[Feb 8th 2025]

The world this week

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The world this week

Politics
Business
The weekly cartoon
This week’s cover
The Economist :: How we saw the world

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The world this week

Politics
2月 06, 2025 09:02 上午

During a visit by Binyamin Netanyahu, Israel's prime

minister, to the White House Donald Trump suggested that
the 2m Palestinians in Gaza should be “permanently”
resettled in neighbouring countries and that there should be
a full American takeover of the strip. Mr Trump said the
enclave could be developed into the “riviera of the Middle
East”. Egypt and Jordan retorted that they would not host
displaced Palestinians. The UN warned deportations would
be tantamount to ethnic cleansing and breach international
law. Saudi Arabia rejected the suggestion and reaffirmed its
support for a Palestinian state. Mr Netanyahu said the idea
was “worth paying attention to”. Israel's far-right welcomed
the plan.
Mr Trump issued an order reinstating his “maximum
pressure” campaign on Iran by enforcing sanctions aiming
to reduce its oil exports to zero.

Ahmed al-Sharaa, the newly appointed interim president of

Syria, laid out his vision for the country. In an interview with
The Economist he outlined a timetable for taking Syria in
“the direction of” democracy and promised presidential
elections, but was non-committal on the question of Islamic
law and women's rights. He criticised America’s “illegal”
military presence in Syria and welcomed talks with Russia
about its military bases.

In eastern Democratic Republic of Congo a

“humanitarian” ceasefire declared by an alliance of rebel
groups, including M23, which is backed by Rwanda,
appeared to be breaking down. The capture of Goma, the
largest city in eastern Congo, has marked an escalation in a
conflict that spans decades. At least 900 people have been
killed in recent fighting around the city, and possibly as
many as 3,000. The rebels said they had no intention of
attacking Bukavu, another city along the Rwandan border,
and asked South Africa to withdraw its forces from Congo.

The future of the US Agency for International

Development looked to be in doubt after Donald Trump
said it was run by “radical lunatics” and Elon Musk
suggested he had the president’s support to shut it down as
part of his crackdown on government waste. Marco Rubio,
America’s secretary of state, was then appointed as USAID’s
acting director. Its website was shut and staff were told to
work from home.

There’s a new sheriff in town

The president of Panama, José Raúl Mulino, announced that
he would not renew an investment agreement with China.
This came after a visit to Panama by Mr Rubio, who warned
its government to take immediate steps over what he said
was China’s “influence and control” over the Panama Canal.
Mr Trump repeated his threat to take command of the
waterway, which would violate Panama’s sovereignty over
it.

Mr Rubio also visited El Salvador, where the president,

Nayib Bukele, offered to “outsource” the country’s prisons to
America. Mr Bukele suggested that Salvadorean gang
members in the United States as well as American citizens
convicted of crimes could be incarcerated in El Salvador’s
penal system for a fee. His crackdown on gang violence at
home has led to a dramatic fall in murders.

Mr Trump signed an executive order banning transgender

women and girls from participating in women’s sports in
colleges and schools. If educational institutions don’t
comply they will lose federal funding. The order, which relies
on existing equal opportunity laws, aims to “protect all-
female athletic opportunities and all-female locker rooms”.

The appointments of Tulsi Gabbard and Robert F.

Kennedy junior for the positions of director of national
intelligence and health secretary were approved by the
Senate committees overseeing those policy areas, after a
few wavering Republicans fell into line at the last minute.
The whole Senate now votes on whether to confirm them.

The lower house of Congress in the Philippines voted to

impeach Sara Duterte as vice-president. Ms Duterte has
been feuding with the president, Ferdinand “Bongbong”
Marcos, ever since their election in 2022 (the president and
vice-president are elected separately). She has been
accused of misappropriating funds and last year raised the
prospect of assassinating Mr Marcos. She denies any
wrongdoing. The Senate will not hear her impeachment trial
until June.

Australia banned DeepSeek’s chatbot app and website

from all government devices and computers over national
security concerns, though the government insists the ban is
not linked to DeepSeek’s Chinese origins. Taiwan has also
prohibited the use of DeepSeek in government
departments.

A gunman shot dead 11 people at an educational facility in

the Swedish town of Orebro, the worst mass shooting in
Sweden’s history. The suspect then apparently shot
himself. Police said there was no ideological motive for the
attack.

The French prime minister, François Bayrou, used a

constitutional rule to push the government’s budget through
parliament without a vote. Arguments over the budget led
to the downfall of Mr Bayrou’s predecessor, Michel Barnier,
in December. Mr Bayrou survived two votes of no confidence
after the hard right and the Socialists withdrew their support
for the motions.

Bart De Wever, a Flemish nationalist, was sworn in as

Belgium’s prime minister, leading a new coalition
government headed, for the first time in the country’s
history, by a party from the hard right. Mr De Wever’s N-VA
party took the most seats in an election last June. In a
speech to parliament he said his government’s priorities
would include a crackdown on migration and increasing
defence spending.

Germany recorded 213,000 asylum applications in 2024,

down by 34% from the previous year. And, according to the
police, illegal arrivals fell by a similar percentage, to 83,500.
The coalition government said this proved its tougher border
measures were working. It faces probable defeat at a
general election on February 23rd, at which migration is a
big issue.

Norway’s governing coalition collapsed in a row over

implementing energy directives from the EU. The Labour
Party is now governing alone and has appointed Jens
Stoltenberg, who was NATO’s secretary-general for a decade
before stepping down last year, as finance minister. A
general election looms in September.

An election was called in Greenland for March 11th. The

biggest issues will be the island’s relations with Denmark
and Donald Trump’s proposal that America take it over.

Armen Sargsyan, the commander of a pro-Russian

paramilitary group in eastern Ukraine, was killed by a bomb
in Moscow. Russian media said it was an assassination. The
SBU, Ukraine’s security service, had recently described
how Mr Sargsyan enrolled convicts to fight against Ukraine.
In December Ukraine admitted that it had killed General Igor
Kirillov, head of Russia’s biological and chemical warfare
division, with a bomb in Moscow.

Nul points

In an unexpected turn to soft power, Vladimir Putin said a

Russian alternative to this year’s Eurovision Song Contest
would be held in Moscow. Russia was booted out of
Eurovision when it invaded Ukraine. Mr Putin’s revival of
the Intervision Song Contest will feature contestants from
countries like Belarus, China and Cuba. Unlike the often
extravagant gay-friendly performances at Eurovision, it will
focus on sober, traditional family values. North Korea could
even make an appearance.

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this-week/2025/02/06/politics

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The world this week

Business
2月 06, 2025 09:02 上午

Donald Trump announced and then postponed punitive

tariffs of 25% on goods from Canada and Mexico. The
American president is using the threat of tariffs to press
both countries to stop the flow of migrants and fentanyl
across the border. He granted a 30-day reprieve following
urgent talks with Claudia Sheinbaum, Mexico’s president,
and Justin Trudeau, Canada’s prime minister. Both leaders
promised to boost their border security. Both had earlier
vowed to retaliate with tariffs of their own on American
products. The European Union said it would also retaliate
after Mr Trump said he would “definitely” impose tariffs on
EU imports over America’s trade deficit with the region.
Global markets shuddered.
The phoney war

Mr Trump did impose extra tariffs of 10% on Chinese

imports. China responded with limited duties on a range of
American goods, tighter export controls on critical minerals
and an antitrust investigation into Google, which has little
presence in China. Its muted response raised hopes that the
two sides will negotiate.

The tremors from the political earthquake in Washington

spread to the Consumer Financial Protection Bureau, a
watchdog that the Republicans have wanted to abolish ever
since its creation after the global financial crisis of 2007-09.
Donald Trump dismissed Rohit Chopra as head of the bureau
and Scott Bessent, the treasury secretary, took over as
acting director. Mr Bessent immediately put the CFPB’s
investigations and proceedings on hold.

The chief executive of Hewlett Packard Enterprise,

Antonio Neri, said his company would fight the Justice
Department’s attempt to block its $14bn acquisition of
Juniper Networks. The department’s lawsuit claims the
takeover would reduce competition in the market for
networking equipment, but Mr Neri said its reasoning is
flawed. The deal has already been approved in Britain and
the EU.
The share price of Palantir surged to a new high, after the
data-analytics company produced a bumper set of earnings
and described demand for its artificial-intelligence software
as “untamed”. The company focuses primarily on the
defence industry and has benefited from the election of Mr
Trump. Alex Karp, the CEO, described the new government’s
cost-cutting drive as a “revolution”, which would benefit
Palantir because of its data-crunching expertise.

By contrast, Alphabet’s stock sank after its quarterly

earnings disappointed investors. Revenue from its cloud
business grew by 30%, year on year, but this was less than
the 35% in the previous quarter. Alphabet suggested it
didn’t have the capacity to meet demand. It also anticipated
investing $75bn on data centres this year, up from $53bn
last year.

What market rout in AI?

OpenAI and SoftBank announced a venture that will develop

AI across the Japanese conglomerate’s subsidiaries.
SoftBank is investing $3bn a year in the project, named
Cristal Intelligence. Its aim is to create AI agents for
“knowledge work” that will automate mundane tasks, such
as generating financial reports and managing customer
inquiries. It will also be marketed to other companies in
Japan. Masayoshi Son, SoftBank’s boss, said he now believes
that the ability of AI to match or surpass humans across a
range of cognitive tasks will happen much sooner than he
had predicted.

The Bank of England reduced its benchmark interest rate

from 4.75% to 4.5%. Two members of the monetary
committee voted for an even larger cut of half a percentage
point. The bank said that inflation in Britain remains
“somewhat elevated”, and economic growth “has been
weaker than expected”.

The release of “Moana 2” and “Mufasa: The Lion King”

helped Disney’s earnings come roaring back to life in the
last three months of 2024. Operating income at the
company’s entertainment division, which includes films,
grew by 95% in the quarter, year on year. Revenue from
streaming was up by 9%. “Inside Out 2”, “Deadpool &
Wolverine” and “Moana 2” were the top three box-office hits
worldwide in 2024. https://t.me/+w49ZOrm3c4I1NmRh
Quarterly revenue and profit at UBS came in above market
expectations, which the Swiss bank said was a result of
strong demand from institutional and private clients
following the election of Mr Trump. It warned, however, that
its plans for a $3bn share buy-back could be derailed by
possible higher capital requirements in Switzerland.

UPS announced that it was reducing the amount of

shipments it handles from Amazon by 50% so that it can
focus on more profitable business. The US Postal Service
recently adjusted its fees, shaking up the economics of
parcel deliveries. We are “taking control of our destiny”,
said Carol Tomé, the chief executive, before UPS’s share
price sank by almost 15%.

Spotify reported its first annual profit since launching in

2008. The music and podcast streaming platform now has
675m monthly active users.

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this-week/2025/02/06/business

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The world this week

The weekly cartoon

2月 06, 2025 09:02 上午

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

America’s scheme for Gaza contains much to regret

Donald Trump’s eye-popping plan to make Gaza American·

The editorial cartoon appears weekly in The Economist. You

can see last week’s here.

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this-week/2025/02/06/the-weekly-cartoon
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The Economist

This week’s cover

How we saw the world
2月 06, 2025 09:02 上午

THIS WEEK we examine the rapid growth of online

scamming, an industry that steals over $500bn a year from
victims all around the world. We introduce “Scam Inc”, our
eight-part podcast series, which investigates the crimes
involved in online scamming, the criminals who carry them
out and the untold suffering they cause. The industry’s rise
is the most significant change in transnational organised
crime in decades. We explain how it works and what
authorities can do to stop it.
Leader: The vast, sophisticated and fast-growing global
enterprise that is Scam Inc
Briefing: Online scams may already be as big as scourge as
illegal drugs
Podcast series: Scam Inc

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this-week/2025/02/06/this-weeks-cover

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Leaders
The vast, sophisticated and fast-growing
global enterprise that is Scam Inc
International crime :: Online scamming leaves nobody safe

The meaning of Donald Trump’s war on

woke workers
American business and politics :: A worthwhile idea is straying into cruelty
and, possibly, illegality

America’s scheme for Gaza contains much to

regret
MAGA in Gaza :: As well as some hard truths

It’s not over: Donald Trump could still blow

up global trade
The end of the beginning :: Ideology, complacent markets and a need for
revenue may still lead to big tariffs

How Labour can unshackle Britain’s most

innovative region
Going up :: It will have to confront the charge of elitism

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International crime

The vast, sophisticated

and fast-growing global
enterprise that is Scam Inc
Online scamming leaves nobody safe
2月 06, 2025 09:02 上午
EDGAR MET Rita on LinkedIn. He worked for a Canadian
software company, she was from Singapore and was with a
large consultancy. They were just friends, but they chatted
online all the time. One day Rita offered to teach him how to
trade crypto. With her help, he made good money. So he
raised his stake. However, after Edgar tried to cash out, it
became clear that the crypto-trading site was a fake and
that he had lost $78,000. Rita, it turned out, was a trafficked
Filipina held prisoner in a compound in Myanmar.

In their different ways, Edgar and Rita were both victims of

“pig-butchering·”, the most lucrative scam in a global
industry that steals over $500bn a year from victims all
around the world. In “Scam Inc”, our eight-part podcast, The
Economist investigates the crime, the criminals and the
untold suffering they cause. “Scam Inc” is about the most
significant change in transnational organised crime in
decades.

Pig-butchering, or sha zhu pan, is Chinese criminal slang.

First the scammers build a sty, with fake social-media
profiles. Then they pick the pig, by identifying a target; raise
the pig, by spending weeks or months building trust; cut the
pig, by tempting them to invest; and butcher the pig by
squeezing “every last drop of juice” from them, their family
and friends.

The industry is growing fast. In Singapore scams have

become the most common felony. The UN says that in 2023
the industry employed just under 250,000 people in
Cambodia and Myanmar; another estimate puts the number
of workers worldwide at 1.5m. In “Scam Inc” we report how
a man in Minnesota lost $9.2m and how a bank in rural
Kansas collapsed when its chief executive embezzled $47m
to invest in crypto, under the tutelage of a fake online
woman, called Bella. A part-time pastor, he also stole from
his church.

Online scamming compares in size and scope to the illegal

drug industry. Except that in many ways it is worse. One
reason is that everyone becomes a potential target simply
by going about their lives. Among the victims we identify
are a neuroscience PhD and even relatives of FBI
investigators whose job is to shut scams down. Operating
manuals give people like Rita step-by-step instructions on
how to manipulate their targets by preying on their
emotions. It is a mistake to think romance is the only hook.
Scammers target all human frailties: fear, loneliness, greed,
grief and boredom.

Another reason scamming is worse than drugs is that the

industry is often beyond the reach of the law. In the physical
world pig-butchers work from compounds that host
production lines of scammers and are a cross between a
prison camp and an old-fashioned company town, with
supermarkets, brothels and gambling dens—as well as
torture chambers for workers who cause trouble. Some of
the profits buy protection from politicians and officials. In
the Philippines a Chinese national called Alice Guo became
the mayor of a small, run-down town and built a scamming
complex there with about 30 buildings. Over $400m passed
through her bank accounts in 2019-24. In Cambodia, Laos
and Myanmar cybercrime is a mainstay of the economy.
Scam states are likely to become even harder to deal with
than narco states.

The scammers are just as elusive in the online world. The

Chinese criminal syndicates running them are not
hierarchical mafias. Instead, they form an underground gig
economy. One group may specialise in contacting marks,
another in coaching them to invest in crypto and a third in
laundering their stolen money. The digital fracking of human
frailty is highly scalable.

The last reason the scamming is worse than drugs is that it

is so innovative. Crooks use advanced malware to harvest
sensitive data from victims’ devices. Online marketplaces
trade tools and services, including web domains, artificial-
intelligence (AI) software and torture instruments.
Cryptocurrency enables crooks to move money quickly and
anonymously into the real world. Regardless of its merits,
the crypto deregulation under way in America will give them
fresh opportunities.

AI will turbocharge this innovation. Even today, just 15

seconds of someone’s voice is enough to produce a clone
that criminals use for impersonation. An employee in the
Hong Kong office of Arup, a British engineering firm, was
tricked into paying out $25m by a video call with deepfakes
of his colleagues, including the head of finance. By
combining voice-changing and face-changing AI with
translation services and torrents of stolen data sold on
underground markets, scammers will be able to target more
victims in more places. Criminals will also be able to use
analytics to search through large data sets for wealthy,
lonely or troubled people who make promising targets.

Online scams will be even harder to curb than the drugs

trade—and, in contrast with drugs, the option of
legalisation, regulation and treatment is not available.
Education may help. In Singapore warnings pop up on public
transport and during online transactions. But policing must
also change.

To fight the scammers, the authorities must create networks

of their own. Today too many police forces that devote huge
resources to combating the drugs trade treat scamming as a
nuisance and victims as dupes. Instead they need to work
with banks, crypto exchanges, internet-service providers,
telecoms companies, social-media platforms and e-
commerce firms. Singapore has established a nerve centre
where police, banks and e-commerce firms can track and
freeze money in an instant as scammers move loot between
accounts.
Spare them from the butcher’s knife

Countries also need to look across their borders. When

criminals move money and people through many
jurisdictions, global law-enforcement machinery cannot
keep up. Many scam bosses are from mainland China and
the Chinese Communist Party arrests hundreds of thousands
of alleged scammers each year. No country understands the
scale and sophistication of the criminal groups better. At a
time when America and China are at loggerheads,
scamming is one area where they could—and should—work
together for the common good. ■

For subscribers only: to see how we design each week’s

cover, sign up to our weekly Cover Story newsletter.

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American business and politics

The meaning of Donald

Trump’s war on woke
workers
A worthwhile idea is straying into cruelty and, possibly,
illegality
2月 06, 2025 09:02 上午

IT AMOUNTS TO a bonfire of rainbow tape. Donald Trump

has declared war on DEI, or diversity, equity and inclusion.
He is already reshaping American institutions. Companies
are abandoning programmes that they had put in place to
increase the racial and gender diversity of their workforces
(or at least renaming them to avoid Mr Trump’s ire). The
whiplash has been most severe inside the federal
government. There, Mr Trump’s people, in the form of Elon
Musk and his DOGEtenants, are uprooting DEI staff,
programmes and contracts with unseemly relish. A
reasonable idea for reform is straying into self-defeating
cruelty and, possibly, outright illegality.

Insofar as Mr Trump’s moves against DEI are designed to

make America more meritocratic, they are welcome. Firms
owe their shareholders an open competition for jobs. In
recent years they have paid lip service to anti-discrimination
laws while intervening to diversify their labour force. Such
policies were justified by research by McKinsey, a
consultancy, tying diversity to profits. But the methodology
has been criticised, the causality unproven and other
studies have reached different conclusions. Indeed the
policies may backfire by casting suspicion on the merits of
minorities and women who are promoted. One of the most
flagrant interventions—a rule which required companies
listed on Nasdaq to have a diverse board, or explain why
they did not—was shot down by an appeals court in
December. Since the election, firms including Google,
McDonald’s and Target have scrapped policies designed to
engineer the composition of their workers and suppliers.

What is extravagant in business often becomes even more

wasteful in government. That is why Mr Trump is right to
scrap affirmative-action rules in the bureaucracy. Quite how
much money might be saved by dismantling diversity
initiatives within government services is unclear, but the
Veterans Affairs Department alone has suspended 60
workers. The same is true for rules that govern companies
tendering for government contracts. Removing them will
lower the cost of doing business with the government and
thereby boost competition.
Yet the way Mr Trump is enforcing his mandate is dangerous
and cruel. He has asked officials to produce reports that
shame the worst DEI offenders, including companies. His
vague anti-DEI order for firms seems crafted to take on
progressive initiatives in the workplace rather than just
reverse discrimination. Anti-bias training, affinity groups and
identity months may often be associated with corporate
mediocrity. But whether a particular company sees them as
useful should be for its shareholders, customers and
employees to sort out between themselves. It should not be
determined by fiat in the White House.

The president’s relationship with the bureaucracy is

different. Here Mr Trump has a legitimate role in determining
how the administration should work. Yet he is trying to pin
everything on DEI. Last week, without any evidence, he
blamed a collision between a passenger jet and a military
helicopter on diversity hiring. He was exploiting a tragedy in
an apparent bid to prove that his sweeping approach was
necessary.

Worse, the attack on DEI looks more like a purge of any civil
servant· whom his DOGEtenants suspect of disloyalty. Some
with only minimal connections to past diversity efforts are
reportedly being placed on leave. When explaining her
boss’s desire to shut down USAID, the main American
development agency, the White House press secretary
rattled off a list of DEI initiatives as justification. However,
whatever the benefits of scrapping DEI, the government
cannot simply flout the law. Indiscriminate witch hunts and
institution-wrecking are probably illegal. Even if he gets his
way, they are certain to backfire. ■

Subscribers to The Economist can sign up to our

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

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MAGA in Gaza

America’s scheme for

Gaza contains much to
regret
As well as some hard truths
2月 06, 2025 09:02 上午

DONALD TRUMP’S first two weeks in the Oval Office have

featured plenty of jaw-dropping moments. Even so, his
proposal of an American “takeover” of Gaza on February 4th
was extraordinary. He combined sinister ideas—ethnic
cleansing and a lethal indifference towards Palestinians’
rights—with unorthodox improvisation over one of the
world’s most intractable problems. In his first term Mr Trump
brokered the Abraham accords between some Arab states
and Israel, and in January he helped bring about the
temporary ceasefire in Gaza that had eluded the Biden
administration for a year. It is possible his latest intervention
also shakes up the Middle East. The danger is it will
embolden hardliners and deter America’s allies from
supporting his efforts to promote stability.

Mr Trump explained his plan· immediately after a meeting in

the White House with Binyamin Netanyahu, Israel’s prime
minister. Diplomats had expected Mr Trump to press a
reluctant Mr Netanyahu into advancing to the second stage
of the ceasefire in Gaza, in which all hostages would be
returned and Israeli forces would stop fighting and exit
Gaza. Instead Mr Trump proposed that 2m Gazans be urged
or forced to leave the strip for Jordan, Egypt or elsewhere.
American troops might have a role, he said.

After the deportations, the president said, the enclave would

be rebuilt by America, with outside cash, to become “the
riviera of the Middle East”, at which point some Palestinians
might return. He implied that, in return for prosperity, they
should forget their historical dispossession and abandon
their dreams of statehood. Mr Trump’s broader vision is to
extend the Abraham accords to Saudi Arabia, and to use
this new American, Israeli and Sunni Arab grouping to
contain Iran’s regime, which is close to getting a nuclear
bomb. Hours before his remarks on Gaza, Mr Trump issued
an order reinstating his “maximum pressure” campaign on
Iran by enforcing sanctions to squeeze its oil exports to
zero.

It doesn’t take a Nobel peace prizewinner to spot the

problems with Mr Trump’s plan. Morally, it is a call for
conquest and ethnic cleansing that places no weight on the
Palestinians’ right to self-determination or self-government.
By proposing it, Mr Trump is giving succour to the might-is-
right worldview of Russia and China. Practically, it is a non-
starter. American voters have no appetite to send more
troops to the Middle East. America’s record of nation-
building there is poor, as Mr Trump has previously noted.
The Arab nations being asked to host uprooted Gazans
would struggle with the influx. The public backlash over a
Palestinian displacement could even endanger their leaders’
hold on power. No wonder Mr Trump’s officials began to walk
back his plan the next day, asserting that he had not
promised to use American troops, and that the Palestinian
displacement would be temporary.

Yet Mr Trump’s diagnosis also contains shards of truth. He is

right that Gaza is a “hell hole”, shattered by war. And that
this will not change so long as Israelis feel too insecure or
emboldened to pursue peace, Hamas has a hold over Gaza,
the Palestinian Authority (PA) festers in the West Bank and
the world pays lip service to a two-state solution. “You can’t
keep doing the same mistake over and over,” Mr Trump
said.

He is also right that more taboo-busting thinking is needed

to give Gaza’s young people space. For instance, the
territory could lease land from Egypt in the neighbouring
Sinai or even reclaim land from the sea. Falling back on the
old formula of a flawed UN agency perpetuating Gazans’
hopeless refugee status, and pretending to prepare for the
return of the PA, is to recreate the conditions that allowed
Hamas to thrive and arm itself for war.

There is a narrow path to peace. It would require the

transformation or recusal of Hamas’s leadership in Gaza,
with an Arab-and-PA-led security force restoring order and
Western and Gulf cash. In parallel, talks about two states
could unlock the regional alliances and bargains Mr Trump
dreams of.

The Middle East desperately needs new thinking, yet by

blurting out a proposal that is impractical, unethical and
unprepared, Mr Trump has sapped American credibility. He
may end up causing turmoil and empowering extremists.
Hamas is now arguing that America doesn’t care about
Gazans. Israel’s hard right can cling to its dream of expelling
the Palestinians from Gaza and building settlements there.
And Mr Trump is also estranging the allies he needs to make
peace. He may have hoped to use the threat of expelling
Gazans to get Saudi Arabia to recognise Israel. More likely,
the Saudis will find it impossible to reach a compromise. ■

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The end of the beginning

It’s not over: Donald

Trump could still blow up
global trade
Ideology, complacent markets and a need for revenue may
still lead to big tariffs
2月 06, 2025 09:03 上午

IF DEALMAKING MEANS threatening catastrophe in order to

win small gains, then Donald Trump is the master of the art.
Having threatened Canada and Mexico with 25% tariffs
which would have imperilled the carmaking that criss-
crosses North America’s borders, he granted them both a
30-day reprieve on February 3rd. In return, he got a modest
boost to their help securing America’s frontiers, including
from 10,000 extra Mexican troops, plus the reiteration of
some old promises.

Was the “dumbest trade war in history·” also the shortest?

Investors seem to think so. For months they saw Mr Trump’s
threats as negotiating ploys. Then, as tariffs loomed, the
S&P 500 index of American stocks fell by 3%. But since the
first deal with Mexico they have recovered their poise, and
more than half their losses.

Unfortunately, that looks like complacency. It would be a

mistake to conclude Mr Trump’s trade aggression is a
tactical distraction. More probably, it is only just getting
started.

For one thing, a blanket 10% tariff really did go into effect
against China—adding more than half as much again to
existing average levies on the country. China has set out its
retaliation, which will come into force on February 10th. And
Mr Trump has vowed to strike more blows, including,
perhaps, to fulfil his threats against the European Union and
Taiwan.

For another thing, the president genuinely believes that

tariffs would be good for the American economy. It is true
that in his first term Mr Trump repeatedly backed out of
tariff threats; America’s effective average tariff rate rose by
just 1.5 percentage points. Ever the showman, he delights
his base by throwing America’s weight around and boasting
of his victories.

However, he repeatedly sets out his vision for the re-

industrialisation of America by force. He wants
manufacturers to choose between tariffs and moving
production to America—which he promises will be a low-tax,
deregulated business paradise. He also castigates countries
with which America runs trade deficits, which he calls
“subsidies”, as if buying from a foreigner involved a gift
rather than a beneficial transaction. And he has extolled the
federal budget of the late 19th century, under presidents
including William McKinley, when America’s federal
government raised much of its revenue from tariffs because
there was not yet a federal income tax.

That leads to the biggest reason to fear tariffs, which is that

the federal government needs the money. Its deficit in 2024
was 6.9% of GDP. Official forecasts show this remaining
above 5%, despite assuming that many of Mr Trump’s tax
cuts from his first term will expire as scheduled at the end of
2025.

In reality Republicans want to renew those tax cuts and then

some. Mr Trump is odd in his belief that tariffs are desirable
on their face. But plenty of Republicans may prefer them to
defying him and putting up income taxes. A 10% universal
tariff would raise about 1% of GDP in annual revenue—not
much less than the cost of renewing Mr Trump’s earlier bill.
Today’s rules prevent a simple majority in Congress from
passing budgets that raise deficits more than ten years into
the future. So if universal tariffs were in the law, it might
enable permanent tax cuts. As a result, although it is
impossible to imagine a wholesale return to the 19th-
century tax system—not least because America’s
government is a far bigger share of the economy—a step in
that direction is all too plausible.

The blow to the global economy would be profound. Mr

Trump is right that America holds the cards in a trade war. It
is an enormous, diverse free-trade zone with plentiful
natural resources. The big costs of a step towards autarky
would be borne by places that depend on America for trade,
none more so than its immediate neighbours. However, the
Smoot-Hawley levies that helped wreck global trade in the
1930s raised America’s tariff rate by only six percentage
points, and from a much higher starting-point. Their effects
were exacerbated by deflation and the retaliation against
America that followed. Thankfully, today’s world economy is
much healthier, but retaliation is still certain. And if a trade
war can rage when there is no global slump, what happens
when a recession hits?

Hold your fire

Mr Trump is sensitive to Wall Street’s opinion, viewing the

stockmarket as a kind of presidential scorecard. If it
concludes that he is always bluffing when he threatens self-
harming policies, it will fail to move—making him think it is
safe to follow through. Expect, therefore, that the president
will take the global trading system to the cliff edge
repeatedly, each time with a growing risk that he pushes it
over. ■

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Going up

How Labour can unshackle

Britain’s most innovative
region
It will have to confront the charge of elitism
2月 06, 2025 09:03 上午

THE IDEA that Oxford and Cambridge are bastions of elite

privilege runs deep. The two universities were among the
first to be established in the Western world, in 1096 and
1209 respectively. Yet as dozens followed across Europe, it
took 600 years for a third to come along in England. This
was no mistake. By banning their graduates from teaching
elsewhere, Oxford and Cambridge secured a monopoly for
more than half a millennium—and with it an outsize role in
national life.

It is an irony, then, that the academies’ contribution to the

economy has been shackled by another set of regulations.
The two cities are still recognised the world over as hives of
thinking and innovation. But they are far too small, and they
do not have access to the workers who would help turn
great ideas into flourishing ventures, because for decades
they have been choked by Britain’s planning laws·. It is a
problem that generations taught among the steeples and
cloisters have persistently failed to grasp.

The chancellor, Rachel Reeves (New College, Oxon), hopes

to remedy this by reviving the Ox-Cam Arc, which involves
linking the two cities with a railway, and letting them and
places in between build lots of houses and laboratories. This
comes as part of a rebranding of the Labour government’s
increasingly urgent search for growth. Sensibly, Ms Reeves
has alighted on symbols, such as Oxford, Cambridge and
Heathrow (where the government backs a third runway),
that even distracted international investors will notice.

Her idea of allowing Britain’s most successful area to grow is

hardly a novel one. Still, were it implemented, the effect
would be big. By one estimate, the plan could add £14bn
($18bn) to annual GDP by 2035. That is the sort of prize
which Britain, trapped between high debt and low growth,
cannot afford to pass up. And it is just the sort of obvious
idea the country is fond of squandering. In 2022 Boris
Johnson (Balliol, Oxon) ditched an almost identical plan in
the face of NIMBYism and the charge that it would not help
poorer regions.

Oxford and Cambridge can go toe-to-toe with the most

innovative clusters. They file more patents per person than
Boston, home to America’s biotech industry. Yet places like
Boston and the Bay Area are bigger and more productive,
creating spillovers. Hence the attraction of an Oxbridge
powerhouse. It takes almost two-and-a-half hours to travel
106km (66 miles) from Oxford to Cambridge by train or car.
The new, 90-minute line· will complete a triangle with
research-rich London, and link Oxford and Cambridge to
Milton Keynes·, which has strengths of its own. Clusters
elsewhere show that strong links encourage risk-taking.

So far Ms Reeves has given a speech and approved some

reservoirs. Now she needs action, which must involve
redefining green belts to allow more building; Cambridge
oozes potential in industries like biotech, but lacks 80,000
square metres of lab space. The chancellor should confirm
the £7bn needed for the rail line and look at how to
strengthen pension reforms designed to boost firms’ access
to capital. She could also cajole the universities to do more,
including giving better incentives for spinoffs.

In all this Ms Reeves’s great strength—and the reason she

has a chance to succeed where Mr Johnson failed—is that
her party does not rely on the votes of those most opposed
to development. But she is exposed to an older, deeper
grievance: many of her colleagues wanted the money to go
to an alternative plan for boosting science activity in the
poorer north-east.

Ms Reeves could point out that Cambridge is close to some

poor places, too. But a stronger argument is that Labour’s
pledge to improve Britain’s public services requires growth.
If Labour wants growth and thinks global investors have a
part to play, then the Ox-Cam Arc must be part of the
answer. ■
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Letters
Letters to the editor
On airport slots, oligarchies, Africa, rock climbing, dishonest societies,
corporate hierarchies :: A selection of correspondence

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On airport slots, oligarchies, Africa, rock climbing, dishonest societies,

corporate hierarchies

Letters to the editor

A selection of correspondence
2月 06, 2025 09:35 上午

Letters are welcome via email

to letters@economist.com

Airport slots

Bagehot (January 25th) quoted the International Air

Transport Association’s statement that airport slot auctions
would be a “disaster” without explaining why this would be
so. Unlike economic theories of why market-based auctions
would be better for slots, we prefer to rely on real-world
experience. When slot auctions were tried in China they
further entrenched incumbent airlines, only at a greater
cost, which had to be passed on to consumers.

Moreover, the analogy between airport slots and radio

spectrum is false because Britain’s aviation system does not
exist in a bubble. Airports must connect internationally, and
that requires a common set of rules and standards. In
reality, the current slot regulations allow for a free, fair and
transparent allocation of scarce capacity. In doing so, they
have enabled more access for successful airlines while
rightly setting a high performance bar if airlines are to retain
their slot privileges.
Willie Walsh
Director-general
International Air Transport Association
Geneva

Defining an oligarchy
It is not true that Russian big businesses, or “oligarchs”, do
not compete with each other (Schumpeter, January 25th).
Even now they compete in fields such as banking, oil,
steelmaking, construction and information technology. In
2004, Schumpeter’s reference point, which is roughly the
period when Russia could conceivably be characterised as
an oligarchy, competition was fiercer than it is now.

Vladimir Putin’s Russia today is not an oligarchy. It is a

personalist autocracy in which big businesses are
completely subordinated to the strongman at the top. In
fact, the way captains of American tech are currently
queuing to bribe Donald Trump with policy tweaks and,
amazingly, literal cash donations bears an uncanny
resemblance to the behaviour of Russian billionaires in the
early 2000s. Which makes me think that, indeed, America is
not at risk of becoming a big-tech oligarchy, but only
because it is choosing a much darker Putinesque path.
Dr Mikhail Tamm
Russian researcher in exile
Tallinn, Estonia
Africa’s microbusinesses

Your special report in the January 11th issue diagnosed well

the challenges of running a business of any size in Africa.
There is no doubt that Africa needs more large businesses to
increase productivity. But your dismissal of microenterprises
does a disservice to the many small, informal enterprises
that are currently an important economic engine in much of
the continent.

According to America’s Small Business Administration,

99.9% of firms in the United States are small and micro
businesses, accounting for 46% of private-sector
employment and generating 61% of net new jobs between
1995 and 2023. The contributions of small and
microenterprises are similar in the European Union.

This is a critically important dynamic. Across Africa, far too

many people, especially women, are relegated to
subsistence farming, inhibiting their ability to earn a
sustainable income and move up the economic ladder. In a
low-income country such as Uganda smallholder farmers
make up more than half the population. Countries like this
need the opportunities offered by both large and small firms
to provide jobs and growth. But firms of all sizes are
inhibited by the absence of affordable capital, electricity and
other infrastructure, as you rightly pointed out.

Although Africa does indeed need more large firms, the

problem isn’t necessarily too many microenterprises. It is
too little opportunity for people, including women, to move
from subsistence farming into any sector, including as
owners of small businesses, which will continue to be the
backbone of African economies.
Greta Bull
Director
Women’s Economic Empowerment
Gates Foundation
Seattle

Towers of strength
It was great to see your article about the health benefits of
strength training as you get older (“Should you start lifting
weights?”, January 18th). But one problem with lifting
weights is that it is boring. Rock climbing is a better
alternative. Finger, arm, leg, foot and core muscles are all
involved. And climbing requires mental focus, strategic
thinking and persistence, all of which enhance a person’s
cognitive abilities as they age. It is also fun and a social
sport, practised worldwide. And with the proliferation of
indoor climbing gyms a person doesn’t need to venture into
the wilds in search of natural crags. I am 66. Our family was
lucky to have discovered this sport 30 years ago and we all
hope to continue climbing well into our advanced years.
Terry McColl
North Vancouver, Canada

Why societies are dishonest

“A nation of polite liars” (January 18th) reported on how

Britain is becoming a well-mannered but deceitful society. In
the 1990s I helped promote a yearly magazine article about
which city in Europe was the most honest. In a very
unscientific survey, editors would drop wallets in a given
European city and then tally up the number that were
returned. Helsinki was a winner one year.

I thought of that simple exercise when I read your article.

The moral implications of cheating were not explored at all.
Instead, you focused on things like the lack of control over
the internet and social media and the government’s
behaviour during the pandemic. But what about the loss of
institutional importance, such as churches and civic
organisations, and the sordid example of some of our
elected leaders who prevaricate with abandon. With fewer
opportunities for teaching and promoting role models the
moral high ground is now just a slippery slope.
Michael Fanning
Charlotte, North Carolina

In the mid-1940s George Orwell asserted that the English

were unusually upstanding, you say. I can pinpoint when the
fall occurred. In 1966 the World Cup was stolen from a hall
that was also being used by Methodists. Fortunately, it was
later recovered by a dog named Pickles. At least British pets
have remained trustworthy.
Mark Yeomans
Regina, Canada
The corporate ladder

Following the letters (January 25th) in response to Bartleby’s

piece on hierarchy in the office, I remember my late
husband’s experience at Shell. There the aim was to qualify
for what was known as “tray and drapes”. It meant your
coffee was brought to you on a tray and you had curtains at
your window. My husband left Shell before he had aspired to
such dizzy heights.
Anne Smith
London

Bartleby’s original column (January 11th) mentioned the

challenges of choosing the right seat in relation to the boss
at a meeting as a means of establishing one’s place in a
hierarchy. Perhaps the Gospels provide some guidance on
this. To paraphrase Luke 14:7-11, when you are invited, go
and sit down at the lowest place, so that when your host
comes, he may say to you, “Friend, move up higher”; then
you will be honoured in the presence of all who sit at the
table with you. For all who exalt themselves will be
humbled, and those who humble themselves will be exalted.
Mike Danagher
Ottawa, Canada

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By Invitation
Donald Trump poses a grave threat to
others’ sovereignty and freedom, says
Chrystia Freeland
Canada in Donald Trump’s tariff sights :: The world must stand with
Canada, says a leading candidate to become prime minister

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Canada in Donald Trump’s tariff sights

Donald Trump poses a

grave threat to others’
sovereignty and freedom,
says Chrystia Freeland
The world must stand with Canada, says a leading
candidate to become prime minister
2月 06, 2025 09:02 上午

LAST SATURDAY, February 1st, could well be the day future

historians judge as marking the end of the rules-based
international order that was built atop the bloody ruins of
the second world war and that has brought peace and
prosperity to so many for so long.

I do not exaggerate the importance and the peril of the

moment. President Donald Trump is threatening to impose
tariffs of 25% on Canada on the flimsiest of pretexts.
Moreover (and you have to pinch yourself that this really is
happening), he says he will lift the threats if America can
annex Canada. These threats represent such a gross
violation of international norms that it puts the entire basis
of global trade rules and international relations at risk.

While Team Canada’s strong response has bought a stay of

execution, the threat of these tariffs still hangs over us:
uncertainty is a feature not a bug of the new Trump
administration. The stakes could scarcely be higher. How
America’s unforced fight with Canada ends will determine
how the world will work in the 21st century. Right now, we
risk heading down a dark path indeed.

Let’s be clear about why this fight matters, and not just to
Canada. By threatening to impose illegal and unjustified
tariffs on its partners in the United States-Mexico-Canada
Agreement (USMCA)—a gold-standard free-trade deal
agreed to by Mr Trump himself during his first term as
president—America is saying that trade agreements count
for nothing. That is a truly dangerous precedent for the rest
of the world. Worse is America’s threat to annex us, a
peaceful and settled democracy. Canada is an American ally
in NATO, and, through NORAD, works side by side with
America to ensure that North America’s aerospace and
maritime realms are safe and secure. Yet by saying it will lift
its tariff threats in exchange for annexation, America is
saying that military alliances do not matter and that it can
ride rough-shod over its friends—or anyone.
A world without mutually binding trade agreements and
security alliances among democratic partners is a world with
few rules at all. We would be back to the 19th century,
where might was right, and where the strong did what they
could and the weak suffered what they must. It took us two
world wars and the Depression to understand that humanity
could do better than that. Today, we are at a greater risk
than at any time since 1945 of falling back into a brutal and
impoverished world that we thought we had left behind.

As the world faces this awful prospect, the country where

the future direction could be decided is my own, Canada.
Our capitulation would set a disastrous precedent and make
it immeasurably harder for everyone else.

Luckily, as the world has seen, Canada does not give in. In
the first 48 hours in which Mr Trump tried to stare us down,
we showed that we are strong, smart and united. But, as we
navigate the new period of economic uncertainty we now
face, we really could use some help.

That’s where Americans come in: CEOs and blue-collar

workers; mayors, governors, and senators; businesses who
sell us their wares, and consumers who rely on what we sell
you; our friends, our family and our neighbours. We know
you and we like you.

We know you want cheap petrol and groceries, not a tariff

war that will make life more expensive. We know you want
good jobs, and businesses that thrive. And many of you (Mr
Trump included) want a flourishing stockmarket.

So we are counting on you to speak up and tell your

president that a win-win deal with Canada is possible. In
fact, it already exists: USMCA, which he himself signed.
Lastly, there is the rest of the world. You may be tempted to
dismiss our clash as a far away contretemps, best settled
among neighbours. That would be a grave mistake and one
Mr Trump is hoping you will make. After all, if he can
successfully coerce us into submission, it will be that much
easier for him to move on to other targets. But the contrary
is also true. If Canada can insist that America not tear up
current arrangements but instead keeps a win-win
relationship going, then the rest of the world will be far safer
in future.

So stand with us. Not only is it the right thing to do, it will
save you a lot of pain and economic harm later.

We are all at a turning-point in the way this century will

work. The rest of the world is incredibly fortunate that
Canada is at the centre of it all. We are the True North,
strong and free, and we will never give in. Stand with us
today and stand on the right side of history. ■

Chrystia Freeland is a Canadian MP, former deputy prime

minister and candidate for leader of the Liberal Party of
Canada.

