The Economist USA 12.12.2020

Europe’s vaccination battleplan
Capital gain—the IPO boom
An uninvited visit to Xinjiang
High hopes: hydrogen-powered flight

DECEMBER 12TH–18TH 2020

Will inflation return?





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Contents The Economist December 12th 2020 7

On the cover The world this week United States
11 A summary of political 29 BLM six months later
Low inflation underpins 30 Black entrepreneurs
today’s economic policies. and business news 31 Donald Trump’s
Governments should prepare
in case it doesn’t last: leader, Leaders deepening defeat
page 15. How strong is the case 15 Inflation 31 The public-toilet shortage
that inflation is about to 32 Anti-Semitism
return? Briefing, page 25. Will it return? 32 The Fort Hood report
There are tentative signs that 16 Brexit trade negotiations 33 The right size of stimulus
productivity growth might 34 Lexington When America
accelerate, page 69 Last tango in Brussels
16 The IPO boom and China went to war
• Europe’s vaccination
battleplan The EU prepares to Capital idea The Americas
receive its first batches of the 18 Transgender medicine 36 Nicaragua’s strongman
covid-19 vaccine. But supplies 37 A better dulce de leche
and uptake are both uncertain, First, do no harm 38 Bello Central American
page 52. Why is the bloc so 20 The music industry
riddled with vaccine scepticism? disasters
Charlemagne, page 56 Knock-knock-knockin’
on Jody’s door Asia
• Capital gain—the ipo boom 39 Covid-19 in Japan
Raising equity is back in fashion: Letters 40 Suicide in South Korea
leader, page 16. Companies have 22 On race data, Galicia, 41 Tourism in Thailand
issued more debt and equity in 41 Philippine policing
2020 than ever before. What epidemiology, Bosnia, 42 Banyan Thailand’s
now? Page 63 companies, Jonathan
Sacks, China absolutist king
• An uninvited visit to Xinjiang 44 Rohingyas in Bangladesh
Our columnist turns up at a Briefing
factory complex accused of 25 Inflation China
using forced Uyghur labour: 45 Training foreign
Chaguan, page 47 Prognostication
and prophecy politicians
We are working hard to 46 Club culture expands
ensure that there is no dis- Bartleby A new book 47 Chaguan Xinjiang’s
ruption to print copies of argues that decency pays
The Economist as a result of off in business as well as grim factories
the coronavirus. But if you in life, page 65
have digital access as part of Middle East & Africa
your subscription, then acti- 48 Zambia’s toxic mine dump
vating it will ensure that you 49 Ghana votes
can always read the digital 50 Making nice in the Gulf
version of the newspaper as 50 The Yazidis’ struggle
well as all of our daily jour- 51 The UAE scores in Israel
nalism. To do so, visit
economist.com/activate 1 Contents continues overleaf

8 Contents The Economist December 12th 2020

Europe Finance & economics
52 Vaccinating Europe 69 Productivity trends
53 Germany and covid-19 71 Buttonwood Investors’
54 France and Islamism
54 The Brothers of Italy overconfidence
55 Romania’s election 72 An end to oil restraint
56 Charlemagne On 72 Mexico’s unbanked
73 Counting banks’ carbon
anti-vaxxers 74 Free exchange Economic

Britain research
57 Brexit and chemicals
58 Assertive tech regulation Science & technology
58 Toppling statues 77 Hydrogen-powered flight
59 BLM and public schools 78 A megamegaphone
79 SpaceX’s latest launch
International 79 Gene therapy for sight
60 Transgender rights 80 Bees v hornets

and children Books & arts
82 America’s far right
Business 83 The Enlightenment
63 A year of capital-raising 84 Johnson Accent
64 Facebook
65 Bartleby Why fair discrimination
86 William Kentridge’s art
play pays
66 SAP’s reset Economic & financial indicators
66 India’s lawsuits 88 Statistics on 42 economies
67 Unautonomous Uber
68 Schumpeter Unshackling Graphic detail
89 What countries do economists study and why?
France SA
Obituary
90 Chuck Yaeger, test pilot

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The world this week Politics The Economist December 12th 2020 11

The Supreme Court made its Opposition candidates made Coronavirus briefs
first foray into the jumble of gains in a parliamentary elec-
lawsuits from Republicans still tion in Kuwait, raising fears To 6am GMT December 10th 2020
trying to overturn the election that they will stand in the way
result. In a one-line response of efforts to tackle a fiscal crisis Weekly confirmed cases by area, m
with no dissents, it refused to caused by low oil prices and
hear a case from Pennsylvania. the outbreak of covid-19. None 2.0
Joe Biden’s victory will be of the 29 female candidates
officially confirmed on Decem- who ran won a seat. Europe 1.5
ber 14th, when the electoral Latin America US 1.0
college meets to cast its vote. Ethiopian federal troops fired
at un workers who were as- Other 0.5
As Brexit trade talks went sessing roads to provide aid in
Britain began the world’s first down to the wire, the British Tigray, a war-torn region. 0
vaccination programme for government announced an Fighting erupted in November M A M J J A S O ND
covid-19 using a fully tested “agreement in principle” with between the central govern-
vaccine. Thousands of people, the European Union over ment and Tigrayan forces, after Confirmed deaths*
mostly the very elderly and border controls between Ire- Tigray held what the govern-
frontline health workers, land and Northern Ireland. ment called an illegal election. Per 100k Total This week
received the Pfizer/BioNTech Britain also agreed to scotch The government has shut
jab in hospitals. Family doctors legislation that would allow it internet and telephone access Belgium 151.9 17,603 692
will also administer the to break international law. to the region. Thousands have 435
injections, as will care homes Boris Johnson, the prime died and perhaps 1m have fled Peru 110.4 36,401 4,694
by Christmas. Canada became minister, went to Brussels for a their homes. 1,235
the second country to approve dinner with Ursula von der Italy 102.1 61,739 2,867
the Pfizer vaccine and will start Leyen, the president of the Five people were killed in 1,066
distribution soon. In America European Commission, but election-related violence in Spain 100.6 47,019 15,851
regulators were on the verge of their meeting left a bad taste in Ghana. Both presidential and 4,090
approving it. the mouth for those hoping for parliamentary races were Britain 92.2 62,566 2,826
a breakthrough. close. Results showed that 621
General Lloyd Austin was Nana Akufo-Addo won a sec- Argentina 89.0 40,222
tapped by Joe Biden to be his France published details of a ond term as president, narrow-
defence secretary. If con- proposed new law designed to ly beating his predecessor, United States 87.0 288,018
firmed, General Austin, who combat the spread of radical John Mahama, who said the
has led America’s command in Islam. The law, which will go to election was flawed. Mexico 86.6 111,655
Afghanistan and Iraq, will be parliament next year, was
the first black person to hold prompted by the beheading of Opposition leaders in India France 86.2 56,293
the job. He will also be a former a French schoolteacher for complained that the govern-
military man in a position that showing children cartoons of ment was preventing them Czech Rep. 85.3 9,136
by tradition goes to a civilian. the Prophet Muhammad. from joining farmers protest-
Donald Trump’s first defence ing against recent agricultural Sources: Johns Hopkins University CSSE; UN;
secretary, James Mattis, also Venezuela’s dictatorial reforms, which would curb The Economist *Definitions differ by country
came from the armed forces. regime, led by Nicolás Maduro, price supports for crops. The
reclaimed control of the protesters rejected an offer to America reported more than
The House of Representatives legislature, the one branch of revise the reforms. 3,000 deaths in a single day
passed a defence bill, with 140 government it did not com- for the first time. Hospital-
Republican votes, that would, mand. The ruling psuv and its Gibran Rakabuming Raka, the isations also hit a new record.
among other things, remove allies won more than two- eldest son of Indonesia’s
the names of Confederate thirds of the votes in a legisla- president, Joko Widodo, was Most of California’s residents
generals that adorn some tive election that was boycott- elected mayor of the city of were told to stay at home, as
military bases. Mr Trump says ed by most of the opposition. Surakarta, the job that tighter restrictions were
he will reject the bill, but it has The psuv’s victory means that launched his father’s career. introduced in counties where
been approved by a two-thirds the opposition’s leader, Juan the virus is surging.
majority, enough support to Guaidó, recognised as Venezu- Rarely can a mountain stretch
override a presidential veto. It ela’s interim president by more its advantage over its rivals, but Officials in France said it was
now goes to the Senate. than 50 countries, will lose his this week Everest did just that. now unlikely that a national
role as head of the assembly. Nepal and China, the two lockdown will end on Decem-
The House also passed a bill countries that the “goddess ber 15th. In Germany, Angela
that would decriminalise Tabaré Vázquez, who was twice mother of the world” straddles, Merkel said her country
marijuana and overturn the Uruguay’s president, died. A agreed that the correct height should go into a hard lock-
sentences of those who have doctor turned left-wing poli- is 8,848.86 metres above sea down before Christmas.
been convicted of non-violent tician, Mr Vázquez’s victory in level, 86cm above the previous
cannabis crimes. Its purpose is 2004 ended more than 160 height, established in 1954 by a Daily infections in India
to redress the racial disparities years of rule by the National survey in India. China did its continued to fall, dropping
in marijuana convictions and Colorado parties. His own estimate in 2005 and had below 27,000 for the first time
(black people are more likely to second term ended in March insisted that Everest was four in five months.
be jailed for possession). It is this year. metres shorter.
unlikely to pass the Senate. A “cruise to nowhere” in
waters off Singapore, which
allowed passengers to experi-
ence the fun of a cruise ship
without disembarking, had to
return to port when someone
tested positive on board (he
subsequently tested negative
in a re-test).

For our latest coverage of the
virus please visit economist.com/
coronavirus or download the
Economist app.

12 The world this week Business The Economist December 12th 2020

America’s competition regu- had set out to investors, as it October 2009. A drop in food The World Economic Forum
lator filed an antitrust lawsuit prepared to float on the Nasdaq prices, notably in pork, as pig changed the location of its
against Facebook, alleging that exchange. stocks improved after a bout of annual meeting next year to
it bought WhatsApp and swine fever, lay behind the fall. Singapore. The event, already
Instagram, two social-media jd Health’s ipo was also a postponed from January to
rivals, to suppress competi- success. The health-care In Japan the government began May, is normally held in Davos,
tion. Separately, a coalition of division of jd.com, one of a fresh round of stimulus Switzerland, but the wef
46 American states, led by New China’s big e-commerce following earlier packages in thinks the risk from covid-19 is
York, launched a similar law- companies, raised $3.5bn in April and May, and said it too high in Europe.
suit against the company. Hong Kong, in the biggest thinks the latest measures will
Facebook argues that the legal flotation of shares on the city’s boost gdp by 3.6%. As well as In what is thought to be the
actions are an attempt to revise stockmarket this year. fighting covid-19, the money most lucrative deal for a single
history, as the takeovers were will be spent on green and artist’s publishing rights, Bob
scrutinised and approved by China’s exports digital technologies. Dylan sold the copyright for
regulators at the time. more than 600 songs to Uni-
2020, % change on a year earlier* Société Générale became the versal Music. The price was not
Uber decided to sell its autono- latest big bank to recognise the revealed, but the troubadour
mous-vehicles subsidiary to 20 pandemic’s effect on changing and winner of a Nobel prize in
Aurora, a startup that counts customer behaviour, as it set literature is said to have wrung
Amazon among its backers. 0 out a restructuring plan with a $300m from Universal, cer-
Uber spent billions on self- “fully digital banking model” tainly no simple twist of fate.
driving cars, which it can no -20 at its heart. The French bank is
longer afford as the pandemic merging its two retail-bank A publishing sensation
eats into its ride-hailing busi- -40 networks, which will result in Seventy years after it was first
ness (it is also selling its flying- around 600 branch closures. published, ikea said it was
car division, Uber Elevate, to a J FMAM J J A SON “turning the page” and will no
separate startup). The project Ivan Glasenberg decided to longer print a catalogue. ikea
unnerved investors in 2018 Source: Haver Analytics *$ terms retire as chief executive of used to distribute 200m copies
when one of its cars killed a Glencore, a job he has held for of its book in 32 languages, but
woman in Arizona, the first China’s exports grew by 21% in almost 20 years. Under his it has been surpassed by digital
fatal collision involving an dollar terms in November over leadership Glencore became a browsing. Catalogues in gen-
autonomous car and a pedes- the same month last year, the global powerhouse in com- eral are heading for the check-
trian. Uber is not getting out of fastest pace since February modities, expanding from out. Argos, a British retailer,
the business entirely. It will 2018. Much of that came from trading into mining. Mr Gla- will stop printing its in Janu-
take a stake in Aurora and may exports to the United States, senberg’s replacement when ary. A family staple at Christ-
eventually integrate the tech- which rose by half, despite the he steps down next year will be mas, the Argos catalogue was
nology with its platform. stiff tariffs imposed by the Gary Nagle, who runs Glen- once Europe’s most widely
Trump administration in the core’s coal business. He has printed publication, vying
Back in the sky countries’ trade war. been tasked with a new com- with the Bible for the title of
The first commercial flight of a pany plan to cut its emissions most-read book in Britain.
Boeing 737 max took place, 20 Meanwhile, China’s official by 40% over the next 15 years.
months after the fleet was consumer price index fell by
grounded worldwide following 0.5% in November from a year
two fatal crashes. Gol airline earlier, the country’s first
flew passengers from São Paulo month of deflation since
to Porto Alegre after its pilots
completed training to fly the
revamped jet, which has been
certified as safe in Brazil and
the United States. Meanwhile,
Boeing delivered its first 737
max aircraft since the ban was
lifted, to United Airlines,
which will test the plane before
entering it into service.

Huge investor appetite for the
stockmarket debut of Door-
Dash, America’s leading meal-
delivery app, pushed its share
price up by 86% on the first day
of trading, valuing it at $60bn.
DoorDash raised $3.4bn from
its ipo. Facing similar demand
for its ipo, Airbnb priced its
shares above the target range it

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Leaders Leaders 15

Will inflation return?

Low inflation underpins today’s economic policies. Governments should prepare in case it doesn’t last

Economists love to disagree, but almost all of them will tell placent. The Federal Reserve says it wants inflation to overshoot
you that inflation is dead. The premise of low inflation is its 2% target to make up for lost ground; the European Central
baked into economic policies and financial markets. It is why Bank, which was expected to announce more stimulus after we
central banks can cut interest rates to around zero and buy up went to press, may yet follow suit. Weighed down by the need to
mountains of government bonds. It explains how governments pay for an ageing population and health care, politicians will in-
have been able to go on an epic spending and borrowing binge in creasingly favour big budget deficits.
order to save the economy from the ravages of the pandemic—
and why rich-world public debt of 125% of gdp barely raises an Might these arguments prove correct? A temporary rebound
eyebrow. The search for yield has propelled the s&p 500 index of in inflation next year is perfectly possible. At first it would be
shares to new highs even as the number of Americans in hospital welcome—a sign economies were recovering from the pandem-
with covid-19 has surpassed 100,000. The only way to justify ic. It would inflate away a modest amount of debt. Policymakers
such a blistering-hot stockmarket is if you expect a strong but in- might even breathe a sigh of relief, especially in Japan and the
flationless economic rebound in 2021 and beyond. euro zone, where prices are falling (though rapid changes in the
pattern of consumer spending may have muddied the statistics).
Yet as we explain this week (see Briefing), an increasingly vo-
cal band of dissenters thinks that the world could emerge from The odds of a more sustained period of inflation remain low.
the pandemic into an era of higher inflation. Their arguments But if central banks had to raise interest rates to stop price rises
are hardly overwhelming, but neither are they empty. Even a getting out of hand, the consequences would be serious. Markets
small probability of having to deal with a surge in inflation is would tumble and indebted firms would falter. More important,
worrying, because the stock of debt is so large and central-bank the full cost of the state’s vastly expanded balance-sheet—both
balance-sheets are swollen. Rather than ignore the risk, govern- governments’ debt and the central banks’ liabilities—would be-
ments should take action now to insure themselves against it. come alarmingly apparent. To understand why requires peering,
for a moment, into how they are organised.
In the decades since Margaret Thatcher warned of a vicious
cycle of prices and wages that threatened to “destroy” society, the For all the talk about “locking in” today’s low long-term inter-
rich world has come to take low inflation for est rates, governments’ dirty secret is that they have been doing
granted. Before the pandemic even an ultra-
tight jobs market could not jolt prices upwards, the opposite, issuing short-term debt in a bet
and now armies of people are unemployed. that short-term interest rates will remain low.
Many economists think the West, and especially The average maturity of American Treasuries,
the euro zone, is heading the way of Japan, for example, has fallen from 70 months to 63.
which fell into deflation in the 1990s and has Central banks have been making a similar wa-
since struggled to lift price rises far above zero. ger. Because the reserves they create to buy
bonds carry a floating interest rate, they are
Predicting the end of this trend is a kind of comparable to short-term borrowing. In No-
apostasy. After the financial crisis some hawks warned that bond vember Britain’s fiscal watchdog warned that a
buying by central banks (known as quantitative easing, or qe) combination of new issuance and qe had left the state’s debt-ser-
would reignite inflation. They ended up looking silly. vice costs twice as sensitive to short-term rates as they were at
the start of the year, and nearly three times as much as in 2012.
Today the inflationistas’ arguments are stronger. One risk is So while the probability of an inflation scare may have risen
of a temporary burst of inflation next year. In contrast to the per- only slightly, its consequences would be worse. Countries need
iod after the financial crisis, broad measures of the rich-world to insure themselves against this tail risk by reorganising their
money supply have shot up in 2020, because banks have been liabilities. Governments should fund fiscal stimulus by issuing
lending freely. Stuck at home, people have been unable to spend long-term debt. Most central banks should start an orderly rever-
all their money and their bank-balances have swelled. But once sal of qe and instead loosen monetary policy by taking short-
they are vaccinated and liberated from the tyranny of Zoom, exu- term interest rates negative. Finance ministries should incor-
berant consumers may go on a spending spree that outpaces the porate risks taken by the central bank into their budgeting (and
ability of firms to restore and expand their capacity, causing the euro zone should find a better tool than qe for mutualising
prices to rise. The global economy already shows signs of suffer- the debts of its member states). Shortening the maturity of the
ing from bottlenecks. The price of copper, for example, is 25% state’s balance-sheet—as in 2020—must only ever be a last re-
higher than at the start of 2020. sort, and should not become the main tool of economic policy.

