The Economist May 28Th 2016 5

Home , Election promise, Federico Ghizzoni

INSIDE: A 14-PAGE SPECIAL REPORT ON MIGRATION Who’s in charge in Iran? Opioids in a world of pain America’s tangled voting laws Big-headed babies, big-brained parents

MAY 28TH–JUNE 3RD 2016 Life in the fast lane: CEOs and F1 A nuclear nightmare

Kim Jong Un’s growing arsenal

Contents The Economist May 28th 2016 5

8 The world this week Asia 33 America and Vietnam Leaders Pull the other one 11 North Korea’s weapons 34 Afghanistan’s Taliban A nuclear nightmare Aiming for the head 12 Austria’s election 35 India’s deep south Disaster averted—for now Southern comfort 12 Online platforms Nostrums for rostrums China 13 American elections 36 Retirement America’s Voting wrongs China’s Florida Voting rules electoral laws are a recipe for 14 Opioids 37 Social media chaos in November: leader, The ecstasy and the agony The dark art of astroturfing page13. Today’s voting-rights On the cover 38 Banyan disputes are less clear-cut It is past time for the world Letters Disturbing the China dream than those of the civil-rights to get serious about North era, but they are inflammatory 16 On genomics, migrants, Korea’s nuclear ambitions: all the same, page 23. China, London, cronies, Middle East and Africa leader, page11. Kim Jong Un Compulsory voting is hardest country living is on the home straight to 39 Iranian politics to enact in the places where it making his country a serious Who’s in charge? would make most difference: nuclear power. Nobody knows Briefing 40 Fighting Islamic State Free exchange, page 68 how to stop him, pages19-22 19 Nuclear North Korea Fallujah, again By the rockets’ red glare 41 Israeli politics He’s back! The Economist online United States 41 Tanzania Daily analysis and opinion to Government by gesture supplement the print edition, plus 23 Voting rights The fire next time 42 The Torah in Abuja audio and video, and a daily chart Who wants to be a Jew? Economist.com 26 The Libertarian Party Guns, weed and relevance E-mail: newsletters and mobile edition 26 The campaigns Special report: Migration Economist.com/email Heard on the trail Looking for a home After page 42 Print edition: available online by 27 Hillary Clinton’s e-mails 7pm London time each Thursday An indictment of sorts Europe’s far right Extremist Economist.com/print 27 Disability lawsuits Europe parties are no longer a fringe: Audio edition: available online Frequent filers 43 Visa liberalisation leader, page12. The far right to download each Friday 28 Soccer flourishes Europe’s deal with Turkey lost in Austria, but it is a Economist.com/audioedition Kick turn growing force in Europe, page 44 Crimea’s Tatars 45. The migrant crisis in 29 Lexington 1944 all over again Europe last year was only one Oh, Oklahoma 45 Greece gets its bail-out part of a worldwide problem. Temporary relief The rich world must get better The Americas 45 Austria’s vote at managing refugees. See our special report after page 42 Volume 419Number 8991 30 Mexico’s elections Extremism loses, barely A test for the ruling party 46 German nationality Published since September1843 to take part in "a severe contest between 31 Bello Name, date of birth, intelligence, which presses forward, and Chávez’s little blue book migration background an unworthy, timid ignorance obstructing our progress." 32 Britain and Argentina 48 Charlemagne Editorial offices in London and also: Ending estrangement Le sexisme Atlanta, Beijing, Berlin, Brussels, Cairo, Chicago, Lima, Mexico City, Moscow, Mumbai, Nairobi, 32 Brazilian culture New Delhi, New York, Paris, San Francisco, A history of jeitinho São Paulo, Seoul, Shanghai, Singapore, Tokyo, Washington DC

Who’s in charge in Iran? The supreme leader is clipping the wings of the reformist president, page 39

1 Contents continues overleaf 6 Contents The Economist May 28th 2016

Britain Science and technology 49 Rural Britain 69 Human evolution Countryside blues Of bairns and brains 50 Brexit brief 70 Global warming Yes, we have no straight In the red bananas 71 Drone countermeasures 50 Teenage pregnancy Hacked off Not in the family way 71 Product design 51 Bagehot The replicator The continental imperative 72 Additive manufacturing Opioids Americans take too Alloy angels Babies and intelligence many painkillers. Most other Children are born helpless, International people don’t get enough: which might explain why leader, page14. The war on 53 Opioids Books and arts humans are so clever, page 69 drugs is depriving people in The problem of pain 73 Dawn of the oil industry poor countries of pain relief, Guts, greed and gushers page 53 Business 74 Genetics Subscription service For our latest subscription offers, visit 57 Regulating tech firms Mix and match Economist.com/offers Taming the beasts 74 Jacobean history For subscription service, please contact by telephone, fax, web or mail at the details 58 Alibaba Forgotten hero provided below: Under scrutiny 75 Mali North America Paper trail The Economist Subscription Center 59 Oil-price reporting P.O. Box 46978, St. Louis, MO 63146-6978 Striking it rich 75 The invention of dating Telephone: +1 800 456 6086 Facsimile: +1 866 856 8075 60 American media Love’s labour E-mail: [email protected] Sumner’s lease 76 Opera Latin America & Mexico Fiery angel The Economist Subscription Center 60 Alcohol in China P.O. Box 46979, St. Louis, MO 63146-6979 Reviving the spirits Telephone: +1 636 449 5702 Facsimile: +1 636 449 5703 61 The future of carmakers 80 Economic and financial E-mail: [email protected] Regulating tech firms The Upward mobility indicators Subscription for 1 year (51 issues) growing power of online 62 Schumpeter Statistics on 42 economies, United States US $158.25 (plus tax) platforms is worrisome. But Life in the fast lane plus a closer look at GDP Canada CA $158.25 (plus tax) regulators should tread growth in Africa Latin America US $289 (plus tax) carefully: leader, page12. Finance and economics European governments are Obituary Principal commercial offices: not alone in wondering how to 63 Banks and Brexit sw1a 1hg 82 Fritz Stern 25 St James’s Street, London deal with digital giants, page 57 Wait and hope Tel: +44 20 7830 7000 Another German 64 Buttonwood Rue de l’Athénée 32 Ignorant investors 1206 Geneva, Switzerland Tel: +4122 566 2470 65 Quicken Loans 750 3rd Avenue, 5th Floor, New York, NY 10017 A new foundation Tel: +1212 5410500 65 Japan’s pension fund 1301Cityplaza Four, That sinking feeling 12 Taikoo Wan Road, Taikoo Shing, Hong Kong Tel: +852 2585 3888 66 Payday loans Regulators take interest Other commercial offices: Chicago, Dubai, Frankfurt, Los Angeles, 67 Cyber-attacks on banks Paris, San Francisco and Singapore Heist finance 68 Free exchange Compulsory voting Life in the fast lane Business people are racing to learn from Formula One drivers: Schumpeter, page 62

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8 The world this week The Economist May 28th 2016

New government, old problems Bank, has repeatedly derided this would remove a “lingering Politics Romero Jucá, Brazil’s planning efforts to secure peace with the vestige ofthe cold war”. China, minister, stepped aside after Palestinians. however, worries that tapes were leaked in which he America’s efforts to improve its appeared to suggest that the A series ofbombings hit two relationship with Vietnam is impeachment ofthe president, government strongholds on aimed at keeping it in check. Dilma Rousseff, would blunt Syria’s coast, killing as many an investigation into the multi- as100 people. billion-dollar scandal centred on Petrobras, the state-con- The government and opposi- trolled oil company. MrJucá, tion leaders in Burundi started one ofthe targets ofthe in- talks to resolve a crisis in vestigation, says his remarks which more than 1,000 people were misinterpreted. He was are thought to have been only recently appointed by the killed. But the government interim president, Michel excluded key opposition fig- Alexander Van derBellen, a Temer. The new government ures from the talks, reducing formerhead ofthe Green proposed several reform mea- the chances ofa successful party, won Austria’s presi- sures, including a cap on the outcome. dential election by just 31,000 growth ofpublic spending. Tsai Ing-wen was sworn in as votes, defeating Norbert Hofer The monetary-policy commit- Taiwan’s new president. She is ofthe Freedom Party. Had he Cuba’s Communist govern- tee ofNigeria’s central bank the island’s first female leader, won this (largely ceremonial) ment said it would legalise voted to allow the currency, and the second from the post, Mr Hofer would have small and medium-sized the naira, to float against the Democratic Progressive Party, been the first far-right head of enterprises. That builds on dollar. The country has previ- which favours independence state in the European Union. earlier reforms, which allow ously maintained an over- from China. Ms Tsai called for His surprisingly high support “self-employed” Cubans to inflated peg against the dollar “positive dialogue” across the reflected voter anger over own restaurants, bed-and- that is 40% higher than the Taiwan Strait, but did not immigration. As in several breakfastsand other small black-market rate, leading to a mention the “one China” European countries, the far businesses. shortage ofhard currency. notion that China insists right has been making ground. Taiwan must accept. Communications breakdown In Brussels Greece’s creditors In a report to Congress Hillary In Afghanistan the Taliban agreed on a deal to secure debt Clinton was criticised by the named a new leader to replace reliefforthe country. The State Department’s inspector- Mullah Akhtar Mansour who measures, which were general forusing a private was killed by an American thrashed out in late-night talks e-mail server when she was drone. He is Hibatullah after months ofwrangling, are secretary ofstate. Mrs Clinton Akhundzada, a hardline intended to restructure Greek should have discussed the religious scholar who served debt, which is currently180% security risks with officials, the as Mullah Mansour’s deputy. ofGDP. Greece will receive €10 report said, though it recog- billion ($11billion) in aid to nised that the department had Protests by hundreds of help it avoid a default, starting a history ofdealing inade- parents ofuniversity with €7.5 billion next month. Coca-Cola stopped producing quately with electronic mes- applicants spread to a fourth sugary drinks in Venezuela sages. The issue continues to province in China. They are After being detained in Russia because it cannot obtain sugar. dog Mrs Clinton’s campaign. angry about plans to reduce for two years Nadia Price controls have made the number ofplaces reserved Savchenko, a Ukrainian pilot, growing sugar cane unprofit- A bill that would help Puerto forlocal students. Parents was released from jail and sent able and the country suffers Rico manage its $70 billion worry that this will mean home. She was exchanged for from a shortage offoreign debt pile was introduced in greater competition forplaces two Russian prisoners cap- exchange. Congress. The legislation and reduce their privileges, tured in Ukraine. On her return would set up a financial con- which is indeed the point. home Ms Savchenko ironically The push back trol board and restructure thanked those who had Iraq’s government announced some debt. It has bipartisan China’s Communist Party “wished me evil”, and was the start ofan operation to support, but is opposed by stepped up its efforts to per- greeted as a national hero. retake Fallujah, a city just a some ofthe American territo- suade members to write out 30-minute drive from Baghdad ry’s creditors. The governor of the party’s constitution by In Turkey Binali Yildirim was that has been held by Islamic Puerto Rico welcomed parts of hand. Two newly weds have sworn in as prime minister State forthe past two years. the bill, but worries that a become famous fordoing so following the ouster ofhis financial control board would on their wedding night. The predecessor, Ahmet Davu- Avigdor Lieberman, who leads be too powerful. aim is to remind members of toglu. Mr Yildirim is a loyal Israel’s nationalist Yisrael their communist ideals, but the supporter ofRecep Tayyip Beiteinu party, joined Arms deal army’s newspaper warned Erdogan, the president, and Binyamin Netanyahu’s During a visit to Vietnam, that some people were— vowed to continue with an coalition government, and BarackObama announced an believe it or not—just going overhaul ofthe constitution became defence minister. Mr end to America’s embargo on through the motions when which is handing more powers Lieberman, who lives in a the sale ofweapons to the transcribing the document’s to the presidency. Jewish settlement in the West communist country. He said 15,000 characters. 1 The Economist May 28th 2016 The world this week 9

acquired from Nokia two years when UniCredit agreed to Bayer presented its $62 billion Business ago and will take another underwrite Banca Popolare di takeover bid for Monsanto, write-down, of$950m. Never Vicenza’s disastrous capital- the latest attempt at consolida- a big player in the business, its raising, which ended with a tion in the agricultural seeds share ofthe global smart- government-orchestrated and chemicals business. The phone market shrankagain in rescue from a fund backed by it American company said the the first three months ofthe and other Italian financial initial proposal from its Ger- year, to 0.7%, according to firms. man rival was “inadequate”, Gartner, a research firm. but believes in the “substantial Approaching vessels benefits” ofa deal. Alibaba, China’s biggest The Singapore Exchange e-commerce company, dis- (SGX) declared an interest in Europe’s antitrust regulator closed that it is being investi- taking over the Baltic approved Anheuser Busch gated by America’s Securities Exchange in London, which InBev’s $108 billion merger and Exchange Commission would combine the two lead- with SABMiller, after getting over the way it accounts for ing maritime-industry hubs. the assurances it wanted that Faced with a future where revenue, including sales from The latter compiles the Baltic the newly combined beer ride-hailing could reduce car Singles’ Day, China’s version Dry Index, which measures giant will sell SABMiller’s ownership, Toyota and Volks- ofBlackFriday. the costs ofshipping commod- European brands. The deal still wagen became the latest car- ities, and has developed deriv- needs to be cleared by compe- makers to invest in startups The drama over Sumner Red- atives forshipowners to insure tition authorities in America, that provide such services. stone’s control ofViacom against fluctuations in freight China and South Africa. Toyota formed a partnership continued. The 92-year-old prices. Founded in 1744, it also with Uber, the biggest ride- mogul removed Philippe provides a code ofpractice for In, out, shake it all about sharing app, to develop Dauman, Viacom’s chairman, the shipping market. The European Central Bank “mobility services”. And from a trust that will decide warned that the rise ofpopu- Volkswagen invested $300m what happens to Mr Red- BSI, a Swiss bank, was ordered list parties in Europe could in Gett, the Israeli outfit be- stone’s holdings when he dies. to close its business in Singa- slow the pace ofeconomic hind the largest taxi-hailing Mr Dauman filed a lawsuit to pore afterregulators identified reforms. Populists on the left app in Europe. Unlike Uber, thwart the move, arguing that serious anti-money-launder- and right ends ofthe political Gett signs up only regulated Mr Redstone was mentally ing lapses in connection with a spectrum have made gains in drivers in the cities in which it incompetent and being manip- corruption scandal at1MDB, a elections by running against operates, such as London’s ulated by his daughter, Shari. Malaysian state investment spending cuts. Another big black-cab drivers. fund. At the same time Swit- concern ofthe ECB is the po- Federico Ghizzoni is to step zerland fined the bankSFr95m tential riskposed by the vote in Prompted by the market domi- down as chiefexecutive of ($96m), opened a criminal Britain on whether to leave the nance ofFacebook, Google UniCredit, Italy’s biggest probe and approved a take- European Union, which will and the like, the European bank. Speculation had in- over of BSI by EFG Internation- be held on June 23rd. Commission set out sugges- creased about his future as the al, which is based in Zurich, tions forregulating online bank’s problems mounted. Mr that would see it “integrated Other economic data and news platforms. The proposals Ghizzoni was heavily criticised and thereafter dissolved”. can be found on pages 80-81 target specific problems such as the ability to move personal data from site to site. The commission also wants to make it easier forconsumers to shop online by removing “geoblock- ing” tools that prevent shop- pers in one country getting deals offered in another.

Hewlett Packard Enterprise, the smaller ofthe two businesses to emerge from Hewlett Packard’s split last year, announced that it is spinning oﬀ its enterprise-services unit. The unit grew out ofHP’s takeover in 2008 ofEDS, an IT out- sourcing company founded by Ross Perot.

If it could turn back time Also picking up the pieces from a takeover that hasn’t worked out, Microsoft announced more job cuts at the mobile-phone business it growth journey? accelerate your to path right the What’s Find outmore: www.ey.com/ccb through alliances with unconventional partners. innovation initiating C-suite executives are

It is past time forthe world to get serious about North Korea’s nuclearambitions ARACK OBAMA began his tions. China is infuriated by Mr Kim’s taunts and provocations B presidency with an impas- (it did not even know about the nuclear test until after it had sioned plea for a world without happened). It agreed to tougher measures, including limiting nuclear weapons. This week, in financial transactions and searching vessels forcontraband. his last year in office (and as we But China does not want to overthrow Mr Kim. It worries went to press), he was to be- that the collapse ofa regime on its north-eastern border would come the first American presi- create a flood of refugees and eliminate the buffer protecting it dent to visit Hiroshima, site of from American troops stationed in South Korea. About 90% of one ofonly two nuclearattacks. MrObama has made progress North Korea’s trade, worth about $6 billion a year, is with Chi- on nuclear-arms reduction and non-proliferation. He signed a na. It will continue to import North Korean coal and iron ore strategic-arms-control treaty (New START) with Russia in 2010. (and send back fuel oil, food and consumer goods) as long as Aseriesofnuclear-securitysummits helped stop fissile materi- the money is not spent on military activities—an unenforce- al getting into the wrong hands. Most important, he secured a able condition. deal in July to curtail and then constrain Iran’s nuclear pro- Protected by China, Mr Kim can pursue his nuclear programme forat least the next10-15 years. gramme with impunity. The sanctions are unlikely to stop But in one area, his failure is glaring. On Mr Obama’s watch him. If anything, they may spur him to strengthen and up- the nuclear-weapons and missile programme of North Korea grade his arsenal before China adopts harsher ones. has become steadily more alarming. Its nuclear missiles al- Understandably, therefore, Mr Obama has preferred to de- ready threaten South Korea and Japan. Sometime during the vote his efforts to Iran. Because the mullahs depend on sales of second term ofMrObama’ssuccessor, theyare likelyalso to be oil and gas to the outside world, embargoes on Iran’s energy able to strike New York. Mr Obama put North Korea on the exports and exclusion from the international payments sys- back burner. Whoever becomes America’s next president will tem changed their strategic calculus. But this logic will not not have that luxury. workwith North Korea. Can anythingstop MrKim? Perhapshe will decide to shelve The other Manhattan project his “nukes first” policy in favour ofChinese-style economic re- The taboo against nuclear weapons rests on three pillars: poli- form and rapprochement with South Korea. It is a nice idea, cies to prevent proliferation, norms against the first use of and Mr Kim has shown some interest in economic develop- nukes (especially against non-nuclearpowers) and deterrence. ment. But nothing suggests he would barter his nuclear weap- North Korea has taken a sledgehammer to all ofthem. ons to give his people a better life. No country in history has spent such a large share of its Perhaps dissent over Mr Kim’s rule among the North Kore- wealth on nuclear weapons. North Korea is thought to have a an elite will lead to a palace coup. A successor might be ready stockpile of around 20 devices. Every six weeks or so it adds for an Iran-type deal to boost his standing both at home and another. This year the pace of ballistic missile testing has been abroad. That is a possibility, butMr Kim has so far shown him- unprecedented (see pages19-22). An underground nuclear det- selfable to crush any challengers to his dominance. onation in January, claimed by the regime to be an H-bomb The lasthope isthattoughersanctionswill contribute to the (but more likely a souped-up A-bomb), has been followed by collapse of the regime—which, in turn, could lead to reunifica- tests of the technologies behind nuclear-armed missiles. Al- tion with the South and denuclearisation ofthe Korean penin- though three tests of a 4,000-kilometre (2,500-mile) missile sula. That would be the best outcome, but it is also the one that failed in April, North Korean engineers learn from their mis- carries the most danger. Moreover, it is precisely the situation takes. Few would bet against them succeeding in the end. China seeks to avoid. North Korea is not bound by any global rules. Its hereditary dictator, Kim Jong Un, imposes forced labour on hundreds of Fat boy thousands ofhis people in the gulag, includingwhole families, Without any good options, what should America’s next presi- withouttrial orhope ofrelease. MrKim frequentlythreatens to dent do? A priority is to strengthen missile defence. New drench Seoul, the South’s capital, in “a sea of fire”. Nuclear THAAD anti-missile systems should be sent to South Korea weapons are central to his regime’s identity and survival. and Japan, while America soothes objections that their radar Deterrence is based on the belief that states act rationally. could be used against China’s nuclear weapons. China should ButMrKim isso opaque and so little isknown abouthow deci- also be cajoled into accepting that sanctions can be harsher, sions come about in the capital, Pyongyang, that deterring without provoking an implosion. Were that to lead initially North Korea is fraught with difficulty. Were his regime on the only to a freeze on testing, it would be worth having. Because a point of collapse, who is to say whether Mr Kim would pull sudden, unforeseen collapse of Mr Kim’s regime is possible at down the temple by unleashing a nuclear attack? any time, America needs worked-out plans to seize or destroy The mix of unpredictability, ruthlessness and fragility frus- North Korea’snuclearmissilesbefore theycan be used. Forthis trates policymaking towards Mr Kim. Many outsiders want to China’s co-operation, or at least acquiescence, is vital. So clear force him to behave better. In March, following the recent and present is the danger that even rivals who clash elsewhere weapons test, the UN Security Council strengthened sanc- in Asia must urgently find new ways to worktogether. 7 12 Leaders The Economist May 28th 2016

Austria’s presidential election Disaster averted—for now

Europe’s farright is no longera fringe USTRIA dodged a bullet this Ms Le Pen is unlikely to win the second round of the presiden- Voting intention Jan 2013 Aweek. So did Europe. Nor- tial election. In Denmark and the Netherlands, populists have For far-right parties, % Latest 010203040 bert Hofer, a talented politician quit or refused to join coalitions for fear of being blamed for Austria with a winning smile, nearly be- unpopular decisions. But they still influence policy, and force France came the first far-right head of the centre-right and -leftinto grand alliances, leaving the popu- Netherlands Denmark state in western Europe since lists as voters’ only plausible alternative. Sweden the end of the second world How can mainstream parties beat them? Not by peddling Germany war—but failed, by a nerve-jan- diluted versions of their Eurosceptic or anti-immigrant poli- gling 0.6% ofthe vote (see page 45). cies. Austria’s Social Democrats switched from welcoming This is scant cause for relief. Mr Hofer has shown that well- asylum-seekers to tightening border controls, and were flat- packaged extremism is a vote-winner. He sounds so reason- tened for it. Voters prefer real populists to centrists who fake it. able. Austria must maintain border controls for as long as the Besides, extreme policies fuel irrational fears rather than extin- European Union cannot enforce its external frontiers, he says. guish them. Look at France and eastern Europe: the far right is Of course he supports the EU, but only on the basis of subsid- thriving, though few Syrian refugees have arrived. iarity (“national where possible, European where necessary”). It is easy to forget that his Austrian Freedom Party (FPÖ)was Stickto yourguns partly founded by ex-Nazis, and that its manifesto—much of Moderates cannot defeat extremists by abandoning their ide- which Mr Hofer wrote—bangs on about Europe’s Christian als. Rather, they must fight for them. Voters are deserting main- culture and the German ethno-linguistic Heimat. Or that his stream parties because they stand forso little. They are hungry party demonises “fake” asylum-seekers and vows to outlaw for politicians with clear values. Radicals of the left have un- the distribution offree copies ofthe Koran. derstood this: witness the passionate support aroused by Brit- The FPÖ’s popularity,like that ofxenophobic parties across ain’s Jeremy Corbyn and Spain’s Pablo Iglesias. The world Europe, is in part an angry reaction to the recent influx of Mid- needs leaders who can make an equally rousing argument for dle Eastern refugees. Alexander Van der Bellen, the former moderation. The mushmouths that France’s mainstream par- Green Party leader who narrowly beat Mr Hofer, owes his vic- ties appear set to nominate next year will not do. toryto a broad alliance ofvoterstryingto blockthe farright. Yet Responsible parties must also bring results. As our special a fringe party that draws halfthe vote is no longera fringe. And report this week makes clear, the task of integrating refugees, Austria is a harbinger: all over Europe, far-right parties are be- economically and socially, is more urgent than ever. And Mr coming too big to ignore (see chart). Hofer is right about one thing: to open its internal borders, the In France Marine Le Pen will probably come first in the ini- EU must secure its external ones. Extreme nationalist parties tial round of next year’s presidential election. In the Nether- cannot integrate new immigrants, nor build an effective Eu- lands Geert Wilders is polling far ahead of any rival. Far-right rope of shared asylum burdens and orderly borders. Only the parties in Denmark and Switzerland have been winning plu- parties of tolerance and liberal values can do that. They need ralities foryears, and Sweden’s may soon. This is not the1930s. to convince voters ofit. 7

Online platforms Nostrums for rostrums

The growing powerofonline platforms is worrisome. But regulators should tread carefully N1949FrankMcNamara,anex- card and also to pay him a commission. Within a year, the Din- Iecutive at a struggling finance ers Club card was accepted in hundreds of places and carried company, had the idea of a by over 40,000 people. charge card to settle the tab at The Diners Club may not seem to have much in common high-class eateries. First, he had with digital giants like Facebook, Google, Uber and Amazon. to solve a tricky problem. Res- But such businesses are all examples of “platforms”: they act taurants would not accept a as matchmakers between various entities and they typically charge card as payment unless charge different prices to different actors in the market. Google customers wanted to use one; and diners would not carry a connects websites, consumers and advertisers, who foot the card unless restaurants accepted it. His solution was to give bill. Facebook does something similar for its members. Uber away his card to a few hundred well-heeled New Yorkers: once matches passengers and drivers, who pay the ride-hailing app the elite of Manhattan’s gourmands were signed up, he could a slice ofthe fare. Amazon bringstogethershopperswith retail- persuade a few upscale restaurants to accept his new charge ers, who pay a fee. 1 The Economist May 28th 2016 Leaders 13

2 The growing clout of online platforms is a boon to society One of their strategies is to use mergers. “Shoot-out” acqui- but a headache for trustbusters. Platforms benefit from the sitions is the name given to purchases ofstartups with the aim power of networks: the more potential matches there are on ofeliminatinga potential rival. Manyclaim thatFacebook’sac- one side of a platform, the greater the number that flock to the quisition of WhatsApp was in this category. A recent parlia- other side. The consequence may be a monopoly. That is nor- mentary report in Britain noted that Google had made 187 pur- mally a red flag for trustbusters, who are scrambling to keep chases of other tech firms. Trustbusters tend to ignore mergers pace with the rise of platforms (see page 57). But they should ofbusinesses in unrelated markets and big firms hoovering up tread carefully. The nature of platforms means established small fry. Buyers of firms with an EU-wide turnover of less rules ofregulation often do not apply. than €100m do not have to notify the European Commission. Rules that take into account how markets may develop over Thinkdifferent longer periods will be fiendish to craft. But they are needed. In a conventional, “one-sided” market, prices are related to the Asecond concern is talent. Tech firms are jealous of theirse- cost ofsupplyinggoods and services. Ifa business can charge a crets. When their best people leave, they take ideas with them. big mark-up over its marginal cost of production, a wise regu- Yet clauses in job contracts that restrict what types ofworkem- lator would strive to ensure there are enough firms vying for ployees can do once they leave a company are also a means of business or, where that is not possible, to set prices in line with thwarting the emergence of rivals. California has shown the the monopolist’scosts. Such preceptsare little use in regulating way by clamping down on such practices. platforms. Theirprices are set with an eye to the widest partici- A third issue is the power of personal data. Google is such pation. Often consumerspaynothingforplatform services—or an effective search engine in part because its algorithms draw are even charged a negative price (thinkofthe rewards systems on vast logs of past queries. Amazon can use customers’ trad- run by some payment cards). Pushingdown prices on one side ing history to guide its marketing with greater precision. These ofthe platform maycause chargeson the otherside to rise, a bit data troves raise barriers to entry to the next Google or Ama- like a waterbed. That in turn may drive some consumers away zon. There are no easy fixes, however. Even defining who from the platform, leavingeveryone worse off. Such uncertain- owns information is complex; making data portable is tricky. ties mean that regulators must not act precipitously. As Frank McNamara and his heirs have found, a successful But they are right to be thinking about the unique econom- platform company finds ways of balancing the interests of the ics of platforms. Tech giants like to claim there is no need for parties it brings together. Regulators of online platforms face a special regulation. The winner-takes-all aspect of networks similar balancing act—between the incentives fornew firms to may mean there is less competition inside the market, but emerge and the benefits to consumers of large incumbents. there is still fierce rivalry for the market, because countless That will require new ways of thinking and careful judgment. startups are vying to be the next Google or Facebook. Unfortu- In the meantime, however, the priority for trustbusters must nately, incumbents may be able to subvert this rivalry. be to ensure they do no harm. 7

American elections Voting wrongs

America’s electoral laws are a recipe forchaos T IS the morning of November face legal challenges, which allege that they have been de- I9th, the day after the election, signed in order to discourage African-Americans and Latinos and America is waking up to from voting. It is past time to start worrying about where these find out who is the new presi- challenges might lead. dent. The result turns on the vote in North Carolina, where The Xfactor the ballot papers are being re- The new laws date largely from a Supreme Court decision in counted. Even when the tally is 2013. Before then, many states in the South, and a couple else- in, the result will be in doubt. where, that had spent much of the 20th century finding inge- North Carolina’s new voting laws are subject to a legal chal- nious ways to prevent minorities from voting, had to clear any lenge, which could take weeks for the courts to resolve. Both changes to their voting laws with the Justice Department or a sides complain that the election is being stolen; the acrimony, federal court. Three years ago, the Supreme Court ruled the sharpened byallegationsofracial discrimination, makes Flori- country had “changed dramatically” and that the formula for da’s hanging chads and the Supreme Court’s ruling in favour choosing which states were covered was outdated. That al- ofGeorge W. Bush in 2000 seem like a church picnic. lowed all the states to write laws unsupervised. This is not as fanciful as it sounds. America organises its de- Handed power over the rules for electing themselves, Re- mocracy differently from other rich countries. Each state publican politicians in southern statehouses have, unsurpris- writes its own voting laws, there is no national register ofeligi- ingly, tilted them in their own favour. Early voting, which non- ble voters and no form of ID that is both acceptable in all poll- whites (who lean Democratic) are keen on, has been restricted. ing booths and held by everyone. Across the country, 17 states Another change has been to limit the kinds of ID that are ac- have new voting laws that, in November, will be tested for the ceptable at a pollingstation. In Texas student IDs are out, hand- first time in a presidential contest. In several states these laws gun licences are in. 1 14 Leaders The Economist May 28th 2016

2 The authors of these laws protest that they have nothing to ing elections they should not be entrusted with choosing the do with race orpolitical advantage and claim that they are nec- government. Any political party that hopes for lower turnout essary to guard against voter fraud. Yet there is scant evidence has lost its way. William F. Buckley, a conservative pundit, once of fraud. To claim otherwise is cynical and corrosive. In the 12 wrote that he would rather be governed by the ﬁrst 2,000 peo- years before Alabama passed its new voter-ID law there was ple listed in the Boston telephone directory than by 2,000 one documented case ofimpersonation. members of Harvard’s faculty. Republican lawmakers must The second argument made, in southern states, is that the decide whether they still believe in the good sense of those new voting laws merely bring them in line with those else- they aspire to govern, or whether they lost that faith somewhere in the country, some ofwhich do not allow early voting where on the way to the statehouse. atall. Thisistrue, buttantamountto an admission of guilt: poli- The new voting laws suggest the Supreme Court underesti- ticians in some safely Democratic districts in the north have mated the grip the past still has on the present. Were politi- not been above ﬁddling with election rules and redrawing dis- cians really concerned about voter fraud they would hand trict boundaries to protect incumbents either. Indeed, it is an over the running of elections and voter registers to non-parti- argument fora more general change. san bodies. Unfortunately, this will not happen. Why disarm The worst of all the arguments for the new voting laws is when you have all the bullets? As a second best, therefore, the that casting a ballot should not be made too easy, because if courts should expedite cases on voting laws to reduce the people are not clever enough to understand the rules govern- chances oflegal challenges after the election. 7

Opioids The ecstasy and the agony

Americans take too many painkillers. Most otherpeople don’t get enough LEASURE is oft a visitant; gettingthem into the rightones. The UN saysboth goalsmatter. “Pbut pain clings cruelly,” But through the 1980s and 1990s, as the war on drugs raged, it wrote John Keats. Nowadays preached about the menace ofillegal highs with barely a whis- pain can often be shrugged off: per about the horror ofunrelieved pain. opioids, a class of drugs that in- American policy has been especially misguided. By keep- cludes morphine and other de- ing cocaine and heroin illegal, drug warriors have empowered rivatives of the opium poppy, criminal gangs that torture and kill. Even as American fee-for- can dramatically ease the agony service doctors overprescribed opioids at home, America ofbroken bones, third-degree burnsorterminal cancer. Butthe spread its harsh approach to illegal drugs worldwide. Poor mismanagement of these drugs has caused a pain crisis (see countries, scared of getting on Uncle Sam’s wrong side for not page 53). It has two faces: one in America and a few other rich trying hard enough to control narcotics, have written laws countries; the other in the developing world. even more restrictive than those recommended by the UN. In America for decades doctors prescribed too many One passed in India in 1985 saw legitimate morphine use opioids for chronic pain in the mistaken belief that the risks plunge by 97% in seven years. In Armenia morphine is only were manageable. Millions of patients became hooked. Near- available to cancer patients, who must rush from ministry to ly 20,000 Americans died from opioid overdoses in 2014. Abe- ministry filling in forms to receive a few days’ supply. lated crackdown is now forcing prescription-opioid addicts to Opioids should be more widely available. That entails endure withdrawal symptoms, buy their fix on the black mar- risks. One is addiction: doctors need training to minimise it. ket or turn to heroin—which gives a similar high (and is now Long-term use is perilous; use by the terminally ill is not. An- popular among middle-aged Americans with backproblems). other risk—that the drugs will leak onto the black market—is In the developing world, by contrast, even horrifying pain real, but less serious than America’s example might suggest. is often untreated. More than 7m people die yearly of cancer, Many American buyers of street opioids were first hooked by HIV, accidentsorwarwoundswith little orno pain relief. Four- their doctors; other countries can avoid that mistake. They can fifths of humanity live in countries where opioids are hard to also avoid the mix of fee-for-service provision and direct-to- obtain; they use less than a tenth of the world’s morphine, the consumer drug advertising that aggravated America’s lax pre- opioid most widely used fortrauma and terminal pain. scribing. And they should copy Britain’s centralised system for Opioidsare tricky. Take too much, ormixthem with alcohol prescription records, which stops patients from doctor-hop- or sleeping pills, and you may stop breathing. Long-term pa- ping their way to addiction. tients often need more and more. But for much acute pain, and certainly for the terminally ill, they are often the best treat- Biting on a stick is not good enough ment. And they are cheap: enough morphine to soothe a can- Above all, the global bodies that monitor narcotics should re- cer patient fora month should cost just $2-5. cognise that easing suffering is as important as preventing ad- In poor countries many people think of pain as inevitable, diction. Forcing people in great pain to jump through hoops to as it has been for most ofhuman existence. So they seldom ask getreliefshould be recognised asan infraction ofinternational for pain relief, and seldom get it if they do. The drug war de- rules. The UN has, belatedly, started to talk of unrelieved pain clared by America in the 1970s has made matters worse. It led as a problem. As the cause of needless suffering, it should be to lawsthatputkeepingdrugsoutofthe wronghands ahead of trying harder to bring solace. 7 We began with an &. The world’s first telephone & telegraph company.

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Risk rewards in science labour. With borders closing They managed to hide some, American government takes around them, some are but many more were de- the view that there is a differ- Younote current efforts to trapped in Serbia and Macedo- stroyed. This is the real reason ence between a monopoly harness the promise ofgeno- nia, with no way forward and behind the atrocity.Purging his that is established through its mic medicine aimed at se- no way back. Many have been rivals at the same time was just own growth and one that is quencing more genomes, to illegally detained in Greece. convenient forMao. established through acquisi- understand labyrinthine Weall need to see those LOUISA VAN DIJK tions. The government brings genetic susceptibilities arising children forwhat they are: not The Hague many cases against mergers from variation in multiple as migrants, financial burdens that would have resulted in a genes (“Encore une fois”, May or threats to society but as On the right track company taking enough mar- 7th). However, it is also note- children in need ofprotection. ket share to extract rents, but worthy that the initial se- They have rights and they There is a way forthe new fewer against those that gained quencing ofthe human ge- deserve to be given a future. mayor ofLondon to realise his their monopoly position nome in 2000 enabled entirely VITO ANGELILLO objective ofconnecting the through growth. new fields ofdiscovery,in- Director-general development ofhousing to There is no reason why cluding transcriptomics (the Terre des Hommes public transport (“Going there should be any difference large-scale study ofRNA mole- Zurich underground”, May14th). He in the government’s treatment cules), proteomics (the same could compulsorily purchase ofa monopoly. Yet there is, for proteins) and big-data Foolish academics land to build rail connections despite the lackoflitigation. science in biology.These in- and homes and then sell or The fact that more anti-com- novations have revolutionised “It was the worst oftimes” rent the new homes in part- petitive cases aren’t brought translational research and may (May14th) marked 50 years nership with a developer to against such technology com- now do the same forclinical since the start ofthe Cultural pay forthe railway.Crucially, panies suggests that cronies medicine. Yet they would have Revolution in China. Your he should keep in public own- have managed to convince been impossible without article brought backmemories ership any stations and other government about the merits substantial funding for risky ofWestern intellectuals at the commercial properties in the ofthis false distinction. science, from governments, time who supported Mao area to provide ongoing rental ANDY EDSTROM investors and philanthropic Zedong’s eradication ofold income. Los Angeles bodies. customs, culture, habits and This is the strategy used by Rather than failing to live ideas. I recall one ofmy fellow the Mass Transit Railway Cor- The great escape up to their potential, the large- graduate students in London, poration in Hong Kong. MTRC scale efforts to sequence the an avowed Maoist, bursting is 77% owned by the Hong human genome, and the re- into the college’s common Kong government. It already sulting “omics technologies”, room to announce that in runs light-rail services in Lon- have yielded tremendous China mathematics teachers don and will operate Crossrail. economic and scientific bene- were now being sent to the It has also won a contract to fits forsociety. land to labour along with the extend Stockholm’s urban PROFESSOR THOMAS VONDRISKA peasants. networkto the city’s commut- David Geffen School of Medicine In a challenging tone, he er belt by using the profit from University of California, Los asked whether we did not rising land-values to pay for Angeles thinkthat was wonderful. the railway.Its profits help pay “Certainly”, responded one of forpublic services in Hong Suffer the children our finest scholars with wide- Kong by way ofdividends. eyed, possibly disingenuous Wedon’t need to hand It is not only a humanitarian innocence, “as long as the London’s underground to the Yourreview ofAdrian imperative to help unaccom- peasants reciprocate by going MTRC.Wecouldleaveitto Tinniswood’s “The Long panied child migrants who to the towns to teach algebra Transport forLondon, allow- Weekend” asserts that the arrive in Europe (“Under-age and calculus.” They never ing it in time to become a “English country house casts a and at risk”, May 7th). Euro- spoke to each other again. profitable business as opposed long, rose-tinted shadow” pean states also have a legal MICHAEL SINGER to one with a permanent (“Partying, hunting, shooting”, obligation to do so, having Dickson Poon School of Law public subsidy. May 7th). I thinkthat’s right. ratified the 1989 Convention King’s College London ANDREW PURVES “Country House”, a song on the Rights ofthe Child. London released by Blur in 1995, comes Every child has a right to ade- Mao believed that knowledge to mind, describing the lei- quate shelter, to a caregiver was too powerful a tool, lead- Tech cronies sured life ofa modern-day and to an education. It is ing to wisdom, thoughts and nouveau-riche on his landed shameful that many ofthe questions which could un- The technology industry estate who is “reading Balzac world’s richest countries, dermine his rule. Both my should have been included in and knocking backProzac”. which see themselves as the great-aunt and uncle were your crony-capitalism index RICHARD SPENCER cradle ofhuman rights, deny teachers at the Beijing Dance (“The party winds down”, Woodland Hills, California 7 children those very rights. Academy. Both were de- May 7th). Microsoft was in- The children who arrive in nounced as intellectuals and novative in its early years, but Europe without their parents sent to be reformed. What ifit isn’t now a monopolist, I Letters are welcome and should be addressed to the Editor at have fled their homes in fear of made it worse was not the don’t know what is. Youcited The Economist, 25 St James’s Street, their lives. They have entrust- forced hardship, but the con- Google as a potential candi- London sw1A 1hg ed themselves to gangs of fiscation ofall the books, art date because it is involved in E-mail: [email protected] smugglers and put themselves works and other culturally anti-competitive litigation. But More letters are available at: at riskofabuse and child related items they possessed. litigation is the wrong test. The Economist.com/letters

18 Executive Focus

The Economist May 28th 2016 Brieﬁng North Korea’s nuclear weapons The Economist May 28th 2016 19

North Korea would not have been able to By the rockets’ red glare derive weapons-grade nuclear material— economic aid and an easing of sanctions if he agreed to freeze and then dismantle the country’s nuclear-weapons programme. This “Agreed framework” collapsed in 2002 when evidence of North Korean Kim Jong Un is on the home straight to making his countrya serious nuclear power. cheating became impossible to ignore. Nobody knows how to stop him North Korea duly quit the NPT. N JANUARYNorth Korea detonated a nu- It is always tempting for America and The next diplomatic efforts were the Icleardevice underground, its fourth such other countries to put North Korea’s nuc- “Six-party talks”, which included China, test and the first, it claimed, to show that it lear ambitions on the back burner of poli- Japan, Russia and South Korea as well as could build a thermonuclear weapon. In cy priorities, in large part because of a America and North Korea. They appeared February it successfully launched a satel- chronic absence of good options for deal- to bear fruit in 2005 when America con- lite. It has since been testing missile tech- ing with them. But only an extreme opti- firmed its recognition of North Korea as a nology at a hectic pace. In March, its leader, mist can today doubt that North Korea has sovereign state that it had no intention of Kim Jong Un, posed with a model ofa nuc- developed missiles that threaten not just invading, and North Korea agreed to return lear weapon core and the re-entry vehicle its southern neighbour but also Japan and, to the NPT, thus putting all its nuclear facil- ofa long-range missile. On May 7th he told soon, the American base on Guam. Many ities underthe oversight ofthe Internation- the congress of the Korean Workers’ Party experts, such as John Schilling, who writes al Atomic Energy Agency (IAEA), and to in Pyongyang that his nuclear-weapons about missile technology at 38 North, a forsake “all nuclear weapons and existing and missile programmes had brought the website on North Korea run from Johns nuclear programmes”. country “dignity and national power”. He Hopkins University, believe that North Ko- boasts of his ability to “burn Manhattan rea is on track to have a nuclear-capable So different from Iran down to ashes”. missile with the range to reach the conti- Despite North Korea carrying out its first The nuclear test, most experts believe, nental United States by early next decade— nuclear weapon test in 2006, the six-party- did not in fact demonstrate the ability to which is to say, within America’s next two talks process somehow limped on until build a thermonuclear hydrogen bomb. presidential terms. Stoppingthat from hap- April 2009. Then, over a period of little The satellite does not seem to be working. pening needs to be a front-burner priority. more than seven weeks, North Korea tried Some of the missile tests failed. Mr Kim The history of unsuccessful responses to launch a satellite with a three-stage says a lot ofnasty things. But there is a limit to North Korea’s nuclear ambitions began Unha-2 rocket in defiance of UN Security as to how much you can downplay this se- in 1994, when Mr Kim’s father, Kim Jong Il, Council Resolution 1718, chucked IAEA in- quence of events. As Mark Fitzpatrick of threatened to pull out of the nuclear Non- spectors out of its Yongbyon reactor com- the International Institute for Strategic Proliferation Treaty (NPT) (see timeline on plex and carried out a second under- Studies, a think-tank, puts it: “Just because following page). The Clinton administra- ground nuclear test. Since then it has been Pyongyang wants us to pay attention, that tion promised him two proliferation-resis- pretty much downhill all the way. A final doesn’t mean we shouldn’t.” tant reactors—that is, reactors from which attempt at a deal based on aid in exchange 1 20 Briefing North Korea’s nuclear weapons The Economist May 28th 2016

North Korea’s nuclear path Says it will disable nuclear Agrees testing Claims to have facilities. America agrees to moratorium in carried out a Threatens to leave Nuclear Says it is leaving NPT unfreeze assets and provide aid Launches exchange for aid Third hydrogen- Non-Proliferation Treaty bomb test Fires Taepodong Declares reactivation Unha-2 rocket nuclear (NPT), then relents Launches a missile over Japan of nuclear facilities in defiance of test UN security satellite using Launches satellite Agrees to return First test of Nodong 1 missile Announces it has resolution the Unha-3 Restarts on Unha-3 to NPT and rocket Yongbyon nuclear weapons UN agrees new UN inspectors say North Korea “forsake nuclear Expels UN nuclear sanctions is hiding evidence of nuclear Agrees to weapons”. inspectors; pulls reactor freeze testing fuel for bombs One day later, out of talks and Three unsuccessful on long-range demands reactor restarts nuclear launches of missiles Signs “Agreed framework” Expels UN from the US facilities Claims it Musudan with US to freeze and has tested inspectors from Second missiles dismantle nuclear Sinks the South submarine- Yongbyon underground programme in exchange Korean warship launched Apparently nuclear facility nuclear test Cheonan for nuclear reactors, aid Carries out first missile successful and easing of sanctions underground launch of nuclear test missile from submarine

1993 94 95 96 97 98 99 2000 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 Six-party talks with China, Russia, NK supreme leaders and Series of US-North Korean talks US presidents United States, Japan and South Korea Kim Il Sung Kim Jong Il Kim Jong Un Bill Clinton George W. Bush Barack Obama

2 for a testing moratorium in early 2012 was Sanctions were also a much more po- Lastly, Iran always (if implausibly) de- stillborn when North Korea announced a tent weapon against Iran than they ever nied that it was seeking the capability to new missile launch only a fortnight later. could be with North Korea. Iran was vul- make nuclear weapons—the supreme Faced with such a record of duplicity nerable because it is dependent on oil and leader Ali Khamenei even issued a fatwa and intransigence, Barack Obama had ap- gas exports. And even though the country that described possessing nuclear weap- parently long since concluded that if he is only minimally democratic, its leader- ons as a “grave sin”. Mr Kim believes that was to achieve anything in the sphere of ship has to pay attention to falling living nuclear weapons are essential. Like his fa- nuclear non-proliferation, Iran offered at standards and the anger they can bring. ther before him he has built them into the least a chance ofsuccess; with North Korea That helped make the removal of sanc- national narrative and iconography, seeing there was virtually none. tions a greaterpriority than pressing ahead them as fundamental to the dynasty’s sur- It was a cool calculation typical of the with the nuclear programme. vival. Even without nuclear weapons, Iran president. For a start, North Korea was a lot By contrast, sanctions have had a rela- is a regional power that America has to further down the road to a nuclear-weap- tively low impact on North Korea’s closed take seriously. North Korea has no other ons capability than Iran, which had re- economy. In large part that is because 90% claim to fame except its nastiness. Its ruler mained within the NPT and was still a few ofthe trade it does is with China, which re- sees nuclear weapons as the key to gaining years from being able to test a device. And fuses to cut it offbecause offears that a sub- the respect he demands from the outside Mr Obama realised there was also much sequent economic collapse would bring world. They are not bargaining chips to be more leverage to be had over Iran than with it a torrent ofrefugees and the demise traded forother benefits. North Korea. Bill Clinton had come close to of a useful buffer against a close American authorising an air strike on Yongbyon in ally.Nor does Mr Kim have to worry much You can observe a lot just by watching 1994, but pulled back in the belief it would about the political consequences of hard- That is why the evidence of an almost trigger a new war on the peninsula that, by ship for his people. So effective is the re- manic amount of nuclear-weapons-relat- some estimates, could cost a million lives. gime’s brutal system of control—anyone ed testingsince January is so alarming, and After the nuclear test in 2006 the military suspected of disloyalty may be killed or why interpreting what it means both in option was off the table for good. That was banished to a frozen gulag—that there was terms of political signalling and technical never true of Iran. The Iranian leadership little sign of dissent even when hundreds progress has become urgent. Gary Samore, could not fully discount the threat of a pre- of thousands died of starvation during the Mr Obama’s arms-control adviser until emptive strike by either Israel or America. 1990s. 2013 and now research director at Har- vard’s Belfer Centre, cautions how little outsiders really know forsure about North Korea’s capabilities. Jonathan Pollack, a Korea expert at the Brookings Institution, agrees the data are limited. Nevertheless, he says: “In the words of Yogi Berra, you can observe a lot by watching.” David Albright, the president of the In- stitute for Science and International Secu- rity, a think-tank, and a former IAEA inspector in Iraq, has carried out detailed analysis ofwhat is known ofNorth Korea’s capacity to reprocess plutonium and en- rich uranium. If the country is producing bombs similar in yield to the one that America dropped on Hiroshima—thatis, of 10 to 20 kilotons, which would be small by modern standards, but would therefore require less-capable missiles for their deliv- Whizz for atoms: a science and technology centre in Pyongyang ery—his central projection is that it can pro-1 The Economist May 28th 2016 Briefing North Korea’s nuclear weapons 21

2 duce enough fissile material for around seven warheads a year and that its current stockpile is about 20. Mr Albright, like most analysts, is deeply sceptical that the device tested in Janu- ary was, as Mr Kim claimed, a true hydrogen bomb. In hydrogen bombs a “primary”, which gets its power from nuclear fission in uranium or plutonium, sets off a “secondary”, which gets its power from the fusion of deuterium and tritium. Such bombs have yields in the hundreds of kilotons, or megatons. Estimates based on seismology suggest this year’s test, like its predecessors, had a yield of no more than ten kilotons, though the fact that the bomb was more deeply buried than the first three suggests its makers may have ex- Here’s one I made earlier...... (which just happens to fit inside this) pected something bigger. Mr Albright sus- pects the engineers were trying a tech- gines from Soviet-era R-27 submarine- success. Three recent test fires of the Musu- nique developed by South Africa’s defunct launched ballistic missiles were coupled dan flopped. Michael Elleman, a missile nuclear programme in which a lithium, together to provide the propulsive power expert at the IISS, speculates that perhaps deuterium and tritium tablet at the centre and range fora warhead carried bya KN-08 the missiles were solid-fuelled and the en- ofa fission device boosts its yield with a bit to hit the east coast ofthe United States. It is gines still at an early stage ofdevelopment. offusion. not known how many R-27s North Korea Mr Elleman reckons that getting the Musu- The next issue is whether the North Ko- has, but up to 150 went missing from Russia dans working, and thus being able to reans have graduated from devices that in the post-Soviet 1990s. Mr Schilling reck- threaten the American base in Guam over can be tested to devices that can be fitted ons flight testing of a KN-08 enhanced in 3,000km away, must be a priority. He cau- onto either its existing medium-range No- this way could begin soon, leading to a tions that a string of failures is not grounds dong missile (developed from the Soviet- “limited operational capability by 2020”. for optimism; the North Korean approach era Scud C) or its two missiles under devel- Other recent tests include a large solid- is to try it, find out what went wrong, find a opment, the Musudan intermediate-range fuelled rocket motor of the kind needed to fixand then validate it. “Theirsystems nev- ballistic missile (IRBM) and the KN-08 in- launch a mobile medium-range missile at er work first time,” says Mr Schilling, “but tercontinental ballistic missile (ICBM). Mr very short notice (liquid-fuelled rockets, they persevere.” Schilling thinks that they would not have like those on the KN-08, take much longer Some of what Mr Fitzpatrick describes carried out fournucleartests on something to prepare forflight and are harder to move as “this extraordinary amount of activity” they did not think they could deliver. On around) and the launch of a ballistic mis- may have been related to the seventh con- March 9th, MrKim wasphotographed pay- sile apparently from a submerged sub- gress of the Workers’ Party, a sanctification ing a visit to what may have been the marine in late April. ofMrKim’sleadership. Alessfrenzied pace Chamjin missile factory outside Pyon- Not all North Korea’s tests meet with of testing may now resume. Since 2013, Mr1 gyang. In a hall packed with several ballis-

tic missiles, Mr Kim posed beside a plausi-

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consistent in size with a ﬁssion device A K A N

