Economist 20200411

How not to run an election
A world awash with oil
Should you wear a mask?
A special report on South Korea

APRIL 11TH–17TH 2020

The business
of survival

How covid-19 will reshape global commerce

Contents The Economist April 11th 2020 3

On the cover The world this week United States
5 A summary of political 17 White House v virus
Some companies won’t make it 18 Race and the pandemic
through the crisis. Those that and business news 19 Covid-19 in the navy
do will face a new business 19 Michael Atkinson’s ousting
climate: leader, page 7. The Leaders 20 House-sharers’ struggles
pandemic will accelerate 7 Companies and covid-19 21 Counting inmates
trends that were already 22 Lexington Fly-fishing
reshaping global business, The business of survival
page 13. Covid-19 is changing 8 The euro area The Americas
factories. Some of the 23 How Latin America’s
innovations could be Cut to the chase
permanent, page 15. Banks 8 Voting in a pandemic health systems will cope
entered this crisis in better 24 Venezuela’s navy meets
health than the previous one. Wisconsin’s warning
How sick might they get? 9 The IMF its match
Page 55 25 Bello Self-isolating
Break the glass
• How not to run an election 10 America v China Bolsonaro
Wisconsin shows how not to Asia
organise an election while Huawei and 5Geopolitics 26 Singapore locks down
covid-19 is spreading: leader, 27 Uzbekistan’s courts
page 8. The list of mistakes Letters 28 Taiwan on alert
made by the federal government 12 On covid-19, China, 28 Dress codes in Japan
in responding to the virus is 29 Judges v jury in Australia
long. Now that the White House digital payments, cats, 29 Elections in South Korea
has taken charge, how is it Sinn Fein, Jamie Dimon, 30 Banyan Pacific boltholes
doing? Page 17 Tahiti China
31 Peddling unproven
• A world awash with oil Briefing treatments
An unprecedented plunge in oil 13 Covid and the company 32 Beekeepers’ travails
demand will turn the industry 33 Chaguan A documentary-
upside down: briefing, page 53 Sinking, swimming and maker’s last resort
surfing
• Should you wear a mask? 15 Manufacturing at a Britain
A guide to the debate about distance 34 Boris Johnson in
wearing masks in public to slow Still made in China
the spread of the virus, page 60 intensive care
Special report: 35 Labour’s new leader
We are working hard to South Korea 36 Bagehot Missing Boris
ensure that there is no dis- Loosening up
ruption to print copies of After page 36 1 Contents continues overleaf
The Economist as a result of
the coronavirus. But if you Lexington Fly-fishing is
have digital access as part of compatible with social
your subscription, then acti- distancing—and a lesson
vating it will ensure that you in American strengths
can always read the digital and strains, page 22
version of the newspaper as
well as all of our daily jour-
nalism. To do so, visit
economist.com/activate

4 Contents The Economist April 11th 2020

Middle East & Africa Finance & economics
37 Dark times ahead in Iraq 55 How sick might banks get?
38 Covid couture in Lebanon 56 The economics of price
39 Why migrants fib about
gouging
money 57 Buttonwood The woes of
39 Africa’s debt crisis
40 Farming flops in Ethiopia unicorns
58 Joe Stiglitz and the IMF
Europe 58 The labour market’s turn
41 The coronabonds row
42 Vulnerable Greece for the worse
43 Russia’s invisible leader 59 Free exchange Special
43 Turkey’s obsession with
drawing rights
cologne
44 Charlemagne Running Science & technology
60 Masks and covid-19
Europe via Zoom 62 Silent disease-spreading

International Books & arts
45 Religion and covid-19 63 Feminist revenge dramas
46 Virtual worship 64 London fiction
65 Postcards from doomsday
Business 65 The trouble with
47 5Geopolitics
49 Bartleby Inside jobs bystanders
50 SoftBank and sensibility 66 Soviet dissidents
50 Zoom in, Zoom out 67 Home Entertainment
52 Schumpeter Strategic
Trollope’s world
pile-up 67 A Flemish Robin Hood

