The Surging Cyberthreat from Spies and Crooks

Assessing Biden’s summitry Iraq: a good-news story Hard truths about SoftBank Economic divergence: jabs and jab-nots

JUNE 19TH–25TH 2021 Broadbandits The surging cyberthreat from spies and crooks

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Contents The Economist June 19th 2021 5

The world this week Britain 8 A summary of political 23 Northern Ireland and business news 24 Cop corruption An lgbt charity Leaders 25 Inbred thoroughbreds 11 Cyber-security 25 Broadbandits 26 A little more lockdown 12 The Biden-Putin summit 26 Out of town, on the up Worth the air miles 28 Not your dad’s army 12 Corporate governance 30 Bagehot The two cultures, The benefits of foresight revisited 14 Iraq Peace gives a chance Europe 16 Northern Ireland 31 The BidenPutin summit On the cover Protocol problems 32 Albania’s pyramid The new age of cyber-attacks 33 German climate politics could have huge economic Letters 34 Charlemagne Made in costs: leader, page 11. 18 On gold and bitcoin, America Ransomware is not the only buses, air conditioning, challenge for governments: greenwashing, China briefing, page 20. Hacker gangs United States go where the money—and the Briefing data—are, page 70 35 The Biden domestic 20 The complexities of agenda stalls cybersecurity Assessing Biden’s summitry 36 Pipeline politics The meeting with Vladimir Putin Technology Quarterly: Southern Baptists was a small step forward: leader, 37 Protecting biodiversity page 12. A return to traditional 37 Joe Biden and antitrust diplomacy in Geneva, page 31. The other emergency 38 California’s budget After page 44 America is an engine of 39 Emergency powers European integration, Lexington Terry McAuliffe intentionally or not: 40 Charlemagne, page 34 The Americas Iraq: a good-news story Few 42 Mexico’s refugee wave things are harder than building 43 Americans flock to Mexico a state. But hints of progress can 43 Venezuela and Iran be detected: leader, page 14, and analysis, page 45 44 Bello Latin America’s schools Hard truths about SoftBank The Japanese techinvesting group has pulled off a stunning Middle East & Africa comeback. But some of its flaws 45 Building a state in Iraq remain, page 59. Investors in 47 Israel’s new government technology firms too often put 48 Elections in Ethiopia up with ropy corporate governance: leader, page 12 49 Africa’s space race

Jabs and jab-nots Uneven vaccination rates are creating Bartleby Picking the a new economic divide, page 67 right pattern for hybrid working, page 64

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012 6 Contents The Economist June 19th 2021

Asia Finance & economics 50 The Modi blues 67 An economic divide 51 Crybabies in South Korea 68 America’s housing boom 52 Cabin fever in Singapore 69 Buttonwood China’s 52 Mongolia’s onehorse race rising currency 53 Banyan Wet winds of 70 America’s highyield debt change 70 The new bank robbers 72 Free exchange Do robots China kill jobs? 54 Hong Kong’s beleaguered press Science & technology 55 SinoAmerican struggles 74 Drones are oﬀ the leash 56 Chaguan Green 75 Why Betelgeuse dimmed autocracy’s limits 76 Coelacanth lifespans 76 A covid19 drug 77 Urban microbiology International 57 Covid19 and the urban poor Books & arts 78 Covid19 in America 79 A woman’s vengeance 80 Carlos Ghosn and Nissan 80 A South African library burns Business 81 Johnson The translator’s 59 Hard truths burden about SoftBank 63 Italy’s lipstick valley Economic & ﬁnancial indicators 63 Ownership in India Inc 84 Statistics on 42 economies 64 Bartleby Remote rotas 65 Schumpeter Firms’ Graphic detail Olympic dilemmas 85 Cryptominers and the chip shortage

Obituary 86 Edward de Bono, father of lateral thinking

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012 8 The world this week Politics The Economist June 19th 2021

Myanmar’s ruling junta put Pedro Castillo, a hardleftist, Aung San Suu Kyi on trial claimed victory in Peru’s Coronavirus briefs behind closed doors. The army, presidential election. He To 6am GMT Jun 17th 221 which took power in a coup in finished 44,000 votes ahead of February, has charged the his rival, Keiko Fujimori, the Weekly confirmed cases by area, m 3 country’s former leader with hardright daughter of a India seven crimes, including cor former president. She claims 2 ruption and possessing walk that the count was inflated by Western Europe ietalkies. If found guilty she fraud and has promised to 1 faces decades in prison. challenge the result in court. Other US 0 Tens of thousands of people Criminal violence in Portau 2020 2021 Joe Biden and Vladimir Putin rallied in Madrid against the Prince, the capital of Haiti, has Vaccination doses met in Geneva for a summit. It government’s plan to pardon 12 led 8,500 people, mostly wom % of over-11s with lasted less than four hours, but separatists from Catalonia who en and children, to flee their Total ’000 1st dose nd both men described it as con were behind an illegal in homes, according to Unicef. UAE 13,964 99 62 structive. The two sides agreed dependence referendum in Some 14,000 people have been Malta 596 88 65 to return their ambassadors, 2017. Nine of the separatists displaced. Israel 10,632 82 77 who were recalled earlier this were found guilty of sedition, Mongolia 3,566 78 69 year, and said they would work in what was Spain’s biggest Naftali Bennett was sworn in Bhutan 483 78 0 Iceland 327 78 36 on new nucleararmscontrol political crisis for decades. as prime minister of Israel, Canada 29,918 75 16 measures. Mr Biden criticised Some 60% of Spaniards oppose ending Binyamin Netanyahu’s Chile 20,657 73 55 Russia’s humanrights record, their pardons. 12 years in power. Mr Bennett Uruguay 3,358 73 43 but said the topic should be faced an immediate test when Britain 72,041 72 52 dealt with separately from At a referendum in Switzer- Jewish nationalists marched Sources: Johns Hopkins University CSSE; other matters, such as security land, voters narrowly rejected through the Old City of Jerusa Our World in Data; United Nations and climate change. Mr Putin a plan to levy taxes on airline lem, some chanting racist denied that Russia engages in tickets and car fuel to tackle slogans. Hamas, the Palestin The number of infections cyberattacks. climate change, complicating ian militant group that runs continued to fall in India. the government’s ambitions Gaza, launched incendiary Tourist attractions, including China rejected criticism made under the Paris accord. balloons at Israel, which the Taj Mahal, reopened to by g7 countries at their responded with air strikes in visitors. There are worries summit in Britain. The g7 had Boris Johnson postponed the Gaza. There were no casualties. that easing restrictions will called for peace in the Taiwan final lifting of covid restric It was their first big clash since cause a new wave of cases. Strait and asked China to tions in England for what had last month. respect human rights, espe been labelled “Freedom Day”. Officials in Moscow told cially in Xinjiang and Hong Cases of the Delta (Indian) Lebanon’s currency, which people to work from home, as Kong. A Chinese official said variant are rising. Britain’s has lost more than 90% of its new daily cases in the city America was sick and the g7 prime minister hopes that by value since October 2019, hit a leapt to their highest level should give it medicine. Mean July 19th twothirds of the new low. The country is mired since December. while, 28 Chinese military population will be fully vacci in an economic crisis that has aircraft flew into Taiwan’s nated and restrictions can at left it short of basic goods such California and New York airspace, more than had been last end. Meanwhile, it was as fuel and medicine. Efforts to lifted almost all their remain recorded on any previous day. reported that carehome staff form a new government ing restrictions. The number will have to be vaccinated if remain stalled. of new infections in both China passed a law allowing its they want to keep their jobs. states are at their lowest levels government to retaliate America is considering a plan since the start of the crisis. against sanctions imposed on A judge found that Joe Biden to send commandos back to it by other countries. Individ may have exceeded his presi- Somalia. This would partly Tanzania said it would uals or entities involved in dential powers when he reverse a decision by Donald release data on covid19 implementing such sanctions stopped issuing licences to Trump, who withdrew all 700 infections for the first time in could be put on a blacklist and drill for oil and gas on federal American troops from the more than a year. This would have their assets in China land, one of his first orders as country. The soldiers would make the imf and World Bank seized. In Hong Kong the president. Granting an in train Somali forces battling more likely to disburse funds. editor and four other people junction against the order, the alShabab, a jihadist group. Tanzania’s late president, associated with the Apple judge said that only Congress John Magufuli, had halted the Daily, a prodemocracy news could take such action. Tedros Adhanom Ghebreyesus, publication of such statistics. paper, were arrested for pub the head of the World Health He also denied there was lishing articles calling for Another six opposition poli Organisation, warned that covid in his country, and said sanctions against the city’s and ticians were arrested in poor countries needed more that vaccines did not work. mainland’s governments. Nicaragua, bringing the total vaccines for covid19, and to 13 in recent weeks. They now, “not next year”. The g7 North Korea’s dictator, Kim have chided President Daniel had just promised 1bn doses. →For our latest coverage of the Jong Un, warned that the coun Ortega, who stands for re At least 11bn will be required if virus please visit economist.com/ try faced food shortages, which election in November and 70% of the world’s population coronavirus or download the he blamed on flooding, seems determined to do is to be vaccinated by the time Economist app. covid19 and sanctions. anything to win. the g7 meet again in 2022.

012 The world this week Business The Economist June 19th 2021 9

The Federal Reserve left America and the eu reached a Satya Nadella took on the role Nagayama Osamu said he interest rates on hold at its deal to end their 17year dis of chairman at Microsoft in would consider resigning as latest meeting, though there pute over subsidies for Boeing addition to his job as chief chairman of Toshiba, follow was a perceptible shift in the and Airbus. Titfortat tariffs executive, the first time that ing the publication of a scath mood music. The central will be suspended for five both roles have been combined ing independent report into bank’s projections now suggest years while both sides work since Bill Gates was in charge. collaboration between man that rates will be lifted twice in out an arrangement to limit agement and the Japanese 2023, a change from previous subsidies and discuss other Didi Chuxing filed papers to government, but only after he guidance that they would issues, such as funding to list shares on either the had fixed the company’s pro remain at recordlow levels develop new aircraft. Nasdaq or New York Stock blems. The report laid bare the until the end of 2024. The us Exchange. Expected next extent to which officials col economy is recovering from Five bills were introduced in month, the ipo of China’s luded to head off a rebellion at the pandemic more quickly America’s House of Repre biggest ridehailing firm could last year’s shareholders’ meet than had been thought. sentatives that aim to curb the raise a reported $10bn. ing, which critics say proves power of big tech companies that the government is more by, among other things, pro Emirates reported an annual interested in protecting cro Inflation sensation hibiting a dominant platform loss of $5.5bn for the year nies than investors’ interests. from promoting its products ending March 31st. With Consumer prices over others and barring the use international travel almost at a A court in France fined ikea % change on a year earlier of takeovers to smother com standstill because of the €1m ($1.2m) for spying on its 6 petition. The most ambitious pandemic the airline carried staff through a surveillance United States 4 overhaul of antitrust law in just 6.6m passengers over the system between 2009 and

Britain 2 decades would affect all firms, 12 months, down by 88% from 2012. The former head of risk at but is directed at Apple, the previous year. The govern ikea France reportedly once 0 Amazon, Facebook and Google. ment of Dubai will continue to inquired how a member of Euro area -2 The bills face a long journey support the company, which staff could afford a new bmw. 2020 2021 through Congress. has shed almost a third of its Source: Refinitiv Datastream workforce since the start of the Big tech companies are to face crisis. Get off the chaise longue The annual rate of change in a formidable foe at the Federal Bankers in America are being Britain’s consumer price index Trade Commission, where Britain struck a freetrade deal pressed to return to the office jumped to 2.1% in May, from Lina Khan has been appointed with Australia, the first after a year of remote working. 1.5% in April. Inflationary chairwoman. Just 32 years old, agreement negotiated from James Gorman, the boss of pressures are increasing as Ms Khan is a professor at scratch by the British govern Morgan Stanley, told staff that economies return to business. Columbia University Law ment since Brexit. British if they felt comfortable visiting Inflation in America also rose School and has written exten farmers are worried that their a restaurant in New York then again in May, to 5%, the high sively on reforming antitrust market will be swamped by they should also come back to est reading since August 2008. law. She was a counsel to the cheaper goods from Down the office. Goldman Sachs has congressional committee that Under. They will be protected taken the toughest approach, With inflation running at 8%, drafted a report forming the by a cap on tarifffree imports ordering all its employees back Brazil’s central bank raised basis of the bills in the House. for 15 years. to their desks. interest rates for the third time this year, lifting its benchmark rate to 4.25%.

A big factor driving inﬂation is rising energy costs. The price of Brent crude closed in on $75 a barrel this week after opec and the International Energy Agency issued bullish fore casts on demand for oil. The iea called on opec to “open the taps” to keep markets ade quately supplied.

The European Union conduct ed the ﬁrst funding operation for its Next Generation eu programme, raising €20bn ($24.2bn) through the sale of a tenyear bond, the largest amount the eu has raised in a single transaction. The bloc wants to tap €800bn in capital markets by the end of 2026 to ﬁnance the recovery fund.

012 012 Leaders 11

Broadbandits

The new age of cyber-attacks could have huge economic costs wenty years ago, it might have been the plot of a trashy air and public bodies. The perpetrators include states conducting Tport thriller. These days, it is routine. On May 7th cyber espionage and testing their ability to inflict damage in war, but criminals shut down the pipeline supplying almost half the oil also criminal gangs in Russia, Iran and China whose presence is to America’s east coast for five days. To get it flowing again, they tolerated because they are an irritant to the West. demanded a $4.3m ransom from Colonial Pipeline Company, A cloud of secrecy and shame surrounding cyberattacks am the owner. Days later, a similar “ransomware” assault crippled plifies the difficulties. Firms cover them up. The normal incen most hospitals in Ireland. tives for them and their counterparties to mitigate risks do not Such attacks are evidence of an epoch of intensifying cyber work well. Many firms neglect the basics, such as twostep au insecurity that will impinge on everyone, from tech firms to thentication. Colonial had not taken even simple precautions. schools and armies (see Briefing). One threat is catastrophe: The cybersecurity industry has plenty of sharks who bamboo think of an airtrafficcontrol system or a nuclearpower plant zle clients. Much of what is sold is little better than “medieval failing. But another is harder to spot, as cybercrime impedes the magic amulets”, in the words of one cyberofficial. digitisation of many industries, hampering a revolution that All this means that financial markets struggle to price cyber promises to raise living standards around the world. risk and the penalty paid by badly protected firms is too small. The first attempt at ransomware was made in 1989, with a vi The lbs study, for example, concludes that cyberrisk is conta rus spread via floppy disks. Cybercrime is getting worse as more gious and is starting to be factored into share prices. But the data devices are connected to networks and as geopolitics becomes are so opaque that the effect is unlikely to reflect the real risk. less stable. The West is at odds with Russia and China and sever Fixing the private sector’s incentives is the first step. Officials al autocracies give sanctuary to cyberbandits. in America, Britain and France want to ban insurance coverage Trillions of dollars are at stake. Most people have a vague of ransom payments, on the ground that it encourages further sense of narrowly avoided fiascos: from the Sony Pictures attack attacks. Better to require companies to publicly disclose attacks that roiled Hollywood in 2014, to Equifax in 2017, when the de and their potential cost. In America, for example, the require tails of 147m people were stolen. The big hacks are a familiar but ments are vague and involve large time lags. confusing blur: remember SoBig, or Solar With sharper and more uniform disclosure, Winds, or WannaCry? investors, insurers and suppliers could better A forthcoming study from London Business identify firms that are underinvesting in secu School (lbs) captures the trends by examining rity. Faced with higher insurance premiums, a comments made to investors by 12,000 listed flagging stock price and the risk of litigation, firms in 85 countries over two decades. Cyber managers might raise their game. Manufactur risk has more than quadrupled since 2002 and ers would have more reason to set and abide by tripled since 2013. The pattern of activity has be product standards for connected gizmos that come more global and has affected a broader help stem the tide of insecure iot devices. range of industries. Workers logging in from home during the Governments should police the boundary between the ortho pandemic have almost certainly added to the risks. The number dox financial system and the shadowy world of digital finance. of affected firms is at a record high. Ransoms are often paid in cryptocurrencies. It must be made Faced with this picture, it is natural to worry most about harder to recycle money from these into ordinary bank accounts spectacular crises caused by cyberattacks. All countries have without proof that the money has a legitimate source. Likewise vulnerable physical nodes such as oil pipelines, power plants with cryptocurrency exchanges, which should face the same ob and ports whose failure could bring much economic activity to a ligations as established financial institutions. standstill. The financial industry is a growing focus of cyber Cyberinsecurity is a matter of geopolitics, too. In conven crime: these days bank robbers prefer laptops to balaclavas (see tional warfare and crossborder crime, norms of behaviour exist Finance section). Regulators have begun to worry about the pos that help contain risks. In the cyberdomain novelty and confu sibility of an attack causing a bank to collapse. sion reign. Does a cyberattack from criminals tolerated by a for But just as costly is the threat to new tech as confidence in it eign adversary warrant retaliation? When does a virtual intru ebbs. Computers are being built into cars, houses and factories, sion require a realworld response? creating an industrial “internet of things” (iot). Insights gleaned A startingpoint is for liberal societies to work together to from oceans of data promise to revolutionise health care. In the contain attacks. At the recent summits of the g7 and nato, West ory, all that will boost productivity and save lives for years to ern countries promised to do so. But confronting states such as come. But the more the digital world is plagued by insecurity, China and Russia is crucial, too. Obviously, they will not stop the more people will shy away from it and the more potential spying on the Western countries that do their own snooping. But gains will be lost. Imagine hearing about ransomware in some a third summit, between Presidents Joe Biden and Vladimir Pu one’s connected car: “pay us $5,000, or the doors stay locked.” tin, began a difficult dialogue on cybercrime (see next leader). Dealing with cyberinsecurity is hard because it blurs the Ideally the world would work on an accord that makes it harder boundaries between state and private actors and between geo for the broadbandits to threaten the health of an increasingly politics and crime. The victims of cyberattacks include firms digital global economy. n

012 12 Leaders The Economist June 19th 2021

The Biden-Putin summit Worth the air miles

The meeting between Joe Biden and Vladimir Putin was a small step forward he aim, President Joe Biden said, before setting off on a The second bucket is trickier. Mr Biden warned Mr Putin that TEuropean tour that ended in a summit with his Russian America will protect its own interests and those of allies, over counterpart on June 16th, was to “make it clear to Putin and Chi cyberattacks or the territorial integrity of Ukraine. The trouble na that Europe and the United States are tight”. He achieved that, is that no one knows how far Mr Biden would be willing to go, more or less. After meetings of the g7 and nato and an euAmer and Mr Putin simply denies everything. He insists, for example, ican powwow, it is clear that the rich countries of Europe and that Russia, not America, is the main victim of hacking. North America (and Japan) share common concerns about the The third area is human rights, where Mr Biden says America two great autocracies that confront them. Whereas Donald will always defend universal values and warned of “devastating Trump showed a strange fondness for dictators, Mr Biden is do consequences” if Alexei Navalny, an opposition leader, should ing a fair job of uniting democracies to call the autocrats out. die in prison. However, by putting them in their own bucket, he Mr Putin and Mr Biden arrived in Geneva without much room hinted that human rights are not the reddest of red lines. Critics for manoeuvre. Mr Biden wants to look tough on Russia, but will call this détente at best, a sellout at worst. Others will see it finds himself constrained. He needs Russian help on a range of as sensible. Relations with Russia are too important to be seen issues, including climate change, keeping only through one lens. nukes out of Iran, ending the war in Syria, forg Mr Putin may welcome a breathing space, ing new armscontrol treaties and, perhaps especially if he is, more or less, left alone within most of all, avoiding an escalation of the con his borders. If he continues troublemaking, it is flict in Ukraine that might suck America in. unclear how much stomach Mr Biden has for a Mr Putin is constrained, too. He faces dis fight. Like Mr Trump and Barack Obama, he sent at home, and would gain from a relaxation rightly sees China, not Russia, as the urgent of economic sanctions. Russia has turned itself challenge. He would love to leave Russia to the into a “fortress economy” to withstand these, Europeans, letting America devote its full at but that makes life harder for ordinary Russians. Mr Biden can tention to Asia. But the Europeans are not up to the task. They not give him such relief, so long as the repression that is neces are divided among themselves and parsimonious. sary to Mr Putin’s political survival goes on, and in the absence What is left if fingerwagging achieves little and it is too hard of a humiliating withdrawal from Ukraine. to restrain autocracies? Mr Biden talks of outcompeting them. Still, they talked for four hours, and both men agreed that it Yet the g7 summit missed a chance to show leadership, pledging had been constructive. After the summit, Mr Biden put the is to donate fewer than 1bn doses of covid19 vaccine to the less for sues into three buckets. The first is those areas where America tunate, a tenth of what is needed. It also failed to add flesh to its and Russia share common interests and can work together. grand ideas about a Build Back Better World (an infrastructure These include climate change, Iran, the Arctic and arms control, plan to compete with China’s Belt and Road Initiative). Outdoing where there was an outline agreement to restart stalled talks. Russia economically is not hard, but China is a different matter. Both sides agreed to return their ambassadors, who were re Mr Biden’s domestic agenda is hobbled by congressional grid called earlier in the year, after Mr Biden called Mr Putin a “killer”. lock and deep political polarisation (see United States section). On these issues grownup, plodding diplomacy will resume. America will find that contest a more severe one. n

Corporate governance The beneﬁts of foresight

Investors in technology firms too often put up with ropy corporate governance. They may come to regret it very business cycle, as it runs out of puff, reveals problems Guessing where tomorrow’s cautionary tale may lie is not Ethat seem obvious in hindsight. Twenty years ago, when easy. But investors seeking to avoid blowups should pay special stockmarkets slumped, accounting frauds came to light at En attention to securities, companies and bosses that encapsulate ron, an energytrading firm, and WorldCom, a telecoms outfit. the boom today. One area of financial risk is the thriving high Less spectacular were the revelations that many companies had yield debt market where underwriting standards have slipped cut corners or behaved recklessly. The actions of titanic bosses (see Finance section). In the corporate world the prime candi ruling over General Electric and Vivendi, a French media group, date for a governance conflagration is the technology industry. ended up hobbling them for decades. After 2008, the emperors One reason is the enduring exuberance for anything with the of Wall Street were revealed to be wearing no clothes, with Leh whiff of tech. The recession caused by covid19 was a hammer man Brothers, Merrill Lynch and others collapsing under the blow to many parts of the global economy. But a sideeffect of the weight of huge losses—and their bosses’ giant egos. pandemic was to turbocharge Silicon Valley and its various off

012 012 14 Leaders The Economist June 19th 2021

shoots, amplifying an already unprecedented bullrun. All man that collapsed earlier this year; WeWork, a troubled office com ner of sins, from questionable accounting to imperious execu pany; and Wirecard, a fraudulent German fintech firm. tive behaviour, tend to be overlooked in good times. As Warren That raises questions about how SoftBank itself is run (see Buffett famously noted, only when the tide goes outcan you see Business section). Although a tentacular outfit, the firm is best who has been swimming naked. thought of as the Masa show, where all the big decisions are Another reason to watch tech is the plentiful fundingfor ris made by its founder and boss, Son Masayoshi. This includes ky ventures. Investors desperate for returns have been shovel how to allocate oodles of capital—the firm is currently spending ling money at businesses with high valuations, butwhose pros over $200m a week backing companies. pects are far from proven. Didi Chuxing, a Chinese ridehailing Risk control at the firm is patchy. Its internal hedge fund, outfit, may well receive a valuation of over $100bnin an upcom once dubbed the “Nasdaq Whale”, roiled markets last year, send ing share sale, despite amassing $13bn of cumulativelosses. Fur ing shares of various companies berserk. The firm has morphed ther rum has been added to the punch with the so many times analysts admit struggling to un proliferation of specialpurpose acquisition SoftBank Group derstand what goes on there. Dealings between companies, or spacs, which are listed pots of Market capitalisation, $bn the firm, its funds, its executives and its affili money designed to merge with private firms. 200 ates can create the risk of conflicts of interest. 150 The last reason to watch out for tech firms is 100 SoftBank is not alone. There is surely ques their bosses. Dotcoms and their corporate cous 50 tionable corporate governance in other tech ins are often still run by their founders. Many of 0 firms, too. Disclosure is patchy at best. At the them have controlling stakes, thanks to 1614122010 2118 big tech firms, it is far less demanding than at soupedup voting rights. These entrepreneurs big banks: Facebook’s annual report has 129 pag tend to have a messianic confidence in their own abilities and a es, compared with 398 at JPMorgan Chase. This week executives fortune to match. The heady potion of control, wealth and self at Lordstown Motors, an electricvehicle startup, resigned after belief can lead bosses to brush aside all criticism and to look the firm made inaccurate disclosures. Those dualclass share upon rules as things for other people. holding structures often let exalted founders keep control. One firm that highlights all of these worries is SoftBank. The In tech, activist investors hold relatively little sway. Their ar world’s biggest tech investor, with a market value of over $120bn, rival would go some way to improve corporategovernance stan it has been instrumental in fuelling today’s ebullience. Some of dards by subjecting management to more rigorous scrutiny (as its bets, including Didi and Coupang, a South Korean ecom Elliott has at SoftBank). In their absence, conventional share merce champion, have been great successes. But as well as back holders and creditors should be vigilant. When the tide goes ing some hits, and its inevitable share of duds, the Japanese firm out—as one day it will—the investors who paid closestattention has also become mired in firms like Greensill, a British lender during the dizzying days of the boom will be rewarded. n

Iraq Peace gives a chance

Some steps that Iraqis could take towards building a functioning state ince the overthrow of Saddam Hussein, a bloodsoaked des they wangled permanent spots on the public payroll. Spot, Iraq has lurched from crisis to civil war and back again. The militias’ budget for salaries has increased annually, from Today, as the country prepares for an election in October, many 1.3trn Iraqi dinars ($1.1bn) in 2018 to 3.5trn Iraqi dinars in 2021. Iraqis say they are too disgusted to vote (see Middle East & Africa Iraq’s government now spends 2% of gdp on its informal armed section). What is the point, they ask, when the government they forces, more than most countries spend on their formal ones. will elect can barely govern, when politicians are useless and This does not include the money that militias make from smug corrupt, and when the country is really run by militias, factions, gling and extortion. And many are anything but loyal to the tribal chiefs and foreign powers? state. Some take orders from Iran; others from venal warlords. Yet there is cause for hope. The main one is that Iraq is less It would help if Ayatollah Sistani, who has gone silent of late, violent than it was. As recently as 2014, a third of its territory was told the militias that their mission is over. Regardless, the gov controlled by Islamic State ( is), a group that enslaved women ernment should seek to take charge of the vast fiefs the militias and burned people in cages. Since the “caliphate” was crushed in control. It should also integrate some of their gunmen into the 2017, a measure of calm has returned, letting businesses operate Iraqi army, under the regular chain of command, and demobil and children walk to school without fear of being blown apart by ise and pension off the rest. a car bomb. The economy is set to recover from the shock of This will be both horribly expensive and dangerous—a vocal covid19. And peace creates an opportunity for Iraqis to build a advocate of demobilisation was recently murdered. But the al state that actually works. ternative is worse. Some militia bosses aim to emulate the Irani An essential step in that direction is to defang the militias. an Revolutionary Guard Corps, a force that corruptly dominates Several of these mostly Shia armed groups were created to defeat the Iranian economy and takes orders only from Iran’s top theo is. Ayatollah Ali alSistani, the most revered Shia cleric in Iraq, crat. A plan to demobilise Iraqi militias was drafted years ago. It urged young men to join the fight. However, when the campaign should be dusted off and implemented. ended, they did not lay down their arms. Quite the opposite: Another vital step is for the government to provide services

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012 16 Leaders The Economist June 19th 2021

for citizens and not just jobs for civil servants. Pay and pensions pose a market rate on consumers. This would give them an in for publicsector workers sometimes gobble up more than all centive to conserve energy, public money and the environment. the state’s oil revenues. Hiring is nepotistic. No private employ To help bring all this about, voters need to vote. Although this er pays so much for so little work, so most Iraqis want a govern can be scary in militiadominated areas, when Iraqis boycott the ment job. This makes it harder for private firms to recruit. It also ballot it only cements the grip of the armed groups and the hated devours cash that could be used for schools, hospitals and wel corrupt factions. It would help if the antigraft protesters who fare for the truly needy. The finance minister has a plan to slim made so much noise in 2019 got themselves organised and of the civil service, remove ghost workers and invest in things that fered an alternative. Failing that, voters should pick the cleanest benefit the majority of Iraqis. It should be enacted. candidate in their district. Third, the government should scrap energy subsidies, which cost a staggering 10% of gdp. Electricity is cheap—or, since bills The long road back are seldom collected, entirely free—so users waste it on a huge The next Iraqi government will face plenty of opposition to such scale. To generate more, the government imports gas from Iran, reforms if it attempts them. All the more reason to agitate harder but often fails to pay for it. for them. Building a state is tough, and will take a long time. But None of this is necessary. Iraq produces lots of gas, but waste it is in Iraqis’ interest. Their country’s recent experience of chaos fully flares most of it. The country should capture more and im should make them aware of the price of failure. n

Northern Ireland Protocol problems

Britain and the European Union should seek compromise over Northern Irish trade eldom can a mere treaty protocol have caused so much fuss by law and it fears that Mr Johnson will gradually undermine the Sso soon after it was signed. Under Boris Johnson’s Brexit deal, entire protocol. But by pressing its case it is playing into his Great Britain has left the European Union’s single market and hands, because his poll ratings rise in line with battles with the customs union. But to avoid a hard northsouth border in Ire eu. Even if the law is on its side, the politics are not. land, Northern Ireland has, in effect, remained in both. That ne A compromise is available. The eu could be more creative in cessitates border and customs checks between the province and assessing whether goods going to Northern Ireland are really Great Britain instead. about to cross into its single market. It is already easing the The prime minister is now attacking Brussels for its legal movement of guide dogs and medicines, and the single market purism in enforcing their agreement. His supporters denounce has just survived six months of freeflowing British sausages. the eu’s colonialism and lack of feel for delicate Northern Irish Although the eu does not trust the British government, Mr politics. They have even accused eu leaders of treating the prov Johnson could help by offering a concession of his own by pro ince as if it were no longer a full member of the United Kingdom. mising to observe, for a limited period, eu foodsafety stan Yet it was Mr Johnson who chose to negotiate the protocol as dards, as Switzerland does. That would eliminate 80% of checks the alternative to the loathed “backstop” engineered by Theresa in the Irish Sea and, moreover, allow beef, lamb and fisheries ex May, his predecessor. This would have kept the ports from Britain to the eu to resume. entire United Kingdom in a customs union Some argue against this, pointing to a Brit with the eu. The protocol lays down precisely ish ideological allergy to any alignment with eu how this alternative arrangement should work, rules. Yet the British government is sticking to including rules to block movement of chilled the eu’s veterinary standards—indeed, it is pro meats such as fresh sausages, after a grace per mising to exceed them. Others say that regula iod that expires on June 30th. tory divergence with the eu may be needed to Mr Johnson knew all this when he trium secure a freetrade deal with America, a big food phantly ratified the protocol, calling it the best exporter. Yet at the g7 summit Mr Biden prom of both worlds. It is disingenuous for him to feign outrage today, ised that this would not be the case. In any event, there is no when Brussels calls for the rules to be implemented, not broken. prospect of a transatlantic freetrade deal for several years. However much he relishes the political gains from a fight with Other freetrade deals with, say, Australia would still be pos the eu, for the sake of peace in Ireland and the health of Britain’s sible while sticking to eu rules. Switzerland has a deal with Chi most vital commercial relationship, he should compromise— na and, unlike eu countries, can import hormonetreated beef if and the eu should go out of its way to help him. it is labelled. Tellingly, temporary British observance (avoiding An early sign of the potential costs came at the g7 summit in the term “alignment”) of the eu’s veterinary standards has been Cornwall, Britain’s postBrexit comingout party, which was called for by all parties in Northern Ireland, including the new partly overshadowed by squabbles over the protocol (see Britain Democratic Unionist leader, Edwin Poots. section). Mr Johnson signalled that he plans to break the treaty This scheme would give time for relations with the eu to cool (and, once again, international law) by unilaterally extending and let negotiators find a more pragmatic approach to Northern the chilledmeats grace period. Brussels meanwhile is insisting Irish trade. That would be wiser than further breaches of inter that it will invoke its right to retaliate with tariffs. national law or the imposition of tariffs. DoesMr Johnson want a A tariff war over sausages would be an absurdity. The eu runs fight, or what’s best for the United Kingdom? n

012 Executive focus 17

012 18 Letters The Economist June 19th 2021

is an American standard pub tends to encourage a binary The nature of gold Get on the bus lished in 2001. It describes how framework of clean versus Buttonwood’s column on Your special report on race in to ventilate “smoking rooms” dirty at any given point in bitcoin and the battle between America (May 22nd) didn’t say (smoking in workplaces was time. It is better to use the “crypto kids and fiat dino much about inequities in outlawed over a decade ago). carbon footprint along with saurs” (May 29th) made many transport. I have been a bus Building officials are keen to forwardlooking data, such as excellent points, although a driver for 13 years in southeast ensure the water pipe serving a temperature trajectories, couple of them could be qual Michigan. We have many good toilet is the correct size, but are which seek to capture the ified. The column stated that jobs in my suburb of Livonia, completely uninterested in the overall journey and potential “crypto, like gold, is built on a but it has chosen not to partici design for adequate ventila for longterm improvement. collective belief about its pate in the regional bus tion. The air quality inside BlackRock says it will map value. But so to an extent are system, cutting off people of buildings is largely deter trajectories this year. all asset prices.” Although we all races in Detroit from the mined by the whims of indi We welcome mandatory agree with much of this, the opportunities here. vidual engineers. climate disclosure, as sig argument assumes that gold is An extremely lowcost way The pandemic has not nalled by the g7, but would solely a financial instrument. to support people economical helped. Rather than imple emphasise that marketled It is not. It has a dual nature as ly is to reorganise transit sys menting sciencebased sol incentives offer a valuable a consumer good and an tems that serve lowerincome utions, such as increasing system. Most companies are investment. This sets it apart areas. This enables easier ventilation rates or adjusting not required by law to disclose as an asset and is one of the access to jobs and education in room air distribution patterns, environmental information, ways gold differs from crypto. the suburbs. One of my regular the snakeoil salesmen are out and even in jurisdictions that The price of gold is not just passengers works in a sub in force successfully hawking have mandatory disclosure, driven by how investors view urban nursing home but lives inadequate “air purifier” the legal requirements are it. It also responds to its uses in Detroit. Her home and place systems. With a focus on generally more light touch. in jewellery, technology and in of work are seven miles apart. energy efficiency and air tight paul simpson myriad other realworld appli She has to take a Detroit bus to ness in buildings, what could Chief executive cations. Together, jewellery Eight Mile Road (the city’s once have been forgivable cdp and technology account for limit) then wait to transfer to a omissions of proper ventila London more than 40% of net annual suburban bus, both ways. This tion may now be creating gold demand. should be a 25minute bus unproductive or unsafe indoor Although there are perhaps ride. But because she has to spaces. The encroaching state a few similarities between transfer her trip takes an hour, mike dixon China shouldn’t tell its people crypto and gold, there are more if the buses are on time. She Abbotsford, Canada how many babies to have, says clear differences, and there are cannot work overtime because The Economist, in a year when many reasons why the value of the last suburban bus leaves at governments, with a straight gold is not solely determined 6:30pm. She doesn’t bother Full disclosure face, have told people whom by investors’ beliefs. with Sunday work because the At cdp, the charity running the they are allowed to hug and david tait buses are unreliable at week world’s largest corporate envi when they may leave their Chief executive ends. Going to community ronmental disclosure system, homes (“Procreation myth”, World Gold Council college is out of the question we read your leader on “green June 3rd, digital editions). I London because there are no late eve washing” with interest (“Hot fear the golden age of self ning buses. I know of many air”, May 22nd). It is true that determination and freedom is The suggestion that the price people who routinely make the current system of largely now long behind us. of bitcoin is the latest measure threehour commutes, each marketled environmental If we ever emerge from of investor risk appetite way, because they have to reporting comes with a risk biosecurity tyranny (unlikely) reminded me of your article catch two transfers, and still that some companies might we will have ecosecurity tyran years ago describing my work walk a mile or more. not disclose full information. ny to look forward to. Restrict (“Time to whet investors’ Safe and efficient public However, the cdp system, used ions on fertility are a perfectly appetites”, February 24th 1996). transport will boost the eco by 10,000 organisations a year, logical response to the envi The more an asset lacks nomic lives of everybody, but mitigates against this by ronmental crisis. Not a demo intrinsic value, the more it is a especially AfricanAmericans inducing transparent respons cratic response, not a response barometer of shifting risk who have been locked out of es through our scoring meth compatible with basic free appetite. We shifted from the larger economy for all odology. Additionally, science doms and probably not a very private to fiat money because these generations. based targets require compa effective response, but none of the price of money cannot frank kalinski nies to report their entire that made any difference to the swing wildly. Any seller of Livonia, Michigan valuechain emissions rigor imposition of coronavirus products in bitcoin, made with ously, the gold standard for restrictions, did it? products purchased in bitcoin, climate targets. ben rapp would go from bust to boom Is the AC working? Your leader claims that “a Marisule, St Lucia daily. Modern money is a “Fresh thinking about fresh better system would force social construct. Unregulated air” (May 29th) struck a chord companies to reveal their full private money can never be with me. As a ventilation carbon footprint.” Thousands Letters are welcome and should be more than a curiosity. engineer I am constantly of companies already do that addressed to the Editor at avinash persaud cdp The Economist, The Adelphi Building, appalled at the low priority put through . And although the 1-11 John Adam Street, London wc2n 6ht Emeritus professor on air quality in buildings by carbon footprint is an impor Email: [email protected] Gresham College regulators. The current code tant measure, by definition it More letters are available at: Economist.com/letters London minimum in British Columbia looks at past emissions and

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012 20 Brieﬁng Cybersecurity The Economist June 19th 2021

Over there in the shadows no further cyberattacks. A permissive attitude to cybercrime is unsurprising for a regime led by an old spook like Mr Putin. The covert things that states have always done to each other— spying, propaganda, subversion and vio lence—are normally crimes as far as at least one of the parties is concerned. Crim A spate of ransomware hacks highlights the challenges governments face as they inals and spies lurked in the same shad try to defend themselves—and attack others—online ows, shared the same methods and occa or the past month Ireland’s health ident Joe Biden invoked emergency pow sionally combined their roles long before Fcare system has been in disarray. On ers. The company paid a ransom of over the dark recesses of the internet beckoned. May 14th the Health Service Executive $4m; even so, it took several days for the oil For the most part hostile state activity is (hse), the statefunded healthcare provid to start flowing again. nonviolent, a matter of harvesting infor er, was hit by a “ransomware” attack which The two stories are in some ways par for mation helpful to your national interest— led it to shut down most of its computer the course. More and more enterprises are including the commercial interests of your systems. The attackers threatened to re being hit by ransomware attacks, and some companies—and discombobulating the lease stolen data, including confidential of the targets are giants. In recent months opposition. “Most activities in cyberspace patient records, unless the hse stumped attackers have struck jbs, the world’s big have little to do with the use of force,” up $20m (€16.5m). It declined to do so. Its gest meat producer, and Apple. writes Joshua Rovner of American Univer staff were reintroduced to pen and paper, In other ways they feel like an escala sity, who in 201819 was scholarinresi its procedures delayed, its patients incon tion. Attacks on core state functions such dence at the National Security Agency venienced. By June 14th services had still as health care and crucial infrastructure (nsa), America’s signalsintelligence agen not returned to normal. like pipelines are normally the stuff of war, cy, and Cyber Command, a Pentagon com This out(r)age might have attracted insurgency or terrorism. They do not lose mand which conducts cyberoperations. greater attention beyond Ireland’s shores their capacity to worry governments just “They are largely an intelligence contest— had it not occurred a week after a similar because they are being undertaken for an effort to steal secrets and exploit them attack had disabled a crucial oil pipeline cash, especially when the criminals perpe for relative advantage.” on the other side of the Atlantic. On May trating them come from unfriendly coun But the scale, speed and ease at which 7th Colonial Pipeline, a company whose tries. The gangs responsible for the hse that contest can now play out has been namesake asset delivers nearly half the and Colonial Pipeline attacks both seem, transformed. Robert Hanssen, one of the fuel used on America’s east coast, had its like many of their sort, to be based in Rus kgb’s most productive agents ever, sup systems compromised by a cyberattack sia. At his summit with Vladimir Putin on plied thousands of pages of classified ma and had to shut down the flow of oil. Some June 16th Mr Biden listed 16 types of infra terial to his handlers. But he did so over a people headed to the pumps in panic. Pres structure against which he wanted to see period of 20 years, from 1979 to 2001. Vasili

012 The Economist June 19th 2021 Brieﬁng Cybersecurity 21

Mitrokhin, a disillusioned kgb archivist, Sony’s good name was not that impor bilities and opportunities. pilfered an astonishing 25,000 pages of tant to any government; other state action The earliest examples of people hack material between 1972 to 1984, hiding against companies could be. In 2017 Russia ing into computers, encrypting files and reams of documents under the floor of his launched a ransomwarelike cyberattack, demanding payment in return for decryp dacha, but it took him another eight years NotPetya, against companies in Ukraine so tion were pennyante stuff—a way to ex to get those secrets to Britain’s mi6. as to damage the country’s economy. The tort a few hundred dollars from someone By contrast, the Chinese hackers who attack spread well beyond Ukraine’s bor who didn’t want to lose treasured family penetrated America’s Office of Personnel ders; it has been blamed for $10bn of dam photos. Its growth into a criminal industry Management in 2014 gained access to the age worldwide. One of the companies af preying on large organisations is in part records of 21.5m people at a stroke—a haul fected was Mondelez International, an down to the replicability that the digital which, if printed out, would have filled a American snackmaker, which made a domain makes so easy; criminals can fleet of lorries. Some see the capacity to $100m insurance claim as a result. But Zu launch dozens of attacks as easily as one. steal secrets in such remarkable quantity rich American Insurance declined to pay As the business got more lucrative the as qualitatively different from older forms out, pointing to an exception for “hostile technology became better; larger ransoms of espionage: not just spying but warfare, or warlike attack” in the company’s policy. allow the criminals to buy more sophisti or some hybrid of spying and warfare, or The case has gone to the courts in Illinois, cated “exploits” which in turn allow more something entirely new. where it is currently pending. ambitious attacks. The growth of remote Last year America uncovered a colossal working has also helped, providing crimi hacking campaign which, by compromis Exceptional thieves nals with far more opportunities to worm ing SolarWinds, a softwaremaker, had In general, though, there is little indication their way into corporate networks. penetrated a panoply of government de that the increasing damage done by ran The rise of cryptocurrencies, which partments. The justifications the Biden ad somware is statedirected, as NotPetya provide a convenient and discreet way for ministration offered for its subsequent seems to have been. It is for the most part lawabiding victims to pay, adds to the sanctions against Russia, which it blamed merely state tolerated. The extortionists crime’s appeal. Chainalysis, an American for the attack, were telling. One was the enjoy impunity to the degree that their firm which examines the “blockchain” sheer scale and scope of the penetration. host countries are indifferent to the harm databases that power such currencies, But there was also a worry that such a capa they do elsewhere—though they may also, reckons that hackers took around $350m bility could pivot easily from wholesale es on occasion, be required to do their hosts in cryptocurrency payments in 2020, up pionage to wholesale sabotage. The scope nefarious favours. fourfold on the year before. Increasingly of the attack was “virtually a declaration of The Royal United Services Institute, a the hackers prefer newer cryptocurrencies war by Russia on the United States”, thun thinktank, analysed 1,200 ransomware at such as Monero or Zcash, which are de dered Dick Durbin, a Democratic senator. tacks which mostly took place last year. signed with privacy in mind, to bitcoin. Demarcation becomes yet more com Two of its findings make the extortionist’s The fact that its blockchain makes transac plicated when nonstate actors are added incentives clear. The fact that 60% of vic tions using bitcoin “wallets” public helped to the mix, either as perpetrators or vic tims were based in America or had their American police recover around half of the tims. The Colonial Pipeline attack shows headquarters there can be explained by Colonial Pipeline ransom after it was paid. that private ransomware rackets are now Sutton’s law: that’s where the money is. The cybersecurity industry, whose job ambitious—and, considering the new level The fact that there were no victims in Rus is to protect its customers from such at of concern, arguably foolish—enough to sia or most other postSoviet countries can tacks, looks increasingly ineffective. Mi attack vital state interests. The Sony Pic be explained by other rules—rules about crosoft estimates that annual spending on tures attack of 2014 showed that states can activities which are inappropriate on your antivirus software, firewalls and the like seek to destroy private corporations; Sony own doorstep, or where you eat. was around $124bn in 2020, up 64% in five had incurred the wrath of North Korea by The rise in the use of ransomware may years. Last year Debate Security, a group of mocking its supreme leader, Kim Jong Un, reflect, and indeed exacerbate, interstate cybersecurity experts, published a report and had a great deal of dirty corporate tensions, but it is not directly due to state pointing out that despite all this the aver laundry exposed as a result. action. It is mostly down to increased capa age number of breaches recorded each year

Lord of the pings Selected cyber-effect operations*, by year Ukraine Colonial power grid NotPetya Pipeline Russia United States North Korea Sony Iran Pictures Israel Stuxnet Britain Ukraine South Korea Fourth Dark Seoul Pyeongchang Georgia Winter Georgia of July Saudi Arabia Olympics 2008 Shamoon Shamoon 2.0/ Estonia Actor description (Saudi Aramco) Stonedrill Estonia Bahrain Suspected state 200 Compromise ISIS Criminal group UK/US of Bapco Other western Unknown TV5 Monde v ISIS JBS HSE Various global Direction of attack WannaCry 2007 08 09 10 11 12 13 14 15 16 17 18 19 20 21 Sources: EU Institute for Security Studies; Max Smeets; CSIS; Council on Foreign Relations; press reports *Cyber-effects include the disruption of computer networks and manipulation of data, but exclude espionage

