics is now a contest between an
offline prime minister and a very online leader of the
opposition.

In 2004, two years before the launch of X (then Twitter),

Michael Goldhaber, an American thinker, published an essay
arguing that the internet would produce a new type of
human, just as printing had. Homo typographicus would be
followed by Homo interneticus. His “mentality significantly
altered” by the effects of intense internet use, interneticus
would be unmoored from time and space, disrespectful of
old sources of authority and facing a constant battle for his
attention.

Sir Keir is a politician of the pre-internet age. He was born in

1962, and he became a national figure in 2008 as director of
public prosecutions (a fine job for typographicus). Britain’s
low-tolerance approach to wild talk online was shaped
during his tenure, with the prosecution of a man who joked
on Twitter about blowing up an airport. As prime minister in
2024 he insisted that prosecutors throw the book at those
who encouraged riots on social media—and drew a first
salvo from Mr Musk.
In a sympathetic biography of Sir Keir by Tom Baldwin, social
media appear as either a nuisance or a threat. Trolls say vile
things about him; his strategists warn that Labour activists
should spend less time in their online bubbles. On the brink
of electoral victory, Sir Keir promised that a Labour
government would cool online populism. He can, Mr Baldwin
says, be the prime minister “for the 80% of normal people
who don’t abuse each other as ‘rape genocide enablers’
before they have had their cornflakes”.

And so Sir Keir tried to brush off Mr Musk’s onslaught. “I

think most people are more interested in what’s going to
happen to the NHS, frankly, than what’s happening on
Twitter,” he told a press conference at a hospital on January
6th. His rivals, he said, needed to decide if they wanted
politics rooted in truth or in lies.

If for Sir Keir social media are a distraction from real politics,
for Ms Badenoch they are the essence of it. She is the right
honourable member for interneticus. Born in 1980, she took
a course in Apple repairs and later a computer-engineering
degree. She is reputed to have been busy on Nigerian-
diaspora message-boards; a job on the website of the
Spectator, a conservative magazine and keen participant in
the culture wars, would follow.

Interneticus, wrote Mr Goldhaber, would attach himself to

new communities based on affinities “unshackled by space,
unbounded by borders”. So the causes that most animate
Ms Badenoch are litigated online and heavily influenced by
America: gender identity; critical race theory; diversity,
equity and inclusion schemes. She wants her party to think
deeply about the civilisational questions the internet poses,
such as the loss of presumption of innocence that emerges
from online “pile-ons”. She was quick to defend Allison
Pearson, a conservative journalist questioned by police over
remarks on X.

Whereas Sir Keir speaks with lawyerly caution, Ms Badenoch

does not so much talk as post, whether online or off. When
she stood for the leadership, Tory members (though mostly
older than Sir Keir) loved her pithy, contrarian hot-takes,
served up in a style familiar to those who dwell on X. Sir Keir
is criticised for being dull; she is unusually interesting.

Little wonder that she embraced the intervention of Mr

Musk, who she says has made X much better since buying it
in 2022. Soon after his onslaught began, she proposed a
new national inquiry into the grooming gangs; she brought a
vote (though doomed by Labour’s huge majority) in
Parliament on January 8th.

Sir Keir was baffled: had her party not been in power for 14
years, while reports into the abuse gathered dust? Why was
she tweeting about it now? Yet, wrote Mr Goldhaber, the
internet would erode notions of time, because unlike musty
books which immediately betray their age, pixelated text is
continually refreshed. Interneticus would live in a “space
devoid of chronological ordering…an ever-changing now”.
And so the court judgments of over a decade ago pinging
round X seem as urgent as if they had been written
yesterday.

Mr Musk was also rumoured to be mulling a donation of

$100m, a huge sum in British politics, to Reform UK, until a
spat—on X, naturally—with the populist outfit’s leader, Nigel
Farage. (Mr Farage, as it happens, was early to see the
potential in YouTube and Facebook for propelling the fusty
Eurosceptic movement.) Yet Mr Musk’s posts on sexual
abuse had MPs gyrating without his spending a cent.
Neither Sir Keir nor Ms Badenoch has the balance right. Sir
Keir is too slow and unagile to react to developments online,
his colleagues complain, and does not give the real debates
on race and gender that play out there due credence. In
2024 online platforms overtook television as Britons’ main
source of news; amid the vitriol, millions of voters of all ages
head there.

Ms Badenoch, though, seems too online for her own good.

Even on Boxing Day, as Britons digested their turkey, she
was rowing on X with Mr Farage over whose party had more
members. Yet she has little to say about public services, still
the most important issue to voters, polls suggest.

It is possible to be both interesting and irrelevant. A decade

ago another prime minister, David Cameron, crowed that his
defeated rivals had tangled themselves in online debates:
“Britain and Twitter—they’re not the same thing.” Or as Mr
Goldhaber put it: “For Homo interneticus, cyberspace is
most of the real world, and the rest is an appendage of it.“
■

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Driving up the price

Rolls-Royce cars pushes

the pedal on
customisation
Be your own Bond villain
1月 09, 2025 02:51 下午

Rolling along

A VISIT TO Rolls-Royce’s factory in Goodwood reminds you

that Rolls is a carmaker like no other. Set amid the lovely
West Sussex countryside, it resembles a fancy hotel, amid
wildflower meadows, reed-fringed ponds and lime trees,
with foliage trimmed into perfect cubes. The reaction of the
maker of the world’s swankiest cars to a dip in sales is also
untypical. The firm revealed on January 8th that in 2024 it
sold 5,712 cars, 320 fewer than in 2023. But is Chris
Brownridge, the boss since late 2023, concerned?
“Absolutely not!” he declares, noting that “we don’t see
ourselves as a car company.”

Success for Rolls, which instead regards itself as a luxury-

goods firm, is measured on “bespoke content”, says Mr
Brownridge. These are the personal touches that customers
can request to be added to their vehicles, from a coachline
along the bodywork to hand-painted silk panels. Last year
the firm increased the value of such highly profitable
features by an average of 10% per car, the most yet. That
pushed the average price paid for a Roller to around
£500,000 ($615,000).

The rest of the car industry is catching up with Rolls. Even

proletarian brands now differentiate themselves through the
in-car “experience”, from mood lighting to elaborate
infotainment systems, rather than the horsepower of an
internal combustion engine, which is increasingly
disappearing in favour of an electric motor. Where Rolls
used to disdain performance figures as unspeakably vulgar
(it would merely describe its cars’ capabilities as
“adequate”), it now emphasises craftsmanship while others
boast about digitalisation.

To that end Rolls has a long list of options available through

its dealers: within the rear armrests, they may offer you a
mini-fridge and a pair of champagne flutes; a lesser
company will try to flog plastic cupholders. But the firm also
encourages customers to visit Goodwood or four “private
offices”, in New York (America is its biggest market), Dubai,
Seoul and Shanghai. There customisation can be taken to a
new, even pricier, level in consultation with the firm’s army
of designers.
Rolls will say merely that “hundreds” of customers have
done so. The ultra-rich may not be feeling the pinch quite as
hard as buyers of lowlier luxuries, and British craftsmanship
still has an appeal. Indeed Rolls is the only carmaker with a
head of embroidery, who will stitch intricate designs into
interiors—such as the wildflower one customer took a liking
to when out for a hike. The firm is especially proud of a
Phantom saloon modelled as a homage to the one driven by
the villain in “Goldfinger”, an early James Bond film.

Mr Brownridge says he is more interested in increasing

bespoke offerings than in lifting sales. An investment of
£300m to expand the factory next year will help this side of
the business grow even faster, as well as provide more
space to make yet more exclusive one-off cars that might
fetch $30m apiece. Ever discreet, Rolls does not reveal how
much all this effort makes for BMW, its German owner, but
for a “jewel in the crown”, it is a “meaningful contribution”,
says Mr Brownridge. And if you want a bejewelled crown
added to your car, Rolls will surely oblige.■

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Apple watches and wobble boards

A much-praised British
scheme to help disabled
workers is failing them
It lavishes spending on some, and unfairly deprives others
1月 09, 2025 02:50 下午

RACHEL REEVES, Britain’s chancellor, loves “working

people”. She mentioned them 13 times in her budget
speech in October. But like her Conservative predecessors,
Ms Reeves is rather less keen on benefit recipients. The
welfare bill for those on sickness and disability is expected
to increase by about half in the next five years, exceeding
£100bn ($123bn), or 3% of GDP, by 2030. Some suspect the
generous terms are contributing to Britain’s high levels of
economic inactivity.

Against this backdrop, Access to Work, a government

initiative to help people with a disability or a health
condition back into work, seems like a godsend. Recipients
can receive grants of up to £69,260 a year to pay for things
like equipment, sign-language interpreters, coaching and
counselling. Spending has jumped by 72% in the past two
years, but at £258m it is still but a snip of the overall
benefits budget. To supporters, it is world-leading and a rare
example of something that is right with the benefits system.
Instead, it may embody everything that is wrong with it.
The scheme seeks to tackle a real problem: only 53% of
disabled Britons are in work, compared with 82% of non-
disabled. Some 2.6m more working-age people identify as
disabled than did so a decade ago.
For years spending on the scheme remained stable (and
was mainly on support for the deaf). Yet since 2022 the
number of claimants has doubled. Most of those now
applying cite poor mental health, learning disabilities and
neurodivergent conditions such as autism and attention-
deficit hyperactivity disorder (ADHD).

The trouble is that generous terms intended to empower

disabled people may have left the scheme open to
gimmicks. No formal diagnosis is necessary to apply, the
grant is not means-tested and no assessment is needed “if
a customer knows their support requirements”. One website
lists fidget tools and wobble boards as “practical”
equipment that can be reimbursed. On Reddit, a client talks
up the “Apple watch” they were awarded for time
management.

Word spreads on social media. Maddy Alexander-Grout, an

influencer who helps other entrepreneurs “become more
visible by telling their story”, coaches 40 people with ADHD,
a service paid for by Access to Work. In one YouTube video,
Ms Alexander-Grout helps a friend fill in the application form
for ADHD and “possible dyspraxia” (“she’s sometimes a bit
clumsy…she does hurt herself a lot”).

There is no reason to suggest that Ms Alexander-Grout has

done anything improper. But quietly the Department for
Work and Pensions (DWP) has cracked down on the budding
coaching industry, reducing the hourly costs of coaching
that can be reimbursed under the scheme from £450 to
£205, and restricting the number of sessions. Demand is
growing far faster than the scheme is able to absorb. In
October the backlog for applications stood at 55,000, more
than the entirety of those who received support in 2022-23.
In another video on TikTok Ms Alexander-Grout complains
about not being reimbursed for hiring an administration
assistant, joking that the department is punishing her for
the “huge waiting lists that I caused them”.

Many recipients genuinely benefit from the scheme, says

Leanne Maskell, who runs ADHD Works, a coaching
company. But it is unclear if, overall, the spending does in
fact help much: the DWP has consistently said the scheme
is too difficult to evaluate. Despite its recent expansion the
number it supports remains tiny: some 68,000, or 1% of the
disabled in work.

The growth of Access to Work papers over wider cracks in

the benefits system. Yasmine Camilla, who has dyslexia and
ADHD, applied for disability benefits last year when she was
struggling with her mental health. The DWP rejected her for
the standard disability allowance, worth around £400 a
month, but ended up giving her £70,000 over two years
through Access to Work to help her focus on being a social-
media influencer. “When I was granted the money I kind of
laughed inside,” she says. “I’m disabled enough to help me
pay more money and pay more tax, but [not enough] just to
live.”

Under the Equality Act of 2010 employers must make

“reasonable adjustments” to meet the needs of their
disabled employees. But in reality the workplace still
discriminates against disabled people, notes Kim Hoque of
King’s College London, who points out that a voluntary
employer scheme, Disability Confident, has failed to
improve outcomes. To truly help the disabled back into
work, the government should start by making workplaces
more accessible: not only with wheelchair ramps, but with
quiet corners and flexible working. Then Access to Work
could be used for those who most need it, rather than those
who discover it first. ■
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disabled-workers-is-failing-them

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Conservation

Britons are keener than

ever to bring back lost and
rare species
Immigrants that everyone can get behind
1月 09, 2025 02:50 下午

An immigrant that everyone can get behind

THE LARGE blue butterfly has a strange life. After munching

on wild thyme flowers for a few days, it drops to the ground
and persuades a particular species of red ant to carry it into
a nest. It stays underground for months, impersonating an
ant grub and snacking on its hosts. Eventually, it crawls out
of the nest and flies.
It became extinct in Britain in 1979, just as scientists began
to understand its idiosyncratic needs. But a few years later
two researchers, David Simcox and Jeremy Thomas, brought
some eggs from Sweden. The reintroduction of the large
blue has been so successful that Britain lords it over
continental Europe, where the butterfly continues to decline.
More than half a million eggs are laid in the country each
year.

Britons have been reintroducing species since the 1830s,

when the capercaillie, a large bird, was brought to Scotland
from Sweden for the purpose of shooting it. The onset of
rapid climate change and the vogue for rewilding have
made them much keener. Alastair Driver of Rewilding
Britain, a charity, knows of plans to reintroduce 64 species
to 45 sites. Some, like red squirrels and devil’s-bit scabious,
a plant, never disappeared from Britain but are missing from
particular places. Others, like Eurasian beavers, had
vanished.

The beavers are famous for their furriness and for their
ability to transform landscapes. So are white-tailed eagles,
which were reintroduced to Scotland beginning in the 1970s
and have more recently been released in the Isle of Wight.
But many of the projects involve insects. Chequered skipper
butterflies have been brought from Belgium to
Northamptonshire, where they are thriving. Narrow-headed
ants, which had been driven into a single wildlife refuge in
southern England, have been moved around the country.

In December Forestry England announced that it had moved

plugs of earth containing fungi from an old forest to a new
one. The distance travelled was short, just nine miles
(14.5km), and the species involved could hardly be less
photogenic. But fungi are crucial for plant health, and they
are collectively massive, with a global biomass thought to
be several times greater than all animals. “Very few top
predators can be reintroduced,” says Andrew Stringer of
Forestry England. The smaller stuff is where the action is.

People who work on reintroductions and translocations

describe many difficulties. Funding for projects is often
short-term, and can cease as soon as creatures are
released. Governments dither over the status of some
species, including the Eurasian beaver (some have been
released illicitly by impatient rewilders, a practice known as
“beaver bombing”). Farmers object to some toothy and
clawed creatures.

Regulations to prevent suffering and the spread of diseases

have become far more exacting. In the 1980s Mr Simcox,
who is now at the Royal Entomological Society, set out to
collect large blue butterflies in a camper van. When Nigel
Bourn of Butterfly Conservation brings chequered skipper
butterflies to England, vets check the insects before and
after the journey to see how they are coping. It does not
deter him at all. Mr Bourn says that discussions are under
way about bringing back two other butterflies. ■

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End of the space race

The decline in remote

working hits Britain’s
housing market
A return to the office means a return to town
1月 09, 2025 02:49 下午

BRITONS ARE back in the office—and not just because a

new year has begun. Five years after the start of the
pandemic, ever more employers are demanding that their
staff come in three, four or even five days a week, forcing
many to abandon home offices eagerly acquired, furnished
and decorated during lockdown. That turn in the trend is
showing in Britain’s housing market. Properties, often large
ones outside London, bought and built in the hope that
covid had consigned commuting to the past, no longer look
so desirable.

The switch back from working at home has gathered pace.

According to the Virgin Media O2 Business Movers Index,
which tracks commuting behaviour in Britain, the number of
companies requiring employees to turn up three or more
days a week rose to 75% in 2024, from 67% the year before.
Bosses at half the firms it surveys have ordered staff back
for at least four days, up from 46%. Nearly one in three
companies insist that employees are in the office for a full
five days.

On January 7th WPP, an advertising giant, became the latest

to tighten its policy. From April it will require its workers to
be in the office four days a week. Nearly two-fifths of British
workers now commute five days a week; 83% of business
leaders polled by KPMG, an auditor, say they expect a full
return to the office by 2027.

All this is undermining the home-buying habits formed

during lockdown. So far, house prices overall have remained
resilient, even though interest rates are no longer at rock-
bottom. They rose by 3.3% in 2024, according to Halifax, a
big mortgage lender. But cracks are appearing in the prices
of homes that were sought after for their large gardens or
extra rooms when covid was at its height.

In 2024 detached properties, the prices of which rocketed

during the pandemic, recorded the weakest price growth of
any category for the second year running—behind flats,
semi-detached and terraced houses, according to
Nationwide, another leading lender. They are also proving
harder to sell. Detached houses take 73 days to find a
buyer, twice as long as they did in 2022 and longer than
other homes, says Rightmove, a property website.

Even at the top end of the market, prices are adjusting to

this new reality. Outside London, prices of “prime”
properties, valued at £1m ($1.2m) or more, have fallen by
nearly 7% from their peak in September 2022, says Lucian
Cook, head of residential research at Savills, an estate
agent.

Higher mortgage costs explain some of this. But dwindling

demand in areas that Londoners flocked to during
lockdowns, sending prime-property prices up by 17%
between 2020 and 2023, suggests a structural shift. Prime-
property prices in coastal regions, which performed strongly
during the pandemic, declined by more than 5% last year,
for instance. It marks the end of both the race for space and
the dash to the countryside, says Mr Cook.

Markets closer to London appear to be heading the other

way—perhaps reflecting a renewed need to be within
commuting distance. The capital’s prime markets, which
lagged behind those in the rest of the country during covid,
are returning to modest growth: prices rose by 1.4% in
2024, according to Savills.

As preferences and prices change, so do developers’

priorities. Many housebuilders shifted away from flats
towards detached homes after the global financial crisis to
appeal to cash-rich buyers (see chart). In 2008 detached
properties made up 15% of new housing stock, according to
the National House Building Council.
A government-backed help-to-buy scheme, initiated by the
Conservative-Liberal Democrat coalition in 2013, helped
first-time buyers purchase larger homes by lending them
part of a property’s value. By 2019 detached houses’ share
had reached nearly 30%. The pandemic reinforced the
trend. By 2022 the desire for more space had boosted the
share of detached homes in new housing to more than 35%.
Developers are adjusting their inventory once again. Last
year the number of new detached homes was down by more
than half from its peak in 2022—a larger decline than for
flats, terraced houses or semi-detached homes. The return
to the office and the end of cheap debt are pointing the
same way: no longer able to afford the houses they want,
Britons are settling for the ones they need.■

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Dangerous liaisons

The phenomenon of sexual

strangulation in Britain
A survey suggests the risky practice is more common than
you might think
1月 09, 2025 02:50 下午

“I’M VANILLA, BABY/ I’ll choke you, but I ain’t no killa, baby,”
raps Jack Harlow on his number-one hit from 2023, “Lovin’
On Me”. According to a survey of over 2,000 people
published in December by the Institute for Addressing
Strangulation (IFAS), a charity, more than one in three
Britons aged between 16 and 34 have been strangled
during consensual sex on at least one occasion. IFAS was
established with Home Office funding in 2022, when non-
fatal strangulation was made a distinct offence in England
and Wales. Previously, crimes involving strangulation were
often charged as common assault (a category that also
covered simply shaking a fist at someone or using
threatening words).

Despite the perils, sexual strangulation—or “choking”, by its

friendlier name—appears to be widespread. It refers to the
obstruction or compression of airways and blood vessels in
the neck by external pressure, usually a hand. Starving the
brain of oxygen is known to induce feelings of euphoria. A
survey in Australia found that most first encountered such
strangulation in online porn.

The IFAS survey probed the quality of “consent”. It found

that only half of those who said they had experienced
strangulation had always agreed to it beforehand; 17% said
they had never agreed to it. For consent to be genuine, it
must also be informed. Yet the dangers are not widely
known. The oxygen deprivation from even modest pressure
to the neck can lead to brain injury. Damage to blood
vessels in the throat can cause clotting and, ultimately, a
stroke—weeks or months later. A meta-study in 2020
suggested that strangulation may be the second-most
common cause of stroke in British women under 40.

Data are, unsurprisingly, scarce. In 2019 a BBC survey of

over 2,000 women aged 18-39 found that more than one-
third had experienced unwanted strangling, slapping,
gagging or spitting during sex. According to one study,
women who are non-consensually strangled face a seven-
fold increase in the odds of being murdered by their partner.

Victims now have better recourse to the law, at least on

paper. A strangulation case typically takes about three years
to get to court. Campaigners say their work has just begun.
Although they raised the alarm about sexual strangulation
several years ago, the IFAS survey is the first major British
study on its prevalence. IFAS wants to conduct more
detailed research and (like the recent “Breathless”
campaign in Australia) raise awareness of the practice’s
risks among those most likely to experience it. But that will
take money. And despite the Labour government’s pledge to
halve violence against women within a decade, cash can be
in short supply. ■

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Bagehot

How means conquered

ends
British politics has become a prisoner of process
1月 09, 2025 02:50 下午

“WE CAN’T AFFORD not to act,” said Wes Streeting, the

health secretary. After six months in office the Labour
government on January 3rd unveiled its scheme to sort out
England’s social-care system. All parties agree the system is
a disgrace. It jams the ailing National Health Service, heaps
pressure on close-to-bankrupt local councils and causes
misery for the infirm and disabled. So act Mr Streeting did:
he unveiled an independent commission on social care. Its
final report is due in 2028.
British politics has become a prisoner of process, with social
care simply the latest topic to be banged up. “Process is a
worthy means to an end,” wrote Sir Tony Blair in “On
Leadership”, a self-help book for people who think they
should run G7 countries. “The trouble is its tendency to
become the end.” The result is “a continuous loop of
deliberation not decision”.

Commissions, consultations and inquiries designed to

improve policy instead delay and distort it, allowing
politicians to duck difficult but necessary decisions, such as
who pays for social care and how. In the 20th century
arrogant and over-powerful governments trampled voters
with the view that the ends justified the means. Now means
trump the ends. Guardrails introduced to avoid the errors of
the 20th century are instead enabling the errors of the 21st,
in which stasis has led to decay.

Decisions that can be made are delayed. Consider the Lower

Thames Crossing, a £9bn ($11.1bn) tunnel to the east of
London. In 2023 Sir Keir Starmer, who has styled himself as
a builder, bemoaned its slow progress, pointing out that the
tunnel had cost the best part of £800m before building had
even begun. After several consultations, the project was due
to receive a yea or nay from ministers in the autumn.
Instead, the government delayed its decision, and launched
another consultation. It is a controversial project:
environmentalists hate it; local MPs love it. Someone will be
angry, whether it is blocked or built. A belief in immaculate
conception has been replaced by the immaculate
consultation: the idea that something can happen without
someone being screwed.

If the purpose of a system is what it does, then

consultations, commissions and inquiries are there to ensure
decisions are simply not made. After all, in Westminster,
doing nothing is wise. Sophisticated operatives quote “Yes,
Minister”, a 45-year-old television satire about a minister
and his wily civil servants. “He is suffering from politician’s
logic,” says one mandarin of a minister keen on action.
“Something must be done; this is something; therefore we
must do it,” replies another. SW1 is a world where sins of
commission are everywhere and sins of omission do not
exist.

When stasis is the norm, legislation at normal speed can

seem irresponsibly quick. The most consequential moment
of Labour’s tenure so far came when a bill on assisted dying
whisked through its first stages in Parliament in November.
Rather than representative democracy in action—MPs
debated a topic, and sent it through to the next stage—
some saw an abuse of process. A Royal Commission would
have been a better approach, they said. People who see
assisted dying as little more than state-sanctioned murder
would care little if the policy were first suggested by a panel
of grandees with a soup of letters after their names. In such
a moral case, the means hardly matter when the ends are
so profound.

When the choice is between doing and discussing, British

politicians instinctively opt for the latter. Consider the recent
frenzy over “grooming gangs”—the abuse of thousands of
girls by men of mainly Pakistani heritage in Rotherham and
other towns from the late 1990s to the early 2010s. The
facts are well-known; culprits were jailed; hundreds of pages
of reports, detailing wretched abuse and the screw-ups that
led to it, are available to read.

Rather than action to prevent a repeat, Conservative MPs

and far-right outriders combined to demand a more
comprehensive inquiry. Even extremists, whose policy
prescriptions sometimes involve mass deportation or the
death penalty, called for a grandee to re-examine what is
already known. In response the government confirmed it
would enact some of the recommendations of an inquiry
into child abuse from 2022, which included basic measures
such as a statutory duty for certain people working with
children to report suspicion of abuse. That the Tories did not
enact them while in office is telling. After all, the inquiry had
done its job; the means to a better policy had instead
become the end.