Briefing Economic & financial indicators
53 Crude’s collapse 68 Statistics on 42 economies

Graphic detail
69 A study showing that covid-19 is everywhere is good news

Obituary
70 Catherine Hamlin, obstetrician

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The world this week Politics The Economist April 11th 2020 5

Japan and Pakistan. The ments of Egypt, Honduras, Coronavirus briefs
governments of Japan and Indonesia, Saudi Arabia and
Singapore, which had not yet Serbia for attempting to To 6am GMT April 8th 2020
placed severe restrictions on “undermine the public con-
people’s movement, did so. But versation” in those countries. Confirmed cases, by region/state
South Korea, which was the log scale
first country outside China to Iran’s president, Hassan Rou- 100,000
suffer a severe outbreak, said hani, said that “low-risk”
elections would go ahead on economic activities would Hubei 10,000
April 15th, after a slowing of resume in most areas. Iran has London 1,000
new infections. struggled to contain one of the
world’s worst outbreaks of Lombardy 100
The authorities in Myanmar covid-19. But the government is 10
Boris Johnson, Britain’s prime arrested the editor-in-chief of a worried about the effect of its Madrid New York 1
minister, who has contracted news website for publishing an mitigation efforts on the econ- Jan Feb Mar Apr
covid-19, was admitted to interview with the spokesman omy, which was already reeling
intensive care after a deterio- of a rebel militia that the gov- because of sanctions. Confirmed deaths, log scale
ration in his breathing. ernment had recently labelled
Dominic Raab, the foreign a terrorist group. The editor Negotiations took place to free Spain Italy 10,000
secretary, is to stand in for him faces life in prison. the leader of the opposition in Iran 1,000
chairing cabinet meetings Mali, Soumaïla Cissé, after he France
“where necessary”. George Pell, an Australian was kidnapped by gunmen Britain 100
cardinal who was once the believed to be affiliated with
America braced itself for a Vatican’s main financial man- al-Qaeda, a jihadist group. US
surge in deaths related to the ager, was acquitted of sexual S Korea
new coronavirus. There were abuse of minors on appeal, The British Labour Party elect-
some tentative signs of good after a two-and-a-half-year ed Sir Keir Starmer as its new 10
news in Europe, as the number legal saga. A court in the state leader, replacing Jeremy
of people dying and the num- of Victoria had found Mr Pell Corbyn, who in December led 0 10 20 30 44
ber of new cases registered guilty of assaulting two choir- Labour to its worst election Days since tenth death
each day fell in several coun- boys when he was Archbishop defeat since 1935. The party’s
tries, including Spain and Italy, of Melbourne in the 1990s. new deputy leader, Angela Sources: JHU CSSE; NHS; national statistics
the two worst-affected. Austria Rayner, a Manchester native,
talked of starting to emerge Wisconsin’s Democratic may help the party recover the Joe Biden floated the idea that
from its shutdown, and in primary went ahead. A last- “red wall” of northern seats it voters in America’s presi-
Denmark junior schools and minute order from the Demo- lost to the Tories in December, dential election might have to
kindergartens are to reopen. cratic governor to postpone the though it has its work cut out. participate by mail only.
But Europe remains the worst- election, and other state con- As the pandemic deepens the
hit part of the globe. tests, until June because of Conservative government’s The captain of the uss Theodore
covid-19 was overturned by the popularity is hitting new Roosevelt was fired after asking
For the first time since it start- state Supreme Court. Those highs. for help when covid-19 spread
ed publishing daily figures in voters who did venture out to among his sailors. Officials
January, China reported no the polling stations faced long Ecuador’s top court convicted said he had not gone through
new deaths from covid-19. A queues. Rafael Correa, who was presi- the proper channels in airing
cordon sanitaire was lifted dent of the country from 2007 his complaint. The captain was
around Wuhan, the city where Meanwhile, the Democrats to 2017, of corruption and given a rousing send-off by
the outbreak was discovered. pushed back the date of their sentenced him to eight years in sailors. After a backlash, the
The country’s borders re- national convention from jail. He was charged with ac- head of the navy resigned.
mained shut to most foreign- mid-July to mid-August. It is cepting $8m in bribes in ex-
ers. Meanwhile, Donald Trump still supposed to take place in change for awarding public In South Africa a man was
accused the who of being “very Milwaukee, though Joe Biden contracts. Mr Correa, who is charged with spreading fake
China-centric” in its handling has suggested it might have to living in Belgium, can appeal. news about testing.
of the crisis. be held online.
A Venezuelan naval patrol Scotland’s chief medical offi-
China’s Communist Party said Donald Trump sacked the vessel fired on an unarmed cer resigned after she broke the
it was investigating a property inspector-general of America’s Portuguese-flagged cruise government’s advice by leaving
tycoon, Ren Zhiqiang, for intelligence services. There ship, the rcgs Resolute, which her house, twice, during lock-
“serious violations of dis- was no apparent reason other it claimed was in its waters. down to visit her second home.
cipline and law”. An essay than that he was the official Columbia Cruise Services said
attributed to Mr Ren accused Xi who alerted Congress to a the holiday craft, hardened to A tiger in the Bronx Zoo is
Jinping of being a “clown” and whistleblower’s complaint withstand polar ice, was thought to have contracted
argued that the covid-19 epi- about the president’s dealings rammed by the Venezuelan covid-19 from an infected
demic had been made worse by with Ukraine, which led to Mr vessel, which then sank. All 44 zookeeper. There is no evi-
curbs on freedom of speech. Trump’s impeachment. Venezuelan sailors were res- dence that tigers can give the
cued. Their commanders disease to humans.
Covid-19 infections jumped in Twitter removed thousands of congratulated them on their
a number of big Asian coun- accounts linked to the govern- “impeccable performance”. For our latest coverage of the
tries, including Indonesia, virus and its consequences
please visit economist.com/
coronavirus or download the
Economist app.