012 22 Brieﬁng Cybersecurity The Economist June 19th 2021

by Accenture, a consultancy, has risen. Ad something Mr Martin favours—are two stance may also provide a deterrent. Amer mittedly breaches might have risen faster ways for governments to defend their cor ica, which according to a forthcoming stu if spending had not gone up, but it is hard porate citizens and the infrastructure they dy by the International Institute for Strate to see the record as encouraging. Ciaran control against commercial cyberattacks. gic Studies, a thinktank, has “offensive Martin, who led the creation of Britain’s In doing so they may go some way towards cybercapabilities...more developed than National Cyber Security Centre (ncsc), the protecting themselves from direct attack those of any other country”, is widely defensive arm of its signalsintelligence by other states, too. thought to have used them to fire a warn agency, gchq, was one of the report’s con Offensive cybercapabilities are now ing shot over North Korea’s bow: the dicta tributors. He argues that the way the busi widespread among states, and commonly torship’s internet suffered an odd blackout ness works is fundamentally flawed. used in military campaigns. In their war shortly after the Sony hack. Mr Biden’s de against Islamic State, Britain and America mand that some areas be exempt from Poison pills used cyberattacks to suppress the group’s criminal attack was paired with a threat to The report’s subtitle—“Is cybersecurity propaganda, disrupt its drones and sow respond with what he described as Ameri the new ‘market for lemons’?”—echoes a confusion in its ranks. They are also used ca’s “very significant cybercapabilities”. famous analysis of the effect of “asymmet to do physical damage in times where no It is possible that defence, deterrence ric information” on the secondhandcar war is officially taking place. Consider the and attack will blur. In recent years, Cyber market. George Akerlof, an economist, ar pioneering AmericanIsraeli Stuxnet Command has embraced a strategy of “De gued that since buyers cannot reliably worm, which induced Iranian centrifuges fend Forward”, which involves observing identify highquality secondhand cars, to tear themselves apart a decade ago, or enemy hackers before they enter American they will be unwilling to pay high prices. Russia’s successful sabotage of Ukraine’s networks—something that, given the ab The sellers of good cars are thus driven out power grid in 2015 and 2016. sence of unowned buffer zones in comput of the market, ceding the field to those sell Achieving dramatic physical effects is er networks, unavoidably requires intrud ing cheaper, shoddy “lemons”. exceptionally demanding and vanishingly ing on the networks of others. “There are Mr Martin thinks that the cybersecuri rare. But in some cases it may offer the per no ‘high seas’ or ‘international waters’ in ty field is mired in a similar asymmetry. petrator advantages. Gary Brown, a profes cyberspace,” writes Erica Borghard, who Ian Levy, the ncsc’s technical director, has sor at America’s National Defence Univer served on America’s Cyberspace Solarium said that a lot of the industry operates in sity who was the first senior legal counsel Commission, a national task force. much the same way as medieval witch for Cyber Command, argues that states are craft: “Buy my magic amulet and you’ll be more tolerant of “kinetic effects” caused by Welcome to the party, pal fine.” It is hard for buyers to pick effective online operations than those which result As more states develop stronger and more defences against the dark arts out of the from armed provocations . Had Iranian active cyberforces, the idea that the best— dross, and they know it. Almost none of commandos attacked Israeli water plants perhaps the only—form of defence is the bosses Debate Security interviewed in April 2020, the result might have been something which looks very like an attack could agree on how to measure the effec war. An alleged Iranian cyberattack which points to evermore intense competition tiveness of the software they were buying. sought to increase chlorine levels in drink over computer networks. “Perhaps defend There was much talk of the need to “cross ing water, prompted instead only a rela ing forward is necessary to frustrate partic our fingers” and “accept what we can get”. tively tepid Israeli cyberriposte against an ularly reckless and brazen campaigns,” ar Fixing the problem, says Mr Martin, is like Iranian port. Israeli forces have, though, gue Columbia University’s Jason Healey ly to require the development of common launched air strikes against sites in Gaza and Robert Jervis. “But in the long run it standards for assessing how well cyberse they associate with cyberattacks by Ha may someday spark a larger conflict.” Be curity software really works. mas, a militant Palestinian organisation. cause Russia and China scarcely admit to Given that they are on the hook for ever Retaliating against cyberattacks in conducting cyberoperations at all, it is increasing ransomware losses you might kind may become a norm—more assertive impossible to say how far they have trod expect insurance companies to be pushing than turning the other cheek or lodging a den the same path. for such standards. In 2020 Munich Re, a diplomatic complaint, less risky than re And as state capabilities grow it seems a reinsurance company, estimated that the sponding with physical violence. Such a sure thing that criminal ones will too. Cyb cyberinsurance market was worth $7bn ercapabilities are easily spread and avail and could be worth $20bn by 2025. But Kel able to those of modest means. A ranking ly Bissell of Accenture says that insurers of offensive “cyberpower” created by the frequently conclude that the easiest way to Belfer Centre at Harvard University last deal with an attack on a firm they have in year put Israel and Spain in third and sured is simply to pay up; that may min fourth place, with Iran, the Netherlands imise costs on a oneoff basis, but it en and Estonia all placed in the top ten. Priv courages more attacks in future. ate firms like Israel’s nso Group and Italy’s France—which according to Emsisoft, a Hacking Team sell powerful hacking tools cybersecurity firm, suffered ransomware which allow states to quickly bootstrap losses of more than $5.5bn in 2020, second their own cyberforces. It is hard to imag only to America—is taking a hard line on ine all these capabilities being kept out of this. “Regarding ransomware, we don’t pay the hands of criminals who inhabit the and we won’t pay,” Johanna Brousse, a same demimonde. Extortionists demand French prosecutor, said at a recent discus ing ransoms, spies pocketing data and sion at the senate. In May axa, a big French states spreading disinformation will sit insurer, having been lent on by the au alongside one another—multiplexed on thorities, said it would stop writing poli the same channels as never before. “Cyber cies that allow reimbursement of ransom as a domain of military and nationalsecu ware payments. rity operations coexistswith cyber as a do Clamping down on ransom payments main of everydaylife,” says Mr Martin. “It’s and setting standards for cybersecurity— the same domain.” n

012 Britain The Economist June 19th 2021 23

→ Also in this section 24 How corrupt are the capital’s cops? 25 An LGBT charity Stonewalls 25 Thoroughbred—and inbred 26 A little more lockdown 26 Retail parks stage a revival 28 Not your dad’s army 30 Bagehot: The two cultures, revisited

Brexit and Northern Ireland the most immediate negative effects of Brexit are loss of mobility and damage to Border trouble the union. Musicians and others in cre ative industries are complaining loudly about the first, and employers in hospital ity also bemoan shortages of eu workers. As for the second, Brexit has clearly boost ed the longterm chances of independence BELFAST AND LONDON for Scotland, which voted strongly to re Britain’s relationship with the eu will get worse before it gets better main in the eu. But the bigger worry is une 23rd marks the fifth anniversary of earlier 10% fall since the referendum. Northern Ireland. Jthe Brexit referendum. Even the keenest Such numbers suggest that what was Accommodating its needs was always Brexiteer must feel that the process has once dismissed as Project Fear is now Pro going to be devilishly difficult, because its been tortuously long. That has been, in ject Fact. A survey by consultants at ey border with Ireland is Britain’s only land large part, because successive British gov found that 75% of firms had experienced border with the eu. All sides agree that a ernments have refused to accept the trade business disruption from Brexit. Small “hard” northsouth border—one with off between untrammelled sovereignty firms found adjusting particularly hard be physical infrastructure—could threaten and frictionfree access to the eu’s single cause the euuk trade deal was struck just the fragile peace. Theresa May’s failed an market, a refusal that shapes today’s a week before exit, meaning there was no swer was to avoid any border or customs increasingly testy relationship. transition period. Services have been par checks with a “backstop” in the protocol Almost six months after Britain finally ticularly hard hit. A study by researchers at that would have kept the entire uk in a cus left the single market, the impact on the Aston University concluded that, in the toms union and the single market for economy is hard to unpick from that of co first four years after the referendum, Brit goods until alternative arrangements were vid19. Yet the effects of new barriers to ish exports of services were more than possible. But Mr Johnson came to power trade are clear. The Trade Policy Observato £110bn ($155bn) lower than they would having pledged to get rid of the backstop by ry at Sussex University reckons that in the have been without the Brexit vote. And a taking Great Britain out of the single mar first quarter of 2021 British goods exports report by New Financial, a Londonbased ket and the customs union, leaving North to the eu fell by 15%, while eu exports to thinktank, found 440 financialservice ern Ireland alone in both. And although he Britain fell by 32%. The Office for National firms that were moving part of their busi has often pretended otherwise, that made Statistics finds similarly that total euuk ness and some staff, along with a shift of an eastwest customs and regulatory bor trade has shrunk by 20%. And a model con over £900bn of bank assets (10% of the to der in the Irish Sea unavoidable. structed by John Springford of the Centre tal) to theeu. Just as inevitable were unionist objec for European Reform, a thinktank with of The economy’s bounceback and Brit tions. When supermarket supplies were fices in both London and Brussels, con ain’s successful vaccine rollout have dis disrupted straight after Brexit, loyalist cludes that goods trade is 11% lower than it guised much of the impact. João Vale de Al youths took to the streets to protest. would otherwise have been, on top of an meida, the eu’s ambassador to Britain, says Unionist hardliners even claimed that, just

012 24 Britain The Economist June 19th 2021

as the decision to avoid a hard northsouth border was motivated by fears of Policing nationalist violence, so the threat of loyal Aftermath of a murder ist violence might now get rid of border controls in the Irish Sea. The new Demo cratic Unionist Party ( dup) leader, Edwin A panel finds that the capital’s cops are corrupt Poots, calls for the protocol to be scrapped. Even if it stays, in 2024 the Northern Irish n march 1987 Daniel Morgan, a private that story, but discounted it partly be assembly could vote to end its application. Iinvestigator, was found dead in the car cause the man who related it had been A simple majority would suffice. park of the Golden Lion pub in south charged with a crime. Morgan may have Arguments over implementation have London. The axe used to kill him was been about to reveal corruption in the been stirred by unilateral actions on both embedded in his head. Its handle had Metropolitan Police to an officer from sides. The British government first pro been wrapped with sticking plasters, another force when he was killed. posed to breach international law in its in perhaps for a better grip, perhaps to All this is described in a long and ternalmarket bill last autumn, but avoid fingerprints. A wad of banknotes in detailed report released on June 15th by a dropped this plan when it struck a trade his pocket was untouched. panel chaired by Lady Nuala O’Loan, a deal with the eu. In January the eu threat The Metropolitan Police’s investiga veteran of police investigations in North ened to suspend the protocol unilaterally tion of the crime was appalling. Its foren ern Ireland. But the panel was concerned in a bid to stop vaccine exports from the sic work was lamentable even by the not only with Morgan’s murder (for bloc, though it backed down within hours. sloppy standards of the time. The in which nobody has ever been convicted) Mr Johnson has since broken the treaty by vestigation was marred by unseemly and the investigation into it, but also extending a grace period for the import of links between the police and Morgan’s corruption in the Metropolitan Police, supermarket goods. Now he promises to associates, and between the police and both past and present. do the same for the grace period for tabloid newspapers. A detective sent to That corruption was once serious and chilledmeat imports that expires at the interview Morgan’s business partner, widespread in London’s main police end of June. The eu threatens to respond Jonathan Rees (who was later acquitted force is indisputable. Officers with mem with not just legal action but tariffs, too, as of the murder) omitted to mention that ories of the 1980s recalled envelopes permitted by the terms of the trade deal. he knew him well, and that the three filled with money and criminals paying The prospect of a trade war over sau men had been drinking together the for the right to operate. Ten officers sages may delight the proBrexit press, evening before Morgan was killed. connected to Morgan’s associates were which is itching for a fight with the bully The most alarming possibility, which later convicted of offences including on the other side of the channel. It is un the panel can neither prove nor disprove, bribery and supplying drugs. In 1997 the popular, however, with Northern Irish is that police officers were involved in Metropolitan Police commissioner esti businesses. And getting rid of the protocol the murder. Investigating officers heard mated that between one in 200 and one would not be straightforward. The assem in 100 officers were corrupt. bly election due within 12 months may see It is much harder to argue that cor Sinn Fein, the main Irishnationalist party, ruption still flourishes in the Met, given take the most seats, making it harder to strenuous efforts to root it out since the win a majority in favour of removing the 1990s. But the panel adopts a broad defi protocol. Katy Hayward of Queen’s Univer nition, arguing that failing “to be open sity and uk in a Changing Europe, a think and transparent” or “to admit past mis tank, points out that voting to remove its takes” is corruption if the intention is to trade clauses would merely trigger a nego protect an organisation’s reputation. It tiation to find some other option. And as dubs these “institutional corruption” Claire Hanna, a Social Democratic and La and says the force still suffers from this. bour Party mp, observes, the dup has not Witness, for example, the Met’s tardiness suggested any alternative. in handing documents to the panel. Aodhan Connolly of the Northern Ire The conclusion deliberately echoes land Retail Consortium offers one possible the Macpherson Report, which in 1999 solution. Instead of what he calls diploma dubbed the police institutionally racist. cy by rival opeds, he suggests a temporary The police eventually accepted that commitment by the British government to charge. So far they are having no truck stick with eu foodsafety and veterinary with the idea that they are institutionally standards. That would cut the number of What did Morgan know? corrupt as well. border and customs checks required under the protocol by 80%, he says. The eu would be happy to agree to such a temporary mea America, which always demands better ac Johnson signed the protocol intending not sure, as would Mr Poots and the dup. cess for its farmers. But at the g7 summit in to stick to it. Mr Johnson thinks that some Mr Johnson, however, is not keen on Cornwall between June 11th and 13th, Presi within the bloc want to drag Britain back any alignment with eu regulations. This dent Joe Biden, anxious to avert renewed into its regulatory orbit. Most worrying is may seem odd, since he also insists he has trouble in Northern Ireland or any risk of that both sides have something to gain no intention of weakening foodsafety an intraEuropean trade war, promised from playing tough: the eu by demonstrat standards. Other neighbours of the eu, that a trade deal would not be blocked by ing that those who sign deals with it must such as Norway and Switzerland, are hap British alignment to eu food standards. stick to what they agreed; Mr Johnson by py to abide by its food rules in order to And such a deal would, in any case, take standing up to an overweening neighbour. avert trade barriers. A more substantial ob years to negotiate. Diplomats on both sides expect the rela jection is that such a policy would make it The biggest obstacle to a pragmatic sol tionship to worsen. Sadly, Northern Ire harder to negotiate a freetrade deal with ution is lack of trust. The eu believes Mr land may be the fall guy. n

012 The Economist June 19th 2021 Britain 25

Diversity and inclusion vice.” Stonewall’s insistence that transness is not a physical matter, she suggests, ech Stonewalling oes the Catholic belief in transubstantia tion: a man may “retain the accidents of a man, but the essence is that of a woman”. There are a few signs that faith in Stone wall may be starting to wane. In May the Equality and Human Rights Commission, A campaigning LGBT charity turns a an official body, said it was pulling out of deaf ear to its critics the Diversity Champions scheme. Other eople believe many things, some sen big organisations are also leaving, and Liz Psible, some less so. English law regards Truss, the minister for women and equali it as a right to hold and express those be ties, says all government bodies should. In liefs—within reason. In recent years courts an article in the Times in May, Matthew Par have ruled that beliefs in catastrophic cli ris, another cofounder of Stonewall, said mate change, ethical veganism and “the that “Stonewall has lost its way”. What was ability to communicate with spirits via it doing, he asked, getting entangled in at mediums” are all “worthy of respect in a tempts to suppress free speech? democratic society”. In 2019 a tribunal con Mr Fanshawe thinks Stonewall’s tra sidered yet another, namely “that there are vails are part of a wider malaise in political only two sexes…male and female”. debate, namely a failure to engage civilly The defendant was Maya Forstater, a tax with opponents. The recent judgment, he published in Scientific Reports found “a expert, who lost her job with an American points out, upheld not only Ms Forstater’s highly significant increase in inbreeding thinktank for tweeting about her beliefs. right to her beliefs, but also the right of in the global thoroughbred population She summarised them as that: “Women are others to believe in the primacy of gender during the last five decades”. All but 3% of adult human females. Men are adult hu identity over biological sex. True inclusion the 10,000 horses in the study counted man males,” and “sex cannot change”. means, he says, “creating a very broad alli Northern Dancer, born in 1961, among their Those beliefs were found “not worthy of ance”—not doing as Stonewall does, which ancestors. Superstar sires “cover”, as hors respect in a democratic society” by an em he characterises as “sitting in a corner of a ey types call mating, over 200 mares per ployment tribunal. On June 10th that rul room with a bag over its head shouting year, up from 40 in Northern Dancer’s day. ing was overturned. ‘bigot’ at people”. n At first, horse breeders did not consider The decision matters, both for Ms For inbreeding a problem. On the contrary: stater and for Stonewall, a large campaign horses, like maidens, were better when ing charity. It says being trans—identifying Horse breeding purer. Within a century of the arrival of as other than your natal sex—“isn’t about those three stallions, it was decided that having (or not having) particular body Neigh laughing the job of perfecting the horse had been parts”, but “something that’s absolutely done so well that the stud book was closed core to a trans person’s identity and matter to new entrants. Aristocrats policed the doesn’t alter—whatever outward appear parentage of their horses, listing their ances might be”. It describes any other dams and sires in Weatherbys stud book. view as “transphobia”. In 1826 Burke’s Peerage appeared, allowing NEWMARKET Stonewall spreads this doctrine, widely aristocrats to do much the same for them Thoroughbreds are increasingly inbred known as “gender selfidentification”, selves. Francis Galton, the father of eugen through its Diversity Champions scheme, he course of true love never did run ics, recommended that “no time ought to which hundreds of big organisations, in Tsmooth. That is particularly true when be lost” in instituting a human equivalent cluding nhs trusts, mi6, the army and the your lover weighs half a tonne and is wear to the stud book, to record not class, but fit Home Office, are signed up to. The ing steel shoes. At the National Stud in ness and form. scheme’s business model is simple. Com Newmarket, a town in Suffolk widely re Eugenics has fallen out of fashion. The panies give Stonewall money; Stonewall garded as the home of thoroughbred rac horsey equivalent has not. Thoroughbreds checks that their policies align with its ing, it is breeding season. A mare stands in can earn far more from propagating their ideas and then badges them as diverse and the shade of a stable. Her hooves have been race than from running races. At the Na inclusive. Simon Fanshawe, one of the covered with leather boots, to dampen tional Stud, one commands a fee of charity’s founders and now a critic, thinks kicks; her head is held by grooms. Tim £25,000 ($35,000) for a cover. Galileo, employers like it at least in part because Lane, director of the stud, calms her. The among the world’s finest stallions, is ru “everybody’s so terrified that everybody got horses, brushed till they are as shiny as moured to command £600,000 a pop. it so badly wrong with the gays that they’ve conkers—“they’ve got to look good,” ex Such fees make the very best thor panicked about getting it wrong with the plains Mr Lane—eye each other warily. oughbred semen one of the world’s most trans people”. Thoroughbreds are the aristocrats of expensive substances, at around £6m a li But the result has been inimical to free the horsing world: glamorous, subjected to tre. Precise sums are difficult as it is not doms of belief and speech at work. It is as odd mating rituals and more than a touch sold by the bottle (horses conceived by arti though all major institutions decided that inbred. All are descended from three Arabi ficial insemination cannot be registered as everyone had to be a practising Catholic, an stallions brought to England in around thoroughbreds) and quantities naturally says Naomi Cunningham, an employment 1700; animals which, Charles Darwin said, vary, but there is no doubt this is a profit barrister and cofounder with Ms Forstater had “the commingled blood of Arabs, able business. The finest stallions can earn of Sex Matters, a campaign group. “And Turks and Barbs” in their veins. They make a million pounds in a day. suddenly the rest of us have woken up and the Habsburgs look genetically diverse. Fashionable sires are therefore good for realised that we are in the grip of a theocra Always closely related, thoroughbreds breeders. But they may be bad for the cy [that] requires everybody to pay lip ser are getting even more so. A recent study breed. As genetic mutations accumulate,

012 26 Britain The Economist June 19th 2021

health and fertility decline. Such problems six people, would be delayed from June 21st Retail parks have been found in species as diverse as to July 19th. The government is also think dogs, humans and cows, and it is hard to ing about the long haul, including how to Clicks and mortar see why horses would be immune to them. improve public ventilation and whether to “We don’t know yet how much inbreeding encourage people back into offices. is tolerable or whether we’ve reached a tip The postponement reflects both bad ping point, or when that point might be luck and bad policy. According to Public reached,” says Emmeline Hill of University Health England (phe), the Delta variant is Out of doors and out of town is a College Dublin, one of the authors of the around 60% more transmissible than the winning combination recent report. Genetic problems may be ac Alpha (formerly Kent) variant, which is in cumulating, unseen. turn more transmissible than earlier ones. imes were tough for offline retail be Back at the National Stud the gleaming The new wave is spreading among younger Tfore covid19. Rising costs and tepid horses, cover completed, trot back into the Britons, who are more likely to be unvacci sales growth had squeezed margins; online sunlight. Mr Lane, like Ms Hill, considers nated or to have received only a single shopping was filching market share. Ac that what matters is not just appearance, dose, which another phe study finds is a cording to the Centre for Retail Research, but function. A horse that looks wonderful third less effective at preventing infection an analytics firm, by early 2020 high might not race well, or breed well. Teasing by the Delta variant than by the Alpha one. streets had around 50,000 fewer shops ly, he reaches for an analogy with another The extra delay before easing restrictions than a decade before, a drop of 13%. species. “Not all goodlooking women can will mean more second jabs, which are just Then the pandemic struck. During the cook, can they?” n as good at preventing hospitalisation. first lockdown, customer numbers for all Nadhim Zahawi, the vaccines minister, retail locations plummeted. Intown shop has said the rollout would have been fast ping centres were the worst hit and slowest Covid-19 er had the Joint Committee on Vaccination to bounce back: data from another analyt and Immunisation (jcvi) not recommend ics firm, Springboard, show that footfall in The British ed, in response to rare blood clots, that un the first week of June was 22% below that der40s be offered jabs other than AstraZe in the same week in 2019. But amid the warning neca. This raises two questions. Was the gloom, there is a bright spot. Visitor num advice followed correctly? The jcvi recom bers for outoftown retail parks were hit mended other jabs only if it would not far less hard, and have recovered to 3% be “substantially delay” vaccination. And will low their prepandemic level. Why rapid vaccination is not enough to that advice change? No casecount thresh Property investors have noticed. Ac keep reopening on schedule old has been set for reversing it, but the cording to Savills, an estate agent, rental t first the government focused sup committee is keeping an eye on the risk yields on shopping centres and highstreet Aport—surge vaccination, wastewater benefit calculation as cases rise. stores were rising before the pandemic, testing and the like—where the covid19 Britain is still better placed than most of but the pace accelerated during it, meaning Delta variant (then known as B.1.617.2) had the rich world to weather the new variant that the market is demanding a higher re taken hold. Now, it is everywhere, account (see chart). “Countries that have taken a turn on assets it perceives as riskier. Yields ing for 90% of cases, and so the support has more lackadaisical approach will find for retail warehouses have been falling spread, too; from Bolton and south London themselves with a big problem,” predicts since September 2020. Acquisitions tell a to Birmingham, Blackpool, Cheshire, Sir John Bell of the University of Oxford. similar story: buyers have spent £900m Chester, Liverpool and Warrington. The That there are so many Delta cases proba ($1.3bn) snapping up retail parks so far in battle to defeat the variant has been lost. bly reflects the fact that lots of people in 2021, but only £280m on shopping centres. The aim now is to stop cases spiralling. fected with it reached Britain early, he says. In part, they reason that retail parks will Ministers and modellers hold little Mr Johnson’s delay in adding India to the do better in a world reshaped by the pan hope that these measures, and a vaccina “red list” of countries, with tighter travel demic. Shoppers feel safer in outlets visit tion campaign that has jabbed more than restrictions, looks foolish. That vaccines ed by car rather than public transport, and six in ten Britons, will protect hospitals. So mean the mistake is likely to prove less where moving between shops happens out on June14th Boris Johnson announced that deadly than previous ones will be little of doors. Outlets in retail parks are larger, “stage 4” of the reopening, allowing big comfort to businesses desperate to reopen, which helps with social distancing and events and indoor gatherings of more than or to hedonists desperate to party. n ventilation. Moreover, they are stuffed with the sorts of shops that have boomed during the pandemic: supermarkets, pet One, two–but no knockout supply stores and those selling everything Covid-19 needed for the home, from plants and paint to futons and fridges. Vaccinations per 1 people Cases per million people But the pandemic is not the only reason June 15th 2021 or latest Seven-day moving average retail parks are outperforming. They are 1,000 much better placed than their highstreet Two doses One dose counterparts to survive the rise of internet Britain 800 6050403020100 shopping. People buying white goods, fur Britain United States 600 niture and furnishings want to see and United States European Union 00 touch them before shelling out cash. Vast shop floors and good road access mean Spain 200 they can double as distribution centres. Germany 0 And they are ideal for “click and collect”, the fastestgrowing form of online shop France 2020 2021 ping. Expect investors’ enthusiasm to out Source: Our World in Data last lockdowns. n

012 012 28 Britain The Economist June 19th 2021

vices Institute, a thinktank. That is precisely what 77 Brigade has done. The army’s specialist unit for infor mation operations—in large part, psycho logical warfare—it has more reservists than regulars. They include journalists, psychologists and executives at socialme dia firms. Many have the opportunity to use skills such as hacking in a way that would otherwise be illegal. Attracting such talent will require greater flexibility than is usual in armed forces. Already cyber reserves, who con tribute to the new offensive National Cyber Force, need not satisfy the same age and fitness standards that bind other reserv ists. Mr Sullivan’s terms of service allow him to keep a beard. Lord Lancaster’s own reserve career involves working two days a week as a brigadier at Britain’s Strategic Military reserves Command, which coordinates cyber and special forces, among other crossservice Not your dad’s army capabilities. Such parttime involvement currently requires special permission, but the armedforces bill introduced in May would put it on a regular footing. “Being a reservist fits with the gig economy,” notes Mr Sullivan. “More and more people now Britain’s armed forces want to make better use of civilians have portfolio careers.” Also being considered is allowing expe ary sullivan is the chairman of Wil pandemic, during which the armed forces rienced civilians to enter at higher ranks, Gson James, a security and logistics have driven oxygen tankers, built hospitals rather than working their way up. The rank company. But when covid19 ravaged Brit and delivered vaccines, most recently to system itself might need to adapt, too. Mr ain last year he shed his suit, donned a uni combat local outbreaks in the north of Eng O’Neill gives the example of a hypothetical form and helped build a hospital at a con land. That response was possible only be barrister who wants to “run around Salis vention centre in east London. For in addi cause reservists brought skills from the ci bury Plain as an infantry soldier”. He or she tion to his day job, Mr Sullivan is also the vilian world. Mr Sullivan’s staff corps also might be recruited as a junior officer, vault commanding officer of the British Army’s responded to Hurricane Irma in the Carib ed to lieutenantcolonel when the army Engineer and Logistic Staff Corps, a group bean in 2017, the collapse of a dam at Todd needs legal expertise and dropped back of senior executives who volunteer their brook reservoir in the Peak District in 2019 when the need has passed. time to the armed forces. His straddling of and last summer’s explosion in Beirut. That still leaves bigger questions about civilian and military worlds might be a Mobilising civilian expertise is nothing the reserves’ raison d’être. Regular forces model for the future. new. The staff corps was formed in 1865, to are now very lean by historical standards, Last month the government published ensure privately owned railways would and would need augmenting in time of an independent review of military reserv serve the state in wartime. Military doctors major war. But using reserves for this pur ists conducted by Mark Lancaster, a Con have long worked in the National Health pose would be tricky. Ben Barry of the In servative peer and former minister for the Service to keep their skills sharp. But the ternational Institute for Strategic Studies, armed forces. His recommendations, he renewed emphasis on reservists also fol another thinktank, who once command says, would constitute the “biggest shake lows from a broader shift in the nature of ed a reserveheavy brigade in Bosnia, up of reserves since 1914”. warfare: away from manpower and to points out that whereas the army reserve is Britain’s Army Reserve has existed in wards technology and information. During a microcosm of the regular force—a little of one form or another for over a century. As the cold war the cutting edge of technology everything—the navy and airforce equiva the Territorial Army, the name used until lay in defence laboratories. Now many ad lents focus on niche capabilities. They 2014, its reputation was that of enthusias vanced military capabilities—cybersecu could not be called up as complete squad tic amateurs playing soldiers at the week rity, space, artificial intelligence and robot rons like America’s Air National Guard. ends. Reserves were warm bodies used to ics—lie largely in the private sector. Raw numbers are also an issue, how bulk out an army that had shrunk dramati Meanwhile a growing emphasis on pro ever. In March, as part of a radical defence cally after the cold war, training sporadi paganda and battles of narrative lends it review, the government said the regular ar cally but to be used only in extremis. In re self to skills found in creative industries. my would shrink to 72,500 soldiers, its cent years the reserve developed a more “If you want a good television camera smallest in centuries. Lord Lancaster’s re “professional ethos”, says Patrick Bury of person for countering Russian media oper view envisions not just reservists who are the University of Bath, shedding its old ations, you’re better off recruiting some more actively engaged, but alongside them (and unfair) reputation as a “drinking body from the bbc to be a reservist than a “largely dormant” pool of exregulars, club”. Reserves made up 15% of the de trying to bring them into the army and who could provide “surge capacity” in a ployed force in Iraq and Afghanistan. then expecting them to maintain their crisis. Yet the government has given no Now, the idea is that they should play a skills level,” says Paul O’Neill, a former sign that reserves willgrow. Patriotic hack larger and more routine role in military ac head of “people strategy” at the defence ers and bored lawyerswill not be enough to tivity. One spur for change has been the ministry and now at the Royal United Ser make up the numbers. n

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012 30 Britain The Economist June 19th 2021

Bagehot The two cultures, revisited

Britain’s intelligentsia is split by a new version of C.P. Snow’s divide pid economic and demographic growth are “good for the econ omy, the planet and our lives”. We need to stop treating “change, innovation and discovery as unalloyed benefits”, he argues, and welcome slowdown as salvation from “disaster far worse than a pandemic”. Another is Dan Hicks, curator of the Pitt Rivers Muse um, author of “The Brutish Museums” and a leading campaigner for the return of the Benin Bronzes to Nigeria. He argues that West ern museums “house unending violence, ceaseless trauma, colo nial crimes committed again every morning as the strip lights click on”. The only alternative he sees to complicity in imperial bloodshed and genocide is to return “the curated spoils of empire” as part of a broader process of “decolonisation”. The younger re searchers who added their names to the letter are well represented by Sneha Krishnan, a “feminist historical and cultural geogra pher” who is studying “how childhood and youth are materialised in entanglement with the enduring power of imperialism”. The contrast between the honorands and the letterwriters points to the existence of two cultures in the modern university, and indeed the modern intellectual world: one of optimistic pro blemsolving and another of pessimistic problemwallowing. The honorands, confronted by a global pandemic, set about fighting it with every weapon to hand. The signatories are fixated on battles ew lectures have had as much impact as C.P. Snow’s on “two about cultural symbols. The honorands are inventing the future; Fcultures”, delivered in Cambridge in 1959. Its thesis was that the signatories are preoccupied with purging the sins of the past. Western intellectual life was divided into two mutually uncom The honorands represent a newfound commitment to commer prehending camps—the sciences and the arts—with arts gradu cialising university research, particularly in the life sciences and ates disdainful of culturally illiterate scientists, and scientists as medicine, and thereby powering the country’s economy. The let tonished that arts graduates had no clue about the second law of terwriters represent the latest example of the ancient academic thermodynamics. (Snow, as both a chemist and a novelist, had a habit of contemplating one’s own navel. foot in both camps.) It provoked a vituperative response from F.R. It is easy to dismiss such broadbrush generalisations with Leavis, an Englishliterature don, who described his Cambridge Leavisite disdain. Isn’t the division between problemsolvers and colleagues as being “intellectually as undistinguished as it is pos problemwallowers just another way of describing C.P. Snow’s di sible to be”, but was largely greeted with rousing applause as an in vision between scientists and artists? There is a limit to how much tellectual landmark and a call to action. you can improve the world by writing another commentary on This columnist was reminded of the two cultures by recent go Chaucer. And isn’t the real problem with the letterwriters, and ingson in Oxford, Cambridge’s perennial rival. On June 12th a those who think like them, not that they are energysapping but striking number of Oxford scientists were recognised in the that they are irrelevant—fighting about the past because they have Queen’s Birthday Honours list for their role in fighting the corona no purchase on the future? virus pandemic. Among those honoured were Sarah Gilbert and Adrian Hill, who were instrumental in developing the AstraZene Makers and takers ca vaccine; and Peter Horby and Martin Landray, who coled the The first objection has merit, but only up to a point. Though it is world’s largest randomised tests of treatments. The awards recog certainly easier for scientists to invent the future, plenty of scien nised Oxford’s commitment to scientific excellence, as well as the tists are addicted to negativity and plenty of arts graduates relish a dedication of extraordinary individuals. challenge. Some within the Royal Society, Britain’s premier scien Days earlier 150 Oxford dons had published an open letter an tific institution, are notably reluctant to seize the opportunities nouncing a boycott of Oriel College. They would refuse to teach its provided by the twin hammer blows of Brexit and covid19 to help students, attend its seminars or help with outreach to applicants, convert Britain’s scientific talent into innovation. The second ob in protest against its decision not to remove a statue of Cecil jection is, sadly, wide of the mark. There are good reasons for ac Rhodes that faces the High Street. What to do with the statue is knowledging the sins of the past, particularly if they are celebrated complicated by Rhodes’s dual career as a committed imperialist by statues that offend ethnic minorities. But it is ahistorical and and great university benefactor. (It is also ugly.) But a boycott is antiintellectual to ignore context and pretend that no other cul silly. It punishes Oriel’s students and potential students, who have tures have ever sinned in matters of slavery and imperialism. no say over the statue’s fate. It offends against college selfgover For worryingly many intellectuals, this obsession with the past nance. After agonising over the statue for years, Oriel has opted for crimes of Western countries is part of a bigger project of decon a policy of “retain and explain”, in part because changing the fa structing Western power. This means tearing down structures çade of a Grade Two listed building would be pricey, and the col that, supposedly, continue to oppress everybody other than lege is already burdened with pandemicrelated expenses. heterosexual white males. It also means damning capitalism as The letter was signed by many of Oxford’s noisiest public and inherently racist and colonialist. The slowdown that would inev wouldbe public intellectuals. One is Danny Dorling, a professor itably follow any such deconstructionwould leave Oxford fellows of geography and the author of “Slowdown”, which argues that te standing, but flatten ordinary Britons. n

012 Europe The Economist June 19th 2021 31

The Biden-Putin summit on vital infrastructure were off limits; dis putes over Ukraine and Belarus should not A whiff of détente be resolved by military means. Killing Alexei Navalny, the jailed opposition lead er, would bring devastating consequences but, regrettable as humanrights abuses are, they should be treated separately from security. In coldwar parlance, there was more than a hint of détente. A return to traditional diplomacy in Geneva Mr Biden has recast the relationship in oe biden was 12 in 1955 when Dwight Ei other’s weaknesses. The only concrete grand terms, as a contest between demo Jsenhower sat down in Geneva with Niki agreements were to start a new round of cracy and autocracy, represented this week ta Khrushchev for the first bilateral sum nuclear talks and to return ambassadors to by Russia, though principally by China. He mit between the leaders of America and the their posts. These are both small but solid put his meeting with Mr Putin in the con Soviet Union. The current American presi wins. The fact that this return to diplomacy text of renewed unity within the g7 and dent was a 42yearold senator working on produced a sigh of relief was a measure of nato. His style and rhetoric were meant to arms control when Ronald Reagan sat on a how difficult relations have become since highlight how different he is from Mr sofa with Mikhail Gorbachev for the first Russia annexed Crimea and launched a Trump. His mantra is “to restore predict time in the same city, taking what turned war in Ukraine in 2014. ability and stability” to America’s relations out to be the first step towards ending the The summit was a departure from the with Russia, to create a basis for relations cold war. psychodrama of Donald Trump’s relation to be workmanlike if also adversarial, rath On June 16th it was Mr Biden’s turn to ship with Mr Putin. American diplomats er as they were with the Soviet Union. encounter Russia’s leader, Vladimir Putin, shudder to recall a press conference in Hel The problem was that the man who sat who has undermined many of the achieve sinki at which Mr Trump said he had no across from him in Geneva was not a Sovi ments of the postcoldwar order and re reason to distrust Mr Putin. There was no etstyle leader constrained by ideology, vived some of the worst Soviet practices. joint press conference this time. But after party hierarchy and, most important, the But although the location was the same, less than four hours meeting in an 18th experience of common victory in the sec the plot was different. This was not a sum century villa, Mr Putin and Mr Biden knew ond world war. mit between two superpowers holding the where the other man stood: cyberattacks He is, rather, a product of the Soviet col fate of the world in their hands. Nor was it lapse. He presides over a kleptocratic re an attempt to have another reset of the re gime dominated by violent security servic lationship, as Barack Obama tried. Rather it → Also in this section es. It is a regime that cares more about was something a bit murkier. wealth than ideology, and is preoccupied 32 Albania’s unloved pyramid The purpose of the meeting was to with its own survival rather than a global manage an ongoing confrontation by firm 33 Climate politics in Germany contest with America, let alone the inter ing up red lines, clarifying the rules of en ests of the Russian people. It thrives on dis 34 Charlemagne: Made in America gagement and getting a measure of each order. It has invaded neighbouring coun

012 32 Europe The Economist June 19th 2021

tries, poisoned its opponents, and waged weight of his domesticsecurity apparatus uralgas pipeline that Russia is building cyber and information warfare against the to crush Mr Navalny’s movement and under the Baltic Sea to Germany, bypassing West. Mr Putin talks of restoring Russia’s purge Russian politics of meaningful dis Poland and Ukraine. Mr Biden meant this greatness while allowing his cronies to sent. Some dissidents fled the country. Mr as a concession not to Russia but to Germa loot its resources. Putin suffocated the few remaining inde ny and to reality (the pipeline is 90% com The danger is that Mr Biden’s tough pendent media outlets by labelling them plete). Yet Mr Putin and Volodymyr Zelen sounding rhetoric will be a substitute for “foreign agents”, thus scaring off advertis sky, Ukraine’s president, who learned tough action, rather than a precursor to it. ers. To drive home the message to Wash about America’s decision only from the The genesis of the summit in this respect ington, Russian spooks hacked into Amer media, considered it a big win for Russia. may be more illustrative than its outcome. ican humanrights groups and thinktanks Mr Putin has signalled that he, too, is In March, two months after his inaugu that criticised Mr Putin. interested in a “predictable and stable” re ration, which coincided with the return to Russia’s Ukrainian wardrums got Mr lationship—by which he means that Amer Russia and imprisonment of Mr Navalny, Biden’s attention; and he suggested a sum ica should predictably stay out of Russia’s Mr Biden called Mr Putin a murderer. Mr mit. His team hoped that making a conces affairs and its backyard. In the hope of Putin smirked, ominously wished Mr Bi sion to Mr Putin’s vanity would incline drawing his own red lines, he preempted den good health and suggested they meet him to cause less trouble. Meanwhile, they the summit by outlawing Mr Navalny’s and debate on television. Mr Biden’s office hoped to project a new example of demo movement as “extremist”, threatening to replied that the president had better things cratic vitality and global leadership. annihilate Ukraine were nato to move to do that weekend. Mr Biden then gave Mr Putin another closer, and backing Alexander Lukashen A few weeks later Mr Putin massed a win, this time overruling the objections of ko, the Belarusian dictator, who last month vast army on Ukraine’s eastern border. At his top aides by waiving sanctions on one hijacked a Ryanair flight in order to arrest the same time, he brought down the entire of the firms behind the Nord Stream 2 nat an opponent. If Mr Biden needs to dial down tensions with Russia so that he can focus on a more Albania pressing contest with China, Mr Putin needs a form of détente with America, so Pyramid scheme that he can focus on the more urgent busi ness of repressing dissent and rebuilding TIRANA his empire. “Over the past few years the A memorial to Albania’s late dictator gets a new lease of life Kremlin appears to have come to the con or years it has been an eyesore. real significance was obvious to every clusion that it cannot simultaneously FStripped of its marble facing and one. Mr Hoxha had been Albania’s pha eliminate risks to its rule at home while al defaced with graffiti, Tirana’s pyramid raoh and he would be remembered for so fighting against the West at an everris was falling down. Now workmen are thousands of years. In private, Albanians ing economic cost,” says Andrei Kortunov, busily clambering about on top of it, as grumbled. They were poor, a pyramid head of the Russian International Affairs work has begun on restoring the Albani seemed rather extravagant and besides, Council, a thinktank. an capital’s most unusual building. Hoxha was a massmurdering monster. Whereas Mr Biden, like Mr Obama be Completed in 1988, the same year as I.M. When communism collapsed in Albania fore him, sees Russia as a distraction, Mr Pei’s Paris pyramid, Tirana’s shabbier in 1991, the memorialcummuseum was Putin sees America and its values as an ex version is getting a new lease of life. promptly closed. istential threat. “If Putin were to fulfil Bi The building was put up as a museum Ever since, no one has quite known den’s wishlist, release all political prison and memorial to Enver Hoxha, Albania’s what to do with the thing. nato opened a ers, withdraw from Crimea and Donbas, Stalinist dictator, who died in 1985. It was regional headquarters in it during the [and] concede to the West on other key designed by his daughter and her hus war in neighbouring Kosovo in 1999. Sali points, it would result in the collapse of the band, who said their inspiration was the Berisha, a postcommunist leader, start existing regime,” says Dmitri Trenin, the mountain that rises above the city. Its ed an abortive project to convert it into a director of the Carnegie Moscow Centre, a new national theatre. The structure thinktank. In his press conference Mr Pu became “a Frankenstein”, says Erion tin tried to justify his repression by calling Veliaj, Tirana’s mayor. his political opponents American agents Last year Mr Veliaj came under fire for and pointing to America’s own injustices, demolishing the existing, miniature from gun crime to Guantanamo Bay. national theatre, which was built during For now, Mr Putin’s gambit appears to the second world war by the occupying have paid off. Progress on nuclear agree Italians out of (oddly enough) compacted ments and the return of ambassadors lend paper matches. Mr Veliaj shrugs. Leaders a veneer of legitimacy to a rogue regime sometimes have to go against the flow, that is prepared to sacrifice lives to protect he reckons: “Only dead fish go with it.” By its wealth and power. But it remains to be contrast, his decision to restore the seen whether the summit, and the ones to pyramid is rather popular. come, will make Mr Putin’s regime less When the restoration is finished the dangerous. Fiona Hill, who served on the pyramid will be faced with staircases, so National Security Council under Mr people can climb to the top. And an Trump, argues that Mr Putin’s kleptocracy organisation that Mr Veliaj came across has become one of the biggest security in Armenia, which teaches teens how to threats for Western governments, along code, will work inside what was once a with crippling cyberattacks. “We have to shrine to a communist tyrant. There are show that we are prepared to hold the line Enver who? worse uses. with action, not just words. Otherwise we are simply inviting Russia to move in.” n

012 The Economist June 19th 2021 Europe 33

Climate politics in Germany plan to redistribute dividends from carbon tariffs to Germany’s less welloff. Grant me greenery, but not yet But voters distrust such schemes. Nor are they wild about making specific sacri fices, such as paying more for petrol or ditching meat. Germany must now reduce greenhousegas emissions by 65% (from BINGEN AM RHEIN Climate change will sit at the heart of Germany’s election. But the trickiest 1990 levels) by 2030, in order to reach net discussions will have to wait until afterwards zero emissions by 2045. This will have a dramatic impact on everything from retro he first sign of trouble on the Rhine, fitting housing stock to the speed with TEurope’s busiest inland waterway, was Turning greener which German petrolheads are weaned off when the river cruises and hotel ships dis “In your opinion, what is currently the most the combustion engine. “Most people have appeared. Then the cargo vessels got small important problem in Germany?”* no clue what it will take for Germany to er, or simply stopped sailing; goods like % responding achieve its goals,” says Anita Engels, a cli coal were shifted to trains. Water levels fell 80 mate sociologist at Hamburg University. low enough to expose unexploded wartime Foreigners/ Environment/ Few politicians seem inclined to tell them. bombs. These grim scenes, described by integration/ climate/energy In theory, the cdu/csu’s emphasis on refugees transition 60 Florian Krekel of the Bingen office of Ger market methods for climate action versus many’s Waterways and Shipping Adminis Coronavirus the Greens’ penchant for regulation could tration, date from autumn 2018, when a 40 make for “healthy debate” in the campaign, long drought so depleted the waters along Social reckons Ottmar Edenhofer, head of the Pensions decline this scenic part of the Rhine that naviga 20 Potsdam Institute for Climate Impact Re tion became nearimpossible. Manufac search. Some younger cdu mps, sniffing turers on the river had to slash production, the political wind, would indeed like to exporters were cut off from world markets Education 0 take the fight to the Greens. But others and petrol stations in Cologne had to raise 2018 19 20 21 doubt the wisdom of battling on Green prices. The disruption shaved 0.2 percent Source: Forschungsgruppe turf, and they seem to have Mr Laschet’s Wahlen ‘Politbarometer’ *Two responses maximum age points off German gdp, according to ear. A leaked draft of the cdu’s imminent the Kiel Institute for the World Economy. manifesto offered little detail on climate. Over twothirds of Germany’s land area threaten Germans’ sacred right to an annu A new report by More in Common, an was afflicted by the great drought of 2018. al jolly in Majorca. “People in the cities tell international group that works on social Soon afterwards climate change shot up ing people in the countryside how to live— polarisation, finds a broad consensus the list of voters’ priorities (see chart). And it’s crazy,” grumbles Jochen Ratzenberger, a across Germany for climate action, along as its effects, potential or actual, on Ger Greensceptic Rhineland winemaker. The side concerns about fairness and a sense of many’s waterways, forests and farms have Greens have slumped in polls. personal helplessness. Twothirds of Ger become harder to ignore, it has remained Their response is twofold. First, to tamp mans it polled want binding climate rules. at or near the top ever since. Germany’s down excesses in their own ranks. At the “Politicians are threatening social cohe parties, gearing up for an election in late Green congress the leadership saw off ac sion by not acting,” says LauraKristine September, are reacting accordingly. tivists who wanted bolder promises to in Krause, the outfit’s Germany director. The Green Party, which approved its crease Germany’s new carbon price. Sec Should Mr Laschet and Ms Baerbock manifesto at a party powwow last week ond, to provide a cheerful narrative for the find themselves yoked in coalition after end, has naturally placed climate policy at climate struggle. Robert Habeck, who leads the election, as many expect, climate will the centre of its offer. But the centreright the party with Ms Baerbock, delivered a be among the toughest elements of the Christian Democrats (cdu), their Christian barnstorming speech linking climate ac negotiations. The new targets mustbe met, Social Union ( csu) allies in Bavaria, and tion to heroic themes like freedom and jus and the court satisfied. Postponing tricky the Social Democrats (spd), who currently tice. More prosaically, the Greens have a conversations carries its own costs. n rule in coalition, have also had to put their imprints on it. Parliament is debating a re vision to Germany’s climate law, spurred by a constitutionalcourt ruling that made the government tighten its climate goals. In 1990, in the newly reunified country’s first election, the Greens boasted, “Every one is talking about Germany. We’re talk ing about the weather.” Three decades on, their rivals have fallen into line. Yet that may not work to the Greens’ ad vantage. Although climate’s prominence in Germany’s debate is new, the old tactic of tarring the Greens as a bossy Verbots partei (“prohibition party”) still looks po tent. When Annalena Baerbock, the party’s chancellorcandidate, recently said petrol prices would have to rise, the cdu/csu and spd hammered her for building climate policy on the backs of poor motorists. Ar min Laschet, her cdu rival, says the Greens Dry me a river