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N 1 9 c Korea had not yet mastered this technol- Okinawa - n 0 N a 0 ogy. Buton March 15th picturesappeared in A h SOUTH E 0 C n , KOREA P C O E 0 the North Korean media of what appeared A C I F I 1 to be a nose-cone from a KN-08 placed on an engine test stand one and a half metres Guam beneath an ignited Scud rocket motor. An- Selected North Korean missiles Hawaii Maximum range estimates other picture (above, right) showed Mr Kim examining the re-entry vehicle after it KN-08, A U 9,000km had seemingly passed its test. S T Enhanced R Another ground test on April 9th has, A Nodong, Musudan, 10,000- L according to Mr Schilling, put to rest any I A 1,500km 3,500km 13,000km doubts about North Korea’s ability to build IN DEVELOPMENT Sources: IISS; 38 North an ICBM sooner rather than later. Two en- 22 Brieﬁng North Korea’s nuclear weapons The Economist May 28th 2016

2 Kim has talked of his byungjin policy of change Mr Kim’s mind but not so punitive that concern seems far-fetched. The combining nuclear deterrence with eco- as to risk the collapse of the regime. How- THAAD system is designed to destroy mis- nomic development. Mr Pollack says that ever, if Mr Kim believes he is now on the siles during the terminal phase of their tra- ifMr Kim wants the sort ofbells-and-whis- “home straight”, his instinct may be to jectories, when they are coming back tles deterrent deployed by the large nuc- sprint for the finishing line and talk after- down; it can do nothing against missiles lear powers, with submarine-launched wards. Mr Chun thinks that North Korea during their boost or midcourse phase, so and mobile missiles, the ruinous expense will never denuclearise; if it agreed to stop Chinese missiles aimed at America would would make such a policy impossible. If, testing it would be because it had achieved have nothingto fearfrom a THAAD battery on the other hand, MrKim just wants what the nuclear power and status it craves. in South Korea. Still, the Chinese claim to Mr Pollack calls a “don’t fuck with us” de- The rest of the world will not agree to be worried that THAAD’s radars, if used in terrent—one that keeps outside powers that. Still, Mr Fitzpatrick says that some “look mode” rather than “terminal mode”, from interfering with his regime—he prob- kind of high-level engagement is overdue: could reach deep into their territory. ably has one now. he thinks it preposterous that the only Americans point out that using the ra- Given what he has been testing, it American who knows Mr Kim is Dennis dar that way would decouple it from the seems likely that Mr Kim has his heart set Rodman, a retired basketball player. Peace- missile-defence system it was deployed on the former. His talk of economic re- treaty talks with North Korea to bring with, which would defeat its purpose. form—he laid out the first new five-year about a formal end to the Korean war, he More generally, they say that this is just plan for decades at the congress—is short something China will have to put up with. on specifics. If his enthusiasm for growth As America’s defence secretary, Ash Car- has led him to be worried by the suppos- ter, said last month: “It’s a necessary thing. edly toughersanctions agreed to by the UN It’s between us and the South Koreans, it’s Security Council in Resolution 2270 on part of protecting our own forces on the March 2nd in response to the nuclear test, Korean peninsula and protectingSouth Ko- he has shown no sign ofit. rea. It has nothing to do with the Chinese.” The message to China was clear: as you Deterrence, defence, despair have done such a lousy job persuading These latest sanctions reflect China’s in- your ally to rein in his nukes, you will have creased willingness to co-operate with to accept the consequences. America and others on North Korea, a new Mr Elleman has calculated that, faced mood born of frustration and annoyance with 50-missile salvoes, a layered defence thatMrKim continueshisnuclearprovoca- consisting of two THAAD batteries and tions when China has asked him to stop. South Korea’s existing Patriot systems Still, unlike the sanctions on Iran, those on would be able to stop all but 10% of what North Korea remain focused on hobbling was fired. He and Michael Zagurek, in a pa- the nuclear programme and denying luxu- per for 38 North, base their calculations on ry goods to Mr Kim and his cronies, rather whatisknown in the jargon as“single-shot than on damaging the general economy. probability of kill” (SSPK). With two layers North Korea is free to buy fuel oil and sell of defence, the SSPK of each interceptor iron ore and coal as long as the revenues need only be a bit over0.7 for90% ofthe in- are not used to fund military activities. coming missiles to be destroyed. This is not a condition that can be practi- That would be an impressively effec- cally enforced. tive defence against conventionally armed Chun Yung-woo, South Korea’s former missiles. But only one or two nuclear war- chief negotiator at the six-party talks and Is THAAD the best you can do? headsneed to getthrough forthe casualties national-security adviser to President Lee to be immense (420,000 killed and injured Myung-bak until 2013, says that although reckons, would not require recognition of in Seoul for each 20 kiloton warhead, reck- China has toughened its stance towards North Korea’s nuclear status and could be on MrElleman and MrZagurek). And if nu- North Korea, it has “not fundamentally part of an agreement to freeze nuclear- clear-tipped missileswere launched along- changed its policy of putting stability be- weapons development. side or behind conventional decoys the fore denuclearisation—it will only imple- Mr Samore thinks Mr Kim’s behaviour system would be clueless as to which was ment sanctions that are tolerable to North may eventually exasperate China so much which. If Mr Kim were to add submarine- Korea”. He hopes that the next American that it will bring into play sanctions which launched missiles to his arsenal, defence president, with support from Congress, really hurt. In the absence ofsuch leverage, would be harder still; they could be fired will put China on the spot by applying a though, the focus must be on strengthen- out ofsight ofTHAAD’s radar. “secondary boycott” to any Chinese busi- ing deterrence and containment. That Like tougher sanctions, THAAD is well nesses trading with North Korea. means resisting or defusing Chinese dis- worth deploying. But neithercan fully con- Another South Korean official, who pleasure over the proposed fielding of the tain the threat. Nor is it certain that conven- talks regularly to the Chinese, is more sym- THAAD (terminal high-altitude area de- tional deterrence (which rests upon the as- pathetic to their dilemma. The official says fence) ballistic-missile defence system in sumption that the regime to be deterred is Beijing has been disturbed by an almost South Korea. The Chinese oppose THAAD sufficiently rational not to invite its own complete lack of communication with the on the basis that its powerful AN/TPY-2 ra- destruction) will necessarily work against North Korean regime since Mr Kim execut- dar could undermine the effectiveness of North Korea. Another reason the Chinese ed his uncle, Jang Song Taek, in 2013. Jang their nuclear deterrent against America, a give for their unwillingness to tighten the was the one senior figure in Pyongyang claim that Mr Samore rejects. screw on the regime is that they fear its im- with whom the Chinese had close ties. The China fears that, over time, a regional minent collapse could result in a last act of Chinese are changing their tactics, if not network of anti-missile systems deployed suicidal nuclear defiance by Mr Kim. That their strategy, in response to what they see by America’s allies might come to threaten may just be what Mr Kim wants his adver- as continuing provocations, looking for a the deterrent effect of its relatively small saries to believe. But if it is a bluff, it is not sanctions “sweet-spot”—harsh enough to strategic nuclear forces. In this instance one that anybody wishes to call. 7 United States The Economist May 28th 2016 23

Also in this section 26 The Libertarian Party 26 On the trail, surrender edition 27 Hillary Clinton’s e-mails 27 Disability lawsuits 28 Soccer ﬂourishes 29 Lexington: Oh, Oklahoma

For daily analysis and debate on America, visit Economist.com/unitedstates Economist.com/blogs/democracyinamerica

Voting rights Altogether17 states will have new rules in place for this presidential election. Rev- The fire next time erend William Barber, a civil-rights activist who is leading the fight against North Car- olina’s changes (among the most sweep- ing), shares Mr Poe’s outrage. These are, he says, summarising the general complaint, UNION SPRINGS, ALABAMA “an all-out retrogressive attack on voting Today’s voting-rights disputes are less clear-cut than those ofthe civil-rights era, but rights”, which his generation must defend, they are inflammatoryall the same just as a previous one secured the passage HE 45-mile drive from Union Springs, as when, as a youngman in Union Springs, of the Voting Rights Act (VRA) in 1965. Thus Tseat of Bullock County, Alabama, to he had to interpretthe constitution in order his slogan: “This is our Selma.” Montgomery, the state capital, might not to vote, but, he thinks, they are obnoxious Yet if this patchwork of initiatives is in- seem very arduous. But for some locals, all the same. deed an assault on hallowed rights, it is, the distance itself is not the main obstacle. For Mr Poe, the explanation of what he metaphorically speaking, a crime without Going to Montgomery, as some now must calls “a slickJim Crow” is simple: “Republi- a body or incontrovertible smoking gun. to get a driver’s licence, means the best part cans want fewer people to vote.” Far from That is partly due to the fiddly nature ofthe of a day off work for two people, the test- it, insists John Merrill, who as a Republican reforms. Chief among them are require- sitter and his chauffeur (there is no public legislator helped craft the new law and ments for photo-IDs which, surveys sug- transport). That is a stretch for employees now oversees its implementation as Ala- gest, minority citizens are more likely to in inflexible, minimum-wage jobs—and bama’s secretary of state. Anyone without lack (in Texas, which has the toughest ID there are lots of them in Union Springs, a a driving licence can apply for a free, alter- law, you can vote with a gun licence but tidy town in which the missing letters on native ID—in Union Springs, at the friendly not a student or employee card). Other re- the shuttered department store’s façade registrar’s office in the courthouse. True, visions include the curtailment of early- betray a quiet decline, surrounded by the fewer than 8,000 have been issued, but voting periods and the ending of election- sort of spacious but dilapidated poverty that, Mr Merrill says, is because not many day registration and out-of-precinct voting. characteristic ofAlabama’s BlackBelt. people need them (others disagree). He North Carolina’s law contains all these ele- To some, this trek is not just an inconve- pledges to ensure that anyone who wants ments: all, say its critics, will dispropor- nience but a scandal. The state’s voters an ID gets one, even if he has to go to their tionatelyaffectminorities. Elsewhere there must now show one of several eligible house himself. Turnout soared in the re- are conflicts over the need to produce photo-IDs to cast a ballot, ofwhich driving cent primary, he points out (though only proof of citizenship to register to vote (re- licences are the most common kind. Last on the Republican side). As for racial dis- cently discounted by a court in Kansas) year, supposedly to save money, the issu- crimination at the polls: “That day is over.” and the pruning ofelectoral rolls. ing office in Union Springs, formerly open Innocent or insidious, these tweaks are for a day each week, was closed, along Across the Edmund Pettus bridge notasluridlydiscriminatoryasthe blatant, with others in mostly black, Democratic- The nuances, malleable data and emotive often bloody shenanigans of the past. leaning counties. After an outcry, the ser- claims in the row over Alabama’s voting Moreover their impact is difficult to prove vice was reinstated for a day per month; at law are typical of similar disputes raging conclusively. A study by the Government other times, applicants head to Montgo- across the South, in and out of court, and Accountability Office found that, in Kan- mery. For James Poe, a funeral-home direc- elsewhere. Some might not be resolved be- sas, tighter ID laws led to a drop in turnout tor and head of the NAACP in Bullock fore the presidential election and may of roughly 2% between 2008 and 2012, and County, the combination of a new vot- cloud its outcome. At their heart is the slightly more in Tennessee; younger and er-ID law and reduced hours is “insanity”. question of how far America has escaped black voters were more likely to be affect- Such impediments may not be as flagrant the racial traumas ofits past. ed. Researchers at the University of Cali-1 24 United States The Economist May 28th 2016

2 fornia,San Diego, also calculated that strict 700-odd discriminatory measures blocked ture growing minority populations, tight- ID laws depress minority turnout, notably by the Justice Department between 1982 ening political competition, or both. In among Hispanics. There are worrisome and 2006; she likened the decision to 2008 Barack Obama won North Carolina projections: Arturo Vargas of the NALEO “throwing away your umbrella in a rain- by a whisker; Wisconsin and Virginia, two Educational Fund, a Latino lobby group, storm because you are not getting wet”. other swing states, are also involved. The reckons 875,000 Latino voters could be im- Not all the places now embroiled in history, like the geography, is fishy. As Rich- peded by new regulations in November, controversy had been fingered for preclea- ard Hasen of the University of California 90% ofthem in Texas. rance. But several were, and theirnew laws recounts, the tinkering began after the de- But, as in Alabama, there is contrary ev- might have been rejected—as some appar- bacle in Florida in 2000, which showed idence, too. For instance, in the congressio- ently realised. Alabama, recipient of 24 ob- that “in close elections, the rules matter”. nal elections of 2014, the first held under jections by the Justice Department since Mr Obama’s election gave it another impe- North Carolina’s new regime, black turn- 1990, passed its voter-ID law in 2011, but tus; the Republicans’ statehouse victories out rose—a bump Mr Barber’s side attri- held it back; it announced that it would im- in 2010, and then the Supreme Court’s rul- butes to an exciting Senate race and an en- plement it the day after the ruling. North ing, facilitated further spurts. This, alleges ergetic get-out-the-vote push. As it Carolina’s legislators rushed theirs Mr Vargas, the Latino advocate, is “the sta- happens, Alabama’s turnout crashed in through a month later, one remarking that tus quo trying to hold on to its political 2014, which officials ascribe to that year’s the VRA “headache” had been lifted. Tex- power for as long as possible”. dull, incumbent-heavy races. Those expla- as’s law was blocked, then revived. That nations point up a basic evidential hitch: telling opportunism lies behind Mr Bar- Afterthe end ofhistory electoral behaviour is driven by many fac- ber’s view that blackvoters now have “less “Voting in the South,” says Mr Barber, “has tors, from the political (a historic black can- protection than on August 7th, 1965”, the alwaysbeen aboutthe issue ofrace.” Ifthat didate) to the personal (getting stuck at day after the Voting Rights Act was signed. remains true, and if election regimes can- work). Demonstrating a single rule’s con- Exhibit B in the circumstantial case not be assessed in isolation from history, sequences is tricky; proving why people against the new laws is the ropey rationale practices that are permissible in one partof fail to vote is particularly fraught. And lots forpassingthem. The main reason cited for the country—NewYorkhasno earlyvoting, ofthese measures are yet to be tested. the ID requirements is the need to combat forexample—might indeed be deemed dis- fraud. That sounds reasonable, except that criminatory in another. Occasional inop- A rainstorm with no umbrella the kind of impersonation they prevent is portune comments by bigoted politicians, Hardly surprising, then, that opponents of vanishingly rare. In Alabama, argues the such as the legislators in Alabama caught these changes, including the federal gov- NAACP’s Legal Defence Fund, there was referring to black voters as “aborigines”, ernment, have sometimes struggled to per- one documented case of voter-imperson- bolster that gloomy analysis. A milder suade courts that they violate the VRA or ation in the 12 years before the ID law was judgment is that, these days, race is a proxy are unconstitutional. “They’re wasting a passed. The laws’ supporters, such as Mr for partisanship, since minority Ameri- lot of money,”says Christian Adams of the Adams, dismiss these quibbles: “How cans mostly vote Democratic, rather than a Public Interest Legal Foundation, which much criminal activity is OK?”, he de- target in itself; though as Wendy Weiser of joined Virginia in a successful defence of mands. Mr Merrill, in Alabama, says the the Brennan Centre for Justice says, it is voter-ID; a federal court recently upheld state should always try to improve, just as scant consolation for black people to be North Carolina’s law. On the other hand, its triumphant college football team con- disenfranchised for their party allegiance Texas’s has been judged discriminatory,as, stantly recruits new players. rather than simply fortheir skin colour. this week, were Ohio’s cuts to early voting; If there were no other cause for suspi- At the least, many of these reforms im- several states, including Alabama, face on- cion, that perfectionist argument might ply a wilful failure to understand the con- going litigation. wash. But there is, including—Exhibit C— straints of poverty, especially the rural, Perhaps if the burden of proof fell more the roster of implicated states. Several fea- poorly educated sort. In Alabama appli- squarely on the laws’ proponents, the out- cants for a free voter ID must swear, on comes ofthese cases might be more consis- pain of prosecution, that they have no oth- tent—especially if circumstantial evidence er valid kind. That, for some, is offputting, weighed more heavily. Exhibit A might be as is the paperwork required, in some their incriminating timing. states that provide such loopholes, to vote The key date, say activists, was June without an ID. Early voting, same-day reg- 25th 2013. That was when the Supreme istration and out-of-precinct voting are Court neutralised the aspect of the VRA useful to people leading hard-pressed, that required nine mostly southern states sometimes disrupted lives. with records of discrimination, plus parts In truth, though, as some activists ac- of six others, to clear changes to their vot- knowledge, these hurdles are not the only ing practices with the Justice Department barrier to greater minority influence. Na- or a federal court before they took effect. tionwide turnout was already low among Edward Blum, a pro-reform campaigner Latinos and black youngsters—a disen- who helped bringthesuit,arguesthat,hav- gagement that, in down-at-heel places ing “done what it was designed to do”, the such as Bullock County, is at once tragic relevant section ofthe VRA had become an and understandable. The possible closure infringement of state sovereignty; in va- of a nearby prison is a bigger preoccupa- rious southern states, he notes, black turn- tion in Union Springs than the election. out is now higher than in other bits of “We don’t have any industries trying to America. A narrow majority of the court knock the door down,” laments Saint duly ruled that, while prejudice persisted, Thomas, the mayor. “You just about got to the country had “changed dramatically”, beg ‘em.” Mr Poe ofthe NAACP offered free and that the formula used to apply the pre- rides to Montgomery for anyone keen to clearance requirement was outdated. Dis- gettheirID there. No one, he saysdisconso- senting, Ruth Bader Ginsburg adduced the Still marching lately, hastaken him up on it. 7 EXPERTS COLLABORATING ON CARE IS WHAT WE CALL A HEALTH CARE COMMUNITY

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optum.com/healthier 26 United States The Economist May 28th 2016

The campaigns Heard on the trail

Lindsey Graham (Senator from South Chris Christie (Governor ofNew Jersey) Carolina) “Acrisis for Donald is when his favourite “He’s a race-baiting, xenophobic, reli- restaurant on the Upper East Side isn’t gious bigot.” December 8th 2015,CNN open.” January 30th 2016

“Wetalked about national security,and “There is no-one who is better prepared told some jokes. [Trump’s]very cordial, to provide America with the strong lead- he’s a funny guy,and he’s from New York. ership that it needs both at home and He can take a punch.” May12th 2016 around the world, than Donald Trump.” February 26th 2016 John McCain (Senator from Arizona) “I thinkhe may owe an apology to the Rand Paul (Senator from Kentucky) familiesofthose who have sacrificed in “Donald Trumpis a delusional narcissist conflict and those who have undergone and an orange-faced windbag.” January The Libertarian Party the prison experience in serving their 25th 2016, The Nightly Show country.” July 20th 2015,MSNBC Guns, weed and “I tooka pledge when I ran forpresident “You have to listen to people that have to not run as an independent candidate relevance chosen the nominee ofour Republican and to support the Republican nominee. I Party.I thinkit would be foolish to ignore stand by that pledge.” May17th 2016, them.” May 7th 2016, CNN Breitbart.com WASHINGTON, DC GaryJohnson could launch the Bobby Jindal (formergovernor of Rick Perry (formerTexas Governor) Libertarians on a big third-partyrun Louisiana) “Donald Trump’scandidacy is a cancer S THE likely presidential nominee of “But you know why [Trump]hasn’t read on conservatism, and it must be clearly Athe Libertarian Party, Gary Johnson the Bible? Because he’s not in it.” Septem- diagnosed, excised and discarded.” July has a lot to be modest about; and he is. ber10th 2015 22nd 2015 “Everybody I meet seems to like me,” says the two-term former Republican governor “I thinkelecting Donald Trumpwould be “I`m going to support him and help him of New Mexico. “But I’m a Libertarian, so the second-worst thing we could do this and do what I can. He is one ofthe most doesn’t that denote there are some loose November, better only than electing talented people who has ever run for screws out there?” He leaves the question Hillary Clinton.” May 8th 2016, Wall Street president I have ever seen.” May 5th 2016, hanging. Journal CNN Tiny, electorally trifling and obsessed with guns and weed, cherished emblems of its 11,000 members’ freedom, the party clusion in this year’s televised debates. And the Libertarians’ voguish message of has nevermattered in national politics. It is With publicity, he could catch on. He fiscal conservatism, social liberalism and by some measures America’s third-big- has the accomplishments of a chest-beat- anti-interventionism has something for gest—yet not flattered by that comparison. ing conservative hero—he is a self-made the disaffected of both big parties. Com- In 2012 MittRomneycrashed to defeatwith millionaire, triathlete and razor-beaked pared with a straightforward Trump-Clin- 61m votes; Mr Johnson, who ran for the deficit hawk; he vetoed 750 spending bills ton match-up, the Monmouth poll suggest- Libertarians after failing to be noticed in in New Mexico. He is also a sometime ed Mr Johnson could take 6% of the vote the Republican primaries, won1.3m. Yet he dope smoker (he resparked his youthful from Mrs Clinton and 4% from Mr Trump. could be about to improve on that. habitin2005 to manage the pain from a pa- The particularunease ofmany Republi- Mr Johnson and his running-mate, Bill ragliding accident), who comes across as cans with their presumptive candidate— Weld, a formergovernor ofMassachusetts, almost goofily unaffected. He speaks in alongwith theirfailure hitherto to launch a are expected to emerge from the Libertar- horror of the disdain many Americans conservative rival to him—explains a surge ians’ convention in Orlando on 30th May show for Mexican immigrants—whom he of interest in the Libertarian confab in Or- with the party’s ticket. If so, he could feasi- calls “the cream of the crop”—as if it were lando. After Mr Trump sewed up their bly launch the biggest third-party run since borne of some crazy misunderstanding, nomination in Indiana this month, Google Ralph Nader won almost 3% ofthe vote for rather than embedded nativist resentment reported a 5,000-fold increase in online the Green Party in 2000—including and economic anxiety.Voters sickofpoliti- searches forMr Johnson. He is not to all Re- 100,000 votes in Florida that may have cal polish mightlike the mix: he really isau- publican tastes; Mr Trump’s most outspo- cost Al Gore the presidency.Or he could do thentic. Yet Mr Johnson’s main cause for ken critics in the party tend to hold neo- better; a poll by Monmouth University put hope is the unpopularity of the likely Re- conservative views on security. Yet even MrJohnson on11% in a three-way race with publican and Democratic alternatives. they hope he might bringdisenchanted Re- Donald Trump and Hillary Clinton. That Around 60% of voters dislike Donald publicans to the polls in November, and was especially creditable given how little Trump and 55% Hillary Clinton. That thereby retain their support for Republican he is known; he figured in almost no na- should encourage more Americans to vote candidates in the coterminous congressio- tional polls in 2012. It has encouraged Mr as freely ofthe old duopoly as they increas- nal contests. Johnson to think he could register the 15% inglyclaim to be; 42% saytheyare indepen- Mr Johnson rejects Mr Trump utterly: vote-share that would guarantee him in- dent voters, up from 30% a decade ago. “There’s nothingabout Donald Trumpthat1 The Economist May 28th 2016 United States 27

2 appeals to me.” Yet he sounds most hope- nald Trump, her unconscionable Republi- tory oflaxity and supplication to its boss. ful of picking up support from disaffected can rival, will now feast. Yet if it may be possible to take a toler- Democrats, especiallyfollowers ofSenator Ever since Mrs Clinton’s e-mail server ant view ofhow this started, there is no ex- Bernie Sanders, whom he says he agrees became a matter of public debate last year, cusing the mess Mrs Clinton has made of with on almost everything—including the she has said she broke no rules. Tothe con- it. A more agile politician would immedi- evil of crony capitalism and virtues of trary,the State Department report says she ately have recognised the scandal’s poten- pot—except the economy. Yet how would was under an “obligation” to seek clear- tial to exacerbate the poor trust ratings that he woo them? ance for her e-mail system, did not, and it are her biggest weakness. She would then Mr Johnson’s suggestion is unconven- would have been denied if she had done, have taken urgent measures to confess her tional. On the basis that, he argues, with due to “security risks”. carelessness, express remorse and make a some support from surveys, Americans Her e-mail rig was not a secret, exactly. fulsome display of handing over whatever are more libertarian than they know, he The report notes “some awareness” of it materials the investigators required. In- would point them to an online quiz, “Iside- among senior diplomats. It points instead stead Mrs Clinton obfuscated, denied and with.com”, to help them work out where to the impunity with which Mrs Clinton’s watched the scandal grow.The most signif- they stand. “I say, “Take the quiz, and who- affairs were handled. When two IT whiz- icant indictment to arise from it may well ever you pair up with, I think you should zes expressed fears that her e-mails might concern her skills as a politician. But with knockyourselfoutoverthem.” Hisown ex- notbe preserved, theirboss“instructed the the latest polls giving Mr Trump a narrow perience with the quiz, he sweetly relates, staff never to speak of the secretary’s per- lead, that is not at all reassuring. 7 suggest he agrees with 73% ofMr Sanders’s sonal e-mail system again.” proposals, 63% of Mrs Clinton’s and 57% of In Mrs Clinton’s defence, the report Mr Trump’s. 7 notes that the department has “longstand- Disability lawsuits ing, systemic weaknesses” in its record- keeping. Colin Powell, Mrs Clinton’s pre- Frequent filers Hillary Clinton’s e-mails decessorbutone, also used a private e-mail account and broke record-keeping rules. Already indicted Yet the report suggests he had more of an excuse; it was hard to send e-mails outside SANTA BARBARA the State Department’s system in his time. Laws meant to help the disabled have He also sent fewer e-mails than Mrs Clin- had unintended consequences ton, for whom secrecy—not mere “conve- WASHINGTON, DC nience”, as she has claimed—seems to have OR an inkling of how good intentions The Democratic front-runneris mired in been a motivating factor. E-mails included can go awry, consider Title III of the a scandal ofherown nurturing F in the report show her fear that, if she Americans with Disabilities Act (ADA). OULD Hillary Clinton’s bid for the adopted an official e-mail account as an Passed by Congress in 1990 with the laud- C presidency be undone by her unusual aide had advised her to, her personal e- able aim of giving the disabled equal ac- e-mail arrangements as secretary of state? mails could be published: “I don’t want cess to places of business, it has been sup- A report by an internal watchdog of the any riskofthe personal being accessible”. plemented with new Department of State Department, the inspector-general, On the evidence available, that says a Justice standards (in 2010, for example, the into her use of a private e-mail account for lot about the origins of this scandal. Out of DOJ said that miniature horses can qualify official business, suggests it could be. The a neuralgic concern forconfidentiality, Mrs as service animals). The hundreds ofpages report, which was released on May 25th, Clinton overrode rules that her advisers of technical requirements have become so does not allege Mrs Clinton broke any law: considered to be less important than they “frankly overwhelming” that a good 95% that would have stoked fears of a cam- were. She was no doubt motivated by of Arizona businesses haven’t fully com- paign-ending indictment by the FBI, which years ofpolitical smears (which Mr Trump, plied, says Peter Strojnik, a lawyer in Phoe- is also investigating the matter. Yet it raises who has already suggested she may be a nix. He has sued more than 500 since start- concerns about her conduct and uncandid murderer, is now dredging up); her staff ing in February, and says he will hit response to the scandal—upon which Do- was lulled by the State Department’s his- thousands more in the state and hire staff to begin out-of-state suits. Businesses that brave court instead usually lose. Lawyers need only show that a violation once existed—a bathroom mir- ror, stall partition, or sign improperly posi- tioned can be enough, as is having handicapped parking marked with faded paint. Violators must pay all legal fees. Mr Stroj- nikuses the money taken in to pay helpers, including testers who hunt for infractions and serve as plaintiffs, and puts the remaining proceeds into his charity, Advo- cates for Individuals with Disabilities. Peo- ple should give attorneys like him who enforce the law a break, he says, and instead “be grumpy at Congress”. The money machine has sped up in the past couple of years, with some plaintiffs now filing more than two dozen lawsuits a week, says Richard Hunt, a Dallas lawyer who defends businesses and teaches disability law at Southern Methodist Univer-1 28 United States The Economist May 28th 2016

Soccer ﬂourishes Kick turn

NEW YORK More and more Americans like watching people kickround balls ESPITE its name, the Copa America at MLS games have grown by 56% since Dhas never been played north ofthe 2001. In the past five years they have risen Rio Grande before. On June 3rd the inter- 29%. More people go to MLS games than national soccer tournament kicks off in go to an NBA games or National Hockey Santa Clara, California. Games will take League ones (though both basketball and place in ten cities across the country over hockey are played in smaller stadiums the next fourweeks. It is the latest effort with higher ticket prices). When it comes to cement the sport into the mainstream to revenue, soccer is still a minnow: MLS consciousness. Soccer still lags behind generates just halfthe revenue ofJapa- America’s fourleading sports: baseball, nese baseball and a tenth ofwhat the basketball, hockey and American foot- NBA does. ball. But several measures suggest that There is also depth to this growth the game is gaining ground. among fans. In May FC Cincinnati, a Much ofthe hard running tookplace freshly minted team playing in the third in the1990s, when the successful hosting tier (the United Soccer League, or USL), ofthe World Cup coincided with a surge registered one crowd ofmore than ofyoung players and the formation of 23,000. In 2015,newly formed New York Paralegal paradise Major League Soccer (MLS). According to City FC sold15,000season tickets before a poll for ESPN, soccer has become the they had kicked a ball. The league is set to 2 sity. Small businesses typically settle for second-most popular sport for12-24 year grow from 20 to 24 teams over the next $3,500 to $7,500. That’s a bargain com- olds, afterAmerican football, and is the two seasons, and one ofthe youngest, pared to the cost of a court fight, Mr Hunt standout leader among Hispanics ofthe most eclectic fanbases ofall American says, and, forthe lawyerand plaintiff, good same age. Last year soccer-playing sports—52% ofMLS fans are aged18-34, money fora few hours’ work. among boys in high school grew more the highest proportion ofany profession- California offers a bigger bonanza. The than any other sport, according to the al sports league. state’s Unruh Act awards a disabled plaint- National Federation ofState High School Viewing figures for MLS also have a iff up to $4,000 for each time he or she vis- Associations (perhaps capitalising on long way to go before they can compete ited, or wished to visit, an offending busi- fears over the safety ofAmerican foot- regularly with the big four. But TV audi- ness. This increases the cost of losing a ball, where numbers fell). ences are growing (tying domestic fix- lawsuit, so California’s small businesses The success ofthe national teams, in tures in with English Premier League typically pay settlements of $15,000 to particular the women’s side, has been a games, which attract larger audiences, $20,000, says Tom Scott, head ofthe Sacra- boon. Last year, the Women’sWorld Cup has worked well) and networks see the mento branch of the National Federation final attracted a domestic TV audience of potential, signing a $90m-a-year deal to ofIndependent Business. 27m—roughly the same as the record- 2022 for broadcasting rights. Nearly all California businesseshave at setting college American football cham- Still, MLS has still not fully dispelled least one violation, perhaps of a state pionship game in 2015.Until recently,the its image as a retirement home for building code, says Marejka Sacks, a para- challenge had been to keep people inter- clapped-out European stars. Only Sebas- legal at Moore Law Firm in San Jose. Her ested between World Cups. A rise in the tian Giovinco, a player forToronto FC, team cutsbusinessesslackfor“the little mi- number ofgames from other countries can be considered a foreign star in his nutiae stuff,” she says, but has still sued that are broadcast live has helped. Ac- prime. With a new surge ofspending on more than 1,000 since switching from cording to Stephen Master ofNielsen, soccer in China, it may become even criminal law to ADA infractions in 2009. which measures such things, there is more difficult to attract stardust. America Proving that a violation has caused a now more live soccer available on Ameri- churns out more world-beating athletes handicapped person difficulty, discomfort, can TV than in any other country. than any other country,but none of them or embarrassment is “not a difficult thresh- Partly as a result, average attendances play soccer. Yet. old”, she says. Nineteen of every 20 businesses paid up to avoid trial. Serial filers say they provide a valuable March a California judge ordered Colora- cases multiply, content may be taken off- service because Congress did not fund a do retailer Bag’n Baggage to pay $4,000 in line. Paying an accessibility consultant to dedicated enforcement bureaucracy. Why damages and legal fees thought to exceed spot the bits of website coding and meta- do businesses think it’s OK to risk our safe- $100,000 because its website didn’t ac- data that might trip up a blind user’s ty forprofit?, asks Eric Wongofthe Disabili- commodate screen-reading software used screen-reading software can cost $50,000 ty Support Alliance, himself a wheelchair bya blind plaintiff. MrRosalessays extend- for a website with 100 pages. Reflecting on user. He says that those who think there ingADA rulesto websites will allowhim to the implications of this, Bill Norkunas, a are thousands of wasteful lawsuits share begin suing companies that use colour Florida disability-access consultant who “the delusional rationalisations of serial combinations problematic for the colour- was struck with polio as a child (and who ADA violators”. blind and layouts that are confusing for helped Senator Ted Kennedy draft the What’s next? Omar Weaver Rosales, a people with a limited field ofvision. ADA), says that removing videos that lack Texas lawyer, has sued about 450 business- The DOJ is supporting a National Asso- subtitles would deprive wheelchair users es in the past two years; more than 70% ciation ofthe Deaflawsuit against Harvard and the blind, who could at least listen to paid up to avoid a trial. But even more lu- for not subtitling or transcribing videos them. Mr Norkunas hopes that won’t hap- crative pastures are coming into view. In and audio files posted online. As such pen, but reckons it very well might. 7 The Economist May 28th 2016 United States 29 Lexington Oh, Oklahoma

What happens when voters distrust theirpoliticians so much that they bind theirhands Budget negotiations ended without a pay rise for teachers (and indeed resulted in a 16% cut to higher education), so the matter is now in the hands of voters. A bipartisan group wants to ask them to increase education fundingby addinga penny in the dollar to state sales taxes in November. Their ballot measure, State Question 779, is backed by a former Democratic governor, David Boren, and a group of business bosses and former members of Ms Fallin’s cabinet. It aims to raise $615m, enough for a $5,000 increase per teacher. Even supporters admit that sales taxes are a clumsywayto raise money, because the poorspend a larger share of their incomes on day-to-day shopping. Mr Boren, an old-fash- ioned centrist who is now president ofthe University of Oklaho- ma, calls sales taxes “regressive” and would have been “thrilled” iflawmakers had acted. MrSheehan, anotherbackerofthe initiative, worriesaboutthe impacton low-income families, though he argues that schools are often their best ladder out of poverty. The ballot initiative amounts to voters telling legislators: “you guys are not doing your job,” says the teacher, who is running as an independent for the state senate in November. Mr Boren sees a problem of political culture. For 25 years both Democrats and Republicans have won elections in Oklahoma by OME weeks ago Oklahoma’s teacher of the year for 2016, promising tax cuts. In the 1990s voters amended the state consti- SShawn Sheehan, dined in Washington, DC, with counterparts tution so the legislature can only increase taxes if super-major- from California and Washington state. The mood was jolly until ities ofthree-in-fourmembers agree, or ifvoters say yes in a refer- the high-flyers, all finalists for national teacher of the year, com- endum. After living through three boom-and-bust commodities pared salaries. When Mr Sheehan—a young teacher of mathe- cycles, the 75-year-old ex-governor fretted as he saw Republicans matics and special education—revealed his pay, his table-mates cutstate income taxestwice, againsta backdrop ofsurging oil pro- “sort of went silent”. For in state rankings of teachers’ pay Okla- duction and revenues. “Oklahomans got sold on a free lunch,” homa comes 48th. Washington’s teacher of the year has since says Mr Boren. Businesses wanted a free lunch too, he adds: de- been urging Mr Sheehan to move to the West Coast. “He’s been manding tax breaks and subsidies, while still expecting a well- sending me house listings,” he says, ruefully. trained workforce. Republicans do not wholly disagree. Senator Oklahomans dislike such stories. They are sternly conserva- Rob Standridge represents the district that Mr Sheehan is contest- tive: God-fearing, tornado-lashed prairie folk, so proud of their ing, near Oklahoma City. Though Mr Standridge defends low tax mineral wealth that an oil well stands next to the State Capitol, rates, he laments that states get into bidding wars to woo employ- where feebler types might plant flowers. They scorn big govern- ers: “We spend way too much on incentives.” ment—the state is in the bottom third for tax revenue per person. But Oklahomans care about their public schools, which educate Bound and gagged the vast majority of their kids, and which (notably via sport) are The campaign behind the ballot initiative polled voters to ask if social anchors for many towns. So they wince when good teach- they would tolerate higher income, property or sales taxes to in- ers are lured elsewhere. Even now, as slumping oil and gas prices vest in education. Income taxes divided voters along partisan have been followed by a deep budget crisis, the Republican go- lines, with Republicans rejecting rises. As for property taxes, vernor, MaryFallin, saysshe wantsto give teachersa raise, an am- Oklahomans like them low—Mr Boren links this to their history bition echoed by legislators from both parties. A poll last year as land-rich, cash-poor homesteaders. Most backed higher sales found 98% of Oklahomans back higher classroom pay, dividing taxes. People tell Mr Boren that they like sales tax because “every- only over whether to raise salaries across-the-board, or on merit. body pays it,” unlike fiddlier taxes that the rich can dodge. That consensus makes raising teachers’ pay a good test of ba- The Oklahoma Council of Public Affairs, a smaller-govern- sic governance. Alas, legislators negotiating a new budget have ment group that tried to blockthe measure in court, says Oklaho- spent May failing it. Democrats blocked a scheme involving high- ma cities could end up with some of the country’s highest sales er cigarette taxes, because they wanted some of the revenues for taxes. It points to polls showing an option that Oklahomans like health care. Republicans introduced and withdrew a proposal to better: paying teachers by cutting tax credits forwind and renew- increase teachers’ pay while cutting their other benefits. Worse, able energies, and other corporate subsidies. But that risks clash- with days left to fill a $1.3 billion hole in the budget, Republicans es between special interests: scrapping tax breaks for wind ener- devoted long hours to further loosening gun laws, to arguing gy is a priority for Oklahoma’s mighty oil and gas industry. about transgender pupils in school bathrooms and to passing a A narrow question of public policy—how to stop Texas and law that sought to make performingalmost all abortions a felony. other neighbours pinching Oklahoma teachers—has exposed That attempt to criminalise abortion was certain to be struck broad, not very cheering truths about democracy. Elected politi- down as unconstitutional in the courts. Governor Fallin vetoed cians have prospered by urging voters to distrust them. Voters the law, calling it ambiguously worded. The only doctor in the dulybound legislators’ hands to limit government mischief. Now state senate, a Republican who personallyopposesabortion, was Oklahoma is struggling to deliver a policy with near-universal crisper in his diagnosis, calling the proposal “insane”. support. Hope that someone learns a lesson from all this. 7 30 The Americas The Economist May 28th 2016

Mexico’s regional elections Also in this section The view from Veracruz 31 Bello: Chávez’s little blue book 32 An Anglo-Argentine rapprochement 32 A history of the Brazilian jeitinho

VERACRUZ An electoral contest in a troubled state is a test forthe country’s ruling party ERACRUZ calls itself “four times hero- ent by Mexican standards, it is perilous for nomic performance may bring to an end Vic” to commemorate the occasions in journalists who inquire into allegations of 80 years ofunbroken rule by the PRI. Many the 19th and 20th centuries on which it re- corruption and ties between the govern- Mexicans would see in that result a harbin- sisted foreign assaults. The election cam- ment and organised crime. An estimated 18 ger ofthe country’s presidential election in paign taking place in the port city on the reporters have disappeared or been mur- 2018. Mexico’s president, Enrique Peña Gulf of Mexico, and in the surrounding dered during the tenure of the current go- Nieto, belongs to the same party as Mr state of the same name, is less edifying. vernor, Javier Duarte, who accuses jour- Duarte and, like him, is widely blamed for Héctor Yunes Landa, the candidate of the nalistsin turn ofconsortingwith organised corruption and lawlessness (though he is ruling Institutional Revolutionary Party crime. Many are afraid to do their jobs. not quite as unpopular). (PRI) forthe governorship of the state, calls Mr Duarte is loathed; his disapproval In Veracruz, voters may opt for neither his rival, Miguel Ángel Yunes Linares, “a rating among veracruzanos stands at 83%, ofthe brawlingcousinsand choose instead pervert, sexually sick”. He warns voters to by one poll. Mr Yunes Linares has pledged the candidate of the hard-left Morena “take care of the safety of your children.” to throw him in jail if he wins. Although party, Cuitláhuac García Jiménez. That Mr Yunes Linares, who leads a coalition the governor cannot run for re-election his would give hope to Morena’s populist thatincludesthe conservative National Ac- unpopularity and the state’s poor eco- leader, Andrés Manuel López Obrador, a tion Party and the left-wing Party of the twice-defeated presidential candidate Democratic Revolution, denies reports who plans to run again in 2018. Those with that he belonged to a paedophile ring. He Bruised Veracruz a stake in Mexico’s stability will worry. says his opponent, who is also his cousin, Mexico, state* GDP, average annual % increase The state elections will not be a straight- is waging a “dirty war”. Q4 2010-Q4 2015, % forward referendum on Mr Peña’s presi- With 8.1m people, Veracruz is Mexico’s 0123456 dency. The PRI, which governed Mexico as third most populous state. Its mix of cities Aguascalientes PRI a one-party state for most of the 20th cen- and rural settlements, indigenous and tury, runs nine of the 12 states being con- Quintana Roo PRI non-indigenous folk—and its oil, farming tested, some of them, such as Chihuahua, and manufacturing—make it a microcosm Chihuahua PRI much better run than Veracruz. The party’s of the country as a whole. It is also among Hidalgo PRI national leader, Manlio Fabio Beltrones, the most troubled of the 12 states that will Tlaxcala PRI expects the PRI to win nine governorships, elect new governors on June 5th (most are Puebla PAN though perhaps not the ones it has now. In also holding municipal elections, as is a Zacatecas PRI four states besides Veracruz the PRI has 13th state). Veracruz’s economy has grown Oaxaca MC† never been out of power. Regional issues the least over the past ﬁve years (see chart). Durango PRI will matter more than national ones in It has a reputation forcorruption. A federal most places. But that does not mean that Sinaloa PAN auditor found irregularities in the use of14 Mr Peña, who cannot run again in 2018, or Tamaulipas Current PRI billion pesos ($1 billion) of federal money governor, Mr Beltrones, who may try to succeed him transferred to Veracruz in 2014, the highest Veracruz party PRI as president, will be able to shrugoﬀ losses level ofsuspect spending in Mexico. *With gubernatorial elections on in Veracruz or the other states where the Source: INEGI June 5th 2016 †Citizens’ Movement Although the state isnotespecially viol- PRI now rules. 1 The Economist May 28th 2016 The Americas 31

2 The mud-fight in Veracruz shows why The same can be said of some other The president has taken big steps towards some voters are disenchanted with main- states. In Oaxaca a tip-off led to the discov- modernising Mexico, including opening stream parties, but also why those parties ery this month of a warehouse packed energy and telecoms to competition and continue to win elections. As its long rule with fridges, children’s bicycles and gro- raising standards for state schools. And yet of Veracruz suggests, the PRI remains a for- ceries, along with PRI campaign literature, he cannot divorce himself entirely from midable machine, sometimes steamroller- apparently intended for distribution to the sleaze in Veracruz and other states. As a ing legal norms as well as political oppo- voters. In Tamaulipas 52 candidates for PRI man, he profits from the sharp-el- nents. A functionary in Veracruz of municipal office have quit, saying they bowed electoral tactics of its operatives. In Prospera, a federal social programme, re- were threatened by gangs that back rival 2018, the machine will workjust as hard for signed on May10th after he was caught on candidates. Such episodes help explain the party’s presidential nominee as it has tape discussing how to buy votes for the why, according to Latinobarómetro, a poll- in the state elections. PRI. “Normal democratic politics are not in ing group, just19% ofMexicans are satisfied Mr Peña’s standing with voters has place in the likes of Veracruz,” says Jesús with democracy, the lowest level among been hurt by his mishandling of the mur- Silva-Herzog, a political scientist at Tecno- the 18 Latin American countries surveyed. der of 43 students in September 2014, a lógico de Monterrey, a university. Mr Peña is not a bruiser like Mr Duarte. crime that shocked Mexicans; by a recent 1 Bello Chávez’s little blue book

Outsiders should push Nicolás Maduro to hold a recall referendum this year IME was when Hugo Chávez was im- Maduro but keeping power. Tmensely proud of the new constitu- In ignoring the demand for political tion he gave Venezuela in 1999, at the start change the regime is “playing with fire”, of his 14 years of rule. He had it printed in Margarita López Maya, a Venezuelan po- a little blue book, and would hand out litical scientist, told Prodavinci, a website. copies to everyone he met. Now the gov- On the streets, desperation is mounting. ernment of Chávez’s chosen successor, Incidents of looting rose in March and Nicolás Maduro, is tearing it up. April, to more than one a day. Although That process began after an election in the security forces usually react swiftly, December in which the opposition won on May 11th a wholesale market in Mara- control of the National Assembly with cay, about 80km (50 miles) west of Cara- 7.7m votes (56% of the total). That is a big- cas, was looted forthree hours. ger (and fresher) mandate than Mr Madu- Mr Maduro’s strategy depends on mil- ro’s own. The regime has illegally neu- itary support. Many officers are involved tered the assembly. The supreme tribunal, in business, legal and illegal. They and the packed with chavista puppets, threw out president are “hostages to one another”, an amnesty law forpolitical prisoners ap- says Ms López. Some in the army are wor- proved by the assembly, which has the Why is Mr Maduro ripping up Chávez’s ried. Two retired generals who were close constitutional right to grant one. The as- little blue book? Venezuela is in desperate to Chávez recently called for the referen- sembly has twice used its constitutional straits, because of the fall in the oil price dum to take place. power to reject Mr Maduro’s decrees and years of mismanagement. As it strug- To deny Venezuelans a recall referen- granting himself emergency powers. The gles to avoid a debt default, which would dum in 2016, wrote Luis Almagro, the sec- president has pressed on regardless. “It’s a cut off credit to the oil industry, Mr Madu- retary-general of the Organisation of matter of time” before the assembly “dis- ro’s government has applied a python American States (OAS), in an open letter appears”, he said this month. squeeze to imports. Coca-Cola this week to Mr Maduro this month, “would make Article 72 of the constitution declares announced it would halt production in the you just another petty dictator”. Changes that all elected officeholders are subject to country because of sugar shortages. Many of government in Argentina and Brazil recall via referendum after the halfway Venezuelans spend hours queuing for the have deprived MrMaduro ofallies. Sever- point of their terms. This article is part of scarce food available at officially con- al countries in the region are calling fordi- Title 4, on political rights. Yet this month trolled prices. Patients are dyingneedlessly alogue in Venezuela. But Mr Maduro has Mr Maduro, who won a narrow and dis- because ofshortages ofdrugs. shown he is not interested in talks he can- puted victory in a presidential election in The government knows it would al- not control. A diplomat from the Vatican April 2013, said that the recall referendum most certainly lose a referendum. Datana- this month cancelled a trip to Venezuela. against him, which the opposition de- lisis, a pollster, finds that 64% want Mr Ma- According to a source in Caracas, that was mands, was merely “a constitutional op- duro to go. Electoral defeat would destroy because Mr Maduro rejected a five-point tion”, not an “obligation”. “There won’t the founding myth of chavismo: that it em- plan formediation by the pope. be a referendum” this year, insisted Aris- bodies a popular revolution. Mr Maduro Mr Almagro has proposed invoking tóbulo Istúriz, the vice-president. The tim- would prefer to be pushed out by a mili- the OAS’s Democratic Charter, which ing matters. If the president is recalled in tary coup, which would make him a vic- could lead to Venezuela’s suspension year four of his term, a new election fol- tim, argues Henrique Capriles, the opposi- from the organisation. He may not have lows; if it is later, the vice-president, who tion presidential candidate in 2013. Many the votes to make that happen. But absent is appointed by the president, serves out analysts believe that the regime’s strategy a referendum, it is the right course. Latin the term. The electoral authority, which in is to hang on until 2017, in the hope that the America’s tacit acceptance of unconstitu- practice acts as a branch of the govern- oil price will continue its recent partial re- tional government in Venezuela sets a ment, is stalling the referendum process. covery and/or with a view to replacing Mr dangerous precedent. 32 The Americas The Economist May 28th 2016