6 The world this week Business The Economist April 11th 2020

The s&p 500, Dow Jones Indus- Boeing shut production of its number not seen since the biggest market. Along with
trial Average and nasdaq 787 aircraft at its factory in depth of the financial crisis. In other big British banks, hsbc
stockmarkets all rose by more South Carolina because of the Britain 1m new people applied suspended shareholder
than 5% on April 6th, as in- covid-19 outbreak, and extend- for benefits over two weeks, payouts after the Bank of Eng-
vestors reacted positively to ed indefinitely the closure of ten times the normal rate. land leant on them to do so, but
slowing death rates from its plant near Seattle. The Some 4m workers have been a group of investors in Hong
covid-19 in a few places. But aerospace company has invited temporarily laid off in France, Kong has banded together to
with America expecting a surge workers to apply for voluntary and Spain has reported its try to force an extraordinary
in new cases, trading remained redundancy, though it is still biggest-ever rise in job losses. general meeting on the matter.
turbulent. Oil prices whip- recruiting new employees “in
sawed in reaction to differing certain areas”. The German government said Despite interruptions to pro-
reports about the possibility of it would relax the border re- duction because of covid-19,
Russia and Saudi Arabia reach- In Germany Lufthansa decom- strictions it has imposed dur- Samsung forecast that its
ing a deal to end their price missioned around 40 jetliners ing the pandemic and will operating profit for the first
war. A meeting between Russia and ceased operations at its allow tens of thousands of quarter will be 6.4trn won
and opec was postponed until Germanwings discount carrier. seasonal workers to enter the ($5.2bn), up by 3% from the
later in the week, after which a The airline warned that it will country, after farming groups same three months last year.
meeting of g20 oil ministers is take “years until the worldwide and retailers warned that crops The South Korean tech giant
scheduled to take place. demand for air travel returns to would otherwise be left to rot. expects to gain from increased
pre-crisis levels”. The workers come mostly from demand for its chips in data
ExxonMobil reduced its eastern Europe and will be centres and the roll-out of 5g
planned capital spending by a US non-farm payrolls quarantined for two weeks. networks. However, it could
third this year, a deeper cut take a hit if consumers feel less
than its rivals, which are also Change on previous month, m Jamie Dimon returned to work inclined to splash out on
curtailing output amid fore- full-time as chief executive of smartphones and televisions.
casts of plunging energy de- 0.5 JPMorgan Chase, four weeks
mand. “We haven’t seen any- after undergoing emergency But he still won’t wear one
thing like what we’re 0 heart surgery. Like many peo- Donald Trump announced a
experiencing today,” said the ple these days he is working deal with 3m, an American
chief executive, Darren Woods. -0.5 remotely, though not isolated industrial conglomerate, that
from the arguments on Wall will see it import n95 respira-
Russia’s central bank said it -1.0 Street about whether to cancel tor masks to the United States
would continue to sell dollar dividends. Mr Dimon warned from its factories in Asia. The
reserves, and that this was 2008 10 12 14 16 18 20 investors that JPMorgan Chase president had warned 3m that
intended to stabilise markets. could suspend shareholder it would have “a hell of a price
The rouble has weakened as oil Source: US Bureau of Labour Statistics payments for the first time. to pay” if it did not limit over-
prices have tumbled. The seas sales of the face masks
central bank indicated that a Around 10m Americans filed The decision of hsbc to sus- (under the deal it will continue
cut to interest rates was also on claims for unemployment pend its dividend payments to sell masks to Canada and
the cards. Non-essential busi- benefits in the second half of has sparked a backlash among Latin America).
nesses in Russia have been March, more than had been investors in Hong Kong, its
ordered to close. expected following the virtual
lockdown of the economy.
Payroll employment plummet-
ed by 701,000 in the month, a