012 34 Europe The Economist June 19th 2021

Charlemagne The EU: Made in America

America is an engine of European integration, intentionally or not has the final legal say, scholars look to the same debates that played out in 19thcentury America. The eu is a unique beast, but American history still provides the best instruction manual for how to handle it. Sometimes European integration is a byproduct of American policy. Stubbornly national elements of policymaking, such as corporation tax, are slowly being mangled into eu matters thanks to American action. A recent Americanled push to set a global minimum tax rate for big business has done more to shunt the eu towards a common tax policy than years of nagging and legal tricks by Brussels. Within the eu, lowtax countries such as Ire land and Hungary wield a veto on its tax affairs. Diplomatic force majeure by America overcame that. If American governments have been an engine of integration, then American companies have greased the gears. The rise of Net flix and other streaming services means that Europeans increas ingly watch the same programmes, breaking national siloes. Face book and Twitter allow for a raucous public sphere, where anyone can share thoughts on Emmanuel Macron. Google Translate makes users feel as if they had weirdly woken up with the ability to read 24 languages, allowing Italians to flick through newspapers in Swedish and Bulgarian, if they have the urge. rom the Big Mac to the nuclear bomb, the list of 20thcentury At times, America drove Europe closer together by mistake. FAmerica’s achievements is long. In a remarkable period of in When the American government tried to tear the club apart under vention, America bestowed human flight, superglue, rock and Mr Trump, it ended up accidentally fortifying it. Mr Trump taught roll, the Saturn V rocket, Pop Tarts and the internet upon human eu leaders that America would not always be a helpful ally and ity. One American innovation from this era receives much less at that the bloc had to stick up for itself. French diplomats were gid tention: the European Union. dy, blowing the dust off old policy ideas for beefing up European The eu is an American creation, as much as a European one. In power. In a postTrump era, their fellow officials actually listened. the middle of the 20th century, there were more European federal The eu still falls far short of the federal minime imagined by ists in Washington than in Brussels. Senators bashed out resolu the likes of Marshall, Kennan and Truman. During the eurozone tions declaring: “Congress favours the creation of a United States crisis, American officials were left perplexed that Greece, an econ of Europe.” The Marshall Plan, a torrent of postwar funding for omy just over half the size of New Jersey, might blow up the pro the crippled continent, came on the condition that European ject. When viewed from 4,000 miles away, the vicious disagree countries meld themselves together. George Kennan, an Ameri ments in European politics that stood in the way of further inte can diplomat, summed up American policy: “We hoped to force gration seemed rather small. In this way, says Jeremy Shapiro at the Europeans to think like Europeans, and not like nationalists.” the European Council on Foreign Relations, America’s take on Forget Jean Monnet. When it comes to naming founding fathers European integration resembles Gandhi’s view of Western civili for the eu, the list should start with President Harry Truman. sation: it would be a good idea. When Joe Biden swung by Brussels on June 15th, he reiterated a longstanding American goal. In a festival of backslapping, the Nowhere to run ain’t got nowhere to go president heaped compliments on the eu and stressed that an in From an American perspective, a stronger eu is one that can be left tegrated club was in everyone’s interests. Donald Trump did his alone. Europe was the front line of the cold war, but it is the pe best to bury the thing, attacking it at every opportunity and loudly riphery in America’s struggle with China. Europeans may not en supporting Brexit. With Mr Trump gone, America has returned to joy isolation. In the shade of America’s defence umbrella, difficult its normal role of trying to make Europeans get along. decisions could be avoided. It does not matter if, say, Poland or America has always been the secret ingredient of European in France has different security concerns, as long as America is hap tegration. In the aftermath of the second world war, unifying Eu py to sit behind all of them. Exit America and these debates be rope made sense for America. A divided continent could hardly re come awkward. sist Soviet domination. Nor would it be able to fix the “German On paper, America wants a more capable eu. In practice, it may problem” that had resulted in two wars in three decades. Instead, find such a development unsettling. At the turn of the century, the in a novel experiment by a victorious power, America opted to try euro was talked of as a rival to the dollar. The euro’s nearcollapse a to unite a traumatised continent, even though it could be a poten decade later put paid to that idea. A stable euro zone with the abil tial rival. ity to issue collective debt at will would be a much stronger poten Skip forward 70 years and America is now a more subtle force tial challenger to the dollar’s supremacy. Where the eu does have for European unity. Statebuilding can be a messy business, but power, such as over competition policy or privacy rules, it has de American history provides one of the few guides for creating a lighted in whacking American firms. Such areas are rare but be continentsized democracy. When discussing whether to issue coming less so. A more unified eu is a more powerful one and, al collective debt, European politicians reach for Alexander Hamil most inherently, a more independent one. America may, with ton, one of America’s Founding Fathers. When wrestling over who time, come to regret what it has wrought. n

012 United States The Economist June 19th 2021 35

Joe Biden’s legislative agenda lief that ending the filibuster would some how destroy the Senate. Look at Joe not go On infrastructure, Mr Biden seems to be pursuing the first path. Joe Manchin of West Virginia, the Senate’s most conserva tive Democrat, insists on a bipartisan deal. The White House pursued one, negotiating for weeks with Senator Shelley Moore Ca WASHINGTON, DC Factionalism and the filibuster imperil the president’s domestic ambitions pito, the Republican senator from West Virginia. Those talks collapsed on June 8th. fter his first 100 days in office, Joe Bi That leaves three plausible options. The The White House has now pivoted to nego Aden looked ruthless and Rooseveltian. first is to negotiate down his proposals, tiating with a separate bipartisan group of He had just passed a $1.9trn rescue package which risks losing the support of the senators—which may also prove a long despite painfully narrow majorities. His Democrats’ left flank. The second is to slog with little hope of success. administration was triumphantly prepar squeeze the agenda into a “reconciliation” If there were an obvious path to get his ing future plans to spend trillions more on bill that is primarily budgetary, and im full, ambitious package through Congress, climate, infrastructure and safetynet ex mune to a filibuster. That would probably the president would already have taken it. pansions. Since then, however, little has require excising some important regulato Mr Biden had little compunction about happened, and the prognosis looks murky. ry provisions, such as a cleanelectricity pushing his rescue package through recon When mathematicians confront a sys standard or a minimumwage rise. It also ciliation and passing it largely unscathed tem of equations, they sometimes find that risks losing the votes of moderate Demo on a partyline vote in the Senate. Moder there is no possible solution: the equations cratic senators hopelessly bent on biparti ates acceded during an emergency, but are are simply inconsistent and cannot be re sanship. The third option—abolishing the much less enthusiastic about using recon solved. The various constraints on gover filibuster through a simple majority vote— ciliation for ordinary legislating. nance—Democratic squabbles over the im is hostage to moderates’ unshakeable be Looking at the concessions already portance of bipartisanship, the brutal forced upon the administration is instruc mathematics of thin margins, unrelenting tive. Ms Capito’s final counteroffer was for → Also in this section opposition from Republicans—are starting $330bn in additional spending—not even to resemble such a system. 36 The politics of pipelines 10% of Mr Biden’s $4trn package. The presi The main constraint on Mr Biden’s am dent, for his part, had offered to cut pro 37 Southern Baptists bitions has always been the filibuster, a posed spending to $1trn, and suggested Senate rule that mandates 60 (out of 100) 37 Joe Biden and antitrust taking the corporatetax rise (from a cur votes to push through most legislation. rent rate of 21% to a proposed 28%) off the 38 California’s budget Democrats hold 50 Senate seats; assuming table. The offer being crafted by the new unanimity among them, the administra 39 Governors and emergency powers group, which may yet fail to attract ten Re tion thus needs ten Republican votes. Mr publican votes, is said to be $579bn in extra 40 Lexington: Terry McAuliffe Biden will be hardpressed to find them. spending, and mainly limited to “hard” in

012 36 United States The Economist June 19th 2021

frastructure—roads, bridges and the like— Senate budget committee, aims to start the ful vaccination campaign and healthy re without any of the welfarestate expansion reconciliation process soon. But that will opened economy may help him when fac that Mr Biden included in the second half get only some of Mr Biden’s agenda ing that headwind. of his plans. through, and nothing at all on voting But given the Democrats’ narrow mar Even if the negotiations yield a compro rights, gun control or immigration. gins, even small losses would put Congress mise, factional forces loom. Climatecon And this may prove the most favourable in Republican control. Herding Democrats scious Democrats seem poised to bolt. (Re legislative environment of Mr Biden’s is hard enough. The Republican congres publicans have been adamant that “core term. Parties in power tend to lose seats in sional leadership could kill Mr Biden’s leg infrastructure” ought not to incorporate midterms, though Mr Biden is proving a islative priorities, leaving him reliant on greenery.) “You can’t handwave or spin slippery target for Republicans, and his executive orders, as his two predecessors away the scientific necessity that we have signature legislative achievement sho were in the second halves of their terms. to get our climate emissions down to pro wered Americans with cheques. A success That is a long way from Rooseveltian. n tect public health,” says an aide to Senator Ed Markey of Massachusetts, who vows to vote against any bill that is “in denial” on Pipeline politics climate change. Progressives in the House of Representatives, where Democrats have Keystone chimera only a bare majority, also have sufficient NEW YORK numbers to torpedo any legislation they The death of a totemic pipeline has been greatly exaggerated deem insufficient. Much of the rest of Mr Biden’s agenda he website of 350.org, an environ fossilfuel companies.” looks even more endangered. The For the Tmental group, screams, “We want to Perhaps, but greens should not pop People Act, also known as hr1, which end the fossilfuel industry within the the champagne just yet. For a start, the Democrats see as their answer to state Re next decade.” The group’s cause célèbre loss of one conduit will hardly dent publicans’ tightening of voting rules and to has been halting the completion of Keys America’s petroeconomy, which boasts the threat to democracy posed by Trump tone xl, an $8bn pipeline that was in over 200,000 miles of oil pipelines (see ism, looks dead. Mr Manchin will not sup tended to transport oil mined fro map). Gasguzzlers will not be affected port it (not because of any of its manifest m mucky “tar sands” in Canada’s Alberta one whit. John Coleman of Wood Mac flaws, but because it was too partisan). He province over a thousand miles into the kenzie, an energy consultancy, puts it also has repeatedly rejected calls to weak American heartland. bluntly: “Keystone xl was more of a en the filibuster. Among the ironies engen To that end, greens joined with native luxury than an absolute necessity for the dered by the filibuster is that a simplema Americans and ranchers, who also op us oil market.” jority vote is sufficient to confirm a Su posed the pipeline out of concerns that it If slaying this pipeline sparks broader preme Court justice with the power to would disturb sacred grounds and pol antioil protests, argued Mr McKibben strike down legislation, but insufficient lute vital water supplies. They persuaded recently in The New York Times, then actually to pass any. Barack Obama to revoke an essential “much of the rest of the elaborate archi permit, which halted construction. But tecture of fossilfuel expansion begins to A mausoleum of ambition tc Energy, the firm behind the project, topple”. Activists in Minnesota have Mr Manchin promised instead to whip up and the Albertan government were turned their attention to an alternative support for hr4, the John Lewis Voting equally determined. They persuaded oil pipeline running from Canada to Rights Advancement Act, a more limited Donald Trump to reverse Mr Obama’s America, known as Line 3. But on June bill than hr1 (which devoted much of its ruling, allowing it to proceed. 14th an appeals court affirmed that state’s space to the somewhat ancillary concern of Then in January this year President approval of the pipeline. drawing up a publicfinancing scheme for Joe Biden reversed Mr Trump’s ruling, Even if those activists succeed, they elections). Even this strategy is suspect. halting construction again. After review will only inconvenience peddlers of Earlier introductions of the legislation ing its legal options, tc Energy declared Alberta’s carbonintensive crude, not have been cosponsored by only a single on June 9th that Keystone xl is “termi shut them down altogether. Canadian Republican senator, Lisa Murkowski of nated”. Bill McKibben, a founder of producers can still send their oil south Alaska—which leaves the administration 350.org and a noted environmentalist, through other pipelines or via rail, and nine votes short. exclaimed: “[W]hen enough people rise ship it west to global markets via the Chuck Schumer, the Senate majority up we’re stronger even than the richest Pacific. Chris Midgley of s&p Global, a leader, has suggested that he will force a se research firm, concludes that there is ries of votes in the coming month. That Alberta Pipelines sufficient transport capacity “to handle may yield political benefits for next year’s growing oil sands and shale production Tar sands CANADA May 202* midterms. Substantively, however, he Crude oil over the next decade out of west Canada”. may wind up with little to show for his ef Keystone Refined Exuberance over the Keystone xl forts. Votingrights legislation is imper Line 3 petroleum victory may prove fleeting. Alberta’s Source: EIA illed, and a compromise guncontrol bill is Keystone XL government, which has ploughed over looking unlikely after talks broke down be (cancelled) $1bn into the pipeline, has indicated that tween John Cornyn of Texas and Chris it will try to invoke the new North Amer Murphy of Connecticut. UNITED ican freetrade agreement to revive it. On That is not to say that nothing will pass. STATES June 15th a federal judge blocked Mr The Senate recently approved a relatively Biden’s attempt to halt new oil and gas undiscussed $250bn industrialpolicy bill drilling on federal lands, ruling that such aimed at improving competitiveness with a decision requires congressional ap

China. A $547bn surfacetransport bill may 300 km proval. Environmentalists may well ﬁnd soon pass with a smattering of Republican MEXICO *Or latest available Big Oil to be a hydraheaded beast. support. Bernie Sanders, who chairs the

012 The Economist June 19th 2021 United States 37

Southern Baptists “want to deflect the issue to arcane discus sions that people do not understand, such A house divided as ‘critical race theory (crt),’” an academic niche more condemned than understood. crt has become a bogeyman for the Amer ican right, and incensed some pastors who consider woke ideologies a grave threat to NASHVILLE their churches and the country. America’s largest Protestant Anticrt pastors last year formed the denomination holds off an insurgency Conservative Baptist Network, whose agi nnual meetings of the Southern Bap tation has led some AfricanAmericans to Atist Convention (sbc), America’s larg cut ties with the denomination and has est Protestant denomination, are usually tormented anyone seen as insufficiently dull. Church representatives, known as conservative. In his resignation letter, Mr “messengers,” debate resolutions about ec Moore wrote, “My family and I have faced clesiological minutiae and hold referen constant threats from white nationalists dums about referendums. There is a com and white supremacists, including within mittee on committees that selects officers our convention.” for a committee on nominations that The conservative wing’s choice for pres nominates members of other committees. ident was Mike Stone, a pastor from Geor This year was different. The agenda in gia. He ran against Ed Litton, a pastor from cluded the election of a new president, a Alabama known for his efforts at racial rec Joe Biden and antitrust vote on whether to allow an investigation onciliation. Mr Litton eked out a narrow into accusations of sexual abuse, and a victory. Soon afterward, messengers Yes they Khan showdown over race (the denomination charged him with creating a task force to was founded in the precivil war South oversee an independent investigation into after Northern Baptists refused to appoint the sbc’s historic handing of sexual abuse. slaveholders as missionaries). On most of Jules Woodson, who says she was abused DALLAS these issues, the sbc’s more moderate wing by her youth pastor when she was 17, tweet Joe Biden appoints an activist to head held off a rightwing insurgency—for now. ed, “Thank you from the bottom of my the Federal Trade Commission Tensions within the sbc had long been heart for hearing our cries.” building, particularly around accusations Some hope that the victory of the less he early motto of Mark Zuckerberg, that the convention had shielded sexual conservative wing may help staunch the TFacebook’s boss, was “Move fast and predators. In a resignation letter leaked on outflow of members. Though more than break things”. Bruce Mehlman, a former as May 29th, Russell Moore, head of the sbc’s 14m Americans identify as Southern Bap sistant secretary of commerce for technol publicpolicy arm and a man broadly re tists, their number has been declined for 14 ogy policy, predicts the same maxim may spected as a writer and thinker outside the years in a row: 2020 (when membership now guide the Federal Trade Commission denomination, alleged that the sbc’s exec shrank by 435,000) was the worst year on (ftc), a consumerprotection agency. On utive committee “exonerated” churches in record. Southern Baptism is an evangelical June 15th news leaked that Lina Khan, a a spurofthemoment meeting over co denomination, which means that mem prominent critic of large tech firms, whom vering up allegations of sexual abuse. bers must choose to be baptised into the the Senate had just confirmed to be one of Mr Moore was also at the centre of the faith; according to figures presented at this the ftc‘s five commissioners, would chair firestorm within the sbc about race. He year’s meeting, the sbc is baptising 40% the agency. Her appointment shows that called for white Christians to empathise fewer teenagers than it did in 2000. taking on tech has become a rare biparti with AfricanAmericans over issues such Churches also struggle to retain young san concern in Washington, and that the as police brutality, but said some leaders people; half of those raised in sbc churches White House supports a more activist en leave, in part because of how the denomi forcement agenda. nation responds to social questions. Ms Khan, who is 32, is best known for “Either the Southern Baptist Conven “Amazon’s antitrust paradox”, an article tion rectifies the ways that it has hurt peo she wrote in 2016 while a student at Yale ple...or I think that more young people like Law School. She argues that current inter myself will find new avenues to pursue pretations of antitrust—which hold that if ministry and denominational affiliations,” consumers benefit from free services then says Leah Boyd, a 22yearold seminary no harm is being done—are insufficient to student whose Twitter account is popular deal with the power of platforms such as among young evangelical Christians. Amazon. The tech giants could use preda “They told us to read our Bibles and so we tory pricing and market control to harm did and then we all became...very social smaller firms. justiceminded,” Ms Boyd adds, pointing Two more recent works show just how to Biblical commands to care for the poor deeply Ms Khan’s technoscepticism runs. and the oppressed. She contributed to a report last year by the But the church’s more conservative House judiciary subcommittee on anti wing will not simply retreat to lick their trust, which suggested that trustbusting wounds in the back pews. Before the vote, needs a reboot. She has argued in the Co- Rod Martin, an architect of the conserva lumbia Law Review for “structural separa tive resurgence, said, “If we do not prevail tions” at big tech companies. She also goes today, we will comeback next year, and the far beyond conventional wisdom in her in Praying for guidance next and the next.” n terpretation of antitrust law’s toolkit.

012 38 United States The Economist June 19th 2021

Breaking up big tech is a popular talking point, advanced by elected officials on both sides of the aisle and by the Open Mar kets Institute, a oncefringe thinktank where Ms Khan used to work. Perhaps the White House chose Ms Khan in part to please progressives, who are likely to get less from the administration’s infrastruc ture package than they hoped. Yet many of Ms Khan’s views are also popular with con servatives, who bash big tech firms for their size and stifling of free speech. “She’s a controversial figure within antitrust cir cles, but a very popular one in political cir cles,” says Blair Levin of New Street Re search, an analysis firm. According to Mr Levin, the agenda to combat the tech giants’ power will have four fronts. Ms Khan will work with Con gress on bills (which have a degree of bi partisan support) to constrain the power of Trolls to the left of me, ogres to the right big tech firms by, for example, banning them from favouring their own services. June 14th the legislature agreed to pass a which are controlled by vetoproof Demo Second, Ms Khan will collaborate with $264bn draft budget—the largest in the cratic supermajorities. The legislature and European regulators, who have led the state’s history, nearly 30% bigger than the Mr Newsom agree that the state should charge against the tech behemoths. Third, previous record in 201920. start paying for healthcare coverage for she will launch investigations. And fourth, Dubbed the “California Comeback poor undocumented immigrants. But Mr she will litigate cases against businesses. Plan”, Mr Newsom’s proposed spending Newsom wants this to apply to undocu Here she may be most constrained, says a promises to help California “to make a mented immigrants who are 60 and older, former ftc commissioner: courts tend to onceinalifetime investment in the fu whereas some legislators want to lower the favour business, especially since Donald ture of the state”. The budget will devote age to 50. Even that reveals a lack of ideo Trump nominated 234 judges. billions to public education, housing, tran logical diversity: no powerful voices are Just how aggressively the Biden admin sport, health care for undocumented im asking whether the state ought to spend as istration wants to pursue big tech firms migrants, fighting homelessness and cli much as $1.3bn a year on the health care of should be revealed soon, when the head of mate change, and more. Though the bud lowincome noncitizens. the Department of Justice’s antitrust divi get is not yet final, its size highlights politi Californians need a robust social safe sion is named. But the selection of Ms cians’ belief that more government tynet—the state has America’s highest Khan shows that Washington’s view of spending is the solution to the state’s pro poverty rate when adjusted for the cost of tech firms has changed since Mr Biden was blems, as well as some of their own. living. But two important questions arise. vicepresident. That was another age, back California is so flush with cash that it is One is whether expanding the footprint of when BlackBerrys—and tech ceos—were launching the largestever state tax rebate. government without making reforms is still popular. n Those earning under $75,000 will be eligi likely to help the people the state is trying ble to receive cheques of up to $1,100 (in ad to reach. The pandemic has laid bare how dition to federal stimulus). A law passed by badly California runs its operations. The The Golden State’s budget voters in 1979 requires the state to refund Employment Development Department taxpayers once appropriations reach a cer (edd), which handles unemployment Gavin Newsom’s tain level, but California and Mr Newsom claims, has been bedevilled by ineptitude, are “following the progressive orientation technical problems, fraud and lack of over wild ride of the state, which is to give back more to sight. People can wait days to reach some the neediest citizens”, says Ken Miller of one at edd, and months to get a cheque. Claremont McKenna College. Meanwhile the schools, among the biggest The generosity may also be selfinter staterun enterprises, have been closed for How California is spending a $100bn ested. Mr Newsom faces a Republicanled inperson instruction far longer than in windfall reveals a lot about its politics campaign to recall him from office, which other states because of powerful teachers’ ecently california has been running gained steam during the state’s longrun unions. As of April 30th, only 13% of pub Ra lottery to encourage vaccinations ning shutdown in response to covid19. licschool pupils were in the classroom against covid19. Those who have received California was one of the last states to lift five days a week. That burden has fallen their jabs can enter to win prizes, includ restrictions; it reopened only on June 15th. disproportionately on the poor and has on ing holidays, gift cards and ten grandprize Spending on popular progressive causes ly widened inequalities. cheques of $1.5m each. California has also helps ensure that no Democrat will run Another question is whether spending recently won a windfall of its own. Instead against him in the recall, while sending so much now instead of preparing for the of an expected $54bn budget deficit be cheques to voters may blunt some of their next recession is wise. To make the maths cause of the covid19induced recession, a frustration with him. “It’s in Newsom’s of higher spending work, the governor is roaring stockmarket combined with a fed shortterm political interest to spend now, banking on a further climb for the stock eral stimulus has produced a surplus of instead of save now,” says Mr Miller. market in the coming years, even though it more than $100bn. It is striking how little disagreement is already near historic peaks. “We’re a Politicians, including Gavin Newsom, there is on the budget between Mr New state, not a spac,” says David Crane, a lec California’s governor, are splurging. On som and the legislature, both chambers of turer in public policy at Stanford Universi

012 The Economist June 19th 2021 United States 39

ty, referring to the investment vehicles that to rescind publichealth orders from the (Mr Cuomo earned a reputation for being make often overrosy assumptions about state’s health department. A law in Utah fond of power: after taking office, he mod growth. “We should make reasonable pro prohibits the governor from placing strict estly declared, “I am the government”.) jections about the future.” er emergency limits on religious gather But the more interesting political bat Because California depends on perso ings than on other meetings. tles are taking place in states with Republi nalincome taxes and stockmarket gains A national reckoning over gubernato can legislatures and Democratic gover for revenue, busts are painful. In both 2001 rial power is unusual in American history. nors. In Kentucky, the state supreme court and 2008, the state’s net capitalgains real Most emergencies are local or regional, but heard oral arguments last week in two cas isations declined by a whopping $80bn covid19 affected every state and munici es concerning orders issued last year by each time, leading to massive cuts to gov pality. Asking how powerful governors Andy Beshear, the Democratic governor. ernment programmes and the social safe should be is welcome, for two reasons. Though most of Mr Beshear’s orders have tynet. The governor’s own maths in his First, because they have grown far more already expired, the court’s decision is still proposed budget showed the downside powerful than they used to be. State gover important, both for Kentucky as it contin risk to another stockmarket fall, yet the nors were at first little more than figure ues to navigate the pandemic and for pre state is not setting aside enough in re heads. Miriam Seifter, a law professor at cedent in future publichealth crises. serves to prepare for it. the University of WisconsinMadison, In Pennsylvania, because the gover California has already withdrawn $8bn says that they became more active in the nor’s emergency powers are enshrined in from its $16bn rainyday fund to cope with early 20th century, when figures such as the state’s constitution, lawmakers called a the pandemic, but is allocating only $3.7bn Robert La Follette of Wisconsin and Wood referendum on two amendments that back into the fund, leaving it with a frac row Wilson of New Jersey pioneered regu would limit emergency orders to 21 days, tion of the reserves required to insulate latory and electoral reforms; and as the ad and give the legislature—rather than the against another economic shock. Some ministrative state expanded after the sec executive branch—the ability to extend, or legislators sent a letter to Mr Newsom ar ond world war. Today many governors end, them. Voters approved both mea guing for setting aside more reserves, but wield powers that even the president lacks, sures. Tom Wolf, the state’s Democratic go their calls have gone unheeded. Politicians such as the lineitem veto, which allows vernor, called the strategy a “thinly veiled are too busy partying as if they have just them to delete parts of a bill without reject power grab”. Governors cannot veto or won the lottery. n ing the whole thing. block ballot initiatives; Republican legisla Second, the question suggests that with tors may use the same approach to reform the immediate threat of the pandemic re voting rules. State governors ceding, Americans are starting to assess These new state laws may soon be put how their governments responded to co to the test. Summer usually sees hurri Checking and vid19. “The idea that after a crisis, legisla canes in the southeast. Wildfires already tures and the public would deliberate and blaze across the West. And although the balancing reflect on a gubernatorial emergency re vaccination drive is going well, the virus sponse, and then follow that with tailored has not disappeared. The next disaster reforms...That’s a good thing,” says Ms Seif could reveal whether the new strictures DENVER ter. “That's part of a healthy system of America debates how much power promote good government or tie governors checks and balances.” state governors should have when expediency is most needed. Legislatures have been willing to take Before the pandemic “governors often ne year ago, America’s governors on governors of their own parties. Ohio’s seemed like a footnote”, says John Wein Owere having a moment. Covid19 cases Republicanled legislature overrode a veto gart, the Director of Rutgers University’s were rising, federal leadership was absent from Mike DeWine, the Republican gover Centre on the American Governor. “If and much of the responsibility for fighting nor, to impose emergencypowers restric nothing else, people have seen that the of the pandemic fell on their shoulders. Be tions. In New York, Democrats revoked the fice of thegovernor is important—however fore Andrew Cuomo was mired in personal emergency powers that they granted Mr one thinks their powers need to be adjust and professional scandals, his daily press Cuomo last year to deal with the pandemic. ed or not.” n briefings were mustsee tv. Gretchen Whitmer’s star rose in the Democratic Par ty after she sparred with Donald Trump, who referred to her as “the woman from Michigan”—a phrase her supporters soon had emblazoned on tshirts. But many saw lockdowns, mask man dates and other emergency powers as sumed by governors as infringements on their civil liberties. Early this year, law makers entered new legislative sessions in a powerrestricting mood. So far this year, according to the National Conference of State Legislatures, lawmakers in 45 states have introduced more than 300 bills and resolutions concerning legislative over sight of governors’ emergency powers, with 14 states enacting such measures. Most new laws place time limits on go vernors’ emergency orders, and require the legislature’s consent to extend them. Ohio’s legislature granted itself the power A sober reckoning with gubernatorial power

012 40 United States The Economist June 19th 2021

Lexington And in the blue corner

Terry McAuliffe’s victory in Virginia’s gubernatorial primary could be one for the history books same party as the incumbent president. Forty years later, Mr McAuliffe was the next candidate to manage that feat—thereby confirming how sharply Virginia had swung back to the Demo crats. The state now has its first Democratic legislature in a quarter of a century, has not elected a Republican to statewide office since 2009, and last November chose Joe Biden over Donald Trump by a tenpoint margin. Comparing those seachanges is instructive. The voters who left the Democrats over civil rights in the 1960s and 70s were white, mostly workingclass and more radicalised than the patri cian establishment of either party. By contrast, the left’s new vot ers, in the affluent suburbs of Richmond and northern Virginia, are diverse professionals who are chiefly recoiling from a Repub lican establishment captured by the wildest spirits of its base. Mr McAuliffe’s opponent in November, Glenn Youngkin, a su perrich political newcomer, was one of the more moderate candi dates in the Republican primary. Yet to win it he was forced to de clare fealty to Mr Trump, perhaps the most unpopular politician in Virginia, and tacitly endorse his lie that the general election was stolen. The former privateequity baron has launched an “election integrity taskforce” and called a Trumpist conspiracy theory about voting machines “the most important issue” of the campaign. he only man to serve two terms as governor of the Old Domi This encapsulates the handicap Republicans face in every state Tnion since the civil war was a courtly “Virginia gentleman” and with extensive suburbs—including Arizona and Georgia, as well segregationist called Mills Godwin. Hailing from the rural south as Virginia. They are attempting to win them back while leaning of the state, whose large black population and racism recalled the into the extremism that suburbanites loathe. Deep South, Godwin claimed that letting black children attend This is a bigger advantage to Mr McAuliffe than his governing Virginia’s better schools “would be a cancer eating at the very life record (which jaundiced voters, in another contrast with Godwin’s blood of our public education system”. It is interesting to wonder time, are liable to set aside these days). He has therefore nick what he would have made of Terry McAuliffe, who looks well named his Republican opponent “Trumpkin” and is trying to goad placed to match his achievement in November. Mr Trump into getting involved in the race—ideally by visiting the Flamboyant, some might even say shameless, “the Macker” is a state. “Oh my goodness, I’ll pay for his gas to come!” the irrepress carpetbagging native of New York who was governor in 201418 ible Macker told your columnist. “But I’m telling you he’s scared of and formerly known as a fasttalking Clinton crony and outland me, he’s not coming here, we keep beating them!” ishly good fundraiser. He allegedly inspired (though he denied it) The Democrats’ main weakness is also apparent in the race. It is a scheme to Airbnb the Lincoln Bedroom to Bill Clinton’s top do that the voluble left thinks the party’s new supporters have come nors. He once wrestled a 280lb alligator for a $15,000 gift to Jimmy to it in a great awokening, not, as is the case, by default. During the Carter’s reelection campaign. Godwin and the Macker, who won primary, leftwingers suggested that Mr McAuliffe’s candidacy Virginia’s Democratic gubernatorial primary last week in a blow was an affront to his three black primary opponents. In giving him out, have two big things in common. 62% of the vote in a fivehorse race, Democratic voters dismissed Both transformed their reputations in office. The segregation that, and in the process underlined another Democratic advan ist ushered in Virginia’s first sales tax and bond issuance, leading tage. The moderation of the party’s new suburban voters is re to new roads and a communitycollege system. The Macker, work inforcing the previously underestimated centrism of its African ing around a militant Republican legislature, reenfranchised American base—which in Virginia represents a fifth of the elector 173,000 exfelons, nearly half of whom were AfricanAmerican. He ate. Mr McAuliffe, who has said relatively little about race while was also as effective a salesman for Virginia as he had been—as vowing to boost education spending and job creation, thereby America’s youngestever bank chairman—in business. He rode in won the primary vote in every city and county of the state. a fighter jet to impress the aerospace industry, played a revolu tionarywar general on television to bring in the entertainment A Macker for all seasons industry, and installed a kegerator in the governor’s mansion to As a competitive state, which holds one of the first statewide votes woo the craftbeer industry. If he didn’t wrestle another gator, it after a general election, Virginia has long been an important polit was because Virginia already had three zoos. A popular governor ical straw in the wind. Despite its recent lean towards the Demo with a decent economic record, he was probably denied a second cratic Party, this year will be no different. There is so much on the consecutive term only because the commonwealth forbids them. line. Mr Youngkin will test the Republicans’ ability to detoxify Through luck as well as judgment, Mr McAuliffe and Godwin themselves now that Mr Trump is off the ballot. The party’s anti were also beneficiaries of Virginia’s two biggest political shifts democratic drift, perpetuated by Mr Youngkin, will be all the more since Reconstruction. Godwin won his first term, in 1965, as a threatening if they succeed. Opposing them stands the author of southern Democrat. But as the south lurched to the right after the “What a Party! My Life AmongDemocrats: Presidents, Candidates, passage of the Civil Rights Act he won his second, in 1973, as a Re Donors, Activists, Alligatorsand Other Wild Animals”. Cometh the publican. Unusually in Virginia, he did so despite being of the hour, cometh the Macker. n

012 012 42 The Americas The Economist June 19th 2021

Migration un’s refugee agency. “You can spend years trying to get into the United States, or A destination in its own right spend those years building a life in Mexi co,” says Rafael Alonso Hernández of Colef, a Mexican thinktank and college. Mexico has a history of accepting immi grants. During the Spanish civil war in the 1930s many refugees fled across the Atlan SALTILLO tic. Its laws are welcoming. Its definition of Many Central American migrants are staying in Mexico a refugee goes beyond the un’s, to encom or years Juan and Marta ran a success to issue a belated warning: “Do not come.” pass anyone who is fleeing widespread vi Fful transport company in El Salvador In fact, many migrants are stopping olence. Hondurans qualify almost auto that attracted the attention of gangs. Thugs short of the United States, and claiming matically. Moreover, refugees, once ac held them at gunpoint and extorted money asylum in Mexico instead. In 2015 there cepted as such, can do everything but vote: from them. In 2019 Juan left to claim asy were 3,424 requests; by 2019 the number they can work, take advantage of state lum in Mexico. He was given permission to had increased to 70,302. Some of that may funded health care and send their children stay and found work. In April Marta and be thanks to Mr Trump’s policy of obliging to local schools. their three children were allowed to join those claiming asylum in the United States This generosity is tempting, as is join him. They are thrilled by the prospect of a to stay south of the border while their ap ing relatives who have already made the quieter life in the northern Mexican city of plications were processed (Mr Biden ended journey. “The United States has two mag Saltillo. Nothing is as good as at last feeling this policy on coming to office). nets—family networks and high salaries,” secure, says Marta. “It gives you back life.” Even so, this year looks set to break new says Andrés Ramírez, the head of Comar, Latin American migrants, mostly from records. Mexico had 41,195 requests for asy Mexico’s refugee agency. “Now Mexico has the “Northern Triangle” of Guatemala, lum, more than half from Hondurans, in the family networks.” Mexico may not offer Honduras and El Salvador, are attempting the first five months of 2021. Some of these high salaries—even in Honduras, the to cross the border from Mexico to the Un may eventually continue north. Many oth minimum wage is higher—but it does at ited States in ever higher numbers. In May ers, however, seem to want to stay. The least have work and more safe areas. For 180,000 arrived there, the highest monthly country is becoming a destination in its Spanishspeaking migrants there is no lan total in more than 20 years. The number of own right, says Mark Manly of unhcr, the guage barrier. Juan and Marta had worked arrivals in April was almost as large. illegally for a year in the United States be Most are escaping violence and poverty. fore returning to El Salvador and then mov The impression that President Joe Biden’s → Also in this section ing to Mexico. Marta says she would “never administration will be more friendly to live there again”. It did not feel like home, 43 Americans flock to Mexico migrants than Donald Trump’s was seems and was too expensive. to have spurred many to make the journey. 43 Gunboat diplomacy Until a few years ago most migrants Kamala Harris, Mr Biden’s vicepresident, were young men on their own. Later fam 44 Bello: Latin America’s schools visited Mexico and Guatemala in early June ilies began arriving. By the end of March

012 The Economist June 19th 2021 The Americas 43

Mexico hosted 3,500 unaccompanied chil- must stay in the state where they arrive as his struggle to find and retain Mexican dren, up from just 380 at the start of the their claims are processed. Yet the states workers. Refugees are both happy to move year, according to unicef. The Mexican along the southern border, where almost to take a job, and less likely to quit. Accord- authorities are struggling to comply with a all asylum-seekers show up, are among ing to unhcr, fully 86% of those relocated, law passed last year that bars them from Mexico’s poorest, and offer few jobs. Stay- such as Juan and Marta, have stayed where keeping children in detention centres for ing in those areas is dangerous for some they are a year later. It helps that refugees immigrants. The nationalities of refugees migrants; Juan claims that Salvadoran can earn more in these places. In their first are shifting, too. Hondurans have sought gang members tracked him down there to year of work the average refugee earns asylum in Mexico in the largest numbers intimidate him. The concentration of refu- 1,500 pesos a week in the north, but just for the past three years. But last year Hai- gees in an already poor place also stokes 800 in the south. tians were the second most likely to claim anti-immigration sentiment. Immigration advocates would like an asylum, followed by Cubans. When given the chance, migrants can even more welcoming system. This could All this means that Mexico is at a “mo- integrate well. For over a decade unhcr help the country more broadly, as attract- ment of transition”, says Ximena Escobedo has run a programme to move people from ing and retaining skilled workers remains of the foreign ministry. It is likely to have the south to areas in the north, such as tricky, too. Legal migrants often have to to deal with a lot more migrants in the fu- Saltillo, once they have been granted refu- jump through several regulatory hoops ture. But without some changes it will gee status. Those who are selected, based and the system is creaking. But despite the struggle to cope. Last year Comar’s budget on their willingness to stay in Mexico, are bureaucratic hurdles, Mexico needs more increased to 47m pesos ($2.4m), almost helped to find work, a house and schools people who are happy to work. Its popula- double that of previous years. But it needs for their children. tion is starting to age and many of its own yet more funds to provide more shelters, So far, the results are encouraging. An- citizens are leaving for other countries. In argues Mr Ramírez. drés Navarro of cinsa, a company in Salt- more ways than one, it is becoming like its Mexican law says that asylum seekers illo that makes tableware, says firms like richer northern neighbour. 

Moving to Mexico Venezuela and Iran The Latin American dream Gunboat

AJIJIC diplomacy Why some people are migrating south from the United States n the year and a half since Annette are realising. The us State Department and Mike Thompson sold their house reckons 1.5m live south of the border, I Iranian warships seem bound for in Texas and upped sticks for Mexico, making them the largest group of im- Venezuela. Will they get there? they have had few regrets. Now they live migrants in Mexico and the largest group in Ajijic, a pretty town by Lake Chapala in of Americans outside the United States t is not exactly the Cuban missile crisis. the western state of Jalisco. Their large (Mexico counts fewer: around 800,000). IIn early June, a pair of warships rounded house has a spectacular view over the The largest single community of non- the Cape of Good Hope and became the water, where birds glide in the late after- military American expats in the world is first Iranian naval vessels ever to enter the noon breeze. “The only thing we miss is in Mexico’s west, close to Guadalajara. Atlantic without port stops. The irins Tex-Mex food,” says Mrs Thompson. In Mexico the cost of living is cheaper Makran, inching along at the speed one The clichéd view of Mexico is that it is and the weather nicer. The Thompsons would expect of a former oil tanker, is poor and crime-ridden. Popular tv se- brought Mrs Thompson’s parents down thought to be carrying fast attack craft— ries, such as “Narcos: Mexico”, do little to with them. Her mother has dementia but small, agile missile-toting warships— dispel this image. The reality has long affordable care frees up her father to go bound for Venezuela. The United States been more nuanced, as more Americans fishing and play cards. And despite Mrs has warned that any arms delivery would Thompson’s yearning for Tex-Mex, the be a “provocative act and a threat to our food is better, too. partners in this hemisphere”, meriting “ap- Migrants used mostly to be retirees: propriate measures”. osteopathy clinics are abundant in Lake Iran and Venezuela are united in hostil- Chapala. But thanks to the pandemic, ity to the United States, which has imposed and Mexico’s lax rules over lockdown, tough sanctions on the former for its nuc- younger workers are moving, too. lear programme and on the latter for its re- Joyanne Sloan, who works in digital pression at home. Last year Iran sent marketing for American companies, equipment and experts to help Venezuela moved there with her 12-year-old daugh- revive its ailing oil refineries, plus fuel and ter from Seattle last year. She is not the food to stock an Iranian supermarket, in only one. “You can’t swing a cat around return for Venezuelan gold. here without hitting someone from the Since the expiration of a un arms em- United States,” she says. In well-heeled bargo in October, Iran has also been free to parts of Mexico City, such as La Condesa, sell weapons to anyone it fancies. Venezu- English is heard as much as Spanish. ela is a happy customer. In December the On the whole Mexicans are welcom- head of the us Southern Command pointed ing. But some complain that many of the to “growing Iranian influence” and newcomers come without the right visas. claimed that Iran had sent its Quds Force, The largest group of illegal immigrants an elite expeditionary unit, to support the You can leave your hat on in Mexico—by far—is the yanquis. regime of Nicolás Maduro, Venezuela’s dictator. American officials told Politico, a

012 44 The Americas The Economist June 19th 2021

website, that the deal for weapons was A year ago, the American State Department America’s return to the multinational nuc signed last year. Fast attack boats would be threatened sanctions against Greekowned lear deal abandoned by Mr Trump. It is a welcome addition to the Bolivarian Navy, tankers to foil a delivery of Iranian fuel to therefore eager to project defiance. But Mr which has not covered itself in glory. Last Venezuela. But warships have “practically Maduro may have less stomach for con year it lost a patrol boat after ramming a absolute sovereign immunity”, says Cor frontation. Eager to ease pressure on his cruise liner in the Caribbean. nell Overfield of cna, a thinktank, mean regime, he recently let the un’s World Food The United States has few good options ing that the United States cannot lawfully Programme resume operations in Venezu for halting the Makran and its accompany seize or attack them. That principle, in ela and freed six former employees of an ing frigate. In October Donald Trump’s ad force from around 1812, was reaffirmed American oil company. There is still time ministration threatened simply to “elimi when international courts blocked Ameri for a change of heart. Some Venezuelans nate” any longrange missiles sent to Vene ca’s attempt to impound an Argentine war speculate that Iran’s shipment is timed to zuela by Iran (there was no sign that Iran ship at a port in Ghana in 2012. arrive by June 24th, the 200th anniversary intended to send any). Joe Biden’s admin In the middle of a heated presidential of a famous battle against Spain, tradition istration has stopped short of such threats. campaign, Iran is currently negotiating ally the national day of the armed forces.n Bello Latin America’s silent tragedy

Prolonged school closures are inflicting lasting harm on a generation or the first time in more than a year, reckons that some 77% of students would same pace,” says Marco Fernández, an Fthis month small groups of children be below the minimum performance for educational specialist at the Technologi with their backpacks and chatter have their age, up from 55% in 2018. This has cal University of Monterrey in Mexico. trooped into some schools in Mexico longterm effects. Even if only ten months “They can’t ask questions or get feedback City. It is a cautious reopening. It is up to of classes are missed, the bank reckons as they would in the classroom.” Beyond schools whether or not they open, and that the average student could lose the the loss of learning, school closures have only a minority have chosen to do so. equivalent of $24,000 in earnings over his brought emotional costs and a big in Only part of the class attends each day. or her lifetime. The poorest, those in rural crease in the number dropping out. The same goes for 18 of Mexico’s 31 other areas, and girls are most affected by the Schools in many countries in other states; in the others all schools remain school shutdown, aggravating Latin Amer regions reopened months ago, with shut. With the pandemic far from over, ica’s already wide inequalities. social distancing, testing and thorough caution may be understandable. But Many Latin American countries have cleaning. Apart from the severity of the among the living, children continue to made big efforts to organise distance pandemic, there are several reasons this be among its principal victims, in Mexico learning during the pandemic. But a size hasn’t happened in Latin America. Par and across Latin America. able minority of schools lack internet ents have generally not been keen. In The region has been hit especially access for teaching purposes. Whereas Mexico, until most people are vaccinated hard by covid19 in three ways. With 8% 98% of the richest fifth of students in the “we think that unfortunately the condi of the world’s population it has suffered region have internet at home, just 45% of tions don’t exist for a massive return to around a third of officially recorded the poorest do. In Brazil mobile phones school,” argues Luis Solís of the National deaths from covid19 (and many more offer the only internet access for over 60% Union of Parents, a voluntary group. unrecorded ones). Its economies con of black and indigenous students. Many Teachers’ unions have been reluctant, tracted by an average of 7% last year, governments are using traditional chan too. In Argentina when the mayor of worse than the world as a whole. Much nels, such as television, radio and printed Buenos Aires tried to reopen schools in less discussed is that Latin America’s materials. Mexico has offered distance March he was opposed both by the union schools have stayed shut for longer than learning by these means for 25m pupils. and the national government, its ally. those in any other region. The effects will This is no substitute for facetoface “There’s no pressure” on governments to be felt long after the pandemic is over teaching. “Not all students learn at the reopen, laments Mr Fernández. and economies have recovered. Governments could do much more to Schools closed nearly everywhere in promote safe reopening, through in the region in March 2020 and many have formation and consultation. “By now all remained shut ever since. They are fully countries should at least have made a open only in six smaller countries. Some substantial effort to open schools,” says countries, such as Argentina and Colom Emanuela Di Gropello of the World Bank. bia, began opening their schools earlier “We are not where we should be.” Catch this year only to close them again as they ing up will be a formidable challenge. suffered a second wave of the pandemic. Schools need quickly to assess each The prolonged loss of learning will pupil’s level, organise remedial teaching, make dismal educational standards and make up lost time with Saturday worse. The pisa international tests of classes and longer terms. This will take 15yearolds in 2018 found that in read money as well as effort. Many govern ing, maths and science, Latin American ments have spent more on health care participants were on average three years and emergency aid to families and firms behind their peers in the oecd group of during the pandemic. Education should mainly rich countries. With schools be an equal priority if Latin America is closed for 13 months, the World Bank not to fail a whole generation.