The outcomes were terrible but the process was

immaculate

People worry, fairly, about the future of democratic politics

in Britain. The stability of Parliament, where Labour enjoys
an unassailable majority, stands in contrast to the chaos of
public opinion, where both main parties are remarkably
unpopular. Too often, the saviour is more process. Citizens’
assemblies, in which randomly selected people chew over
knotty issues and present their conclusions to lawmakers,
are beloved by wonks. At their heart is the mistaken idea
that people are unhappy with the manner of decisions, not
their effect. Forget the ends, consider the means.

Offering another commission, consultation or an assembly

becomes little more than an ineffective “accountability
sink”, into which blame for a decision can be poured. The
term was coined by Dan Davies in “The Unaccountability
Machine”, one of the most useful books of 2024. In it, he
defined accountability thus: “The extent to which you are
able to change a decision is precisely the extent to which
you can be accountable for it, and vice versa.” In other
words, a shop assistant might be able to fob off an angry
customer by blaming a system they have no power to
change. Politicians have no such defence. After all, a
government is almost always able to change something. It
can hide behind process only for so long. Voters see through
it, eventually. Means are no protection if voters are unhappy
with the ends. ■

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International
Women warriors and the war on woke
The Kevlar ceiling :: Trump’s Pentagon pick wants women off the battlefield

Donald Trump has a strong foreign-policy

hand, but could blow it
The Telegram :: Bullying foreigners can be sadly effective, but also a
dangerous distraction

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The Kevlar ceiling

Women warriors and the

war on woke
Trump’s Pentagon pick wants women off the battlefield
1月 09, 2025 02:50 下午

ON JANUARY 14TH Pete Hegseth, Donald Trump’s nominee

for secretary of defence, will be grilled by senators on his
suitability for the job. He will be quizzed on allegations of
sexual assault and excessive drinking. He is also certain to
face questions about women and war. “We should not have
women in combat roles,” he said in a recent podcast. He
acknowledged that women had served “amazingly” in
America’s armed forces and that female fighter pilots were
welcome, but argued that women were simply not strong
enough to serve in infantry, armour and artillery units. Since
admitting women, “the standards have lowered,” he said.

Mr Hegseth’s intervention comes after a decade of

integration in America. Some armed forces lifted restrictions
on women years before: Sweden’s and Canada’s in 1989,
Finland’s in the 1990s. In others the change is more recent.
America gradually eased its rules in the 1990s and 2000s,
but its biggest step came in 2015 when Barack Obama’s
administration opened all combat positions to women (see
chart 1). Britain made the same move a year later, declaring
that women could serve on the front lines, beginning in the
armoured units and expanding to the infantry by 2018. That
experience has thrown up a number of lessons.
Mr Hegseth complains that sex differences in “bone density
and lung capacity and muscle strength” preclude women
from combat. This has two aspects. One is the heightened
risk of injury during training. A study by the British Army
found that the rate of musculoskeletal injuries in initial
training was twice as high in women as men. Female
trainees were three times more likely to suffer a stress
fracture—and ten times more likely to suffer one at the hip
—than men.

The second aspect is the physical ability to perform the

tasks involved in combat. Some of the most detailed
evidence of this has come from a study by the US Marine
Corps, in which mixed units, each including one or two
women, were pitted against all-male ones in a battery of
realistic tests—marksmanship, loading artillery shells and
the like. In 93 out of 134 tasks, the all-male units performed
better. Only in two did the mixed units come top. The time it
took to evacuate casualties was higher in mixed units (see
chart 2). The study was controversial. Ray Mabus, then
secretary of the navy, criticised its design and overruled its
conclusions, demanding that the marines integrate
regardless.
Some argue that technology has made physical strength
less important to soldiering. That may be true of some roles,
such as for pilots. But, in practice, strength still matters.
Anthony King, professor of war studies at Exeter University,
who recently wrote an internal report for the British Army on
its culture, including the role of women, points out that the
average infantryman in the second world war carried around
20kg of equipment in battle compared with 36kg carried in
Helmand province in Afghanistan, with loads routinely
hitting 45kg. Even among men, he notes, only 30% of
recruits meet the requirements for serving in combat arms
and even fewer actively want to serve in the infantry.

In Canada women make up almost 17% of the total force,

but just 4% of the infantry. In 2023 in Britain only ten female
recruits started infantry and armour basic training. Just 85
women have joined those two branches since 2019. Even in
the Israel Defence Forces, which are widely held up as an
example of successful integration, female soldiers serve
overwhelmingly in support units. Some armed forces have
targets, such as Britain’s wish for 30% of new recruits to be
women by 2030. However, Mr King is sceptical that this will
mean many more women serving in the infantry: “In combat
arms and infantry there is no historical or contemporary
evidence for the notion you could even get close to 10%.”

Mr Hegseth and those who share his views do not just argue
that women are unsuited to combat. They also believe that
the presence of women undermines cohesion. There is
much less evidence supporting this view. The conscript
forces of the 20th century often relied on male bonding (and
racial solidarity) to gel their unskilled troops, says Mr King,
but in modern professional armies, good training is an
effective substitute. A study commissioned by Britain’s
defence ministry found that men did not rate cohesion as
being weaker when women were present. Women
themselves experienced lower cohesion than men. But the
study was not clear on whether that was because they were
women, or because women tended to serve for less time,
knew other team members less well and were likely to be
more junior.

Mr King says that, in his experience, there are occasions

when standards may have been relaxed to accommodate
female recruits. What is more common is that women are
judged by a double standard. “A successful woman will be
given the status of an honorary man and treated as a good
bloke,” says Mr King. “But the minute she makes a mistake,
the mistake gets gendered.” That is compounded by other
factors, including sexual abuse.

Still, the climate for women is improving in some ways. In

the US Army, unwanted sexual contact affected 6.8% of
women in 2023, down from 8.4% in 2021. In Britain 2% of
rape cases and 6% of broader sexual offending cases
resulted in conviction in the civilian justice system,
compared with 8% and 23% respectively in the military
system. Culture is also changing more broadly. “Ten years
ago you would never get senior people talking about
menstruation, bras or anything like that with anything other
than a sense of profound embarrassment,” says Andrew
Murrison, a former British junior defence minister. “These
days, it is common parlance.”

The experience of integrating women into combat roles has

been “overwhelmingly positive”, says Mr Murrison.
Opponents like Mr Hegseth are vocal, but they are in a
minority. Even in 2013, two-thirds of Americans supported
integration, which has expanded the potential pool of
recruits at a time when armed forces in America and Europe
are struggling to fill their ranks.
Many of the challenges of integrating women have nothing
to do with combat or culture wars, points out Katherine
Kuzminski of the Centre for a New American Security
(CNAS), a think-tank. Some of these are purely practical. “I
used to have one set of barracks,” commanders might ask,
she says, “but what do I do if I now have two women and
100 men? Do I need to build an entirely separate barracks?”

Earning their jump wings

Others are about providing a level playing field. Men have

often had access to training programmes that give them a
better shot when they join the armed forces, says Ms
Kuzminski. Yet that can be addressed by relatively simple
interventions. The Marine Corps found that a 12-week
training programme led to a 30% increase in the number of
women who could perform the requisite number of pull-ups.

In the past, women’s body armour tended to be scaled-

down versions of male armour. Yet this puts disproportionate
pressure on women’s hips. A study by the US Army’s
special-operations command in 2021 found that 44% of
women had experienced problems with the fit of equipment
and pointed out the absence of devices to allow female
aviators and flight crew to urinate. “Gender bias is deeply
embedded into staff processes and equipping, at all
echelons,” it concluded.

In many ways, these are old issues. The first female

American paratroopers graduated from the army’s airborne
school more than 50 years ago, in 1973. Two decades later
America lifted its “risk rule”, which decreed that women
could not be assigned even to non-combat support positions
—say, as an intelligence officer—if they would be at the
same risk of becoming involved in combat as a front-line
unit. Thousands of women received the combat action
medal in Afghanistan and Iraq, where there was often little
distinction between a rear area and a combat zone. That
distinction has been further blurred by the growing range,
precision and proliferation of drones and missiles. As much
as Mr Hegseth may hanker after a more sexist past, he
cannot turn back time itself. ■

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The Telegram

Donald Trump has a strong

foreign-policy hand, but
could blow it
Bullying foreigners can be sadly effective, but also a
dangerous distraction
1月 09, 2025 02:50 下午

An illustration of Donald Trump pushing down on a lever

with one foot, attempting to lift the globe on the other side.

FOR THE SPIES, diplomats and military types tasked with

keeping America safe and prosperous, Donald Trump’s
bullying long ago lost its power to shock. Indeed, the
national-security establishment—including officials who
currently serve President Joe Biden—concedes that Mr
Trump’s brand of statecraft, involving America First
bombast, cruel jokes and offers that can’t be refused, is at
times effective. Mr Trump’s ability to generate leverage
leads to a different lament. Shrewd professionals worry that
the 47th president has a potentially strong hand, but might
blow it.

Mr Trump’s foreign-policy pronouncements on January 7th at

his Florida residence, Mar-a-Lago, were a case in point. At
moments he mangled facts like a rich uncle at Thanksgiving
dinner, falsely claiming that China controls the Panama
Canal and hinting that America might have to “do
something” about that. Yet he also showed off a salesman’s
knack for spotting unhappy punters possibly open to a new
deal. In this case some of Greenland’s 56,000 people chafe
under semi-colonial rule from Denmark. Mr Trump’s demand
that Denmark sell the resource-rich island to America or
face “very high” tariffs might be a show for supporters or a
ploy to soften up allies. But it touches on a real
dissatisfaction.

To be clear, Mr Trump’s land-grabbing bluster is a

propaganda win for aggressors such as Russia’s president,
Vladimir Putin. But Mr Trump did actual harm by saying that
he can “understand” why Russia feels threatened by
potential NATO membership for Ukraine—endorsing a key
Kremlin argument ahead of peace talks that he said could
end the Ukraine war in six months.

Mr Trump’s ability to amass and squander leverage is at the

heart of messages that the Biden administration hopes to
pass to its successor. This will be a struggle, for serving and
former officials concede that Mr Trump and his team view Mr
Biden’s foreign-policy record with scorn. For all that, some
messages may get through. Mr Trump’s chosen national
security adviser, Mike Waltz, has been talking intensively to
the incumbent, Jake Sullivan. Mr Trump and top aides are
consuming top-secret intelligence from America’s spy
agencies.

Transitions between political parties can be productive as

well as fraught, argues Rick Waters, who in nearly three
decades as a career diplomat served on the National
Security Council of President George W. Bush, and from
2021 to 2023 co-ordinated China policy at the State
Department. When one party stays in office, it can be hard
to question settled policies. Newcomers have an interest in
learning about looming crises, secret negotiations and other
“things that are not obvious outside government”.
Grown-ups in the Biden team and Trump-world agree on
more than some might expect. They concur that Mr Trump’s
impatience with Ukraine gives him power over President
Volodymyr Zelensky. It may even give Mr Zelensky a
political excuse to enter negotiations that involve the loss of
some territory—an endgame that Mr Biden’s team, like Mr
Trump’s, considers inevitable. The message from the
outgoing Biden team involves the need for corresponding
leverage over Mr Putin. In their telling, for the fighting to
end soon Mr Trump must be willing to let the war run,
otherwise Mr Putin will think he can wait America out.
Knowing that this advice is unwelcome, some in Biden-world
draw analogies with America’s chaotic departure from
Afghanistan, and ask whether Mr Trump wants to preside
over comparable failure in Ukraine.

On the Middle East, the Biden team agrees with Trump aides
that Iran is weaker than in decades. The devastation by
Israel of its proxies, Hizbullah and Hamas, and the collapse
of the Assad regime in Syria, offer a huge strategic
opportunity. That may help Mr Trump with his goal of
normalising relations between Israel and Arab states,
including the great prize, Saudi Arabia. The Biden team has
risks to flag, too. Islamists could end up controlling Syria.
Should Mr Trump push regime change in Iran, that overreach
will undermine American leverage regionally. Iranian
vulnerability could lead the regime to sprint for nuclear
weapons.

Mr Trump has generated leverage over China. Chinese

leaders are braced for pressure over their industrial policies,
trade practices and the modernisation of the People’s
Liberation Army. Global markets have priced in some
disruption. All this gives Mr Trump negotiating clout. The
question is how to use it. Trump aides will hear that Chinese
leaders are resigned to attempts to rebalance the US-China
trade relationship, but will respond fiercely if the Communist
Party’s legitimacy is questioned. Meanwhile, China’s levers
of retaliation should be taken seriously, as should its
rampant hacking and spying on American infrastructure.

Away from the TV lights

Whether they listen or not, Trump aides will hear how Team
Biden views the axis of adversaries formed by China, Iran,
North Korea and Russia. Co-operation between the four is
real and dangerous, they will hear, but China is also an
outlier. China has a stake in a stable international order. The
other three have little to lose. The advice is for America to
impose costs on China, without binding it more tightly to the
axis. Space warfare offers an example. Some time ago,
America spotted that Russia might deploy a satellite-killing
nuclear device in space. Mr Biden’s team urged China to
warn Russia against such a terrible idea.

Finally, national security involves a lot of hard, thankless

work. Biden aides have warned their successors that two
differently failing states, Haiti and Venezuela, may soon
generate flows of migrants to America. They have messages
to share about AI governance and AI diffusion, meaning the
tricky business of deciding which technologies to sell to
which countries. These are dull problems that cannot be
bullied away, but may shape the coming world. Wish the
grown-ups luck. ■

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Special report
The economic gap between Africa and the
rest of the world is growing
Like the jaws of the crocodile... :: Business as usual will not narrow it, says
John McDermott

Africa is undergoing social change without

economic transformation
An urbanisation unlike any other :: Neither farms nor workers are getting
more productive

Africa has too many businesses, too little

business
Size matters :: Being your own boss is not the best strategy

African elites should align themselves with

their countries’ needs
The need for “development bargains” :: Otherwise the future looks zero-
sum

The African investment environment is at its

worst in years
Who you gonna call? :: Sources of finance have declined

To catch up economically, Africa must think

big
Closing arguments :: But it would require a new surge of ambition

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Like the jaws of the crocodile...

The economic gap

between Africa and the
rest of the world is
growing
Business as usual will not narrow it, says John McDermott
1月 09, 2025 02:50 下午

IN MANY WAYS, there has never been a better time to be

born African. Since 1960, average life expectancy has risen
by more than half, from 41 years to 64. The share of
children dying before their fifth birthday has fallen by three-
quarters. The proportion of young Africans attending
university has risen nine-fold since 1970. African culture is
being recognised worldwide; in the 2020s African authors
have won the Booker prize, the Prix Goncourt and the Nobel
prize for literature. This year the G20 will hold its first
summit on the continent, in South Africa. All of this progress
augurs well for the world’s youngest and liveliest continent.

And not since prehistory has there been a time when people
were more likely to be born African. The total population of
its 54 countries has doubled in 30 years, to 1.5bn. The UN
predicts it will double again by 2070. Most of the population
growth expected over the rest of the 21st century is
expected to take place in Africa. These new generations are
already leaving their mark. Political parties that trace their
roots to the independence struggles of the 20th century are
losing support from a generation of better educated and
digitally connected Africans. In the past decade nearly 30
incumbents have lost general elections.
Demography, urbanisation, politics and consumer
technologies mean the continent is undergoing profound
social change. But that change is not being supported by
economic transformation. Instead, African economies are
falling ever further behind the rest of the world. In 1960 GDP
per person in Africa, adjusted for the different costs of goods
in different places (so-called purchasing-power parity, or
PPP), was about half of the average in the rest of the world.
Today it is about a quarter. Then the region was roughly on a
par with East Asia. Today East Asians have average incomes
seven times higher than those in sub-Saharan Africa. When
plotted (see chart) the steadily growing gap looks “like the
jaws of a yawning crocodile”, says Jakkie Cilliers of the
Institute for Security Studies, a South African think-tank.
One line rises up, the other stays almost flat.

In terms of the great issues of the 21st century, the fact that
Africans are becoming relatively poorer even as they are
powering the world’s population growth ranks up there with
climate change and the risk of nuclear war. On current
trends Africans will make up over 80% of the world’s poor by
2030, up from 14% in 1990.

Real changes, lost chances

Though the continent seemed to have made a promising

start to the 21st century—this newspaper went from
lamenting the Hopeless Continent on its cover in 2000 to
celebrating Africa Rising in 2011—the growth spurt was
short-lived and comparatively weak. Even in the heady days
of 2000-14, when real GDP per person rose by 2.4% per
year, other developing regions were growing more than
twice as fast and creating more jobs. Since then, despite
some stellar performers, income per person has stayed flat.
The World Bank talks of “a decade of futility in economic
performance” in sub-Saharan Africa.

By 2030 Africans will make up over 80% of the world’s

poor

This feeds a growing concern that Africa may have missed

its moment. In the 2000s African economies were buoyed by
Chinese demand for commodities and by the rise of
globalisation. Widespread debt forgiveness, finalised in the
mid-2000s, meant that African governments could spend
more on schools and infrastructure and take on new loans
more easily.

It is wrong to say that the opportunities afforded the

continent at that time were all wasted. Abebe Selassie, the
head of the IMF’s African department, likes to remind those
stressing about the latest crises in Africa that, although
these may be tough times, the continent is in much better
shape than when he was a young Ethiopian technocrat in
the early 1990s. “If anybody had said to me then that Accra,
Kampala and Addis would, 30 years on, look anything like
what they do today, I would have thought they were under
the influence of more than just a cup of strong Ethiopian
coffee,” he said in a speech in July.
And the region can boast some enduring success stories.
Over the past 60 years Botswana, Mauritius and the
Seychelles have grown at a clip, roughly keeping pace with
the rise in GDP per person elsewhere in the world. More
recently countries such as Ivory Coast, Ethiopia and Rwanda
have chalked up impressive growth. But they have been
exceptions rather than the rule. And the largest economies
—Egypt, Nigeria and South Africa—have been especially
sluggish. Even before the twin shocks of covid-19 and war in
Ukraine, some were asking, in the words of the title of a
paper co-authored in 2019 by Indermit Gill, now chief
economist of the World Bank: “Has Africa missed the bus?”

In most of Africa most people are poor and productivity

growth remains sluggish. As long as that continues the
continent’s youthful population will not be able to become
the force for change that it ought to be. “We have to create
jobs for our young people,” says Mavis Owusu-Gyamfi,
president of the African Centre for Economic Transformation,
a pan-African policy institute. “They can’t keep being
labelled an ‘opportunity’ that is never realised.” Sir Mo
Ibrahim, a Sudanese-British businessman, adds: “Unmet
expectations, especially for the young people, fuel
frustration and anger, the best triggers for unrest and
conflicts.”

Growing economies with lots of opportunities are not only

good for civic calm; they are also vital to withstanding
climate change. The UN Economic Commission for Africa
says that 17 of the 20 countries most vulnerable to climate
change are in Africa. In 2024 droughts and floods associated
with the El Niño phase of the El Niño-Southern Oscillation, a
flip-flopping tropical-weather phenomenon, showed how
vulnerable farmers’ livelihoods are to climate extremes.
Floods displaced 4m people and closed thousands of
schools. The World Meteorological Organisation, a UN
agency, has estimated that African countries divert up to
9% of their budgets to deal with such shocks. If the global
temperature rises more than 2°C above what it was in the
19th century African crop revenues could fall by 30%,
according to a recent paper by Philip Kofi Adom for the
Centre for Global Development, a think-tank based in
Washington, DC.

But the foundations such growth would need are in

disrepair. The IMF says that about half the countries in Africa
are experiencing “high macroeconomic imbalances”, by
which it means one or more of the following: inflation at
50% or higher; a wide fiscal deficit; debt-service costs of
20% or more of government revenue; and foreign currency
reserves that can cover just three months of imports.

Finance is increasingly hard to come by. Borrowing in dollars

on capital markets is more expensive than in the 2010s.
Foreign direct investment flows have fallen by about a third
since 2021. In 2023 Chinese lending to Africa was $4.6bn, a
rebound from paltry amounts at the start of the decade, but
still below what was seen in every year of the 2010s. The
share of Western aid flowing to Africa is declining.

There are other reasons to worry. Geopolitical tensions are

at a post-cold-war high, and the IMF says sub-Saharan Africa
is the region that would be hit hardest if the world split into
separate trading blocs. Some policymakers also fret that the
rise of automation will make it harder to attract the sort of
labour-intensive manufacturing that powered Asia’s rise.
This special report will argue that, under a business-as-usual
scenario, the Africa gap will not be closed. The continent’s
countries need much greater levels of investment from
Africans and foreigners alike. Most need larger, more
dynamic private sectors, more productive farms and more
effective governance. They need better provision of public
goods and less graft. Only then can they expect the sort of
productivity gains and economic transformation seen
elsewhere in the emerging world.

For this to happen, those in power need to want it to

happen. At present, this is all too often not the case. African
elites are often frustratingly complacent about the future of
the continent. There are exceptions, but for the most part
this generation of political leadership is deeply uninspiring.
African business leaders, for their part, are hobbled by
political interference and thus incentivised to be damagingly
short-termist. This can lead to mutual enrichment and a
satisfaction with the status quo. But business- and politics-
as-usual are failing today’s ordinary Africans—and blighting
the prospects of those to come. ■

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An urbanisation unlike any other

Africa is undergoing social

change without economic
transformation
Neither farms nor workers are getting more productive
1月 09, 2025 02:51 下午

Hit the road, Jack

IT IS HARD to decide which looks more forlorn, Webster

Malupande or the wilted maize stalks around him. A
smallholder in southern Zambia, Mr Malupande is one of
many farmers devastated by a recent drought that halved
production, leading the government to declare a state of
emergency. Even before then he struggled to get more yield
from his fields. “We do what we can,” he says, “but it is
never enough.”

The next day Hakainde Hichilema is standing in another

field, tipping his cowboy hat to the crowd. Zambia’s
president—who has an MBA and a cattle farm—is inspecting
crops grown from drought-resistant seeds. “Climate change
is here to stay…We don’t need to debate that any more,” he
says. Using new technology can prevent shocks in future, he
continues. More productive farms mean more food and
higher rural incomes, which in turn will boost industry. “This
is a Godsend,” the president says of the new seeds.

Mr Hichilema wants Zambia, whose GDP per person of

$1,226 is below the average for sub-Saharan Africa, to be a
“prosperous middle-income country” by 2030. He has talked
of the need for “structural transformation”. That means
people swapping farming and rural life for urban, industrial
jobs. He wants Zambia—and Africa as a whole—to go
through the sort of green revolution seen in Asia and Latin
America last century.

It is not the only revolution Africa has done without. Robert

Osei, an economist, has written that Ghana developed
“without a green revolution, an industrial revolution, or a
service revolution of the types seen …in Asia”; the
observation applies beyond his homeland. In 2024 the
African Centre for Economic Transformation (ACET), a
Ghana-based think-tank, likened African economies to “early
transformers” in Asia and Latin America. Its “African
Transformation Index”, which scores countries based on
their adoption of technology, labour productivity and
diversity of exports, was sobering. “Most African countries
are not transforming their economies at a consistent or
steady rate,” noted K.Y. Amoako, ACET’s founder.
Superstructuralism

Underpinning much of this is a lack of productivity growth. If

the Africa gap is defined in terms of GDP per person, then
closing it could happen via two channels. The first is by
having a rising share of workers relative to non-workers. In
many African countries that ratio will become more
favourable over the 21st century as women have fewer
children. But a large “demographic dividend”—like that seen
in late-20th-century Asia, where fertility plummeted much
faster—is unlikely.

The second channel—increasing how productive each

worker is—remains the crucial one. Research by the World
Bank has found that growth in total-factor productivity (TFP)
—how efficiently labour and capital are combined, and a
proxy for the use of technology in production—has been
“negligible” on the continent for the past 60 years. This
suggests that African economies have grown from increases
in labour, capital and natural resources, but not from
technology.

It is not that African countries are standing still. Far from it.
But social change is happening without economic change
alongside. Understanding what is happening is crucial to
closing the Africa gap.