The British Treasury unveiled
yet another scheme to help
companies ride out the crisis,
this time providing a govern-
ment guarantee to enable
banks to make loans of up to
£25m ($31m) to businesses
with a turnover of between
£45m and £500m. Those mid-
sized firms had found them-
selves squeezed out of preced-
ing rescue packages.

Bus companies in Britain
received additional emergency
funding from the Department
of Transport in order to keep
the services running and “pro-
vide a lifeline for those who
cannot work from home”. Bus
drivers have called for better
protection; in London at least
eight drivers have died from
the coronavirus.

Leaders Leaders 7

The business of survival

Some companies won’t make it through the crisis. Those that do will face a new business climate

Most bosses and workers have been through economic cri- their industry, their balance-sheets and how easily they can tap
ses before. They know that each time the agony is differ- government loans, guarantees and aid, which amount to $8trn
ent—and that each time entrepreneurs and firms adapt and in big Western economies alone. If your firm sells confectionery
bounce back. Even so, the shock ripping through the business or detergent, the outlook is good. Many tech companies are see-
world is daunting. With countries accounting for over 50% of ing surging demand. Small firms will suffer most: 54% in Ameri-
world gdp in lockdown, the collapse in commercial activity is far ca are closed temporarily or expect to be in the next ten days.
more severe than in previous recessions. The exit path from They lack access to capital markets. And without friends in high
lockdowns will be precarious, with uneasy consumers, a stop- places, they will struggle to get government help. Only 1.5% of
start rhythm that inhibits efficiency, and tricky new health pro- America’s $350bn aid package for small firms has been disbursed
tocols. And in the long run the firms that survive will have to so far and Britain’s effort has been slow, too. Banks are struggling
master a new environment as the crisis and the response to it ac- to deal with contradictory rules and a flood of loan applications
celerate three trends: an energising adoption of new technol- (see Finance section). Resentment could rage for years.
ogies, an inevitable retreat from freewheeling global supply
chains and a worrying rise in well-connected oligopolies. Once exits from lockdowns start and antibody testing ramps
up, a new, intermediate phase will begin (see Briefing). Firms
Many firms are putting a brave face on it. Pumped with adren- will still be walking, not running (China is still only functioning
alin, bosses are broadcasting rousing messages to their staff. at 80-90% of capacity). Ingenuity, not just financial muscle, will
Normally ruthless corporate giants are signing up for public ser- become a source of advantage, allowing cleverer firms to operate
vice. lvmh, the Parisian purveyor of Dior perfume, is distilling closer to full speed. That means reconfiguring factory lines for
hand-sanitiser, General Motors wants to make ventilators as physical distancing, remote monitoring and deep cleans. Con-
well as pickups, and Alibaba’s founder is distributing masks sumer-facing firms will need to reassure customers: imagine
worldwide. Cut-throat rivals in the retail trade are co-operating conferences handing out n95 masks with the programme, and
to ensure supermarkets are stocked. Few listed firms have made restaurants advertising their testing regimes. Over a quarter of
public their calculations of the financial damage from the freeze the world’s top 2,000 firms have more cash than debt. Some will
in business. As a result, Wall Street analysts ex-