012 → June th Why biodiversity matters Sensors and sensibility Cracking the DNA code Crowdsourced science Ecosystem modelling Reviving extinct species The role of policy

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012 The Economist June 19th 2021 Technology Quarterly Protecting biodiversity 3

Protecting biodiversity The other environmental emergency

Loss of biodiversity poses as great a risk to humanity as climate change. Technology has a growing role to play in monitoring, modelling and protecting ecosystems, writes Catherine Brahic uman societies depend on healthy ecosystems. People con Since the 1990s, alarmed by studies showing rapid declines in Hsume their products in the shape of fish, meat, crops, timber animal and plant species around the globe, ecologists have talked and fibres such as cotton and silk. Medicines may bedirectly har of an impending mass extinction. It would be the sixth in the vested from the natural world or inspired by molecules and mech Earth’s history, but one unlike any that has come before. Surveys anisms found within it. The ecosystems that crops depend upon show that the loss of biodiversity is the result of a combination of are regulated by living things. Through photosynthesis, trees and factors: climate change, pollution, human exploitation of land, other plants take in carbon and pump out oxygen. In doing so they sea, plants and animals, and the displacement of some species in remove roughly 11bn tonnes of carbon dioxide from the atmo to new territories where they play havoc with existing ecosystems. sphere each year, equivalent to 27% of what human industry and Uniquely in Earth’s history, each of these drivers of ecological agriculture emits (the oceans absorb a further 10bn tonnes). change is caused by a single species: Homo sapiens. The services that ecosystems provide to humanity depend, in When ipbes (the Intergovernmental SciencePolicy Platform turn, on there being a diversity of living things. More than 75% of on Biodiversity and Ecosystem Services, similar to the Intergov global foodcrop types, including coffee, cocoa and almonds, are ernmental Panel on Climate Change) published its assessment of pollinated by animals. The complex web underpinning every food the state of global biodiversity in 2019, it offered a sobering pic chain and ecosystem means that the narrow range of species that ture. Roughly 1m animal and plant species were deemed to be at humans eat and exploit cannot be sustained without the existence risk of extinction, more than at any other point in human history. of a much greater diversity of animals, plants and bacteria. These included many that are used in farming. At least 9% of the More diverse forests store more carbon than monocultures. 6,200 breeds of domesticated mammals that humans eat, or use to Skipjack tuna makes up roughly half of the global tuna catch for produce food, had become extinct by 2016, and at least 1,000 more human consumption. As young animals, they eat zooplankton, are threatened. More than onethird of continental land area and which is to say very small floating animals like tunicates, cteno nearly threequarters of freshwater resources are used to produce phores and small crustaceans as well as the larvae of larger ani crops or livestock, but environmental degradation has damaged mals. As adults, they eat smaller fish, squid and crustaceans. To the land’s ability to support these activities. And onethird of ma conserve the skipjack, all this diversity in its food chain must also rine fish stocks were being unsustainably exploited in 2015. be conserved. The biodiversity crisis poses as great a risk to human societies

012 4 Technology Quarterly Protecting biodiversity The Economist June 19th 2021

as climate change. Yet it has a fraction of the public profile. In part The device takes its name from the fact that moths can hear that is because the loss of biodiversity cannot be neatly quanti sounds across a wide frequency spectrum. It is roughly 60mm fied, as climate change can, into parts per million of carbon diox square and 15mm thick and includes a smartphone microphone, a ide, or degrees above preindustrial average temperatures. And the memory card and a basic processing chip, powered by three aa webs that link species within and across ecosystems are even batteries. Dr Rogers’s startup, Open Acoustic Devices, sells them more complex than the processes that drive climate change. for $60 through a grouppurchasing scheme which helps keep Understanding a problem, however, is a necessary step to costs low. At that price, “you can deploy many more devices, you wards solving it. And that is where technology can help. This Tech can post them out to people and if they get lost or stolen, it doesn’t nology Quarterly will consider its role in monitoring, preserving really matter,” says Dr Rogers. To date, some 30,000 AudioMoths and restoring ecosystems and species. Only by measuring the have been scattered around the globe. A smaller version has just state of ecosystems can their health be assessed, losses be quanti been launched and is being incorporated into an experiment to fied, and the effectiveness of interventions be evaluated. study how African carnivores are responding to warmer tempera As well as monitoring biodiversity, technology can also be de tures by monitoring the sounds they make, such as panting. ployed to protect it. And in some cases it may even be able to re The AudioMoth is just one example of the explosion in the use verse losses, by bringing extinct species back from the dead. Iron of sensors to monitor ecosystems that has occurred in the past de ically, it is humanity’s use of technology, whether in simple forms cade. Such devices are peppered across forests and national parks, such as chainsaws or dragnets, or more complex ones such as attached to trees or the backs of animals. As well as recording en modern agriculture and transportation, that is chiefly responsible vironmental data, such as temperature or humidity, they also for biodiversity loss. The challenge now is to deploy it so that it is monitor the nature, number and movement of living things. not just part of the problem, but part of the solution. n Motionactivated camera traps have captured images of the shyest snow leopards. Microphones monitor bat colonies, known to harbour diseases that can jump to humans, and coral reefs, Sensors and sensibility whose crackling sounds are thought to broadcast their location to nearby fish. Radio tags attached to animals capture data about The new web of life their behaviour as they go about their daily lives. The Icarus pro ject has around 5,000 lightweight tags, weighing just five grams each, attached to animals on all continents. The sensors track the animals’ movements to within a few metres, along with the local temperature, pressure and humidity—all of which is relayed back to researchers via an antenna on the International Space Station. All kinds of scanning and sensing technologies are being used Technologies borrowed from the smartphone industry, includ to monitor the natural world ing batteries, cameras, microphones and chips, have helped make he new forest cicada had not been seen in seven years when such sensors smaller, cheaper and more capable. Before the Icarus Tit caught the attention of Alex Rogers, an ecologist and com project developed its fivegram sensors, most radio tags weighed puter scientist at the University of Oxford. The insect is the only 1520g. A future version will reduce the weight to just one gram, al cicada native to the British Isles. It spends 78 years underground lowing the tags to be attached to even smaller creatures. Smart as a nymph, then emerges, reproduces and dies within six weeks. phone technology has also reduced the cost and size of camera During its short adult life, it produces a highpitched hiss that traps. TrailGuard, a device developed by Resolve, an American en would make it easier to detect, were it not at the upper limit of hu vironmental group, houses a tiny camera in a package the size of a man hearing. Its call is audible to children but not to most adults. Sharpie pen, which is hard to spot once it has been hung in a tree. It can, however, be picked up by smartphone microphones. This Another hot technology, machine learning, has revolutionised led to the invention of AudioMoth, an “acoustic logger” that can be the task of scanning through the resulting sound recordings, im set to listen for a particular sound and record it. ages and other readings, many of which are false alarms. Working

Rainforest in Peru, as seen by the Global Airborne Observatory

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with researchers in artificial intelligence, metre. Such data can be used to estimate conservationists can rely on algorithms to Dead as a dodo the volume and mass of a tree, or an area of do the recognising for them. Big tech firms, Global, % of species driven extinct, cumulative forest, and hence its carbon content. including Google and Microsoft, are also 2.5 The Global Airborne Observatory takes getting involved. Wildlife Insights, a col this kind of 3d modelling one step further. laboration of seven large conservation or Amphibians The brainchild of Greg Asner of Arizona 2.0 ganisations, with support from Google, is State University, it combines lidar with Mammals trying to create a single space where all spectrometers and cameras mounted on a Birds camera traps will log their data (its data 1.5 plane. Two highpowered laser beams fired base currently counts 16,652 cameratrap out from beneath the plane sweep over the projects in 44 countries). Its machine Reptiles 1.0 landscape, creating a detailed 3d model of learning models can filter out the blank Fish everything underneath, from the treetops images that make up the majority of came 0.5 to the ground. At the same time, the spec ratrap pictures and identify hundreds of trometers bounce light of various wave species in the remaining ones. Wild Me, an lengths off the foliage. Using a reference li ngo based in Oregon, has algorithms for 53 0 brary containing thousands of dried and species, capable of distinguishing between 19001800170016001500 2018 frozen plant samples, the team has worked individual animals based on their stripes, Source: IUCN out how to identify individual plant spe spots or wrinkles. cies from the spectroscopic data and deter As sensors get smarter, they are increas mine their moisture content. The result is ingly able to process data themselves—at the network edge, rather a detailed picture of the landscape showing the shape, size and than centrally in the cloud—which reduces the need to transmit or species of individual trees, from which the carbon content and store data unnecessarily. If sensors are networked, they can also overall health of the forest can be determined. raise the alarm right away if they spot something important. Trail In May 2021, Dr Asner and his team launched a related tool fo Guard is different from most camera traps in that it is built to iden cused on the oceans. Coral bleaching, caused by warmer seas, tify poachers, rather than wildlife. During its demonstration damages reefs. Thousands of associated species, from sponges to phase, it was installed in one of Africa’s largest wildlife parks, and octopuses, depend on the health of their home reef. The Allen Cor detected two humans as they entered the area. Within a minute, al Atlas uses highresolution satellite imagery and machine learn images had been sent to the park’s headquarters, where staff con ing to monitor bleaching events in real time by detecting changes firmed that they showed two poachers, who were later arrested. in the reflectivity of reefs. A trial run, in Hawaii in 2019, identified Relaying data back to researchers can be tricky, however, as wild bleaching that field surveys had missed. The hope is that by de life surveys are often carried out in remote areas with little or no tecting it as it occurs, other causes of stress suchas fishing can be mobilenetwork coverage. Sending data via satellite works well, reduced, giving reefs a better chance of recovery. n but is expensive—though prices may fall as new constellations in lowEarth orbit become available. Putting devices on the ground, or attached to animals, is not DNA analysis the only way to monitor ecosystems. It can also be done from the air or from space. Regional, and even global, snapshots can be gen Cracking the code erated using instruments mounted on planes or by scanning the Earth using satellites. The dozens of Earthobservation instru ments orbiting the planet can collect information about land use, detect blooms in oceanic plankton, monitor emissions from for est fires, and track oil spills or the breakup of polar ice sheets. Re The sampling and sequencing of genetic material has emerged mote sensing has long been used by environmental groups keen as a powerful conservation tool to monitor deforestation rates in remote regions. But satellite imagery can be flawed. Viewed from above, some n september and October 2000, the carcasses of several north tropical tree plantations can look like native forest. And although Iern hairynosed wombats and some fragments of intestine were spotting large areas that have been clearcut is simple, identifying discovered in Australia’s Epping Forest National Park, apparently regions where selective logging, clearing of underbrush or over left behind by a mystery predator. Cattle farming has shrunk the hunting of seeddispersing animals is degrading the integrity of a wombats’ natural habitat and consequently their population, forest is much more difficult. A study published in Nature in 2020 which reached a low of just 2030 animals in the 1970s before land found that only 40% of remaining forests have high integrity; the management policies helped push numbers back up to roughly remaining 60% have been degraded in some way. In 2019, an inter 100 in the early 2000s. By sequencing dna extracted from the Ep national team of ecologists and forestry experts showed that tak ping Forest remains, researchers identified six males and one fe ing into account the degradation of seemingly intact forests in male. But what had slain 6% of the known wombat population? creased estimates of forestry emissions sixfold, compared with Suspicion fell on either dingoes or wild dogs, and the final an just looking at emissions caused by clearcutting. This research swer came packaged inside faeces collected in the park. Some relied on a combination of remote sensing data with numerical yielded the same genetic sequences as the carcasses. They had modelling and ontheground fieldwork. been left by dingoes. The team had identified their killers, and in 2002 a 20km protective fence was put up around the forest. Eyes in the sky Environmental dna, or edna, has emerged as an increasingly New tools to assess forests’ health are becoming available, the popular tool among conservation biologists and land managers, most important of which is lidar—a technique which is similar as dna sequencing tools have become progressively smaller, fast to radar except that it employs infrared laser light instead of radio er and cheaper. The field began in the late 1980s, when microbiolo waves, and can map out spaces in high resolution and in three di gists started using it to look for bacteria in rivers and sediment. mensions. Pointed at a tree, it can generate a 3d model of its entire This had previously involved smearing water or dirt on Petri dish structure, including the position of every branch to within a milli es to grow colonies of the resident microbes and then identifying

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them under the microscope, based on the mine what the animal ate, or what bacteria shape of the colonies or how they respond Consequential live in its gut. ed to being stained with dye. It was lengthy Global DNA databases On land, researchers can use edna from and errorprone. Extracting dna from sam faeces, urine or hair to see how popula Gene sequences deposited Genome assemblies added ples instead, and comparing their genetic on the Barcode of Life to NCBI BioProject, tions are interacting. In Malaysia, an ongo sequence to reference libraries, was quick database, cumulative, m cumulative, ’000 ing project is focused on whether subpop er and more reliable. 10.0 20 ulations of the Malayan tiger are still con Birds The same approach was adopted and Fishes nected when deforestation has fragmented built upon in the early 2000s by ecologists, Mammals* their habitat. In Britain edna is used to who were aware that the animals they 7.5 Insects 1 monitor a protected newt. Other projects studied were constantly shedding dna in have begun to show that cells left in foot Fungi faeces, saliva, blood, scales and sloughed 5.0 10 prints in snow can yield enough dna to tissue. Gathering and sequencing this ma identify species and possibly sex. terial provided valuable information with Land plants Several groups are attempting to identi out needing to interact with the animals 2.5 fy all the individuals belonging to a popu themselves. The approach found particu lation from footprint dna, which would lar favour early on with researchers study 0 0 transform monitoring of populations, help ing freshwater systems. By simply dipping with the tracking of animals as they roam 2005 10 15 21† a test tube into a stream, they could find Sources: International Barcode of Life; *Excluding Homo sapiens across wide areas without the need for out if a target species was present and even NCBI BioProject database †Year to May 31st radiotags, and setting sustainable hunting how abundant it was. quotas. Researchers at the us Forest Ser Because trace amounts of dna can be vice are trying this with wolves. amplified before sequencing using a method called polymerase Socalled “metagenomic” studies use edna to map the genetic chain reaction (pcr, the same method used to detect sarscov2 makeup of entire communities, such as coral reefs, or the vast, in coronavirus testing), edna studies can detect species present in largely unexplored bacterial community that lives deep inside the low numbers—a useful tool for tracking down rare species, or Earth’s crust and whose biomass is an order of magnitude greater spotting invasive ones before they wreak havoc on a fishery. Other than that of all animals combined. Such studies can offer a genetic studies have sought evidence that escapees from fish farms were snapshot that might take years of field studies to establish. mating with wild populations, potentially eroding them. The field is booming, but there are challenges. It can be diffi dna from scat, as wild animal droppings are known, can map cult to tell when edna was deposited. dna sampled at one point in out food chains without having to capture and kill animals in or a river could have come from anywhere upstream. And species der to examine the contents of their guts. Killing large or rare spe identification is only as good as the speciesspecific genetic bar cies like whales, even for conservation purposes, poses ethical codes and reference genomes that serve as points of comparison. and practical challenges. But whale scat has the great advantage of This has spurred a rush of projects to either identify a unique ge buoyancy. Finding a turd floating in the middle of the ocean is netic signature for every species, such as the International Bar made easier with the help of dogs that are trained to sniff out the code of Life, or sequence the whole genomes of as many species as signature smells of excrement belonging to a range of endangered possible (see chart). The $4.7bn Earth Biogenome Project aims to species. dna in the netted excrement can be analysed to deter sequence 1.5m species in ten years. As well as collecting and pre

Whale poo is full of useful DNA

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serving genomes, such genetic databases can be mined for infor mation on susceptibility to disease, or for potential medicines. Citizen scientists But even though genetic sequencing has become much cheap iNaturalist app, cumulative er since the late 20th century, it remains prohibitively expensive for most researchers outside America, Europe and China. Se Users, m Species logged, ’ quencing technologies are improving rapidly, however. In partic 4 400 ular, Oxford Nanopore, a British company, has developed portable Birds* technology that allows sequencing to be done in the field, not just Other Fungi in the lab. It relies on nanopore sequencing, a technique in which 3 300 Plants strands of dna are drawn through a nanometresized pore in a Insects biological membrane. Each of the four letters of the dna alphabet 2 200 produces a distinct electrical signal as it passes through the pore, allowing the sequence to be read in real time. 1 100 Oxford Nanopore’s Min ion, a usbpowered, pocketsized de vice, allows every part of the sequencing processto be done in the field. Sequences are produced within an hour. The devices are rel 0 0 atively affordable: prices start at around $1,000, though subse 2008 10 12 21181614 2008 10 12 14 16 18 21 quent recharges are needed to run more samples. They have been Source: iNaturalist *Bird observations are often logged with specialist birding apps used to sequence viruses in Brazil, amphibian dna in Tanzania and bacteria on the International Space Station. The technology also opens up new possibilities for investiga gists have signed up to iNaturalist, a social network run jointly by tion and enforcement. Genetic sequencing in the field can be used the California Academy of Science and the National Geographic to identify the nature and origin of illegal bushmeat, fish or smug Society. Its users have contributed 66m observations of more than gled ivory. A paper published in Forensic Science International: Ge- 300,000 species (see chart). Such apps engage people in their nat netics in March 2021 compared results obtained by the Minion ural environment, “a really important and overlooked aspect of with the standard sequencing methods used in wildlife forensics. the interface between technology and conservation,” says Joe Wal It found the results to be comparable, potentially paving the way ston of the Wildlife Conservation Society (wcs) in New York. Col for handheld devices to be used in wildlifecrime prosecutions. n lective interest on public forums can help create new protected ar eas. In 2016, wcs worked with the Woods Hole Oceanographic In stitution, a research institute, to drop hydrophones in the Hudson Crowdsourced science river to monitor passing whales. The data were made publicly available and the research was discussed in local news. Pressure The wisdom of crowds from New Yorkers, astonished to find that they had a resident whale population, led to changes in shipping lanes and speeds, in order to create less disturbance for the whales. Elsewhere, researchers faced with having to sift through thou sands of hours of images recorded by camera traps have found willing helpers in armchair ecologists. Penguin Watch, for in stance, recruits people to go through images collected by camera Volunteers are acting as a human sensor network traps that are trained on Antarctica’s penguin colonies. cology lends itself to being helped along by the keen layper Increasingly, some of this work is being handed to machine Eson perhaps more than any other science. For decades, bird learning algorithms that are trained to recognise particular spe watchers have recorded their sightings and sent them to organisa cies. Wild Me, an ngo based in Oregon, has taken the idea one step tions like Britain’s Royal Society for the Protection of Birds, or the further. It provides online platforms where users upload pictures Audubon society in America, contributing precious data about that are then run through imagerecognition software. Just like fa population size, trends, behaviour and migration. These days, any cialrecognition systems, the software can recognise specific indi smartphone connected to the internet can be pointed at a plant to viduals belonging to species that have identifying features such as identify a species and add a record to a regional data set. spots or stripes. So far, Wild Me has applied this approach to 53 Socialmedia platforms have further transformed things, add species, including clouded leopards, skunks and leopard sharks. ing big data to weekend ecology. In 2002, the Cornell Lab of Orni As pictures are added to the platforms, each individual can be thology in New York created eBird, a free app available in more tracked as it develops and moves around its region or the globe. than 30 languages that lets twitchers upload and share pictures and recordings of birds, labelled by time, location and other crite Facebook for zebras ria. More than 100m sightings are now uploaded annually, and the One of the group’s early projects involved a collaboration with the number is growing by 20% each year. In May the group marked its Grevy’s Zebra Trust in Kenya, which organises an annual twoday billionth observation. The Cornell group also runs an audio library rally in the Lewa Wildlife Conservancy to capture as many pictures with 1m bird calls, and the Merlin app, which uses eBird data to as possible of the eponymous endangered equine. Participants, identify species from pictures and descriptions. including scientists and members of the public, are given guide All these data are used to generate detailed maps and forecasts lines on how to photograph animals, record gps coordinates and of species distribution, abundance, migrations, and snapshots of feed pictures into the Wild Me algorithm, which uses the animals’ how populations are changing and adapting to their environment. distinctive stripe patterns to identify individuals. With repeated They feed into hundreds of academic papers and national conser surveys, the zebras’ population structure, movements and evolu vation assessments such as the 2020 State of India’s Birds, the first tion can be monitored. The work has shown that lions were killing attempt to classify Indian birds according to their extinction risk. more young zebras than the group could sustain, leading the park The analysis of 867 species found that many of those that were to change its management of the lion population. It is now a key thought to be widespread were in fact endangered. component of the official population assessment of the Interna There are many other such projects. Nearly 4m amateur ecolo tional Union for the Conservation of Nature.

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Images uploaded to Wild Me range from tourist snaps to pic Keystone species illustrate the complex webs of interactions tures from camera traps or drones. Researchers can reconstruct that underpin biodiversity. Understanding, let alone predicting, the recent history of a species by uploading their entire backlog of the impact that removing one species can have on the rest of a cameratrap pictures. The Wild Me team has also been harnessing nonlinear system is devilishly complicated. Even if sensors and data generated by inadvertent ecologists in the form of pictures ecologists could log the identity and location of every living crea and videos posted on Twitter, Facebook, YouTube or Flickr. “In ture on the planet, such data would be worth little without an un 2018, just by taking publicly posted videos of whale sharks, there derstanding of how everything relates to everything else. were more sightings than all the human contributors combined Computer models are ideally suited to providing just that. Gen from all the other sources,” says Tanya BergerWolf, a cofounder. eral circulation models, for example, simulate the planetary cli There is, however, a downside to making reams of gpstagged mate, linking the physics that govern the formation and disinte data of endangered species publicly available online. In January gration of ice sheets to the huge currents that push water through 2020, within hours of a picture of an elephant being posted on so the ocean, and oceanic temperature gradients to the formation of cial media, a poaching attempt was made on the very same ani storm systems over the continents. These models are so complex mal. On that occasion, the elephant escaped. Aware of the delicate that they take months to run, even on the world’s most powerful balance that needs to be struck between sharing and protecting supercomputers. Climate science and policy would be nothing conservation data, conservationists have started advocating for without them. “privacy for tigers”. Groups like Wild Me and iNaturalist strip or Ecology has few equivalents. One reason is that ecosystems are hide geotags from their images. But webcams of nature reserves much harder to simulate. “In a physical system, you have a set of around the world can be watched, live, by anyone with an internet atoms or molecules that behave in a predictable way, even if it is connection. In the space of 30 minutes, your correspondent complex,” says Derek Tittensor, a marineecosystem modeller at jumped between elephants drinking from a watering hole to lion Dalhousie University in Canada. Ecology, by contrast, deals in liv cubs playing in long grass to a herd of elk striding across the Cana ing things, whose interactions are determined by the unpredict dian Arctic. The location of each camera was clearly indicated— able behaviour of individuals. and was thus available to poachers. n Added to this is the complexity of the pressures and stresses that modify ecosystems. Carbon dioxide and methane are pro duced by different processes and behave differently in the atmo Ecosystem modelling sphere, but fundamentally they both warm the atmosphere. Burn ing fossil fuels also produces a mix of particles which cool the cli Simulating everything mate. These emissions are all very different, but their effects can, to some approximation, be reduced to a single variable known as their “globalwarming potential”. Ecosystems, by contrast, are af fected by warming temperatures and changing water cycles, but also by chemical pollution, urban encroachment, hunting and overfishing. None of this can be reduced to just one or even a Compared with climate, modelling of ecosystems handful of quantitative variables. is still at a primitive stage And so ecosystem modelling remains in its infancy. Statistical very few weeks from June 1963 until July 1968, Robert Paine, a models, built on relationships between historical data sets—for Ezoologist, made the journey from Seattle, where he taught at example, how the amount of vegetation in a tropical forest tends the University of Washington, across Puget Sound to the rocky to grow or shrink as temperatures and rainfall vary—are easier to shores of Mukkaw bay. There, he had found virtually pristine tide build, and have progressed furthest. But they cannot capture or pools that teamed with life— limpets, anemones, mussels, sea predict the dynamic, nonlinear ways ecosystems respond to weeds and purpleandorange seastars known as Pisaster ochra- change, including the tipping points at which cumulative damage ceus. The unspoiled landscape offered the perfect setting for what to an ecosystem suddenly shifts it into a new regime, for example was to become a seminal experiment in ecology. On each visit, Dr when deforestation tips a region from forest to savannah. Paine systematically removed all the seastars he could find from Doing that requires “processbased” or “mechanistic” models, one patch of rock, lobbing them as far as he could into the waves. which are harder to build, but can produce nonlinearity and He did this for five years, all the while carefully documenting emergent behaviour. They are the ecological equivalent of general how the shoreline communities evolved. Very little changed in circulation models, and operate as fully functioning simulations the untouched areas. But in his seastarfree zone, everything was of Earth’s biosphere. They are particularly useful for unpicking altered. Pisaster is a greedy carnivore that feasts on mussels, bar what is driving change in an ecosystem. If a fish population is nacles, limpets and snails. Released from their predator, these growing, is it because rising temperatures have driven predators species began to spread out. The acorn barnacles took over first. away, or because deforestation on land nearby is releasing iron Later, they were displaced by goose barnacles and mussels. By re rich dust which is fertilising the local plankton population? moving just one species, Dr Paine had triggered a domino effect. Marine science has produced a number of processbased mod Soon, the number of species in the community had dropped from els, though they are less uniform in their design than climate 15 to eight. By 1968, the mussels had taken over completely. models. Some are built around food chains and the way they move Dr Paine dubbed Pisaster a “keystone species”; remove it and biomass and energy around ecosystems; others focus on how the ecosystem is transformed. Large herbi wellsuited different species are to particular vores like rhinos are keystone species, spread Ecosystems, and the ecological niches, or group species and their ing seeds of the plants they consume across interactions based on body size, which is a vast areas, thus maintaining or altering vege interactions reasonable predictor of an organism’s place in tation. In the kelp forests of the Pacific North between living things, the food chain. west, sea otters play a keystone role by are harder to simulate Over the past decade marineecosystem munching on sea urchins. The urchins graze than the global climate modellers have formed the Fisheries and Ma on kelp and, left unchecked, are capable of rine Ecosystem Model Intercomparison Pro wiping out entire kelp forests on which fish ject. Its goal is to determine how fishing and and seals depend. climate change are likely to alter marine fish

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eries around the world, which provide 11% of the animal protein It therefore cannot distinguish between two species of small humans consume. “Fish mip” develops standardised scenarios songbird that live in the same region, but it does simulate interac that can be run across global and regional marineecosystem tions between, say, megafauna and their prey. models. As with climate modelling, the idea is to run the same All this allows for in silico experiments in which all the world’s simulations on different models and combine the results into ro top predators are wiped out entirely, an extension in space of Dr bust projections that can inform policy decisions. Fishmip stud Paine’s famous seastar experiment but also an extrapolation of ies suggest that larger fish species, which make up most of what current global trends. An assessment in 2014 of 31 of the world’s humans consume, are affected most by climate change, as are the largest mammalian carnivores found that threequarters of them tropics, where people tend to be more dependent on catches and were in decline, and 17 occupied less than half of their historical more vulnerable to economic instability and poor nutrition. territory. Using the Madingley model, Selwyn Hoeks at Radboud But simulating the effects of fishing operations is more com University in the Netherlands, and his colleagues found that re plicated than studying the impact of rising temperatures, as as moving all carnivores weighing more than 21kg triggered a domi sumptions have to be made about a range of variables, from how no effect in food chains with the net result that the total amount of the industry will redistribute fishing fleets as fish migrate towards vegetation on Earth decreased. Their results were published in the poles, to how fishing technology will change, and whether 2020 in the journal Ecography. changing attitudes towards sustainability will mean more marine Ecologists have long argued that conserving large carnivores protected areas. The climatemodelling community handles such has tangible benefits beyond the cuddly feeling of saving tigers. uncertainty by drawing up standardised hypothetical scenarios According to the “green Earth hypothesis”, no carnivores means and producing climate projections for each one. But the scenarios more herbivores and thus fewer plants. Vegetation soaks up car do not yet take into account the ways in which humans effect bio bon dioxide, so less plant life would amplify global warming. diversity, such as by overfishing. What of the reverse, where all plant life is gradually removed? Modelling is far less advanced for land ecosystems. “Dynamic Changing landscapes, particularly through agriculture, is human global vegetation models” can simulate human impacts on plants ity’s greatest impact on biodiversity, and one that is likely to in but do not represent nonhuman animals. And though there are at crease. Expanding agriculture reduces the amount of plant life at least eight global marineecosystem models that simulate life in the base of food webs. Tim Newbold, of University College Lon the ocean, there is just one processbased model that includes life don, and colleagues simulated the removal of increasing amounts on land: the Madingley model, first published in 2014, which rep of vegetation from China, France, Libya and Uganda. They found resents life both on land and in the ocean. that once 80% of plant life was gone, entire food chains began to Named after the village in Britain where it was devised, it collapse and could not be rebuilt by simply restoring the plants. breaks down land and ocean into grid cells that are up to 200 As well as predicting outcomes, global ecosystem models square km (77 square miles). Climatic conditions are set for each make it possible to test policies. What would be the consequence cell, which are also populated with organisms, so long as they of reintroducing a species from a population bred in captivity? weigh more than ten micrograms. To simplify the equations in Would the decline of a species be halted or reversed if a percentage volved, the model groups organisms by size, habitat and function. of its territorial range were protected, or would it be more efficient to create a corridor between two existing protected areas? Carbon storage, clean water, clean air, abundant crops and fish are all examples of “ecosystem services” that benefit human ity. The principle is undeniable on a grand scale, but the details are harder to map. “We don’t have any frameworks which link bio diversity changes to changes in ecosystem functioning, and on to the services that hu mans derive from those ecosystems,” says Michael Harfoot of the un World Conserva tion Monitoring Centre and coauthor of the Ecography paper. Statistical models try to infer changes in ecosystem services from, for instance, trends in forest cover. But processbased models need further refinement so that changes in temperatures or land use can be linked to changes in biodiversity—and then, in turn, to the functioning of ecosys tems and the services they provide. “That is probably the next big frontier for ecosys tem modelling,” says Dr Harfoot, “and es sentially, also, for conservation.” For now, this remains some way off. To day’s ecosystem models are widely com pared to where climate models were in their earliest days of development, about 50 years ago. “Given the urgency of the situ ation, we need ecosystem models to be where climate models will be in ten years’ Your friendly ecosystem-services provider time,” says Dr Newbold. n

012 10 Technology Quarterly Protecting biodiversity The Economist June 19th 2021

De-extinction done this since the early 20th century. In the San Diego facility, however, tissue samples are not just stored, but are grown in liv Back from the dead ing cell cultures. Oliver Ryder, director of conservation genetics, remembers peering through a microscope to look at the po’ouli’s chromosomes, aware that he was looking at the genetic material of a species that had already expired. “Extinction is, for a lot of people, kind of an abstract concept, but for some of us it has a real ly visceral feeling,” he says. Reviving extinct species may soon be possible—and banking Dr Ryder and others are developing techniques that might, the cells from endangered species can help in other ways, too oretically, make it possible to create a live newborn long after the ate one day in April 2002, a delicate bluebeige bird with a last members of its species have died. They are not the first to at Lwhite collar and black eye mask was released into the dense tempt this. In 2009, a team of researchers announced they had de forest on the Hawaiian island of Maui. The bird, a female, was one livered the kid of a bucardo, a species of wild goat that had gone ex of just three remaining po’ouli (pronounced pohohoolee), a spe tinct nine years earlier. A skin biopsy taken from the last female cies of honeycreeper that had been discovered in 1973. Believing had produced live cells. The team removed the bundle of dna from there to be one male among the three, researchers were desperate inside those cells and injected it into the emptied eggs of a domes to arrange a match. The birds, however, did not appear in the least tic goat. Using a zap of electricity, they fused the dna with the egg’s bit concerned about the fate of their species. To help things along, cellular “shell” and produced more than 400 embryos, all carrying earlier that day a team had caught the female, fitted her with a the goat’s genes. Over 200 embryos were transferred to the wombs small radio transmitter and set her free where the male had last of surrogate domestic goats, leading to just one live birth. It was been seen. The next morning they set off with aerials to track the delivered by caesarean section in 2003, but lived for only “some female’s progress. They soon found her, resolutely making her minutes”, according to an account in the journal Theriogenology. way back across the island to her own territory. Conservation is full of such failed romances. When a species is Not looking swell, Dolly reduced to a few individuals, researchers will go to great lengths to The technique that produced the shortlived bucardo kid was sim set up arranged marriages. If wild matings cannot be facilitated, ilar to that used to create Dolly, a cloned sheep, in1996. Its dna was they may try to breed animals in captivity and then release them primarily inherited from a single individual. Even if it had lived, it back into the wild. Thus, the California condor was brought back could only ever have given rise to a population of clones, the oppo from 22 individuals; the Arabian oryx from just nine. With the site of biological diversity, for which genetic diversity is essential. po’ouli, the decision was made to bring the reluctant trio in for Efforts to rescue a species from the brink of extinction must begin captive breeding. The male was caught in September 2004. He was long before it is reduced to just one individual, or even three. old, had only one eye and died a few weeks later. The other two The po’ouli’s frozen cells, therefore, are unlikely ever to give birds were spotted around the same time, then never seen again. rise to a new population of birds. But alongside them in San Diego And that, you might think, was the end of the po’ouli’s tragic are tubes that hold a different promise. They contain the remains tale. But reproductive and genetic technologies developed in the of not one but 12 northern white rhinoceroses, five males and sev past decade mean other outcomes are now conceivable, as it were. en females. The northern white rhino is what is known as “func A cluster of cells from the oneeyed male is held at the San Diego tionally extinct”: the last male, Sudan, died in 2018, leaving behind Wildlife Biodiversity Bank, also known as the Frozen Zoo. Banking just two females, a motheranddaughter pair in Kenya, dubbed tissue samples from wild species is not unusual: seed banks have Najin and Fatu. Nevertheless, at a meeting in Vienna in 2015, re searchers agreed on a twintrack approach to deextinction. The first approach, led by a group called BioRescue, uses a ver sion of invitro fertilisation involving rather more international Staying alive travel than most human procedures. Five times since 2019, a team Northern white rhino, two approaches to de-extinction of researchers, conservationists, park rangers and veterinarians have gathered in the park to harvest oocytes (immature egg cells) In-vitro fertilisation (IVF) In-vitro gametogenesis (IVG) from the ovaries of one or both females, who are placed under gen Tissue samples from eral anaesthetic for the procedure. The oocytes are immediately deceased females were flown to Italy, where they are fertilised with thawed sperm from a previously collected and frozen dead male whose cells are banked in Germany. Sperm are injected Scientists harvest eggs Sperm from deceased through a needle directly into the eggs. They are then placed in a from the last two living males were previously Skin cells are transformed specially designed incubator equipped with a camera that allows female rhinos collected and frozen into stem cells that have the team to monitor the cells as they develop. Any embryos that the capacity to develop into eggs successfully develop in the dish are placed in liquid nitrogen for safekeeping until such a time as the team is ready to implant Egg Sperm them into a womb. The most recent egg collection was performed on March 28th. Egg A total of 19 oocytes were obtained from Fatu; 14 were fertilised with sperm from Suni, a male who died in 2014. Four developed in to viable embryos, bringing the total number of frozen embryos to IVF nine. The next step will be to transfer embryos to a surrogate. Nei ther Najin nor Fatu is thought to be capable of a safe pregnancy, so the embryos will instead be entrusted to female southern white rhinos, a related species with a healthy wild population. Before ivf Northern white implanting them, BioRescue has been testing the procedure rhino embryo using southern white rhino cells. This has resulted in seemingly healthy embryos, but none has yet led to a live birth. The team Sources: Nature; The Economist Surrogate southern white rhino Northern white rhino calf hopes that doing the embryo transfers in the wild, rather than at a

012 The Economist June 19th 2021 Technology Quarterly Protecting biodiversity 11

And then there were two: Najin and Fatu

zoo in Europe, will improve the chances of success. successfully reprogrammed skin cells belonging to nine of the 12 Thomas Hildebrandt of the Leibniz Institute for Zoo and Wild dead northern white rhinos to become induced pluripotent stem life Research, who is leading much of the work, says there is a cells. BioRescue has had similar success. Not all such cells are tru short window for the transfers to happen because Najin and Fatu ly pluripotent, so it is not a given that the team will be able to make are both quite old. “We can try to preserve biological material very oocytes. Initial tests, though, are promising. nicely,” he says, “but we can’t preserve social knowledge. And we Today, the frozen collection at the San Diego Wildlife Biodiver have only two rhinos which can teach the calf how to behave as a sity Bank contains more than 10,000 cell lines belonging to 1,100 northern white rhino.” Moreover, this ivf approach still faces the species and subspecies of vertebrates, plus tissue and blood sam fundamental limits of genetic diversity. Fatu’s embryos carry only ples that have not yet been cultured. Other biobanks are held by her and Suni’s genes. But the cells stored at 196°C in San Diego and members of the Frozen Ark project, run by Britain’s University of other frozen stores carry much more, and they hold the key to the Nottingham. Whether or not reviving extinct species becomes second strategy for saving the northern white rhino. possible in the next few years, such biobanks can already be used To determine whether they could theoretically build a healthy to improve genetic diversity in endangered species. The American population, Dr Ryder sequenced the San Diego collection. “We blackfooted ferret, for example, was all but wiped out in the 20th found that there was more genetic variation in those 12 than in the century before being rescued through captive breeding of 18 sur [roughly 20,000strong] standing population of southern white viving animals. In 2015 researchers showed that inseminating fe rhinos,” he says. “If we could turn those cells into animals, there is males with frozen sperm from the Smithsonian Conservation Bi no reason the northern white rhino shouldn’t be able to recover.” ology Institute could increase the ferrets’ genetic diversity. What is needed now is the means of turning frozen skin cells Similar work could one day restore commercially valuable from longdead rhinos into viable eggs. A way to do that has been populations, such as threatened fisheries—but only if cells are demonstrated by Katsuhiko Hayashi, a reproductive biologist at banked now for an unknown future. That said, not all tissues lend Japan’s Kyushu University and colleagues. In 2016, the team creat themselves to being preserved in liquid nitrogen. Cryopreserva ed baby mice from skin cells and sperm. They did this by taking tion is also expensive and energyintensive. So far, according to a cells from the tail tips of adult mice, growing them in culture, then paper published in July 2020 by Joseph Saragusty at the University flooding them with chemical signals that reprogrammed some of of Teramo in Italy and colleagues, sperm from just 116 species, or them to become “induced pluripotent stem cells”—special cells approximately 2% of all mammals, have been preserved, as well as that can develop into any other cell found in eggs from “just a handful” and embryos from the body, including oocytes. The oocytes were 51 species. Live births produced from frozen then fertilised and implanted into the wombs mammalian sperm have been reported in only of surrogates, resulting in live mice, which Biobanks are already around 45 species. But cryopreservation can went on to produce their own offspring. being used to improve hold species in suspended animation while A mouse, of course, is very different to a genetic diversity in new technologies are invented or existing rhinoceros. Nevertheless, earlier this year, ones improved. As Kurt Benirschke, who Marisa Korody of the San Diego Zoo Wildlife endangered species founded the San Diego collection, had the Alliance and colleagues at the Scripps Re foresight to declare: “You must collect things search Institute in La Jolla wrote that they had for reasons you don’t yet understand”. n

012 12 Technology Quarterly Protecting biodiversity The Economist June 19th 2021

The role of policy Targets need practice Bridging the gap Progress towards targets set at the 2010 Aichi summit to be met by 2020 Met (0) Partially met (15) No progress (1) Negative progress* ()

1 Increase public awareness 11 Increase protected areas 2 Include biodiversity in national policies 12 Stop extinction of threatened species Technology can help conserve biodiversity, but only in 3 Reform or phase out incentives & subsidies 13 Maintain genetic diversity conjunction with action by policymakers 4 Start sustainable production & consumption 14 Restore ecosystems providing services rotecting the biological, ecological and genetic diversity 5 Decrease habitat loss by at least half 15 Enhance ecosystem resilience Pthat sustains life on Earth is the mission of the United Nations 6 Better manage marine resources 16 Nagoya protocol on genetic resources Convention on Biological Diversity. But progress has been slow, to 7 Better manage farming & forestry 17 Implement biodiversity strategies put it mildly. A list of 20 conservation targets, known as the Aichi 8 Reduce pollution to non-harmful levels 18 Respect traditional knowledge of biodiversity targets, was drawn up in 2010, with a 2020 due date. In the event, 9 19 not a single one of the goals was met in full (see chart). Prevent and control invasive species Share biodiversity technology In 2020, ipbes (the Intergovernmental SciencePolicy Platform 1 Reduce pressures on vulnerable ecosystems 2 Increase financial resources for biodiversity on Biodiversity and Ecosystem Services, a body created to bridge Source: Convention on Biological Diversity *On some aspects of the target the gap between biodiversity science and policy) published a glo bal appraisal of the state of biodiversity. Written by 145 experts from 50 countries who reviewed 15,000 research and government have been instrumental in deepening the understanding of cli sources, it offered a sobering message. “The health of ecosystems mate change, projecting future impacts, building public and polit on which we and all other species depend is deteriorating more ical awareness, and designing policies. Global ecosystem models rapidly than ever,” said Sir Robert Watson, chairman of ipbes. “We are decades behind by comparison. Better models would let are eroding the very foundations of our economies, livelihoods, policymakers set more specific and effective targets. The 2010 Ai food security, health and quality of life worldwide.” chi list was hopelessly detailed in its breakdown of what needed to According to the 2020 Living Planet Report, produced by wwf be done, while remaining vague and qualitative about how targets and the Zoological Society of London, two conservation and re should be met. Governments are now negotiating a new list, search groups, populations of mammals, birds, amphibians, rep which is due to be signed off at an intergovernmental summit tiles and fish shrank by 68% on average between 1970 and 2016. scheduled to take place in October 2021, setting goals for 2030 and Two years earlier, it had found the decline to be 60% for the years 2050. Simple, quantifiable targets and clear methods for measur spanning 1970 and 2014, suggesting that losses are accelerating. ing success, as exist for climate change, are urgently needed. Human activity is thought to be causing species to disappear Third, once monitoring systems, models and policies are in around 100 times faster than the natural background rate. place, technology can help assess and enforce those policies, and As this Technology Quarterly has shown, an explosion of tech make the case for adjusting or extending them as appropriate. If nology, from nanopore dna sequencing to global computer mod marine protected areas are expanded, for example, ecosystem els, is expanding human understanding of ecosystems. Yet most monitoring can both measure the impact on fish stocks, and keep biodiversity indicators are still heading in an alarming direction. an eye out for unauthorised fishing boats. How can advances in technology be coupled to the policy changes All this will require funding for monitoring and enforcement. needed to reverse the decline? It will require three things. And at the moment, most technology for conservation is devel The first step is to knit together the various monitoring sys oped in rich countries, while most biodiversity is concentrated far tems in order to provide a clear picture of what is going on and away in poorer ones. Even when American or European kit makes what needs to be done. The siloed nature of ecological science, in it into the hands of researchers, park rangers or land managers, which teams focus on a particular animal, plant or ecological maintenance is a problem. More training, and greater use of open niche, has created a patchwork of initiatives and data rather than a source platforms that put knowledge in the hands of people on the comprehensive, global approach. At the moment it is not even ground, can help. But ultimately there will need to be broader possible to draw up an accurate summary of the number, location mechanisms for richer countries to assist poorer ones. and type of different sensors around the world, let alone the spe Many of the necessary policies will overlap with those needed cies they are monitoring. Wildlife Insights, an online global re to address climate change. But not all of them. Understanding pository for camera traps, has logged thousands of cameras, but is how ecosystems are changing, and measuring the impact and ef constantly discovering more. One country recently informed it fectiveness of interventions, will be critical to conserving biodi that it had another 1,000 sensors that had not yet been logged, for versity. Technology cannot solve the problem on its own. But it is example. A survey due to be published later this year by WildLabs, hard to imagine how the problem can be solved withoutit. n a network of conservationtechnology users, found that financ ing, coordination and capacitybuilding are critical to the devel opment and adoption of conservation technology. A list of acknowledgments and sources is included in the online Shared practices, databases and platforms, such as Wildlife In version of this Technology Quarterly

sights, are starting to close the gap. In addition, says Tanya Berger Reprints of this TQ are available, with a minimum order of five copies. Wolf, a computer scientist and ecologist at Ohio State University, For academic institutions the minimum order is and for companies . ecosystemwide observation networks are needed to measure We also offer a customisation service. To order, contact Foster Printing Service: everything from the structure of a landscape and its climatic con Tel: + ; email: [email protected] ditions, to the location and identity of animal species, and how For information on reusing the articles featured in this TQ, or for copyright queries, they interact with each other and with human infrastructure. contact The Economist Rights and Syndication Department: Tel: + () ; The second step is to create more powerful and detailed eco email: [email protected] system models, so that they can be used to develop and analyse Previous TQs can be found at policy changes, for example on land use, ﬁshing rights, farming Economist.com/technology-quarterly practices and regulation of pollutants. Computer simulations

012 Middle East & Africa The Economist June 19th 2021 45

Iraq wins, the shots will really be called by mili tias, tribes, corrupt factions and foreign Thirsting for change powers. Many plan to boycott the ballot. Five young men in a restaurant in Basra, a southern city, sum up the mood. All sup ported the huge antiestablishment prot ests that rocked the country in 2019. Two KARBALA show off scars from having been beaten by Few things are harder than building a state in Iraq. But hints of progress militiamen. None plans to vote. “I want a can be detected country,” says Nabil, a civil servant with a round noon on June 9th, a sudden ber. It will be “a huge task to ensure they nasty truncheon injury. Ahubbub echoed through the Imam are free”, says President Barham Salih. The Like many Iraqis, he frets that his Hussein shrine in Karbala. Qassem Mus un has been invited to supervise. Thirteen motherland is tugged and battered by forc leh, a militia boss who had been arrested main factions are jostling for power. Seven es beyond the government’s control. Qas two weeks earlier on suspicion of murder, are Shia, four Sunni Arab and two Kurdish. sem Suleimani, one of Iran’s top generals, was free and visiting one of Shia Islam’s Two broad coalitions of Shias, Kurds and used to visit regularly to help organise holiest sites. A happy crowd surged around Sunnis will probably emerge from the mix: Iraq’s Shia militias. America, which still him as he walked out into the blazing sun. one leaning towards Iran; the other to has 2,500 troops in Iraq, killed him with a Some did not even stop to retrieve their wards America and the Sunni Gulf states. drone strike last year as he left Baghdad air shoes, and scorched their feet on the Mustafa alKadhimi, the prime minister (a port. The charred wreckage of his car is street. Your correspondent squeezed into position more powerful than president), now mounted on a pedestal near where he the throng for a brief interview. “They had may get a second term if the factions are died. It is one of the first things visitors see, no proof,” crowed Mr Musleh. convinced that he is pliable. along with countless billboards of Sulei For many Iraqis, his release was a sad However, Iraqis wonder how much au mani’s face, and that of Abu Mahdi alMu reminder of how weak their state is. Prose thority the government they elect will ac handis, an Iraqi militia commander who cutors had accused him of ordering the as tually have. Many fret that, no matter who died with him. sassination of a campaigner against cor Scores of militias, most of them Shia, ruption and Iranian influence. When Mr are collectively known as the Hashd al Musleh was arrested, his gunwaving sup → Also in this section Shaabi (Popular Mobilisation Forces). They porters promptly occupied parts of the played a crucial role in vanquishing the 47 Israel’s new government Green Zone, where Iraq’s central govern torturebroadcasting Sunni jihadists of Is ment is based. Rather than risk a bloody 48 A divisive election in Ethiopia lamic State ( is), who once controlled a confrontation, the state released him. third of Iraqi territory. But after is was de 49 Africa’s space race Iraq is preparing for elections in Octo feated in 2017, the militias did not disband.