In 1960, 15% of sub-Saharan Africa’s population lived in

cities. Now 43% of people are classed by the UN as urban.
The region is urbanising faster than any other. The
Economist Intelligence Unit (EIU), our sister organisation,
reckons that more than half of Africans will live in cities by
2035. Africa will have six cities of over 10m and a further 17
of over 5m.
On the face of it this is a repeat of the global shifts from
rural to city life. But African urbanisation is happening in
countries poorer than has been the norm elsewhere. And
elsewhere more productive farms encouraged urban
migration, with less need for farmhands to till fields. Again
Africa is different. Its urbanisation looks more like an
alternative to rural development than a consequence of it.
Today a little more than half of workers in sub-Saharan
Africa still labour on farms, about the share in western
Europe two centuries ago. They typically work unproductive
plots of less than two hectares (five acres) using methods
more suited to the 19th century. The “value-added” per
worker in sub-Saharan Africa, a measure of productivity, is
less than half the global average, and less than one-fiftieth
of the places with the most productive farms. Africa’s cereal
yields, another measure of productivity, are less than half
the average in the rest of the world. And though production
has increased since 1980, this has largely been because
Africans are farming more land, not farming it more
productively. Between 1980 and 2018 South Asia more than
doubled cereal yields without using any more land. In sub-
Saharan Africa yields tripled, but the land used more than
doubled.

Though there are hi-tech commercial farms in parts of

Africa, most small farms are low-to-no tech. Fertiliser use is
a tenth of that in Asia. Only 3.5% of agricultural land in sub-
Saharan Africa is irrigated. A lack of cold storage means that
much food is wasted; in Nigeria 45% of produce rots.
Christopher Udry, an economist based at Northwestern
University in Illinois, notes how, in America’s Midwest,
farmers just 80km apart may use different seed varieties.
But in Africa, “We don’t have seeds optimised for every 50
miles, we have seeds optimised for the continent.”

Less than 5% of agricultural land is irrigated

African policymakers and donors have tried to encourage

smallholders to adopt better technology. But it has proved
difficult. In a review of the evidence on technological
adoption published in 2024, Mr Udry and Tavneet Suri of MIT
found that “there is no single binding constraint”. Mr
Malupande, the Zambian farmer, has barely any savings to
invest, no access to finance and little option but to buy the
generic seeds on offer from state-subsidised schemes.

Small surprise that some farmers, or at least their children,

are upping sticks. In a lecture in 2024 Mr Udry showed that,
in a sample of 200,000 plots in six African countries, yields
fell by 4-5% per year between 2008 and 2018. After mulling
many explanations—such as changing weather, land
degradation, nearby conflict—he concluded that it was
because the farms were being worked less. Farmers, and
their children, are opting to try their luck elsewhere. Yields
declined most in farms closest to cities, suggesting that
there is a flow of erstwhile farmhands from the fields to the
hustle on the margins of the urban economy.

The share of Africans working in the service economy has

risen from 26% to 37% over the past three decades, more or
less mirroring the decline of the share in agriculture from
64% to 52%. However, these jobs are not in corporate back
offices. They are casual work in shops, markets and building
sites. McKinsey, a consultancy, notes that service-sector
productivity in Africa is less than half that in Latin America,
and lower than in India.

Trouble at mill

So far manufacturing has not offered the plethora of jobs

seen in other parts of the world. Only 11.5% of sub-Saharan
African workers are employed in industry, marginally higher
than the 9.9% share in 1991. Why manufacturing has
struggled to take off is hotly debated. Africa has for
centuries had lots of land and a scarcity of labour, the
opposite of Asia. At independence economies were geared
to resource extraction. And perhaps because unproductive
farms mean more expensive food, it seems to cost more to
employ Africans than it does to employ Asians. Research by
the Centre for Global Development (CGD), a think-tank
based in Washington, has found that in Africa labour costs
were on average roughly twice as much as a country’s GDP
per person, whereas in Bangladesh, for instance, they were
roughly the same.

In 2021 Xinshen Diao and co-authors at the Washington-

based International Food Policy Research Institute analysed
what they call “Africa’s manufacturing puzzle”. Using data
from factories in Ethiopia and Tanzania, they find a
dichotomy: highly productive plants use lots of hi-tech
equipment but few workers, and many less productive
plants use lots of people and little kit. This is not what
happened in Vietnam and Taiwan, they note, where labour
was absorbed into productive factories—creating a flywheel
that helped boost GDP per person over many years.

The authors suggest that this is primarily because, to be

globally competitive and plug into international supply
chains, factories need to adhere to high technological
standards. “The choice that African manufacturers seem to
face is either to increase productivity or to increase
employment.”

The implication is that Africa was late to the party; cheap

labour may not be the advantage it once was. “The
escalator is slowing, although it will not stop altogether,”
says Alan Gelb of CGD.
For some, manufacturing is special because it has
historically employed lots of people globally and had
positive spillover effects. In an article about Mauritius, which
successfully transitioned from a poor, sugar-dependent
economy in the 1960s to one based on textile
manufacturing, Joe Studwell, author of “How Asia Works”,
writes, “The lesson about the special role of manufacturing
in developing countries ought to be clear to every African
state. And yet the continent has almost no other examples
of governments developing and deploying coherent
manufacturing strategies.”

It may be the case that Africa’s development will look more

like South Asia’s than East Asia’s. A paper by Tianyu Fan of
Yale University and co-authors, entitled “Growing like India”,
noted that Indian development has come in part from
improving productivity in non-traded service sectors, such
as retail, hospitality and property, rather than export-
oriented manufacturing. This suggests that Africa could
follow the same path, given its large services sector. The
authors imply, however, that the cost could be high levels of
inequality and joblessness, as seen in India.

A different route

“The general process of African transformation—which

seems to be bypassing an industrialisation stage—is
probably not just a temporary phenomenon,” argues
Douglas Gollin of Tufts University. “What’s much less clear to
me is that this alternative path is suboptimal.” He believes
that development economists can be too focused on what is
happening in parts of the economy, such as farms or
factories, and not enough on general market frictions that
hinder productivity. He would like more attention on
removing barriers to trade, specialisation and the allocation
of capital wherever it is most productive.

The fact that Africa is following an idiosyncratic path does

not mean it is headed for a dead end. But whatever route it
is on, it needs more productive firms. Even if the continent
is not having a green or an industrial revolution, it will still
need a commercial one. ■

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Size matters

Africa has too many

businesses, too little
business
Being your own boss is not the best strategy
1月 09, 2025 02:51 下午

Stack 'em high

AFRICAN POLICYMAKERS love to champion their continent’s

entrepreneurs. For Paul Kagame, Rwanda’s president, small
and medium enterprises are the “backbone of Africa’s
economy”. “We must support the youth to go beyond
looking for jobs,” says Akinwumi Adesina, the head of the
African Development Bank (AfDB).
Such bigwigs like to point to data that seem to show how
unusually entrepreneurial Africa is. The African Youth
Survey, a regular poll, suggests that 71% of young Africans
plan to start a business. Male leaders also like to
congratulate themselves on how more than a quarter of
adult women have started, or are starting, a business—the
highest share of any continent, according to data cited by
the AfDB.

Yet much of this praise amounts to misplaced virtue-

signalling. Though there are African entrepreneurs founding
innovative startups in everything from fintech to commercial
agriculture, running a business is often the result of
desperation, not choice. To close the gap with the rest of the
world, Africa does not need more small businesses. It needs
more large ones. Large firms are productivity powerhouses.
They bring people, ideas, technology and equipment
together in ways that make workers more efficient, which
makes people richer.
McKinsey estimates that there are 345 firms in Africa with
revenues over $1bn (China has about 1,500). Yet the
consultancy noted in a report in 2018 that, excluding South
Africa, Africa has only around 60% of the large firms one
would expect, given the overall size of the countries’
economies. Those large firms are also not as large as the
ones found in other emerging regions. Taken together, adds
McKinsey, the total revenue pool of African firms (excluding
South Africa) is “about a third of what it could be”. Africa is
the only inhabited continent without any of the world’s 500
biggest firms, as compiled by Fortune, a magazine.

Other research suggests that African firms employ fewer

people than businesses do elsewhere. A paper by Leonardo
Iacovone, Vijaya Ramachandran and Martin Schmidt, three
economists, albeit from a decade ago, estimated that
African firms employ between a fifth and a quarter less
people than firms of the same age in other countries, even
after controlling for the size of the market where they
operate. Karthik Tadepalli of the University of California,
Berkeley, says that, in America, firms “either grow or die”.
Those that are still around ten years after their founding
typically employ three times as many people as when they
started. Unfortunately, in many developing countries,
including African ones, firms grow very slowly, often barely
adding workers over time.

Many of the “self-employed” may just be the

unemployed “in disguise”

Instead of many large firms with salaried staff, Africa has

lots of micro-enterprises and informal workers. More than
80% of employment in Africa is informal, according to the
International Labour Organisation. Roughly half of informal
workers in cities are self-employed, doing everything from
crafting Instagram advertising to fixing roofs. Many Africans
mix formal work with informal hustles, which are often
poorly paid. Most would love a steady job. Mr Tadepalli
suggests that many of the “self-employed” may just be the
unemployed “in disguise”.

Informal work is common in all poor countries. Data from

the 2010s suggest that African cities had similar shares of
informality to Indian cities. But Africa seems different in two
ways: it has a relatively high share of informal self-
employment, and the likelihood of a young person entering
informal work does not seem to be diminishing.

In 2022 Oriana Bandiera of the LSE and co-authors

compared the sorts of work done by 18- to 24-year-olds in
various parts of the world. Young Africans, they found, are
more likely to do unpaid work and not to have an employer
than their peers in other developing countries. They also
found that young Africans are not any more likely to hold a
salaried job than older Africans. “The jobs of many young
people in Africa do not differ from [those] of their parents’
generation.”

Small is unproductive

Part of the problem is poor education. Mass literacy has

been a precursor to take-off growth in many parts of the
world. Reading helps people follow instructions in a factory
or a call centre. Yet while primary-school enrolment has
risen in sub-Saharan Africa in the past 25 years, some 60%
of 15- to 17-year-olds are not in school. Literacy rates for
15- to 24-year-olds are around 75% across the region. The
average for other developing regions is 90%.

The two most commonly cited obstacles are capital and

electricity

But the problem is bigger than that: there are simply not
enough jobs for young people. There is a risk of a “vicious
cycle”, argues Ms Bandiera, “where most people run
subsistence enterprises because there are no salaried jobs
and there are no salaried jobs because most enterprises
operate at subsistence levels.” As Paul Collier of Oxford
University says, “Small isn’t stunning. It’s unproductive.”
The World Bank surveys firms from around the world about
what they see as their biggest obstacle. The results point to
something akin to the business version of Maslow’s
hierarchy of needs. In sub-Saharan Africa the two most
commonly cited obstacles are the basics every growing firm
needs: capital and electricity. In each case firms from the
region are more likely to cite these barriers than those
anywhere else. (A lack of “educated workers” is one of the
least commonly cited obstacles in sub-Saharan Africa.)

Access to finance is the main constraint cited by firms. Less

than 10% of those with under 20 employees use bank
financing. Making Finance Work for Africa, an NGO , reckons
that just 20% of all firms have a bank loan or a line of credit,
the lowest share of any continent. The ratio of credit to GDP
in sub-Saharan Africa is half of that found in South Asia and
Latin America.

Small wonder when it costs so much to borrow. The average

lending interest rate (the rate banks charge firms to meet
short- and medium-term needs) for the 19 African countries
for which the IMF had data in 2023 was 25%. In India and
Vietnam, it was around 9%. In some African countries
business people face even higher rates. On a visit to Accra
your correspondent visited Muina Wosornu, founder of Prête
Cashews, a snacks firm. She has relied on financing from
friends and family. Asked how much it would cost to take out
a bank loan, she calls up a banker who says, over the
speakerphone, that it would be six to ten percentage points
above the base rate, which at the time was 29%.

One reason for high rates is a lack of competition among

banks. Their net-interest margins are the highest of any
region. Research by the IMF shows that markups in sub-
Saharan Africa are on average 11% higher than in other
developing regions, suggesting that firms have outsize
market power and are shielded from competition from
startups.

Rates would also be lower if there were more savings to go

around. But the domestic savings rate in sub-Saharan Africa
from 2010 to 2021 was just 19%, against 37% in East Asia.
This is partly a demographic story: when fertility rates are
high there are more mouths to feed and less money to save.
But some analysts caution that in parts of Africa, savings
rates have remained low even as fertility rates have dipped,
suggesting that other factors matter, too.

Stagnant economies do not help. Neither does a rational

aversion to saving cash in countries with histories of high
inflation or, as was recently the case in Ghana, state-
enforced restructuring of pensions because of a debt crisis.
Many Africans continue to see land and property (and in
some cases cattle) as more reliable places to store wealth.
Though the rise in fintech firms should make it easier to
save, the shallowness of capital markets means there can
also be a lack of investment options. On a recent trip to
Angola your correspondent sat in on a talk by a young
investor who pitched to his peers on investing in the local
stock exchange. It will be hard for them to diversify their
portfolios, though: there are only four listed firms.

Then there is electricity, the second most commonly cited

obstacle. Energy for Growth Hub, another think-tank, found
that 78% of firms in Africa experienced annual power cuts in
2018, and that 41% identified electricity as a major
constraint to their operations, the highest of any region.
African firms lose on average the equivalent of 25 days of
economic activity a year through power cuts. Justice Mensah
of the World Bank last year estimated that Ghana’s power
crisis of 2013-16 increased the unemployment rate by five
percentage points, because it stunted incumbents and
made it harder for new businesses to get started. Other
research shows that firms in poor countries subject to power
cuts have lower productivity growth than those with a
steady supply, because it stops them using their capital
equipment.
Other inadequate infrastructure also matters. The cost of
transporting goods in Ethiopia and Nigeria, for instance, is
3.5 and 5.3 times that of America, according to analysis by
David Atkin and Dave Donaldson, two economists. Sub-
Saharan Africa has a road density of only about a fifth of the
global average, and only about a quarter of roads are
paved. When markets, domestic or regional, are poorly
integrated, firms’ growth prospects are constrained.

To see the difference good infrastructure makes visit Vertical

Agro, a processing firm in Kenya. It just became the first
company anywhere to sell frozen avocados to China, an
achievement that would have been impossible without
reliable electricity for freezing. (That electricity, like most of
Kenya’s, is from renewable sources, which should also help
the firm export frozen vegetables into regions implementing
cross-border carbon taxes, such as the EU.) Being located
near farms, major roads, a railway and Nairobi’s airport
means goods can get to market swiftly. “If you come back
in 25 years this whole valley will be full of factories,” says
Tiku Shah, the firm’s boss.

Other research points to the role of market frictions in

keeping African enterprises small. A study in Uganda found
that when farmers were given a digital platform that allowed
them to sell their goods to a wider group of buyers, they
increased their revenues. It is no coincidence that some of
the biggest conglomerates in Africa today, including
Dangote, a Nigerian company run by Aliko Dangote, Africa’s
richest man, started out as trading firms. Having access to
granular market intelligence when information is scarce
allowed them to build businesses serving demand about
which others did not know.

Yet boosting the size, number and productivity of African

firms is not simply a case of overcoming market failures.
Business in Africa can be highly political, in ways that
undermine the continent’s growth. ■

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The need for “development bargains”

African elites should align

themselves with their
countries’ needs
Otherwise the future looks zero-sum
1月 09, 2025 02:50 下午

Little Big Man?

IN 2017 CLAUDIO SILVA, who a few years earlier returned to

Angola after growing up in America, was optimistic that the
country of his birth was turning a corner. That year João
Lourenço became president, replacing José Eduardo dos
Santos, the corrupt autocrat who ran sub-Saharan Africa’s
second-largest oil producer for 38 years. The new president
pledged to reform the economy and to cut graft.
Today Mr Silva is sceptical. His dream of setting up a
restaurant showcasing local produce has been delayed by
venal officials demanding bribes. “I realise the more you try
not to be corrupt the more you get punished,” he says.

Mr Lourenço’s team insists the president is overhauling

Angola. “You don’t change a political system overnight,”
warns a cabinet minister. But business people all have
stories of graft. Beyond Luanda, the capital, there is little
sign of the tens of billions of dollars earned from oil. Most of
the population lives in poverty. Public spending on health
and education is around 3% of GDP, less than half the
regional average. “We had the potential to accumulate
generational wealth,” Mr Silva sighs, “just as the population
was exploding. But we didn’t leave enough on the table.”

There is frustration with politics all across Africa. A decade

ago the share of Africans telling Afrobarometer, a pollster,
that their country was going in the wrong direction was
roughly the same as the share who felt it was on the right
track. These days twice as many Africans think things are
going badly (see chart). Young people have recently taken
to the streets in Kenya, Mozambique and elsewhere to
protest against governments they see as corrupt and
incompetent.

The bad and the ugly

African politics is subject to the same forces as elsewhere.

When governments do a bad job, citizens want them out.
Yet there are certain aspects of the political economy in
many African countries that seem especially bad for growth,
making it harder to close the Africa gap. The first is the
weakness of the state. Most African countries are
autocracies of one sort or another; the EIU, our sister outfit,
classifies just six of the 54 countries as full or flawed
democracies. That can bring to mind the idea of all-
powerful, ever-present government. The reality is different.
African states are often incapable of doing the things a state
should do, while doing plenty of things that it should not.

Whether it is the provision of security and basic services or

the collection of taxes, Africa is under-governed. Less than
half of babies have their births registered in sub-Saharan
Africa. Congo has not had a census in 40 years. The IMF
estimates that in sub-Saharan countries tax revenues make
up 13% of GDP on average, against 18% in other emerging
and developing countries and 27% in rich countries. The
number of public-sector workers as a share of the
population is lower in sub-Saharan Africa than in any other
region. When Afrobarometer asks Africans to name the most
important problems they face, the issues they mention are
things taken for granted elsewhere: clean water, electricity,
roads, food and security.

A capable state matters for economic growth. Ricardo

Hausmann of the Growth Lab at Harvard University argues
that African states struggle to ensure “complementarity
between private and public goods”. In 2023 the Growth Lab
estimated that failing utilities were responsible for 40% of
the South Africa’s recent economic underperformance. State
shortcomings put off investors. Sameh Shenoudah of the
Africa Finance Corporation, a Lagos-based financial
institution, says he tells his dealmakers they need to
consider how any exporter they invest in is going to get its
goods out. “Don’t bring me a project, bring me an
evacuation plan,” is his message.

At the same time African policymakers have less margin for

error than those in other parts of the world. Picking the
wrong infrastructure project matters more if you have
funding for only a few. The margin of error is also narrow
when it comes to adapting to a warming planet. Poor
countries are more vulnerable to volatile weather because
they are less resilient. They do not have paved roads, high
building standards and ample cold storage. The World
Meteorological Organisation, a UN agency, estimates that in
sub-Saharan Africa the cost of adaptation will be $30-
50bn per year over the next decade, or 2-3% of GDP. This is
money that most African countries do not have.
Yet it is also true that many African countries do not help
themselves. There are more subtle ways in which African
governments undermine development. A research project
led by Nic Cheeseman of the University of Birmingham has
mapped what it calls “Africa’s shadow states”. These are
made up of parasitical networks through which businessmen
get sweetheart deals in exchange for funding politicians or
accepting kickbacks. This was the model on catastrophic
display in South Africa under Jacob Zuma.

And there is a yet more subtle cost. If secure property rights

depend on the whims of African leaders, they last only as
long as the Big Man is in office. This discourages long-term
investment. Ken Opalo, a Kenyan academic at Georgetown
University, in Washington, DC, argues that when politicians
and businessmen do not keep to their “lanes” it makes for
the worst of both worlds. “The fusion of lanes makes it
difficult for elites to specialise in either business or politics,
resulting in a region full of mediocre politicians and
politically dependent mediocre businesspeople.”

Looking for bargains

The closeness of business and politics also helps explain

why there are so few African entrepreneurs of global
standing, and so few globally competitive African firms. It is
hard to become a legitimate billionaire when wealth
depends on politics. It also encourages Africans with cash to
stash it offshore. Perhaps 30% of African wealth is held
outside the continent, compared with a global average of
8%, according to (somewhat old) estimates by Gabriel
Zucman, an economist.

Stefan Dercon of Oxford University, a former chief

economist at Britain’s Department for International
Development, sees rebooting relationships and attitudes
among elites as the key to progress. The shared
characteristic of successful countries, he argues, is not a
particular set of policies. “Successful countries appear to
have pursued a relatively diverse set of economic and other
policies”. It is that political and business elites have agreed
on an implicit pact that prioritises increasing the size of the
economic pie over simply gobbling it all up, as they did
before. Mr Dercon calls this a “development bargain”, and
argues that the agreement such bargains produce on the
path forward matters more than what the path actually is.

Mr Dercon points to India, Bangladesh and Vietnam as

examples of Asian countries that were as poor as many in
Africa today, but found the right elite consensus. He argues
that Ethiopia and Rwanda, both of which grew at 7% per
year for much of the past three decades, are African
examples of regimes that had such bargains. He suggests
that Uganda, Kenya and Ghana may have the ingredients to
forge deals, too.

You could add a few others. At independence, in 1968,

Mauritius was a poor plantation economy. Its first
government cut a deal with the sugar barons to invest in
manufacturing. That provided the foundation for the island’s
future success in tourism and services as well. The decent
growth in the first 15 years after apartheid in South Africa
can be seen partly as the result of a pact between the new
black political elite and the mostly white capitalist class.

It is easy to quibble with the idea of development bargains.

There is a risk of circular logic where any country that grows
very fast ought to put its success down to an elite deal of
some sorts. The bargain is an easier thing to describe after
the fact than to outline ahead of time. In neither Ethiopia,
which has recently had a civil war, nor Rwanda, where Paul
Kagame rules with an iron fist, do the elite bargains seem
durable.

Yet Mr Dercon’s insight ought to be galvanising for African

policymakers. It suggests that African countries need not be
defined by their histories; they could be defined by their
futures. And it suggests that the African politicians can do
more than just copy and paste the ideas they see abroad,
whether in the West or in East Asia. Yuen Yuen Ang, a
Singaporean academic who wrote “How China Escaped The
Poverty Trap”, an influential book that emphasises the
idiosyncratic interplay between government and market
forces, argues that the lesson from China for Africa is about
“using what you have”. “As someone coming from a post-
colonial country, I know what it’s like when great powers tell
you that you have nothing. Believing in yourself is a
necessary first step to transformation.”

Whether African elites are willing and able to strike such

bargains is unclear. The model of divvying up rents
extracted by foreign firms has worked fine for many of them
in the past. For this to change, African elites either need a
new mindset—or a change of incentives, making it in their
self-interest to gamble on development. The bargains Mr
Dercon describes have often been struck when regimes face
existential threats to their legitimacy. And there is no
shortage of those on the continent, whether in the form of
climate change or the 15m young people entering the
workforce every year, the vast majority of whom will not get
a formal job. African policymakers say that keeps them up
at night. Yet many seem as if they are yet to truly wake up
to it. ■

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Who you gonna call?

The African investment

environment is at its worst
in years
Sources of finance have declined
1月 09, 2025 02:50 下午

Still friends

ETHIOPIA HAS long benefited from close ties to the West,

China and emerging powers. In 2004 Western and
multilateral creditors wrote off more than $3bn of its debts.
Since 2000 it has received more loans from China than any
other African country except Angola. In 2014 it borrowed on
international capital markets for the first time. Asian
manufacturers set up factories in industrial parks with the
aim of using Ethiopia’s duty-free access to Western markets.
More recently it has received billions of dollars in investment
from the United Arab Emirates (UAE). Though the atrocious
civil war in Tigray caused the West to suspend some ties,
there was a reset in 2024, with the IMF and World Bank
announcing new loans last July.

Yet the architect of many of the reforms which attracted

those institutions is concerned about the headwinds faced
by African countries. Mamo Mihretu, Ethiopia’s central-bank
governor, worries that net financial flows—the balance
between the amount received in loans from overseas and
the amount going out in debt repayments—have turned
negative for many African countries. It is a clear sign of how
hard it is to attract the new investment they need. “This is
the biggest story that nobody is paying attention to,” argues
Mr Mihretu.

To match the sort of capital flows that led to East Asian

economic booms, Africa would need to roughly double
investment as a share of GDP from its current level of
around 16%. The African Development Bank (AfDB) has a
similar figure, estimating that the continent needs to close
an annual financing gap of $400bn, or almost 14% of its
GDP, to “accelerate its structural transformation process”.

Until recently, the 21st century appeared a benign time for

Africa in international affairs. China’s rise fuelled demand for
its natural resources. Globalisation encouraged investors
into emerging and “frontier” markets. Widespread debt
relief in the mid-2000s gave governments room to borrow.
They took out loans not just from the World Bank and
Western governments but from commercial creditors.
Between 2007 and 2020, 21 African countries borrowed on
global capital markets, many for the first time. China
became the largest official bilateral creditor, lending more
than $180bn since 2000, according to the Chinese Loans to
Africa database managed at Boston University.