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Briefing
Online scams may already be as big a
scourge as illegal drugs
Scam Inc :: And they are growing fast

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Scam Inc

Online scams may already

be as big a scourge as
illegal drugs
And they are growing fast
2月 06, 2025 09:03 上午 | Elkhart, Kansas and Manila

AS THE CEO of a small bank in Kansas, a former chairman of

the Kansas Bankers Association and a former officer of the
American Bankers Association, Shan Hanes knew all about
the risks of online fraud. As a family man and part-time
pastor at a local church, he was not the type to do anything
reckless. As a shrewd investor, he had no need for get-rich-
quick schemes. In fact, he had made a lot of money trading
cryptocurrencies. But he was having all sorts of
administrative trouble repatriating the money from Asia and
needed some extra cash to sort out the paperwork and
bring his millions home.

Within about six months, Mr Hanes had transferred to

anonymous crypto accounts not only his own savings and
the money he had set aside to pay for university for one of
his daughters, but also his church’s reserve funds and some
$47m belonging to Heartland Tri-State, the bank he ran. The
bank’s losses were so severe that it became one of only five
banks to fail in America in 2023. Yet even after the FBI
swooped in and Mr Hanes was charged with embezzlement,
he struggled to accept that he had been duped. He is now
serving a 24-year prison sentence.

That a bank manager, of all people, could be fooled on a

scale sufficient to bring down a bank is a sign of how
sophisticated and far-reaching online scams have become.
The days of patently false emails from supposed Nigerian
princes are long gone. As our new eight-episode podcast,
“Scam Inc”, describes, online fraudsters have become rich
and powerful enough to corrupt entire governments, turning
whole countries into the cyber-scam equivalent of narco-
states. Scam operations can be found all over the world,
from Myanmar to Mexico. The global proceeds of online
fraud are probably more than $500bn a year, estimates
Martin Purbrick, an expert in Chinese organised crime who
was a police officer in Hong Kong for 11 years. That puts
scamming on a par with the illegal drugs trade as one of the
world’s biggest illicit industries. And unlike illegal drugs,
scams cannot be seized by police or customs. With nothing
more than a phone line and internet connection, scammers
can turn anyone into a potential victim.

From ear to purse

The specific scam that Mr Hanes fell for is known as “pig-
butchering”. Victims are identified on social media or dating
apps and then “fattened up” by a scammer who spends
weeks or months building trust by posing as a potential
friend, business partner or romantic interest. Scammers
then use this trust to “slaughter” the pig by suggesting fake
investment opportunities and absconding with the money. In
Mr Hanes’s case, an investment adviser claiming to be in
Australia steered him to a fake crypto exchange complete
with an elaborate website on which Mr Hanes was able to
monitor his entirely fictional balance.

The rise of online scams represents an enormous transfer of

wealth from the middle class to a criminal underworld. The
FBI reports that losses from investment scams in America
increased by 22% in 2023 to more than $12.5bn. That is far
more than the cost of burglary or car theft, and is in all
likelihood a severe underestimate, since many victims do
not file police reports owing to feelings of shame or denial.
The actual amount stolen from Americans each year is
probably around $50bn, estimates Erin West, a former
prosecutor who led some of America’s first attempts to try
pig-butchers. She thinks around one in 100 Americans falls
victim to a scam annually. Many are young and tech-savvy;
police officers, FBI agents, financial advisers and
psychologists have all been taken in.

That hints at the scammers’ sophistication. Rita (not hear

real name), a Filipina scammer interviewed in “Scam Inc”,
describes how she and her co-workers were given detailed
manuals about how to dupe victims. There was a primer on
cryptocurrency and a guide on how to prevent phoney
social-media accounts from getting flagged and taken down.
There were conversational prompts on books, music,
gardening and football, as well as seemingly innocent
questions intended to help discern a potential target’s
wealth. She was ordered to ask about their house, car and
where they went to university. Victims should be rich but not
good-looking. “This type of man will be very attentive when
meeting a woman,” the instructions said.

There were also instructions on how to establish intimacy.

Pay compliments. Mirror their tone. Greet them every
morning. Say good night when they go to sleep. Learn about
them. Find out what’s lacking in their life: what’s the
emotional hole you can fill? Cathy Wilson, a mental-health
counsellor in Colorado whose clients include scam victims,
calls the techniques that criminals use to create
relationships “psychological weapons, because they are
very effective, just like a knife or a firearm”.

Yet some scammers are also victims themselves. The UN

estimates that in 2023 at least 220,000 people were being
forced to work as scammers in Myanmar and Cambodia.
People from over 70 countries have been trafficked to fraud
factories in South-East Asia, says Eric Heintz of International
Justice Mission, an NGO. Many are multilingual university
graduates from poor countries who have been lured by the
promise of a well-paid job in a call centre.

In “Scam Inc”, former scammers describe the harrowing

conditions. “If you don’t hit your targets, they electrocute
you,” explains Jalil, a Ugandan who was trapped in a scam
compound in Myanmar in 2023. Sara (also not her real
name), who was trafficked from South Africa to Myanmar,
was told to bring in more money or she would be sent “to
the second floor…where they send all the ladies to be sex
workers”. Rita, who was held in a nearby complex around
the same time, said she met an Ethiopian whose kidney had
been removed as a punishment for low earnings.
To escape, people get relatives to pay huge ransoms or
even trick others into replacing them. Jalil ended up in his
compound because a friend who was trapped there
promised a well-paid job in data entry and online marketing.

Like pigs in clover

Scam operations thrive in lawless places, such as Myanmar,

where many rival militias control small slices of territory, or
corrupt ones, like Cambodia, where the authorities can be
paid to look the other way. They are protected by high walls
topped with barbed wire, surveillance cameras and armed
guards. A single fraud park in Myanmar may house
thousands of scammers working for several different
operations, says Sammy Chen, a former Taiwanese
businessman who has worked with governments to rescue
enslaved scammers. Each operation rents space, as if
operating in an industrial park. There are often also money-
laundering operations, currency exchanges, supermarkets
and brothels in the same compound, he says. Sometimes
the scam bosses sell workers to each other.

War, poverty and lack of opportunity mean that scam

compounds in these areas are increasingly able to hire
willing employees desperate for work rather than rely on
forced labour. Scam bosses prefer this because it’s less
trouble, says Mr Chen, especially now that AI makes
translation easier and reduces the need to entrap English-
speakers. “The underground criminal ecosystem is a perfect
marketplace,” says Jackie Burns Koven of Chainalysis, a
blockchain-analysis firm· which has traced hundreds of
millions of dollars in crypto wallets controlled by scammers.
The criminals are “always willing to pivot to the path of
profitability”.
A growing number of scam compounds have been
discovered outside South-East Asia, in Africa, eastern
Europe, the Middle East and South America. One was even
found last year on the Isle of Man, an island off the British
mainland. Latin American crime syndicates have diversified
into pig-butchering, including Mexico’s infamous Jalisco New
Generation.

Scam operations can be of any size. Some are run from

hotels: criminals rent a few floors, put up metal gates and
hire armed guards while hotel-owners look the other way.
Others may be even smaller, run out of tiny offices or
apartments. About 500,000 people work directly as
scammers, according to the United States Institute of Peace
(USIP), an advocacy group. The broader industry may
employ 1.5m.

As “Scam Inc” recounts, the main victims of this growing

industry used to be Chinese. But China has arrested
hundreds of thousands for involvement in scamming and
pressed the governments of Cambodia and Myanmar to
curb the duping of Chinese citizens. It has also mobilised its
propaganda apparatus against fraud, producing lots of films,
television shows and songs about the scam industry. In the
same summer that “Barbie” and “Oppenheimer” were
drawing crowds in the West, an anti-scam film, “No More
Bets”, which depicts a Chinese programmer trapped in a
fraud compound, was captivating China, making more than
$500m in its first month.

Like so many other Chinese firms, criminal syndicates

diversified abroad as business slowed at home, increasingly
targeting people elsewhere in Asia and the West. America
and Britain have placed sanctions on several suspected
scamming bosses from China and South-East Asia. But the
structure of the scamming industry makes it hard for police
to penetrate and dismantle. “We have this habit in most
countries in the West of looking at criminal groups as
hierarchical, maybe with a sort of kingpin at the top,” says
Mr Purbrick. “I don’t think that works with Chinese and some
other Asian criminal networks, simply because they’re
networks, rather than structures.”

Criminals might previously have fought for control of

gambling tables in Macau or street corners for drug
distribution. But in the scam industry, there are no physical
constraints to their operations and so nothing to fight over.
What a banker might call the “total addressable market” is
more or less unlimited. Barriers to entry are low and returns
are high.

That allows criminals to co-opt the authorities, especially in

poor countries. “There is no law enforcement presence,
they’re essentially the law, they’re the government,” says
Chris Urben, who spent 25 years at America’s Drug
Enforcement Agency. Scamming has become the “mainstay
of the economies of Cambodia, Myanmar and Laos”, notes
Jason Tower of USIP. He reckons Cambodia’s online-scam
industry makes over $12.5bn a year, equivalent to about
half the country’s formal GDP. That means the broader
economy in these places—construction, hospitality and so
on—is also dependent on scams. “The level of co-option of
state actors in countries like Cambodia exceeds what we
saw in narco-states of the 1990s in Latin America,” agrees
Jacob Sims, an expert on organised crime in South-East
Asia.

Even the Philippines, a relatively stable American ally and

popular tourist destination, is teetering on the edge of state
capture. A year ago allegations emerged that Alice Guo, the
mayor of the small town of Bamban since 2022, was
involved in a scam compound that was bigger than the town
itself. It turned out that she was not Filipina at all, but
Chinese. She had acquired the documents that had allowed
her to stand for election fraudulently.

The authorities seized property, luxury cars and a helicopter

worth 6bn pesos ($100m) from Ms Guo and her associates.
Between 2019 and 2024 around 24.5bn pesos moved
through her accounts, according to Winston Casio of the
Philippines’ commission against organised crime.

It was a scheme that took lots of time, money and planning

to pull off. As Sherwin Gatchalian, a Filipino senator
campaigning against scam compounds, explains in “Scam
Inc”, “They have studied the Philippines very well. They
know how to navigate through our political system.” He has
had to employ bodyguards since he started speaking out.
Even as the Senate was holding hearings about Ms Guo in
July, she managed to flee the country “because she co-
opted a good number of corrupt government officials”, says
Mr Casio, who lives in his office so criminals will not know
how to find his family. Ms Guo was later tracked down in
Indonesia and extradited to the Philippines, where she faces
charges of money-laundering, human trafficking and
corruption.

Mr Gatchalian worries that other Philippine scam bosses are

going into politics like Ms Guo. The industry is a threat to
national security, he warns. Once scam bosses have enough
clout within the political system, it will be nearly impossible
to enact policies to undermine their operations. “What we’re
doing is just knocking at barely the tip of the iceberg,” says
Mr Casio, speaking from a former scam compound that the
Philippine government, in an attempt to save money, has
repurposed to house its anti-scam operations. “We haven’t
made a dent in this problem.”

Following the bacon home

One way of fighting organised crime is to follow the money.

Our reporting for “Scam Inc” revealed that Mr Hanes, the
bank CEO, was one of several Americans to lose millions
through scam websites with names resembling that of a
legitimate crypto-trading service, Coinrule. A man in
Minnesota lost $9.2m on a scam site called CoinRule-
Web3.shop, for instance. A Californian lost $2.2m on
CoinRule-Web3.net, the same site that duped Mr Hanes.

The criminal network targeting Mr Hanes in effect

outsourced its money-laundering via a platform called
Huione Guarantee, according to Adam Hart of Chainalysis,
who traced Mr Hanes’s crypto for The Economist. Huione
Guarantee is a Chinese-language online marketplace
established in 2021, ostensibly for trading property and
cars. It handles billions of dollars a year in business and is
owned by a Cambodian conglomerate called Huione Group.
An investigation by Elliptic, a blockchain-analytics firm, said
it had found links between Huione Group and Cambodia’s
ruling family. Alongside more conventional products, the
market offers goods and services that could have legitimate
uses but are of special interest to scammers: web domains
for new websites, AI face-changing software for video calls
and torture tools like electric batons. After these details
became public, Huione Guarantee changed its name in
October to Haowang Guarantee. The renamed firm denies
facilitating crime.

After scam proceeds are laundered, they become harder to

trace. But recent incidents suggest they are all around us. In
2023 Singapore initiated a huge money-laundering
crackdown. Police seized more than $2bn in property, gold
bars, cash and other assets. Ten people from Fujian province
in China but with passports from multiple countries were
arrested. They are accused of profiting from illegal
gambling. Casinos are often fronts for online gambling or
cyber-fraud, according to the UN Office on Drugs and Crime
(UNODC). Two of those arrested, Zhang Ruijin and Lin
Baoying, were business partners of Ms Guo. Others had links
to Dubai, Hong Kong and Thailand.

Scam money flows beyond Asia, too. Prosecutors have

charged Chinese scammers with laundering money in
American banks. Su Haijin, one of the men arrested in the
Singaporean money-laundering case, was found to be a
part-owner of two buildings worth nearly $56m in London,
according to an investigation by the Organised Crime and
Corruption Reporting Project and Radio Free Asia. Some
Asian online gambling brands that have advertised at
English Premier League matches are also used by scammers
to launder their money, says Philippe Auclair, a journalist
with Josimar, who has investigated links between scam
compounds in South-East Asia and businesses in Britain.
The same criminals who are targeting Americans like Mr
Hanes in pig-butchering scams are diversifying into other
kinds of cybercrime including hacking, ransomware attacks
and identity theft, says John Wojcik of UNODC. “What we’re
observing is that these syndicates are becoming more
sophisticated cyber-threat actors.” These groups use
information-stealing malware to infect a device and harvest
its data including its messages and browsing history. They
often sell the resulting information online via a monthly
subscription service to scammers and other cybercriminals.
The criminal syndicates running pig-butchering scams are
“increasingly recruiting people with data-analytic skills,
programmers who can sift through massive amounts of
data”, Mr Wojcik adds. That will enable them to execute
even more targeted, invasive and effective scams—or
simply use malware to drain your bank account. In all
likelihood, the collapse of Heartland Tri-State Bank is not a
high-water mark, but a beginning. ■

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Asia
Why India isn’t winning the contest with
China
Subcontinental drift :: A series of setbacks suggest that new policies are
needed

India’s attempt to save the tiger has been a

remarkable success
Big cats, big lessons :: The predator is now thriving in many parts of the
country, even alongside humans

Japan could finally face its own #MeToo

crisis
A belated reckoning :: A series of scandals has rocked the country

Pakistan is furious with the Afghan Taliban

Durand under duress :: Violence on the border is the worst it has been for a
decade

Donald Trump and Japan’s Ishiba Shigeru

make for an odd couple
Banyan :: But shared interests can help keep America and Japan close

China is infiltrating Taiwan’s armed forces

Tai, spy :: And Taiwan is struggling to deal with the growing number of
spies

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Subcontinental drift

Why India isn’t winning

the contest with China
A series of setbacks suggest that new policies are needed
2月 06, 2025 09:02 上午 | COLOMBO

THE PILOT’S tower at Colombo port, in Sri Lanka’s capital,

provides a telling snapshot of India’s struggle with China in
South Asia. To the east lie the berths where Indian and
Chinese warships often dock, a port official explains.
Southwards sits the Chinese-operated container terminal
that was an early part of China’s Belt and Road plan. Next
door, to the west, is where India’s Adani Group is building
another terminal which, in 2023, won $553m of American
government funding.
When that deal was unveiled, it was hailed as a showcase of
co-operation to counter Chinese influence, which had been
spreading in the region through trade, arms sales and
infrastructure projects. India was pushing back in other
ways too, granting neighbours relief from covid-19 and from
debt problems linked to Chinese loans. “India is no longer
losing—and may even be winning—its strategic competition
with China,” wrote the Rand Corporation, a think-tank, in
2023.

Yet as Narendra Modi, India’s prime minister, prepares to

visit Washington this month, his regional scorecard looks
patchy at best. In the last 18 months, India-friendly leaders
have been ousted in the Maldives, Nepal, Bangladesh and
Sri Lanka. Bangladesh, especially, is tilting towards China.
And several regional Adani projects are mired in controversy
following those upheavals and American bribery allegations
against its chairman, Gautam Adani (who denies
wrongdoing). On December 11th, the firm said it would no
longer use America’s loan for the Colombo port.

The to-and-fro is partly because regional leaders are playing

Asia’s giants against each other. But it also stems from poor
diplomacy. That raises tough questions for India, whose
geographical and cultural links give it a natural edge.
Moreover, Mr Modi adopted a “neighbourhood first” policy in
2014. Within India’s security and diplomatic elite, some fear
a lack of vision and cohesion is thwarting potential gains in
a period of relative Chinese weakness.

It is a worry, too, for America and other governments

banking on India to help constrain China. Many Western
officials fear that India’s regional diplomacy often backfires
or conflicts with their own. Some say it mirrors China’s
behaviour by backing despots, promoting opaque business
deals and stirring chauvinistic nationalism at home. Donald
Trump’s return to the White House adds new challenges,
too.

Take Bangladesh, the biggest regional “swing state”.

(Pakistan has long been in China’s camp.) India was a
staunch supporter of Sheikh Hasina, Bangladesh’s prime
minister from 2009 to 2024, and turned a blind eye to her
increasingly autocratic rule. Indian officials even lobbied
America to tone down criticism of her record, warning that
Bangladesh could be overwhelmed by Islamist extremists.

For a while, India’s approach worked. Trade, infrastructure

and security ties flourished. Bangladesh expanded links with
China, but deferred to India on security. Then, in August
2024, India’s gamble backfired. Sheikh Hasina was deposed
by student-led protests and fled to India. Anti-Indian
sentiment is now widespread in Bangladesh; many Indians
are outraged by reports of attacks on Bangladesh’s Hindus.

China, meanwhile, is exploiting any strategic openings

despite scaling back its Belt and Road infrastructure push,
and despite resolving a four-year border standoff with India
in October. China has already pledged $2bn in financial aid
for Bangladesh and is discussing $5bn more, says Touhid
Hossain, Bangladesh’s interim foreign minister. Visiting
Beijing in January, he requested more and China extended
the term of some loans. Both sides also committed to
infrastructure projects and discussed a Chinese proposal to
develop Mongla port (Bangladesh’s second-biggest). India
bid for that under Sheikh Hasina as part of efforts to match
the network of Chinese-controlled Indian Ocean ports.

This was not just an Indian intelligence failure: it exposed an

outdated approach to the region. For decades, India has
largely backed whoever is in power so long as they
furthered its security interests. Mr Modi built on that but
relied more on economic muscle, using generous aid
(including $4bn for Sri Lanka after its debt default in 2022)
but also stiffer penalties such as an unofficial blockade of
Nepal in 2015.

Indian officials say the approach is working. They cite their

outreach to Sri Lanka’s new president, whose first foreign
trip was to India, despite his party’s historic links to China.
They also persuaded the Maldives’ new leader to reverse
the “anti-India” stance of his election campaign. As for
Bangladesh, they do little to quell unfounded Indian media
chatter that America engineered Sheikh Hasina’s downfall.

In recent weeks, however, senior Indian diplomatic and

security figures have called for a rethink. They say India has
been too heavy-handed and, like China, failed to nurture
links to opposition parties and civil society or promote a
common sense of values and identity. Some connect those
to Mr Modi’s hostility to political opponents and non-
governmental organisations; his Hindu nationalism often
backfires too (especially in Muslim-majority Bangladesh).

“The world has changed very fast,” says Shivshankar

Menon, a former foreign secretary. “But we’re still doing
what worked earlier and expecting the same result.” India,
he says, should concentrate on economic integration and
stop seeking reciprocity from weaker neighbours. Others
want greater focus on the region’s young people, getting
more to study in India. Shyam Saran, another former foreign
secretary, says India needs more diplomats dealing with the
region and more involvement by local governments in
border areas.

Indian diplomats have been nimbler with Sri Lanka. But its
president, Anura Kumara Dissanayake, is still hedging.
Visiting China in January, he agreed to fast-track a $3.7bn
Chinese plan for an oil refinery alongside a Chinese-owned
port in southern Sri Lanka that India considers a potential
military threat. He has lifted a moratorium on visits by
foreign research ships that was imposed after India
protested about such visits by Chinese vessels.

He also adopted China’s preferred wording, referring to

Tibet as “Xizang” (its Mandarin name) and backing “all”
China’s efforts to achieve unification with Taiwan. Nepal’s
prime minister, K.P. Sharma Oli, used similar wording when
he visited China in December and agreed to deepen
economic ties. Ranjit Rae, a former Indian ambassador to
Nepal, faults India for neither building cross-party ties nor
inviting Mr Oli to visit after his appointment in July.

Another worry for India is its reliance on Adani (whose

chairman is close to Mr Modi) in competing for infrastructure
projects. In 2017 Adani signed a 25-year deal to supply
electricity to Bangladesh. In Sri Lanka, it won the Colombo
port contract and a wind-power deal, both without open
tenders. In Nepal, it has lobbied to build one airport and
operate three. Bangladesh now wants to renegotiate the
power deal, alleging it involves inflated prices (Adani has
said the company has upheld all its contractual obligations).
Sri Lanka is reviewing the wind deal on similar grounds.

Underlying all these problems is a more fundamental one.

Mr Modi promotes India as an emerging world power and a
champion of the global south. Yet officials across the region
say it is still unclear what India stands for in its own
backyard. Until it defines that, sceptical neighbours will
continue to hedge their bets. And China will reap the
rewards.■

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Big cats, big lessons

India’s attempt to save

the tiger has been a
remarkable success
The predator is now thriving in many parts of the country,
even alongside humans
2月 06, 2025 09:03 上午 | Singapore

Burning bright

IN INDIA IMAGES of tigers are everywhere. The apex

predator is seen accompanying Hindu gods and its face
adorns political banners. Yet for most of the country’s
history, spotting the actual animal had become ever harder.
Poaching, deforestation and other human activity caused
tiger populations to collapse from 40,000 at the beginning
of the 20th century to fewer than 1,500 in 2006.

But now a recovery is afoot. Since 2006 the number of

tigers in India has more than doubled, to 3,682. According to
a new study published in the journal Science, the country is
now home to 75% of the world’s tigers, despite having just
18% of the global tiger habitat. The big cats prowl 138,200
square kilometres (53,000 square miles) of land across the
country, an area roughly the size of Greece.

To explain this trend, the researchers delved deeper into

wildlife-survey data, gathered every four years since 2006
at a granular level (in grids of 100 square kilometres). This
allowed them to examine how various habitat and economic
indicators, such as land-use characteristics, livestock
population and night-lights data, are tied to the prevalence
of tigers within those grids. They find that tigers thrive in
protected reserves, where prey is plentiful and human
interference minimal. These reserves, which have grown in
number and size, have far-reaching effects by helping other
threatened species, such as elephants and leopards.

More surprisingly, the study shows that, though protected

habitats are important, tigers can survive even in the
presence of humans. Nearly half of India’s tigers live in what
the researchers call “human multiple-use habitats”, which
are home to 60m people. The study suggests that Indian
officials have helped ensure peaceful coexistence by
compensating farmers for lost livestock and channelling
tourism revenues into local economies. Such measures are
crucial. Tigers are more likely to disappear in places where
there is armed conflict or poverty persists (because
incentives for poaching are stronger).
Above all, the researchers argue that tigers are making a
comeback because of the government’s dedication to
helping its national animal. Not only do targeted laws exist
to protect it, but governments across party lines have acted
on them. The tiger’s cultural cachet has helped, but the
researchers also credit Indian officials’ “meticulous
governance” which, they write, holds lessons for
conservationists in other countries, especially poor ones.
But even Indian policymakers tackling thorny issues in other
domains could take note. ■

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A belated reckoning

Japan could finally face its

own #MeToo crisis
A series of scandals has rocked the country
2月 06, 2025 09:02 上午 | Tokyo

The embattled Fuji Television

UNLIKE ITS neighbour South Korea, Japan has not had a

vociferous #MeToo movement. Is that now changing? Last
year a newspaper reported that Nakai Masahiro, a boy-band
star turned television presenter, had sexually assaulted a
female newsreader. Mr Nakai, who reached an out-of-court
settlement with the unnamed victim of ¥90m ($590,000),
resigned from all his shows. Even so, outrage mounted. Fuji
Television, the victim’s employer, became a target of ire.
Over 70 sponsors yanked their commercials, forcing two
executives to step down.

The fiasco follows a string of revelations rocking Japan’s

showbusiness. In 2023 Johnny & Associates, renowned for
churning out boy-bands, admitted its late founder had
sexually abused hundreds of teenage boys over decades.
Last year, Matsumoto Hitoshi, a popular comedian, vanished
from TV screens following sexual-abuse allegations (which
he denies).

It is not just pop culture that is facing a reckoning. Last year

a female prosecutor in Osaka, in west of Japan, accused a
former chief prosecutor of rape. (At first he admitted to it,
but now says he is innocent.) A petition demanding his
punishment has gathered over 60,000 signatures.

Japan’s #MeToo movement has been “building up slowly”,

says Miura Mari of Sophia University in Tokyo. In 2017 Ito
Shiori, a freelance journalist, accused a reporter and the
biographer of then-prime minister Abe Shinzo, of rape. Her
criminal case was dismissed, but she won damages in a civil
lawsuit. “Black Box Diaries”, her film chronicling the
episode, became the first Japanese documentary to be
nominated for an Oscar last month (though there is no
release date for it in Japan). Her case proved controversial
and sparked nationwide conversations. According to
surveys, only 5-10% of people report assaults to the police
in Japan, compared with 23% in America. Demonstrations
also started in 2019 after four rape acquittals were handed
down by the courts in quick succession.

A few changes have occurred. In 2023 parliament raised the

age of consent from 13 to 16. Lawmakers also expanded the
definition of rape to encompass “non-consensual” sex,
rather than requiring that physical force was involved.
But many of the problems in the TV industry run deep,
including its culture of trivialising women on screen. Female
news presenters are called joshi-ana (or “girl announcers”),
a label that prizes their youth and looks. Many of them are
plucked from college beauty pageants. They are treated as
“commodities”, says Tanaka Toko at the University of Tokyo.
And at a gruelling ten-hour press conference last month, Fuji
Television’s executives offered few signs of major reform.
One employee suggested sending “a man or an older
woman” to dining parties instead of “offering a young
woman”. Sponsors have yet to return, while public outrage
remains high. “We wouldn’t have seen the kind of response
we see today a few years back,” notes Ms Miura. Tolerance
for terrible behaviour may be eroding among the population
at large, but change at the top still takes time. ■

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Durand under duress

Pakistan is furious with

the Afghan Taliban
Violence on the border is the worst it has been for a decade
2月 06, 2025 09:02 上午 | Islamabad

IT IS A humbling admission for an old ally. “They don’t listen

to us,” General Asim Munir, Pakistan’s army chief,
complained about the Afghan Taliban last month. In General
Munir’s reckoning Pakistan is not asking for much. All the
country needs from its “brotherly neighbour” is to stop the
“spread of terrorism in Pakistan from across the border”. A
helping hand, as it were, from the Afghan Taliban.
Instead, the powerful unelected generals who run Pakistan
have mostly received a middle finger. In December, 16
Pakistani soldiers were killed by the Tehreek-e-Taliban
Pakistan (TTP), the Pakistani wing of the Taliban, in a border
attack. Pakistan’s armed forces responded by bombing TTP
hideouts in Afghanistan. That prompted the Taliban to
defend the TTP as “guests” and vow revenge. That month
the Taliban attacked Pakistani troops on the border.

Pakistan’s anger at its vexatious ally is well founded.

Violence is up: in 2024 there were 521 terrorist attacks in
Pakistan, a 70% increase on the year before, according to
the Pakistan Institute for Peace Studies, an Islamabad-based
think-tank. This resulted in nearly 2,000 casualties. Militant
violence, which had been in decline in Pakistan since 2014,
has increased every year since the Taliban came to power in
Afghanistan, following America’s withdrawal of troops from
the country in 2021.

Much of the violence last year, with over 300 attacks, can
be attributed to the TTP. Pakistani officials estimate 10,000
of its fighters now roam along the border between the two
countries. The TTP has narrowed its focus and its goals: it
mostly attacks military targets, and is demanding a reversal
of the merger in 2018 between Khyber Pakhtunkhwa, a
province of Pakistan, and British-era tribal areas.

“Pakistan miscalculated in assuming the Taliban would be a

reliable and pliable ally once in power,” says Andrew Wilder
at the United States Institute of Peace, a think-tank.
Pakistan’s lopsided relations among the Afghan Taliban
factions have added to the problem. Pakistan’s army is close
to the Haqqani network, with its strongholds in eastern
Afghanistan. By contrast, the TTP pledges allegiance to the
Taliban’s leader, Haibatullah Akhundzada. Relations
between him and Pakistan’s generals are far cooler.
Wizened Afghan hands have known the Taliban to be
stubborn allies since inception. In the 1990s they gave
sanctuary to Pakistani sectarian militants who tormented
the country’s Shias. They refused to hand over the leaders
Pakistan demanded. But Pakistan’s dysfunctional politics
also complicates the relationship between the two
countries. The province of Khyber Pakhtunkhwa, where
there were 295 militant attacks last year, is governed by the
Pakistan Tehreek-e-Insaf, the party founded by Imran Khan,
the jailed former prime minister. Its chief minister insists on
negotiating unilaterally with the Taliban, incensing the
federal government. The army, which opposes such talks,
wants Mr Khan’s provincial government to beef up its police
resources to fight the TTP.

The government is trying other negotiating tactics. Since

September 2023 some 815,000 Afghans have been evicted
from Pakistan. (The United Nations estimates another 3m,
fleeing Afghanistan’s long wars, remain.) Trade between the
two countries has nosedived. Even so, the Afghan Taliban
are unmoved. They know Pakistan’s arm-twisting has its
limits.

Last month the Taliban hosted the Iranian foreign minister in

Kabul, a first since 2017. Trade was on the agenda. Earlier in
January India’s foreign secretary met the Taliban’s foreign
minister in Dubai, to Pakistan’s annoyance. “We ask them to
start acting and behaving like a state [and to] understand
[their] obligations,” a senior Pakistani security official
complains. “But nothing changes.” So much for that ally. ■

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Banyan

Donald Trump and Japan’s

Ishiba Shigeru make for an
odd couple
But shared interests can help keep America and Japan close
2月 06, 2025 09:02 上午

IN HIGH SCHOOL, Ishiba Shigeru joined the golf club. But he

abandoned the sport after entering politics. The elitist
hobby did not suit his image as a man of the people from
rural Tottori, in Japan’s west (never mind that, like many
Japanese politicians, he descends from a political dynasty).
His loyal grassroots following ultimately helped him to
become his country’s prime minister. Alas, a good short
game would have been an asset in one of his most
important tasks as Japan’s leader: managing the
relationship with America’s mercurial president, Donald
Trump, whom he will meet at the White House for the first
time on February 7th.

Abe Shinzo, one of Mr Ishiba’s predecessors, used golf to

help charm Mr Trump during his first term. Just over a week
after the presidential elections in 2016, Abe rushed to Trump
Tower with a gold-plated golf club as a gift. Following their
first meeting at the White House the next spring, the two
flew to Mar-a-Lago and hit the links. During Trump 1.0, Abe
emerged as the Trump-whisperer par excellence; his
example is now studied in capitals across the world.

Mr Ishiba will find it hard to replicate Abe’s connection with

Mr Trump, and not just because he no longer golfs. “It will
be like a second marriage after the love of your life dies,”
says one person familiar with the Abe-Trump bromance.
Moreover, given Mr Ishiba’s long-standing animus towards
Abe, it may be a bit like being forced into an arranged
marriage with your soulmate’s arch-enemy. No wonder Mr
Trump rebuffed Mr Ishiba’s requests to meet ahead of his
inauguration, while welcoming Abe’s widow, Akie, for dinner
at Mar-a-Lago.

The power dynamics between Mr Ishiba and Mr Trump will

also differ. When Mr Trump first came to office, on the global
stage “Abe was the veteran and Trump was the new one,”
says a lawmaker from Japan’s ruling Liberal Democratic
Party. “Now it’s the reverse.” Abe also had a strong grip on
power at home, which helped earn Mr Trump’s respect; Mr
Ishiba leads a precarious minority government that may not
last past this summer.
When asked about the potential chemistry, Japanese
officials purse their lips and cross their fingers. Colleagues
describe Mr Ishiba as modest, respectful, shy. But to
Americans he can seem nerdy. “A strange duck,” says one
former American official. “Awkward and weird,” echoes
another. The prime minister’s enduring passions—model
trains, anime and a 1970s girl pop band called “Candies”—
may read to Mr Trump and his macho courtiers as
hopelessly uncool. Where Abe was a charmer, Mr Ishiba is
“more of a thinker, a philosopher”, says one Japanese
official.

During Mr Ishiba’s visit he may not bring anything gold-

plated, but he will come bearing policy gifts, such as plans
to buy more LNG from America. He will recap what Japan
has done to boost its defences since Mr Trump’s previous
term, including raising security spending to 2% of GDP by
2027. He will surely note that Japan has the largest stock of
foreign direct investment in America and that Japanese
firms are directly responsible for around 1m American jobs.
He will remind Mr Trump that Japan now accounts for less
than 10% of America’s trade deficit, down from a peak of
65% in the early 1990s; he may point out that America
currently runs far larger trade deficits with China, Mexico,
Germany and even Vietnam.

There will be plenty of tense topics as well. Mr Trump’s

tariffs may not yet be directed at Japan, but it will suffer
nonetheless. Share prices of Japanese carmakers, which
have large production bases in Canada and Mexico, have
fallen in recent days. Mr Ishiba criticised Joe Biden for
blocking Nippon Steel’s acquisition of US Steel—a decision
that Mr Trump promised to uphold. Mr Trump may feel
Japan’s defence-spending pledge is inadequate, and push
for 3% of GDP. Japan’s recent openness to restarting
dialogues with China may rankle hawks around Mr Trump. If
America abandons Ukraine, Japan will be dismayed.

Yet Japanese officials are nonetheless relatively sanguine

about their relationship with America under Trump 2.0. “I
like Japan,” Mr Trump said when Mr Ishiba’s visit was
announced. Individuals with ties to Japan occupy high places
in the new administration. Shared interests can keep the
two countries close, even if their leaders are not. In
America’s stand-off with China, Japan is the single most
crucial ally. “America and Japan need to be friends in today’s
environment,” says another Japanese official. “Even Trump
understands that.” ■

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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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Tai, spy

China is infiltrating
Taiwan’s armed forces
And Taiwan is struggling to deal with the growing number of
spies
2月 06, 2025 09:02 上午 | Taipei

One by one

IN 2021 A retired Taiwanese general named Kao An-kuo

made a video of himself dressed in camouflage, calling on
Taiwan’s armed forces to overthrow the island’s
government. The ruling Democratic Progressive Party (DPP)
was full of “ethnic traitors” who were selling Taiwan out to
America, he said, and obstructing the Chinese nation’s great
rejuvenation. At that time it drew little attention. Mr Kao was
the ageing leader of a fringe pro-unification group with
scarce support in Taiwanese society. But in January Mr Kao,
who is now 80, was indicted for military espionage.
Prosecutors allege that he and five others created an armed
group to work with China’s armed forces towards an
invasion of Taiwan. They were accused of using drones to
track military drills, reporting training results to China and
trying to recruit more collaborators.

Mr Kao is the highest-ranking veteran of Taiwan’s armed

forces to have been accused of spying for China, but he is
not the first. In January another group of veterans was
indicted for allegedly sending photos and maps of America’s
de facto embassy in Taipei and of Taiwanese military bases
to Chinese agents. Last year Taiwan’s courts prosecuted 64
people for spying for China. Two-thirds were current or
retired military personnel. Prosecutions have jumped
fourfold in the past four years, according to Taiwan’s
National Security Bureau. Yet China’s infiltration is still
evolving in both scope and tactics.

There have been 1,706 instances of Chinese intelligence

trying to recruit Taiwanese officers and soldiers online
between January 2022 and June 2024, says one government
report, creating an “unprecedented challenge” for Taiwan’s
armed forces. China is targeting rank-and-file soldiers as
well as high-level officers, reaching them through channels
such as online gaming platforms and underground lenders.
Chinese goals are shifting, too, from stealing tactically
useful intelligence to using co-opted soldiers for
psychological warfare. Some have allegedly filmed
“surrender videos” in which they pose in Taiwanese uniform
with a Chinese flag and promise not to fight, or sign oaths of
loyalty to the Chinese motherland if war broke out.
How is China convincing Taiwan’s soldiers and officers to
collaborate? In the past it targeted retired officers first.
These older veterans tended to come from a generation that
may have fled the mainland, identified as Chinese
nationalists and opposed Taiwan’s independence. Many also
disliked the DPP for cutting veterans’ pensions in 2018.
Resentful Taiwanese veterans were susceptible to Chinese
agents, says Chang Yen-ting, a retired air-force general.
They would befriend them on family visits or business trips,
taking them out to meals, inviting them to play golf,
“peeling them like an onion, layer by layer”, until they felt
that the mainlanders were their true allies and the DPP their
enemy.

Turning the tide

China is now targeting younger personnel, says one of the

special prosecutors who handles national-security cases in
Taiwan. Many of the younger targets are in debt, he says.
They start out searching for ways to make money online.
Some of them get into gambling. Others look for loans
through informal lenders, often linked with criminal gangs
that are associated with Taiwan’s temple networks.

China works through middlemen affiliated with those

groups, who will offer base payments of up to NT$200,000
($6,000) for “rubbish intelligence” he says, such as a photo
of toilets in a training base or a video saying they don’t
want war. Naive soldiers think it’s easy money. “Hundreds of
thousands just for a twenty-second video, it’s incredible,”
says the prosecutor. But once the first payment has been
made, the middlemen will ask targets to provide more
advanced information.

None of these videos have been released. But, says the

prosecutor, China may be collecting them for use in future,
when it wants to break the Taiwanese public’s will to resist.
“They can be used to tell ordinary Taiwanese people, ‘Look,
even your army is not loyal to your country,’” says Nie Ruiyi,
a lawyer who has worked on many military-espionage cases.

That psychology is also one of China’s recruitment methods.

Agents will reveal to Taiwanese targets that they already
know all about that soldier’s deployment orders. They scare
the target, then tell him that war is coming soon, and they
can keep their family safe if they collaborate, says Mr Nie.
Some of these methods are working. The prosecutor says he
dealt with a recent case where a Taiwanese lieutenant
agreed to collaborate in return for Thai passports, obtained
through Chinese investment on behalf of his family. “That
lieutenant told me, if war happens, he will remain here to
fulfil his duty. But he wants to get his wife and children out
right away.”

Taiwan is trying to stop China’s military infiltration. Most of

the prosecuted cases have been uncovered through internal
reporting, showing that anti-spy education is working, says
the defence ministry. Its courts have also been meting out
heavier sentences as a deterrent. China is maximising the
propaganda value of these cases by using them to fan
Taiwan’s domestic divisions. Asked about Mr Kao’s case this
month, Chen Binhua, a spokesman for China’s Taiwan Affairs
Office, said the DPP was using an “evil” national-security
law to suppress opponents. ■

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China
Donald Trump’s new trade war with China is
also an opioid war
Fentanyl and free trade :: The president claims that drugs are poisoning
geopolitics

Cuts in American aid are crippling groups

promoting rights in China
Shutdown :: Some aid money has been very well spent

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Fentanyl and free trade

Donald Trump’s new trade

war with China is also an
opioid war
The president claims that drugs are poisoning geopolitics
2月 06, 2025 09:02 上午

MORE THAN six years after Donald Trump, then in his first
term as America’s president, mounted a trade war against
China, the guns are firing again. On February 4th Mr Trump
imposed an additional 10% tariff on imports from China,
which responded with a slew of its own on various American
products. Canada and Mexico, which had also been
threatened with tariffs, gained at least a temporary
reprieve. But even if China eventually gets a similar
concession, the drugs that Mr Trump cites as the reason for
his latest actions—synthetic opioids—will continue to
devastate American lives and poison the Sino-American
relationship. The battle over them will be bitter and
protracted.

“The influx of these drugs to our Nation threatens the fabric

of our society,” said Mr Trump’s announcement of the levy
on Chinese goods. He accused China of “actively sustaining
and expanding the business of poisoning our citizens”.
China hit back: “Fentanyl is an issue for the US,” it said,
warning that the levies could undermine co-operation on
drug control.

Mr Trump’s claims about the opioid trade are hyperbolic,

and his remedy counterproductive, but there is little doubt
that the synthetic-drugs business is a problem and that
China could do more. In the year to August 2024 nearly
90,000 Americans died from drug overdoses. The majority
had taken fentanyl. Chinese firms are the main suppliers of
chemicals that are “cooked” into fentanyl by cartels in
Mexico and smuggled into America. (Almost none comes
through Canada.)

Mr Trump has attempted to put some of the blame on Mr

Biden, whom he accuses of failing to chivvy China’s leader,
Xi Jinping, into fulfilling a promise (which Mr Trump says the
Chinese president made during Mr Trump’s first term) to
execute people who send fentanyl to America. “That would
have stopped it,” he told reporters on January 23rd. But
even if China made such a pledge, death sentences are
unlikely to have helped. In 2019 China banned unauthorised
manufacture of all fentanyl-type opioids. A Chinese court
imposed a suspended death sentence on a man for
trafficking fentanyl to America. But the crackdown led to
Chinese firms exporting the chemical components, or
“precursors”, of fentanyl instead. These often have legal
uses as well.

The problem is partly political. China expected rewards for

taking America’s concerns more seriously. It was outraged
when the Trump administration imposed sanctions on the
Ministry of Public Security’s forensic-science institute in
2020 because of its alleged links with the repression of
Uyghurs in Xinjiang. China scaled back its co-operation with
America in fighting drug crime. In 2022 it severed such
collaboration in response to a visit to Taiwan by Nancy
Pelosi, the then speaker of the House of Representatives.
Co-operation resumed only after Mr Biden agreed to lift the
sanctions in November 2023 during a summit in San
Francisco with Mr Xi.