2 double-digit rise in the number of homi- paign-finance laws.) cides; and by a conflict-of-interest scandal Jeitinho, which has connotations of in- related to the building of his wife’s house. genuity as well as illegality, is a marker of The PRI’s failure to approve a draftanti-cor- national identity, says Livia Barbosa, an ruption bill in Congress in April has anthropologist. Two-thirds of Brazilians opened him, and the party, to accusations confess to seeking out such shortcuts, ac- that the PRI is blasé about graft. cording to a survey conducted in 2006 by In the state of Nuevo León last year Alberto Almeida, a political scientist. Daily Jaime Rodríguez Calderón, better known life is criss-crossed with them. A restaura- as“El Bronco”, became the firstgovernor to teuroffers policemen a packed lunch to en- be elected without the support of a politi- tice them to patrol his street, saving 10,000 cal party. Next month veracruzanos may reais ($3,000) a month in private-security elect Mr García, the left-wing Morena can- fees. Laranjas (“oranges”) act as cut-rate didate, who rails against corruption in the shell companies, hiding business activities parties backing the Yunes cousins. In 2018 from taxmen and investigators. voters may turn on the same parties’ can- Don’t chime for me, Argentina To spare busy students from having to didates in the presidential election. That accept internships, required for many uni- could let in mavericks, such as El Bronco, or Signs of this former commercial cama- versity courses, professors approve ficti- even provide Mr López Obrador with an raderie are everywhere. Red post boxes ap- tious ones, complete with made-up re- opportunity to carry out his dangerous pear on street corners. Football, the nation- ports. Braziliansbringalongchildren orold programme of left-wing anti-reform. Vera- al sport, is an English invention, as are people to jump queues at banks, clinics cruz, Mexico’s microcosm, may prove to be some Argentine teams. The original New- and government offices; some parents a model forits future politics as well. 7 ell’s Old Boys, Lionel Messi’s first club, lend out their children for that purpose. were the pupils of a Kent-born teacher. The material world has its own sort of jei- Posh porteños (Buenos Aires residents) tinhos, jury-rigged contrivances called Anglo-Argentine relations play cricket at the Hurlingham Club. gambiarras. An iron could serve as a skillet; The Falklands war,triggered by Argenti- a sawed-off styrofoam cup, affixed to a Ending na’s invasion of the islands in 1982, ended fork, becomes a spoon. the bonhomie. Signs of Britishness were Keith Rosenn, a legal scholar at the Uni- estrangement expunged. Bar Británico, once frequented versity of Miami in Florida, points out that by British railway workers, changed its sign in the parts of Latin America governed by to read Bar tánico. The Torre de los Ingleses Spain rule-bendingwas tolerated. Charged BUENOS AIRES became the Torre Monumental. with executing laws ill-suited to local con- Diplomatic relations were restored in ditions, colonial administrators could tell A new start foran old relationship 1989 but Ms Fernández and her late hus- the king, obedezco pero no cumplo (I obey ITH its green bell tower and royal band, Néstor Kirchner, who was president butdo notcomply), withoutfearofpunish- Wcoat of arms, the Torre Monumental before her, interrupted the rapprochement. Though Portugal’s monarchs offered in Buenos Aires would not look out of ment. In 2012 Argentine veterans broke their Brazilian “captains” no such leeway, place in a British market town. The 60-me- into the tower. Now the city government theytookitanyway. Hence, the resort to jei- tre (200-foot) Palladian clock tower was a wants to repair the damage. Mr Macri tinho. Modern laws are no more sensible. gift from the city’s British community to hopes to do the same for Argentina’s bat- Brazil passed more than 75,000, many of markthe centenary ofArgentina’s1810 rev- tered relationship with Britain. 7 them pointless, in the ten years to 2010. olution (though it was completed in 1916). More than half of Brazilians think there is On May 24th this year around 200 people little reason to comply with many ofthem. gathered to commemorate its centenary. Brazilian culture Some scholars think that Catholics, The celebration comes at a rare mo- tempted to regard confession as an alterna- ment of warmth in Anglo-Argentine rela- Way, José tive to compliance, are especially prone to tions. Argentina’s newish president, Maur- jeitinho-like behaviour. Others suggest that icio Macri, has reasserted his country’s mestiço (mixed-race) societies like Brazil’s claim to the Falkland Islands(known in Ar- are liable to be flexible, about the law as gentina as the Malvinas), which belong to much as ethnicity. Perhaps inequality Britain. But, unlike his pugilistic predeces- SÃO PAULO plays a role: the rich and powerful flout the sor, Cristina Fernández de Kirchner, he law, so why shouldn’t ordinary folk? A guide to cutting corners wants to co-operate with Britain on such That may be getting harder, and not just areas as trade and fighting drug-trafficking. RAZILIANS delight in Portuguese for politicians caught up in the judiciary’s Argentina’s foreign minister, Susana Mal- B words that seem to have no equivalent unrelenting investigation into the bribery corra, met her counterpart in London on in other languages. Saudade is yearning for scandals surrounding Petrobras, the state- May12th, the first such meeting since 2002. an absent person ora place leftbehind. Ca- controlled oil company. Nowadays, cam- Flights to the Falklands may resume after a funé is the act of running one’s fingers eras rather than police officers enforce 13-year interruption. through a lover’shair. More newsworthy is speed limits. E-Poupatempo (e-save time), A hundred years ago Britain and Argen- jeitinho, a diminutive of jeito (“way”). It is a an internet portal set up by the state of São tina were complementary economic wayaround something, often a laworrule. Paulo, expedites such tasks as filing police superpowers. Britain built Argentina’s rail- The impeachment of Dilma Rousseff, an reports. Itallowslittle scope forjeitinho. Ro- way, which helped make Argentina one of unpopular president who has not perso- berto DaMatta, an anthropologist, thinks the world’s ten richest countries, and nallybeen accused ofseriouswrongdoing, Brazil may be moving towards Anglo-Sax- bought 40% ofits exports, mainly beef and is a jeitinho around the constitution. (Many on norms, in which laws “are either grain. In 1914 Harrods, a fancy department of the politicians who voted to impeach obeyed or do not exist”. If that happens, store, opened its first overseas branch in her are themselves indefatigable explorers the satisfaction many Brazilians will feel Buenos Aires. of such byways, for example around cam- may be tinged with saudades. 7 Asia The Economist May 28th 2016 33

Also in this section 34 War in Afghanistan 35 India’s deep south

For daily analysis and debate on Asia, visit Economist.com/asia

America and Vietnam America’s own armed forces, such as a return to Cam Ranh Bay, once an American Pull the other one naval base on the south-eastern coast. America had previously insisted that lifting the embargo would depend on Viet- nam’s progress on human rights, which even Mr Obama admits has been only “modest”. The regime’s thuggishness SINGAPORE makes even a largely symbolic concession America’s president plays the Vietnam card hard to swallow. The party was seen to ARACK OBAMA fooled no one this noodles bought from a street stall. have eased up on critics during 2015, when B week when, having announced that The end of the arms ban will have little it was negotiating access to the American- America was lifting its embargo on selling immediate impact. America had already led Trans-Pacific Partnership (TPP), a free- weapons to Vietnam, he denied that the twice loosened it, first in 2007 and again in trade deal—but it has since reverted to decision was “based on China orany other 2014, allowing the sale of needed patrol form, and its new leadership, reshuffled in considerations”. It was a tactful fib, to por- vessels. It will take years for the Vietnam- January, contains several former secret po- tray the move as merely part of Mr ese, short on cash and largely reliant on licemen. Mr Obama’s arrival in Vietnam Obama’slegacy-buildingmission ofrecon- Russian weaponry, to integrate American coincided with a ludicrous parliamentary ciliation with historic enemies, to be fol- hardware. Moreover, weapon salesto Viet- “election”, boasting a 96% turnout, and lowed days later by a historic visit to the nam (like to anywhere else) will still need with a crackdown on environmentalists site of America’s atom-bombing of Hiro- to be approved case by case, and the first who have been gathering in the cities to shima. But at a time ofincreased tension in purchases are likely to be ofrelatively inof- protestaboutpolluted canalsand seas. The the South China Sea, where Vietnam is fensive systems, such as radar. China’s authoritieseven sabotaged MrObama’sef- among the countries disputing territory press has warned that America risks turn- forts to meet critics of the party by briefly with China, America’s policies there are ing the region into a “tinderbox of con- detaining several campaigners whom the bound to be seen in a different context. The flicts”, yet its diplomats, not normally slow president had invited to his hotel for a chat. headline in Global Times, a fire-breathing to accuse America of stoking tensions, Chinese tabloid, read simply: “Washington played down the decision. A spokes- China plays the Gambia gambit uses past foe to counter China”. woman forthe foreign ministry welcomed Boosters say that improving Vietnam’s hu- The American president made his an- the normalisation of ties between Viet- man-rights record is bound to be a long nouncement a few hours into his first state nam and America, and painted the arms slog, and that gaining the regime’s trust is a visit to Vietnam, following a meeting with ban as a kooky anachronism. prerequisite. They say that arms sales are the country’s new president, Tran Dai America’s move is partly a sop to con- far from America’s only bargaining chip: Quang, in Hanoi. Official enthusiasm was servative factions within Vietnam’s Com- the terms of the TPP, for example, oblige mirrored in the thick crowds lining the munist Party in need of reassurance. Be- Vietnam to begin tolerating independent streets in the capital and in Ho Chi Minh hind this week’s smiles they still fret that unions, a reform that could loosen the City to greet Mr Obama, whose visit be- America harbours hope of overthrowing Communists’ monopoly on public life. But tween May 23rd and 25th was only the the party. Bigwigs in government feel that deal will have no impact if, as seems third by an American leader since the end bounced into their friendship with Ameri- all too possible, America’s Congress re- of the Vietnam war in 1975. His star power ca by virulent anti-Chinese sentiment fuses to ratify it. contrasted with the indifference most Viet- among ordinary Vietnamese, some of So Mr Obama is taking the long-term namese show for the stiff apparatchiks of whom accuse the cadres of going soft on view that closer partnership with Vietnam the ruling Communist Party. Locals in Ha- Vietnam’s overbearing northern neigh- is worth sacrificing some principles for. noi gawped at Mr Obama tucking into bun bour. Trust earned by dropping the embar- America and its regional friends are cha, a cheap meal of grilled pork and rice go might eventually gain advantages for alarmed by China’s forcefulness in the 1 34 Asia The Economist May 28th 2016

2 South China Sea—notably its building risk. On May 17th Chinese fighter jets dan- showed that he had also frequently flown boom, turning disputed rocks and reefs gerously intercepted an American recon- from Karachi to Dubai and Bahrain. That into artificial islands, which may well, de- naissance plane over the sea. China denies American spooks tracked him after a spite Chinese denials, become military its planes did anything provocative. lengthy stay in Iran may lead comrades to bases. Both diplomacy and American dis- China does seem to worry about its im- wonder about traitors in their midst. plays ofmight have failedto stop this. age, however. Its foreign minister, Wang Yi, In Afghanistan, people sick of endless America currently has an aircraft-carri- recently toured the smallest South-East Taliban attacks emanating from Pakistan erbattle group in the South China Sea to re- Asian countries—Brunei, Cambodia and were delighted. Afghan leaders had long mind the world of its military strength. To Laos—and announced that China had wanted America to take the war against Chinese protests, it has sent ships and reached “consensus” with them on han- the Taliban to Pakistan. That it has now planes close to Chinese-claimed rocks and dling disputes in the sea. This was news to done so is a boost for President Ashraf reefs. Meanwhile, the Philippines has chal- the countries concerned, and alarmed Ghani. His attempts to befriend Pakistan in lenged China’s territorial claims at an in- theirfellow members ofthe Association of hopes of support for peace talks earned ternational tribunal in The Hague, which is South-East Asian Nations, who saw a bla- him scorn athome. The talkshave gone no- expected to rule soon. China has said it tantattemptto divide them. China has also where, violence has escalated and the Tali- will ignore the ruling. The Philippines’ lobbied G7 countries in the hope that the ban have grabbed more territory than at new president, Rodrigo Duterte, has not statement their leaders issue on May 27th any time since their ouster in 2001. made clear how he would react to a deci- after their summit in Japan will not scold The peace talks, hosted by Pakistan in sion in his country’s favour. China over the South China Sea. Already the capital, Islamabad, involve Afghani- Although nobody expects America and China’s newest diplomatic partner, the stan, America and China. But in five meet- China to go to war over some remote rocks Gambia, in distant west Africa has, bizarre- ings, there has been ever less to talk about. and man-made islands, an accidental clash ly, confirmed China’s “indisputable sover- Mullah Mansour was more interested in in or over the South China Sea remains a eignty” over the sea. So that’s that, then. 7 sending militants to Kabul than envoys to the talks (in April over 60 Afghans were killed in one attack alone in the Afghan War in Afghanistan capital). The Afghan government, believ- ing Pakistan had promised to use force Taliban reshuffled against “irreconcilable” insurgents, did not even bother to send a senior official, bar its ambassador, to the last meeting on May 18th. It is not clear how much of a reputa- ISLAMABAD AND KABUL tion Pakistan can salvage as a self-pro- claimed peace broker, especially as Mullah The Americans’ killing ofMullah AkhtarMansourwill deepen divisions within Mansour’s sojourns in Iran suggest that he the Taliban but not end the insurgency may have been slipping from the Pakistani OR the second time in under a year, se- Pakistani feelings). They said he was an orbit. Some in the Pakistani establishment Fnior men from the Afghan Taliban have “obstacle to peace and reconciliation” who may even have been happy for the Ameri- descended on Quetta, capital of Balochis- had stopped more reasonable Taliban cans to kill him. tan, the largest but least populated of Paki- leaders from “participating in peace talks But America remains royally fed up stan’s four provinces, to elect a new su- with the Afghan government”. with Pakistan, notleastbecause ofits reluc- preme leader. The first time was hurriedly Mullah Mansour got about. On his final tance to go after a key Taliban ally, the Haq- to choose a successor to Mullah Muham- day he had travelled 450 kilometres (280 qani network, sheltering in North Waziri- mad Omar, the Taliban’s founding leader, miles) bytaxi from the borderwith Iran (he stan. In February the American Congress afterattemptsto hide hisdeath in a Karachi was struck shortly after stopping for refused to give Pakistan financial help to hospital two years earlier were exposed. lunch). His Pakistani passport (under an as- buy eight F-16 fighter jets. As for China, a But now that successor, Mullah Akhtar sumed name) that was found at the scene key Pakistani ally, it has promised billions 1 Mansour, who was involved in the cover-up of Omar’s death and in a ruthless purge of rivals afterwards, is himself dead. He was killed on May 21st, on a lonely road in Balochistan, by an American drone. For his Pakistani hosts, Mullah Man- sour’s death has embarrassing echoes of Osama bin Laden, who was killed by American special forces five years ago in his secret home near a Pakistani military academy. But Mullah Mansour was no fearful recluse. He had the backing of a Pakistani state that gives sanctuary to Tali- ban leaders as a means of maintaining influence in Afghanistan. And whereas American drone strikesagainstmilitants in the tribal area ofNorth Waziristan are long- established and carried out under rules se- cretly agreed with Pakistan, Balochistan was considered to be off-limits. No longer. The Americans, whose strikes are usually clandestine, were quick to announce Mul- lah Mansour’s elimination (so much for Out of a clear blue sky The Economist May 28th 2016 Asia 35

2 ofdollars in roads and more, but is likely to year-olds, followed by Chennai region, remain uncomfortable about its invest- covering the rest ofsouthern India. ments until the region’s Islamist insurgen- Yet India’s deep south has not trans- cies are stamped out. Meanwhile, on May muted growing prosperity into greater po- 23rd the leaders of Iran, India and Afghani- litical clout. It remains largely aloof from stan signed a deal to create a transit hub at broader political trends, including a slug- the Iranian port of Chabahar on the Arabi- ging match between the Bharatiya Janata an Sea. That would challenge Pakistan’s Party (BJP), in office nationally under Na- own port joint-venture with the Chinese at rendra Modi, the prime minister, and Con- Gwadar,170kmfarthereast. gress, the once-dominant centre-left party On May 24th the Taliban appointed as that worships Gandhi. In elections across their new leader Haibatullah Akhund- fourIndian states that wrapped up on May zada, a former head ofthe courts with little 19th, attention elsewhere focused largely military experience but with a line in fat- on the fortunes of those two parties. The was endorsing executions and amputa- BJP’s capture from Congress of Assam in tions. He inherits a death sentence from the north-east was seen as a big boost for America, and a squabbling outfit at war Mr Modi. Congress’s failure to take any with itself as well as with the Afghan gov- state was seen as a sign ofdecay. ernment and its sponsors. Voters in both Kerala and Tamil Nadu, Mullah Mansour was viewed by some which has 72m people, paid hardly any at- field commanders as being too close to tention at all. In both states the contest was Pakistan. Mr Akhundzada may need to between long-established state-level par- prove his credentials by redoubling a Tali- Coimbatore: bobbin and weavin’ ties. Keralitesand Tamilsalike admitthatin ban offensive in Afghanistan that has been terms ofpolicy not much distinguishes the raging since last summer. With the spring and ambitious, Coimbatore evokes the rival parties. For a generation, power in fighting season under way,and a profitable American Midwest of a century ago. A re- Kerala has alternated between two left-of- opium harvest gathered, the Taliban are gional manufacturers’ group that was centre coalitions. Tamil Nadu, meanwhile, well placed to tighten their pincer around founded in 1933 during Gandhi’s home- has been in thrall to parties that both make Lashkar Gah, the capital of Helmand prov- spun campaign has now designed, built “Dravidian progress”—a reference to South ince in the south, and to expand their of- and marketed a hand-held, battery-operat- India’s linguistic and racial separateness fensive in the north. They may even at- ed cotton picker that it claims is six times from the “Aryan”, Hindi-dominated tempt to retake Kunduz, the northern more efficient than human fingers. north—part oftheir name. provincial capital thatwasbrieflycaptured Gandhi would have been appalled. But Elections are often bidding wars. In last year. Peace will have to wait. 7 the gadget says something about the quiet Tamil Nadu this has meant offers ofhouse- success of parts of India’s deep south. Mill hold goods or simple cash. The favoured owners worry that with day wages in Tam- lure in Kerala, where politics is so staid that India’s deep south il Nadu and neighbouring Kerala to the rival party bands traditionally deliver a westnowfarhigherthan those in northern joint crescendo in village squares to mark Southern comfort India, local cotton may grow uncompeti- the end of campaigning, has been prom- tive. Tea planters in the hills west of Coim- ises ofever more generous welfare. batore are already squeezed. One land- In practice, voters often punish the owner, in Kerala’s Wayanad region, where party in power. But this year voters in Tam- COIMBATORE silver oaks shade trim ranks of tea bushes, il Nadu re-elected the incumbent govern- Tamil Nadu and Kerala dance to a says that his pickers get 300 rupees (about ment for the first time in a generation. The different tune from the rest ofIndia $4.50) a day, nearly three times the wage in AIADMK, whose boss is a former actress Darjeeling in India’s north. known as Jayalalithaa, had the stronger AHATMA GANDHI would not have It may not sound like much, but it is also party machine and a track record of gener- Menjoyed Texfair 2016 in Coimbatore more than the average Indian earns. And osity. It secured victory overthe DMK, from in the southern state of Tamil Nadu. The as a whole, GDP per person in Tamil Nadu which itsplitin 1972. The outcome in Kerala man hated machines and factories, and and Kerala is 68% and 41% higher respec- wasmore traditional. The corruption-taint- promoted Indian independence by urging tively than the national average of $1,390 a ed ruling coalition, led by a local affiliate of every household to spin its own cotton year. With the south’sboomingnewindus- Congress, was trounced by the commu- yarn. But on display at the textile fair were tries, better education and higher wages nist-led Left Front. bobbins, rollers, waste balers, quality-con- contrasted with declining industries in the Interestingly, gains were made by a trol sensors and much, much more. north and east, India is undergoing a shift a newcomer to Keralite politics since the last Indeed, India is vying with China to be bit like the American one from the rustbelt state elections in 2011: Mr Modi’s BJP. It the world’s biggest producer of yarn, with to the sunbelt in the 1980s. Kerala shares in picked up just one seat in the 140-member over 45m spindles twirling around the this new industrialisation less than Tamil state assembly, but almost doubled its pro- clock. But what is striking about the trade Nadu, but that is balanced by another portion of votes, to 15%. To some, the Hin- fairis how so much of the modern wizard- source of prosperity: remittances from du-nationalist party’s entry reflects the im- ry on show is made not in better-known abroad. As many as one in ten of Kerala’s patience of Kerala’s growing (and mostly industrial centres around the world but in 35m people workin the rich Arab countries Hindu) middle class with the handout pol- Coimbatore itself, a city of just 1.6m some ofthe Persian Gulf. Theirremittances boost itics that tends, on paper at least, to favour 500 kilometres (310 miles) south-west of local incomes, property prices and de- religious minorities in a state that is 27% Chennai, the Tamil Nadu capital. mand for better schools. Kerala, under left- Muslim and 18% Christian. ButKeralites fed The fast-growing city is an inelegant istgovernmentsforthe pastsixdecades, al- up with both Congress and the hammer- sprawl stretching into groves of coconut ready has India’s best state education and and-sickle mob, both of which have failed palms. It teems with technical institutes, its highest literacy rate. Its school district to foster industrialisation and jobs, may bustling factories and civic spirit. Earnest has again topped nationwide exams for 17- have felt they had nowhere else to go. 7 36 China The Economist May 28th 2016

Also in this section 37 Astroturﬁng the internet 38 Banyan: Failings of the China dream

For daily analysis and debate on China, visit Economist.com/china

Retirement ida. Now Chinese people are moving from the industrial heartland ofHeilongjiang, Ji- China’s Florida lin and Liaoning (the three north-eastern provinces) to Hainan. And just as movement to America’s sunbelt helped trans- form a backward region, so the same thing could happen in China. SANYA Fifty years ago Sanya was a small fish- ing village. Ye Yaer, who was born there in People used to retire where they lived and worked. That is beginning to change 1961, survived on discarded ends of sugar HE cheongsam modelling contest place ofbirth. cane and did not get a pairofshoes until he Tstarts at 7pm; at 8pm it is group dances Thanks to the migration of workers, was12. Every day his mother walked 25km in the style of ethnic Uighurs from China’s however, 260m people, about one-fifth of to the nearest market town, carrying those far west, and of fan-waving north-eastern- the population, now live somewhere oth- ofherchildren too youngto walkaswell as ers from provinces adjoining Russia and er than their birthplace. In the past five 20 kilos of fish to sell. Now Mr Ye is a suc- North Korea. Participants and spectators years, the pattern ofretirementhasalso be- cessful fish-dealer whose business extends alike are pensioners: retired miners, teach- gun to change. Increasing numbers spend across southern China; Sanya is full of five- ers and industrial workers. They sit in the some or all of their pensionable years star resorts. And as happened in Florida, a evening cool, gossiping and applauding. A away from where they used to work. Nei- retirement business is being built on the man in a Hawaiian shirt keeps the beat ther filial tradition nor the hukou system backofHainan’s tourism. with castanets. Fei Liyue, a former con- have proved strong enough to prevent this. According to Sanya’s government, struction manager, says that he and his rel- In the 1950s and 1960s Americans 400,000-500,000 pensioners head to the atives come every evening. He is 3,200km flocked from cold industrial cities, such as city each year, perhaps half of them from (2,000 miles) from his home in the bleak New York and Chicago, to subtropical Flor- the north-east. That compares with the oil city ofDaqing. city’s total population (those resident for six months or longer) of 749,000. The in- Almost everyone is, like Mr Fei, from RUSSIA the rust belt of the north-east, a region that comers are not the new rich. Huang Cheng HEILONG- is gripped in winter by an Arctic chill. But Daqing JIANG of Sanya University says one-third of the MONGOLIA the scene here is by the beach in the sub- JILIN sun-seekingpensionershave a monthly in- tropical city of Sanya in Hainan, an island come of 2,000-3,000 yuan ($305-460), LIAONING province as far south from their native re- New N. KOREA about the average for a working person. A York’s latitude gion as it is possible to go without leaving Beijing quarter receive only 1,000-2,000 yuan a the country (see map). Palm fronds and month. Most come for six months and re- bougainvillea rustle in the breeze. Bikini- turn to the north-east in summer. “It’s too clad tourists dash by. The crowds ofelderly CHINA hot here then,” says Mr Fei, the oil-city visitors (some are pictured) are something man, though he admits he is thinking of e newin Sanya. Theymayherald a profound titud settlingin Sanya full-time. Ratherlike Flori- i’s la social change. Miam da’s “snowbirds”, many rent an apartment Chinese people used to live, work, re- YUNNAN GUANGXI just for the winter. tire and die where they were born. The Fewer than 100,000 migrant pension- country’s filial traditions reflect this: chil- HAINAN ers live on the island year round, thinks Mr dren are supposed to look after their par- Sanya 500 km Huang. But there are signs that more are ents. The bureaucracy enforces it: every- Climate Tropical Humid temperate Dry temperate settling. Half of those he interviewed said one has a hukou (household registration) Continental Dry Mountain they had bought property in Sanya. The which provides subsidised health and Source: “Mapping Crop Cycles in China Using MODIS-EVI Time Series”, number staying permanently started to education, almost always in a person’s by Le Li et al. Remote Sensing. March 2014 soar in 2010 when the city’s retirement1 The Economist May 28th 2016 China 37

2 boom began. Hua Hong Investments, a lo- hill towns in Yunnan, a subtropical prov- on his way to the airport to pick up rela- cal property company, is about to open the ince on the mainland. In Guangxi prov- tives when he disappeared; and that tim- city’s first American-style residential care ince, bordering on Yunnan, the village of ings and other details given by the police home, with medical services, an indoor Bama attracts those keen to learn the secret were implausible. These counterclaims golfdriving-range and calligraphy classes. oflongevity—itissaid to have an unusually created a firestorm online, and even in The winter pensioners are “awesome”, large population ofcentenarians. state-linked media. enthuses Wu Qifa, a farmer in Danzhou, a China has about 220m people over 60. The case is the latest illustration of how village on the edge ofSanya, who rents out If they prove as mobile as American retir- social media—despite huge efforts by the rooms to them. “We couldn’t survive with- ees (1.1% of whom move from one state to government to blockaccess to online infor- out them.” The village pharmacy is unusu- another each year), that would mean over mation that it considers sensitive—play an ally well stocked with heart medicines, 2m pensioners upping sticks annually, po- important role in China’s public and politi- blood-pressure pills and pain relief for tentially making a huge difference to the cal life. Censors tried hard to delete posts knee and hip joints. economies and social structures of their critical of the police handling of Mr Lei’s Li Wen, from Heilongjiang, followed destinations. Tojudge by the experience of case. But it proved impossible to keep up the seniors down to Sanya and opened a Sanya, few places are ready for it. 7 with the deluge. restaurant there offering north-eastern cui- Such efforts by the censors are relative- sine. It has been doing a roaring trade, he lyeasyforinternetusersto detect. More dif- says, though this year business has slack- ficult to monitor are the government’s at- ened, reflecting an economic slowdown in tempts to influence online discussion by the north-east. Thanks to tourism and the intervening surreptitiously with posts and retirees, Sanya’s economy grew more than comments they disguise to look like they tenfold between 2000 and 2013, almost come from the public. A new study pub- twice as fast as the country as a whole. lished by Harvard University offers a rare But with so many moving in, problems analysis ofhow this works. On the basis of are inevitable. Medical services—poor at a leaked e-mail archive from a local gov- the best of times—are overwhelmed in ernment’s propaganda office, the authors winter. Doctors among the retired visitors conclude that 488m such bogus posts ap- have been drafted in to help. Everyone pear each year, about one out of every 178 complains about traffic. In winter the price of the messages that are posted each year ofvegetablestypicallydoubles, and that of on commercial sites. seafood triples, says Mr Huang. In summer Contrary to popular belief, those in- most pensioners go home, hurting firms volved in this effort avoid arguing with that cater to them. sceptics of the government. Instead, the Not surprisingly, given the pressure on scholars write, they try to distract the pub- public services, relations between locals lic and change the subject. Most of their and the newcomers are “sensitive”, say posts gush with praise for China, the party volunteers at the Sanya Association for Re- or other symbols ofthe regime (such as the settling Retirees. “I would as soon befriend much-loved police). an Iraqi as a north-easterner,” fumes one Social media The authors describe this as a “massive Sanya resident. It did not help when in secretive operation”. But its existence has 2014 Li Boqing, a deputy mayor who is The dark art of long been suspected. The government’s himself from the north-east, said that: “If online cheerleaders are commonly dispar- immigrants left the city, Sanya would be- astroturfing aged as belonging to the “50-Cent Party”, a come a ghost town overnight.” reference to the amount, equivalent to The city government, however, does BEIJING eight American cents, that they are ru- not want its hospitals and roads clogged moured to receive for each pro-govern- On the internet, nobody knows you’re a up, and so is trying to control the flood of ment post. The scholars believe, though, running dog incomers. One method is requiring that that most 50-centers are government or new apartments be 80 square metres or HE people’s police love the people, party officials, and that they are paid noth- larger. Typically, pensioners rent spaces far “Tthe people love the people’s police” ing extra for their online scribblings. smaller than that. There are other factors is a well-known ditty that officials claim is Theirposts were clearly oflittle use dur- that may curb the influx. Huang Huang of cherished and accurate. Earlier this month, ing another recent scandal that came to the China Tourism Academy in Beijing however, Global Times, a newspaper in light thanks to a furore on social media. It says that those in early retirement (which Beijing, said that police were struggling to involved the death of a student who spent usually begins at the age of 60 for men, 55 convince the public that they had acted vast sums of borrowed money for an inef- for female civil servants and 50 for other properly in the case of a 29-year-old man fective course of cancer treatment at an women) will normally be well enough to who died in the capital while in their cus- army hospital. He had learned about it seek a cleaner, warmer environment away tody. Disdain for and distrust of the police from Baidu, China’s largest search engine, from their children. As they become less is, in fact, widespread. But it is rare foran or- which did not make clear that advertising active, however, many will migrate back to gan so closely linked to the Communist payments skewed its search results. be near their families. At the last stage, Party to admit that officers have a credibil- In an e-mail reportedly sent to his staff when they need frequent medical assis- ity problem. Baidu’s CEO, Robin Li, wrote thatas a result tance, they will probably enter old-age in- Police said they had detained the man, ofthe scandal, Baidu faced a crisis in public stitutions. It is unclear whether the govern- Lei Yang, on May 7th during a raid on a trust. “Baidu could go bankrupt in just 30 ment will build these in big population brothel; that he had resisted arrest and days if we lose our users’ support,” he centres or in places like Sanya. died of a heart attack. His family and wrote. The episode was a huge embarrass- Pensioners themselves are looking be- friends used social media to challenge this ment to the party too. But ifits leaders have yond Sanya’s overcrowded streets. Some account. They said that Mr Lei was fit and the same worries as Mr Li, they have yet to are moving to villages along the coast, or had no record of heart trouble; that he was become public. 7 38 China The Economist May 28th 2016 Banyan Rocking boats, shaking mountains

To bewilderment in China, neitherHong Kong norTaiwan seems to want to follow its script cessor, Ma Ying-jeou of the Kuomintang (KMT), caused huge protests in 2014. Yet MrZhangspent his time urgingHongKongers to focus on the economy and not to “rockthe boat”. He dodged issues that have angered people, notably China’s refusal to allow proper elections for Hong Kong’s chief executive. That decision, also in 2014, triggered large demonstrations, too. China’s approach to Ms Tsai suggests it has few new ideas, either, on how to handle Taiwan. She was elected in January despite China’s warnings. It abhors her Democratic Progressive Party, which leans towards formal as well as functional independence from China. So China insists that Ms Tsai mustaccept what is known as the “1992 consensus”—that there is only “one China”, however defined, of which Taiwan is part. Mr Xi last year thun- dered that if Taiwan rejects this “the earth will move and the mountains shake.” To emphasise the point, last November he made a remarkable concession for a Chinese leader by travelling to Singapore to meet Mr Ma, then Taiwan’s president. That was a reminder of the importance to China’s leaders of reclaiming Tai- wan: the unfinished item in its agenda of national recovery from a “century of humiliation”. Since 1981 they have been trying to woo Taiwan with a “one-country, two-systems” arrangement HE “China dream” of the president, Xi Jinping, is of a rejuve- comparable to the one later offered to Hong Kong, but giving Tai- Tnated, rich and strong country that will once again enjoy the wan even greater leeway. Hong Kong’s enjoyment of 50 years of respectand fealtyin Asia commanded bythe empiresofold. That autonomy after its reversion to Chinese sovereignty in 1997 was last part is not happening: from a recalcitrant young despot, supposed to be an advertisement of the advantages of this ar- North Korea’s Kim Jong Un, on its north-eastern border, to those rangement. It has turned instead into a warning ofits dangers. ungrateful Vietnamese Communists to the south, flirting with Since January, China has turned to its usual battery of eco- America, insolent insubordination abounds. And perhaps most nomic, diplomatic and strong-arm methods to bring Ms Tsai into alarming of all, the people of “inalienable” territories wrested line. Touroperators report a sharp drop in the numberof Chinese from the motherland by predatory imperialists—Hong Kong and tourists. China has signalled an end to the “diplomatic truce” it Taiwan—show no enthusiasm at all for a return to its bosom. had been observing by not competing with Taiwan for recogni- Events in recent weeks have highlighted China’s difficulties in tion from poor countries: in March it established ties with Tai- both places. In Hong Kong a visiting senior official from Beijing, wan’s former partner, the Gambia. It has also bullied Kenya into ZhangDejiang, had to scurryaround underhigh security to avoid sending Taiwan citizens, detained on suspicion of fraud, to Chi- meeting protesters. Paving stones were glued down in case they na. And, just before Ms Tsai’s swearing-in, it staged military exer- became projectiles. And in Taiwan President Tsai Ing-wen, at her cises on the coast opposite Taiwan, as ifrehearsing an invasion. swearing-in on May 20th, rejected months of intense Chinese The pageantry around the inauguration included a re-enact- pressure to pay lip service to the notion that there is “one China”. ment of the brutal suppression of an uprising against mainland Mr Zhang presented a friendly face in Hong Kong, prompting (then KMT) rule in 1947—a defining event for the island’s indepen- the Big Lychee, an acerbic local blog, to note: “Few sights are more dence movement. But in her speech Ms Tsai bent over backwards painful to behold than a seniorChinese CommunistParty official to keep to her promise not to upset the status quo. She even ac- attempting to be nice. They do it with undisguised distaste, only knowledged the “historical fact” of the meeting in 1992 at which when the usual thuggish methods like violence and bribery have the alleged consensus was reached. But she did not repeat the failed.” As for Ms Tsai’s performance, China did not mask its dis- “one China” fiction. Struggling to appease both her pro-indepen- appointment. Its Taiwan-affairs body, unabashed at treating a dence supporters and Taiwan’s domineeringneighbour, she gave popularly elected leader like an underperforming fourth-grader, neither quite what they wanted. called it “an incomplete test answer”. Some democracy-loving Chinese citizens showed more sympathy, with supportive posts Straitened circumstances online (soon deleted), and a rally (soon dispersed) by a handful It is Hong Kong that seems to be learning from Taiwan, not the ofpeople in the city ofChongqing to markthe inauguration. other way round. A small but vocal independence movement In Hong Kong and Taiwan China’s tactics are much the same. has sprung up there. But China is not changing course in either It uses economic sticks and carrots combined with occasional place. Its response to Ms Tsai’s speech was to resort to threats heavy-handed displays of power. It ignores or suppresses views about cutting offcontacts and to belittle her. The lack ofspecifics, it does not like and appeals to pan-Chinese patriotism. But it however, has left China room for manoeuvre. It would be heart- should know by now that these methods do not work. For exam- ening to thinkthat this means China’s leaders realise that the best ple, to help Hong Kong recover from the SARS epidemic in 2003, way to win hearts and minds in Hong Kong and Taiwan is not to China eased restrictions on the numbers of mainland visitors. bribe, browbeat and bully, but to make China itself look a more The resulting throngs ofChinese tourists soon became yet anoth- attractive sovereign power. More likely, however, is that China er ofthe locals’ grievances. Similarly, in Taiwan, a massive expan- has too many problems to deal with, at home and on its periph- sion oftrade and tourism links with China underMs Tsai’s prede- ery, to riskanother crisis in the Taiwan Strait just now. 7 Middle East and Africa The Economist May 28th 2016 39

Also in this section 40 The campaign against Islamic State 41 Avigdor Lieberman returns 41 Tanzania’s impulsive president 42 Africa’s new Jews

For daily analysis and debate on the Middle East and Africa, visit Economist.com/world/middle-east-africa

Iranian politics after the nuclear deal to regard it as toxic. Few expect any change this side of the American elections, and Who’s in charge? perhaps formany months thereafter. Mr Khamenei has seemingly turned on the government of President Hassan Ro- hani. Mr Rohani had reckoned the agreement would rapidly attract $50 billion TEHRAN worth offoreign investment, see funds frozen by foreign governments speedily re- The supreme leaderis clipping the wings ofthe reformist president leased and spur growth to 8% a year. “We BOVE the grimy car-choked streets of Without cast-iron assurances big banks, thought we would revive relations with ATehran, Iran’s down-at-heel capital, a spooked by the gigantic fine of $9 billion the banks immediately afterthe deal,” says new poster campaign is under way. Beside levied on BNP-Paribas in 2014, are steering the central bank’s governor, Valliollah Seif. the brooding black-turbaned features of clear. SWIFT, the global bank transactions Many businessmen echo the supreme Iran’s supreme leader, Ayatollah Ali Kha- network, has been reconnected to Iran, but leader’s derision: “How come they didn’t menei, slogans extol the virtues of the “re- remains dormant—“a newly built highway negotiate the processoffinancial reintegra- sistance economy”. The regime, it seems, is no one is using”, says an Iranian official. tion—which banks would transfer the fro- notreadyto letgo ofthe isolationist daysof Visitors to Iran still have to bring large zen assets, how much and when?” asks a Iran’s worst confrontations with the West. wads of cash, since international credit market analyst, aghast. Mr Khamenei’s ad- Anyone who hoped that the signing cards do not workthere. visers level accusations of incompetence, last July ofa nucleardeal between Iran and Iran-minded fund managers, jubilant a and suspect Mr Rohani has fallen into an six world powers would strengthen the year ago when an outline of the nuclear American trap. hands of the country’s reformists at the ex- deal was first settled, now lament the lack The supreme leader is seeking to rein in pense of the religious conservatives is of business. American investors visiting the president. Some of Mr Rohani’s starting to think again. The deal, which Mr Tehran will not even leave their business planned visits abroad, including to Bel- Khamenei had been persuaded would cardsforfearofpossible repercussions. De- gium and Austria last month, have been boost a stagnant economy (see chart) by spite Iran’s stability in a volatile region, its cancelled at the last minute. “I urge you to ending most international sanctions and educated population, its well-developed come and see for yourself,” said Mr Seif, reintegrating Iran into the global financial road network and its potential as a region- wooing investors at a conference in Lon- system, has so far fallen far short of what al hub, most Western companies continue don earlier this month. But Westerners was hoped. The backlash has begun. whom the president’s office has invited to Iranian oil exports have, it is true, Iran find their meetings blocked by the su- grown by 60% since the formal lifting of Brought to its knees preme leader’s men. Puncturing public sanctions in January. Iranian and Western Iran hope of an end to revolutionary isolation, trade delegations scurry back and forth. Oil production GDP Mr Khamenei recently criticised the teach- But Iran is struggling to repatriate its earn- Barrels per day, m % change on a year earlier ing ofEnglish. ings, and to turn its memoranda of under- 5 15 Mr Khamenei is also resorting to force. standinginto contracts. Although John Ker- 4 10 “Don’t be bashful,” he recently exhorted ry, the American secretary of state, insists some 7,000 undercover police mobilised the way is open for legitimate trade with 3 * 5 to uphold puritanical codes—even though Iran, Treasury officials say any dealings + the country’s mores are closer to those of 2 0 that “touch” America—forinstance by trad- – Central Asia than the sex-segregated Arab ing with Iran in dollars—risk falling foul of 1 5 world. (“White marriage”—the term forun- America’s remaining sanctions if they in- married coupleslivingtogether—isincreas- volve entitieslinked to the armyorthe Rev- 0 10 inglycommonplace.) Afresh catch ofactiv- 2000 02 04 06 08 10 12 14 15 olutionary Guards. Given the opacity of ists has been put behind bars, including Iran, that might mean any sizeable firm. Sources: EIA; IMF *To October journalists, human-rights monitors and 1 40 Middle East and Africa The Economist May 28th 2016

2 models who had appeared on social me- hardline Mahmoud Ahmadinejad and the boom years, poor Iranians remember a dia unveiled. “The empire,” says a dip- reformist Muhammad Khatami (whose time ofgenerouswelfare handoutsand the lomat in Tehran, “is trying to strike back.” name he still bans from appearing in reconstruction of Shia shrines, like Qom’s Mr Rohani refuses to buckle. Embold- print). But the leader seems crankier than opulent Jamkaran. “When he goes walk- ened by the conviction that he represents before. Mr Rohani enjoys the support of about in the provinces, Ahmadinejad is the popular mood, the president these Ayatollah Ali Akbar Hashemi Rafsanjani, ten times more popular than Rohani,” in- days sounds more like an opposition the veteran kingmaker. After the latest test- sists Hamid Reza Tareghi, a confidant ofMr leader, forall that he is a formerhead ofthe ing of ballistic missiles, timed to under- Khamenei who derides Mr Rohani’s sup- National Security Council and an Islamic mine one of Mr Rohani’s trips abroad, Mr porters as counter-revolutionaries. clergyman. Along with his vice-president, Rafsanjani tweeted that Iran would be bet- Qassem Suleimani, the head of the he distances himselffrom talkofthe “resis- ter engaging in dialogue than conducting IRGC’s foreign legion, the Quds force, has tance economy”; he insists on the virtues missiles tests. “Those who say the future is been mentioned as another possible can- of English and of pivoting towards global in negotiations not missiles are either igno- didate. He is popular among reformists as economic engagement. This means news rant or traitors,” snapped back an irked Mr well as hardliners, having led the fight bulletins can be schizophrenic. Headlines Khamenei. against the Sunni jihadists in Iraq and Syr- celebrate the latest trade deals alongside So bad have things become that many ia. But entering politics might cost the Rev- the supreme leader’s fulminations against observers now wonder whether Mr Kha- olutionary Guard its most popular leader. Western plansfor“colonialistinculcation”. menei will let Mr Rohani stand for a sec- The electorate itself may lose interest. It is, however, hardly an even fight. ond term next year: his hand-picked Though Iranians voted in droves in the last Beyt-e-Rahbar, the supreme leader’s head- Guardian Council could decide to bar him. election, Mr Khamenei’s recent actions quarters, commands the armed forces, the Mr Khamenei’s problem is that there is no demonstrate the limits of the ballot box in 128,000-strong Revolutionary Guard obvious alternative. For want of anyone determining Iran’s course. Nor does the Corps (IRGC), the networks of spies, the more like-minded, he is healing his rift prospect of change from within inspire vast state-owned firms that dominate the with Mr Ahmadinejad, perhaps hoping much hope. Down an alley of Tehran’s ba- economy, the judiciary,the sprawling state that the ex-president can recover his popu- zaar, a wizened peddlersellstea from a cart media and the bodies that vet and veto list touch. Although Iran’s middle class and compares the Shah’s reign with the elected bodies. Presidential decisions are blames Mr Ahmadinejad for squandering current incumbents. Forget the people, he diluted or simply ignored by civil servants the money that rolled in during the oil- says, this lot struggle to rule themselves. 7 appointed by Mr Rohani’s predecessors. Even the cabinet is a coalition, including ministers wary ofprivatisation. The campaign against Islamic State Some in Mr Rohani’s camp think little will change before MrKhamenei diesor re- Fallujah, again tires (he is 76, and thought to suffer from prostate cancer). Even then things might not improve. This week came the news that a veteran conservative from Tehran, Ayatollah Ahmad Jannati, has been appointed as the head ofthe Assembly of Ex- Why retaking the jihadist stronghold has become a priority perts, which will pick the next supreme leader when the moment arrives. ALLUJAH is a place with bad memories Abadi, declared that an offensive to retake “Mr Rohani believes in economic liber- Ffor the American soldiers who served the city, which lies only half an hour’s alisation, but it doesn’t percolate down the in Iraq. Two battles in 2004, the second of drive west ofBaghdad, had begun. pyramid,” says a member of Iran’s cham- which was the bloodiest of the whole war, For the American-led coalition fighting ber of commerce. And for all Mr Rohani’s confirmed it as the stronghold of the insur- IS, the decision to go for Fallujah makes lit- success in sharply increasing the number gencythatarose to challenge the American tle military sense. The priority remains of reformist parliamentarians, the presi- occupation. It was also the first big city to wresting back Mosul, Iraq’s second-biggest dent still lacks a majority in the Majlis fol- fall to Islamic State (IS) at the outset of its city, which fell to IS two years ago. Prepara- lowingelections held in February and con- rampage across Iraq in 2014. Now there is tory operations are well under way, al- cluded with run-offs in April. Some 80-85 to be a third battle of Fallujah. On May though few believe that the security forces independents hold the balance of power, 22nd Iraq’s prime minister, Haider al- will be ready to move in before the end of1 and may bend as much towards Mr Kha- menei as Mr Rohani. When your correspondent visited parliament recently, a preacher was giving sermons about the dangers ofEnglish spies. Still, there are a few hopeful signs: three-quarters of the fractious old parliament lost their seats, including Gholam Ali Haddad-Adel, a veteran loyalist and a close relative of Mr Khamenei. The clerical con- tingent collapsed to 6%, half that of the last election in 2012 and just a tenth of its strength in the first post-revolution election in 1980. For the first time women out- number clergymen in the Majlis. Mr Khamenei has won every power struggle he has faced, including with Mr Rohani’s predecessors as president, the Will the plan survive contact with the enemy? The Economist May 28th 2016 Middle East and Africa 41

TURKEY Israeli politics

SYRIA Mosul He’s back! dam IRAQI Sinjar KURDISTAN Mosul Erbil Makhmour JERUSALEM Kirkuk AvigdorLieberman returns to Baiji government, more powerfulthan ever Euphrates IRAQ Tikrit VER since his fourth election victory in Samarra IRAN EMarch 2015 Binyamin Netanyahu has Fallujah DIYALA been trying to broaden his coalition, Tigris which, with only 61 members, had the Baghdad slimmest ofmajorities in Israel’s120-mem- 100 km Ramadi ber parliament. For most of the past year Area of Islamic State control (May 23rd 2016) he has held on-and-off talks with the Get ready for fireworks Source: Institute for the Study of War leader ofthe centre-left Zionist Union, Yitz- hak Herzog. But last week, as the negotia- club of rebels, which until recently includ- 2 the year. The Americans fear that Fallujah tions hit a snag, the prime minister as- ed MrLieberman himself, may prove a big- will become a distraction that will delay tounded the country by concluding a deal ger threat than the official opposition to Mr the assault on Mosul even further. with AvigdorLieberman (pictured left), the Netanyahu’s rule. MrHerzog, who failed to Though the military logic is dubious, leader of Yisrael Beitenu (Israel is Our close a deal largely because offears that his there are good political reasons for Mr Home), a right-wing nationalist party. party would not go along with him, is fac- Abadi’s announcement. His feeble govern- The renewed alliance with Mr Lieber- ing calls foran early leadership election. ment has endured an even more than usu- man, a formerforeign minister, who has re- Mr Lieberman is hardly a safe pair of ally torrid few weeks. Twice since the end peatedly fallen out with Mr Netanyahu hands. In the past he has threatened Egypt of April mobs loyal to Muqtada al-Sadr, a and who recently called him “a liar and a (saying he would bomb the Aswan Dam turbulent cleric and militia boss, have fraudster” and accused him of being inca- on the Nile) and called for the beheading breached the heavily fortified “green zone” pable of making decisions, shows the of “traitors” among Arab citizens of Israel. and ransacked parliament in protest lengths the prime minister is prepared to He has said that, if named defence minis- against corruption and sectarianism. go to preserve his rule. In return for bring- ter, he would order the killing of the Ha- Meanwhile, the security situation in Bagh- ing his five Knesset members into the co- mas leader, Ismail Haniyeh, within 48 dad has steadily worsened with a series of alition, Mr Lieberman will be appointed hours if he did not accept Israel’s demands bombings carried out by IS against Shia ar- defence minister, traditionally the most for the return of the bodies of two Israeli eas of the city. On May18th IS boasted that important job in Israel after the prime min- soldiers killed in Gaza in 2014. MrNetanya- it had killed 522 Baghdadis in a month. ister’s. He is also getting 1.4 billion shekels hu may not get the stability he so craves. 7 Mr Abadi had to be seen to be doing ($360m) to boost pensions for low-income something. According to Michael Knights, retirees, mainly immigrants from the foran Iraq expert at the Washington Institute mer Soviet Union, the Moldovan-born Mr Tanzania for Near East Policy, it is unlikely that the IS Lieberman’s core constituency. bombing campaign is being orchestrated Another concession to coalition part- Government by from Fallujah, which has been tightly ners agreed upon this month was the deci- sealed off for months. It is more plausible sion to continue public funding for ultra- gesture that the bombs are being brought in from Orthodox schools that do not teach basic Diyala province to the east and from the secular subjects, including maths and Eng- DAR ES SALAAM south along the Tigris river. But Fallujah is lish. Thismove, which bythe end ofthe de- A president who looks good but still an irritant that can and probably cade could deprive as many as 20% of Is- governs impulsively should be dealt with. raeli schoolchildren of basic skills, was a Mr Knights says that the Fallujah offen- demand by the “Haredi” parties, Shas and HEN opening parliament after his sive ought not to delay the retaking of Mo- United Torah Judaism, who together are Welection last year, Tanzania’s presi- sul. The forces in the north will largely be represented by13 members ofMr Netanya- dent, John Magufuli, repeated a campaign regular army divisions retrained by the co- hu’s coalition. promise: parents would no longer have to alition, and Kurdish peshmerga fighters. The deal with Yisrael Beitenu precipi- pay for secondary education. “And when I The Fallujah operation depends on so- tated the resignation of the well-respected say free education, I indeed mean free,” he called Popular Mobilisation Units, mainly defence minister Moshe Yaalon, not only assured MPs. This year the government Shia militias, most of which are supported from the ministry, but also from the Knes- started expelling foreign workers without directlybyIran, and local police. The spear- set, citing “difficult disagreements on mor- proper permits, including thousands of head, as with the retaking of Ramadi last al and professional matters” with Mr Net- Kenyan teachers. Schools that were al- December, will be elite counter-terrorism anyahu and attacking the “extreme and ready straining to cope with a huge influx units backed up by coalition air power. dangerous elements that have taken over ofnew pupils are now at breaking point. It looks probable that Fallujah will be Israel and the Likud Party”. The president, nicknamed “the Bull- back in government hands before long. MrYaalon, a formergeneral, had recent- dozer”, has delighted Tanzanians with an That its retaking will have any effect on the ly clashed with the prime minister over anti-corruption drive and public displays IS bombing campaign in Baghdad is less military criticism of an increasingly anti- of austerity. Within weeks of taking office likely. The Americans say that as IS loses Arab atmosphere in parts of Israeli society. last November he had banned all but the territory, it is inevitably returning to its old Mr Yaalon has now joined a growing most urgent foreign travel for government terrorist ways. That is not much comfort to group of disgruntled former ministers officials. He spent Tanzania’s Indepen- the city’s long-suffering inhabitants. 7 sworn to removing Mr Netanyahu. This dence Daypickingup litterbyhand. He has1 42 Middle East and Africa The Economist May 28th 2016