pect only a slight dip in profits in 2020. buy rivals in order to expand their market share
or secure their supply and distribution.
Don’t be fooled by all this. In the last reces-
sion two-thirds of big American firms suffered a The job of boards is not just to keep afloat,
fall in sales. In the worst quarter the median but also to assess long-run prospects. The crisis
drop was 15% year-on-year. In this downturn is set to amplify three trends. First, a quicker
falls of over 50% will be common, as high streets adoption of new technologies. The planet is
become ghost towns and factories are shut. Nu- having a crash course in e-commerce, digital
merous indicators suggest extreme stress. Glo- payments and remote working. More medical
bal oil demand has dropped by up to a third (see Briefing); the innovations beckon, including gene-editing
volume of cars and parts shipped on America’s railways has technologies. Second, global supply chains will be recast, speed-
dropped by 70%. Many firms have only enough inventories and ing the shift since the trade war began. Apple has just ten days’
cash to survive for three to six months. As a result they have start- worth of inventory, and its main supplier in Asia, Foxconn, 41
ed to fire or idle workers. In the fortnight to March 28th, 10m days. Firms will seek bigger safety buffers and a critical mass of
Americans filed for unemployment benefits. In Europe perhaps production close to home using highly automated factories.
1m firms have rushed to claim state subsidies for the wages of in- Cross-border business investment could drop by 30-40% this
active staff. Dividends and investment are being slashed. year. Global firms will become less profitable but more resilient.

The pain will deepen as defaults cascade through domestic Don’t go from crisis to stasis
payment chains. h&m, a retailer, is asking for rent holidays, The last long-term shift is less certain and more unwelcome: a
hurting commercial-property firms. Some supply chains linking further rise in corporate concentration and cronyism, as govern-
many countries are stalling because of factory closures and bor- ment cash floods the private sector and big firms grow even more
der controls. Italy’s lockdown has disrupted the global flow of dominant. Already, two-thirds of American industries have be-
everything from cheese to jet-turbine components. China’s fac- come more concentrated since the 1990s, sapping the economy’s
tories are cranking back into action. Apple’s suppliers bravely in- vitality. Now some powerful bosses are heralding a new era of co-
sist that new 5g phones will appear later this year, but they are operation between politicians and big businesses—especially
part of an intricate system that is only as strong as its weakest those on the ever-expanding list of firms that are considered
link. Hong Kong’s government says its firms are reeling as multi- “strategic”. Voters, consumers and investors should fight this
nationals cancel orders and ignore bills. The financial strain will idea since it will mean more graft, less competition and slower
reveal some astonishing frauds. Luckin Coffee, a huge Chinese economic growth. Like all crises the covid-19 calamity will pass
chain, has just admitted brewing its books. and in time a fresh wave of business energy will be unleashed.
Far better if this is not muffled by permanently supersized gov-
In the past two recessions, about a tenth of firms with credit ernment and a new oligarchy of well-connected firms. 7
ratings defaulted worldwide. Which survive now depends on

8 Leaders The Economist April 11th 2020

The euro area

Cut to the chase

Look out for a panic about the single currency. If it cannot integrate further it will break up