In January 2024 a new bilateral forum on counter-narcotics

work met for the first time in Beijing. China took further
steps to tighten its controls on opioid-related business. In
September it imposed restrictions on three more fentanyl
ingredients. It shut down 14 websites and more than 1,000
online shops that were offering precursors for sale. “As soon
as something’s internationally agreed, they’ll control it. So
I’ll give them credit for that,” says a senior official familiar
with China’s efforts.
But websites offering precursors still abound. If the sellers’
country of origin is not explicit, their contact details
involving WeChat, a Chinese messaging platform, and
Chinese mobile-phone numbers, make the China connection
clear. “Safety Delivery to Mexico, USA”, says a dealer on a
chemical trading platform in Shanghai, purporting to be
from a firm in Anhui province. The webpage advertises 1-
boc-4-AP, one of the precursors that China took action
against in 2024. It may be a scam. But in July 2024 Reuters,
a news agency, said its reporters in America had secured
deliveries of precursors and a pill press from online sellers in
China. They cost a total of about $3,600 and could have
made tablets worth about $3m, according to Reuters.

Such sales could be disrupted by another measure

announced by Mr Trump along with his latest tariffs: the
scrapping of so-called “de minimis” exemptions from duties
for small packages sent from China . De minimis products
usually entered the country with very little inspection,
making it easy for fentanyl-related shipments to evade
detection.

Biden-era officials say that in 2023 Mr Xi appeared to get a

better grasp of how neuralgic the fentanyl crisis had
become in American politics, and seemed more willing to
help. “China has worked more productively with the US
during the last 15 months on the precursor issue,” says a
former official involved in those efforts.

But in April last year a bipartisan committee of America’s

House of Representatives released a report on China’s
connections with fentanyl. It alleged that China’s security
apparatus consistently cracks down against drug traffickers
“only in cases that impact its domestic population”. It said
China was using fentanyl as a “valuable rhetorical and
propaganda tool” to highlight Western decadence. In July a
senior American official said the Biden administration had
no information to support the committee’s finding that
China was actually subsidising precursor exports. But, the
official said, “I think there’s a need for an ongoing
conversation about that.”
Mr Trump’s tariffs will not encourage China to talk. But
Vanda Felbab-Brown of the Brookings Institution in
Washington believes America may have leverage. China is
keen to be removed from an annual American list of major
drug-producing and transit countries, to which it was added
in 2023. Ms Felbab-Brown believes it could be willing to take
further steps to stop the opioid-related trade if America
agrees to remove that label. “China is very focused on its
reputation,” she adds.

Even with China’s best efforts, the problem will not

disappear quickly. The country has a vast and nimble
chemical industry that, along with India’s, dominates global
supplies of pharmaceutical raw materials. Its manufacturers
can quickly produce other suitable chemicals if the
government restricts sales of a fentanyl component. Their
legitimate uses, in addition to their fentanyl-making ones,
would make any government hesitate to stop their
production completely. China’s local governments have an
interest in protecting businesses that prop up sagging
economic growth. And a tougher crackdown in China could
push more of the business elsewhere, such as to India. In
geopolitics, the poison will long persist. ■

Subscribers can sign up to Drum Tower, our new weekly

newsletter, to understand what the world makes of China—
and what China makes of the world.

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Shutdown

Cuts in American aid are

crippling groups
promoting rights in China
Some aid money has been very well spent
2月 06, 2025 09:03 上午

CHINA LABOUR WATCH (CLW), an NGO based in New York

City, has investigated labour abuses in Chinese supply
chains for 20 years. It is small, with a staff of seven and a
budget of $800,000 a year. Now it is on the verge of
collapse. Some 90% of its funds come from the American
government. Since Donald Trump ordered a freeze on
foreign aid in January, CLW has had to halt most of its work.
Li Qiang, its founder, says staff will have to be laid off. It is
all “very painful”, he says, and “completely unexpected”.

CLW is one of many China-focused groups facing closure.

The State Department has said it is freezing aid for 90 days
to review programmes for waste, wokeness and support of
American national interests. Those depending most on
American funds are run on a shoestring budget by exiled
activists who struggle to find other support, says Maya
Wang of Human Rights Watch, a group not affected by the
cuts. Private donors avoid critics of China in order to protect
business interests. Governments are wary of Chinese
dissidents. Activists cannot even rely on crowdfunding, says
Ms Wang, because of surveillance.

These organisations often have the best language skills and

contacts within China. Journalists rely on them for first-hand
accounts and data. CLW has built a network of contacts with
workers inside factories across China and in Chinese
projects in the global south. Uyghur and Tibetan researchers
use personal connections to report on re-education camps
and detentions.

The Economist spoke with members of groups that monitor

protests, support local journalists and report on the Chinese
state’s repression. Most were afraid to speak on the record
because they did not want to be punished for criticising the
Trump administration. Some said they were applying for
waivers to the freeze, hoping that China hawks in the
administration would continue their support. Others were
conflicted about taking funds from a government that no
longer seemed aligned with their values.

For decades the Communist Party has accused Western

governments of fomenting instability in China through civil
society. “Everyone in this space is constantly doing risk
assessments to figure out if we’re going to get shut down
from the Chinese side,” says one member of a Washington-
based group. It is “deeply ironic”, she says, that they may
soon collapse because of American policy. America’s
government is “essentially doing the job of the Chinese
government for it”, says Ms Wang.■

Subscribers can sign up to Drum Tower, our new weekly

newsletter, to understand what the world makes of China—
and what China makes of the world.

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groups-promoting-rights-in-china

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United States
Elon Musk is shredding America’s
government as he did Twitter
The Twitter playbook :: Some of his operatives are barely out of their teens

Florida comes to Washington, DC

Hard reboot :: Using the Sunshine State’s politics as a guide to the Trump
administration

RFK junior and Tulsi Gabbard, set to sail

through a cowed Senate
Confirmation bias :: But Congress will bargain harder on taxes and
spending

New York City commits to involuntary

commitment
Crisis management :: Compulsory treatment of the severely mentally ill
was once taboo. No longer

The clean-up after the LA fires is already

revealing tensions
A rocky start :: When a city burns, how does recovery even begin?

Donald Trump is turning payback into policy

Lexington :: And setting new, dangerous precedents for the American
presidency

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The Twitter playbook

Elon Musk is shredding

America’s government as
he did Twitter
Some of his operatives are barely out of their teens
2月 06, 2025 09:03 上午 | CHICAGO AND WASHINGTON, DC

JUST PAST midnight on February 3rd Elon Musk appeared on

X to explain what he is doing to the federal government. He
had to speak over the patter of his four-year-old son, also
called X. The bureaucracy, Mr Musk argued, constitutes an
illegitimate “fourth branch of government”. He then came to
the US Agency for International Development (USAID),
which he denounced as little more than a device to funnel
taxpayers’ money to Marxists and criminals. He had, he
claimed, the full support of Donald Trump and is “shutting it
down”, notwithstanding that the agency’s existence is
mandated by Congress. Later he posted that he had spent
the weekend “feeding USAID into the woodchipper”.

Even as Mr Musk was speaking, workers at USAID’s

headquarters in Washington were being told not to come in
the next day. Later on February 3rd Marco Rubio, the
secretary of state, announced he had been made acting
head of the agency while it faces “reorganisation”. But there
is already little of the agency left for him to head. By
February 4th the USAID website had been replaced with a
single statement, announcing that by the end of the week,
all of its permanent workers would be placed on
administrative leave. Overseas staff will return to America
within a month.

The takedown of USAID is the most dramatic example of

what seems to be Mr Musk’s plan for the whole of
government. It is drawn from his playbook as a corporate
boss. Just over two years ago Mr Musk took over Twitter in a
messy $44bn deal. Within a few months, much of which he
spent at the company’s headquarters in San Francisco, he
had reduced the company’s headcount by around four-fifths.
A third of the staff accepted buyouts; many of the rest were
fired. They included senior executives who were sacked
instantly to stop their stock options vesting. Every decision,
such as those about which Twitter accounts to ban, was put
directly into Mr Musk’s hands.

Now he is trying to do the same thing with over 2m federal

employees, in an attempt to cut $1trn—more than half of all
discretionary spending—out of the federal budget. It is, says
Donald Kettl, of the School of Public Policy at the University
of Maryland, like nothing that has ever happened before.
“On a scale of one to ten, this is about 145. It’s so far off the
charts,” he says. Richard Nixon was the most recent
American president to govern as if the laws of the land did
not apply to him, but “this is far beyond anything that Nixon
even attempted”.

The first hints of Mr Musk’s seriousness came on January

28th, when most federal employees were sent an email by
the Office of Personnel Management (OPM), the closest
thing the government has to a human-resources
department. The message offered “deferred resignation”. It
had the subject line “fork in the road”, the same as in the
email sent to Twitter employees when Mr Musk took over
there. Lots of federal employees have been sent several
more emails affirming the offer since. One went out to air-
traffic controllers less than a day after a plane crash in
Washington, DC, which has raised questions about short-
staffing at Reagan airport.

DOGE is technically embedded in the US Digital Service, an

organisation created by Barack Obama to spread the use of
new technology across government. But DOGE is an entirely
new thing. Its employees seem to be junior workers pulled
in very recently from Mr Musk’s many private firms. Wired, a
magazine, has identified six engineers now working with
DOGE. The one who sent the email shutting down USAID,
Gavin Kliger, graduated from high school in 2017. The
youngest of the six, Edward Coristine, is 19; his relevant
work experience consists of a few months interning at
Neuralink, Mr Musk’s brain-implant firm. On his now-deleted
LinkedIn profile, he took the moniker “bigballs”.

These engineers—and it is unclear how many more there

may be—now are able to enter just about any government
building they like. They have apparently installed sofa beds
in the office of the OPM. Under an executive order that Mr
Trump signed on his first day in office, they are promised
“full and prompt access to all unclassified agency records,
software systems, and IT systems”. The fact that they are
handling classified data implies some DOGE workers have
also been issued with the “interim Top Secret” clearances
created by another of Mr Trump’s executive orders.

Government employees report that staffers from DOGE are

turning up at their offices, demanding data and running
“code reviews”. Civil servants tell The Economist what the
DOGE people are most keen on is access to personnel
records. In some agencies they are also conducting
interviews. According to one civil servant the questions
include, “Which of your colleagues are most expendable?”

Delete, delete

Here, too, Mr Musk seems to be applying lessons from his

takeover of Twitter, where a small group of trusted acolytes
combed through records like the company’s Slack channels
and email accounts to decide whom to fire. Defenders of the
old order were quickly removed. Yet the federal government
is a much larger beast than Twitter, which at its peak had
just 7,500 workers. And Mr Musk has been touching some
extremely sensitive parts of it. On January 31st it emerged
that David Lebryk, a senior career Treasury official, is
retiring after clashing with officials from DOGE. They may
have obtained access to the government payments system,
which pays the government’s bills and makes almost 90% of
its bank transfers.

Mr Musk has suggested in a tweet that he has direct control,

claiming that his team are “rapidly shutting down”
government payments to contractors. Jonathan Blum, a
political appointee at the Treasury, denied this in a letter to
Congress, saying DOGE’s access is “read only”. But insiders
doubt this, and despite two court rulings compelling the
government to make payments, a growing number of non-
profits contracted to provide federal services report not
being paid.

Is any of this legal? Agencies established by Congress

cannot simply be shut down by fiat, and Mr Rubio’s
appointment is not much of a figleaf. DOGE workers can
enter buildings, but laws about the handling of government
data remain in force. Few legal experts think that the offer
of “deferred resignation” is lawful. Nick Bednar, of the
University of Minnesota’s law school, notes that various laws
exist to stop the government from offering no-work jobs.
Workers who accept the offer—which had a deadline of
February 6th—“could very much be left high and dry”, he
says.

Lawsuits are being filed, and protest is growing. A few

Democrats have threatened to shut down Mr Trump’s
appointments in the Senate over the USAID shutdown. On
February 3rd, at the aid agency’s headquarters, Kristina
Drye, a USAID speechwriter, says that she “signed a
contract to serve the American people” and, despite getting
the email, decided to go into the office anyway. A security
guard escorted her as she retrieved some books, as well as
a pair of beloved high heels. She says she does not expect
to ever go back in. What Mr Musk is doing is “sheer, blatant
disregard” for important work, she says. But DOGE is
already moving into new agencies. Nobody is stopping him.
■

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daily newsletter with fast analysis of the most important
political news, and Checks and Balance, a weekly note from
our Lexington columnist that examines the state of
American democracy and the issues that matter to voters.
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states/2025/02/03/elon-musk-is-shredding-americas-government-as-he-did-twitter

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Hard reboot

Florida comes to
Washington, DC
Using the Sunshine State’s politics as a guide to the Trump
administration
2月 06, 2025 12:09 下午 | TALLAHASSEE

Florida woman

THE START of Donald Trump’s second term has been

dizzying. But to Republicans in Tallahassee, a southern
capital city draped in Spanish moss, it all looks familiar. The
administration is full of Florida politicos. Most prominent are
Mr Trump’s chief of staff, Susie Wiles (he calls her “the most
powerful woman in the world”), the secretary of state
(Marco Rubio), the attorney-general (Pam Bondi) and the
national security adviser (Mike Waltz). Floridians will lead
the Centres for Disease Control and Prevention and the
Office of the Surgeon General. With them come deputies
and staffers. Back in 2017 Ballard Partners, Florida’s biggest
lobbying firm, set up shop in Washington. This time the
Southern Group, the second-largest, is too.

There is a long tradition of presidents poaching people from

their home state to run the government. Jimmy Carter
brought Georgians, Ronald Reagan brought Californians and
Bill Clinton brought Arkansans. But that trio began their
political careers in the states whose talent they brought to
Washington. Mr Trump, by contrast, is a New Yorker who
only settled in the Sunshine State in 2019. What, then,
draws the president to Floridians?

Ask Republicans and Democrats alike and they will tell you
that Florida is the “reboot” state. Exiles from Latin American
autocracies move to Miami in search of more freedoms and
northerners drive down I-95 to reinvent themselves by the
beach. It’s a place where the American dream flourishes and
where disgraced doctors become chiropractors. Since the
turn of the century only one of the state’s four governors—
Jeb Bush, Charlie Crist, Rick Scott and Ron DeSantis—has
been native. And although Mr DeSantis was “geographically
raised in Tampa Bay”, he writes in his biography that
“culturally” he was influenced more by his grandparents’
Midwestern steel town. Being an outsider who chose Florida
is precisely what makes Mr Trump at home there.

Most of the president’s picks got their start around Mr Bush,

who was once kingmaker in Florida politics. But it was the
Tea Party movement of the late 2000s that shaped the
state’s political culture. It brought Ms Bondi and Mr Rubio
into politics. Many lawyers and real-estate agents who then
got involved did so not for ideological reasons, but to further
their careers outside of politics, says Peter Schorsch, a
political commentator. That gave Tallahassee a transactional
flavour, where money and politics go hand in hand. “The
mentality is make the deal and get on to the next project,”
Mr Schorsch explains. The Florida political brand is all about
“being aspirational, bucking conventions and hustling for
outcomes”, says Paul Bradshaw, the boss of the Southern
Group.

Ms Wiles, also a northern transplant, is as much a creature

of Florida politics as anyone else. “She is no ideologue,”
says John Delaney, a former mayor of Jacksonville for whom
she was chief of staff in the late 1990s. He describes her as
a “traditional Episcopalian country-club Republican” who is
left of centre on gay rights, race issues and the
environment. But more than anything she is pragmatic and
“loyal to what the boss wants to get done”.

When Mr Trump left office in 2021 Florida kept his legacy

alive, says Roger Severino of the Heritage Foundation, a
think-tank. During the pandemic Mr DeSantis opened
businesses, did battle with wokeness and rebranded Florida
as “the free state”. A partisan shift followed, as northerners
migrated south for better weather and countercultural
politics. In 2020 Democrats had 97,000 more registered
voters in Florida. A year later Republicans had flipped the
advantage and today they have nearly 1.2m more. In
November they won a majority of non-Cuban Hispanics for
the first time. The speed of the realignment gave Democrats
“no time to build a resistance”, says Evan Power of Florida’s
Republican Party. The legislature has now passed nearly
every policy on its wish list: universal school choice, an
abortion ban, tax cuts and permitless carry of guns.

With only four years to govern, Mr Trump has tapped

Floridians to strike while the iron is hot. Fast and aggressive
action demoralised Democrats down south and Republicans
hope to do the same in Washington. Mr Power thinks that
the nominees will return to their Tea Party roots and debloat
government: Ms Bondi will curtail prosecutions and Mr Rubio
will do less to “project American power everywhere”. With
eye-popping cuts to the federal government, the
administration is already trying to make America more like
Florida, which has the smallest state workforce per resident.
But Washington is not Tallahassee. There is more scrutiny
and more checks and balances. Nor are their tactics making
them new friends, Mr Power acknowledges: “The Florida
fighter ethos is not always popular.” ■

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Confirmation bias

RFK junior and Tulsi

Gabbard, set to sail
through a cowed Senate
But Congress will bargain harder on taxes and spending
2月 06, 2025 09:03 上午 | WASHINGTON, DC

TWO OF Donald Trump’s most controversial cabinet choices

appear to be heading for confirmation after winning critical
Senate committee votes on February 4th. It was a political
triumph for Mr Trump, whose lieutenants managed to cajole
sceptical Republican senators into approving two
unorthodox nominees who would not previously have been
allowed near such high office. Yet this may prove to be the
high point of the president’s influence over the legislative
branch.

After much lobbying of wobbly senators, Robert F. Kennedy

junior, Mr Trump’s pick as secretary of health and human
services, and Tulsi Gabbard, his nominee as director of
national intelligence, cleared their initial hurdles without
much drama, albeit on strict party-line votes. Both
nominees will almost certainly win approval in the full
Senate, where Republicans hold a three-seat majority. Pete
Hegseth, a combat veteran and Fox News host, had earlier
won approval as defence secretary. Kash Patel, nominated
for FBI director, is likely to be approved as well. This is a
remarkable turn of events, given the shock and outcry that
followed Mr Trump’s announcements of these nominees last
year.

Mr Kennedy fumbled his confirmation hearing; Ms Gabbard

did better but faced tough questions about her past support
of Edward Snowden. Gentle persuasion, coupled with public
threats to go after Republican dissenters when they sought
re-election, seems to have got them through. J.D. Vance, the
vice-president, coaxed former colleagues such as Todd
Young, an Indiana senator and Gabbard sceptic, who
announced a yes vote after lengthy conversations with the
veep. Bill Cassidy, a Louisiana senator and Kennedy
doubter, thanked Mr Vance “for his honest counsel” when
announcing that he would vote to send Mr Kennedy forward.

Behind Mr Vance’s discreet soft touch was a menacing

public threat: “Any Republican Senator who votes against
@TulsiGabbard deserves a primary,” declared Donald Trump
junior, who rallies MAGA world to various causes. “No more
Deep State bullshit!!!!” That warning carried more weight
given that Elon Musk, the world’s richest man, has made
plain his willingness to fund primary challengers to senators
seen as undermining Mr Trump.

Mr Trump was, by his standards, relatively quiet throughout.

But he also let it be known that he might make recess
appointments, which allow a president to bypass Senate
confirmation and temporarily fill a position when Congress is
not in session. Republican leaders in the Senate would
prefer to avoid that for high-level nominees, though they are
more open to using it for lesser positions. A wavering
senator might have reasonably concluded that paying a
price for a no vote on Ms Gabbard or Mr Kennedy made no
sense if Mr Trump might appoint the nominee anyway.

The outcome leaves the Senate looking spineless. Indeed,

only one cabinet nominee—Matt Gaetz, Mr Trump’s initial
choice for attorney-general—has had to withdraw in the face
of Republican opposition. But this does not mean that Mr
Trump can expect smooth sailing for his forthcoming
domestic legislative agenda. Strong-arming individual
senators on nominations, where presidents usually receive
some deference, was well-suited for a MAGA pressure
campaign. It could focus on just a handful of senators and
Mr Trump’s preferences were clear.

Passing complex tax-and-spending legislation will be much

harder. The House of Representatives is raucous and
unpredictable. Members have already shown a willingness
to buck Mr Trump on fiscal matters: In December 38
Republicans voted against a Trump-endorsed budget deal.
Republican senators will also assert themselves more
forcefully on tax reform than on cabinet nominees.

Mr Trump is on his way to having his administration run by

his people, unconventional though some of them may be.
Approving a budget to run the government will be another
challenge entirely. Funding runs out on March 14th. ■

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Crisis management

New York City commits to

involuntary commitment
Compulsory treatment of the severely mentally ill was once
taboo. No longer
2月 06, 2025 12:15 下午 | NEW YORK

New York’s finest

WALK DOWN the passage connecting the subway on 34th

Street-Herald Square to a commuter line bound for New
Jersey and you will almost certainly see people sleeping
rough. The tunnel is a warm spot on a bitter January night. A
team of police officers and psychiatric clinicians approach
the sleepers to check how they are doing, and if they agree,
transport them to a shelter. The clinician may also
determine if they need more pointed help, whether they
want it or not.

This is part of the city’s overnight homeless-outreach

programme, Partnership Assistance for Transit
Homelessness (PATH). They offer a bed, often giving the
person a choice of borough and type of shelter. If a team
determines someone might be in severe mental distress,
and may be a danger to themselves or to others, their
consent is not needed.

Involuntary commitment laws in New York state go back

decades, but the idea fell out of favour after the closing of
asylums. Over the past few years politicians in New York
who were opposed have embraced it. Since 2022 Eric
Adams, the city’s mayor, has instructed police and first
responders to hospitalise people with severe mental illness
who are incapable of looking after themselves. Kathy
Hochul, the governor, has announced plans to “add more
teeth” to the state laws on involuntary treatment and is
promising more money. This builds on what is already
happening in New York City.

Here a culture change is under way, says Brian Stettin, the

mayor’s adviser on severe mental illness. “It’s just not going
to be acceptable anymore to walk by people who are in a
psychiatric crisis and are in desperate need of medical
care.” It takes a lot to rattle New Yorkers. But seeing
someone on the subway who is in distress, is not wearing
shoes and may also be shouting profanities at passengers
will do it. Straphangers have been shaken by attacks on the
subway: at the end of January a homeless man shoved a
woman into the path of a moving train; on New Year’s Eve
security cameras recorded a man in Manhattan being
shoved onto the tracks just as a train entered the station.
Subway riders used to stand near the platform edge to
quickly hop onto the train. Now they have taken to hugging
the walls until the train arrives. Although subway crime has
fallen and Mr Adams has deployed police to ride the rails
overnight, the perception is different.

Mr Stettin says there are relatively few people who require

involuntary care: the health department maintains three
lists of 50 people who have been identified as the most
challenging cases (he knows most by name). Police and
clinicians also haul off other people if they are deemed a
danger to themselves or others. Still, the number of people
with severe mental illness ought to be manageable, and the
programme can already point to successes.

About 150 people were taken off the subway last year under
initiatives like PATH. Some now live in permanent supportive
housing, others are in hospital, sometimes for as long as
seven months. “At this point, it’s much more about proof of
concept than huge numbers,” says Mr Stettin. Not everyone
in severe distress meets the commitment criteria: some are
in drug-induced psychosis. They will be diverted to other
programmes. The officers The Economist accompanied as
they worked with clinicians were kind to those in mental
distress. Indeed, a few sought the police officers, not the
nurse, for help.

New York is not alone in expanding involuntary treatment.

California overhauled its system in 2022, creating a new
civil-court system aimed at directing the mentally ill and
homeless to treatment and housing. In a forthcoming paper
Alex Barnard, a sociologist at New York University, found
that the number of bills related to involuntary treatment
introduced per year doubled between the 2011-12
legislative session and 2021-22. Criteria for commitment
vary by state and it is difficult without evidence to
determine which states have had better outcomes. Just
changing the rules is not enough: San Francisco is now
using laws that make involuntary commitment easier, but
there are a lot of ill people living on the streets.

Helping the mentally ill while enhancing public safety is

hard. “If your goal is to just have people not shouting on the
subway, that’s different from if your goal is to deal with the
unhoused,” says Mr Barnard. “But if your goal is a
humanitarian impulse for a very small subset of people,
then this approach makes more sense.” ■

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A rocky start

The clean-up after the LA

fires is already revealing
tensions
When a city burns, how does recovery even begin?
2月 06, 2025 09:02 上午 | Altadena

Before helping others

A HAZMAT TEAM, on their hands and knees, sifts through

piles of ash slowly, methodically. They poke and prod
mounds of debris with a shovel. They were tasked by the
Environmental Protection Agency (EPA) to examine what is
left of Altadena, a neighbourhood destroyed by the fires that
razed parts of Los Angeles County last month. The crew
wears jumpsuits and gas masks while they look for
pesticides, paint cans and propane tanks—anything toxic or
prone to explode. They avoid walking near chimneys, which
are often the only things left standing on incinerated lots.
They could topple over at any minute. To the north, the
charred mountains loom.

The fires, which killed at least 29 people, are at last fully

contained. Before rebuilding, there is the question of what
to do with the wreckage left behind. The scale of the task is
daunting: more than 16,000 buildings were destroyed
across an area larger than San Francisco. Clean-up has just
begun, and it could be months before any new construction
starts. But the recovery is already revealing tensions
between Angelenos and their government, and is sparking
questions about how much the fires will or won’t change
America’s second-largest city.

First comes debris removal. The Trump administration

decreed that the EPA needs to finish removing hazardous
waste in 30 days, an unprecedented pace for fires of this
size. Time isn’t the only challenge. Some houses are hard to
get to, especially in the canyons of Pacific Palisades, a
neighbourhood that burned. Only one big road serves the
area: the Pacific Coast Highway. Lorries hauling debris,
police cars and power utilities have to work around LA’s
infamous traffic.

Tara Fitzgerald, who is overseeing the EPA’s clean-up, says

that because the fires burned through urban areas, it was
tricky to find a large place to gather all that hazardous
waste before shipping it to landfills, scrap yards or recycling
centres around the country. People who live near those
waste-collection sites aren’t too happy about their new
neighbours. Then there is the waste itself. Some of the
biggest hazards among the debris are lithium-ion batteries
used in electric vehicles (EVs). The EPA first found large
numbers of burned EVs in Lahaina, a Hawaiian town that
was reduced to ashes in 2023. They were shipped off Maui
and then trucked to a battery recycler near Reno, Nevada.
Some of LA’s waste might end up in the same spot. When a
battery heats up and expands, explains Harry Allen, the
EPA’s on-scene co-ordinator, “there’s a jet fire like a little
roman candle.” He shows your correspondent a video of one
of his teams gingerly towing the skeleton of a Tesla.

Next comes the rest of the debris: the husks of washing

machines, the chimneys standing sentry over the remains,
and heaps of ash and rubble. The Army Corps of Engineers
initially told Angelenos that clean-up would take 18 months.
Residents revolted, and they were joined by an unlikely ally:
President Donald Trump.

The fire next time

In an awkward discussion with local leaders during his first

week in office, he lambasted LA’s mayor, Karen Bass, for
moving too slowly. Although many Angelenos welcomed his
visit (and his impatience), Mr Trump’s overall response to
the fires has been chaotic. The same executive order that
expedited waste removal also directed federal agencies to
“maximise water delivery” from reservoirs in the Central
Valley, which, rather than helping LA, nearly resulted in the
flooding of farmland during the state’s wet season.

While some things about the LA fires resemble what

happened in Lahaina, the better comparison is to the Camp
Fire, which wiped out the northern California town of
Paradise in 2018. “Wind conditions, no rain, no ability to get
aircraft up to fight the fire. It was a carbon copy of what
happened to us,” says Steve Crowder, the mayor of
Paradise. He has been fielding calls from LA asking for
advice. Mr Crowder understands better than most the need
for speed, but warns that rebuilding Paradise may take 20
years. Officials there reckon they went from erecting fewer
than ten homes a year to more than 500. Five years after
the fire, the town has recovered only about 40% of its
population.

LA County, home to nearly 10m people, has far more

resources than Paradise. Still, the need for workers and
speedy permits (not something California does well) will be
enormous. The county wants to create a fast process for
those who want to rebuild exactly what they lost and a
slower lane for everyone else. Local officials also plan to ask
the state to allow them to ignore recently-passed laws to
increase housing density, arguing that they will just slow
down rebuilding. YIMBYs say these moves would prioritise
rebuilding single-family homes in fire-prone areas. “There’s
political pressure to be seen as doing something,” says
Chris Elmendorf of the University of California, Davis. Fire
victims deserve haste and help. “But I don’t see the
legislature just saying, ‘OK, you don’t have to comply with
any state housing law.’”

In the past, cities have used disasters to remake

themselves. After Chicago burned in 1871, buildings got
taller and less flammable. Insurers demanded stricter fire
codes. Housing in San Francisco was built more densely
after the earthquake of 1906 and the resulting fires. More
than a century later, California’s government is fragmented
and sclerotic, making sweeping change hard. A lack of
imagination won’t help.■

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Lexington

Donald Trump is turning

payback into policy
And setting new, dangerous precedents for the American
presidency
2月 06, 2025 12:24 下午

DURING A DEBATE last summer, when Donald Trump was

asked what he meant by saying that as president he would
have every right to “go after” his political opponents, he
replied, “My retribution is going to be success.” His first few
weeks back in the job have confirmed what many of his
supporters and critics assumed he had in mind: that in office
he would define “success” to include retribution. Mr Trump
is not just returning to the ways of American presidents
before the Watergate scandal, which led to reforms meant
to insulate the Justice Department and FBI from presidential
pressure. Those earlier presidents tended to be furtive in
their use of government to punish adversaries: Richard
Nixon’s “enemies list” was a secret.

Mr Trump is up to something new. He not only wants to

punish critics and officials, down to the lowliest bureaucrats,
who do not embrace him and his priorities. He wants all
America to know he is doing it. Revenge, for him, is best
served publicly. His new aides are pulling down official
portraits of former aides who crossed him, firing prosecutors
and FBI agents who investigated him and demanding the
names of thousands more agents involved in the inquiry
into the attack on the Capitol on January 6th 2021. As the
president said recently, “I have certain hatreds of people.”

Mr Trump’s most shocking punishment has been to strip

government protection from former officials facing death
threats from Iran for supporting his own first-term policy.
One of them, John Bolton, who served as Mr Trump’s
national security adviser, says he has resorted to “private
measures” for protection, having been informed just before
the inauguration that the Iranian threat is as active as ever
against him and others. “That’s Trump,” Mr Bolton says, by
way of explanation. “It’s all transactional and seen through
the prism: how does this benefit Donald Trump?”

When Mr Trump was asked by a reporter if he would take

any responsibility if something happened to Mr Bolton and
others denied security, he responded, “I think that,
certainly, I would not take responsibility.” But Mr Bolton says
“The blood would be on his hands,” and the president would
almost certainly have to take military action against Iran.
For Mr Bolton this would be a somewhat pyrrhic outcome,
since he supported such action during Mr Trump’s first term.
In “The Room Where it Happened”, his memoir of working in
the Trump White House, he calls Mr Trump’s last-minute
decision to cancel a planned reprisal strike on Iran “the
most irrational thing I ever witnessed any president do”.

Mr Bolton’s book is searing even by the molten standards of

the Trump tell-all genre. He describes Mr Trump as unfit for
the office, easily manipulated by the flattery of foreign
leaders·, and childishly unfocused, sidetracking national-
security meetings with looping digressions about wanting to
give citizenship to white South African farmers or to replace
electronic aircraft-carrier systems for lifting planes with
steam-powered ones. “In no arena of American affairs has
the Trump aberration been more destructive than in national
security,” Mr Bolton writes. One can see why Mr Trump
might be annoyed.

As Mr Bolton notes, this is less true of another former official

whose government protection Mr Trump withdrew, Mike
Pompeo, once Mr Trump’s secretary of state. Mr Pompeo
weighed running against Mr Trump, but then fell back in line
and gave a speech praising his foreign-policy record at the
Republican convention last summer. That now makes him an
even more cautionary tale for those who might risk irking Mr
Trump: his move against Mr Pompeo sends a clearer signal,
as Mr Bolton puts it, “that there’s no limit to how vindictive
Trump can be”.

This is why, in the “my-retribution-is-going-to-be-success”

tradition, assurances by Mr Trump’s appointees about the
limits to vengeance should be taken with a grain of salt.
Pam Bondi, Mr Trump’s attorney-general, told senators
during her confirmation hearings that she would “ensure
that all laws are followed” and would not “target people
simply because of their political affiliation”. If she pursues
officials who prosecuted Mr Trump, neither statement could
be called a lie if she thinks they may have broken the law,
as she has suggested in the past. Kash Patel, Mr Trump’s
pick for director of the FBI, pledged during his hearings that
“no one that did not break the law will be investigated”—a
standard that implies he can determine guilt in advance,
and one that also supplies him with plenty of running room
if he suspects wrongdoing. And he sure does: “Democrats in
power are not held accountable for their crimes,” he
complains in “Government Gangsters”, his own memoir.

Gotta serve somebody in particular

The flipside to punishing critics, however irrelevant they

have become, is rewarding loyalists, however dodgy. Hence
Mr Trump’s pardons even for those January 6th rioters who
attacked police officers. The Justice Department has also
abandoned the prosecution of a former Republican
congressman (Mr Trump called it partisan). By fighting so
hard for nominees like Tulsi Gabbard and Robert F. Kennedy
junior·, Mr Trump is demonstrating how far he will go to
reward even manifestly flawed allies, provided their support
for him is unqualified.

Mr Bolton believes Mr Trump’s denial of security for former

officials will chill policymaking. More broadly, Mr Trump is
creating precedents and even incentives for future
presidents to conduct wide-ranging reprisals of their own
and to flush the bureaucracy of suspected non-believers.
Maybe, over time, this will enhance political accountability
and lead to better service from the bureaucracy for the
citizens. It is more likely to turn taking a government job at
any level into a sucker’s bet. For now, if Mr Trump has his
way, it will make serving in government mean serving
him. ■
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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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The Americas
How Mexico and Canada handled Trump’s
tariff threat
Round one :: Officials in both countries are scrambling to find more
offerings to appease America’s protean president

The Trump tariff saga offers Canada’s

Liberals a lifeline
A chink of light :: Suddenly, Canadians have someone to hate even more
than Justin Trudeau

Ecuador chooses a leader amid murder,

blackouts and stagnation
A record of violence :: The front-runner, Daniel Noboa, is a billionaire heir
with links to Donald Trump’s circle

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Round one

How Mexico and Canada

handled Trump’s tariff
threat
Officials in both countries are scrambling to find more
offerings to appease America’s protean president
2月 06, 2025 09:03 上午 | Mexico City and Ottawa

CLAUDIA SHEINBAUM, Mexico’s president, beamed as she

announced on February 3rd that Donald Trump had agreed
to delay imposing tariffs of 25% on exports from her
country. The levy had been due to go into effect at midnight.
“He asked how long I wanted; I said, ‘forever’,” she
recounted, to laughter. She settled for a month. Hours later
Justin Trudeau, Canada’s prime minister, announced a
similar reprieve. (An additional tariff on China of 10%, on
top of those already in place, went ahead.) A North
American economic crisis has been narrowly avoided, for
now.

Ms Sheinbaum (pictured) won praise at home and abroad for

her handling of her mercurial American counterpart.
Throughout the confrontation her demeanour was respectful
but firm. When Mr Trump ordered tariffs on February 1st, she
told her team to prepare countermeasures, but did not
publicise the details.

Mr Trudeau took a more defiant stance. Faced with a 25%

tariff on all goods but oil, which would be subject to 10%, Mr
Trudeau announced retaliatory tariffs on C$155bn ($106bn)
of imports from America. His negotiation for a stay took two
calls, during which he was reportedly told that Canada could
avoid tariffs by becoming the 51st member of the United
States.

Mexico and Canada both agreed to increase security at their

borders with the United States to address Mr Trump’s
concerns about fentanyl trafficking and immigration. Ms
Sheinbaum pledged to deploy 10,000 National Guard troops
to Mexico’s northern border, adding to the 10,000 already
stationed there. Mexican officials will work with their
American counterparts on trade and security, as they
already do on migration. Mr Trudeau reheated a border-
security package worth C$1.3bn that was announced in
December, and promised to appoint a “fentanyl czar”.

The moves were pragmatic. Some 80% of Mexico’s exports

go to the United States. A 25% tariff could shrink its
economy by 2-4% in 2025. Canada, which sends 77% of its
exported goods south, would be only slightly less affected.
But the tariff pause had as much to do with Mr Trump’s
whim as with any real capitulation by Mexico and Canada.
American businesses, in particular the auto industry, which
would have been hard hit, lobbied aggressively.

Ms Sheinbaum had for months signalled willingness to

deepen bilateral security co-operation. Mexican authorities
have seized 20m doses of fentanyl since her term began in
October. She claims to have convinced Mr Trump to consider
cracking down on American guns flowing south, and to learn
from Mexico’s public-awareness campaign about the
dangers of consuming fentanyl. (Mr Trump omitted these
points from his account of their “very friendly“
conversation.) Mr Trudeau, for his part, had already
deployed additional police, drones and dogs to the border.

Ms Sheinbaum says she is confident that she can produce

further results to keep Mr Trump’s mood placid. The
authorities is likely to step up fentanyl raids and migrant
crackdowns, and accept non-Mexican deportees. But
substantive results on such complex issues will take more
than a month, says Fernanda Caso, a political analyst. In the
meantime the Trump team will probably be examining
Mexico’s willingness to co-operate in practice, and the
amount of money assigned to Ms Sheinbaum’s
commitments.

Canada faces a tricky path, too. Neither fentanyl trafficking

nor irregular migration is a major issue, despite what Mr
Trump says. Nonetheless Canada’s government says its new
fentanyl czar will work with American officials in “combating
fentanyl”, that it will improve co-ordination with the United
States, and invest another C$200m in anti-drug efforts.
Canada is to follow the United States’ lead in classifying
Mexican drug gangs as terrorist organisations. Mr Trudeau
steps down as prime minister on March 9th, having
announced his resignation· last month.

Both countries are dispatching officials to Washington to

push back against Mr Trump’s economic grievances—
starting with trade deficits. If imports of Canadian oil are
excluded, for instance, the United States runs a trade
surplus with its northern neighbour. Yet Mr Trump’s core
beliefs are harder to counter. He thinks tariffs will generate
revenue and force firms to make more products in the
United States. His claim on February 1st that Mexico’s
government has an “intolerable alliance” with drug gangs
that operate in the country—which Ms Sheinbaum has called
“slander”— may yet resurface. Even if Ms Sheinbaum wants
to confront the collusion which often exists at local-
government level, doing so will be hard.

Neither Mexican nor Canadian officials are resting easy. Both

think it likely that Mr Trump will at some point follow through
and impose tariffs, at least on a subset of imports. They are
certain that he will use tariffs as leverage during a
forthcoming renegotiation of the United States-Mexico-
Canada free-trade agreement (USMCA). Mr Trump signed
the USMCA in 2020, but he always maintained that he
wanted it scrapped. Now he wants to renegotiate it ahead of
the scheduled review in 2026. The uncertainty alone will
stifle investment.

Now is a “very good moment” to strengthen the region’s

trade and economic security, says Luis Rosendo, Mexico’s
undersecretary for foreign trade. Officials and
businesspeople across North America may draw a different
conclusion. Mr Trump’s propensity to bully allies and gamble
with economic stability makes the United States an
unreliable partner. Even as they seek to stave off American
tariffs, they will also be looking for ways to reduce their
dependence on their powerful, volatile neighbour. ■

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A chink of light

The Trump tariff saga

offers Canada’s Liberals a
lifeline
Suddenly, Canadians have someone to hate even more than
Justin Trudeau
2月 06, 2025 09:02 上午 | Ottawa

WHEN JUSTIN TRUDEAU announced his resignation as prime

minister on January 6th, his Liberal Party was as unpopular
as it has ever been. A historic drubbing at the hands of
Pierre Poilievre’s Conservatives in the next general election
looked certain. One month later the Liberals are showing
signs of life, thanks in part to a politician Canadians dislike
even more than Mr Trudeau: Donald Trump.

The American president’s erratic efforts to levy tariffs on

Canadian exports have triggered a surge of patriotism in
Canada. Holidays in the United States have been cancelled
and the American national anthem booed before hockey
games. Shops have emptied their shelves of American
booze, replacing it with placards that read “Buy Canadian
Instead”.

Mr Trump’s offer to hold off on tariffs if Canadians agreed to

their country becoming the 51st state only focused minds
further. Some 90% are not interested in being absorbed.
Many got angry. “The mood of the country has changed
from one of confusion, to one of betrayal to one of resolve,”
Mark Carney, the front-runner for the Liberal leadership, told
CNN on February 3rd.

An election that was set to turn on the fulcrum of fatigue

and frustration with Mr Trudeau, his unpopular carbon tax
and his languid response to a housing crisis will now almost
certainly be decided by voters assessing which candidate
can stare down an American president who merely
postponed the threat of tariffs for 30 days on February 4th.
Mr Poilievre, who had mastered the sport of Liberal-bashing,
has had to change tactics. This sudden coalescence of anti-
Trump unity, coupled with Mr Trudeau’s imminent departure,
has some Liberal supporters daring to dream that they
might pull off one of the greatest comebacks in Canadian
political history.
For now, reverie is the appropriate mode for such thinking.
Surveys still suggest that Mr Poilievre and his Conservative
Party would win a majority in an election that could be held
as soon as this spring. But the threat of an extinction-level
reckoning for the Liberals has abated. Polls show the party
picking up modest support (see chart). Mr Trudeau’s exit
seems to have suddenly expanded the pool of potential
Liberal voters. “That shook loose people who wouldn’t vote
for Liberals because of Trudeau,” said Éric Grenier, a polling
analyst. Mr Grenier’s aggregate of polls compiled for the
Canadian Broadcasting Corporation (CBC) has Liberal
support climbing to 23.4%, shrinking the Conservatives’
lead from 24 points to 20.

If the direction of Mr Poilievre’s rhetorical fire is any guide,

the Liberal most likely to benefit from all of this is Mr Carney.
(The other leading Liberal candidate, Chrystia Freeland, is
suffering from her decade-long political connection with Mr
Trudeau.) The Conservative leader now spends much of his
time attacking the former governor of the Bank of England,
who will become prime minister if he wins the race to lead
the Liberals. That race will be decided in a party vote on
March 9th.

Read Chrystia Freeland’s guest essay on the threat

Donald Trump poses to Canada and global trade.

Allan Gregg, who was the pollster for the Conservative Party
in 1993, when an election removed it from power and
reduced its representation in Parliament from 156 seats to
two, says that Mr Carney offers the Liberals a chance to
avoid a similar fate. Politicians and politics may be
polarised, but some 40% of voters are not, Mr Gregg
believes.