China whirl

The world seems less forgiving these days. Geopolitical

tensions mean that sub-Saharan Africa may get stuck in the
middle of economic competition between the West and
China. African leaders may hope to play one side off against
the other. But since the region trades roughly as much with
China as it does with America and Europe combined, any
decoupling of the two blocs into separate trading areas will
be bad news. An IMF paper in 2024 suggested that, in such
a scenario, the median sub-Saharan African country would
face a permanent decline of 4% in real GDP. No other region
would be hurt as much.

It is also harder than it was for most African countries to

raise financing. This is to some extent a problem of Africans’
own making. After the debt relief of the 2000s, states
borrowed heavily. Debt to GDP in sub-Saharan Africa has
doubled over the past 15 years. Poor countries need to
borrow to pay for infrastructure to help them become less
poor. But in Africa debts are growing faster than output and
productivity.

FDI in Africa in 2023 was just $53bn, or 4% of the global

total

Now governments are spending more scarce revenue on

paying off old debts. Since 2022 a higher share of
government revenues has gone on servicing debts than on
health. The median share in Africa is 14% and in 13
countries it is more than 20%. Principal and interest
payments are expected to rise as a share of GDP across
sub-Saharan Africa in 2025, says the IMF, which has warned
that Africa faces a big funding squeeze. Some bright spots,
such as Ivory Coast, have refinanced their debt by returning
to capital markets. But interest rates on “eurobonds” (debt
issued in a foreign currency) are one to four percentage
points higher than before the covid-19 pandemic. Kenya, for
instance, issued a bond at 10% interest rate in February
2024 to pay off an older eurobond due a few months later. It
thus risks piling up problems for the future.

Other sources of capital are relatively scarce. Chinese

lending to Africa peaked at $28.8bn in 2016. In the 2020s it
has averaged $2.5bn per year (the pandemic played a role).
Foreign-direct investment in Africa in 2023 was just $53bn
or 4% of the global total, less in nominal terms than a
decade previously. In 2022 the share of aid from rich
countries going to Africa was at its lowest level since at
least 2000.

Around half of African countries have “macro-imbalances” of

some sort, notes the IMF. And the lack of investment in
future sources of growth, like education, infrastructure or
research and development, means that Africa looks likely to
fall further behind. On current trends it seems implausible
that it can attract the game-changing investment sums it
needs.

What might change this? Even a small increase in the share

of global private capital going to Africa could make a big
difference. (Between 2013 and 2021 Africa accounted for
just 0.5% of the global private-equity market.) There is a
debate about whether investors neglect Africa because they
think it is riskier than it is. Ignorance about the continent’s
diversity means that what happens in the most fragile
states can affect would-be investors’ opinions about, say,
Kenya. Data suggest the default risk of African infrastructure
projects is lower than in Asia and Latin America.
 For major investors Africa remains too small and too
fragmented

But that is only one sort of risk—and infrastructure is only

one class of investment. Analysis by the IMF suggests that,
though African sovereigns attract higher interest rates than
other developing countries, the spread can be explained by
factors such as a lack of transparency about spending and
borrowing. Other sorts of investment, say, in local firms, are
vulnerable to big currency devaluations and difficulties
repatriating profits. Then there is the risk of operating in
countries where politics and business are entwined. A
veteran investor says: “I know it’s popular to say that Africa
is misperceived but what’s the time value of bullshit? The
risk is real. Africa is a high-friction place.”

And the lack of reward can be as important as the presence

of risk. For major investors Africa remains too small and too
fragmented. Bright Simons of Imani, a think-tank in Ghana,
says, “There’s still a lot of room for the global investor to
ignore Africa. There’s still a lot of other places to go.”

What about China? At the latest triennial Africa-China

summit, President Xi Jinping announced $50bn in financing
over the next three years. There is less to the figure than
meets the eye. Some $10bn will go to Chinese firms in
Africa; $30bn is in the form of vague “credit lines”. At the
summit there was talk about how “small is beautiful”. But
big is needed.

Middle powers may fill some of the gap. Turkish arms and
construction firms are winning more contracts. The UAE is
by some measures the fourth-largest source of FDI in Africa,
after China, the EU and America. It and other Gulf countries
have deposited hard currency in central banks facing
liquidity problems. Yet the economic influence of many
middleweight powers can be exaggerated. The EU imports
33 times more from sub-Saharan Africa than Russia does.

African leaders are calling for more money from customary

sources. In 2024 they wanted donors to increase funding for
the World Bank’s vehicle for poor countries, the
International Development Association (IDA), to $120bn
over the next three years, from $93bn in the previous
window. The total announced in December was $20bn shy of
that target. Donald Trump’s administration could bring in
officials sceptical of the very idea of the World Bank.

Some African policymakers have latched onto climate

finance as a chance to direct more cash their way. But “the
dirty secret of climate finance is that much of it is displacing
traditional development aid,” says Vijaya Ramachandran of
the Breakthrough Institute, an American think-tank. CARE,
an NGO, believes half of climate finance provided by 23 rich
countries from 2011 to 2020 was money that previously
went on funding for areas like health, education and
women’s rights.

And the money that does go to poor countries for climate

change is mostly on mitigation, not adaptation, despite the
small impact that Africa has on emissions. IDA-eligible
countries are responsible for 0.5% of current emissions and
much less of historical ones. There is a risk that fiscally
constrained countries are being encouraged to take on more
debt for projects that divert their resources from growth.
The West’s approach to aid and climate in Africa is like
“banning buses in poor neighbourhoods while subsidising
private jets for the rich”, says Ms Ramachandran.

Outsiders can help in other ways besides aid, such as

clamping down on tax havens and making it easier for
African firms to sell their goods overseas. China has
promised “green lanes” to facilitate more agricultural
exports, but commercial farmers complain of arduous
regulations. America’s African Growth and Opportunity Act
granting African countries tariff-free access could be
expanded, for example by offering negative tariffs to
incentivise exporters, by making services eligible, and
cutting regulations on agricultural exports. Even if all that is
unlikely under a tariff-loving President Trump, his
government could boost America’s Development Finance
Corporation, a $60bn fund for investments in poor countries’
private sectors, set up during his first administration.

Geopolitics may encourage great-power competition that

Africans can exploit. But rising nationalism and
protectionism bode ill. It would be naive to think the world
will be kinder to Africa. If the continent is to close the gap it
will have to do the hard work itself. ■

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Closing arguments

To catch up economically,
Africa must think big
But it would require a new surge of ambition
1月 09, 2025 02:50 下午

HEDGE FUNDS are paid to anticipate the way the world is

heading. So it was notable that a few months ago Nir Bar
Dea, the boss of Bridgewater, the world’s largest hedge
fund, was in Abidjan, the commercial capital of Ivory Coast,
to co-host a summit calling for more money for the World
Bank. For Mr Bar Dea, Africa’s population explosion is one of
those “long term trends that people don’t pay attention to.”
By 2030 half of all new entrants into the global workforce
will be from sub-Saharan Africa. By 2050 the region’s
working-age population will still be rising when it will be
falling everywhere else. At that point Africa will be home to
approximately 2.5bn people, or around a quarter of
humanity. And unless Africa finds a way to boost its sagging
productivity, it will continue to fall further behind the rest of
the world, ensuring an ever greater share of the world’s
population is left behind. “People aren’t looking at the
problem,” he says.

Heavyweight hedgies visiting Abidjan reveal a couple of

things. The first is that capitalists, as well as do-gooders and
donors, remain Africa-curious. Jamie Dimon, the boss of
JPMorgan Chase, visited Nigeria, Kenya and South Africa in
2024 to build networks that can be “a gift to the next
generation” of his bank’s leadership. The International
Holding Corporation, the largest firm in the UAE, is eyeing
African assets. So are Saudi and Qatari investment funds.

Hedgies visiting Abidjan reveal that capitalists are still

Africa-curious

The second is that, for all the curiosity, those paid to be

unsentimental can see that the current trajectory is
worrying. The danger is that, rather than driving global
growth, its economies will continue to struggle.

The demographic divergence could be a boon. African

emigrants will be needed to do jobs in the rest of the world.
They will send home remittances, which are already worth
almost double the continent’s total FDI. African economies
will inevitably grow as their populations swell, adding to
global demand. If sub-Saharan Africa can repeat Asia’s
transformation, it “will become the next major engine of
global growth”, argues a research note by Bridgewater.
Today, it says, the region is home to 15% of global
population, accounts for just 3% of global output and
provides 5% of growth. If sub-Saharan Africa were to raise
its productivity growth from around 1% per year to 4%
(close to India’s recent rate), by 2050 its share of world
output would be 10%—and it would account for a fifth of
global growth.
The risk, however, is that Africa combines high population
growth with low or stagnant productivity growth—and that
the Africa gap only widens. If current trends continue
unchecked, this is what will happen. The Institute for
Security Studies (ISS), a South African think-tank, has
published scenarios for the future of the continent. These
“African Futures” incorporate data on a variety of factors
including demography, productivity, financial flows,
infrastructure and measures of human capital. Its “current
path” makes for sober reading. By 2043, the year its
forecasts end, median African GDP per person, adjusted for
purchasing-power parity (PPP), will be about a quarter of the
rest of the world’s, essentially what it is today. And Africa
will still have 400m people in extreme poverty, the vast
majority of the world’s destitute.

This special report has tried to explain the reasons for this
disappointing path. These include the scarce use of
technology in agriculture, the rise of unproductive, low-end
services and the absence of a manufacturing revolution.
Productivity is further hampered by small firms and small
markets. Africa has perhaps just half of the investment it
needs to close the gap. “Something drastic is needed to
change this rather dismal forecast,” write the authors from
the ISS.

Yet there is a better way forward. The ISS also forecasts a

“combined scenario”, where it projects what would happen
if African countries did most things right. These include
making a quicker demographic transition, expanding
education, increasing investment in infrastructure, boosting
agricultural productivity and manufacturing, encouraging
greater financial flows and implementing the African
Continental Free Trade Area (AfCFTA). Under its most
optimistic scenario the ISS reckons the Africa gap would
begin to close over the next 20 years. By 2043, GDP per
person in PPP terms would be about a third of that in the
rest of the world. Just 8% of Africans would live in poverty,
rather than the 17% projected on the current path.

Viewed from 2025 that continent-wide tide seems unlikely

to rise. More probably the gaps already visible between
African countries will widen. Last year it had nine of the 20
fastest growing economies in the world, including Ethiopia,
Rwanda and Ivory Coast. “Africa is becoming a split story,”
argues Charlie Robertson, author of “The Time-Travelling
Economist”. The countries that have seen fertility rates fall
below three, as happened in Mauritius in 1979 and Morocco
in 1999, have enjoyed demographic tailwinds, he argues, as
families have been able to save more money, increasing the
overall pool of investment and lowering interest rates.
Kenya should pass this threshold in 2029, Mr Robertson
points out.

Think bigger

“You need to discriminate between the different countries

on the continent,” cautions Amit Jain, who spent many years
in Africa and is now at the Centre for African Studies at NTU
Singapore. He points to how Morocco is developing a
commercial-agriculture sector and suggests that east
African countries are doing better than their peers in west
Africa in educating their children and expanding access to
electricity. The likes of Kenya are well located to integrate
into Asian firms’ supply chains, he adds. “Countries in the
region might not hit $60,000 per capita but $15,000 is
possible and would be a heck of an achievement.” Pan-
African rapid growth will require co-operation, though.
“Africa needs to morph itself into a bigger single market,
something like what India is trying to do,” argues Mr Jain. If
the AfCFTA were fully operational, the World Bank reckons it
could lift overall GDP by 7% by 2035 and take 40m people
out of extreme poverty.

Everyone with a stake in Africa must think big. Countries

need development bargains that allow for the emergence of
large firms and productive industries. Africa as a whole must
make the AfCFTA a reality, giving it more bargaining power
at international forums. Foreign countries need to face up to
the reality that their current approach to development
financing is nowhere near sufficient for Africa to transform
its economies and respond to climate change.

Perhaps most important, Africa needs to recover a sense of

ambition. In too many African countries the default
approach is what Ken Opalo of Georgetown University calls
“low-ambition/muddling-through developmentalism”, a
“destination anywhere” approach which follows paths
defined from outside without a clear sense of the paramount
goal. There is an urgent need for African policymakers and
business leaders to set their own far-reaching goals for
economic transformation and rally their people behind
them.

The stakes are high. Africa’s demographic boom has led to

the idea that the 21st is the African century. It could yet be.
But a quarter of the way into it, Africa had better hurry up.
■

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Business
A new electricity supercycle is under way
It’s electrifying! :: Why spending on power infrastructure is surging around
the world

Will Mark Zuckerberg’s Trump gamble pay

off?
Making friends :: He risks making enemies elsewhere

Alcohol-free drinks are becoming big

business
High and dry :: But will they ever be as good as the real thing?

America’s internet giants are being

outplayed in the global south
Southern oscillation :: From e-commerce to online banking, regional
competitors are innovating rapidly

Foxconn and other gadget-makers are

expanding their empires
Beyond the iPhone :: The world’s contract manufacturers are moving into
new products and places

What next for US Steel?

Alloys and allies :: The faded industrial icon has few good options without a
Nippon deal

The signals of workplace submissiveness

Bartleby :: Deference is all around you, unfortunately

Meet the ambitious wolf cubs of Wall Street

Schumpeter :: A duo of whippersnappers is taking on Goldman Sachs

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It’s electrifying!

A new electricity
supercycle is under way
Why spending on power infrastructure is surging around the
world
1月 09, 2025 02:50 下午 | Conselve

THE FACTORY floor of Schneider Electric’s plant in Conselve,

Italy, hums with urgency. Workers at the power-equipment
company’s facility, which is in the midst of a major
expansion, are busily assembling advanced cooling systems
for the data centres that underpin the development of
artificial intelligence (AI). “The key is the integration of grid
to chip and chip to chiller,” says Pankaj Sharma, an
executive at the French company, referring to a new design
it recently developed with Nvidia, an AI chip giant.

Over the past year, Schneider’s market value has risen by

over a third, to around $140bn. It is not the only maker of
electrical gear that is booming (see chart 1). The market
capitalisation of Hitachi, a Japanese conglomerate, has
tripled since the start of 2022, thanks in part to the rapid
expansion of its power-equipment division. After a difficult
2023, weighed down by troubles in its wind-turbine division,
shares in Siemens Energy rose by 300% last year,
outperforming even those of Nvidia, thanks to fast-growing
sales in the German firm’s grid-technology business.
“Electricity is a key driver for us,” says Christian Bruch, its
chief executive.
Scott Strazik, boss of GE Vernova, a power-equipment
business that was spun out from the conglomerate last year,
sees a “supercycle” in the making. Demand for everything
from transformers and switchgears to high-voltage
transmission cables is being turbocharged. The International
Energy Agency (IEA), an official forecaster, estimates that
global investment in grid infrastructure reached nearly
$400bn in 2024, up from a little over $300bn in 2020 and
reversing a decline that began in 2017 on the back of
slowing demand in China (see chart 2). The IEA predicts that
spending will rise to around $600bn annually by 2030. What
is behind the surge?

The decarbonisation of electricity generation is one factor.

Adding wind and solar power, often in remote locations,
requires extending power lines and investing in hardware
and software to manage their intermittency. In Britain the
government’s ambition to achieve a net-zero grid by 2030
has prompted network operators to submit investment
proposals amounting to nearly $100bn over five years. Even
in America, where the incoming president is a climate-
change sceptic, investment in renewable energy is expected
to continue rising in the years ahead thanks to the
plummeting cost of solar and wind power.

Electricity’s growing share of energy consumption is a

second force propelling investment. The IEA forecasts that
demand for electricity, from clean and dirty sources, will
increase six times as fast as energy overall in the decade
ahead, as it powers a rising share of cars, home-heating
systems and industrial processes. California alone will need
$50bn in electricity-distribution upgrades by 2035 to charge
its electric vehicles (EVs). Mr Strazik of GE Vernova reckons
that this shift from “molecules to electrons” is just getting
started.
The world’s total energy needs are also continuing to rise—a
third force boosting investment in electricity infrastructure.
Economic growth, and rising use of air-conditioning, are
pushing up demand in developing countries. Goldman
Sachs, a bank, estimates that India’s grid will require
$100bn of investment between 2024 and 2032 as its
economy grows. Rystad, an energy consultancy, forecasts
that annual grid investment in China will increase from
around $100bn in 2024 to more than $150bn by 2030.
Spending by tech giants on AI is contributing to rising
energy demand, too, flowing through to increased electricity
consumption and investment. Some data centres now
gobble up as much energy as a nuclear-power plant
generates, requiring network operators to upgrade
transformers, power lines and control equipment. To
accommodate the growth of data centres, Tokyo Electric,
Japan’s largest power utility, plans to spend more than $3bn
by 2027 on its infrastructure. The boom in data centres has
also caused spending by developers on cooling equipment
and other ancillary electrical gear to rocket.

A final force behind the investment surge is grid

fortification. Extreme weather events, including deadly
storms and wildfires like the one that began in Los Angeles
on January 7th, are becoming more common. They caused
over $100bn in damages worldwide in 2023, only
about half of which was covered by insurance. Last month
America’s Department of Energy provided a $15bn
loan guarantee to PG&E, a Californian power utility that has
been hit hard by wildfires in recent years, to help it invest in
making its infrastructure more resilient. Across much of the
rich world, electricity grids are old and creaking. In Europe
the infrastructure is over 40 years old, on average. “Grid
infrastructure was not built for resilience but for
transmission,” says Mr Bruch of Siemens Energy.

As investment in grid infrastructure has soared, various

bottlenecks have emerged in the supply chain. Wood
Mackenzie, another energy consultancy, estimates that a
global shortage of transformers has led prices to rise by 60-
80% since 2020, with waiting times tripling to five years or
more. That is spurring both capital spending and innovation
among suppliers. Mr Bruch says his firm is investing record
amounts to tackle an order backlog that now exceeds
€120bn ($124bn). GE Vernova, whose backlog has reached
$42bn, has said it will put $9bn into capital spending and
research and development by 2028. Hitachi’s energy
business, which also has a hefty backlog, has invested $3bn
to increase production over the past three years and plans
to spend another $6bn by 2027, including $1.5bn on
transformers.

Current concerns

Expanding manufacturing capacity will leave these firms

exposed if the electricity supercycle turns out to be no such
thing. Growth in EV sales has already slowed in many rich
countries. The AI boom could yet turn to bust. To reassure
shareholders, Andreas Schierenbeck, boss of Hitachi’s
energy business, says that his company has been getting
big customers to reserve capacity with upfront payments,
and is shifting from customised orders to framework
contracts with standardised product designs. All this makes
future revenue more dependable and expanding production
capacity less risky.

For now, spending on electricity infrastructure shows no sign

of easing, as grid operators grapple with rising power
consumption, a changing generation mix and ageing
infrastructure. Those pressures will only increase, predicts
Mr Bruch. “That is why we are bullish.” ■

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Making friends

Will Mark Zuckerberg’s

Trump gamble pay off?
He risks making enemies elsewhere
1月 09, 2025 02:50 下午

“IT FEELS LIKE we’re in a new era now,” said Mark

Zuckerberg, Meta’s chief executive, as he announced
sweeping changes to the firm’s social-media platforms in a
video on January 7th. Two weeks ahead of Donald Trump’s
presidential inauguration, Mr Zuckerberg outlined an
overhaul of Meta’s content-moderation policy that meets
many of the demands of American conservatives. The
initiative says much about both the future of social media
and the relationship between American business and
government.

After building probably the world’s largest fact-checking

operation, including hiring thousands of content
moderators, Meta will stop attempting to verify the truth of
posts on Facebook, Instagram and Threads, starting in
America. Checking will instead be left to volunteers via
“community notes”, a user-run system championed by X, a
social network run by Elon Musk, an adviser to Mr Trump.

Meta will also “get rid of a bunch of restrictions” on topics

such as immigration and gender, on which the firm’s
existing rules “are just out of touch with mainstream
discourse”, Mr Zuckerberg said. Automated filters will no
longer weed out minor violations of Meta’s content rules;
instead, such posts will be removed only if they attract a
complaint from a user. In an accompanying blogpost, Meta
said that 10-20% of the content that it has removed until
now has been taken down in error.

Mr Zuckerberg was frank about his rationale. “The recent

elections also feel like a cultural tipping-point towards once
again prioritising speech,” he said. Meta is rejigging its team
in a Trump-friendly fashion. Sir Nick Clegg, the firm’s left-
leaning global-affairs chief, will be replaced by Joel Kaplan,
who worked in the White House under President George W.
Bush. Dana White, a Trump ally and boss of Ultimate
Fighting Championship, a martial-arts company, will join
Meta’s board. (So will John Elkann, CEO of Exor, which part-
owns The Economist‘s parent company.)

Meta is not alone in seeking favour with the incoming

government. Tech bosses from Tim Cook to Sam Altman are
said to have donated to Mr Trump’s inauguration fund ($1m
appears to be the going rate). Amazon’s streaming studio
has just spent a reported $40m on a flattering documentary
about Mr Trump’s wife, Melania. Mr Trump has described
Facebook as an “enemy of the people” and threatened to
put Mr Zuckerberg in jail for “the rest of his life” if he
interferes in elections. The firm also faces an antitrust trial
in April that seeks to undo its acquisitions of Instagram and
WhatsApp.
Yet even before Mr Trump’s victory last year, Meta had
begun to loosen its approach to moderation. Mr Zuckerberg,
formerly a free-speech advocate, launched a crackdown on
misinformation around five years ago, amid accusations of
Russian interference in Mr Trump’s first election and an
epidemic of harmful nonsense about covid-19. But lately it
has been removing less content (see chart). Its rules on
misinformation have also been relaxed. In 2023 Meta
decided to allow ads falsely claiming that America’s election
of 2020 had been “stolen”. Mr Zuckerberg was at pains to
portray the latest changes as part of a return to business as
usual, saying three times in his five-minute video that Meta
was “getting back to our roots” on free speech.

The company will need to tread carefully. Mr Zuckerberg

acknowledged that a more hands-off approach will mean
more “bad stuff” on Meta’s platforms. That will not go down
well with advertisers. X’s worldwide ad revenue fell by more
than half during Mr Musk’s freewheeling first year in charge,
estimates eMarketer, a research firm. And although users
may like the sound of free speech, they may not enjoy its
messy reality. X has lost more than a tenth of its users in
America since Elon Musk took over, estimates eMarketer.

Loosening up on moderation will complicate Meta’s business

abroad. The EU’s Digital Services Act obliges platforms to
limit the spread of misinformation, on pain of steep fines;
suspending fact-checking there may prove impossible.

Mr Zuckerberg also promised a revival of “civic” content on

Meta’s platforms. The company has spent years saying that
users are bored and depressed by political news, even
turning it off in countries such as Canada, where news
publishers have demanded payment in return for their links
being shared. If, as Mr Zuckerberg claims, users are once
again looking for more news in their newsfeeds, Meta will
not find it so easy to dismiss the demands of those
publishers. Meta seems to be making progress in keeping Mr
Trump and his friends happy. But it risks making its relations
with everyone else trickier. ■

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High and dry

Alcohol-free drinks are

becoming big business
But will they ever be as good as the real thing?
1月 09, 2025 02:51 下午

DRY JANUARY is under way. After the excesses of the festive

period, nearly one-third of Americans are expected to give
up, or at least cut down on, alcohol this month. Many will
save money. Some will lose weight. And a growing number
will still continue to drink their favourite tipple—or at least
something close to it.

The teetotal and “sober curious” are no longer restricted to

fizzy drinks, fruit juice or water. The market for alcohol-free
beverages—including beer, wine and spirits—has been
buzzing of late. Global sales came to $20bn in 2023,
according to data from Euromonitor, a research firm, double
the amount from five years before (see chart). The market
grew by roughly 20% in 2023, compared with 8% for
alcoholic drinks. How big will it get?

Demand for alcohol-free drinks is not limited to Dry January.

A growing number of health-conscious youngsters are going
sober all year round. The share of Americans aged 18-34
who drink alcohol has dropped to 62%, according to the
latest figures from Gallup, a pollster, compared with 72%
two decades earlier. Many who do booze are having fewer
drinks. “Zebra-striping”, or alternating between alcoholic
and alcohol-free drinks, is in vogue. More people may join
the sober trend if America’s surgeon-general gets his way.
On January 3rd he called for alcoholic drinks to come with a
label warning of their health risks.

In response to all this, booze giants have been developing

alcohol-free lines. Diageo, one of the biggest, spent two
years experimenting with 400 different recipes for an
alcohol-free version of its Captain Morgan Spiced Gold rum.
It recently bought Ritual, a non-alcoholic drinks brand.
LVMH, owner of Moët & Chandon champagne, has invested
in French Bloom, a brand of alcohol-free sparkling wines.