2 fired officials suspected of incompetence Reading the Torah in Abuja or dishonesty and purged 10,000 “ghost workers” from the public payroll. How- WhowantstobeaJew? ever, he has a worrying tendency not to thinkthings through. LAGOS Take, for example, his efforts to extract The unlikely spread ofJudaism in Africa more tax from people using the port at Dar es Salaam, a gateway forthe region. He has S THE sun sets on a Friday in a smart whole there may be thousands more enforced VAT on the costs ofmoving goods Anew suburb ofLagos, Harim Obidike self-declared Jews. One community in that arrive at the port overland to neigh- dons his kippah and opens up a prayer eastern Uganda, the Abayudaya, adopted bouring countries such as Zambia and Ma- book. It is the start ofshabbat, the Jewish the faith almost a century ago. Its rabbi lawi. Shipping firms have immediately holy day,and as he croons through the was recently elected the country’s first switched routes and now unload in Kenya, psalms, a gaggle ofyoungsters sing along. Jewish member ofparliament. Mozambique or South Africa, leaving a “We are Israelites,” he says after bread Yet the embrace by these communi- once bustling harbour almost empty. has been broken and the candles lit. ties ofthe laws ofMoses has not been Mr Magufuli remains popular with or- Nigeria is a devout country split loose- warmly reciprocated by the Orthodox dinary Tanzanians. Twitterusers at #What- ly between a Muslim north and a Chris- establishment in Israel. Unlike proselytis- WouldMagufuliDo celebrate his thrifti- tian south: two halves which were ing religions such as Christianity, the ness by suggesting amusing things he brought together by colonialists and still guardians ofOrthodox Judaism go out of might approve of, such as wearing a cur- butt heads today.A couple ofdecades their way to make conversion difficult, tain instead of buying new clothes and ago, modern Judaism was almost un- insisting on a two-year programme of heating showers with a candle. The presi- heard of.But this household is one ofa study and lifestyle changes. dent has mended fences with neighbours, growing number that are taking to the Still, officialdom is shifting. Israel’s too. In April Uganda decided that a $4 bil- Torah. In Abuja, the capital, there are at Jewish Agency last month recognised the lion oil pipeline would go through Tanza- least foursmall communities ofIgbo- Abayudaya as Jews, meaning that they nia, scrapping a previous agreement with speakers that have opened synagogues. are allowed to emigrate to Israel. There is Kenya. A month later Rwanda decided to (Jews joke that every town needs at least a precedent. Since the1980s more than build a railway to Dar es Salaam instead of two so that members can hold a grudge, 90,000 Ethiopian Jews (known to some the Kenyan port ofMombasa. and refuse to attend one ofthem.) In one, as Falashas) did so after Israel’s rabbis However, some Tanzanians, especially on the outskirts ofthe city,there is a accepted them into the fold. businessfolk, are having doubts about Mr gospel lilt to the songs: members taught Such a stamp ofapproval seems a Magufuli’s flair for the dramatic. When he themselves to read Hebrew and then had little less likely in the case ofNigeria. thinks a public official has misbehaved he to make up the tunes, says one. Some fear it would open Israel’s gates to fires him on the spot, rather than following It might seem odd that people would thousands ofeconomic migrants. Yet this due process. More important is that he sign up to join a small faith whose mem- does not trouble the likes ofMr Obidike. shows little interest in wider reforms bers have suffered centuries ofoppres- Nigeria’s Semites argue that they are aimed at spurring economic growth. If sion. Yet Uri Palti, Israel’s ambassador to descended from one ofIsrael’s lost tribes anything he seems to be making it tougher Nigeria, reckons there are more than 40 and that cultural similarities such as to invest in a country that already scores such communities across the country. circumcision are proofoftheir pedigree. dismallyon the World Bank’sease ofdoing Daniel Lis, an academic, thinks there may Others at his synagogue do not worry business index, where it is ranked 139th out be thousands ofNigerians who practise much about officialdom’s response. “We of189. “What Africa needs is strong institu- Judaism. Millions more ofthe Igbo tribe are Jewish,” says one old lady who tions, not strong men or women,” says believe that they are descended from switched from Catholicism. “Whether Zitto Kabwe, an opposition leader. biblical Israelites. Across Africa as a you are recognised or not is no matter.” Surprisingly Tanzania even makes it hard forhonest companies to pay their taxes (there it ranks 150th). Little wonder structural issues Mr Magufuli has contin- trast, the government is painfully slow to many less scrupulous ones don’t bother: ued to live up to his nickname of “Bulldoz- pay its own bills: it still owes the same last year fewer than 500 companies con- er”: one foreign firm was given seven days company $30m. Accia Mining, a gold pro- tributed an astonishing 43% of govern- to settle a $5m bill, says its boss. The coun- ducer, is owed $98m in VAT rebates—effec- ment revenues. Many others paid nothing. try’s revenue authority then tookthe mon- tively an interest-free loan to the govern- Instead of addressing these deeper ey directly from its bank account. By con- ment. “The country has become totally uninvestable,” says a bigwig at a private- equity firm with holdings across Africa. “Youpay your taxes forfive years and have the returns to prove it and then some guy arrives with his own calculation and says you haven’t paid your tax.” MrMagufuli’szeal may be admired, but his party, which has ruled Tanzania since independence, is thuggish and undemo- cratic: itsuppressed dissentduringthe elections last year and then cancelled a vote held in Zanzibar after the opposition probably won it. Frustrated, America suspended $472m of aid. The Bulldozer merely har- rumphed that Tanzania would soon no longer need aid and told the revenue authority to squeeze even harder. 7 SPECIAL REPORT MIGRATION May 28th 2016

Looking for a home

SPECIAL REPORT MIGRATION

Looking for a home

The migrant crisis in Europe last year was only one part of a worldwide problem. The rich world must get better at managing refugees, says Tom Nuttall LIKE COUNTLESS STUDENTS of German before him, Ahmed is struggling with his verb placement. Eager to learn, he listens patiently as the earnest volunteers from Über den Tellerrand kochen (Cook Outside the Box), a Berlin-based outfit that began by offering refugees a space to prepare food and has since branched out into language classes, explain the fiendish intricacies of the grammar. But before long they have moved on to the difference between Sie and Du, and Ahmed is floundering. “I love the German people,” he says later. “But I just can’t speaktheir language.” That is not his only problem. Deposited byGermany’s refugee office in Hoppegarten, a distant suburb of the capital best known for horserac- ing, Ahmed, a 24-year-old Syrian refugee, cannot afford to com- mute to Berlin proper. Even if he could, he might still find it hard to get a job, though as a refugee he has full access to Germany’s labour market. A barman by training—he claims to mix a killer mo- CONTENTS jito—Ahmed would face a lot of competition in job-poor Berlin, 5 The language of migration and hislackofGerman isa handi- Terminological exactitudes cap. It is also hindering his search for accommodation closer to 6 Politics Welcome, up to a point town, which, within reason, the state would pay for. For now, it 8 Integration seems, he is stuck. A working solution Ahmed arrived in Germany last November, joining hundreds 9 Demographics Not so fast of thousands of Syrians and other asylum-seekers on the migrant 10 Resettlement trail via Turkey, Greece and the Bring me your huddled Balkans. Like many of his compa- masses triots, he had fled not Syria itself but Lebanon, where he and his 12 Lebanon’s and Jordan’s family had been leading a clan- plight Caught by geography destine life for years, safe from harm but strugglingto get by and unable to return home. As his story sug- 13 Refugee camps in Africa gests, Germany (along with several other European countries) faces a From here to eternity huge challenge integrating its newcomers, most of whom arrived with few language skills or qualifications, into its labour market and wider 15 Looking ahead How to do better society. That will take time, resources and political capital. In some countries it will test assumptions about welfare, housing and employment. But last year’s drama was also a sharp reminder to Europe that it cannot insulate itself from the troubles of its wider neighbourhood. For years Syrian refugees had been building up in Turkey, Lebanon and Jor- dan, not to mention the millions displaced inside the country itself. Of the estimated total of13m displaced by the war (7m inside Syria, 6m outside), around 1m have gone to Europe. Lebanon now hosts 1.07m registered Syrians (the total number is closer to 1.5m), a staggering burden for a country of 4.5m. In Jordan 1.3m refugees swallow up one-quarter of public spending. Governments and officials in the Middle East had warned Europe about a wave ofrefugees. But without a robust system of international rules that could have eased the burden on the refugee-hosting countries, or any political interest in Europe in resolving the problem, it A list of acknowledgments and sources wasleftto Ahmed and manyotherslike him to vote with their feet, bring- 1 is at Economist.com/specialreports

The EconomistMay2UI2016 3 SPECIAL REPORT MIGRATION

2 ing chaos in their wake. What was Lebanon’s problem is now up the main framework for international protection of people Germany’s. Belatedly, the rich world has learned that the current fleeing persecution and provide the basis for the work of the system of international protection for refugees is broken. And UNHCR. The convention is one of the most potent instruments Europe, which is where the global refugee regime began 65 years of international law ever devised. The primary obligation that it ago, and where its limits have now been most starkly exposed, places on signatories is the duty of non-refoulement, meaning will have to be the catalyst forchange. they may not return people to countries where they are at risk. ButasJamesHathaway, an experton refugee lawatthe Uni- The 60m question versity of Michigan, points out, it has also proved to be an ex- Thanks in part to the explosion of refugees from Syria, the tremely versatile device. Over the decades regional and interna- United Nations High Commissioner for Refugees (UNHCR), the tional law has built on the convention’s foundations, extending UN’s refugee body, now puts the world’s displaced population at the scope of protection beyond the original definition of a refu- a post-war record of 60m, of whom 20m are stranded outside gee as someone who faces a “well-founded fear of being perse- their own countries (the map shows only registered refugees, for cuted”. Notably, many parts ofthe world now offerprotection to whom firm figures are available). Except for a couple of bright those fleeing war-torn countries like Syria. spots, such as the possible return of up to 6m internally dis- And yet the politicians who established the refugee regime placed Colombians after a peace deal between the government in the early 1950s, with the horrors of the second world war still and the guerrillas, the problem is getting worse. New conflicts in fresh in the mind, had modest ambitions. The convention cov- places like South Sudan are creating fresh refugee problems; old- ered only Europeans who had been displaced before 1951, includ- er ones, such as Somalia’s, grind on with no solution in sight. ing millions during the war and many more in post-war ethnic Still, there is no iron law that says the globally displaced cleansing. (The UNHCR had no role in helping the millions dis- must continue to rise in number. Conflicts can be resolved, just placed by India’s partition, or the Arab-Israeli war of 1948.) By as they can breakout. Perhaps more worryingis that a record 45% 1950 resettlement and repatriation efforts had reduced Europe’s of the world’s refugees are now in “protracted situations” that refugee population to less than half a million. The UNHCR was have lasted five years or more. Syrians are the latest recruits to small, poor and feeble. Few expected it to last for long. this wretched club, and the welcome is wearing thin in the coun- However, it turned out to be a ratheruseful adjunct to West- tries to which most have fled. Indeed, dismal prospects in Turkey, ern foreign policy, particularly forrefugees fleeing communist or Jordan and Lebanon partly explain last year’s exodus to Europe. Soviet-backed states. In 1956 the high commissioner used his Shocked to learn that they were legally obliged to help the good offices to help hundreds of thousands of Hungarians who people streaming across their borders, a growing number of fled the Soviet tanks, even though they were not covered by the European politiciansand officialsare pressingforrevisions to the convention. Many were resettled in America or other countries UN’s1951 Refugee Convention and its1967 protocol, which make outside Europe. The UNHCR helped victims of fighting in Africa and Asia in the 1950s and 1960s, and the 1967 protocol to the convention removed its geographical and temporal limits. Agreements in Africa and Asia extended the scope of protection. Later, the Euro- EUROPE pean Union created new forms of protec- 3.49 tion that fell short of full refugee status, to ASIA & help victims of war and other forms of vi- MIDDLE EAST & 3.79 PACIFIC NORTH AFRICA 3.01 olence that did not meet the convention’s strict definition. The result was an interna- AMERICAS 0.75 tional mesh of laws and institutions to help displaced people around the globe. Number of registered SUB-SAHARAN refugees* 4.06 By country, June 2015 AFRICA Total refugees* Magic number By region, m 1m+ 500-5k In time the UNHCR identified three WORLD 15.1 250k-1m 1-500 “durable solutions” for refugees beyond 50k-250k 0 or providing immediate sanctuary: volun- no data 5k-50k tary repatriation, integration in the country that offered asylum and resettlement Biggest population movements due to conflict, m Worldwide number of refugees‡, m to another country, usually in the rich Europe, second world war†, 1939-45 20 world. All are now floundering. Most refu- 15.0 gees would dearly love to return home, India, partition, 1947 but that would require resolution of the 14.0 15 conflicts they fled in the first place, and Bangladesh, war, 1971 there is little sign of that for Somalis, Syri- 10.0 10 ans or Afghans. Returns are at their lowest Syria, war, 2011 - present UNHCR 4.2 since 1983, according to figures. Afghanistan, wars, 1978 - present That leaves integration and resettle- 5 3.5 ment. Western governments can play a crucial role in both. To promote integra- Iraq, war, 2003-11 tion in countries that may be resistant to 2.1 0 1951 60 70 80 90 2000 10 15§ opening their labour markets or overbur- Sources: UNHCR; NATO; Migration Policy Institute; *Or people in a refugee-like situation †Includes internally displaced people dening public services, they can provide Refugees International; US State Department; press reports ‡Data missing for some countries before 1990s §To end June financial and logistical support. For the 1

4 The Economist May 2UI 2016 SPECIAL REPORT MIGRATION

2 Syrian refugees in Turkey,Jordan and Leb- tionally takes a large share of resettled refugees, has slightly in- anon, that can mean anything from cheap creased its quotas but has been deterred by probably ill-founded loans to the creation of special economic security concerns since last November’s terrorist attacks in Paris. zones to assistance for overburdened Canada’s new prime minister, Justin Trudeau, speedily made towns and villages. In parts of Africa, this good (at great expense) on an election promise to resettle 25,000 report will show, there are glimmers of a Syrians, and then promised to take more. But this alone is a drop new approach that may offer refugees an in the ocean. alternative to mouldering in camps. But today’s politics has turned against resettlement, in which vulnerable It seems unfair that proximity to war zones should refugees are moved to rich countries that define responsibility to refugees volunteerto accept them, usually with the help of the UNHCR. Too often such rich countries, having clamped down on irregular flows, promise As Peter Sutherland, the UN’s special migration representa- generous resettlement to compensate but fail to follow through. tive, notes, it seems unfairfora country’s proximity to war zones Australia, forexample, is often accused ofnot livingup to its vow to define itsresponsibilityto refugees. To ward offthis danger, the to increase its resettlement quotas now that it has more or less 1951 convention calls on signatories to act in a “spirit of interna- eliminated spontaneous arrivals of asylum-seekers by turning tional co-operation”, but places no specific obligations on coun- them back at sea. There are worrying signs that the EU may fol- tries and regions not faced with a refugee influx. Last year’s crisis low suit. Vague promises of mass resettlement of refugees from in Europe revealed the weaknesses of the global refugee regime. Turkey to Europe have not materialised. America, which tradi- Europe learned that its carefully constructed asylum and border rules were no match for migrants who flouted them en masse. But it also found that the arrival of modest numbers of un- Terminological exactitudes invited foreigners quickly upset its com- fortable political and economic balance. To keep them out, in March the EU signed The way people talk about migration is carefully modulated a deal with Turkey that skates close to the edge of international law by obliging asy- WORDS MATTER. OR, as Twitter-savvy urged politicians and journalists to “drop lum-seekers who reach Greece to return migration campaigners on both sides of the I-word” when referring to America’s to Turkey, where some may face inade- the Atlantic put it, #wordsmatter. Political estimated 11m illegal immigrants. “Un- quate protection or even refoulement. advocates have long sought to advance documented” is now in wide use, but this All this shows up a glaring differ- words and phrases likely to generate perceived concession to political correct- ence in the treatment ofrefugees between sympathy for their cause: “pro-life” versus ness irritates some. Donald Trump rouses the rich and the poor world. In Europe, “pro-choice”, “spending cuts” versus his crowds by reverting to the controversial asylum-seekers are treated generously by “savings”. As opinion has divided over term “illegals”. global standards, even if some countries migration, it is no surprise that the politi- Other languages have their own have tightened their rules. In most EU cal battle has spread to linguistics. versions of this war of words. In German, countries they can work before they ob- Broadly, the best term for those who those who object to the standard term for tain refugee status (or some lesser protec- move permanently from one country to refugees, Flüchtlinge (declared word of the tion), and certainly afterwards. They are another, for whatever reason, is “mi- year for 2015 by the Society for the German promised housing, freedom of move- grants”. If they are fleeing persecution or Language), now use the PC term Geflüchtete ment and protection from official harass- violence, they can present themselves as (those who have fled). Germans expelled ment. Public services generally workwell asylum-seekers; once their claim has been from Czechoslovakia and other east Euro- and benefits are adequate. Afterfive years accepted, they become refugees, with all pean countries after the second world war refugees in EU states can usually become the protections that entails. But for some, became known as Vertriebene (driven out), permanent residents (which gives them the term has become loaded. a term that conferred victimhood. Mexicans freedom of movement throughout the The English-language service of who unofficially live in the United States call EU), and in some cases full citizens. And Al-Jazeera, a broadcaster, was cheered by themselves sin papeles (“without papers”). even those whose bids for asylum fail are refugee-rights campaigners last summer In Europe the picture is clouded by often granted some of these privileges, when it vowed to stop calling the people mixed motives and imperfect data. Afghans partly because governments find it so streaming across the Aegean “migrants”, make up the second-largest group of arriv- hard to send them back. a “reductive” word it said enabled “hate als, but around one-third of their asylum speech and thinly veiled racism”. The claims are rejected. How should they be Fortune favours the brave UNHCR, as the custodian of a legal frame- categorised? Few Syrians leaving homes in Unwilling to unwind these protec- work that relies on a careful distinction Turkey and Lebanon are fleeing for their tions, European governments have sim- between refugees and others, preferred lives, but most win some form of protection ply made it harder for asylum-seekers to the phrase “refugees and migrants”. For in Europe. And many Africans who emigrate reach their borders in the first place. The nationalist demagogues like Hungary’s for economic reasons encounter the sort of overall effect has been something akin to Viktor Orban, “migrant” was about as persecution on their journeys that provides a dystopian television game show: the ref- polite as it got. grounds for asylum. The distinction be- ugees must brave untold hardships to America has experienced similar tween “refugees” and “migrants” matters to reach their destination, but a glittering battles. Latino campaigners have long lawyers as well as linguists. prize awaits them once they arrive. For the 86% of the world’s refugees 1

The Economist May 2UI 2016 5 SPECIAL REPORT MIGRATION

2 who fetch up in the developing world, the reverse applies: the Politics journey is often (though not always) less arduous, but conditions are likely to be far worse. By accidents of geography countries that border war zones, such as Lebanon, Jordan and Kenya, find Welcome, up to a point themselves the involuntary hosts of millions of refugees, some languishing in camps, others scratching a meagre existence on the fringes of cities. Some of these countries, particularly in the Middle East, never signed the 1951 convention. Others, mainly in Politicians must keep better control of migration, Africa, simply ignore its provisions, denying refugees the right to workortravel, sometimes fordecades at a stretch. This leaves the and tell the truth hard-working but largely unaccountable (and often underfund- THE EARLY STAGES of Europe’s refugee crisis produced ed) humanitarian organisations that care for them, including the heartwarming images. Volunteers flocked to Greek islands UNHCR, to serve as surrogate states, a role for which they are to help the refugees clambering ashore from their overloaded rarelysuited. The effectofthisapproach can be seen in placeslike rubber dinghies. Locals lined the platforms of German railway Dadaab, a collection of five camps near Kenya’s border with So- stations, applauding the migrants as they stepped off the trains. malia described later in this special report (and now threatened “I’ve neverbeen so proud ofmycountry,” saysKadidja Bedoui of with closure). There, a second and third generation of refugees is We Do What We Can, a voluntary outfit in Sweden, which at the growing up entirely dependent on the rations, sanitation ser- peakwas receiving over10,000 migrants a week. vices and schooling provided by NGOs. But as the people kept coming, more voters started to believe populists who claimed that governments had lost control. Europe’s dilemma The Sweden Democrats, an anti-immigrant party that had This special report will argue that the Refugee Convention, gained notoriety with a television spot showing burqa-clad and the further protections embodied in regional agreements, Muslims overtaking a shuffling pensioner in a race for public should be retained. But it will also show that fresh thinking is funds, topped polls. Eventually Sweden’s overwhelmed govern- desperately needed to make them work, especially for refugees ment slammed on the brakes, erecting border controls and tight- in protracted situations. Developing countries will continue to ening asylum rules. Other European countries saw the chaos in host the lion’s share of the world’s refugees, and that need not Sweden and Germany as an example ofwhat not to do. 1 spell disaster: Syrians may have a betterchance ofeconomic and social integration in Lebanon or Jordan than in Europe, and will be more likely to return home if peace is made. Such countries can also usually host refugees at a small fraction ofthe cost in Eu- rope or America. But they cannot be left to cope with the problem alone, and when their limits are breached others will feel the consequences, as Europe learned last year. A new compact between rich and poor world is therefore needed. Europe will be the Petri dish. Other regions, including North America and Australasia but also wealthier parts of the Middle East, Asia and even Latin America, may follow. A UN refugee summit in New York in September, devoted to exploring fresh avenuesforinternational protection, offersa chance to start the conversation. But it will be hard for rich countries to extend more help to refugees when their own voters are fretting about a loss of control. For European governments in particular, that means two things. First, they must ensure that the integration of refugees like Ahmed proceeds as smoothly as possible, which is harder than many suggest. Second, they need to restore confidence in border management and their ability to control irregular migratory flows. Europe’s response to last year’s crisis was improvised, chaotic, divisive and expensive. The damage was immense, and the loss ofconfidence will be hard to repair. Western governments have been muddying the waters on migration for decades, pretending that the “guest workers” they had imported to ease labour shortages would return home; relying on armies of undocumented migrant workers; and making unrealistic promises about their ability to control borders. This has fostered distrust, allowing anti-immigrant populists to flour- ish, and shrunk the political space for sensible and compassion- ate policies. It has exposed the West to charges of hypocrisy, not always unwarranted. The hope must be that Europe’s troubles last year will jolt politicians into taking a more far-sighted approach towards refugee management, including better co-operation among themselves and more help for the poor countries that bear the heaviest load. The fear is that, by spooking voters and polluting politics, it will do the opposite. 7

6 The Economist May 2UI 2016 SPECIAL REPORT MIGRATION

2 International law obliges governments to help refugees mainsthe UNHCR’sbiggestdonorbyfar. Buttodaysecurity fears, who reach their borders, but domestic politics constrains their sharpened after last year’s terrorist attacks in Paris and the mass room formanoeuvre. Europe presentsa double challenge. First, it killings in San Bernardino, California, make it harder for the isa rich region with a commitmentto human rightsthat happens Obama administration to take in more than its current plan for to sit next to two poor, troubled and crowded ones: Africa and 10,000 Syrians (on top of 75,000 refugees from elsewhere). Lin- the Middle East. Second, it is a (largely) borderless club of geo- gering memories ofthe large numbers ofillegal immigrants who graphically concentrated states with widely varying economies, arrived in America from Mexico and Central America in search benefit systems and labour markets. Asylum-seekers shop ofjobs in the1990smay also have limited politicians’ options. around, leaving some EU countries to bear a far heavier burden than others. That sets governments against one another. Pick and choose Overthe yearsthe EU has taken haltingsteps to manage this Canada has taken a different approach. Its physical remote- problem. The 2004 Qualification Directive, built on the frame- ness from any refugee streams has allowed it to pursue a gener- work of the1951Refugee Convention, extended the scope of pro- ous but selective immigration policy, based mainly on its own tection beyond the definition in the convention and provided for economic needs. One-fifth ofits population is now foreign-born, common groundson which itcould be granted. Otherrules guar- the highest rate in the G8, and nearly half the immigrants have a anteed minimum reception standards for asylum-seekers across tertiary education. Last year Justin Trudeau, the newly elected the EU and set out which country was responsible for each asy- prime minister, declared Canada the world’s first “post-nation- lum claim (usually the first one a migrant sets foot in). Member al” state. Public confidence in the country’s migration policy al- countries were unwilling to sacrifice too much sovereignty (for lowed Mr Trudeau to campaign on a pledge to resettle 25,000 example, by allowing EU officials to adjudicate asylum claims), Syrian refugees, a rapidly executed policy that proved so popular but the rudiments of a common asylum policy worked well that the quota was increased to 35,000. Agrateful Filippo Grandi, enough when the number ofarrivals was limited. head of the UNHCR, calls Mr Trudeau one of his two “saviours” But all that changed when over1m asylum-seekers reached (the other is Jim Yong Kim, the president ofthe World Bank). Europe last year. Most of them had travelled across safe coun- But geographical seclusion can cut both ways. Japan show- tries; indeed, a good number hailed from them, particularly ers money on the UNHCR but until 2010 accepted no refugees at those Africans who sailed to Italy from Libya. European govern- all, in keeping with a closed-door migration policy that few vot- ments had to decide whether to follow through on the promise ers seem minded to overturn. Australia does resettle thousands of comprehensive protection implied in of refugees each year, but has taken a tough line on spontaneous the EU’s asylum directives—and in the arrivals since a surge in boat people from rhetoric ofsome oftheir leaders. South-East Asia three years ago. The navy The answer turned out to be no. A The EU’s now intercepts all asylum-seekers at sea Eurobarometer poll last July, even before progress on and either sends them back to their port the arrivals peaked, found that immigra- of departure or directs them to detention tion had become Europeans’ biggest con- migration centres in Papua New Guinea and Nauru. cern, far ahead of the economic issues and asylum This expensive and legally dubious poli- that usually dominate such surveys. Pop- cy enjoys bipartisan political support, ulist parties like the Sweden Democrats rules has and Australia bristles at international crit- linked governments’ handling of migra- been icism. Politicians have hinted at revising tion to their established claim that elite or even withdrawing from the 1951 con- parties are incompetent or treacherous. agonisingly vention, which Australia signed. Once the Willkommenskultur in Ger- slow EU officials often fume about the op- many and elsewhere receded and the probrium heaped upon Europe over mi- backlash began, panicked governments gration while rich Gulf or Asian states put up border controls and struck ques- look the other way. Every time spontaneous arrivals to Europe tionable deals with third countries to surge, so do calls for barriers to be erected, navies to be dis- keep migrants out. A series of sexual as- patched, laws to be scrapped—and allegations that Europe has saults by migrants on German women in succumbed to a newage ofprejudice. Thatisunfair. In Britain, for Cologne on New Year’s Eve further dark- example, where concerns about migration have been rising for ened the mood. years (as has immigration itself), standard measures of xenopho- Other rich countries have not faced bia have been declining: just15% ofpeople worry about a relative irregular arrivals on anything like Eu- marrying someone of a different race, down from 50% in the rope’s scale, leaving them largely free to mid-1980s, according to research by British Future, a think-tank. design their own refugee policies. The Instead, the hostility springs from a fear that governments United States, which signed the 1967 pro- have lost the ability to manage who may or may not cross their tocol to the Refugee Convention but not borders, supposedly one of their primary responsibilities to citi- the original document, has traditionally zens. “Nothing erodes public acceptance of migration like the taken in the bulk of refugees resettled by perception that it is out ofcontrol,” says Paul Scheffer, a Dutch an- the UNHCR. But for decades its response alyst. ThatiswhyEurope, havingmessed up itsinitial response to was driven by foreign-policy consider- the migrant crisis, had no alternative but to strike its deal with ations; between 1956 and 1968 all but Turkey in March. 1,000 of the 233,000 refugees it admitted Voters have also grown tired of confusing and contradic- came from communist countries, accord- tory messages. Rare is the politician who can speak honestly ing to Gil Loescher, a refugee analyst. about immigration. When foreign workers first arrived in large America continued to resettle refu- numbers in western Europe decades ago, political leaders, espe- gees after the end of the cold war, and re- cially in Germany, insisted that theirs were not immigration 1

The Economist May 2UI 2016 7 SPECIAL REPORT MIGRATION

2 countries. But over the years voters watched a different story un- fold as the sights and sounds of the streets changed and govern- Settling in ments started to write integration policies. In countries like Employment rate* by duration of residence All migrants Refugees Spain and America, politicians’ reluctance to acknowledge that 2014, % Non-migrant population they needed foreign workers led to growing irregular immigra- Belgium Sweden tion and, later, to embarrassing amnesties. America is still batt- 100 100 ling this legacy. Immigration from Mexico to the United States 80 80 went into reverse at least two years ago, yet 38% ofAmerican vot- 60 60 40 40 ers agree with Donald Trump’s proposal to build a giant wall 20 20 along the country’s southern border. 0 0 1-5 6-9 10+ 1-5 6-9 10+ Politicians still struggle to talkabout immigration, says Sun- Years Years der Katwala of British Future. He thinks they should avoid dis- Switzerland Britain missing public anxiety by spouting facts and figures, which 100 100 preaches to the converted but confirms sceptics’ fears about de- 80 80 tached elites. But they should also resist aping the rabble-rousing 60 60 of populists who will never command majority support. The 40 40 20 20 messages that resonate best with voters acknowledge the pres- 0 na 0 sures of migration while calling for the benefits to be harnessed. 1-5 6-9 10+ 1-5 6-9 10+ Years Years Some politicians are getting the message. Since Sweden’s main- Source: Eurostat *15- to 64-year-olds stream parties lifted the taboo that once surrounded debates on immigration, support forthe Sweden Democrats has slid. Most importantly, politicians should remember that unre- nomic and social integration was encouraged, but culture, reli- alistic promises may come back to haunt them. David Cameron, gion and customs were to be left out as part of a laissez-faire ap- Britain’s prime minister, will never live down his doomed vow proach that later, in the Netherlands and elsewhere, became in 2010 to reduce annual net immigration to his country to below known as multiculturalism. 100,000 (“no ifs, no buts”). Politicians in Sweden and Germany may be repeating that mistake by pledging to send back tens of It’s compulsory thousands of failed asylum-seekers, which on past form they In time that changed as some Dutch voters grew anxious will find hard to do. Designed largely to deternew migrants, such about the cultural distance between some groups of migrants talkinstead risks further eroding public trust. and mainstream society. In 2004 the debate sharpened after a But many liberals also need to come clean. The police and Dutch-Moroccan Islamistmurdered Theo van Gogh, a controver- media cover-up after Cologne shattered many Germans’ confi- sial film-maker. Integration became, and remains, contested po- dence in their government’s policy. All sides need to accept that litical territory. The government shifted the burden of integra- rich countries cannot remain immune from the global increase tion to the migrants themselves, which Mr Penninx frowns on. in mobility, and that certain sectors would collapse without mi- Today the “Integration in the Netherlands” website baldly states: grant labour; but also that refugees are not invariably a great “You have three years to integrate…You must pass the integra- boon to economies, as advocates suggest. But to ensure the maxi- tion exam within this period of time.” This exam, which tests mum benefit from the arrangements for everyone, the newcom- language skills and knowledge of Dutch society, is compulsory ers have to be properly integrated. 7 for any migrant who seeks to obtain permanent residence. Fail- ure to integrate can incur a fine of up to €1,250 ($1,410). After last year’s influx, other countries, such as Germany and Belgium, are Integration mulling tightening integration requirements forrefugees. ManyEuropean governmentsface a dilemma: bettercondi- tions for asylum-seekers should help their integration, but may A working solution also attract more of them. Under the strict Dutch approach, asylum-seekers may not receive anything more than basic state assistance until their claim has been processed. After last year’s surge in asylum applications to 59,000, that can take a year or more after arrival. Limited employment rights are offered after The best way to settle newcomers is to find them jobs six months. This delay infuriates local politicians, who want to get on with integration while asylum-seekers are still motivated. YEHYAIS ONE ofthe lucky ones. A refugee from the north- Integration is one of the three “durable solutions” the ern Syrian city of Aleppo, he reached the Netherlands in UNHCR seeks forrefugees. In the poor world, most governments June 2015, before the rush of arrivals swamped the asylum sys- fear unsettling their own citizens by allowing refugees to flood tem. He obtained protection in just two months, entitling him to labour markets. That is less ofa concern in the developed world; begin integration classes at Implacement, an Amsterdam-based indeed, there is evidence that over time refugees may spur low- firm that offers refugees three-month courses on language, com- skilled natives to move into more productive employment. But puter literacy and a basic introduction to Dutch life, taking in the record of rich countries in integrating immigrants into the everything from taxes to transsexuals (“Muslims find that a bit workforce ismixed. America doeswell; itsflexible labour market strange,” admits an administrator). creates large numbers oflow-skilled jobs, and officials aim to get Classes like these began in the early1980s, springing from a resettled refugees into workquickly. Last year the Migration Poli- Dutch integration policy written by Rinus Penninx, an academic cy Institute, a think-tank, found that in the United States, be- who feared that the guest workers the Netherlands had been im- tween 2009 and 2011 male refugees were more likely to be em- porting, largely from Turkey and Morocco, and theirdescendants ployed than their locally born counterparts; female refugees were in danger of becoming an underclass. Initially legal, eco- fared as well as American women. 1

8 The Economist May 2UI 2016 SPECIAL REPORT MIGRATION

2 In Europe the results are patchier. Some of the more visible ers after nine months, though several do not. All refugees are en- signs of failure to integrate earlier immigrants—from the ban- titled to workonce their claim has been approved. lieues that ring French cities to the divided towns of northern Access to the labourmarketisoflittle use ifmigrants cannot England—make it harder for governments to take in new ones. speak the language. That mattered less for the Turkish and Mo- The country to watch is Germany, which took in 1.1m asylum- roccan guest workers who manned Dutch and German assem- seekers last year. Some will be refused protection, and others bly lines in the 1960sand 1970s. But today even basic jobs require will return home voluntarily. But Germany still faces the biggest linguistic fluency, ifonly to understand health and safety rules, integration challenge in Europe; failure will discredit Angela so most governments lay on language classes for newcomers. Merkel, the chancellor, and hamper her attempts to organise a That delays entry into the labour market. pan-European resettlement scheme for Syrians. The Cologne as- A bigger problem is that refugees have tended to flock to saults stoked concerns about cultural clashes. But the challenge countries with little need for low- or unskilled labour. Half of of finding employment for hundreds of thousands of people those who have arrived in Sweden in the past two years have may prove tougher. nine years or less of schooling, says Susanne Spector, a labour- “What is integration? It’s a job, and speaking German,” says market economist at the Confederation of Swedish Enterprise, Achim Dercks of the Association of German Chambers of Com- but 95% of jobs require more than that, and the few basic jobs merce and Industry (DIHK). Recognisingthe powerofworkto in- available attract an average of three applicants each. Germany’s tegrate newcomers, in 2014 Germany cut the waiting period be- Federal Employment Agency reckons that only10% of the recent fore asylum-seekers can lookfora job to three months. ByEU law arrivals will be ready to work after one year, 50% after five years most countries must open their labour markets to asylum-seek- and 70% after15. (MrDercks is more optimistic.) 1

Not so fast

Refugees cannot solve Europe’s demographic woes A CONSPIRACY THEORY took hold in Germany Indeed, demographics can present a last year: it was self-interest, said critics, not Young blood Asylum-seekers threat as well as an opportunity. Population compassion, that led Angela Merkel to open Dependency ratio*, 2015 General population forecasts for the Arab world and, in partic- the door to hundreds of thousands of refu- ular, sub-Saharan Africa foreshadow growing gees. Greying Germany, expected to lose 10m 01020304050607080 migration pressures. Thirteen of the 15 of its current population of 81m by 2060, France countries with a total fertility rate (roughly, Sweden desperately needed an injection of young Denmark numbers of children per woman) above five workers to boost its labour force and prop up Britain are in Africa. In 2050, according to UN fore- its pension schemes. Who better to provide it Greece casts, the population of Africa will be three than the young migrants streaming across Italy times that of Europe, compared with less the border? And what was good for Germany Netherlands than twice as much today. The continent was good for its neighbours. Nine of the EU-28 already struggles to find jobs for the 11m world’s ten countries with the highest share Germany young men and women that reach working of over-65s are European (the tenth is Ja- Spain age every year. Governments are often con- pan). Nor are more babies likely to bring Bulgaria tent to see young people leave: emigrants EU Romania relief: the fertility rate in all countries is Hungary relieve pressure on labour markets and send below—often far below—the replacement home juicy remittances. Europe will remain *Population aged less than 18 and rate of 2.1children per woman. Source: Eurostat over 65 per 100 people aged 18-64 the destination of choice for most of them, Four-fifths of asylum applicants in the but they may not be a good fit for the jobs on EU last year were younger than 35. Thanks to offer there. immigration, Germany’s population stopped committing “demographic suicide”. Better, then, to help developing coun- falling in 2011and has been rising slightly But migrants are no demographic tries create jobs for their own? The king of but steadily ever since. Young immigrants panacea. The scale of immigration needed to Morocco supposedly once told EU leaders that can help ageing societies in two ways: they compensate for Europe’s rising age profile is if they did not want his people, they would lower the dependency ratio (the proportion politically implausible. Germany’s Federal have to scrap their agricultural subsidies and of the non-working young and old to people Statistics Office recently calculated that the take his oranges instead. This apocryphal of working age), and they often have more country would need to accept 470,000 work- story got things upside-down: emigration in children than the native population, at least ing-age migrants a year to offset its de- poor countries tends to rise with income per initially. America’s open immigration policy mographic decline. And the migrants would person, up to around $7,500 a year, as people has helped it maintain a relatively healthy have to keep coming, because they age, too, acquire the means to leave. The African age structure. By contrast, the population of and their fertility rates tend quickly to con- migrants who reach Europe via Italy are often Japan, which allows almost no immigration, verge with those of the native population. among the richer and better-educated. So as is declining by hundreds of thousands a year. Besides, they do not always stick around. The Africa gets wealthier, more of its people may Last year, as the magnitude of the refugee fertility fillip Spain got from high immigra- decide to chance their hand elsewhere. Some inflows became clear, Vítor Constâncio, a tion before the financial crisis, for example, will go to richer parts of their own continent, vice-president of the European Central Bank, evaporated when foreign workers went home but plenty will seek the bountiful lands to said that immigrants could stop Europe from after the 2008 crash. their north. Europe, look out.

The EconomistMay2UI2016 9 SPECIAL REPORT MIGRATION

2 That leaves a lot ofmigrants drawingunemployment bene- study found that after a year 76% had jobs, compared with 45% of fit; and long-term welfare dependency, particularly of non-citi- those backed by the state. The British government is now consid- zens, drains treasuries and fosters resentment. Christina Merker- ering a scheme along Canadian lines. Siesjo, who runs Yalla Trappan, a social enterprise for migrant But in the poor countries where most refugees live, integra- women in Rosengard, a refugee-heavy district of Malmo, says tion poses an entirely different set of problems. In long-estab- Sweden’s generous benefits can induce passivity among new- lished refugee camps NGOs usually provide services like health comers. Better to get them involved in some form of activity as care and education, sometimes to a higherstandard than is avail- soon as possible, whether paid or voluntary. able to the country’s ordinary residents, but governments rarely A recent IMF report urges countries to make labour markets allow the refugees to work. Labour-market restrictions have more flexible to speed up the integration of refugees. Germany’s forced most of the working-age Syrian refugees in Turkey, Leba- Hartz labourand welfare reforms, introduced between 2003 and non and Jordan into black-market jobs, with the attendant ex- 2005 by the then chancellor, Gerhard Schröder, made it more at- ploitation. Little wonder that so many aspire to a better life in the tractive to take the sort of low-skilled work that may suit many West, either braving dangerous journeys to get there or accepting refugees, but plenty more can be done to loosen up what re- a long wait fora state-backed resettlement. 7 mains a tightly regulated labour market. From this summer a new “3+2” rule will protect refugees on three-year vocational courses from deportation for two years after completing their Resettlement training, removing a disincentive to recruiting them. Germany may not be crying out for low-skilled labour, but its tradition of vocational training can provide a bridge into workforsome. The Bring me your huddled country could also do a better job of recognising the qualifications ofskilled refugees, such as doctors. masses In Sweden nearly 20% of the non-Europeans who immi- grated in 2002-12 were asylum-seekers and refugees, and last year’s influx will have pushed the number higher. This helps ex- It worked for the Indochinese. Why not the Syrians? plain why unemployment for immigrants, at16%, is almost three times that for natives. Employment rates for refugees are lower NINE COUNTRIES HOST most of the world’s refugees. than fornative Swedes even after ten years. Ms Spector says that None of them is wealthy. All border war zones, from Syria in the long run the best thing the government could do for immi- to South Sudan. The simplest way for rich countries to help the grants is to allow much greater variation in pay to encourage em- pooronesthatshoulderthe lion’sshare ofthe global refugee bur- ployers to create more low-skilled work. den is through resettlement, the UNHCR’s second “durable solution”: accepting refugees directly from the countries they have The lesser of two evils? fled to. Many countries have had annual resettlement quotas for That would be a hard sell in a country that cherishes its col- decades, agreed with and implemented through the UNHCR. lective-bargainingtraditions, in which employersand unions ne- America, for example, plans to take in 85,000 refugees this year. gotiate annual wage deals. But some opposition parties have But the numbers are nothing like enough to accommodate the urged a reduction in pay to get more refugees into work. Sweden most acute refugee emergency: the 5m or so Syrians stranded in may ultimately have to choose between unemployment ranks Turkey, Lebanon and Jordan, not to mention the 7m displaced in- swollen by refugees or a looser approach to employment and side Syria, many ofwhom could still flee. benefit rules, including stronger incentives to work. That will be That is why some Europeans have sought a new approach: tricky. The Hartz reforms, though widely credited with keeping eliminate, or at least drastically reduce, irregular migrant flows, German unemployment low, were blamed in part for Mr and launch a mass refugee-resettlement scheme instead. It is a 1 Schröder’s defeat at the polls in 2005. Last year’s influx of refugees included many children, and educating them will be crucial for long-term integration. Coun- tries must balance their specific needs—especially language learning, which calls for segregated teaching—against the social value of teaching them in the same classrooms as everyone else. Germany has recruited new teachers and set up one-year “welcome classes” for newcomers with a focus on language teaching. Housing presents another challenge. In most countries asylum-seekers are placed in reception centres until their cases are heard (unless they can find theirown accommodation). Once accepted, they are usually free to live where they like. But cities that are popular with refugees, such as Berlin, may not offer the best workopportunitiesorbe well placed to provide welfare support. To avoid overconcentration, the German government is consid- ering obliging refugees to stay put fortheir first two years. Canada has tried an alternative to the usual state-led integration model. Since 1978 it has allowed voluntary groups, such as churches or diaspora organisations, to sponsor refugees privately, supporting them financially for a year and introducing them to life in their new home. One-third of the 25,000 Syrian refugees Canada has recently taken in were resettled this way. Privately sponsored refugees tend to integrate more quickly; one

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2 beguiling idea: replace chaos with order, destroy the business been true of the Hungarians.) The West may sympathise with models ofthe smugglers who thrive on illegality,and have coun- the victims of Bashar al-Assad’s barrel bombs, but sees little geo- tries choose refugees rather than the other way around. political gain in helping them. Even the Indochinese effort was Mass resettlement was supposed to play a large part in the neither quick nor easy. It involved several false starts and lots of controversial agreement struck between the European Union arm-twisting, and took years to complete. And Europe’s political and Turkey on March18th. The deal committed the Europeans to will has been sapped by the chaos oflast year’s mass arrivals. taking in one Syrian refugee from Turkey forevery irregular Syri- But if Europe cannot muster the will for mass resettlement, an sentbackfrom Greece. Largernumberswould be resettled un- the danger is of drift towards an Australian-style solution in der a separate “voluntary humanitarian admissions” scheme, which a “hard” rejection policy is unleavened by generosity and which could also include Jordan and Leb- anon. The more ambitious speak of reset- tling 250,000 Syrians a year to Europe. If Some Europeans are now arguing for a new approach: thatinspired America and otherrich coun- drastically cut back irregular migrant flows and put in tries to step up their efforts, the burden on Syria’s neighbours might become more place a mass refugee-resettlement scheme instead manageable and the chaos ofirregular migration could be brought under control. It has been done before. Almost all of the 180,000 Hungar- neighbours are leftto bearthe burden. Australia boasts that it has ians who fled to Austria after the Soviets suppressed the 1956 eliminated the unplanned arrival of asylum-seekers by sea. But uprising were quickly resettled, some as far afield as Nicaragua its politicians’ promises to boost the resettlement of refugees and New Zealand. But for most the model is the Indochinese have not been kept: quotas fell from 20,000 in 2012-13 to 13,750 in “boat-people” crisis that began in the 1970s, which gave rise to 2014-15 (although numbers are due to rise again). Campaigners perhaps the most successful mass resettlement in history. Mil- devote their energy to undoing Australia’s offshoring deals with lions of refugees scrambled on to boats to flee the communist Papua NewGuinea and Naururatherthan boostingresettlement governments that tookover in Vietnam, Laos and Cambodia fol- numbers. Europe may be moving in this direction: the push for lowing the American military withdrawal in 1973. When over- resettlement has got lost in the row over the deal with Turkey. burdened South-East Asian countries started to turn refugees away, the international community took action. Between 1975 Chaos into order and 1995 about 1.3m Indochinese refugees were moved to rich If Europe cannot do it, what about the rest of the world? countries, mainly the United States, Canada and Australia. Canada’s programme, described earlier in this report, is gener- Most settled in well. In America, the median household in- ous but pricey, and highly selective: single men are placed at the come of immigrants from South-East Asia is now higher than back of the queue. America is already struggling to meet its that of people born in the country. Filippo Grandi, the UN’s refu- pledge to resettle 10,000 Syrians this year. Barack Obama would gee chief, notes proudly that the refugee co-ordinator who probably like to take more, but that will be hard in an election showed him around Illinois on a recent visit was an evacuee year dominated by Trumpian immigration demagoguery. And from Vietnam. The response to the Indochinese boat people sug- fears of terrorism have clouded the issue, despite elaborate gests that co-ordinated global action with a bigdollop ofpolitical screening protocols for refugees that can take two years or more. will can resolve refugee crises. Could it workforSyrians? After last November’s attacks in Paris, Republican governors fell Probably not. The numbers are farlarger today, and Syrians over themselves to declare their states closed to refugees. are not the only people seeking refuge. America’s generosity to- In otherregions the picture is dimmerstill. Japan and South wards the boat people sprang in part from a desire to show sol- Korea, never known for generosity towards refugees, have not idarity with the victims of communist regimes. (The same had agreed to accept any Syrians at all. The same goes for the rich Gulf states, none of which has signed the Refugee Convention. Some, such as Saudi Arabia, host large numbers of Syrians on work visas, but these offer nothing like the protection afforded byrefugee status. Brazil isa brighterspot; ithasissued humanitarian visas to over 8,000 Syrians under an open-door policy, although barely a quarter of them have made the journey so far, not least because they have to find their own air fares. With the usual routes apparently blocked, Mr Grandi has tried to expand the criteria for resettlement through “additional pathways”—university scholarships, expanded family reunion and humanitarian visas. Over the next three years the UNHCR hopes to move at least 450,000 Syrian refugees to the West, mainly from Turkey, Jordan and Lebanon. But a recent conference in Geneva failed to attract many new resettlement pledges. It seems clear that there will be no Indochinese-style mass resettlement solution to Syria’s refugee crisis. That may not be a disaster. Resettlement is in some ways an admission of defeat. Refugees who have been accepted into a third country are less likely to return to their original homes than those who remain where they were first granted asylum. “I’m not a big fan of[resettlement], but what are the alternatives?” asks Mr Grandi. For those in the world’smost“protracted refugee situations”, thatis a crucial question. 7

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Lebanon’s and Jordan’s plight tious parliament has been unable to elect a president since 2014, and struggles to hold legislative sessions more than once a year. At times the state is unable to perform basic functions, as the Caught by geography mountains ofuncollected rubbish bags on some streets testify. Lebanon’s economy was splutteringeven before the Syrian refugees crossed over, and the 1.5m now inside its borders—more than the total number of asylum-seekers who reached Europe last year—make up overone-quarterofits population, disrupting Syria’s neighbours bear a heavy burden the labour market, overburdening water and sanitation systems and, since the vast majority are Sunni, upsetting the sectarian LOOK AT US, we’re just sitting here,” says Hassan al-Ba- balance. The public debt has swelled. Lebanon’s attempts to dis- rouk, a refugee from al-Qusayr, a Syrian town near Homs. tance itselffrom Syria’s strife have faltered as Hizbullah, the Shia The air inside the tent in which your correspondent encounters militia, has intervened to help the Assad regime and Sunni terro- Mral-Baroukand a clusterofotherrefugees, part ofa small camp rists have scrapped with Lebanese troops in the country’s north- outside the Lebanese town of Saadnayel, is thick with hopeless- east. Add to all this the apparently insoluble problem of the half- ness. There is no talkofadventuring to Europe, no question ofan million Palestinian refugees living in the country, and you might organised resettlement to a country that might offer a future. In- reasonably askhow Lebanon is managing. stead the complaints pour forth. The Lebanese authorities make To answer that, Nasser Yassin, an academic at the Ameri- it impossible to register, which denies refugees the ability to can University of Beirut, points to the extensive and long-stand- move freely. Schools arbitrarily stop Syrian children from attend- ing informal networks between Syrians and Lebanese. Under a ing classes. Workis forbidden. The main way of passing the time deal struckin 1993 Syrians could workin Lebanon without visas; is swapping WhatsApp messages with friends and family back perhaps halfa million were doing so before the war. (Jordan had home, as the regular phone chirrups testify. Everyone in the tent a similar arrangement.) Many of the scruffy refugee settlements says they want to return home to Syria, but no one believes it can around Lebanese towns grew out of informal housing plots for happen soon. Syrian farm workers. Syrians working illegally for low pay on Refugees like the 24 families in this “informal tented settle- farms or building sites are competing mostly against each other ment” (the Lebanese government does not allow official refugee (or Palestinians); few Lebanese are interested in such jobs. Eu- camps) make up 15-20% of the Syrians in Lebanon. Most of the rope, suggests Mr Yassin, could learn a thing or two from Leba- rest rent their homes, which are often just garages or disused non about the value ofinformal mechanisms. warehouses. The camp-dwellers are the poorest of the bunch, Perhaps half the Lebanese economy is underground, and obliged to sell assets and take on debt to pay their bills, including the authorities tend to turn a blind eye to Syrians who work annual rent of $300-$1,000 a year per tent. NGOs are on hand to without permits. The ownerofa large, popularSyrian restaurant help, but food rations have been cut for lack of funding. Only in the middle ofBeirut says finance-ministry officials told him to emergency medical treatment is covered. Some towns here in find a Lebanese business partner to get round ownership restric- the Bekaa valley, an agricultural region in Lebanon’s east, have tions. He, and many other Syrians like him, are useful sources of more refugees than locals. And they are not going away. employmentforrefugees. Some Syrian capital hasfollowed refugees over the border, and private landlords benefit from lots of A troubled land new tenants who are pushing up rents. Every refugee has a story Lebanon has more refugees per head of population than to tell about ill-treatment at the hands of locals, but there have any other country; its near-neighbour Jordan has one-third the been no widespread protests or reports of systematic persecu- number. Riven by sectarian strife between its Sunni, Shia and tion. The wide dispersal of refugees around the country may Christian populations, and with a 15-year civil war in living have helped. memory, Lebanon is a minnow in a volatile region with irascible Thus has Lebanon stayed afloat for now. But, notesMr Yas- giants like Iran and Saudi Arabia tugging at its politics. Its frac- sin, the country is storing up trouble. Life has become much 1