He thinks Canadians are looking for a practical centrist to

the right of Mr Trudeau who can confront the threat Mr
Trump poses to a country that sends 77% of all goods it
exports to the United States. Mr Carney, who led central
banks in Britain during Brexit and in Canada during the
financial crisis of 2008, looks like that sort of person. “What
they want is Dad,” says Mr Gregg. “A guy who is definitive
and authoritative.” That kind of leader could run Mr Poilievre
and the Conservatives close. His research shows that voters
are not strongly attached to any party.

How likely is a Liberal comeback? Modelling by the CBC

gives the party just a 1% chance of winning the next
general election. Mr Poilievre, who has disappeared from the
headlines during the tariff crisis, has quickly started to
emphasise how he would confront Mr Trump. Says Mr Gregg:
“The best campaign slogan ever written is still ‘time for a
change’.” ■

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A record of violence

Ecuador chooses a leader

amid murder, blackouts
and stagnation
The front-runner, Daniel Noboa, is a billionaire heir with links
to Donald Trump’s circle
2月 06, 2025 12:17 下午 | Quito

To the dark side and back

RUNNING ECUADOR seems an unenviable job. In recent

years it has become the most violent state in mainland Latin
America. Droughts have caused blackouts. Economic growth
is anaemic. Even so, 16 presidential candidates are vying
for Ecuadorians’ vote when they go to the polls on February
9th. (They will also select all 151 members of their
legislature.)

Only two have any chance of winning. One is the current

president, Daniel Noboa, the 37-year-old scion of a banana
empire. He has been in power since he won a snap election
in October 2023. His main challenger is Luisa González, a
47-year-old leftist lawyer who also ran in 2023. If neither
candidate wins a majority—or more than 40% of votes with
a ten-point lead—a run-off will be held in April.
Polls indicate that Mr Noboa will win, perhaps even in the
first round. Yet surprises could still happen: at least a
quarter of voters are undecided and many do not even know
when the election is. At stake is the future of a country
which is worryingly close to falling into the grip of drug
gangs, and which has become a major source of migrants to
the United States.
In his short time in office, Mr Noboa has faced more
daunting challenges than most leaders do in a full term.
Weeks after he assumed power, gangs orchestrated a show
of force, killing prison guards, setting fire to buses and
taking television presenters hostage live on air. Mr Noboa
declared an “internal armed conflict”, sending the army
onto the streets and into prisons. Thousands of people were
arrested.

Results looked promising at first: murders per 100,000

people fell from around 46 in 2023 to around 39 last year.
Yet killings started ticking up again in the middle of 2024,
and in January they reached their highest monthly level on
record.

The cost of the use of force

The abuse of state power is becoming more common, and

more gruesome. In December four children aged 11 to 15
went missing on their way home from a football game. The
army initially denied involvement, but surveillance footage
obtained and broadcast by local TV stations showed soldiers
forcing two of the children into a truck. The children’s
burned bodies were later found near an air-force base.
Sixteen soldiers are being investigated. “This government
lacks respect for the people, the security forces do whatever
they want,” says Maria (not her real name), at a rally in
Quito, the capital.

An environmental crisis has compounded problems. Severe

drought last year curbed the output of Ecuador’s
hydroelectric dams, leading to blackouts that lasted up to
14 hours. The government has had some economic success.
Mr Noboa has raised VAT from 12% to 15% and reduced
costly fuel subsidies while avoiding the usual protests that
accompany such reforms. He also signed a deal with the IMF
that will give the country access to $4bn in loans over four
years. On February 4th the government agreed the terms of
a free-trade deal with Canada.

Many of Mr Noboa’s rivals have suffered. In 2023 one of his

main challengers was Jan Topić, a tough-on-crime
businessman and former foreign legionnaire. In November
an electoral court disqualified Mr Topić from running in this
election on the grounds that he is a shareholder in
companies with government contracts. The same electoral
court has disqualified several major political groups from
fielding legislative candidates, allegedly for administrative
and procedural violations. Teneo, a consultancy in London,
warns of “authoritarian creep”.

Mr Noboa has surrounded himself with relatives and

buddies. A lawyer who has worked for a company owned by
his wife is a minister. Several other cabinet roles are held by
friends. His mother is a leading candidate for the legislature.
Though nepotism is not unusual in Latin America, Teneo’s
Nicholas Watson warns that it could eventually cause
“image problems”.

For now though, his image is perhaps Mr Noboa’s greatest

strength. He and his wife, a fitness influencer, are social-
media virtuosos. His TikTok and Instagram accounts, which
boast millions of followers, are littered with posts of him
wearing dark sunglasses and bulletproof vests, working out
in sleeveless tops and dancing with voters. “He sells his and
his wife’s lifestyle, they are aspirational figures,” says
Sebastián Hurtado, a political analyst in Quito.

If re-elected Mr Noboa will have powerful allies. He was one

of just a few foreign leaders invited to Donald Trump’s
inauguration. He probably has his links to Robert F. Kennedy
junior, Mr Trump’s nominee for US secretary of health, to
thank for that. Mr Kennedy is a friend of Mr Noboa’s father,
and has said that Mr Noboa was “raised in my house”. He is
reportedly the godfather of Mr Noboa’s youngest brother.

Depending on Donald

Yet if Ecuador does not solve its security issues, the

relationship with Mr Trump could sour. As violence has
soared, so has migration. Between 2012 and 2018 an
average of 3,600 Ecuadorians were detained annually at the
southern border of the United States. In 2024 some 122,000
were caught making the crossing. Ecuador also signed a
free-trade agreement with China in 2023. Chinese-made
cars dominate Quito’s streets. All this could rile Mr Trump.

For now Mr Noboa has the support of the markets, a

connection to the hemisphere’s most powerful president
and tolerance from Ecuadorians who have stomached
difficult reforms. Four more years in power could help him
consolidate his gains—or “create time for the government to
discredit itself”, warns Mr Hurtado. ■

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complex region.

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Middle East & Africa

Donald Trump’s eye-popping plan to make
Gaza American
From MAGA to Gaza :: Is his call to evict Palestinians from the “hell hole” an
imperial fantasy or a negotiating ploy?

Warlord, jihadi or nation-builder?

From rebel to ruler :: An interview with Syria’s president, Ahmed al-Sharaa

Why Islamists in the Arab world speak the

language of free markets
Of Mecca and Mammon :: The Middle East’s most religious politicians are
often its most capitalist as well

France’s bitter retreat from west Africa

The long au revoir :: The danger is a security void now opens up

A leader of Congo’s rebels vows to fight on

An interview with a Congolese rebel :: It is not clear that a recent truce in
Congo will hold

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From MAGA to Gaza

Donald Trump’s eye-

popping plan to make
Gaza American
Is his call to evict Palestinians from the “hell hole” an
imperial fantasy or a negotiating ploy?
2月 06, 2025 09:02 上午 | JERUSALEM AND WASHINGTON, DC

GAZANS HAVE lived through 15 months of war between

Hamas and Israel. They have been repeatedly displaced.
Tens of thousands have been killed. But they could not have
predicted President Donald Trump’s astonishing plan to end
their misery: the eviction of all Palestinians and a full
American takeover to turn Gaza into the “riviera of the
Middle East”.

Arab governments were alarmed, worried such a move

would cause instability. Britain, France and Germany
condemned the proposal, and reaffirmed their support for a
“two-state solution”, ie, the creation of a Palestinian state
next to Israel. The UN warned deportations would be
tantamount to ethnic cleansing, and would breach
international law. In America some Republicans hailed the
president’s plan as a stroke of genius; others looked
askance. A far-right Israeli minister rejoiced, quoting a
Biblical psalm: “The Lord hath done great things for us;
whereof we are glad.”

Read all our coverage of the war in the Middle East

Mr Trump hurled his bolt after a meeting at the White House

with Binyamin Netanyahu, Israel’s prime minister. The
president said America would “do a job” with the Gaza Strip.
“We’ll own it and be responsible for dismantling all of the
dangerous unexploded bombs and other weapons on the
site.” America, he added, would take “a long-term
ownership position”. Asked about sending American troops,
Mr Trump replied, “If it’s necessary, we’ll do that.”

The president said he was entirely serious: “Everybody I’ve

spoken to loves the idea of the United States owning that
piece of land, developing and creating thousands of jobs
with something that will be magnificent.” Palestinians, he
said, could not live in the “a demolition site” of Gaza. Better
for other countries to “open their hearts”, take them in and
resettle them in new communities. Once rebuilt, people
“from all over the world” would live in Gaza, including some
Palestinians.
Mr Netanyahu seemed in equal parts delighted and
nonplussed. He did not entertain the proposal in any detail,
but praised Mr Trump and noted vaguely: “It’s worth paying
attention to this…it’s something that could change history.”

To some Americans the plan looked like more imperial fancy

—akin to Mr Trump’s provocative talk of buying Greenland—
except more dangerous. Some worried that he had forgotten
America’s bloody misadventures in Afghanistan and Iraq,
which he has long decried. Others wondered whether, as
with his threats of tariffs, Mr Trump set out an outlandish
position to gain negotiating leverage.

Amid the tumult, the White House soon reversed course.

The press secretary said any removal of Palestinians would
be temporary, and the president did not plan to deploy
troops or spend taxpayer dollars in Gaza. Michael Waltz, the
national security adviser, said the plan served to push “the
entire region to come with their own solutions.” Leaks
suggested Mr Trump had talked about his idea for weeks,
but officials had made no plans for it.

Most proposals for peace between the Israelis and

Palestinians, including one from Mr Trump during his first
term, have involved the formal partition of the land into a
Palestinian state and a Jewish one. These have often
provoked more violence.“You can’t keep doing the same
mistake over and over again,” Mr Trump complained. “Gaza
is a hell hole right now.”

Yet the idea of a Western colonial enterprise in Palestine has

not been considered since Britain gave up the mandate for
the territory in 1948 after years of violence. America refused
to take up mandates in the Middle East after the fall of the
Ottoman empire in the first world war.
Mr Trump appears to have plucked disparate ideas from the
cauldron of the Middle East: the removal of Hamas from
Gaza demanded by Mr Netanyahu; the eviction of
Palestinians sought by his far-right allies; old dreams of
turning Gaza into another Dubai; the hope of Arab
petrodollars for its reconstruction; and calls for America to
lead a peacekeeping force. To all this Mr Trump has also
added the real-estate mogul’s zeal for redevelopment.

Mr Netanyahu’s team had expected Mr Trump to urge Israel

to start the talks for the second phase of its truce with
Hamas, involving a permanent cessation of hostilities and a
full withdrawal of Israeli forces. The third phase would
involve the rebuilding of Gaza. All this would prepare the
way for Saudi Arabia to normalise relations with Israel, in
exchange for progress towards a Palestinian state, thereby
forging a grand coalition of America, Israel and pro-Western
Arab regimes. Mr Trump’s idea that America would carve out
Gaza for itself was beyond the Israelis’ imagination.

Mr Netanyahu knows well the difficulties (and illegality) of

such a plan. Gazans would not volunteer for another nakba,
or “catastrophe”, the name Palestinians give to their
displacement during the birth of Israel in 1948. Arab
leaders, though privately indifferent to the plight of
Palestinians, cannot be seen to connive in pushing them out
of their homeland. And no Arab country wants to take in
many more disgruntled Palestinians. Egypt and Jordan have
refused. Mr Trump shrugged. “They say they’re not going to
accept. I say they will.”

Mr Netanyahu seems willing to play along, both to

strengthen bonds with Mr Trump and to exploit his plan for
domestic advantage. The prime minister’s far-right allies are
threatening to bring down his government if he presses
ahead with a full ceasefire. Mr Netanyahu has tried to buy
himself more time by continuing to insist on total victory in
Gaza. But that opens a potentially damaging gap with Mr
Trump, who expressed confidence that the ceasefire deal
will be implemented fully. The president’s Gaza plan may
throw the prime minister a lifeline. The far-right will
probably not bring down the government and jeopardise its
dream of resettling Gaza.

That threat explains Saudi Arabia’s prompt riposte, which

said it would “not establish diplomatic relations with Israel”
without the creation of a Palestinian state. And yet might
the Saudis accept a deal that forestalls Mr Trump’s plan and
saves Palestinians from mass expulsion? Saudi officials insist
they will not.

Arab leaders are wary of antagonising the president. But if

Mr Trump is serious about his latest proposal, a forceful
condemnation may follow. Mr Trump has built his success on
the idea of “Make America Great Again”. His devotees
probably did not sign up for “Make Gaza American”. ■

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consequential part of the world.

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From rebel to ruler

Warlord, jihadi or nation-

builder?
An interview with Syria’s president, Ahmed al-Sharaa
2月 06, 2025 09:02 上午 | DAMASCUS

From rebel to ruler

IN HIS FIRST interview since assuming the Syrian presidency

on January 29th, Ahmed al-Sharaa sat down with The
Economist and laid out his vision for rebuilding Syria’s
smashed and bankrupt state. Forty-eight hours into his
tenure, the former al-Qaeda leader in Syria outlined a
timetable for taking Syria in “the direction of” democracy
and promised elections. Many outsiders hoped that his rise
would mark Syria’s strategic shift out of the clutches of Iran
and Russia and into the Western fold. In fact, he spoke
harshly about America’s “illegal” military presence in Syria,
welcomed talks with Russia about its military bases and
warned Israel that its advance into Syria since the fall of the
Assad regime “will cause a lot of trouble in the future”.

There was little sign of the inclusivity that he mentioned so

enthusiastically. He was surrounded by a small band of
advisers mostly drawn from his Idlib emirate. Otherwise the
cavernous palace, six times the size of the White House,
was empty.

Read the transcript of our interview with Ahmed al-

Sharaa

Mr Sharaa has a way of appearing to be all things to all

men. When he announced his presidency two nights earlier,
he wore military fatigues as he stood before rebel chiefs.
The next evening he spoke to Syrians as a civilian in a black
suit and green tie. For The Economist, he chose a hipster
look: a cream jacket over a black shirt buttoned to the neck
and slim trousers. He might have been heading for a Friday
night out on the town. He mentioned his attire three times,
perhaps because he knows that observers will read a lot into
it.

His messages seem tailored for each audience. But the

constant changes make a man who set up suicide-bombings
for Islamic State and led al-Qaeda in Syria hard to measure.
He is an interim president, but his vision is long-term. Many
of his undertakings, like a constitution and elections, were
pushed “three or four years” into the future. For now he is
intent on consolidating the power he has grabbed.

First is the question of capacity. He wants to re-establish

central authority over Syria’s fractured state and, Kurds
aside, claims to have secured the agreement of “all” Syria’s
militias to join a new Syrian army. All militias, including his
own, Hayat Tahrir al-Sham (HTS), he says, have been
dissolved. “Anyone who keeps a weapon outside the control
of the state” would be subject to unspecified “measures”.
He ruled out a federal arrangement to deal with Kurdish
opposition. But the projection of a strongman was belied by
the absence of palace staff. There was no one on hand to
serve coffee. His foreign minister and fellow former jihadist,
Asaad al-Shaibani, sat at his side directing proceedings.

On the ground his 30,000-man force is stretched just as

thin. As he notes, “a vast area is still out of the control of
the Syrian state”. None of the rebel commanders assembled
for his stage-managed inauguration clapped. “We also
sacrificed for a decade,” says a rebel commander, who
fumes that Mr Sharaa took charge of what had been a
collective effort to overthrow the Assads. Rival militias
control most of the country’s borders. Many of their chiefs
are reluctant to surrender their weapons, fiefs or command.
The Kurds, who control Syria’s prime oilfields, farmland and
the dam that provides much of its electricity in the east,
refuse to recognise his rule.

Mr Sharaa is also struggling to curb the jihadists who

hitherto formed his base. To date, a bloodbath has been
averted. But the information ministry has restricted access
for foreign journalists in areas where revenge killings
against Alawites are spiking. Mr Sharaa dismisses talk of a
resurgent Islamic State (IS). But he admits that his forces
have foiled “many attempted attacks” since he took power.
IS cells are believed to be returning, soaking up growing
dissent.

He has promises to keep

Second is the question of whether he actually intends to

fulfil his promises—or at least try. In our interview, Mr
Sharaa used the word “democracy” publicly for the first
time since taking power. “If democracy means that the
people decide who will rule them and who represents them
in the parliament,” he said, somewhat half-heartedly, “then
yes, Syria is going in this direction.” He insisted he would
replace his cabinet of loyalists from Idlib in a month with a
“broader and diverse government with participation from all
segments of society”. He said that ministers and members
of a new parliament would be chosen according to
“competency, not ethnicity or religion”, raising the prospect
that for the first time he might appoint some non-Sunnis. He
would also hold “free and fair” elections and complete the
drafting of a constitution together with the UN after “at least
three to four years”. For the first time, he promised
presidential elections.

But Mr Sharaa is juggling many constituencies, including his

jihadist base and a largely conservative Sunni Arab majority.
If he deprives them of the spoils of war and the Islamic state
he promised when he was running Idlib, he risks a backlash.
He has set a room in the presidential palace aside for prayer
and removed the ashtrays from the coffee tables, in keeping
with his puritanical strain of Islam. (He has also grown his
moustache, which is at odds with it.)

In our interview he palmed off the issue of sharia, Islamic

law, onto one of his appointed bodies. If the interim
government approves sharia, he said, “my role is to enforce
it; and if they do not approve it, my role is to enforce their
decision, as well”. The formation of political parties was
another matter for the constitutional committee. He was
also non-committal on whether women would have equal
rights and access to power. There would be a “wide labour
market” for them, he said.

That is unlikely to satisfy Syria’s religious minorities,

particularly the Alawites, who held sway under the Assads.
When he speaks of democracy, many fear he means Sunni
Arab majoritarian rule. (“In our region there are various
definitions of democracy,” he says.) Presidential elections
could look like the plebiscites of other Arab security
regimes. And he is intent on gutting what remains of the
battered but still functioning state he inherited. He has
disbanded the Baath party, security apparatuses and much
of the civil service.

Mr Sharaa’s biggest challenge is the economy. Power flickers

for an hour a day. The scale of reconstruction is
unfathomable. The country has a massive liquidity crisis and
lacks the cash to pay salaries even at pitiful rates. “Without
economic development we will return to a state of chaos,”
he warns.

Recovery can come only with help from abroad. On January

30th he welcomed Qatar’s emir, the first head of state to
visit since Mr Assad’s ousting. On February 2nd he made his
first trip abroad as president, to Saudi Arabia, where he was
born. He singled out both as potential investors in “big…
projects”. But he also needs America, whose sanctions, he
said, pose “the gravest risk” to his plans. He praised Donald
Trump for “seeking peace in the region” and spoke of
restoring diplomatic relations “in the coming days”. He has
also tried to improve Syria’s regional standing by vowing to
halt the export of captagon, an amphetamine mass-
produced in Syria under the Assads, and to bring foreign
fighters under the government’s control. He said he had
“pledged” to Turkey that Syria would not be a base for the
PKK, the Kurdish Workers’ Party which backs the Kurdish
administration in the north-east.

But Mr Sharaa carries the millstone of his designation and

that of his movement as terrorists. “My status is the
president of Syria, not HTS,” he protests. But many in the
region are outraged at his appointment of HTS cadres to top
positions and of foreign jihadists to army posts. There are
signs that the frustration could be denting his initial
courtship with the West. He contrasted Russia’s readiness
to negotiate a deal on its military bases with America’s
reluctance and called the presence of American forces in
Syria “illegal”.

He also said Israel “needed to retreat” from land it had

occupied beyond the armistice lines of 1974 after Mr
Assad’s fall. Israel’s displacement of Palestinians was “a big
crime”. He said “actually we want peace with all parties”
but noted that as long as Israel occupied the Golan, a
mountain plateau it conquered in 1967, any deal would be
premature. And it would require “wide public opinion”.

For now, under Mr Sharaa, Syria is the calmest it has been

since the Arab spring in 2011. The country is breathing
more freely after half a century of totalitarian rule. But its
new president has a long way to go to prove that he is
inclusive, that his jihadist worldview is behind him and that
he is Syria’s best hope of a fresh start. ■

Editor’s note: This article has been amended to clarify

Ahmed al-Sharaa’s statement on the enforcement of sharia.

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Of Mecca and Mammon

Why Islamists in the Arab

world speak the language
of free markets
The Middle East’s most religious politicians are often its
most capitalist as well
2月 06, 2025 09:02 上午 | DUBAI

Preaching to the choir

A POLITICIAN PROMISED to open his poor country for foreign

investment and wean it off aid, while Tony Blair nodded
sagely. Standard fare for Davos—except that two months
earlier the politician, Asaad al-Shaibani (pictured), was a
member of a jihadist group blacklisted by the UN. It was
hard to imagine he would end up as Syria’s foreign minister,
extolling the virtues of the free market on a mountain in
Switzerland.

Yet in one sense, his journey was not unusual. Across the
Arab world, Islamists are often more devout capitalists than
their nationalist rivals. When the Muslim Brotherhood came
to power in Egypt it wooed private capital for everything
from energy to education. Ennahda, Tunisia’s main Islamist
party, took more flak for trying to privatise state firms than
for trying to Islamise society.

Some of this is tactical. The Islamists who assumed control

in recent years did so after popular revolutions. They
needed to distinguish themselves from their predecessors.
Syria under the Assad regime combined a Soviet-style
command economy with crony capitalism. Only sensible,
then, that its new rulers would promise something different.
The success of Turkey’s business-friendly Justice and
Development Party, which took power in 2002, has been a
model.

When lawmakers need a religious justification for their

policies, clerics are happy to provide it. Dar al-Ifta, a state-
run religious authority in Egypt, argues that a planned
economy is contrary to Islam because it restricts personal
freedom. The ideal Islamic economy, it explains, is a “free
market devoid of monopoly, deception” and other ills, in
language that sounds more Adam Smith than al-Shafi’i.

Many scholars argue that nothing in Islam is hostile to

business. After all, the Prophet Muhammad was a successful
trader. A tax known as zakat, obligatory on believers, serves
to redistribute wealth—but there is nothing wrong with
accumulating it in the first place. Khairat al-Shater, the most
powerful member of the Brotherhood after the Egyptian
revolution, was a millionaire who ran chains of groceries and
furniture stores.

Even if religion supports free markets, though, it does not

explain how to organise them. The Brotherhood and
Ennahda both failed to implement serious reforms. In
finance as in faith, knowing scripture is easy; following it is
hard.■

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The long au revoir

France’s bitter retreat

from west Africa
The danger is a security void now opens up
2月 06, 2025 09:02 上午 | BAMAKO AND PARIS

Allez vite!

FOR NEARLY a decade the French embassy in Bamako, the

capital of Mali, was the political nerve centre of a counter-
terrorism operation that spanned five countries. The
sprawling fortress still resembles a military base. But its
guard towers and walls topped with razor wire are as much
a relic of a bygone era as the French-built colonial avenues
that surround it.
Following the ignominious end in 2022 of Barkhane, the
multi-country anti-terrorism operation it launched at Mali’s
request in 2013, France has given up most of its military
footprint across west Africa with astonishing speed. By the
end of the year, the only remaining French base in Africa will
be in Djibouti. Driven by pressure from the military
dictatorships that have taken power across the Sahel and by
anti-French sentiment in nearby countries, the abrupt exit
marks a sea change in France’s relationship with its former
colonies. It also raises the question of what will fill the void
left by the French presence.

Unlike other former colonial powers, France kept permanent

military bases in Africa long after the continent’s countries
won their independence. At times it acted as a regional
gendarme, propping up leaders and beating back jihadists.
No more. Military juntas have forced French troops out of
Mali, Niger and Burkina Faso (see map). Chad took over the
French base there in January. In December Ivory Coast and
France agreed on the withdrawal of French forces. Senegal
has declared that French soldiers will leave in 2025.

France wanted a more orderly exit. In a speech in Paris on

January 6th, President Emmanuel Macron lamented
“ingratitude” in the Sahel for France’s efforts to fight
jihadists there. Mr Macron’s comments, widely criticised in
the region, marked an awkward twist to his promise, upon
taking office in 2017, of a more equal partnership with
France’s former colonies.

Yet the more important question is what the French

withdrawal will mean for security across the region, which is
being menaced by jihadism, separatism and military rule.
For a period, it seemed as if Mr Macron’s revamped version
of Barkhane was making tactical gains against jihadist
groups, and helping to improve the appalling insecurity for
civilians in some parts of the Sahel. After Mali’s new junta,
which seized power in 2020, hired mercenaries from
Russia’s Wagner Group, relations took a turn for the worse.
In 2022 the French quit Mali and shut down Barkhane, and
the regional domino effect began.

Military leaders in the Sahel, who have increasingly turned

to Russian-backed mercenaries to help fight separatists and
jihadists, have cheered the French departure as the end of a
neo-colonial hangover. Last year Mali, Burkina Faso and
Niger formed the Alliance of Sahel States (AES), a putative
group to rival the Economic Community of West African
States (ECOWAS), the main regional bloc. Critics in the
region claim that for years France and ECOWAS undermined
their counter-terrorism campaign. “Previously, everything
was controlled by France,” alleges Drissa Meminta, an
influential Malian pundit. “Now we can join forces to fight
terrorism.”

In practice that has meant that AES countries have

jettisoned efforts to negotiate with rebels of all stripes in
favour of full-bore militarism. Yet this approach has fared
little better than the French operation. In Mali the army,
backed by Russia’s Wagner Group and Turkish Bayraktar
drones, made important territorial gains in the north. In
2023 it seized Kidal, the symbolically significant stronghold
of Tuareg separatists that French troops blocked Malian
forces from entering a decade before.

But it has failed to stop the entrenchment of Islamic State in

the north, or to stem worsening violence elsewhere in the
country. Urban areas considered secure have recently seen
attacks. In September Jama’at Nusrat al-Islam wal Muslimin
(JNIM), a jihadist group linked to al-Qaeda, attacked a police
academy and an airport in Bamako, the first major terrorist
incident in the Malian capital for nearly a decade. “They say
things are better since they captured Kidal,” complains a
local businesswoman. “But why hasn’t that stopped
terrorists from bombing the city?”

Elsewhere in the region, things are hardly better. A month

after the attack in Bamako JNIM claimed responsibility for an
attack on a military checkpoint on the outskirts of Niamey,
Niger’s capital. In Burkina Faso, the national army now
controls barely a third of the country’s territory.

Unlike the French troops and UN peacekeepers, local armies

and the mercenaries that support them care little for
protecting civilians. In the first six months of 2024, 3,064
civilians were deliberately targeted and killed in the Sahel,
up from 2,520 in the last half of the previous year, according
to ACLED, a conflict monitor. In 2022 the Malian army and
Wagner forces killed over 500 civilians, mostly women and
children, in a single operation, according to UN
investigators. “Before, people were afraid of the terrorists,”
says Fatouma Harber, a Malian journalist. “Now they are
afraid of the Malian army and Wagner.”

Yet there appears to be broad support across the Sahel for

the departure of French troops. However much worse things
may have got since they left in 2022, many Malians point
out that security had been deteriorating since their arrival a
decade earlier. “With all the means they had at their
disposal, what did they achieve?” asks a local investor. The
disillusionment has made it easy for the region’s juntas to
use France as a scapegoat, accusing the former coloniser of
isolating the AES diplomatically while conspiring with
militants to destabilise it. However much anti-French
sentiment in the Sahel was fanned by Russian cyber-
propaganda and influence operations, which French officials
say they have documented exhaustively, France proved ill-
equipped to counter its potency. Even in the traditional
redoubts of Françafrique, Senegal and Ivory Coast, such
feelings have been on the rise.

Nor would a return be on the cards. By the end of the year

France will close all its permanent bases on the continent,
besides Djibouti, according to military sources. A rotating
average of some 100 soldiers will be stationed at any time
on what will become an Ivorian base in Abidjan and a co-run
Gabonese base in Libreville, chiefly for training purposes.
They will report to a new Africa command based in Paris.

The new arrangement marks the “demilitarisation” and

“normalisation” of France’s tie to Africa, says a presidential
adviser. The hope is that 2025 will mark the end of an
anachronistic high-visibility footprint that exposed France to
accusations of neo-colonialism, without precluding
modernised defence aid. Full training exercises or
operations involving the dispatch of planes or soldiers from
France may be carried out, only if requested by African
partners, under the Paris command.

Where does that leave the Sahel? Regional observers say

there are signs the juntas are realising that they cannot
defeat insurgents by brute force alone. Niger’s junta
recently sent envoys to jihadist leaders. Regional
negotiations devoid of external influence could produce
deals that reduce the violence. More likely, for now, the
toxic new alliance of military rulers and Russian mercenaries
will continue to cause misery for beleaguered civilians.■

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An interview with a Congolese rebel

A leader of Congo’s rebels

vows to fight on
It is not clear that a recent truce in Congo will hold
2月 06, 2025 09:03 上午 | GOMA

CORNEILLE NANGAA sits in an armchair in a five-star-hotel

in Goma, the largest city in eastern Democratic Republic of
Congo and stretches out his hand. “Thank you for
embracing the terrorists,” he jokes, to laughter from his
entourage.

Mr Nangaa (pictured) is the head of the Alliance Fleuve

Congo (AFC), the political arm of M23, an armed group led
by Congolese Tutsis and backed by next-door Rwanda. Last
week M23 rebels and Rwandan troops captured Goma after
a rapid offensive that featured drones and heavy artillery
that shattered Congolese defences. The UN says at least
900 people were killed, though some estimates put the
death toll closer to 3,000. The escalation in fighting risks
sparking a regional war. The four other African armies that
came to Congo’s aid also failed to repel the invaders.

But Mr Nangaa, who has become the public figurehead of

M23, strikes a relaxed tone. “We want to wage a clean war,”
he insists, explaining that M23 pushed into Goma after
years of laying siege to it because of attacks from
Congolese forces and their allies around the city.

The group has made dramatic advances in Congo’s North

Kivu province since re-emerging as a force in late 2021. It
has repeatedly denied receiving support from Rwanda. And
the government in Kigali equivocates about its support for
the rebels. But no one seriously doubts its role.

Rwanda may have as many as 4,000 troops inside Congo,

helping M23, according to a UN panel of experts. Since the
fall of Goma, the UN has become more blunt, accusing
Rwanda of deploying soldiers to help capture the city of
over two million people. On February 3rd Rwanda’s
president, Paul Kagame, told a reporter, implausibly, that he
did not know whether his soldiers were in Congo.

Mr Nangaa claims that M23’s fight is a local one. “Our

vocation is the absence of the state,” he explains. “We are
Congolese and we have problems and demands that are
Congolese.” These include, he says, ending the corrupt rule
of Congo’s president, Felix Tshisekedi, his repression of the
political opposition, and above all, the exclusion of some
ethnic communities, especially the Tutsis. Mr Nangaa (who
is not a Tutsi) has vowed to go as far as Congo’s capital,
Kinshasa, in pursuit of these aims: “The cause is such that
our young people may advance until the last drop of blood.”

On the ground in eastern Congo, the conflict might yet

expand. There are fears the rebels will march further into
neighbouring South Kivu province and capture or besiege
the city of Bukavu. Mr Nangaa would not comment, but said
that if military attacks keep originating from Bukavu’s
airport, M23 would “silence the guns there”. Burundian
forces in the province also pose a threat, he said.

On February 3rd, the rebels declared a unilateral ceasefire,

but it seems to have rapidly broken down. M23 has long
pushed for direct talks with the Congolese government, but
the government in Kinshasa has always rejected the
prospect. Now, in an ominous sign, Mr Nangaa casts doubt
on the very possibility of negotiations. “There are lots of
preconditions,” he said, without naming any. “How can you
place your trust in a crook like Tshisekedi?”

Sharp, and surprisingly jolly for an internationally

sanctioned rebel threatening regional chaos, Mr Nangaa
offers to exchange phone numbers. “Everyone’s afraid to
call me,” he says, to more laughter. ■

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Europe
Germany’s election campaign is creating a
security risk
Only halfway there :: Voters are not being prepared for the difficult
decisions ahead

The added dangers of fighting in Ukraine

when everything is visible
The transparent battlefield :: There is no more fog of war

Can Georgia’s shadowy despot survive?

Protest and repression :: Cracks are appearing in Bidzina Ivanishvili’s power
structure

Turkey is building a spaceport in Somalia

Per Erdogan ad astra :: Believe it or not, the president is planning a
moonshot

Can Europe afford to be the world’s last

free-trader?
Charlemagne :: The EU tries to navigate a global trade spat

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Only halfway there

Germany’s election
campaign is creating a
security risk
Voters are not being prepared for the difficult decisions
ahead
2月 06, 2025 09:02 上午 | BERLIN

IN FEBRUARY 2022, three days after Vladimir Putin invaded

Ukraine, Olaf Scholz, Germany’s chancellor, declared a
generational change in foreign and security policy. In his
Zeitenwende, or “turning-point”, address to the Bundestag
Mr Scholz announced a raft of changes to Germany’s
diplomatic, security and energy posture, ranging from a
long-term promise to meet the NATO defence-spending
target of 2% of GDP to bolstering energy resilience. “The
world afterwards”, he said, “will no longer be the same as
the world before.”

Germany’s election on February 23rd, which will probably

mark an end to Mr Scholz’s tenure, is a good moment to
assess the durability of his Zeitenwende. Three years on,
much about Germany’s world is indeed no longer the same.
Every mainstream party has committed to the 2% target;
some, feeling the breath of Donald Trump on their necks,
want more. Although Germany’s flat economy and tight
fiscal rules mean money is hard to come by, officials know
that Germany’s NATO commitments will in time oblige them
to spend closer to 3% of GDP.

German election tracker: who’s leading the polls?

Meanwhile, politicians who argued that forging energy ties

with Russia helped not only German industry but also the
cause of peace have been sidelined, as the country has
pivoted to other sources of gas. Germany is Europe’s
biggest supplier of military and other aid to Ukraine, even if
Mr Scholz has sometimes dragged his feet. And the defence
minister, Boris Pistorius, has become Germany’s most
popular politician despite issuing stark warnings that the
country must be kriegstüchtig, or “war-capable”, by the end
of the decade. None of this was imaginable before 2022.

Yet implicit in Mr Scholz’s speech was a promise that not

only would Germany stand behind Ukraine, but that it would
begin to shed the timidity that had long characterised its
foreign-policy stance in place of a more hard-headed
approach that accepts trade-offs. And here, says Stefan
Meister at the German Council on Foreign Relations, the
glass looks half empty.
“The moment the Russians withdrew from Kyiv and the
fighting was restricted to the east of Ukraine, everything
went back to peacetime mode,” says Carlo Masala, a
professor at the Bundeswehr University in Munich. Specific
decisions on spending, sanctions and energy have not
yielded a broader rethinking of Germany’s role in the world.
“Simply saying that Ukraine should not lose and Russia
should not win is not a strategy,” he argues.

Some military figures similarly worry that in the absence of

a crisis it will be harder for Germany to fulfil the pledges,
implicit or otherwise, of the Zeitenwende. These include
some form of conscription to boost the armed forces’
flagging numbers: an attempt last year by Mr Pistorius,
already watered down, was scrapped after the collapse of
Mr Scholz’s government in November. And the work of
reforming the Bundeswehr and the defence ministry itself,
argues Nico Lange, a former official in the ministry, remains
incomplete at best.

A fading sense of urgency also hinders the case for

accelerating Germany’s defence spending. A €100bn
($104bn) fund established to meet the 2% goal will run out
during the next parliament, leaving an annual gap worth
€30bn-35bn, or around 6% of today’s federal budget.
Everyone accepts, some more vocally than others, that part
of this will have to be funded by fresh borrowing, either via
another off-books fund or a tweak to Germany’s
constitutional debt brake. But that will require tough
negotiations between coalition partners after the election,
and then a potentially tricky two-thirds majority in
parliament.

Serious thinking is taking place on all these issues, and

more, including the question of Germany’s exposure to
China and how to adapt the country’s export model to the
world’s protectionist turn. But none is being seriously
debated in the election campaign. “We badly need a new
foreign policy, and no one is campaigning on it,” says Mr
Lange. “This is a grave mistake; I would even consider it a
security risk.”

The most immediate challenge may be contributing to the

EU’s response to the tariffs Mr Trump says are coming.
Discussion on this has been almost entirely absent during
the campaign, a striking omission given that Germany has
the club’s largest trade surplus with America. Tariffs of the
magnitude Mr Trump threatens could pummel an economy
that has already been in recession for two years.

Later could come an American demand that Europeans, with

Germany near the top of the list, help police a settlement in
Ukraine, should one be secured. Officially the line is that
Germany is waiting for Mr Trump to move. Unofficially the
question is causing sleepless nights in Berlin. Officials and
MPs across the spectrum remain convinced that Germany
will continue or intensify its support for Ukraine, including
training its troops and backing its EU bid. But sending
German soldiers into harm’s way is another matter. Doing so
without a robust commitment of support from Mr Trump
would invite Mr Putin to test the transatlantic alliance.
“What would we do if Russia killed four of our soldiers?”
asks an official. “Without an answer, we can’t make an
offer.” If support for Ukraine is set against keeping NATO
intact, Germany will unhesitatingly choose the latter.

Many officials express bafflement or even fury with

Emmanuel Macron, France’s president, for what they see as
recklessness in floating the idea of establishing a “tripwire”
force in Ukraine comprising thousands of European troops.
There is also concern that Mr Trump may seek to strike a
deal with Mr Putin over the heads of Europeans. But these
worries are no substitute for a serious security debate
during the election campaign. “Rather than wait, it would be
smart if the Germans, along with the French, British, Poles
and others, produced a proposal for the Americans on how
to manage a ceasefire, along with a request for specific
enablers like air and missile defence,” says Claudia Major at
the German Institute for International and Security Affairs.

That task may fall to Friedrich Merz, head of the

conservative Christian Democratic bloc, who polls suggest
will oust Mr Scholz. His choice of coalition partner will also
matter: most foreign-policy analysts would prefer the
Greens over Mr Scholz’s Social Democrats. On January 23rd
Mr Merz outlined his approach in a sweeping speech that
included a warning to German firms planning investments in
China, “a state not governed by the rule of law”, not to seek
bail-outs if things go sour.

Declaring Mr Scholz’s Zeitenwende incomplete, Mr Merz

proposed a series of reforms to remedy the lack of
“strategic culture” in German foreign policy, including the
creation of an American-style national security council in the
chancellery. Views differ on whether that would work in
Germany’s political system. But as one official puts it,
“culture eats structure for breakfast”—meaning that if
Germany really wants to get something done, it will not be
hamstrung by bureaucratic arrangements.

The question is whether Germany does want to get things

done. The “fundamental decisions” that will confront the
next government, says Mr Masala, make this year’s election
comparable to that of 1949, conducted in the ashes of
military defeat, and 1990, the first in reunified Germany. But
this time a sense of urgency is almost entirely missing from
the election campaign. In that respect, at least, the world
afterwards looks rather similar to that before. ■
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The transparent battlefield

The added dangers of

fighting in Ukraine when
everything is visible
There is no more fog of war
2月 06, 2025 09:03 上午 | KYIV

We see you

FOR CENTURIES the “fog of war”, the inability to see

through the confusion of combat, has been a given. No
longer. The front lines in the war between Russia and
Ukraine are now saturated with surveillance drones
livestreaming video footage in real time. Everyone can see
pretty much everything. Armies are having to work out how
to fight on what is being called the transparent battlefield.

The surveillance is layered. Orbiting satellites scan the Earth

from space. Tactical drones have ranges of 200km or more.
Smaller surveillance drones relay sightings to the operators
of first-person view drones (FPVs), which carry a small
munition to attack soldiers on the ground. Add a thermal-
imaging camera and soldiers can also be spotted at night.

Read more of our recent coverage of the Ukraine war

“Darwin”, an FPV operator in Ukraine’s 92nd Brigade, says

the changes that the drones have wrought are colossal.
Three years ago, at the beginning of the full-scale invasion,
a drone team could operate in open fields. Now they hide in
the woods and don’t leave their positions during the day.
“Before, operations could be carefully planned,” he says.
“Now every mission is a lottery, you can be lucky or
unlucky.”

Reconnaissance and foot patrols from forward positions

have virtually ceased and it is increasingly perilous to
evacuate the wounded or retrieve the dead. Infantry avoid
gathering in large groups. Open ground is a killing zone,
speed the only protection. Soldiers use quadbikes and
motorcycles to outrun the reaction time of an FPV operator.
And though it is impossible to move, it is also dangerous to
stay in one place. Fortified trench systems are obvious
targets. Armoured vehicles have been virtually neutralised.
“When a tank appears it’s like dropping a plate of food in
front of a table of hungry drone operators,” says Darwin.

To disrupt the omnipresent drones, Russians and Ukrainians

are engaged in an electronic-warfare arms race·. Operating
in a village or a town means cellphone signals can be
disguised in the welter of civilian connections. In the field,
soldiers limit their use of phones to avoid creating an
obvious cluster. Radios are adjusted to send weaker signals
that can be picked up only over short distances. Soldiers
cover themselves with “multi-spectral” camouflage nets to
block heat signatures: invisibility cloaks against thermal
cameras.

Bad weather and night afford some protection. Wind and

rain hamper drone flight, cloud and fog reduce visibility. It’s
harder to orient a drone in the dark, says Darwin. Thermal
cameras can see soldiers at night, but not at any great
distance.

Long-standing tactics have been upended. “One of the most

obvious”, says Glib Voloskyi, an analyst for Come Back Alive,
one of the largest volunteer organisations raising money to
donate equipment to the Ukrainian armed forces, “is that
it’s hard to achieve surprise.” It is also almost impossible to
achieve local force superiority: to gather and concentrate
troops for an attack. The lethality of fire is greater because
targets are easily identified, and artillery adjustments can
be made quickly. The transparent battlefield gives the
defender the advantage. “Offensive operations,” says Mr
Voloskyi, “are a really nasty business.”

Infantry now operate in small groups, which are harder to

spot. The Russians have been able to make advances in
recent months by sending handfuls of soldiers forward to
gain a foothold. Most are picked off by the drones; this
incremental nibbling, says Mr Voloskyi, is working in part
because the Russian tolerance for casualties is high and
refuseniks are shot.