The euro area is set for its deepest downturn and its sternest cover. The bank may feel it lacks the mandate to extend its
economic test yet. Some forecasters expect gdp to shrink by scheme. A legal challenge in Germany is an ever-present threat.
nearly a tenth in 2020. But as history is being made, it is also be- And, aware that they are pushing their luck, southern countries

ing repeated. Talks between Europe’s politicians about the co- may opt for smaller stimulus packages than they really need.

vid-19 crisis have descended into yet another ugly row over That could still mean they face a doom loop as a shrinking econ-

which countries gain and lose from a common currency. The ac- omy makes it harder to service existing debts.

rimony has its roots in Europe’s sovereign-debt crisis in 2010-12, Politically the euro faces a dilemma. In the south millions

when stricken southerners pleaded for solidarity and northern- more might conclude that membership of the single currency

ers refused to bail out what they saw as bad behaviour. brings no benefits, fuelling support for Eurosceptic parties such

Back then the euro area avoided collapse largely thanks to ac- as Italy’s Northern League and the National Rally of Marine Le

tion by the European Central Bank (ecb). The euro zone has since Pen in France (see Europe section). In the north bail-outs would

had a chance to pass deep reforms in order to deal with its fragil- bolster the likes of the hard-right Alternative for Germany.

ity once and for all, but the time was ill-used. Having given up What to do? As The Economist went to press euro-area finance

their monetary independence long ago and ministers were still struggling to agree on mea-

failed to cut public debt, some countries cannot General-government gross debt sures, including common funding for unem-
deal with the crisis on their own. They need help ployment insurance and easier access to credit
2019, % of GDP

from stronger economies in the north. 0 50 100 150 lines from a common bail-out fund. But the re-
To avoid a deep and enduring slump, the Italy
sources available are puny. A proposal, backed

southern countries need government spending France by nine member states, for “coronabonds”, or

that will shore up their economies today and re- Spain jointly issued debt, is likely to founder. This

launch them when the pandemic has abated. Yet Germany would have let the south take advantage of the

this spending will sharply increase their debts. north’s cheap borrowing costs.

In Italy public borrowings are already worth 135% of gdp, and Northerners have long resisted mutualisation for fear of un-

that figure could easily rise to well over 150% with even a modest derwriting laxity in the south. But without it Italy and Spain will

stimulus. If its government spends freely, investors could panic face either a savage crisis now or a lengthy debt crisis in the fu-

about an eventual default or debt restructuring. Greece, Spain— ture. With lockdowns in place from Saxony to Sicily, debt issued

and even France—face the same hard choices. today is a result not of bad behaviour but of the pandemic. Mutu-

The temptation is to dither. Southern borrowing costs are alisation should be a compromise, signalling that north and

higher than the north’s but not near panic levels. Italy’s ten-year south have to live together in their common interest. Even some

bonds yield about two percentage points more than Germany’s. past opponents of Eurobonds, such as Klaas Knot, head of the

After fumbling, the ecb has tried to limit the damage by acquir- Dutch central bank, now see a case for them. Northern leaders

ing bonds and relaxing rules about what it buys. must follow. For two decades they have shied away from the fact

Those actions will buy time, but no more than that. There are that the currency union cannot succeed unless its members

still limits on how much the ecb can help the south and extra share more risk. If they do not face up to that today, the euro, and

bond purchases are likely to end before southern economies re- perhaps the European Union itself, will not survive. 7

Voting in a pandemic

Wisconsin’s warning

How not to run an election while covid-19 is spreading

Democracies around the world are wondering how to hold went all the way to the state Supreme Court. The judges sided
elections during a pandemic. The state of Wisconsin, which with the Republicans, so an election that had apparently been
may well decide the outcome of America’s presidential election cancelled a few hours earlier then went ahead anyway.
in November, has just provided a lesson in how not to do it.
In the past decade Wisconsin’s politics have been growing
On April 7th, despite a shelter-in-place order from the gover- steadily more toxic. As a purple state that is bitterly fought over
nor and warnings from the White House about the severity of in national elections, Wisconsin shows what happens when par-
America’s epidemic, Wisconsin held votes for several offices, in- tisanship, left unchecked, leaches into the soil from which polit-
cluding the state Supreme Court. The day before the vote was ical institutions grow.
due, Wisconsin’s Democratic governor, Tony Evers, issued an ex-
ecutive order postponing voting in person until June. That order Democratic candidates do well in Wisconsin’s cities, princi-
was disputed by the state’s Republican Party and its challenge pally Milwaukee and Madison. The cities are where cases of co-
vid-19 have been diagnosed and where people are sheltering at1