A sea of misery Registered refugees, June 2015 By host country, m Per 1,000 population of host country By origin, m 0 0.3 0.6 0.9 1.2 1.5 1.8 0 30 60 90 120 150 180 210 0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 Turkey Lebanon Syria Pakistan Jordan Afghanistan Lebanon Nauru Somalia Iran Chad South Sudan Ethiopia Turkey Sudan Top 3 Top 3 Jordan Top 5 South Sudan Congo Top 5 Top 10 Top 10 Kenya % of Mauritania C.A.R. % of total total Uganda refugees Djibouti Iraq refugees Chad Sweden Eritrea Sudan Malta Myanmar Source: UNHCR

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2 tougher for refugees since the government tightened its rules last year. Registered Syrians must now pay $200 to renew residency permits and sign a pledge not to work; the non-registered require a Lebanese sponsor. Most refugees do not have official papers, and over two-thirds live below the official poverty line. Some schools are “double-shifting” (Lebanese in the morning, Syrians in the afternoon), but most refugee children are not in school at all. Many must toil in the fields to help keep their families going. Little wonder so many Syrians grabbed the chance to leave for Europe when it came last year. In January, asTurkey prepared to reintroduce visas for Syrians travelling from third countries, the queues at Beirut airport stretched around the block. But now that that valve has been shut, a large, idle population could start to pose a security threat. Jabhat al-Nusra, a Syrian al-Qaeda affiliate, has sought to recruit among refugees. Can the UN’s “durable solution” of integration work here? Not according to one French official, who says Lebanon would collapse if forced to offer citizenship to all the refugees it has taken in. Thatmaybe true, butthere isplentyofground between the extremes of mass naturalisation and permanent limbo. Fortu- nately the West has started to rethink its approach. A recent do- nor conference in London raised $11 billion for Syrian refugees, and promised more help forhost communities. This is already bearing fruit in some quarters. The deputy Refugee camps in Africa mayor of Majdal Anjar, a town in the Bekaa that took in 25,000 refugees, boasts about the shiny new rubbish-collection vehicle he has been sent, courtesy of the UN. Donors such as Britain From here to eternity speakenthusiastically offundingsewage systems, irrigation projects and flood walls for particularly burdened regions. The EU plans to relax trade barriers on certain goods from Jordan to create jobs for both locals and refugees. In exchange for all this Kenya’s Dadaab camp has become many refugees’ largesse, donors want the beneficiaries to do more for the refugees they host, in particular by opening up their labour markets. permanent home—but the goverment wants to shut it Atthe London conference the Lebanese governmentpromised to “STATUS DETERMINATION”. “IMPLEMENTING part- ease formal restrictions in a few sectors. This summer Jordan ners”. “Well-founded fears”. One of the first things you no- plans to launch a pilot programme that will offerworkto 150,000 tice aboutDadaab, a sprawlingcollection ofrefugee camps in the refugees in low-tax special economic zones. Kenyan desert 90km (56 miles) from the Somali border, is the jar- Charges that the West hopes to manage its refugee problem gon. It comes thick and fast in conversation with the NGO work- bythrowingmoneyatitmaybe justified. Butmoneygoes further ers running the field offices and health clinics. It is on the posters in the region than it does at home: Mr Yassin estimates it can cost in agency compounds and the donated t-shirts sported by tod- 40 times as much to host a refugee in Britain than it does in Leba- dlers. You even hear it from some of the younger refugees, be- non. And although the NGOs are skint, fresh forms of financing cause the quickest way to get a water pipe fixed or a latrine built are emerging. The World Bank recently relaxed its rules on pro- is to use the language of rights and repression. In Dadaab, the viding cheap loans to middle-income countries facing humani- world’s largest agglomeration of refugees, the bureaucracy is al- tarian crises, such as Jordan and Lebanon. most as stifling as the heat. It was not supposed to be like this. The refugee-protection A hologram government regime established after the second world war promised liveli- In some ways Lebanon is a special case. What Rabih Shibli, hoods and security offered by stable states, not NGOs. But al- also atthe American UniversityofBeirut, callsits“hologram gov- though many Europeans may imagine refugees as people on the ernment” makes it difficult for foreign diplomats to extract reli- move—crossing the Mediterranean in overloaded rubber din- able commitments. And like most other Middle Eastern coun- ghies ortrudgingthrough the Balkans—Dadaab is closer to the re- tries, Lebanon held back from signing the Refugee Convention. ality ofmost ofthe world’s displaced people. Some 345,000 refu- But more than five years into the Syrian crisis, there are signs that gees, 95% of them Somalis who have fled across the border, are the governmentmayrelaxsome ofitsstrictures, particularly ifits spread across five camps, their lives governed by dozens of own citizens can see some benefit. Here, and elsewhere in the re- NGOs that have little understanding of development or state- gion, donorscan encourage thisbyworkingwith the grain ofsuc- building, and a Kenyan police and securitypresence that attimes cessful regional and local programmes. Amore predictable fund- can feel more like an occupying force. ing structure would help, so that refugees do not see wild swings Back in 1991, when the UNHCR first consolidated the infor- in their financial support, and municipalities can better plan mal settlements established by Somalis fleeing civil war into an theirprovision ofpublicservices. And the West’sresettlementef- organised refugee camp, no one expected Dadaab to last this forts should extend beyond Turkey to Jordan and Lebanon. long. But over time the camps grew (some now resemble cities), All told, the refugees in Lebanon and Jordan are probably informal economies emerged and people got used to the life. So- still betteroffthan the hundredsofthousandsin Kenya’sDadaab malia’s endless strife made return home difficult formost. camp 4,000km to the south, near the Somali border, who have In many respects the NGOs that run the place do a fine job. lived there all their lives. 7 The schools they operate are overstretched, but that is partly be- 1

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2 cause they have attracted lots of pupils. There are no funds for tions on work, opening up to investment in infrastructure or al- treatingchronicconditions, butthe clinicsare clean and well run; lowing them to move out of the camps. But even if the govern- a cholera outbreaklate lastyearwasquicklycontained. Manyref- ment does retreat from its plan, there is no prospect of local ugees dislike the maize, beans and flour they are given—“donkey integration forthe denizens ofDadaab, and only a lucky few will food”, says one—but now that the UNHCR has introduced a bio- be resettled. metric system to cut fraud, it is at least distributed efficiently. That leaves the UNHCR’s third “durable solution”: volun- There are flourishing secondary markets for UN rations. In some taryrepatriation. In 2013 the UNHCR and the Somali government ways the services are better than those available to some Ken- bowed to Kenyan pressure and backed returns forSomalis in Da- yans, so thousands oflocals, mainly ethnic Somalis, have passed daab. Under this “tripartite agreement” the UNHCR arranges themselves offas refugees to gain access to the camps. journeys back to Somalia for willing refugees. They are given a But agencies can do only so much. Few refugees are able to $100 voucher for food, and agents follow up with phone calls to work. Once children finish school there is little chance of higher checkon their progress. “The world is looking at the Middle East, education except for the lucky few who obtain scholarships to not at us,” says Abdisaid Aden, a former businessman, as he pre- places like Canada. “What’s the point?” asks Deka Abdullahi, an pares to board a repatriation flight to Mogadishu after five years ambitious 18-year-old at Hagadera Secondary School, who com- in Dadaab. He blames cuts in the camps for his decision to leave. plains that her hard work will leave her no better off than girls Over14,000 refugees have returned since the scheme took effect who quit school years ago. Many refugees have simply pressed in December2014. But that is not fast enough forthe government. pause on life, idling away the hours by chewing the fat (or the Almost all those who have been repatriated are from the khat). A second generation has grown up with no knowledge of second influx of Somali refugees, who arrived in Dadaab in life outside Dadaab; a third is already10,000 strong. 2010-11fleeingdroughtasmuch asviolence. The first, much larger The “docile, disempowered” refugees, writes Ben Raw- wave, dating to 1991-92, will be harder to persuade. With settled lence in City of Thorns, an account of life in Dadaab, “do as they lives in the camps, they have more to lose and, in most cases, lit- are told. They hesitate before authority and plead for their rights tle to return to: most have sold, orlost, what assets they had in So- in the language of mercy.” Their lives are shaped by external malia. “I’m not going anywhere,” grins Bishar Barre, a tailor who forcesthatreach the campsthrough two main tribunes: the agen- has lived in Hagadera, the largest of the five camps, since 1992. cies and NGOs that sustain them, and the Kenyan government, His small clothes-repair outfit keeps him busy, and his ten chil- which wants to close them. Then there is the violence of Soma- dren have places in the camp’s schools. He says he will leave lia’s al-Shabab insurgency, which has spilled overinto the camps only ifeveryone else does. in previous years. Dadaab is a much saferplace these days, but that is not how Try another way Kenya’s politicians see things. The government says the camps Elsewhere in Kenya things may be more promising. In Kalo- harboural-Shabab terrorists. In Mayitabruptlydisbanded itsde- beyei, a settlement outside Kakuma, another refugee camp, in partment for refugee affairs and said it would close Dadaab by the remote north-west, a plan is afoot to grant refugees small May 2017, without explaining how such a massive operation plots of land and allow them to sell their produce. (Kakuma was might be carried out. Some saw the announcement as a ruse to also slated for closure in May, but the government appears to extract more money from donors, who have been distracted by have backtracked, as there are no suggestions of terrorist links to the Syrian crisis. Since 2010 the UNHCR’s fundingforDadaab has the camp.) Cash vouchers may replace food rations to encourage fallen from $223 to $148 per person a year (excluding food). The local economic integration. It is early days, but agencies hope Ka- World Food Programme cut its rations by 30% last year. Previous lobeyei may be built up to accommodate 60,000 people. The ex- pledges to close Dadaab have come and gone, yet this time the periment was inspired by a model over the border in Uganda, government seems more determined. where refugees from Congo, Rwanda and elsewhere have long Aid groups warn that closing Dadaab could trigger a hu- been granted a degree of self-reliance. From beginnings in farm- manitarian catastrophe, particularifrefugeeswere sent into dan- ing, some have now diversified into commerce and manufactur- ger zones across the Somali border. But the government has rare- ing. One-fifth ofrefugees in Uganda employ people outside their ly been interested in outsiders’ views. For years donors have family, and of those 40% are Ugandans, according to research by urged Kenya to allow refugees to integrate, by loosening restric- Oxford University’s Refugee Studies Centre. This approach has provided refugees with livelihoods and hope, and helped secure some support from their Ugandan hosts. The Kenyan Alas, back in Dadaab the residents government have no such ambitions. Instead they are left to pray for more generous donors, a has gradual improvement back home and clamped mercy at the hands of their Kenyan hosts. Around the world, from Pakistan to Gaza, down on over 11m refugees are living in such “pro- refugees’ tracted situations”. “We don’t have a future,” says Victoria, a South Sudanese freedom of woman, as she concludes a phone con- movement versation with an NGO about a broken water tap. “We’re just refugees.” This is life for hundreds of thousands in Dadaab. Syrians entering their fifth year of displacement in neighbouring countries fear they might be going the same way. 7

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Looking ahead does not mean giving refugees immediate citizenship rights (although in due course they should be offered to some). The pos- How to do better sibility of a return home should never be blocked off. But over time, grantingrefugees a degree ofself-determination can reduce the distressing waste of human potential in places like Dadaab, and reduce friction between refugees and their hosts. For too long Western politicians have been profusely Spontaneous migrant flows cannot be prevented, but thanking refugee-hosting countries for their generosity while chastising them for not allowing their guests to work or move they can be handled more competently around freely. Such hypocrisy has not gone unnoticed in the de- THE REFUGEE CONVENTION says that states should do veloping world. So in a related change, the West should intro- “everything within their power to prevent [refugees] from duce long-term development thinking into refugee policy, the becoming a cause of tension” between them. They have mani- better to align the interests ofrefugees with those of the commu- festly failed. Chaotic flows set governments against one another. nities that host them. Countries hosting lots of refugees bitterly resent the rest of the Some refugee aid should be shifted from humanitarian world for failing to do its bit. Refugees, bar the lucky few who agencies to development budgets, politically difficult though have made it to developed countries, are increasingly locked in that might be. The World Bank has already changed its rules to limbo, wards of a system run by NGOs that offers them no hope help middle-income countries facinglarge refugee burdens. Indi- ofbuilding a meaningful life. vidual rich countries, or clubs of them, could offer trade prefer- Thatdoesnotmean the world should rip up the convention ences to countries with large refugee populations, as they do for and start again, as some urge. A tapestry ofinternational law has the world’s poorest. But governments are not the only actors. Jor- been woven around the idea that there is a specific class of peo- dan’s economic zones show how the private sector may be en- ple who deserve the protection of states other than their own. couraged to help both locals and refugees. Starting from scratch is more likely to undermine that idea than expand on it. A legal definition of refugees is needed to secure Be prepared consent in countries that protect them. Without it the right to asy- Managingthe world’s stockofrefugees is one thing; dealing lum, and the prospect ofresettlement, will evaporate. with sudden flows from conflict areas that can strain economies, Instead, suggests James Hathaway of the University of infrastructure and social cohesion is another. Countries like Leb- Michigan, view the convention as a beautiful house with a worn anon and Jordan, dealt a poor hand by geography, should not be carpet. It needs renovation, not reconstruction. That means two left to cope on their own. things. First, recognition that refugees will eventually need more It is impossible to tell where or when the next wave of dis- than humanitarian protection. Second, a new compact between placement will appear, but educated guesses can be made. The the rich world, which has the resources to manage the problem, UNHCR is worried about women and children fleeing gangs in and the poor, which bears the brunt ofit. Countries like Lebanon Central America and heading forthe United States. In north-east and Kenya are providing a global good and deserve more help. Nigeria Boko Haram has displaced 2.2m people. The Middle East The startingpoint must be a new approach to protracted sit- is as flammable as ever. And otherpotential sources of large pop- uations to place integration at the heart of refugee policy. That ulation shifts loom, notably climate change, which might gener- 1

The Economist May 2UI 2016 15 SPECIAL REPORT MIGRATION

2 ate fresh waves of migration as arable land degrades and water would otherwise struggle to scarcity leads to conflict and flight. keep a lid on. The disorderly Help from the rich world should begin with the traditional flows into Europe last year were responses: more resettlement and more help for humanitarian the outcome of a problem al- bodies. Acutely overstretched countries should be given particu- lowed to fester. “Refugees are Reprints lar support. David Miliband, head of the International Rescue convincing governments of the Reprints of this special report are available Committee, a humanitarian group, wants rich countries to ac- need to act,” says Mr Grandi of at US$7.00 each, with a minimum of 5 UNHCR copies, plus 10% postage in the United cept 10% of the world’s refugees, concentrating on the most vul- the . If nothing is done, States, 15% postage in Mexico and Canada. nerable. More money is needed, too. Last year the UNHCR was “they will come anyway.” Euro- Add tax in CA, DC, IL, NY, VA; GST in Canada. able to meet only half the needs it had budgeted for, and several pean leaders no doubt regret For orders to NY, please add tax based on ofits projects were left massively underfunded. having paid so little attention to cost of reprints plus postage. For classroom use or quantities over 50, But fresh thinking is also needed to help countries avoid illegalmigrationuntilayearago. please telephone for discount information. sinking into protracted situations. Places like Lebanon should Many fear the next wave, from Please send your order with payment by not have to hold out the begging bowl at hastily convened donor Libya, Turkey or even Russia. A cheque or money order to: conferences every year or two. Agencies have learned to move pre-emptive approach might be Jill Kaletha of Foster Printing Service Telephone: +1 866 879 9144 Extension: 168 equipment and personnel near conflict zones in preparation for seen as a form of insurance. So or email: [email protected] a wave of refugees. An expanded global fund for displacement, there is a strong case for Europe (American Express, Visa, MasterCard and overseen by an independent authority that can spring into ac- leading the way. Discover accepted) tion when required, would make such planning and response But first the EU must get its For more information and to order special easier. Governments might prefer the predictability of regularly own house in order, using the reports and reprints online, please visit our paying into a fund to ad hoc donor events. And once refugee pro- breathing space that the deal website www.economist.com/rights blems turn from acute to chronic, the response should shift from with Turkey has granted (pro- humanitarian to development. vided it holds). Rather than Future special reports The International Organisation for Migration, which may squabbling about plans drawn Artificial intelligence June 25th soon be folded into the UN, could help match global migration up in Brussels to spread refugees Chinese society July 9th The company September 17th supply and demand as part of a tighter international migration around member countries, it rl b r regime. But global governance has its limits. The international should think about different The wo d economy Octo e 1st system is prone to inertia and turf wars. The UNHCR, the tradi- ways in which countries may Previous special reports and a list of tional guardian of the rules governing refugee movements, no contribute, be it in cash or in forthcoming ones can be found online: economist.com/specialreport longer carries the clout it once did, and kind. There is a case for generat- may find it difficult to embrace fresh aping common resources to man- proachesto protection. So the political en- age this common problem, whether by issuing bonds, as Italy ergy for change will have to come from has proposed, or through a new tax, as Germany might prefer. At governments, often acting together. The the same time the EU must continue its slow trudge towards a next American president, if so inclined, harmonised asylum system. might encourage a rethink of the global The advantages of co-operation are less obvious to coun- protection scheme, perhaps with the help tries isolated from the direct consequences of regional unrest, ofa new UN secretary-general. such as Australia, Japan and, to a degree, America. But they, too, The new approach should work have an interest in preserving the liberal order that is threatened with the grain ofinternational politics. Bi- lateral relationships often yield better results than sluggish international bodies Migration is an intrinsically ambivalent business, both can offer. Spain’s deals with West African countries such as Senegal, which combine for the governments that must manage it and for the police and patrol co-operation, repatria- migrants themselves tion deals and lots of aid, slashed illegal immigration some years ago. Some countries will be well placed to accept particular refugee groups be- by vast refugee flows. They do not want to see the EU, its greatest cause of historical or colonial ties, as in the successful resettle- champion, tear itself apart. Another refugee crisis in the Middle ment in Britain of the Ugandan Indians expelled by Idi Amin in East could topple governments, with unpredictable conse- 1972. Rich countriesseekingto plugparticulargapsin their labour quences in a combustible region. And even the status quo might markets might be encouraged to take in refugees. not be stable. Some refugee populations, if left to rot, can turn to what aid groups call “negative coping strategies,” from drug It’s everyone’s problem abuse to crime to the threat of terrorism across borders. Many All these changes would make it clearer that legal responsi- will be exploited, especially children. bilities to refugees cannot be separated from politics. Too often In the end, though, nothing can force a government to do national politicians and international officials talkpast each oth- more forrefugees outside its borders. The policies ofthe next age er: accusations of xenophobia fly in one direction, dismissals of of refugee management still depend on a spirit of compassion starry-eyed idealism in the other. In the West, the first principles and humanitarianism. Migration is an intrinsically ambivalent of international refugee law are wearily revisited every time business, both for the governments that must manage it and for numbers surge. the migrants themselves. The hopes they have invested in a new Lawyers and NGOs need to accept that the treaties and homeland will always be tempered by regret forwhat they have rules they cherish will wither without the continued consent of lostand byfearofwhatmaylie ahead. Asforpolicymakers, there the democracies that drew them up. Politicians, for their part, is nothing they can do to prevent unpredictable refugee flows. should acknowledge that aid agencies manage a problem they But they could certainly make a better job ofmanaging them. 7

16 The Economist May 28th 2016 Europe The Economist May 28th 2016 43

Also in this section 44 Crimea’s Tatars 45 Greece gets its bail-out 45 Austria’s presidential squeaker 46 Germany’s ethnic labels 48 Charlemagne: Sexism in France

For daily analysis and debate on Europe, visit Economist.com/europe

Visa liberalisation reach even extends beyond Turkey. In April he exploited a German prohibition on in- Europe’s murky deal with Turkey sulting foreign heads of state to demand that Jan Böhmermann, a comedian, be prosecuted for reading a satirical poem on television that depicted Mr Erdogan in various obscene acts. BRUSSELS AND ISTANBUL All this has spooked officials in Brus- sels. On May 23rd Mrs Merkel admitted The EU is gambling its reputation to secure its borders that visa-free travel would not happen by T WAS meant to be a game-changer. son forMr Davutoglu’s departure. July, as had been agreed on (somewhat un- IWhen a deal between the European Un- Mr Yildirim pledged to enshrine Mr Er- realistically) in March. Turkey still needs to ion and Turkey was struck in March with dogan’s status as the party’s leader and ex- meetthe EU’sfinal seven conditions(out of the aim oflimitingthe numbers ofasylum- ecutive president. Two days earlier Tur- 72). These include issuing biometric pass- seekers coming to Europe, many in Brus- key’s parliament lifted the immunity of its ports; cracking down on corruption; be- sels felt cautiously optimistic. Angela Mer- members, opening the way for 50 of 59 coming more co-operative with extradi- kel, the German chancellor, claimed it of- MPs from the pro-Kurdish Peoples’ Demo- tion requests; and, most controversially, fered a “sustainable, pan-European solu- cratic Party to face prosecution, mostly on narrowing the broad anti-terror laws it has tion”. In exchange for visa-free travel for spurious terror charges. Mr Erdogan accus- used to harass journalists, academics and some ofitscitizens, €6 billion ($7 billion) in es them of peddling propaganda for the politicians. The EU’s Council of Ministers refugee aid and revived talks on possible Kurdistan Workers Party, an outlawed mili- isdevelopingnewrulesthatwould make it future accession to the EU, Turkey was to tia—an accusation they strenuously deny. easier for Europe to suspend visa liberal- take back migrants who had made their Mr Erdogan has also clamped down isation for six months, or rescind it alto- way to Greece and try to secure its borders. more forcefully on the press and potential gether, if circumstances change. Such con- Faced with perhaps another million refu- dissidents. According to a report in May, tortions may make visa-free travel more gees making their way to Europe this year, nearly 900 Turkish journalists have lost politically palatable to Europeans wary of it appeared to be the only way to bring their jobs in the first four months of the illegal immigration from Turkey. But they some order to the chaos. year, and 33 were detained. Prosecutors also make the deal lookcynical. The number of refugees coming to Eu- have opened more than 1,800 casesagainst The problem, says Marc Pierini of Car- rope has indeed dropped (see chart). Yet people suspected of insulting Mr Erdogan negie Europe, a Brussels think-tank, is that the agreement is looking more and more since he was elected president in 2014. His the issues of visa liberalisation, EU acces- murky. It risks undermining both the repu- sion and immigration should not have tation of the EU and its relationship with been mixed up in the first place. Turkey has Turkey, from whose shores hundreds of From flood to trickle been seeking visa-free travel for years. In- thousands of refugees set off last year on Daily migrant arrivals to Greek islands, ’000 cluding it in the refugee deal makes it a re- their journey to Europe. ward for doing Europe’s dirty work, rather 10 Since the agreementRecep Tayyip Erdo- EU-TURKEY DEAL than a way of granting Turkey more equal GOES INTO FORCE EU gan, Turkey’s president, has become even 8 footing with the . The deal also gives Mr more openly and arrogantly autocratic, as Erdogan a bargaining chip: if no visa-free if to show that he can flout European 6 travel is forthcoming, he could let refugees norms with impunity. On May 22nd he re- through to Europe once more. Even a few placed the prime minister, Ahmet Davuto- 4 thousand would cause chaos: Greece is glu, who was the engineer of the migrant 2 still overwhelmed by the 50,000 refugees deal, with a loyalist, Binali Yildirim. The stuckthere since March. ousting was as smooth as it was ruthless. 0 If visa liberalisation does go ahead, Eu- Save fora fewvague referencesto party un- Oct Nov Dec Jan Feb Mar Apr May rope could lose much of its leverage over 2015 2016 ity, no one in the ruling Justice and Turkey. “Europeans overstate the attraction Source: UNHCR Development party bothered to offera rea- of what they are offering,” says Hugh Pope 1 44 Europe The Economist May 28th 2016

2 of the International Crisis Group, an NGO. erence to Vladimir Putin’s “hybrid war” of The idea of accession is less of a draw than UKRAINE dirty tricks and disinformation when grab- it was in the mid-2000s, when Turkey was Dnipropetrovsk bing Crimea in the first place. pushing through reforms. Support for the Luhansk Russia has long practised similar meth- EU hasincreased: accordingto one poll 62% Donetsk ods in the North Caucasus. Abdurashid ofTurkswantto join the EU,upfrom42%in Rostov Dzhepparov, a Tatar activist whose son 2015. But nearly seven out of ten believe and nephew were abducted two years ago Turkey will never be allowed in. and never found, says the goal is either to Most damaging, European leaders Odessa intimidate or to provoke a revolt that Sea of Azov seem to be lowering standards in order to RUSSIA would serve as a pretext for mass repres- make the deal work. Few spoke out when CRIMEA sion. Prosecutors have charged several ob- the offices of Zaman, a formerly critical Bakhchisaray Simferopol servant Muslims with terrorism and ad- newspaper, were seized by the govern- herence to Hizb ut-Tahrir, a pan-Islamic Sebastopol Yalta ment in March. Other abuses, including political organisation that was banned in the shelling ofresidential neighbourhoods Black Sea Russia in 2004 but not in Ukraine. In an Or- 150 km Sochi during clashes with Kurdish insurgents, wellian twist, Tatars who opposed Russia’s have been raised only hesitantly. annexation have been charged with Ifvisa liberalisation is granted after Tur- exile his mother died, aged 32. He was put “threatening Russian territorial integrity”. key merely tweaks its laws, that would fur- into an orphanage. His father, who had The Russian government is also trying ther undermine the EU. Many in Brussels been with the Sovietarmyfightingthe Ger- to co-opt Tatar leaders. A few members of are unhappy that it has sacrificed its princi- mans, came to collect him. the Mejlis have switched sides, launching ples to such an extent, says Marietje Mr Selyamiev’s latest experience of a pro-government movement called Ky- Schaake, a Dutch MEP. It sends the mes- Russian state violence is much more re- rym. Other Tatars face a difficult moral sage that “if we need you badly enough, cent. On February12th a dozen armed men choice. Lenur Islyamov, once Crimea’s big- then everythingcan be talked about”. Yet it in balaclavas broke into his house, forced gest businessman and the owner of ATR, is not clear the EU can get a better deal. The his son to the floor and placed his two the Tatars’ TV channel, has moved to Uk- message this one sends may be accurate. 7 grandsons facing the wall, guns pointed at raine. He has organised a blockade of their backs. Other armed men, accompa- goods to Crimea and put together a mili- nied by a dog, searched the premises. His tary battalion which, he says, would be Crimea’s Tatars son was taken to the police station, where ready to defend Crimean Tatars. he was interrogated over alleged sabotage On the other side, Remzi Ilyasov, a for- 1944 all over again ofrailway tracks, then released. mer Mejlis member, now serves as a vice- Crimean Tatars who refuse to accept speaker of the Russian-installed Crimean Russianannexation see itas a continuation parliament. He says the Tatars should ac- ofStalinism. (As ifto prove them right, Rus- cept Russian rule, and Mr Islyamov endan- BAKHCHISARAY AND SIMFEROPOL sia’s Communist Party has peppered road- gers the lives ofordinary Tatars. ways with billboards featuring Stalin’s Mustafa Dzhemilev, formerly the head A Eurovision win provides symbolic portrait and the words “It is our victory!”) of the Mejlis and, before that, the leader of victoryoverRussian repression Governed by Sergei Aksyonov, a Russian a nonviolent Tatar resistance movement N May 14th Crimea’s indigenous Ta- puppet nicknamed “Goblin”, the peninsu- against Soviet rule, now lives in exile in Otars sat glued to their screens, watch- la has become dangerous for the Tatars. Kiev, barred from entering his homeland. ing as Jamala, a Ukrainian singer of Tatar Their houses and mosques have been He is resolute: “If an enemy comes to your descent, won the Eurovision song contest. searched and some oftheir men abducted, land, you have to resist.” Anyway, he ar- Jamala’s song “1944” commemorated Sta- tortured and killed. The Mejlis, their repre- gues improbably, it is only a matter of time lin’s brutal deportation of the entire Cri- sentative body, has been outlawed. Some before Crimea is returned to Ukraine. “The mean Tatar population. For Russia’s gov- 15,000 have fled, mostly to Ukraine. Nari- Soviet government was trying to break us ernment, the song was an infuriating man Dzhelalov, the deputy head of the but in the end broke up itself. And Russia is breach of the contest’s ban on politics. For Mejlis, callsita “hybrid deportation”—a ref- not even the Soviet Union.” 7 Tatars, it was a gesture ofdefiance. Most Ta- tars refuse to accept Russia’s annexation of the peninsula in 2014. Asa result, they have been singled out forpunishment. In Crimea every Tatarfamily has stories ofthe deportation. Eighty-one-year-old Re- fat Selyamiev still clearly remembers May 18th,1944, when Soviet soldiers came to his family’s house, led his mother and her three children out and brought them to a local cemetery. They expected to be murdered. Instead they, along with the rest of Crimea’s 200,000 Tatars, were taken to the train station, bundled into cattle cars and shipped to Uzbekistan. Stalin claimed the Tatars had collaborated with the Germans. The trip took 18 days. Mr Selyamiev remembers the thirst, the diet of salted her- ring, and the dead (8,000 in total during the journey) being chucked out of car- riages at train stops. Three months into the A Tatar’s courage never flags The Economist May 28th 2016 Europe 45

Greece gets its bail-out sion and tax reforms, and speed up priva- to Alexander Van der Bellen, Austria’s 72- tising state property. year-formerGreen Party leader. Just 31,000 Temporary relief In sum, the deal extends the long Greek votes averted the election of western Eu- and European tradition of down-road can- rope’s first far-right head of state since 1945. kicking. Yet for Greek businesspeople, any How had a man who talks of the “Muslim agreement is a welcome promise of finan- invasion” ofEurope come so close? ATHENS cial stability. Yields on Greek bonds are at The answer is part local, part European. theirlowest since November. Finance min- The FPÖ epitomises Austria’s failure fully The EU, the IMF and Greece agree to istry officials think the government can re- to come to terms with its complicity in the disburse now and argue later turn to capital markets early next year. The Third Reich. Founded by former SS officers, HERE was plenty of shouting in parlia- European Central Bank is set to accept the partyhasclose linkswith Austria’sBur- Tment as Greece’s government, led by Greek government bonds again as collater- schenschaften, secretive fraternities that the leftist Syriza party, pushed through a al for loans, allowing Greek banks to bor- embrace pan-Germanistideology. The FPÖ €1.8 billion ($2 billion) package of tax in- row at cheaper rates. That will free up bil- has traded its earlier anti-Semitism for Isla- creases on May 22nd. Protestors, among lions in desperately needed liquidity for mophobia; “Vienna must not become Is- them a former Syriza cabinet minister, borrowers. Kostis Michalos, chairman of tanbul” runs one slogan. Yet it enjoys some hoisted a banner outside the building de- the Athens chamber of commerce, respectability. It has formed regional gov- claring “They (the measures) shall not summed up the mood: “I have to admit, ernments with both the centre-right ÖVP pass”. But Alexis Tsipras, the prime minis- I’m beginning to feel optimistic.” 7 and the centre-left SPÖ, and in 2000 joined ter, rallied his lawmakers: there were no a national government as a junior partner. defections. Afterwards Panos Kammenos, Voters in Austria are fed up with the defence minister and leader of the right- Austria’s presidential squeaker two mainstream parties, which have spent wing Independent Greeks, Syriza’s co- decades parcelling out state jobs to their alition partner, blasted the rise in value- So long, farewell? supporters and have been in coalition to- added taxes on small Aegean islands— gether since 2007. The unemployment rate which he had just voted for—as “criminal”. has risen slightly, to 5.7%. When the mi- From next year Greeks will have to pay grant crisis broke, the SPÖ-ÖVP govern- more for the small pleasures that have VIENNA ment first endorsed Angela Merkel’s pro- made life bearable during the country’s refugee policies, then reversed course. The The farright lost in Austria, but it is a seven-year recession: cigarettes, coffee and FPÖ, with its dark warnings about foreign growing force in Europe even craft beer. VAT will rise to 24% on gro- criminals, has looked more sure of itself. ceries, mobile phone calls and most con- HERE are two possibilities,” predict- The two establishmentpartiestogether ob- sumer goods. “Just surviving has become a “Ted Norbert Hofer, who had just be- tained just 22% ofthe vote in the first round challenge,” sighed Stelios Paterakis, a re- come the standard-bearer of Europe’s hard of the presidential contest. Mr Van der Bel- tired army officer living on a pension of right. It was May 22nd, voting in Austria’s len won thanks more to strong anti-FPÖ €800 a month. presidential run-off had ceased and the turnout than to his own appeal. The tax increases completed a package Freedom Party of Austria (FPÖ) candidate The continental dimension is the refu- of reforms that Greece agreed to after six seemed to be ahead. “The first: I become gee crisis. Across Europe, parties of the months of negotiations with its creditors, president. The second: I become president, populist right have made strides (see chart) the European Union and the International and Heinz-Christian Strache becomes by whipping up angst about the newcom- Monetary Fund. Their passage could mark chancellor!” In the beer garden in Vienna’s ers. Some, like Poland’s Law and Justice a turning point. Last year Greece’s econ- Prater amusement park, his supporters party and Viktor Orbán in Hungary, are omy suffered tremendous damage while roared, drowning out shrieks from the ad- post-Soviet nationalists. Others, like Alter- the newly-elected Mr Tsipras battled the jacent roller coaster. Mr Strache, the FPÖ’s native for Germany, the Danish People’s EU and the IMF, demanding a debt write- leader, grinned. Party, the Party for Freedom (PVV) in the off and better loan terms. According to the Once absentee ballots were counted Netherlands and the UK Independence Lisbon Council, a think-tank, the six- the next day, a third scenario materialised. Party, are break-outs from the mainstream month confrontation cost Greece more Mr Hofer (who carries a Glock pistol, sup- right. Then there are openly racist outfits than €40 billion in lost output and rev- posedly to fend off refugees) narrowly lost like Hungary’s Jobbikand Greece’s Golden enues before Mr Tsipras capitulated, ac- Dawn. The FPÖ, like Marine Le Pen’s Na- cepting harsh conditionality in return for tional Front in France, is in a fourth catego- an €86 billion bail-out. Up on the right ry: hard-right parties reaching new voters But having accepted the bail-out, the Voting intention for far-right parties by smoothing over their extremism. governmentdragged itsfeetoverthe condi- Selected countries, % of respondents Mainstream European politicians—not tions. The May 22nd vote finally satisfied 50 unlike American ones currently discom- Greece’s creditors that they had been met. Poland bobulated by Donald Trump—lack a for- In the early hours of May 25th, after a gru- 40 mula for beating these upstarts. The popu- eling 11-hour meeting, Eurozone finance Austria list right is using the refugee crisis to woo Switzerland ministers hashed out a deal to disburse 30 older, poorer and more nostalgic voters €10.3 billion of funds to cover Greece’s France* with talk of national pride and the deca- Netherlands debt repayments forthe rest ofthe year. 20 dence of elites. In Austria, at least, the cen- Denmark Deep divisions remain between the EU Sweden trists have an example of what not to do. Italy and IMF, which insists that Greece’s credi- 10 The country suffers from an over-cosy es- tors must reduce its huge debt load to make Hungary Britain tablishment and a deficit of mainstream Germany SPÖ ÖVP it sustainable. Germany will not hear of it. 0 opposition voices. The and have The deal struck in Brussels delays the issue January 2013 May 2016 or latest pandered to the anti-refugee right rather until 2018, after the current bail-out ends Sources: Ipsos Mori; YouGov; TNS-Nipo; *% with positive than confront it. The result on May 23rd (and after Germany’s election next year). Gallup;demoskop.se; electograph.com; sentiment could easilyhave gone the otherway. Mod- Niepewne Sondaze; press reports towards Meanwhile Greece must plod on with pen- erates elsewhere should be scared. 7 46 Europe The Economist May 28th 2016

German nationality back awkwardly to old notions of blood identity, argues Anne-Kathrin Will at the Name, date of birth, migration Otto-von-Guericke University in Magde- burg. To have a “migrant background”, it is background enough for one parent to be born abroad. And the German system, unlike the Dutch, passes the status on to the children. Many BERLIN Germans with just one foreign-born grandparent are classified as having a mi- Ofall the ways European countries classifyethnicity,Germany’s may be the worst grant background. But parents or grand- N TERMS of diversity,the German squad were already multi-ethnic. Policymakers parents who migrated to Germany before Ithat will travel to France for the UEFA wanted to compile statistics for different the 1950s are excluded, in order to exempt football championship next month leads groups in the hope that this might help the millions of ethnic Germans who fled the national trend. About one in five Ger- them monitor discrimination. So they in- from eastern Europe just after the second mans has a so-called “migration back- cluded questions about ethnicity in their world war. Although they were migrants, ground”, but nearly half the national team censuses. But respondents self-identify by they and their progeny are not considered does. The names on the jerseys include choosing from a menu of options, includ- to have a “migration background”—in ef- Boateng (Ghanaian), Mustafi (Albanian ing “black British” and “mixed”. Ethnicity fect, they are deemed bio-Deutsche. via Macedonia), Bellarabi (Moroccan), and is subjective, not scientific. All approaches have their problems. Khedira (Tunisian). Even some of the Ger- The countries of eastern Europe reflect The French notion that the state should de- man names belie foreign origins. Antonio yet another tradition. They are young liberately ignore the ethnicity ofits citizens Rüdiger’s mother is from Sierra Leone. states that broke out of collapsing multi- is naive, says Mr Simon. Refusing to collect Bernd Leno has Russian roots. ethnicempires. Theiremphasisistherefore data on how many citizens have African or When Germans talk about ethnic ori- on counting centuries-old national minor- Arab backgrounds makes it much harder gins, they contrast the term “migration ities, rather than new migrants. Hungary, for policymakers to identify or fight dis- background” with its cheeky antonym, forexample, has a list ofofficial ethnicities, crimination. By contrast, the problem with bio-deutsch (“organic German”). This re- from Magyar and Slovenian to Serb or self-identification is that categories are flects attitudes toward nationality that are Roma. But these countries also use self- subjective and culturally fluid. This makes both controversial and in flux. By tradition, identification. One drawback is that some it hard to compare data over time. Germanness has always been an ethnic groups, especially Roma, may prefernot to Butmostscholarsthinkthatbureaucrat- identity, based on shared descent or “out” themselves forfear ofstigmatisation, ic decisions made through pseudo-objec- “blood”. But today Germany is becoming a and thus go undercounted, says Linda Su- tive proxy questions are the worst option. multi-ethnic society like other Western pik, an ethnologist in Essen. When parental birth is the only criterion, countries. This raises the question of how Germany, the Netherlands and the ethnic information is lost with each gener- the state should officially treat the catego- Scandinavian countries form a final bloc. ation. A fourth-generation German citizen ries of“bio” and “migrant”. In the past, these societies were relatively who is black may want to identify with his The pressing issue this year is how to homogenous. Today, they have a well-in- ethnic group—as many Latino Americans count them. Since 1957 Germany has con- tentioned reluctance to admit the exis- do, for example. By contrast, a German ducted an annual “micro-census” of 1% of tence of an ethnic mainstream, which child who has one foreign grandparent the population. Anew law in 2005 added a could imply that other groups are second- may not view ethnicity as relevant to her complex tangle of questions every fourth class citizens. Their censuses do not ask di- identity at all. The ultimate challenge, says year meant to determine whether a house- rectly about ethnicity, but use proxies— Mr Simon, is to rethink the meaning of hold has foreign origins. Bureaucrats de- such as the birthplace ofparents—and then “mainstream”. The aim is to make society cide whetherto assign the label “migration assign a seemingly objective category. more cohesive. Germany’s classification background” based on the questionnaire, In the German case this approach harks system seems to be dividing it. 7 which has become controversial. Because the law expires this year, moreover, a new version is now wending its way through the committees of the Bundestag. This has scholars and policymakers pondering how identity should be measured. The rest ofEurope takes wildly differing approaches. At one extreme is France, which has traditionally defined citizenship as a choice. It thus officially ignores descent and ethnicity in its census questions. This was always a bit hypocritical, says PatrickSimon ofthe National Institute for Demographic Studies in Paris; the French used racial categories in their empire and, when it ended in the1950s, began applying them to the ex-colonials who came to France. But they soon reverted to treating nationality as a binary matter of having or not having citizenship, regardless ofdescent. Britain in1991and Ireland in 2010 tooka different path. Like other English-speaking countries, theyaccepted thattheirsocieties All cheering for the same team

48 Europe The Economist May 28th 2016 Charlemagne Of creeps and crèches

French working women get universal child care—and universal harassment Italians, the French have traditionally treated male seduction as part of the political game. Infidelity by public figures is seen as normal, and disapproval asa puritan obsession ofuptight Ameri- cans or northern Europeans. No French president has been hounded from office for sexual dalliances, including the current one, who wasphotographed headingfora tryston a scooter. Both the wife and the mistress ofanother, François Mitterrand, attended his funeral, to general indifference. Moreover, even some women ridicule the notion that com- menting on their appearance is sexist. France, after all, values elegance and aesthetics in all corners of life, whether of cakes in a pâtisserie window, orneatly polished nails. Admiring a woman’s look is not always meant as a sexual advance. Nor is a feminine dress sense—the Christian Louboutin heels, the Dior silk skirt— automatically interpreted as a statement ofsexual availability. French law defines sexual harassment with apparent clarity. In practice, however, the rules are far from clear-cut. The cultural celebration of femininity in France, deplored back in 1949 by Si- mone de Beauvoir in “The Second Sex”, blurs the lines and com- plicatesjudgment. There isa self-censoringculture of silence over predatory behaviour. HERE is a scene in “Marseille”, a new television drama billed A younger generation, however, is not so indulgent. This Tas a French version of “House of Cards”, in which an ambi- month 17 female former ministers, from left and right, declared tious deputy mayor holds a campaign meeting in his office. A that the “taboo and law of silence” was no longer acceptable. photo is selected for election leaflets. New polls provoke cheers. Women need to overcome their fear that society will judge that As the male stafffile out, the deputy mayorshuts the door behind “they were asking for it”, says Caroline de Haas, a young French them, detaining the sole young woman on his team. “Agood poll feminist. Even if codes of seduction in France make it difficult to should be celebrated,” he mutters, pinningherto hisdesk and un- decrypt certain words or gestures, argues Clémentine Autain, a buttoning her shirt: “Isn’t this what you wanted?” feminist politician, one phrase is unambiguous: “No means no.” Sex and smoking feature to excess in “Marseille”. Perhaps the For a country that launched post-war feminist theory, France French writers are catering to what they think Americans expect sometimes seems to be fighting yesterday’s feminist battles, and from a drama about French politics. Yet there is something about not just in politics. Corporate France, too, has its share ofwoman- the casual indifference of this scene, of no great narrative conse- ising chancers, as well as clubbish male practices. Only one quence, that makes it unusually plausible. Five years after the CAC40 firm, Engie, is run by a woman. In America this might DSK affair—when Dominique Strauss-Kahn, the former IMF chief prompt a debate over whether the problem is female assertive- and Socialist politician, was arrested on rape charges (later ness (see Sheryl Sandberg) or corporate demands (see Anne-Ma- dropped)—France again faces claims ofpredatory sexism. rie Slaughter). In France the discussion is stuckon chauvinism. This month Denis Baupin resigned as deputy speaker of par- Yet, if drawing the line between harassment, prejudice and liament after claims of years of sexual aggression and harass- Gallic charm makes France a complicated place to be a profes- ment(which he denies). DayslaterMichel Sapin, the finance min- sional woman, it is also in other ways one ofthe most supportive ister, apologised forinappropriately touchinga female journalist. in Europe. France stands out for its policies on working parent- Such caddish behaviourwould hardlybe rare: parliament, nearly hood. On weekday mornings Paris’s sidewalks throng with tiny three-quarters male, sometimes echoes like a farmyard. One op- children, one hand clutching a comfort blanket, the other tucked position deputy clucked like a hen (une poule is used to mean into that of a besuited parent. They are off for a long day at école “chick”) when a female deputyspoke. Otherswhistled when a fe- maternelle, or nursery, which the French state provides free to all male minister tookthe floorin a dress. “We thought the DSK affair children. Over 99% of three- to five-year-olds attend nursery, the had changed the situation and that macho habits…were heading highest rate among OECD countries apart from Malta. for extinction. Alas,” wrote a group offemale journalists last year France’s pro-natalist policies, historically inspired by the need in Libération, a newspaper. to breed soldiers to keep Germany at bay, guarantee Scandina- vian levels of spending on family benefits and crèches. Train tra- What’s the French for“chauvinism”? vel is subsidised for bigfamilies. Generous paid holidays, and the Of course, every country suffers from sexism. And France has at cult ofthe month ofAugust, help mothers, too. least made an effort to combat discrimination. Although women As a result, far more mothers of small children work full-time did not get the vote until 1944, today parité, or equal rights, is a na- in France than in Germany or Britain, all professional categories tional creed. Half of government ministers are female. Electoral included. By actively supporting working motherhood, France rules require party lists to be made up equally of men and wom- makes it easier for women to stay on the career ladder after child- en. Next yeara quota will require women to make up at least 40% birth, even if statistics show they still do most of the housework. ofbig companies’ board members. In short, between good child care and infuriating male chauvin- What makes France different, though, is a tolerance of sexual ism, French working women have both the best and the worst of entitlement, mixed with complex codes about femininity. Like it. Which is not quite the same as having it all. 7 Britain The Economist May 28th 2016 49

Also in this section 50 Brexit brief: Embracing red tape 50 A decline in teenage pregnancy 51 Bagehot: The continental imperative

For daily analysis and debate on Britain, visit Economist.com/britain

Rural Britain poses extra costs on rural businesses. The countryside has lost out from gov- Countryside blues ernment policy in another way, too. Since 2010 the number of public-sector workers across Britain has fallen by about 15%, as the government has trimmed public spending. This is a troubling development, OKEHAMPTON AND JOHN O’GROATS since rural parts often rely heavily on the state for economic growth. For instance, Britain’s rural areas are struggling. Cyclical and structural factors explain why without the spark generated by a growth VISIT to Okehampton—a small town in plenty of empty shops. Since 2010 the rate of government jobs, private-sector em- AEngland’s most rural parliamentary of business creation in Central Devon has ployment in the Scottish Highlands would constituency of Central Devon—fulfils a been one of the lowest in the country. Its have fallen in the 2000s. very English yearning for long shadows on position on a ranking of“multiple depriva- The pace of public-sector job losses in cricket grounds and warm beer. It is near to tion”, a rounded measure of poverty in England since 2009 has been roughly 50% Dartmoor, a wild national park; cream teas English constituencies, has worsened by faster in rural areas than in highly urban are served in its 1950s-themed railway sta- eight places since 2010. This is not just parts. This may be the result of the govern- tion, from where tourists can catch a train chance: the average “highly” rural area in ment consolidating jobs in urban areas to along the moor to Exeter every Sunday. England deteriorated by 14 places over the make them more efficient. In partsof Leeds Youmight be forgiven for thinking that ru- same period. Highly urban areas, mean- and Coventry, two mid-rankingcities, pub- ral areas like Okehampton must be big while, improved by 11 places on average lic-sector employment has recently risen. winners from Britain’s rapid shiftto the on- (though urban areas still tend to be more line economy. Why live in a cramped city deprived than rural ones). In the decade to Down, on the farm when you can be just as productive work- 2013 (the latest available data) suicides in However, structural economic changes, ing from a pretty village? highly rural parts of England rose by 3%, beyond the remit of any politician, may be Since 1999 the proportion of British while falling by10% in urban areas. even more important than government households with an internet connection The poor performance of rural areas is policies. Agriculture may be one weak- has increased from 15% to 90%. Most adults in part because of government policy. ness. Total income from farming is estimat- now have a smartphone and in 2015, 13% of Firms in the countryside struggle to break ed to have fallen in 2014-15 by a whopping retail saleswere online, up from 3% in 2007. into the online economy; in Okehampton 29% in real terms. Yet over a longer time- Yet many places like Okehampton are not the internet can be painfully slow. The pre- frame farminghas performed decently. Av- booming. The economic output of “previous Labour government promised that erage farm incomes are roughly double dominantly rural” areas in England (a clas- everyone in the country would have what they were a decade ago. sification based on the number of people broadband by2012. Havingmissed thattar- Changesto Britain’smanufacturingsec- living outside settlements with more than get, the Conservative government estimat- tor have probably had a bigger impact on 10,000 people) accountsforaboutone-fifth ed that by the end of2015 less than 1% ofall rural areas. From the 1960s to the 1980s of the country’s total. But output is proba- premises would have access to speeds of manufacturing employment grew rapidly bly lowertoday than it was in 2006, official under2Mbps—good enough forbasicinter- in the countryside, according to a paper by figures suggest—in effect, a decade-long ru- net use, but not for streaming videos. The David Keeble of Cambridge University, as ral recession. The percentage of rural folk average download speed in urban areas is firms looking to expand left the cities in who are employed is lower now than it at least three times what it is in rural ones, search of cheaper land. Places like Powys, was in 2008-09. In recent years population according to a report from Ofcom, the tele- in central Wales, and the Highlands and Is- growth has been far slower in rural areas communications regulator. A recent study lands of Scotland benefited, even as over- than in urban ones. by the universities of Aberdeen and Ox- all manufacturing employment started its On Okehampton’s high street, there are ford argues that low-quality internet im- long decline. Rural areas ended up about a 1 50 Britain The Economist May 28th 2016