AI is being used to analyse surveillance data and cross-

reference it with signals intelligence and open-source
information, like Russian soldiers’ social-media posts, which
can reveal their positions. But object-recognition software is
in the early stages. Mr Voloskyi says AI can generate false
signals, muddling the picture, “and this might actually
decrease transparency”. There is a difference, he points out,
between seeing something and understanding what you are
looking at. Last summer the Russians saw the Ukrainian
build-up of troops in the Sumy area, but never imagined
they would attack across the border into the Kursk region.
“That’s the problem with transparency,” says Mr Voloskyi.
“You can see actions, but you don’t necessarily correctly
interpret them.” ■

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Protest and repression

Can Georgia’s shadowy

despot survive?
Cracks are appearing in Bidzina Ivanishvili’s power structure
2月 06, 2025 09:03 上午 | Tbilisi

ON NOVEMBER 28TH, the day the Georgian government

announced it was suspending talks on joining the EU, the
Royal District Theatre in Tbilisi performed “Phaedra in
Flames”, a contemporary take on a Greek myth that deals
with power, politics and emancipation. That night, the actors
took no curtain call. Still in their wigs and make-up, they led
the audience out onto Freedom Square, where tens of
thousands had again gathered to protest against the
reclusive oligarch Bidzina Ivanishvili and his cronies, who
have captured the Georgian state.

The drama has been sustained for more than two months
now. Its energy comes in waves, and takes new forms, such
as marches, strikes and flashmobs, but is not going away.
Every night people block the square and Tbilisi’s main
artery, Rustaveli Avenue. On February 3rd there was an
extra-big protest. The police responded with their trademark
violence, beating demonstrators and detaining several
activists and two opposition leaders.

The immediate demands of the protesters are new elections

and the release of all political prisoners, including Mzia
Amaglobeli, a prominent journalist who has been on hunger
strike since January 12th. But what is really at stake is
Georgia’s future. Is it to be a modern European country or,
should Mr Ivanishvili have his way, a backwater under
Russia’s domination?

A post-Soviet oligarch, Mr Ivanishvili had a $6bn fortune—

equal to over a third of the country’s annual GDP—when he
founded the Georgian Dream party in 2012. It won an
election that year, and has held power ever since. Mr
Ivanishvili holds no elected office, but runs the country from
behind the scenes. For a decade he paid lip-service to
Western institutions, especially the EU and NATO, while
treating Georgia as a personal fief, installing his associates
in key government positions.

Although Mr Ivanishvili’s government did “precisely

nothing”, according to Giorgi Kadagidze, a former head of
the central bank, the economy trudged along. Georgia
drifted, the West lost interest and Mr Ivanishvili entertained
himself by replanting 100-year-old trees in his residence and
building a private zoo.
Russia’s invasion of Ukraine in 2022 changed all of that.
Georgians, also victims of Russian occupation, rallied behind
the Ukrainians. The EU urged Georgia to apply for candidate
status, along with Ukraine and Moldova, and at the same
time the European Parliament recommended that Mr
Ivanishvili should be penalised with sanctions for his
oligarchic influence. That did not happen, but the oligarch
saw the move as blackmail. George Bachiashvili, his former
asset manager, says the prospect of sanctions has caused
his old boss’s bankers to become cautious to the point of
being unco-operative.

Mr Ivanishvili grew yet more alarmed when in December

2023 the EU granted Georgia candidate status, with the
important proviso that he should not have total control over
the judiciary and other levers of power. The vast majority of
Georgians saw this as an opportunity; he saw it as a
conspiracy. “The way he thinks, everything must be under
his control: people, trees, animals,” says Mr Bachiashvili,
who now faces a prison sentence after falling out with his
old boss.

Unable simply to turn his back on EU membership, which

the great majority of Georgians aspire to, Mr Ivanishvili
started to sabotage accession. The Imedi media channel, a
mouthpiece for Georgian Dream, demonised the West as a
“global war party” that has been dragging Georgia into
armed conflict, and portrayed Georgia’s liberal donors as a
bunch of pro-LGBT conspirators who were plotting a
revolution and threatening the country’s identity.

The party then enacted a Russian-style “foreign agents” law

that targets Western funding of Georgian civil society, as
well as a law blocking LGBT rights, including gay marriage.
On November 28th it announced the suspension of
negotiations with the EU. Georgia’s cities erupted and the
government responded with a level of violence and
repression which the country has not seen since Soviet
times.

Mr Ivanishvili is now faced with a choice: resolve the crisis

through new elections or resort to yet heavier repression.
Several factors may make him think twice about the iron
fist. One is the economy. Georgia’s economy is private,
liberal and highly dependent on foreign investment; its
banks and companies are plugged into the Western financial
system. Foreign direct investment dropped by 40% last year
and the capital inflow from international institutions fell by
almost half, says Nika Gilauri, a former prime minister. The
central bank has spent nearly 20% of its reserves propping
up the currency.

Even more than a financial crisis, the business families

around Mr Ivanishvili fear sanctions, which the West has
threatened but hardly imposed. And as Mr Kadagidze
explains, they fear being stigmatised by their own children,
most of whom sympathise with the protesters. “In Georgian
culture, you want to be a hero to your children, it is a big
deal,” he says.

Nervousness is palpable in Tbilisi. Take Irakly Rukhadze, an

American citizen who owns Imedi. While his channel
continues to pump out anti-Western and homophobic tripe,
he insists that he is fully pro-Western and is sending signals
to the American government about the need for
negotiations. “My goal is to save my business, my family,”
he says. Behind the scenes, business figures from both sides
are talking.

Giorgy Gakharia, Georgia’s prime minister from 2019 to

2021, says the “power pyramid” that Mr Ivanishvili has built
there is supported by about only 50 families. Most of their
assets and children are in the West. “All these people, law-
enforcement bosses, business, media, church, they are so
connected with each other.” If some of them start defecting,
the pyramid will crumble. On January 14th Mr Gakharia, who
now leads an opposition party, was beaten up by thugs.
“This is a message personally from Ivanishvili,” he said in
his Tbilisi home, his face covered in bruises.

Luckily for Mr Ivanishvili, Georgia’s opposition is too

disparate and distrusted by the protesters to present a
consolidating figure or party that would attract defectors.
And he is hoping that the activists will tire and leave for
Europe. He also calculates that Europe is too weak and
America too distracted to deal with Georgia. The message
that Georgian Dream is putting out to the EU flag-waving
crowd is that the West will betray them. But the drama
could still end with a very different twist. ■

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Per Erdogan ad astra

Turkey is building a
spaceport in Somalia
Believe it or not, the president is planning a moonshot
2月 06, 2025 09:02 上午 | Istanbul

Where next?

ALPER GEZERAVCI’s first message from space was a

patriotic one. “The future is in the skies,” he said from a
Falcon 9 rocket on its 14-day mission in January 2024. The
line is one of many attributed to Kemal Ataturk, Turkey’s
founder, and Mr Gezeravci, Turkey’s first astronaut, is the
poster boy for the space ambitions of Recep Tayyip Erdogan,
the current leader. The Turkish Space Agency was founded
in 2018, and in 2021 the president announced a ten-year
plan for space, including home-made satellites and a moon
landing. Mr Gezeravci campaigned alongside Mr Erdogan’s
AK Party after returning to Earth.

State spending on space research and development has

risen from $4.7m in 2013 to a still-tiny $140m in 2025, but it
is increasing. In December the government began work on a
spaceport in Somalia, a project that has been projected to
cost $350m. Space is a matter of national prestige for Mr
Erdogan, but it is also an important auxiliary to the booming
Turkish defence industry. The government has confirmed
that it also wants to use its spaceport as a place to test
missiles; from Somalia they can safely be fired east. Last
month Mr Erdogan announced that Turkey is developing a
missile with a 2,000km range, more than twice that of its
current Tayfun.

Turkey’s domestic satellites are already integrated with its

drones, which can be controlled anywhere in the world from
the Turksat 5B, launched in 2021. Selcuk Bayraktar,
chairman of Turkey’s biggest drone manufacturer Baykar
(and Mr Erdogan’s son-in-law), founded a sister company,
Fergani Space, in 2022 to develop space technology. Last
month it launched its FGN-100-D1 positioning and
communication satellite, one of a hundred it plans to put in
orbit over the next five years to build a global-positioning
system that can be used by the armed forces. Space is an
arena where Turkey may annoy its Western allies: it has
applied to join the International Lunar Research Station, a
Chinese-Russian rival to America’s Artemis programme.

Mr Erdogan has poured cash into the defence industry, even

considering a tax on credit cards and car and property sales
to support the sector. But his budget deficit may put a
dampener on his plans; and the defence sector is not
immune to the country’s brain drain, with many engineers
leaving to work abroad for much better pay. Mr Erdogan
may be looking to the stars, but Turkey’s talented youth are
more likely to be looking at their pay cheques.■

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somalia

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Charlemagne

Can Europe afford to be

the world’s last free-
trader?
The EU tries to navigate a global trade spat
2月 06, 2025 09:02 上午

THE EUROPEAN UNION seems an unorthodox champion of

free trade. Beyond a few purveyors of handbags and
slimming drugs, few of its big companies compete
successfully with rivals from America and China, the world’s
two biggest economies. Negotiating a trade agreement with
the EU means that countries halfway across the world have
to sulkily accept that champagne can come only from the
northern region of France or feta cheese from Greece. Back
in Europe, the merest hint of a free-trade deal causes
farmers from across the continent to descend on Brussels
and pummel Eurocrats with eggs and manure.

Despite all this, the EU is what passes for a free-trade

enthusiast these days—if only by default. America, which
built the global free-trading system alongside Europe in the
decades after the second world war, is now run by a
president who adores tariffs almost as much as he does
gaudy skyscrapers. China is no better. Though it got rich in
part through its exporting prowess, it continues to lard
favoured companies with subsidies, against the spirit of
free-trade rules; this week it imposed retaliatory tariffs on
American goods. Plenty of smaller economies, from Costa
Rica to Japan, remain committed to the strictures of the
World Trade Organisation. But of the world’s three major
economic blocs, the EU is the only one that could plausibly
hide behind trade barricades—leaving its firms serving a
market of over 400m mostly rich consumers—but has so far
decided not to. Being in this major-open-economy club of
one sets nerves jangling among some politicians. Is the EU
naive to follow global rules others ditched long ago? Can
Europe afford to remain the world’s last free-trader?

The short answer is that it may have no choice. Donald

Trump’s bluster on trade is concerning for Europe precisely
because international commerce matters to it so much. For
despite an enduring bout of economic anaemia, the EU is an
importing and exporting powerhouse. Its 27 countries sell
more goods to foreigners than anyone bar China, and are
behind only America when it comes to buying them in.
Despite its smaller economy, the EU out-trades America in
absolute terms. It sends and receives goods from outside
the bloc worth 29% of GDP, compared with 19% for
America. The surplus of trade beyond the club’s borders is
vital for the European economy, not least given that its own
consumers (and many governments) are hard-up. “Europe
has been relying on exports more than other regions,”
points out Brad Setser of the Council on Foreign Relations,
an American think-tank.

Two prospects haunt the EU. The first is an inescapable

trade tiff with Mr Trump, who calls the EU an “atrocity” on
trade and has promised to impose his beloved tariffs, as he
did in his first term. Assuming the threat is enacted, this
would throttle Europe’s exports to its biggest market just as
its economy is in the doldrums. The second fear is how
China will react to finding itself on the sharp end of
American protectionism. With its own biggest foreign market
increasingly restricted, China might divert goods to the still-
open EU so as to keep its factories humming. Though
consumers would benefit from cheap wares, European firms
making cars, dishwashers and the like there would suffer.
Politicians are unlikely to tolerate this; a surge in Chinese
electric vehicles (EVs) heading to the EU last year prompted
the bloc to impose tariffs of around 35%, purportedly to
offset the advantage Chinese firms get from state subsidies.

Such fretting over slumping exports and surging imports

comes on top of a growing scepticism in some EU quarters
of the benefits of free trade. These days it is not only
European farmers who complain about imports. “Trade used
to be about economics; now it is also about geopolitics,”
says Jacob Kirkegaard at Bruegel, a think-tank in Brussels.
Globe-spanning supply chains were once seen as clever
business. Now politicians worry more about economic
security, and becoming hooked on stuff produced by
potential foes (Russian gas comes to mind). France, long
sceptical of overly-open trade, has pushed the idea of
“strategic autonomy”, meaning reducing reliance on
foreigners. Germany used to be keen on trade with China
when that meant shipping lots of cars there; less so now
that Chinese rivals build world-beating EVs. The EU has also
gummed up international trade by insisting its partners
must espouse Euro-regulatory norms as a condition of trade:
countries exporting steel made with planet-warming coal,
for example, will soon have to pay into a “carbon border
adjustment mechanism”.

Trading places

Luckily for free-traders, France’s influence in Europe has

atrophied as its politics has descended into chaos. And there
are still lots of fans of open commerce in Europe, notably
among its smaller countries, from Denmark to the Czech
Republic and Ireland. Their firms have long thrived by
looking beyond puny domestic markets: there are only so
many potential Danish customers for Ozempic, a fat-busting
drug invented there. Bringing down trade barriers is
enshrined in the EU’s founding treaties, points out Cecilia
Malmstrom, a former trade commissioner for the bloc.

With no choice but to keep trading, what are Europe’s

options? One solution is to find a balance between China
and America. EU officials have suggested the bloc should
help America contain the “challenge” of Chinese exports, or
conversely seek ways of expanding its trade with China
(final outcome: to be confirmed). Meanwhile the bloc has
signed or initiated a slew of bilateral trade arrangements
with smaller partners in recent months, including Mexico,
Malaysia and Mercosur, a bloc that includes Brazil and
Argentina. More such deals are in the works, to farmers’
irritation. But if the two giants of the global economy step
back from free trade, Europe will need new partners. ■

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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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Britain
Oxford and Cambridge are too small
Build the Arc :: Linking up the cities, and letting them grow, could power
Britain’s economy

Milton Keynes shows the rest of Britain how

to grow
Expanding cities :: NIMBYs don’t have the upper hand everywhere

Worries about Britain’s construction crunch

are overdone
Plan it and the builders will come :: Stop worrying and learn to love the
labour market

Britain’s plan to shake up school inspections

pleases no one
Causing concern :: Labour replaces a simple but controversial system with
a complex, clunky one

British “equal value” lawsuits have become

an absurd denial of markets
Equal pay :: The gavel takes on the invisible hand

Speeches in Britain’s Parliament are getting

shorter—and worse
Rhetoric and reality :: The problem lies not merely with speaking but with
listening

Must Leeds always lose?

Bagehot :: Too prosperous to pity. Too poor to thrive

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Build the Arc

Oxford and Cambridge are

too small
Linking up the cities, and letting them grow, could power
Britain’s economy
2月 06, 2025 09:03 上午

TWO WEEKS ago few people had heard of Tempsford, a

sleepy village of 600 people in rural Bedfordshire. But it is
located handily at the intersection of the east-coast
mainline, which runs between London and Edinburgh, and a
proposed Oxford-to-Cambridge railway. That made it an
ideal spot for a new town and railway station, suggested a
blog by Kane Emerson and Samuel Hughes, a pair of
researchers, in July. On January 29th the chancellor, Rachel
Reeves, announced that—hey presto!—Tempsford would be
built.

It was just one example of the speed with which the

chancellor has suddenly been backfilling Labour’s growth
agenda. In a speech laden with bulky projects, Ms Reeves
also revealed that she had bounced her cabinet colleagues
into approving a third runway at Heathrow and would back
redevelopment around Old Trafford, the stadium of a
Manchester football team. Most significant, however, was
the idea of turning a swathe of south-central England into
“Europe’s Silicon Valley”.

The plan, dubbed the Oxford-Cambridge Arc (see map), is

not a new one. But it is a good one, because it correctly
identifies what Britain does well—and what holds the
country back. Although Ms Reeves has come to it late, she
has a better chance of implementing it than anyone before
her.
Oxford and Cambridge have some big strengths. The two
university cities outstrip most other innovation clusters on
scientific publications and patent applications. They have a
high share of bright, young graduates, many of whom want
to build the companies of the future. They are home to
buzzy biotech and artificial-intelligence startups.

Yet they punch below their weight because they have not
been allowed to grow. “The region is astonishing per capita
but small in scale,” says Rachel Wolf of Public First, a think-
tank. Oxford is the bigger of the two; its population is still
only 160,000, and just 35,000 more than it was in 1980.
Homes cost 14 times the average salary, making it hard for
firms to hire. Lab space is another big constraint in both
cities. Some new developments have eased the pressure,
but new sites are scarce.

To see this self-defeatism at work, consider Oxford’s Ellison

Institute of Technology, set to be one of the largest startup
incubators in Britain when it opens in 2027. Backed by
£130m ($160m) from Oracle’s co-founder, Larry Ellison, it
will have 30,000 square metres of lab space, along with
clinics and supercomputers. But planning and environmental
restrictions have made it “just a complete nightmare”, says
Sir John Bell, an Oxford immunologist leading the project.
“We had the Environment Agency chasing frogs up and
down.”

It is hard to imagine Mr Ellison dealing with such problems in

America. More widely, says Sir John, there is a “content and
complacent” attitude in the cities with their rich histories.
Locals ask: “Do we really need a new rail line?”

Compare that with Boston, San Diego or the Bay Area.

Innovation clusters in those cities are much bigger and more
productive. They benefit from bringing together lots of
workers who can swap ideas. Although housing is not
always cheap, people have places to live and businesses
space to grow. A large ecosystem encourages risk-taking; if
a company fails, people quickly find another. The GDP of the
Boston metropolitan area is almost ten times that of Oxford
and Cambridge combined.

Ms Reeves hopes to emulate these successes. Silicon Valley

and Tempsford may seem worlds apart, but the idea is not
fanciful. On top of the strengths of Oxford and Cambridge,
Milton Keynes·, which would be on the rail line, is a growing
hub for tech and defence firms. All three cities are also
connected to London, still a global centre for financial
services. Modelling by Public First suggests that Oxford,
Cambridge and Milton Keynes could contribute an extra
£14bn ($18bn) a year to GDP by 2035 if the cities could
count on more skilled workers and higher R&D spending.

The chancellor has focused on two big problems that have

thwarted progress. One is transport. Oxford and Cambridge
are only 66 miles (106km) apart, but it takes two-and-a-half
hours to make the journey by train, via London, or a similar
amount on patchy local roads. A plan for a dual carriageway
was scrapped in 2021. Ms Reeves says she will support east-
west rail, including the station at Tempsford; the first trains
are due to be running by 2035. Around £7bn for the project,
which involves both upgrades and new track, is expected in
the spending review this summer. That will upset some
Labour MPs, who will no doubt argue that the money should
have gone farther north instead, to places like Leeds· .

The other problem is housing. Ms Reeves has floated a

sketchy “zoning scheme”, which would create a
presumption in favour of housebuilding alongside railways.
Designed well, that could lead to a surge of construction.
Michael Gove, the Conservative minister who was steering
the Arc until the election, argues that densifying Oxford and
Cambridge is also critical. They have been throttled by
green belts for decades, while NIMBYs have blocked
infrastructure. Ms Reeves has approved new reservoirs
serving both cities. To seriously increase building within the
city limits, she will need to work with development
corporations, says Mr Gove.

There are other challenges. The Oxbridge cluster will need

skilled workers, which could come into tension with the
government’s plan to reduce immigration. A lack of access
to growth capital remains a constraint. Many in startup
circles think the government should go further in cajoling
pension funds to invest in equities. Ms Reeves does not yet
have all the answers. But Labour is well-placed to build the
Arc because it is far less beholden to the voters who oppose
homes and infrastructure. “The politics are just much
easier,” says Ms Wolf, who was previously a Tory adviser.
“Labour should have no problem with letting the diggers
loose in the shires.” ■

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Expanding cities

Milton Keynes shows the

rest of Britain how to grow
NIMBYs don’t have the upper hand everywhere
2月 06, 2025 09:03 上午 | MILTON KEYNES

A SCHOOL THAT has never seen children is a strange place.

The carpets and walls are unnaturally clean; the building is
eerily quiet. Elverby Primary School feels especially odd. It
sits in a field north-east of Milton Keynes, amid mud and
half-built roads. But the children will come, because some
5,000 homes are planned for the site. “And that’s only a
fraction of what we can build, or want to,” says Peter
Marland, leader of the Labour-run city council.
The Oxford-Cambridge Arc links three cities which, if they
were guests at a wedding, would not be seated together.
Cambridge and Oxford are small, ancient university cities
(though Oxford has an industrial fringe). They are girdled by
green belts and miserable to drive around. Milton Keynes is
brash, modern and car-oriented. Although founded only in
1967, it already contains some 300,000 people, almost as
many as Cambridge and Oxford put together. It shows the
rest of the Arc, and the rest of Britain, how to build.

Milton Keynes’s most important and unusual feature is its

grid of major roads connected by roundabouts, around
which local people drive at alarming speed. Between the
roads, behind trees, are neighbourhoods of roughly one
square kilometre where everything moves more slowly. In
other cities, people mobilise to protect beloved buildings. In
Milton Keynes they defend the grid. Last September the
council suggested adding traffic lights to a grid road. “Are
you joking,” one respondent wrote. The council retreated.

Grids allow cities to expand quickly and neatly, as Barcelona

and New York demonstrated in the 19th century. Milton
Keynes’s grid has probably helped suppress local objections
to the city’s expansion. It helps, too, that the city tends to
build large suburbs with proper infrastructure, like Elverby
Primary School, rather than allowing a few dozen homes
here and there in the standard British fashion. And it helps
that people are used to change. Chris Curtis, the MP for
Milton Keynes North, suggests that the city is pro-growth
because it has always grown.

Its ambition is to reach a population of 410,000 by 2050,

which would make it bigger than Cardiff or Newcastle today.
It seems likely to hit or comfortably exceed that target. The
centre of Milton Keynes contains vast moats of surface
parking and some decrepit office buildings, some of which
will soon give way to blocks of flats. More important, on the
outskirts of the city, the grid is reasserting itself.

Some of the developments that were built on the fringes of

Milton Keynes this century are not plugged into the road
grid. Instead of houses being set back from major roads
behind banks of trees, they press up against them, as in a
conventional modern suburb. Because the homes are so
close, speed limits are low. Drive east out of central Milton
Keynes along Chaffron Way, and a fast parkway turns into a
slow residential road. Soon a driver is confronted by a
20mph zone, a crossroads, a T-junction and—horrors!—
traffic lights.

The city authorities now regret that era. The new

development, known as MK East, will be connected to the
grid and will extend it. Not far from Elverby Primary School,
earth-moving machines are constructing a road and a
roundabout—the first time for many years that one has
been added to the grid, claims Mr Marland. The new school
is impressive; a nearby clinic and community centre is too.
But he seems more delighted by the roundabout than by
anything else. ■

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Plan it and the builders will come

Worries about Britain’s

construction crunch are
overdone
Stop worrying and learn to love the labour market
2月 06, 2025 09:02 上午

SIR KEIR STARMER has promised to run a government for

the builders, not the blockers. Certainly, the prime minister
and his colleagues have given the builders a lot to do.
Alongside commitments at the election to build 1.5m homes
and decarbonise the electricity grid within five years, the
government has also revived several megaprojects,
including a new rail line connecting Oxford to Cambridge·
and a third runway at Heathrow.

All that adds up. Capital investment in energy, transport,

data centres and the like will more than double over the
next five years, according to Boston Consulting Group (BCG,
see chart 1). House building will also need to rise by 50% to
hit the targets. Can Sir Keir find the builders? Worrywarts in
the construction industry fret that he will struggle. Sceptics
say the government should take things more slowly.
That would be a mistake. The history of past building booms
shows that, when demand is strong enough, work gets
done. Construction in Britain surged during the housing
bubble of the 2000s, pulling over half a million workers into
the industry. Many left after the financial crash of 2007-09,
and have stayed out. After the second world war, Britain’s
physical landscape was remade on a vast scale. Further
back, in the 17th century nearly the entire City of London
was rebuilt within a decade of the Great Fire, and to a much
higher standard. Labour markets can quite effectively
shuffle workers round when a sector has more capacity and
can offer higher wages.

That does require politicians to be flexible. London was

rebuilt so quickly in the 1660s and 1670s only because
occupational licensing rules were loosened and restrictions
relaxed on imports like Scandinavian timber. (“The
Norwegians warmed themselves comfortably by the fire of
London,” went a saying at the time.) Access to European
workers speeded construction a great deal in the 2000s;
Irish workers were important in the post-war years.

What about today? The starting-point is hardly ideal. The

share of workers in construction is at a record low (see chart
2). Industry surveys still say that planning restrictions are
the biggest block to building, but labour and materials
shortages figure, too (see chart 3). One London-area
contractor laments that young people would rather work
from home than on a building site, and that lots of Polish
workers have left Britain for Spain, with warmer weather
and more jobs. Green rules are also increasing the
complexity of construction work.
None of that should surprise, given how little Britain has
built over the past few decades. It will take a strong pipeline
of projects and—at least for a time—higher wages to pull
more people into the industry. The road will be bumpy.
Plenty of skilled trades take years to learn. Heavily
regulated sectors, like water or energy, may struggle to
pass along price increases, notes Raoul Ruparel of BCG. That
risks handicapping them in the fight for workers. Britain’s
post-Brexit migration rules are hard to navigate for self-
employed construction workers. Letting its immigration-
reducing zeal impede building would be a self-inflicted
wound for the government.

“It’s a mighty task,” says Ian Fletcher of the British Property

Federation, a trade group. But the reward is enticing, too.
One reason why building projects in Britain so often balloon
in cost and overrun deadlines is that there is no consistent
flow of them, helping teams build experience. Productivity in
the industry has languished for decades; labour-saving
advances like Japanese modular construction techniques
have not taken root. If Britain is lucky, Labour’s big push
could be demanding enough to change all that.■

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Causing concern

Britain’s plan to shake up

school inspections pleases
no one
Labour replaces a simple but controversial system with a
complex, clunky one
2月 06, 2025 09:02 上午

Hard to get the balance right

WHEN IT TOOK office Labour promised to “reset” relations

with England’s unhappy teachers. Last autumn it earned a
huge cheer from the profession when it announced that
Ofsted, the school inspectorate, would stop handing
institutions blunt overall grades (such as “Requires
improvement”, and “Inadequate”). Yet the fuzzy feelings
evaporated on February 3rd, when the government and
Ofsted released fuller details of their plans to change how
schools are monitored. Furious unions say the new regime
looks even worse than what has come before.

Resentment towards inspectors began soaring two years

ago following the death of Ruth Perry, a head teacher who
killed herself after Ofsted gave her primary school a failing
grade. A coroner concluded that inspection had at times
been “rude and intimidating”, and that the experience had
probably contributed to Ms Perry’s death. Soon after, Ofsted
published tweaks aimed at making its visits a bit less
stressful for school leaders. But last year Labour ordered it
to cook up deeper reforms.

The proposals put out to consultation this month confirm

that schools will no longer get overarching “headline”
ratings. Instead, Ofsted is to begin issuing colour-coded
“report cards” measuring how well schools perform in a
minimum of eight different subdomains, such as
“Developing teaching”, “Behaviour and attitudes” and
“Inclusion”. For each category, schools are to be handed a
grade on a five-point scale.

Though Ofsted will no longer brand any school as overall

“Inadequate”, it will still inform the government of
institutions it thinks are failing. The worst of these will get
the same medicine as at present: takeover by a “multi-
academy trust” with experience of turning schools around.
But some poor performers will instead receive help from
new squads of government troubleshooters (called “RISE”
teams). Those boffins will also counsel “stuck” schools:
institutions that repeatedly chalk up weak results, without
ever doing quite badly enough to trigger automatic
interventions.
Bridget Phillipson, the education secretary, believes all this
is going to give parents and schools better information than
at present. She implied in a speech that a move to more
granular “report cards” will make it easier for even very
good schools to identify ways they might improve. The hope
is that the new RISE teams will cut the time it takes to get
failing institutions back on track. The government says its
plans will double the number of schools which, after
inspections, receive some kind of mandatory help to
improve.

Critics on all sides are unconvinced. Supporters of the old

regime insist none of this needed fixing in the first place.
Years of blunt inspections have helped English schools rise
up international league tables, they reckon. Ditching
headline grades for mealier-mouthed summaries is a
disservice to children; asking inspectors to report on a wider
range of metrics risks making their judgments less reliable.
The much vaunted RISE teams are embryonic, their
effectiveness unknown.

Yet the loudest yowls have come from teachers’ unions,

which wanted much more radical reforms. They are happy
to see the back of headline judgments. But they are furious
that inspectors will instead begin handing schools more
grades in more categories than ever before. The Association
of School and College Leaders insists the new system will
“subject a beleaguered profession to yet more misery”. The
National Education Union says the “botched and rushed”
rethink will lead only to “continued disaster”.

The new regime will not be in place until at least November,

by which time school inspections will have been operating
under interim rules for more than a year. Should resistance
to the government’s plans force a pause or a rethink, the
system could end up stuck in limbo for even longer than
that. Meanwhile, the furore is drawing energy and focus
away from problems—including rampant absenteeism and a
swiftly collapsing special-needs system—that almost
everyone agrees are extremely pressing. Labour may end
up wishing that it had left inspections well alone. ■

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Equal pay

British “equal value”

lawsuits have become an
absurd denial of markets
The gavel takes on the invisible hand
2月 06, 2025 09:02 上午

THE DECISION came, as awkward news tends to, late on a

Friday. The employment court had been asked to rule not so
much on matters of law as on matters of the market: what is
value, and who works equal amounts of it? Tens of
thousands of workers (most of them female) in stores were
suing Asda, a supermarket, for being paid less than their
colleagues (most of them male) in warehouses, on the basis
that their work was of “equal value”.

After a decade of legal wrangling, on January 31st the

judges sided with the shop workers (with the exceptions of
personal shoppers and edible-grocery staff). It is the largest
private-sector suit of its kind so far, involving at least
60,000 staff. And it could become the costliest: if Asda fails
to prove that it had good reason (a “material factor”) for the
pay disparity, in a process that could take another two
years, the final compensation to the plaintiffs could be
worth £1.2bn ($1.5bn), and boost Asda’s wage costs by an
annual £400m, or 15%.

The court left no aisle unscrutinised. Judges weighed up the

relative pitfalls of dealing with muttering customers or
impatient lorry drivers. Ms Ashton regularly mopped up
spills. Mr Opelt had to learn how to operate a hand-held
scanner. Both Ms Hutcheson and Mr Ballard used a forklift
for some of their work. Rival experts were hired. Precise
timings were calculated (Mr Devenney spent 3% of his time
tidying). Points for knowledge, communication and
“emotional demands” were awarded. Detailed job
descriptions submitted for the judges’ consideration
spanned over three times the length of the complete works
of Shakespeare.

The aim of all this is equality. Advocates of “equal value”

suits argue that predominantly female jobs are
systematically paid less than similarly useful “male” ones,
and that needs rectifying. This was not originally a British
notion of equality. Barbara Castle, a Labour minister who
brought about the Equal Pay Act in Britain in 1970, had
thought “equal value” too abstract a concept to be included
in her law. But the European Union insisted, and an
amendment came in 1983: British workers were then
entitled to claim equal pay if they could prove they
performed work of equal value to their opposite-sex
colleagues. Few tried to do so. Such cases were time-
consuming and therefore costly.

Then came a change in the economics, says Stefan Cross, a

leading equal-pay lawyer. The European Court of Justice
ruled in 1999 that winning litigants could claim back pay for
six years instead of two. In Britain regulations for “no win no
fee” lawyers had been relaxed. The combination made
group “equal value” suits financially viable, even lucrative,
for firms. And so their numbers soared. Reports by the
Advisory, Conciliation and Arbitration Service, a public-
arbitration body, counted over 50,000 new equal-pay cases
in 2007-08, compared with just 3,000 in 2003-04.

The new wave hit councils and the health service first. A suit
comparing cleaners with binmen in effect bankrupted
Birmingham City Council. Supermarkets came next. Leigh
Day, the law firm representing Asda’s staff, is also
representing shop workers bringing claims against Tesco,
the Co-op, Morrisons and Sainsbury’s. A clothes chain, Next,
is already on the hook to pay compensation, possibly more
than £30m. The cases are costly even for those not directly
involved in them. Organisations pay millions to consultants
to draw up “job evaluation schemes” in an effort to protect
themselves from litigation.

The cases do not hinge on proving any actual sexism. The

ruling against Next noted that “there was no conscious or
subconscious gender influence in the way Next set pay
rates”. Nor are women precluded from working in
warehouses (Next’s was 47% female). The court will not
even consider whether Asda had a good reason for the pay
disparity until the coming stage of the case.
What started on the continent is likely to return there. The
EU’s Pay Transparency Directive seeks to make the cases
easier to bring in Europe too, says Jennifer Granado, a
Brussels-based lawyer. The gavel-wielding hand is on the
move, at the (considerable) expense of the invisible hand. ■

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Rhetoric and reality

Speeches in Britain’s
Parliament are getting
shorter—and worse
The problem lies not merely with speaking but with listening
2月 06, 2025 09:02 上午 | Westminster

A way with words

THE PROBLEM is the Post-its. Many criticisms have been

made of prime minister’s questions (PMQs). It has been
called “boorish”, “childish” and “rude”. Sir Tony Blair
thought it “unforgiving”; David Cameron called it “Punch
and Judy politics”. It can be cruel: it was at PMQs that Boris
Johnson called Sir Keir Starmer “a pointless human bollard”
and “Captain Crasheroony Snoozefest”. It can cause shock—
and awe. “I count my blessings”, George H.W. Bush said,
that “I don’t have to go into that pit.”

But PMQs is changing. “Captain Crasheroony” does not

bring insults to PMQs. Instead he brings a nice, smart A4
file, neatly flagged with Post-its. Then he opens it and says
things like: “Clean energy is at the heart of this mission-
driven government.” He is not boorish, childish or rude. Or
interesting. He is unlikely to strike fear into foreign
presidents. He does have a splendid collection of stationery.

And that too is a problem. Listen closely in the corridors of

power and you will hear the usual worries: that Britain’s
finest hour is over; that the cradle-to-grave NHS is in its
grave; that even the white heat of AI technology won’t save
us. But you will hear another worry too: that politicians can
no longer even articulate our inadequacy. That phrases such
as “finest hour” (Winston Churchill) and “white heat of
technology” (Harold Wilson) and even “corridors of power”
(C.P. Snow) are no longer being coined. That, as one MP put
it, “the day of oratory is passing.”

Given that that MP was a young Churchill it is possible that

the death of rhetoric has been exaggerated. Memory is a
poor judge of oratory, since memorable phrases are just
that: memorable. The sieve of history will therefore tend to
catch the best and lose the rest. But something does seem
to be changing, quantitatively as well as qualitatively. Study
a century of parliamentary speeches (excluding interjections
of under 100 words) and a pattern emerges.
In 1938 the average speech was almost 1,000 words long.
In 1965 James Callaghan delivered a budget speech that
was almost 19,000 words: less a speech than a novella.
Until 1970 the average was still almost 900. Then they start
to shrink—dramatically so after 2015, when video
functionality appeared on Twitter (now X). Last year the
average was 460: less a novella than a few tweets (see
chart).
This matters. Britain is in trouble. Its GDP has barely risen in
five years. It needs to grow. Yet speak to people in business
and few have a sense of how the government hopes to
make this happen. Political speeches are, says Michael
Gove, a former Conservative minister, more than mere
messaging. “Think in ink” was, he says, a phrase he lived by
when in government. Write a speech down and “it has to be
logical.” People sniff at slogans but words are not witchcraft.
They are simply thoughts on the page. Sir Keir needs to
offer his, clearly to the country. A stationary country
requires more than stationery from its PM.

This matters historically too. British politics has been shaped

by combative debate. Leaders at PMQs stand, it is said, two
swords’ length apart. Their week is defined by that joust:
PMQs lasts for only half an hour in total but Margaret
Thatcher spent almost eight hours preparing for it. Debate
defines who becomes a politician: a list of former presidents
of the Oxford Union is a “Who’s Who” of British politics—
William Hague, Mr Gove, Mr Johnson.

Arguably Britain has overemphasised argument. Open the

first edition, published in 1844, of “Erskine May”, the
parliamentary handbook, and between advice on whether
one can hiss in the House of Commons (one cannot) or
insult the monarch in it (definitely not), you will find 87
mentions of the word “debate” but only five of the word
“constituents”. This is Parliament less as a democratic tool
than a debating club with a country inconveniently attached
to it.

Debate shaped its elite institutions. For centuries, students

at Eton, Oxford and Cambridge stood at despatch boxes to
debate the issues of the day. The titles of these offer an
index of each era’s anxieties: in Oxford, students considered
such topics as pacifism (“This House will in no
circumstances fight for its King and its Country”), the rise of
socialism (“this House deplores” it) and delicate questions
of feminism (“Woman: Angel or Idiot?”).

Talking less, tweeting more

Such debates might seem absurd. They are also excellent

preparation for Westminster. Points are not awarded for
factual knowledge or deducted for ignorance. Victory
comes, as in politics, with a vote. Thus the “person with the
funniest jokes wins”, says Simon Kuper in “Chums”, a book
on Oxford politicians. This trains you “very well for survival
and success in the House of Commons”. Though not
necessarily, as Mr Johnson’s eloquent but chequered career
shows, for how to run a country well.

To understand the state of English oratory, creep into

Parliament’s press gallery. This offers the usual blend of
decadence and decay. It has a doorman in bowtie and tails,
magnificent leather seats and frayed carpets. Sit here and
you are close enough to hear the PM turn the pages with
those Post-its. But do not look at him; turn and look at the
press gallery behind. Except at PMQs, it will be almost
entirely empty.

The real problem with Parliament is not just that people

cannot speak. It is that nobody is listening. “Parliament”,
says Ben Griffin, a senior lecturer in history at Cambridge
University, “is becoming peripheral”. It is notable that
Britain’s fastest-growing political party has just five MPs.
Parliament’s benches are less a place to go to pose
questions than to pose for clips on X. This House seems to
believe old-fashioned debating is a waste of time. ■

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Bagehot

Must Leeds always lose?

Too prosperous to pity. Too poor to thrive
2月 06, 2025 09:02 上午

ATTENDEES HEADING to Leeds Dock for the “Real Estate

Investment and Infrastructure Forum” in May are in for a
treat. Infrastructure-lovers arriving in the northern city by
train should go down into the bowels of the station, ignoring
the whiff of damp from its position on arches above the
River Aire. Cut through the quayside new-builds towards a
crumbling stone jetty. A tram was supposed to link the dock
to the station. It was never built. Leeds remains the biggest
city in Europe without a mass-transit system. Instead, the
Twee, a bright-yellow second-hand taxi boat from
Amsterdam, has to do.
What Leeds wants, Leeds does not get. Whenever a major
infrastructure decision has been made, England’s third-
biggest city has invariably been on the wrong end of it. The
Leeds limb of HS2, the blighted high-speed rail network, was
the first to be cut. Northern Powerhouse Rail, a plan to
improve links between Leeds and Manchester, was
curtailed. After the city approved an expansion to Leeds
Bradford Airport in 2021, the then Conservative government
blocked it. The Twee is a bright-yellow reminder of the city’s
tramlessness; it runs every 15 minutes at £3 ($3.75) each
way.

If ever there was a moment for Leeds to enjoy a shift in

fortunes it is now. Sir Keir Starmer, the prime minister,
attended university there. Even better, the member for
Leeds West and Pudsey is the chancellor, Rachel Reeves. Yet
Labour has announced a slew of measures to improve
growth in Britain’s thriving south-east. Heathrow is to
benefit from a new runway, while a rail route connecting
Oxford and Cambridge is to be dotted with new towns.
Leeds lost out again. Why?

It is not NIMBYism. At the moment, Leeds is a city of

architectural renderings plastered on the side of building
sites. Its population grew by 8.1% between 2011 and 2021,
the highest rate of any big city bar Bristol. It built 4,441
houses in 2023-24. If every local authority matched it on a
per-person basis, Labour would meet its stretching target to
build 1.5m homes by 2029. Most do not.

Instead, Leeds has become the laboratory for a dominant

strand of thinking in Britain’s Treasury: that infrastructure
does not much matter. In this world the relative failure of
England’s main cities is the result of a lack of skills, rather
than a lack of capital investment. Leeds is an unwilling lab
rat. Standing near a ring road where a gleaming high-speed-
rail terminus should be is the Asda Centre for Merchandising
Excellence. There is no finer place to learn the best way to
sell a sausage; there is no worse place to try to catch a
train.

The result is economic purgatory, with the city unable to

either truly thrive or wither. Take Temple Works, a bizarre
warehouse that combines Egyptian-style hieroglyphs and
experimental Victorian engineering. It is the heart of a
redevelopment to the south of the main station in Leeds and
was to be the site of the British Library’s northern branch. At
the last budget, Ms Reeves chopped its funding of £10m.
The building is Grade I-listed, meaning it must be cherished.
The British state enforces the obligations of a rich country
with the means of an increasingly poor one. If the area is to
grow, it will have to do so around a rotting hulk.

When investment is greeted with technocratic scepticism,

only politics can loosen the purse-strings. It is a game Leeds
has played badly. Greater Manchester has long managed to
pull together. It is a coherent whole, politically and
economically. By contrast, “West Yorkshire”, the newish
combined authority of which Leeds is the most important
part, is an awkward compromise. “We just thought people in
Yorkshire hated everyone else,” said David Cameron, a
former prime minister, during one row in the region. “We
didn’t realise they hated each other so much.” It is still the
neatest summary of intra-Yorkshire politics.

A paranoid style shapes the city’s politics. The current

government insists it is committed to a tram in Leeds, just
as the government was committed to a tram under the
Conservatives in 1993 and under Labour in the 2000s. There
will be shovels in the ground by 2028, insist local politicians.
Those in the city will believe it when they see it; local
investors are unwilling to place money on it either. Yet more
economic stasis is the result.

Some fall from paranoia into conspiracy and the idea that
politicians and civil servants in the south-east actively want
the region to fail. The reality is more depressing:
government is institutionally incapable of caring about a
middling city, doing fine but not well. Leeds was never a
post-industrial wasteland. It did not require the fiscal CPR
applied to Liverpool or Teesside. An official from the
Treasury visiting for the day will see cranes in the sky and
the city centre’s curious mix of Greggs, a baker, and stores
selling Gucci and assume all is peachy.

Yet the government looks past places like Leeds when it

comes to growth. Ms Reeves and the Treasury focus on the
south because it pays Britain’s bills. Only two regions are
net contributors to Britain’s coffers: London and the south-
east. Leeds is caught in a trap: too prosperous to pity, but
still too poor to pay its own way.