Nadine Sarwat of Bernstein, a broker, reckons that drinks

firms are not cannibalising their sales by making alcohol-
free products. More than 94% of Americans who buy
alcohol-free alternatives still buy alcoholic drinks, too,
according to Nielsen, a data company. Some consumers see
zero-alcohol alternatives as a substitute for fizzy drinks,
rather than booze. The drinks also tend to be more
profitable than alcoholic ones, as they are priced only a little
lower but are taxed more lightly.

Still, making alcohol-free drinks that taste like the original is

not easy. The beer industry, which began producing alcohol-
free products in the 1970s, is furthest along in this. That is
partly why beer makes up 89% of sales of non-alcoholic
drinks, with wine and spirits accounting for just 7% and 4%,
respectively, according to Bernstein. Rather than heating
beer to evaporate the alcohol, which ruins the flavour,
producers have come up with various alternative brewing
techniques, many of which are closely guarded secrets.
Athletic Brewing, a popular brand in America, is trying to
patent parts of its production process.

The race is now on to develop methods for alcohol-free

wine. Although there are ways to remove alcohol from wine,
including reverse osmosis, which involves filtration, and
spinning-cone technology, which uses centrifugal force,
these often ruin the taste, too. Wine relies on alcohol for
much of its flavour and mouthfeel. “We are 20 years behind
beer,” says Moritz Zyrewitz, founder of The Gentle Wine, a
German low- and no-alcohol brand.

There are other challenges to further expanding the alcohol-

free-drinks business. Some consumers balk at the price of
products. Alcohol-free aperitifs, which are mostly a mixture
of spices and botanicals, can sell for around $40 a bottle. In
a recent survey of Americans by The New Consumer, a
website, and Coefficient Capital, an investment firm, 38% of
respondents said that non-alcoholic drinks should cost “a lot
less” than alcoholic ones.

Brands are doing what they can to lift the appeal of alcohol-
free alternatives. Corona Cero, produced by AB InBev,
another drinks giant, was an official sponsor of last year’s
Olympic Games; Heineken 0.0% sponsors Formula One.
Lucky Saint, another alcohol-free beer brand, opened its
own pub in central London, which serves both alcoholic and
non-alcoholic brews. Celebrity booze startups that offer non-
alcoholic alternatives may also help convert drinkers. Blake
Lively, an actress, Katy Perry, a singer, and Lewis Hamilton,
a Formula One driver, have all launched brands in the past
few years that offer alcohol-free drinks.

For now, alcohol sales, which reached $1.8trn globally in

2023, are hardly slumping. Spending in many developing
economies continues to rise along with incomes. And the
overall share of Americans who drink alcohol has remained
steady at around 60% over the past two decades, according
to Gallup. More intemperate older consumers are making up
for the sobriety of youngsters. Retail sales at beer, wine and
liquor stores in America continue to climb steadily. Plenty of
consumers will celebrate the end of Dry January with a full-
strength tipple. ■

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Southern oscillation

America’s internet giants

are being outplayed in the
global south
From e-commerce to online banking, regional competitors
are innovating rapidly
1月 09, 2025 02:50 下午 | Bangalore

IT IS UNUSUAL for Amazon, the world’s biggest e-emporium,

to be playing catch-up in its own industry. Yet that is exactly
what it is doing in India, where last month it began piloting a
quick-commerce service in the city of Bangalore, delivering
a wide variety of goods in minutes. It is years behind local
stars such as Swiggy, Zepto and Zomato, which already
offer such a service.

A decade ago Jeff Bezos, Amazon’s founder and then boss,

stood atop a brightly decorated truck in Bangalore and
waved a cheque for $2bn, determined to dominate India’s
market. It has been an uphill struggle. The company, which
accounts for a quarter of e-commerce sales in India, trails
behind Flipkart, a local e-commerce rival that commands a
third of the market (and is now owned by Walmart,
America’s bricks-and-mortar behemoth). Elsewhere
Amazon’s record has been worse. In South-East Asia it has
been bested by local firms such as Shopee, Tokopedia and
Lazada. In Latin America MercadoLibre, an Argentinian firm,
is the undisputed leader in e-commerce (see chart).

America’s internet champions once seemed destined to

conquer the globe. With China off-limits, many turned their
attention to expanding in other developing markets. Some
of them triumphed, including Google, a search giant, and
Meta, a social-media titan. But many did not, particularly in
areas such as e-commerce, ride-hailing and digital
payments, where local knowledge or physical presence
matters. Uber, which once promised to make
“transportation as reliable as running water, everywhere, for
everyone”, withdrew from South-East Asia in 2018 after
burning through over $700m. PayPal, a payments firm, has
struggled to make inroads in much of the developing world,
even as digital payments have boomed.
Local challengers in the global south once imitated
American offerings and competed with clever adaptations
for their home markets. MercadoLibre and Flipkart built
logistics networks in places where existing infrastructure
was shoddy. MercadoLibre turned to motorcycles for
congested cities. Flipkart introduced “cash on delivery” to
counter mistrust of online payments. Now internet firms in
the global south are moving from adaptation to invention—
and teaching American firms a thing or two in the process.

Quick commerce is one example. The pandemic-era frenzy

in the West for ten-minute deliveries has largely fizzled out.
In India it is just getting started. In its densely populated
cities, where roads are often gridlocked, riders on two-
wheelers zip around making small deliveries to lots of
customers, relying on networks of compact warehouses. The
products on offer go well beyond groceries and include
everything from clothing and electronics to gold coins.
Bernstein, a broker, reckons that quick-commerce sales in
India reached $7.2bn in 2024, up from just $200m in 2021,
and will almost double this year.

Another example is digital banking. Whereas centuries-old

banks continue to dominate in the West, digitally native
ones have made big inroads in the global south. Nubank, a
Brazilian digital lender, has more than 100m customers in
its home market, representing over half the adult
population, and is expanding quickly across Latin America.
Its approach has been to focus on segments of the
population that have been underserved by traditional banks,
whose reliance on physical branches makes it expensive to
serve poorer customers. Having started with credit cards, it
now offers bank accounts, insurance and investments. A
strategy of targeting underserved customers has also
worked well for Meesho, an online marketplace that has
focused on India’s smaller cities and is now its third-largest
e-commerce firm by sales.

A final example is social commerce, which blends shopping

with entertainment. It has taken off in South-East Asia,
where most online shopping is done on smartphones (65%
of e-commerce sales in Indonesia are made on mobile
devices, compared with 39% in America). Jianggan Li of
Momentum Works, a Singaporean research firm, notes that
traditional e-commerce sites spend heavily to lure in users.
Social selling keeps costs low as users come to be
entertained and stay to shop.

In 2021 TikTok, a short-video app owned by ByteDance, a

Chinese tech giant, launched TikTok Shop, which lets users
buy products while scrolling. In 2023 the app sold $20bn-
worth of products, with three-quarters of that coming from
South-East Asia. The model proved so successful in
Indonesia that the government banned e-commerce sales
on social-media platforms to protect small merchants. TikTok
acquired Tokopedia in response, and now offers a similar
service through it. In September Shopee announced a
partnership with YouTube, an American video site, to
develop a rival offering.

Not all these innovations will have a place in the West.

Costly labour and lower population densities make quick
commerce tricky in America and Europe. It can be tough to
find underserved populations in rich countries. Social
commerce, though, is gaining momentum. America is now
the largest market for TikTok Shop, overtaking Indonesia last
year. Although America’s Supreme Court is deciding
whether to uphold a ban on the app in the country from
January 19th, TikTok continues to expand elsewhere in the
West.
That should remind America’s tech giants to keep an eye on
innovations in the global south. Local ideas often take time
to “bubble up” to headquarters in Silicon Valley, notes Kevin
Aluwi, co-founder of Gojek, an Indonesian ride-hailing app,
who is now a venture capitalist. Those delays could cost
America’s champions dearly. ■

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Beyond the iPhone

Foxconn and other gadget-

makers are expanding
their empires
The world’s contract manufacturers are moving into new
products and places
1月 09, 2025 02:50 下午

FOXCONN, A TAIWANESE electronics manufacturer, is best

known for making iPhones in China. Yet in October it
announced plans to build a megafactory in Mexico that will
churn out servers made with artificial-intelligence (AI) chips
from Nvidia, a semiconductor giant. To meet the roaring
demand for AI, the plant’s capacity will be, as Young Liu,
Foxconn’s chairman put it, “very, very enormous”.

That phrase could well describe the ambitions of the

contract-manufacturing industry as a whole. The firms,
which make gadgets for other companies, are on a tear. On
January 5th Foxconn, also known as Hon Hai, announced
record fourth-quarter sales of $65bn, up by 15%, year on
year. Its smaller rivals, such as Quanta Computer and Jabil,
have also reported solid results recently. In the past two
years the combined market value of the eight biggest
contract manufacturers has roughly doubled (see chart).
Buoyed by their impressive performance, the companies are
busy expanding into new products and places.
Much of their recent success is down to AI. Whereas
demand for smartphones and PCs has stagnated, for data
centres it has ballooned. On January 3rd Microsoft said that
it would splurge $80bn on AI infrastructure this year. For
Foxconn, a big supplier to the software giant, AI servers will
make up about a quarter of total sales in 2025. For Quanta
that share could be half, according to Mizuho, a Japanese
bank. Other contract manufacturers, such as Luxshare, a
Chinese supplier to Apple, and Compal, a Taiwanese one,
are hoping that AI will revive sales.

Contract manufacturers have also been expanding into new

industries. In October Foxconn unveiled two new electric-
vehicle designs, to add to the six other models which it will
build for companies. Competitors such as Pegatron are now
making gear for private 5G networks. Quanta is expanding
into wearable medical devices and smart-home gadgetry.
Foxconn has blasted two prototype satellites into space.

The firms are trying to control more of the value chain as

well. Foxconn wants to provide parts, such as liquid-cooling
technologies, for the server racks it assembles. Luxshare,
which began life as a maker of components for
smartphones, is doing more assembly. On December 31st it
announced it would acquire the assembly division of
Wingtech, another Chinese supplier to Apple.

At the same time, a geographic shift is under way,

precipitated by Donald Trump’s first round of tariffs in 2018.
According to Counterpoint, a research firm, the production
of smartphones and PCs mostly remains in China, though
there has been some relocation to places like India and
Vietnam. But the manufacturing of other products has
moved closer to customers. About two-fifths of Taiwanese
contract manufacturers’ server production now takes place
in Mexico, reckons JPMorgan Chase, a bank. That cuts the
cost of shipping to the American cloud-computing giants,
which are their biggest customers.

For all the expansion, contract manufacturers face a number

of risks. One is competition. The firms are constantly
invading each others’ turf. Luxshare was founded by two
former factory workers at Foxconn, with which it now
vigorously competes. Tata, an Indian conglomerate, bought
the local iPhone operations of Wistron, a Taiwanese
manufacturer, in 2023, and is acquiring a majority stake in
the Indian operations of Pegatron.

Another risk is customer concentration. Around 70% of

Luxshare’s business comes from Apple. Foxconn gets about
60% of its revenue from the iPhone-maker. Booming sales
related to AI mean some contract manufacturers now rely
heavily on Nvidia for their growth.

A final risk is trade. Mr Trump has said he will slap tariffs on

Canada, China and Mexico. Their dependence on a few
customers suggests that contract manufacturers may
struggle to pass on higher costs. That could mean thinner
margins as gadget-makers absorb the levies or plants are
moved to tariff-free countries. During Mr Trump’s first term
Apple and Samsung successfully lobbied for exemptions for
their supply chains. Contract manufacturers will be hoping
for a repeat, perhaps with support from the cloud giants.
Despite their best efforts at diversification, Foxconn and
friends are still at the mercy of big tech. ■

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Alloys and allies

What next for US Steel?

The faded industrial icon has few good options without a
Nippon deal
1月 09, 2025 02:51 下午

TO MAKE STEEL pliant enough to be shaped into parts for

cars and planes, it must first be heated until it glows cherry
red. That, incidentally, may have been the colour of David
Burritt’s face when Joe Biden blocked the purchase of US
Steel by Nippon Steel, a Japanese firm, on January 3rd. Mr
Burritt, the American steelmaker’s boss, issued an
incandescent statement calling the president’s decision
“shameful and corrupt” and accusing him of helping China
(“Chinese Communist Party leaders in Beijing are dancing in
the streets”).
That the purchase was supported both by US Steel’s
management and many of its employees was not enough to
win over Mr Biden. Nor were Nippon’s pledges to hand out
$5,000 each to workers and give the American government
a decade-long veto on production cuts. Selling America’s
third-largest steelmaker to a rival from an allied country
would hardly have posed a threat to national security, as Mr
Biden claimed. But the decision to block the takeover is
entirely consistent with the protectionist mood in
Washington that is set to intensify under Donald Trump, who
also vowed to block the deal. Where does that leave US
Steel?

The company’s first response has been to call the lawyers.

On January 6th US Steel and Nippon jointly announced two
lawsuits. One asks the court to overturn Mr Biden’s decision
on the basis it was done for “purely political reasons”, rather
than for national security. It also accuses the Committee on
Foreign Investment in the United States, America’s inbound-
investment watchdog, of not conducting a lawful review (the
committee had failed to reach a consensus on whether the
deal posed a national-security threat, referring the decision
to Mr Biden).

The second lawsuit is aimed at Cleveland-Cliffs, a rival

American steelmaker, and the United Steelworkers union,
alleging that they colluded to torpedo Nippon’s bid (a claim
they call “baseless”). Cleveland-Cliffs narrowly lost to
Nippon in a bidding war for US Steel last year.

Overturning Mr Biden’s decision in court will be tough.

Judges give wide latitude to the executive on matters of
national security, and allegations of insufficient due process
will be a hard sell, says Jonathan Gafni of Linklaters, a law
firm.
US Steel’s prospects as a standalone company, though, look
bleak, even with a $565m break-up fee from Nippon. It has
long struggled to compete with imported steel and “mini-
mills” that use electricity to melt scrap metal. Nippon had
promised to invest billions upgrading its tired kit, and the
deal offered an opportunity to learn from a far more efficient
partner (the Japanese firm earns more profit per tonne of
crude steel than any of its big rivals).

If it fails in court, US Steel may therefore seek another

buyer. But finding one could be tricky. Other foreign
steelmakers will probably steer clear. Even if Cleveland-Cliffs
still has its heart set on a deal, it may struggle to find the
cash: its balance-sheet is already stretched owing to
slumping steel prices and its acquisition last year of Stelco,
a Canadian steelmaker. Antitrust regulators might also have
something to say about a tie-up between the two; American
carmakers have complained that the combined company
would produce 65-90% of the steel they use to make
vehicles.

Mr Burritt may now pin his hopes on America’s next

president. Higher tariffs, which Mr Trump has promised,
could help shield the firm (at the expense of customers). Mr
Burritt has also appealed to the president-elect to save the
Nippon deal. The lawsuits may buy time for Mr Trump, who
fancies himself America’s dealmaker-in-chief, to eke out a
few more concessions and declare victory. He will have to
decide whether he wants US Steel to be part of a vibrant,
global firm, or carry on as a declining, all-American one. ■

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Bartleby

The signals of workplace

submissiveness
Deference is all around you, unfortunately
1月 09, 2025 02:50 下午

ANIMALS HAVE evolved many different ways to signal

submissiveness to their more powerful counterparts. Lower-
ranking chimpanzees might greet a dominant chimp by
producing a breathy sound known as a pant-grunt.
Hanuman langurs present their hindquarters. Spotted
hyenas of both sexes (yes, both) have a habit of displaying
erections to acknowledge that they sit lower down the
pecking order. Chickens invented the very concept of
pecking orders.
The spotted hyena would not survive for long in most
organisations. But patterns of deference and dominance are
as natural for humans as they are for other animals, and the
workplace is no exception. Most companies have org charts
that show who outranks whom. Job titles are used to
advertise not just what a person does but also where they
sit relative to others. Sometimes hierarchies are obvious. In
the armed forces, people must salute their superior officers.
But deference shows up in other, less explicit ways, too.

Seating arrangements are a good example. Imagine

entering a meeting room first. You know that lots of people
are going to be sitting around the table, some more senior
than you, and that the meeting will be chaired by the chief
executive. Your task is to work out where to sit. Chances are
that you will not take a seat at the head of the table or
midway along either side: these are places where the boss
would naturally sit. Somewhere along the sides and towards
the end are the safest places to head.

If the CEO is already sitting there when you arrive, your

choice now becomes simpler: anywhere but the adjacent
chairs. Unless you are very senior yourself, sitting too close
to the alpha executive risks being a transgressive act. If
someone has an empty chair on either side of them at a
boardroom table they either have halitosis or the top job.
(Something similar is at work in conference halls: the front
rows remain stubbornly empty for a reason.)

Another form of deference has more obvious roots in the

animal kingdom. In his book “Mama’s Last Hug”, Frans de
Waal, a primatologist and author, describes how monkeys
and apes use a teeth-baring grin as a signal of
submissiveness to a dominant animal. The office equivalent
is observable when the most senior person in the room
makes a joke and everyone laughs. Seen from a distance, it
might look like the filming of a Netflix special. Inside the
room it’s much more likely to be a display of deference than
an outbreak of genuine hilarity.

The language of the workplace is also suffused with an

awareness of hierarchy and territoriality. People will say
things like “this is above my pay grade” to preface
conversations where they want to be clear that they are not
challenging anyone’s authority even as they explain why
things would be so much better if they were running things.

Deferential language is not just used when underlings

communicate upwards; it is also a way for peers to signal
that they are not going to trample on each other’s turf. A
paper published in 2012 by Alison Fragale of the University
of North Carolina and her co-authors analysed email
communications within organisations for signs of verbal
deference—imagine the use of a qualifying phrase like “I’m
not 100% sure I agree” to mean “I totally disagree but am
not intending to threaten your status.” The authors found
that this kind of language was more common between
people at similar levels in an organisation than between its
junior and senior members.

Hierarchies are useful. They incentivise people to aim higher

in their careers, they enable co-ordination and they mean
that decisions are taken and then stick. When someone
higher up the food chain has the power to promote or sack
you, a bit of deference is not just inevitable but also wise.
But hierarchies can also cause a lot of damage, by quelling
debate, gumming up decision-making and reducing
autonomy.

This is why it is worth being alert to quietly submissive

workplace behaviours. Their pervasiveness is a reminder to
managers that power is always likely to distort interactions
—in ways that are subtle as well as obvious, small as well as
large. If you hear someone say “that’s above my pay
grade”, then your attempts to instil a sense of ownership
have a long way to go. If your employees express mild
concern about a decision of yours, it is probably best to
assume they are really worried about it. And if someone
laughs at your jokes, don’t start planning a career in stand-
up.■

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Schumpeter

Meet the ambitious wolf

cubs of Wall Street
A duo of whippersnappers is taking on Goldman Sachs
1月 09, 2025 02:50 下午

THE MASTERS of the universe will have hoped for some

peace and quiet over Christmas. The holiday period was the
last time for Wall Street financiers to catch a breath before
Donald Trump is handed the keys to the White House on
January 20th. Even if he does not make Canada the 51st
state or annex Greenland, his second term promises lots of
excitement. Currency traders are watching the Canadian
dollar, Danish krone and other monies—though this has less
to do with Mr Trump’s territorial ambitions and more with
the tariffs he has vowed to slap on allies and foes alike.
Stockpickers are waiting to see which firms find favour with
the mercurial president and which fall foul.

Yet it is investment banks’ rainmakers who expect to be the

most hyper-caffeinated. President Joe Biden’s zealous
trustbusters, with their mantra that “big is bad” and novel
ideas about what mergers and acquisitions (M&A) count as
anticompetitive, are out. Their Trumpian replacements,
though as leery of big tech, look more relaxed about most
other transactions, so long as these do not raise prices for
consumers. Mr Trump himself has declared he wants “clear
rules that facilitate, rather than stifle, the ingenuity of our
greatest companies”. Translation: deals, deals, deals.

With rising corporate profits (which fill prospective buyers’

coffers with cash), easing monetary policy (which makes it
cheaper for them to borrow more) plus high stockmarket
valuations (which strengthen the currency of their shares),
before long boards will be asking CEOs, “What’s your M&A
strategy?” sums up Ryan Kenny, a banking analyst at
Morgan Stanley. Mr Kenny’s employer and its investment-
banking arch-rival, Goldman Sachs, stand to benefit from
this dealmaking FOMO. Their market values hit records in
late November, each surpassing $200bn (if briefly, in
Goldman Sachs’s case).

Impressive. But look at growth and it is two independent

competitors, Evercore and Jefferies, that have really set
investors’ pulses racing. Their share prices have more than
doubled in the past two years, roughly twice the gains of the
industry giants. Evercore is now worth over $10bn. Jefferies
is closing in on $17bn.

Both are rising up various league tables. Last year Jefferies

came seventh in Dealogic’s latest ranking of banks by
investment-banking revenue, up from tenth in 2023. On
January 8th it reported total revenues of $7bn in the 12
months to November, compared with $4.7bn the year
before. Net profit more than doubled to $669m. If analysts
are right, in 2024 Evercore surpassed Morgan Stanley in
terms of global advisory revenues, behind only JPMorgan
Chase and Goldman Sachs.

The two firms, with headquarters on opposite sides of the

intersection of 53rd Street and Madison Avenue, represent
distinct visions of high finance. Evercore makes little use of
its balance-sheet and earns most of its money from fees
clients pay it to advise on transactions. Its founder, Roger
Altman, a former Treasury official, created it in 1995, when
standards on Wall Street in matters such as treatment of
confidential information and conflicts of interest were
slipping. Mr Altman stresses his firm’s “fanatical
commitment to quality and integrity”. Corny? Sure, he
concedes. But also good business.

Where Evercore is genteel, Jefferies looks, in the words of a

hedge-fund admirer, “swashbuckling”. Its CEO of 24 years,
Rich Handler, posts photos on Instagram of himself wielding
a laser-tag gun. Its $64bn in assets is wee and unleveraged
next to Goldman Sachs’s and Morgan Stanley’s trillion-dollar
balance-sheets, and it relies on a joint-venture with SMBC, a
giant Japanese bank, to fund some of its activities. But it
seems risk-tolerant in other ways. In 2009 aggressive
recruitment tactics led UBS, a Swiss lender, to sue it for
poaching a star rainmaker. After the Adani Group, an Indian
conglomerate, was attacked by a short-seller in 2023 over
alleged fraud, Jefferies stood by its client as others steered
clear. It reportedly began reviewing its ties only once
American prosecutors charged the founder, Gautam Adani,
with bribery in November. (The Adani Group and Mr Adani
deny all charges.)
Yet Evercore and Jefferies share commonalities, too, and not
just their address. Both fetishise talent even more than their
industry as a whole. “I spend a tremendous amount of time
recruiting,” says John Weinberg, Evercore’s chief executive.
Its ranks of senior investment bankers rose by 27% in the
past three years. Relative to size, it was out-hired only by
Jefferies, whose equivalent head count rose by 46% in the
period.

Both display an aversion to middle management. Just two

layers separate a managing director from Mr Handler and
Brian Friedman, Jefferies’ president. “Managers are player-
coaches,” explains Mr Friedman. “Everyone is on the field
and leading by example.” Evercore is similarly flat. Goldman
Sachs and Morgan Stanley have at least one more layer.

Spot the next Goldmen

In some ways the two starlets are becoming more alike.

Jefferies is raising its advisory revenues, paring back some
capital-intensive activities such as buying stakes in
companies, and wants a bigger slice of the company mega-
mergers that are Evercore’s forte. Evercore, for its part, is
increasingly helping clients raise capital, on top of offering
deal counsel, and is eyeing the not-so-mega-deals involving
private-equity investors, which Jefferies dominates. Both are
sizing up advisory opportunities in private credit, which is
replacing bank lending in many mergers and buy-outs.

Both must also prove they can put their highly paid hires to
work. Their dealmakers are the most productive among
listed rivals, last year bringing in an estimated $10m each in
fees at Jefferies and $18m at Evercore. To ensure this
continues, Messrs Handler and Weinberg had better keep
those coffee cupboards full. ■
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Finance & economics

Europe could be torn apart by new divisions
Falling stars :: The continent is at its most vulnerable in decades

Can America’s economy cope with mass

deportations?
Labour the point :: Production slowdowns, more imports and pricier housing
could follow

China’s markets take a fresh beating

Dark humour :: Authorities have responded by bossing around investors

How corporate bonds fell out of fashion

Buttonwood :: The market is at its hottest in years—and a shadow of its
former self

An American purchase of Greenland could

be the deal of the century
Free exchange :: The economics of buying new territory

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Falling stars
Europe could be torn apart
by new divisions
The continent is at its most vulnerable in decades
1月 09, 2025 02:50 下午

EUROPE’S DIVISIONS were once simple. Fiscal policy and

sunshine? That was a north-south carve-up: grey,
abstemious north; sparkling, spendthrift south. Migration
and wealth? Newcomers were mostly tolerated in the rich
west and despised in the poor east. Only the wine-beer-
vodka spectrum, which produced a twice-diagonal split, was
more complex. When crisis struck, these familiar dividing
lines helped. Predictable splits are easier to manage.