2 third more dependent on manufacturing firms still want to be clustered. EU. The costliest burdens are home-grown employment than highly urban places. In the past decade the economies of not EU-inspired, notably tight planning However, recently the pressure of for- Britain’s five biggest cities have grown 12 controls, the new living wage and the ap- eign competition has made production percentage points faster in real terms than prenticeship levy. By international stan- even in rural areas unviable. Manufactur- the rest of the country. Even if every rural dards, Britain remainslightlyregulated. Ac- ing employment in the Highlands and Is- area were hooked up to ultrafast broad- cording to the OECD think-tank, it has the lands has fallenby about 20% since 2004, a band, places like London, Manchester and least-regulated labour market and the sec- similar magnitude to the average rural Glasgow have other advantages which ond least-regulated product market in Eu- area. In 2013-14 a maker of electronic goods make them an irresistible draw. rope. It also comes high in the World near Okehampton, which had been there To convince rural folk that it was not Bank’s rankings for ease ofdoing business. for50 years and employed at least 250 peo- just concerned about cities, last summer Despite what Brexiteers promise, it is ple, closed. the governmentsetoutten measuresto im- not clear that a vote to leave would mean a Nationally, the service sector has more prove rural productivity, including vague bonfire of EU regulations. Were Britain to than compensated for the continued fallin promisesabout“encouraginglong-term in- seek close links to the single market from manufacturing jobs. But high-value ser- vestment” and giving such areas “greater outside, like Norway and Switzerland, it vice-sector industries are much better local control”. Access to superfast internet would have to observe mostEU ruleswith- suited to urban areas. Such are the benefits will soon be a legal right. All this will help, out having a say in them (Norway applies of close personal relationships, in indus- yet the economics continue to tilt in favour 93 of the 100 most expensive EU regula- tries like banking, or the rapid sharing of of cities. Small towns and villages may be tions). Even if it left the single market and ideas, in industries like advertising, that no the spiritual heart of the nation, but eco- traded from outside, exporters to the EU matter how good technology is, dynamic nomically they will continue to struggle. 7 would have to comply with most EU regulations—and that includes small firms that supply big exporters. If EU-US talks on a Brexit brief transatlantic free-trade deal succeed, most of the world is likely to have to adopt their Yes, we have no straight joint standards. In short, even if Britain left the EU, it bananas would not find it easy to scrap many of its regulations. Open Europe puts the maximum feasible saving at around £12.8 billion. And Raoul Ruparel, its director, con- cedes it would be politically challenging to Brexiteers carp at European Union red tape, but how much ofit would they tear up? realise that much. Most of the gains would VERYBODYcomplains aboutEU regula- More will be needed to extend the single come from ending EU climate-change, fi- Etion. Myths abound over curvature of market to areas like digital, energy and ser- nancial-services and employment rules. cucumbers, how many bananas are al- vices. Brexiteershave often made fun ofex- Yet Britain has longsupported the first two; lowed in a bunch or whether children may tensive rules on road haulage, only to real- and itseemsfanciful to expectworkers and blow up balloons. More legitimate gripes ise that road hauliers find them helpful. unions to accept a dilution ofemployment include rules limiting working time to 48 It is also misleading to claim EU rules rights that business is not even calling for. hours a week, enforcing parental leave or are always imposed on an unwilling gov- One more point is lost in this debate: regulating vacuum-cleaner power. Brexit- ernment. Analysis by the London School that the EU is proposing far fewer rules eers say much red tape is imposed against of Economics finds Britain siding with the now. The European Commission’s better British wishes and hobbles small firms majority in 87% of EU votes. On climate regulation agenda limits new regulations that do not trade with the EU. They pro- change and financial regulation, Britain and even withdraws existing ones. Most mise liberation after a vote to leave. has led the push for tougher action. When EU members want less red tape. It is ironic Membership of the EU, especially its businesses complain about red tape, they that Britain should consider Brexit just single market, brings with it many rules. even find that the government has added when the EU has come round to a more Some are ill-judged, uncosted and not sub- extra rules to “gold-plate” those from the competitive, less intrusive approach. 7 ject to cost-benefit analysis. The working- time directive was a needless intrusion into an issue better decided at national lev- Not in the family way el. And regulation imposes costs. Open Eu- Births per 1,000 women, 15- to 19-year-olds rope, a London-based think-tank, using of- N THE1990s,Britain had the highest ficial figures, says the annual cost to the Iteenage-pregnancy rate in the rich 50 economy of the EU’s 100 most expensive world, except America. It is still higher United States rules is £33 billion ($49 billion) a year. than much of western Europe, but be- 40 Yet regulation also brings benefits, put tween 2000 and 2014, the rate halved. in this case by the government at £59 bil- This partly reflects youngsters staying in lion (surelyan exaggeration). Itpredates EU education longer, and better access to Britain 30 membership: the first rules on cucumbers contraception. But according to a paper came in the 1960s, before Britain joined. published by the Lancet, a journal, policy 20 Moreover, the EU single market works only mattered, too. In 2000 the government thanksto common rules. Thatiswhyin the launched a new strategy of better sex Germany France 1980s Margaret Thatcher accepted more education and a media campaign. More 10 voting by majority (not unanimity) on sin- money was spent in poor areas, which Spain gle-market laws. Carolyn Fairbairn, direc- then saw the largest decline. Policymak- tor-general of the Confederation of British ers may soon know the true importance of 0 2000 02 04 06 08 10 12 14 Industry, says such rules should really be the strategy; its funding was cut in 2010. seen as standardisation, not regulation. Source: World Bank The Economist May 28th 2016 Britain 51 Bagehot The continental imperative

To wash its hands ofEurope would be a betrayal ofBritain’s past, and future ing over food. “ANOTHER far-right party emerges in Europe” bel- lowed the Daily Express, one ofthe Leave camp’s favourite media outlets, on May 25th above an article on Denmark’s ultra-conservative New Civil Party. A simple message runs through all this: Europe is sliding into stagnation, turmoil and extremism. Britain must inoculate itself by getting out of the EU (or as Mr Hannan calls it: “the elderly, creaking, sclerotic economies on the western tip of the Eurasian landmass”) while it can. Europe has plenty of problems but such exaggerations will become yet more lurid as the campaign enters its final weeks; expect more blood-curdling warnings of the chaos should Turkey join the EU. The insinuation that Britain should abandon its neighbours in their hour of need—anti-democratic forces on the march, decline and disintegration threatening—is a betrayal of the blood, sweat and treasure that the country has dedicated to the pursuit of peace and prosperity on the continent. Europe today has been shaped much more by its island neighbour than it might admit; byBritonswho sheltered from bombsratherthan suingfor peace, who landed on the beaches of Normandy, prosecuted Nazi war criminals, built new states from the rubble (the architecture of REXITEERSrarelyhesitate to professtheirlove ofEurope. Dan- modern Germany was designed by British civil servants), helped B iel Hannan, a campaigningMEP, stresses that he speaks Span- defeat communism and—though not involved from the start— ish and French. Sarah Vine, a journalist married to Michael Gove, helped to shape the institutions and scope oftoday’s EU. the anti-EU justice secretary, points to herhusband’s penchant for Europe bears the stamp of British endeavour and influence, a glass ofBordeaux. “I love Europe!” Boris Johnson protested, un- and is all the better for it. That is not a case for glorious, self-satis- bidden, in a recent conversation with Bagehot. To prove his point, fied isolation, but for Britain staying in and rolling up its sleeves. the formermayor ofLondon inflicted a rendition of“Ode to Joy”, Such was the argument of a letter to the Guardian on May 25th in in the original German, on a startled crowd of supporters. Such which over 300 academic historians pointed to Britain’s past and declarations are often accompanied by what might be called the future “irreplaceable role” in Europe. “The lesson ofhistoryisthat pro-European case for Brexit. Britain voting to leave the EU on British isolationism has often been associated with continental June 23rd would produce a “domino effect” and “the democratic disintegration,” observed one of them, Niall Ferguson, at a liberation of a whole continent”, gushed Mr Gove in a speech in speech in Downing Street ahead ofits publication. April. It would be a helpful “wake-up call” concurs Liam Fox, a formerdefence secretary. Fog in the channel Such overtureshave a semi-official slogan: “Love Europe, Hate Britain’s past achievements were more than philanthropic; they the EU”. It is even available on sweatshirts. Which is all very jolly. were also self-interested. For just as plant seeds and spores blow It also bears no relation to the reality of Brexit and the campaign across the English Channel (the same varieties of flowers and beingfoughtin itspursuit. Take MrGove’sdream ofa sunnyEuro- fungi bloom in Kent as do in Flanders), so, too, do the continent’s pean spring. This rests on the Utopian premise that the dark triumphs and traumas. Europe’s economic sluggishness is Brit- forces of European history—nationalism, fragmentation, dema- ain’s problem, too: it still sells more services to Luxembourg than goguery—would simply dissipate in the pandemonium of the to India, for example. No country can truly insulate itself from EU’s sudden collapse. Hardly any mainstream figure on main- pollution, criminal networks or mass migrations. And in any land Europe agrees that Brexit, let alone the EU’s dissolution, case, some 2.2m Britons live in the same European countries would lead to more democracy and dynamism (it would do the wracked by the apocalyptic crises so prominent in the pro-Brexit opposite, argues Radek Sikorski, the Anglophile former foreign campaign’sarguments. Citingunemployment, terrorism orinsta- ministerofPoland). It is also why hard-right populists like Marine bility on the continent as a reason for Britain to withdraw from Le Pen in France and Lutz Bachmann, the founder of Germany’s the EU is like spotting your neighbour’s house on fire and resolv- anti-Islam Pegida movement, have both endorsed a Leave vote. ing to put a better lockon your door. Moreover, for people who claim to love Europe, Brexiteers Which is a round-about way of saying that Britain, though an seem rather energised by its woes. The continent’s economic de- island with an island’s outlook, is also a European country. Its cline, relative to the likes of China, is frequently and gleefully in- connections with the continent grew up overmillennia of shared voked (Britain is “shackled to a corpse” runs the over-used meta- history; ofthe ebb and flowofpeople, ideasand goods. The result phor); in an article forthe Daily Mail on May 22nd Steve Hilton, a in 2016 is a large moral, economic and political stake in the suc- former adviser to David Cameron, described the union’s mem- cess of the mainland, the dominant institution of whose com- ber states as “ungovernable”. Meanwhile Vote Leave, the official mon civic life is currently—like it or not—the EU. To be “pro-Euro- Out campaign, warns of “terrorists and gangsters” roaming the pean”, really, is not to have a passion for Beethoven, or to be able continent. Leave.eu, another Out campaign group, has shared a to conjugate a passé simple. It is to possess a concern, both selfish video purporting to show migrant youths in Greece, France and and munificent, for an old continent that encompasses Britain Hungary attacking police cars, scrambling over fences and fight- now as in the past. “Love Europe? Make the EU better.” 7 (JWFBHSBEVBUFTVCTDSJQUJPO

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Opioids mune. A definitive diagnosis will have to wait until the results of his autopsy, but The problem of pain some suspect that Prince, a musician who died unexpectedly last month, was a victim ofprescription painkillers. Opioids kill by slowing the respiratory KANO AND THIRUVANANTHAPURAM system. A person who has taken too many—or who combines a standard dose Americans are increasingly addicted to opioids. Meanwhile people in poor with depressants such as alcohol, anti- countries die in agony without them anxiety pills or sleeping aids—may lose EVIN LYALL had experimented with cine dedicated to curbing the pain of those consciousness and stop breathing. Accord- Ddrugs recreationally as a teenager be- with illnesses such as cancer or AIDS. ing to the National Safety Council, an fore a doctor in her hometown of North But in the 1980s a series of papers by American non-profit, the difference be- Wilkesboro, North Carolina prescribed American researchers claimed that tween an effective and a lethal dose is her opioid painkillers after an ankle sur- opioids could be used safely for longer pe- “small and unpredictable”. Data are gery. But it was only when she began tak- riods. The evidence was slight, but, com- patchy, but state statistics suggest that ing Vicodin—one of the most popular pre- bined with a formidable marketing effort many victims of opioid poisoning have le- scription opioids—that she became an by drug firms, it led to American doctors gitimate prescriptions for chronic pain. addict. She relished the sense ofinvincibil- prescribing opioids with abandon for Newer evidence suggests that other ity it gave herand began swappingher pills chronic, non-terminal pain. According to drugs might be better for chronic pain. An- for stronger opioids on the black market. America’s Centres for Disease Control drew Kolodny of Physicians for Responsi- When that became a hassle, she found a (CDC), between 1994 and 2006 the share of ble Opioid Prescribing, an advocacy and doctor who would prescribe her harder American adults who had used prescrip- research group, says that a combination of stuff, such as Roxicodone. It was not diffi- tion opioids in a given month jumped non-opioids, such as paracetamol and ibu- cult, she recalls from her office at the North from 3.4% to nearly 7%. In 2012 doctors profen, can relieve acute pain at least as Wilkesboro addiction-treatment centre wrote 282m prescriptions for opioids— well—and certainly more safely. she opened in February, afterthree years of enough for a bottle each for every adult. A handful of other rich countries are sobriety. “It was easy to figure out which Americans guzzle six times more prescrip- struggling with opioid misuse, too. Cana- doctors were prescribing what,” she says. tion opioids per person than 20 years ago. dians are increasingly getting hooked on Opioid painkillers stimulate receptors and killed by the drugs, says Benedikt Fi- in the brain and elsewhere to produce a Everybody hurts scher, who studies prescription-drug mis- powerful pain-numbing effect. They also These doctors doubtless wanted to help use at the University of Toronto’s Centre lessen anxiety and depression—two com- patients in pain to lead happier, more ac- for Addiction and Mental Health. Britain, mon side-effects of intense pain. The sen- tive lives. However, America’s fee-for-ser- by contrast, has largely avoided creating sation they induce is often described as eu- vice health model also gave them a finan- opioid addicts. According to Cathy Stan- phoria. Some, such as morphine, are made cial incentive to provide patients with nard, a pain specialist at Southmead Hos- from the opium poppy; others, such as what they asked for—especially if it led to pital in Bristol, its publicly funded national oxycodone, are semi-synthetic or synthet- repeatprescriptions. Whateverthe motiva- health-care system means doctors have no ic. Theyare highlyaddictive: even brief use tion, haphazard clinical practice and spot- incentive to over-prescribe. And prescrip- can be followed by withdrawal symp- ty oversight led to addiction and death. In tion records are held centrally, so a patient toms. As a result, for most of the 20th cen- 1999-2014 more than 165,000 Americans bouncing from doctor to doctor in search tury they were usually reserved for acute died from prescription-opioid overdoses. ofpain pills would quickly be spotted. pain, after a serious accident or surgery, The typical victim waspoor, white and sin- America is at last starting to wake up to say, and palliative care, a branch of medi- gle—though wealthy people are not im- its opioid scourge. The CDC recently re-1 54 International The Economist May 28th 2016

2 leased guidelines that urged increased cau- tion when prescribing opioids to non-can- Uncomfortably numb cer patients, and according to IMS Health, a US, prescription opioid pain-relief Cancer incidence and consumption of opioid pain-relief consultancy, prescriptions have declined Number of Overdose 2011-13 by 12% nationally since the peak in 2012. In prescriptions, m deaths, ’000 45 Africa United States February the president, Barack Obama, 300 20 Americas 40 said he would seek $1.1 billion in new fund- 240 16 Asia 35 ing for opioid-addiction treatments. Con- 180 12 Europe (south & east) gress responded by passing18 opioid-relat- 120 8 30 Europe Germany ed bills in May. In many states doctors must 60 4 (west & central) 25 now check databases to ensure that pa- 0 0 Oceania Canada tients have not already been prescribed 2000 02 04 06 08 10 12 15 20 opioids elsewhere (though they can still 15 get hold of pills in more than one state 10 without triggering an alarm). The Drug En- 5 DEA forcement Agency ( ) has cracked South Korea population per day dose per 1,000 daily Standard down on “pill mills” that reaped hand- 0 0 50 100 150 200 250 300 350 some profits from prescribing opioids to Diagnosed cancer cases per 100,000 population*,2012 anyone who showed up to claim them. Sources: IMS Health; US Centres for Disease Control and Prevention; GLOBOCAN; International Narcotics Control Board *Age-adjusted Tighter prescribing is essential. But it has caused unintended harm. HeatherRat- cliff of Petaluma, California, suffers from have committed suicide in a single year be- time she receiveschemotherapy. When the Ehlers-Danlos Syndrome, a degenerative cause of unbearable pain, estimates the money runs out, the pair leave. “At home disease; her tendons and ligaments do not Lancet, a British medical journal. there is no help for her pain,” the mother properly secure her bones. A hearty laugh Globally, such situations are far more says. “The pain will be eating her, and all I or unexpected sneeze is enough to dislo- common than the overuse seen in Ameri- can do to cool her down is pet her.” cate her ribs. She tried acupuncture, osteo- ca. In poor and middle-income countries, Most palliative-care professionals, in pathic manipulative treatment and several people suffering from cancer and other ter- Nigeria and elsewhere in the developing other pain-relief methods before finally minal illnesses often die excruciating world, are found in cities. That makes it turning to opioids. “I hate them,” she says. deaths with minimal relief. The Interna- hard for rural patients to get treatment for “I hate how they make me feel—foggy- tional Narcotics Control Board (INCB), an their suffering. Gayatri Palat, a professor of headed and slow. I hate how people as- independentmonitorthatoverseesthe im- pain and palliative medicine at the MNJ In- sume people who consistently use opioids plementation of UN drug conventions, es- stitute of Oncology and Regional Cancer are addicts. But I need them.” timates that 92% ofall morphine, an opioid Centre in Hyderabad, India, recalls a for- Of late, Ms Ratcliff has found her medi- commonly used to control the pain caused mer patient, a child with cancer. He had cation harder to get. Her hydrocodone was by cancer, is consumed in America, Cana- visited several clinics nearer his home in cut offby a doctorwhen she tested positive da, New Zealand, Australia, and parts of search of pain relief before stumbling into for cannabis—even though she had previ- western Europe—which between them her hospital, ragged and short of breath. It ously disclosed her use of the drug, and hold only 17% of the world’s population. had taken him more than 12 hours to get had a medical licence for it. She says that “It’s an absurd situation,” says Dr Fischer, there, and he died soon afterwards. In Ten- these days doctors and pharmacists are the Canadian professor. “We’re spraying kasi, a rural town in India’s humid south, jumpier about DEA scrutiny, which in ex- [opioids] from a fire-hose while the major- Samuel Samudra, a gaunt 60-year-old, was treme cases can lead to licences being re- ity ofthe world doesn’t have them.” discharged from surgery for throat cancer. voked. On one occasion a pharmacist re- By the time he arrived at Pallium India, a fused to fill a prescription. House of pain small palliative-care hospital in Thiruva- The squeeze has also caused a startling Access to pain relief in Nigeria has im- nanthapuram, the state capital of Kerala, heroin problem. People cut off from pre- proved a bit since the country started im- the operative wound on his throat was in- scription opioids sometimes turn to her- porting morphine in 2012. But pharmacists fested with maggots. For pain relief, he had oin, which offers a similar high and is from hospitals outside Lagos, the commer- only over-the-counter pills. cheap and easy to score on the street. Ac- cial capital, must travel there to buy mor- When illness strikes, patients in poor cording to the American government’s Na- phine. Smaller hospitals struggle to pay for countries expect to suffer. Even when the tional Survey on Drug Use and Health, the trip. Aminu Kano, a hospital in the tumouron his hip grew to the size of a foot- four out of five heroin users had pro- country’s north, is one of those that man- ball, Mato Samaile, a frail 50-year-old Nige- gressed from opioid pain-relievers. In 2014 ages to procure opiates. Even so, a visit rian cattle farmer, was reluctant to go to nearly as many Americans died from her- turns up distressing scenes. A burns victim hospital. “When I found the lump I said to oin and prescription opioids as from traffic lies deathly still under crisp white sheets, my son: ‘We can’t leave the farm. We accidents. Pregnant users are giving birth the skin on his face peeled back. More than should stay until after the rain falls,’” he to addicted babies. They suffer the same halfhis body was set alight when a gas hob says from his bed in Aminu Kano. “People symptoms as an adult undergoing with- exploded in his house, but he is given no are brought up to tolerate pain,” says drawal: tremors, vomiting and fever. morphine. His brother says that at night he Amina Ibrahim, a surgeon at the hospital. If in America the problem is over-pre- wakes up screaming from the pain. “If you don’t you are a coward. That is just scription, in Russia it is the opposite: Down a leafywalkway, a motherstraps our culture. So even doctors are not liberal opioids are too hard to come by. In 2014 a her three-year-old daughter to her back. on painkillers.” retired admiral in Moscow with pancreatic One side of the child’s face presses up Though Colombia produces its own cancer shot himself when his wife tried against her; on the other, a growth the size opioid painkillers, some regional govern- but failed to procure opioids for him. He of an orange protrudes from the socket ments either cannot afford to buy them left a note saying that the blame lay entire- where her eye should be. She has a rare from the federal government, or regard ly with the health ministry and the govern- kind of cancer called retinoblastoma. Her them as a low priority. ment. He was one of about 40 Russians to family must pay120,000 naira ($600) each And patients often associate morphine 1 The Economist May 28th 2016 International 55

2 with imminent death, says Marta Ximena and humane treatment for terminal pain, firmed through a biopsy, a procedure only León of the palliative care and pain group and also appropriate in many cases of a few Armenian hospitals perform. The at the University of La Sabana in Colom- acute pain. oncologist must then try a series ofweaker bia. She recalls meeting cancer patients The rest of the world would probably pain medicines before asking a panel for who begged not to be given the drugs. have seen the same progression in recent permission to use morphine. Five special- “They felt that ifthey were prescribed mor- years—had it not been for the “war on ists assess the situation and either confirm phine, that meant there was nothing else drugs” that America launched with such ordenythe prescription, which then needs that could be done forthem,” she says. fanfare half a century ago. The INCB has a to be authorised with four stamps and Doctors in many places are also wary. dual mandate: to increase access to con- three signatures. A patient lucky enough to In India, Dr Palat explains, their training in- trolled substances for medical purposes receive an authorised prescription must cludes very little about pain management. and to stop their illicit use. Many govern- travel to one of the few clinics or pharma- Areportin 2009 byHuman RightsWatch, a ments, however, pay little attention to the cies where morphine is stored and will re- pressure group, found that of some 300 In- first of those aims and focus instead on the ceive only enough fora few days. dian medical colleges, only five taught pal- second. With no impetus for wider pre- Such rules are far more restrictive than liative care. The consequence is that few scribing from doctors, patients or govern- anything in the UN’s drug conventions, doctors know how to prescribe opioids ments, inertia and bureaucracy rule. says Diederik Lohman, who works on pal- safely. Even for patients with advanced To try to stop leakage onto the black liative care for Human Rights Watch. cancer, they avoid morphine, says Dr Palat: market, the INCB requires countries wish- “Countries have been told ‘you have to “They’re afraid it will cause addiction in ing to import opioid painkillers to provide crack down on drugs: the harsher the bet- healthier patients or respiratory depres- estimates of the quantity they expect to ter,’” he explains. “For many years, drug sion in those with terminal illnesses.” Sim- use in the coming year. If the board deems strategies published by the international ilar worries in India’s north-eastern neigh- the request reasonable, it is approved. But community and the United States did not bour, Nepal, meant that 50% of the many countries decide how much to ask mention the medical importance of cer- country’s supply ofsustained-release mor- for by looking at past consumption, there- tain controlled substances.” A1998 UN dec- phine tablets went unused in 2011. M.R. Ra- by underestimating current need. Senegal, laration begins: “Drugs destroy lives and jagopal, the head of Pallium India, says for example, has asked for a similar mor- communities, undermine sustainable hu- that news of the opioid crisis in America phine quota each year since the 1960s. In man development, and generate crime.” has only heightened such fears. 2013 it applied foronly1kilo ofmorphine— Nowhere does it refer to medical uses. For about enough to soothe the pain of200 pa- most patients in the developing world, un- Show me where it hurts tients with advanced cancer. treated pain is the status quo and therefore Pain management is simply not a priority The Russian admiral who committed they do not agitate against severe controls for governments in much of the develop- suicide appears to have been denied as their peers in the rich world might. ing world, says Meg O’Brien, the managing opioid painkillers because his stacks of pa- A handful ofcountries, including India, director of global cancer treatment at the perwork were missing one essential signa- Ukraine and Colombia, have recently American Cancer Society. Many focus on ture. Shortly after his death, his daughter amended their laws to make it easier for life-threatening epidemics rather than wrote on her Facebook page: “To get a five patients who need them to be given treatingpain, she says. “No one getsin trou- days’ supply of [morphine], one has to opioids, though doctors say that imple- ble if, at the end of the year, pain relief has spend manyhoursdashingbetween many mentation is slow. Some others have start- not been procured.” doctors’ office in the clinic, [even] spend a ed producing their own morphine, or im- The lack of opioids across the develop- few days. By the day’s end, one signature porting morphine powder which is less ing world is particularly striking, because was still required and the clinic closed. My controlled and can be whizzed into orally the drugs are cheap to make, and the raw father was outraged. It was the last straw.” administered syrup. Such changes mean ingredients plentiful. Estimates suggest In a recent report Human Rights Watch that, since 2003, opioid consumption has that the global harvest of opium poppies, detailed the Byzantine process cancer pa- increased in most regions. But much more from which natural and semi-synthetic tients must follow to procure morphine in must be done. The first step is to ensure that opioid medications such as morphine and Armenia. First patients are diagnosed by doctors—and patients—know that it is not codeine are prepared, together with the an oncologist and their diagnosis is con- necessary to die in pain. 7 chemicals for synthetic ones, should be enough to satisfy all the demand in the world. Few opioids are patented; a monthly dose ofmorphine should cost just $2-5. But paltry prices can work against developing countries, says James Cleary, a palliative-care specialist at the University of Wisconsin: they mean drug firms have little incentive to bring them to new markets. Tariffs, import licences and high costs for small-scale local production mean that morphine can cost twice as much in poor places as rich ones. Some countries, such as Jamaica, subsidise opioid painkillers. Many others do not. Untreated suffering used to be the norm in the developed world, too. Even after the advent of modern painkillers, it took changing attitudes on the part of patients, doctors and governments before they became widely used. Opioids are now understood to be the most effective “First Republic feels more like a friend than a business.”

BRIGETTE LAU CHAMATH PALIHAPITIYA Board Partner Founder and Managing Partner Social Capital Social Capital

(855) 886-4824 or visit www.irstrepublic.com New York Stock Exchange Symbol: FRC Member FDIC and Equal Housing Lender Business The Economist May 28th 2016 57

Also in this section 58 Alibaba under scrutiny 59 Oil-price reporting 60 The Viacom saga 60 Alcohol in China 61 The future of carmakers 62 Schumpeter: Life in the fast lane

For daily coverage of business, visit Economist.com/business-ﬁnance

Regulating technology companies forms exhibit what is known as “network effects”: the bigger the number of one kind Taming the beasts of customer, the more attractive these services are forthe other sort, and vice versa. Facebook, the world’s biggest social network, symbolises the rise ofglobal platforms. It now boasts over1.65 billion active BRUSSELS AND PARIS users a month worldwide—more than the population of China. On average, they European governments are not alone in wondering how to deal with digital giants spend about 50 minutes per day on the site ALK to Axelle Lemaire, a French secre- and the other two big services Facebook Ttary of state in charge of all things digi- Platform four owns, Instagram and WhatsApp. Formany tal, and one topic quickly comes up: online Market capitalisation of platform companies, 2015 of its users, the social network is not only platforms of the kind operated by tech $trn useful forconnectingwith friendsand rela- giants such as Facebook, Google and Uber. 0123 tives but also an important news source. “France is very open to them,” she insists, Platformshave also started to emerge in North 64 “but consumers have to be protected.” America other sectors. Industrial machines and Ms Lemaire’s words will soon be put theirproductsare packed with sensors and into action. The French parliamentis about Asia 82 connected to the internet, digitising the to pass a law, sponsored by her, which will real world and creating opportunities for create the principle of loyauté des plate- matchmakers to connect manufacturers Europe 27 formes, best translated as platform fair- with suppliers. (This is where the EU sees a ness. Once it takes effect, operators of on- Number of platform chance to close the gap with America.) Africa and 3 line marketplaces will, among other L. America companies If Europe, predictably, is reacting to the things, be required to signal when an offer rise of platforms through the rule book, Source: Global Platform Survey, CGE is given prominence because the operator America’s response also fits a stereotype. has struck a deal with the firm in question, Regulators have largelygiven the country’s as opposed to it being the best available. reached a total of $1.6 trillion in the past platforms free rein—which may not be un- In Brussels, too, the regulation of plat- four years; more than 80% ended up in connected to the fact that they are now fer- forms is on the agenda. On May 25th the America. The commission has been going vent lobbyists. In 2013, for instance, the European Commission announced plans after American tech firms for a while, say Federal Trade Commission (FTC), which for how it intends to deal with such ser- critics—it will soon decide how to punish had been scrutinising Google, decided to vices. Its proposals cover everything from Google for abusing its dominance in inter- take no action. But private actors are flex- what tech firms should do to rid their digi- net search, for example. This week’s plan ing their muscles. tal properties of objectionable content, fits a pattern. such as hate speech, to whether users can But it is not only Europe that is suffering The platlash move data they have accumulated on one from growing platform anxiety. Although Platform operators have faced a barrage of platform to another. worries vary, politicians and regulators class-action suits from private litigants. Here we go again, many will say. As around the world are waking up to the Last month Uber, a taxi-hailingservice, set- usual, Europe is putting regulation above power of these online matchmakers, tled one brought by drivers, promising no innovation, and being protectionist to whose role is to bring together different longer to kick them off its app without boot, since most platforms are either groups—advertisers and consumers in the warning or recourse. After pressure from American or Asian (see chart). European case of Facebook and Google, merchants consumer groups, Google announced on firms earned only about 5% ofthe profits of and buyers in the case of Amazon, drivers May 11th that it would ban adverts for pay- the 50 biggest listed platforms, which and passengers in the case of Uber. Plat- day lenders, which are widely viewed as 1 58 Business The Economist May 28th 2016

2 exploiting their customers. Alibaba The debate about the power of platforms has grown more heated thanks to reports this month that Facebookemployees Under scrutiny have kept news topics on issues close to SHANGHAI conservatives’ hearts away from promi- American regulators are investigating China’s e-commerce giant nent display. Many, on both right and left, have called forFacebook, which denies the E HAVEfrom time to time been baba has a 47% stake. The agency also allegations, to be reined in. When a group “Wsubject to PRC and foreign gov- wants data on “Singles’ Day”, an annual ofconservatives recently met MarkZucker- ernment inquiries and investigations.” marketing promotion that last year ap- berg, the firm’s boss, some demanded that So declared form 20-F, a regulatory filing parently generated $14.3 billion in gross it should have a more politically diverse submitted by Alibaba, China’s biggest merchandise value (GMV) on one day. As workforce and take into consideration the e-commerce firm, to America’s Securities GMV is not a recognised term in GAAP, impact on businesses when it changes the and Exchange Commission (SEC)onMay the accounting standard used in America, algorithm that decides if their Facebook 24th. It is tempting to dismiss this as the SEC may be digging into this claim. page is shown in people’s newsfeeds. boilerplate language. All foreign firms Most intriguingly, the American regu- Nowthe regulatorywindsmaybe shift- listed in America (Alibaba trades on the lator is also scrutinising how the coming. The FTC seems to be having second New YorkStockExchange) are required to pany has handled its many related-party thoughts: it is not only looking again into file this document regularly.In fact, it is transactions. JackMa, the firm’s founder, Google’s search business, but is investigat- not inconsequential. The filing revealed caused outrage when he unilaterally ing whether the firm abuses its dominance that Alibaba is the target ofan ongoing spun offAliPay, Alibaba’s lucrative on- in mobile operating systems. Whoever is SEC investigation into its accounting line-payments arm, in 2011into an entity elected president in November is unlikely practices. The company’s shares fell that he controlled. That business, now to ignore the question ofplatforms. “IfI be- sharply afterthe news became public. known as Ant Financial Services Group, come president, oh do they have pro- The SEC appears to have three areas of is valued at $60 billion and is heading for blems,” Donald Trump has said of Ama- concern. It wants to know more about a public flotation. zon, accusing it ofevading taxes. the Cainiao Network, a logistics joint Where will this SEC action lead? It The mood is changingin Asia too, albeit venture worth $7.7 billion in which Ali- could be a routine inspection ofthe sort more slowly. In recent years the size of most public companies can expect from Naver, a web portal in South Korea, has time to time. Alibaba certainly denies prompted debate about whether it should any wrongdoing, noting that it is co- be regulated. After an investigation by the operating with the authorities and volun- country’s watchdogs, the firm has agreed, tarily disclosing the fact that it is under among other things, to help smaller online investigation. But ifthe regulators do firms sell their wares. uncover evidence ofreal misconduct, The Chinese government is making life things could get nasty for China’s most harder for platforms—and not just big celebrated firm. Western ones, many of which are banned The only certainty, argues Vasu Muth- in the country or kept out by its Great Fire- yala ofKobre & Kim, a law firm, is that wall. Alibaba, Baidu, Tencent and other big Chinese firms face greater scrutiny. Mr Chinese internet firms already know what Muthyala, a formerprosecutor who is expected ofthem when it comes to keep- previously served at the SEC, says: “As ing their services free of politically sensi- Chinese business looks west for new tive content. But other concerns are also in- capital, customers and business partners, creasingly to the fore: earlier this year there will inevitably be an increase in Baidu got into hot water after the death ofa Ma ponders interest from American regulators.” student who said he had received misleading information on a cancer treatment from the company’s search engine. The that 20% ofcontent is European. Germany, in particular, had demanded government may seek even greater control In most other respects, however, the such “horizontal legislation” to strengthen over online-video platforms by insisting plans are a farcry from the fiery rhetoric in the rights of smaller businesses that have on taking minority equity stakes. late 2014, when the European Parliament come to rely on platforms—for instance, to The European Commission’s plans passed a resolution for Google to be bro- keep platforms from imposing unfair don’t go that far but some proposals could ken up. In fact, theyare notable asmuch for terms and conditions or changing them end up being very interventionist (the de- whattheydo notsayaswhattheydo. They unilaterally. But given the diversity of plat- tails are still being worked out). For in- do not, forinstance, seekto make platforms forms, the commission has opted to stick stance, the commission intends to create a responsible for illegal activities on their with existing competition law and look at “level playing field” for conventional tele- properties. Such “platform liability” problems on a case-by-case basis. (In a nod coms carriers and firms that offer commu- would hurt small (mostly European) ones to more interventionist member states, nication services over the internet, such as more than big (mostly American) ones, be- however, it plans to revisit the question messaging apps. The question is whether cause there are economies ofscale in polic- next year). levellingthe field would involve lightening ing this sort of thing. Instead, the commis- The most interesting questions concern the regulatory burden on incumbents, sion is betting mainly on self-regulation to how platforms collect data from users and such as the requirement to offer universal keep platforms clean (although it says it connected devices. These help firms im- service, or applying such rules to newcom- might take “additional measures” should prove services and target ads. But they can ers. If the commission’s intentions for on- such voluntary efforts fall short). also be a source of market power—some- demand video services, such asNetflix, are Another notable absence is a plan to thingantitrustexpertshave onlynow start- any guide, the newcomers are likely to face apply new competition rules across all ed looking into. “Exclusive access to multi- new responsibilities: it wants to ensure types of platform. Last year France and ple sources of user data may confer an 1 The Economist May 28th 2016 Business 59

2 unmatchable advantage,” warns an influ- their ability to scoop up data from sites be- trade flows have shifted east. Platts’s long- ential report by a committee in Britain’s longing to others. Another proposal is to established Dubai benchmark, used to House of Lords. Germany’s competition make it easier, for both consumers and price Middle Eastern crude bound for Asia, authority is investigating whether Face- businesses, to transfer data if they want to has been whipped around in the past year book has abused its dominance to impose switch platforms. byaggressive tradingfrom two bigChinese weakprivacy rules on users. Regulators still have much to learn oil firms, Unipec and China Oil. India’s Re- Sensibly, given how little is known about how to deal with platforms. But they liance is also musclingin, and there is a vig- about the mechanics of data markets, the have no choice but to get more expert. As orous new source ofdemand from China’s commission intends to take only limited Martin Bailey, who heads the commis- so-called “teapot” refiners, recentlypermit- steps. For instance, it wants online firms to sion’s efforts to create a single digital mar- ted to import oil. Big oil traders like Royal give usersthe option to login using govern- ket, told the Lords committee: “There is Dutch Shell, long used to calling the shots ment-issued IDs rather than credentials hardly an area of economic and, arguably, on Brent crude, have complained about provided by big platforms. This could social interaction these days that is left un- undue Chinese influence on prices in Asia. make it harder for these to track users as touched by platforms in some way.” That is Platts says it has addressed the problem by they move around the internet, limiting true farbeyond the borders ofEurope. 7 adding crudes to make the benchmark more liquid this year. There are also calls for stronger regula- Oil-price reporting tion as the industry consolidates. “There’s a huge tension between the economic val- Striking it rich ue ofthese businesses—both to theirshare- holders and the broader economy—and the lack of oversight provided by host governments,” says Owain Johnson, managing director of the Dubai Mercantile Ex- change (DME). The companies argue that they are me- A niche business straddling journalism and oil is proving surprisingly lucrative dia outlets coveringphysical commodities, WO lines ofbusiness have stood out of grades of oil traded in the Americas, is as- and should not be regulated like futures Tlate for their inability to make money: sessed at a landlocked hub in Oklahoma markets such as the Chicago Mercantile Ex- journalism and oil. So when it emerged on and has not got the same global reach. change, where WTI futures are traded, or May 23rd that Argus Media, a British firm General Atlantic says its interest in Ar- the DME. Though their benchmarks carry that reports global commodities prices, is gus grew after 2009, when big producers enormous weight, they are gathered by to be sold to an American investment firm like Saudi Arabia began using its sour- journalists who sit in newsrooms, watch- for $1.4 billion, it aroused a variety of emo- crude index rather than a rival from Platts ing screens and contacting traders by tions. One was surprise. “Data about oil to price imports into the United States—an phone and instant messenger. They say markets now seem to be worth more than indication that Platts’s leadership of the they police themselves based on princi- oil itself,” exclaimed one executive of a market was not impregnable. In December ples set by the International Organisation commodities exchange. Another, in the America lifted a ban on crude exports, giv- ofSecurities Commissions in 2012. words ofan employee at S&P Global Platts, ing WTI a new lease of life. General Atlan- They may be partially reassured that Argus’s main rival, was “jealousy”. The tic hopes Argus’s WTI physical assessment General Atlantic, an investor in Airbnb sale has turned some of Argus’s 750 scrib- will become an international rival to Brent. and Uber, disrupters of hotel and taxi ser- blers, a quarter of whom are said to own “The battleground is global,” says Adrian vices respectively, understands the impor- shares or options, into millionaires. Binks, who will remain Argus’s boss after tance of trying to keep regulators at bay. In Argus began in 1970 as a newsletter re- over 30 years leading the company. the meantime, it has created a rare species porting on petroleum-product prices in the Asia is a further bone of contention as at Argus: the rich and happy journalist. 7 Netherlands. General Atlantic, which is buying out the family of Jan Nasmyth, its late founder, has made the most aggressive move so far in an industry that is fast consolidating. Its leaders, Platts and Argus, are battling for dominance over reporting prices of the most widely used oil benchmarks, such as Dated Brent and West Texas Intermediate (WTI), against which billions ofdollars-worth ofoil are priced each day. The benchmarks are used by oil companies, oil-producing countries, derivatives traders and others to decide at what level they should price hundreds of different grades of oil. Their providers make money by selling subscriptions to their information; the more prominent the benchmark, the more subscribers it generates. In recent years, Platts has made the run- ningin the oil marketswith itsBrent assessment, based on four grades of North Sea crude, which is used as a reference for pet- rol prices stretching from Europe to Asia. WTI, which sets the price of different Keeping a close eye on the barrels 60 Business The Economist May 28th 2016

Alcohol in China Proof positive

SHANGHAI Sales ofbaijiu, China’s national tipple, are on the rebound VENUE PÉTAIN, a tree-lined bou- frequent his current establishment prefer Alevard ofgrand mansions and Art to drinkbaijiu, rather than whisky or Deco towers in Shanghai’s old French other foreign spirits, with their Chinese concession, was once one ofthe city’s food. “It’s a habit!” he insists. He also most prestigious residential streets. Heng- senses a shift towards swigging pricier shan Road, as it is now called, is today full premium brands. ofbars and restaurants. The most intrigu- IfMr Luo’s professional odyssey ing used to be the Moutai club, a secretive traces the fortunesofChina’s national outfit catering to political bigwigs that drink, then the future holds peril as well decorated its walls with pictures of Deng as promise for baijiu. He is right that Xiaoping and other luminaries quaffing private consumption is behind the recent firewater. Their glasses may have con- renaissance. Fully halfofall baijiu pur- tained a special blend ofMoutai, an chases in 2012 were made by the govern- expensive brand ofbaijiu, a liquor dis- ment, but that figure had collapsed to just tilled from sorghum. a small fraction ofthe total by last year. Alas, this pleasure palace has since But Mr Luo also observes that many shut down. A crackdown on corruption younger patrons preferto sip wine at American media by the government ofPresident Xi Jin- business dinners, even rebuffing their ping has made it risky for officials to elders’ offers ofbaijiu. Sumner’s lease schmooze with businessmen over bot- As foreign businessmen know all too tles ofbaijiu. Sales ofChina’s national well, drinking vast quantities ofthis spirit (and the world’s most popular hard foul-smelling, throat-burning local brew liquor), which rose at double-digit rates has long been an unavoidable part of NEW YORK from 2007 to 2012, were dealt a big blow. doing business in China. Toasts ofgan bei Annual growth in sales plunged to barely and endless rounds ofbaijiu are still The future ofViacom is shrouded in 3% in 2014 as purchases forofficial ban- popular with the old guard, to be sure. uncertaintyand mired in litigation quets and other forms ofostentatious But the drink’s resurgence may only be NDER normal circumstances, a nasty boozing plummeted. temporary.Mr Luo offers this prediction: Upublic powerstruggle between a com- Baijiu is now making a comeback. “it may take years, but these old habits pany’s controlling shareholder and its Sales last year rose by roughly 7% (see will fade away.” chief executive might put a dampener on chart). In a recent report, “The Hangover the share price. But the circumstances at Fades”, Citigroup, a bank, estimates that Viacom, a media conglomerate, are any- profits for the three biggest manufactur- Spirit levels thing but normal. Sumner Redstone (pic- ers ofbaijiu—Moutai, Wuliangye and Sales of baijiu in China tured), an ailing 92-year-old mogul, recent- Yanghe—have jumped since the second % increase on a year earlier ly kept control of his $42 billion media halfoflast year. The bankalso notes that 40 empire after a humiliating legal battle to baijiu continues to outperform beer on prise it from his hands. Now the focus has sales volume growth, “suggesting that 30 shifted to the leadership of Philippe Dau- Chinese consumers’ preference for baijiu CEO man, the of Viacom, prompting an- remains intact.” 20 other round of lawsuits. Although the What explains the revival, given that 0.4 Litres, bn drama makes the firm’s future more uncer- the corruption crackdown continues? tain, investors seem more excited. Andy Luo, a formermanager ofthe de- 1.3 10 Like many a television soap opera, re- funct Moutai club, believes a boom in cent events have been absorbingly far- private consumption is the answer. Mr 0 2005 07 09 11 13 15* fetched. First came a lawsuit by Manuela Luo, who now runs a popular restaurant Sources: Wind Info; The Economist *Estimate Herzer, a former lover of Mr Redstone’s in Shanghai, says the businessmen that who had been written out of his will. Her reinstatement would have threatened the tycoon’s control of Viacom and another suits have flown. The removal of Mr Dau- price fell by close to 40% over the past year. media giant, CBS. A judge threw out that man from the trust raises the prospect of For nearly a decade before that under Mr lawsuit on May 9th. Then, on May 20th, Mr his dismissal from the firm. That seems to Dauman it was the worst performer in its Redstone ejected Mr Dauman from a trust promise the change in strategy at Viacom peer group. Since September 2006 Via- that will decide the fate of his holdings that many believe is overdue. Eric Jackson, com’s shares have nudged up a little while after his death. Three days later Mr Dau- an activist investor who has blasted Mr Disney’s have more than tripled in value. man filed a lawsuit to block the move, ar- Dauman’s leadership, believes the share All parts of Viacom are underperform- guing that Mr Redstone was mentally in- price, currently around $42, could rise by ing. Its movie business, Paramount, has competent and that Shari Redstone, his another $10 or more if Mr Dauman is fired. lagged behind the other big Hollywood daughter, was pulling the strings in an “un- A long-standing confidant of Mr Redstone, studios forfouryears in a row; in April it re- lawful corporate takeover”. Mr Redstone’s and a spring chicken by comparison at 62, ported a quarterly loss of $136m after dis- lawyers filed their own suit in response. Mr Dauman has fallen out offavour as Via- appointing box-office receipts for “Zoolan- The share price has surged as the law- com has floundered. The company’s share der 2”. The company’s portfolio of cable 1 The Economist May 28th 2016 Business 61

2 channels, including MTV, Nickelodeon require some fancy footwork. Ms Herzer’s Though the latest battleground is ride- and Comedy Central, has lost more view- lawsuit had challenged Mr Redstone’s hailing, car companies have their eyes on ers in America than its big competitors—a competence to write her out of his will, other ways of making money from mobil- decline of 35% over the past five years, by which he did last autumn; she accused ity. People who might hitherto have want- one measure. The cable networks remain Shari Redstone of manipulating her father ed to own a carmayno longerdo so, prefer- lucrative but profits are falling as subscrib- to her own benefit. If Ms Herzer had won ring to pay to drive when they need to. ers turn offand advertisers turn away. her suit, control of Viacom and CBS might Youngcity-dwellers are turningtheir backs Mr Dauman’s critics claim that he has have gone to the trust on which Mr Dau- on owning a costly asset that sits largely run the company like the lawyer he is at a man and an ally on Viacom’s board, unused while losing value. Membership time when it required a creative leader. George Abrams, held seats (Mr Abrams of car clubs, which let people book vehi- They say he never came up with a strategy was also removed on May 20th). cles by app for short periods, is growing for growth, resisting efforts to embrace the At the time, Mr Dauman, in support of fast. ZipCar, the world’s largest, is owned digital era. He pushed an aggressive buy- Mr Redstone and his daughter, gave sworn by Avis Budget, a car-hire firm. More car- back programme to support the share testimony on the nonagenarian’s “en- makers are copying Daimler’s Car2Go and price, which Mr Redstone was known to gaged and attentive” state of mind (though BMW’sDrive Nowapps. Ford, forexample, watch assiduously. If he kept Mr Red- the decisive testimony was Mr Redstone’s is testing car-sharing services in America, stone’s confidence, former executives say, own, in which he repeatedly called his for- Britain, Germany and India. he lost that of his workforce. Senior bosses mer paramour a “fucking bitch”, in a lucid Car-sharing and ride-hailing schemes and talented TV starshave leftto work else- but deeply unpleasant videotaped tirade). may eventually make carmakers money. where. The 52nd floor ofthe Viacom build- Now,to regain his position at the trust, and, For mass-market firms, used to slim mar- ing in New York, where Mr Dauman’s of- perhaps, to remain in the 52nd-floor suite, gins, it might even prove a boon, though fice is located, is a mirthless place, “like the MrDauman is havingto make the opposite premium carmakers, used to fatter profits, gallows”, says one formeremployee. case. Fortunately forhim, lawyers are good may not agree. Carmakers will not only If Mr Dauman is to keep his job it will at presenting either side ofan argument. 7 take a cut of the fares but will jostle to supply vehicles. Indeed Toyota’s deal includes a financing scheme for Uber drivers to ac- The future of carmakers quire its cars. GM offers a similarscheme to help Lyft’s drivers get on the road. Upward mobility But their chances ofprofiting from user- ship rather than ownership depend on two things. First, carmakersneed to change how they operate. Mastering the complicated business of manufacturing cars has kept new competitors largely at bay. But si- multaneously running a service business Making vehicles may prove easierthan selling services that depends on constant engagement AR companies have long talked a good aims to be a world-leading mobility pro- with customers and crunching large quan- C game when it comes to harnessing vider by 2025. tities of data is a far cry from designing a technology that threatens to undermine VW will not lack for company. In Janu- new SUV. Indeed the flurry ofinvestments the business of making and selling vehi- ary General Motors invested $500m in by carmakers has been driven as much by cles. In the1990s, as the dotcom boom was Lyft, Uber’s closest rival in America, partly the desire to learn how these new busi- in full swing, Jac Nasser, then boss of Ford, to embrace ride-hailing and partly to share nesses workas for immediate profits. said that the new business models the in- in the development of self-driving robo- Second, big tech firms, adept at han- ternet would enable meant that his firm taxis. Last year Mark Fields, the boss of dling data and selling services, cannot get would outsource the dull task of assem- Ford, perhapsforgettingMrNasser’searlier too farahead. Google leads the field in self- bling cars and reinvent itself as a mobility pronouncement, said that henceforth his driving vehicles. Apple is rumoured to be company,selling transport as a service. Mr firm would be a mobility company as well planning to build its own car and recently Nasser was too early with this insight. as a carmaker. Rumours abound that Ford invested in Didi Chuxing, China’s answer Only now are most big carmakers teaming is planning its own ride-hailing app and a to Uber. A host of startups are plotting up with tech firms that offer transport ser- vehicle to go with it—perhaps an on-de- ways to profit from offering services that vices, on the road to becoming mobility mand minibus service. will move customers from A to B. providers. But they in turn may have left it Instead of owning a car, the future too late. could include a monthly subscription to In the scramble to reinvent themselves, an app that combines car-sharing, taxis, conventional carmakers have turned their buses, trains, bicycles and anythingelse on attention oflate to ride-hailing apps. These wheels, including on single journeys services allow people to use smartphone where multiple modes of transport are the apps to summon a car and driver to ferry quickest or cheapest option. More efficient them to their next destination. On May use of public transport, more car-sharing 24th both Toyota and Volkswagen an- and more ride-hailing will mean that peo- nounced tie-ups with taxi-hailing apps. ple who might have bought a car may no The Japanese firm hasmade a small, undis- longer do so, stifling the growth in vehicle closed investment in Uber, the world’s big- salesthatwasexpected asthe middle class- gest ride-hailing firm, with operations in es take to the roads in developing coun- over 70 countries. VW announced an in- tries. Carmakers face sellingfewervehicles vestment of $300m in Gett, an Israeli firm while freewheeling competitors, unen- that is popular in Europe. Matthias Müller, cumbered by a vast manufacturing busi- VW’s boss, has much bigger aspirations. ness, mop up the profits from selling tran- He declared that the German carmaker Rivals in the pink sport to customers on the move. 7 62 Business The Economist May 28th 2016 Schumpeter Life in the fast lane