The world should be able to manage such a temporary burst of In praise of mothballs
inflation. But the second inflationista argument is that more The chances are the inflationistas are wrong. Even the arch-
persistent price pressures will also emerge, as structural disin- monetarist Milton Friedman, who inspired Thatcher, admitted
flationary forces go into reverse. In the West and in Asia many late in his life that the short-term link between the money supply
societies are ageing, creating shortages of workers. For years glo- and inflation had broken down. But the covid-19 pandemic has
balisation lowered inflation by creating a more efficient market shown the value of preparing for rare but devastating events. The
for goods and labour. Now globalisation is in retreat. return of inflation should be no exception. 7

Their third argument is that politicians and officials are com-

16 Leaders The Economist December 12th 2020

Brexit trade negotiations

Last tango in Brussels

If a last-minute trade deal is done, it will be thin—yet even that would be better than no deal

With the Brexit trade talks deadlocked—again—Boris John- out of the customs union implies not just more bureaucracy and
son flew to Brussels on December 9th to meet Ursula von customs controls but also checks on rules of origin for exports. A
der Leyen. By having a fish dinner with the European Commis- trade deal that erects rather than pulls down barriers is an un-
sion’s president, the prime minister hoped to replicate the last- usual beast. Industries ranging from broadcasting to chemicals
minute deal that he struck in the Brexit withdrawal treaty in the (see Britain section) will suffer from being under a different reg-
autumn of 2019 after he went for a walk in Cheshire with his Irish ulatory regime and losing hitherto frictionless trade.
counterpart, Leo Varadkar. This time it seems not to have
worked. As we went to press, the two had agreed that negotia- Then there is Northern Ireland. Under the withdrawal treaty,
tions should continue until Sunday, but the dinner failed appre- the province will stay in the single market and customs union in
ciably to narrow any of the big gaps remaining. order to avert the risk of a hard border with the Irish Republic.
But this necessitates checks on goods crossing the Irish Sea. It is
Contrary to many reports, the most intractable of these is not welcome that, after reaching agreement with the eu this week on
over access to British fishing waters. For both sides, fisheries are how these checks should be done, the government has aban-
politically important but economically insignificant, which doned its earlier plans unilaterally (and illegally) to rewrite the
should make a compromise feasible. The big-
gest difficulty concerns the so-called level play- Northern Irish provisions of the withdrawal
ing field. This is the label for the European Un- treaty. But treating the province, which voted to
ion’s longstanding worry that post-Brexit remain in the eu, differently from Great Britain
Britain may undercut the social, labour, envi- inevitably raises questions about the future of
ronmental and state-subsidy rules that under- the United Kingdom. Equally, the demand for a
pin its single market. The eu’s wish to be al- second independence referendum is rising in
lowed to retaliate promptly if this happens runs Scotland, which also voted to remain.
slap against Mr Johnson’s claim that Brexit must
mean unfettered sovereignty and an absolute right to diverge Yet even a thin deal would be better than no
from regulations that are set in Brussels. If no compromise deal at all. The economic differences between
proves possible on the level playing field, the outcome is likely to the two count for something. Modelling by the independent Of-
be that there will be no trade deal in place when the transition fice of Budget Responsibility finds that a deal would make gdp
period comes to an end on December 31st. some 4% lower than it otherwise would be: no deal would add a
further 2 percentage point cut on top. Then there are the politics.
The deal or no-deal argument skates over an important fact: Whereas a deal would create a base on which Britain could build
that even agreement would represent a hard Brexit. Avoiding ta- other agreements with its largest and most important neigh-
riffs and quotas on goods is certainly desirable, but it still entails bour, the acrimonious blame game that would follow a failure in
leaving the single market that Margaret Thatcher did so much to the talks would poison relations for years. Not reaching a deal
create. The deal does nothing for services, which make up 80% of would complicate co-operation on such matters as domestic se-
the economy. The eu is withholding decisions to grant Britain curity, intelligence-sharing and foreign policy. And it would
the necessary equivalence for its financial regulation or to rule stand as a globally reputation-shredding failure of statecraft by
its data protection adequate so as to permit data transfers. Being both sides. As he returns home from his Brussels dinner, Mr
Johnson should reflect on what a poor outcome that would be. 7

The IPO boom

Capital idea

Why raising equity is back in fashion

For over a decade many people in finance have worried about ery company, raised $3.4bn in an ipo. In Hong Kong shares of jd
the decline of the public company. Big firms were shrinking Health, a digital-medicine star, rose by over 50% on their first
their capital bases by buying back shares. And fast-growing day of trading after its $3.5bn ipo. As we went to press Airbnb,
firms, including several hundred tech “unicorns”—startups one of the largest unicorns, was listing at a valuation of over
worth over $1bn—chose to remain in private hands rather than $40bn. Worldwide, some $800bn of equity has been raised in
bother with an initial public offering (ipo). The result was riskier 2020 by non-financial firms, the highest sum on record. In
corporate balance-sheets and the exclusion of ordinary inves- America in the last quarter the proceeds should roughly match
tors from the ownership of the economy’s most exciting firms. the amount of shares that companies have bought back.

This year has seen a reversal of this trend with an equity-rais- Equity is more expensive than borrowing, but has attractions.
ing bonanza (see Business section). In the past few days Tesla has It is permanent capital that does not need to be repaid. And be-
said it will sell $5bn of new shares, while DoorDash, a food-deliv- cause it does not come with interest payments it is flexible, mak-1



18 Leaders The Economist December 12th 2020

2 ing firms more resilient. It is back in fashion for several reasons. pandemic abates, firms may reinstate buybacks and dividends.
Some firms need to repair the damage from the pandemic, for ex- The last danger stems from a cohort of firms having too much
ample Rolls-Royce, an aircraft-engine maker, and Carnival
Cruises. The tech boom means unicorns can go public at sky- cash. In the 1970s Michael Jensen, a scholar, argued that debt
high valuations. Frothy share prices allow the founders of firms forced discipline on managers. His ideas were taken too far by
that are already listed to raise capital without diluting their own Wall Street’s junk-bond salesmen, but the risk of executives
stake by as much—something Tesla’s Elon Musk has spotted. wasting cash on deals or vanity projects is real. The five biggest
There are other factors, too. More Chinese firms are coming of tech firms have over $550bn sitting around. They might try big
age. This year Nongfu Spring, China’s answer to Evian, floated, takeovers—think of Apple buying Netflix. Meanwhile, some
making its founder the country’s richest man. Investors are ex- newly listed firms have oodles of cash, but give outside investors
perimenting with legal structures that they think are more effi- only limited voting power, making managers unaccountable.
cient than ipos, including spacs (special purpose acquisition
companies). Finally, because covid-19 has led many firms to cut Governments should welcome the equity boom. For years lib-
their buybacks there is less equity being retired than normal. ertarians have argued that the only way to revive ipos is by water-
Investors are euphoric but they face several risks. One is that ing down corporate-governance rules. They have been proved
prices are too high. Another is that it is not yet clear whether wrong. Many politicians long to ban buybacks, which they ac-
overall corporate indebtedness will fall, partly because the dam- cuse of all sorts of evils (in fact they are similar to dividends but
age from lockdowns is still mounting. For non-financial compa- more flexible, which came in handy this year). If politicians real-
nies in America’s s&p 500 index, net debt (debt less cash), ly want to sustain healthy equity markets, they should instead
dropped only slightly in the third quarter of this year, and re- reform tax codes, which almost everywhere favour debt by mak-
mains above its level in 2019. Some firms are still burning cash ing interest costs tax-deductible. Removing the tax break for
and perhaps a fifth of s&p 500 firms are overborrowed. As the debt and putting equity on a level playing field should be the pri-
ority. It has the added advantage that the proceeds should help
governments repay their own colossal debts. 7

Transgender medicine

First, do no harm

Other rich countries should learn from the Keira Bell case in England

What should you do if a12-year-old girl says: “I am a boy”? If ment treatment may never be able to have children of their own,
the answer were simple or obvious, the question would or experience an orgasm; and the evidence of long-term benefits
not be so explosively controversial. A good place to start, if you is extremely sketchy. The English court said it was highly unlike-
are a parent, is to affirm that you love the child. It should go with- ly that someone of 15 could understand all this well enough to
out saying, too, that no child should be bound by gender stereo- give informed consent to taking puberty blockers, which it
types. Boys can wear dresses; girls can play with cars, or become called an experimental treatment. It suggested that in the case of
plumbers. The question gets much harder, however, when chil- 16- or 17-year-olds, it might be wise for doctors to seek a court’s
dren say they hate their body and want a different one. Gender permission before prescribing such drugs. Once they reach
dysphoria (a feeling of alienation from one’s natal sex) is real, adulthood, young people in England and Wales are free to seek
and the proportion of children and adolescents diagnosed with whatever hormones or surgery they choose.
it in rich countries is rising for reasons that are poorly under-
stood (see International section). One school of Many trans activists denounced the ruling as a travesty, or
thought, which has spread rapidly, is that you even a denial of the right of trans people to exist.
should agree with youngsters who identify as Their passion is understandable. Trans people
transgender, and offer them medical interven- have often been appallingly treated, and it is
tions, if they ask for them, to help their bodies right that societies should pass laws to protect
match what they regard as their true selves. them from discrimination, and from bullying in
schools. But given the available evidence, the
England’s high court last week highlighted ruling is a reasonable attempt to set out guide-
some of the problems that can flow from such lines in an area where there are as yet no good
thinking. The case concerned Keira Bell, who solutions. Other countries should learn from it.
says she was rushed into life-changing medical treatment when
she was 16, which she now regrets. The process began with drugs Some children and adolescents who express gender dyspho-
that delay puberty. These are typically described as reversible ria will never be happy with their natal sex. But studies suggest
and a way to “buy time”. But at the Tavistock clinic, where Ms Bell that 61-98% of children with gender-related distress, if allowed
was treated, most patients who took puberty blockers went on to go through puberty without medical intervention, will be rec-
also to take cross-sex hormones (oestrogen for males who want onciled to it. Many will realise that they are simply gay. Alas,
to grow breasts; testosterone for females who want to develop there is as yet no way to predict these outcomes. So the possible
male sexual characteristics). Many then proceeded to surgery. harm of delaying transition for those who might benefit from it
must be weighed against harm to the health and the emotional
Some of the effects of this are irreversible. Skipping puberty lives of a larger number of people. The latter harm appears worse,
causes sterility. Ms Bell’s breasts, which were removed when she so the English court was right to err on the side of preventing it.
was 20, will not grow back. Those who undergo gender-reassign-
It was also right to criticise the Tavistock for several failures.1

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20 Leaders The Economist December 12th 2020

2 The clinic could not say how many of those referred for puberty Some Australian and American states have banned “conver-
blockers had autism, which is common among those who ex- sion therapy” in relation to sexual orientation or gender identity;
press gender dysphoria. It did not have good data on how many Canada is considering doing likewise. This conflates two issues
move on to cross-sex hormones. Nor did it properly lay out for which are not the same. It is wrong to try to talk gay people into
patients the alternatives to medical intervention. being straight. But the same principles applied to gender identi-
Perhaps clinics in other rich countries do a better job of caring ty could criminalise counselling that raises the distinct pos-
for the children and adolescents that attend them. But since they sibility that a particular trans-identifying child or adolescent
are often subject to less scrutiny, it would be unwise to assume might one day desist. So such laws are a bad idea. Youngsters
so. The number of transgender clinics has shot up in several who are trying to grapple with gender dysphoria need honest,
countries. In America it has risen from one to more than 50 since caring therapy that sets out all the long-term options. Health ser-
2007—there are no national statistics on how many patients vices must do a better job of providing it. And before embracing
seek treatment. And some activists are urging rules which, invasive procedures such as those undergone by Ms Bell, the
though no doubt well-meaning, would make it harder to strike medical profession needs to gather evidence to establish the bal-
the right balance when treating gender dysphoric children. ance of benefits and harm they bring. 7

The music industry

Knock-knock-knockin’ on Jody’s door

Selling your songs makes sound commercial sense. But it may not always fit the brand

This week Bob Dylan sold his song catalogue to Universal Mu- That the live-performance industry is in severe recession?
sic Publishing Group. Mr Dylan, like other musicians, has not Yes, ’n’ how many years can some people exist
been able to tour during the pandemic. Cashing in now will spare Before they capitalise their ongoing revenues?
him the bureaucracy of future tax payments. Universal’s chief The answer, my friend, is contained on p96 of the
executive, Jody Gerson, has not disclosed how much the group offer document
paid. Mr Dylan has put his thoughts about the deal into ballad-
form. It came into our hands thanks to a Mr Tambourine Man. I ain’t gonna work on no one’s farm no more
No, I ain’t gonna work on no one’s farm no more
Hey! Ms Universal, Ma’am, play my songs for me Well, I tried my best
In the clouded covid mourning I’ll sell ’em all to you To find the highest price
My weariness amazes me, I’m branded on my feet And Universal wants me
I have no one to sing to To sell it to them
And the ancient empty street’s dead set for streaming So I ain’t gonna work on no one’s farm no more

We live in a commercial world Ring them opening bells at the nyse
Love don’t have any place So the people will know
Life is in mirrors, death disappears Oh it’s rush hour now
Up the steps into the nearest bank Ring them closing bells for the chosen few
who will judge when the dividend is due
Papa’s bank book wasn’t big enough Bring them Nobels for the child that cries
And I was standin’ on the side of the road When innocence dies
Lord knows I’ve paid some dues gettin’ through
Tangled up in red tape You say you’re lookin’ for someone
Who’s never venal but always strong
I never said nothing, there was nothing I wrote To protect you and defend you
I went with the woman From the greed you think is wrong
In the long black stretch-limo Someone to turn their back on Mammon’s law
But it ain’t me, babe
Oh, Bob said to Jody G, “Name me a sum” No, no, no, it ain’t me, babe
Jody says, “Man, you must be puttin’ me on” It ain’t me you’re lookin’ for, babe
Bob say, “No.” Jody say, “What?”
Bob say, “You must pay what I want Jody How does it feel
But next time they play my songs you’re in the mon How does it feel
Ey.” Jody says, “When you want this payin’ done?” Like a complete tycoon
Bob says, “In structured payments in the next three tax years.” Like a rolling stone?

How many roads must a man walk down Hey! Ms Universal, Ma’am, play my songs for me
Before you call him a financier? In the clouded covid mourning I’ll sell ’em all to you
Yes, ’n’ how many deaths will it take till he knows
©Universal Music Publishing Group 7

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22 Letters The Economist December 12th 2020

WEIRD science Porto. Thanks to the eu, we are Instead they have benefited ous male’s cubs. This also
You reported that a lack of data now more open to internation- greatly from them and been happens in companies, where
on race hampers efforts to al trade than most Spanish very much aware of how diffi- projects and sometimes people
tackle inequalities, and exhort- regions, and our economy is cult it is to forecast an epidem- linked with the previous boss
ed governments to ensure that growing fast. In Galicia, at least ic in the face of limited and are “killed off” by the successor
they start to gather this vital on the economic front, our fast-changing data availability upon taking over.
information (“Wanted: more relationship with Portugal is as and quality. They also try to
data”, November 21st). This important as it is with Madrid. collaborate with, and get feed- daniel weihs
message also needs to be heard Our languages are similar, back from, epidemiologists
by researchers. The over- or which helps us communicate and public-health researchers. Haifa, Israel
under-sampling of ethnic and with 300m Portuguese speak-
social groups in research is ers around the world. benjamin moll What Abraham said
skewing our understanding of Your lovely obituary of Rabbi
human behaviour and disease. enrique sáez Professor of economics Lord Sacks (November 21st)
As of 2018, individuals includ- London School of Economics mentioned that “Abraham,
ed in the vital studies defining A Coruña, Spain ordered to sacrifice his son
the genetic causes of diseases After the Dayton peace deal Isaac, had said three times to
were 78% European, 10% The economics of a disease “Dayton at 25” (November 21st) God, ‘Hineni’, ‘Here I am.’” In
Asian, 2% African, 1% Hispan- Although epidemiologists may depicted Bosnia correctly in fact, Abraham says Hineni to
ic, and less than 1% for all other have sometimes failed to see several aspects. When I started God only once in that episode,
ethnic groups. A report in how social behaviour influ- visiting the country 12 years once more to God’s messenger
Science suggested that Western ences the spread of a disease ago, I was surprised to still see (or “angel”), and once to Isaac
bias in human genetic studies (Free exchange, November divisions among its people. himself. The story is about
is “both scientifically damag- 14th), economists have often The war heroes on monuments Abraham’s fidelity and avail-
ing and unfair”. In the field of been slow to recognise how the in one place would be consid- ability to God, surely; but by
psychology, the problem is so social changes generated by ered war criminals just a few embedding the same word in
great—96% of data comes from the threat of a disease affects kilometres away. Car plates Abraham’s response to his son,
12% of the world’s citizens— the economy. This is the sec- bear no indication of the re- the story itself presents the
that the over-sampled privi- ond time this century that gion of registration, probably tension between our obliga-
leged population has its own economists have failed miser- to prevent trouble. Yet some of tions to the divine and our
acronym, weird (Western, ably to anticipate how an the problems you pointed out obligations to our fellow hu-
Educated, Industrialised, Rich epidemic can be as much an are not necessarily attributable mans. It does not try to obscure
and Democratic). This weird economic crisis as it is a pub- to the current state structure: those tensions, but confronts
population has been shown lic-health one, and to antici- mass emigration, poverty and the reader frankly with them.
across a number of traits to be pate how deep it would be once bad public services can be
poorly representative of the it did emerge. found in several ethnically I met Rabbi Sacks only once,
wider population. homogenous countries. As and very briefly. But from that
You said, rightly, that regards Milorad Dodik, he may encounter, I suspect that he
Missing data matter. This economics shows very little well talk “of independence and would be delighted that the
increases inequalities, espe- interest in crossing disci- integration with Serbia”, but he obituary’s small slip gives us
cially when missing from plines. More worrying is the will not follow this up with an opportunity to contemplate
inputs to algorithmic decision- insistence of economists to action. Any new armed con- some of the fundamental
making systems and artificial rely on a limited set of meth- frontation is close to impos- dynamics he had dedicated his
intelligence, technologies that ods that, although rigorous, sible. Over time, the present life to communicating.
have an impact on society. prevent us from investigating differences will soften. In the
catastrophic risks. George future, Dayton at 50 might be a charles mathewes
professor andrew morris Akerlof recently criticised the rare example of a successful
“hard” methods that are case in state building. Professor of religious studies
caroline cake preferred in economics. University of Virginia
oleksandr ovchynnykov Charlottesville, Virginia
professor alastair ilan noy
Strasbourg So there
denniston Chair in the economics of Chinese officials’ views of
disasters and climate change The corporate jungle America and its democracy
Health Data Research uk Victoria University of Writing about the change in may be filled with “disdain”
London Wellington leadership at McDonald’s, (Chaguan, November 7th) but
Wellington, New Zealand Schumpeter mused on new there is something we can do
Borders melt away bosses who are “overeager to that China’s citizens cannot.
One important thing to note Your column claimed that tear up the legacy of their We can change our president.
about the Spanish region of economists like me and epide- disgraced predecessors” (No- And we did.
Galicia is that things began to miologists “got off on the vember 14th). This is what I call
improve when Spain joined the wrong foot” during the pan- the Simba Syndrome. Many roy girasa
European Union and the bor- demic. The views you attribut- new executives follow the
der with Portugal disappeared ed to “economists” are those of model of the lion pride, formed Beaverton, Oregon
(“Us Gallegos”, November 7th). a small but loud minority. Most by a dominant male, several
The combined Spanish and economists I know value the lionesses and their cubs. When Letters are welcome and should be
Portuguese area in the north- work of epidemiologists and a new male takes over by chas- addressed to the Editor at
west of the Iberian peninsula try to learn from them as much ing off or killing the previous The Economist, The Adelphi Building,
has 12.5m people. Money from as possible. They do not king he then kills off the previ- 1-11 John Adam Street, London WC2N 6HT
Europe helped build a “intensely criticise” epidemi- Email: [email protected]
motorway between Vigo and ologists’ models or their use. More letters are available at:
Economist.com/letters

Executive focus 23

SHELTER AFRIQUE:

Seeking an independent board director

1.0 ABOUT SHELTER AFRIQUE

Shelter Afrique is the only pan-African finance institution that exclusively supports
the development of the housing and real estate sector in Africa. By meeting the
needs of the continent’s rapidly growing urban population, our work has a direct
and positive impact on the lives of many.