Can’t spell Leeds without an L

If Britain has a growth problem, it is not just that it has

hobbled high-potential stars such as Oxford and Cambridge
in the south, but also in part because cities like Leeds
underperform. And if Leeds has a problem it is because a
place like Leeds Dock is almost empty. Local businesses rule
out moving there because it is poorly connected. No amount
of signs declaring it “LEEDS CREATIVE DISTRICT” in a
tasteful sans-serif font changes that. On a fine recent
winter’s afternoon the place is dead. The only noise comes
from the builders ripping down flammable cladding from the
surrounding buildings and the Twee blasting its horn as it
rounds a bend on the Aire. ■
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International
Xi Jinping swings his “assassin’s mace” of
economic warfare
Trade trouble :: China is weaponising its supply chains, but risks blowback
if it goes too far

Allies will not appease Donald Trump for

ever
The Telegram :: If Trump convinces partners that the post-1945 order really
is dead, things will get ugly

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Trade trouble

Xi Jinping swings his

“assassin’s mace” of
economic warfare
China is weaponising its supply chains, but risks blowback if
it goes too far
2月 06, 2025 09:03 上午

THE INK had barely dried on Donald Trump’s order to

impose a 10% tariff on imports from China before its leader,
Xi Jinping, was reaching for his “assassin’s mace” to strike
back. On February 4th, in addition to new tariffs, the
Chinese government listed several rare metals as controlled
exports, giving Mr Xi the power to ban shipments to America
at a moment’s notice. The riposte underscores an essential
difference between American and Chinese power: Mr
Trump’s ability to coerce comes largely from what America
buys and its dominance of international finance, while Mr
Xi’s far more nascent coercive strength is based on what
China sells.

The weapon he is wielding is newly forged and based on

tough export-control rules enacted just over two months
ago, on December 1st, which expanded on far more
tentative restrictions imposed since 2023. The new regime
had its first real test two days later, when China banned
shipments to America of gallium, germanium and antimony
—rare metals needed to make advanced chips, weapons
and munitions—as well as some “superhard” materials with
defence applications. Prices of some key minerals jumped
after the bans (see chart 1).
In its most recent move this month, China imposed controls
on five additional metals, including tungsten, used in
armour-piercing bullets, and molybdenum powder, used to
make missiles. This salvo appears to have been a warning
shot rather than the start of a full-scale trade war: China
gave itself the ability to ban exports of the five metals, but
has not done so yet.
Nevertheless, China’s growing embrace of export
restrictions and bans signals its intent to use its economic
power to weaponise supply chains and punish foreign firms
and countries. As such, the move has alarmed policymakers
and analysts in America, who worry it could harm their
strategic industries. “In terms of strengthening military
preparedness, China is operating in a wartime posture while
the United States is operating in a peacetime posture,”
noted Gracelin Baskaran and Meredith Schwartz of the
Centre for Strategic and International Studies (CSIS), a
think-tank in Washington. “Bans on vital mineral inputs will
only further allow China to outpace the United States.”

It is also causing consternation among governments from

Europe to East Asia, who fret that the same economic
weapons may be turned on them. Some have been running
war games to see how they might fare if a critical input
were to be choked off, and unlikely constellations of
countries are clubbing together in new trade pacts to shield
themselves.

China’s new export-control regime ostensibly tracks items

that are “dual-use”, meaning they have both civilian and
military applications. Chinese exporters of listed products
must now tell the state who their customers are and what
they are likely to use the goods for. But Mr Xi’s sanctions go
far beyond non-proliferation, and seem to be aimed at
entrenching China’s economic domination of key
technologies, materials and industries. In doing so he is
deepening other countries’ dependence on China in areas
such as solar panels and the batteries used in electric cars.
He has called the world’s reliance on China for these
advanced technologies his “assassin’s mace”, or trump
card, that will give China “deterrent capabilities based on
artificially cutting off supply to foreigners” should they
impose sanctions.
If successful this would add to a growing one-way
dependency of Western economies on China. Canada’s
producers, for example, are ten times more reliant on the
use of Chinese inputs than Chinese producers are on inputs
from Canada. Similarly stark asymmetries show up in
countries from the EU (see chart 2).

This has allowed Mr Xi to take aim at a vulnerability in

Western economies, and to exploit one of China’s key
strengths. A wide range of electronics, from radars and
smartphone chargers to the computer chips that will be
used to train artificial intelligence, rely on a small number of
rare minerals dominated by China. One of these is gallium,
which America has not produced since 1987. Although
America imported less than $150m worth of the stuff last
year, its impact is far bigger because it is used in high-value
products. A full embargo would trim some $3.1bn a year
from America’s output.

Gallium is not the only critical mineral that China now

dominates. Although many rare metals are found in places
such as Australia, Brazil, Greenland and South Africa, about
90% of the world’s capacity for refining them is in China.
China produces almost all of the world’s germanium and
manganese, three-quarters of its lithium and natural
graphite and half its antimony. Often few good substitutes
for such metals exist. When it comes to the magnets used in
wind turbines, for example, only neodymium will do.
Alternatives are either more expensive or not as good.

Worryingly, the West’s reliance on Chinese-made inputs for

its own industries goes far beyond rare minerals and is
greater than meets the eye. Most economists or strategists
look simply at how much Western countries import from
China when assessing vulnerabilities. But when you also
include imports from third countries that contain Chinese
inputs, the figure jumps sharply, according to Richard
Baldwin of IMD Business School and co-authors. Looked at
this way, America’s dependence on China is four times
greater than indicated by bilateral trade statistics.
When it is not being used to punish, China’s exercise of
economic power and of its new export-control tool follows a
clear commercial logic. Its officials stop the flow of inputs
and intellectual property into foreign products that may
challenge Chinese national champions, says Rebecca
Arcesati of MERICS, a European think-tank. Take, for
example, high-end medical equipment. On February 4th, as
part of its response to Mr Trump’s tariffs, China’s commerce
ministry added an American genomic-sequencing giant,
Illumina, to its new “unreliable entities list”, potentially
cutting it off from its Chinese patients and manufacturing
facility. China’s own sequencing champion, BGI, is in a bitter
battle with Illumina for global market share.

Beyond stemming the flow of raw inputs, China’s

bureaucrats are also keen to slow the efforts of other
countries to build supply chains that bypass it. In recent
years, both Chinese and Western firms have moved
production to third countries to skirt tariffs and avoid being
cut off in a conflict. This transformation, known as “China
Plus One”, challenges the Communist Party’s grip on an
increasing number of global supply chains and has spurred
economic planners to issue tighter controls on the sharing of
intellectual property. In January China proposed controlling
the export of know-how for the extraction and processing of
rare metals, specifically gallium and lithium.

China clearly sees some parallels between the power

America has to impose financial sanctions from its position
at the centre of global finance, and its own power to punish
adversaries from its position at the heart of global
manufacturing, through its dominance of critical minerals.
But America’s use of financial sanctions also offers a
cautionary lesson on the geopolitical paradox that China
faces: the more successful it is in creating monopolies and
dependencies, and using them to bend countries to its will,
the more it will push those countries to diversify their
exposure.

America has been able to punish people, companies and

countries by shutting off their access to international
payment systems. For instance, it has booted some Russian
banks off SWIFT, the messaging system used by more than
11,000 financial institutions for cross-border payments. But
in doing so, it has pushed China, Russia and others to
develop alternative payment systems. Last year Russia
presented efforts to persuade the BRICS group of countries
to create such a system as a way of sanctions-proofing
themselves.

The West’s use of financial sanctions offers other lessons,

too. In theory these hit hard and quickly, and ought to be
easy to police. In the real world, however, groups ranging
from Hamas to drug gangs have been able to dodge them
by funnelling money through cryptocurrency markets or
lightly regulated banking systems.

China’s ability to enforce export controls abroad may face

similar problems. It will require officials to keep track of
more than 700 products and producers, their customers and
the customers of those customers. America has struggled to
stop its high-end chips from being smuggled into China, or
dual-use materials making their way to Russian defence
firms. It will be harder for China to track critical minerals
shipped in small quantities.

Western governments cannot rely on smuggling metals, or

on suppliers in third countries turning a blind eye. Instead
many are keen to diversify their supply of critical minerals.
Throughout 2022-24, dozens of countries signed
agreements to share information, including sensitive trade
secrets, and encourage private investment for alternative
supplies of inputs critical to their economies. Last autumn
officials from 14 countries in the Indo-Pacific, led by South
Korea, huddled in Washington to map their shared
vulnerability to supply-chain shocks and to war-game
responses. The countries included Vietnam, Thailand,
Malaysia and Fiji as well as the major Western allies.

They can draw some comfort that China would face the
same dilemma that the West has long faced: the more
powerful the sanctions and the bigger your enemy, the
mightier the blowback. ■

This article was downloaded by calibre from

https://www.economist.com/international/2025/02/06/xi-jinping-swings-his-assassins-
mace-of-economic-warfare

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The Telegram

Allies will not appease

Donald Trump for ever
If Trump convinces partners that the post-1945 order really
is dead, things will get ugly
2月 06, 2025 09:03 上午

THESE ARE heady times for supporters of President Donald

Trump. In their telling, their champion has declared a new
era in which America will use its strength without
embarrassment to secure its interests, and the world is
falling in line.

For leading members of Trumpworld, such a scuttling retreat

is no surprise. As they see it, the globalised, America-led
world order that followed the second world war had become
a racket. Especially in the hubristic years after the Soviet
Union crumbled, when Washington grandees surveyed a
world seemingly without rivals, successive presidents
allowed feckless allies and trade partners to free-ride on
American security and steal American jobs. Now, like
thieves caught in the act, foreigners feel Mr Trump’s
righteous, America First wrath, and know the game is up.

As a Republican senator, Marco Rubio spent years as a

Reagan-praising advocate of a muscular American foreign
policy. After a conversion to Trumpism, he is now the
secretary of state. Explaining his new job on Fox News, Mr
Rubio described telling foreign counterparts: “I know you’ve
gotten used to a foreign policy in which you act in the
national interest of your country and we sort of act in the
interest of the globe or the global order. But we are led by a
different kind of person now.” As for countries that use
asymmetrical market opening to run up trade surpluses with
America, their leaders have been wondering “why it took us
so long” to catch on to their wiles, Mr Rubio suggested.

Seen from Washington, it looks as if even rich, proud allies

are in retreat. Take Europe. Mr Trump has demanded that
America should buy the mineral-rich island of Greenland
from Denmark. Rather than confront him, the Danes have
asked European leaders to avoid statements that might
provoke Mr Trump. Small wonder Mr Trump sounds serene,
telling reporters last month that “we will get” Greenland.
America must control the island because Denmark cannot
defend the Arctic from China and Russia, insisted Mr Trump,
mocking Danish plans to beef up its northern defences as
adding “two dog sleds” (while neglecting to mention
American armed forces already stationed in Greenland).
In truth, if Mr Trump thinks other governments are
surrendering without a fight, and resigning themselves to a
new, might-makes-right world order, he is miscalculating.
Most allies believe in the post-1945 system that he so
despises, and hope to defend its essential elements.
Avoiding fights is an initial, tactical response. A second plan
involves buying him off, explain senior figures in Brussels.
Though European Union trade officials have spent months
modelling the costs of various Trump tariffs on EU exports,
and of retaliatory moves, the real ambition is to avoid all-out
trade conflict. That explains Trump-pleasing proposals from
European Commission chiefs to buy more American
liquefied natural gas, ideally ending Europe’s need for
Russian gas. It is why several members of NATO are
promising to increase defence budgets, and to spend those
extra billions on American fighter jets and other expensive
kit.

But gestures of appeasement and tactical retreats on minor

issues can buy only so much time, and Europe is realising
that far harder choices loom. Mr Trump’s assault is broader
and more profound than anticipated, says Steven Everts,
director of the EU Institute for Security Studies, an EU
policy-planning and research agency. “The attack was
expected to come on trade and economics, we were ready
for that.” Europe’s plan was to hedge its bets to keep
globalisation alive, he relates: “There are 7.5bn people who
aren’t Americans, let’s trade more with them.”

Mr Trump, however, is picking fights that touch on Europe’s

core interests, as a bloc whose strength lies in unity and in
rules. In Brussels a striking number of Eurocrats express
angst about a dispute that pits Elon Musk and other
American technology bosses against an EU law, the Digital
Services Act. The act requires social-media firms to control
misinformation, hate speech and illegal content on their
platforms. Eurocrats investigating how X and other firms
police content could impose huge fines. Mr Musk, the owner
of X, calls that outrageous censorship, even as he wades
into Europe’s culture wars by promoting hard-right and
antiimmigrant demagogues on social media. A European
official insists that the online spread of “blatant untruths”,
some propagated by Russia and other hostile powers to
influence elections, imperils “the European way of life”. But
Mr Musk’s complaints have Mr Trump’s ear. “We are stuck,”
laments the official. “We can’t just say we won’t apply the
provisions of the Digital Services Act.”

Mistaking fear for an admission of defeat

In the glass-walled corridors of Brussels power, there is real

anger over Mr Trump’s support for populist nationalists in
Europe, notably Hungary’s prime minister, Viktor Orban. Mr
Orban’s pro-Russia, pro-China sympathies routinely lead him
to block tough EU policies towards those powers. For
centrist Europeans, it is not just a partisan move for
Trumpworld to embrace Mr Orban. It is an attack on their
continent’s unity and thus its security.

European leaders are trying to accommodate Mr Trump—for

now. A handful of populist leaders share his views. A larger
group is betting that he will become distracted and find
other targets. Some hope to wait him out. But the moment
that Mr Trump convinces allies that their favoured world
order is dead, their incentives will reverse. With nothing to
lose, even friendly European governments will try to
deceive, resist and hedge against a hostile America.
Already, influential voices in Brussels, Berlin and other
capitals murmur that Europe should draw closer to China.

Mr Trump loves winning. Actually, many allies and rivals still

hope that he may yet fail. Once they believe him, he will
find the world harder to bend to his will. ■

This article was downloaded by calibre from

https://www.economist.com/international/2025/02/04/allies-will-not-appease-donald-
trump-for-ever

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Business
Corporate America’s diversity wars are just
getting started
Whiplash :: Donald Trump’s attacks on DEI are causing huge headaches for
bosses

The data-centre investment spree shows no

signs of stopping
Splashing the cache :: Demand for processing power will continue to
outpace supply

Can Nintendo’s new console propel it to

even greater heights?
Next level :: The Switch 2 is another bet that price and portability will beat
processing clout

Shein and Temu are in Donald Trump’s

cross-hairs
Parcel out :: An end to the de minimis exemption will hurt Chinese e-
commerce firms—and enrage American consumers

An encounter with the reception desk

Bartleby :: The place where first impressions are made

Donald Trump loves big oil. Does big oil love

him back?
Schumpeter :: American supermajors’ shareholders have mixed feelings

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Whiplash

Corporate America’s
diversity wars are just
getting started
Donald Trump’s attacks on DEI are causing huge headaches
for bosses
2月 06, 2025 09:03 上午

“I AM A woman of colour. I am a mom. I am a cis-gender

millennial who has been diagnosed with generalised anxiety
disorder. I am intersectional.” She was also a spook. Her
mission: advertising a career at the CIA. The time? 2021.
The place? President Joe Biden’s America.
The American workplace was remade after the death of
George Floyd in May 2020. A policeman was convicted of his
murder. There were riots. In the heat, the principles of
diversity, equity and inclusion (DEI) were extolled in
government and across corporate America. Unconscious-
bias training and email-signature pronouns became features
of office life. All manner of flags were hoisted. Active
discrimination was encouraged through hiring practices that
often penalised white men. Political correctness went mad
as never before.

That vast project is now crumbling. President Donald Trump

has promised a “revolution of common sense”. America’s
federal bureaucracy is his main target, and those in DEI-
related jobs are the bullseye. Last year the State
Department employed a staff of 13 in its “office of diversity
and inclusion”; $2.9m was earmarked for diversity training.
Now, under secretary of state Marco Rubio, staffers have
reportedly been told to declare diversity initiatives to
“DEIAtruth@opm.gov” (the “A” stands for accessibility).
Finished, too, are plum contracts for consulting firms. Since
2020, for instance, Deloitte had won more than $12m in
DEI-related work from the Department of Health and Human
Services.

In corporate America the backlash against DEI began well

before Mr Trump’s return. After the Supreme Court ended
affirmative action in university admissions in June 2023, a
barrage of lawsuits were filed against companies. “We sued
international law firms over their internship programmes.
We sued venture-capital firms. We sued the Smithsonian
Museum. We sued Southwest Airlines. I can’t even
remember all of them,” says Edward Blum, who brought the
university-admissions case. A second front opened up
online. “We’ve been fighting this fight for five years, and
we’ve faced immense opposition,” says Christopher Rufo, an
influential conservative activist who has written extensively
against corporate DEI policies.

Mr Trump’s victory in November accelerated the reversal.

Some of America’s biggest firms, including Amazon and
Walmart, have since scrapped DEI initiatives. The most
severe whiplash is in tech. You can listen to it on Spotify. On
one podcast Marc Andreessen, a venture capitalist, scolded
BlackRock, the world’s biggest asset manager, for forcing
“retarded” social policies on companies it invests in. Mark
Zuckerberg went on Joe Rogan’s show to decry the lack of
“masculine energy” in the modern workplace. In an email to
its staff on February 5th, Google said that it would axe hiring
targets intended to improve the diversity of its workforce.

What remains of the DEI movement is being swiftly

rebadged. Last month McDonald’s said it too would abandon
its workforce-demographic goals; the fast-food chain’s
“diversity team” has become its “inclusion team”. At Target,
“supplier diversity” is out; “supplier engagement” is in. The
retailer says it wants to stay “in step with the evolving
external landscape”.

Firms retaining DEI policies are likely to have change forced

upon them. Anti-DEI executive orders came immediately
after Mr Trump’s inauguration. One revoked civil-rights-era
rules that required extensive demographic-data collection
by firms doing business with the government (that includes
many big public companies). The burden of the old rules
should not be understated. “I have seen many companies
decline government contracts just because of the costs of
compliance,” says Bob Lian of Akin Gump, a law firm.

Deals with the state will now require companies to take a

vow of abstinence from “programmes promoting DEI that
violate any applicable federal anti-discrimination laws”. But
DEI is a broad bag of concepts. So far that ambiguity has
aided its supporters: one man’s discriminatory pursuit of
diversity is another’s agenda for inclusion. Now Mr Trump is
fighting vague management-speak with vaguer legalese.
When bosses “don’t know what the government and the
court’s view will be of which programmes are lawful” they
will be much more careful, says Jason Schwartz of Gibson
Dunn, another law firm.

It is having the intended effect. Bosses are seeking counsel

on whether workplace “affinity groups”, for example, are
legal. Is it worth a court case to find out? “Some of the
mechanisms in the executive order are clearly designed to
generate private litigation,” says Ishan Bhabha of Jenner &
Block, another law firm. America First Legal, one of the most
litigious groups in recent years, was founded by Stephen
Miller, now Mr Trump’s deputy chief of staff. “The people
leading the activist groups now have the machinery of the
federal government behind them,” says Mr Schwartz.

Federal agencies have also been told to name and shame

institutions they deem the worst DEI offenders, including
public companies. In government, that is unprecedented.
But in the online MAGA world, public shaming has proved to
be a powerful tool. “I expect the investigations to yield a
treasure trove of excess, illegality and insanity, all driven by
left-wing ideologies,” says Mr Rufo.

When DEI was ascendant, bosses thought of themselves as

statesmen solving social problems more effectively than
governments. Many now blame the hubris of that period on
paying too much attention to the demands of young
employees. The reality is more complicated. Not long ago
there was consensus among elites about the benefits of DEI.
As America’s culture wars have intensified, that consensus
has shattered. With Mr Trump in the White House, the fallout
is likely to get more painful still.

Costco offers a cautionary tale. Unlike Target, the retailer

has not released a statement disavowing its commitment to
DEI. But it told shareholders to reject a resolution from a
conservative group which would have forced a review of its
DEI policies. They did; such resolutions rarely get much
support. The left wrongly interpreted this as a full-throated
commitment to DEI: Al Sharpton, a black preacher, strolled
its aisles in support. The right—just as inaccurately—saw
the move as a defiant challenge to Mr Trump’s war on DEI.
Attorneys-general from 19 Republican states wrote a letter
chastising the firm. Promises of boycotts swirled online.
When selling a hotdog and soda for $1.50 can’t unite
Americans, perhaps nothing can. ■

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technology, sign up to the Bottom Line, our weekly
subscriber-only newsletter.

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https://www.economist.com/business/2025/02/02/corporate-americas-diversity-wars-are-
just-getting-started

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Splashing the cache

The data-centre
investment spree shows
no signs of stopping
Demand for processing power will continue to outpace
supply
2月 06, 2025 09:02 上午

IF INVESTMENT IN data centres is about to slow, nobody told

Mark Zuckerberg. On January 29th, during an earnings call,
Meta’s boss boasted that the social-media giant had plans
to build an artificial-intelligence (AI) data centre “so big that
it’ll cover a significant part of Manhattan if it were placed
there”.
His timing was conspicuous. Only two days earlier the share
prices of firms from Nvidia, a chipmaker, to Dell, a
manufacturer of servers used in data centres, had
nosedived in response to the release of a new AI model
created by DeepSeek, a Chinese firm. Its training costs were
a fraction of those for similarly powerful Western models,
raising questions over how much computing power—and
investment—is needed to develop AI.

Although many of those share prices have since recovered,

the episode has brought increased scrutiny to the huge
sums of money that are being spent on data centres. Meta
and America’s three big cloud-service providers—Alphabet,
Amazon and Microsoft—splashed a combined $180bn on
data-centre infrastructure last year. Add in spending by
smaller tech firms, telecoms providers, big enterprises and
data-centre operators such as Digital Realty and Equinix,
and the figure rises to around $465bn. Land, buildings and
peripheral gear such as electrical equipment make up about
30% of that, with chips, server racks, networking kit and the
like accounting for the rest. Cashed-up private-equity firms
such as Blackstone have been lured in by the spending
boom, undertaking a record $70bn-worth of data-centre
deals last year.

From northern Virginia to Johor Bahru in Malaysia, there are

now as many as 11,000 data centres around the world, by
one estimate. They collectively guzzle some 55 gigawatts
(GW) of power (about as much as the generating capacity of
the Netherlands) and take up around 300m square feet of
land (more than 4,500 football pitches). The Americas are
home to a little over 50% of capacity, measured by power
consumption, with Asia accounting for just under 30% and
Europe, the Middle East and Africa making up the remaining
20% (see map).
The spending spree shows no signs of letting up. On
February 4th Sundar Pichai, Alphabet’s boss, said during an
earnings call that his firm’s capital expenditure would hit
$75bn this year, mostly for data centres, up from $53bn last
year and more than analysts had expected. At least another
63GW-worth of data centres are set to come online over the
next few years, according to Omdia, a research firm.

Yet those worried that the world will soon be awash in

excess data-centre capacity need not be, for two reasons.
The first relates to supply, of which there is currently too
little. According to CBRE, a property firm, just 2.8% of data-
centre space in North America is unoccupied; capacity is
often “pre-leased” even before it is built, typically for 10-15
years.

Both Alphabet and Microsoft blamed capacity constraints for

slower growth than expected in their cloud divisions in the
last three months of 2024. In an effort to keep up with
demand, the cloud giants have been leasing facilities from
data-centre operators. But they, too, have been struggling
to expand supply quickly enough. Jon Lin, an executive at
Equinix, points out that it can now take three years to build
a data centre, up from 12-18 months not long ago.

Supply chains are part of the problem. CBRE notes that a

growing number of projects are in the “under-construction
phase for extended periods” because of power
shortages. The wait for transformers, a critical electrical
component for data centres, can be years.

Governments around the world have also gummed up

development. In Malaysia, which has emerged as a regional
data-centre hub, officials have rejected applications for new
facilities to conserve water and power. Last year Dublin
axed a data centre planned by Alphabet; other cities have
put in place temporary moratoriums on new facilities. In
Virginia, home to a quarter of America’s data-centre
capacity, local authorities are tightening zoning rules to limit
where data centres can be built.

The second reason not to expect a data-centre glut relates

to demand, of which there will still be plenty in the years
ahead. At the end of 2024 AI soaked up only about a tenth
of data-centre capacity, according to Goldman Sachs. Before
the DeepSeek ruckus, the investment bank predicted that
AI’s data-centre usage would triple by the end of 2026. Even
so, it would still have accounted for only about a quarter of
the total (see chart).

Various other forces are propelling demand for data centres.

Many companies are still in the process of digitising their
operations and moving them to the cloud. Internet usage
continues to rise as consumers in poor countries gain access
and those in rich countries gorge on video content. Devices
from fridges and cars to industrial machinery now generate
oodles of data, too.

Recentred

Even if demand from AI decelerates because models require

less computing power to train, data-centre operators say
that their facilities could be repurposed for other
applications. The biggest difference between AI and regular
data centres is how much power they consume per square
foot: running whizzy AI chips in particular requires lots more
energy. That means cooling systems have to be upgraded,
though not much else. Switching between uses is “pretty
seamless”, says an executive at one data-centre operator.

What is more, plenty of techies are optimistic that cheaper

AI will increase demand for the technology. Some also point
out that new “reasoning” models use more computing
power when responding to queries, in order to generate
better answers. Whether those effects will be enough to
offset a fall in the number-crunching capacity needed for
model training is not yet clear. In the meantime, the data-
centre bonanza goes on. ■

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technology, sign up to the Bottom Line, our weekly
subscriber-only newsletter.

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shows-no-signs-of-stopping

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Next level

Can Nintendo’s new

console propel it to even
greater heights?
The Switch 2 is another bet that price and portability will
beat processing clout
2月 06, 2025 09:02 上午

Rainbow road to riches

THE WORLD’S most successful maker of gaming hardware

has not released a new console for nearly eight years. Yet
the fanfare around the Nintendo Switch 2, expected to
launch in the next few months, has been relatively quiet.
Last month Nintendo released a brief video introducing the
machine, which looks much like its predecessor. Under the
plastic casing things are no more exciting: analysts expect
the console to pack about as much processing punch as
Sony’s PlayStation 4 (PS4), which is more than 11 years old.

The Switch 2 is a sheep in sheep’s clothing. So why is

Nintendo’s share price at an all-time high? As greater
computing power leads to diminishing improvements to the
gaming experience, Nintendo is betting that consumers are
willing to trade processing oomph for portability and price.
That proved to be a winning gamble with the original
Switch. With its next console, Nintendo is doubling down on
the strategy.

Early rounds of the “console wars” were defined by

competition over what the machines could do. Each new
generation of console represented a step change in
graphical fidelity or gaming mechanics. Nintendo’s N64,
released in 1996, catapulted Mario from two dimensions into
three; Sony’s PlayStation 2, launched in 2000, rendered a
formerly blocky Lara Croft in glorious curves.
Today each update is marginal. Sony’s PS5 Pro, a hulking
$700 beast released in November, offers improvements
over the PS5 that are imperceptible to most players. As a
result, many no longer bother to upgrade: nearly half of
active PlayStation gamers still use an old PS4, Sony says.
Game publishers increasingly cater to older machines:
Electronic Arts recently released a version of its latest “Star
Wars” game for the PS4, more than a year after it launched
on the PS5.

The first generation of Nintendo’s Switch proved that a

console no longer needs to be cutting edge to be a
commercial hit. On February 4th Nintendo reported that
lifetime sales of the device had reached 151m, just shy of
the record set by the PS2 20 years ago. The Switch pushed
Nintendo’s operating profit close to an all-time high, though
it has recently begun to fall again as the device has aged
(see chart). The Switch 2 will be backwards-compatible,
meaning millions of existing Switch users can upgrade and
still play their old games. Analysts expect the new console
to cost a modest $400-500 (Trumpian tariffs
notwithstanding), which should also help sales.

Although still underpowered relative to its peers, Nintendo’s

new console promises more computing might than the first-
generation Switch. That creates a “potentially
transformative opportunity” for game publishers, says
Matthew Ball, a technology analyst. Many of the most
popular titles of recent years, such as Activision’s “Call of
Duty” or Take-Two’s “Red Dead Redemption 2”, cannot run
on the Switch. Nintendo’s new console will offer enough
power to support them. The chance to reach millions of
gamers on Nintendo’s platform opens a big new market for
these publishers.
They need it: soaring development costs and stagnant
demand have pushed many game-makers into crisis. Last
month Electronic Arts sharply reduced its revenue forecast
for the year. Ubisoft’s future is uncertain following a string of
flops; the French game-maker has lost around 90% of its
market value since its peak in 2018. Even Sony and
Microsoft, Nintendo’s biggest rivals, are expected to publish
more games on its platform to recoup the rising costs of
development. Sony recently released “LEGO Horizon
Adventures” on the Switch, and Microsoft is encouraging
Xbox users to “play anywhere”, selling gaming subscriptions
that can be used on any device.

The Switch 2’s sales are unlikely to match those of its

predecessor, believes Josh Chapman of Konvoy, a venture-
capital fund focused on gaming. Whereas the Switch
originally faced little competition in the handheld market,
the space is now becoming crowded. The portable Steam
Deck, released in 2022 by Valve, another video-game
company, offers PC titles on the move. Valve announced last
month that it will also power new portable consoles made
by Lenovo. Microsoft and Sony are said to be working on
handheld Xbox and PlayStation devices. If the old console
wars were about building the mightiest machines, the next
battle may be about building the smallest. ■

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technology, sign up to the Bottom Line, our weekly
subscriber-only newsletter.

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to-even-greater-heights

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Parcel out

Shein and Temu are in

Donald Trump’s cross-
hairs
An end to the de minimis exemption will hurt Chinese e-
commerce firms—and enrage American consumers
2月 06, 2025 09:02 上午 | Shanghai

FOR AMERICAN CONSUMERS, online shopping has just got

dearer. On February 1st Donald Trump did away with a
decades-old provision, known as the de minimis waiver, that
exempted goods under a certain value (lately $800) from
customs duties. With the same stroke he raised tariffs on
Chinese goods by 10%. Then on February 5th the United
States Postal Service announced that it had temporarily
suspended inbound parcels from China and Hong Kong,
before abruptly reversing, causing all manner of confusion.

Millions of packages arrive in America from China every day.

Mr Trump’s new trade barriers will be a blow not only to
American consumers, but also to the e-commerce
companies that have cashed in on the de minimis
exemption. Shein, a Chinese apparel group whose largest
market is America, is now the world’s biggest fast-fashion
retailer by sales. Temu, a Boston-based offshoot of the
Chinese e-commerce firm Pinduoduo, has also expanded
rapidly in America since it launched there in 2022. TikTok, a
Chinese-owned short-video app that is currently in legal
limbo in America, has built a thriving e-commerce business
there as well, through its TikTok Shop feature.

Total de minimis shipments into America were worth around

$80bn in 2024, by one estimate, up from $50m in 2012.
Late last year American customs officials were processing
4m of these shipments per day, an increase from 2.8m a
year earlier. They comprise roughly 20% of America’s e-
commerce market and about 7% of all the consumer goods
imported into the country. Most come from China.

The exemption helps keep prices low and speeds up

processing. Many American consumers have been willing to
overlook the often shoddy quality of products from Shein
and Temu because they are so cheap. This will change when
tariffs and other customs fees are added, which in some
cases may double the price for consumers. Logistical
disruption could be an even bigger problem for the
companies, which have tended to ship products straight
from factories in China. Shipments will now be subject to
more customs procedures and data provisions from which
they were exempt in the past. This will probably overload
American customs’ capacity for processing, which is said to
be strained already, and delay deliveries.

The changes will test Shein’s and Temu’s ability to adapt.

The risk of an end to the exemption has been hanging over
their heads for months: it was initiated by Joe Biden before
he left office. The resulting disruption will weaken their
businesses, but will not be a fatal blow, argues Mark
Williams of Capital Economics, a research firm. The
companies could push more shipments through third
countries, such as Vietnam, though that would add to
delivery times, which can already be lengthy. Other options
include setting up warehouses closer to customers, to
lessen delays, and sourcing products from other countries.
Shein already sources wares from Brazil and Turkey.

Meanwhile, the fallout from ending the de minimis

exemption will also test Mr Trump’s resolve to wage trade
battles using consumer goods. Chinese e-commerce has
been wildly popular in America. Many products featured on
Amazon, America’s favourite e-emporium, are sold by
Chinese companies. A paper by Pablo Fajgelbaum of the
University of California, Los Angeles and Amit Khandelwal of
Yale shows that poorer zip codes in America receive more de
minimis shipments. Ditching the exemption will therefore
disproportionately hurt poor families. Mr Trump has delayed
the forced closure of TikTok, seemingly to appease its many
American users. Perhaps angry shoppers will soon change
his mind about the de minimis exemption, too. ■

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Bartleby

An encounter with the

reception desk
The place where first impressions are made
2月 06, 2025 09:03 上午

GOOD MORNING, Madam. Welcome to Frostings. How may I

help you?

Good morning! I’m here for a meeting with Victor Rumbaba.

Is he expecting you?

He is indeed.
Let me just check on the system for you. Can you spell
Rhubarb for me?

Er, sure. R.H.U.B.A.R.B.

Typing

I’m afraid that’s not coming up on the system. Can you spell
his name again?

Oh, I’m sorry. I thought you were testing my spelling for

some reason. That’s R.U.M.B.A.B.A.

Typing

There he is. I’m afraid there is no record of him expecting

guests this morning, so I will need to take your details. Can I
have some ID, please?

Of course. Here you go.

That’s a gym-membership card.

Oh sorry. Hold on. Here’s my licence.

Thank you, Ms Genoise.

Typing

What company are you from?

Battenberg.

Typing

Can you look into the camera?

Sure.
That’s actually my water bottle.

I’m so sorry. Everything here looks like it could be a device.

The camera is just here.

I’m so sorry.

Just stand back a bit. You don’t need to be quite so close.

Not quite so far. That’s it. Thank you.

Printer whirrs

Hold on a second. We’ve run out of stickers for the visitor

passes. I’ll just radio my colleague. Alpha Bravo
Windowcleaner, come in.

Tango Lemonade Delta. Receiving you loud and clear. Over.

Alpha Bravo Windowcleaner, we need stickers for the visitor

passes. Do you know where they are? Over.

Tango Lemonade Delta, in the cabinet on the left. The one

with the crisps. Over.

Wilco. Over and Out. Let me just load this up for you, Ms
Genoise, and we’ll get it printed off.

Tray-opening. Grunting. Printing

Right. Here’s your pass.

Is this OK? I’m just a silhouette on this, you would have no

idea it’s me.

Don’t worry. I’ve worked here for 23 years and no one ever
looks at the photo.
Why do you need one then?

Protocol. Just stick it somewhere on your jacket. I’ll call up to

let Mr Rumbaba know that you are here.

Pushing of buttons

I’m afraid no one is picking up. Let me leave a message.

Hello, this is reception. I have Mildred Genoise waiting for
you.

Does anyone ever pick up?

Not any more. I’m not even sure people have phones on
their desks up there. I sometimes think I might as well be
sending interstellar messages to aliens.

So what happens now?

I send him an email saying exactly the same thing.

Typing

Does that work any better?

No.

A cough from behind

Mildred? It’s me. Victor.

Oh hello! We were just trying to get hold of you.

Yes, sorry. I was coming from another meeting outside the

building and thought it must be you.

No problem.
Well, one problem actually. Turns to reception. Hello. I left
my pass at home. Could you let us in?

I’m afraid not. I’ll need to get someone to vouch for you.

Really? We’ve been on silent-nodding terms for years.

Really. Can you give me the name of a colleague to call?

Er, yes. Try Sam Bundt.

Sound of someone pushing buttons.

No one is picking up. I’ll leave a message. Hello, this is

reception. Can you come down to vouch for someone who
has lost their pass?

I’m pretty sure we don’t have phones on our desks. I’ll

WhatsApp Sam.

Texting sounds

Success! He’s on his way.

I’m afraid you’ll still need to sign in, Mr Rumbaba.

Really? Why?

Protocol. My colleague won’t let you through those barriers

without a pass. Who are you here to see?

No one. I’m the person being visited.

Hmmm. This could be a problem.

Do you ever worry that your job might be taken over by a

computer?
I don’t think so. You can’t really replace the human touch,
can you?■

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Schumpeter

Donald Trump loves big

oil. Does big oil love him
back?
American supermajors’ shareholders have mixed feelings
2月 06, 2025 09:03 上午

DONALD TRUMP likes oil—and oilmen. He gushes about

“liquid gold” with as much ferocity as Spindletop, an oil well
that spat out perhaps 1m barrels over nine days in 1901 and
turned nearby Houston into a boomtown. In his first
administration he named Rex Tillerson, former chief
executive of ExxonMobil, America’s mightiest hydrocarbon
firm, as secretary of state. On February 3rd the Senate
blessed Chris Wright, who founded an oil-services firm
called Liberty Energy, as head of the Department of Energy.
Mr Trump promises that on his watch big oil can “drill, baby,
drill” to its heart’s content.

In some ways, the affection is mutual. Oil bosses certainly

like the sound of smoother permitting processes and less
environmental red tape. This occasionally tied their firms
down under Barack Obama and Joe Biden, whose greener-
than-thou Democratic administrations bracketed Mr Trump’s
first stint in the White House. The industry cannot wait for
Mr Trump to reverse his predecessor’s halt on exports of
liquefied natural gas (LNG). His plan to rescind fuel-
economy standards for cars and pickups could mean more
gas-guzzling for longer. And what CEO doesn’t want lower
corporate taxes, Mr Trump’s signature promise?

More broadly, the president “will be a super-salesman for

American energy”, expects Daniel Yergin, an industry
wiseman and vice-chairman of S&P Global, a research firm.
As a token of appreciation, Chevron, ExxonMobil’s smaller
supermajor rival (which traces some of its roots back to
Spindletop), referred to the “Gulf of America”, as Mr Trump
has unilaterally rebranded what most still call the Gulf of
Mexico, in its latest quarterly-earnings presentation on
January 31st.

Those results, like ExxonMobil’s the same day, were

disappointing. Chevron’s profits and ExxonMobil’s revenues
missed Wall Street forecasts. There is, then, room for
improvement under Mr Trump. Yet it is unclear just how
appreciative ExxonMobil’s and Chevron’s shareholders will
be in four years’ time.

So far they are not exactly cock-a-hoop. The two companies’

combined market value of $754bn is around $50bn less
than on the eve of Mr Trump’s election victory three months
ago. History is also unencouraging. During his first term in
2017-21 the supermajor duo’s total returns, including
dividends, underperformed Brent crude, the global
benchmark with which big oil’s fortunes tend to rise and fall.
For ExxonMobil that was true even before the market chaos
of the covid-19 pandemic. In contrast, returns beat Brent
with Democrats in power—handily in Mr Obama’s second
term and by an order of magnitude under Mr Biden.

That is not because Democratic anti-carbon rhetoric

concealed pro-carbon policies—or vice versa when Mr Trump
was last in charge. It is because, as Mr Yergin puts it, the
two most important characters in the oil story are supply
and demand, over which presidents wield little direct
influence. And this time Mr Trump’s other big ideas may
have indirect effects that hurt rather than help the American
supermajors in the long run.

Big oil is not about to go a-drilling. With crude prices already

soft, companies have no incentive to weaken them further
by flooding the market. For them, cheaper oil means lower
profits. Of the executives at large American producers
surveyed last month by the Dallas Federal Reserve, half said
that their firms would cut capital spending this year and
14% expected it to remain unchanged from 2024. None
forecast a significant increase. Chevron plans to spend a bit
less globally than last year, and half as much as it averaged
between 2013 and 2016. ExxonMobil will spend a bit more,
but only because it is digesting a $60bn takeover in 2024 of
Pioneer Natural Resources, a shale-fracking specialist.

This capital discipline has endeared the two firms to

investors. They will not forsake it just because Mr Trump has
declared open season for prospecting on federal land.
Between 2017 and 2020 his government tried to auction off
25m acres, nearly twice as much as in the four previous
years and 17 times the figure in the first three years of the
Biden administration (those for which data are available).
Oil firms bid on less than a quarter of the acreage on offer.
Most will be no less discerning this time.

The supermajors will be chary of rushing into Alaska, despite

an executive order enjoining them to go wild in the
resource-rich north. Big oil firms are serious about self-
regulation, says Pete Bowden of Jefferies, an investment
bank. The last thing they want is another Exxon Valdez, a
tanker which sank and soiled the state’s coast in 1989. This
is less about legal liability and more about protecting their
global brands, including in places like Europe that abhor Mr
Trump’s environmental vandalism and where the firms
operate petrol stations. After the election ExxonMobil’s
chief, Darren Woods, cautioned Mr Trump against creating
more uncertainty, for an industry already grappling with the
energy transition, by pulling out of the Paris climate
agreement (to no avail).

The crudest of presidents

Then there are Mr Trump’s tariffs. Those on Canadian and

Mexican imports were paused at the last minute this week.
If they take effect, ExxonMobil and Chevron will bear some
of their cost: by making less on the oil they produce in
Canada to export back home, and by paying more for the
Canadian and Mexican crude they refine in America. They
have already taken a hit from retaliation by China, a third
Trump target which did not get a reprieve and responded by
slapping levies on American oil and LNG.

A full-blown trade war would be worse. Since most oil is

traded in dollars, other countries would be able to afford
less of it as their currencies weakened against the
greenback. As their economies slowed, they would not need
as much. That is a recipe for cheap crude—and, for
America’s oilmen, a crude, profitless future. ■

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Finance & economics

Why Donald Trump’s protectionist zeal has
only grown
Worse to come :: Lessons from a week of chaos

Tariff uncertainty can be as ruinous as

tariffs themselves
Mercantilist menace :: Whatever its geopolitical merits, the “madman
theory” transfers badly to economics

When will remote workers see their pay cut?

All good things :: Logging on at home is a perk, yet so far it has not been
treated as such

Europe has no escape from stagnation

Onwards and sideways :: Things look increasingly dark for the continent

Narendra Modi is struggling to boost Indian

growth
Seventh heaven :: Tax cuts may lift short-term output, but deeper reform is
required

How to invest like a MAGA bigwig

Buttonwood :: Cannabis, crypto or half of North Dakota?

Don’t propose with a diamond

Free exchange :: Lab-grown gems may destroy both their own value and
that of natural rocks, too

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Worse to come

Why Donald Trump’s

protectionist zeal has only
grown
Lessons from a week of chaos
2月 06, 2025 09:02 上午 | Washington, DC

DONALD TRUMP’S supporters celebrate him as a man who

says what he means and means what he says. The trade
crisis he ignited over the past week has provided more
proof, if any was needed, that this reputation is undeserved.
Yes, Mr Trump has been clear that he loves tariffs, but he is
vague and even misleading about what this ardour means in
practice. That has made for a remarkably chaotic start to his
new administration, with businesses, investors and other
governments all trying to figure out exactly what he wants—
and most now bracing for more turbulence.