012 46 Middle East & Africa The Economist June 19th 2021

On the contrary, they have won public 200 km programme yield an agreement. Iraq has funding: 2% of gdp last year. Thus, the gov TURKEY often failed to pay what it owes, prompting ernment bankrolls private military forces Iran to curb supplies. Mosul of dubious loyalty with a lavishness many Ironically, Iraq produces plenty of gas, Euphr ate formal armies would envy. (Iraq’s gets 4%.) s Tigris which bubbles out of its oil wells. But most “We always follow the prime minister’s is flared (ie, burned on the spot) or released orders,” says Sheikh Abdul Zahra alGha SYRIA Oilfields IRAN into the atmosphere. This is environmen nim, the spiritual leader of the Hashd’s tally irresponsible and economically daft. 10th brigade. But the pictures on his wall Baghdad Were the gas to be captured, it could re are of Suleimani and Ali Khamenei (Iran’s IRAQ Zayouna place Iranian imports entirely. supreme leader). Abu Fatima alBasri, who Karbala Some firms are trying. Basrah Gas Co, a runs the martyrs’ centre where Mr Ghanim joint venture between the state, Shell and is sitting, lets the mask slip: “On religious Basra Mitsubishi, has since 2013 gone from cap matters, we follow Ayatollah Khamenei; on Nasiriya turing gas equivalent to 50,000 barrels of earthly matters, we follow the prime min oil a day to 210,000. Work has begun to cap ister.” And if their instructions were to ture 100,000 barrels more. “Technically SAUDI KUWAIT conflict? “Our faith is above the prime min ARABIA none of this is complicated,” says Malcolm ister,” he says. Mayes, the managing director. The diffi Mr Basri adds that he would like the culty has been making sure the govern Hashd to become like the Iranian Revolu out jobs to their supporters and their cous ment pays what it owes—essential for a tionary Guard Corps. For many Iraqis, this ins. Merit barely merits a mention. “When project that requires hefty upfront invest is a horrifying prospect. Iran’s elite force I say I don’t belong to a party, they won’t ment. After some hiccups, the firm has answers to the top cleric, not the president, even let me apply for a job,” says a young oil worked out a deal whereby payment is se and runs a vast, corrupt business empire. engineer in Basra. (He plans to emigrate.) cured with oil, and is pressing ahead. The Hashd already control some minis When a huge portion of public workers The fossilfuel industry can never be a tries, and make tidy sums from extortion stayed at home during the pandemic, there big employer. And that irks many Iraqis. and smuggling. Resentment against Iran was “no effect on output”, sighs Mr Allawi. The tribes from whose land the fuel is and its proxies is widespread. Protesters And this is not because they were furiously pumped insist that as many jobs as possi set fire to the country’s consulate in Karba working remotely. Some 10% of them, he ble are given to their members. The tribes la last month. Others burned a Hashd of says, are ghost workers. next door tend to miss out. On a tiny island fice in Nasiriya last year. Soot still daubs Efforts to trim the public payroll, so that in the marshes near Basra, surrounded by the walls. The attacks were “paid for by there might be cash left over for schools, water buffaloes, Noaman alSalmi grum outside forces”, claims one of the staff roads, hospitals and so on, meet fierce re bles about the blazing flare on the horizon, there. Such conspiracymongering is rife. sistance. Iraq’s 4.5m public employees and and the pollution that falls like mist. “We The prime minister’s men say they are 2.5m pensioners in an adult population of get no jobs,” he says, “only cancer.” gradually curbing militia power. Last roughly 20m are a gigantic interest group Beset by pious gunmen, some Iraqis month Mr Kadhimi issued a report claim that politicians fear to defy. have grown disillusioned with religion it ing that the government had impounded The other big drain on the public purse self. Imams bemoan their dwindling con 1,700 missiles in the past year, but it did not is subsidies, on such things as food and gregations. The country’s top Shia cleric, say from whom. A plan was proposed to electricity. Energy subsidies (largely in the Ayatollah Ali alSistani, has stopped giving merge the Hashd with the army and pen form of free oil to generate power) run to weekly sermons. Iraqis speak of a rising sion off many of its members. It has gone $17bn a year, or 10% of gdp. This makes nationalism that eschews foreign inter nowhere. One of its more vocal advocates, electricity cheap; even so, few Iraqis pay ference, especially Iran’s. Hisham alHashimi, was murdered last their bills. Officials take bribes to overlook Respect for human rights is still lack year. Many Iraqis have lost faith in the this. Politicians are reluctant to upset ei prime minister. When he visited Nasiriya ther group. Because electricity is in effect on June 12th, protesters pelted his motor free, demand is “uncontrolled”, says Mr Al cade with sandals. lawi. “Go to any squatter settlement, every one has airconditioning.” Except during No work and all pay power cuts, which are common. A state is supposed to serve its citizens. If Iraqis had to pay their bills, they The Iraqi state, however, serves its employ would waste less. Iraq would find it easier ees. In a normal year, pay and pensions for to keep the lights on. In a pilot scheme in publicsector workers gobble up two Zayouna, a Baghdad suburb, a private firm thirds of the budget. Last year, when oil collected payments for electricity. Resi prices were low thanks to covid19, they dents and local businesses found they ac swallowed an estimated 122% of Iraq’s oil tually saved money, because there were revenues, which are the state’s only big fewer power cuts and they spent less on source of income. Civilservice bonuses costly diesel generators. But such reforms and perks are not taxed, so civil servants may take time to catch on. are mostly paid in bonuses and perks. Po To generate more power, Iraq imports lice get extra for standing guard in risky ar Iranian natural gas. Because of American eas; professors, for lecturing. The govern sanctions on Iran, paying for this is com ment pays more money, more reliably, for plicated: Iraqi dinars must be placed in an less work, than any private firm. So “every escrow account, which can then be used to one wants to work for the government,” buy food and medicine. Iran would rather observes Ali Allawi, the finance minister. have cash, but this will not be allowed un Parties take over ministries and dish less international talks about its nuclear Burning money, spreading pollution

012 The Economist June 19th 2021 Middle East & Africa 47

ing. Sunni Arab dissenters are treated as passing a budget would be seen as a suc terrorists and have largely been silenced. cess: Israel has not had one in two years. Shia ones fear assassination. The prime But because of its makeup, Mr Bennett’s minister promised to arrest the thugs who government is also in a position to tackle killed more than 560 protesters last year. issues that Mr Netanyahu long ignored. But a year of investigations has yet to result The commission on the Meron disaster in a single prosecution, says the un. is indicative. The pilgrimage site is the fief Some perspective is in order. “This dom of ultraOrthodox Jewish groups that country has seen devastation no other bristle when the state tries to interfere in country has seen,” says Mr Salih: dictator their affairs. Mr Netanyahu, who depended ship, genocide, invasion and a blood on the ultraOrthodox for votes, let them drenched “caliphate”. Building a state that be. But they are not part of the new co can govern Iraq “needs a lot of work”, he alition, which gives it more freedom to act. says. Still, there are signs of progress. It may expand the network of state schools The main reason for optimism is that serving the ultraOrthodox, who are about the country, though still violent, is less so 12% of the population. That would see than at any point since the Americanled more of them studying standard subjects invasion in 2003. The last big car bomb was alongside religious ones, and so prepare in 2017. Tribal feuds are still common, but them for work as well as piety. The govern the sound of gunfire in cities is fading. ment might also curtail funding for Iraq is also opening up. Visas that once schools that refuse to teach the national took months are now available on arrival. “core curriculum”. Traffic flows through checkpoints more Israel Another area of focus will be Arab easily than before. The economy is re Israelis, who are 20% of the population. bounding from covid19.Having plummet New man in charge Their longheld grievances fuelled clashes ed by 10% last year, it will grow by 2% this between Arab and Jewish citizens in Israeli year and 8.4% in 2022, predicts the World cities last month. The groups are meant to Bank. The budget assumes an oil price of have equal status, but Arab citizens com $45 a barrel; it is around $70, so the fiscal plain of discrimination and neglect. JERUSALEM deficit should shrink from 5.5% of gdp in Ra’am’s presence in the new government Naftali Bennett’s new government may 2021 to a more manageable0.6% in 2023. will help. The coalition agreement in tackle issues long neglected The state is as corrupt as ever. But opti cludes a promise to spend over $15bn on mists note that much of the money that is hen israel’s new government, led infrastructure and social programmes in stolen is now invested locally, rather than Wby Naftali Bennett, holds its first cab Arab towns. It also vows to tackle a lack of spirited abroad. Cranes long dormant are inet meeting on June 20th, it is expected to urban planning in these areas, which has rotating again. Welltended shrubbery has appoint an independent commission of led to illegal building and, in turn, demoli appeared by roads in Basra. The old city of inquiry into the disaster at Mount Meron, tions by the state. Mosul, which was bombed to cinders dur where 45 people were crushed to death at a The government will probably not do ing the war against is, is being rebuilt with religious pilgrimage in April. Mr Bennett’s much to address the conflict with the Pal help from the un. Of the 6m Iraqis dis predecessor, Binyamin Netanyahu, shun estinians. In the past Mr Bennett opposed a placed by that war, almost 80% have re ned such commissions during his 15 years Palestinian state and wanted formally to turned to their areasof origin. as prime minister. Mr Netanyahu, who is annex much of the West Bank. His govern on trial for corruption, was not fond of pes ment, though, also includes supporters of Chin up ky investigators looking into his govern the twostate solution. So its members Covid19 has spurred innovation. Credit ment’s actions. have agreed not to make any big moves. Yet cards are rare, making it hard for home Mr Bennett’s government will be differ the conflict cannot be ignored. After Jew bound Iraqis to order things online. So ent in other ways, too. Whereas Mr Netan ish nationalists marched through the Old firms such as Zaincash have built apps to yahu led a cohesive coalition of rightwing City of Jerusalem on June 15th, Hamas, the allow digital payments. “Small businesses nationalist and religious parties, Mr Ben Palestinian militant group that runs Gaza, are working incredibly fast because of co nett leads an unwieldy one that includes launched dozens of balloons bearing in vid19,” says Rashwan Shareef, who runs a some nationalist parties (such as his own, cendiary devices at Israel, causing brush Basrabased online marketing company. Yamina), as well as leftwing and secular fires. Israel responded with air strikes on Meanwhile, ordinary Iraqis are getting parties—and, for the first time ever, an Hamas positions. on with their lives. Ghayth alHillo recalls Arab Islamist party (Ra’am). The new gov Neither Hamas nor Israel seemed inter taking a highschool exam in Baghdad in ernment was approved in the Knesset, Is ested in provoking a repeat of the 11day the turbulent days of 2007. Desks were rael’s parliament, by just a single vote. conflict that killed 269 people (mostly Pal spaced far apart toprevent cheating. When That has led to low expectations. Just estinians) last month. Hamas did not a gunfight broke outon the floor below, the teacher did not stop the exam. “We were told to sit closer together, away from the The slimmest majority windows,” recalls Mr Hillo. Israel’s Knesset, number of seats by party, June 16th 2021 Now, aged 30, he seldom hears shoot ing. He is developing an online startup, Bennett-led Blue and Yamina Religious Netanyahu-led government (61) White Labour Meretz (6+1) Zionism Shas opposition (53) Join the Club, to help Iraqis improve their English. He is guardedly hopeful about the Yesh Atid 17 877666467 1 6 Likud 30 future. But still, he scorns the choices at Yisrael New Ra’am Joint List United Torah Judaism the upcoming election. “I’m going to spoil Sources: Haaretz.com; Beiteinu Hope (uncommitted) Majority 6 my ballot,” he says. n The Economist

012 48 Middle East & Africa The Economist June 19th 2021

launch any rockets this time. The targets time toppled the government. Now he of a devastating civil war. Fighting between struck by Israel were empty. No casualties promises “to bring down this dangerous the central government’s forces and those were reported on either side. leftwing government, this scam govern allied with the region’s former ruling party, As big a challenge may come from Mr ment that will fall quickly.” the Tigrayan People’s Liberation Front Netanyahu, who took a moment to adjust Mr Netanyahu is 71and, besides his cor (tplf), is far from over. Indeed, it may well to his new post as leader of the opposition. ruption trial, he must contend with fis be intensifying. Moreover, millions of peo On June 13th, after the government won its sures in his party, Likud. Still, he is deter ple are at risk of starving to death in Tigray initial confidence vote in the Knesset, he mined to win the top job for a third time. because forces allied to the government had to be told by a colleague that he needed His continued presence, though, will re are not allowing enough lorries carrying to vacate the seat at the centre of the gov mind members of the new government aid to pass their checkpoints. In a closed ernment’s bench. But Mr Netanyahu has what brought them together. More than meeting of the un Security Council on June since taken to his new role with a ven anything, it was their opposition to the for 15th Mark Lowcock, the un’s humanitarian geance, reminding colleagues that he was mer prime minister. That may also keep chief, said that parts of the region are now opposition leader twice before—and each them together. n suffering famine. He added that Eritrean soldiers, who have been fighting alongside Ethiopia’s federal forces, “are using starva tion as a weapon of war”. He also spoke of widespread rape, attacks on civilians, and the intimidation, harassment, beating and killing of aid workers. In short, there is no chance of a free vote in Tigray. But the delay to voting also ap plies to the Somali and Harari regions, which have been beset by legal disputes as well as mishaps such as misprinted ballot papers. A second round of voting is there fore scheduled for September. Abiy’s vast home region of Oromia, which contains 41% of registered voters, is a onehorse race. The two main Oromo op position parties have boycotted the vote, citing the persecution of their members and arrest of their most popular leaders (for supposedly inciting ethnic violence). Khalid’s party, Ezema, espouses a pan Ethiopian ideology that stresses individual rather than group rights. This sets it apart from most other parties, which typically champion one of Ethiopia’s many ethnic Elections in Ethiopia groups. It stands almost no chance of win ning seats in Oromia. In the nearby village of Beshasha, where Abiy was born, a hall Abiy’s coronation set up for residents to wait in before they cast their vote is decked exclusively with bunting celebrating the ruling party. “The people believe in the election,” says a local

AGARO AND AMBO official. “They want to show their love for A flawed wartime election is a far cry from what Abiy Ahmed once promised the government.” Many opposition supporters, especially halid jemal, a merchant from the have talked up elections (originally sched young people, may simply stay at home on Kwestern Ethiopian town of Agaro, is no uled for 2020) as a salve for the country’s polling day. “Why waste my time and ener stranger to elections. The poll on June 21st divisive politics and bitter ethnic cracks. gy?” asks a student at Jimma University, in will be his fourth as an opposition candi According to the prime minister, this will Oromia. Some people complain that offi date—and, barring divine intervention, his be the most credible vote in Ethiopian his cials forced them to register, for instance fourth successive defeat. Since 2010, when tory. Given that the country has never had by withholding statesubsidised rations of the ruling party and its allies won all but an election in which the incumbent did sugar or cooking oil from anyone without a two parliamentary seats, Khalid has had not claim victory, that is a low bar. Unfor voter card. But apathy does at least mean the misfortune of standing against Abiy tunately the coming poll may not clear it. worries about postelection violence have Ahmed, then an upandcoming party man In some places the vote will be competi waned. “There’s a kind of disengagement,” and now the prime minister. “I’m proud tive: notably Addis Ababa, the capital, and says Geresu Tufa, a peace activist in Oro he’s from here and I respect him,” he told parts of Amhara, the secondmost popu mia. “So in that sense it’s safe.” The Economist in an interview held not in lous region. But the overall result is not in Where it is not so safe is in parts of his office, but in one belonging to the rul doubt. For Abiy, who has said his mother western and southern Oromia, which are ing Prosperity Party—and with an attentive prophesied that he would one day be king, racked by armed insurgency. Fierce fight official of that party taking notes. it is less an election than a coronation. ing in these places, as well as in the neigh Abiy took office three years ago, after About a fifth of constituencies will not bouring region of BenishangulGumuz, massive protests forced his predecessor to take part at all on June 21st. This includes has scotched any hope of voting there pro resign. Ever since, government officials all of Tigray, a northern region in the midst ceeding on schedule. “This time [violence]

012 The Economist June 19th 2021 Middle East & Africa 49

300 km Africa’s orbital ambitions satellites, bringing Africa’s total in orbit that year to 41. Red Sea Taking off SUDAN ERITREA Space in Africa, a consultancy based in Nigeria, reckons that African governments Benishangul- Tigray budgeted about $500m for their space Gumuz agencies in 2020. That is a sliver of the Amhara Gulf DJIBOUTI of Aden $23bn spent last year by nasa, but it still ETHIOPIA marked a big jump from the $325m they Countries on the continent are blasting spent in 2019. This does not include spend Ambo their way into the space race ing by private investors such as Eutelsat, a Agaro Addis Ababa Harari n the hours after Hurricane Katrina European operator, which park communi Oromia Beshasha Somali slammed into America in 2005, destroy cations satellites in orbits so they can SOUTH I SUDAN ing large parts of New Orleans, the people beam signals down to Africa. coordinating the disaster response ur African governments argue that their SOMALIA gently needed satellite pictures to show investments in space programmes help to UGANDA KENYA them what they were facing. The first im build local skills that can attract invest ages to come in were not from the constel ment and spill over into other areas of the will not be about ‘My party didn’t win’,” lations launched by nasa or the space economy. The Square Kilometre Array, an predicts a Western diplomat. “It’s about agencies of other rich countries. They were internationally funded radio telescope be discrediting the whole thing.” Rebels have beamed to Earth by a small Nigerian space ing built in South Africa, will pull in almost attacked electoral posts and assassinated craft that had been launched from Russia €2bn ($2.3bn) of investment and is creat officials from the ruling party. In response just two years earlier. ing thousands of jobs. It is also inspiring local security forces have unleashed terror The small cube—Nigeria’s first satellite youngsters to study engineering. on civilians. Many have been arrested or and only the second launched by a subSa The satellite programme started on the killed. In May police tied up and beat a haran African country—did not just watch Stellenbosch University campus has alrea teenage boy in broad daylight—and then a storm, it provoked one, too. British politi dy borne fruit. Several of its graduates went publicly murdered him. “There’s no mercy cians and a taxpayers’ pressure group on to work at Dragonfly Aerospace, a firm at all now,” says Ashenafi Dhabate, an op called for a halt in development aid, saying based in Stellenbosch that hopes to build position supporter in the western Oromo Nigeria did not need help if it could afford a as many as 48 small satellites a year. In town of Ambo. space programme. Still, the sums being April Max Polyakov, a Ukrainianborn in Foreign governments are belatedly spent on space by African countries back vestor, bought a controlling stake in the sounding the alarm. On June 11th America’s then were tiny. South Africa’s sunsat, the company for an undisclosed sum. State Department said it was “gravely con region’s first satellite, was built by stu African countries missed out on the big cerned” about the election and called on dents at Stellenbosch University and shift in the world’s economy in the 1990s, the government to promise talks with the hitched a free ride on a nasa rocket. Nige when manufacturing moved from rich opposition afterwards. America has alrea ria’s spacecraft cost just $13m. countries to poorer ones in Asia, because dy imposed travel restrictions on officials In the past few years, however, the con they were not nimble enough to open their connected to the war in Tigray and has tinent has dashed into space. The most re economies and attract investment. Now asked the imf and World Bank to withhold cent orbital enthusiast is Mauritius, which they are entering the space industry just as economic assistance. Last month the Euro put up a satellite on June 3rd. At least 20 Af it is being disrupted by new entrants, who pean Union cancelled its election observa rican countries now have space pro are making small satellites that cost a frac tion mission, saying that bureaucratic ob grammes. These include heavyweights tion of the price of big ones made by in stacles had made its work impossible. such as Egypt, Algeria and Nigeria, as well cumbents. That offersa rare opportunity to Abiy has responded by making stand as smaller countries such as Ghana. In 2019 countries and companies quickwitted ing up to the West part of his election another five African countries launched enough to graspit. n schtick. At a large rally organised by the government last month protesters de nounced American sanctions. On state television broadcasters warn of foreign plots to weaken Ethiopia. In a speech on June 6th the prime minister called on the public to “eliminate” what he said were foreign enemies and domestic traitors. Whatever the election’s shortcomings, Abiy is sure to claim a big popular man date. In theory that might make it easier for him to take bold steps, such as calling a ceasefire in Tigray or releasing opponents from prison. But it will do nothing to fix the problems that brought down his prede cessor, such as the federal government’s centralisation of power and the deep mis trust among the country’s 80 or so ethnic groups. “Real dialogue should be the next step to solve the underlying disagreements about what kind of country we want,” ar gues Geresu. “An election alone cannot bring enough legitimacy to govern.” n Mauritius’s satellite gets a lift

012 50 Asia The Economist June 19th 2021

→ Also in this section 51 Anti-feminists in South Korea 52 Cabin fever in Singapore 52 Mongolia’s one-horse race 53 Banyan: Wet winds of change

Politics in India last week’s meeting of the g7 group of rich democracies as a distinguished guest, In The Modi blues dia’s normally photophilic prime minister was conspicuous by his absence. In short, nearly all the wind of promise that Mr Modi’s premiership started with seven years ago has abruptly blown away. His opponents are, for a change, landing DELHI hit after hit. The most recent charge is of India’s prime minister is down but not out hypocrisy. His government relentlessly he story of Narendra Modi, India’s anxieties of widespread death and dis bullies critics and even platforms, such as Tprime minister, has been a fable of ex ease—the country’s richest are getting os Twitter, that carry their messages, yet de traordinary good fortune. From running a tentatiously richer. The wealth of Gautam clares itself a champion of freedom. “The railway teastall in provincial Gujarat he Adani, a Gujarati billionaire, increased by Modi government should practise in India rose to lead his state and then his country, $43bn in the pandemic year, before a re what it preaches to the world,” was the acid the world’s biggest democracy. Yet no one’s cent market scare knocked $10bn off his comment of Palaniappan Chidambaram, a luck lasts forever. And for Mr Modi the cur take. With such internal stresses sharpen grandee in the opposition Congress party, rent monsoon season is not the only thing ing, and constituencies including farmers, following a video address by Mr Modi to proving that when it rains, it pours. doctors and migrant workers now all bear the g7 meeting in which he declared India The full toll from India’s nowwaning ing grudges, Mr Modi’s party has faced un to be a “natural ally of open societies”. second wave of covid19 remains unclear. A wonted humiliation in recent local elec For any other leader such a concatena reasonable guess is around 2m dead from tions. In May voters in West Bengal, where tion of bad news could prove fatal. But Mr the virus so far, making this the worst ca the prime minister had campaigned fierce Modi is far from an ordinary leader. De lamity to hit the country since the Bengal ly despite signs that covid19 was surging spite widening anger not only among Indi famine of 1943. But Mr Modi’s woes go be back, handed a walloping majority to his an elites, but even among loyalists of his yond happening to be in charge, and per rivals (Mr Modi is pictured on the stump). Bharatiya Janata Party ( bjp), the chances haps making some bad decisions, at such a His government’s international stature that the prime minister could be unseated terrible time. has suffered, too. Chinese troops refuse to before the end of his term remain virtually India’s economy, which had been slow budge from Indianclaimed territory that nil. Indeed, unless his government com ing even before the pandemic and then they occupied a year ago, while India’s mits even more blunders, and its oppo shrank by a dismal 7% in the year to March chestthumping about being a vaccine su nents somehow unscramble their current 31st, has now stalled instead of restarting. perpower swiftly turned embarrassing: Mr disarray, Mr Modi may have the last laugh. Yet even as ordinary folk are squeezed by Modi’s government had procured far too India’s next general election in 2024 could rising inflation, unemployment, malnu few jabs even for its own people, let alone see him return to occupy the controversial trition and poverty—all made harder by the for foreigners. Despite an invitation to join new prime ministerial residence he is hav

012 The Economist June 19th 2021 Asia 51

ing built for himself. Politics in South Korea lets. That culture ruins lives, according to a This is because Mr Modi has more than report issued on June 16th by Human luck on his side. He has charisma, enough Sausage party Rights Watch, an international monitor. to sustain his image as a longedfor strong Many young men take a different view. leader even beyond his Hindunationalist In a survey conducted in 2019 some 60% of fan base. Like followers of Donald Trump men in their twenties said that discrimina in America, Mr Modi’s admirers seem im tion against women was not a serious is SEOUL pervious to glaring evidence of poor deci sue. More than twothirds said that unfair A conservative upstart appeals to sionmaking. Opinion polls, while gener ness towards men was the big problem. young men who fear feminists ally unreliable in India, do reveal clear They said they felt disadvantaged by South trends. MorningConsult, which tracks na as it merely an innocent sausage? Korea’s marriage culture, job market, and tional ratings of the elected leaders of 13 WLast month a poster promoting the application of its laws. Compulsory countries, shows a 20point slide over the camping kit sold by gs25, a chain of shops military service, which applies only to past year in the proportion of Indians who in South Korea, included an illustration of men, is a particular grievance. “We have to approve of Mr Modi. Yet at 66% in early two fingers reaching out to grasp a steam compete against women after sacrificing June, he still outperforms all the rest. An ing banger. Angry young men complained. 22 months for the country,” says a 25year other recent survey by Prashnam, an Indi They said the detail, which resembled an old surnamed Jung. “We just want com an pollster, found that, although 42% ofre emoji that depicts a hand making a pinch pensation for our sacrifice.” spondents who say they suffered personal ing gesture, was a hidden insult planted by Mr Lee has railed against radical femi ly from covid19 blamed Mr Modi’s govern feminists. As everyone knows, the symbol nism. He said the ruling party performed ment, a bigger share blamed local leaders is commonly used when mocking the size poorly in mayoral elections in April be or simply fate. of a man’s penis. One critic was especially cause it focused too much on pleasing fe Even sceptics who note that Mr Modi’s outspoken. “Why on earth would the sau male voters and had “underestimated” older, greyer image has lost appeal, and sage have to be there and who would eat a young males. He has promised to abolish that after so long in power his attacks onri hot sausage with their fingers?,” said Lee quotas for women in the ppp and wants to vals carry less sting, admit that he holds Junseok. “We deserve an explanation.” restore “fairness” to the political process another strong card. The bjp remains a On June 11th Mr Lee was elected leader by using tests to choose his party’s candi daunting political machine. What public of South Korea’s main opposition party, dates. This appeals to many young men, records there are in the murk of Indianpo the People Power Party (ppp). At 36 he is the more than threequarters of whom voted litical finance suggest that the party rakes youngest person ever to lead a South Kore for the conservatives in the recent mayoral in more than fourfifths of known contri an political party. His election marks an ef election in Seoul. “Most of my friends feel butions to all parties combined. The bjp al fort to rejuvenate the conservative outfit discriminated against in some way and so enjoys firm backing from the powerful ahead of the presidential poll next year, that’s why we support Lee Junseok,” says Hindunationalist parivar or family, a con though Mr Lee is not himself old enough to Mr Jung. “It’s not about antifeminism, it’s stellation of groups ranging from tradeand be eligible for that job. Among his biggest about fair competition.” student unions to vigilante gangs. Despite fans are men in their twenties who feel vic Mr Lee graduated from Harvard and occasional setbacks, and the wariness of timised by South Korea’s increasingly vo worked for an education startup but has India’s periphery about the Hindispeak cal feminist movement. never held public office. He may struggle to ing heartland where the party is strongest, South Korea scores poorly on measures find more policies that can unite his young the bjp remains the only outfit able to lure of equality between the sexes. The “glass fans with his party’s older and crustier sup political talent and contest elections virtu ceiling index” compiled by the Economist porters. These include evangelical Chris ally anywhere in the country. Intelligence Unit, a sister company of The tians with a penchant for conspiracy theo Mr Modi also holds a powerful joker. Economist, rates it the worst rich country in ries whom many in the ppp find embar For all its pointscoring against his govern which to be a working woman. Many wom rassing. His idea to make party members ment and even its victory in electionshere en suffer discrimination and harassment. compete for nominations by taking exams and there, India’s opposition remains as Creeps use hidden cameras to snap pic in skills such as drafting powerpoint pre fragmented and vulnerable as ever. Itsonly tures of them in bedrooms and public toi sentations is unlikely to fly, reckons Choi hope lies in pulling together to form anun Jinbong of Sungkonghoe University. His likely coalition such as the Israeli front, ambition to abolish quotas for women and uniting hardright Zionists with leftists young people will irk other party leaders, and Arab parties, that recently ended Bin some of whom are young women. yamin Netanyahu’s 12year reign. Yet Mr Lee’s youth and novelty may The fact is that most of India’s political prove powerful assets. The ppp has opposition consists of regional partiesthat changed its name twice since losing power are content to reach a modus vivendi with four years ago after a corruption scandal a bjpruled “centre”. Congress ran India as toppled Park Geunhye, the previous presi a virtual fief for decades and still pretends dent. Until recently it had shown no appe to nationwide influence. But under itscur tite to renew itself any more than that. A rent leader, Rahul Gandhi, it lacks both conservative landslide in the mayoral elec street clout and the tenacity and agility to tions suggests voters are souring on the rally allies. “However embattled Modi may leftish government of President Moon Jae be after getting almost everything wrongin in, which has been damaged by scandals of handling the pandemic, Rahul Gandhi, its own and delays to vaccinations against who got almost everything right, is not covid19. Mr Lee’s popularity will aid likely to be the preferred option,” is the whomever the ppp nominates to run for judgment of Samar Halarnkar, an editor the presidency next year—among some and columnist. It is not just Mr Modi’sluck male voters, atleast. Women may find him that needs to turn for change to happen. n Not a sausage less impressive. n

012 52 Asia The Economist June 19th 2021

Covid-19 in Singapore Fever cabins

SINGAPORE Migrant workers have endured interminable lockdowns t is more than a year since Mohammad ISharif Uddin leafed through a book at the National Library or wandered beneath Sin gapore’s skyscrapers, two of his favourite pastimes. Since early 2020 migrant work ers such as Mr Sharif, a Bangladeshi who oversees safety on construction sites, have endured lockdowns far stricter and longer than those imposed on the rest of Singa pore’s population. His employer ferries Hardly in the pink him to and from work. But otherwise he must remain in his dormitory, where he to suicide than in previous years. nated and “the covid19 situation in Singa shares a room with eight others. He passes The crisis could improve conditions in pore further improves”. By early June only the time on a top bunk reading, writing, the long term. Last year the government set a fifth of dormdwellers had received all praying and trying to stay cool amid the up a task force that is seeking ways to im their jabs, compared with a third of the heat. “I feel like I am trapped in a cage.” prove migrant workers’ mental health. Of overall population. More than 300,000 of Singapore’s mi ficials thinned crowds in dormitories by Many migrants have gone home. Last grant workers live in dormitories (one is moving some residents into former year the number of foreigners employed in pictured). Most are men from India, Ban schools and vacant factories . The govern industries such as construction and ship gladesh or China, sharing rooms that ac ment says it is building new permanent ac building shrank by about 16%. Mr Sharif commodate as many as 20 people. These commodation blocks that will offer slight would be on a flight back to Bangladesh if cramped conditions made it easy for co ly better conditions. It says polls of mi he could afford it. Instead he has made use vid19 to spread. Four out of five dorm grant workers find that most are “coping of his idle hours to write and publish a dia dwellers surveyed in April 2020 by home, a well”. But it says restrictions on their ry of his days under lockdown. As he puts charity, said it was difficult to keep a dis movements will remain tight until more of it: “The government has locked us in in tance from others. That month new cases the people living in dormitories are vacci visible shackles.” n of covid19 in the dorms peaked at nearly 1,400 a day. Foreign workers living in dormitories account for nearly 90% of all Elections in Mongolia the people who have tested positive for co vid19 in Singapore. Antibody tests suggest One-horse race that by December nearly half of the work ers in dormitories had been infected. At the beginning of the crisis strict lock downs prevented many migrants from leaving their dormitory rooms, even to BEIJING cook meals. By November most were back The ruling party secures a thumping victory at work and had been given limited free dom to visit “recreation centres” set aside nlike the shenanigans that came be but a ploy to tee up a presidential run. for them, where they can shop for grocer Ufore it, the result was remarkably clear. His campaign had to swerve traps laid ies and send money home. At first the gov Ukhnaagiin Khurelsukh romped to victory by the incumbent, Khaltmaagiin Battulga ernment allowed them to visit these places in Mongolia’s presidential elections, held of the opposition Democratic Party (dp). In once a week for three hours; this was in on June 9th. He became the first candidate April the courts ruled that Mr Battulga creased to three times a week for four in recent history to snaffle more than two could not seek reelection (a constitutional hours. But the visits were stopped in May, thirds of the vote. His Mongolian People’s amendment passed by the mpp in 2019 lim after a slight rise in infections. Workers Party (mpp) already holds a supermajority its presidents to one sixyear term, though must get approval to run essential errands. in parliament. After Mr Khurelsukh takes whether that applied to Mr Battulga had HealthServe, a charity that helps pro office on June 25th it will have an even previously been unclear). Within days the vide medical care to migrant workers, says stronger hold on power. president declared that he was outlawing that the restrictions have exacerbated Mr Khurelsukh was Mongolia’s prime the mpp. That pronouncement shocked “feelings of isolation, anxiety and despair”. minister until January, when he resigned Mongolians, but had little other effect. The Last year journalists reported several cases suddenly and ostentatiously over some party ignored his decree. The Supreme of migrant workers killing themselves (the thing that did not seem to require it: Mon Court also declined to enforce it. government said it had not observed a golians had objected to footage of a new The election was a disaster for the dp. spike in such deaths). In December home mother shivering in the cold while being Its leaders had bickered over whom to said stories reported in the media were the transferred to a facility for patients with nominate as the party’s candidate . The “tip of the iceberg”. It says a hotline that it covid19. Handing the reins to a protégé man they selected, Sodnomzundui Erdene, runs has received many more calls related was not an act of principle, it turned out, secured only 6% of the vote. Even some

012 The Economist June 19th 2021 Asia 53

longstanding supporters of the party supermajority would be dangerous. He drowned out useful stuff. Campaigns gave chose to cast blank votes rather than en campaigned under the slogan “Mongolia little time to bigger questions such as how dorse him. That is a fresh nadir for an outfit without dictatorship”. But many Mongo to manage relations with Russia and Chi that was already in trouble. It held almost lians and foreign observers sound relaxed na, reduce unemployment, invest mineral half the seats in parliament before its co about singleparty rule. The mpp is “quite wealth and diversify the economy. alition lost elections in 2016. These days it fragmented internally”, says Sumati Luv The electorate looks disengaged. The has less than onesixth of them. sandendev of the Sant Maral Foundation, a turnout of 59% was the lowest ever. Chris The opposition’s implosion leaves the pollster. He is confident that lively faction tian Sorace, who follows Mongolia at Colo ruling party unchallenged. Although con alism within the party will help moderate rado College in America, warns that the stitutional changes have lessened the pow its decisionmaking. country’s political class is only storing up er of the presidency, the job still confers Whatever comes next, the poll has un problems. “There is no political move control of the army, among other trophies. derlined the depressing superficiality of ment, party, or politician who speaks di Mr Erdene had argued that handing the much political debate. Loud personalities rectly to the massive socioeconomic dis mpp the presidency in addition to its and squabbles over electoral rules parities of Mongolian society.” n Banyan Wet winds of change

Climate change is remaking South Asia’s monsoon ince arriving two days late at its British imperial administrator that the on their phones. Millions of rural people Susual landing point at Thiruvanan Indian budget is “a gamble in rain” re use the service which, Mr Patil says, has thapuram in Kerala near India’s southern mains true today. done much to improve the accuracy of tip, South Asia’s annual summer mon Yet the monsoon is no uniform wave. It shortterm forecasts. soon has made up for lost time. Tearing is overwritten by “vagaries”: bursts of Yet a longterm threat also looms: the north, the southwesterly, rainbearing intense rainfall in some parts and dryness effects on the monsoon of climate winds covered fourfifths of the country in others. Scientists have yet to get to the change. Recent analysis in the jour in the first two weeks of June, reaching bottom of these vagaries. But they can nal Earth System Dynamics led by Anja even India’s northeasternmost states. have profound effects. A farmer can see Katzenberger of the Potsdam Institute for The monsoon’s western arm has yet to his crop washed away in a thunderstorm, Climate Impact Research suggests that reach the states of Gujarat, Haryana and or seedlings wither in a drought. In his the monsoon is both getting wetter—by Rajasthan. But Yogesh Patil, head of part of Andhra Pradesh in southeastern 5% for every one degree Celsius of global Skymet, a private weatherforecasting India, S. Ananth, a writer on the monsoon, warming—and more erratic. In other service, predicts that the monsoon will says that this year the monsoon has deli words, the frequency of extreme down cover the whole country by July 8th, vered just one proper downpour and a few pours is growing. It might be thought pretty much bang on its average date. mild showers. A cyclone churned through that the aerosol soup of dust, exhaust Bangladesh, Bhutan, Nepal and Paki the Bay of Bengal in May, which was emissions and particulates from stubble stan are also recipients of the South unusually early. Mr Ananth’s greatgrand burning that hangs over the vast north Asian monsoon. It touches over 1.8bn father used to say that after a cyclone in Indian plain might absorb solar energy people, or nearly a quarter of the world’s May, the monsoon would fail. Folk myth, and so counteract somewhat the effects population. Though its circulation is perhaps, but local farmers are worried. on the monsoon of a warming planet. Yet complex, at its heart the summer mon Since vagaries can make or break farm a paper in Earth-Science Reviews led by soon is a sea breeze that operates on a ers, Mr Patil says, Skymet is using satellite Qinjian Jin of the University of Kansas seasonlong, continental scale. A rapidly imagery and data from over 7,000 weather argues that Asian dust more generally heating Indian subcontinent causes hot stations to make 72hour forecasts with reinforces an aerial heat pump that also air over it to rise. That draws in wetter villagelevel detail, including storm and helps render the monsoon hotter and maritime air from the Indian Ocean. As drought alerts, which farmers can access wetter. While the monsoon has long this air in turn rises, it cools and falls as made mankind in South Asia, man is rain. The northern wall of the Himalayas now remaking the monsoon. amplifies the effect. Nor is it clear how much can be done The monsoon’s arrival is cause for about it, short of a global will to reduce rejoicing. Over 70% of the year’s rain falls carbon emissions. Building resilience in just four months. It cools the fierce helps. Work is being done in India to summer heat and slakes a thirsty earth. improve crop selection and manage The Ganges and other rivers fill and ment. Improving water storage and spread rich silt over flood plains. Sown lessening the risks from flooding would crops put on growth at last. Agriculture help, too. Here, however, aquifers are supplies nearly half of all India’s jobs and being mined faster than rain can replen accounts for nearly 20% of gdp (most ish them, while urban development farmers rely on rainfed crops rather swallows up ageold reservoirs, water than irrigation). A bad monsoon can cut tanks and flood plains. Meanwhile, India economic growth by a third, drive farm remains dependent on coal for electricity ers into penury and create knockon and on belching lorries and trains for effects for government revenues when transport. The monsoon will continue to they are needed most. The remark by a bring relief but also, increasingly, grief.

012 54 China The Economist June 19th 2021

Hong Kong’s media dozens of countries to mark the second an niversary of the outbreak of the protests No news is bad news went unaired by big broadcasters, says Chris Yeung, the chairman of the Hong Kong Journalists’ Association. The law’s ripple effect was also evident in the case of Claudia Mo, a prodemocracy politician who was arrested under the new bill in Jan HONG KONG uary. In May the High Court denied bail to The Communist Party wants to tame Hong Kong’s feisty media Ms Mo, saying statements she had made to ince china imposed a nationalsecuri ries of antigovernment protests in 2019 foreign journalists disqualified her. That Sty law on Hong Kong a year ago, restric and could face life in prison under the se sent a signal to reporters that they could tions on the city’s media have sharply esca curity law. Chinese state television has get interviewees in trouble by quoting lated. The latest clampdown came on June called Apple Daily “a platform for incite them. “I didn’t become a journalist for my 17th when police arrested Ryan Law (pic ment” of troublemakers. Many of the stories to be used in this way,” says a re tured), the chief editor of Apple Daily, an newspaper’s staff believe it is a matter of porter who has recently resigned. outspoken prodemocracy newspaper. Al time before it has to close. Apple Daily has always prided itself on so seized were the tabloid’s publisher and Over the past decade, Hong Kong has being provocative. But other, less fiery, me three other bosses associated with it. They plummeted from 54th to 80th in the Press dia have also been suffering. Take the city’s have been accused of violating the new law Freedom Index published by Reporters public broadcaster, Radio Television Hong by conspiring to collude with foreign forc without Borders, a campaign group. It still Kong (rthk), which long boasted an inde es. “We value freedom of the press,” a se ranks higher than mainland China, which pendentminded culture inspired by that nior officer said afterwards. Many journal is fourth from bottom at 177th, just above of the bbc. In February rthk’s Englishlan ists see no sign of that. North Korea. The city also lacks the main guage radio station stopped its nighttime Following the arrests, hundreds of po land’s draconian internet controls. But the relay of the bbc World Service. Its Canton lice raided Apple Daily’s offices. They re political climate in Hong Kong has ese talk channel ditched a weekly broad portedly searched for journalistic materi changed dramatically since the central cast of an hourlong bbc news programme als, including laptops, notebooks and mo government imposed the security law. in that language. This followed China’s de bile phones. The government called it a Editors now worry whether the content cision to ban the airing of bbc shows on its “crime scene”: it says the newspaper’s as they handle could be in breach of the new territory because of the British broadcast sets have been frozen. This grim spectacle law. Footage of rallies held on June 12th in er’s coverage of abuses in Xinjiang. was little surprise. Apple Daily has long It is clear that Hong Kong’s government been in the sights of China’s ruling Com wants rthk on a tighter leash. In March it → Also in this section munist Party. Its owner, Jimmy Lai, is rare installed Patrick Li, an official with no among local tycoons for his outspoken 55 Sino-American struggles background in journalism, as director of criticism of the party. He was arrested last broadcasting. Since then, several senior 56 Chaguan: Green autocracy’s limits year for his involvement in a prolonged se editors have resigned, reportedly because

012 The Economist June 19th 2021 China 55

of concerns about editorial freedom, and Tit-for-tat struggles warming. America’s vague plan notes that popular programmes that poked at official projects will be developed in a sustainable dom have been axed. So, too, have televi Try this for size and transparent manner—a dig at the sion documentaries containing references opacity common in bri contracts. It will al to the protests in 2019. Their topics includ so mobilise private capital where China ed police behaviour during the unrest and has mainly used stateowned firms. mask shortages during the pandemic, as The idea appears halfbaked. It is not HONG KONG well as subjects far removed from politics: clear whether Mr Biden or other g7 leaders In their power struggle, China and one was about whales, another about hip will be able to extract substantial addition America are learning from each other hop bands (someone interviewed about al funding from their governments. The the whales had mentioned the protests; merican and Chinese officials often White House says it will work with Con one of the bands was antigovernment). In Atalk of expanding the array of weapons gress to “augment our development fi May rthk did not renew the contract of a they have to confront one another. China nance toolkit”. Yet Mr Biden is still strug journalist who is renowned for putting studies its opponent’s moves and responds gling to get Republican votes for spending tough questions to politicians. Also that in kind. America is learning from its adver on domestic infrastructure. It is not even month staff began deleting archived shows sary, too. On June 12th the White House evident that the plan involves much more from Facebook and YouTube, including in said that America and members of the g7 than the rebranding of projects that are al vestigations about the protests that had would launch a scheme to help finance in ready being considered. These include nu garnered millions of views. frastructure, such as roads and bridges , in merous green infrastructure schemes in The South China Morning Post, the terri poor countries. The plan, dubbed Build poor countries that were promised as part tory’s main Englishlanguage newspaper, Back Better World ( b3w), is an explicit of the Paris climate agreement of 2015. Eas still has leeway to criticise the party. In counter to China’s Belt and Road Initiative ing this backlog will be costly. 2015 it was bought by Alibaba, a Chinese e (bri), a programme that began to take Increasingly, China and America are commerce giant, which said it wanted to shape in 2013 with many of the same goals. replicating each other’s munitions. Days combat alleged antiChina bias in the for Competition with China has dominated earlier, on June 10th, China’s legislature eign media. That sparked fears it might be Joe Biden’s agenda since he took over as passed a law that allows the government to come a party mouthpiece. But the Post still America’s president in January. His admin take action against individuals and com often reports on humanrights abuses in istration has promised to use “all available panies for complying with other countries’ China and other politically sensitive top tools” to push back against what it de sanctions against China. America and the ics. Former staff say it is more cautious scribes as China’s unfair trade practices. European Union have hit China with va about subjects the party considers utterly The b3w plan takes aim at a global initia rious punitive measures because of its taboo, such as corruption involving serv tive closely associated with his Chinese mistreatment of ethnic Uyghurs in the ing leaders and their families. counterpart, Xi Jinping. Although bri does western region of Xinjiang and its demoli Journalists in Hong Kong wonder how not have a central planning body, more tion of freedoms in Hong Kong. Donald long it will remain possible to publish any than 100 countries that are in need of infra Trump barred investment in several firms thing that is highly critical of the party. The structure have signed up to it. The initia with links to the Chinese armed forces. His central government is reportedly prepar tive has been criticised for burdening poor successor, Mr Biden, has doubled down on ing to set up a department in Hong Kong to countries with unsustainable debts. But it those rules by strengthening the legal run “propaganda”. Many reporters fear this has helped to strengthen bonds between foundations of the sanctions. could mimic the role of the party’s Publici China and the developing world. China’s new law says the government ty Department in Beijing, which is in b3w would offer financing for cleaner can seize the assets and block the transac charge of censorship. In March Xia Bao projects, in contrast to some of those tions of firms complying with American or long, China’s chief of Hong Kong affairs, la backed by China, which include coalfired eu measures against China. Unlike the mented that in the media and other power plants that contribute to global European Commission’s statute on foreign spheres, “patriots” were not yet fully in sanctions, which prohibits compliance charge in the territory. To China, that with them, the Chinese law does not ex means people who love the party. plicitly make such activity illegal. Instead Hong Kong’s chief executive, Carrie it is intended as a deterrent that provides Lam, appears unsympathetic to reporters’ the authorities with a legal means to im complaints. She says officials are mulling a pose countermeasures, say state media. law against “fake news”, a term they use to The competing regimes put multina describe coverage they dislike. At her press tional firms in a bind. Fund managers have conferences, Mrs Lam increasingly choos been attending webinars on how to navi es to take questions from China’s state me gate increasingly complex American and dia. In an annual survey of local reporters Chinese sanctions, says Kher Sheng Lee of conducted in May by the Hong Kong Jour the Alternative Investment Management nalists’ Association, more than 90% of re Association, an industry body. Companies spondents said press freedom had hit a re have had little choice but to follow Ameri cord low. About 85% of them blamed the can sanctions. China’s new bill could make city’s own government. that choice more difficult. Some media workers are as gloomy Likewise, poor countries have had few about their readers as they are about curbs alternatives to China’s bri project, until on freedoms. They say demand for punchy now. If executed well, the b3w plan could journalism is diminishing as citizens grow provide healthy competition to that, says disillusioned with politics. “Many of us Wang Jiangyu of City University of Hong now wonder, what is the point?” says one Kong. But those countries now face a di reporter. “The CommunistParty is going to lemma, he says. They may be “forced to do what they want to do.” n choose between b3w and bri”. n

012 56 China The Economist June 19th 2021

Chaguan Is China serious about the climate?