Europe also had plenty of reason to unite. Trade talks are

less complicated for a single market if 27 countries find a
common position, even if doing so sometimes means
compromising on national interests. A euro crisis would hit
all members of the currency area. When Russia invaded
Ukraine, most of Europe reacted with instinctive horror.
Sanctions on Russia and cash for Ukraine swiftly followed.

The next crisis will be harder, in part because the nature of

the threats facing Europe has changed. America and China
will soon share disdain for the EU and global rules. Their
leaders will have no problem tying together economic and
security matters for maximum leverage, as is illustrated by
Donald Trump’s promise to use tariffs and possibly even
force to induce Denmark to hand over Greenland.
International security has deteriorated to the point where
European armed forces are being re-engineered, with bigger
budgets. And Europe is acting from a position of weakness.
Germany, its biggest economy, is entering its third year in
recession. These threats and problems are dividing Europe
along new lines.

To see how, start with the continent’s economic difficulties.

Weak economies are more likely to make poor geopolitical
decisions. During the euro crisis of the early 2010s, it was
Europe’s periphery that was struggling. Southern European
countries flogged visas to investors indiscriminately. Central
and eastern European countries were more than happy to
work with China in its “16+1” initiative, which sought to
draw the region into Xi Jinping’s orbit. Now Europe’s core is
suffering. It is not just Germany; the IMF also forecasts
meagre growth for France and Italy (see table). Europe’s
biggest countries will therefore have to steer the EU through
dangerous times while trying to reform their own
economies. In September Mario Draghi, a former president
of the European Central Bank (ECB) and prime minister of
Italy, laid out an ambitious reform agenda. Without
agreement between France and Germany there is little hope
for even the most modest of his proposals.

The EU’s members never saw eye-to-eye on trade, but there

was a balance. A free-trade bloc, with Britain at its heart,
helped contain the protectionist instincts of France. A strong
internal market with limits on industrial policy, and global
trade largely on the World Trade Organisation’s terms, kept
all parties broadly satisfied. Now that Britain is out, the
balance has shifted in favour of those who want to use
tariffs and subsidies for political aims. The WTO has few
friends left outside of Europe and has lost a few inside the
bloc as well.
In the debate over the future of industrial policy and how
best to respond to the provocations of Mr Trump, the big
countries have very different incentives. Germany and the
Netherlands conduct a lot of trade beyond the EU’s borders
(see table). The former continues to reject tariffs on
Chinese-made electric vehicles for fear of retaliation against
its carmakers; the latter had to be strong-armed by America
into restricting exports of chipmaking equipment to China.
By contrast, France, Spain and Poland are much less
exposed to international commerce, and as a consequence
are more willing to sacrifice the gains of trade. Although the
European Commission has agreed a trade deal with
Mercosur, a South American group, it has not yet been
ratified, and is being opposed by France and Poland. Such
countries are also much more likely to argue in favour of
European production of “strategic goods” and “buy
European” clauses.

At first glance, the continent appears unified on defence.

After Russia’s invasion of Ukraine and the re-election of Mr
Trump, few are under any illusion about military spending. In
2023 EU countries spent 1.6% of GDP on defence—“not that
much more than the roughly 1% limit the allies set for
Germany after the first world war to prevent the country
from being able to defend itself”, notes Moritz Schularick of
the Kiel Institute, a research outfit. Now everyone agrees
spending will have to rise beyond 2% or even 3% of GDP.
That is a sizeable increase for a continent used to
outsourcing its security to America.

But even here there are differences: not all countries are
equally worried by Russia. Generally speaking, the closer a
country’s capital is to Moscow, the higher both its military
aid to Ukraine and defence spending (see chart). These
differences will become a source of tension. Mr Trump has
made clear that he expects NATO members to raise
spending to 5% of GDP if they wish to continue to benefit
from American protection. The EU budget may need a large
pot of €100bn ($103bn) for common outgoings on defence,
up from €8bn at present, Andrius Kubilius, the EU’s first-ever
commissioner for defence, has argued. An increase of that
size would entail cuts to the bloc’s other spending
commitments, or bigger contributions from all members.

Cost a bomb

Security will also complicate other matters. Countries with

an especially strong interest in retaining American military
support, such as the Baltic states, may reject retaliatory
tariffs against Mr Trump. They may also side with America
on measures against China, as they did last year when
voting in favour of EU tariffs on Chinese electric vehicles.
Even free-trading Nordic countries either supported the
measures (in the case of Denmark) or abstained (Finland
and Sweden).

Funding is another problem. Even before armed forces get

their extra money, public debt in France, Italy and Spain
exceeds 100% of GDP. Last year France ran a deficit of more
than 6% of GDP; it aims merely to bring this down to around
5% in 2025. We have calculated how much countries would
need to reduce their primary deficit—that is, deficits before
interest payments—to keep their debt ratios at current
levels (see table). Unsurprisingly, France stands out,
requiring spending cuts or tax rises worth 4% of GDP.
Poland and Italy would also face tough measures.

In April the EU changed its fiscal rules. It now requires each

country to put together plans for a more balanced budget,
via either lower spending or higher taxes. The ECB, which is
ultimately the backstop for all euro-zone government debt,
has indicated that compliance with such rules is mandatory
for any country hoping for its support. France, Italy and
Spain will all have to adjust by about 0.5% of GDP a year,
according to Bruegel, a think-tank. Arguments are on the
way.

An economic downturn would make the arguments even

more heated. The ECB is still battling inflation—with prices
for services a particular problem, at 4% above a year ago—
and as a result is reluctant to cut interest rates sharply.
Euro-area household savings have risen to 16% of
disposable income, up from 13% before the covid-19
pandemic, hurting consumption. Businesses are braced for
the impact of Mr Trump, amid already intense competition
from China. The euro zone may soon return to a familiar
debate: should deficit spending be used to prop up an
economy?
During the euro crisis, the EU overcame problems through
deeper integration. Unthinkable policies, such as the ECB
standing behind government debt and EU countries
incurring common debt, became reality. “The good thing is
that the EU’s team is the best it has been in decades,” says
Mujtaba Rahman of Eurasia Group, a consultancy. Ursula
von der Leyen, president of the European Commission; Kaja
Kallas, the Commission’s lead on foreign policy; and António
Costa, head of the European Council, are all adroit,
ambitious politicians. They will be ably supported by Mark
Rutte, NATO’s new secretary-general.

Yet Europe’s politics is being pulled to the extremes.

Germany will be consumed by an election until late
February, with the likely result another constrained centrist
coalition. In France Emmanuel Macron is struggling to form a
stable government. Spain’s minority government cannot
pass a budget. Indeed, in an unusual reversal, Italy is the
bloc’s most stable big country, according to Verisk
Maplecroft, another consultancy (see map). On top of this,
many of the EU’s problems touch upon matters at the heart
of national politics: security, the state’s role and taxation.
Mr Draghi’s grand plans increasingly look like a wishlist for
another world. For Europe, this will be a year of crisis
management. ■

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Labour the point

Can America’s economy

cope with mass
deportations?
Production slowdowns, more imports and pricier housing
could follow
1月 09, 2025 02:50 下午 | Washington, DC

Many people are leaving

WHEN DONALD TRUMP takes office on January 20th,

deportations will be a priority. The president-elect has
promised the biggest removals in American history, with
workplace raids and the revocation of parole programmes.
Stephen Miller, his deputy chief of staff, and Tom Homan, his
border tsar, want to use the armed forces to get the job
done. Mr Trump has cited “Operation Wetback”, a
controversial campaign in the 1950s under President Dwight
Eisenhower, which threw out around 1.1m people, as an
inspiration.

What economic consequences might follow a large-scale

crackdown? According to the Pew Research Centre, a think-
tank, some 11m unauthorised migrants lived in America in
2022, of whom 8.3m were in the workforce. A recent surge
means the number will now be higher. Experts estimate
there may be 10m unauthorised workers, representing 6%
of the labour force. Many work on building sites and farms,
as well as in restaurants. California, Florida, New York and
Texas are home to nearly half of them. The economic fallout
from a deportation of this population—whether full or, as is
more likely, partial—can be assessed across three
dimensions: employment, consumer prices and public
finances.

Deportations are often discussed as a boon for American

workers. Mr Miller, for example, has said that mass removals
would create jobs for Americans and increase wages.
Whether that proves to be the case depends on whether
unauthorised immigrant labour substitutes for, or
complements, native-born labour. The evidence suggests
the latter. A study by Chloe East of the University of
Colorado Denver and co-authors found that deportations
under President Barack Obama led to the loss of one native-
born job for every 11 migrants thrown out of the country. A
paper from the Peterson Institute for International
Economics, a think-tank, has similar findings. The authors
estimate that deporting just 1.3m workers would cause
employment to permanently fall by 0.6%. Production would
take an even bigger hit.
“Unauthorised immigrants do not just supply labour for a
fixed demand,” explains Michael Clemens of George Mason
University, “they are a crucial ingredient for production.”
After all, someone must pack seafood to make lobster
salads and hand-harvest cucumbers destined for Greek
salads. Yet Americans are seldom willing to take such jobs at
the wages on offer. During the covid-19 pandemic, the
National Council of Agricultural Employers ran a survey to
find out how many out-of-work Americans would take nearly
100,000 seasonal farm jobs that were advertised for guest
workers via a federal programme. At the height of the crisis,
just 337 applied. With the employment rate among 25- to
45-year-old native-born workers at a decades-long high and
the population ageing, labour shortages will only worsen.

Supply bottlenecks tend to push up prices, but the impact

varies by sector. Agriculture is especially vulnerable. A
report by the Migration Dialogue at the University of
California, Davis, estimates that almost 1m of America’s
2.5m farmworkers are unauthorised immigrants. Dairy and
poultry farms, which cannot make use of seasonal guest-
worker visas, are particularly reliant on them. The loss of
this labour could be offset by ramping up automation,
through more guest workers or by consumers relying more
on imports. Mr Clemens, Ethan Lewis of Dartmouth College
and Hannah Postel of Duke University have found that
excluding 500,000 temporary Mexican labourers from farms
in the 1960s led mostly to more mechanisation. However,
robots remain no match for humans when it comes to
picking strawberries. Today the consequence would either
be higher costs, or another unpalatable outcome for the
Trump administration, such as a wider trade deficit.
Housing costs are also likely to be pushed up. Unlike food-
production firms, which can sometimes turn to automation
or imports, construction companies have fewer alternatives.
Some 1.5m unauthorised migrants toil in the industry,
accounting for about a sixth of the workforce, as well as just
under a third in trades such as drywall installation and
roofing. Housebuilding is already under pressure from higher
interest rates; further supply-chain disruptions could worsen
shortages. Although deportations should mean less housing
demand, recent research by Troup Howard of the University
of Utah and others finds that removals during the Obama
administration exacerbated housing shortages. The supply-
side impact of lost labour dominated the fall in demand.

Then there is the fiscal cost. Mass deportations would not

just shrink the labour force; they would also strain public
finances. Unauthorised immigrants are ineligible for most
direct federal benefits, such as Obamacare subsidies, public
housing and welfare programmes. But despite being
ineligible they still pay into public coffers via sales and
payroll taxes for Social Security and Medicare. Many also
pay property taxes indirectly through rent payments.

The fiscal effects of immigration extend beyond direct

contributions. Migrants boost labour supply and economic
output, lifting taxable income and business profits. The
Congressional Budget Office expects the recent surge in
migration to reduce federal deficits by $900bn from 2024 to
2034, owing to higher tax revenues and economic growth.
Removing these workers would shrink the tax base and
leave spending obligations intact—a recipe for unbalanced
books. ■

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Dark humour

China’s markets take a

fresh beating
Authorities have responded by bossing around investors
1月 09, 2025 02:51 下午 | Shanghai

In the green

AS CHINESE MARKETS came crashing down at the start of

2025, a joke circulated among investors: “What is the most
valuable asset in the market?” The answer, they replied with
a chuckle, was “retail investors”. China’s stockmarkets are
dominated by amateurs. They buy high and sell low, helping
the professionals eke out a living. They also seem to be in
endless supply, no matter how much money is lost. “They
get cut down like chives but grow right back,” goes a
popular saying.
Although retail investors will have suffered most in the
recent sell-off, others are being cut down, too. Chinese
stockmarkets experienced their worst first day of trading
since 2016 as the CSI 300, a benchmark index, fell by 2.9%
on January 2nd. During the first four trading days in 2025 it
was down by over 3.5%. More striking still, yields on long-
dated government bonds have cratered. Those on ten- and
30-year government bonds hit record lows on January 6th.
On the same day the yuan sank to 7.33 to the dollar, a 15-
month low.

There is no shortage of explanations for the gloom. One is

uncertainty linked to the fast-approaching second term of
Donald Trump, which starts on January 20th and brings with
it the possibility of new tariffs on Chinese exports. The
American defence department’s recent decision to add
Tencent, one of China’s most valuable tech firms, to a list of
companies working with China’s armed forces has not
helped. Another is that patience with a state bail-out is
evaporating. In September regulators promised to take swift
action to solve China’s biggest problems, such as a property
crisis and highly indebted local governments. Talk of a hefty
stimulus package at the time pushed up the CSI 300 by
more than 25% in a week or so of trading.
Yet the state’s delivery has since been underwhelming. In
December consumer inflation fell towards zero, China’s
statistics authority announced on January 9th. The biggest
component of stimulus has gone to paying off local-
government debt. Although home sales in a few big cities
rebounded in the final weeks of 2024, compared with the
previous year, the vast housing inventory in smaller cities
means national prices will probably continue to decline. As
long as the housing market struggles, sentiment among
ordinary folk will be tough to revive. Goldman Sachs, a
bank, has suggested that investors look to Japan’s “lost
decade” as a guide to the future of the Chinese
stockmarket.

Movements in the bond market have worried global

investors. China’s regulators have been dealing with falling
yields for months as local investors scramble for a haven,
with many piling into government bonds. Cuts to the deposit
rate have prompted people to shift their money from banks
to fund managers. This trend is one factor that prompted
investment funds to become the biggest buyers of bonds
last year, according to Standard Chartered, another bank.
Some investors speculate that the yield on the ten-year
government bond could even fall below 1% this year.

Authorities have homed in on market players, rather than

economic fundamentals, as the source of the problem. They
have told analysts and economists working at banks to
avoid topics such as deflation and comparisons with Japan’s
stagnation. As bond investors search for safe investments,
regulators have instructed them to stop driving down yields.
Some small banks have been banned outright from buying
government bonds or had purchases cancelled. On January
3rd the central bank called a meeting with fund managers
to tell them to reduce bond buying, according to Reuters, a
news agency. Stock exchanges have also called meetings
with international investors in the hope of calming nerves. A
Shanghai-based portfolio manager notes that many of these
moves have only increased the sense of panic.

The state has not been stingy when shoring up the

stockmarket. China’s central bank has offered up some
800bn yuan ($110bn, or 0.6% of GDP) in relending for stock
purchases and swap facilities since September. State-owned
firms, collectively known as the “national team”, probably
spent over 700bn yuan in 2024 to prop up share prices. This
type of state intervention may be dialled up. Rumours of a
“national stabilisation fund”, or a centrally controlled
investment vehicle for buying stocks, circulated last year.
When local traders are not swapping jokes, they are sharing
tips on how and when state capital might come pouring into
the market. ■

Correction (January 8th 2025): This article previously

misstated the share of Chinese GDP represented by 800bn
yuan as 4% rather than 0.6%. Sorry.

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Buttonwood

How corporate bonds fell

out of fashion
The market is at its hottest in years—and a shadow of its
former self
1月 09, 2025 02:51 下午

THERE ARE normally few thrills to be had from investment-

grade bonds, which is just the way it should be. After all,
this is lending to the very safest companies. Just now,
however, bondholders are throwing a veritable rave.

To gauge their mood, look at the “credit spread”, or

additional interest they charge corporate borrowers over
and above the yield on equivalent government bonds. At 0.8
percentage points, the average credit spread on American
investment-grade bonds was last this low in 2005, amid a
lending surge that helped set the stage for the global
financial crisis. Asian spreads are similar, and European
ones not much higher. The bankers who help companies
issue new bonds have not been so busy since policymakers
flooded markets with liquidity during the covid-19
pandemic.

Interest rates spent much of the past two decades on the

floor. Now they have increased sufficiently that, even when
accounting for razor-thin credit spreads, the all-in yields on
plenty of high-grade corporate bonds are well above 5%.
That looks rather good compared with the 4% earnings yield
which is implied by the ratio of American share prices to
underlying profits expected in 2025. Small wonder investors
are keen on bonds, or that companies are exploiting their
enthusiasm to issue more.

Yet in another sense, today’s seemingly red-hot market

comes as a shock. Racier forms of corporate debt, ranging
from risky “junk” bonds to modish private credit, have been
booming for decades. In contrast, the stature of the bog-
standard corporate bond has trended firmly in one direction
—down—for not just decades but centuries.

First issued by municipal Venice in the 1100s, bonds once

made up the entirety of capital markets. Companies started
selling them in the 1600s, around the same time as they
began selling shares. Although stocks stayed grubby for
aeons, corporate bonds became respectable more quickly. In
the 19th century they were the least volatile securities on
the Paris bourse; in America they outperformed shares for
decades. Long after the Wall Street crash of 1929, investors
still spurned stocks. As late as the 1950s they were happy to
accept yields of 3% on corporate bonds, while demanding
shares offer earnings yields close to 10%.

Then something in the collective psyche shifted and the cult

of equity took off. Shares’ promise of dizzying profits
trumped the fixed income on bonds; investors poured
money into the stockmarket; valuations soared and so did
returns. The ballooning venture-capital industry vividly
demonstrated the riches early ownership of high-growth
firms could bring. Since 1900, crashes notwithstanding, the
annualised real returns on American shares have been
6.5%, compared with 5.3% for corporate bonds.

Over the past ten years the divergence of the two markets
has continued apace. Investment-grade bonds issued by
American firms were worth $7.5trn in 2014, compared with
$19trn for shares in firms in the S&P 500 index. Now the two
figures are $11trn and $52trn, respectively. The bond
market’s value, then 39% of that for stocks, is now 22%.
Issuance volumes hint at a continuing decline. Although
2024 was the busiest year in several, in real terms its
$1.6trn of newly minted bonds was below the annual
average for the preceding decade. The market is less
attractive than it appears.

This is down to more than changing tastes among investors

in recent decades. The tech titans that have sent share
prices soaring are less suited to issuing bonds than the
corporate behemoths that preceded them. They generate
torrents of cash, so have less need to raise capital from
debt. What is more, their assets are largely intangible rather
than the tangible sort against which bonds can be secured:
intellectual property as opposed to factory machinery.

Could the corporate bond rise again? It is only natural that,

as young and innovative companies have come to dominate
markets, investors have wanted equity stakes in their
growth. As such firms mature, and their profits rise more
slowly, maybe their debt will look comparatively more
attractive. They might also have more cause to issue it, as
they plough ever more capital into the infrastructure that
powers artificial intelligence. Last year Meta, the social-
media conglomerate, sold bonds worth $10.5bn, its biggest
issuance to date. Maybe investors will regain the
enthusiasm they held for the asset class in decades gone
by. More likely, though, they will hunt for the shares of
tomorrow’s giants.■

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Free exchange

An American purchase of
Greenland could be the
deal of the century
The economics of buying new territory
1月 09, 2025 02:51 下午

ALTHOUGH AMERICA has a history of taking a commercial

approach to international relations, purchases are rarely
made without controversy. When Thomas Jefferson bought
Louisiana in 1803, doubling the size of the country, he had
to set aside his zest for constitutional constructivism, which
would have ruled out such bold federal action. Sixty-four
years later, when William Seward, then secretary of state,
purchased Alaska from Russia for $7.2m ($162m today), the
move was dubbed “Seward’s folly”. Now the Alaska deal is
seen as a masterstroke and the Louisiana purchase the
greatest achievement of one of America’s greatest
presidents. In hindsight, both look extraordinarily good
value.

History will not be as kind to Donald Trump if he gets

Greenland from Denmark under duress. On January 7th the
president-elect declined to rule out using military might or
economic warfare in his pursuit of Greenland (and of the
Panama Canal). America will lose friends if it bullies one into
ceding territory. But Mr Trump’s provocations are also foolish
because an agreement to buy Greenland, made freely and
in good will, could indeed be another deal-of-the-century.
Such a deal would increase America’s security, and perhaps
that of its NATO allies, too. Autocrats would be dispirited.
And a purchase could also benefit the inhabitants of the
island, who must—and surely would—have the final say.

What, then, is Greenland worth? One starting point is the

island’s annual GDP. At last count, in 2021, it was $3bn, or
one seven-thousandth of America’s. Only 56,000 people live
in Greenland, despite the fact it is bigger than any American
state. Much of the territory’s output is the work of the 43%
of the labour force employed by the state (against 15% in
America). Over half the government’s bills are paid by
Denmark, which gives the territory $500m a year. The
biggest industry is fishing. Removing the public sector,
ignoring other spending commitments, assuming
Greenland’s long-run growth continues and America’s
federal government receives 16% of GDP in tax (the
national average), as well as discounting using America’s
30-year Treasury yield, produces a valuation of $50bn, or a
twentieth of America’s annual defence spending.
Yet Mr Trump covets Greenland for its strategic and
economic potential, rather than its puny output. The island
sits between America and Russia in a part of the world that
is becoming more navigable as Arctic ice melts. Although
America’s Pituffik Space Base on the territory’s north-west
coast already provides the armed forces with missile-
warning sensors, an American Greenland might better
monitor the Greenland-Iceland-UK (GIUK) gap, a strip of the
Atlantic Ocean that is the access route for Russian
submarines to America’s east coast, and to the North
Atlantic.
On top of this, Greenland’s resource wealth is immense. It
has known reserves of 43 of the 50 minerals deemed
“critical” by America’s government, including probably the
largest deposits of rare earths outside China. These are
crucial to military kit and green-energy equipment. Wells off
Greenland’s coast could yield 52bn barrels of oil, about 3%
of the world’s proven reserves, according to an estimate in
2008 by the US Geological Survey.
Greenland’s resources have gone relatively unexploited
owing to the difficulty of operating in the territory’s harsh,
remote areas. Four-fifths of the island is covered by ice.
There are not even roads linking settlements. And the
government banned oil exploration in 2021. But as the
climate warms, the minerals become both more accessible
and more valuable. Already, perhaps the greatest resource
rush ever seen, on a per-person basis, is under way. Firms
are drilling at around 170 sites, up from 12 a decade ago.

From whom could the island be bought? In 2009 Denmark

all but granted Greenland the right to declare independence
should its people choose such an option in a referendum.
The island’s nationalist government would very much like to
exercise this right. At the same time Denmark granted the
territory control of its own natural resources (though as its
revenues go up, its block grant from Denmark goes down).
Any purchase, therefore, should not be from Denmark,
which really would be colonialist, but from the islanders
themselves. If America offered merely our crude valuation of
the flow of future taxes, it would amount to nearly $1m per
inhabitant. Given the territory’s riches and importance,
America could probably make every Greenlander a
multimillionaire and still benefit enormously from the
purchase.

Cold feet

Romantics and nationalists would doubtless call such an

arrangement grubby. Couldn’t the island go it alone? After
all, the 380,000 citizens of Iceland manage well enough.
Greenland could host more American military bases at the
same time as exploiting its natural resources on its own
terms. Why abandon your identity and subject yourself to
political control from Washington?
But natural-resource bonanzas bring risks, too. One is
corruption that prevents the benefits from being divided
fairly. It is unclear whether 56,000 people can govern
effectively in the presence of an immense windfall: imagine
an English town council being given Saudi Arabia’s oilfields.
Extracting minerals means mass immigrant labour. National
security is no longer just about the risk of invasion but also
forestalling hybrid warfare, from sabotage to propaganda on
TikTok. Selling to America up front would bring the full might
of America’s administrative and security apparatus to the
territory, while guaranteeing—if your columnist’s advice was
followed—an equal distribution of the windfall.