Not once in the lead-up to the election did he mention the

possibility of tariffs aimed at both Canada and Mexico,
America’s biggest trading partners. Yet his first move on
trade after taking office was to announce hefty levies on the
pair, threatening to blow up a North American pact
renegotiated in his first term. As justification, he invoked an
emergency on America’s borders from an influx of drugs
and illegal migrants, only to then say that what really
bothered him was America’s trade deficit. Meanwhile, his
most radical campaign proposal—a universal tariff on
imports—has, for now, been supplanted by talk of more
targeted levies.

In the gap between rhetoric and action, plenty of space

exists for others, including his own advisers, to impose their
own interpretations of Mr Trump’s trade plans. Some see
him as a masterful negotiator, using tariffs primarily as
leverage in negotiations—a view endorsed by Scott Bessent,
his treasury secretary. Others see him as a wrecking ball
who will destroy an unfair system of international commerce
rigged against America—the belief of Peter Navarro, one of
his most hawkish advisers. Parsing these interpretations is
difficult when the policies Mr Trump pursues, and his cited
rationales, change so frequently.

The drama of the past week has nevertheless yielded a few

important lessons. Most alarmingly, Mr Trump is proving far
more aggressive than in his first four years in office. Back
then, Robert Lighthizer, America’s chief trade
representative, oversaw investigations before gradually
imposing tariffs. Jamieson Greer, set to be America’s new
chief trade representative, will only have his nomination
hearing on February 6th (after The Economist goes to
press). Yet Mr Trump has already announced tariffs that
would have been more extreme than any of his previous
actions.

During Mr Trump’s first term, China was the main target of

his tariffs, which ended up applying to $380bn-worth of
goods. His new tariffs would have covered $1.4trn-worth of
imports from Canada, Mexico and China, or about 40% of
America’s total imports. Although Mr Trump ultimately
suspended his proposed tariffs of 25% on Canada and
Mexico for 30 days, those on China—an additional 10% levy
on top of existing duties—have gone into force. And these
extend to goods such as iPhones, which Mr Trump had
previously excluded from extra duties to shield consumers
from higher prices.

Mr Trump’s new tariffs also arrived suddenly. In his first term

he provided months-long notice to affected firms. This time,
he announced the tariffs on February 1st, and importers
were due to start paying the levies three days later. Mr
Trump has also let it be known that he is far from done. He
has said that he will “absolutely” implement tariffs on the
European Union and has pledged to slap levies of as much
as 100% on Taiwanese semiconductors. “He has come right
out of the starting gate, going after our close friends and
allies,” says Douglas Irwin of Dartmouth College. “He is so
much more brazen.”

A second lesson is that Mr Trump is a true believer in tariffs,

seeing them as a singularly effective tool for achieving
multiple objectives. This is why there are so many different
interpretations of his philosophy: they can all apply at
different times. Mr Trump unquestionably views tariffs as
leverage, and is not wrong that America, the world’s largest
importer, has an advantage in any trade war. Consider the
country’s relationship with its neighbours. Exports to
America are worth roughly 20% of Canadian GDP and 30%
of Mexican GDP. By contrast, American exports to Canada
and Mexico combined are worth just 3% or so of American
GDP.

Mr Trump believes that tariffs can be a large revenue

source, too, helping wean America off income tax. Never
mind that any reasonable estimate shows they would pay
for only a fraction of federal spending. Mr Trump also thinks
tariffs will prompt a manufacturing renaissance—another
idea scoffed at by economists since tariffs raise input costs
and shield inefficient producers. Mr Trump’s belief in tariffs
can thus be said to be overdetermined. “We don’t want to
predict the timing because it’s impossible. But at the end of
the day are we going to get significant new tariffs on lots of
different countries? I think the answer is ‘yes’,” says Andy
Laperriere of Piper Sandler, an investment bank.

A more hopeful lesson is that even a true believer must

come into contact with reality. This was shown by Mr
Trump’s suspension of his tariffs on Canada and Mexico.
Although America had a stronger hand than either, the
tariffs would have done serious harm to American
manufacturing, especially American carmakers, who,
encouraged by decades of free-trade deals, have come to
rely on factories in Canada and Mexico. A 25% tariff could
have wiped out the profits of Stellantis, General Motors and
Ford, the “big three” automakers in Detroit, according to
Barclays, a bank.

The impact might have been greater than a 25% surcharge

on vehicles and parts made in Canada or Mexico would
suggest. Some vehicles cross America’s borders up to seven
times as components are assembled into bigger and bigger
units, and they would have faced fresh tariffs each time
they entered America. Certain production lines could have
ground to a halt. “As prepared, this was a tactical nuclear
weapon” for transnational supply chains, says an executive
at the US Chamber of Commerce, an influential lobby group.

Slam the breaks

Mercifully, the memo reached Mr Trump. Although American

firms are still desperate to curry favour with him, they
mounted a pushback behind the scenes. Publicly, they also
aired concerns. The American Farm Bureau, a lobby group
sympathetic to Mr Trump, warned that its members would
“bear the brunt of retaliation”. United Steelworkers said that
“lashing out at key allies like Canada is not the way
forward.” Having based so much of his election on Joe
Biden’s mismanagement of inflation, Mr Trump may also
have been sensitive to warnings that his tariffs would drive
up everyday prices and make him unpopular.

These messages were reinforced by markets. As investors

absorbed the tariffs, stocks fell, oil prices rose and
currencies weakened against the dollar. Then, amid a flurry
of telephone calls between Mr Trump and Claudia
Sheinbaum, president of Mexico, and Justin Trudeau, prime
minister of Canada, it became clear a trade war was not
about to break out—or at least not yet. The market moves
went into reverse. Now you see the damage; now you don’t.
This will not be the last contest between Mr Trump’s love of
tariffs and economic reality. His plans are historic, in a bad
way. Mr Irwin calculates his proposals on February 1st would
have lifted America’s average tariff on dutiable imports by
ten percentage points, twice the rise under the notorious
Smoot-Hawley tariffs of 1930. Although America’s tariffs
were higher in that era, goods imports have gone from 3%
of GDP back then to 11% today.

One might, therefore, expect markets to react swiftly and

negatively to any big announcements by Mr Trump in the
months to come. But his de-escalation, welcome though it
is, has set up a paradox. Many are now convinced that as
much as Mr Trump likes to bully other countries, he does not
want to trigger a stockmarket rout. This belief may end up
limiting sell-offs in future disputes as investors assume Mr
Trump, sooner or later, will back down. Calmer markets
could, in turn, let Mr Trump stick to his protectionist guns.

It is also not obvious that business will be as determined in

pushing back next time. Given how many firms have tight
links with Canada and Mexico, they were highly motivated
to oppose tariffs on these countries. They do not have the
same density of supply chains elsewhere. As such, they will
lobby for specific exemptions from tariffs on, say, Asia or
Europe, but may be more restrained in trying to stop Mr
Trump’s broader programme.

Other checks on Mr Trump’s protectionist zeal will be even

weaker. The president is unlikely to face much opposition
from either Congress or the courts. Broad laws such as the
International Emergency Economic Powers Act (IEEPA) allow
Mr Trump to impose duties so long as he cites a national
emergency as justification. Courts have not considered such
sweeping use of a president’s trade authority before, but
trade lawyers think Mr Trump would prevail against legal
challenges given the breadth of his delegated authority.
Even if judges do place limits on IEEPA, Mr Trump can draw
on other statutes.

The erstwhile free-trading instincts of Republicans are

certainly not standing in Mr Trump’s way. Only a few true
believers, such as Ron Johnson and Rand Paul, two senators,
have lodged objections on Reaganite grounds. Most of their
peers have accepted that they must grin and bear Mr
Trump’s declarations—and undeclarations—of trade war.
They will remain reticent for as long as their constituents do
not feel themselves to be harmed.

During Mr Trump’s first term he faced opposition within his

own administration. During one alleged incident, Gary Cohn,
his top economic adviser, swiped a letter from his desk that
would have led to America’s withdrawal from a trade
agreement with South Korea. In the current White House, Mr
Trump is surrounded by loyalists who hew closely to his
vision, making such defiance unthinkable. That hints at the
most important lesson from the past week: Mr Trump wants
to go at speed and there are few obstacles in his way. ■

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Mercantilist menace

Tariff uncertainty can be

as ruinous as tariffs
themselves
Whatever its geopolitical merits, the “madman theory”
transfers badly to economics
2月 06, 2025 09:02 上午 | Hong Kong

AMERICA’S PRESIDENT tempts many people to invoke the

“madman theory” of diplomacy. In dealing with other
countries, it helps if they think you are crazy. By making
threats credible even if they would harm your own country,
such a reputation will let you win games of brinkmanship.
Whatever its geopolitical merits, the madman theory
transfers badly to economics. Crazy leaders are hard to
predict. Unpredictability creates uncertainty. And
uncertainty kills investment and hiring, at home as well as
abroad. In trying to win a bigger share of the spoils,
brinkmanship ensures there are fewer spoils to be won.

Donald Trump’s approach to trade illustrates the point.

Since his election victory he has threatened a bewildering
array of tariffs, ordered duties on Canada and Mexico,
suspended these orders, then placed tariffs on China. Dario
Caldara of the Federal Reserve and colleagues calculate the
share of articles in (mostly) American newspapers
containing words such as “tariff” or “import duty”, together
with words like “uncertainty” or “dubious”. According to
their index, uncertainty was higher in the past three months
than at any point since the data begins in 1960.
Uncertainty makes a virtue out of hesitation. Imagine a firm
looking to build a factory in China or Mexico to support an
American expansion. When Mr Trump threatened tariffs of
60% on China last year, the firm might have favoured
Mexico. When he then promised tariffs of 25% on Mexico
and only 10% on China, it might have turned to China. After
he delayed the Mexican tariffs and implemented the
Chinese ones, it could be forgiven for doing nothing at all
until things settled down. Watchful waiting is prudent for the
firm, but damaging for the economy. Even if the factory
eventually opens, the production lost to delay will never be
recovered.

Uncertainty can also hurt less tangible forms of investment.

Many firms invest in relationships with buyers or suppliers,
adapting to idiosyncratic needs. Such “sticky” relationships
between French firms and European partners account for a
disproportionate share of trade, according to Julien Martin of
the University of Quebec in Montreal and co-authors. Some
relationships last more than six years. That is longer than
many French marriages. But when uncertainty rises,
companies are less likely to pair off with one another.

The economic stakes can be illustrated by looking at market

reactions to Mr Trump’s earlier trade wars. Mary Amiti of the
New York Fed and her co-authors point out that the
American stockmarket fell by a combined 12% on the 11
days in 2018 and 2019 when tariffs were announced by
America or China. That wiped over $4trn from firms’ market
value. By looking at the response of options prices and
Treasury yields, the economists calculate that about half the
drop reflected a flight to safety and a reluctance to hold
risky assets, rather than a simple change in expected
profits.

The war also hurt China. Felipe Benguria of the University of

Kentucky and his co-authors have scoured annual reports
from over 2,000 listed Chinese firms in this period, looking
for mentions of tariffs, protectionism or unilateralism, and
references to uncertainty, crisis or threats. Business nerves
increased by over 300% from 2016 to 2018. The authors
distinguish between the “pain” of tariffs and the “anxiety” of
uncertainty. They show that the anxiety, even controlling for
the pain, had a measurable impact on profits and
investment.
China’s investors have so far taken Mr Trump’s new duties in
their stride. For the past few months, they have been
braced for worse. Even so, uncertainties remain. Mr Trump’s
order closes a loophole—the de minimis exemption—that
allows packages worth less than $800 to escape duties on
the grounds that they are not worth the inconvenience of
collecting. (The government should not spend a dollar to
collect 50 cents, as one official put it in the 1950s.) Chinese
e-commerce firms had become adept at exploiting the
loophole.

But America’s customs agency lacks the machinery or

manpower to examine even a fraction of these parcels. And
the extra burdens of compliance may be as costly to
exporters as the duty itself. Some exporters to America may
need to invest in new storage and distribution. Before they
make that investment, they will need to be convinced that
the loophole will remain closed despite the inconvenience.

Canada and Mexico have a month to sort a deal with

America. Even if they succeed, the chaos has cost the three
economies, harming the credibility of their trade agreement.
The virtue of NAFTA and (to a lesser degree) its successor,
the USMCA, is that it ties the hands of governments, giving
them the power to limit their own power. That allows
elaborate, border-straddling production networks to flourish.
They now look vulnerable. A leader’s recklessness can add
credibility to mutually destructive threats. Yet it drains
credibility from mutually beneficial commitments. ■

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All good things

When will remote workers

see their pay cut?
Logging on at home is a perk, yet so far it has not been
treated as such
2月 06, 2025 09:03 上午 | Washington, DC

EMPLOYERS ARE ordering workers back to the office. In

recent weeks Dell, a hardware-maker, and JPMorgan Chase,
a bank, have issued such decrees. They join a growing list
that includes AT&T, Amazon and even the American
government, where Elon Musk—who has called remote work
“morally wrong” and its supporters “detached from
reality”—has championed the shift. Bosses insist that
mandates will boost productivity. Workers see them as a
way to cut staff without mass firings.

If the goal is to reduce costs, there may be a simpler way:

lower pay for remote workers. A new study indicates many
would take the deal. Zoe Cullen of Harvard Business School,
Bobak Pakzad-Hurson of Brown University and Ricardo
Perez-Truglia of the University of California, Los Angeles, find
that tech workers are willing to accept a pay cut of 25% in
return for fully or partly remote jobs. That suggests remote
work is much more than a perk. If workers value it more
than bosses dislike it, there should be scope for bargaining.

The authors reached this estimate by analysing real-world

job offers and acceptances, controlling for company type,
benefits and the local cost of living, so as to isolate the
impact of remote work. Their findings contrast with those
from a survey by Nicholas Bloom of Stanford University and
co-authors, which found that American workers, on average,
would accept only an 8% pay cut for a hybrid schedule, with
just one in five willing to take a hit of 15% or more. The
discrepancy may stem from methodology. Surveys reflect
what workers say they want; Ms Cullen and her co-authors
track the trade-offs they actually make. Sample differences
may also matter. Tech workers, who tend to be higher
earners, may place a greater premium on flexibility than the
general workforce.

Historically, perks with clear monetary value have come at a

cost to wages. Jonathan Gruber of the Massachusetts
Institute of Technology and Alan Krueger of Princeton
University have found that when American states in the
1980s raised mandatory compensation insurance for
workplace injuries, wages fell to offset the cost. Price
Fishback of the University of Arizona and Shawn Kantor of
Florida State University found a similar pattern when
workers’ compensation laws were introduced in dangerous
industries such as coal mining or lumber milling. If remote
work is, like the provision of benefits, costly to companies
but valuable to workers, wages should follow the same
pattern.

Yet in most cases so far they have not. One explanation may
be that firms are reluctant to create visible pay gaps
between remote and in-office workers. Human-resource
policies generally aim for internal equity to prevent
resentment. There may be legal risk, too. As women are
more likely to work remotely, cutting pay for remote jobs
could indirectly lead to a gender wage gap, which firms
would prefer to avoid.

Another explanation is that remote work has become a

bargaining chip. Rather than lowering wages, firms use
flexibility to attract and retain top performers. Take an
artificial-intelligence specialist earning $250,000 at Amazon.
If the tech giant orders them back to the office, a less
prestigious rival may not match the salary but could lure
them with a remote-work offer. Flexibility also helps with
retention. Mr Bloom finds that hybrid policies reduce quit
rates among engineers by a third.

But what happens when labour-market conditions worsen? If

workers have fewer options, firms may no longer need to
compete by offering remote work. Instead, they may begin
pricing it in—offering lower salaries for remote roles,
knowing job-hunters have fewer alternatives. Some signs of
such a shift are already evident. Employment rates for
middle-aged women and disabled folk have risen, with
many newly able to take up remote work, yet their wages in
these new remote roles are falling.
Workers hate return-to-the-office mandates. When JPMorgan
announced the shift, it had to disable comments on its
online post after a fierce backlash. At Dell nearly half of
employees opted to stay remote last year, even when
bosses made it clear they would not be promoted if they did
so. All the same, workers might like what comes next even
less. ■

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Onwards and sideways

Europe has no escape

from stagnation
Things look increasingly dark for the continent
2月 06, 2025 09:03 上午

IT IS HARD to avoid the soft bigotry of low expectations. The

EU’s statistics bureau titled a recent release—showing no
economic growth in the last quarter of 2024—“GDP stable in
the euro area”. “Stagnant” would have been more accurate.

Policymakers, at least, are increasingly alarmed by the

situation. Ursula von der Leyen and Christine Lagarde, head
of the European Commission and European Central Bank
respectively, together wrote recently that faster growth was
needed to protect the quality of life of Europeans, and their
security. The intent was to jolt politicians and the public into
action.

But where is growth supposed to come from? Europe’s

ageing population is not as innovative as it once was,
dampening productivity. The global economy will no longer
support Europe’s export-led approach. Investment requires
confidence in the future. Consumers are fearful, with many
choosing to keep money in the bank. The ECB remains busy
fighting inflation and governments are avoiding difficult
reforms for fear of a populist backlash. Small wonder, then,
that even optimistic growth forecasts for this year barely go
beyond 1%.
One idea is that, as inflation subsides, the ECB can return to
stimulating the economy with lower interest rates. ECB
policymakers have already cut their main rate from 4% in
June to 2.75%. Markets expect them to reach 2% by the
year’s end, as wage growth cools, which would, in turn, cut
cost pressures for firms. Yet the problem is that prices are
still rising by 2.5% a year. Those for services are particularly
hot, increasing at 4% a year. Thus hope of much looser
policy will probably prove forlorn.
Analysts had thought consumers might spur the economy
once their real wages started to rise. Now that pay packets
are swelling, however, they are refusing to play their part.
The euro-zone household savings rate tended to hover at
around 12% before the covid-19 pandemic. As of October,
the date of the most recent data release, it was above 15%.
Consumer sentiment has recently dropped again, to below
its long-term average. Europe’s gloom, it turns out, is
resistant even to higher wages.

External demand is unlikely to come to the rescue either.

China is hellbent on exporting its manufacturing surplus to
the world, rather than buying more from Europe. America no
longer wants to play the role of consumer of last resort, and
could push more Chinese goods Europe’s way by raising
trade barriers. Although in theory trade deals could fuel the
EU’s export machine, protectionists, led by France, will
attempt to slow things down, as can be witnessed in their
opposition to a deal with Mercosur, a large South American
trade group.

The continent’s leaders have explored making use of the

EU’s budget-deficit rules to spend more on defence, in order
to protect against possible future Russian aggression.
Germany, one of the bloc’s most miserly members, needs to
invest and has the money, which the next government may
make use of after a forthcoming election. Greater
government spending should therefore offer some support
to the European economy, but it is unlikely to provide a
large boost. Italy has to cut spending to stabilise its debt;
France has to do so to bring down an outsize deficit.

That leaves businesses’ animal spirits. A rejigging of the

global economy creates plenty of opportunities. New forms
of technology, not least artificial intelligence, are waiting to
be adopted. The green revolution, where Europe has a head
start, is gaining followers around the world. But if companies
are keen to splash the cash, they have a funny way of
showing it. Their investment rate has steadily fallen since
2019. Now Donald Trump’s protectionist policies may induce
export-minded firms to invest in America instead.

The commission’s leaders are putting their faith in supply-

side reforms, hoping to simplify regulation, remove single-
market barriers and knit together capital markets. Although
this is a good start, the plans seem unlikely to get the bloc
anywhere near the €800bn ($830bn, or 4.5% of GDP) in
annual investment that Mario Draghi, a former president of
the ECB, envisaged in a doorstopper of a report on the
European economy he published in September. To become
green, remain prosperous and live securely, the EU and its
member states will have to go further. Stable GDP is not
enough. ■

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Seventh heaven

Narendra Modi is
struggling to boost Indian
growth
Tax cuts may lift short-term output, but deeper reform is
required
2月 06, 2025 09:02 上午 | Mumbai

AHEAD OF INDIA’S budget on February 1st, Narendra Modi

asked Lakshmi, the Hindu goddess of wealth, to bless the
poor and the middle class. The prime minister’s request for
divine intervention mingled public spirit with political self-
interest: frustration about economic growth and joblessness
contributed to Mr Modi’s loss of his outright majority in
elections held last year. As it turned out, the middle class,
rather than the poor, ended up the real winners of the fiscal
statement. Nirmala Sitharaman, Mr Modi’s finance minister,
announced tax cuts that were worth around 1trn rupees
annually ($12bn, or 0.3% of GDP), which was enough to
exempt millions of relatively high-earning Indians from
income tax altogether.

India urgently needed a change of approach. According to

the most recent data, the country’s economy is growing at
just 5.4% a year, down from 8.1% in 2023 (see chart). The
Economic Survey, produced by the government’s chief
economic adviser ahead of the budget, forecast growth of
6.3-6.8% in the year to come, below both the pace set in the
years following covid-19 and India’s average growth rate of
7% or so in the decade before the pandemic. If India is to
achieve the government’s aim of becoming a developed
country by 2047, it will have to sustain growth of at least
8%.
A temporary slowdown would not be too much of a problem.
Some of the previous rapid growth reflected big spending by
the urban middle classes, who had pandemic-era savings to
put to use. Policy then became more restrictive. At the end
of 2023 India’s central bank (the RBI) warned commercial
lenders against overly generous loans and tightened
restrictions on consumer borrowing. Government spending
was then interrupted by last year’s general election, which
ran from April to June. By December only 62% of budgeted
capital expenditure had actually taken place, compared with
67% the previous year.

Policy has now become more stimulative. On January 27th

the RBI announced measures, including repo auctions and
outright bond purchases, to improve banking liquidity.
Sanjay Malhotra, the RBI’s new governor, who took office in
December, will meddle less with the exchange rate. Bankers
speculate that previous attempts by the central bank to
stabilise the rupee against the dollar had drained the money
market. On February 3rd the rupee fell to its lowest level
ever against the dollar. A cheaper currency should boost
export competitiveness and the value of remittances from
India’s diaspora.

The tax cuts should also fuel consumption among India’s

urban middle classes. The new threshold for income-tax
payment is, at $14,000 or so, around five times the median
annual wage of a salaried Indian employee. Already, just
76m of India’s 589m-strong workforce file a tax return, with
the majority having no tax liability at all. Agricultural income
is exempt altogether, and 43% of Indians work on farms.
Ministers hope that leaving more money in the pockets of
India’s urban middle class will increase demand for the
goods and services produced by those lower down the
income distribution, who carry more political heft. Shares in
India’s consumer-goods firms rallied following the budget.

Factory farming

Meeting Indians’ longer-term aspirations is a much more

difficult task. It means building a broader middle class and
supporting the creation of good working-class jobs. Although
the country’s highly competitive services sector provides
strong export earnings, it does little for employment.
Manufacturing, which tends to be better at soaking up
labour, has fallen as a share of GDP to just 13%, its lowest
since 1967. Private capital investment, rather than the
state-directed kind in bridges, ports and railways, has been
sluggish for decades. India’s official unemployment rate
may be low at 3.2%, but millions struggle in poorly paid
informal work.

Moreover, the path to prosperity beaten by China, South

Korea and other Asian countries—building low-value
manufacturing, before then attracting more complicated
forms of industry—is becoming much narrower. The world
has entered an era of protectionism and tariffs, and India
must cope with the flood of cheap goods from China and an
increasingly difficult American market. At the budget, Ms
Sitharaman announced a swathe of tariff cuts, including on
components for consumer electronics, electric vehicles and
the capital equipment used to manufacture them. Tellingly,
she also cut tariffs on Harley-Davidson motorcycles, a long-
term ask of Donald Trump. During the American president’s
first term, India failed to attract companies pursuing a
“China plus one” strategy (ie, shifting parts of their supply
chain out of China). Instead, India’s government maintained
trade barriers that sought to push firms to move whole
supply chains to India. Ministers are wise to take a different
approach this time round.

Yet boosting Indian manufacturing will require additional

deregulation from an exhausted and insecure government.
There were some steps in the right direction at the budget.
A “high-level panel”, convened to examine permits and
licences, will seek to make it easier to do business in the
country. Failing to comply with some rules, such as by filing
a tax return late, will be decriminalised and no longer carry
a jail sentence. In other matters, not least the especially
sensitive issues of labour and land regulation, there is little
evidence of progress. And although the budget itself did not
provide much direct support for the poor, India’s
government has tilted towards more welfarist policies via
direct handouts that are distributed by state governments,
often timed to coincide with elections. In the absence of
greater government ambition, India’s best hope may lie in
more divine intervention. ■

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Buttonwood

How to invest like a MAGA

bigwig
Cannabis, crypto or half of North Dakota?
2月 06, 2025 09:02 上午

WHEN THE 24 cabinet secretaries and top-level officials in

Donald Trump’s new government assemble, they will form
one of the wealthiest administrations in history. Whether
they are the very wealthiest is impossible to say, since
official disclosures top out at “over $50m”—a pittance for
some of the assembled. But such disclosures are helpful in
another way: they shine a light on the widely varying
investment strategies of MAGA luminaries, and thus their
widely varying outlooks on the world.
For many, the lion’s share of their wealth is held in private
firms. This is true of two of the richest: Howard Lutnick (Mr
Trump’s nominee to be commerce secretary) and Linda
McMahon (the education nominee), whose wealth is counted
in the billions. Mr Lutnick is chairman of Cantor Fitzgerald, a
brokerage and investment bank. Ms McMahon, whose
finances are yet to be disclosed, owes most of her riches to
World Wrestling Entertainment, a sports-media business. At
the other end of the spectrum, Lori Chavez-DeRemer
(labour) owns a stake worth between $1m and $5m in SJJD
Consulting, a recreational-cannabis producer with a licence
to operate in Oregon, her home state.

Property investments are another recurring theme. Most

cabinet members and would-be members are landlords;
none is more enthusiastic than Doug Burgum, the secretary
of the interior. Twenty-four years ago he sold Great Plains
Software, a technology firm, to Microsoft for $1.1bn of the
computing giant’s stock. He has since bought up swathes of
land across his home state of North Dakota and
neighbouring Montana, which will have appreciated nicely:
house prices are on the rise in both states. He would have
been better advised to keep hold of the Microsoft stock,
however, which has risen in value by more than 1,200%
since he sold his company.

That is where the similarities end. The most obvious

differences concern overall levels of wealth. Scott Bessent, a
hedge-fund titan whom Mr Trump has selected as treasury
secretary, owns art and antiques worth $1m-5m, or at least
five times the value of all assets reported by Marco Rubio,
America’s secretary of state. Mr Bessent has holdings in
stock and bond exchange-traded funds (ETFs), and
hundreds of millions of dollars in bets on international
currency markets. The latter is a meat-and-potatoes choice
for a hedge-fund magnate, even if it would be a little
adventurous for an average retail investor.

The portfolios of Jamieson Greer, Mr Trump’s nominee to be

US trade representative, and John Ratcliffe, the new director
of the CIA, are largely held in pedestrian stock and bond
funds, bank accounts and annuities, as well as a few
individual stocks. By contrast, some MAGA types have quite
literally bought into the cause. Pam Bondi, the attorney-
general, holds between $2m and $10m in shares and
warrants in Trump Media and Technology Group, which owns
Truth Social, the president’s social-media network. Ms
McMahon sits on the company’s board.

No single asset class better illustrates the divide between

the financially conservative and the new American right
than cryptocurrencies. Mr Trump now has exposure to digital
assets himself through the $TRUMP meme coin he launched
shortly before his inauguration. Six of the 24 cabinet
secretaries and cabinet-level officials own bitcoin or other
tokens, including J.D. Vance, the vice-president. This group
is in the ascendancy both politically and financially: bitcoin
has risen in price by more than 130% in the past year,
trouncing returns from traditional assets.

Indeed, two of Mr Trump’s most controversial appointments

are big digital-asset investors. Robert F. Kennedy junior
holds between $1m and $5m in bitcoin. Tulsi Gabbard, the
nominee for director of national intelligence, is a crypto
omnivore, with $30,000-100,000 in bitcoin and up to
$15,000 each in cronos, ethereum and solana, three smaller
coins. Although Mr Bessent reports an investment in a
bitcoin ETF, it accounts for less than 0.1% of his assets.

The new cabinet’s level of crypto enthusiasm outstrips that

among the broader American population. According to a
survey conducted by the Pew Research Centre, 15% of rich
American households own cryptocurrencies, with their
popularity skewed to younger investors. Such an unusual
level of exposure will surely buttress the administration’s
support for the industry. Not only is the incoming cabinet
ideologically committed to crypto—they have a huge
personal stake in its success, too.■

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Free exchange

Don’t propose with a

diamond
Lab-grown gems may destroy both their own value and that
of natural rocks, too
2月 06, 2025 09:02 上午

VALENTINE’S DAY is fast approaching. Inside sock drawers

around the world, men (and a few women) will be hiding
rings intended to convey their everlasting love. Since De
Beers, the world’s leading diamond company, ingeniously
announced that “diamonds are forever” in the 1940s, most
engagement rings have included a diamond—and an
expensive one at that. The average American will spend
$5,000 on the band for their proposal.
A lot has changed in recent years, however. The most
important development is the soaring popularity of lab-
grown diamonds. Identical to their natural alternatives—
except to gemologists with specialist equipment—such
stones now make up around half of the American DER
market, reckons Martin Rapaport, chairman and founder of
Rapaport, a diamond pricer, up from a tiny fraction a decade
ago. (DER is the unglamorous acronym the industry uses for
“diamond engagement ring”.) American jewellers report
that lab-grown diamonds now account for more than half
their sales of loose diamonds (ie, those not in a ring), an
increase from one in ten at the beginning of 2020.

For the past few years it has been easier to produce a

diamond in a factory than to extract one from the ground.
This is reflected in price tags. At one leading jeweller,
$5,000 spent on a lab-grown diamond will yield a rock
roughly four times bigger than if the money was spent on a
natural diamond of similar quality. As a consequence, the
parsimonious boyfriend now faces an alluring proposition: a
larger, nicer diamond; a happier fiancée; and a healthy
status symbol to boot. Little surprise, then, that the average
size of diamonds purchased in America is on the rise, even
as the amount of money spent on engagement rings is
falling. The world has entered an era of frugal matrimony.

So far the trend has been excellent news for sellers of lab-
grown diamonds, and terrible for those flogging the
traditional variety. America, by far the biggest purchaser of
lab-grown diamonds, has seen its imports of cut-and-
polished natural diamonds fall by half between 2022 and
2024, according to Rapaport. De Beers’s revenues have
decreased by a third. Some industry analysts extrapolate
from this and foresee a future filled to the brim with lab-
grown gems. And for other kinds of products they would be
correct. With “ordinary goods”, consumer demand moves
inversely to prices: when something gets cheaper, people
want more of it. When air travel was expensive, for
example, few could afford it. Now you can hop from London
to Madrid for £50 ($63), many more do so—and the airline
business has boomed.

However, as anyone who has bought one is aware,

engagement rings are not ordinary. Being a (hopefully) one-
off purchase to celebrate a significant milestone, the price
tag is as important as the ring itself. A large, gleaming rock
on a partner’s finger illustrates the strength of the
proposer’s love (and perhaps, more accurately, the size of
their wallet). Diamonds are the stone of choice because
they are scarce and, as a result, expensive.

Lab-grown diamonds upset this equation, as they are both

more common and indistinguishable from a mined rock.
Their availability is not limited by what was formed billions
of years ago in the Earth’s crust, nor by the desire of miners
to spend lots of money to extract them, but by what sellers
find profitable. Wholesale synthetic-diamond prices have
fallen by 90% over the past six years, according to Paul
Zimnisky, a diamond-industry analyst, meaning that rocks
can now be sold at much lower prices for similarly strong
profits. And wholesale prices are set to keep falling as
manufacturing techniques continue to be refined and
competition between manufacturers intensifies.

Will lab-grown diamonds become cheap enough to

undermine the entire industry? Owing to the similarities
between synthetic and natural diamonds, at some point the
stones may no longer work as a way to signal both love and
wealth. Jewellers have so far not passed on all of the
collapse in wholesale prices to consumers, preferring
instead to increase mark-ups. Indeed, Mr Zimnisky reckons
that retail margins on lab-grown diamonds have climbed to
nearly 90% for three-carat rocks, up from 30% five years
ago. Margins on mined stones are still about 30%.

Rock bottom

But this dynamic seems unlikely to last. For one thing,

wholesale synthetic-diamond prices may not yet
have bottomed out: “I can see $10-15 a carat coming soon
in lab diamonds’ future,” predicts Mr Rapaport. Moreover,
the diamond market is sufficiently competitive that jewellers
will struggle to retain such fat margins. Some online
retailers now flog healthy stones for just a few hundred
dollars. Although a boyfriend might be happy to take a
chance on a $4,000, larger lab-grown diamond rather than a
$6,000 smaller, natural stone, he will probably turn his nose
up at a $300 ring compared with a $6,000 one. Nobody
wants to be quite that cheap a husband. As lab-grown
diamonds become a feature of costume jewellery and the
wares of discount retailers (such as Pandora, which already
sells rings featuring lab-grown diamonds for just $200), their
status as a luxury gift worthy of a Valentine’s Day
engagement looks set to crumble.

This could spell yet more trouble for companies selling

natural diamonds, whether in Antwerp and New York or on
the high street. In the face of growing competition, the price
of a ring-size single-carat stone has fallen by 37% over the
past six years. If, as seems likely, lab-grown diamonds lose
their signalling value, a much steeper fall in prices is in
store. To survive, luxury jewellers will have to persuade their
clientele that a natural diamond is still worth the outlay at a
time when less-well-heeled shoppers will be buying near-
identical stones for their children’s birthdays. Perhaps, then,
De Beers was wrong. A diamond is not for ever. ■
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Science & technology

Fighting the war in Ukraine on the
electromagnetic spectrum
Fighting flight :: Drone operators and jammers are in a high-tech arms race

Fine-tuned acoustic waves can knock drones

out of the sky
Make some noise :: The right sounds can also disable their cameras

Cryptocurrencies are spawning a new

generation of private eyes
Crypto crime-hunters :: Their tools are software, and a nose for trouble

Are ice baths good for you?

Well informed :: They won’t hurt. Actually they might, a bit

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Fighting flight

Fighting the war in

Ukraine on the
electromagnetic spectrum
Drone operators and jammers are in a high-tech arms race
2月 06, 2025 09:03 上午 | Kyiv

FOR SOLDIERS at the front, electromagnetic defences are as

vital as air: invisible when present, and disastrous when not.
In July Ukrainian troops in southern Donbas found this out
the hard way. Abruptly, Russian drones switched
frequencies, from standard 700-1,000 megahertz to 400-
500 megahertz, blinding Ukraine’s electronic-warfare (EW)
systems. The drones flew deep behind the lines, cutting off
units and making supply routes impassable. Tens of
Ukrainian military vehicles were destroyed daily in what
Serhii Beskrestnov, a Ukrainian EW specialist, calls a
“Russian safari”. Only when Ukraine understood what was
happening, and secured new EW systems working at 500
megahertz, weeks later, were they able to stabilise the
situation.

The war of waves has been pivotal to the wider conflict. A

continuous and intense contest between munitions and
jammers is driving rapid change, as each side scrambles to
find, monitor, occupy and attack increasingly rare gaps in
the spectrum where signals can get through. “What you’re
seeing in Ukraine is electromagnetic manoeuvre warfare in
action,” says Thomas Withington, a fellow at the RUSI think-
tank. “Much as land forces are always moving to find that
high ground or key crossing, so too are electronic ones.” As
jammers become more numerous and more sophisticated,
the quest for jam-proof drones becomes ever more urgent.

Russia began its all-out invasion with colossal advantages. It

was the world’s EW superpower—if measured by the
quantity, might and variety of its systems. It dominated the
initial exchanges, jamming much of Ukraine’s military
communication. Elon Musk’s Starlink, a secure satellite-
communication network, gave a lifeline to Ukraine. Then, in
2023, came the drone revolution. Ukraine pioneered the use
of first-person-view (FPV) drones to search, chase and
destroy enemy targets with pinpoint accuracy. “Without the
proper drone and electronic warfare support, an infantry
unit will survive only a few hours on the battlefield,” says
Major Dmytro Tolstoluzhsky, an officer in a specialised
technology unit of Ukraine’s defence ministry. The task of
EW turned to neutralising the drones, loitering munitions
and glide bombs that now dominate the skies.
The new war exposed vulnerabilities in Russia’s extremely
powerful but bulky EW systems, which became liabilities
lying within FPV drone range. They were forced to retreat a
full 10-15km away from the front line, diluting their effect.
Meanwhile, Ukraine began to make progress expanding its
own EW capacity, with local producers scaling up production
of trench-level EW systems. Yaroslav Filimonov, the chief
executive officer of Kvertus, a Ukrainian company that
specialises in EW, says monthly production jumped from
100 devices at the start of 2022 to 1,000 by 2023, and is
now up to 5,000. At least 200 companies now work on EW,
says Mr Withington.

The basic science of a front-line jammer is not complicated:

a cheap metal box with aerials generates electromagnetic
noise to block piloting signals or video feeds. Both sides rely
heavily on commercially available Chinese components. But
beyond this is a constantly evolving, high-stakes
technological arms race. Every eight to 12 weeks sees a
major change in either EW or drone practice, says Major
Tolstoluzhsky. Both sides switch within a wide frequency
spectrum from 200 megahertz to 1,000 megahertz, and
above. But the “main race” last year, says Andrey Liscovich
of the Ukraine Defence Fund, a non-profit which sources
non-lethal aid, was a shift in frequencies down from
standard GSM bands—those used by mobile phones—to 300
megahertz, making it trickier to find off-the-shelf
components.

The result of these proliferating frequencies is vehicles that

resemble steampunk porcupines, bristling with half a dozen
antennae to protect against different drones, each drawing
significant power.

Defenders also have to know where and when to focus their

attention. Using a device which spits out a lot of radio waves
not only risks electronic fratricide, but also makes the user a
potential target. Knowing when to turn it on, and on which
frequency, depends on passive sensors which can
triangulate radio emissions from the other side to work out
their source. The sensors used early in the war, to spot
cheaper Chinese-made drones, are no longer as useful.
Some of today’s sensors are in space: Ukraine is using data
from satellites built by HawkEye 360, an American firm.

More common is a spectrum analyser, a small $7,000 box,

which picks out the different frequencies broadcasting at
any time. That information can then direct your jamming. In
theory, spectrum analysers could be strung together to
create a giant electronic picket to detect emissions all along
the front line. That would cost around $10,000 per kilometre
of front, estimates Mr Liscovich, perhaps $10m for the entire
stretch—a modest amount. The problem, as with so much
else in the war, is supply chains. Only three companies in
America and Germany build the devices; turnaround times
are eight months.

Both sides are also experimenting with cleverer methods. Mr

Filimonov describes Azimuth and Mirage, a pair of products:
the first picks up signals within 25km and feeds it to the
second, which uses software to generate waveforms on the
right frequency. In theory, that frees up the need to carry
around several different jammers. But both sides can make
disruptive changes. “This is a field of science where
everything can be upended in the shortest of time,” says
Lieutenant Colonel Oleksandr Korobka, who heads an EW
unit in Ukraine’s 54th brigade.

The top-end Russian drones, for example, have already

evolved to include backup piloting systems. They may
switch from standard GPS to satellite-led or inertial-
navigation systems, which use gyroscopes and
accelerometers to work out a drone’s real position. They
may also use artificial intelligence (AI) or communication
with beacons on the ground to move drones to a target or
back to base. “In such a case full EW defence is practically
impossible,” says Colonel Korobka.

The newest challenges are last-mile automation and fibre-

optic drones. Last-mile automation avoids most tactical EW
shields, which have a range of about 50m, by guiding
drones to near a target, and then using AI to visually lock on
and strike. Fibre-optic drones, first seen on the battlefield in
the spring of 2024, unwind spools of tiny cable as they fly,
making them more difficult to manoeuvre but impervious to
EW interference. Fibre-optic drones often spearhead attacks,
targeting and destroying EW systems first so other radio-
piloted drones can follow. Both sides are in the process of
ramping up the technology. Russia, the first-adopter, has a
lead. Mr Filimonov says that methods such as stroboscopes
—flashing lights to dazzle the drone’s cameras—are also
being tested.

For now, most drones are still jammable. And Ukraine still
has the edge in EW. “They’re certainly quicker than the
Russians,” says Mr Withington. The war has also made them
quicker than many Western competitors. Mr Filimonov
visited 15 military exhibitions around the world last year.
The EW technology he saw was not only pricier—American
and European amplifiers are two to three times more
expensive than the Chinese ones commonly found in
Ukrainian kit—but also obsolete. “These technologies are
somewhere in 2021,” he says, witheringly. “Everything they
are producing is, for the moment, useless on the front line.”
■

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Make some noise

Fine-tuned acoustic waves

can knock drones out of
the sky
The right sounds can also disable their cameras
2月 06, 2025 09:03 上午

Mic drop

AS CHILDREN EVERYWHERE are delighted to learn in science

class, sound can shatter glass. Might it also be possible,
then, to use acoustic waves to disrupt the
electromechanical sensors that drones require to fly? To find
out, four engineering students at the University of Toronto
repurposed small car speakers to cobble together a
contraption “for blasting a drone with sound”, as one of
them, Michael Acquaviva, puts it. It worked in early tests,
though only at close range. Drones 50cm away wobbled. At
25cm, they crashed.

Come the spring of 2024, after the kit’s power supply was
beefed up and the speakers were replaced with transducers
capable of producing ultrasonic waves, the system was
entered in a counter-drone competition held by Canada’s
defence department. The team’s design tied for second
prize, winning C$375,000 ($262,000). Its members founded
a small startup, Prandtl Dynamics, that now plans to have a
prototype the size of a carry-on suitcase suitable for
battlefield use by June. The desired initial attack range is
100 metres.

Prandtl’s unique “soft kill” sonic weapon exploits materials’

tendency to vibrate when exposed to acoustic energy,
especially if the sound waves match the material’s resonant
frequency. Prandtl’s system, says Parth Mahendru, the firm’s
boss, concentrates energy into a narrow acoustic “laser”
that disrupts, among other things, the gyroscopes drones
require for stable flight. To detect drones and aim the
acoustic beam, the system records sound waves from
approaching drones and uses a computer costing around
C$30 to crunch data from a sky-scanning camera.