2.0 ROLE SPECIFICATION

Shelter Afrique is seeking to appoint an Independent Non-Executive Director who
will be expected to among others:

• Contribute towards the Board’s responsibility in ensuring that the Company’s
portfolio is properly invested and managed in accordance with the investment
objective.

• Maintain and enhance the range of the Board’s skills, expertise, experience
and knowledge.

• Maintain, through Board integrity, the reputation and profile of the
Company.

3.0 PERSON SPECIFICATION

The successful candidate will have a combination of the following characteristics:

Required:
• Diversity of thought: The successful candidate will bring diversity of thought
to the board.
• A background in managing NPLs or restructuring, fund/capital raising.
• Experience of project finance is essential and specifically residential real
estate investing would be an advantage.

Applicants are invited to send a cover letter illustrating their suitability against the
listed qualifications and detailed curriculum vitae as well as names and addresses of
the referees to [email protected].

The deadline for submission is 31st January 2021.

Only short-listed applicants meeting the above requirements will be contacted.

We invite you to learn more about Shelter-Afrique and about this role by accessing
our web site: http://www.shelterafrique.org.



Briefing Inflation The Economist December 12th 2020 25

Prognostication and prophecy The agenda for a big conference on central
banking to be held in February has copious
How strong is the case that inflation is about to return? space for financial instability, climate
change and inequality but barely any for
In 1975 Adam Fergusson, a journalist on the number of “inflation surprises” in inflation—despite taking place in Ger-
the Times, published a book called “When which the rate spikes (see chart 1 on next many, a country which, since Weimar, has
Money Dies”. A history of hyperinflation in page). When “The West Wing”, a television all but fetishised sound money.
Germany in the early 1920s, it was written show, gave its fictional president a “secret
with an eye to what was going on in the plan to fight inflation” in 1999 it was as a Indeed a modest rise in inflation, rather
then-present day. Inflation in Britain was joke, not a plot point. True to Mr Fergus- than giving central bankers the vapours,
not at the prices-soaring-day-by-day levels son’s belief that the experience of living would have them sighing with relief. In re-
seen in the Weimar Republic. But in 1975 it with inflation is “forgotten or ignorable cent years, and most dramatically during
reached an unprecedented 24%—grim when it has gone”, his book fell out of print. the worst of the crisis this spring, the threat
enough for Fergusson’s warning that the of demand-sapping deflation loomed
experience of inflation was “totally absorb- It was republished to acclaim at the end large, especially in the euro area and Japan.
ing, demanding complete attention while of the 2000s, when post-financial-crisis Some want central banks to aim for infla-
it lasts” to hit home. stimulus packages increased government tion higher than the 2% target that most of
debt prodigiously, and “quantitative eas- them use, and America’s Federal Reserve
Rapid, continuous increases in prices ing”, the process by which trillions of new has already said that it wants to overshoot
arbitrarily take wealth away from savers dollars would be created, started to hit its its 2% target in the recovery to make up for
and devalue people’s wages. It is not just stride. Many worried that the stage seemed recent shortfalls. Recent experience sug-
the purchasing power of a unit of currency set for prices to surge in a way which had gests that may be hard: interest rates close
that is eroded; it is the trust in a reliable fu- not been seen for a generation. to zero have left monetary policy hard-put
ture on which contracts and capitalism de- to push inflation back up even to 2%.
pend. From the early 1970s to the 1980s They did not. Over the 1970s rich-world
more than 50% of Americans said “infla- inflation averaged 10% a year. In the 2010s Look behind you
tion or the high cost of living” was the sin- the rate stayed stubbornly below 2% a year. But if it is easy to ignore the prophets of
gle biggest problem facing the country. That is one of the reasons that the small but doom, it may not be wise. If 2020 has a les-
vocal band of economists and investors son, it is that problems which many in the
But by the 1990s the beast seemed to be that is once again worried about excessive world had broadly stopped worrying about
vanquished. Average rates dropped; so did price rises is by and large being ignored. can rear up with sudden and terrible force.
And those sounding the alarm today are
right to point out that the circumstances of
the covid pandemic do not offer a simple
re-run of 2009’s false alarm.

Some of today’s inflationistas predict a1

26 Briefing Inflation The Economist December 12th 2020

2 possibly high but transitory spike in prices The private sector will thus find itself economist, points out that this means
as consumer spending bounces back from flush with cash as vaccinated economies there is a “clash” between the two best-
the pandemic. On December 3rd Bill Dud- reopen. Households and firms may remain known economic theories associated with
ley, who was until 2018 a vice-chairman of cautious, sitting on their accumulated sav- the Chicago school. Milton Friedman said
the Fed’s interest-rate-setting committee, ings. But amid the joy of reopening they sustained growth in the money supply
warned Bloomberg readers that sharp price may instead go on a spending spree, mak- leads to inflation; Eugene Fama argued that
increases might be necessary “to balance ing up for all the time not spent in theatres, market prices fully reflect all available in-
demand with the available supply, which restaurants and bars during 2020. That formation. “If you believe that we are going
the pandemic has undoubtedly dimin- would result in a lot of money chasing to have inflation now...the efficient-mar-
ished.” The next day David Andolfatto, an goods and services that might not be in am- kets hypothesis would have to be wrong,”
economist at the St Louis Fed, warned ple supply, resulting in a period of inflation Mr Christensen argues.
Americans to “prepare themselves for a that would tail off as the purchasing power
temporary burst of inflation.” of the money involved fell, bringing things Most economists side with the markets
Others warn of more persistent infla- back towards the status quo. and Mr Fama. In general they no longer
tionary pressure. Economists at Morgan think about inflation as 1980s monetarists
Stanley, a bank, predict “a fundamental From the Black Death on did (indeed even Friedman, late in life, ad-
shift in inflation dynamics” in America, Researchers from the Bank of England who mitted that modern central banking might
with inflation rising to the Fed’s 2% target looked at 800 years of (admittedly patchy) have severed the link between the money
by the second half of 2021 and going on to records have concluded that inflation does supply and prices). Following the “New
overshoot it. After a typical recession such typically rise in the year after a pandemic Keynesian” framework of the 1990s they
a rebound takes three years or more. The begins. A recent paper by Robert Barro of believe that the underlying driver of infla-
most pessimistic group warns that com- Harvard University and colleagues finds tion is a combination of the public’s expec-
placent or distracted central bankers will that the influenza pandemic of 1918-20 “in- tations of price rises, which are self-fulfill-
allow such pressures to go unchecked, creased inflation rates at least temporar- ing, and the health of the labour market.
leading to a decade of stubbornly high in- ily”. By the time the effects of the covid-19 Both currently point to low inflation.
flation comparable to the 1970s. pandemic are fully on the wane more firms
Three main factors are deemed to be at will have joined the ranks of those which Neither survey data nor the financial
play: the after-effects of the stimulus mea- have already gone under and many of the markets suggest that the public expects
sures taken by governments to cope with survivors will be struggling to run at full dramatic price rises. And most forecasts
the pandemic; demographic shifts; and tilt. Thus people’s willingness to spend suggest it will take some time for employ-
changes in policymakers’ attitudes to- could easily rebound faster than their op- ment to find its pre-pandemic level, even
wards the economy. portunities to do so. There is already some in the economies which bounce back most
Take the stimulus packages first. Mone- evidence of bottlenecks where supply is quickly. Goldman Sachs, a bank which has
tarism, which was the dominant economic falling behind demand. The price of ship- been especially bullish about the prospects
ideology over the period in the 1980s dur- ping an object from one country to another for the American economy, does not expect
ing which inflation was squeezed out of has jumped in recent weeks, while the the unemployment rate to fall below 4%
rich-world economies, sees the root cause price of iron ore has risen by more than until 2024. And America’s economy is ex-
of inflation as an excessive supply of mon- 60% since the beginning of the year. pected to recover faster than most. Rela-
ey. On that basis the fact that nearly a fifth tively high unemployment—in the jargon,
of all the dollars in existence have been This is the risk of which Mr Dudley an “output gap”—will give firms little in-
created this year clearly looks perturbing. warns. In the aggregate, though, investors centive to increase people’s wages, and
Central-bank balance sheets in America, seem unconvinced. The inflation expecta- thus little need to raise prices. A “projected
Britain, Japan and the euro zone have risen tions which can be derived from prices in large output gap should push global core
by more than 20% of their combined gdp financial markets have recently picked up a inflation 0.5% percentage points below its
since the crisis began, mostly to buy gov- little thanks to the good news on vaccines pre-crisis levels next year”, argue econo-
ernment debt. This new money is paying and the prospects for a rebound in the mists at JPMorgan Chase, another bank.
for enormous stimulus programmes, in- world economy. But they still suggest that
cluding wage subsidies, furlough schemes investors think next year’s inflation is So even if there is a spending boom,
and expanded welfare benefits that put more likely to be below the 2% central there will be plenty of economic slack
money in pockets and purses. banks target than above it (see chart 3 on around to accommodate it. Some econo-
This money creation differs from the next page). Lars Christensen, a Danish mists bridge the two views, predicting that
burst seen after the financial crisis—the the economy will get back to speed in fits
burst which, despite warnings, triggered and starts, some perhaps inflationary. But1
no surge in inflation. That earlier burst be-
gan during a prolonged credit crunch. This A problem vanquished?
meant that the new money created by cen-
tral banks was making up for money that Countries in which inflation rose by more 1 Broad-money supply* 2
was not being created by bank lending. than four percentage points in a year 60 % increase on a year earlier
This time it is not just “base money”— % of total 40 20
physical cash and electronic reserves the OECD 15
quantity of which is under central-bank Rich Non-rich 10
control—which has soared. Measures of 5
“broad money”, which includes house- 20
holds’ bank balances, have, too. Lending to
the private sector has risen sharply as firms 0 World 0
have borrowed cash to continue opera-
tions. After 2009 the broad-money supply 1961 70 80 90 2000 10 19 1988 95 2000 05 10 15 20
rose slowly; today it is spiking (see chart 2).
Sources: World Bank; Haver Analytics/Oxford Economics; The Economist *Cash and near-cash equivalents

The Economist December 12th 2020 Briefing Inflation 27

Hardly ominous 3 aged the most, puts paid to this idea. Infla- will respond to the prospect of inflation
4 tion there has long been lower than any- rising above its target with higher interest
Inflation expectations, five-year swap rate, % where else, despite Herculean efforts on rates, regardless of what politicians and
the part of the Bank of Japan. Mr Goodhart the public might want.
Britain* 3 and Mr Pradhan counter this argument by
United States 2 saying that a “global escape valve” stopped It is possible that these norms are weak-
inflationary pressures in Japan from ening. In recent years there have already
Europe 1 achieving much. Rather than stagnate, in- been greater attacks on the independence
Japan 0 vestment moved overseas as Japanese of central banks, such as President Donald
manufacturing firms took advantage of Trump’s exhortations that interest rates
2015 16 17 -1 plentiful global labour. Cheap imports kept should stay low. And during the pandemic
18 19 20 goods inflation down and the offshoring of the relationship between central banks
Source: Bloomberg manufacturing jobs reduced workers’ bar- and finance ministries has grown unusu-
*Expectations for RPI not CPI gaining power. ally close. After it ends, politicians will face
the problem of the debts left behind.
2 for most, high joblessness and contained In fact, though, wage growth in Japan’s Where those debts are long-term, inflation
inflation expectations make forecasting manufacturing industries has been com- would be a handy way to reduce their real
continued low inflation a no-brainer. paratively strong. What is more, the au- value, easing the strain on budgets. Politi-
What, though, if the New Keynesian thors concede that Japan’s ageing popula- cians may be more willing to entertain
view is missing key parts of the story? In tion has not had quite the effect on the such an option for the reason identified by
“The Great Demographic Reversal”, pub- dependency ratio that might be expected— Mr Fergusson—that, after a long period of
lished last summer, Charles Goodhart, a because many more elderly people are now low inflation, people forget how awful it
former member of the Bank of England’s working. The same phenomenon could yet can be. A third of the people currently liv-
monetary-policy committee, and Manoj contain inflation elsewhere. ing in the rich world had not been born
Pradhan of Talking Heads Macro, a re- when average inflation last exceeded 5%.
search firm, provide an alternative view of The third argument for fearing a return
the past decades’ low inflation. It was not, of inflation is political. It rests on the idea Doubting the future
they say, the result of a correct diagnosis of that governments and central banks are be- The Fed’s commitment to deliberately al-
the problem leading, in the hands of inde- coming more tolerant of inflation, and that low inflation to exceed 2% during the re-
pendent central bankers, to appropriate they will become even more so as the ex- covery is Exhibit A for this belief. Christine
monetary policy. Rather, it was driven by tent of the pressure on government bud- Lagarde, the president of the European
global demography. gets becomes apparent. Central Bank (ecb), emphasises her man-
In recent decades the integration of Chi- date is to “support the general economic
na, Europe’s formerly communist east and Back in the 1970s presidents and prime policies” of the eu, as well as ensure stable
other emerging markets into the global ministers were happy to strong-arm cen- prices. Central bankers everywhere now
trading system provided the world econ- tral bankers into doing what they wanted. admit, if only under their breath, that as
omy with millions of new workers. As Inflation was tamed only after Paul Volcker well as maintaining price stability they are
bosses found it ever easier to get their la- proved the Fed’s commitment and inde- also trying to keep governments’ long-
bour done in Guangdong or Bratislava the pendence by pushing America into reces- term-borrowing costs low in order to facili-
bargaining power of rich-country workers sion to slow price rises. A new paper by Jo- tate fiscal stimulus. Should inflationary
fell, and price rises to cover increased nathon Hazell of Princeton University and pressure start to rise while they are doing
wages became a thing of the past. This fits colleagues argues that post-Volcker “shifts so, will they abandon that effort? Central
the finding that much more of the low in- in beliefs about the long-run monetary re- banks which put up borrowing rates under
flation seen in recent decades has come gime” have proved more important than the current circumstances would undoubt-
from stable or falling prices for goods that any other factor in conquering inflation. edly face opposition from the finance min-
can have their site of production shifted Their actions in recent decades have built istries that would pay the increased costs
than has come from services which have to up a firm expectation that central banks and suffer in subsequent elections. Infla-
be delivered in situ. tionistas think that the politicians would
Things are now about to change, the au- win, as in many cases they constitutionally
thors claim. As populations in the rich should. Central bankers’ independence is
world and China age, the number of depen- granted by elected politicians.
dents per worker will soar, creating a la-
bour shortage in care industries. True, Afri- But this political argument, too, has its
ca and India have plenty of youngsters. But weaknesses. The ecb’s independence is
rich-world politics may further increase protected by treaty, and even though it has
the barriers to their migration. Workers in become more willing to stimulate in recent
the rich world will thus acquire more bar- years, it still exhibits a hawkish bias, toler-
gaining power; wages will rise and prices ating inflation expectations that are well
will rise accordingly. As well as reigniting below target. Elderly people like to vote and
inflation, these demographic forces will tend to dislike inflation, argues Vitor Gas-
make Western countries more equal, Mr par of the International Monetary Fund.
Goodhart and Mr Pradhan argue: another That should limit any political pressure for
seemingly inexorable trend reversed. higher inflation in ageing societies.
It might seem that the recent experi-
ence of Japan, the rich country that has The doves and the markets currently
have the better of the argument. But the
case for reflation in the world economy is
stronger than it was after the global finan-
cial crisis. A recovery from the pandemic
that is untroubled by excessive inflation
looks likely. But it is not guaranteed. 7

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United States The Economist December 12th 2020 29

Black Lives Matter support for the blm movement, founded
seven years ago, soared to an unheard-of
The George Floyd effect 67% in June, according to Pew researchers.
It has slipped a bit since, but remains high.
CHICAGO
Voters, especially Democrats, respond-
Six months after mass protests started to rock America, a stronger black-lives ed. Joe Biden has concluded that more Afri-
movement may be emerging can-Americans must be seen in prominent
jobs. His choice of Kamala Harris, who is
“When there’s a chance to make feeling new “validation” for her work. Olu- part African-American, as his running-
change, we must be ready to take chi Omeoga at Black Visions Collective, a mate proved popular. This week he picked
it,” says YahNé Ndgo, a singer and activist grant-giving body in the same city, is also Lloyd Austin as defence secretary. If the re-
with Philadelphia’s chapter of Black Lives fired up, saying America has entered “a dif- tired four-star general is confirmed, he
Matter (blm). Events over the past six ferent phase, one hundred percent”. Public would be the first African-American to pre-
months, she says, have brought a rare side over the Pentagon. That matters, says
chance to shape national affairs. Protests Also in this section the incoming president, to “make sure that
flared across America after footage spread 30 Hope for black entrepreneurs our armed forces reflect and promote the
of the death of George Floyd, an African- 31 The never-ending election full diversity of our nation”. His cabinet
American who was choked for nearly nine 31 The urinal is political will be home to many non-white faces.
minutes by a policeman in Minneapolis in 32 Anti-Semitism accusations
May. By one count over 8,500 civil-rights 32 The Fort Hood report Does this amount to a new wave for the
demonstrations have taken place since. 33 How much economic stimulus? civil-rights movement? blm looked bereft
34 Lexington: America and China before the summer. Several activists say
The sight of thousands of marchers, the national part of their movement had
usually young and mostly peaceful, helped lost its way. Ms Ndgo, who is critical of na-
to sway public attitudes in ways small and tional leaders, says it had become “a sham-
big. Kenya McKnight, who runs a group in bles”. Local chapters were passionate, but
Minneapolis educating black women focused mostly on holding rallies in re-
about finance, says she was invigorated, sponse to violent incidents by police. blm
boasted of its grass-roots organising and
decentralised, leaderless structure. But
critics say that proved messy, bureaucratic,
slow-moving and ineffective.

Patrisse Cullors (pictured), one of blm’s
three co-founders, bluntly blamed her
movement’s “half-drawn blueprints and
road maps that led to untenable ends”, as
well as its lack of funds and vision. Black
people, she wrote in September, had “paid
dearly” for these shortcomings. Better fo-
cus and organisation were needed.