Until China burns less coal, foreign firms will be reluctant to invest more there lowed to expand production again, months after they were caught breaking environmental rules and ordered to cut emissions. Climaterelated efforts in China are not always as mysterious or prone to sudden reversals. Take the China operations of foreign multinationals. Responding to consumers and politicians back home, many such firms have promised to make their global busi nesses carbon neutral, and to seek big cuts in emissions from their supply chains. As a result, the China bosses of some wellknown European companies have told officials, including in the north eastern cities of Tianjin and Shenyang, that they will find it hard to expand or open new production sites if the electricity or heating on offer locally continues to come from coal. “In an energyinten sive industry, if the electricity is coalbased, you can’t build a new plant,” says Harald Kumpfert of the European Union Chamber of Commerce’s branch in Shenyang, the capital of Liaoning province. The largest taxpayer in Shenyang is a bmw joint venture that makes 600,000 cars a year at two plants. In 2016 the city had no green electricity to sell. Now a new wind farm in Liaoning—a blus tery coastal province with huge potential for green energy—pro vides about twothirds of bmw’s power. More energy comes from solar panels built over car parks where vehicles await delivery. On a recent visit, Chaguan was shown technologies that have cut car o hear china’s Communist Party tell it, the nifty thing about bon emissions per vehicle by 84% since 2016, such as cleverly con Tautocracy is that it lets rulers plan for the long term. Apologists trolled ovens in the paint shop. In a nicely dramatic touch, freshly for oneparty rule hail China’s leaders as enlightened technocrats baked car bodies emerge on a raised conveyor that carries them on who think in centuries, while decadent Western democracies a bridge through an office building, on their way to assembly lines. struggle to see beyond the next election cycle. Alas, hundreds of bmw suppliers in China have “huge trouble” By the autocrats’ logic, China should excel at tackling climate obtaining renewable electricity, say engineers at the car firm, sug change. For it faces stark longterm risks. As an arid country that gesting that the foreigners have snapped up most green energy on lacks clean water and productive farmland, and where the richest offer. To avoid simply shuffling dirty energy around and to in regions lie on the coast, China is exceedingly vulnerable to global crease demand for renewables, energyintensive Chinese suppli warming and rising sea levels. Sure enough, the supreme leader, ers, such as steelmakers or aluminium foundries, need to start in President Xi Jinping, seems to be taking charge. Last September he stalling efficient technologies and using lowcarbon energy. Pro decreed that China’s emissions of CO 2 will peak by 2030 and that gress also requires changing the incentives that guide officials. by 2060 the country will become carbon neutral. A Chinawide bmw makes the case to governments that “jobs using renewable emissionstrading system goes live this summer. Vast wind farms energy are sustainable jobs,” says Johann Wieland, head of the car and arrays of solar panels have been built, and more are coming. maker’s main China business. In fact, Chinese climate policy is a mess of contradictions. Per haps time will show that Mr Xi is serious about making the unpop Long-term plans, short-term incentives ular, expensive changes that are needed to wean his country off China’s political system, for all its multidecade plans, is run by fossil fuels, notably the coal that supplies nearly 60% of the coun officials who may stay in a given job for five years, and whose next try’s energy. But it is difficult to be sure. China’s coal consumption promotion depends on economic growth now. Zhang Lei, the has risen significantly since it joined the Paris climate agreement chief executive of Envision, a big windenergy and battery compa in 2015. At home, a ban on new coalfired power stations was lifted ny, is confident that topdown orders can overcome local inertia. in 2018. The total capacity of such plants approved for construc “The most important thing is that President Xi has made a huge tion or being built is larger than America’s entire active coalfired commitment and continues to push that agenda,” says Mr Zhang. power sector. Overseas, despite pleas from America, the European Ma Jun, an environmentalist, sees a role for pressure from Union and others, Chinese development banks lend billions of above and below. He runs the Institute of Public and Environmen dollars each year to build coalburning plants, though a state tal Affairs, an influential Beijingbased organisation that tracks owned giant, the Industrial and Commercial Bank of China, says it and publishes pollution and emissions data. “It is too much to ex will phase out coal financing. pect a foreign company to change the energy mix of a city,” says Mr Provinces and cities, especially in the coalreliant northeast, Ma. But nudges from foreign and local businesses might push offi are hesitant about publishing carbon “peaking plans”. They want cials to a tipping point. “To change minds we need both market more time to pursue growth before curbing greenhouse gases. The based and policybased interventions,” he says. rules governing the emissionstrading scheme have been loos Multinational corporations are not saints. Many were happy to ened so that only a handful of plants will face real constraints, at run profitable but dirty plants in faraway places. Too many are still least initially. This reflects the leading role apparently granted to reluctant to demand transparency from suppliers. But Western the main economic planning agency, at the expense of the envi voters are growing serious about the climate, and about holding ronment ministry, in bodies charged with deciding how, and how governments and businesses to account. That pressuremight just fast, to tackle climate change. Some big steelmakers have been al be helpful in China. Pluralism is messy but potent stuff. n

012 International The Economist June 19th 2021 57

Poverty Before the pandemic, policymakers worried most about poverty outside cities Rich slum, poor slum (see chart on next page). Rural places often lack basic infrastructure such as roads and internet connections. But with an airborne virus in circulation, the risk of working outside tending livestock or ploughing fields is lower than cleaning houses. And CAÑADA REAL AND KIBERA even when no money is coming in, subsis Economically, covid-19 has hit hard-up city-dwellers hardest tence farming keeps stomachs full. innie muhonja has faced many dif dren struggled with online learning. “I It is hardup folks in cities who have Wficulties in her life. Covid19 is just want to finish my studies, start working been hardest hit by covid19, both econom the latest. Having grown up in Kibera, a and get out of here,” says the 17yearold. ically and in terms of their health. In May huge slum with 300,000 residents in the With so many other problems in their over a third of respondents in Kenyan cit middle of Nairobi, she is used to the pres lives, neither Ms Muhonja nor Ms Akrikez ies told the World Bank that they had ence of disease and the absence of money. has much time to fret about covid19. But skipped at least one meal in the previous Ms Muhonja, who is 25, has lived with her the pandemic means policymakers are week, compared with 27% of those in the sister since she left school eight years ago. concerned about them. Around the world countryside. Among citydwellers 15% said She has two jobs but cannot afford 1,000 over a billion people live in slums, in ricke they were unemployed, almost certainly shillings ($9.30) a month to rent a mud ty homes without property rights or basic representing a bigger shock to urban areas. house for herself and her oneyearold son. services such as running water or reliable By the end of this year the bank predicts the “I just hope one day I'll get a chance to get electricity. Most of the world’s worstoff pandemic will have pushed 150m more out of Kibera,” Ms Muhonja says. slumdwellers are in poor countries but people into extreme poverty, defined as Almost 4,000 miles away in Madrid, shantytowns exist in rich ones too. Those living on less than $1.90 a day. The new another young woman longs to escape her who live in them tend to have informal poor are more likely to be in metropolises neighbourhood. In Cañada Real, a shanty jobs: hawking snacks, for example, or than previously. town of about 8,000, Douaa Akrikez is in cleaning richer people’s houses. In rich Covid19 has forced city authorities to her final year of school and studying hard. countries, this means they miss out on acknowledge slums, both for the sake of Life in Europe’s biggest slum is not nearly government support such as furlough their inhabitants and their neighbours. as grim as it is in Kibera but it is still precar schemes. In poor countries, they get little The disease spreads fast when people live ious. Electricity outages this winter left at support of any kind. In Nairobi, curfews at close quarters. One study of Mumbai be least 4,500 people there without heat for have been imposed to slow the spread of tween June and July last year, before India’s months, at a time when Spain was hit by re covid19. Those who have broken them in second wave hit, found 54% of the city’s cord snowfalls. Without light and unable their efforts to make enough money to sur slumdwellers had covid19 antibodies, to charge laptops or mobile phones, chil vive have been beaten up by the police. compared with 16% of those in formal set

012 58 International The Economist June 19th 2021

tlements. That quickly spills into other neighbourhoods. Students from Cañada To each according to his nationality Real pile into buses to get to schools in and Social-assistance coverage in the poorest population quintile, % Rural around the capital. Kibera is nestled be 2020 or latest available Urban tween posh residential areas of Nairobi, where many slumdwellers work. By income group* By region* Development wonks tend to focus on 806040200 806040200 poor people in poor cities, such as Ms Mu Latin America High income honja, rather than poor people in rich cit & Caribbean East Asia & ies, such as Ms Akrikez. That makes sense. Upper-middle the Pacific income The former are much poorer. Kibera is the Europe & sort of slum depicted in fundraising letters Lower-middle Central Asia income Middle East & from charities: huts made of mud and north Africa sheets of corrugated iron; rubbish heaped Low income on unpaved streets. South Asia Extreme poverty makes it harder to stay World Sub-Saharan healthy. Ms Muhonja shares her oneroom Africa Source: World Bank *Of 10 countries shack with five other people. Social dis tancing is all but impossible. They have no running water. Instead they buy jerry cans told her classmates where she lives. She Real have long known how difficult life of water for drinking and cooking and pay had to build up the courage. Many think there is. They signed a pact four years ago to use communal baths. the residents of Cañada Real are “differ pledging to move families from the worst Residents of Kibera complain less ent”, “delinquents” and “people who don’t off parts and upgrade the rest. But progress about the risks of covid19 to their health work”, she says. That humiliation, says Sa has been sluggish. Ms Akrikez knows of and more about its economic impact. bina Alkire, director of the Poverty and Hu just one family that has been rehoused. When the hair salon where she works cut man Development Initiative at Oxford Uni Reliable utilities and clear property Ms Muhonja’s hours, a friend hired her to versity, can affect the brain in the same way rights are a long way off in shantytowns look after his mobilemoney stall. But the as physical pain. “People feel excluded and everywhere. In places such as Cañada Real, 6,000 shillings a month she earns there is it hurts,” she continues. Ms Akrikez goes to where relative poverty is the problem, not enough. And she is one of the lucky school outside Cañada Real. Her friends there is no quick fix. Some residents have ones. Many of her neighbours are jobless. hang out in the city centre at the weekend. formal ids and receive handouts from the Many residents rent their homes from She has no way of getting there. Her only government. But social exclusion persists. private landlords. These landlords threat outings are organised by Caritas, a Catholic en tenants, removing doors and roofs as charity. “It’s not a normal life,” she says. Shifting up a gear penalty for nonpayment, according to Joe When most Madrileños think of Cañada In some of the world’s poorest countries, Muturi of Slum Dwellers International, a Real they imagine not diligent teenagers where the problem is extreme poverty, the network of community groups. “The threat but drugs. One area, Sector Six, is a hub in pandemic is prompting governments to of eviction is always there,” he says. Europe’s drug trade. At a local church char action. Some governments are extending People in Cañada Real are far better off. ities hand out food, water and clean nee socialprotection programmes, like cash Many do not pay rent. The settlement sits dles. “This is the back door of Madrid transfers, to urban areas. It is not easy. Lo on public land that was once an ancient where people put their trash and don't even cal authorities do not have complete lists droveroad for sheep. The residents in look at it,” says María de las Mercedes Gon of who lives where or details of their earn clude Roma (gypsy) families, poor Span zález Fernández, the central government’s ings. Few slumdwellers have the neces iards and north African migrants, many of top official for Madrid and a member of the sary paperwork. But in recent months the whom worked in the construction indus Socialist Party, who blames the rightwing Democratic Republic of Congo has used try before the global financial crisis of municipal government for failing to help. satellite imagery to identify the poorest 2008. As a result parts of the slum look like The authorities responsible for Cañada neighbourhoods by housing density and any other neighbourhood in Spain’s capi flood risk to help target its emergency tal, with solid roads lined with neat con cashtransfer programme. Togo’s govern crete houses. Only the tangle of wires on ment has signed up a third of its adult pop top of electricity posts gives away that this ulation, 1.6m people, to a new socialassis is an informal shantytown. tance programme using radio, television Ms Akrikez lives with her parents and and social media to spread the word. Now four siblings in a sturdy house with clean it must find more money for them. water and flushing toilets in Cañada Real. Even such minor successes are all too Her father makes a steady living on build rare. Covid19 has turned a spotlight on ing sites. They can afford to buy face slums, but most governments are still fail masks and new clothes. ing their inhabitants. As they did before the pandemic, charities are trying to plug The thief of joy the gap. People in Kibera joke that there is But people in Cañada Real are poor com one for every household in the area. They pared with those around them. Relative have set up handwashing facilities and poverty (ie, how poor people’s incomes education campaigns during the pandem compare with the national median) is ic. But volunteers can only do so much. painful. The stigma is worse. Most people Overcrowded, unregulated settlements Ms Muhonja knows struggle just like her to risk becoming a Petri dish for newvariants get enough food, a roof and clean water. of covid19. So far, even that threat has not Ms Akrikez, by contrast, only recently Babes reduc’d to misery spurred governments to do much. n

012 Business The Economist June 19th 2021 59

SoftBank market for junkrated corporate bonds (SoftBank’s debt is rated below investment The empire of Son grade). SoftBank announced a sale of $41bn of its $252bn in total assets in order to shore up its position. Now Mr Son is once again looking like a genius. Backing tech darlings proved the perfect strategy in the digitally accelerated The Japanese techinvesting group has pulled off a stunning comeback. coronavirus economy. His hunches have But some of its flaws remain paid off. In just over a year SoftBank has very day, from 8am to 10pm, Son Ma In spring 2020 SoftBank’s entire tech gone from survival mode to spewing out Esayoshi sits in his mansion in Tokyo do edifice nearly came tumbling down. As co cash like a giant atm. The listing of Cou ing what entertains him like nothing else: vid19 spread and markets convulsed, Soft pang, a South Korean emerchant, reaped sizing up technology entrepreneurs and Bank’s lenders took fright. Yields on its SoftBank $24bn in profits. Several more handing out money. Working from home bonds surged. Investors wondered how— firms it has backed launched into an ipo has not slowed down the billionaire boss or if—Mr Son’s punts might weather the market that turned redhot last summer. of SoftBank. At the Japanese group’s earn pandemic. His signature approach—big Last month SoftBank reported an annual ings call on May 12th Masa, as he is univer bets based less on spreadsheets than on net profit of $46bn, the highest ever by a sally known, boasted of backing 60 compa “feeling the force” of a deal—looked riskier Japanese company. And more is to come: nies in three months. Between January and than ever. The initial public offering ( ipo) on June 10th Didi Chuxing, a Chinese ride March he doled out $210m a week. of WeWork, an officesharing firm, col hailing firm onefifthowned by SoftBank, In the past four years SoftBank has lapsed in late 2019, before the pandemic. said it would list its shares at a valuation of poured $84bn or so into startups. It was the Between February and March 2020, Soft around $100bn. Despite a recent dip, Soft world’s biggest tech investor even before Bank’s share price plunged by over 50%. Bank is worth a cool $126bn, $60bn more complementing a $98.6bn vehicle it runs, “Masa got close to the flame,” sums up a than at the trough in March 2020. the Vision Fund, with a sibling that now person close to SoftBank. But then the mar As one big SoftBank shareholder puts it, contains $30bn. The 224 tech firms it has kets rebounded. The Federal Reserve was after a spell like this, “they are untouch backed range from earlystage startups to pumping in liquidity by supporting the able.” Forgotten was the fact SoftBank’s established giants like ByteDance, owner bumper profits followed one of the largest of TikTok, a Gen z timesink. Names such losses in Japanese corporate history a year → Also in this section as Plenty, Better and Forward imply mis earlier. Forgotten, too, was a familiar criti sions to transform industries like food, 63 Italy’s lipstick valley cism of recent years: that Masa, who is ulti health and banking. Going by the valua mately responsible for every yen spent by 63 The ownership of India Inc tions used by SoftBank and other venture the group, picks hyped investments. capital (vc) funds, the backed companies 64 Bartleby: The best remote rota Perhaps most forgotten of all is that are collectively worth a colossal $1.1trn, ac SoftBank, having come to epitomise the 65 Schumpeter: Olympic dilemmas cording to PitchBook, a data provider. tech wave, has occasionally acted in what

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some onlookers regard as questionable maining mobile businesses and Arm (with It was such ways that brought SoftBank ways. It has eschewed common gover Arm heading for disposal). SoftBank’s two into the Wirecard fiasco. In early 2019 the nance standards. It has become entangled Vision Funds make up the third portion. German firm’s share price had fallen by in Europe’s two biggest corporate scandals Finally comes Northstar, an internal hedge half from its peak in late 2018 after reports in recent years: over Wirecard, a fraudu fund set up a year ago. At the centre sits Mr of accounting irregularities. On March lent German payments processor, and Son. “It’s one company, the Masa show, 28th 2019 Wirecard, by then a member of Greensill, a British supplychainfinance that’s it,” sums up a former executive. Germany’s bluechip dax 30 index, said it firm now facing bankruptcy. And it has Mr Son has two big ideas for the latest was suing the Financial Times over a series fused ever more closely with its founder. iteration of SoftBank. The first is to com of investigative reports. At that moment Created by Mr Son in 1981 to distribute bine tech investing with financial engi another exDeutsche Bank trader at Soft computer programs, SoftBank first delved neering. In order to juice up returns, he has Bank, Akshay Naheta, chose to back the into internet services in the 1990s before taken traditional vc and piled on leverage controversial company with the full reinventing itself as a telecoms business. It and complex structures. Second, Mr Son weight of his employer’s reputation. bought the Japanese activities of Vodafone, wants to create an overarching tech “eco On April 24th 2019 Wirecard announced a British mobile carrier, in 2006. In 2013 it system” with SoftBank at its heart. Al that a SoftBank “affiliate” would invest bought Sprint, an American mobile pro though SoftBank often owns only slivers of €900m ($1bn) via a convertible bond. Soft vider. Along the way, in 2000, Mr Son paid companies, he wants them to work togeth Bank also struck a cooperation agreement $20m for a chunk of Chinese ecommerce er as if part of one group. The model is with Wirecard that opened the way for the upstart called Alibaba. That genius bet— evocative of, if not identical to, the keiret- payments firm to do business with other Alibaba is now a global giant worth nearly su—Japanese conglomerates such as Mit SoftBank companies, including those in $600bn—earned Mr Son kudos as a tech vi subishi, with tentacles in finance, carmak the Vision Fund. The apparent validation sionary. It also inspired him to transform ing and lots besides, all helping each other. of Wirecard by the world’s largest tech in SoftBank into an investment firm. vestor sparked a 21% rise in the German In 2018 Mr Son spun off some Japanese It’s complicated firm’s share price. It also bolstered Wire telecoms assets and unveiled the Vision Start with the financial gymnastics. At card’s creditworthiness. Fund. Not content with raising a typical SoftBank’s highest levels, close to Mr Son, The Wirecard deal had two unusual as $1bn10bn vc vehicle, with the help of Ra is a group of traders who worked at Deut pects. For a start, it turned out to be ephem jeev Misra, a wellconnected exDeutsche sche Bank at a time when the German lend eral. It later emerged that the €900m bond Bank financier and Mr Son’s key lieuten er was famous for its appetite for risktak was subject to a refinancing exercise al ant, SoftBank raised $45bn from Saudi Ara ing. Chief among them is Mr Misra, who most as soon as it was issued, reaping an bia’s Public Investment Fund (pif) and heads sbia, the part of SoftBank running immediate €64m profit. When Wirecard $15bn from Mubadala, Abu Dhabi’s sover the Vision Fund. “There are people at the went bust in June 2020, after the FT’s re eignwealth fund. The Japanese firm put in Vision Fund whose entire raison d’être is porting proved accurate, it was other inves $28bn of its own cash and assets, including financial engineering,” says a person who tors who lost out. a slice of Arm, a British microchip designer knows SoftBank well. “Complexity is their Another oddity was that SoftBank itself it had bought in 2016. best friend—if they want to get from a to b put no money into Wirecard. The “affili Today SoftBank is best understood as they will go through all the letters of the al ate” fund that did was managed by sbia, having four main parts. The most valuable phabet to get there.” Mr Son appears to the Vision Fund overseer. Its investors in by far is the 24.85% stake in Alibaba, worth prefer their swashbuckling ways to those cluded a small group of individual Soft $144bn. The second part contains its re of oldschool, more conservative vc types. Bank executives aiming to make a personal profit, among them Mr Naheta, Mr Misra and Sago Katsunori, SoftBank’s former Banking on the future strategy chief, and one of Abu Dhabi’s sovereignwealth funds. Wirecard publi cised its agreement with SoftBank to finan SoftBank Group, gross asset value SoftBank March 31st 2021, $bn Vision cial markets, an association that for Soft SoftBank Corp T-Mobile Fund II Bank carried reputational risk given the Total $ 14.2bn 24.9 16.0 11.9 FT’s reporting on Wirecard. In the end the Alibaba SoftBank Arm bulk of the immediate profit on the bond 15 .0 Vision Fund I 56.1 24.6 trade went to the affiliate’s individual in vestors, not to SoftBank or its share Northstar Others 15.0 12.7 holders. Wirecard’s later implosion con firmed the reputational risk that SoftBank SoftBank Vision Funds I and II SoftBank Group had run. A person familiar with the matter Gain/loss on investments, $bn Market capitalisation, $bn also confirmed that the position of the 40 200 sbiamanaged affiliate fund meant it stood 30 to lose potential gains if Wirecard went 150 bankrupt. 20 One person in the know describes Mr Naheta and colleagues as putting a team to 100 10 work to introduce Wirecard to certain Vi 0 sion Fund portfolio companies, in accor 50 dance with a cooperation agreement be -10 tween sbia and Wirecard. These portfolio -20 0 firms included stars of the tech world, whose tacit endorsements could have giv 2018 1 20 21 181614122010 21 en the ailing German company a publicre Sources: Jefferies; Refinitiv Datastream lations fillip—possibly boosting the Soft

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Bank executives’ returns. In the event, Vi terest could be managed. Credit Suisse, for sion Fund firms avoided Wirecard owing one, is unimpressed. It is preparing for liti to the FT’s reporting. gation against SoftBank. A SoftBank Northstar is another example of Mr spokesperson says that “Any potential con Son’s embrace of high finance. SoftBank’s flicts were appropriately managed in ac newest unit looks like the exact opposite of cordance with existing sbia policies.” Mr Son’s selfproclaimed desire to back ex In late 2019 it seemed that SoftBank citing new firms and think in terms of an might take a different, less controversial investment horizon stretching 300 years path. SoftBank’s shares were trading at an into the future. Northstar’s mandate seems estimated 7075% discount to the value of to be to make shortterm bets on public the company stakes it owned, a historic stocks that anyone with access to a broker low on that measure. Elliott Management, age account could buy or sell. One reason an activist hedge fund from New York, for this apparent departure from Mr Son’s spotted an opportunity. Simplifying Soft guiding philosophy was that SoftBank had Bank’s structure, improving governance cash lying around. When the financial and returning money to shareholders were pinch of the early pandemic eased, some all timetested ways to cause the conglom proceeds from the $41bn of asset sales erate discount to narrow. The earlypan could be reinvested. Most companies park demic scare forced Mr Son’s hand. The spare cash in dull securities like govern $41bn of asset sales included most of Soft ment bonds. But that is not the Masa way. Bank’s remaining American telecoms busi Instrumental to Northstar is Mr Naheta, multiple purposes. Its Australian founder, nesses. It is selling Arm to Nvidia, a bigger who runs the unit. The 39yearold was not Lex Greensill, had a wellrehearsed story chipmaker (the deal awaits regulatory ap the obvious pick to head a fund placing about using tech to transform a stultified proval). This streamlined the group some some of the world’s biggest stockmarket industry—Masa’s special formula. Green what. But it accelerated the metamorpho bets. After leaving Deutsche Bank he set up sill could be used for the benefit of Soft sis from a juicedup telecoms utility into a his own stockpicking firm, which seems Bank’s ecosystem. Its flagship product in complex investment holding company. to have focused on midcap stocks. North volved making loans to tide companies ov Elliott’s prodding prompted some stan star, by contrast, has deployed huge sums er after they issued invoices to customers dardissue governance improvements, of money, using SoftBank’s spare cash but before they received payments. Green such as appointing a woman to its allmale magnified by leverage. Last September in sill then repackaged these invoicebacked board and lifting the number of indepen vestors started noticing that one market loans and sold them to investors. Credit dent directors. As of June 2021, four out of player’s techfocused bets were so big (and Suisse, a bank, offered to pitch funds full of nine board directors count as indepen structured in such a complex way) that it those bonds to clients, including family of dents, up from three out of 12 in January singlehandedly caused some companies’ fices and corporate treasurers. 2019. Yet few observers think this resolves share prices to rocket. It was not long be Mr Son called Mr Greensill the “money all potential problems. Since the start of fore Northstar was unmasked as the “Nas guy”. Starting in May 2019 the Vision Fund last year SoftBank has suffered departures daq Whale”. It lost $5.6bn on derivative invested $1.4bn in Greensill, turning its of highly experienced senior executives in transactions in the year to March 2021. founder into a paper billionaire. Early last volved in legal affairs and compliance. A In what appeared to be a letter in re year the investment started proving its val shared concern, according to a person sponse to a freedomofinformation re ue. Some companies in the Vision Fund close to some of them, was SoftBank’s cul quest by PlainSite, an investigative news badly needed money. Firms like Katerra, a ture. The firm is alleged to be permissive of outlet, the Securities and Exchange Com nowbankrupt American construction conflicts of interest. The use of financial mission said in March it was investigating startup, found that building houses could intermediaries was another concern. SoftBank. A SoftBank spokesperson says not easily be made cheaper and faster with The latest person to announce her de the company is “not aware of any sec in software. Oyo, an Indian hotel group, tried parture was Kawamoto Yuko, SoftBank’s vestigation into the company’s securities to expand too quickly. After the WeWork first female director and a respected cor trading and has not been notified of such”. debacle potential lenders steered clear of porategovernance expert. She left after many Vision Fund firms. Greensill could just a year to take a job as a commissioner Techno-ecology help fill the hole. It lent money to Katerra at Japan’s National Personnel Authority, If Wirecard and Northstar exemplify Mr and Oyo—or, rather, Credit Suisse clients having reportedly disagreed with Mr Son Son’s penchant for financial gymnastics, did so indirectly. At times it was not in over internal controls. On May 21st she the story of Greensill’s rise and fall high SoftBank’s interest for some of its portfolio published a description of governance at lights the dangers of its ecosystem. Soft firms to raise fresh equity: a lower valua SoftBank, calling for more internal checks Bank touts this as a competitive advantage. tion might oblige SoftBank to revalue its and more dissenting voices. She com It regularly hosts gettogethers for all the shareholding, generating a loss. Having mented that it would be nice if the “obliga founders whose firms it has backed. At its Greensill on hand to extend loans to strug tion to dissent” or to disagree when neces best the ecosystem can be a way for entre gling firms proved useful in the end. sary was more widespread throughout preneurs to share ideas, bolster sales and This introduced potential conflicts of SoftBank. SoftBank says that “constructive boost prospects. But it can also lead com interest. SoftBank invested in the company debate is the sign of an effective board” and panies in which SoftBank is a minority that made the loan (Greensill) and in those that Ms Kawamoto agreed with governance shareholder to feel the need to favour other it lent to (Katerra, Oyo and others). Soft changes including the appointment of a parts of the ecosystem—even if this is not Bank invested over $500m in Credit Suisse chief risk officer, which she had sugges obviously in the interest of nonSoftBank funds. Greensill’s demise means its erst ted. “She did not leave because of a dis investors or counterparties. SoftBank says while backer can paint itself as one of its fi agreement, but rather because she was ap its portfolio firms “have full autonomy to nancial victims. A former SoftBank execu pointed to a government position,” a Soft decide whether or not to work together”. tive familiar with the matter says the situa Bank spokesperson says. For SoftBank, Greensill could serve tion was complex but that conflicts of in Under the existing governance arrange

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ments, potentially problematic dealings gin. The boundaries are seemingly not al than SoftBank even though their ratios can crop up. In return for facilitating the ways clear. Some of the firm’s activities are after s&p’s adjustments are weaker than SoftBank affiliate’s convertiblebond deal, designed so an outsized share of profits SoftBank’s. A SoftBank spokesman says for instance, Wirecard and sbia paid flows to Mr Son relative to other SoftBank that as it establishes a record of improve multimilliondollar success fees to a Ger shareholders. Take Northstar. When it was ment this will help s&p’s ratio level. The man financier, Christian Angermayer, ac set up, a third of the money invested was company is “continuing our communica cording to the FT. In another example, last Mr Son’s; that brings him a third of the pro tion with [s&p] for upgrading”. summer Marcelo Claure, SoftBank’s chief fits generated by the fund. But Northstar— Borrowing pops up across the company. operating officer, bought 5m shares of t and so Mr Son personally—benefit from The Vision Fund can borrow against com Mobile, a mobile operator, for around belonging to SoftBank, roughly 70% of panies it owns, which are themselves in $500m. The purchase was funded by a loan which is owned by other shareholders. Its debted. Mr Son is known to have pledged from SoftBank. tmobile’s share price has trades are either explicitly or implicitly his own shares in SoftBank to fund activi risen, and Mr Claure will keep the upside. backed by SoftBank’s balancesheet. ties related to the firm. Moody’s, another But had it fallen, SoftBank would have had An obvious potential problem with a creditrating firm, describes the resulting to find a way to get hundreds of millions of ceo having a personal interest in a particu capital structure as fluid, complex and dollars back from its own executive. A Soft lar division of his firm is that such a boss having limited transparency . Analysts Bank spokesperson says “the loan to ac cannot neutrally allocate capital. Diverting gripe that disclosure is patchy at best. quire tMobile shares further aligns the in cash to Northstar, in this case, can lead to Corporate governance, debt, SoftBank’s terests of SoftBank shareholders with its profits surging—and flowing in part to association with Wirecard and Greensill: management. Under the terms of our Mr Son. Northstar’s structure, including none is likely to be troubling Mr Son right merger agreement, SoftBank stockholders Mr Son’s personal stake in it, was approved now. The signs are he feels emboldened will receive over $7bn in tMobile equity if by SoftBank’s board, which discussed the after surviving the corporate version of a the company continues to perform and matter independently of Mr Son. 100year flood. This carries risks, warns a achieves a stock price of $150.” SoftBank shareholder: “Masa and the se According to a person familiar with the Not so loanly nior team have been so successful, there is Vision Fund, in at least one case an execu SoftBank insists its governance and fi a feeling of ‘can everyone just leave us alo tive invested privately in an unlisted firm nances are sound. It has long had a policy ne’…That could be dangerous if they think before SoftBank backed it, resulting in a of keeping enough money on hand to repay there is less need to take notice of cor large valuation increase. Deep Nishar, se all its bonds that mature in the next two porate governance.” Investors were sur nior managing partner at sbia, made a per years. The asset disposals after last year’s prised by the news in May that instead of sonal investment in Petuum, an artificial crisis resulted in a less indebted group. continuing to buy back shares, as they intelligence startup founded in 2016, be SoftBank says it does not want to borrow would like, Mr Son is tripling the size of Vi fore leading the Vision Fund’s $93m bet on more than a quarter of the value of the sion Fund 2, from $10bn to $30bn. Unlike the firm in 2017. SoftBank’s policies let Mr holdings (for example in Alibaba) that are the first Vision Fund, where outside limit Nishar keep the personal investment, often used as collateral for the loans. ed partners sometimes acted as a brake, the which was disclosed to the Vision Fund’s This is only a partial comfort to minor new fund has no external investors. limited partners. SoftBank says that “the ity shareholders and other observers. Soft Masa seems to have been given even investments in Petuum were disclosed, Bank’s professed leverage cap is high by in freer rein to feel the force. On June 10th the complied with the firm’s policies, and are vestment firms’ standards. Standard & new fund led a $639m investment in Klar relatively common practice in growth Poor’s (s&p), a creditrating agency, says it na, a Swedish fintech firm. That and other stage investing.” Other vc firms call such a disagrees with how SoftBank calculates the similarsized bets are much larger than practice rare, and typically require execu ratio of credit to assets. SoftBank says that last year’s investments of under $100m. tives to sell equity stakes in a company at s&p calculates the ratio using its own SoftBank has set up three specialpurpose cost to their firm in such situations. methodology; it has revised its rating out acquisition companies hoping to raise a Another big question governance ex look for SoftBank from negative to stable. combined $1bn or so, and then merge with perts have wrestled with is where SoftBank Some of the investment holding compa startups—possibly including, SoftBank ends and Mr Son’s individual interests be nies rated by s&p receive higher ratings has said, some in the two Vision Funds. That would kick up still more potential conflicts of interest. The bull case for SoftBank is simple. It is an unabashed wager on techfuelled firms continuing their meteoric rise. It can thrive as long as investors are on hand to fund lossmaking companies in the hope of future riches. For now, they are. But the recent ipo boom is petering out. Much of SoftBank’s record profit came with an as terisk: the share prices that helped gener ate it had already started falling back to Earth. Coupang has lost a fifth of its market value since listing. SoftBank and its share holders are aware the party in the markets could come to an end, especially if central banks raise the ultralow interest rates that make borrowing cheap and growth stocks appealing. Masa’s rebound last year was swift—but also lucky. The next stress test for SoftBank may not be far off. n

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virons of Crema, a medieval city an hour’s The ownership of India Inc drive to the east of Milan, in particular at tracted such companies starting in the late Short circuit 1990s, with proximity to the creative fer ment of the Milanese fashion scene as well as the technical expertise of an earlier clus ter of chemicals firms. Intesa San paolo, a bank, reckons that around 350 cosmetics A strange news report rattles Indian startups were created between 2012 and markets—and sheds light on a quirk 2017, mostly in lipstick valley. Today the area is home to more than he adani group underpins swathes of 1,000 companies in the makeup sector, TIndia’s economy. The familycon which generate annual revenues of €12bn trolled conglomerate’s businesses include ($14.5bn). In the few years before the pan airports, energy and natural resources, demic they were benefiting from the bright among other critical infrastructure. Its and brash beauty trends rewarded on so founder, Gautam Adani, is the world’s 14th cial media. Lipstick valley was in expan richest man, worth some $72bn, according sion mode. Ancorotti Cosmetics, a family to Bloomberg. In terms of perceived ability firm which makes onefifth of the world’s to navigate India’s treacherous legal land mascaras, acquired and repurposed a fac scape and impenetrable red tape, he is in tory near Crema once owned by Olivetti, a the same league as a fellow (slightly defunct industrial giant. wealthier) billionaire, Mukesh Ambani. Mr Ferrari is confident that his compa So when the share prices of the Adani Cosmetics ny will recover swiftly from the slump. Group’s six listed entities plunged on June Sales in March were already higher than in 14th, heads spun. That day the Economic Down and up in the same month in prepandemic 2019, he Times, an Indian newspaper, reported that reports. He is particularly bullish on cus the National Securities Depository, which lipstick valley tom from upstart brands. Luca Solca of clears stockmarket trades, had frozen the Bernstein, a broker, says that the combina shares held by three funds based in Mauri tion of social media and digital distribu tius owing to insufficient information MILAN tion has led to greater fragmentation of the about their underlying investors. All three After a pandemic black eye, Italian beauty business. Two decades ago the vast funds were registered at the same address makeup-makers are looking pretty majority of Intercos’s sales went to tradi and appear to have a combined $6bn or so wenty years ago Leonard Lauder, the tional beauty firms such as Estée Lauder or in Adani Group assets. The news that a sub Their to the Estée Lauder beauty empire, L’Oréal. Today only half do; directtocon stantial chunk of the free float in Adani observed that during economic downturns sumer brands account for about a third Group companies could no longer be trad consumers liked to sweeten belttighten (the rest is bought by retailers like Sephora ed triggered wild trading in the portion ing with small indulgences. He called it the for their private labels). ”You can come to that still could be. Share prices of the com “lipstick effect”, after one common pick us and we can make a brand in six months,” panies fell by between 5% and 25%. meup. Disappointingly for Italy’s “lipstick Mr Ferrari boasts. The Adani Group immediately issued a valley”, a part of Lombardy that, according He is also eyeing Asia . Goldman Sachs, statement calling the story “blatantly erro to Cosmetica Italia, an industry group, pro an investment bank, expects sales of cos neous”. It was vindicated after the clearing duces 55% of the world’s eye shadows, metics in China alone to double between house cleared up that the funds were not in mascaras, face powder and lipsticks, con 2019 and 2025, to $145bn. Last year Intercos fact frozen. The affected shares largely re sumers mostly shunned these little luxu took full control of a joint venture with couped their losses. Securities firms ries amid the pandemic recession. Wheth Shinsegae, a South Korean retailer, which rushed to put out reports underscoring er because maquillage is less meaningful allows Intercos to manufacture Shinse that the odd movements in share prices did on grainy Zoom calls or contoured lips in gae’s popular brands—and also tap into k not reflect a change in the group’s pros visible behind facemasks, sales of Italian beauty trends, which have conquered the pects, which appear bright. Mr Adani’s makeupmakers fell by 13% last year. world. It already manufactures products companies have recently won big contracts Luckily for Italy’s beauty firms, shop for Perfect Diary, an Instagrammable Chi pers are desperate to show their faces in nese brand whose parent company, Yatsen public again. “When the masks come off in Holding, listed in New York last year. Power surge June people will go crazy,” predicts Dario Mr Ferrari’s fellow lipstickvalley boss Adani Group companies, market capitalisation Ferrari, who founded and runs Intercos, es are likewise looking east. Investors—in $bn the valley’s biggest firm and the world’s cluding eastern ones—are in turn looking 140 largest contract manufacturer for makeup. gic at them. In December , Singapore’s Power Denizens of lipstick valley also stand to 120 sovereignwealth fund, bought a minority Ports and SEZ benefit from two longerterm trends: the 100 stake in Mr Ferrari’s family holding compa Transmission rise of the imageconscious Asian shopper ny. Giovanni Foresti of Intesa Sanpaolo cal Total Gas 80 and of directtoconsumer makeup brands culates that Italian cosmeticsmakers’ re Enterprises 60 that need contract manufacturers to bring tained earnings are higher than for the av Green Energy their Instagram feeds to life. erage domestic manufacturer and they 40 Lipstick valley is the latest industrial spend much more on research and devel 20 cluster to emerge in northern Italy. Al opment. Before the pandemic Mr Ferrari 0 though France makes more cosmetics, in was planning to list Intercos on Milan’s 2020 202 cluding skincare and body lotions, Italy bourse. No wonder bankers are nagging Source: Refinitiv Datastream has carved out a niche in makeup. The en him to revive the idea. n

012 64 Business The Economist June 19th 2021

to run airports and exploit energy ﬁelds. in the three Mauritian funds had in fact nership—and its uncertain future. To cope The group counts giants like Total, a been suspended because of an order issued with India’s extensive, bewildering and in French oil supermajor, and Qatar’s sover several years ago. It gave no details of the trusive tax regime, foreign investors have eignwealth fund as junior partners in va suspension. That in turn set tongues in In for years invested in the country through rious joint ventures. The combined market dia’s gossipy business world wagging. Mauritius, which has a tax treaty with In value of the Adani Group’s six listed sub Some wondered if this is a sign of a regula dia. That pact has been amended over time. sidiaries has more than quadrupled in the tory crackdown on plutocrats of the sort In February 2020 a new change enabled the past year, to $115bn (see chart on previous now under way in China. Others recalled a Indian authorities, concerned that Indian page), propelling Mr Adani past Chinese report published in April by the Morning citizens were using the island to evade In moguls into second spot on Asia’s rich list, Context, a businessnews site, about the dian taxes, to gain access to Mauritiusreg behind only Mr Ambani. three Mauritian funds’ high exposure to istered funds’ lists of investors. This time That was not the end of the confusion, the Adani Group. the story of a trading freezemay have been however. In a regulatory ﬁling on June 15th The episode also brought renewed at bunk. Another time, for some company or the Adani Group noted that some trading tention to a quirk of Indian corporate ow another, it might not be. n Bartleby Timing is everything

Picking the right pattern for hybrid working ybrid working may be the future heading off to work, while you sit in your cious a choice. Colleagues will smile Hbut that raises the question of how it slippers, sipping a coffee. knowingly and use their fingers as in will actually be organised. Will compa Wednesday: Remote working on this verted commas when you say you are nies let their employees choose which day would appeal to Hercule Poirot, “working from home” on Fridays. Man days they come in to the office, and Agatha Christie’s detective who was fond agers will take to calling you at various which days they are at home? And what of symmetry and order. Two days of work moments in the day to listen out for about working hours? If employees do ing in the office, a day at home, two more telltale signs of the beach or golf course. get a choice, they clearly need a strategy days in the office and then a twoday There is no need to risk experiencing to maximise their visibility and min weekend. It doesn’t fit with The Econo- this managerial suspicion. Slackers have imise the stress. So this columnist has a mist’s schedule (Wednesday is deadline long learned that Fridays tend to be more few tips about which days you should opt day). It is nevertheless a good one to pick. relaxed at the office; colleagues may to work from home. Ignore the “Wednesday’s child is full of disappear for long lunches (or early Monday: Too obvious. You might as woe” propaganda. Companies will prob drinks) and no one will ask too many well say, “I’ve been drinking all weekend ably be happy to allow employees to questions if you are not at your desk after and I’m too hung over to come in.” In the choose this day, as Mondays and Fridays 3pm. So if you genuinely want to bunk 18th and early 19th centuries, when peo will be the most popular options. off work, go in on Fridays and sneak in ple were paid on Saturdays, absenteeism Thursday: Although it breaks up the your leisure time on a different day. And on the first official day of the working working week in a similar way, this seems if you are a diligent employee who wants week was so common it was known as a less satisfactory remote working day to maintain a reputation for hard work, “Saint Monday”, because it felt almost than Tuesday. That is because, having don’t choose Friday for remote working. like a second sabbath. avoided the commute on Thursday, you Of course, many companies may From the working point of view, will have to go through the process all over allow two days of remote working, which Mondays are usually a day when some again on a Friday. There is something to be leads to another ten possible combina sort of team meeting is held and the said for this option, however, as it means tions. To avoid suspicion, don’t pick priorities are set for the rest of the week. you can start thinking about the weekend Monday/Friday or Thursday/Friday as It would seem best to head in to the office on Wednesday night. your remote combination. Tuesday and on that day and postpone the time for Friday: Like Monday, this is too suspi Thursday might be a good selection, as it solitary working until later in the week. means you will be at the office (and thus Showing your enthusiasm to the boss by visible) every other day. turning up on the first day of the week is And then there is the possibility of probably a good idea as well. flexible hours. Early risers may relish the Tuesday: Some people might not like chance to start the day at 8am, finish by the pattern created by spending Tues 4pm and have the rest of the day to them days at home, as it breaks the working selves. But in many companies the boss week into two unequal chunks. Not is up at the crack of dawn, so the early Bartleby, who used to work from home bird may be landed with all the work. that day before the pandemic struck, Start at noon, and finish at 8pm, and you completing the column (taking out the may find there is nobody around to typos, axing the non sequiturs and pol bother you after 6pm, and you can safely ishing the puns). Still, besides breaking have dinner and watch Netflix. The rules up the week, home working on Tuesday are changing and so is the potential to also seems likely to be a day few others exploit them. To flourish in the era of might choose. And then there is nothing remote working, employees will need more satisfying than looking out of the the cunning of Machiavelli and the tacti window and watching everyone else cal brilliance of Napoleon.