Respecting Greenland’s right to self-determination means

respecting its citizens’ right to consider such an offer, which
could be put to a referendum. For the choice to be free, Mr
Trump would have to retract his threat of force. He should
do so—and then try putting some red meat in front of the
polar bear. ■

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century

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Science & technology

How the Gulf’s rulers want to harness the
power of science
Return of the House of Wisdom :: A stronger R&D base, they hope, will
transform their countries’ economies. Will their plan work?

Training AI models might not need

enormous data centres
I can do it with a distributed heart :: Eventually, models could be trained
without any dedicated hardware at all

Does melatonin work for jet lag?

Well informed :: It can help. But it depends where you’re going

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Return of the House of Wisdom

How the Gulf’s rulers want

to harness the power of
science
A stronger R&D base, they hope, will transform their
countries’ economies. Will their plan work?
1月 09, 2025 02:50 下午 | Dubai

BAYT AL-HIKMA, or the House of Wisdom, in Baghdad

emerged in the ninth century—even before the Accademia
dei Lincei in Rome, widely considered the first academy of
sciences. The Banu Musa brothers, sons of an astronomer in
Baghdad, created the first machine with a stored program
there and scientific textbooks from the institute were
translated and made their way to Europe.

That marked a high point. Amid the siege of Baghdad in

1258, the Mongols destroyed the institute and threw all the
texts into the Tigris river. Scientific discovery in the Middle
East waned and has never returned to the heights of the
Islamic Golden Age, as the era was known. Of all the Nobel
prizes for the sciences handed out since 1901, only two
have gone to recipients from the region.

The Gulf’s rulers want to do better than that in future. Keen

to diversify their economies away from fossil fuels, the
governments of Qatar, Saudi Arabia and the United Arab
Emirates (UAE) are turning to scientific research.
The UAE launched a policy for science, technology and
innovation in February 2024 and, seven months later,
opened the research-led National University of Dubai. In
Saudi Arabia Muhammad bin Salman, the crown prince, has
launched a revamped strategy for the King Abdullah
University of Science and Technology (KAUST), the
kingdom’s science hub, which is modelled on Western
universities, to focus on research aligned with his “Vision
2030” economic blueprint. The kingdom has also struck a
co-operation agreement with Britain. Qatar’s third national
strategy, which covers the six years to 2030, contains
targets for patents, publications and R&D spending by
scientific foundations and the private sector.

Currently, the UAE spends just 1.5% of its GDP on R&D,

Qatar only 0.7% and Saudi Arabia 0.5% (see chart 1). This is
well short of the 2.7% average among OECD countries, but
that is partly because the region is not taking a “kitchen-
sink” approach and spreading its funding across every
imaginable project, says Sarah al-Amiri, chair of the
Emirates Science Council and the UAE’s minister of state for
public education.

Golden dreams

Nevertheless, the Research Development and Innovation

Authority in Saudi Arabia, set up in 2021, hopes to invest
2.5% of the kingdom’s GDP on research, development and
innovation by 2040. Qatari officials plan to double their
country’s current spending levels by the end of this decade,
with about three-fifths coming from businesses. R&D is no
longer just a “nice-to-have”, says Hilal Lashuel, a
neuroscientist and an adviser to Sheikha Moza, the chair of
the Qatar Foundation, a body that oversees that country’s
universities and scientific research.

The Gulf’s new approach to building its science and

technology prowess has three distinct characteristics: a
focus on domestic problems; a preference for applied
research; and a careful choice of international partnerships.
Researchers in the region focus on practical topics such as
food security, energy efficiency and health. Scientists at
KAUST, for example, are using the fibrous structure of oyster
mushrooms to create a membrane that can simultaneously
absorb oil and repel water, useful in mopping up oil spills.
Researchers at the UAE’s Khalifa University are focusing on
graphene membranes to improve water desalination. At
New York University’s campus in Abu Dhabi, scientists have
developed nanoparticles that could improve treatment of an
aggressive form of breast cancer, the most frequently
diagnosed cancer in the Gulf.

“The first priority is to have an impact in the country,” says

Dr Lashuel. He gives the example of rare diseases, where
the Gulf has, until now, focused solely on identifying genes
that contribute to causing them. Those have then been
studied further by researchers elsewhere but now, he says,
Gulf scientists will look for ways to use those discoveries to
develop drugs or companies in the region.

Commercial successes are not unheard of: the Khalifa

University’s graphene research centre has tied up with a
Swiss maker of pipes to work on high-performance pipelines
for oil and gas. But there is scope for plenty more. In Saudi
Arabia, for example, tie-ups between universities and
companies—including such firms as Aramco, the oil giant,
and SABIC, a chemicals champion—account for only 2% of
scholarly output (see chart 2), compared with the average
of 6% for countries in the OECD.
Aware that there are still gaps between academia and
businesses, though, governments are stepping in with
initiatives like the Qatar Research, Development and
Innovation Council. “You need to teach the private sector
the R&D mentality, and that is lacking,” says Abeer al-
Hammadi, the director of the innovation centre at Qatar’s
Hamad Bin Khalifa University. In the UAE, the government is
helping companies to assess where they could better use
technology. To accelerate progress, a financing agreement
worth 5bn dirhams ($1.4bn) has been set up with the
Emirates Development Bank. Hassan Arafat of Khalifa
University, who leads the Research and Innovation Centre
for Graphene and 2D Materials, says that companies in the
region have long imported technology through licences and
franchises. Building it from the ground up is a “huge
change”, he says.

Emirati, Qatari and Saudi officials also want to improve

foreign collaborations. That means no longer being seen as
just a pool of readily available funds for Western
universities. “We want equal participation and benefits,”
says Ms Hammadi.

Here the Gulf authorities have learned from past mistakes.

Two decades ago Qatar and the UAE brought in the likes of
Carnegie Mellon and New York University to set up
campuses in Doha and Abu Dhabi. In 2015 the UAE
announced a science and technology policy that covered
100 national initiatives and had a budget of more than
$82bn. At one point, the UAE was home to a fifth of all
international university branches. Saudi Arabia formed
partnerships with over two dozen universities, including one
between Imperial College London and KAUST. Between 2008
and 2014 Saudi Arabia allocated more than $6bn to its
science policy.

Despite the investment, the Gulf’s economies were not

transformed. The Masdar Institute of Science and
Technology, for example, was created in 2007 with hopes
that it would become a global leader in research on
renewables and alternative energy, with help from the
Massachusetts Institute of Technology; a decade later its
academic arm was dropped and the remainder was merged
with the Petroleum Institute and became part of the newly
formed Khalifa University.
Collaborations such as these are more dicey in the modern
day, in any case, complicated by geopolitical wrangling. In
February Texas A&M University abruptly announced it was
shutting down its campus in Doha, which has been
profitable and running for over two decades. Students and
researchers are now in limbo. The closure has left a “big
shadow” over such foreign partnerships, especially with
America, one academic says.

Home-grown universities are therefore now much higher on

the Gulf’s agenda. A large proportion of academics in these
universities still come from overseas so, to hedge the risks
to their economic-transformation efforts, the region’s
leaders increasingly want to bring back more Arab scientists
from top global universities.
They are also diversifying their research partners. The UAE’s
universities are seeking collaborations with European
centres like CERN in Geneva, the world’s biggest particle-
physics laboratory. Saudi Arabia’s top collaborator in 2024,
as measured by co-written research, was China, ahead of
America; KAUST’s biggest partner was the Chinese Academy
of Sciences. Emirati officials say China has been a keen
collaborator, especially because of its desire to globalise its
education system. The Chinese are willing to bring more
resources and talent to the table than the Americans are
and collaborations do not come with “an invoice or bill
attached”, says one professor at an Emirati university.

The Gulf’s approach to research may not bring the

international kudos of fundamental scientific breakthroughs,
even though the volume of patents and research citations
coming out of the region is rising (see chart 3). But the
technocratic approach could solve its own problems, says
Khaled Machaca, a physiologist at Weill Cornell Medicine’s
Qatar centre. And a more dynamic approach to research and
innovation could be the Gulf’s biggest contribution to global
science. ■

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I can do it with a distributed heart

Training AI models might

not need enormous data
centres
Eventually, models could be trained without any dedicated
hardware at all
1月 09, 2025 02:50 下午

ONCE, THE world’s richest men competed over yachts, jets

and private islands. Now, the size-measuring contest of
choice is clusters. Just 18 months ago, OpenAI trained GPT-
4, its then state-of-the-art large language model (LLM), on a
network of around 25,000 then state-of-the-art graphics
processing units (GPUs) made by Nvidia. Now Elon Musk and
Mark Zuckerberg, bosses of X and Meta respectively, are
waving their chips in the air: Mr Musk says he has 100,000
GPUs in one data centre and plans to buy 200,000. Mr
Zuckerberg says he’ll get 350,000.

This contest to build ever-bigger computing clusters for

ever-more-powerful artificial-intelligence (AI) models cannot
continue indefinitely. Each extra chip adds not only
processing power but also to the organisational burden of
keeping the whole cluster synchronised. The more chips
there are, the more time the data centre’s chips will spend
shuttling data around rather than doing useful work. Simply
increasing the number of GPUs will provide diminishing
returns.

Computer scientists are therefore looking for cleverer, less

resource-intensive ways to train future AI models. The
solution could lie with ditching the enormous bespoke
computing clusters (and their associated upfront costs)
altogether and, instead, distributing the task of training
between many smaller data centres. This, say some
experts, could be the first step towards an even more
ambitious goal—training AI models without the need for any
dedicated hardware at all.

Training a modern AI system involves ingesting data—

sentences, say, or the structure of a protein—that has had
some sections hidden. The model makes a guess at what
the hidden sections might contain. If it makes the wrong
guess, the model is tweaked by a mathematical process
called backpropagation so that, the next time it tries the
same prediction, it will be infinitesimally closer to the
correct answer.

I knew you were trouble

The problems come when you want to be able to work “in
parallel”—to have two, or 200,000, GPUs working on
backpropagation at the same time. After each step, the
chips share data about the changes they have made. If they
didn’t, you wouldn’t have a single training run, you’d have
200,000 chips training 200,000 models on their own. That
step, called “checkpointing”, can get complicated fast.
There is only one link between two chips, but 190 between
20 chips and almost 20bn for 200,000 chips. The time it
takes to checkpoint grows commensurately. For big training
runs, around half the time can often be spent on
checkpointing.

All that wasted time gave Arthur Douillard, an engineer at

Google DeepMind, an idea. Why not just do fewer
checkpoints? In late 2023, he and his colleagues published a
method for “Distributed Low-Communication Training of
Language Models”, or DiLoCo. Rather than training on
100,000 GPUs, all of which speak to each other at every
step, DiLoCo describes how to distribute training across
different “islands”, each still a sizeable data centre. Within
the islands, checkpointing continues as normal, but across
them, the communication burden drops 500-fold.

There are trade-offs. Models trained this way seem to

struggle to hit the same peak performance as those trained
in monolithic data centres. But interestingly, that impact
seems to exist only when the models are rated on the same
tasks they are trained on: predicting the missing data.

When they are turned to predictions that they’ve never

been asked to make before, they seem to generalise better.
Ask them to answer a reasoning question in a form not in
the training data, and pound for pound they may outclass
the traditionally trained models. That could be an artefact of
each island of compute being slightly freer to spiral off in its
own direction between checkpointing runs, when they get
hauled back on task. Like a cohort of studious
undergraduates forming their own research groups rather
than being lectured to en masse, the end result is therefore
slightly less focused on the task at hand, but with a much
wider experience.

Vincent Weisser, founder of Prime Intellect, an open-source

AI lab, has taken DiLoCo and run with it. In November 2024
his team completed training on Intellect-1, a 10bn-
parameter LLM comparable to Meta’s centrally trained
Llama 2, which was state-of-the-art when released in 2023.

Mr Weisser’s team built OpenDiLoCo, a lightly modified

version of Mr Douillard’s original, and set it to work training
a new model using 30 GPU clusters in eight cities across
three continents. In his trials, the GPUs ended up actively
working for 83% of the time—that’s compared with 100% in
the baseline scenario, in which all the GPUs were in the
same building. When training was limited to data centres in
America, they were actively working for 96% of the time.
Instead of checkpointing every training step, Mr Weisser’s
approach checkpoints only every 500 steps. And instead of
sharing all the information about every change, it
“quantises” the changes, dropping the least significant
three-quarters of the data.

For the most advanced labs, with monolithic data centres

already built, there is no pressing reason to make the switch
to distributed training yet. But, given time, Mr Douillard
thinks that his approach will become the norm. The
advantages are clear, and the downsides—at least, those
illustrated by the small training runs that have been
completed so far—seem to be fairly limited.
For an open-source lab like Prime Intellect, the distributed
approach has other benefits. Data centres big enough to
train a 10bn-parameter model are few and far between.
That scarcity drives up prices to access their compute—if it
is even available on the open market at all, rather than
hoarded by the companies that have built them. Smaller
clusters are readily available, however. Each of the 30
clusters Prime Intellect used was a rack of just eight GPUs,
with up to 14 of the clusters online at any given time. This
resource is a thousand times smaller than data centres used
by frontier labs, but neither Mr Weisser nor Mr Douillard see
any reason why their approach would not scale.

For Mr Weisser, the motivation for distributing training is

also to distribute power—and not just in the electrical sense.
“It’s extremely important that it’s not in the hands of one
nation, one corporation,” he says. The approach is hardly a
free-for-all, though—one of the eight-GPU clusters he used
in his training run costs $600,000; the total network
deployed by Prime Intellect would cost $18m to buy. But his
work is a sign, at least, that training capable AI models does
not have to cost billions of dollars.

And what if the costs could drop further still? The dream for
developers pursuing truly decentralised AI is to drop the
need for purpose-built training chips entirely. Measured in
teraflops, a count of how many operations a chip can do in a
second, one of Nvidia’s most capable chips is roughly as
powerful as 300 or so top-end iPhones. But there are a lot
more iPhones in the world than GPUs. What if they (and
other consumer computers) could all be put to work,
churning through training runs while their owners sleep?

The trade-offs would be enormous. The ease of working with

high-performance chips is that, even when distributed
around the world, they are at least the same model
operating at the same speed. That would be lost. Worse, not
only would the training progress need to be aggregated and
redistributed at each checkpoint step, so would the training
data itself, since typical consumer hardware is unable to
store the terabytes of data that goes into a cutting-edge
LLM. New computing breakthroughs would be required, says
Nic Lane of Flower, one of the labs trying to make that
approach a reality.

The gains, though, could add up, with the approach leading
to better models, reckons Mr Lane. In the same way that
distributed training makes models better at generalising,
models trained on “sharded” datasets, where only portions
of the training data are given to each GPU, could perform
better when confronted with unexpected input in the real
world. All that would leave the billionaires needing
something else to compete over. ■

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Well informed

Does melatonin work for

jet lag?
It can help. But it depends where you’re going
1月 09, 2025 02:50 下午

DROP INTO any pharmacy in America and you will find jars
of melatonin promising to relieve you of dreaded jet lag.
There are tablets, pink gummies, potent-looking capsules—
whatever appeals. But all you want to know is: does it work?

Melatonin is known as the “darkness hormone”. When the

sun goes down, it is released by the pineal gland in the
brain. Production peaks in the middle of the night before
slowly falling as the morning light returns. Although driven
by the biological clock, rather than darkness itself, the
emergence and disappearance of light helps regulate the
clock each day and keeps melatonin production
synchronised to the day-night cycle. The night-time increase
in melatonin puts people into a pleasant state that makes it
easier for them to fall asleep. And when people are given
melatonin during the day, they get sleepy then, too.

Disrupted melatonin production can lead to sleep disorders.

People who are blind, for example, do not have their
biological clocks set by the changing light. Because the
natural clock runs a little slower than the 24-hour cycle,
their melatonin production can diverge from the external
day-night cycle. Drifting melatonin peaks eventually make
them sleep during the day, even against their best
intentions.

Jet lag, similarly, can cause melatonin disruptions. One

reason is that sleep is interrupted by the bright lights of the
plane cabin, but the much more detrimental effect comes
from arriving at a destination with a day-night cycle out of
sync with your biological clock. The clock, and the
melatonin, can take days to catch up.

Managing jet lag with melatonin supplements, therefore,

has become popular. But understanding whether or not they
work is hard. Experiments that mess with people’s biological
clocks in a controlled way, and which also recreate real-life
scenarios, are not easy to do. Many studies, for instance,
have kept people from sleep by exposing them to bright
lights all night. But that is not only a little cruel, it is not an
ideal way to model sleep disruption.

Instead, scientists have given melatonin to people who were

travelling anyway, such as air cabin staff, soldiers and
scientists travelling to conferences. In those cases, the
supplements do seem to work. A landmark paper that
pooled the results of five randomised controlled trials in
2002 found that people given melatonin rate their jet-lag
experience as half as bad as those who are given a placebo,
on a scale from zero to 100.

“Melatonin is quite effective if you have to speed up your

clock,” says Derk-Jan Dijk, director of the Surrey Sleep
Research Centre. “It’s not good at slowing down your clock.”
That means taking melatonin may be more useful after
eastward flights, when you have to go to bed sooner than
your body wants to, than after westward flights, when you
have to stay up. Fortunately for those with westward travel
plans, there are other things you can do to help your
biological clock adjust—gradually shifting the wake-sleep
cycle in the days before the flight, for example, and getting
natural sunlight and exercise during daytime hours at the
destination, which helps adjust melatonin production.■

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Culture
Sex and Snow White: how Grimm should
children’s books be?
Into the woods :: The German authors suggest very, but today trends run
the opposite way

Millennials and Gen Z are falling hard for

stuffed animals
Going soft :: Plushies are cute, cuddly and costly

Jimmy Lai’s trial is a headline-worthy

example of injustice
No crime, plenty of punishment :: A new biography aims to keep the
public’s attention on the pro-democracy tycoon

Are mystics kooks or valuable disrupters?

Thinking outside the God complex :: A realist’s refreshing take on
mysticism

Ten years after the Charlie Hebdo attack,

satire is under siege
Free speech in France :: Public support is waning for the right to offend

Ovation inflation has spread from Broadway

to London’s West End
Back Story :: Why do dud plays get standing ovations?

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Into the woods

Sex and Snow White: how

Grimm should children’s
books be?
The German authors suggest very, but today trends run the
opposite way
1月 09, 2025 02:50 下午

ONCE UPON a time there were two little boys who lived in a
deep, dark forest. Their name was Grimm, and so was their
life. Their father died, and their mother was poor. She
slaughtered pigs, while their aunt castrated cocks with a
knife. When the boys grew up Napoleon invaded, and one
brother travelled to war. He saw villages burned, girls raped
and piles of corpses so big the villagers could not bury
them.

But this story has a happily ever after. Because when the
boys grew up they wrote down stories. They penned “Snow
White” and “Cinderella” and indeed the line “happily ever
after”. There were hints of their life in their tales, though, as
a new book by Ann Schmiesing, an academic, shows. For
they also wrote a tale called “How Some Children Played at
Slaughtering”. In it, one boy slits another’s throat; his
brother drowns in the bath; his mother hangs herself with
guilt; his father dies of grief. A forgotten children’s classic.

This is a story about children’s stories. It is about what

stories should include—sugar, spice and all things nice, or
frogs, snails and incest?—and how dark their telling should
be. In the Grimms’ day, the answer was very. In these
stories fathers abuse daughters, Rapunzel falls pregnant
and Red Riding Hood is duped into bed (“My, how hairy you
are, granny!”) and raped. In a Swiss telling of “Snow White”,
the girl is a “slut”, the seven dwarves are murdered and
their house is burned down. Disney did not go with that
version.

This debate still matters now. Children’s books cause

conniptions. In Britain Roald Dahl was edited to remove
words such as “fat” that, to some modern eyes, seemed
objectionable and (as Dahl might have put it) fizzwiggling. In
2023, 17 American states tried to censor more than 100
books. “There is a sort of tug-of-war through the history of
children’s writing between instruction and delight,” says
Sam Leith, author of “The Haunted Wood”, a book about
children’s literature.

The debate is fraught partly because the stakes—and the

sales—are high. The personal stakes are high, too. Reading
is dangerously independent. It offers children their first
escape from their parents. Go into Narnia or Neverland or
Wonderland and you—like Lucy or Peter Pan or Alice—go
alone. And what you see there will shape you: for ever after
you will know what lies behind the wardrobe door (furs and
firs), what eating Turkish delight leads to (trouble) and what
to do with bottles saying “DRINK ME” (don’t).

When Martin Amis, a British novelist, said that he would

write a children’s book only if he “had a serious brain
injury”, he distilled centuries of disdain. Until the 18th
century there was no distinct children’s literature. Though
not everyone was so dismissive: John Locke argued that,
since children’s minds were “as easily turned this or that
way, as water”, books should be written specially for them
to guide them. And, sounding slightly less like Britain’s
foremost political philosopher and slightly more like
someone’s six-year-old, they should have “as many pictures
of animals…as can be found”.

Publishing eventually caught up. “The New England Primer”,

first published in the 17th century, promised young readers
illustrated alphabets, a “pleasant guide” to reading—and an
arguably muted idea of what constitutes pleasure. From its
syllabic spelling guides (three-syllable words offered “Ho-li-
ness” and “God-li-ness”), to its illustrated alphabet (“Y”
glumly informed readers that “No Youth we see / From
death is free”), the tone was sober—though it did brighten
for some three- and four-syllable words (“Drunk-en-ness”
and “For-ni-ca-tion”).

By comparison, the arrival of the Grimms—with their

slaughter, torture and violent animal deaths (a wolf drowns,
a hare dies an agonising death)—was almost larky. Though,
as Ms Schmiesing points out, their stories were not really
intended for children. The Grimms were linguists, not
novelists; their aim was preservation, not entertainment.
Industrialisation had started to creep through the ancient
forests of Germany, destroying habitats, species and stories
as it went. Narrative naturalists, they wanted to pluck
Germany’s native species of story from its fields and press
them between the pages of their anthology before such
tales went extinct.

The aim might have been scholarly, but the result was an
unexpected children’s bestseller. Not everyone approved:
early readers complained about the darkness. Even the very
structure of these stories was gloomy: the famous “happily
ever after” ending alternated with the glummer “And if they
haven’t died, they’re still alive.” The Grimms responded
briskly: take the nasty bits away from children’s books and
you may as well “blindfold” youngsters so they cannot see
at all.

A look at the bestseller chart shows that books that sell

sweetness do well. One ever-popular title is “Guess How
Much I Love You” (1994), in which Little Nutbrown Hare
spends his days trying to tell Big Nutbrown Hare how much
he loves him and does not, alas, experience an agonising
death. The bestselling book in America in a recent ten-year
period was not Shakespeare or even Dan Brown but Dr
Seuss’s “Oh, the Places You’ll Go!”. Silly, scatological tomes,
such as “The Fart that Changed the World”, are also in
vogue.

Children’s literature has never been just for children: adults

happily read “Harry Potter” and Philip Pullman. All good
children’s writers know that they are “writing for a double
audience”, says Cressida Cowell, a former children’s
laureate in Britain and the author of the “How to Train Your
Dragon” series. There is the child being read to and the
adult doing the reading: “The very best children’s books…
work on both levels.”

Fashions in children’s literature tend to have great

“swerves” says Mr Leith, followed by “massive over-
compensation”. After a recent testy period, tensions have
calmed a little: attempts to censor books fell in America
from January through August 2023. Penguin, after noisy
complaints, reinstated the fizzwiggling parts of Dahl.
Children’s books are certainly not as dark as they were in
the Grimms’ time (incest sells less well these days), nor do
they need to be. But perhaps more parents will crave books
for their children that better balance dark and light, happily
ever afters with big bad wolves. ■

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Going soft

Millennials and Gen Z are

falling hard for stuffed
animals
Plushies are cute, cuddly and costly
1月 09, 2025 02:51 下午

Some like them soft

IT LOOKED LIKE a typical fish-and-chip shop. Aproned chefs

tended to frying baskets and wrapped orders in newspaper.
But the catch of the day came with a catch of its own: at
Selfridges, a department store in London, patrons were
buying toys rather than trawl. Cuddly cod were garnished
with fuzzy lemons and served with plushy peas. The
cheapest item cost $25, twice the cost of an actual meal.
Jellycat, the British brand behind the pop-up shop, invited
everyone to play with their food.

The world has gone soft for soft toys. On TikTok videos
tagged #Plushies, featuring various stuffed creatures and
objects, have been viewed around 8bn times. Stampedes
have broken out at shops. The Jellycat pop-up required
visitors to book a slot. Labubu dolls—elfin figures in fluffy
outfits made by Pop Mart, a Chinese toy company—are
popular across Asia.