Some of that has changed. Start with the
great fire-hose of money pointed at blm
groups and sympathisers. The example of
Niko Georgiades of Unicorn Riot, a non-
profit, left-leaning media firm that posted
early footage of protests in Minneapolis, is
instructive. Thanks to online donations,
within a couple of months his almost-
broke outfit went from $8,000 in the bank
to nearly $650,000. That’s enough to keep
operating for another five years, he says
joyfully. Ms McKnight saw donations flood
in from people in America, Europe, Japan
and Brazil. Within a month of the protests,
blm’s national network had to scramble to
offer a first round of $6.5m in grants—far
more than ever before—to city chapters,
gay-rights groups and others.

That was just a start. Vastly larger prom-
ises and sums followed as employee and
corporate donors, as well as rich individ-
uals, joined the gift-giving. Donations to
blm-related causes since May were
$10.6bn. Exact sums received will be
known when the central body overseeing
blm spending publishes its finances (con-
fusingly it relies on another entity, a “fiscal
sponsor”, the Tides Foundation, to oversee1

30 United States The Economist December 12th 2020

2 its books). A leading figure talks of “incred- sees blm as an offspring of the radical Black unlikely to end, but it is also doubtful that
ible financial growth and capacity”, and a Power activism of the 1960s, but fears it is the disgruntled ten chapters can lure more
huge surge in “the number of folks who instead becoming “vanilla”, ineffective and to their camp. Nobody owns the blm trade-
want to throw down with us”, meaning co-opted by those who resist change. mark. Nor can anyone say convincingly
long-term partners. what counts as an official chapter of the
Another change, the restructuring of Ms Ndgo is also upset at secrecy. She movement. That means both camps are
blm, could turn out to be just as signifi- warns that Ms Cullors, if she does emerge free to go on operating. Much will depend
cant: power is to be centralised. Ms Cullors as the main blm leader, may be out of touch on who has more resources to help activ-
has stood up as the boss of blm’s Global because “she is not on the streets, not ists or mount bigger campaigns. If the
Network Foundation, which she calls the grass-roots organising”. She complains money keeps flowing to the foundation
“umbrella organisation” for the whole that the foundation has been woefully that Ms Cullors runs, then her more-organ-
movement. In taking responsibility, as she opaque about its money. ised vision for blm may emerge stronger. 7
says, for the “onus of our successes and
failures”, she appears to be claiming leader- The schism between the two camps is
ship of the once leaderless movement.
That is because the foundation will con- African-American businesses
trol funds, dishing them out to officially re-
cognised blm city chapters through anoth- Capital punishment
er new body called blm Grassroots. The
foundation is also moving away from do- NEW YORK
ing mostly on-the-ground work. For exam-
ple, it is pressing Congress to pass legisla- Long-suffering black entrepreneurs may soon have reasons for cheer
tion, known as the Breathe Act, that would
order a big increase in federal spending on Black entrepreneurs face a mighty tenth the assets of white ones. In addi-
public housing. Leaders of the foundation struggle. African-Americans make up tion, notes Katherine Klein of the Whar-
were hoping to meet members of Mr Bi- about 13% of the country’s population but ton School, they tend to have lower credit
den’s transition team this week. In October only 2% of its business-owners. Their scores. Black female entrepreneurs
a blm political-action committee was firms earn just 0.3% of total business receive less than 1% of all venture capital.
launched, to “bring the power of our move- receipts. Minority-owned businesses are
ment from the streets to the ballot box”. less profitable than comparable white- So even a tenfold increase in govern-
That reflects new ambition, what Ms owned firms, and have much higher rates ment funding would not solve the pro-
Cullors has called “a totalising and unprec- of failure. blem, argues Shelley Stewart of McKin-
edented transition” for blm. It has long fo- sey, without bottom-up fixes too. That
cused largely on police violence, mass in- The pandemic has hit these firms points to the second reason for cheer. In
carceration and other criminal-justice especially hard. Black-owned firms were the wake of the Black Lives Matter prot-
woes. The idea is to confront the way Afri- nearly twice as likely to shut down (by ests, corporate titans have made big
can-Americans live, not only their repres- August, over two-fifths had done so) commitments to boost black businesses.
sion and deaths. because of covid-19 as small firms over- JPMorgan Chase, a banking Goliath, says
blm leaders plan, for example, to cam- all. Emergency aid often did not reach it will pour $30bn over five years into
paign for more funding for the Postal Ser- them, in part because the Small Business boosting black and Latino households
vice, a big employer of middle-class Afri- Administration (sba) did not direct and businesses. Citi, another giant bank,
can-Americans. Early next year it hopes to banks to prioritise lending to such firms vows to take on “the racial wealth gap”
launch a bank to push capital to black- as Congress intended. with a $1bn pledge.
owned firms and non-profit groups. That
reflects a wish to address problems of race Black entrepreneurs may now have Sceptics worry this will prove mere
and economic inequality. two reasons for cheer. One is top-down. “race-washing” and that Mr Biden’s
All that is appealing if the movement is Past efforts by the federal government to efforts will get mired in red tape. But if
to be more effective than just a protest out- boost minority enterprises, a mix of loan they do take off, then black entrepre-
fit. But the changes have upset radicals, guarantees and quota schemes, have neurs might at last have a fighting
such as those who prefer the idea of abol- fallen short. A recent analysis by McKin- chance. If they could achieve revenue
ishing capitalism over making banks work sey, a consultancy, notes that although parity with comparable white-owned
better, or who reject electoral politics as in- the sba awarded some $2.3bn in federal businesses, McKinsey reckons, it would
trinsically ineffective. On November 30th contracts and backed about $210m in boost their business equity by $290bn.
representatives of ten city chapters, in- loans for disadvantaged businesses in
cluding large ones from Chicago, Denver, 2019, these schemes were “often imper-
Philadelphia and Washington, said they re- fectly implemented”.
jected the recent changes as an undemo-
cratic, secretive power-grab done without The incoming administration is
the backing of most blm members. promising a big revamp. Joe Biden vows
One opponent, Vanessa Green, a blm to fund such firms to retain and rehire
organiser in Hudson Valley, New York, says workers. After the pandemic, he wants to
nobody was consulted about launching the expand training, small-business in-
political-action committee. Earlier com- cubators and innovation hubs for “black
plaints from smaller groups like hers about and brown entrepreneurs”. He also
the centralisation of power were brushed promises to create a $30bn Small Busi-
aside in the rush to change. “You have to in- ness Opportunity Fund and to direct
clude every damn body,” she says. “To be ig- additional billions to minority firms.
nored, it feels like a slap in the face.” She
But the playing field for black en-
trepreneurs is not level, argues Dana
Peterson of the Conference Board, a
business-research firm: access to credit
is “too often determined by the colour of
the skin”. Black households have just a

The Economist December 12th 2020 United States 31

The never-ending election Mr Biden appeared to be nearly tied with
the president on election night—a thin
Final countdown margin of 1.5 points, or just 1.9m votes. Giv-
en the electoral college’s inherent advan-
NEW YORK AND WASHINGTON, DC tage for Republicans, Democrats struggled The urinal is political
with their traumatic recollections of Mr
Donald Trump’s deepening defeat Trump’s seemingly unimaginable defeat of Where have all the
Hillary Clinton in 2016. toilets gone?
Four years ago Democrats groused that
Donald Trump had secured victory in In the end, the popular vote was not Long time passing
the presidential election through razor- nearly as close as that (see chart). The pic-
thin victories in three states, meaning that ture changed partly because of the peren- Yesterday’s outrage often slips away
77,774 voters in effect swung the election. nial slow vote-counting in populous quietly. In 2016 a North Carolina law re-
This time, regardless of a lopsided popular Democratic strongholds such as California quiring transgender people to use the toilet
vote in the Democrats’ favour, the elector- and New York, and also because of the of their birth sex upset the nation’s stom-
al-college margin was even thinner. The fi- unusually large numbers of (mostly Demo- ach. Companies pulled out of ventures in
nal, certified results show that had just cratic-leaning) Americans who voted by the state, sports leagues called off games
43,560 voters, or 0.03% of the total, in three post in this cycle because of the covid-19 and rock stars cancelled concerts. The law
states (Arizona, Georgia and Wisconsin) pandemic. Mr Biden’s popular-vote margin was repealed and replaced with one which
changed their minds, there would have has swelled to 4.5 points, or more than 7m prevented state and local agencies from
been a tie in the electoral college. The out- Americans. regulating who uses which toilet in public
come would then have been decided by a buildings, but barred local governments
still more arcane, less-majoritarian elec- That is a good bit healthier than Hillary from passing non-discrimination laws
tion in the House of Representatives, prob- Clinton’s margin of 2.1 percentage points. blocking private businesses from doing the
ably in Mr Trump’s favour—making it the Even so, Democrats came surprisingly same. On December 1st that ban expired,
third time in 20 years that Democrats close to losing the election as a result of meaning that local governments in North
would have lost the presidency despite America’s byzantine electoral-college Carolina can enact legislation to prevent
winning the popular vote. rules, which inflate the value of small, typi- discrimination against lgbt people.
cally Republican-leaning states and allo-
That nightmarish scenario for Demo- cate votes on a winner-take-all basis. Thus closes another chapter in the poli-
crats has been narrowly avoided, however. tics of the toilet. The story is a long one. In
All states except Wisconsin finalised their The president is still denying defeat, re- the1950s and 60s civil-rights protesters de-
results by December 8th. On December14th fusing to concede or to go gently into that cried “whites only” latrines. An Oakland
the electoral college will meet and elect Joe good night. His legal team has racked up an assemblywoman, Margaret Fong Eu, took a
Biden as the 46th president of the United impressive record of one win and nearly 50 sledgehammer to a toilet wrapped in
States. It will do so by a pledged margin of losses challenging election results in state chains outside the state capitol in 1969 to
306 votes to 232. This is exactly the same as and federal courts on its quixotic quest to protest against pay toilets in public build-
Mr Trump’s margin four years ago, which overturn the outcome. ings, arguing that they placed an undue
he described as a “landslide” back then and burden on women because urinals were of-
now decries as pure fraud. On December 8th Mr Trump got the es- ten free. Activists poured fake urine over
pecially sobering piece of news that the Su- the steps of Harvard’s Lowell Hall in 1973
The full picture of the election has preme Court, which he had been “counting demanding “potty parity”, the equitable
emerged only slowly. Early on the evening on” to look at the ballots and deliver him a distribution of male and female toilets.
of November 3rd, Mr Trump won the cru- second presidential term, had stamped out Grip bars in bathrooms were among the de-
cial state of Florida with unexpected ease. a wild lawsuit that sought to reverse his mands of the disability protesters who oc-
He looked stronger than anticipated in loss in Pennsylvania. The plaintiffs sought cupied a federal building in San Francisco
Georgia and North Carolina. Rather than to toss away the state’s entire mail-in bal- for 26 days in 1977.
leading by ten percentage points in the lot, which would have disenfranchised
popular vote, as some polls had predicted, 2.6m voters. The end came in a whimper: a The feminist fight against pay toilets,
one-sentence order issued merely 34 min- and a campaign by a student group, the
Slowly does it utes after the plaintiffs, a group of eight Committee to End Pay Toilets in America,1
Pennsylvania Republicans, filed their last
US presidential election, total reported votes cast brief. No justices noted their dissent.
2020, by date and time*, m
As preposterous as this contention was,
85 it attracted the support of 23 House Repub-
licans and Senator Ted Cruz, who had of-
Election Joe Biden 80 fered to argue the case before the court.
75 And the brusquely rejected case did not
Dec 8th even take the prize for the wackiest and
01:00 most anti-democratic lawsuit. That hon-
our goes to the state of Texas, which sued
Donald Trump 70 four other states—Georgia, Michigan,
Pennsylvania and Wisconsin—in an at-
Nov 4th 65 tempt to throw out Mr Biden’s victories on
01:25 60 the day states were required to finalise
their results. The Supreme Court will en-
3 10 15 20 25 30 5 8 tertain this chutzpah-laden request no
more than it did the other last-ditch effort.
Nov Dec In the words of Rick Hasen, a law professor
at the University of California at Irvine, the
Source: Decision Desk HQ *Eastern Standard Time move is merely “a press release masquer-
ading as a lawsuit”. 7

32 United States The Economist December 12th 2020

2 led to many states banning pay toilets in And no Jews? Their lawyer, Keisha Russell of First Liber-
the 1970s. Vandalism and the cost of up- ty, a not-for-profit firm that specialises in
keep shut down many public ones. Discus- ing any law. religious-discrimination cases, said one
sions about public toilets assume they are This is one of several examples of al- client spent $50,000 over two years trying
still widely available, according to Taunya to get approval for a home extension.
Lovell Banks, of the University of Mary- leged religious discrimination offered by
land, but “free or low-cost public toilets op- the Department of Justice in its lawsuit For the past decade the ultra-Orthodox
erated by government have largely disap- against Airmont. It asserts that the village (particularly the Hasidic) population has
peared”, and access to toilets in adopted discriminatory zoning codes and been growing in towns in upstate New York
government buildings has been reduced land-use practices that violate federal law and neighbouring New Jersey. Many of the
since the Oklahoma City Bombing and 9/11. and previous court judgments. Airmont arrivals were priced out of their old neigh-
So those caught short must duck into a claims the government is misinterpreting bourhoods in gentrified Brooklyn. The
local business and awkwardly ask for relief. the village code. Yet this is the third time surging numbers and their demands for
“Restrooms are for customers only” signs the federal government has filed a suit land have often put them at odds with lo-
mean it often takes a penny to spend a pen- against the village since it was incorporat- cals. After battles over zoning and lawsuits,
ny, creating a barrier to the poor. Where ed in 1991. A jury unanimously found in voters in nearby Monroe agreed in 2017 to
public urination is criminalised, the 1995 that the village’s first mayor, trustees allow a Jewish enclave to secede from the
homeless may have no option but to risk and zoning board had engaged in a con- surrounding town to create a new town
arrest by going in public places. In some spiracy to deprive Orthodox Jewish resi- called Palm Tree. There, most wanted to
states, this can land them on the sex-of- dents of their civil rights. One local said at replicate city life, living close together in
fender registry. Closures of toilets during the time: “the only reason we formed this multifamily dwellings.
covid-19 have only added to the problem. village is to keep those Jews…out of here.”
The lack of accessible toilets has public- But most Orthodox Jews in Airmont live
health consequences. Holding water for For much of its history, Airmont has in single-family homes on large lots on
too long can lead to urinary-tract infec- been under investigation, in litigation or quiet streets. Yehuda Zorger, a community
tions, and failure to defecate can lead to under some sort of federal oversight. Its activist, for instance, left Brooklyn in 2014
constipation and haemorrhoids. This can very creation, said Audrey Strauss, the act- for Airmont’s suburban lifestyle. He says it
be difficult for workers who lack easy ac- ing attorney for New York’s Southern Dis- has reached the point where even having
cess to toilets, such as taxi drivers, and dis- trict, has its roots in animus against Ortho- extended family help fix his deck might
proportionately affects women, who need dox Jews. Its incorporation came about draw the wrath of code enforcement. Had
to go more frequently. No toilets also because some locals wished to impose zon- he known Airmont’s history before he
means no soap. An outbreak of hepatitis A ing restrictions to prevent the growing moved there, he says, he would have
linked to the lack of toilets led to the death ultra-Orthodox Jewish population from looked elsewhere for his coveted suburban
of 20 and the hospitalisation of hundreds worshipping together at home. lifestyle. Now, he is not going anywhere. 7
in San Diego in 2017.
Public toilets are costly to install and Since federal oversight expired in 2015, The Fort Hood report
maintain, and can attract undesirable be- the latest lawsuit says, the village has dou-
haviour. But spurred on by America’s bled down on discriminatory land-use A look under
homelessness crisis, some cities are an- zoning. The government claims the village
swering the call. The right to urinate might unlawfully prevented the approval of an the Hood
not be up there with the right to vote, but Orthodox Jewish school’s expansion. Air-
having it guaranteed would be a relief. 7 mont implemented an 18-month village- NEW YORK
wide moratorium on development, which
Anti-Semitism accusations the lawsuit claims was targeted at the Or- A review of one of America’s biggest
thodox Jewish community. When the mo- bases may change the army’s culture
Here today, zone ratorium expired in 2018, the filing claims
land-use laws were amended and applied Vanessa guillén, a 20-year-old soldier,
tomorrow arbitrarily. Jewish homeowners were pro- told her mother she had been sexually
hibited from installing mikvahs, ritual harassed for months by higher-ranking
AIRMO NT, NEW YO RK baths used for religious observances. soldiers at her Fort Hood army base in Tex-
as. She had refrained from reporting it out
The federal government sues a village Several rabbis jointly filed suit in a fed- of fear of retaliation. Not satisfied with the
for religious discrimination (again) eral court in 2018. The case is pending. army’s response to her disappearance in
April, her family told local lawmakers and
Asukkah is a temporary hut built for media that she had been harassed by supe-
Sukkot, a weeklong Jewish festival. It is riors. Two months after she went missing,
usually covered in branches. In September her dismembered body was found buried
2017 the then mayor of Airmont, a village 35 near a river 20 miles from the base. It later
miles north of New York City, ordered the emerged that one of the harassing soldiers
fire inspector to the home of the mayor’s allegedly murdered her.
neighbours, an Orthodox Jewish family, to
demand the family dismantle its sukkah. The hashtag #IAmVanessaGuillén, a
According to a lawsuit filed by the federal military version of #MeToo, went viral. Ser-
government on December 2nd, the inspec- vice members and veterans shared their
tor, at the mayor’s direction, threatened the stories of sexual harassment and assault in
family with immediate eviction unless the the army. President Donald Trump vowed
sukkah was taken down. The family dis- to help the family. In recent years Fort
mantled it, despite the sukkah not violat- Hood’s reputation has suffered as a result
of sexual assaults, suicides, murders and
two mass shootings as well as busts for
prostitution and child-sex rings. Spurred1