012 The Economist June 19th 2021 Business 65

Schumpeter Track and mineﬁeld

Once a bonanza for sponsors, the Olympics are becoming a drag There are few precedents in sport; the collapse of Allen Stanford's annual cricket Super Series in 2009, when he was charged with running a Ponzi scheme, hardly compares (with all due respect to cricket fans). This time a lastminute cancellation, or a spike in covid19 cases a few days in, cannot be ruled out. Parts of Japan re main under a state of emergency. Over half the population oppos es the games going ahead. That puts domestic partners, such as Japan Airlines and ntt, a telecoms firm, in a bind. What was sold to them as a onceina generation opportunity now risks alienating consumers in their home market. They doubled down last year, signing contract ex tensions and adding a combined $200m to the pot. Some, fearing a summer pr disaster, are reportedly offering even bigger sums if the games are moved to October, when more people will have jabs and public disquiet may have abated. The top sponsors, whose contracts may span a few summer and winter games, can shrug off one dud Olympics. Regulars like Coke and Visa are already looking beyond Tokyo. The 2022 winter games will, pandemic permitting, kick off in just over seven months. Yet there, too, corporate back ers face a problem: the choice of host, Beijing, has led to ever loud er calls for a boycott over China’s humanrights record. Such pleas are not new—they rang loud before the Beijing sum rom cuisine to carmaking, the Japanese way is meticulous. Yet mer games of 2008. Firms have mostly shaken them off. They are Fwith just over a month to go, the Tokyo Olympics remain any more willing to withdraw endorsements from misbehaving indi thing but. Thanks to covid19, and Japan’s sluggish vaccinations, it viduals (think Lance Armstrong or Tiger Woods) than to desert is unclear whether the games, originally due to be held last sum tainted hosts and organisers, from China to fifa, football’s cor mer, will let spectators in—if, that is, the event takes place at all. ruptionplagued governing body, because of the vast tv exposure Organisers insist it will. This is nervejangling for those hoping to they offer. That may not be so easy this time. Global outrage over peak at the right moment: the athletes, of course, but also the China’s mistreatment of its Uyghur Muslim minority is mounting, games’ financial muscle, its corporate sponsors. Though no back as is pressure on companies to find “purpose”—which in practice ers have pulled out, some are privately calling for another delay. often means taking a stand on hotbutton issues. Asahi Shimbun, the games’ official media partner, has called the In the runup to Beijing, global brands will thus find them decision by the International Olympic Committee (ioc) to plough selves squeezed between calls to disengage and fear of retaliation on “selfrighteous”. What was supposed to be a golden opportuni from a huge market. Pulling back from one Olympics, let alone ty to burnish brands has turned into a reputational minefield. two, could shut them out for longer, as firms from China and else Olympic commercialism has deep roots. Kodak advertised in where take their place. Undemocratic regimes are happy to splash the official results book of the inaugural modern games in 1896. out for sportstournament hosting rights; Qatar is hosting the Then, in 1984, the Los Angeles Olympics ushered in a new era. It 2022 football World Cup . Local companies are waving money. was the first to be largely bankrolled by big business. Organisers Russia’s Gazprom is a sportsadvertising giant. Chinese firms are bet that brands from McDonald’s to Buick would splash out for ex spending heavily to boost their global image: Hisense, Alipay and clusivity in their product segments. And splash out they did: the Vivo are among the top ten sponsors of the European Champion la games turned a profit. Since then profits have been rare for host ship in football that kicked off last week. Alibaba is unlikely to be cities, which splurge billions on venues and transport links. the sole Chinese firm on the ioc’s top roster for long. For corporate sponsors the financial wins are nebulous . Still, they keep coming back, so must feel it is worth it. They can flaunt Champion prevaricators brands, push new products to a global audience—3.2bn people Back in Tokyo, some sponsors have hired consultants to assess the tuned in to the Rio de Janeiro games in 2016—and be associated possible impact on their brands of sticking with the programme or with a globally admired symbol, the Olympic rings. The Tokyo or withdrawing. Marketing campaigns are “in disarray”, says one ad ganisers touted all this plus, for domestic sponsors, a chance to viser. With no spectators, there will be no promotions at venues or partake in a celebration of Japan’s emergence from decades of eco corporate hospitality. Merchandise sales will be limp; mountains nomic stagnation, just as the 1964 games marked its postwar of Tokyo 2020branded gear will gather dust. As for advertising, “comingout party”, says Andrew Zimbalist, a sports economist. sponsors are unsure what the message should be, or whether to Tokyo raised over $3bn from 47 mostly domestic “partners”— flaunt their ties to the Olympics. Just in case, many are not, instead more than twice the previous Olympic record. It is also getting telling athletes’ stories while emphasising unity, resilience and around $500m from the ioc’s 14 “top” sponsors: global firms like other admirable traits that imply an awareness of the pandemic. CocaCola, Visa and Airbnb that sign multigames tieins. Some sponsors are working on dual campaigns, one more Olym Corporate involvement always carries risks for the firms. picthemed than the other. For Western brands, the ideal competi When people look back at Rio, they are just as likely to recall crime, tion would always take place in a world of happy, healthy democ whiteelephant projects and the Zika virus as sporting glory. But racies. But most aren’t above donning their face masksor holding the disintegration of a megaevent is something else entirely. their noses, if that is what it takes to stay in the race.n

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012 Finance & economics The Economist June 19th 2021 67

The world economy grow by just 2.5%. The divide also shows up in forecast revisions. Thanks to Ameri The jabs and the jab-nots ca’s pace of inoculation (as well as the scale of its stimulus), its projected growth for 2021 was revised upwards from 3.5% to 6.8% since the World Bank last released its forecasts in January. Emerging economies that have vaccinated faster than their peers HONG KONG have also enjoyed large upgrades. Uneven vaccination rates are creating a new economic divide On the other side of the divide, the pic n the 1970s the fortunes of the world casts this month. But it is a “tale of two re ture is far more chequered. In the world’s Ieconomy, in all its unfathomable com coveries”, says the bank’s Ayhan Kose. Rich poorest 29 economies (including 23 coun plexity, seemed to turn on one product: oil. countries, many of which have vaccinated tries in subSaharan Africa), only 0.3% of Exported by a narrow clique of countries, people relatively quickly, are enjoying, in the population has received even one dose this vital input was hostage to ferocious Dickensian terms, a spring of hope and so of vaccine. This group’s growth prospects political forces. Today the world’s econom on. But where vaccination has lagged, es have deteriorated. Their combined gdp is ic prospects similarly depend on another pecially in poor countries, some econo set to grow by 2.9% this year (not 3.4% as allimportant input, vaccines, which are mies seem to be going direct the other way. forecast six months ago). That would be also narrowly produced, delicately politi The divide between the jabs and jab their secondworst performance in the cal—and unevenly distributed. Wide nots is visible even in a simple comparison past two decades. Their worst was last year. spread vaccination is helping America to of vaccination rates and growth forecasts Vaccination helps growth in at least two boom, pushing core inflation to its highest (see chart on next page). Among the big ways. It allows countries to relax lock rate since 1992. But delays in buying, mak economies highlighted by the World Bank, downs or any other restrictions on social ing and deploying shots have left much of the ten with the highest vaccination rates interaction that are still inhibiting the the world vulnerable to new virus out are forecast to grow by 5.5% this year on av economy. And in places like New Zealand breaks and economic setbacks. erage. The ten with the lowest are set to that have already lifted such measures, it On June 16th America’s Federal Reserve reduces the risk of a future outbreak, mak raised its forecast for growth, inflation and ing growth more resilient. Goldman Sachs, interest rates, noting the country’s vaccine → Also in this section a bank, has calculated an “effective lock progress. The median Fed official now ex down index” that combines a tally of policy 68 America’s housing boom pects two rate hikes in 2023. The change of measures with data on mobility drawn tone was enough to increase bond yields 69 Buttonwood: The rising yuan from mobile phones. It shows that social both in America and in economies on the hustle and bustle has returned to many 70 America’s high-yield debt other side of the vaccine divide. countries with high vaccination rates. As The global economy should grow brisk 70 The new bank robbers the pace of inoculation picks up, others ly this year: by 5.6%, according to the will join them. Indeed, the countries most 72 Free exchange: Robots and jobs World Bank, which also updated its fore likely to outperform over the next few

012 68 Finance & economics The Economist June 19th 2021

months, says Goldman Sachs, are those forcing central banks to respond. that are simultaneously making rapid pro Brazil, for example, has raised interest gress in achieving immunity yet still la rates sharply this year. On June 11th Rus bouring under social restrictions. They sia’s central bank also tightened for the have yet to feel the benefit of relaxing re third time since March. Its governor, Elvira strictions, but will soon do so. Nabiullina, cited both vaccination rates In this kind of country timely economic and “extremely loose monetary and fiscal data are still depressed by social curbs that policies in major economies” as reasons will ease given the pace of vaccination. In behind the increase in Russian prices. She other countries, however, such as Taiwan, worries that higher inflation in Russia and new outbreaks of covid19 have yet to show elsewhere may prove more persistent than up fully in mainstream economic indica “perceived at first glance”. tors, which remain strong. The “nowcast” Even temporary inflation could unset model of JPMorgan Chase, which uses tle financial markets, making investors monthly data to predict where the econ doubt the Fed’s commitment to easy mon omy is today shows Taiwan growing at an ey. That could increase the risk premium annual pace of about 9% in the second emerging markets pay on their borrowing. quarter. But the bank thinks that Taiwan’s “We are not necessarily worried about in economy will in fact have shrunk over that flation,” says Mr Kose, whose team fore period. In the euro area, by contrast, casts a rise in global inflation from 2.5% JPMorgan expects vaccinations to have lift last year to 3.9% in 2021. “But we are wor Housing in America ed growth this quarter to over 7% at an an ried about how these inflationary pres nual pace. The bank’s nowcast model, how sures can complicate policymaking” in A prettier picture ever, is predicting growth of less than 3%. emerging markets, especially those with Given the importance of the global vac large amounts of foreigncurrency debt. cine gap, it is worth asking how quickly it is Policymakers in these countries fear a closing. Japan, South Korea, Brazil, Turkey repeat of the “taper tantrum” in 2013, when BEND, OREGON and Mexico will each get at least one shot the Fed’s talk about reducing (or “taper The home-buying boom is not as mad into the arms of half their population by ing”) its asset purchases led to an abrupt as it may appear August, reckons Goldman. South Africa rise in American bond yields and a painful and India will not reach that benchmark selloff in emergingmarket assets. At its favoured pastime for city dwellers on until December. In both of those countries, meeting on June 15th16th, the Fed began Aholiday to quainter towns and villages however, many people have already reco discussing an eventual tapering, but the is to peruse the windows of local property vered from the virus, giving them some timing of such a move remains uncertain. firms and dream of swapping their level of natural immunity. Michael Spen Global inflation this year will remain a cramped twobedroom flat for an entire cer of Deutsche Bank thinks that India, for far cry from the doubledigit rates experi house and garden. Your correspondent is example, could reach a 70% immunity lev enced in the stagflationary 1970s. But just not immune to the appeal: she gazed wist el in less than nine months, counting as the oil crisis back then forced policy fully at a pretty house near the Deschutes everyone who has had either a past infec makers into awkward dilemmas, obliging river in Bend, Oregon, situated among the tion or a first shot of a vaccine. them to raise interest rates in the face of lakes and peaks of the Cascade mountains An uneven recovery is better than none. economic weakness, this year’s vaccine (pictured). She dutifully checked the list But the strength of some countries’ growth shortage could create similar discomfort ing price on Zillow, a realestate platform, could create problems for other parts of the for them. The price of uneven vaccination only to face grim reality: the threebed world. America’s boom, for example, has may be premature austerity and monetary room house was worth $1.25m, a 44% in pushed its own consumer prices up by 5% tightening in some unprotected parts of crease from a year earlier, yielding a price in May, compared with a year earlier, and the world. Countries that jab too late may per square foot higher than Queens and could also add to price pressure elsewhere, have to hike too soon. n most of Washington, dc. It is hard not to feel unease at the spec tacle America’s housing market is making Unlocking potential of itself. House prices have risen 13% on the year, the biggest jump since before the Covid-19 vaccinations and GDP Covid-19 vaccinations and 200709 financial crisis. Inventories of Selected countries lockdown stringency homes for sale have plummeted: there are GDP forecast, 2021 Eective lockdown index† so few on offer in America that there are % increase on a year earlier 100=most stringent currently more agents than there are list 10 Malaysia 60 Stricter lockdown ings. The typical home sells in 17 days, a re India China India ↑ 8 Taiwan → More vaccinations Chile cord low, for 1.7% more than its asking Argentina United States Argentina 40 price, a record high. When Redfin, another 6 South Africa Thailand Turkey Germany Canada property platform, conducted its annual Indonesia Turkey Euro area 4 Brazil Britain survey of around 2,000 homebuyers, 63% Brazil 20 Russia Poland France reported having bid for a home they had 2 Russia United not seen in person. The last boom in house Thailand China States prices was followed by a deep and painful Angola 0 New Zealand Poland 0 recession. Is history likely to repeat itself? 0 20 40 60 0 20 40 60 Consider the mixed news first. The av Covid-19 vaccinations Covid-19 vaccinations % of people with at least one dose* % of people with at least one dose* erage loan to value of a new mortgage in America is a reasonablesounding 83%. On Sources: World Bank; Our World in Data; Goldman Sachs *June 15th 2021 or latest †Seven-day average to June 11th 2021 the reassuring side, this figure has not

012 The Economist June 19th 2021 Finance & economics 69

Buttonwood Chasing the dragon

Why China has learned to relax about its currency n a world in which transparency has of further tariffs on Chinese goods were relaxed its hold on the yuan at a time Ibecome a fetish, it is refreshing to try much reduced. Moreover, monetary con when the ruling Communist Party has to get a read on the People’s Bank of ditions favoured speculative flows out of sought to exert greater control on priv China (pboc). Its various nods and winks dollars and into yuan. In contrast to the atesector businesses and on Chinese life give market analysts something to in Federal Reserve, the pboc did not slash in general. If Chinawatchers know terpret—or overinterpret. On May 31st it interest rates when the pandemic struck. anything, it is that control is prized in announced that it would increase the The sevenday reverserepo rate, one of Beijing. Being in control does not mean proportion of foreigncurrency deposits China’s benchmarks, was trimmed by just that everything has to be nailed down, that commercial banks must keep on 30 basis points to 2.2%, while the Fed though. In the eternal trilemma between reserve at the central bank, from 5% to funds rate was cut to 0.1%. The higher monetary autonomy, openness to capital 7%. After some chinscratching, pboc interest on offer in China’s money markets and currency stability, something has to watchers came to a conclusion: China favoured its currency. give. China has chosen to forgo a stable was sending a signal that the yuan had That is not all. China has been opening currency. That allows it greater traction been rising a bit too quickly. its markets to overseas investors. Non over the domestic money supply and China used to intervene directly—by residents can more easily buy and sell credit growth, which its regulators are buying and selling dollars—to get the stocks and bonds on the mainland’s mar more fretful about. exchange rate it wanted. As recently as kets. China’s government bonds and “A” China’s global ambitions for the yuan 2016 it ran down its foreignexchange shares have qualified for inclusion in also influence its policy choices. It has reserves from $4trn to $3trn to support global benchmarks, such as the msci the world’s secondlargest bond market the yuan. But for the past four years or so equity indices and the Bloomberg Barclays and thirdlargest stockmarket. Yet for its reserves have been stable; there has bond index, which are tracked by huge eigners still own fairly few of its assets. been no largescale intervention to ei pools of capital. A steady flow of foreign Even central banks, which have had ther put a floor under the yuan or to purchases has pushed up the yuan. China access to China’s bond markets for a check its rise. The surprise is not that has not stood in the way. Tellingly on May while, keep only 2% of their reserves in China has thrown a little sand in the 31st the pboc picked a tool that does not yuan. That is barely more than they hold gears of its currency market. It is that it interfere much with portfolio inflows. in the Canadian dollar. Four years ago has become so tolerant of some fairly big Still, there is a paradox. China has there was a vigorous internal debate swings in the yuan’s value. about the merits of freer capital flows, The yuan began its recent ascent a says Eswar Prasad of Cornell University. year ago (see chart), as China’s factories The yuan that got away But for the past two years the consensus reopened and demand for goods surged Chinese yuan per $, inverted scale has shifted in favour of them. If the yuan in the lockeddown rich world. Chinese 6.25 is to be a global currency, it needs first to exporters took a greater share of world be set free. manufacturing, says Mansoor Mohi Even so, no one is confusing the yuan uddin, of Bank of Singapore, which in 6.50 with a freefloating currency. There are turn increased the trade demand for ways—including all that subtle central yuan. Some headwinds became tail bank semaphoring—for China to exert 6.75 winds. The yuan had traded at a discount influence. It is still far from transparent to reflect fears of an escalation in the about where its tolerance bands begin SinoAmerican trade wars. Exporters 7.00 and end. Such ambiguity is wise: give the worried about a further hit to their rev markets a number and they will test it. enues were inclined to hoard dollars—in Perhaps surprisingly China has not stood part as security against their dollar debts. 7.25 in the way of a much stronger yuan. But The prospect of Donald Trump’s electoral 2017 18 19 20 21 its policymakers reserve the right to keep defeat changed the picture. The chances Source: Refinitiv Datastream currency markets guessing.

crept higher even as prices have soared. tween 2004 and 2007 were for people with putedly calling up workplaces to ensure The worrying aspect is that borrowers are “very good” credit scores (above 760). An that employees relocating out of the big, bifurcated. If a homebuyer can put up 20% eighth of borrowers were “subprime”, with highcostofliving cities will be allowed to of the value of a property, they do not have scores below 620. Standards are higher work remotely indefinitely. One bank re to buy private mortgage insurance. As such now. In 2019 60% of mortgages were made ports that its busiest lending businesses around 40% of borrowers make a 20% or to those with scores above 760. This share have been those catering to the well greater downpayment. Most of the rest— climbed further during the covid19 pan heeled: mortgages for second homes and more than half—put down less than 10%. demic as banks, fearing losses, tightened “jumbo” mortgages (those bigger than Given how rapidly prices in some markets lending standards: 73% of mortgages made $550,000). If the roaring housing market of have soared, a houseprice slump could in the first quarter of 2021 went to borrow the mid2000s was the product of reckless leave some of them underwater. ers with very good credit scores. Just 1.4% lending to unreliable borrowers, the boom And yet compared with the past, bor went to subprime borrowers. now is made of different stuff: large loans rowers are in much better financial shape. There is anecdotal evidence of caution made to wealthy borrowers with long cred Just a quarter of mortgages originated be from mortgage bankers, too. They are re it histories in search of greener pastures.n

012 70 Finance & economics The Economist June 19th 2021

Risky debt in America similar deals in the future. To the hilt What happens to loans that do turn The junk heap Debt-to-EBITDA* ratio for the average sour? Lenders are used to the idea that so US high-yield borrower called “firstlien” debt grants them priority 7 over the borrower’s assets should it go ↑ Excess of bankrupt. But Moody’s analysis of defaults debt to income 6 during the pandemic shows that firstlien Low default rates mask the growing lenders are losing nearly twice as much of 5 dangers of the high-yield debt market their capital as they used to: the average re covery rate in 2020 was 55%, compared nvestors in companies issuing high 4 with a longterm average of 77%. yield or “junk” debt have had a relatively This is the result of deteriorating debt I 3 benign pandemic. Usually such highly le structures, another decadelong trend. In veraged borrowers are stung by economic the past, firstlien loans had high recovery hardship. During the global financial crisis 21151005200095901985 rates because a significant portion of the over a decade ago around a seventh of such *Earnings before interest, taxes, remaining debt was subordinated—ie, be Source: Bank of America depreciation and amortisation firms in America defaulted on their debt in hind them in the queue in the event of a de one year. Yet according to Moody’s, a rating fault. But in 2020 over a third of firstlien agency, less than 9% of them went into de less, you give all the flexibility to the bor loans had no junior debt sitting beneath fault in the year to August 2020, and the rower to run the show,” says Mr Friedman. them to absorb losses. If all of a borrower’s rate has continued to drop since. By the Running it some of them are. Serta Sim debt has a first claim over its assets, the end of 2021, a booming recovery should put mons Bedding, a mattress manufacturer, value of that claim is lower, and lenders it back below its longterm average of 4.7% gained notoriety last year for raising lose more protection. It may be too soon for highyield inves $200m by swapping its debts to some lend None of this necessarily means that tors to congratulate themselves, though. ers for new ones with a higher level of se America’s highyield market is heading for The low default rate masks a market that is curity. Without their consent, the nonpar catastrophe. Interest rates remain low, and much riskier than it was before covid19 ticipating creditors were exposed to higher a rapid recovery should restore earnings. struck. Take highyield bonds, the market losses in the event of a default. A lawsuit But a nasty surprise on either front could for which is worth $1.7trn. Issuers have re seeking to unwind the transaction was dis quickly spell trouble. The covid19 default cord levels of debt relative to their earn missed by the courts, paving the way for cycle may yet have a sting in the tail. n ings, increasing their vulnerability to high er interest rates or a disappointing eco nomic recovery. Cashstrapped borrowers Cyber-heists are taking advantage of less restrictive loan contracts to rough up their creditors. And The new bank robbers for the companies that do default, loans that used to be associated with high levels of protection and security are turning out to offer lenders anything but. Start with the sheer amount of debt. Last year $435bnworth of junk bonds were Hacker gangs go after the money—and the data issued. As a result, the average highyield borrower now has debt equivalent to an alk to bankers and some will tell you As one of the first industries to offer on unprecedented sixandahalf times their Tthat when it comes to cybercrime, they line transactions, banks have been fending trailing 12 months’ gross operating profits, are second only to the armed forces in off hackers since the dawn of the internet. or ebitda (see chart). Oleg Melentyev, of terms of the strength of their defences. They spend more on cybersecurity than Bank of America, cautions that the low de And yet trawl the dark web, as Intel 471, an any other sort of firm, and foil many at fault rate may have merely deferred the intelligence firm, did on behalf of The tempted thefts . Nonetheless, since 2016, pain. “Companies are carrying the baggage Economist in May, and it is obvious that at no industry has suffered more from at of capital structures that should have been tempts to breach those walls are common tacks than banks (see chart on next page). restructured, but weren’t,” he says. “We place. One criminal was detected trying to Speaking to Congress in May, Jane Fra will pay the price of elevated defaults at a recruit insiders within America’s three big ser, who runs Citigroup, a Wall Street giant, later point in the cycle.” gest banks, JPMorgan Chase, Bank of Amer called hacks the biggest threat to America’s Meanwhile, borrowers with liquidity ica and Wells Fargo, offering a “sevento financial system. Jamie Dimon of JPMor problems have the upper hand over their eightfigure” weekly payment to authorise gan Chase has said they could become “an lenders. Evan Friedman and Enam Hoque fraudulent wire transfers. Another was act of war”. The result is that banks are un of Moody’s describe how investors’ hunger auctioning the details of 30m accounts at der constant pressure to prepare for the for returns during more than a decade of Bank Mellat in Iran (a country of 83m). worst. “It’s not a matter of ‘if’, it’s a matter low interest rates has loosened loan agree Such activity represents the handiwork of ‘when’,” says the head of cybersecurity ments. Maintenance covenants, or restric of a new breed of bank robber. Forget the at a central bank. The bankers need to tive clauses that allow lenders to seize the holdups of yore. Today’s smartest hackers know the methods and motives of their en reins if the borrower’s financial position are likely to be backed by rogue states, such emies. What have they learned and can deteriorates, are now mostly absent. as North Korea and, to a lesser extent, Iran, they remain a step ahead? Worse, incurrence covenants, which place or tolerated by countries such as Russia As in other industries, attempts to rob limits on borrowers’ ability to issue new and China. They benefit from unprece banks online generally start with “phish debt and pay dividends, have lost force ov dented resources. As well as attempting to ing”, or tricking an employee into down er time. “When you go covenantlite and empty accounts, they also target data for loading a benignlooking software, known make your incurrence covenants tooth insider trading. as a “Trojan”, that creates a backdoor for

012 The Economist June 19th 2021 Finance & economics 71

other viruses to infect the company’s sys and, sometimes, customers, rules change tems. The ruses can be elaborate. In 2019, frequently and vary across jurisdictions, when hackers infiltrated Redbanc, a net meaning disclosure is haphazard. work connecting Chile’s atm system, they Moreover, initial losses can be dwarfed faked a lengthy hiring process, complete by secondorder effects. The average inci with several rounds of video interviews, dent puts 27% of customers at high risk of just to fool one victim into downloading ending their relationships with a targeted and running a Trojan. firm, and reduces companies’ share prices Once the backdoor is installed, the by 57% on average, says John Meyer of hackers have numerous modi operandi. In Cornerstone Advisors, a consultancy. the early to mid2010s a popular tactic was Not everything is going the criminals’ to alter banks’ databases to inflate balances way, though. Forensic firms are doing a on existing accounts in order to drain them good job of attributing attacks to specific with fraudulent online transfers. Another hacking groups, and intelligence agencies was to steal the passwords of employees at linking web handles to real people. Some authorised to access swift, the interbank gangs are neutralised or caught. In Sep messaging system that banks use for inter tember the American army launched a cyb national transfers, in order to make trans er offensive that weakened TrickBot, the fers to the robbers’ own bank accounts. In North Koreabacked Trojan. In January po the world’s biggest cyberheist, in 2016, Click ‘em up lice arrested the thieves running Emotet, thieves transferred funds from an account another botnet allegedly responsible for at the Bangladeshi central bank held at the arrested in 2018). But since America cut least $2.5bn in theft since 2014. Federal Reserve Bank of New York to banks North Korea out of its financial system in For protection, banks hire friendly in the Philippines, Sri Lanka and other 2017, the hermit state has doubled down on “whitehat” hackers to probe their own de parts of Asia. They stole $81m. its relationship with criminal gangs as a fences. The biggest are spending more: in As in other businesses, ransomware at way of “making profit and evading sanc June Bank of America said it would invest tacks are on the rise. But banks are exposed tions”, says Michael D’Ambrosio, a top in $1bn annually to counter threats. A survey in other ways, too. One example is “jack vestigator in America’s secret service. Vari by Deloitte found that financial firms potting”, where malware manipulates ously named Lazarus, Bluenoroff or Bea spent an average 0.48% of their revenue on atms into spitting out lots of cash, accessi gleBoyz, such statesponsored entities cybersecurity last year, up from 0.34% in ble to fake cards, even if no funds exist. have access to vastly more resources and 2019. Applied to the industry’s total rev Thieves then hire packs of money mules, personnel than mere criminals. Their enue in 2020, that would make for $23bn typically from local mafias, to stage multi members often live under cover in Russia worth in spending in America alone. ple withdrawals at once. Using such meth and China, says Mark Arena of Intel 471. But things may get worse because, first ods, in 2018 criminals got away with $13.5m Moreover, statebacked North Korean ly, banks’ networks are becoming costlier from India’s Cosmos Bank through 15,000 outfits have teamed up with Russian to secure. “We recognise that we’re never withdrawals in just two hours. speaking private gangs. One of the latter, going to prevent everything,” says the cyb Sometimes it is data, not money, that which operates an infamous Trojanfor er chief of a top American bank. “So we the robbers are after. The latest trick is to hire called Trickbot, provides access to ma have to have layered defences that assume steal financialmarket data from within ny infected computers. Some cyber experts multiple defences will fail.” The multipli banks in order to facilitate insider trading. were shocked recently when they found cation of internetconnected devices, the A survey by VMware, a cybersecurity firm, that it had been used in conjunction with digitalisation of banking, and remote of126 financial firms worldwide found that North Korean malware in recent attacks. working are offering new points of entry 51% saw a rise in such attacks last year. The costs of all this are unclear. Advi for attackers. Portfolio managers in America and Britain sen, a consultancy, reckons that banks Secondly, the criminals have more re that were recently breached saw suspi have lost about $12bn to cybercrime since sources at their disposal. Security experts cious activity whenever they were about to 2000, around threequarters of which has say banks mainly focus on expelling in trade, says Tom Kellermann, the firm’s come from data breaches. Studies suggest truders before they have time to loot. Yet, strategy boss. every hour of business interruption costs a says one, soon hackers are likely to use ar The multiplicity of methods is com bank $300,000 on average; a typical data tificial intelligence to shorten an attack pounded by the malevolence of those in breach causes losses of $6m. from start to finish—the “kill chain” in the volved. Originally heists were mostly con But banks usually forbid staff from dis jargon. Cybergangs are also growing rich ducted by private thieves from former So cussing such attacks, and the reported er. Maze, one of them, announced its “re viet states. They included Carbanak, a no numbers dramatically understate the pro tirement” in November after pocketing ov torious syndicate that stole over $1bn from blem. Though many institutions are ob er $100m in ransoms in a year. 100 banks after 2013 (its masterminds were liged to report serious hacks to regulators Such hackers can count on thriving se condary markets to monetise their loot. On ToRReZ, an eBay lookalike that The Econo- Because that’s where the money is mist recently visited, creditcard details go United States, industries targeted in cyber-attacks, % for $25 a pop—or four for the price of three. 2016-20 Software & For $4.99, a tutorial offers help in building technology phishing websites copying that of Bar 0 20 40 60 services 80 Utilities 100 clays, a British bank. Purchases are paid in Public Health Education Other cryptocurrencies that can be cashed out in Financial institutions administration care & research industries bank accounts opened with fake ids (a driving licence from Tennessee costs $150, Manufacturing Business Retail for instance). The new bank robbers are as Source: Guidewire, S&P Global Ratings services trade criminally entrepreneurial as ever. n

012 72 Finance & economics The Economist June 19th 2021

Free exchange Stay of execution

Many people are convinced that the pandemic is accelerating automation. Don’t be so sure s economies reopen, labour shortages are still worsening. In technological change from lockdowns. It is true that America’s AAmerica the number of unfilled vacancies, at 9.3m, has never gdp is nearly at its prepandemic level even as the level of employ been so high. Job postings in Canada are 20% above prepandemic ment is 7m lower. This, some say, shows that the economy can get levels. Even in Europe, slower out of the postlockdown gates, a by with many fewer people. But it could just mean that productiv growing number of employers complain of how hard it is to find ity per worker has risen, perhaps because of poorly understood staff. Debates over labour shortages have focused on welfare poli things like remote working. Many of those on the sidelines will get cy and economic disruption. But the phenomenon has a deeper jobs as fear of the virus fades and they find something which suits lesson. It tells us something about the myths of automation. them, in turn raising output above prepandemic levels. Economists have confidently asserted that a wave of jobkilling It is not only labour shortages which undermine the story of a robots was sweeping the labour market. The imf says the pandem growing wave of jobkilling robots. In America the wages of the ic is “hastening a shift in employment away from sectors more worstpaid workers, who are thought to be especially vulnerable vulnerable to automation”. In a recent cowritten article Joseph to automation, are rising more quickly than the average, in con Stiglitz, a Nobel prizewinner, says the extra costs of covid19 are trast to the aftermath of the financial crisis. Borrowing a method “accelerating the development and adoption of new technologies ology from the Federal Reserve Bank of St Louis, The Economist has to automate human work.” In congressional testimony last year divided America’s labour market into “routine” and “nonroutine” Daron Acemoglu of the Massachusetts Institute of Technology roles. Routine jobs involve patterns which are easier for robots to suggested that more firms were “substituting machines for work learn: say, data entry or checking out goods in a supermarket. For ers”. But can pandemicinduced automation really be creating an four decades routine jobs have slowly declined as a share of the to army of surplus workers if employers are complaining of a deficit? tal, as robots have improved (see chart). The economists had good reason to believe that jobkilling automation would surge. Recessions often lead firms to adopt Sticking with the routine more robots, in part because labour gets more expensive as rev So far, however, the covidinduced downturn is bucking the trend. enues but not wages decline. In a pandemic bosses have an extra Had the prepandemic rate continued, we estimate that in May incentive to automate jobs, as research by the imf has shown. Ro 2021 routine jobs would have accounted for 40.9% of overall em bots do not need to socially distance. Nor do they get sick. Thanks ployment. In fact they now account for 41.4%, meaning that Amer largely to government stimulus programmes, firms have also ac ica now has in the order of 1m “extra” routine jobs than expected. cumulated spare cash, which they may now be able to deploy on Perhaps the uncertainty over variants is deferring some invest robotics or on artificialintelligence software. ment in robotics. The mere act of installing new machinery is also Those who believe that automation is speeding up can point to more difficult in a world of travel bans and quarantine. American many examples. In Ohio Lee’s Famous Recipe Chicken, a restau imports of industrial robots fell by 3% in 2020. rant chain, has installed automated voice systems to take drive Australia may be a better place to look for signs of a jobkilling through orders. Pittsburgh’s international airport recently be wave. After some strict lockdowns the country has been under came America’s first to use ultraviolet robots for cleaning. British fairly loose domestic restrictions for over a year, giving a glimpse farmers boast of using ever more machines to pick strawberries of what may lie in store elsewhere. Adapting the results of a gov and kill weeds. The number of news stories mentioning both ernment study in 2015, we gave 335 occupations (from “hotel and “pandemic” and “automation” is growing at an annual rate of 25%. motel managers” to “complementary health therapists”) a score The automation debate is heavy on speculation and anecdote. from zero to 100, reflecting how automatable they seem. It is light on evidence. The citation from one prominent wonk to Automatable jobs were in relative decline before the pandem justify the claim that automation was “already” happening includ ic, falling to 57% of the workforce by 2019. The trend has contin ed a New York Times article and a theoretical microeconomics pa ued, with evidence of a covid19 acceleration: 55% of Australians per. According to some research, last year automatable jobs van are now employed in vulnerable occupations. (We found similar ished in large numbers; but it is hard to disentangle the effect of trends in New Zealand.) Yet Australia’s unemployment rate is nearly as low as before the pandemic. Howls from employers about labour shortages are even louder than in America. Automa March of the machines tion is not, it seems, putting people on the economic scrapheap. United States, routine jobs as % of total employment The pessimists could eventually be proved right. But even if they are not, predictions of a world without work will continue. January 1983-May 2021 January 201-May 2021 This is because the enduring fear of the march of the machines is not really the result of a dispassionate analysis of the evidence. It 60 44 Recession Recession could hardly be so, when centuries of technological improvement 43 have never led to widespread structural unemployment. Coun 40 tries with more robots tend to have less joblessness, not more. 42 Worries about technological unemployment are instead the Detailed plot expression of something else. They reflect a deepseated fascina 41 20 tion with and fear of technology. And they reflect many econo 40 mists’ concern to get policymakers to pay more attention to the 0 job prospects of people with the least marketable skills, who are 21102000901983 2120191817162015 always most vulnerable to economic shifts and shocks. These are perfectly understandable motivations. But next time you hear a Sources: Federal Reserve Bank of St Louis; Bureau of Labour Statistics; The Economist warning about jobkilling robots, think twice. n

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012 74 Science & technology The Economist June 19th 2021

→ Also in this section 75 Betelgeuse’s great dimming 76 Coelacanths live as long as people do 76 A new covid drug 77 Urban microbiology

Uncrewed aerial vehicles Once flying, it scans the customer’s fields with a variety of sensors, gathering data on Drones off the leash crops and growing conditions. When done, it returns to its box, the lid closes, the data are processed and passed to the farm er, and the drone is recharged. To avoid aerial collisions, the Scout sys tem employs groundbased acoustic sen sors which can hear the engines and pro Business is booming as drone laws are relaxed pellers of approaching planes from a dis lthough drones, or uncrewed aerial tions. For instance, regulators have usually tance of several kilometres. This allows the Avehicles (uavs) as they are also known, insisted on ground observers being used to position of an incoming flight to be plotted were originally developed for military tar follow flights beyond an operator’s visual and, if necessary, the drone is instructed to get practice and surveillance, the civilian lineofsight, or bvlos as it is known. This keep clear. The company also plans to sur versions that have emerged over the past means extra staff have to be hired and vey buildings and other infrastructure. Up decade have created a thriving new indus trained, which pushes up costs. to this point, says Reese Mozer, its chief ex try. Commercial uavs, especially the ho However, as companies build up their ecutive, the industry has been “scratching vering type, are used for jobs ranging from flying experience, things are starting to the surface of autonomous drone use”. inspecting power lines, buildings and change. In January, for example, a firm Something similar is happening in Brit crops, to aerial photography, transporting called American Robotics became the first ain. In April the Civil Aviation Authority medical supplies and even delivering piz operator approved by America’s Federal (caa) authorised a firm called sees.ai to zas. The value of this market reached Aviation Administration ( faa) to fly auto carryout routine bvlos flights, albeit at $22.5bn last year, according to Drone In mated uavs at specific sites without any pi specified locations. These include a large dustry Insights, a German research firm lots or observers being present. Staff at the construction site in Surrey, to the south with its eye on the business. By 2025 that company’s base near Boston oversee these west of London. “It is a big step forward figure is expected to exceed $42bn. flights, even though the drones operate as and allows us to fly as often as we like with Something helping to accelerate this far away as Nevada and Kansas. out prior authorisation,” says John McKen growth is a gradual relaxation of the stric na, the firm’s chief executive. For the time tures that aviation authorities, being natu To infinity and beyond being, an observer is required on site, but rally cautious about all these newfangled At the moment, American Robotics’ flights that person need no longer be in constant flying machines taking to the sky, have im take place in rural areas. Their purpose is to contact with the flightmonitoring team at posed on the industry. In most countries, survey farmland. The company’s quadcop the company’s base near Chichester, on the drones may not be flown near people or ov ter Scout drones wait, charged up and rea south coast. The firm hopes that this re er builtup areas, and must be kept within dy to fly, in boxes located on customers’ quirement will soon be lifted. view of their operator. Exemptions may be farms. At the beginning of a mission the As its name suggests, sees.ai relies on sought for specific flights, but this can be a box lid slides open and the drone, sitting artificial intelligence to operate its uavs. longwinded process, hedged with restric on its landing pad, is raised for takeoff. To navigate, the craft employ several cam

012 The Economist June 19th 2021 Science & technology 75

eras and also other systems, including gps, miniature transponders on its drones. and avoid one another. “The levels of safety radar and lidar (which uses light instead of Over in Iceland’s capital, Reykjavik, one are not going to change between piloted reflected radio waves) to build up threedi of the longestestablished dronedelivery aviation and remotely piloted aviation,” mensional images of their surroundings. businesses is also still going strong. This is says David Tait, head of innovation at the The drones’ software is trained to recog a partnership between aha, a local compa caa. Mr Tait is open to alternatives about nise structures and obstacles, including ny, and Flytrex, an Israeli droneservice how drones might do that, but thinks it other aircraft, and to take evasive action if firm. Together, they have been delivering will involve a mixture of technologies, in needed. This also lets the craft fly inside groceries and meals by uav since 2017. Fly cluding some that firms like sees.ai and tunnels and under oil rigs, where gps and trex is now trying to get something similar Wing are developing. radiocontrol signals are easily lost. off the ground in America, with a delivery One difficulty is that light aircraft flying Although the covid19 epidemic has de service from a local Walmart to homes in in uncontrolled airspaces sometimes oper layed some projects, it has spurred others Fayetteville, North Carolina. On May 25th it ate under socalled Visual Flight Rules. along—especially the delivery of medical was given permission by the faa to fly These absolve pilots of the obligation to supplies. Antwork Technology, which in above people. For now, its remote pilots carry transponders and other instrumen 2019 received the first licence granted by still have to keep their craft in view, but tation as long as the journey is being made China’s Civil Aviation Administration for ground observers are no longer required. in conditions of clear visibility and they urban uav trials, moved quickly from “This is a large step forward and allows us keep their eyes peeled. dropping off orders from Starbucks and to significantly expand the number of Iris Automation, in California, thinks it kfc around its home town of Hangzhou to front and backyards we can service,” says has a solution to this problem, which is to ferrying blood supplies and samples. Yariv Bash, Flytrex’s boss. The firm’s give uavs the equivalent of a sharp pair of Antwork placed automated drone drones navigate using gps receivers and eyes. These come in the form of five small “ports” that resemble small shipping con other sensors—but not cameras, because cameras that create a 360° view around a tainers in the car parks of some of the re of fears that Americans might consider drone. This panoptic image is scanned gion’s hospitals and laboratories. Medical them to be intrusive. constantly by ai software which has been staff post samples and supplies through trained to recognise different types of air doors in the sides of these ports. They are Heaven sent craft from several kilometres away. The then loaded automatically into a drone sit Four days earlier than Flytrex, on May 21st, system can calculate an incoming aircraft’s ting on top of the container. At the end of Manna, an Irish dronedelivery company, range and heading, and automatically ad its journey, a drone lands on another port obtained a new type of European Union just the drone’s flight path if a collision and deposits its cargo, which can then be operating certificate. Within certain lim looks likely. picked up from the door. its, it allows the firm to authorise uav oper Costing from $9,000, this is a reason Antwork’s drones, which navigate us ations on its own recognisance. Manna has ably inexpensive piece of kit in aviation ing gps and cameras, are governed by a been delivering food and groceries in sub terms. It is already fitted to some drones, computerised scheduling and monitoring urban Galway for the past year, carrying but John Damush, Iris’s boss and himself a system. Two people at a flightcontrol cen out more than 35,000 flights, and now pilot, is also testing it on a twoseater Piper tre keep an eye on up to eight drones si aims to set up operations in other cities. Cub. He thinks dronetech like this could multaneously, though for the time being For such progress to continue, opera help crewed flight too, because, unlike the company also uses some ground ob tors will have to prove their uavs have as Iris’s drones, pilots don’t have eyes in the servers. Antwork says its drones have cut good an ability as crewed aircraft to detect backs of their heads. n to a few minutes the time taken to make hospital deliveries that once took half an hour or more by road. Several big outfits in the West are also keen on the dronedelivery business. Ama zon, ups and Alphabet, Google’s parent, all have projects in development. Often these are based in remote areas, where there is little manned aviation to worry about bumping into. ups Flight Forward, for in stance, works with local groups delivering medical supplies in Rwanda and Ghana. Some Nordic countries, where the skies are also relatively clear, have been espe cially dronefriendly. Alphabet’s dronede livery subsidiary, Wing, has begun its third Why Betelgeuse dimmed year of flights in Helsinki, dropping off groceries and food to homes and some These images show Betelgeuse, a star that marks one of Orion’s shoulders, as it was in public sites, such as picnic areas. Wing’s January and December of 2019 and January and March of 2020. They were assembled drones employ a hook on a cable to pick up from data collected in those months by the Very Large Telescope, an array of four goods from merchants and deliver them to instruments in northern Chile. Between November 2019 and March 2020 there was customers. The drones fly at an altitude of excitement among astronomers when a rapid dimming of this, the second-closest red 3040 metres, which is well below that at supergiant to Earth, suggested that a supernova might be about to happen. Regret- which crewed aircraft typically operate. tably for those who enjoy watching notable astronomical phenomena, it did not, But just in case, the team overseeing the though one is expected within the next 100,000 years or so. Studying these images, as operation is plugged into a groundbased they write in Nature, Miguel Montargès of the Paris Observatory and his colleagues radio that monitors transponders broad suggest the most likely cause of the diminution was a local cooling of part of the star’s casting the positions of any aircraft in the southern hemisphere, associated with an ejection of mass. The much bigger ejection of area. Wing is also investigating the use of mass that is a supernova will have to wait.