Prandtl hopes, perhaps optimistically, to stretch the range of

its “Sound Matrix”, as employees refer to the kit, to roughly
150 metres. Many of the tactical jammers· on the front in
the war between Russia and Ukraine have an effective
range of just 50 metres or so.

Crucially, many of the newer drones taking to the skies in

that conflict are impervious to conventional jamming
anyway. Some fly using internal-navigation systems that
compare live video from an on-board camera with a
preloaded terrain map, with artificial intelligence selecting
targets. Others receive commands through unspooling wire.
Both drone types would be vulnerable, at least in theory, to
Prandtl’s acoustic attacks.

Prandtl is compiling a library of different acoustic waveforms

that can take out a variety of types of small drones. Acoustic
attacks effective against some 35 drone models have been
worked out so far. In the process, Prandtl’s engineers are
learning some astonishing tricks. By modulating a wave’s
amplitude and other characteristics, the system can
interfere with or even gain a measure of control over
specific subsystems such as the gimbal or camera shutter.
“We can blind the drone, or we can crash the drone,” says
Mr Mahendru.

Prandtl is also designing a 4kg “backpack” model to protect

foot soldiers. Anna Poletaeva, the firm’s chief operating
officer, believes it can be manufactured for less than
C$2,000. Inquiries are coming from America’s armed forces,
Ukrainian defence contractors and others. But the company
also spies a market for non-military environments, where
conventional jamming is generally illegal. For civilians
annoyed by pesky drones, disabling their cameras may be
preferable to bringing them crashing down. ■

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Crypto crime-hunters

Cryptocurrencies are
spawning a new
generation of private eyes
Their tools are software, and a nose for trouble
2月 06, 2025 09:02 上午

FOR THE criminally minded, the allure of cryptocurrencies is

easy to grasp. Decentralised online ledgers called
blockchains allow digital assets, in the form of “tokens”, to
be moved without financial institutions monitoring what is
happening for signs of money-laundering or other
wrongdoing. Chainalysis, a crypto-investigations firm in New
York, tallied more than $53bn in suspected crypto-
laundering in 2022-23, nearly double its estimate for the
previous two years. Nicholas Smart of the Dubai office of
Amsterdam-based Crystal Intelligence, another investigator,
quips that with blockchains, “Anyone can become a bank.”

Then there is the theft of cryptocurrency. As we report in our

new podcast series “Scam Inc”, so-called pig-butchering
cons play on legitimate crypto owners’ naivety and
emotional vulnerabilities. John Powers, boss of Hudson
Intelligence, in New Paltz, New York, says many of his clients
have lost tokens worth north of $100,000—and in some
cases $1m. They are not alone. This global industry is now
worth over $500bn a year worldwide·. Crooks, moreover,
have surely noted that the potential pool is growing. Token
values have soared following America’s election of crypto-
friendly Donald Trump.

Against this backdrop, specialist firms are developing new

forensic software to comb blockchain ledgers in search of
stolen digital assets, and to flag possible money-laundering,
terrorist financing, and other crimes. The market for such
programs is booming. Kroll, an American financial risk and
advisory firm, expects revenues from its crypto-sleuthing
practice to have exceeded $10m in 2024, roughly double
the figure for the previous year.

Making sense of the “data lake” of blockchain ledgers is

challenging. Banks, even those in Switzerland, where
numbered accounts were invented, are expected to know
their account-holders’ identities. But blockchains move
tokens instantaneously between unique alphanumeric
addresses held in digital wallets that can be opened only by
private software keys. Though records of the transactions
themselves are public, the identities of those behind them
are not. Nor is it even clear which addresses are controlled
by a given wallet. That opens all sorts of possibilities for
money-laundering and illicit payments.

The puzzle of crypto transfers can sometimes, however, be

solved by appropriate analytic software. Creators of this are
cagey about their tricks, but the frequency and timing of
transactions provide clues. An especially fruitful approach is
to identify multiple addresses that contribute to a single
payment. The private keys to those addresses must be held,
or at least controlled, by a single entity. Importantly, as Tom
Robinson, chief scientist at Elliptic, a firm in London that
develops such software, observes, these “co-spend
heuristics” will stand up as evidence in court.

Money laundering and illicit payments are not the only

shady activities which transaction patterns can illuminate.
The use of “ransomware” is another. Ransomware is
software installed illicitly on a computer that then locks
valuable data held on it until a crypto payment is made. The
proceeds, says Phil Larratt, who was once a financial
investigator with Britain’s National Crime Agency and now
works for Chainalysis, are then typically split about 70-30
between the gang’s negotiators and the ransomware’s
developers.

Mr Larratt says pig-butchering scams involving romance

also generate fingerprints. They involve “approval
phishing”—fooling lonely hearts into authorising malicious
transactions, often with help from a bogus crypto app. This
lets a scammer withdraw the victim’s funds. Chainalysis has
identified $2.7bn in such fraud since May 2021, passing
relevant data to the police. In one case, this allowed the
notification of a soon-to-be victim just in time.

Many of Chainalysis’s customers are crypto exchanges

(places that convert digital assets into conventional
currency, and vice versa) seeking to comply with the
requirements of the Financial Action Task Force, an
intergovernmental body based in Paris. In 2019 this outfit
issued rules requiring exchanges in member countries, now
numbering 36, to spot and report “sketchy crypto
transactions”. Similar rules have been put in place
elsewhere, too. Red flags include large conversions of digital
assets into normal currency despite a high commission, and
also the transfer of tokens purchased in cash to multiple
exchanges in foreign jurisdictions, especially dodgy ones,
like Russia.

“Obfuscation manoeuvres”, such as scattering funds into

multiple wallets only to reconsolidate them elsewhere, or
transfers through several cryptocurrencies, are another tip-
off. The best software can now trace assets that have
passed through hundreds of wallets. The objective is to
identify the funds’ arrival in an exchange where they can be
seized by a court. Some crypto exchanges even design
trading apps to scan users’ devices remotely. One warning
sign is when multiple accounts are controlled from a single
mobile phone, says Azariah Nukajam, compliance boss in
Britain for Gemini, an exchange in New York.

Developers of device-scanning software are understandably

tight-lipped. But Jeremy Doyle, head of growth for anti-
money-laundering analytics at SEON, based in Austin, Texas,
and Budapest, says its software assesses things like a
phone’s number, location, model, storage capacity and how
data are entered. Human beings enter data slightly
irregularly. Bots tend to be inhumanly precise in such
matters.

“Off-chain” work enriches the picture. Many analytics firms

send messages feigning interest to fishy exchanges and
investment schemes, in order to obtain scammers’ crypto
addresses. They also monitor online forums where
scammers share tips and malicious code. Jeremy Sheridan
of FTI Consulting in Washington, DC, says his firm has
cracked blockchain investigations with titbits gathered this
way. Following social media helps, as well. Mr Smart says he
and his colleagues at Crystal Intelligence found a picture of
“a box room in a suburb of Beirut” that revealed the QR
code of a shady crypto outfit run from the place. Information
from an Israeli intelligence service helped his team conclude
that the operation had received more than $7m in cash from
Hizbullah, a Lebanese terrorist militia.

For all this, the sleuths remain the underdogs. Ironically, the
sort of artificial intelligence which might really help cannot
be fully applied to crypto investigations. Its complexity
means even its programmers and operators cannot know
exactly how it arrives at its conclusions. Those conclusions
thus do not stand up as evidence in court. Instead, the
software used is “rules-based”, so authorities can see how
its conclusions have been drawn. With that unlikely to
change, Mr Powers of Hudson Intelligence reckons crypto’s
cat-and-mouse game is just getting going. ■

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Well informed

Are ice baths good for

you?
They won’t hurt. Actually they might, a bit
2月 06, 2025 09:02 上午

A “COLD SHOCK” sounds unpromising, at least at first blush.

Plunge into icy water, and, as you gasp for air, your
heartbeat jumps, blood vessels constrict, stress hormones
like cortisol, an immunosuppressant, surge and you begin to
shiver. Yet the practice of regularly soaking in cold water is
booming and has even become fashionable.

The movement’s biggest evangelist is probably Wim Hof, a

Dutch athlete and health guru. Dubbed “The Iceman”, Mr
Hof has stood in a container filled with ice for nearly two
hours and has swum under ice for 66 metres—a world
record. His popular Wim Hof Method (WHM) combines
meditation and breathing exercises with frigid soaks (or cold
showers). His website says that adherence to the WHM
burns fat, reduces inflammation, strengthens the immune
system, balances hormones, improves sleep and lifts the
mood. By exercising the heart, vessels and muscles, it also
supposedly remedies cardiovascular diseases.

That would be no trifle if true. And cold does speed up a

body’s metabolism. It also reduces the painful inflammation
that causes swelling, which is why cold packs are placed on
injuries. But does cold-water immersion provide broad
benefits? A study in 2014 of 12 practitioners of Mr Hof’s
method found that, following a deliberate introduction of an
infection, Escherichia coli, they experienced fewer flu-like
symptoms than a control group. In a study in 2018 in which
Mr Hof was subjected to mild hypothermia, the cold was
found to activate brain areas that are associated with pain
suppression and well-being.

The largest study of what Mr Hof and his followers call

“power in the cold shower” was conducted in 2015.
Researchers asked about 3,000 volunteers to either shower
normally or end with a cold blast lasting 30, 60 or 90
seconds. A month later, those who had ended their showers
cold had been absent from work for 29% fewer days than
those washing normally. That sounds impressive. But it may
have been a placebo effect, and in any case there was no
difference in the number of days for which members of the
two groups felt ill.

Researchers at the University of Bern in Switzerland

wondered if cold immersions might boost “body sturdiness”
by improving antioxidant and immune responses. For 22
young men following WHM, they measured blood pressure
and “pulse wave velocity”, the speed at which ventricular
contraction pushes blood through the body’s arteries. Their
work, published in 2023, poured cold water on Mr Hof’s
claim that WHM produces broad results in just ten days. It
concluded that 15 days of WHM therapy “did not exert
positive effects” on a range of parameters.

Research remains far too thin to be conclusive. Sample sizes

have mostly been small. Researchers also struggle to isolate
factors—a study of winter swimmers, for example, might
end up measuring the effects of vigorous exercise, not cold.
That said, the effects of cold-water immersion on mood
seem promising. Studies have shown cold dunks to raise
levels of dopamine and endorphins, neurotransmitters
linked to pleasure. A study in 2023 of 33 adults given a five-
minute chilly bath and a brain scan found that they “felt
more active, alert, attentive, proud and inspired and less
distressed and nervous”.

That finding, at least, seems to justify the movement’s

enduring popularity. For those seeking a break from the
pampering of modern life, cold water can be ruggedly
seductive.■

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Culture
How TikTok became a religious pulpit
What the flock? :: Social media are changing people’s faith in unexpected
ways

It’s spellbinding! Riveting! A triumphant

tour de force!
Puffed out :: Simon & Schuster is cutting back on book blurbs. Good

Why auction houses are turning to private

sales
Hammered :: Customers want instant gratification. Sellers want price
control

Have doctors been wrong about how to

treat Alzheimer’s disease?
Brain fog :: A new book argues that dogma and bad science led Alzheimer’s
research astray

Performing in a cinema near you: Bob Dylan

and Maria Callas
Back Story :: Behind the boom in musical biopics

Fans are going crazy for Thai television

shows and music
Let’s Thai the knot :: Behind the “Boys’ Love” and “Girls’ Love” craze

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What the flock?

How TikTok became a

religious pulpit
Social media are changing people’s faith in unexpected
ways
2月 06, 2025 09:02 上午

THEY SAID it was divine intervention. TikTok was resurrected

on January 19th, just hours after the short-video app shut
down in America. Users gushed that their prayers had been
answered. “God said let TikTok rise up!” one exclaimed. In
fact, Donald Trump issued an executive order on his first day
back in office, granting an extension before the Chinese-
owned app would be divested or shut down due to American
concerns over national security.
Sacred sentiments are not out of place on TikTok, where
religious content is booming among the app’s 1.9bn global
users (none of whom are in China, where it is not available).
Videos with the top five holy hashtags, including #Jesus and
#Islam, have been viewed more than 1.2trn times.

“FaithTok”, as some call the platform’s congregation, is

eclectic. Videos show Catholics sprinkling holy water,
Mormons annotating scripture and Muslims reciting the
Koran. Nuns provide glimpses of convent life; imams proffer
guidance; and congregants try to launch their own
congregations. TikTok offers a cacophony of liturgy, which
sometimes baffles as much as it enlightens. But it is worth
more attention, because the app is changing faith and
culture in notable ways.

This is not the first time technology has influenced religion,

of course. The printing press was famously disruptive,
disseminating new teachings and spurring on the Protestant
Reformation in 1517. Television helped evangelism flourish
in America in the 20th century, though it was also linked to
lower church attendance. After the internet boom in the
1990s, people in the West started shedding their formal
religious affiliations. Since then the share of Americans who
say they have “no religion” has almost tripled, to 28%,
surpassing every other denomination (though most still say
they believe in a “higher power”).

Online there are “so many religious truth claims floating

around that it undercuts your certainty”, explains Paul
McClure, a sociologist at the University of Lynchburg in
Virginia. As people spend more time on the internet, they
are less likely to pray, attend services or belong to a
religious tradition. That does not mean social media have
been all bad for religion: online platforms have sometimes
helped build religious communities through forums and chat
rooms, including during covid. And inundated with multiple
belief systems, pushed through algorithms, research has
found that young adults on social media have become more
accepting of different religions.

TikTok is the loudest pulpit yet. The app is “social media on

steroids”, according to Nathan Mladin of Theos, a Christian
think-tank. Its supercharged algorithms reduce complex
ideas to 30-second clips and erode the “habits and virtues”
of traditional “faith journeys” faster than ever before, he
says.

TikTok is changing faith in three ways. First, conversions are

occurring differently, especially among young people, who
are not always attracted to established religious figures.
Instead, they gravitate to FaithTokers, who sometimes
peddle products that are “in line with scripture”, such as
halal snacks and sportswear emblazoned with Bible verses.
Their videos offer new rituals (“holy girl habits”), slogans
(“God is so cool!”) and counsel in verse (“When in doubt,
worship it out”). Influencers who tout “the Jesus glow” have
seen great success on a platform where personal beauty
advice flourishes.

Gen Z, TikTok’s biggest flock of users, is more likely than

any other generation to think faith has a place in the
modern world, according to a study by Theos. Young
proselytes are often attracted not to established churches
but to online ministries. “Short-form content was…a gift
from God,” says Taylan Michael Seaman, a Louisianan
influencer who runs a digital ministry and helps other
Christians form their own. (“Kingdom University”, his
training programme for would-be ministers, costs $8,000.)
Mr Seaman claims to have started a “viral revival”, training
a thousand preachers and inspiring some 750,000
“salvations”, or conversions.
A second way TikTok is changing faith is by making it less
formal. Gen Z does not want “smoke and mirrors”, argues
Gabe Poirot, an influencer who claims to have converted
some 40,000 people to Christianity. Young people prefer
unedited clips to polished productions. Some are leaving
church pews, he thinks, to develop a more “intimate
relationship with Jesus” online. Pared-back sermons and the
parasocial relationships many netizens forge with online
influencers offer some semblance of closeness to God.

TikTok’s casual style also means that anyone with a phone

and internet connection can start preaching, says Denis
Bekkering, an expert on online evangelism. Influencers are
lauded for their charisma rather than their credentials;
those with large followings have little training. On top of
that, creators are incentivised to provoke or pander to their
audience for views. That leads to clickbait titles such as “Are
YOU going to HEAVEN or HELL?” and inflammatory
interpretations of scripture.

This points to one of TikTok’s biggest effects on faith: it is

sowing division. As ever more voices proclaim authority,
people’s belief systems have splintered. Much as
worshippers abandoned the Catholic church during the
Reformation, today they are leaving traditional institutions
to follow new religions.

The vitality of unorthodox beliefs undermines dominant

authorities. Influencers’ ministries are often “non-
denominational”, espousing views separate from any
established sect. On the outer fringes of FaithTok people are
defecting to “new age” spirituality. #Wicca (paganism) and
#Witchcraft each have billions of views on the platform, as
youngsters extol crystals, potions and spells.
FaithTok is awash in religious disinformation, from AI-
generated hate speeches to deepfakes of prominent
religious leaders. Spiritually minded conspiracy theories
(dubbed “conspirituality”) spread rapidly on TikTok and
beyond. For example, “QAnon” conspiracies are prevalent,
infused with religious imagery and positioned as spiritual
quests. Faith is a mobilising force, because believers think
they are being summoned for a higher purpose, says Joan
Donovan, a disinformation scholar at Boston University.

Some may find it ironic that religious content is flourishing

on an app with strong ties to the Chinese Communist Party,
which officially promotes “state atheism” and has
persecuted religious and ethnic minorities, including mostly
Muslim Uyghurs. But those who have closely studied TikTok
are not really surprised. Divisive content, including about
politics, tends to be amplified on the platform, in order to
sow social instability, some believe. Religious disinformation
can be as divisive as the political sort, Ms Donovan says.
Online, many of the lambs of God turn into lions. ■

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Puffed out

It’s spellbinding! Riveting!

A triumphant tour de
force!
Simon & Schuster is cutting back on book blurbs. Good
2月 06, 2025 09:02 上午

BOOKS ARE about to become a little less “Spellbinding!”,

“Stunning!” and “Compelling!”. Fewer still will offer a “tour
de force” (whatever one of those might be). That is because
Simon & Schuster, an American publisher, has decided to
stop doing book blurbs, those saccharine quotes from other
authors on the back of books, at its flagship imprint. They
are, says Sean Manning, the company’s publisher, “very
weird”.

Few will mourn them. The blurb (which in Britain is also

called a “puff”) is an unloved literary tradition. It first
appeared at the start of the 18th century and spread as
printing presses perfected the modern dust jacket. The aim
was to offer enthusiasm; instead, they were sometimes
seen as suspect. Some authors scorned them; readers
disregarded them. Blurbs are “disgusting tripe”, wrote
George Orwell, in the sort of phrase that rarely makes it
onto a cover.

Their tone is part of their problem. Blurbs are intended to be

alluring. But their tenor of universal acclamation means that
more often they are suspected of simply lying. “Right from
the word go, people are suspicious,” says Ross Wilson, a
professor of English at the University of Cambridge. With
good reason, since blurbs are not quotes culled from
impartial reviews but praise prised from writers (some of
whom share the author’s agent or publisher). Look up the
words “blurb” and “puff” in the dictionary, and definitions of
both explain that their praise is extravagant.

Blurbs mislead readers in two ways. One is by exaggeration.

The style of a puff is, as the name suggests, breathless.
Someone might declare a book “magisterial”, another that it
is “unputdownable”, a third that “If you can read this book
and not shriek with delight, your soul is dead.” You feel
guilty, wrote Orwell, when you are in the library and “fail to
shriek with delight”.

Blurbs also lie by omission. In theory they are testament to

an author’s narrative skills. In truth they are a testament to
their social ones: they often reflect arm-twisting rather than
artistry. Established authors loathe giving them. “We would
as soon sell our tears for lemon-drops”, wrote Nathaniel
Parker Willis, a poet, than thus “defile one of God’s truthful
adjectives”. New authors struggle to get blurbs, which is
partly why Simon & Schuster is ditching them.

Blurbs are also self-defeating. Intended to extol very good

writing, they more often exemplify the very bad kind. Many
are less written than assembled from stock phrases—“A
heartbreaking, unputdownable page-turner!”—with an
exclamation mark at the end. This makes them exhausting
to read! And all but meaningless. There has been honest
copy on dust jackets—T.S. Eliot’s description of Louis
MacNeice, a fellow poet, informed readers that “His work is
intelligible but unpopular”—but it is too rare.

It turns out that the habit of using words like

“unputdownable” is itself quite putdownable. Mr Manning
says his editors will use the time they save on chasing
quotes to instead produce good books. Not, note,
“scintillating” or “heart-rending” books but simply “the best
books possible”. It is an admirably muted aim. ■

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Hammered

Why auction houses are

turning to private sales
Customers want instant gratification. Sellers want price
control
2月 06, 2025 09:02 上午 | HONG KONG AND LONDON

ON FEBRUARY 8TH, after The Economist went to press,

Sotheby’s was scheduled to hold the first international
auction in Saudi Arabia’s history. Among the 162 lots for
sale in Diriyah is a painting by René Magritte, a Belgian
Surrealist, depicting a building—part brick, part cloud (you
realise after staring)—conservatively estimated to fetch
around $1m-1.5m.
It is a fitting image: the structure and stability of the auction
business are not how they appear at first glance. Despite
the search for customers in new markets such as Saudi
Arabia, the auction houses’ main source of growth is not
public sales. Instead, it is private transactions, brokered
discreetly by the auction houses. At Sotheby’s, the world’s
largest auction house, these increased by 17% in value last
year. At Christie’s, the second largest, they rose by 41%;
private sales now account for nearly 30% of total revenue,
compared with just 12% a decade ago.

There are two distinct types of direct transaction. The first is

high-end retail. This trend is most evident in Hong Kong,
where Christie’s, Sotheby’s and Phillips all recently moved
into new customer-facing locations to attract impulsive
shoppers who want to buy something immediately, rather
than register to bid and wait until auction day. Christie’s has
50,000 square feet in a central skyscraper, better to
showcase items such as a white Hermès Birkin bag made of
crocodile and a rare camellia-shaped, diamond-encrusted
watch by Chanel. Each month more than 1.3m customers
pass through Sotheby’s “Maison” in a mall in downtown
Hong Kong where the firm hopes to tempt new customers
with luxury sneakers and a woolly mammoth skull that can
be purchased on site.

The second, more profitable, type of private sale is of high-

end art. When prices for the most expensive artworks fall,
many sellers are wary of putting their work up for sale at
auction, says David Schrader, chairman of global private
sales at Sotheby’s. Private transactions offer sellers full
control on price and security against lowball bids or no bids
at all. A work that is “burned” at auction, meaning that no
bid reaches the minimum price a seller is asking, can dent
its value long-term. Private sales are also speedy: many take
less than two months to complete.

Adrien Meyer of Christie’s refers to private sales as

“matchmaking” buyers and sellers. The centuries-old
auction houses’ most valuable assets are their little black
books. The houses know who owns the item a buyer might
want and which bidders lost out at recent auctions and
might be keen on a similar work. Private sales are lucrative
for auction houses, though many sellers try to negotiate on
the commission. No planning, publicity, exhibition or
catalogue are needed, as they are for live events, so costs
are lower.
Recently sellers have been more keen on private sales, as
geopolitical instability, including war in the Middle East, has
led to less stable auction results. Last year public auctions
were down by 28% (by value) from the previous year at
Sotheby’s and by 16% at Christie’s. Though the volume of
items sold at auction has been growing, there has been a
slump at the top end of the market, according to Clare
McAndrew of Art Economics, a consultancy. In 2024 the 100
most expensive lots at auction fetched less than half the
equivalent group two years before.

But private sales rely on the existing base of clientele; they

do not necessarily bring in new art buyers. The question of
how to attract younger collectors is on every executive’s
mind. The Saudi sale is the first time any international
auction of physical works is open to payment with
cryptocurrency for all lots; it is an attempt to entice the
younger crypto crowd.

If private sales continue to rise, it will represent a big shift.

Auction houses were founded on the idea that marketplaces
enabled price discovery for an artwork, which has no
inherent value. Now the question is whether private sales
could replace a more transparent market with an opaque
one, turning off newer collectors. Fair warning, as an
auctioneer might say. ■

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Brain fog

Have doctors been wrong

about how to treat
Alzheimer’s disease?
A new book argues that dogma and bad science led
Alzheimer’s research astray
2月 06, 2025 09:02 上午

ALZHEIMER’S DISEASE affects more than 30m people

worldwide, mostly the elderly. After the age of 65, the
chance of developing it doubles every five years. By 85, the
odds are one in three. Its symptoms, which include memory
loss, difficulty with basic tasks and depression, progressively
worsen. As global life expectancy rises, so will cases of
Alzheimer’s, making it one of the big public-health
challenges of an ageing world.

There is no cure. Between 1995 and 2021, around $42bn

was poured into more than 1,000 clinical trials. Yet only a
handful of drugs has made it to market. Even those mostly
treat the symptoms of the disease, rather than stop it.

The leading explanation of Alzheimer’s is the “amyloid

hypothesis”, which suggests that deposits of beta-amyloid,
a type of protein, accumulate between neurons and disrupt
their function. But the theory remains controversial: all
brains with Alzheimer’s show beta-amyloid plaques, yet not
everyone with these plaques experiences cognitive decline.
Whether amyloid build-up causes Alzheimer’s, or is merely a
symptom, remains unresolved.

In “Doctored” Charles Piller, a science journalist, details how

groupthink and dishonesty steered Alzheimer’s research off
course. In 2006 a Nature paper by researchers at the
University of Minnesota appeared to provide a major
breakthrough. The study claimed that a subtype of beta-
amyloid caused memory impairment. It quickly became one
of the most cited papers and inspired hundreds of millions of
dollars in public-research grants. Another influential paper
published in 2012 by scientists associated with Cassava
Sciences, a biotech firm, bolstered the amyloid theory by
linking insulin resistance to amyloid plaque formation. The
finding fuelled a wave of research into the idea of
Alzheimer’s being a “diabetes of the brain” that could be
managed with drugs. There was just one problem—both
studies were based on falsified data.

“Doctored” follows Mr Piller’s investigation into the

deception. Central to the story is a group of image sleuths,
with a sharp eye for manipulated pixels of Western blots (a
lab technique used to study proteins, which were doctored
in the studies). Some chapters read like a scientific
whodunnit. In one, Mr Piller has to work hard to earn the
trust of a reluctant whistleblower. In another, he travels to
Prague for a private meeting with a group of image
detectives with cryptic pseudonyms.

Despite clear evidence of manipulated research results,

journals and regulators were slow to act. Mr Piller blames
powerful backers of the amyloid hypothesis who ignored red
flags. It was only in June 2024—two years after allegations
first surfaced—that the Nature paper was retracted by its
authors. Cassava Sciences, while denying wrongdoing,
stopped trials of its Alzheimer’s drug, Simufilam, in
November after it failed to show clinical benefits.

These papers’ consequences go beyond the lab. For patients

and their families, experimental treatments often represent
a final lifeline. Encouraging people to pin their hopes on
medicines that are ineffective, or even unsafe, is a betrayal.
Fixation on a theory offering limited success in human trials
may also have diverted resources from other more
promising therapies.

Since 2023 the Food and Drug Administration, America’s

drug regulator, has approved two new medicines that
modestly slowed cognitive decline by attacking the amyloid
plaques. They also come with dangerous side-effects for
some, which include brain swelling and bleeding. Mr Piller
remains sceptical of these treatments. So will many of his
readers, after his gripping story of medical groupthink and
warped incentives. ■

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Back Story

Performing in a cinema
near you: Bob Dylan and
Maria Callas
Behind the boom in musical biopics
2月 06, 2025 09:03 上午

EVERYONE KNOWS a genius when they see one. At least

they do in biopics. In “A Complete Unknown”, a young Bob
Dylan rocks up at the hospital that is treating Woody
Guthrie, and instantly Guthrie and Pete Seeger, another
folk-music patriarch, recognise he is the real deal. In
“Maria”, even a sweating Nazi officer in wartime Athens, for
whom a callow Maria Callas is forced to sing, gawps at her
talent.

“A Complete Unknown” is up for eight Oscars. “Maria”,

another new release, stars Angelina Jolie as the troubled
diva. Along with “Better Man”, in which Robbie Williams is
portrayed by a CGI ape, these are the latest in a drumbeat
of musical biopics. Last year it was Amy Winehouse and Bob
Marley. Up soon are a quartet of films about the Beatles (an
impending Michael Jackson biopic has reportedly run into
legal woes). Why is this genre playing on repeat?

Celebrity is a narrative shortcut. Like modern myths, the

outlines of stars’ biographies are familiar, so artful directors
can focus on dramatic episodes, rather than squishing a
whole life into two hours. You know Mr Dylan is a great
American bard and Callas was an opera legend. So James
Mangold can concentrate in “A Complete Unknown” on Mr
Dylan’s breakthrough in the early 1960s. In “Maria” Pablo
Larraín zooms in on the week before Callas’s death in 1977,
with flashbacks to her wartime trials, glory days and affair
with Aristotle Onassis.

Meanwhile viewers enjoy two performances in one. They see

the screen Dylan shake up American music. In parallel they
weigh up Timothée Chalamet’s impersonation, comparing
his version of Mr Dylan’s oddly winning whine and enigmatic
air with the original. Mr Chalamet pulls off this high-wire act
with élan. For her part Ms Jolie suggests Callas’s imperious
vulnerability.

The music itself is another draw. Musical biopics are, well,

musicals. Not only do you get Mr Chalamet’s fine renditions
of “Blowin’ in the Wind” and “Like a Rolling Stone”; you
imagine you are present at the creation of these anthems.
You may not have heard Callas sing live, but “Maria”
teleports you to her breakout triumph in “I Puritani” in 1949.

So a musical career is an efficient storytelling vehicle. It is

also inherently dramatic, not just in the artist’s rise from
obscurity but in the act of performance itself: the countdown
to a headliner’s entrance, the audience’s caprice, the
fortune-and-glory stakes. The climax of “A Complete
Unknown” is the Newport Folk Festival of 1965 where Dylan
scandalously “goes electric” and defects to rock’n’roll. In
“Maria”, an ailing Callas tries in secret to revive her faded
voice.

At the heart of the musical biopic is a mystery. Genius may

be easy to spot, but where does it come from? In “Maria”,
Callas reckons “music is born of misery”; you yank it
“through your belly, out your poor mouth”. Ouch! “A
Complete Unknown” dodges the question. Dylan blows into
New York from Minnesota with the gift for lyrics that would
ultimately win him a Nobel prize, plus an intuitive sense
that “you have to kind of be a freak” to hold a crowd. His
only explanation is a cock-and-bull yarn about performing at
carnivals.

With the drama and insights, musical biopics typically have

a dark undertone. After all, stardom is not all growing your
hair wild and wearing shades indoors, as the movie Dylan
does. Fame is a prize but it can also be a torment. The
famous must wrestle for control of their stories with
managers, record labels and, in Callas’s case, domineering
partners. “Maria” imagines her telling John F. Kennedy that
they are both “lucky angels who can go anywhere we want
in the world—but we can never get away”.

This is the flipside of celebrity and of the biopic’s appeal.

The star is an idol and a sacrifice, an object of both
admiration and envy. When people ask where his songs
came from, says the film Dylan bitingly, they really want to
know “why the songs didn’t come to them”. Lots of biopics
supply a shiver of Schadenfreude alongside devotion, in
finales featuring anguish or untimely demise. Think of Elvis
Presley, who in “Elvis” (2022) winds up bloated and
exploited.

In “Maria”, Callas swoons and dies as operatic heroines tend

to. By contrast, Dylan evades the Icarus-like comeuppance
that is a ghoulish element in the biopic formula, riding off on
his motorbike into a wide-open future. The refusal to
conform to type is part of the real Mr Dylan’s greatness—
and a reason why “A Complete Unknown” stands out in one
of cinema’s favourite genres. ■

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Let’s Thai the knot

Fans are going crazy for

Thai television shows and
music
Behind the “Boys’ Love” and “Girls’ Love” craze
2月 06, 2025 09:03 上午 | BANGKOK

They only have eyes for…each other

RECENTLY SIAM PARAGON, a ritzy shopping mall in Bangkok,

transformed into an impromptu concert hall. Beneath palm
trees wrapped in twinkling lights, Oat Pramote, a Thai
singer-songwriter, performed his hit songs to an audience of
hundreds. But the loudest screams erupted when Daou and
Offroad—two male heart-throbs—came on stage in
matching all-white ensembles. The actors, who became
famous as a supposed couple in a “Boys’ Love” (BL) TV
series, sang upbeat tunes, their dancing synchronised. One
teasingly lifted his tank top, sending the female crowd into
elated squeals.

Though South Korea has long dominated Asian pop culture,

Thailand’s cultural scene is booming, with songs and shows
seducing audiences locally and abroad. It started around
2020, with the surprising success of BL shows, or gay
romantic dramas. YouTube helped them find passionate
audiences across Asia and beyond. About half of all TV
series produced in Thailand are now either BL or “Girls’
Love” (GL), an emerging genre starring gay women. In 2024
there were 61 new shows, up from just five in 2018,
according to Poowin Bunyavejchewin, a researcher at
Thammasat University in Bangkok.

The success of BL and GL shows has also contributed to a

surge of “T-pop” music, which TV actors often sing as a
sidehustle. Globally, streams of T-pop doubled in 2023 on
Spotify, a music platform. Between 2021 and 2023 Thai
music industry revenues rose 55%.

Many fans abroad discovered Thai content serendipitously.

In lockdown during the pandemic in America, Beth Ann
Hopkins was browsing through K-pop and Asian dramas on
YouTube before an algorithm led her to a fan edit of a Thai
BL series. “The storylines were not what I expected,” she
admits of the homoerotic dramas. But she was hooked. She
now co-hosts a podcast called “Let’s Talk BL”.

BL originated in Japan in the 1970s; manga depicting gay

couples sold in niche comic-book stores and at fan
conventions. But it was Thai production firms that
recognised the genre’s screen-worthy potential, combining
manga plots with sleek aesthetics. Shows sign up handsome
actors who are “shipped”, or paired together as a fictitious
couple (though many fans want to believe they are really
together). Explanations for BL’s appeal among its largely
straight female fan base range from the simple to the
profound. Some cite the lack of an attractive heroine to
spark female viewers’ jealousy. Others muse on the deep
psychology of mapping forbidden sexual desires onto male
bodies.

Whatever the reason, the genre has become lucrative. SCB

EIC, a research outfit, projects revenues of Thai BL and GL to
reach 4.9bn baht ($144m) in 2025, nearly five times higher
than in 2020. Today BL actor couples dominate Bangkok’s
billboards. The lobby of GMMTV, one of Thailand’s biggest
production firms, teems with fans eager to catch a glimpse
of their favourite acts walking into work.

Unlike its Japanese predecessor, which largely remained in

the realm of fantasy, Thai BL shows tackle serious themes.
Recent series have grappled with issues such as inequality
and disability rights. Many actors attend pride parades and
speak in support of gay marriage, which Thailand legalised
last year.

Such openness may be part of the appeal. The largest

overseas markets are those that do not allow for gay
content to be produced legally, including China (where
homosexual content is officially banned) and Indonesia, a
Muslim-majority country. Thailand’s progressive shows have
become “a resource for people living in some more
oppressive societies”, observes Thomas Baudinette, an
anthropologist at Macquarie University in Australia.

Fan male

Another part of BL’s appeal is the proximity to stars that

fans can achieve. Instead of fans worshipping celebrities at
a remove, Thai entertainment transforms the relationship
into a “two-way communication”, says Sataporn
Panichraksapong of GMMTV. Actors-turned-singers perform
daily at shopping malls, appear at intimate meet-and-greet
events and respond to direct messages and comments on
social media. Ayla Dehghanpoor, the other co-host of “Let’s
Talk BL”, used to buy tickets for expensive K-pop concerts,
but became hooked by the accessibility of Thai pop culture.
“You can truly interact on a personal level with these artists
that you’re so excited about and love so much,” she says.

Can Thailand become Asia’s next cultural powerhouse? The

government is hoping so, recently establishing the Thailand
Creative Culture Agency to boost its entertainment sector
abroad. But Thai pop culture remains far smaller than its
Korean counterpart, which boasts sensations like BTS, a boy
band that was the bestselling musical group globally in
2021.
Today Thailand’s biggest celebrity outside the country is
Lisa, a Thai member of Blackpink, a K-pop group. Last year
she established her own label and filmed a music video,
“Rockstar”, in Bangkok with Thai creators. Meanwhile, “Lan
Ma” (“How to Make Millions Before Grandma Dies”), a family
drama, became the highest-grossing Thai film in several
overseas markets and the first to be shortlisted for an Oscar
(though it was not ultimately nominated). “It’s hard to
predict, but I feel like we’re on the cusp of something big,”
says Mr Baudinette of Macquarie University. “I’m just waiting
for Thailand’s BTS moment.” ■

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Economic & financial indicators

Economic data, commodities and markets
Indicators ::

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Indicators

Economic data,
commodities and markets
2月 06, 2025 09:03 上午
This article was downloaded by calibre from https://www.economist.com/economic-and-
financial-indicators/2025/02/06/economic-data-commodities-and-markets

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Obituary
Marianne Faithfull battled labels all her life
“Virgin on a Pedestal” :: The singer and icon of the 1960s died on January
30th, aged 78

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“Virgin on a Pedestal”

Marianne Faithfull battled

labels all her life
The singer and icon of the 1960s died on January 30th, aged
78
2月 06, 2025 09:03 上午

FREE LOVE. Psychedelic drugs. Embroidered Moroccan

cushions. Nietzsche. Zen. Tribal trinkets. Customised
existentialism. Ossie Clark dresses with knee-high boots.
(Later, it was all ruffled blouses and cloaks from the Antique
Market). Chat-up lines such as “Have you read ‘Les Fleurs du
Mal’?” Or, when she first slept with Mick Jagger, a deep
discussion of the Holy Grail. All these things summed up the
1960s for Marianne Faithfull. But most of all, she would
remember with her still-bright smile, “how beautiful
everyone was”.

And she most of all, many said. To Andrew Loog Oldham, the
Rolling Stones’ manager, who discovered her at a party in
1964, she was an angel (with breasts). To the British public,
who fell for her when she first appeared on “Top of the
Pops”, at 17 with her straight blonde hair and innocent blue
eyes, singing “As Tears Go By” in a plaintive whisper, she
was a demure convent schoolgirl suddenly swept into fame.
“Virgin on a Pedestal” was the first of many labels, which
clung to her like shadows.

That pedestal was not quite so tall. She had several songs in
the top ten in the mid 1960s, but none, not even “Tears”,
reached number one. She made a better actress than a
singer. As for virginal or demure, those were not right either.
True, she sang sweet folk songs round Reading’s coffee
bars. But at St Joseph’s, behind a brown paper cover
purporting to be “The Imitation of Christ”, she was
devouring Huysmans and Genet. She also regularly paid
visits to a commune where her absconding father taught
Dante and Petrarch and, if she crept round the battlements
at night, she could hear the communards noisily making
love. When she left home for London she meant to
experience anything and everything.

First, smoking and drinking. She did lots of both, liking her
life’s grit to sound through her songs. Then plentiful sex.
She tried three of the Rolling Stones: Brian was feeble, Keith
gave her the greatest night of her life, but Mick seemed the
best bet. There was no shortage of others. The chaste angel
was rapidly eclipsed by her role in “The Girl on a
Motorcycle” (1968), straddling her steed in skin-tight black
leather, looking really good. She found Mick voracious, and
too stern about her bowerbird habit of buying glittering
things, but over their four years together he was kind. He
wrote “Wild Horses” after she told him she couldn’t be
dragged away. To the press she was now “Mick’s Muse”, a
label she kept for decades, half-afraid of straying into his
prancing orbit again.

The Stones had been tough company. Those years reeled

past in a whirl of drugs, parties, pregnancies (one by her
first husband John Dunbar, one, miscarried, by Mick), police
raids and bad press. She insisted she had come to drugs as
a genuine innocent, after, not before, she had inspired Mick
to sing of “Sister Morphine”. She had discovered them at a
party in 1967 for which the host had prepared six lines on a
table. He handed her a rolled dollar bill; she snorted all six.
(It was Merck cocaine, she explained, delicate as
snowflakes.) She soon moved on to heroin, though she
didn’t intend to, and was high for most of the late 1960s.
The newspapers were overjoyed when in 1967 the police
raided a party at Keith’s country house to find her, they
claimed, wearing only a fur rug and intimately involved with
a Mars bar. Sheer fantasy, she retorted. But it gave her a
new label, “Wanton Woman in a Fur Rug”; or, indelibly it
seemed, “Mars bar”.

It was time to disappear. Not to die, really, though she tried

that; but the 14th-floor window of an Australian hotel was
sealed shut, and 15 Tuinal weren’t enough. She needed to
work out who she was. In that heroin high, when she no
longer knew, she had gone to check in the mirror. She was
not there; she saw Brian, who had drowned some weeks
before. If he was dead, maybe she was. William Burroughs’s
“The Naked Lunch” had recommended heroin as the best
way to escape the world. For two years, on the street in
Soho, that was what she tried.
For most of that time, when not in squats, she sat on a wall.
Though she was wearing her Deliss silk dresses, almost no
one recognised her. Her weight fell to seven stone; two front
teeth got knocked out. Facilis descensus Averno, as Virgil
wrote. There were human compensations: local shopkeepers
helped her wash her things and gave her cups of tea. She
reckoned her drugs bill was £20,000, but she had always
been, and remained, hopeless with money. Her label now
was “Junkie”, though as a junkie she was hopeless too,
missing her veins so often that a friend had to shoot up for
her. Gradually she was rescued, but it took 15 years.

Then she had to repair the ruins, both of her face and her
voice. She marked her first determined steps back with an
album called “Broken English” in 1979, snarling her way
through her own disillusion, jealousy, fury and bad dreams.
It was acclaimed. If her looks and cords had perished she
could sing Kurt Weill and the blues, which were both in her
already. She could do cabaret with the world-weariness it
called for; she could do film. (Especially that, as she loved
being someone else.) In 2007 she was nominated as best
actress for “Irina Palm”, the story of a middle-aged woman
taking up sex work to save her son, at the European Film
Awards. After 1985, when she was “clean”, she made 21
studio albums.

She absolutely refused to be a victim. After all, she wasn’t.

She had set the course of her life herself. No one had made
her take up with the Stones, or get married to three brief
husbands, or become an addict. Despite the labels, she had
loved being an icon of the 60s, when all those scintillating
beautiful young things were frolicking beneath a volcano
about to explode. As she might have remarked at the time,
peeling off her baby-doll frock before some romp, “What
would Rimbaud say?” (He was her idol). He wrote, “The poet
makes himself a seer by a long, deliberate and total
disordering of the senses. He consumes all the poisons in
himself.” So had she. No regrets. Undaunted, godammit! ■

This article was downloaded by calibre from

https://www.economist.com/obituary/2025/02/06/marianne-faithfull-battled-labels-all-
her-life

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