Business people are racing to learn from Formula One drivers vealed that 66% were dissatisfied with the quantity of sleep they got and 55% were dissatisfied with the quality. Too many companies are run by people who are dazed by a lackofsleep. The second problem shared by those in the driving seat, whether of a racing car or a multinational firm, is constant travelling. Life on the road not only makes sleep harder to manage by cutting the amount of resting time available and confusing the body clock. It has other debilitating effects. Spending long peri- odsin pressurised airline cabinsdehydratesthe bodyand messes up circulation. Time in airports and hotels encourages overeat- ing. Airports specialise in junk food; airlines serve over-salted and over-flavoured meals to compensate for the fact that flying dulls the taste buds. Deals are done over extravagant dinners washed down with too much wine by businessmen who then find themselves raiding the minibar at odd times ofthe night. Dr Hintsa provides detailed instructions about how to overcome these difficulties. Bringing healthy snacks when travelling reduces the likelihood that frazzled bosses will delve into the minibar. Dimming the lights gradually in the evening prepares the mind for sleep. Switching off screens two hours before bed saves bombardingthe brain with blue light, which tells it to stay awake. N THE face of it business executives and Formula One driv- Reading a bookis better than goggling at a device. Oershave nothingin common, otherthan the factthat theydo His advice forcoping with jet lag is complicated. His clients re- theirjobssittingdown. Racingdrivershurtle round a track, touch- ceive detailed charts that tell them on what side ofthe plane to sit ing speeds of 350km an hour. Office-bound managers may occa- and when to wear sunglasses after landing (when travelling east sionally wheel theirchairs from one side oftheirdesks to the oth- it is wise to wear shades on arrival to minimise exposure to day- er. Drivers risk a high-speed pile-up if they lose concentration. light). The main thing is to decide whether to adapt the environ- Executives merely riskspilling coffee on a Hermèstie. ment to your body, oryour body to the environment. On a short Yet one of the motor-racing world’s gurus now spends much trip, he advises sticking as closely as possible to a normal sched- of his time talking to chief executives. Aki Hintsa, a Finnish sur- ule and adjust meetings and bedtime accordingly. On longer geon, was chief medical officer for the McLaren F1 team for 11 jaunts, start adjusting to the new time zone a week in advance. years. His clients have included two former world champions, And pay attention to light: bright lights send the brain instruc- Sebastian Vettel and Mika Hakkinen, as well as Lewis Hamilton, tions to wake up and dimmer lights tell it to close down. the current holder. Dr Hintsa’s relationship with the business world started informally when a CEO friend turned to him in de- Sleeping your way to success spair, complainingofburnout. His business, Hintsa Performance, DrHintsa is ridinga wave ofinterest in how to improve the perso- employs 30 people, applying his methods from discreet offices in nal performance of executives. Hintsa Performance has a num- Geneva and Helsinki. It earns more than 80% ofits revenues from ber of direct competitors such as Tignum, based in Phoenix, Ari- working with management teams and individual bosses. zona. Big management consultancies have started paying Can business people really learn from Formula One? Dr attention to the subject of shut-eye: the latest edition of the Hintsa argues that the two worlds have more in common than McKinsey Quarterly contains an article on how “sleep-awareness you might think. Drivers sit atop a pyramid of 500-700 employ- programmes can produce better leaders”. Caroline Webb, a for- ees, from engineers to marketing departments, whose liveli- mer McKinsey consultant, has written a book, “How to Have a hoods depend on them. Surrounded by sycophants, drivers can Good Day”, that suggests ways of using recent findings from eco- easily lose control of their egos. They live horribly peripatetic nomics and behavioural science to improve working life. Google lives—races are run in every corner of the world. Dr Hintsa says has established a trend for providing workers with sleep pods, that his grand-prix experience forced him to focus on two pro- nap roomsand healthysnacks. The Boston ConsultingGroup has blems that also plague executives always on the move. experimented with a “time off” policy: employees spend an eve- The first is lack of sleep. A growing body of evidence shows ning every week without e-mail or their smartphone, in order to thatshortage ofshut-eye cripplesindividualsand poisons organi- catch up on sleep. Some airlines and hotels are using“smart light- sations. One study shows that staying awake for20 hours has the ing” to help customers adjust to new time zones. same impact on the performance of various cognitive tasks as a There are good strategicreasonsforthis. Companiesrecognise blood-alcohol level of 0.1%, well over the limit fordriving a car in that, in a world where you can buy so much computer power off most countries. Another study shows that being deprived of the shelf, their competitive advantage lies in the quality of their sleep leads people to adopt a more negative attitude or tone of employees. But the main reason for the interest in firms like Dr voice. Employees are also more likely to report disengagement Hintsa’s is individual angst rather than a corporate master plan. from workifa bad night’s sleep makes their bosses grouchy. From the CEO down, people are so hassled by the pace of busi- Yet sleep deprivation is commonplace in the business world— ness life that they are turning to anyone who can help them get and is sometimes worn as a badge of honour. A recent survey of their lives under control and their batteries recharged. Everyone 196 business leaders by McKinsey, a management consultancy, re- could do with the occasional pit-stop. 7 Finance and economics The Economist May 28th 2016 63

Also in this section 64 Buttonwood: Ignorant investors 65 The qualities of Quicken Loans 65 Japan’s giant pension fund 66 Regulating payday loans 67 Cyber-attacks on banks 68 Free exchange: Compulsory voting

For daily analysis and debate on economics, visit Economist.com/economics

Banks and Brexit cial firm in one member may serve customers in the other 27 without setting up Wait and hope local operations, are another matter. Euro- pean subsidiaries of non-EU banks receive the same treatment, which allows Ameri- can, Swiss and Japanese firms to cater to the whole of Europe from their bases in London. Goldman Sachs is probably the A British departure from the European Union would be costly forthe world’s most extreme example, with 6,000 of its banks. Best not to worry until they have to 6,500 European staffin the British capital; it PINION polls suggest that Brexit Aftera vote to leave, such moves would is building a new London office, due to Owon’t happen. Ladbrokes, a book- look like gentle undulations. Options mar- open in 2019. Partly thanks to the passport, maker, is offering 4-to-1 against. But poll- kets have been pricing in an immediate notes TheCityUK, a trade body that op- sters and bookies have been wrong before: drop of 4% in the pound. Looking six poses Brexit, London boasts around 70% of what ifon June 23rd Britain chooses to quit months or a year ahead, economists, the market for euro-denominated interest- the European Union? The world’s biggest moistened forefingers aloft, guess sterling rate derivatives, 90% of European prime banks, forwhich London is a second home might plunge by 15% or even 30%. The brokerage (assisting hedge funds with trad- if not their first, have plenty of other wor- OECD, the IMF, the Treasury and others ing) and more besides. ries: profits are thin, regulators nagging, in- predict severe damage to Britain’s econ- Without a deal to renew or replace vestorsimpatient. The referendum isan ex- omy (scaremongering, cry Brexiteers); the them, banks’ passports will expire if Brit- tra headache they could do without. Banks euro zone could suffer too. None of this is ain leaves. Such a deal could be struck. The must nevertheless be braced for turmoil good for London-based banks—though EU’s rules allow for non-members’ regula- should the odds be upset. And if Britain sharp traders may profit from gyrating cur- tory systems to be deemed “equivalent” to votes to leave, they will face an awkward rencies—or fortheir corporate customers. itsown; Britain would be desperate to keep decision: should they shift business away its financial industry; banks would surely from Europe’s financial capital? Repo plan lobby hard. Even so, legal costs are likely to Banks do not have to answer that ques- In readying themselves, banks have been rise, simply because banks would have to tion yet. They hope they never will. Al- helped by the strengthening of supervi- comply with two separate (though consis- ready under pressure to cut costs, they are sion since the financial crisis. Regular intent) sets of rules. And agreement may not not spending oodles on contingency plans spection of their defences, both internally come easily. No other non-member, The- and won’t until they have to. For now, they and by central banks, has become routine. CityUK points out, has full passport rights. regard the referendum chiefly as a market Supervisors are promising ample liquidity. Britain’s ex-partners may well be unforgiv- event, with a known date, which could The Bank of England will hold three extra ing: French and German politicians will cause volatility and strain liquidity. The “repo” auctions around the referendum, in not want to look soft before elections due most obvious place to look for trouble is in effect an offer to lend money to any banks next year, and will anyway be hoping to the exchange rate, where there has been that can provide common securities as col- poach financial firms. some pre-poll turbulence. Between the lateral. Big British banks have access to for- Nothingwould be decided quickly. Brit- turn ofthe year and early April sterling slid eign currency through other central banks; ain would remain a member for two years by 9% against the euro. Now it is only 3% the BankofEngland has swap lines with its (possiblymore) afterstartingthe exit proce- down—and in fact a mite stronger against peers in the G7 and Switzerland. dure, while it negotiated the terms of its de- both the euro and the dollarthan when the Volatility, in short, can be managed. The parture. But the clock would be ticking: referendum was called in February. EU’s “passport” rules, underwhich a finan- banks would have to make plans. Since the1 64 Finance and economics The Economist May 28th 2016

2 crisis, supervisors have preferred banks to Paris, where it has a subsidiary, formerly or for a sudden decline. Besides banking have separately capitalised entities in sep- Crédit Commercial de France. Deutsche expertise, it boasts an army ofaccountants, arate jurisdictions. EU regulators may Bank’s co-chief executive, John Cryan, told lawyers and other auxiliaries. People like press them to make their minds up, and the Financial Times last month that it to live in its huge, bubbling melting-pot. move capital and people—most likely, to “would be odd” to trade European govern- But at the very least, there is likely to be places where they already have subsidiar- ment bonds and currency in a non-EU a fragmentation of Europe’s financial in- ies. The head of at least one euro-zone branch of a German bank. Others suggest dustry if Britain quits: more business in bank fears it would become much harder that operations will be built up in Dublin othercentres, lessin London, and probably to clear euro transactions in London. (partly because of Ireland’s liberal labour less overall. Economies of scale in Britain Banks are loth to talk about what they laws) and Luxembourg. would be lost, while otherplaceswould be might do (at least in public, and so close to London has defied gloomy predictions too small to compensate. That means high- the poll), and no one will make firm plans before. It became the euro zone’s financial er costs that financial firms can ill afford before they have to. But HSBC said in Feb- capital even though Britain stayed out of after eight grinding post-crisis years. No ruary that it might shift 1,000 people, the single currency. Its pull is probably too wonder they hope that Britons will vote around one-fifth of its staff in London, to strong for any big bank to leave altogether, the problem away. 7 Buttonwood Ignorance isn’t bliss

Dealing with the problem ofpublicmisperceptions T IS not the “unknown unknowns” that facts may not help since the source of the shoulder more responsibility for their fi- Icatch people out, but the truths they information, whether it is the government nancial well-being than they did in the hold to be self-evident that turn out to be or the mainstream media, will always be past. This is particularly true in the case of completely wrong. On many issues, the suspect. Those advocating that Britons pensions, where companiesare retreating gap betweenpublicperceptionsandreali- vote to leave the European Union in next from the paternalistic approach of offer- ty is very wide. The polling company Ip- month’s referendum, for example, dismiss ing pensions linked to a worker’s final sal- sos Mori found that Americans think 33% warnings about the economic impact from ary. In the brave new world of defined- of the population are immigrants, for ex- the IMF, OECD and BankofEngland on the contribution schemes, workers get a pot ample, when the actual number is 14%. A grounds that, “They would say that, at retirement which they must eke out for 2013 poll found that Britons thought 24% wouldn’t they?” the rest oftheir lives. of the population was Muslim—almost If public misperceptions can distort These are difficult calculations to five times the correct figure of5%. economic debate, they are also a problem make. A survey by the Society of Actu- Misperceptions about economic poli- when it comes to financial markets. Finan- aries found that around 40% of Ameri- cy are common, too. Asked to name the cial productsare often complexand buyers cans underestimated the average life ex- top two or three areas of government can be confused by the terminology. One pectancy ofretired people by five years or spending, 26% ofBritons cited foreign aid, survey found that only half of Americans more. Around 77% of Americans are very more than picked pensions or education. knew that mutual funds did not offer a or somewhat confident that they are well In fact, aid spending is a small fraction of guaranteed return. A lack of mathematical prepared for retirement but only 63% say the other two and only1% ofthe total. knowledge is a further difficulty. Another theyhavesavedanymoneytowardsit, ac- Some of this is to do with innumeracy. survey asked 50-somethings questions cording to the Employee Benefit Research Only a quarter of Britons could work out that related to financial literacy; asked to Institute. that the odds of throwing two consecu- calculate how much each offive prize-win- These misapprehensions illustrate the tive heads in a coin toss was 25%. People ners would get from a lottery jackpot of problem with the idea ofcaveatemptor, or are also heavily influenced by anecdotal $2m, only 56% of respondents could an- buyer beware, when it comes to retail cus- evidence and by fears for themselves or swer the question. More than two-fifths tomers of financial services. Investment their families—hence the tendency to did not know the difference between sim- products are not the same as other goods. overestimate the prevalence of crime or ple and compound interest. First, the price is not immediately obvi- teenage pregnancy. (Asked how many The trend has been for individuals to ous, given the impact of annual charges teenage girls get pregnant each year, and fees on a customer’s long-term re- Americans plumped for 24%; the actual turn. Second, the usefulness of the pro- figure is 3%.) ductmayonlybecome apparentafter sev- More worrying is the possibility that eral years. A mutual fund is not like a people simply do not trust the official corked wine that people can hand back to numbers. When Britons were asked why the waiter right away.By the time custom- they overestimated the percentage of im- ers find out things have gone wrong, their migrants within the population, two an- financial future may be badly damaged. swers dominated. One camp said that the Third, there is an asymmetry of informa- government undercounted the numbers tion between the seller and the buyer. because of illegal immigration; a second Educating children and adults to be fi- group simply insisted their own answer nancially literate might help in the long was right, regardless ofthe evidence. term. Until then regulators, just like politi- This points to the difficulty facing cians, must deal with the public as they mainstream politicians who are trying to are, not how they might like them to be. halt the rise of populists like Donald Trump. Reasoned presentation of the Economist.com/blogs/buttonwood The Economist May 28th 2016 Finance and economics 65

Quicken Loans Detroit. From a growingcollection of grand caused the government losses when the old buildings, including a former outpost loans went bad. Other financial firms hit A new foundation of the Federal Reserve, Quicken began to with similar complaints have grumbled market mortgages to customers all over the about a shakedown and settled. Quicken country. Applications are handled by em- is contesting the lawsuit, saying the gov- ployeesschooled in the legal niceties ofthe ernment’s case rests on 55 mortgages out of DETROIT relevant jurisdiction, but based in Detroit. 246,000, and that it has got its facts wrong It helps that Quicken can sell its mort- about 47 of those. As with so many things One ofAmerica’s biggest mortgage gages through Fannie and Freddie, and so Quicken does, no other big financial firm lenders is not like the others does not need a huge balance-sheet to fi- would have dared behave in that way. 7 ELLS FARGO, America’s biggest pro- nance them. But because it relies on rela- Wvider of retail mortgages, drums up tively expensive wholesale funding, it custom, and cheap funds to lend, through would struggle to compete with other pro- Japan’s giant pension fund its 6,246 branches. The third- (Bank of viders on price. Its interest rates are typical- America) and fourth-biggest (JPMorgan ly 0.25-0.4 percentage points higher than That sinking Chase) providers follow a similar model. the cheapest alternatives. But the second-biggest mortgage firm, Instead Quicken aims to compete on feeling Quicken Loans, does business completely service. It claims customers can fill out an differently. It does not have any branches, online application and receive a decision TOKYO interacting with its customers online and on its latest offering, Rocket Mortgage, Volatile stockmarkets spell pressure for by telephone instead. Nor does it take de- within eight minutes. The underlying soft- the GPIFand its new leadership posits, relying on wholesale funding to fi- ware conducts a quick electronic sweep of nance its lending. Despite (or perhaps be- the applicant’s financial records, along HE fear that a creaking pension system cause of) breaking all these conventions, it with any available data about the property Twill fail to provide forswelling ranks of is the fastest-growing firm in the industry: to be purchased. For customers who are retirees is held by some economists to be its new lendinghas risen from $12 billion in confused or whose applications are one reason why many Japanese prefer 2008 to $79 billion last year. unusually complicated, help is available hoarding their cash to spending it. Any America’s 50 states all have slightly dif- by phone or e-mail. meddling with the ¥140 trillion ($1.27 tril- ferent laws regarding mortgages. Local by- Quicken tries to ensure good customer lion) pot that funds the state pension is po- laws in many cities and counties also affect service by keeping its own employees hap- litically fraught—as Hiromichi Mizuno, the property purchases. Then there are over- py. Desks and chairs are fancy, adjustable, first chief investment officer of the ultra- lapping federal rules, especially regarding ergonomic affairs; the bathrooms have conservative Government Pension Invest- mortgages to be securitised and sold televisions set to sports channels. Some ment Fund (GPIF), is finding out. through Fannie Mae and Freddie Mac, two workers scoot around the bright open-plan In October 2014 the GPIF made an his- government-backed entities. So although offices on hoverboards. New recruits re- toric shift in its asset allocation, trimming mortgages may seem much the same to ceive an eight-hour induction from Mr Gil- its pile ofJapanese government bonds and borrowers across the country, the firms bert and others, built around 19 principles doubling its holding of stocks (see chart on that offer them have long assumed that (“isms” in Quicken-speak). They are told next page). For the next three quarters, its theyneed a local presence to conform with that “a penny saved is a penny earned” is returns duly rose along with stockmarkets. the tangle ofrules. Asa result, the mortgage terrible advice; that they should only say In the financial year that ended on March business is absurdly fragmented. Even “no” when they have exhausted the pos- 31st 2015 the fund made its highest-ever re- Wells has only a 7% market share. sibility ofsaying“yes”, and so on. Show in- turn, of 12.27%. The intention, however, In the late 1990s Dan Gilbert, Quicken’s difference to a customer and, Mr Gilbert was not so much to juice returns as to pre- founder, began to question this logic. He writes, “I will find you… and I will perso- pare forthe return ofinflation. The Bankof was struck by the ease of buying a sofa on- nally root you out.” Japan’s massive monetary easing was sup- line; if something so big and cumbersome It is hard to say precisely how well all posed to be on the verge of pushing prices could be sold without bricks and mortar, this works, since Quicken, as a private firm, up again after a decade of deflation, there- then surely an intangible product like a releases little financial data. But a good test by eroding the value ofJapanese bonds. mortgage could, whatever the legal intrica- of its values came last year, when the gov- Since those heady beginnings, how- cies. He began selling off Quicken’s 28 ernment sued it, claiming it had fiddled ever, Japanese shares, and some foreign branches in 1998 and ultimately central- data on mortgages for poorer house-buy- ones, have sunk. The yen has also strength- ised the firm’s operations in downtown ers backed by the government, which ened, lowering the value of foreign assets. That has left the fund, which is the world’s biggest pension pot, with a loss that analysts estimate at over ¥5 trillion for the most recent fiscal year. In the meantime, the inflation on which the new investment strategy was premised has not appeared. “We built a new portfolio allocation on a base case that the BoJ would generate 2% inflation within two years, but the base case may have changed,” says Mr Mizuno. Prices are currently falling, and the BoJ nowsaysitmay not reach its target before early 2018. Mr Mizuno was unprepared for the bashing now coming the GPIF’s way. He joined from a private-equity firm in Lon- Lift-off in eight minutes don and told friends last year that moving 1 66 Finance and economics The Economist May 28th 2016

Short-term lending More risk than reward Japan’s Government Pension Investment Fund A pink slip Returns, % change on previous quarter

4 + 0 New regulations may kill offmuch ofAmerica’s payday-loan industry – 4 HAT rate of interest...can natural- 30% interest on credit cards issued by ly be more proper than another?” banks in, say, Utah. Last year, however, a 8 “W 2009 10 11 12 13 14 15 asked JeremyBentham in “Defence ofUsu- federal court ruled that banks that sell on ry” in 1787. Anything less than 36%, answer their loans cannot always make use of the Asset allocation, % American activists who want to curtail loophole. One effect of the ruling was that bonds equities Domestic: payday lending—pricey, short-term credit all ofa sudden, interest-rate capsapplied to International: typically used as an advance on a pay online, peer-to-peer lenders, who had pre- Short-term assets cheque. When the Consumer Financial viously channelled their loans through 0 20406080100 Protection Bureau (CFPB) unveils its pro- banks to avoid usury laws. posals for regulating the industry on June A recent paper finds that this crimped End December 2013 2nd, it will not set such an interest-rate cap lending to those with low credit scores. In (the Dodd-Frankact, which established the the seven months following the ruling, on- End December 2015 agency, forbids it from doing so). But the line peer-to-peer loan volumes for those regulator will probably impose tough new with the lowest credit scores grew by 124% Source: Government Pension Investment Fund requirements that could wipe out much of in states not yet affected by the decision. In the supply ofhigh-cost, short-term credit. states where the ruling applied, they 2 to the GPIF was rather like swapping a Fer- Around 12m Americans turn to payday shrankby 48% (see chart). rari fora tricycle. Ithascome asa shockthat lenders in any given year. The typical loan That suggests sky-high interest rates on not only is the GPIF unsophisticated in its is about $350 and costs about $15 every two payday loans do reflect underlying risks, investing approach (it has recently been weeks for each $100 borrowed. At that in- not simply an attempt to exploit borrow- barred from developing the kind of interest rate, a $100 loan, with both principal ers. In 2005 a study by researchers at the house share-buying capability that other, and interest rolled over for a year, would Federal Deposit Insurance Corporation, large institutional investors possess), but explode into a debt ofalmost $3,800. another regulator, found that payday lend- also that politicians and the media are so The CFPB’s studies of the market make ers were not unusually profitable. Bob ready to accuse it ofgambling. for uncomfortable reading. Nearly half of DeYoung, a professor offinance at the Uni- Shinzo Abe, Japan’s prime minister, customers borrow or roll over debt at least versity of Kansas, compares payday loans was among the most ardent advocates of ten timesperyear. Abouthalfofthose who to short-term carrentals, arguingthat ifyou the shift in the fund’s asset allocation. He borrow online incur bank fees averaging divide the fee charged by the value of the recently noted that long-term results, not $185, on top of the cost of the payday loan, car, you get a similarly high “interest rate”. short-term volatility, are what matter. But it when automated repayments from their Elizabeth Warren, the senatorwhose ef- does not help that he has also raised the bank accounts leave them overdrawn or forts led to the founding of the CFPB, has prospect of lower pensions if the GPIF’s fail entirely. Richard Cordray, the agency’s long argued that financial products should losses grow. Many critics of the shift, in- director, alleges that many loans “ensnare” be regulated like toasters: those that often cluding its president at the time, Takahiro borrowers in debt traps. cause fires should be banned. It seems cer- Mitani, claimed the government instigated Last year the agency floated some ideas tain that people who regularly turn to pay- it to pump up the stockmarket. The GPIF, to improve the market, such as mandatory day loans to cover recurring expenses are which normally publishes its annual re- affordability checks and limits on roll- doing themselves no good. The trick, sults in early July, has postponed them un- overs. Critics say such rules will force lend- though, is to protect them without burning til the end of the month, after an election ers to cut off credit to needy borrowers, or the entire industry to the ground. 7 for the upper house of the Diet. The delay to shut down entirely. Thomas Miller, a is a clear sign of political interference, says professor of finance at Mississippi State Jesper Koll of WisdomTree, an exchange- University, estimates that preventing any- Not alright for some traded fund manager in Tokyo. one from usingpaydayloansmore than six United States, growth* in peer-to-peer loan volume Mr Mizuno says the GPIF may have to times a year—another possibility—would By borrower’s credit score, 2015, % adjust its portfolio again in light of the lack cause 60% ofthe industry to disappear. States where rate cap is imposed of inflation. In all likelihood, that would That might harm those who need short- Others entail a shift out of equities and back into term credit to cover unexpected outlays, 50– 0+ 50 100 150 Japanese government bonds. Such a move such as replacing a broken boiler. People 725-750 would be a big embarrassment for the BoJ. typically need emergency credit because But the GPIF may yet decide to stick to its they have few savings; this means they 700-725 current allocation. Later this year, notes Ta- probably have low credit scores, too. That 675-700 katoshi Ito, an adviser to the government leaves them with few other options. on the fund, the powers ofits board will be A recent episode illustrates this point. 650-675 strengthened, making it easier to with- Many states already have usury laws 625-650

stand public criticism about short-term which, in theory, cap interest rates. In New MORE CREDITWORTHY Below 625 losses. And should Japan evervanquish in- York, for instance, charging a rate of more ﬂation, its pensioners will still want a than 25% is a criminal oﬀence. But most *Comparison of lending in Jun-Dec with Jan-May hedge against all those expensive govern- banks can avoid the caps by lending across Source: “The effect of Usury Laws on Riskier Borrowers”, by C. Honigsberg, R. Jackson and R. Squire, May 2016 ment bonds. 7 state lines. New Yorkers can still borrow at The Economist May 28th 2016 Finance and economics 67

the theft, says the median time it takes for targeted companies to realise theirsystems have been compromised is146 days. Banks’ coffers being raided by cyber- crooks is bad enough. Worse, the thefts expose weaknesses in a vital bit of financial plumbing: banks’ connections to the SWIFT network. In each of the cases that have come to light, the thieves hacked into the bank’s system, used malware to log on to the SWIFT network using the bank’s unique code, and re-routed transactions to new beneficiaries. SWIFT, a co-operative owned and used by 11,000 financial firms, processes 25m messages a day, covering half of all big cross-border transfers. Were it to be compromised, trust in the global payments system could evaporate. SWIFT insists its network and core messaging services were not breached; the security problems were at the banks themselves, it says. Officials at SWIFT express frustration that targeted banks can be slow to share information Cyberattacks on banks with it about hacks, meaning other banks don’t get intelligence they could act on. Heist finance Nevertheless, calls have grown for SWIFT to do more (with some geeks even suggesting it be replaced by blockchain technology). Mr Leibbrandt responded on May 24th by announcing a “customer security” plan, aimed at encouraging better networksecurity, information-sharing and Recent hacks highlight the vulnerabilityofthe cross-borderpayments system fraud detection. He also called for a new ARELY an eyebrow is raised these days cessfullyto nab $1m from Tien PhongBank, wave ofinnovation in cyber-security—cov- B when the credit-card detailsofretailers’ in Vietnam, in December. Anothercase has ering “pattern recognition, monitoring, customers are stolen en masse; such come to light through court filings: Ecua- anomaly detection, authentication, bio- crimes are attempted or committed daily. dor’s Banco del Austro is suing Wells Fargo metrics”—to meet the growing threat from But when banks’ own funds are pinched, it for waving through fake transfers of $12m “hoodies hunkering over keyboards”. is time to pay attention—especially when ($3m of which was later recovered) to ac- But SWIFT has no power over banks. the theft involves hijacking banks’ connec- counts in Hong Kong. The American bank That is down to regulators, whose perfor- tions to the global payments system. This is fighting the action. mance in this area varies greatly. Among weekthe Society forWorldwide Interbank Experts say there are likely to be dozens the most switched-on is the Bank of Eng- Financial Telecommunications (SWIFT), a of other actual or attempted breaches of land, which runs a widely respected resil- network that thousands of banks around this kind that have yet to be detected. ience-testing programme forbig banks that the world use to move money, described a Cyber-criminals have become very good includes mock attacks. British banks that recent spate of cyber-heists, which netted at covering their tracks. In the Bangladesh fail to beef up their defences may even be $90m. Gottfried Leibbrandt, SWIFT’s boss, break-in, for instance, they wrote malware forced to hold extra capital. described them as a “watershed moment”. to interfere with a machine whose print- Standards in some emerging markets The threat now, he said, is not just to banks’ outs the bank relied on to check transac- are much lower. Security at Bangladesh’s reputations, but to the very existence of tions. Jens Monrad of FireEye, a cyber- central bank was outdated and inade- those that fail to protect themselves. security firm that is conducting an audit of quate. One investigation found evidence Investigators are still trying to piece to- ofinfiltration by three different groups. It is getherhow thieves pulled offa spectacular unlikely to be a coincidence that the hack- hack that siphoned $81m out of Bangla- Three-alarm firewall ers have targeted banks in relatively unde- desh’s central bank in February, let alone % of British finance executives identifying veloped markets rather than bigger (but who was behind it. This was one ofthe big- cyber attacks as: much better protected) prizes in countries 50 like Britain and America. gest-ever bank robberies, but it could have one of the biggest been worse: $850m of the bogus transfer threats to the Not that banks in bastions of high fi- 40 requests were blocked. The stolen money financial system nance can rest on their laurels. Even iftheir went to a bank in the Philippines, then on 30 cyber-defences are strong, there is always to casinos. Where most of it went from the risk from accomplices on the inside there is unclear. Some ended up with a one of the biggest (help from whom hasnotbeen ruled out in challenges for 20 Chinese operator of junkets for gamblers their firm Bangladesh). Several big banks, including (who denies knowing it was stolen). 10 JPMorgan Chase, have begun to whittle The scam sent banks and SWIFT scram- down the number of employees with ac- bling to check for other infiltrations. Their 0 cess to the SWIFT gateway. As experts nev- probes have turned up at least one similar, 2009 10 11 12 13 14 15 er tire of saying, cyber-security is about albeit smaller, case: hackers tried unsuc- Source: Bank of England Systemic Risk Survey people as much as it is about technology. 7 68 Finance and economics The Economist May 28th 2016 Free exchange Make me

Compulsory voting is hardest to enact in the places where it would make most difference bulk, the chance of any individual vote deciding the outcome is minuscule. For voters, therefore, the potential benefit of partici- patingis tiny relative to the cost oftrudgingto a polling booth and waiting in line. This is a classic collective-action problem, in which individuals have an incentive to free-ride on others’ sense ofcivic duty. Making voting mandatory seems like a quick fix. Voters still have the right to abstain by leaving their ballot blank or otherwise spoiling it. The punishment for failing to vote is usually quite mild: in Australia, where voting has been mandatory since 1924, non-voters must either provide an excuse for their absence, or pay a A$20 ($14) fine. Best of all, it works, both by increasing turnout and by reducing the skew in the electorate. Turnoutin countries with compulsory voting is on average seven percentage points higher than in those where itisvoluntary.Australia and Belgium both boastvot- ing rates ofmore than 90%. In the parts ofSwitzerland where voting is mandatory,the turnout is more representative of the population as a whole than elsewhere. The results are different as a result, with leftist policy positions in referendums winning up to 20 percentage pointsmore support. Bythe same token, when vot- F VOTING made any difference they wouldn’t let us do it,” ing became compulsory in Australia it raised turnout by 24 per- “Iquipped Mark Twain, an American writer. Some govern- centage points, and increased the Labor party’s share of the vote ments, however, think voting makes such a difference that they by 7-10 percentage points. There is an air ofa festival about voting oblige votersto do it. Votingiscompulsoryin 26 countriesaround in Australia: in 2013 19% of polling booths featured “sausage siz- the world, from Argentina to Belgium. To those elsewhere wor- zles”—barbecues to reward voters with a sausage on bread. ried about decliningvoterturnout, compulsory votingmay seem tempting. But it is not a shortcut to a healthy democracy. A spoiled ballot Turnout has fallen from around 85% of eligible voters across Yet mandatory voting does not necessarily yield a democratic the OECD in the late1940s to 65% today,according to the Institute paradise. In places where turnout is already relatively high, com- for Democracy and Electoral Assistance (IDEA), an NGO.For pulsory voting may not do much to alter politics. In Austria, for many, the changing composition of the voting electorate is as instance, introducing it in some regions had little effect on the rel- worrying as its dwindling size. Voters in Britain and America are ative support for left- and right-wing parties or on the level of disproportionately rich, well-educated and old. That, studies sug- public spending. gest, skews policymaking. In late-19th-century America, for ex- And in places where turnout is low, and so the impact ofman- ample,rulesbarringmostblacksintheSouthfromvotingseemto datory voting might be big, it is politically difficult to enact. Ba- have resulted in a much lower ratio of teachers to children in rack Obama recently told a group of students that mandatory black schools. Government spending on health, in contrast, voting could have a “transformative” effect on American politics. jumped by a third when women got the vote. Health spending That is doubtless true: in 2012 voters were split pretty evenly be- also rose by a third in Brazil, when the introduction of electronic tween Mr Obama and his main rival for the presidency, Mitt voting made it easier forthe less educated to vote. Romney; according to opinion polls, non-voters favoured Mr But boosting turnout is tricky. Making it easier to vote, by ex- Obama by a margin of 35 percentage points. More generally, Re- tending voting hours, say, or reducing bureaucracy, sometimes publicans tend to do better among the most consistent voters. It is helps, but often only marginally. Allowing voters to register on hard to imagine them supporting a step that could massively di- polling day increases turnout by 5-7 percentage points; making minish their electoral fortunes. election day a holiday seems to make no difference. One study Republicansmightdressuptheirresistance asa matter ofprin- found thatafterthe American state ofOregon abandoned polling ciple. Forstarters, votingand compulsion are an odd mix. Forcing stations in favour of postal voting, turnout jumped by ten per- apathetic voters into polling stations might mean a more unin- centage points. Subsequent research failed to find such large ef- formed electorate, which protects inept politicians and rewards fects, however, and there is some evidence that postal voting ex- inflammatory ones. It might also take some of the spark out of acerbates the skew in who actually casts a ballot. politics: the Dutch scrapped it in 1967, on the ground that it made Efforts to cajole voters also have only a limited impact. Con- politicians complacent. It would be far better, surely, to try to get tact with a canvasser seems to be relatively effective, raising the non-voters interested in politics than to drag them to the polls chances of someone voting by around 4.3 percentage points ac- against their will. Indeed, Mr Obama himself has been good at cording to one paper. But from Madonna’s threat to spank non- that: his candidacy inspired many Americans to vote for the first voters in her video “Rock the Vote”, to worthy letters calling on time. It is hard to see coercion as a good substitute for an inspira- citizens to perform their civic duties, it is hard to find a tactic that tional candidate, or even for the hard slog of education. Then boosts turnout by more than a few percentage points. again, the odd sausage sizzle wouldn’t hurt. 7 Indeed, in a world of voluntary voting, the real mystery is why so many voters turn out at all. Although votes matter in Economist.com/blogs/freeexchange Science and technology The Economist May 28th 2016 69

Also in this section 70 Temperatures on the up 71 Drone countermeasures 71 Building a replicator 72 3D printing motorbikes

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Human evolution nature of the process would explain why intelligence is so strikingly overdeveloped Of bairns and brains in humans compared even with chimpanzees. It also offers an answer to another evolutionary puzzle, namely why high intelligence developed first in primates, a newish branch of the mammals, a group that is itself relatively young. Animals that lay eggs rather than experiencing pregnan- Babies are born helpless, which might explain why humans are so clever cy do not face the trade-off between head UMANintelligence isa biological mys- Now, though, researchers from Roches- size at birth and infant competence that Htery. Evolution is usually a stingy pro- ter University, in New York, have come up drives the entire process. cess, giving animals just what they need to with anotheridea. In Proceedings ofthe Na- To test their theory, Dr Piantadosi and thrive in their niche and no more. But hu- tional Academies of Science, Steven Pianta- DrKidd turned firstto a computermodel of mans stand out. Not only are they much dosi and Celeste Kidd suggest that humans evolution. This confirmed that the idea cleverer than their closest living relatives, may have become so clever thanks to an- worked, at least in principle. They then the chimpanzees, they are also much clev- other evolutionarily odd characteristic: went looking for evidence to support the ererthan seemsstrictlynecessary. The abil- namely that their babies are so helpless. theory in the real world. To do that they ity to do geometry, orto prove Pythagoras’s Compared with other animals, says Dr gathered data from 23 different species of theorem, hasturned outto be ratherhandy Kidd, some of whose young can stand up primate, from chimps and gorillas to the over the past few thousand years. But it is and move around within minutes ofbeing Madagascan mouse lemur, a diminutive hard to imagine that a brain capable of born, human infants take a year to learn primate less than 30cm long. such feats was required to survive on the even to walk, and need constant supervi- The scientists compared the age at prehistoric plains of east Africa, especially sion for many years afterwards. That help- which an animal weaned its young (a con- given the steep price at which it was lessness is thought to be one consequence venient proxy for how competent those bought. Humans’ outsized, power-hungry of intelligence—or, at least, of brain size. In youngwere) with theirscores on a standar- brains suck up around a quarter of their order to keep their heads small enough to dised test of primate intelligence. Sure body’s oxygen supplies. make live birth possible, human children enough, they found a strong correlation: must be born at an earlier stage ofdevelop- across all the animals tested, weaning age Sexy brains ment than other animals. But Dr Pianta- predicted about 78% of the eventual score There are many theories to explain this dosi and Dr Kidd, both of whom study in intelligence. That correlation held even mystery. Perhaps intelligence is a result of child development, wondered if it might after controlling for a slew of other factors, sexual selection. Like a peacock’s tail, in be a cause as well as a consequence of in- including the average body weight of ba- other words, it is an ornament that, by vir- telligence as well. bies compared with adults or brain size as tue of being expensive to own, proves its Their idea is that helpless babies re- a percentage oftotal body mass. bearers’ fitness. It was simply humanity’s quire intelligent parents to lookafter them. The researchers point to other snippets good fortune that those big sexy brains But to get big-brained parents you must of data that seem to support their conclu- turned out to be useful for lots of other start with big-headed—and therefore help- sions: a study of Serbian women pub- things, from thinking up agriculture to less—babies. The result is a feedback loop, lished in 2008, for instance, found that ba- buildinginternal-combustion engines. An- in which the pressure for clever parents re- bies born to mothers with higherIQs had a other idea is that human cleverness arose quires ever-more incompetent infants, re- better chance ofsurviving than those born out of the mental demands of living in quiring ever-brighter parents to ensure to low-IQ women, which bolsters the idea groups whose members are sometimes al- they survive childhood. that looking after human babies is indeed lies and sometimes rivals. It is an elegant idea. The self-reinforcing cognitively taxing. But although their the-1 70 Science and technology The Economist May 28th 2016

2 ory is intriguing, DrPiantadosi and Dr Kidd somethingwould need to get it goingin the Boulder, Colorado. BOM says that there is a admit that none of this adds up to defini- first place. It may be that some other fac- 50% chance that La Niña, another phase of tive proof. tor—perhaps sexual selection, or the de- ENSO and one associated with unusually That, unfortunately, can be the fate of mandsofa complexenvironment, orsome low surface temperatures in the eastern Pa- many who study human evolution. Any mixture of the two—was required to jump- cific, will form this year. Cooler weather such feedback loop would be a slow pro- start the process. Dr Piantadosi and Dr for south-eastern Asia and western South cess (at least as reckoned by the humans Kidd’s idea seems a plausible addition to America could accompany it. themselves), most of which would have the list of explanations. But unless human But each event has its own quirks. And taken place in the distant past. There are intelligence turns out to be up to the taskof future Niños may hold greater surprises, gaps in the theory, too. Even if such a pro- building a time machine, it is unlikely that thanks to increasing concentrations of cess could drastically boost intelligence, anyone will ever know forsure. 7 heat-trapping gases in the atmosphere. Re- sultant ocean warming means the barrier to extreme Niños “is now lower”, says Eric Global warming Guilyardi, a meteorologist at the Universi- ty of Reading in Britain. Between 1999 and In the red 2012, 69 zettajoules of heat (or 69 x 1021 joules—a vast quantity of energy) have been sequestered in the oceans between 300 metresand1,500 metresdown, according to a 2014 study in Science. Still warmer oceans in years to come will probably mean that the weather events unleashed The end ofEl Niño sees temperatures soaracross the world by strong Niños will intensify. ONDITIONS in India are road-melt- warm water sloshes back eastwards when Blaming climate change for particular C ingly hot: on May 19th residents of the trade winds weaken or even reverse; storms remains tenuous. But America’s Phalodi, a city in the north of the country, this is El Niño in action. The interaction of National Academies of Science, Engineer- had to cope with temperatures of51°C—the the Pacific Ocean and the atmosphere is ing and Medicine released a report in highest since records there began. Records part of a cycle called El Niño Southern Os- March laying out where scientists can are tumbling elsewhere, too. According to cillation (ENSO). more confidently attribute the probability the latest data from America’s National This spilling of the warm pool across or severity of weird weather to climate Oceanic and Atmospheric Administration, the tropical Pacific pushes up global sur- change. It says the most dependable attri- 13 of the 15 highest monthly temperature face temperatures. The consequent in- bution findings are for events related to an anomalies have occurred since February crease in atmospheric heat and moisture aspect of temperature; a warmer climate 2015. The average temperature over land brings deluges to south-eastern South means that unusually hot days become and ocean surfaces in April was 1.10°C America and western North America, and more likely while unusually cold ones be- above last century’saverage (see map). The drought to India, Australia, Indonesia and come less so. India’s scorching tempera- current year will almost certainly be the southern Africa. Niño-like conditions first tures may reflect such trends. Limiting glo- warmest on record, and probably by the began in mid-2014, but the full event did bal warming to less than 2°C above largest margin to date. not emerge foranother year. It then proved pre-industrial temperatures, agreed at UN A Pacific-wide climatic phenomenon one ofthe strongest ever recorded. climate talks last year, appears impossible. known as El Niño (“The Boy” in Spanish) On May 24th Australia’s Bureau of Me- helps explain the heat. In non-Niño years, teorology (BOM) declared El Niño finished, The way we live now trade winds blow warm water to the west, as surface temperatures across the tropical The sweltering temperatures in recent where itpoolsin the western tropical Pacif- Pacific have cooled over the past two monthsmayhelp settle debatesovera sup- ic. Cooler water is drawn up from the weeks. What follows? Temperature peaks posed “pause” in global warming that oc- depths to the surface in the Pacific’s east as typically occur towards the end of El Niño, curred between 1998 and 2013. During that a result, in a process known as upwelling. according to Kevin Trenberth from the Na- period the Earth’s surface temperature Every two to seven years, the pool of tional Centre for Atmospheric Research in rose at a rate of 0.04°C a decade, rather than the 0.18°C increase ofthe1990s. Fluctuating solar output, atmospheric Land and ocean temperature departure from average* pollution, incomplete data and volcanic April 2016, °C -5.0 -2.505 2.5 activitywere all positedaspossiblefactors. Some saw the stasis as evidence that previous temperature rises were thanks to natural cycles, not man-made warming. Others later argued that the hiatus never happened at all: inconsistent methods of mea- suringocean surface temperature orinade- quate statistical analysis were to blame. The complexity of climate systems means temperature variations cannot be ex- plained by a single cause. But those who pinned the pause on the ocean’s heat-storing may have known best. 7

Correction: In last week’s brieﬁng on antibiotic resistance ("The grim prospect"), the word “plasmids” was incorrectly rendered as “plastids” on two occasions. *Grey areas id r n r n n und in ri Source: NOAA Plast s a e pla t-cell o ga elles, ot fo bacte a. represent missing data Be assured that we do know the diﬀerence. The Economist May 28th 2016 Science and technology 71

Drone countermeasures mercial drones are preprogrammed to land or return to base when they lose ei- Hacked off ther of these signals. Lockheed Martin, a big American defence group, has a con- tender called ICARUS that employs multiple sensors to alert an operator to a drone threat and provide a selection of countermeasures, including taking command. The Guarding against rogue drones could be system also works automatically. a legal nightmare Yet such systems could also open up a BLACK package suspended in mid-air legal can of worms. For one thing, inter- Aundera hoveringdrone ispicked up by cepting signals used by a drone might be the CCTV cameras surrounding Wands- considered an illegal “wiretap”, according worth prison in south London one eve- to FCC regulations. Jamming signals is also ning earlier this year. As it moves closer to against the law. Alex Heshmaty of Legal one of the windows, a prisoner leans out Words, a British legal-services company, to snare the delivery with a stickand pull it says that interfering with the software of a inside. Prison officers later recover the third-party drone without permission package and find it is stuffed with drugs Drone alert might breach anti-hacking laws. and mobile phones. Even if these rules can be circumvent- Such events are becoming increasingly Mesmer, a system developed by De- ed, the Federal Aviation Administration common, not just in the use of drones to partment 13, a technology company based makes it illegal to interfere with an aircraft deliver contraband but in all sorts of other near Baltimore, can detect these signals in flight—and drones are considered to be nefarious activities, from paparazzi spying and even use them to identify the type of aircraft. Similar rules exist in many other on celebrities to burglars casing properties. drone. Mesmer then employs its own sig- countries, including Britain. Andrew More worrying still are reports of drones nals to take command of the drone itself, Charlton, a drone expert and head of a being flown near aircraft. Security experts ordering it to divert, land or return to base. Swiss aviation consultancy, reckons that fret about ways terrorists could use drones The Dronebuster from Radio Hill, a workable countermeasures against small to drop bombs or biological weapons. company based in New Jersey, uses a drones will emerge, but in order to deploy What is needed, many reckon, are “point-and-shoot” device which can be them widely countries will have to review drone countermeasures. These already ex- aimed at an intruding drone to jam either rules and regulations drawn up in an era of ist for military drones—including shooting its communications or GPS system. Com- manned flight. 7 them down with lasers. But that is a dangerous way to deal with small consumer drones flying in public areas. So, other an- Product design swers are being sought in a challenge organised by MITRE, an American non-profit The replicator organisation that runs R&D centres funded bythe federal government. Ithasdrawn up a list often contenders to take part in a trial in Augustof“non-kinetic” systemscapable of detecting and intercepting small drones LANCASTER weighing less than 5lbs (2.3kg). These sys- Designing in the digital and physical worlds at the same time tems must be good value and capable of wide deployment. The challenge is offer- HEN great designs are turned into strength or flexibility according to the ing $100,000 of prizes and a chance to Wproducts compromises are made. loads and stresses placed upon them. catch the eye offederal agencies. The beautifully sculpted “concept” cars Components and even entire products can The hurdles posed by the challenge are that regularly appear at motor shows nev- be tested in their digital form, often using not what you might expect. “The technol- er get built, at least not in the form they left virtual reality.When somethingphysical is ogy aspects are sometimes the easy part,” the design studio, because they are inevita- finally built the same software drives the says Duane Blackburn, a policy analyst at bly too difficult and expensive to engineer equipment that produces it, whether auto- MITRE. Various rules and regulations for mass production. For decades this has mated lathes and milling machines that mean that interfering with a drone could meant products have had to be “designed cut and drill material or,in the case ofaddi- be a legal nightmare. For example, detect- for manufacture”, which essentially tive manufacturing, 3D printers that build ing a small hovering quadcopter drone at means theircomponents must incorporate up objects layer-by-layerin a way never be- any reasonable distance requires a rela- features that can be readily shaped by ma- fore possible. tivelypowerful radar. Yetsuch transmitters chines in order to be glued, screwed or Thisdigital dimension givesdesigners a are strictly controlled in America under welded together by people or robots. Now greater level of freedom to create new Federal Communication Commission a combination of powerful computer-aid- things (see box). But not all designers are (FCC) regulations, makingsuch equipment ed design (CAD) software and new manu- skilled in using CAD systems. Even those difficult and expensive to acquire. facturing methods is changing the game. who are might want to set aside the com- The contenders think they can get Instead of being created with technical puter mouse for a saw, a file or a welding around that by detectingthe radio commu- drawings and blueprints, most new pro- torch to get hands-on with their ideas. The nications between a drone and its opera- ducts are today conceived in CAD systems ability to do both is becoming possible. A tor. Although drones can fly independent- in a three-dimensional virtual form. As machine developed at the University of ly, some form of radio is used by an these systems get cleverer some of the de- Lancaster in Britain provides a glimpse ofa operator to relay commands, such as to go sign processes themselves are being auto- future in which product designers will be up or down, left or right, and to provide a mated: algorithms suggest the most effi- able to work in both digital and physical video linkfrom the drone’s camera. cient shapes to save weight, or to provide forms—at the same time. 1 72 Science and technology The Economist May 28th 2016