012 76 Science & technology The Economist June 19th 2021

Covid drugs Antibody of evidence

A new weapon in the war against sars-cov-2 o matter how successful the vaccina Ntion programme against covid19 turns out to be, the disease is here to stay. Better treatments for those taken seriously ill with it are therefore needed. And one has now been proved to work. A study in Brit ish hospitals, carried out as part of a large, continuing effort called the Recovery trial, found that RegenCov, made by Regene Coelacanths ron, a firm in New York state, saved the lives of many of those unable to make their Curiouser and curiouser own antibodies in response to sarscov2. Such “seronegative” individuals constitut ed a third of the 9,785 patients in the study. As compared with a control group given standard treatment (dexamethasone, an antiinflammatory steroid itself identified as lifesaving during an earlier phase of the Coelacanths are even weirder than previously thought Recovery trial, and, for the sickest, an anti n december 23rd 1938 Marjorie Cour In particular, Dr Mahé wanted to know inflammatory antibody known as tocilizu OtenayLatimer, a curator at the East how long Latimeria lives. Previous work, mab), 20% more patients survived. Regen London Museum, in South Africa, dropped which looked at annual growth rings in its Cov also reduced the median length of hos by her local fish market. While there, she scales, suggested a maximum of 20 years. pital stays from 17 to 13 days. spotted the most beautiful fish she had ev That does not square with the animal’s RegenCov is a combination of two er seen. It was pale mauve, nearly two me slow metabolism and low fecundity, both sorts of antibodies, casirivimab and imde tres long, and had silvery markings. traits characteristic of longlived species. vimab. Antibodies are immunesystem Though she had no inkling at the time, it Rather than using standard micro proteins that disable pathogens by locking turned out to be part of a group called the scopes, he and his colleagues employed specifically onto them, and these drugs are coelacanths, hitherto believed to have died polarised light to study the scales. This re laboratorycreated versions of them. Both out with the dinosaurs. vealed extra growth rings so thin that pre casirivimab and imdevimab bind to differ This find, called Latimeria chalumnae in vious work had missed them. Of 27 indi ent sites on the coronavirus’s “spike” pro CourtenayLatimer’s honour, showed coel viduals studied, six turned out to be in tein, preventing the virus from infecting acanths are still very much alive. It was their 60s and one was 84. cells. Using two antibodies instead of one hailed as the most important zoological This was a finding Dr Mahé and his col reduces the risk of the virus evolving resis discovery of the century. Now, work just leagues had more than half expected. What tance to the treatment. published in Current Biology by Kélig Mahé truly surprised them was a discovery made Until now, trials have not made a con of the Fisheries Laboratory, in Boulogne, by looking at two unborn youngsters—for vincing case for the widespread use in hos France, suggests that besides having lasted Latimeria females bear live young rather pitals of antibody therapies for covid19. collectively for more than 400m years, than laying eggs. The fetuses’ scales sug RegenCov has emergency authorisation coelacanths also hang around for a long gested they were five years old, a remark for use in America (where Donald Trump time as individuals. Dr Mahé’s study indi ably long gestation period given the previ was a beneficiary when he contracted the cates they have similar lifespans to human ous vertebrate record of threeandahalf illness), Brazil, Canada, the European Un beings, putting them among the world’s years, held by the deepsea frilled shark. ion and India, but remains an investiga longestlived vertebrates. Though interesting, in some ways Dr tional drug in Britain and elsewhere. One The excitement at Latimeria’s discovery Mahé’s discovery is bad news. An already problem has been a failure to identify a was not just because of the curiosity of its rare, slowgrowing animal with a gestation clear group of patients who can benefit. survival. It was also that coelacanths be period of half a decade has just about the This study is the first which has been large long to a group which have lobeshaped most extinctionprone profile it is possible enough to demonstrate conclusively that a fins of a sort thought to have been precur to imagine. Latimeria is legally protected, combination of casirivimab and imdevi sors to the limbs of terrestrial tetrapods. in as much as such protection pertains at mab reduces mortality in patients admit Many experts have therefore sought to stu sea, and is not a particular target for fisher ted to hospital with severe covid19. dy Latimeria more closely. That is, how folk. But it is already classified as critically Soumya Swaminathan, the World ever, hard. Latimeria is reclusive, noctur endangered by the International Union for Health Organisation’s chief scientist, said nal, lives in depths below 100 metres, and Conservation of Nature. It would be both the result was good news, but warned that is known only from the southwestern In ironic and tragic if, having survived the as access to monoclonalantibody drugs was dian Ocean and from a second, smaller teroid impact 66m years ago that did for “limited globally”. A recent report by the population, L. menadoensis, near Manado the dinosaurs, coelacanths were to disap Wellcome Trust, a British medical charity, Tua, an island in Indonesia. pear for good on humanity’s watch. n and iavi, the International aids Vaccine

012 The Economist June 19th 2021 Science & technology 77

Initiative, showed just how unavailable debate about whether it is worthwhile giv know there aren’t any pathogens because these drugs are in various parts of the ing antiviral therapies to covid19 patients people don’t get ridiculously sick,” says Da world. More than threequarters of the when they arrive in hospital. It is. It had vid Danko, another of the paper’s authors. market for them is in America, Canada and been thought that, by the time somebody The identities of this dark micro Europe. So far, two countries, America and was sick enough to be admitted, only anti biome’s members are just one of the mys Germany, have ordered large supplies of inflammatory drugs, which treat damage teries that remain to be solved. Another is RegenCov. In January America agreed to already done by the virus, were relevant. what regulates a city’s microbial ecology. purchase up to 1.25m doses for $2.6bn. In Now it is clear that this is not the case. Strikingly, the pattern observed reflects the the same month, Germany spent $487m on The result raises, too, an intriguing pos more familiar ecology of plants and ani 200,000 doses. Such prices, which are be sibility. If doctors have patients languish mals in that equatorial cities have richer yond the purses of poorer countries, are ing at home with covid19, it might be ecosystems than those nearer the poles partly a consequence of the inherent ex worth offering those patients cheap lateral (microbial diversity declines at a rate of pense of making antibodies and partly be flow tests to identify who among them are seven species per degree of latitude). No cause the world has few facilities for doing not mounting an immune response and one knows for sure why this pattern per so. That may now change, but building might thus benefit from antibody therapy. tains for macroscopic creatures. That it is such facilities takes time. That would permit earlier treatment, sav also true for microbes may add insight. This latest result also settles a scientific ing lives and hospital beds alike. n On top of latitudinal variation, three other patterns stood out. Coastal cities share characteristics that inland ones lack. Microecology So do those at high altitude, compared with those which are lowlying. And so do cities A midsummer bug hunt with higher humanpopulation densities. At the moment, Metasub is still in the position of the early botanists and zoolo gists, gathering information about what, exactly, is out there. As the underlying pat terns become clearer, though, such sur Every June 21st sees a census of the world’s urban microbes veys could have practical benefits. They should, for example, enable publichealth epending on where you live, June over 70% of samples. The vast majority of bodies to monitor and map the spread of D21st is either the summer or the winter the 4,246 identifiable species were, how diseases, and identify harmful new spe solstice. For some, this is a moment of cele ever, much more narrowly distributed. cies. They could also permit the monitor bration, accompanied by strange rituals. On top of these identifiable organisms ing of bacteria carrying genes that confer And among the celebrants are members of are the unknowns. Around half of the crit resistance to antibiotics. Metasub has the International Metagenomics and Meta ters sequenced had no match in the world’s found such genes to be widespread, but design of Subways and Urban Biomes Con public genetic databanks, says Daniela unevenly distributed. They were less com sortium (Meta sub). If, in Bogotá, Doha, Bezdan, a former executive director of Me mon in Oceania and the Middle East. Why, Kuala Lumpur, London, Minneapolis or tasub who was one of the study’s leaders. is so far impossible to say. any other of some 60 cities around the She estimates that more than 1,000 of the The current paper looks only at dna world, you see on that day someone fur bacteria collected, and 10,000 of the virus from the samples, but Metasub has now tively swabbing a ticket counter, handrail, es, remain unidentified. started surveying rna as well. This is par turnstile or seat in your local under ticularly pertinent to viruses, many of groundrailway station, be not afraid. It is Ill met by moonlight... which, such as the coronavirus currently just one of Metasub’s volunteers gathering Unidentified organisms are common in sweeping the world, store their genes as samples of the local microbes. such microbiological fishing expeditions, rna, not dna. As the team gears up for its Metasub’s purpose is to understand the for a proper understanding of microbial next collection day, it hopes the data it invisible complexes of bacteria, archaea, biodiversity remains a long way off. But, gathers will grant a more accurate portrait fungi and viruses that are life’s smallest though intriguing, such hidden neigh of the role of viruses in cities, and provide representatives. Every year, on June 21st, it bours are unlikely to be dangerous. “We insights into the spread of covid19. n coordinates an army of smallgame hunt ers who have the task of sampling their city’s public transport. The swabs are then Popular cultures tagged with time of collection, local tem Prevalence of microbe species Less prevalent More prevalent perature and humidity, and the nature of in selected cities Not detected the sampled surface, and sent off for genet ic sequencing and statistical analysis. City Janeiro Lumpur Kong York

The consortium’s latest findings, pub Francisco de lished recently in Cell, are based on 4,728 Bogotá Rio Bradford Bury Paris Zurich Taipei Yamaguchi Tokyo Sydney Auckland San Minneapolis New London Lisbon Sofia Kyiv Doha Kuala Singapore Hong Denver samples collected in 2015, 2016 and 2017. Corynebacterium callunae These show that each city has a microbial Streptococcus oralis ecosystem distinctive enough (see chart) Nocardioides dokdonensis to serve as a fingerprint. An algorithm Streptococcus mitis trained on the data could identify the ori Lactobacillus fermentum gin of a randomly chosen sample 88% of Human mastadenovirus C the time. A few species are ubiquitous. Bacillus subtilis Thirtyone (all bacteria) were found on al Listeria monocytogenes most every swab, and a further 1,145 (also, Source: “A global metagenomic map of urban microbiomes and antimicrobial resistance”, Cell 202 bar brewers’ yeast, bacteria) turned up in

012 78 Books & arts The Economist June 19th 2021

→ Also in this section 79 A woman’s vengeance 80 Carlos Ghosn and Nissan 80 A South African library burns 81 Johnson: The translator’s burden

America’s pandemic most affected countries, only Italy and Britain had then lost a higher proportion of On both its houses their populations, at least by the official counts (more recent modelling suggests death rates have been a lot higher in nu merous other places). “The Plague Year” is Mr Wright’s account of how this happened. He identifies three main reasons. First, China’s evasiveness and opacity mitigated A veteran journalist sets out to explain the calamity of covid-19 in America America’s technological prowess. Had the n april 2020 Lawrence Wright pub cdc got the early access to the outbreak in Ilished a novel, “The End of October”, The Plague Year. By Lawrence Wright. Wuhan that it had requested, it would have about a global pandemic and the political Knopf; 336 pages; $28. Allen Lane; £20 pinpointed a crucial difference between meltdown and mass fatalities it causes in the viruses that cause sars and covid19 : America. Health officials struggle to en escaped from a laboratory. According to a the new one could be spread asymptomati force lockdown rules in the face of conspir study published in 2019 by the Economist cally, which made it far more dangerous. acy theorists, feuding rivals, outraged lib Intelligence Unit and others, no country As it was, the cdc did not understand that ertarians and a useless president who, was ready for it. until late February 2020, by which time the washing his hands of the calamity, foists it Still, the study’s authors considered virus was already raging in America. onto his deputy, a former governor and ra America at least better placed than the rest. Not that the cdc fully grasped its preva dioshow host. Then Mr Wright set about Its publichealth institutions, especially lence even then, having failed to develop writing the true story of America and co the Centres for Disease Control and Pre an effective covid19 test. This was the sec vid19. It is not that different. vention (cdc), were the world’s best. And ond reason for America’s plight. Weeks A veteran journalist at the New Yorker, under Barack Obama, who worried a lot after many rich countries had launched who wrote a bestselling account of the ori about pandemics, the federal government mass testing, the cdc was still investigat gins of the 9/11 catastrophe, Mr Wright had taken extra defensive steps. During the ing why its test kit didn’t work. Many of the makes no great claim for his prescience. transition to the Trump administration, kits, it turned out, had been contaminated Plagues, after all, have been common Mr Obama’s team handed over a long guide with the coronavirus at the “filthy” cdc throughout history. And a twoyear pan to combating a “pathogen of pandemic laboratory where they were made. By the demic of the deadly sars disease, which potential”. It included a breakdown of rele time South Korea had tested 65,000 peo emerged in China in late 2002 and spread vant capabilities across the federal agen ple, America had managed to test only 500. to several other countries, had raised the cies, and the order in which they should be Having thereby lost control of the virus, threat warning. It was only a matter of time brought to bear. So why, when Mr Wright America also failed to implement adequate before an even deadlier virus, taking ad submitted his manuscript in late 2020, had social distancing and, in particular, mask vantage of teeming human populations, America performed so badly? wearing. This ensured it fared worse not ravaged wildlife habitats and opaque gov At the time, its death toll from covid19 only than South Korea and other well ernment, jumped between species or was 375,000; now it is 600,000. Among the organised Asian countries, but also some

012 The Economist June 19th 2021 Books & arts 79

European ones. The cause of this third fatal wearing—he thought it made him look un Revenge fantasies glitch was one Mr Wright had foreseen in manly—made it a litmus test of partisan his novel: the malignity of Donald Trump identification. This led to many needless Victim, complex and incompetence of his administration. infections and deaths. In Mr Wright’s view, Even Americans who are not in denial he was even more directly responsible for about that reality may struggle to remem some of them. Since all the guests were ber the many proofs of it; the bloody insur tested, he thinks Mr Trump the likeliest in rection on Capitol Hill that Mr Trump engi fection source of a “superspreader” event neered in January has come to dominate at the White House in October. the memory. Moreover his response to the His leadership did not merely undercut Animal. By Lisa Taddeo. Avid Reader Press; crisis—the biggest test of his presidency— America’s strengths. It also exacerbated its 336 pages; $27.99. Bloomsbury Circus; was often so unconscionable and bizarre weaknesses. Partisan division was among £16.99 that, as time passes, it seems almost in the many preexisting national conditions credible. In his characteristic style, Mr that the virus laid bare—a list that includes n “three women”, Lisa Taddeo’s first Wright provides many small sketches of the hollowing of American manufacturing Ibook (published in 2019), she recounted people touched by covid19—from whizzy supplychains; the disproportionate suf the often disturbing sexual histories of scientists like Barney Graham (“sixfoot fering of black Americans; chronic obesity; three American women whom the author five, with a grey goatee and a laconic man and extreme disparities in healthcare had spent years interviewing. Her decision ner”), to victims like 96yearold Jim Mill quality. Of course, America’s encounter to write from the perspective of her sub er, a DDay veteran who died of the disease with covid19 continues. Perhaps the most jects—but in the third person, traditionally in a cruelly mismanaged home for old sol glaring deficiency of Mr Wright’s book is a novelistic approach—made it hard to diers. But the book’s main character is Mr that it concludes just as America was on gauge the extent of her creative licence. But Trump, and its main service is in weighing the brink of launching, from a faltering the main criticism of her mostly well his responsibility for the disaster. start, one of the world’s most impressive received book involved its focus on charac mass vaccination campaigns (an effort that ters who seemed to have little or no agency. Devil take the hindmost owes much to the Trump administration’s A middleaged restaurateur is coerced by His efforts to purge Mr Obama’s legacy and stimulation of the development and sup her husband into sleeping with other men. his predilection for sycophants put Ameri ply of vaccines). Yet even with that hind A young woman goes to court to accuse her ca at a disadvantage from the start. The sight it is hard to be optimistic about the former teacher, a married father, of having pandemic plan was ditched; the heads of country the pandemic exposed. groomed her for sex. the cdc and the Department of Health and In his most hopeful moment, Mr As if by way of balance, Ms Taddeo has Human Services, Robert Redfield and Alex Wright speculates that “perhaps covid19 now swung to the other extreme, with a Azar, were both inadequate. There was was the force that America needed—to be compulsive debut novel narrated by a nonetheless a moment when it seemed Mr humbled, to reckon with itself, to once wronged woman out to avenge the abuse of Trump might conceivably rise to the his again attempt to create the democracy it male power. Joan is 36 and on the run from toric occasion. In a televised address on had always intended to be.” But even before New York after the gory death (in mysteri March 11th 2020 he acknowledged the pan those words were published 74m Ameri ous circumstances) of Vic, her older, mar demic’s gravity, recommended social dis cans had voted to give Mr Trump another ried lover. Lying low in California, she falls tancing and called on the country to “put four years at the helm. And among the Re in with Lenny, a widower suffering from politics aside”. In Mr Wright’s telling, that publicans now jostling to succeed him are dementia. In his confusion, Lenny mis moment lasted about five days. many lesser covid incompetents—such as takes Joan for the wife he illtreated; the Instead of taking charge of the crisis, Mr Kristi Noem, the governor of South Dakota, crimes to which he confesses boost her re Trump told state governors they were on whose opposition to lockdown measures solve to find redress for the miseries she their own—and must fight it out in the red led to thousands of unnecessary deaths. has endured. hot global market for ventilators, masks Covid19’s terrible cost to America is not So begins a provocative psychological and other kit. It was an unprecedented ab only measurable in jobsand lives. Its other thriller that sets out to subvert #MeTooera negation of federal authority, guaranteeing great toll is accountability. n notions of victimhood, at the same time needless wastage and chaos. “Price is al portraying men as almost uniformly vile. ways a component,” Mr Trump told Charlie The story sags in places, not least during Baker, the governor of Massachusetts, after the novel’s midsection, when Joan recalls he complained that the federal govern her girlhood experience of desire in con ment kept gazumping the state’s orders of versation with a yoga teacher, a sequence masks and other equipment. that resembles an offcut from “Three Having cut the governors loose, Mr Women”. Joan’s narration runs melodra Trump began undermining their public matically hot and can be overly portentous health efforts, in an almost psychopathi (“sometimes it’s better to kill someone cally selfserving bid to politicise the pan than to leave them”). Yet teasing hints demic. He talked up the miraculous prop about “the thing that I would end up doing” erties of hydroxychloroquine, a quack cure build tension, as do allusions to the death peddled on Fox News. He denounced state of Joan’s parents when she was a child, an lockdowns. By tweeting “LIBERATE MICHI event clarified in an explosive climax. GAN!” and “LIBERATE VIRGINIA!”, he Ms Taddeo’s lurid and relentless focus launched vigilantes onto the streets of on horror, from child abuse and rape to those states. Some plotted to kidnap Mich suicide and miscarriage, might be taken igan’s governor, Gretchen Whitmer, in for relish. Yet as in “Three Women”, her de what now looks like a dress rehearsal for termination to tear the veil from experi the insurrection in Washington. ences that normally remain hidden makes Mr Trump’s opposition to mask The unmasked man this startling writer valuable. n

012 80 Books & arts The Economist June 19th 2021

Carlos Ghosn and Nissan lavish party thrown for his wife’s birthday at the palace of Versailles—a far cry from Car trouble his Japanese prison cell, where a bowl of rice gruel counted as luxury. The authors point to a clash of cor porate cultures as the reason he may have sought to circumvent pay disclosure using a deferredpay scheme, which Nissan claimed broke the law. In Japan and France Collision Course. By Hans Greimel and ceos are paid far less than equivalent William Sposato. Harvard Business Review American bosses; doubtless he thought his Press; 256 pages; $30 and £22 skills should be properly rewarded by glo bal standards. The competing narratives he main events of the scandal that were never aired in court, though, after Ja Tbrought down Carlos Ghosn, whose pan’s criminaljustice system—which re restless energy made other globetrotting lies on prolonged incarceration and in bosses look workshy, are appropriately tense interrogation to obtain a confes bookended by flights on corporate jets. sion—collided with Mr Ghosn’s stubborn The drama began with grainy television refusal to admit any wrongdoing. Eventu footage of Japanese prosecutors boarding ally released on bail, he fled in the belief the plane that delivered an unwitting Mr that he would not receive a fair trial and Ghosn to his arrest in Tokyo in November would remain under house arrest for years. 2018. It culminated in his skipping bail on Some readers may be dismayed by the several charges of financial impropriety authors’ reluctance to speculate on the ver around a year later. Stripped of his leader dict should the trial have gone ahead (they Smoke on the mountain ship of a giant conglomerate, he was smug conclude that, given the “arcane” accusa gled out of Japan on another private jet, tions of financial irregularities, a “ruling is building and nearby halls of residence (the this time hidden in a box. likely to be just as abstruse”). But the end cause of the blaze is unclear). The contents Because of that clandestine escape, result is that Mr Ghosn remains trapped, endured the twin effects of flames and, “Collision Course” by Hans Greimel and these days in Lebanon, where he is safe once firemen arrived, hosepipes, leaving William Sposato, two Tokyobased jour from the international arrest warrants that thousands of works charred or sodden. nalists, at times reads like a spy thriller. might be executed should he board any Because they were held in a basement, But their main aim and achievement is to more corporate jets. Meanwhile the alli some books of the highest monetary value give the clearest account yet of the deep ance he created, languishing without its were spared. These were mostly from the rooted causes of Mr Ghosn’s predicament. leader, may yet break apart. n Western canon. But in a bitter twist for a li Underpinning the entire tale—and Mr brary that may have done more than any Ghosn’s status as a corporate superstar— other to enhance scholarship of Africa, the was Renault’s rescue in 1999 of nearbank A library burns most extensive damage was to its African rupt Nissan, an alliance, later joined by studies collection. Almost 100,000 of its Mitsubishi, which he built into the world’s The fire this time roughly 130,000 books were destroyed (the biggest carmaker. count is ongoing). “It was truly a disaster,” The terms of Nissan’s bailout gave Re says Ms Satgoor. nault, in which the French government has The Africanstudies collection dates a large shareholding, control of the Japa back to 1953, five years after the introduc CAPE TOWN nese firm, but Nissan got no say over Re tion of apartheid in South Africa, and four A precious African-studies collection nault in return. The alliance stopped short years before Ghana catalysed decolonisa goes up in smoke of a full merger, which, in the car industry, tion by gaining independence. At the time, had usually ended in disaster. This ar he view from the steps of Sarah Baart “African studies” was dominated by white rangement led to seething resentment at Tman Hall at the University of Cape male authors. But a succession of quietly Nissan, which gradually became the bigger Town (uct) is a reminder of the city’s natu radical uct librarians travelled extensively company and the main source of profits. ral beauty and difficult history. The shad to acquire materials by African scholars, Mr Ghosn kept a lid on the tensions be ow of Table Mountain looms over the neo using funding from the Oppenheimer fam tween the two carmakers—their engineers classical building, renamed in 2018 to com ily, founders of Anglo American, the min rarely agreed on anything—through the memorate Baartman, a Khoisan woman ing giant. Slowly they built the largest store force of his personality. who in 1810 was shipped to Europe to ap of research materials for African scholars But they boiled over as Mr Ghosn pear in freak shows. She replaced Leander on the continent. sought, at the French government’s behest, Starr Jameson, a lackey of Cecil Rhodes Ms Satgoor recalls stumbling through to make the alliance “irreversible”. Nissan who staged a calamitous attempt to start a the rubble and finding only covers of rare read this as code for a full merger that war on behalf of his patron. Until 2015 a dictionaries, their pages incinerated. Gone would cement Gallic dominance. This, statue of Rhodes stood at the bottom of the were early translations of local languages claims Mr Ghosn, led some in Nissan to steps, gazing out at the Atlantic Ocean and from countries such as the Gambia, Sierra manufacture charges in order to get rid of the city he made his own, the headquarters Leone, Gabon and South Africa. Soon after him. Nissan’s version is that he was a gree of his southern African empire. the fire, a number of San and Khoi scholars dy tyrant who regarded the Japanese firm “And there”, says Ujala Satgoor, director (two groups indigenous to the area around as a personal bank account. This claim of uct’s libraries, looking to her right, “is Cape Town who, over time, were termed gained more credence when French prose the famous Jagger library.” Or rather, there Khoisan, like Baartman) noted that the cutors also began an investigation of Mr it was. On April 18th fireballs from a confla blow is particularly painful for their field, Ghosn, including into the funding of a gration on the mountainside engulfed the as much of their oral traditions was lost

012 The Economist June 19th 2021 Books & arts 81

Johnson Only translate

Translators are the unacknowledged facilitators of the world id a mistaken translation put rovers Italy’s bawdy former prime minister. tones; after she and a collaborator consi Don Mars? In 1877 Giovanni Schiapa The job is draining. In “The Language dered and rejected a Scottish inflection, relli, an Italian astronomer, used his Game”, Ewandro Magalhães, a Brazilian they went with snatches of West Country then stateoftheart telescope to view interpreter, described how, at the Nurem English. Since 2016 the overseers of the and describe what he called “canali” on berg trials, small booths hooked up with International Booker Prize for fiction the planet. English translators leapt on telephone wires were first used for in have split the prizemoney equally be the discovery of what they rendered as terpretation into several languages. Staff tween authors and their translators. “canals”. There followed a frenzy of got one day off in three, and shifts were Ms Aslanyan says a mistranslation speculation that Mars might be inhab capped at 45 minutes. Even so, an inter also played a role in America’s atomic ited, which left a deep mark on the hu preter said, four months in Nuremberg bombing of Japan in 1945. An official man imagination. To this day “Martian” made her feel ten years older. Perhaps only statement said that the Japanese would is a synonym for alien life. the Ottomans, who made “dragoman” a “mokusatsu” the Potsdam Declaration But the Italian word could also have powerful job—the grand dragoman was that called on Japan to surrender. The been translated as “channels”. Which did simultaneously deputy foreign minister— verb can mean things including “to offer Schiaparelli mean? In some writings he gave interpreters the respect they deserve. no comment on” and “to kill with si was careful to discourage firm conclu Translation is different: usually sol lence”, but also “to treat with silent con sions about life on Mars; in others, he itary, seemingly more leisurely, but now tempt”. The Americans leaned towards encouraged exactly those conclusions. It under tremendous economic pressure. In the latter interpretation—a defiant in is almost as though canali let him have the digital era, everyone competes with sult—helping seal Hiroshima’s fate. both “channels” and “canals” in his mind everyone and buyers often simply take the Devotees of Esperanto, an artificial at the same time. lowest bid (or Google Translate). The language, have long hoped that un The story is told in “Dancing on literary work that cannot be done by a derstanding would promote peace be Ropes”, Anna Aslanyan’s new book about faceless contractor or a machine may not tween peoples. Douglas Adams, author of translators’ and interpreters’ roles at always pay the bills, but it at least provides “The Hitchhiker’s Guide to the Galaxy”, critical moments in history. It is full of stimulation. Ms Aslanyan recalls trying to satirically took the opposite stance. In lively stories like that of Schiaparelli’s transpose a Russian spoken in rural Uk his fantasy, the Babel Fish—which, once canals. Ms Aslanyan is herself both a raine into an English that carried the same stuck in your ear, instantly provides translator and interpreter (in the argot of perfect translation of all languages—is the profession, the former works in responsible for more wars than anything writing, the latter in speech), and enlists else in history. both practical experience and archival But the most eloquent comment on history. She leaves the reader with an translation may come from José Ortega y awed respect for the translator’s task. Gasset, a Spanish philosopher whom Ms Ideally, interpreters are invisible, and Aslanyan cites. Two words in two lan two people who do not share a language guages are never exact translations of will feel they are conversing directly. But each other, he said. More than that, this ideal is virtually unachievable. though, no two people mean the same Speakers cut off their own interpreters. thing by the same word (with the pos Listeners are rude to them, as if they (not sible exception of some scientific terms). the actual interlocutor) had said some Translation, therefore, is a “utopian” thing objectionable. The poor linguist in endeavour, an impossible act of perfect the middle can thus be tempted to clean mindreading. That does not mean it up or soften a rude remark; Ms Aslanyan should not be attempted—but those who relates some enjoyable tales from the try should be “good utopians” who know Russian interpreter for Silvio Berlusconi, they can never succeed.

during the colonial era. “This devastation Then there was a unique collection of Ms Satgoor began the salvage operation reminds us of when the great libraries in nearly 3,500 African films. One of these, before the embers cooled. Some books will Alexandria, Timbuktu and Rio were de wrote Jeremy Seekings and Chris Saun be saved with the help of cold storage and stroyed,” the scholars wrote. ders, academics from uct, in a recent arti moisturesucking fans. She has received Also thought gone are thousands of of cle for the Daily Maverick, a South African dozens of offers of help, including from ficial documents. Over several decades li outlet, was the pioneering “Afrique sur universities with copies of lost books and brarians collated copies of parliamentary Seine”; it was made in 1955, when Africans films. But it will take time to rebuild a re debates, politicalparty minutes, inquiries in France’s colonies were not allowed to source that had an importance greater than and so on, to help African historians. The make films in their home countries. Others the sum of its parts. Walking through the material included many papers related to were banned works sent to Cape Town in ashstrewn warren of the library, an incon underground activities during apartheid. secret—a film about the Gukurahundi gruous smell of charred damp in the air, Ms The fire severely damaged a complemen massacres in Zimbabwe in the 1980s was Satgoor talks of her admiration for earlier tary audiovisual archive, which included dispatched in an envelope labelled “Auntie librarians who built such a “provocative” rare footage from political protests. Flo’s home movies”. collection. Restoring it falls to her. n

012 82 Conferences

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CONTRACT NOTICE The Durres Port Authority in Albania with address: Lagjja nr. 1, Rruga “Tregtare”, Durres, website www. durresport.al, announces the procurement procedure for the service of: “Drafting a Detailed Technical Design of the new Integrated Commercial Port of Durres in Porto Romano”.

Type of procedure: Consultancy Services - above the upper monetary threshold, with estimated contract value of 1,145,354,372.96 (one billion one hundred forty five million three hundred fifty four thousand three hundred seventy two points ninety six) ALL, without VAT. Deadline for submission of tenders or requests to participate: 09.07.2021 time 11:00 CET. Contract duration or execution time limit: 8 (eight) months Economic operators interested in full and detailed information on the documentation of the procurement procedure are invited to visit the website of the Public Procurement Agency, ww o - REFERENCE NUMBER - REF-97696-06-08-2021.

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012 84 Economic & ﬁnancial indicators The Economist June 19th 2021

Economic data

Gross domestic product Consumer prices Unemployment Current-account Budget Interest rates Currency units % change on year ago % change on year ago rate balance balance 10-yr gov't bonds change on per $ % change latest quarter* 2021† latest 2021† % % of GDP, 2021† % of GDP, 2021† latest,% year ago, bp Jun 16th on year ago United States 0.4 Q1 6.4 6.0 5.0 May 2.7 5.8 May -2.9 -13.5 1.6 82.0 - China 18.3 Q1 2.4 8.5 1.3 May 1.6 5.0 May‡§ 2.8 -4.7 3.0 §§ 41.0 6.40 10.6 Japan -1.6 Q1 -3.9 2.2 -0.5 Apr -0.2 2.8 Apr 3.0 -8.8 nil -8.0 110 -2.4 Britain -6.1 Q1 -5.9 5.8 2.1 May 3.0 4.7 Mar†† -4.5 -11.5 0.8 53.0 0.71 12.7 Canada 0.3 Q1 5.6 5.4 3.6 May 2.2 8.2 May -2.0 -8.9 1.4 89.0 1.22 11.5 Euro area -1.3 Q1 -1.3 4.2 2.0 May 1.5 8.0 Apr 3.1 -6.8 -0.3 18.0 0.83 7.2 Austria -5.5 Q1 -12.6 3.0 2.8 May 2.2 5.6 Apr 3.2 -7.4 nil 15.0 0.83 7.2 Belgium -0.6 Q1 4.2 3.9 1.5 May 1.5 5.3 Apr -0.8 -7.5 0.1 10.0 0.83 7.2 France 1.2 Q1 -0.4 5.4 1.4 May 1.3 7.3 Apr -1.8 -9.0 0.1 16.0 0.83 7.2 Germany -3.1 Q1 -7.0 3.5 2.5 May 2.5 4.4 Apr 6.8 -3.6 -0.3 18.0 0.83 7.2 Greece -1.4 Q1 18.9 5.4 0.1 May nil 15.8 Dec -5.8 -5.8 0.8 -40.0 0.83 Italy -0.8 Q1 0.6 4.1 1.3 May 1.0 10.7 Apr 3.0 -11.9 0.8 -58.0 0.83 Netherlands -2.8 Q1 -1.8 2.9 2.1 May 2.0 3.4 Apr 10.8 -3.4 -0.3 6.0 0.83 Spain -4.3 Q1 -2.1 5.9 2.7 May 1.5 15.4 Apr 1.3 -8.7 0.4 -20.0 0.83 Czech Republic -2.4 Q1 -1.0 3.7 2.9 May 2.2 3.4 Apr‡ 2.1 -5.5 1.7 81.0 21.0 1 Denmark -1.3 Q1 -5.1 3.0 1.7 May 0.7 4.6 Apr 7.4 -1.3 0.1 37.0 6.14 Norway -1.4 Q1 -2.5 2.6 2.7 May 2.9 4.6 Feb‡‡ 2.5 -1.0 1.4 92.0 8.38 14.6 Poland -1.3 Q1 4.5 4.1 4.7 May 3.2 6.3 Apr§ 2.0 -6.9 1.8 36.0 3.72 6.5 Russia -0.7 Q1 na 3.2 6.0 May 5.5 5.2 Apr§ 3.7 -1.7 7.3 152 71.9 -2.9 Sweden -0.1 Q1 3.4 3.3 1.8 May 1.4 9.4 Apr§ 4.1 -2.6 0.4 37.0 8.37 12.3 Switzerland -0.5 Q1 -2.0 3.0 0.6 May 0.3 3.0 May 7.4 -4.0 -0.2 21.0 0.90 6 Turkey 7.0 Q1 na 3.9 16.6 May 14.5 12.9 Apr§ -2.2 -2.8 17.3 558 8.55 9 Australia 1.1 Q1 7.3 4.4 1.1 Q1 2.1 5.1 May 1.6 -5.9 1.5 58.0 1.30 3 Hong Kong 7.9 Q1 23.5 4.9 0.7 Apr 1.6 6.4 Apr‡‡ 3.6 -4.1 1.2 61.0 7.76 1 India 1.6 Q1 6.0 10.4 6.3 May 5.2 11.9 May -1.0 -7.0 6.0 20.0 73.3 9 Indonesia -0.7 Q1 na 3.9 1.7 May 2.5 6.3 Q1§ -0.3 -6.4 6.4 -67.0 14,238 9 Malaysia -0.5 Q1 na 4.4 4.7 Apr 2.4 4.6 Apr§ 4.7 -5.9 3.3 22.0 4.12 3.6 Pakistan 4.7 2021** na 1.7 10.9 May 9.0 5.8 2018 -1.7 -6.9 9.8 ††† 121 157 4.9 Philippines -4.2 Q1 1.2 5.1 4.5 May 4.2 8.7 Q2§ -1.1 -7.6 3.9 55.0 48.1 4.1 Singapore 1.3 Q1 13.1 4.5 2.1 Apr 1.8 2.9 Q1 17.5 -4.3 1.4 52.0 1.33 5.3 South Korea 1.9 Q1 7.1 3.6 2.6 May 1.9 4.0 May§ 4.6 -4.7 2.1 67.0 1,117 8.0 Taiwan 8.9 Q1 12.8 6.0 2.5 May 1.6 3.7 Apr 15.5 -0.6 0.5 -3.0 27.7 7.0 Thailand -2.6 Q1 0.7 2.9 2.4 May 2.2 1.5 Dec§ 4.5 -6.6 1.6 40.0 31.2 -0.3 Argentina -4.3 Q4 19.4 6.2 48.8 May 46.8 11.0 Q4§ 1.7 -6.0 na na 95.3 -27.0 Brazil 1.0 Q1 4.9 4.8 8.1 May 6.8 14.7 Mar§‡‡ -0.2 -7.3 9.0 221 5.02 3.4 Chile 0.3 Q1 13.4 6.2 3.6 May 3.6 10.2 Apr§‡‡ -0.2 -7.2 4.3 169 728 7.3 Colombia 2.0 Q1 11.9 6.0 3.3 May 3.0 15.1 Apr§ -3.4 -8.9 7.0 103 3,698 1.3 Mexico -3.6 Q1 3.1 5.9 5.9 May 4.5 4.7 Apr 1.4 -2.8 6.7 74.0 20.1 10.8 Peru 3.8 Q1 8.3 10.5 2.5 May 2.6 9.7 May§ -0.3 -5.6 5.4 151 3.92 -11.2 Egypt 2.0 Q4 na 2.9 4.8 May 5.7 7.4 Q1§ -3.3 -8.1 na na 15.7 3.4 Israel -1.1 Q1 -6.2 3.8 1.5 May 1.3 5.4 Apr 3.7 -7.9 1.2 45.0 3.24 6.8 Saudi Arabia -4.1 2020 na 2.9 5.7 May 2.4 7.4 Q4 2.8 -2.6 na na 3.75 nil South Africa -3.2 Q1 4.6 2.4 4.5 Apr 3.7 32.6 Q1§ 1.5 -9.2 8.8 -59.0 13.8 25.4 Source: Haver Analytics. *% change on previous quarter, annual rate. †The Economist Intelligence Unit estimate/forecast. §Not seasonally adjusted. ‡New series. **Year ending June. ††Latest 3 months. ‡‡3-month moving average. §§5-year yield. †††Dollar-denominated bonds.

Markets Commodities % change on: % change on: The Economist commodity-price index Index one Dec 31st index one Dec 31st % change on In local currency Jun 16th week 2020 Jun 16th week 2020 2015=100 Jun 8th Jun 15th* month year United States S&P 500 4,223.7 0.1 12.4 Pakistan KSE 48,480.9 1.5 10.8 Dollar Index United States NAScomp 14,039.7 0.9 8.9 Singapore STI 3,139.6 -0.4 10.4 All Items 188.2 188.7 -3.0 71.3 China Shanghai Comp 3,518.3 -2.0 1.3 South Korea KOSPI 3,278.7 1.9 14.1 Food 138.6 132.8 -4.8 46.1 China Shenzhen Comp 2,332.4 -2.7 0.1 Taiwan TWI 17,307.9 2.0 17.5 Industrials Japan Nikkei 225 29,291.0 1.5 6.7 Thailand SET 1,624.8 -0.1 12.1 All 234.6 241.0 -2.0 88.0 Japan Topix 1,975.9 1.0 9.5 Argentina MERV 67,575.6 -0.8 31.9 Non-food agriculturals 164.0 156.4 -6.8 76.0 Britain FTSE 100 7,185.0 1.5 11.2 Brazil BVSP 129,259.5 -0.5 8.6 Metals 255.5 266.0 -1.1 90.2 Canada Mexico IPC 50,579.1 -0.3 14.8 S&P TSX 20,231.0 1.1 16.0 Sterling Index Euro area Egypt EGX 30 9,880.5 -1.6 -8.9 EURO STOXX 50 4,151.8 1.3 16.9 All items 203.0 204.5 -2.1 52.8 France CAC 40 6,652.7 1.4 19.8 Israel TA-125 1,773.7 1.1 13.1 Germany DAX* 15,710.6 0.8 14.5 Saudi Arabia Tadawul 10,856.0 0.6 24.9 Euro Index Italy FTSE/MIB 25,767.5 0.1 15.9 South Africa JSE AS 67,310.6 -0.5 13.3 All items 171.3 172.6 -2.2 58.7 Netherlands AEX 733.5 1.5 17.4 World, dev'd MSCI 3,008.5 0.4 11.8 Gold Spain IBEX 35 9,202.2 0.5 14.0 Emerging markets MSCI 1,370.0 -0.2 6.1 $ per oz 1,893.2 1,860.7 -0.4 7.7 Poland WIG 66,180.2 0.1 16.1 Brent Russia RTS, $ terms 1,679.0 0.3 21.0 $ per barrel 72.4 74.0 7.5 80.7 Switzerland SMI 11,982.0 1.6 11.9 US corporate bonds, spread over Treasuries Sources: Bloomberg; CME Group; Cotlook; Reﬁnitiv Datastream; Turkey BIST 1,431.3 -1.2 -3.1 Dec 31st Fastmarkets; FT; ICCO; ICO; ISO; Live Rice Index; LME; NZ Wool Australia All Ord. 7,633.4 1.5 11.4 Basis points latest 2020 Services; Thompson Lloyd & Ewart; Urner Barry; WSJ. *Provisional. Hong Kong Hang Seng 28,436.8 -1.1 4.4 Investment grade 115 136 India BSE 52,502.0 1.1 9.9 High-yield 346 429 Indonesia IDX 6,078.6 0.5 1.7 Sources: Reﬁnitiv Datastream; Standard & Poor's Global Fixed Income For more countries and additional data, visit Malaysia KLSE 1,578.3 -0.2 -3.0 Research. *Total return index. Economist.com/indicators

012 Graphic detail Computer hardware The Economist June 19th 2021 85

→ CPUs lose value as they get older. But demand for mining Ethereum has sent prices for GPUs soaring, regardless of their age

Average listed price of used computer processors Used GPU/CPU prices listed on Amazon, adjusted*, price at launch=100 Ethereum price, $ On Amazon, price at launch=1 140 550 5,500 Graphics processing units (GPUs) 120 500 5,000 100

80 450 4,500

60 400 4,000 Central processing units (CPUs) 40 Prices forfor GPUs and Ethereum, the main 20 350 cryptocurrency that is mined usingusing these 3,500 0123456 specialised chips, havehave movedmoved in locksteplockstep Years since launch 300 3,000

250 The f vvaluealue oof vversatileersatile CPUs is not 2,500 Listed price of used CPUs on Amazon correlated to Ethereum prices Adjusted†, price at launch=1 100 200 2,000 Ryzen 5 3600 Ryzen 5 600 AMD AMDD 80 i7-3770 i9-9700 Intel 150 1,500 Intel i7-6700 60 Intel 100 1,000 40 FX-6300 AMD 50 500 20

0 0 0 2012 13 14 15 16 17 18 19 20 21 2014 2015 2016 2017 2018 2019 2020 2021

*Adjusted for the age of each chip †Adjusted for changes over time in average CPU prices Sources: Amazon; Keepa; Coindesk; The Economist

tocurrency, are to blame for gamers’ woes. Another boom began last year. As Ethe Pay to play gpus and cpus both perform calcula reum’s price rose from $107 in March 2020 tions, but they are used for different pur to $4,400 last month, the value of mining poses. gpus are specialised chips that excel hardware once again followed suit. In six at matrix algebra, which is required for 3 d months, the six gpus’ listed prices climbed graphics and machinelearning tasks like by 150%. Those of cpus barely budged. translating languages. They are also the The gpu shortage has hurt data scien Crypto-miners are probably best tool for mining Ethereum (though not tists and computeraideddesign users as responsible for the gpu shortage bitcoin). In contrast, cpus are more versa well as gamers. Some relief may be on the he past year has been rough for gam tile, and handle most everyday operations. way. Ethereum’s price is now 40% below Ters. Just as covid19 brought inperson In general, chips lose value over time as its record high. gpu prices have yet to fall, entertainment to a halt, the cost of graph new, more powerful ones are developed. but if history is any guide, they probably ics processing units ( gpus) needed to run Technological gains have slowed since the will soon. Moreover, Nvidia has tried to computer games soared. Graphics cards 1990s, but cpus still obey this trend. For ex cripple its gpus’ mining power, while pro like Nvidia’s rtx 3080, with a suggested ample, a nineyearold cpu like Intel’s Core mising to sell new cards targeted at min price of $699, have fetched up to $2,400. i73770 sells for a third of its release price. ers. It is also cutting back on its output of When bricksandmortar stores get a few However, prices for gpus have risen so older products to focus on newer ones. in stock, buyers queue up overnight. much that even geriatric graphics cards, However, without greater production, Prices for all types of chips have risen of such as amd’s rx580, have gained value. It customising chips will not end the short late, for myriad reasons. Silicon wafers are was released in 2017 at a suggested price of age. Nvidia’s rtx 3080 Ti, one of its first scarce. Manufacturers have suffered dis $229, and is now listed at more than $700. cards with reduced mining power, is listed ruptions. Scalpers use bots to buy up in In theory, such appreciation could re on Amazon at double its suggested price. ventory. Chinesemade chips face Ameri flect the growing popularity of gaming and Meanwhile, Ethereum’s overseers said can tariffs. And demand for personal com machine learning. However, secondhand in May that they will rejig its blockchain to puters is the highest since 2010. market data suggest a different cause. require less computation, and thus less Nonetheless, data from Keepa, a web Since 2015 asking prices for six gpus electricity. If implemented, this might site that tracks Amazon listings, show that tracked by Keepa have moved in lockstep lower gpu prices. However, as long as other asking prices for gpus have risen faster with Ethereum’s value. In late 2017 the cur cryptocurrencies, such as Monero, rely on than have those for central processing un rency’s first big rally coincided with a surge powerhungry protocols that reward good its (cpus). The data also suggest that min in listed gpu prices. Once the crypto bub gpus, miners will pivot to differentcoins— ers of Ethereum, the secondlargest cryp ble burst, gpu costs fell back to earth. and gamers will once again cry foul.n

012 86 Obituary Edward de Bono The Economist June 19th 2021

inherently wrong with logical thinking, as there was nothing in herently wrong with the forward gears on a car. But reverse gear was needed too, to rearrange the pattern or get out of a blind alley. An example: waste from a factory is polluting water for people downstream. You could install expensive filtration, or rehouse the people. Or you could require the factory to take its own water from downstream. Simplicity itself, and perfect sense. As soon as he proposed his method, in “The Mechanism of Mind” (1969), it caught on like wildfire. Lateral thinking was taken up by Siemens, DuPont, Goldman Sachs, bt, ba and Federal Ex press, among many. (At Siemens, productdevelopment time fell by half.) It was adopted in schools from Venezuela to Australia to China. In Britain he was brought in in 1998 to shake up the hide bound and exclusive civil service. During the Soviet Union’s peres- troika, his books were top reading in Moscow. A seminar on his system for the Australian cricket team led to the total thrashing of England in the Ashes series. His detractors, silly little idiots, held that nothing in his method was new and most of it obvious. The brilliant results spoke for themselves. So did the flow of seekers to his online Effective Thinking course, his Practical Thinking Train ing courses (with, in 1995, more than 400 instructors in 27 coun tries) and his World Academy of New Thinking in Malta. He made a very decent living from it all. Nonetheless, it might be hard to impress the Gang of Three with them. Pupils at the original Symposium had been over whelmed by the vertical thinking of Socrates. “Absolutely”, “Of course”, and “Naturally not”, they had answered, not daring to risk Sideways on the putdown of a “No”. The de Bono method, by contrast, pro posed “Po”. This was a language laxative, a provocation thrown in to a discussion to loosen things up. It might even be nonsense on its face, such as “Po: Why are wheels round?” Or it might put two things side by side, a caterpillar and a horse, or food and a shoe, to see what thoughts arose from this rearranging. All would be as Edward Charles Francis Publius de Bono, doctor of medicine sumed to have value. There was no “No”. Another example might and founder of lateral thinking, died on June 9th, aged 88 occur in a discussion about picking apples. Rather than arduously he letter was unexpected, but not undeserved. It contained reaching up to pick, why not attract the apples to the ground? Or Tan invitation to a Symposium in Athens. Over the years Edward remove the trees from the apples? Well worth exploring. de Bono had been to hundreds of these affairs. Some were semi All things considered, though, his best bet for this new Sympo nars, some consultations or lecturing, all based on his muchac sium was a talk on his Six Thinking Hats. He could take a set along, claimed books. He had produced 70 of them, including “How To Be six toppers in good strong colours. The thinking behind the hats More Interesting”, “How To Have a Beautiful Mind”, “Edward de was to make meetings quicker and more productive by taking ego Bono’s Textbook of Wisdom” and “Think! Before It’s Too Late”. That out of them. Instead, those attending wore hats to grasp other last was the message he carried loud and clear as he jetted from ci points of view. A black hat stood for caution and realism. White ty to city and boardroom to boardroom. He was teaching the world meant facts. Green was for creativity, red for feelings, blue for pro a new way of thought, the most important for 2,300 years. cess. Yellow signalled optimism. Trivial, said the idiots again. But A gathering in Greece was alluring. He was a man of the Medi major corporations the world over found it shortened meeting terranean himself, born in Malta to a family boasting seven gener times by half. Thousands of schools used it to make debate civi ations of doctors. On his mother’s side, he was possibly descended lised. In the platinum mines of South Africa, illiterate workers from Napoleon. It was at school that he was first called “Genius” from 14 different tribes learned from it to get on together. In Paki and allowed to skip years. From there he sailed into both Oxford stan, Pervez Musharraf was moved by it to talk peace with India. and Cambridge, to do two doctorates and several years of research No doubt it had uses, too, in the Middle East, though his neatest into physiology and psychology. His study of selforganising sys lateral solution in that case was to ship out Marmite yeast extract tems such as the kidneys and the glands convinced him that the to both Arabs and Israelis, to increase the zinc in their diets and brain, too, could be organised differently. It could be taught to op thus make them less irritable with each other. erate creatively, surprisingly and “outside the box”. His preferred The thought of the coming Symposium was now much jollier. term was “lateral thinking”. With that, he had made the most im Socrates, Plato and Aristotle would soon be lounging in their hats, portant discovery since the time of Socrates, Plato and Aristotle, eager to hear him. The wine, too, would be flowing, and the flute the infamous Gang of Three, as he called them. It was they who girls playing. He might even intrigue them with some of his more had sent the invitation. They were eager, like all the rest, to consult speculative lateral thoughts. For example: why not reduce awk him. ward conversations to simple numerical code? So that “This rela And he had much to say to those gentlemen. Centuries since, tionship is long dead, we both know it, but we hang on for fear of they had imposed on Western brains the tyranny of vertical think the unknown” would become “14/4”? Or why not save wine from ing. That method proceeded by pure logic. At every step, one had to spoiling by decanting each large jar, on purchase, into smaller be right. It was characterised by conflict, argument, arrogance and screwtop containers? Or (ignoring the gang’s full beards) had they rejection of unusual ideas. In schools, it wasted twothirds of soci ever thought, while shaving, of keeping the razor still and moving ety’s natural talent. The concepts it laid down hardened into inad their heads instead? In fact, it worked rather better. Before the eve equate or overcomplex ways of doing things. There was nothing ning was out, they too would be toasting his genius. n

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