The Economist December 12th 2020 United States 33

2 by the outcry over Guillén’s death and pub- port also criticised the inadequate proce- Economic policy
lic awareness of violence at the base, Ryan dures for missing soldiers, especially when
McCarthy, the army secretary, commis- there are suspicious circumstances. The Picking a package
sioned an independent review of Fort absent soldier is often labelled a deserter.
Hood’s leadership. More than two dozen soldiers have gone How much stimulus is enough?
The mostly civilian panel released its missing or died since the start of the year,
scathing report on December 8th. It found including Gregory Morales, a murdered In the spring America passed eco-
that Fort Hood’s commanders fostered a private who the army assumed went awol. nomic-rescue measures worth
“permissive environment”, which allowed His body was found near Fort Hood by in- $2.3trn this year (11% of gdp), a larger
sexual assault, harassment and violence to vestigators looking for Vanessa Guillén. injection than in any other big, rich
go unchecked. The panel called for staffing country. With a slowing economy,
changes and better programmes to protect The panel made 70 recommendations. almost everyone agrees that more is
soldiers. In response, the army removed or Nearly half are aimed at combating sexual required, yet for the past six months
suspended 14 military leaders, including harassment and assault. It also recom- Congress has squabbled over a new bill.
the major-general who headed Fort Hood at mended new procedures for missing sol- Democrats pushed for a deal worth over
the time of Guillén’s disappearance. diers. In response, Mr McCarthy an- $2trn in 2021; Republicans insisted on
Fort Hood has much higher rates of viol- nounced that the army would take far lower amounts. As The Economist
ent sex crimes than other posts—75% high- immediate action when soldiers are re- went to press, it looked as though an
er than the army overall. As far back as 2014 ported missing and formed a task force to agreement might be in the offing. How
the base was identified as a high-risk in- map out a plan to tackle the problems iden- much extra money is needed?
stallation for sexual assault. The report tified in the review. Although the report fo-
said Fort Hood’s commanders did little to cused on Fort Hood, he said, its conclu- To answer that question requires
tackle the spectrum of criminal incidents. sions will have army-wide implications. estimating two things: the size of the
That led to underreporting of sex crimes. He predicted that the findings “will cause “output gap” and the “fiscal multiplier”.
Like Guillén, victims feared retaliation as the army to change our culture”. Both are as hard to quantify as they are
well as ostracism and career damage. Queta to translate into plain English. The
Rodriguez, a former marine who served on Fort Hood’s dysfunction is not unique, output gap measures the difference
the committee, called the number of unre- says Don Christensen, the air force’s for- between the actual level of economic
ported sex crimes at Fort Hood “shocking”. mer chief prosecutor who heads Protect output and the amount the economy is
The committee discovered 93 credible ac- Our Defenders, an advocacy group. Sexual capable of producing. Official data
counts of sexual assault among the 507 harassment and retaliation cut across all suggest that the gap was over 3% of gdp
women it interviewed. Of those, only 59 services, from small air-force bases to na- in the third quarter of the year, but it
were reported. Of the 217 accounts of sexual val ships. “It takes a crisis to move the ball has almost certainly narrowed since
harassment, only half were reported. forward,” he says. Joe Biden, the president- then. Other economists estimate the
The panel found an extremely high elect, has said he would take a hard line gap using data on unemployment. A
number of suicides, but because the post’s against sexual abusers in the forces. rule of thumb is that it is twice the
criminal investigators were inexperienced difference between actual unemploy-
and under-resourced, contributing causes It is rare for the army to allow an inde- ment (6.7%) and full employment (with
were not always examined. Fort Hood has pendent review. Its findings are a wake-up a jobless rate of perhaps 3.5%), which
the highest drug-test failure rate in the call not just for the army, but for Congress, points to a figure of about 6% of gdp.
army. Local police describe the base as hav- too, which has a history of being hesitant in
ing a “thriving drug culture”, but little pushing for change in the armed forces. A stimulus package should aim to
seems to have been done about it. The re- Guillén’s family hopes Congress will pass fill the output gap. But fiscal spending
the I Am Vanessa Guillén Act, which would does not necessarily translate one-for-
allow outside investigators to handle mili- one into increases in gdp. Estimating
tary sexual misconduct. 7 this “fiscal multiplier” is also tricky.
Analysis by the Committee for a Re-
sponsible Federal Budget, a public-
policy organisation, suggests a multi-
plier of about 0.6 during the pandemic,
meaning that $1 of government spend-
ing translates into 60 cents of output.
Many people saved rather than spent
their stimulus cheques, for instance.
They might be less cautious today,
however, in part because more shops
and restaurants are open now.

Assume that the output gap is half-
way between the gdp measure and the
unemployment measure—4% or so—
and that the multiplier is around one. If
so, a package of $900bn-$1trn in 2021
would probably do the trick (further
measures will almost certainly be
needed in 2022 and beyond). But any-
one pressing for a bigger or smaller
stimulus can come up with their own,
also plausible, estimates.

Gone but not forgotten

34 United States The Economist December 12th 2020

Lexington When America and China went to war

The 70th anniversary of the first US-China battles in Korea holds lessons for both countries

Seventy years ago this month, Mao Zedong’s peasant army in- trated by the battlefield recollections Lexington heard this week
flicted one of the worst military defeats on America in the coun- from Jack Luckett, a 91-year-old retired marine. He was occupying a
try’s history. Over two weeks his “volunteer” fighters drove an ridge above Chosin Reservoir, close to the northernmost point of
army of 350,000 American soldiers and marines and their Korean MacArthur’s advance, on the night of November 27th 1950. Awak-
allies the length of North Korea, from the Chinese border to hasty ened by explosions, he saw a column of Chinese—eight men
evacuations by land and sea. Though the Chinese suffered terrible across—advancing in the glow of the defensive flares they had trig-
casualties in the process and the war would continue for another gered. “We were vastly outnumbered,” he said. “We opened fire but
three years (and technically has not ended), the American-led un they kept on coming. They were blowing bugles and firing on us
force never again threatened to reunify the peninsula. while pouring down both sides of the ridge.”

This humiliation was made worse by the fact that General Dou- Mao’s intelligence chiefs had assured him that, for all their su-
glas MacArthur, the force’s megalomaniacal supremo, had only perior technology, American soldiers lacked the belly for a fight.
weeks before assured Harry Truman that the Chinese would not The ensuing 17-day battle, which Mr Luckett fought through until
cross the Yalu river. His commanders duly denied that they had. frostbite laid him low, gave the lie to that. Surrounded by 120,000
When that became incredible, they claimed the cruelly ill- Chinese, the1st Marine Division broke out and made a heroic fight-
equipped Chinese—wearing cotton uniforms and canvas shoes for ing retreat through the frozen mountains. The marines—and a
a high-altitude war fought at minus 30°C—were not a serious foe. small British contingent fighting alongside them—suffered terri-
An American general called them “a bunch of laundrymen”. ble casualties; only 11 of Mr Luckett’s company of 250 survived un-
scathed. Yet they evacuated their wounded and equipment while
It was classic superpower hubris, deserving of the contempt ex- inflicting a far heavier toll on the Chinese. Mr Luckett’s marine di-
pressed by Xi Jinping at a grand 70th-anniversary event in October. vision was reckoned to have disabled seven Chinese ones.
Having emerged victorious from the second world war, with fewer
casualties than any other major participant (America’s covid For a military institution whose small size, relative to the us
death-toll is almost equal to its second-world-war combat toll), army, has fuelled a tradition of mythologising and introspection,
America in1950 had a dangerous sense of impregnability, a racially “Frozen Chosin” ranks alongside “Iwo Jima” in importance. “It’s
infused contempt for Asian capability and a few generals with ab- not an overstatement to say marines credit the marines who
surdly inflated status, including MacArthur. It might seem little fought in Korea with ending the debate about whether there
wonder that America, consumed by the contemporary embarrass- should be a marine corps,” says General Joseph Dunford, a former
ment of its president’s effort to steal an election, is barely com- marine-corps commandant (and recently retired chairman of the
memorating its first and only war with China. joint chiefs of staff). His father celebrated his 20th birthday at Cho-
sin reservoir on the day of the Chinese attack.
That does not denote shame, however. Notwithstanding Amer-
icans’ dewy-eyed view of their forces, public knowledge of their In the soul-searching that followed the American retreat, notes
victories and defeats is similarly thin. American schools do not Max Hastings, a British historian, it is possible to see a familiar de-
teach much military history and democracies do not mobilise peo- bate about the kind of superpower America should be. Deaf to the
ple through a militaristic view of the past. In the case of the Korean entreaties of allies, MacArthur refused to accept the limits to
war, the first “limited” war of the nuclear age, before that concept American power that his incompetence had helped display. He
was well-understood, the forgetting has merely been especially wanted to nuke the Chinese. Truman resisted and, after MacArthur
pronounced. Yet the war retains cautionary lessons for both sides. sneakily appealed to his Republican backers in Congress, sacked
the revered general. It may have cost him a second term. It also set
On one level it encapsulated the superpower’s enduring ability a gold standard for civil-military relations that has since prevailed.
to self-correct. This was apparent even amid the debacle—as illus-
Truman’s multilateralism and restraint were also vindicated
when his Republican successor, Dwight Eisenhower, maintained
his conduct of the war. Better military leadership had by then sta-
bilised the situation. America and China would both settle for
their initial aims: respectively, securing South Korea, which would
become one of the big successes of the late 20th century, and se-
curing a Korean buffer against America’s presence in Asia. Ameri-
ca lost 40,000 lives in the process; China maybe ten times as many.

First know your enemy
That Americans are not more interested in this momentous past
ultimately reflects their restless democracy, which is too con-
sumed by contemporary dramas to dwell on history. Current ap-
pearances notwithstanding, it is the source of American strength.
Yet it is important to underline two lessons from America’s war
with China. In a fog of misunderstanding, each side fatally under-
estimated the other. And each had a flawed idea of the other’s red
lines, the tripwires that turn competition into conflict. The situa-
tion today might look very different. The two countries’ inter-
dependence and mutual awareness are on another plane. But their
potential for underestimation and misunderstanding is still
hauntingly present; and perhaps growing with their rivalry. 7

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MEMBER FDIC AND EQUAL HOUSING LENDER

36 The Americas The Economist December 12th 2020

Nicaragua United States and the European Union im-
posed sanctions against officials and insti-
Seeing off a strongman tutions after the crackdown in 2018, Nica-
ragua is not quite the pariah in the West
MANAGUA that Venezuela is. The imf agreed to lend it
$185m to cope with the pandemic.
To have any chance of defeating Daniel Ortega in an election next year,
the opposition must unite now Mr Ortega’s friends let him rig elections
and take control of courts, the electoral au-
Cloaked in a hoodie, Camila found her- a respectable fight, it will have to settle its thority and the media. He governs with Ro-
self bellowing anti-government slo- differences and find a leader soon. sario Murillo, who is both first lady and
gans along with scores of other people at a vice-president. The duo delivered political
crossroads in Managua, Nicaragua’s capi- John Bolton, a national security adviser stability. Economic growth helped pay for
tal, in April 2018. The protest was part of la under Donald Trump, branded Nicaragua’s benefits, such as tin roofs, for the poor.
crisis, which began in reaction to a proposal regime and those of Cuba and Venezuela as
to cut pension benefits. In putting it down, a left-wing “troika of tyranny”. But Nicara- But when aid from Venezuela dried up
the regime killed perhaps 450 people. Ca- gua is in some ways an exception. Mr Orte- the government had to make painful re-
mila (not her real name) feared she would ga’s revolutionary credentials are impecca- forms, including the pension cuts that
be spotted by government agents scanning ble. His Sandinista Liberation Front sparked la crisis. The unrest hurt business
the crowd. As repression mounted, she fled overthrew the United States-backed So- confidence and tourism, causing the econ-
from Nicaragua. Neighbours, part of the re- moza dictatorship in 1979. He governed the omy to shrink by a seventh since 2017. The
gime’s network of local spies, later stopped country until he lost an election in 1990. number of formal jobs had fallen by a fifth,
by her family’s home to ask after her. Ca- But he is more an opportunist than an ideo- even before the pandemic struck.
mila now studies in Europe. She will not go logue. During his second stint in power,
back, she says, until Daniel Ortega, the re- even as Nicaragua took billions of dollars When it did, the Ortega government was
gime’s leader, is out of power. from Venezuela, he formed an alliance complacent. Before Nicaragua had con-
with business and wooed the Catholic firmed cases, Ms Murillo held a rally for
Veterans of la crisis will have a chance to church by supporting family values and “love in the time of covid-19” to show sol-
remove him in a presidential election anti-abortion legislation. Although the idarity with less fortunate countries. Nica-
scheduled for November 2021. In a fair vote ragua responded to the pandemic’s onset
Mr Ortega, who has held power without in- Also in this section with the world’s laxest containment mea-
terruption since 2007, would probably lose sures, according to a stringency index put
it. But he has long stopped practising fair- 37 Udder delight in Cuba together by Oxford University. The death
ness. The opposition is energised and de- toll, officially162, is 6,000-7,500, according
termined—but also divided. If it is to put up 38 Bello: Central American disasters to an analysis by Confidencial, a newspaper,
of extra deaths attributed to diabetes,
pneumonia and heart attacks. Two hurri-
canes that struck in November left thou-1

The Economist December 12th 2020 The Americas 37

2 sands of Nicaraguans homeless (see Bello). be jailed for life. Opposition politicians lease of the 100-odd remaining political
Mr Ortega’s popularity has plummeted. fear it will be used against them. prisoners and electoral reform. The crafty
president will need to strike the right bal-
His odds of re-election depend on the co- But Mr Ortega is reluctant to steal elec- ance. Too little fairness may provoke isola-
herence of the opposition, and how much tions as flagrantly as his friend, Nicolás tion and another uprising. Too much may
he is willing and able to undermine the in- Maduro, who on December 6th arranged lead to his defeat. The opposition hopes to
tegrity of the vote. for Venezuela’s ruling party to wrest con- exploit any miscalculation.
trol of the legislature from the opposition.
The opposition that burst into life in Without Venezuela’s largesse and oil re- It must overcome voters’ scepticism as
2018 lacked leaders and organisation. serves of its own, Nicaragua has turned to well as Mr Ortega’s manoeuvring. The op-
Those emerged when Mr Ortega convened Western financial institutions. The imf position “represent their own interest”,
a dialogue as a way to buy time. Students, loan is part of nearly $1bn in credits for cop- says Camila, the hooded protester. Unity
businessfolk and think-tankers founded ing with the pandemic and hurricane dam- might help correct that impression. It will
the Civic Alliance. A peasants’ movement, age. (At the insistence of the United States, be needed, even if Mr Ortega, who is 75,
formed earlier in the decade, took part in the un and other bodies will administer wins. Nicaragua will still require a robust
the dialogue. Blue and White National Un- most of that money.) Brazen electoral fraud opposition as a bridge to the eventual re-
ity (unab), a grouping of more than 100 would invite tough sanctions from the in- turn of democracy.
student and civil-society outfits, sprang up coming Biden administration. Full pariah
after the talks. status would further alienate the tycoons Democracy alone may not heal Nicara-
who run much of the economy. gua’s wounds. When Camila contemplates
These groups all want to restore democ- returning, she wonders: “How do I live
racy and obtain justice for the victims of For these reasons Mr Ortega may offer with my neighbour who came down to look
the crackdown. They are not natural part- olive branches. They could include the re- for me?” 7
ners. unab worries about inequality. “We
see crony capitalism as part of the prob- Cuba
lem,” says unab’s leader, Félix Maradiaga.
The Civic Alliance prioritises a quick eco- Udder delight
nomic rebound. Mistrust within the oppo-
sition is rife, partly because almost every- A Cuban student finds a way to extend the shelf life of dulce de leche
one has at some point dealt with Mr Ortega.
Cubans love dulce de leche. The confec- Adriana Rodríguez, a student of chemical
In January its separate elements joined tion of thickened, sweetened milk is an biology, reported in her master’s thesis that
to form a National Coalition. The Civic Alli- ingredient of popular desserts, including she had solved the spoilage problem. Her
ance left nine months later, angry that a tarta de tres leches (three-milk cake) and al- research was prompted by complaints
party in the coalition had come under the fajores. In a country where fresh milk is from shoppers at stores supplied by Gran-
regime’s sway. (It now has new leaders.) scarce, it is sold in the form of solid bars, a lac, a state-run dairy firm, which employs
sugary way to get a bit of milk protein. her. After two years of experimenting she
To have any hope in November’s elec- concluded that the admixture of potassi-
tion the opposition will need to unite. A But the bars do not stand up well to um sorbate, a common preservative, as
candidate needs only a plurality to win. In Cuba’s heat and humidity. Mould and yeast 0.11% of the product’s weight would in-
an opinion poll in June, no opposition fig- spot them, often well before the sell-by crease its shelf life from a promised seven
ure was mentioned as the probable winner date. So it was cause for excitement when days to 30. The new recipe also made the
by more than 13% of respondents. “We lack bars harder, and therefore less prone to
a messiah,” says Juan Sebastián Chamorro, Another food-preservation triumph crumble. La Demajagua, a state-run news-
the head of the Civic Alliance. The opposi- paper, broke the news in November and
tion has until June to register a candidate other newspapers followed. Production of
as the nominee of a party (perhaps the long-life dulce de leche is on its way.
small independent Citizens for Liberty).
This is a rare success in a long and most-
Contenders include Mr Maradiaga, Mr ly thwarted quest to satisfy Cubans’ craving
Chamorro and Medardo Mairena, the peas- for dairy foods. In a speech in 2007 Raúl
ants’ leader. It is not clear how the choice Castro, then the country’s president, de-
will be made. In a stalemate Cristiana Cha- clared: “We must produce enough milk so
morro, Mr Chamorro’s cousin and the that any Cuban who wishes to drink a glass
daughter of Violeta Chamorro, who suc- of it can.” His brother, Fidel Castro, the
ceeded Mr Ortega in 1990, could become founder of Cuba’s revolution, loved ice
the opposition’s standard bearer. Mana- cream almost as much as cigars. In a fore-
gua’s magnates would back her. word to a book based on interviews with Fi-
del, Gabriel García Márquez recounts a
Mr Ortega is already harassing his Sunday afternoon during which, after a
would-be opponents. Mr Maradiaga says large lunch, the leader gobbled 18 scoops.
he has lost three drivers in three months He also liked to quaff chocolate milkshakes
because the police confiscated their li- at the Havana Libre hotel. In 1963 the cia
cences. Last year Mr Mairena was convicted took advantage of this weakness by at-
of attempting to overthrow the govern- tempting to poison one. The plot failed be-
ment and sentenced to 216 years in prison, cause the pill to be slipped into Castro’s1
where he was tortured. He was eventually
pardoned. Mr Ortega may not allow any
credible candidate to challenge him.