2 The ReForm is a desktop machine de- Additive manufacturing veloped by Jason Alexander, Christian Weichel (now at Bosch, a German components group) and John Hardy (now co- Alloy angels founder of HE Inventions, a Manchester startup) to pick up any changes made to a 3D printing produces a curious lightweight motorcycle physical model of a product and reflect those changes back into the digital model, NE ofthe great advantages of3D printing by Airbus, a European aerospace orvice versa. “I like to thinkofit as the clos- Oprinting is being able to escape the group that owns APWorks. est implementation yet of a Star Trek repli- constraints oftraditional production The motorcycle is driven by a 6kW cator,” says Dr Hardy, referring to the de- processes, and to make things with electric motor and battery.It reaches a top vice that could create just about anything unique shapes. The powerful computer- speed of80kph and hits 45kph in three in the science-fiction TV series. aided design programs that are used to seconds. That will not exactly excite run 3D printers help engineers achieve serious bikers, but its 3D-printed frame Tea, Earl Grey, hot this. Algorithms calculate the most effi- could get their attention. It weighs just Inside ReForm is a fast-spinning milling cient structure required to achieve the 6kg, which makes the Light Rider some head, which cuts shapes out of material in lightest weight and yet still handle all the 30% lighter than conventionally manu- the traditional subtractive manner, and a loads and stresses that will be placed factured electric motorcycles. 3D-printing extrusion head, which builds upon the object. Often the result is rather Then there is the frame’s shape, which material in layers up additively. Oversee- like something that nature might come looks like an organic exoskeleton. This ing proceedings is a 3D scanner, which pro- up with—which is hardly surprising as complex and hollow structure could not jects a pattern oflight onto the object being nature has had millions ofyears of prac- have been made with anything other worked upon. A pair of cameras, posi- tice in creating highly efficient structures. than a 3D printer, says Joachim Zettler, tioned in the machine at different view- The latest example ofthis bionic APWorks’ boss. The process involved points, detects minute differences in the design trend is the Light Rider, which is using a laser to melt together thousands pattern of light reflected from the object to claimed to be the world’s first 3D-printed ofindividual layers ofthe powdered determine its shape in a digital form. At motorcycle. The substantial part of its alloy,each layer only some 60 microns present the machine works with model- structure was printed by APWorks, a (millionths ofa metre) thick. The com- ling clay. That might seem a bit old-fash- company based near Munich, using a pany is offering a limited production run ioned, but it is still widely used: despite all proprietary material called Scalmalloy, ofjust 50 Light Riders. At some €50,000 their new digital tools, car designers, for an aluminium-magnesium-scandium ($56,000) each, it is not just the bike that one, continue to make full-sized replicas of alloy that was specially developed for 3D is exotic but also the price. new models in clay. The machine can be used in a number of ways. A digital CAD design can be sent to ReForm and it will set about milling it from a block of clay or printing it, after the machine itself determines which process will be the fastest. It could be a combination ofboth. Alternatively, an object can be placed inside ReForm to be scanned, after which a replica will be made either additively or subtractively. Changes can then be made to the object, cutting a bit off here, say, adding a bit there or drilling a hole. That could be done virtually on a computer screen or by removing the physical model and doing the work manually. Once placed back into the machine, the scanner detects the changes and updates the digital model. An image ofthe object is projected onto the viewing window at the front of the machine. This allows a designer to view the digital version overlaid on the actual clay object inside. It is used to produce a digital preview of what any changes will One printed for the road look like before cutting or printing begins. And if a designer thinks he has really messed up, there is an “undo” button techniques into ReForm, such as making ducts that are more functional. And it which will let him scroll back through im- things in plastic or metal or at much larger could also be used to follow up the soft- agesofpreviousiterations, choose one and scale, with milling and extrusion heads ware updates that many devices now de- leave it to the machine to return the object mounted on robotic arms. mand with hardware updates, too. This to that original state. One intriguing possibility the team is would be done by putting a mobile phone, Machines like ReForm will allow peo- thinking about is 3D printing electrical cir- say, into the machine, cutting out a previ- ple with no technical knowledge to engage cuits, a process that is just beginning to be ous version of any circuitry and printing in product design, says Dr Alexander. With used in some factories. 3D-printed elec- new electronics in its place. With a mach- further development, he believes it will be tronics would give ReForm the ability to ine like ReForm itmightno longerbe neces- possible to integrate other manufacturing make prototypes and even one-off pro- sary to throw any device away. 7 Books and arts The Economist May 28th 2016 73

Also in this section 74 The gene: a history 74 Sir Kenelm Digby, charmer 75 The librarians of Timbuktu 75 The invention of dating 76 Ermonela Jaho, serious soprano

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Dawn of the oil industry its of no-holds barred competition and technological upheaval. Guts, greed and gushers Samuel’sgreatcoup wasto commission the first modern oil tanker, which enabled him to ship hydrocarbons through the Suez Canal. Thus he could undercut Rocke- feller in the Far East with cheap Russian fuel. Royal Dutch’s triumph came from ap- ExxonMobil and Royal Dutch Shell dominate world oil. A century ago, they were plying new geological methods to find born fighting each other gushers of crude in the Dutch colonies of UST over 100 years ago Standard Oil, the East Indies, enabling it to fight Shell in Breaking Rockefeller: The Incredible Jfrom which both Exxon and Mobil Asia. sprang, was the undisputed leader of the Story of the Ambitious Rivals Who Their tie-up, arranged by another in- By Peter Doran. global oil industry. American trustbusters Toppled an Oil Empire. triguing Londoner, Fred “Shady” Lane, fol- Viking; 352 pages; $28 were soon hot on the heels of its competi- lowed the Russian revolution of 1905, tion-killing owner, John D. Rockefeller. So which knocked out Shell’s Caspian pro- too was a scrappy Anglo-Dutch company, kerosene industry. He would slash prices duction and almost broke the company. the product of a merger of Shell Oil with in one district to snuff out rivals, and raise But the timing proved superb. Instead of Royal Dutch in 1907, which had defied fear- them elsewhere to recoup his profits. Such fighting each other, jointly they became a some odds to muscle onto Standard’s was his dominance of global petroleum match for Standard. Its empire was under home turfin America. that he could do this with impunity attackfrom Ida Tarbell, an American inves- That amalgamation had been the work throughout America, Europe and Asia. tigative journalist whose father had been of two men: Marcus Samuel, a brilliant The guts, greed and gusto of this cast of ruined by Rockefeller. Her 19-part series Jewish merchant who built the Shell Tran- characters are what gives the book its vig- starting in 1902 revealed Standard’s secret sportation and Trading Company from his our. The colourful backwaters where they contracts, kickback schemes, Rockefeller’s father’s business selling seashells in waged their counter-offensives, from Lon- “unholy alliance” between oil refiners and Houndsditch, East London, and Henri De- don’s East End, to Baku in the Caspian, to producers, and the extent ofits monopoly. terding, a Dutch wheeler-dealer who built Spindletop, Texas, add historical flavour. Within a decade, the Supreme Court Royal Dutch from unpromisingbeginnings Peter Doran, a Washington-based scholar had ordered Standard Oil to be disman- in the swamps of Sumatra into an Asian on European affairs, admits he has bor- tled, though the bits into which it was bro- powerhouse. These two egos, foryears bit- rowed heavily from such books as “The ken were so valuable that “in the span of a ter rivals, eventually joined forces to con- Prize” by Daniel Yergin to tell his story. few months at the end of 1911, Rockefeller front a “hammerlock on the planet’s oil Samuel ordered almost all of his papers to went from being a very rich man to a fabu- market”. Their story, though not new, is be burned when he died, so some of the lously wealthy one,” Mr Doran writes. His grippingly retold in “Breaking Rockefeller”. lively personality traits found here may be end, as a cheeky old man playing golf and Rockefeller’s life is vivid enough, more the result of imaginative storytelling seducing girls in the back seat of his car in though he is more of a presence snaking than documentary rigour. Florida, is described with humour. menacingly through the book than a cen- But the book is timely in an era when So is the retirement of Samuel, or Vis- tral character. From his grand Manhattan America’s shale revolution has upset the count Bearsted as he became, who helped office on 26 Broadway, the fastidiously OPEC cartel’s efforts to control the world’s persuade Winston Churchill to commis- punctual former book-keeper, with an eye oil markets, and eastern Europe struggles sion oil-burning dreadnoughts just before permanently on the ledger, launched a to free its gas markets from dependence on the first world war. Having climbed the so- “cut-to-kill” strategy whenever competi- Russia’s Gazprom. It is a vivid reminder of cial ladder as a Jew in Victorian England tion threatened his stranglehold on the the dangersofmonopolies, and ofthe mer- was a source of lifelong pride: “You can’t1 74 Books and arts The Economist May 28th 2016

2 think what pleasure it gives me to put ‘The porary China, where scientists are carry- Jacobean history Honourable’ on my children’s envelopes,” ing out cutting-edge, but ethically trou- he said after being made a peer. bling, genetic experiments with human Forgotten hero The book acknowledges that Royal embryos. Dr Mukherjee does not neglect Dutch Shell could not have toppled Stan- the catastrophic missteps that science has dard Oil alone. “The trustbusters weak- taken, including the global rise of the eu- ened Rockefeller’s monopoly. Free marke- genics movement, from the campaign by teers like Deterding[and Samuel] provided Francis Galton, Darwin’s half-cousin, to A Stain in the Blood: The Remarkable Voyage a competitive alternative to it.” Thanks to make it the “national religion” ofBritain, to of Sir Kenelm Digby. By Joe Moshenska. the competition that they engendered, the the atrocities committed by Nazi doctors in William Heinemann; 553 pages; £20 oil industry has become more vigorous the second world war, which largely ever since. The author does not dwell on brought eugenics programmes to a halt. HATEVER became of Sir Kenelm the challenges to oil’s supremacy that have Its grand scope means “The Gene” can- WDigby? A cook, alchemist and philos- arisen lately as a result of climate change. not explore the science to the same depth opher and the inventor of the modern But ifRoyal Dutch Shell’s challenge to Stan- as other books such as Steven Rose’s clas- wine bottle, his life seems to have sunk dard Oil is any lesson, companies that de- sic, “The ChemistryofLife”. Norisitsnarra- without a trace. His recipes, set out in “The velop alternative forms ofenergy will only tive driven by a single powerful idea, as is Closet of the Eminently Learned Sir Ke- become true challengers to Big Oil with Richard Dawkins’s “The Selfish Gene”, nelme Digbie Kt. Opened”, were published guts, greed and better technology.They are published 40 years ago. and republished. His life was first told by not quite there yet. 7 Nonetheless, Dr Mukherjee uses perso- John Aubrey, the great biographer of Dig- nal experience to particularly good effect. by’s age, but only one biography has ap- In “The Emperor ofAll Maladies”, his earli- peared since the 1950s, written by a distant Genetics erPulitzer-winninghistoryofcancer, itwas descendant ofDigby’s. his work as an oncologist that illuminated He was the son ofEverard Digby, a Gun- Mix and match the science of the disease. In “The Gene” powder Plotter condemned to death for his family comes to the fore. He writes ten- conspiring to blow up King James I. Yet Ke- derly, for example, of his two mentally ill nelm charmed his way into becoming a uncles: Rajesh, once “the most promising” courtier to James’s son Charles I. He had a of the brothers, and Jagu, who “resembled bookish, sheltered upbringing. Despite a Bengali Jim Morrison”. It is a poignant that, he went on to marry Venetia Stanley, The Gene: An Intimate History. By way to examine the genetics ofschizophre- a famous 17th-century beauty painted by Siddhartha Mukherjee. Scribner; 592 pages; nia: his own family’s history of mental ill- Van Dyck and elegised by Ben Jonson. $32. Bodley Head; £25 ness leads him to studies of other families Such was his fame forthe occult that it was HE first human with a genome that has “achingly similar” to his own. later rumoured that he had murdered her Tbeen permanently modified in a lab Returningto hisunclesin the final chap- with wine laced with viper venom. In a could be born by the end of this decade. ter, Dr Mukherjee notes that mental illness bid to remove the “stain in his blood” as However innocuous the changes made, can be accompanied by exceptional tal- the son of a Gunpowder Plotter, he decid- the baby’sbirth will markthe firsttime that ents. He concludes his history with a 13- ed to reinvent himselfas a pirate. It is an ex- humanity has selectively interceded to point manifesto for the post-genomic traordinary story. change the genetic inheritance of future world. “Normalcy”, he writes, “is the anti- Joe Moshenska, a specialist in the Re- generations. That is an eventuality, Sidd- thesis of evolution.” This, then, is perhaps naissance period at Cambridge University, hartha Mukherjee argues in his new book, the most powerful lesson of Dr Mukher- digs up the first half of that life story, focus- “The Gene”, for which the world is almost jee’s book: genetics is starting to reveal ing on the voyage to reclaim his honour. wholly unprepared. how much the human race has to gain Charles I commissioned Digby to be a pri- The bookbegins in the tranquil gardens from tinkering with its genome, but still vateer, free to sink enemy ships or seize of St Thomas’s Abbey in Brno in the has precious little to say about how much their loot. Charles was keen for extra cash mid-19th century. It was here that Gregor we might lose. 7 raised through non-parliamentary means, Mendel, an Augustinian friar, began ex- like his predecessors. Digby acted as ship- periments with pea plants to see how bio- sinker, but partly as diplomat as well. He logical traits are passed on from parents to returned with looted wool bales, wine offspring. As he bred peas with different crates, currants (highly sought-after com- characteristics—with purple or white flow- modities at the time), ancient Greek mar- ers, ortall ordwarfplants—Mendel noticed bles and Arabic manuscripts. In Algiers he that no purple-white flowers emerged, nor persuaded the city governors to free 50 any plants of medium height. Instead, the English slaves and open the port to all Eng- original traits reappeared in different ratios lish vessels. after each cross. Mendel realised that these The romance between Digby and Stan- traits were being determined by indepen- ley is just as fascinating. It was said that he dent particles of information, which every faked his death in order to escape the affec- plant inherited from its parents. He had tions ofthe Queen Regent ofFrance. When identified one of the fundamental charac- Stanleyheard he had died, she collapsed in teristics of a gene, a discovery which grief and was persuaded to get engaged to would become a pillarofmodern genetics. a devious suitor. She later forgave Digby, “The Gene” ranges across150 years, tak- and married him. ing in every major advance in the field. It MrMoshenska’s biography gives a wid- traces Charles Darwin’s thinking as he be- erpicture ofEngland’s place in the world. It gan to formulate histheoryofevolution on is not hard to see Digby as an early product his voyage to the Galápagos islands, and ofthe idea ofempire. He brought back trea- follows the thread all the way to contem- sure but he also brought back ancient 1 The Economist May 28th 2016 Books and arts 75

2 learning, as well as foreign fauna and flora. That an intellectual would become an ocean-faring buccaneer may seem incon- gruous, but it would lay the foundations of an English imperialism. Colonialists would go hand-in-hand with botanists and astronomers in their conquest of the globe. The book also connects the English national story with a European one. Digby returned from his travels with continental recipes, philosophy and science. Around the same time Inigo Jones returned with ideas for classical architecture. Charles I, inspired partly by the opulence of the Spanish Habsburg court where he first met Digby, had Van Dyck and Rubens paint his and his father’s image. Mr Moshenska depicts an age that sits between superstition and a scientific revo- Displaced but not destroyed lution. Digby indulged in horoscopes and alchemy, and discussed Galileo’s new ing process swirls to life in red, gold and Africa’s most important works into central ideas with Florentine academics. He ad- black inks, on paper from Fez or distant libraries, faces a difficult, at times insane, vanced a theory that wounds would heal Venice. Three craftsmen were needed to task: how to smuggle nearly half a million if a powder was applied to the weapon create a manuscript: one for the words, an- ancient texts from under the jihadi occupi- that caused the injury. (Unsurprisingly it other for the proofreading and a third to ers’ noses down a 1,000km route to Bama- worked better than spreading mustard on dash in the delicate intonation markings. ko. He develops an ulcer as a result of the the open wound, a common alternative.) Yet the tension, whether to share the texts stress. His book on the weapon-salve, though or hide them, is ever-present. These mil- The reader last encounters the troves of much mocked, went through 29 English lions ofpages become the endangered spe- manuscripts as they arrive at safe houses editions. Digby went on to write the first cies of the story, threatened by wave after in Bamako; “not one had been lost”, ac- paper which the new Royal Society for- wave ofinvaders. cording to Mr Haidara. Here the author mally asked to publish, and he came up Mr Hammer’s book is not strictly about leaves them, as fragile, tantalisingand inac- with a crude theory ofphotosynthesis. the manuscripts, for their escape does not cessible as they were in the desert. What of In his short biography Mr Moshenska really start until halfway through the book. their future? For the ancient books them- successfully brings back to life a forgotten It is mostly a history ofjihad in Mali, which selves, this chapter is one among many. 7 self-made man who was at the same time for centuries lay on the trade route across braggadocio and philosopher, and who the Sahara. One day, a short sandy drive seemed to live so many lives. Readers curi- from his hero librarian’s home, a “butter- The invention of dating ous to learn more can only await the scotch-and-peach painted concrete second halfofthe story. 7 mosque” appeared to Mr Hammer: an out- Love’s labour postofthe puritan, Saudi-funded Wahhabi ideologues taking root across the Sahel. He Mali first sees the new mosque on a visit to Tim- buktu before the war, when he also spots American special forces drinking beer in Paper trail Labour of Love: The Invention of Dating. the heat. Trouble was brewing. By Moira Weigel. Farrar, Straus & Giroux; 292 The story picks up speed as it begins to pages; $26 chart the opening salvos of Mali’s own Arab spring. France and America watch a NTIL the start of the 20th century, the weak region, infested with criminals, rules of courtship were fairly straight- The Bad-Ass Librarians of Timbuktu. By U moulder. Military officials want to strike forward. Male suitors called on eligible Joshua Hammer. Simon & Schuster; 278 extremist groups as they form, they tell the women under the watchful eyes of con- pages; $26 author, whereas diplomats preferdevelop- cerned adults. Keen chaps visited regularly OSHUA HAMMER’S new book, “The ment. Hostages are taken from Mali and and with the intent to marry. It was a dance JBad-Ass Librarians of Timbuktu”, traces neighbours, and traded for huge ransoms. to which everyone knew the steps. Mod- the story of hundreds of thousands of The Tuaregs who supported the Libyan ern pursuers are not so lucky. Who pays? medieval texts as they are rescued in 2012 leader, Muammar Qaddafi, come home When can one text? Just how aloof should from near-destruction by jihadists linked armed and ready for revolution. Just as the one be? Whether you are hoping for a rela- to al-Qaeda in Mali. It is at once a history, fight is brewing, a world-renowned music tionship or just casual sex, dating “often caper and thriller, featuring a superhero- festival in Timbuktu welcomes Bono to the feels like the worst, most precarious form librarian, Abdel Kader Haidara, as the sav- stage. Four days later, after the tourists ofcontemporary labour: an unpaid intern- iour ofan entire culture’s heritage. leave, the shooting begins. ship,” writes Moira Weigel in “Labour of Some of the book’s most compelling Life becomes awful in Timbuktu, with Love”, an occasionally amusing and often passages are lists, sometimes as much as a brutal sharia punishments meted out by provocative lookat the workofwooing. paragraph in length. The spices, minerals, young soldiers. Many Malians refuse to be The rules of love, Ms Weigel argues, are animals, fabrics and books carried into cowed. Here the caper begins at last. Mr shaped by economics. The concept of“dat- Timbuktu in the Middle Ages give a heady Haidara, the dogged manuscript collector ing” only came about at the dawn ofthe in- taste of what the city once was. The print- who has spent a lifetime gathering north dustrial age, when new opportunities1 76 Books and arts The Economist May 28th 2016

2 lured young people to cities in droves. Opera on a compelling momentum as shock re- Working women were soon exposed to an duced her to a seemingly lifeless corpse, array of potential mates, but many lived in Fiery angel before she gave way first to volcanic grief tenements or boarding houses that were and then to wounded-animal rage. unfit for hosting callers. So men offered to “But that anger is also my anger,” she escort romantic prospects to restaurants or said afterwards. “When I sing, I draw on dance halls, luring poorly paid women everything I have seen and heard in my with the prospect of a “free treat”. Policing life.” Her father taught philosophy and How Ermonela Jaho became the vice squads initially found these transac- flew Russian fighters; her mother was a world’s most acclaimed soprano tions suspect, and often arrested ladies teacher, but her family was poor and her who partook in them. But as these prac- HENEVER dictators stifle dissent, the mother could never pursue the singing ca- tices spread amongthe workingclasses, sa- Wart which most often survives is mu- reer she yearned for. A sense of failure per- loons and amusement parks sprang up to sic. So it is no surprise that the soprano vaded herlife. Born in 1974, Ms Jaho always earn their business. By the mid-1910s even who earlier this month carried off the an- wanted to be a singer. Her first ambition the middle classes considered “dating” a nual prize for the singer most esteemed by was to take up pop, until at14 she went to a legitimate way to woo. the readers of Opera Magazine, the indus- performance of “La Traviata”. “In that mo- Shifting demographics also played a try’s bible, should have been born and ment I saw a new horizon, a bigdooropen- role. Falling birth-rates allowed parents to bred in Enver Hoxha’s Albania. Ermonela ing, and I wanted to go through it.” She has dote on fewer children, who were increas- Jaho recalls with affectionate amusement now sung “La Traviata” 232 times. ingly likely to go to school. Young people the paranoid, isolationist atmosphere in In person Ms Jaho is forceful and hu- began mixing in new ways, particularly which she grew up: with one television morous, her ideas tumbling out seemingly once American colleges went co-ed in the channel and one state-approved comedi- unstoppably. She possesses an earthy 1920s. Cars granted young lovers unprece- an (Norman Wisdom, a Londoner); with beauty, with no hint of divadom, though dented privacy, leading one University of baby boys being named Adriatik after the she frequently refers to herself in the third Michigan professor to sniff in 1928: “What sea they had to cross to make their fortune; person, as though watching her own pro- is vulgarly known as ‘petting’ is the rule with hundreds of thousands of pill-box gress with an objective eye. In later life she rather than the exception.” Perhaps it is the bomb-shelters studding the landscape; but wants to spend more time as a voice teach- destiny of parents to be horrified by the also with a heady form of polyphony er—something she already does whenever habits of their children. In the 1950s many which has been sung at village weddings she travels back to Tirana—inculcating in were appalled thatyoungpeople were “go- since antiquity. younger singers the discipline which has ing steady” when they should have been Ms Jaho has great magnetism on stage, allowed her to reach the heights without dutifully shopping around. Yet a shortage her singing complemented by a particular straining (and ruining) her voice. of American men after the second world physical presence. When she sang the title Along the way, she has had a series of war made it wiser for women to get cosy role in Giacomo Puccini’s “Suor Angelica” lucky breaks. The first was when Katia Ric- with one instead ofplaying the field. at Covent Garden in 2011 she drew an ec- ciarelli, an Italian soprano, spotted her in a The mating marketplace has spurred static audience response every night; re- master-class at the Tirana conservatoire, countless businesses. In the 1920s even re- viewing her reprise of the role in March, and invited her to study in Italy, where she spectable ladies began painting their faces, the critics ran out of superlatives. Angelica began her career. She married a childhood and the cosmetics industry exploded. As has been committed to a convent as pun- friend who was living in New York, and late as the 1960s most drinking establish- ishment for an illicit affair. In this cruel still livesthere duringthe two months each ments barred unaccompanied women, drama she learns that her illegitimate son year when she is not travelling. leading one enterprising New Yorker to hasdied; she takespoison and diespraying Her breaks in London have followed a open a place called T.G.I. Friday’s, and the for salvation. Ms Jaho’s performance took time-honoured pattern, stepping in for “singles bar” was born (the place became Anna Netrebko as Violetta in “La Traviata” so popularitneeded velvetropes). The vid- at Covent Garden in 2008, and for Anja eotape dating services used by time-poor Harteros as Suor Angelica in 2011. When yuppies in the 1980s set the stage for the that invitation came through, at exception- boom in high-tech mate-shopping by the ally short notice, she hesitated: she wanted turn of the 21st century. And the desire to to make the role her own, but her parents keep dating well into one’s 40s before set- had both recently died, and she was too tling on a partner has boosted demand for traumatised even to cry, she says. Singing fertility treatments. the part was cathartic. In this lively tour of changing romantic In the coming two years in London, mores, Ms Weigel occasionally rambles New York, Washington and Paris she will off-course. She tends to bury thinly argued again sing the title roles in “La Traviata” points beneath grand statements, and she and “Madam Butterfly”, but she knows her reservesmostofhersympathyforwomen. vocal limits—she will never do Wagner. But she is right to note that modern court- Next month Opera Rara will release its re- ship is full of mixed messages. Women cording of Ruggero Leoncavallo’s “Zazà”, who are pushed to “lean in” at workare ofwhich depends on the charisma of its star. ten told to pull backto appeal to men. Men Only when the record company discov- who may answer to women at the office ered MsJaho did itfeel confidentenough to are encouraged to seem invincible after go ahead with the recording. It will be her hours, and pay for the pleasure, too. Ms recording debut, and she finds the work Weigel argues that this arrangement sus- full ofechoesofhermother’splight: “Some tains the fiction that men are still in control ofZazà’s lines I heard like a refrain from my ofcourtship—and may also explain why,in mother, when I was a child. Singing this these uncertain economic times, the la- part was like having a knife go through bour oflove is so terribly confusing. 7 The Traviata of Tirana my soul.” 7 Courses 77

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Capital Investments & Brokerage / Jordan Ltd. Co. INVITATION TO BID FOR THE ACQUISITION/PURCHASE OF SHARES OF JORDAN MAGNESIA COMPANY LTD No .______Prot. Tirana, on __ / ____ / 2016 Capital Investments & Brokerage / Jordan Ltd. Co. (“CapInvest”) is pleased to invite all NOTIFICATION OF THE CONTRACT interested parties to participate in the bid process in connection with the sale of 100% of the share capital of Jordan Magnesia Company Ltd (“JorMag”). CapInvest is acting as the Name and address of the contracting authority: Ministry of Energy and Industry, fi nancial advisor to JorMag in connection with the sale transaction. address: Boulevard “Deshmoret e Kombit” 1001 Tirana, tel. + 355 42 222 245 Company Background Name and address of the Responsible Person: Etleva Kondi, Ministry of Energy § JorMag is a Jordan-based mining company founded in 1997 to extract, produce, and and Industry (email: [email protected]); market a variety of specialty magnesia products including caustic calcined magnesia and dead-burned magnesia. Type of Contracting Authority: Central Institution § JorMag is currently the only company in Jordan with duly granted rights to extract, produce and market magnesia from the resource-rich Dead Sea. JorMag also has rights to The scope and type of contract: Granting through concessions the “Katundi i Ri” high purity limestone deposits that are abundant at a nearby quarry located in Al-Qatraneh Hydropower Plant, and type of contract is “Work” area in Jordan. Duration of Contract: 35 years § JorMag owns a magnesia plant located at the southern end of the Dead Sea in Jordan with an annual production capacity of 60,000 tons of magnesia products. The location of the object of the contract: In the upstream low of Drin i Zi River, § JorMag benefi ts from a preferential tax-regime (designated a free economic zone), fully from the quota of 400 m.m.n.d (the possible place for the dam construction), up to operational ancillary infrastructure, and contractual arrangements with the surrounding the quota of 445 m.m.n.d on the state border with the Former Yugoslavian Republic mining companies in the Dead Sea concession area to provide the necessary operational of Macedonia. support, critical infrastructure, and key raw materials. Legal, economic, inancial and technical information: In accordance with The Bidding Process Appendix 9 of CSD After executing a confi dentiality agreement, qualifi ed prospective buyers will be provided with access to a virtual data room to undertake their due diligence review of JorMag. Site Criteria for selection of winner: In accordance with Annex 10 of CSD visits and a Q&A process will also be conducted during the due diligence process. At the conclusion, prospective buyers will be expected to submit a fi nal, binding proposal to acquire Deadline for submission of bids: Within and not later than: Date 11/07/2016, at 100% of JorMag’s share capital. Key upcoming dates and events are summarized below*. 12.00 o’clock. Location: On the oficial website of the Public Procurement Agency www.app.gov.al Date Event May 16 – Jun 24 Data room access and due diligence review Deadline for bid opening: Within and not later than: Date 11/07/2016, at 12.00 Jun 6 - Jun 16 Site visits and Q&A o’clock. Jun 27, 2016 Final proposals due Location: On the oficial website of the Public Procurement Agency www.app.gov.al For further information, please contact Omar B. Khader (Vice President) at: The period of validity of tenders: 150 days Offi ce: +962 6 5200330 ext. 2475 Mobile: +962 79 630 3113 E-mail: [email protected] HEAD OF THE CONTRACTING AUTHORITY * The bidding process is subject to the terms and conditions outlined in the bid procedure DAMIAN GJIKNURI letter which will be provided to interested parties

ESTABLISHMENT OF A NATONAL AIRLINE FOR THE REPUBLIC OF GHANA REQUEST FOR EXPRESSION OF INTEREST The Government of Ghana (GoG) has the objective to make Kotoka International Airport (KIA) the aviation hub of West Africa. GoG is therefore looking to establish a national airline to facilitate the achievement of its objective. GoG, acting through the Ministry of Transport (MoT), has appointed a team of consultants led by PricewaterhouseCoopers (Ghana) Limited (PwC) to provide advisory services with regards to the establishment of the proposed new national airline. Feasibility studies conducted by PwC has shown that a market exists to profi tably support the operation of a new national airline without recourse to GoG funding. The feasibility study identifi ed the following advantages currently available in the Ghanaian Setting up Regional Industrial Clusters in Ethiopia: airline industry: Preparation of Master Plan 1. Yields in Ghana and the rest of West Africa are still high compared to the rest of the world 2. Passenger growth rate over the last fi ve years was more than double the global The Ministry of Industry of the Federal Democratic Republic of Ethiopia, in average 3. The Ghanaian economy has experienced signifi cant growth over the last ten collaboration with its partners, would like to develop a Cluster Master Plan to years and is still projected to outpace the rest of the global economy facilitate the growth and development of a large number of SMEs in textiles, The feasibility studies also demonstrated that the new national airline would require agro-processing, metals fabrication, furniture, construction materials, partnership with an experienced strategic airline partner with a global distribution electric and electronic goods. network to adequately take advantage of the opportunities in the market place. GoG is therefore inviting prospective airline strategic partners to submit an Expression of Interest (“EoI”) to work with GoG to establish a new national airline for Ghana. The The Contractor in coordination with relevant government departments expression of interest should demonstrate the following, among others: and stakeholders will be expected to conduct an in-country assessment • The fi nancial strength of the prospective partner and examine various factors such as geography, infrastructure, access to • The prospective partner’s technical strength in areas of IT systems, fl ight raw materials, environmental and social implications in order to develop operations, maintenance, yield and capacity management. a Cluster Master Plan. The assignment, which requires international and • The reach and value of the prospective partner’s distribution network national expertise, will commence on 25th July 2016 and be completed by • The prospective partner’s membership of a global alliance 14th October 2016 The deadline for the submission of the EoI is Friday, 24 June 2016 at 4pm GMT. Expressions of Interest should be marked CONFIDENTIAL – NATIONAL AIRLINE The Ministry of Industry invites eligible organisations to submit proposals to PROJECT and addressed to: carry out this work to the Private Enterprise Programme Ethiopia (PEPE). THE CHIEF DIRECTOR ROOM #6, MINISTRY OF TRANSPORT PRIVATE MAIL BAG Interested organisations may obtain the detailed terms of reference for MINISTRIES, ACCRA, GHANA this work by contacting For enquiries, please contact Thomas Kyei-Boateng (email: thomas.kyei- [email protected] [email protected] or Winfred King (email: [email protected]) at the PricewaterhouseCoopers (PwC) Ghana Ltd offi ce at No. 12 Airport City, Una Home, 3rd Deadline for applications: 30th June 2016 Floor, Airport City, Accra or PMB CT 42, Cantonments, Accra. T: +233 (0) 302 761 500 F: +233 (0) 302 761 544 The Economist May 28th 2016 80 Economic and financial indicators The Economist May 28th 2016

Economic data % change on year ago Budget Interest Industrial Current-account balance balance rates, % Gross domestic product production Consumer prices Unemployment latest 12 % of GDP % of GDP 10-year gov't Currency units, per $ latest qtr* 2016† latest latest 2016† rate, % months, $bn 2016† 2016† bonds, latest May 25th year ago United States +2.0 Q1 +0.5 +1.8 -1.1 Apr +1.1 Apr +1.2 5.0 Apr -484.1 Q4 -2.7 -2.5 1.88 - - China +6.7 Q1 +4.5 +6.5 +6.0 Apr +2.3 Apr +1.8 4.0 Q1§ +293.5 Q1 +2.8 -3.0 2.76§§ 6.56 6.20 Japan nil Q1 +1.7 +0.5 +0.2 Mar nil Mar +0.2 3.2 Mar +151.1 Mar +3.8 -6.2 -0.10 110 121 Britain +2.1 Q1 +1.6 +1.9 -0.3 Mar +0.3 Apr +0.6 5.1 Feb†† -146.9 Q4 -4.7 -3.6 1.57 0.68 0.65 Canada +0.5 Q4 +0.8 +1.6 +0.8 Feb +1.7 Apr +1.5 7.1 Apr -51.6 Q4 -2.8 -1.4 1.39 1.31 1.23 Euro area +1.5 Q1 +2.1 +1.5 +0.2 Mar -0.2 Apr +0.2 10.2 Mar +357.1 Mar +2.8 -1.9 0.16 0.90 0.91 Austria +1.1 Q4 +1.2 +1.1 +2.5 Mar +0.5 Apr +1.1 5.8 Mar +9.6 Q4 +2.5 -2.0 0.55 0.90 0.91 Belgium +1.4 Q1 +0.8 +1.3 +1.2 Mar +2.0 Apr +1.1 8.5 Mar -0.1 Dec +0.8 -2.3 0.52 0.90 0.91 France +1.3 Q1 +2.2 +1.3 -0.8 Mar -0.2 Apr +0.2 10.0 Mar -20.6 Mar‡ -0.3 -3.5 0.50 0.90 0.91 Germany +1.6 Q1 +2.7 +1.5 +0.2 Mar -0.1 Apr +0.3 6.2 Apr +292.3 Mar +7.6 +0.4 0.16 0.90 0.91 Greece -1.2 Q1 -1.5 +1.4 -4.0 Mar -1.3 Apr +0.7 24.4 Jan +1.1 Mar +2.1 -3.9 7.13 0.90 0.91 Italy +1.0 Q1 +1.2 +1.0 +0.5 Mar -0.5 Apr +0.2 11.4 Mar +41.4 Mar +1.9 -2.5 1.36 0.90 0.91 Netherlands +1.4 Q1 +1.9 +1.5 +0.3 Mar nil Apr +0.5 7.8 Apr +68.8 Q4 +9.9 -1.6 0.39 0.90 0.91 Spain +3.4 Q1 +3.2 +2.8 -1.7 Mar -1.1 Apr -0.5 20.4 Mar +17.1 Feb +1.0 -3.4 1.54 0.90 0.91 Czech Republic +4.3 Q4 +2.0 +2.8 +0.7 Mar +0.6 Apr +1.5 5.7 Apr§ +1.5 Q4 -0.1 -1.6 0.52 24.3 24.9 Denmark +0.4 Q4 +0.3 +1.3 -2.6 Mar nil Apr +0.7 4.2 Mar +18.8 Mar +6.4 -2.8 0.45 6.67 6.76 Norway +0.7 Q1 +4.0 +1.5 -5.7 Mar +3.2 Apr +2.1 4.6 Feb‡‡ +35.3 Q4 +11.6 +7.2 1.42 8.33 7.62 Poland +4.3 Q4 -0.4 +3.5 +6.0 Apr -1.1 Apr +1.7 9.5 Apr§ -2.0 Mar -2.1 -1.9 3.07 3.96 3.72 Russia -1.2 Q1 na -1.3 +0.6 Apr +7.2 Apr +8.2 5.9 Apr§ +51.3 Q1 +3.7 -2.2 8.97 65.6 49.9 Sweden +4.5 Q4 +5.3 +3.4 +5.5 Mar +0.8 Apr +0.8 7.3 Apr§ +29.2 Q4 +6.0 -0.6 0.79 8.30 8.38 Switzerland +0.4 Q4 +1.7 +1.1 -4.5 Q4 -0.4 Apr -0.7 3.5 Apr +75.9 Q4 +9.5 +0.3 -0.26 0.99 0.94 Turkey +5.7 Q4 na +3.3 +4.7 Mar +6.6 Apr +8.2 10.9 Feb§ -29.5 Mar -4.5 -1.8 10.10 2.94 2.60 Australia +3.0 Q4 +2.6 +2.5 +1.9 Q4 +1.3 Q1 +1.7 5.7 Apr -56.0 Q4 -4.1 -2.0 2.31 1.39 1.28 Hong Kong +0.8 Q1 -1.8 +2.1 -1.3 Q4 +2.7 Apr +2.6 3.4 Apr‡‡ +9.6 Q4 +2.6 -0.4 1.31 7.77 7.75 India +7.3 Q4 +4.4 +7.5 +0.1 Mar +5.4 Apr +5.2 4.9 2013 -22.6 Q4 -1.0 -3.7 7.46 67.4 63.5 Indonesia +4.9 Q1 na +5.1 +3.4 Mar +3.6 Apr +4.3 5.5 Q1§ -18.2 Q1 -2.4 -1.9 7.58 13,655 13,155 Malaysia +4.2 Q1 na +5.5 +2.8 Mar +2.1 Apr +2.9 3.5 Mar§ +7.0 Q1 +2.7 -3.7 3.86 4.10 3.59 Pakistan +5.5 2015** na +4.8 +6.7 Mar +4.2 Apr +5.4 5.9 2015 -2.4 Q1 -0.9 -4.6 8.03††† 105 102 Philippines +6.9 Q1 +4.5 +6.3 +7.8 Mar +1.1 Apr +2.9 5.8 Q1§ +8.4 Dec +3.6 -2.1 4.46 46.8 44.5 Singapore +1.8 Q1 +0.2 +2.8 -0.5 Mar -0.5 Apr +1.3 1.9 Q1 +54.8 Q1 +20.4 +0.9 2.17 1.38 1.34 South Korea +2.7 Q1 +1.5 +2.5 -1.5 Mar +1.0 Apr +1.3 3.9 Apr§ +107.5 Mar +7.3 +0.5 1.78 1,183 1,090 Taiwan -0.8 Q1 +0.8 +2.3 -4.1 Apr +1.9 Apr +1.0 4.0 Apr +74.8 Q1 +12.3 -0.9 0.85 32.6 30.4 Thailand +3.2 Q1 +3.8 +3.7 +1.8 Mar +0.1 Apr +2.7 1.0 Mar§ +31.6 Q4 +2.3 -2.1 2.26 35.7 33.4 Argentina +2.3 Q2 +2.0 -0.4 -2.5 Oct — *** — 5.9 Q3§ -15.9 Q4 -2.3 -2.7 na 14.0 8.97 Brazil -5.9 Q4 -5.7 -3.7 -11.3 Mar +9.3 Apr +8.3 10.9 Mar§ -34.1 Apr -1.6 -5.4 12.93 3.59 3.06 Chile +2.0 Q1 +5.3 +3.4 +3.9 Mar +4.2 Apr +3.6 6.3 Mar§‡‡ -4.7 Q1 -1.4 -1.6 4.58 693 608 Colombia +3.3 Q4 +2.4 +3.7 +1.3 Mar +7.9 Apr +3.7 10.1 Mar§ -18.9 Q4 -5.1 -1.9 8.13 3,065 2,501 Mexico +2.6 Q1 +3.3 +2.4 -2.0 Mar +2.5 Apr +3.1 4.2 Mar -30.5 Q1 -2.8 -3.0 6.17 18.5 15.3 Venezuela -8.8 Q4~ -8.4 -7.0 na na +181 6.0 Dec§ -17.8 Q3~ -1.4 -14.4 11.17 9.99 6.30 Egypt +4.0 Q4 na +4.0 -10.9 Mar +10.3 Apr +8.8 12.7 Q1§ -16.8 Q4 -2.0 -9.6 na 8.88 7.61 Israel +1.7 Q1 +0.8 +3.7 -0.5 Mar -0.9 Apr +1.7 4.9 Apr +13.8 Q4 +4.3 -2.5 1.84 3.85 3.89 Saudi Arabia +3.4 2015 na +2.8 na +4.2 Apr +3.8 5.7 2014 -53.5 Q4 +0.1 -8.0 na 3.75 3.75 South Africa +0.5 Q4 +0.4 +0.8 -1.5 Mar +6.2 Apr +6.4 26.7 Q1§ -13.6 Q4 -4.1 -3.3 9.43 15.7 11.9 Source: Haver Analytics. *% change on previous quarter, annual rate. †The Economist poll or Economist Intelligence Unit estimate/forecast. §Not seasonally adjusted. ‡New series. ~2014 **Year ending June. ††Latest 3 months. ‡‡3-month moving average. §§5-year yield. ***Official number not yet proved to be reliable; The State Street PriceStats Inflation Index, March 34.88%; year ago 27.1% †††Dollar-denominated bonds. The Economist May 28th 2016 Economic and ﬁnancial indicators 81

Markets % change on African growth Dec 31st 2015 Africa’s economy is projected to expand Index one in local in $ by 3.7% in 2016, according to a report by LIBYA * May 25th week currency terms the OECD, a rich-country club. East Africa -0.8 United States (DJIA) 17,851.5 +1.9 +2.4 +2.4 is predicted to be the continent’s China (SSEA) 2,946.5 +0.3 -20.5 -21.3 ETHIOPIA* Japan (Nikkei 225) 16,757.4 +0.7 -12.0 -4.0 fastest-growing region: Ethiopia, in particular, has averaged double-digit Britain (FTSE 100) 6,262.9 +1.6 +0.3 +0.2 NIGERIA Canada (S&P TSX) 14,053.7 +1.6 +8.0 +14.7 growth since 2005 and its economy is Euro area (FTSE Euro 100) 1,032.4 +3.2 -5.7 -3.2 expected to swell further in 2016, bol- † Euro area (EURO STOXX 50) 3,061.6 +3.6 -6.3 -3.9 stered by public-sector investment. West EQUATORIAL 8.0 Austria (ATX) 2,272.7 +2.8 -5.2 -2.7 Africa will be helped by the end of the GUINEA - Belgium (Bel 20) 3,492.0 +4.1 -5.6 -3.2 Ebola outbreak. Oil exporters have been France (CAC 40) 4,481.6 +3.8 -3.4 -0.8 hit by the falling price of crude: the OECD ANGOLA Germany (DAX)* 10,205.2 +2.6 -5.0 -2.5 expects growth to remain subdued in GDP, 2016 641.8 +2.2 +1.7 +4.3 % change on a year earlier‡ Greece (Athex Comp) Angola and Nigeria while Equatorial Italy (FTSE/MIB) 18,201.4 +2.8 -15.0 -12.8 8.0+ 2.0-3.9 Netherlands (AEX) 447.2 +2.9 +1.2 +3.8 Guinea is forecast to remain in recession. South Africa is another gloomy spot: 6.0-7.9 0-1.9 SOUTH Spain (Madrid SE) 920.9 +4.1 -4.6 -2.1 AFRICA Czech Republic (PX) 890.3 +1.9 -6.9 -4.5 drought and power shortages mean its 4.0-5.9 Decrease ‡ Denmark (OMXCB) 894.2 +4.0 -1.4 +1.5 low-growth trajectory is set to continue. Source: OECD Forecast *Years ending June †No data Hungary (BUX) 26,704.5 +2.6 +11.6 +15.2 Norway (OSEAX) 673.7 +2.0 +3.8 +10.3 Poland (WIG) 46,695.4 +0.2 +0.5 +0.2 Other markets The Economist commodity-price index Russia (RTS, $ terms) 908.0 -2.0 +7.7 +19.9 2005=100 % change on % change on Sweden (OMXS30) 1,367.1 +1.9 -5.5 -4.0 Dec 31st 2015 one one Switzerland (SMI) 8,167.6 +2.4 -7.4 -6.5 Index one in local in $ May 17th May 24th* month year Turkey (BIST) 78,609.0 +1.8 +9.6 +9.0 May 25th week currency terms Dollar Index Australia (All Ord.) 5,436.8 +0.3 +1.7 +0.4 United States (S&P 500) 2,090.5 +2.1 +2.3 +2.3 All Items 137.5 135.5 -1.2 -3.9 Hong Kong (Hang Seng) 20,368.1 +2.7 -7.1 -7.2 United States (NAScomp) 4,894.9 +3.3 -2.2 -2.2 Food 164.5 162.3 +2.1 +4.7 India (BSE) 25,881.2 +0.7 -0.9 -2.7 China (SSEB, $ terms) 336.7 -1.8 -20.2 -21.0 Indonesia (JSX) 4,773.0 +0.8 +3.9 +4.9 Japan (Topix) 1,342.9 +0.3 -13.2 -5.3 Industrials Malaysia (KLSE) 1,631.0 -0.3 -3.6 +0.8 Europe (FTSEurofirst 300) 1,366.8 +3.1 -4.9 -2.5 All 109.4 107.6 -5.9 -14.9 Pakistan (KSE) 36,499.4 +0.5 +11.2 +11.2 World, dev'd (MSCI) 1,654.4 +0.8 -0.5 -0.5 Nfa† 120.2 115.8 -6.6 -7.2 Singapore (STI) 2,766.7 -0.4 -4.0 -1.3 Emerging markets (MSCI) 788.0 -0.8 -0.8 -0.8 Metals 104.7 104.1 -5.6 -18.2 South Korea (KOSPI) 1,960.5 +0.2 nil -0.9 World, all (MSCI) 397.2 +0.6 -0.5 -0.5 Sterling Index Taiwan (TWI) 8,396.2 +2.9 +0.7 +1.3 World bonds (Citigroup) 929.5 -0.4 +6.8 +6.8 All items 172.8 168.7 -1.3 +1.2 Thailand (SET) 1,397.6 -0.2 +8.5 +9.3 EMBI+ (JPMorgan) 754.0 -0.6 +7.0 +7.0 Argentina (MERV) 12,381.5 -3.5 +6.0 -2.2 Hedge funds (HFRX) 1,152.6§ nil -1.8 -1.8 Euro Index Brazil (BVSP) 49,482.9 -2.1 +14.1 +25.7 Volatility, US (VIX) 13.9 +16.0 +18.2 (levels) All items 150.8 150.9 +0.1 -6.2 Chile (IGPA) 19,525.7 +0.1 +7.6 +10.0 CDSs, Eur (iTRAXX)† 75.1 -3.7 -2.6 -0.1 Gold Colombia (IGBC) 9,708.5 -1.6 +13.6 +17.6 CDSs, N Am (CDX)† 89.7 +7.2 +1.6 +1.6 $ per oz 1,279.5 1,234.6 -0.6 +3.8 Mexico (IPC) 45,710.9 +0.4 +6.4 -0.5 Carbon trading (EU ETS) € 5.8 -4.4 -30.0 -28.2 West Texas Intermediate Venezuela (IBC) 15,314.2 +2.0 +5.0 na Sources: Markit; Thomson Reuters. *Total return index. $ per barrel 48.6 48.3 +9.7 -16.8 Egypt (Case 30) 7,543.4 -1.2 +7.7 -5.1 †Credit-default-swap spreads, basis points. §May 24th. Israel (TA-100) 1,249.8 +2.3 -5.0 -3.9 Sources: Bloomberg; CME Group; Cotlook; Darmenn & Curl; FT; ICCO; Indicators for more countries and additional ICO; ISO; Live Rice Index; LME; NZ Wool Services; Thompson Lloyd & Saudi Arabia (Tadawul) 6,516.5 -3.3 -5.7 -5.6 Ewart; Thomson Reuters; Urner Barry; WSJ. *Provisional South Africa (JSE AS) 53,721.9 +1.8 +6.0 +4.6 series, go to: Economist.com/indicators †Non-food agriculturals. 82 Obituary Fritz Stern The Economist May 28th 2016

ians ofits cultural and moral standards. Another big book looked at money and power in imperial Germany, focusing on the previouslyunexplored relationship between Bismarck and his banker, a Prussian Jew called Gerson von Bleichröder. The picture painted was unflattering to both: the Iron Chancellor’s brutal opportunism matched by the financier’s fawning sub- servience. But the moral dilemmas of the Hitler era were the most fascinating. He wrote an insightful study of two anti-Nazi notables: the Protestant pastor Dietrich Bonhoeffer and his friend, the intelligence officer Hans von Dohnanyi.

Stern fans Distinguished in the English-speaking world, the silver-tongued professor was re- vered in Germany. Die Welt called him the country’s “Guardian Angel”: combining an insider’s knowledge with an outsider’s clout. Though originally lukewarm about reunification, in 1990, at a—literally—historic seminar, he helped persuade Margaret Thatcher, then the British prime minister, that it posed no threat to Europe. The Stern professorial wrath descend- Another German ed on Daniel Goldhagen, an American author whose book “Hitler’s Willing Execu- tioners” sweepingly blamed the Holocaust on Germans’ “eliminationist mindset”. His blistering review in Foreign Affairs called it “astoundingly repetitive”, “simplistic” and a “potpourri of half-truths and assertions” Fritz Stern, a German-born American historian, died on May18th, aged 90 (and full of “vaporous, dreary jargon”, to HAT made Germany go mad? Hav- ous, professional Sterns were surely nei- boot). Anti-Semitism was inexcusable, Wing fled the Nazis as a boy, Fritz Stern ther; the family had long ago converted to but—historically—Germany was far from spent the rest of his life trying to under- Lutheranism. Onlywhen rebuked formak- unique. Itsmisdeeds mustbe criticised, but stand and explain the murderous frenzy ing an anti-Semitic remark to his (piously always with scrupulous facts and logic. which beset his homeland. Christian) sisterdid he even become aware Some judgments would have been His life spanned five states ofGermany: ofhis family’s roots. hard for a non-Jewish, non-refugee to the Weimar Republic, Hitler’s Nazi Reich, The Sterns were spared any personal make: forexample that Hitler would today the prosperous, guilt-ridden Federal Re- humiliation: they emigrated unhurriedly be hailed as a German national hero had public, the harshly run communist East, and reluctantly, with their furniture and he died in 1936. His expertise was mostly and finally the reunified country, which other possessions, in 1938, a fortunate six from on high, and from afar, with little time bestowed on him its highest honours. His weeks before the furies of Kristallnacht. actually living in Germany (a five-month impeccable credentials—American, Jew- The young man initially wanted to follow stint in 1992 as the American ambassador’s ish, a refugee from Hitler—meant he could his father into medicine, but found the hu- adviser was the longest stay of his adult praise something that modern Germans manities beguiling. Albert Einstein, a fam- life). Some thought his delight in prizes and could not. He termed it anderes Deutsch- ily friend, advised him to stick with medi- lectures excessive. Yet a self-questioning land (“another Germany”): not a state, but cine: it was a science; history wasn’t. He German soul permits no complacency: a place of noble ideas and brave behav- ignored that, and a career in American aca- after receiving a particularly grand prize, iour, a cultural powerhouse and a force for demia, chiefly at Columbia University, he was asked by his wife “are you happy?” European unity. After the Stern family’s quickly blossomed. He replied sombrely: “ifnot now, when?” flight from Breslau, now Polish Wroclaw, He made his name with a book on cul- He ended his life worrying that democ- Germany could no longer be his father- tural despair, published in 1961, which racy was disintegrating, just as it had in his land, but German, precise and expressive, traced the Nazis’ roots to a 19th-century youth. Authoritarian tendencies in Poland wasstill hismother-tongue—and there was German revulsion against modernity and were distressing. So too were develop- nowhere else, he said fondly, where he liberalism. The trauma of defeat in the first ments closer to home. When the Sterns ar- could use it in the same way. world war turned fashionable cultural rived in America FDR was president. Now Fritz was seven when Hitler came to malcontents into a political force that ulti- Donald Trump—a “nobody” but for his power: bad news, the boy could tell, from mately became a murderous ideology. Hit- wealth and ambition—exemplified “stulti- his father’s reaction when he brought up ler’s rise, he argued, owed less to the Aus- fication” and an ominously “dysfunction- the morning newspaper. But it was noth- trian corporal’s personality, his thuggish al, destructive” politics. A life spent study- ing that affected the family personally. In supporters and brutish ideas, than to his ing how quickly and terribly things can go the early Nazi years left-wingers, not Jews, opponents’ cowardice and the weakness wrong, and the cost of righting them, bore the bruntofpersecution. 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