Melissa Symonds of Circana, a consumer-insights firm, says

that soft toys are the second-largest category in the British
toy market; sales have increased by around 58% since
2021. The global market was worth almost $12bn in 2023
and is expected to grow at an annual rate of 8% until 2030.
So lucrative are these playthings that Warren Buffett bought
the parent company of Squishmallows, an American
purveyor of rotund stuffed animals, in 2022, calling it a
money-making “gem”.
It is not young kids driving the demand but “kidults” (those
aged 12 and above). Kidults now account for over a quarter
of sales and, in 2023, surpassed preschoolers for the first
time as the biggest age cohort for toys overall.

The craze began during the pandemic, as teenagers and

young adults, stuck at home amid a global upheaval, sought
succour in cute playthings. Lucy Dray, the owner of an
online soft-toy shop called Baby Beans, says that plushies
“bring people happiness and comfort”—two states that “can
be quite hard to find in the world we live in”. Pop
psychologists on social media have also preached the
benefits of reconnecting with your younger self. One
influencer suggested that collecting luxury teddy bears was
“healing [her] inner child”.

And as many defer having children until their late 20s or

early 30s, kidults have more money to splurge on
themselves. Soft toys are an everyday indulgence: you can
spend anywhere between $10 and $250 on a Squishmallow.
(Or, if you want a limited-edition black cat, you can buy one
on eBay for more than $1,500.)

Collectors are not put off by such steep prices: if anything,

they only add to the allure. Like obtaining a concert ticket or
a sports trading card, getting your hands on a rare plushie
gives you bragging rights. Celebrity endorsements have
heightened their desirability further. Kim Kardashian and
Lady Gaga are avowed fans.

Some will argue that the plushie craze is another sign of an

“infantilised” generation. But trivial treasures have thrived
in many eras. In the 1980s it was Cabbage Patch Kids; in the
1990s it was Beanie Babies. In due course “fading novelty
could occur with specific toys”, says Dave Neale of
Cambridge University, who studies games. “But I don’t see
it as possible for play more generally because it’s so broad
and varied.”

For the time being, plushies are staying put in bedrooms

everywhere. When Paco the Salamander, a toy influencer,
joked on TikTok that she was “ready to grow up” and get rid
of her sizeable plushie collection, her followers insisted that
“you’re never too old” to own them. For toymakers, it is all
about the soft sell. ■

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No crime, plenty of punishment

Jimmy Lai’s trial is a

headline-worthy example
of injustice
A new biography aims to keep the public’s attention on the
pro-democracy tycoon
1月 09, 2025 02:50 下午

Keeping a close eye on Jimmy Lai

SPECTATORS MIGHT have expected him to be dispirited. But

Jimmy Lai grinned from the stand in late November 2024;
spotting loved ones in the public gallery, he waved and blew
kisses. The pro-democracy media tycoon was testifying in
his national-security trial, which began in December 2023.
Already the 77-year-old has been locked behind bars for
more than four years, mostly in solitary confinement. This
was a show of defiance from a man who has spent his life
defending freedom—and will probably die doing so.

“The Troublemaker” recounts the vertiginous rise and fall of

Hong Kong’s most famous tycoon-turned-political prisoner.
For decades Mr Lai symbolised the island’s promise, having
arrived as a 12-year-old refugee from China. As the city’s
economy boomed, he worked his way up from the floor of a
garment factory to establish a retail empire. An outspoken
critic of communism, he wrote a column in 1994 calling Li
Peng, then China’s prime minister, “a turtle egg” (which is
far more insulting in Mandarin than it sounds in English).

Facing pressure from Chinese authorities, he sold his stake

in his clothing company for $185m in 1996 ($345m in
today’s money). He used the proceeds to fund his pro-
democracy media business, Next Digital, with titles such as
Next Magazine and Apple Daily (a nod to the forbidden
fruit). Both peddled a curious mix of free thinking and sex.
Apple Daily featured restaurant-style reviews of Hong
Kong’s prostitutes; the author was “Fei Long” (Fat Dragon), a
popular nickname for the treasury secretary. When the
feature was paused temporarily, circulation dropped by
30%.

After people took to the streets for pro-democracy protests

in 2003, 2014 and 2019, Mr Lai’s papers championed the
demonstrations. He protested, too, always peacefully, and
held meetings with foreign officials to enlist their support,
including Mike Pence, America’s vice-president under
Donald Trump from 2017-21.

After the government in Beijing imposed a draconian

national-security law on Hong Kong in June 2020, Mr Lai
knew he would be one of its first targets. The following
month 250 police raided and frogmarched him through
Apple Daily’s offices in handcuffs. The paper responded by
splashing a photograph of Mr Lai across its front pages with
the headline “Apple will definitely keep fighting.” He was
released on bail but soon detained again. Apple Daily was
closed the next year.

Mark Clifford, the book’s author, has written a compelling

biography and shows an eye for detail. He depicts a bullish
and generous man who was as uncompromising in business
as in politics. Mr Clifford is a former board director at Next
Digital and a friend of Mr Lai’s, which has given him
privileged access to his subject’s personal life and
professional endeavours. (His name was also mentioned at
the trial.)

Such closeness is both the book’s strength and its

weakness. At points “The Troublemaker” verges on
hagiography. Unfavourable incidents are skated over, such
as how Mr Lai could be very harsh and tough on his
employees, prompting some to call their boss “Chairman
Mao who speaks English” behind his back. But if this
frustrates a nuanced understanding of the man, it frees up
the narrative to focus on the collapse of civil liberties in
Hong Kong.

The most moving passages reflect on Mr Lai’s decision to

stay. As a billionaire with British citizenship, he had every
opportunity to flee. “I must face the consequences of my
actions, just or unjust,” he wrote from prison. “It is also a
way to uphold the dignity of Hong Kong people, as one of
the leaders for the fight of freedom.”

Mr Lai faces a maximum sentence of life imprisonment for

supposed collusion with foreign forces and a separate
charge of sedition. His supporters argue his only crime is
pro-democracy journalism. Mr Lai is likely to be found guilty:
national-security trials have a 97% conviction rate. He is
sustained by his faith and love for his wife. Like Alexei
Navalny, a dissident who returned to Russia despite obvious
peril, Mr Lai sacrificed his liberty for his beliefs.

“The Troublemaker” has little hope of changing Mr Lai’s fate.

But it does aim to keep public attention on the trial, despite
its agonisingly slow pace. (Critics of the national-security
law claim delays are a way to punish defendants before
conviction and curtail media attention.) “Authorities want to
erase him,” Mr Clifford writes. His book sets down the story
of his colleague’s life using ink and paper, Mr Lai’s own
weapons of choice. ■

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Thinking outside the God complex

Are mystics kooks or

valuable disrupters?
A realist’s refreshing take on mysticism
1月 09, 2025 02:51 下午

THE TRAVAILS of Christina the Astonishing, a Belgian

Christian in the 12th century, were astonishing indeed. At
her funeral, Christina, just 21 years old, revived and
levitated. She then fled into the wild, ate rubbish and drank
her own (virgin) breast milk. Or so it was claimed.

The actions of others may also defy belief. Catherine of

Siena, who died in 1380, imagined marrying Christ and
wearing his foreskin as a wedding ring. Around a century
earlier Agnes Blannbekin had visions of tasting the Holy
Prepuce (as it is called) and swallowing it a hundred times.

With such religious peculiarities as these, little wonder

mysticism gets a bad rap. Simon Critchley, a philosopher at
the New School for Social Research in New York, provides an
accessible assessment of the subject that is usually treated
in a maddeningly esoteric or academic way.

Today many people are abandoning religion (the

bureaucratic institutionalisation of faith) but embracing
spirituality (a personal sense of transcendence), so it is a
good moment to look at those on the outer fringes of the
sacred. As the author wryly puts it: “God might be ineffable,
but the mystics are constantly effing the ineffable, for as
long as it effing takes.”

The term “mystical” comes from the ancient Greek

mystikos, which means hidden. Though the idea is old, the
word “mysticism” was coined only in the 17th century,
marking a shift in Western attitudes towards religion from a
sacred mystery to a practice. A mystic is someone who feels
they have had a direct experience of the divine that leads to
personal transformation. They “did not see themselves as
enemies of reason. Neither did they think of themselves as
heretics,” Mr Critchley writes. Though charlatans existed in
every age, many self-professed mystics were sincere. Rather
than seeking attention with frequent visions, they often had
just one or a few that touched them so deeply that they
spent the rest of their lives trying to understand the
experience.

Mystics challenged the power of the church. By claiming a

direct line to God, they threatened to make priests less
important. They also usually wrote in the vernacular, not
Latin, making their ideas more accessible. Margery Kempe,
a British mystic, wrote what is considered the first
autobiography in English. Many medieval mystics were
women, at a time when only men were theological leaders.
Mystics were religious entrepreneurs of their era, rivalling
the incumbent powers. It was dangerous work. Marguerite
Porete’s writing, for example, was burned twice as a
warning before she herself was burned at the stake in Paris
in 1310.

Mr Critchley believes “Mysticism lives on in the modern

world as aesthetic experience,” found in poetry and notably
music, that touches something deep within. Many artists
and writers have such encounters. William Blake saw angels
as a child; William Wordsworth felt transcendence climbing
Mount Snowdon. Mr Critchley displays strong scholarship,
citing a letter from T.S. Eliot—whose poem, “Four Quartets”,
is as deeply Christian as the poet—in which he
acknowledges: “You must not think of me as a mystic or a
contemplative. I have had a few flashes during my life,
though there must be many people whose experience has
taken them further.”

“Mysticism” does a good job of explaining the basics and

the arcane, including apophatic theology (where insight
comes from the absence of words, since they are from the
material world and cannot convey the immensity of the
immaterial one). Yet some readers may feel they are left in
search of more. The book focuses on just a few Christian
thinkers and contemporary writers. It barely mentions other
traditions, such as Sufism or Jewish Kabbalah, and there is
too little on more modern mystics, such as Carl Jung and
Simone Weil. But the book’s power is that it treats the topic
with rigour and rationality, even if it does not completely
transcend. ■
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Free speech in France

Ten years after the Charlie

Hebdo attack, satire is
under siege
Public support is waning for the right to offend
1月 09, 2025 02:50 下午 | PARIS

ON THE MORNING of January 7th 2015 two men, Chérif and

Saïd Kouachi, stormed the offices of Charlie Hebdo, a French
satirical newspaper. Armed with Kalashnikovs, the pair
murdered 12 people, including eight editorial staff, in less
than two minutes. The perpetrators, who were linked to al-
Qaeda, did not pick Charlie Hebdo by chance. For years the
irreverent newspaper had poked fun at religion, including
Islam. It was the start of the worst-ever year of Islamist
terrorist attacks in Paris, which killed nearly 150 people.

A decade on, Charlie Hebdo is unbowed and unrepentant,

turning out a weekly as tasteless, silly and provocative as
ever. But the paper now operates from a secure and
undisclosed location. Laurent Sourisseau, a cartoonist
known as Riss, survived the massacre and took over the
editorship after the attack. Radical Islamists have called for
his death, and he lives under police protection. The
Economist met him at an unmarked third-party office.

Nothing has since been quite the same for Charlie Hebdo.
Yet the paper has nurtured a new generation of cartoonists
and published every week since that awful winter morning.
Its circulation today is some 50,000—over 25% higher than
before the attack. “We think about it all the time, but we
don’t talk about it all the time,” says Riss. “You can’t be
crushed by this history.”

To mark the anniversary, Charlie Hebdo has published a

book entitled “Charlie Liberty”. It is a way for survivors to
pay tribute to former colleagues, five of them cartoonists:
Cabu, Charb, Honoré, Tignous and Wolinski. Charlie Hebdo
has continued a French tradition of political caricature, often
scurrilous and obscene, which has deep roots. Bawdy, anti-
royalist cartoons ridiculed Marie-Antoinette and Louis XVI in
the 18th century. Over 1,500 satirical engravings were
produced in the decade following the revolution in 1789.

The merit of drawings, says Riss, is that they are a “simple

visual language, understood by everyone, to speak about
difficult things”. Founded in 1970, Charlie Hebdo spares
nothing and no one. Its caricatures range from the
irreligious (the Prophet Muhammad displaying his pimply
bottom) to the political (Marine Le Pen shaving her pubic
hair). The paper regularly irks the regimes in Iran and
Turkey, either for mocking their leaders or for joking about
Islam.

Charlie Hebdo’s detractors, though, are not only religious

rulers. Shortly after the attack in 2015, a handful of
American writers boycotted a gala dinner in New York at
which the French paper was getting an award for courage,
on the ground that its caricatures humiliate Muslims.

In secular France, the law forbids hate speech or incitement

to violence but protects blasphemy. Yet Charlie Hebdo is still
controversial in its home country. Mediapart, a left-wing
newspaper, recently denounced a caricature of the conflict
between secular France and hard-line Islamism, which
Charlie Hebdo represented as a woman wearing a burqa and
a bearded man. It was, said Mediapart, a “sinister” form of
Islamophobia lifted straight from the far-right
playbook. (Charlie Hebdo dismisses such charges as
absurd.)

Today French support for the defiant Charlie Hebdo spirit—

known as “Je suis Charlie”—seems more fragile. It was
strong in 2020 after Samuel Paty, a school teacher, was
decapitated by a terrorist. (He had shown pupils caricatures
of Muhammad in a class about free speech.) Yet by 2023
only 58% of the French told a poll “Je suis Charlie”, down
from 71% in 2016.

This may reflect a general trend in the West of growing

intolerance for causing offence. American stand-up comics
including Dave Chappelle have criticised censorious
attitudes towards satire. “We can’t say anything anymore!”
laments a character in a cartoon in the latest issue of
Nouvel Obs, a French magazine; “You can’t say that!” replies
his companion. In 2019, after a caricature of Binyamin
Netanyahu, Israel’s prime minister, prompted an outcry, the
New York Times stopped publishing political cartoons. On
January 3rd a cartoonist resigned from the Washington Post
after the paper rejected her depiction of its owner, Jeff
Bezos, and other bosses kneeling before a statue of Donald
Trump.

Self-censorship, rather than the law, now tempers satire.

Plantu, a cartoonist at Le Monde, has argued that
dessinateurs “no longer [have] the same freedom”. Riss
suggests that Charlie Hebdo is “not extraordinarily
provocative”, but seems so because “the margin of
tolerance” is narrowing. Ten years on, the paper’s voice is
gross but precious. “We’re doing exactly the same thing we
did before,” Riss insists. “But around us people are much
more timid.” ■

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attack-satire-is-under-siege

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Back Story

Ovation inflation has

spread from Broadway to
London’s West End
Why do dud plays get standing ovations?
1月 09, 2025 02:50 下午

AT THE END of “The Tempest”, Prospero steps forward to

solicit applause. Shakespeare’s magician will be marooned
on her island, unless she is freed “with the help of your good
hands”, pleads Sigourney Weaver in a cross-dressed
production at the Theatre Royal Drury Lane in London. The
film star is a bland passenger in a play her character should
command. Yet, on cue, the audience rises as one to acclaim
her.

These days, they all do, even when the show is a dud. Back
Story saw three plays of wildly varying quality in London
over the holidays, each culminating in a knee-jerk standing
ovation. This trend has been gathering for decades but in
the past few years has conclusively swept the West End.
The irrational exuberance—baleful to some observers,
harmless to others—reflects changes in the mood outside
the theatre as much as the drama within.

Standing ovations come in two sorts, the spontaneous and

the staged. The unplanned kind can be powerful, even
reckless expressions of feeling. Think of the indignant
crowds which in 1997 stood to cheer Earl Spencer’s eulogy
for Princess Diana, with its digs at the British media and
royal family. “Who organised the standing ovation?” asked
ever-paranoid Josef Stalin after an audience in Moscow rose
in appreciation of Anna Akhmatova, a dauntless poet.

In London theatres, standing ovations were once remarkable

and rare. Even when a few enthusiasts got up to honour
great performances, they were typically left exposed by the
doggedly seated majority. When Dustin Hoffman starred in
“The Merchant of Venice” in the West End in 1989, the
audience bestirred itself only on the night he announced the
death of Laurence Olivier. “You have to die, you have to
fucking die,” Mr Hoffman reputedly growled. Now the
ovation seems part of the script.

Why? It’s a crossover from TV talent shows, runs one

analysis, on which studio audiences are out of their seats
with aerobic regularity. Alternatively, blame Broadway,
which succumbed to the same tendency years ago and has
exported it to London (and, say locals, to Berlin). The
standing ovation “has become a reflexive social gesture, like
shaking hands with the host at the end of a party”, griped a
critic at the New York Times in 2012.

Rocketing ticket prices are part of the story, too. Forking out
a small fortune ought to make people more demanding.
Instead, through a process of auto-suggestion, many seem
determined to vindicate their outlay by having the time of
their lives (the ecstasies at “Hamilton” epitomised this
syndrome). The routine casting of celebrities is another
factor. Fans of “Alien” who splash out on “The Tempest” may
be keener on seeing Ms Weaver in the flesh than on
critiquing her blank verse.

But, in London at least, the real turning-point was the

pandemic. The punters who returned to reopened theatres
from 2021 have behaved differently from their forebears. A
few go in for raucous behaviour that miffs traditionalists,
from singing and dancing to boozing and fighting. Many
were so thrilled by the rebirth of live performance that they
leapt up in elation. The habit has stuck.

Ovation inflation troubles aficionados for two reasons. First,

it is coercive. Social scientists have studied standing
ovations as examples of group decision-making and game
theory in action. As the vertical momentum builds, the peer
pressure becomes hard to resist. If you stubbornly sit out
the curtain call, you look like a curmudgeon, and moreover
can no longer see the cast.

Second, when standing ovations are ubiquitous, they are

meaningless—an empty ritual rather than a benign
insurrection, like the indiscriminate euphoria at film
premieres or the partisan raptures at state-of-the-union
speeches. In the grumpiest view, ovation inflation is part of
a wider culture of incontinent overpraising, in which
standards are ditched and hype conquers discernment. An
unearned ovation is less a salute to the actors’ craft than to
the audience itself for being there.

All true. Still, a bit of self-congratulation may be a

permissible indulgence in a gloomy world. Decorum can be
overrated; communal whooping is a harmless catharsis. And
the post-pandemic cherishing of theatre is deserved: at its
best it is indeed a form of magic, a nightly alchemy of art
and imagination. If the spell fails, word always seeps out.
Lots of tickets for “The Tempest” remain unsold. Its
audiences may be rising dutifully to their feet, but other
theatre-goers are voting with theirs.■

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controversies, sign up to Plot Twist, our weekly subscriber-
only newsletter
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broadway-to-londons-west-end

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Economic & financial indicators

Economic data, commodities and markets
Indicators ::

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Indicators

Economic data,
commodities and markets
None
1月 09, 2025 02:50 下午
This article was downloaded by calibre from https://www.economist.com/economic-and-
financial-indicators/2025/01/09/economic-data-commodities-and-markets

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Obituary
Chiung Yao taught the Chinese all about
romantic love
Listening to the heart :: The bestselling novelist and screenwriter died on
December 4th, aged 86

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Listening to the heart

Chiung Yao taught the

Chinese all about romantic
love
The bestselling novelist and screenwriter died on December
4th, aged 86
1月 09, 2025 02:50 下午

“SO WE MUST break up?” he asked her. “Yes,” she said. His
face darkened, and he jammed on the brakes. The car
screeched to a halt. Without warning, he flung the door
open. “Then get out!” he cried. They were on a narrow
mountain road, with desolate wilderness all around. Did he
really mean to abandon her? But as soon as she left he
slammed the door, revved up the engine and aimed for the
cliff-edge. Instinctively, she hurled herself onto the bonnet
to save him. At the very edge, he stopped and got out. As
she almost slid off, into the abyss, he pulled her into his
arms.

To cut a long story short, she married him, and they were
together for 40 years. But this was not one of Chiung Yao’s
65 novels; it was a scene from her own life. She was the
passionate heroine, torn between obeying her lover and
living freely. He was Ping Hsin-tao, head of the Crown
publishing company. In 1963 he had published her first
novel, “Outside the Window”, a huge success all over the
Chinese-speaking world. After that, remorselessly, he
ordered her to write more, even two at once. When she told
him she couldn’t, he shouted that she could, and she
succeeded. She and Hsin-tao adapted most of them for film
and television, and in 1998 her adaptation of “My Fair
Princess”, an imaginary saga of the Qing dynasty, became
the most-viewed TV series in China.

At the height of her success in the 1970s and 80s it seemed

that everyone, female at least, was reading her books.
(”That’s so Chiung Yao!” people would say of anything
romantic.) They offered stories of love that triumphed
despite differences of wealth or class, parental disapproval,
etiquette or stifling tradition. There were many, many ups
and downs, much pain, many tears (she loved to cry herself,
the sign of a softening heart). Both her book titles and the
names of her heroines, which became popular too,
suggested something beautiful but fragile: “Dream”,
“Cloud”, “Rain”. Yet despite their apparent weakness or
submissiveness, these were women who insisted on loving
as they chose.
As did she. She took “Chiung Yao”, “beautiful jade”, as her
pen-name, pretty but adamant. And from early childhood
she was already in love, with words. Her mother taught
Chinese literature in primary school, to which girls in
conservative Sichuan were not allowed to go. But she would
sit by the door, listening. When she was six she startled her
mother by correctly reading the characters for “night” in a
wistful poem of the Tang era. Both the melancholy, and Tang
poetry, stayed with her. From that point, she read and read.
At school in Taiwan, to which the family fled in 1949 from
the communist revolution, she realised that all she wanted
to do was write. Rather than retake the college entrance
exam, which she had twice failed, she bought manuscript
paper, ink and pens and began her life in earnest. This was
not a career, her parents told her. But then, to her, neither
was marriage.

Instead, at 18, she fell for the literature teacher at her high
school. He was 25 years older, widowed and lonely, but, as
in “My Fair Princess”, they could watch “the snow, the stars
and the moon” together, and talk poetry. So the affair
began, and went on even when the school learned of it and
dismissed him for seducing a minor. When she realised she
would have to give him up, she was devastated. Even the
success of “Outside the Window”, her account of it all, could
not dull the pain of losing him.

Yet she fell for a writer again. His clothes were worn almost
to romantic rags, and his shack had just a bed, a table and
chair, a pen and paper; but that, he said, was all a writer
needed. She loved him for that. It was a disaster. He was
jealous of her ever-growing success, especially as his
attempt to write the Great Chinese Novel was not going
well. He called her works shallow and sentimental; she was
just “telling stories”. In one of their epic rows, she shot back
that yes, she was telling stories. She loved telling stories!
He should leave her alone to go on writing her shallow
lowbrow stuff!

It was true that, as a writer, she was not a great wife. She
could sew, but her kitchen skills ran mostly to rice and fried
eggs. She controlled the family budget, but was saving for
things, like a refrigerator, whose hidden purpose was to
save her shopping and extend her writing time. They had a
little son, Xiaoqing, whom she adored, but she wrote in
every spare moment when the baby was not crying, or
wrote with him in her arms, and sent him to nursery as soon
as she could. That marriage could not last; this was not how
wives and mothers were supposed to behave.

Nor was a woman supposed to fall for a married man, as she

did afterwards. She tried not to, but Hsin-tao insisted, and
his insistence had proved right before. So after eight years
of wrangling over his divorce they got married. They were
discreet; it was billed as a lunch party. They became,
officially, a power couple on the literary scene, and she
became a model of rebellious, dramatic or improper love,
whichever way people saw it.

By far the most dramatic episodes, however, had happened

long before, as she and her family struggled across China in
the war. Disguised as peasants, they lodged in farmhouse
after farmhouse that was torched by the advancing
Japanese. When they fled, they narrowly escaped being shot
as they hid in woodsheds and ravines. Her brothers went
missing, presumed dead; at which point her parents rolled
into the Dong’an river to drown themselves. She followed,
terrified, and her cries revived their love for her. Having
seen death up close, she realised both the fragility of life
and the endurance of love. That was her real education.
Life, she learned, was a spark that should blaze, not
miserably fade. Twice, in the throes of love, she had taken
overdoses. She had watched Hsin-tao, felled by a stroke,
linger for three years. As she aged, she vowed to control her
own death. Once she had been fiery enough to fling herself
on her lover’s moving car. Now, in a poem she left before
turning on the gas, she was a snowflake flying lightly away
to dance with the sparks of the stars. ■

Correction (January 9th 2025): A previous version of this

article said that Chiung Yao’s family fled to Taiwan from the
Sino-Japanese war, rather than the communist revolution.
Sorry.
This article was downloaded by calibre from
https://www.economist.com/obituary/2025/01/09/chiung-yao-taught-the-chinese-all-
about-romantic-love

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