The government has recently enacted
laws that would mete out prison sentences
for spreading “fake news” (as the regime
defines it) and brand as “foreign agents”
ngos that get money from abroad. Under a
new law, perpetrators of “hate crimes” can

38 The Americas The Economist December 12th 2020

Bello Natural and political disasters

Hurricane devastation in Central America is a problem for Joe Biden, too

It is a month since Central America was state by self-serving elites. Government Honduras, it is “patchy”, says George
hit in quick succession by two hurri- spending in both countries is the lowest Redman of Oxfam, a British charity. He
canes. Parts of northern Honduras are per person in the region, after only Haiti. points out that not only was the govern-
still under water: 50 bridges are down, Guatemala had protests in November over ment unprepared—just weeks before the
and 120 roads and many hospitals and Mr Giammattei’s budget, which cut educ- hurricanes it appointed a reggaeton
schools are still flooded. In all, some 200 ation spending while lavishing money on singer with no relevant experience to
people died and 7m were affected by the insiders. Mr Hernández faced protests in head its disaster-relief organisation—but
storms, most of them in Honduras and 2017, when opponents accused him of that the presence of street gangs
Guatemala, according to the un. Tens of fraudulently winning a second term. complicates aid distribution.
thousands of homes were destroyed, and
perhaps 175,000 people are living in Millions of Guatemalans and Hondu- Donors face a dilemma. The need is
makeshift shelters. rans have fled violence, poverty and clim- huge, but so is corruption. The former
ate change (which has hurt farming). director of Invest-h, a supposedly cor-
The hurricanes came at a bad time, Rather than raising taxes on the better-off ruption-proof agency that implements
amid the pandemic and its economic to spend on health, education, security, foreign-financed projects, is being inves-
slump. Whereas in Guatemala and Nic- disaster preparedness and climate-change tigated over misuse of foreign loans
aragua they struck rural areas, in Hondu- mitigation, the rulers of both countries during the pandemic. Central America
ras they devastated the Sula valley, the have preferred to rely on remittances from will thus be an immediate problem for
country’s economic heartland. The the leavers, which account for 22% of gdp Joe Biden’s administration in the United
Honduran economy was already set to in Honduras and 14% in Guatemala. Gov- States. Arrivals at the southern border
shrink by 7%, and unemployment had ernments kicked out international bodies have risen since the covid-19 recession
soared. Honduras, a country of 10m set up to tackle corruption and organised began. The new administration “will
people, “is now facing the greatest cata- crime in both countries. Prosecutors in have to balance a desire for a more hu-
strophe in its history”, says Gina Kawas, a New York say Mr Hernández took a bribe manitarian approach [to immigration]
consultant at the Central American Bank from a drug-trafficker (he denies this). His with protecting the border”, says an
for Economic Integration who is based in brother was convicted of drug-trafficking American official who has worked on
Tegucigalpa, the capital. Total damage is by a court in New York in 2019. Central America. “It’s a challenge and it’s
equivalent to 40% of gdp. going to come quickly,” he says.
Although a relief effort is under way in
With livelihoods destroyed, the flow Mr Biden has promised a $4bn plan to
of migrants to the United States is likely deal with the root causes of migration
to increase. So think the presidents of from Central America. This builds on a
Honduras, Juan Orlando Hernández, and scheme he promoted when he was vice-
Guatemala, Alejandro Giammattei. Both president. It aims to strengthen the rule
have cited the likelihood of increased of law and democratic governance, partly
migration when calling for North Ameri- by helping local anti-corruption cam-
can help. “If we don’t want to see hordes paigners and prosecutors, who have had
of Central Americans looking to go to some success. The need for foreign help
countries with a better quality of life, we for reconstruction should offer leverage
have to create walls of prosperity in for reform. One idea is to set up an inter-
Central America,” said Mr Giammattei. national body to work with local public
auditors to track spending. But Honduras
This is realistic—and an implicit and Guatemala need political change,
threat. Honduras and Guatemala are rather than just protest or individual
among the worst-governed countries in efforts. Sadly, this is not on the horizon.
Latin America. They offer a caricature of That is a problem for the United States, as
the region’s ills, of poverty, inequality, well as for the countries themselves.
racism, corruption and the capture of the

2 shake froze to the wall of the hotel’s freezer. bus, hoping to create hardy milk cows. Just bring relief to sweltering Cubans.
Undaunted, Fidel made dairy goods a one of their offspring lived up to Fidel’s Things have not improved much. In Oc-
hopes. Ubre Blanca (“White Udder”) set
symbol of the revolution. He wanted to Guinness world records for daily and sea- tober this year Marino Murillo Jorge, the
prove that Cuba could churn ice cream as sonal milk production. When she was economy and planning minister, said Cuba
well as the Americans, and outdo the slaughtered in 1985, aged 13, Granma, the could import milk more cheaply than it
French in making Camembert. In the 1960s Communist Party’s newspaper, published could produce it. But since foreign curren-
Coppelia, a sprawling outdoor ice-cream a full-page obituary. cy is scarce, so is milk. Coppelia serves few-
parlour in downtown Havana, served 50 er flavours: vanilla, coffee, coconut and
flavours to 35,000 customers a day. Dairy disaster deepened in 1990, after tiramisu, recalls a recent visitor. The only
the former East Germany halted food ship- Cubans who can count on a daily glass of
But the island’s Creole and Zebu cows ments to the island and the Soviet Union milk are those younger than seven, who get
were lacklustre lactators. Fidel ordered the cut back on deliveries of butter. Fidel fam- a serving through the ration-book system.
import of Holsteins from Canada, but ously chose to produce ice cream rather For sweet-toothed adults there’s dulce de
many perished in Cuba’s heat. Government than butter, perhaps thinking it would leche, soon minus the mould.  7
breeders tried mating Holsteins with Ze-

Asia The Economist December 12th 2020 39

Covid-19 in Japan or so in America and Britain (see chart on
next page).
3C epiphany
Instead, the government tried to apply
TOKYO the lessons of the Diamond Princess. After
trained quarantine officers and nurses
Japan has had a milder epidemic than most countries, in part because health-care were infected aboard the ship, despite fol-
officials understood the disease better lowing protocols for viruses that spread
through droplets, Mr Oshitani’s team con-
When the Diamond Princess, a cruise “From the beginning we did not aim at cluded that the virus spread through the
ship suffering from an outbreak of containment,” says Oshitani Hitoshi, a vi- air. As early as March, Japanese officials be-
covid-19, arrived in Japan in February, it rologist who sits on an expert panel advis- gan warning citizens to avoid the san-mitsu
seemed like a stroke of bad luck. A small ing the government. That would require or “3cs”: closed spaces, crowded places and
floating petri dish threatened to turn the identifying all possible cases, which is not close-contact settings. The phrase was
Japanese archipelago into a big one. In feasible in a country of Japan’s size when blasted across traditional and social me-
retrospect, however, the early exposure the majority of infections produce mild or dia. Surveys conducted in the spring found
taught the authorities lessons that have no symptoms, argues Mr Oshitani: “Even if that a big majority were avoiding 3c set-
helped make Japan’s epidemic the mildest you test everyone once per week, you’ll still tings. The publishing house Jiyukokumin-
among the world’s big economies, despite miss some.” Japan performs the fewest sha recently declared it “buzzword of the
a recent surge in infections. In total 2,487 tests in the g7: an average of 270 a day for year” for 2020.
people have died of the coronavirus in Ja- every million people, compared with 4,000
pan, just over half the number in China and The Diamond Princess also inspired an
fewer people than on a single day in Ameri- Also in this section early focus on clusters. The government set
ca several times over the past week. Japan up a cluster-busting taskforce in March.
has suffered just 18 deaths per million peo- 40 Suicide in South Korea
ple, a higher rate than in China, but by far These insights allowed the authorities
the lowest in the g7, a club of big, industri- 41 Nature conservation in Thailand to make granular distinctions about risks,
alised democracies. (Germany comes in opting for targeted restrictions rather than
second, at 239.) Most strikingly, Japan has 41 Policing in the Philippines swinging between the extremes of strict
achieved this success without strict lock- lockdowns and free-for-all openings.
downs or mass testing—the main weapons 42 Banyan: Thailand’s absolutist king Nishimura Yasutoshi, the minister over-
in the battle against covid-19 elsewhere. seeing the government’s response to co-
44 Rohingya refugees in Bangladesh vid-19, carries a device that monitors car-
bon dioxide to measure the quality of
ventilation during his meetings. (The room
where he and your correspondent meet1

40 Asia The Economist December 12th 2020

To test or not to test? therefore potentially more vulnerable to than those of any other oecd country ex-
covid-19, it is also very healthy. Only 4.2% cept Lithuania. In 2019 there were 27 deaths
Daily covid-19 tests per 1,000 population of Japanese adults are obese, a condition from suicide for every 100,000 people, al-
2020, seven-day moving average known to make the disease more lethal. most four times the number in Britain and
That is the lowest rate in the oecd and a nearly twice as many as in America. In oth-
Britain United States Italy France tenth of America’s. Japan also has a good er respects, however, South Korea follows
Japan 6 health-care system, with universal cover- global patterns: men and the elderly tend
Germany Canada age and lots of well-equipped hospitals. It to be at higher risk of suicide than women
even had lots of already trained contact- and the young—making the increase in
4 tracers, part of an established public- suicide among younger women all the
health network dating back to the 1930s. more puzzling.
2
These advantages clearly have their lim- Sociologists tend to attribute the high
0 its. The virus has spread rapidly in recent overall rate to social and economic upheav-
MA M J J A S O N D weeks, reaching record highs in terms both al. They argue that rapid economic devel-
of daily cases and daily deaths. The govern- opment combined with a clash between
Source: Our World In Data ment has had to dispatch medical person- traditional social expectations and the in-
nel from the Self-Defence Forces to shore dividualism of modern life have plunged
2 registers 506 parts per million, safely be- up hospitals in the worst-hit spots. But at the country into the sort of confusion that
low the threshold of 1000 ppm that indi- the same time it has discouraged caution Emile Durkheim, a 19th-century sociolo-
cates poor air flow. The interview takes with a scheme that subsidises domestic gist, called “anomie”, in which conflicting
place across a large table, behind plastic tourism and meals out, in an effort to help social signals drive people to despair. That
shields and with face masks on.) the economy. Although this seems to have sort of tension may be particularly acute
Researchers deployed Fugaku, the contributed to covid-19’s recent spread, the for young women in contemporary South
world’s fastest supercomputer, to model government has only curbed it rather than Korea, says Timothy Kang of the University
different situations. Crowded subways scrapping it. And cold weather is now of Saskatchewan in Canada. Having been
pose little risk, if windows are open and pushing people into 3c spaces, as it has brought up in the same competitive aca-
passengers wear masks, Mr Nishimura in- been across the northern hemisphere. But demic environment as their male peers,
sists. Sitting diagonally, rather than di- in Japan, at least, the recent growth in the they then encounter discrimination in the
rectly across from each other can reduce number of cases has started from a dramat- workplace, sexist standards of beauty and
the risk of infection by 75%. Movie theatres ically lower base. 7 pressure to marry and have children.
are safe, “even if viewers are eating pop-
corn and hot dogs”, Mr Nishimura says. Suicide in South Korea South Korean feminists argue that the
While most cinemas in the West are closed, pressure on women has been compounded
“Demon Slayer”, a new anime flick, has Deepening despair in recent years by the use of the internet to
been playing to full houses in Japan, be- propagate misogynistic views and to dis-
coming the country’s second-highest SEOUL seminate illicitly obtained images of wom-
grossing film ever. In addition to the 3cs, en, often from spycams hidden in toilets
the Japanese government warns of five The number of young women killing and changing rooms. The country’s vocal
more specific dangers: dinner parties with themselves is rising women’s movement has faced an intem-
booze; drinking and eating in groups of perate backlash from men who object to its
more than four; talking without masks at As of december 10th, 564 South Kore- demands. “The relentlessness of the at-
close quarters; living in dormitories and ans had died of covid-19. Roughly twice tacks is a big problem for women,” says
other small shared spaces; and using that number died by suicide every month Shin Min-joo, an activist who has received
changing or break rooms. between January and September, the latest plenty of online vitriol herself. The sui-
Of course, these insights would have month for which data are available. Half as cides in 2019 of two female celebrities fol-
been for naught if ordinary people had ig- many again made the attempt and were lowing months of online trolling may have
nored them. But Japanese heeded the gov- saved by the emergency services. added to the trauma, she suggests.
ernment’s advice to stay home and to quar-
antine if showing any symptoms of the High as these numbers are, they are Economic precariousness is another
coronavirus, even though these admoni- mercifully much lower than a decade ago, factor. Sluggish economic growth over the
tions carried no legal force. “Sometimes we when the suicide rate began to decline past few years has been harder on young
are criticised for being an overly homoge- sharply. Unfortunately, this happy trend women, who are more likely to be em-1
neous society, but I think it played a posi- has recently gone into reverse (see chart).
tive role this time,” Mr Nishimura says. The reversal is largely driven by women in Young and hopeless
And already spick-and-span Japan became their teens, 20s and 30s. Between 2018 and
even more punctilious about hygiene. 2019 the number of women in their 20s dy- South Korea, suicides per 100,000 population
While Americans argued over whether face ing by suicide rose by a quarter as the num-
coverings were an assault on personal free- ber of men of the same age killing them- 40
dom, Japanese lined up outside Uniqlo for selves stayed more or less constant. Data
the release of its new line of masks. During from the first three-quarters of 2020 sug- Overall population
the first ten weeks of flu season this au- gest the suicide rate among young women
tumn, Japan saw just 148 cases of common is rising still more. What is going on? 30
influenza, or less than 1% of the five-year
average for the same period (17,000). In most rich and middle-income coun- 20
Better yet, although the population of tries suicide rates have been low and de- Men aged 20-29
Japan is disproportionally elderly, and clining in recent years. Though South Ko-
rea had begun to follow that trend, its OECD average 10
people are more likely to kill themselves Women aged 20-29
0
2000 05 10 15 19

Sources: Statistics Korea; OECD

The Economist December 12th 2020 Asia 41

2 ployed in the service sector and on short- home-schooling kids and looking after vember, officials vowed to expand support
term contracts. The pandemic has proba- vulnerable relatives during the pandemic. for those at risk, particularly young women
bly exacerbated these problems. The drop Past experience suggests that economic in precarious circumstances. The national
in the share of women in work this autumn distress may raise the suicide rate: around suicide hotline, which has been under-
compared with the year before has been the financial crisis in 2008, both young staffed, is recruiting more sympathetic
three times bigger than that for men. “The men and young women took their lives in ears. Public-information campaigns have
economic precarity and the social isolation greater numbers, with the rate among tried to reduce the taboos around mental
that it causes are major problems for young women exceeding that among men for sev- health in recent years, and the government
women, particularly those living on their eral years. has become a bit keener to combat sexism.
own,” says Yun Kim Ji-yeong of Konkuk All of this is welcome. But if rising suicide
University in Seoul. In addition, women The government is taking the problem rates are indeed the result of rapid social
with families have borne the brunt of more seriously than in the past. In a meet- change, a quick reprieve is unlikely. 7
ing on suicide prevention at the end of No-

Policing in the Philippines

Beatings v
shootings

Nature conservation in Thailand MANILA

Unshellfish love The trigger-happy president shows
a softer side
The government finds houses for homeless crustaceans
The rattan sticks being issued to the
Amid a slump in tourism, one nation- wut Silpa-archa, the minister for natural Philippine National Police to keep peo-
al park in Thailand has seen a dra- resources. His inspiration comes from ple apart during the covid-19 epidemic are
matic rise in visitors. So numerous are the hiatus in tourism brought on by versatile, Lieutenant-General Cesar Binag
the hermit crabs thronging the otherwise covid-19. A ban on international visitors explained: “They will be one metre long,
empty beaches of Koh Lanta that shells (now lifted, subject to quarantine) and and will be used for enforcement, for mea-
for them to live in have become a scarce the closure of national parks have helped suring, or for hitting those that are hard-
commodity. The Thai government nature rebound, bringing black-tipped headed.” To critics of President Rodrigo Du-
moved quickly to ease the housing short- reef sharks back into Thai waters and terte, the announcement, on December
age, launching a public appeal for empty endangered leatherback turtles back 4th, was yet another sign of the brutality of
shells that netted over 200kg. On Decem- onto Thai beaches. In the coastal prov- his regime. The Commission on Human
ber 5th these were distributed around the inces of Phang Nga and Phuket, turtles Rights, a state body, remarked drily: “Vio-
park in a ceremony marking the birthday have laid the largest number of eggs for lence, even in its slightest suggestion, is
of the late king, Bhumibol Adulyadej. 20 years. not the best way to address the pandemic.”
Even Mr Duterte’s own spokesman, Harry
Hermit crabs rely on discarded shells The government has decided to try to Roque, had to acknowledge that it would be
to protect their soft bodies, moving to mimic the respite forced on it by the against the law for a police officer to whack
larger shells as they grow. On Koh Lanta coronavirus in future. From now on, all anybody with a stick without proper cause.
and the surrounding, smaller islands, national parks will be required to close
their rapid increase seems to be a natural for part of the off-season and to limit the The police have demonstrated a great
phenomenon, rather than directly relat- number of tourists through a reservation proclivity for violence during Mr Duterte’s
ed to the absence of tourists. But the system when they are open. The tempo- four-year-old war on illegal drugs. His
shortage of shells may be man-made: rary closure last year of Maya Bay, made campaign against both dealers and users
pretty ones have long been gathered to be famous as the eponymous strand in the has killed thousands of people. At least
sold as souvenirs. Crabs had begun to film “The Beach” and subsequently 5,903 of them, by the official count, have
make do with potential death-traps such overrun by tourists, set a precedent. perished at the hands of the security ser-
as plastic caps and bottles.  Although such restrictions mean re- vices, guided by his exhortation to kill any-
duced earnings from tourism in the short body who violently resists arrest. (Thou-
The shell drive was part of a govern- term, in the longer run more pristine sands more have been killed by unknown
ment initiative to “restore the balance of parks may help to keep the tourists com- assailants.) Yet in the most recent of his fre-
nature”. “I have instructed all national ing—and shelling out. quent addresses to the nation Mr Duterte
parks to do whatever it takes,” says Vara- surprised his critics. Instead of ordering
the police to crack heads if people failed to
stay a metre apart, he gave a well-reasoned
argument for the advantages of equipping
the police with rattan sticks or, better still,
proper batons, as a means to reduce their
use of guns and thus stem bloodshed.