The Economist April 11th 2020 Leaders 9

2 home, afraid to go out. On election day Milwaukee, a city of have become so bitter that the struggle has shifted from policy, a
600,000 people, was able to staff just five polling stations. In ru- fit subject for party politics, to the manipulation of the rules,
ral Wisconsin, which leans Republican, the epidemic seems a which is hackery. Mr Evers dithered until the eve of the election
more distant problem and going to vote less of a risk. Because and then wanted to extend the deadline for voting by post, which
Milwaukee has a large African-American population, the urban- would probably have helped his party. The state Supreme Court
rural divide also has a racial element. Thus the virus has un- blocked this by four votes to two along partisan lines, siding with
erringly tugged at the state’s main political fault-line. the state’s Republican Party. At the federal Supreme Court, asked
A state Supreme Court with a member elected under these to rule on a lower court’s order that postal ballots count even if
conditions will lack legitimacy. Yet the court’s members will be they are postmarked after the vote, the five justices appointed by
expected to referee bitter political disputes over the next couple Republican presidents sided with the Republicans and the four
of years, possibly including what kind of identification will be appointed by Democratic presidents sided with the Democrats.
acceptable at polling stations and, after the next census, on the
legality of newly gerrymandered election districts. America needs a dose of political reform aimed at distancing
This debacle holds lessons for other states. One is about turn- political campaigning from the refereeing of elections. Plenty of
out. Wisconsin’s Republican Party has insisted on going ahead states do not have judicial elections, which are fraught with bad
with in-person voting in the midst of the country’s worst public- incentives. An increasing number of states have taken the power
health crisis in a century. The official line is that this is all about to decide on congressional maps away from politicians.
preserving the sanctity and integrity of elections, but it is also
more than a little convenient for a party that seeks low turnout in States must not dither. It does not take a lively imagination to
cities and high turnout in rural Wisconsin. foresee a resurgence of covid-19 before the general election.
That approach—gaining electoral advantage by discouraging States need to start preparing for that as soon as possible. That
voting—is consistent with the Republican Party’s hostility na- means making it easier to vote safely in person, as South Korea
tionwide to measures that would make voting easier. In any de- will next week (see Asia section). It also means finding secure
mocracy, a party that considers pursuing a lower turnout to be a ways to vote remotely. This is in the interest of both parties. It
legitimate electoral strategy does not deserve to win elections. may be that in the autumn some rural areas will also be suffering
Another lesson is about partisanship. Wisconsin’s elections from the virus, which would risk Republican voters being disen-
franchised as well as Democratic ones. Wisconsin has issued a
warning. Other states need to act now. 7

The IMF

Break the glass

Emerging markets are in turmoil. The imf must step in to help

Emerging markets are battling a financial crisis as well as a lars. But among emerging-market central banks only Brazil,
public-health emergency. Since late January foreign inves- Mexico, Singapore and South Korea are included in the swap
tors, desperate to shed risk, have been withdrawing their cash lines, and few poor countries have a ready supply of Treasuries.

from poor countries. At the same time falling global trade, de- So most of the burden will fall on the imf which, unlike the Fed,

pressed commodities prices and vanishing tourists have put ex- cannot create dollars at will. The fund says it has about $1trn on

port revenues, and hence the supply of foreign currency, into tap, about a fifth of which is already committed. Even this may

free fall. This has left many countries struggling to pay for im- not be enough for the job if large economies like Nigeria, South

ports and to service their dollar-denominated debts, let alone Africa or Turkey join the legions of small countries seeking help.