“When a person resists arrest and he be-
comes violent, the first impulse of a police
without a baton is to hold his gun,” he said.
“He might not draw it, but he holds his gun,
ready for action. If he has a baton you just
hit the hand, hit the body. It would be pain-
ful. Maybe you can subdue the person re-1

42 Asia The Economist December 12th 2020

2 sisting arrest.” The president promised the a little too long-winded to be entertaining. forces to shoot dead anyone in Manila
police that he would issue them with But it is not just theatre: this seems to be breaking lockdown rules. Twenty days lat-
proper batons, and told them: “Use the ba- how policy is made in Mr Duterte’s Philip- er a police officer enforcing the lockdown
ton, not the gun.” pines—openly, on screen, evolving hap- killed an ex-soldier who was being argu-
Mr Duterte often goes on television to hazardly from off-the-cuff remarks made mentative. The victim’s behaviour may
deliver rambling monologues about what by the president, which his subordinates have been due to mental illness stemming
his government is doing or what he wants must interpret as best they can. from his military service. The police officer
it to do. These talks are replete with vitup- who fired the fatal shots was later charged
eration, threats and unfunny jokes. Minis- Mr Roque is the chief interpreter of such with murder.
ters, members of Congress, civil servants remarks. The spokesman’s mantra is that
and military or police officers appear Mr Duterte’s statements should be taken This episode may help to explain Mr Du-
alongside him, to voice their agreement seriously, but not literally. Taking the pres- terte’s new enthusiasm for batons. And for
with whatever he says. It is a ritual that ident literally can have deadly conse- once he put his ideas in plain words, which
many ordinary Filipinos find endearing, if quences. In a televised speech on April 1st the police can take both seriously and liter-
Mr Duterte urged the police and armed ally, without fatal consequences. 7

Banyan Cosplaying nice

Thailand’s king is on his best behaviour for all Thais, protesters included. Thai- of the limelight could be helpful.
land, he added, is a “land of compromise”. For the protesters, the king’s conduct
The weeks of stand-off between
young Thai activists and the estab- The monarchy’s critics are not swallow- in Germany only reinforces their scorn
lishment they are challenging have not ing it. The martinet king has taken perso- for his attempts to burnish his image in
been short of political theatre. The prot- nal command of important military units Thailand. Not least, a mistress, Sineenat
esters are calling for the resignation of and direct control over the crown’s im- Wongvajirapakdi, whom the king sum-
the army-backed prime minister, for mense property holdings and investment marily dismissed last year for “misbe-
open elections and, above all, for an portfolio. He now has at his disposal over haviour” and “disloyalty”, has been rein-
absolutist monarchy to be modernised. $60bn in assets—more than the sultan of stated as the “untainted” royal consort.
They raise the three-finger salute of Brunei and the British royal family com- She accompanies the king and queen on
defiance from “The Hunger Games”. bined. Even if he is paying more attention their walkabouts. The king’s polygyny,
Giant inflatable ducks lend their to appearances, the critics say, there is no his humiliation of the women vying for
marches a carnival air—and also prove sign that the king, an absolutist through his capricious affection; his habit of
useful as protection against water can- and through, is thinking of giving up any making even the prime minister pros-
non. And thousands of letters demand- of his authority. trate himself before his majesty: instead
ing that King Maha Vajiralongkorn accept of connecting with members of a new
limits to his power and wealth were Meanwhile, says Pavin Chachavalpong- generation demanding gender equality,
delivered in replica post boxes to the very pun of Kyoto University, a “push factor” democracy and respect for individual
gates of the hallowed royal palace in helps explain the king’s absence from rights, the king’s comportment repulses
Bangkok. Germany—the growing risks of greater them. As Netiwit “Frank” Chotiphat-
parliamentary scrutiny of his presence phaisal, a prominent activist, puts it, the
The monarchy in Thailand sits atop a there and whether it contravenes a ban on walkabouts—the king in a white military
cosmic hierarchy that demands order foreign states operating on German soil. uniform slathered with gold braid—are
and obedience and offers beneficence. The European press gleefully reports not just cosplay in service of the king’s ego.
Never has it been challenged in this way only on how he churns through wives and
before. Yet the king of four years, to mistresses but also on his cavortings. Mr Pavin points out that, for all his
whom even his most loyal supporters Paparazzi keep snapping the 68-year-old in talk of compromise, the king, although
hesitate to attribute a great love of de- crop tops and stick-on tattoos. A spell out supposedly above the political fray, only
mocracy, has betrayed no irritation and meets and greets his supporters. Mean-
even slightly changed his ways. while, the prime minister, Prayuth Chan-
ocha, who led the coup in 2014 in which
A playboy resident in Germany, where the army (ostensibly in defence of the
he occupies a floor in an upscale Bavar- monarchy) seized power, grows less
ian hotel with a shifting harem of “sex conciliatory by the day. In particular, a
soldiers”, King Vajiralongkorn normally draconian law against “insulting” the
spends only brief spells in the country he monarchy has been dusted off and used
rules. But recently he has stayed put in against more than a score of activists. Mr
Thailand. More striking still, for the first Prayuth’s star, admittedly, is waning with
time since his accession (and indeed the the king, not least for letting the protests
first time in decades), he has mingled wax so dramatically. But if Mr Prayuth is
with his people. The stiff and aloof king dismissed as a scapegoat, it will surely be
has gone walkabout, descending from because King Vajiralongkorn wants his
his vintage Rolls-Royce to allow adoring successor to take a harder line. With the
subjects dressed in yellow (which signi- monarch digging in and young prot-
fies devotion to the monarchy) to touch esters convinced that change has arrived,
the royal feet. In his first comments as the cosplay is becoming serious.
king to the foreign press, with Queen
Suthida on his arm, he expressed “love”

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44 Asia The Economist December 12th 2020

Rohingya refugees in Bangladesh leged “gunfights” with security forces, in
incidents that look more like executions. It
Club Mud has also built barbed-wire fences around
the sprawling camps, the biggest of which
DELHI houses nearly 600,000 people.

The government is moving Rohingyas to a remote island Restrictions on the refugees are multi-
plying. Last year the government banned
The flotilla that sailed from the port of Dhaka them from owning sim cards and ordered
Chattogram (formerly known as Chitta- the telecom authority to block mobile-in-
gong) in southern Bangladesh on Decem- Meghna ternet service in the camps. Though the
ber 4th was carrying some 1,642 refugees to networks were restored a few months ago,
a new life across the water. But their desti- BANGLADESH sim cards are still forbidden. Rohingyas are
nation was no far-off promised land. It also barred from holding bank accounts
took less than four hours’ churning Chattogram and from paid work. Learning is almost as
through the wide, muddy estuary of the hard as earning. Having resisted pressure
Meghna River to reach Bhasan Char, an is- Bhasan from ngos to grant Rohingyas access to
land no bigger than a large city park, and so Char education for nearly three years, the gov-
freshly formed it barely peeps above sur- ernment had been on the verge of allowing
rounding tidal flats (see map). Bay of Cox’s Bazar some children to go school in April, when
Bengal covid-19 intervened.
It is here, improbably, that the govern- Refugee MYANMAR
ment of Bangladesh has built a red-roofed, 100 km The move to Bhasan Char fits this pat-
grid-patterned model town, intended to camps tern, and the growing authoritarianism of
house Rohingyas, an ethnic minority from Sheikh Hasina, who has been in power
neighbouring Myanmar. Some 700,000 of and sheltered so many desperate refugees, without interruption since 2009. Trouble-
them were chased into Bangladesh three ordinary Bangladeshis have gradually makers can be more easily controlled on
years ago by the Burmese army and allied grown less welcoming. Stories of violent the island, and it would be useful to reduce
militias in a horrifying bout of ethnic crime and disease in the border camps have the density of mainland camps. It is per-
cleansing. Bhasan Char can house about spread, exacerbated by fears of covid-19 haps no coincidence that cctv cameras
100,000. The hosts present the new settle- and by the smuggling from Myanmar of monitor all the streets of Bhasan Char, or
ment, erected at a cost of $300m by the arms and of drugs such as yaba, a cheap that the government has just created a new
Bangladeshi navy, as a safe, sanitary and form of methamphetamine that is ubiqui- body to oversee refugee affairs. The 15-per-
humane alternative to the teeming and tous in Bangladesh. son committee includes at least ten senior
squalid refugee camps that have mush- security officials, and no representatives of
roomed along the jungly border. The police, who in addition fear jihadist the Rohingyas.
radicalisation among refugees, have adopt-
Yet while some of the island’s new resi- ed an increasingly harsh line in the camps. Despite deep misgivings among aid
dents say they are happy to have pukka Odhikar, a Bangladeshi human-rights workers, there is some sympathy for Ban-
plumbing and cement floors, to many Ro- group, claims that since 2017 perhaps 100 gladesh’s dilemma. If the relocation brings
hingyas the permanence and isolation of Rohingya men have been killed during al- more attention to the Rohingyas’ plight,
the model town promise not relief but the that might be a silver lining, speculates
institutionalisation of their misery. An is- Protection or oppression? John Quinley of Fortify Rights, an advocacy
land exile, they fear, would mean less hope group. “Bangladesh is right, calling out the
of pricking the world’s conscience, and so international community for not pushing
less hope of ever returning to their original hard enough on Myanmar,” he says. The un
homes in Myanmar. “After this move to High Commissioner for Refugees, the main
Bhasan Char, I see our people slowly dy- coordinator of international relief, tiptoes
ing,” warns Ambia Perveen of the European around criticism of Sheikh Hasina’s gov-
Rohingya Council, an ngo. “We are becom- ernment. What it and smaller charitable
ing the Palestinians of Asia.” outfits would most like is access to Bhasan
Char. So far, Bangladesh has not allowed
When Sheikh Hasina Wajed, the prime any regular visits, or any independent as-
minister of Bangladesh, launched the relo- sessment of the model town. Without this,
cation project in 2018, a chorus of similar the un cannot offer assistance.
objections erupted. Even as construction
went ahead, diplomats and aid workers ex- Despite some individual reports of
pressed doubt that large numbers of refu- satisfaction with new homes on the island,
gees would ever be settled on a remote is- which also boasts schools and medical fa-
land prone to cyclones and floods. Aside cilities, the refugees on the mainland seem
from the cost and negative publicity, they mostly sceptical. Many claim that the first
assumed, such a transfer would weaken to relocate to Bhasan Char were not volun-
the argument, strongly advanced by Ban- teers, as claimed by the government, but
gladesh, that Myanmar itself must bear re- were threatened by police, coerced or
sponsibility for the fate of the Rohingyas. swayed by false promises of money. “They
should call it jail island,” says Ro, a resident
As time has passed, however, Sheikh of a mainland camp, walking uphill for bet-
Hasina’s government has faced growing in- ter telephone reception and a jumbled vista
ternal pressure. Although proud that their of plastic sheeting, tin roofs and bamboo
own crowded country of 165m has aided walls. At least here the Rohingya are close
to the border, and have some strength in
numbers, he says. 7

China The Economist December 12th 2020 45

Exporting Xi Jinping thought fort belong to the foreign ministry. But
many, such as those who organised the re-
How the party trains foreign politicians cent seminar on poverty, work for a branch
of the Communist Party called the Interna-
China says it is not exporting a political model, but its officials like to give tips tional Department. Its job is to win support
for China among foreign political parties.
In early december Xi Jinping, China’s virtues of a form of governance that they
leader, declared that the Communist believe is making China rich and can help The department is well suited to the
Party had met a self-imposed deadline. Ex- other countries, too. Some welcome this task. Because it does not directly represent
treme poverty (defined as earning a bit message, even in multiparty democracies. the Chinese state it has no role to play in
more than $1 a day) has been eradicated At the poverty-alleviation forum, the secre- verbal sparring. But as a party outfit it has
from China. Naturally, the party is keen to tary-general of Kenya’s ruling Jubilee Party, considerable authority. It works closely
tell others about its success in fighting Raphael Tuju, was quoted as saying that with the foreign ministry and swaps per-
penury. In October it hosted a mostly-virtu- China’s Communist Party should be an ex- sonnel with it.
al two-day seminar on the subject for near- ample for his own.
ly 400 people from more than 100 coun- Late in 2017 it held a convention in Bei-
tries. Participants quoted by official media In 2017 Mr Xi caused a stir in the West by jing joined by leaders and other members
gushed praise for China’s progress. But the suggesting that China’s development mod- of political parties from 120 countries.
gathering was not just about uplifting the el offered “a new option” for other coun- Some delegates were from rich democra-
needy. It was also aimed at showing off Chi- tries, and that a “Chinese approach” could cies such as Japan, New Zealand and Amer-
na’s political model. help solve humanity’s problems. Though ica. (Both Republicans and Democrats at-
he later insisted that his country did not tended.) Mr Xi gave the keynote address.
In the West, recent coverage of China’s plan to export a “China model”, the coun- Many participants signed a statement, the
diplomacy has been dominated by talk of try’s officials have been, in effect, doing “Beijing Initiative”, praising the Commu-
how aggressive it has become. Some of its just that. Some of those engaged in this ef- nist Party and Mr Xi. The department has
diplomats have been dubbed “wolf war- few qualms about the kind of political par-
riors” because of their habit of snarling at Also in this section ties with which it interacts. “They’ll deal
foreign critics (the label refers to the title of with right-wing parties and they’ll deal
a jingoistic Chinese film). To non-Western 46 Club culture expands with left-wing parties and everybody in be-
audiences, by contrast, Chinese officials tween,” says David Shambaugh of George
are speaking more softly. They preach the 47 Chaguan: A visit to Xinjiang Washington University.

Under Mr Xi one of the department’s
main activities has been organising train-
ing sessions for foreign political parties,
especially those from developing coun-
tries. It does not say outright that authori-1

46 China The Economist December 12th 2020

2 tarianism is good. But its mission is clearly Club culture
to promote the virtues of strong centralised
leadership. In November Song Tao, the de- A different beat
partment’s boss, claimed in an online
briefing of party leaders from 36 sub-Saha- BEIJING
ran African countries that the party’s
achievements in development proved the The pandemic gives China’s disc jockeys a chance to shine
wisdom of five-year plans. “The Chinese
system,” he said, could “serve as a refer- Getting into Zhao Dai, an under- his business will probably break even
ence” for his audience. He said that “only ground nightclub in a fashionable this year, despite being closed for much
by upholding the leadership of the party” part of Beijing, involves a little more faff of its first half.
could such plans “stay on the right track”. than it once did. Party animals must
During the pandemic much of the de- prove that they have not travelled any- The pandemic has wrought changes,
partment’s instruction has been conducted where they might have picked up co- nonetheless. Nightspots have long felt it
online, often focusing on China’s achieve- vid-19, by showing doormen a code necessary to fly in fashionable foreign
ments in crushing covid-19 (one lesson: generated by a government mobile app. djs to help them draw crowds. As a result
tough measures work). Expositions on Mr Once inside, however, the smoke-filled Chinese performers have always had to
Xi’s three-part tome, “The Governance of basement is just as sweaty as usual. On a make do with supporting slots, says
China” have also been a common feature. recent Saturday a hundred unmasked Huang Hongli, a dj who uses the stage
In recent months such classes have been revellers bopped to techno tunes. No one name of Hotwill. Now they have no
attended by officials from ruling parties in bothered to maintain social distancing choice but to give locals a chance to
Angola, Congo-Brazzaville, Ghana, Mo- while dancing. shine. This summer Zhao Dai held an
zambique, Panama and Venezuela. outdoor festival, attended by 3,000
Official websites in China often adver- The pandemic posed an enormous people. The 40 djs who performed there
tise these efforts. One describes a ground- threat to China’s fragile club scene. were all Chinese.
breaking ceremony in 2018 for a China- Nightspots in Beijing were forced to shut
funded ideological school in Tanzania. It in January. They did not reopen properly A second effect of the pandemic has
was attended by Mr Song, the department’s until August. Yet many electronic-music been to help speed up the spread of Chi-
boss, and by ruling-party officials from clubs have weathered the disruption, in na’s club culture beyond its traditional
Tanzania, South Africa, Angola, Mozam- part because punters freed from lock- bases in Beijing, Shanghai and the south-
bique, Namibia and Zimbabwe. down have flocked back to them. A western city of Chengdu. When night-
In democracies such as Ghana, Kenya bouncer eyeing the crowd at Zhao Dai clubs closed at the start of the year Mr
and South Africa the department sponsors says it is as busy as it was before the Huang chose to leave the capital and
trips to China by ruling-party members for closures. Michael Ohlsson, the American return to Xiamen, his hometown south
the study of party-building and gover- owner of Dada, another Beijing club, says of Shanghai, in part because of its lower
nance. In 2018 Ghana’s ruling centre-right cost of living. There he helped to launch
New Patriotic Party (npp) asked for such Fans of fun the city’s first underground nightspot,
training in part to “deepen its ideological which opened in April. This year’s clo-
skills”, found Joshua Eisenman of the Uni- sures gave Mr Ohlsson more time to plan
versity of Notre Dame, an expert on the de- the opening of a new club in Kunming,
partment’s activities in Africa. The former the capital of Yunnan province.
ruling party of Ghana, the National Demo-
cratic Congress (ndc), has sent dozens of Not everyone is happy. Ezzz, a Chi-
its staff to China for such training. The ndc nese dj and music producer, grumbles
has also opened a leadership school in Gha- that many of the djs who have gained
na. It uses teaching materials devised by new followings during the pandemic are
the Chinese Communist Party. proficient performers but do not “un-
It is unclear what foreign party mem- derstand electronic music culture”. Mr
bers gain from China’s training sessions. Huang looks forward to a time when a
They may be no more than a means of ca- few more foreigners can enter the coun-
reer advancement, or of paying ritual hom- try; he thinks some exposure to trends
age to Mr Xi’s wisdom in order to curry fa- from abroad is good for the local scene.
vour—China being a valuable source of As for the audience, few seem to care
loans and investment in many developing much who is performing, so long as they
countries. The seminars can be boozy jun- have somewhere to dance. Lea Liao, a
kets, dreary snoozefests, or both. An Egyp- Beijinger who attended Zhao Dai’s sum-
tian veteran of them says they are hardly mer festival, says she struggled to see the
rigorous; she likened the experience to a stage because of all the gyrating bodies.
“paid vacation”. “But I could hear the music, and that is all
The department says it has contact with that matters.”
more than 600 political organisations in
over 160 countries. Under Mr Xi such en- Martin Hala of Sinopsis, which monitors politicians who find the checks and bal-
gagements have grown. Christine Hacke- China’s activities in Central Europe, has ances of democracy irksome. In June Ken-
nesch and Julia Bader, writing for Interna- called this akin to forming a “new Comin- ya’s Mr Tuju (the cheerleader for China at
tional Studies Quarterly, found that the tern”—a reference to the old Soviet-led in- the anti-poverty seminar in October) was
number of high-level party-to-party meet- ternational communist movement. challenged about his party’s affection for
ings increased by more than 50% between the Chinese Communist Party by a reader
2012 and 2017, to more than 230 annually. There is a critical difference, however. of a Nairobi newspaper. He replied that he
China is not preaching communism. Its did not see what was wrong with “learning
aim, rather, is to show that a country can from the most successful and the best run”
become richer without being democratic. party in the world. 7
That message finds attentive ears among

The Economist December 12th 2020 China 47

Chaguan China doubles down in Xinjiang

Chaguan pays an uninvited visit to a factory complex accused of using forced Uyghur labour

Avast expanse of sand dunes, studded with the wind-eroded ter-terrorism work in Xinjiang with nationwide campaigns to as-
ruins of lost Silk Road cities, the Taklamakan Desert is a fine similate ethnic minorities and push the rural poor into formal
place to hide a guilty secret. At first glance, shame is a plausible ex- employment, in the name of development and social stability. A
planation for a mini construction-boom under way in this remote State Council white paper from September, detailing training and
corner of Xinjiang. For outsiders are increasingly shocked by Chi- job placement campaigns in Xinjiang, found 2.6m “rural surplus
na’s rule over this north-western region, where millions of Uygh- workers” in the region, notably Uyghurs with “outdated ideas”.
urs, an ethnic minority, endure oppressive, high-tech surveillance
and the constant fear of detention for alleged Islamic extremism. Hints of trouble abound. The white paper blames “terrorists,
separatists and religious extremists” for inciting locals to “refuse
For the past few years overseas human-rights groups and schol- to improve their vocational skills”. Global firms that audit multi-
ars have used satellite images and Chinese government docu- national supply chains for labour abuses increasingly decline to
ments to track dozens of factories rising on the Taklamakan’s operate in Xinjiang, blaming authorities for obstructing their
southern edge in Lop County, a poor and almost entirely Uyghur work. Earlier this year the American government said that it sus-
area. The factories line the newly laid streets of an industrial park pects several businesses in Lop County of using forced labour, spe-
sponsored by the city of Beijing, 4,000km to the east. More alarm- cifically firms trading in human hair. American customs officers
ingly, satellite images and the Xinjiang government’s own propa- seized tonnes of wigs and hairpieces in June, then afterwards
ganda suggest that as the park rose from the desert sands, at least banned all hair imports from the Lop County Hair Products Indus-
one political re-education camp lurked amid the factories. trial Park, a zone within the Beijing Industrial Park. Chinese gov-
ernment spokesmen and state media dismiss talk of forced labour
Across Xinjiang over a million Uyghurs have passed through as a smear by Westerners bent on keeping China down.
such camps in recent years. Officials eventually admitted to the
camps’ existence in 2018. Pointing to terrorist attacks by Muslims To an optimist, such shrill denials might suggest that sanctions
from Xinjiang, they said China had set up vocational training cen- are biting. Xinjiang has a lot to lose: it supplies almost a fifth of the
tres to cure minds infected with religious extremism. In October world’s cotton, among other commodities. Your columnist, who is
2018 China Central Television toured a camp in Hotan, an ancient not generally an optimist, headed to Lop County to take a look in
oasis city. Detainees were shown in Mandarin-language classes, person. Chaguan travelled with a reporter from another Western
studying Chinese laws and learning such skills as sewing, before newspaper. As happens in Xinjiang, police were already waiting
thanking authorities for saving them. In contrast, critics call the for the foreign journalists at Hotan, the nearest airport to Lop
campaign both brutal in its methods and horrifyingly arbitrary in County. An hour later, goons blocked an access road to the indus-
its application. Leaked government files record Uyghurs interned trial park, turning Chaguan’s taxi away. He and his colleague final-
for such “suspicious” acts as growing long beards, applying for a ly arrived on foot after a long desert walk around the park bound-
passport or using foreign messaging services like Skype. Ex-de- ary, a metal fence topped with four strands of electrified wire.
tainees have accused camp staff of beatings and rapes.
Defiance in the desert
Now this giant social-engineering project is evolving. In late American sanctions have yet to paralyse Lop County’s factories, it
2019 officials said that all detainees have graduated from compul- can be reported. On a freezing but sunny weekend morning, the
sory studies. On a recent weekend Chaguan visited the Hotan city entrance to the hair-products park was busy with traffic. Nearby,
camp toured by state television and found it apparently aban- construction workers toiled on new buildings. The arrival of for-
doned, observed only by a clutch of camels and locals digging for eign reporters triggered bouts of pushing and arm-grabbing by un-
white jade in a dried-up riverbed. Closing highly visible sites sig- identified men bent on stopping the Westerners from proceeding
nals shifting tactics, not a change of heart. China is merging coun- further, one of whom called himself “the person responsible for
the park”. Trying to grab reporters’ smartphones, they demanded
the deletion of pictures of their industrial zone and of what ap-
pears to be a training facility at the park’s southern end, resem-
bling a secure boarding school, down to young adults lined up in
rows on a playing field. Questions were greeted with evasions. “We
don’t really have dealings with the outside world,” replied one of
the men when asked about American sanctions. Initially asserting
that his company only sells to domestic markets, he then claimed
that it makes nothing at all and “is still being put together”.

The men staged one more physical confrontation when a hulk-
ing, prison-like complex with tall grey walls and guard towers
came into view. Failing to stop the foreigners from seeing the pri-
son, they focused on preventing photography.

Still, evidence-destruction is not a sign of a sore conscience.
Bits of the park designed to be seen from the ground by locals are
unapologetic. Giant rooftop characters in the training facility spell
out such slogans as: “Labour is glorious” and “Serve the economy”.
A poster by the main gate shows President Xi Jinping surrounded
by smiling Uyghur children. China’s regime is secretive because it
has no patience for debating its policies with foreigners. It is proud
of its iron-fisted rule in Xinjiang, and is not about to change. 7

48 Middle East & Africa The Economist December 12th 2020

Mining’s toxic legacy what they will do,” he says. Children are
more likely to inhale and ingest toxic dust.
Lead astray Their bodies are more susceptible to its po-
tential effects, such as behavioural pro-
KABWE blems, learning disabilities and lower iqs.

A class-action lawsuit shines light on a polluted town Three-quarters of Kabwe’s population
are estimated to have more than five mi-
Azael tembo takes a seat in the shade of been to,” says Richard Fuller, its president. crograms of lead per decilitre in their
a mango tree outside his house. He Prolonged exposure to lead degrades blood, levels scientists consider elevated.
kicks up the dust. “It’s affected,” he says, Among children the average levels are
pointing to the plume around his feet. The the body’s nervous and circulatory sys- much higher (see chart on next page). “Kab-
67-year-old lives in Kabwe, a town in cen- tems, damaging the brain and other or- we is the most polluted place for children
tral Zambia whose history, like that of gans. It is associated with higher rates of on the planet,” says Jack Caravanos of the
much of the southern African country, is miscarriage, convulsions, comas and nyu School of Global Public Health.
intertwined with mining. Kabwe sprung death. Mr Tembo believes his poor eyesight
up around a mine founded in 1904 by the and sore limbs are from lead poisoning. The pollution in Kabwe is a scandal. Yet
Rhodesian Broken Hill Development Com- responsibility for it has long been con-
pany, a British colonial firm. For decades But his main concern is for his four tested, and that is set to continue. In Octo-
miners like Mr Tembo crushed and burnt grandchildren, in particular the two-year- ber Mbuyisa Moleele Attorneys, a South Af-
ore to extract lead. That metal made Kabwe old. She enjoys playing outside and is rican law firm, with help from Leigh Day, a
but it also devastated it. To this day lead puckishly recalcitrant when told to stop British one, announced a class-action law-
particles blow across town, making their putting things in her mouth. “I tell her suit against a subsidiary of Anglo American
way into houses and bloodstreams. mum to not let her eat the soil, but kids do on behalf of potentially more than 100,000
children and women of reproductive age in
Scientists generally consider soil haz- Also in this section Kabwe. It is targeting Anglo because it was
ardous if it has more than 400mg of lead affiliated to the mine from the 1920s until
per kilogram. In three townships near the 49 Ghana’s skirt-and-blouse vote shortly after Zambia’s mines were nation-
old mine the soil contains six, eight and 15 alised in 1970.
times that amount, according to analysis in 50 The boycott of Qatar
2014 by Pure Earth, an environmental ngo. The suit claims that most of the pollu-
“Kabwe is the most toxic place I’ve ever 50 The Yazidis fall out tion stems from the period when the mine
was under the de facto control of Anglo,
51 A racist football team in Israel which allegedly did not do enough to stop
the harm. Anglo rejects the claims, arguing
that its involvement ended five decades1

The Economist December 12th 2020 Middle East & Africa 49

2 ago and that, before then, it was neither the Bad blood harder if, as remains possible, power is
operator nor a majority shareholder in the split between the executive president and
mine and thus not responsible. Kabwe, Zambia, estimated mean blood lead levels an opposition-controlled parliament.
The case may take years. The lawyers for By age, Jul-Sep 2017, micrograms per decilitre
the plaintiffs must first convince a South Mr Akufo-Addo’s win owes plenty to his
African court to take it on. Only then may it CHILDREN 30 government’s popular decision in 2017 to
proceed to a trial. Meanwhile children in 25 make senior high school education free.
Kabwe will keep on playing in the dust. Voters also backed his handling of covid-19,
There have been attempts to make Kab- 95% confidence level 20 which included generous handouts. Pre-
we less dangerous. The first concerted ef- 15 election surveys showed he was trusted for
forts came in the 1990s, when Zambia’s his management of the economy.
state-owned mining company conducted ↑ Elevated levels* 10
blood testing and provided some topsoil to 5 Set against this, though, is the view
cover toxic yards. But these efforts were among many voters that his government
woefully inadequate; according to Mr 0 has failed at reducing corruption, says Em-
Fuller of Pure Earth, the government also manuel Gyimah-Boadi of Afrobarometer, a
claimed that sick residents had malaria 0-5 18-23 5 10 15 18 30- 50- 70+ pan-African research group. Shortly before
and prescribed milk to children. Months Years 39 59 the election the independent special pros-
After cajoling from Mr Fuller, the World Age ecutor for corruption, Martin Amidu, re-
Bank included Kabwe in a broader project it signed citing political interference. Voters,
funded to clean up Zambian mines. (To get *Centres for Disease Control and Prevention benchmark especially in the capital, Accra, were unim-
Zambian officials on board, the Bank’s rep- pressed, swinging their support from the
resentative had them watch “Erin Brockov- Source: “Assessing the population-wide exposure to lead president to his opponent. The swing
ich”, a film in which Julia Roberts plays a pollution in Kabwe, Zambia”, by D. Yamada et al., Sep 2020 might have been wider still, had Mr Ma-
lawyer representing victims of pollution.) hama not been tainted by corruption scan-
The scheme, which ran from 2003-11, had whose grandfather, a former miner, dals from his time in office.
some successes. It dredged a toxic canal drummed into her the dangers of lead. “I’m
and buried some contaminated soil. But it worried about their iqs,” she says. Voters seemingly punished ruling-
did not treat the main source of the dust— party mps by voting against them while still
the former mine and dumps—and it left In his front yard Mr Tembo introduces supporting the president’s bid. This was
roads unpaved and most houses untreated. his son, Richard. “All these years I’ve been because they are seen as having failed to
Cornelius Katiti, a local councillor at the affected,” says the 20-year-old. He strug- build things like roads or clinics in their
time, reckons that just 10% of houses had gles to focus on his college work and suf- constituencies, says Bright Simons of
topsoil replaced. An independent evalua- fers from memory loss. He worries about Imani, a local think-tank. In about 20 con-
tion of the project commissioned by the his younger nieces and their difficulties at stituencies the opposition’s parliamentary
World Bank found various shortcomings. school. Given all this, hasn’t his father con- candidate won office, even as their leader
Another clean-up funded by the bank sidered leaving Kabwe? He doesn’t have the lost the presidential vote.
was started in December 2016. But it, too, is money, says Mr Tembo. “This is our home.
struggling. Some children have been tested We’ve nowhere else to go.” 7 “Skirt-and-blouse” voting, as such
and have received therapy to reduce blood splits are called in Ghana, suggests that
lead levels. But since little has been done Ghana’s election voters are discerning in their exercise of
about the lead in the environment there is a democratic power. This may be because of
risk their levels will rise again. “If this were Skirt and blouse experience: Ghana has held elections since
in London, Johannesburg or a rich suburb 1992, with power regularly changing hands.
of Lusaka it would not happen like this,” DAKAR That has made it a beacon in the region.
says Juliane Kippenberg of Human Rights
Watch, an international ngo. The president wins another term, but Yet Ghana’s democracy is not without
At the project office in Kabwe officials his party takes a hit troubles. More than 62,000 soldiers and
refuse to talk to your correspondent. When police officers were deployed. Even so, five
asked if nothing has been done to remedi- After a prayer, the electoral commis- people were killed on election day and the
ate the area, one worker replies: “It de- sion announced that Ghana’s presi- day after. Political violence has been rising
pends on your definition of nothing.” Later, dent, Nana Akufo-Addo, had won another since 2012 and the number of Ghanaians
in the capital, Lusaka, the director of the four years in office in national elections who say they fear becoming victims of it in-
project, Gideon Ndalama, concedes that it held on December 7th. His supporters creased by eight percentage points to 43%
has had a “slow start”, arguing that there is cheered in the streets. But his victory is far between 2014 and 2018.
not enough money to do a full job. from comprehensive.
More than 25 years after the mine Elections also usually add to the coun-
closed, its huge waste dump—known as Mr Akufo-Addo’s margin shrank and his try’s economic woes. Those in power in
Black Mountain—looms. Artisanal miners party suffered heavy losses in the parlia- Ghana almost always splurge heavily in the
cart away maize sacks filled with rocks. ment. About 30 seats were flipped, leaving year before voters get to make their choice.
In the absence of a clear plan that will the house split almost evenly between the This is often followed by an imf bail-out;
end contamination in Kabwe, residents are two major parties. (As The Economist went Ghana finished its16th in 2019. Perhaps try-
trying to protect themselves as best they to a press a handful were still in the bal- ing to tie itself to the mast, the New Patriot-
can. Local ngos such as Environment Afri- ance.) The main opposition candidate and ic Party (npp) government introduced a
ca are educating people in schools and on former president, John Mahama, was yet to rule in 2018 limiting budget deficits to 5%
radio shows. Families pass on warnings. “I concede. His party rejected the result, al- of gdp. But the imf forecasts a deficit of
don’t let my younger brothers play out- leging irregularities without providing evi- 16.4% for 2020, the highest in sub-Saharan
side,” says Joy Mbuzi, a19-year-old student, dence of any. Few expect it to challenge the Africa. Covid-19 explains some of this. But
results in the streets, even if it does take the limit would have been exceeded any-
them to court. Yet the moment the dust has way, says Henry Telli, a Ghana-based econ-
settled, Ghana will face tough economic omist for the International Growth Centre
choices. Its public debt, already high, is of the London School of Economics.
climbing fast. Dealing with it may be even
Worse, Ghana was already at high risk of
debt distress before covid-19 hit. It spends1

50 Middle East & Africa The Economist December 12th 2020

2 and borrows like a middle-income country, and sometimes did the opposite, escalat- drew from the Saudi-led war there. They
but does not collect revenue like one, says ing its media war with the blockading have grown nervous about Mr Trump’s bel-
Greg Smith of m&g, an asset manager. It states and deepening ties with Turkey. ligerent policy towards Iran, which the
scrapes together tax revenue of about 14% Saudis have encouraged. Recently they
of gdp, which is low even for similar Afri- American officials want the quartet to have split over oil: the uae is frustrated
can countries. For the next few years Ghana start by reopening their air space. That with Saudi-backed production caps im-
is likely to spend half of its revenue on in- would fix a self-defeating facet of the em- posed on members of the Organisation of
terest payments. There are other troubles, bargo. The blockading states want Qatar to the Petroleum Exporting Countries.
too. A big new offshore oilfield, Pecan, was cut ties with Iran, yet by forcing dozens of
expected to boost growth. But this has been Qatari planes to fly new routes over Iran Diplomatic niceties will not end the dis-
delayed amid lower oil prices. each day they gifted it hundreds of millions cord between the Qatari emir (pictured, in
Mr Akufo-Addo made bold promises on of dollars in overflight fees. Reopening the white) and the leaders of Saudi Arabia and
the campaign trail, from building more air space would be progress, but hardly a the uae. And for all the talk of the “broth-
than a hundred hospitals to adding railway reconciliation. erly” Gulf states, the blockade has intro-
lines. If he wants parliament to pass his duced a level of personal animosity in the
budgets, he may have to agree to pork-bar- Mr Kushner, who will be out of a job region, particularly between Qataris and
rel side-deals with mps. Yet if the new gov- next month, did not offer much to acceler- Emiratis. “People had a big shock that dis-
ernment cannot set a credible plan to cut ate a deal. Nor is it clear what Qatar would turbed and tortured the social fabric of our
spending—and stick to it— it will lose cred- offer the quartet in return. Buoyed by the region,” says a Qatari official. “To go back to
ibility with lenders. And that, says Mr Telli, world’s third-largest proven natural-gas re- normal, I think we need two or three gener-
could see the imf back again. 7 serves, its economy grew in 2017 and 2018 ations.” Even if Qataris can soon fly over
despite the embargo. It feels no pressure to Dubai, they may not be eager to land. 7
The boycott of Qatar make big concessions. A small one would
be to quieten Al Jazeera, where the tone of The Yazidis
Bridging the Gulf the Arabic-language channel is often a bell-
wether for relations between Qatar and its Divided, oppressed
DUBAI neighbours. Beyond that, Qatar may offer
the promise of a less antagonistic relation- and abandoned
The Gulf states are trying to make nice, ship. In other words, not much.
but a real end to their dispute is far off Five years after escaping Islamic State,
That might still appease Saudi Arabia. the Yazidis are still struggling
Months after four Arab states im- The blockade has upset America, a close
posed an embargo on Qatar in 2017, a partner of both Qatar and the quartet. Steps Like a picture of purity in white robes,
minister from the emirate made what he to end the dispute would curry favour with white shoes and a white turban, Ali Ili-
thought was a controversial comparison. the incoming Biden administration. Some yas emerged from a candle-lit sanctum. He
“To be honest, we consider ourselves like of Saudi Arabia’s partners are less concilia- had just been inaugurated as the new Baba
Israel,” he said, referring to another small tory, though. Qatar remains a bugbear for Sheikh, or spiritual leader of the Yazidis, on
country isolated in the region. Improbably, Egypt because of its support for the Muslim November 18th. Believers gathered at Lal-
almost three years later, this comparison Brotherhood. Less enthusiastic still is the ish, a temple in Iraqi Kurdistan, banging
seems too favourable to Qatar. Thousands uae, whose hostility towards political Is- drums and tootling flutes to celebrate.
of Israelis are visiting Dubai for the first lam puts it implacably at odds with Qatar. It
time this December, while Qataris are no- has responded tepidly to the diplomacy. But behind the scenes an unholy row is
where to be found. Israel will soon have blazing between Yazidi leaders. The Asay-
ambassadors to two of the six members of Reconciliation between Saudi Arabia ish, or Kurdish police, had to intervene
the Gulf Co-operation Council (gcc), the and Qatar would add to a growing list of after scuffles broke out at a gathering to an-
same number as Qatar—a gcc member. disagreements between Saudi Arabia and nounce the new leader. Many Yazidi elders
the uae. The Emiratis pulled out most of boycotted the temple ceremony. For the
The feud in the Gulf has long seemed in- their troops from Yemen in 2019 and with- first time in its history, the esoteric Yazidi
tractable. But for the umpteenth time for- religion faces a schism.
eign officials are trying to resolve it. Jared The masked mediator
Kushner, Donald Trump’s son-in-law and Six years ago Western armies saved the
adviser (pictured, in blue mask), recently Yazidis from Islamic State (is). The jihad-
visited Saudi Arabia and Qatar to push for a ists killed 5,000 of their men and enslaved
deal. The Saudi foreign minister later said 5,000-7,000 of their women, mostly to
one was “within reach”. Qatari officials rape. The genocide caused many Yazidis,
made encouraging noises too. Yet even if who number perhaps1m, to flee abroad. In-
they promise to bury the hatchet, real re- side Iraq new pressures are tearing the
conciliation will remain out of reach. group apart.

In 2017 the “Arab quartet” behind the Some Yazidis see themselves as part of
blockade—Bahrain, Egypt, Saudi Arabia the larger Kurdish community and have
and the United Arab Emirates (uae)— aligned themselves with the Kurdistan
served Qatar a list of 13 demands, among Democratic Party (kdp), which rules Kurd-
them closing Al Jazeera, the satellite broad- istan. But others blame the kdp for not
caster; cutting ties with Islamist groups stopping is. They objected when Mir Ha-
such as the Muslim Brotherhood; and shut- zim Tahsin Beg, a former kdp parliament-
ting a Turkish military base in Doha, Qa- arian, was chosen as head of the Yazidis’
tar’s capital. Qatar acceded to none of them spiritual council last year, believing he
does the party’s bidding. Nevertheless, it
was Mir Hazim who chose the Baba Sheikh.1