fund emergency health or economic programmes. Over 90 coun- Another problem is that a big chunk of the fund’s resources is

tries have approached the imf, the lender of last borrowing from its members that must be re-

resort for governments, to ask for help. Accumulated portfolio flows authorised this year, creating uncertainty.
The fund will need to respond on an unprec- These funds must be secured. America, to its
To emerging markets, 2020, $bn
edented scale. The $96bn investors have already 0 credit, has already approved its share, but the
withdrawn from emerging-market stocks and biggest, richest members need to provide still
bonds dwarfs past capital outflows, according to Equity -25 more. The imf should then follow a three-
the Institute of International Finance, an indus- -50 pronged approach to fighting the crisis.

Total -75
Debt -100

try group. So far this year the Brazilian real, the Jan Feb Mar Apr First, it ought to create new special drawing

Mexican peso and the South African rand have rights (sdrs), a currency of sorts which is con-

lost nearly a quarter of their value against the dollar. Though few vertible into dollars but whose quantity the fund controls (see

countries have sounded the alarm in public, the fund estimates Free exchange). This is a bit like printing money to finance a

that emerging markets will need at least $2.5trn over the course cheap perpetual credit line for every imf member. In 2009, after

of the pandemic. the global financial crisis, the fund created $250bn in new sdrs;

Some of that help is coming from America’s Federal Reserve. today it could create more than twice that amount before having

It is running “swap lines” with a select few central banks, which to ask America’s Congress for permission to continue. Creating

have so far borrowed about $400bn while posting their own cur- sdrs would provide indiscriminate, unconditional aid without

rencies as collateral. The Fed is also allowing most central banks draining the imf’s reserves. However, it is controversial. The

to temporarily exchange any Treasuries that they hold for dol- fund’s core mission is making conditional loans that are repaid,1

10 Leaders The Economist April 11th 2020

2 not printing money. It could take time to build the necessary debt relief (see Middle East & Africa section). Researchers at the
support. In the meantime, rich countries should lend their sdrs fund and the World Bank judged in February that half of low-in-
to countries that are short of reserves. This may be more politi- come countries had shaky finances even before the pandemic. In
cally palatable than lending dollars. these countries there is a danger that emergency loans are used
Second, the imf must alleviate the dollar liquidity shortage in to pay off existing creditors, leaving the imf holding the bag.
solvent countries that have good institutions but which cannot (This is awkward given that, by one estimate, China lent $146bn
borrow from the Fed. In 2017 the fund’s board rejected a proposal to African governments and state-owned enterprises between
to provide its own swap-like funding to countries with strong in- 2000 and 2017.) Better to write down debts collectively. Doing
stitutions. It should revisit that decision. It should also explore this in an orderly manner takes time, but public-sector creditors
ways of getting existing dollar reserves, which are ample at the should immediately suspend both principal and interest pay-
global level, to where they are needed. For example, the fund ments. And if possible, the world should co-operate to shield the
could act as a clearing house for currency swaps, guaranteeing poorest countries from payments to private creditors, too.
participating central banks against losses by graduating any
debts that turn sour into a conventional imf programme. These actions will be needed in addition to the imf’s regular
Third, the fund must persuade the world that many of the lending programmes, which will be called upon at a scale hither-
poorest countries, especially in Africa, are insolvent and need to unseen. The fund has not faced a crisis like this before. It must
fight it with every available tool. 7

America v China

Huawei and 5Geopolitics

Open standards, not sanctions, are America’s best weapon against China’s telecoms giant

Technology is power. Whoever controls the global digital of software (see Business section). Other mobile carriers will fol-
infrastructure controls the world. That is why America is so low suit. Such networks would go a long way towards dealing
worried about China’s rise as a technological superpower. It also with America’s concern about Huawei: that using the firm’s gear
explains why it is going to such lengths, even using European- in 5g networks could let the Chinese government intercept data
style industrial policy, to rein in Huawei, China’s leading maker or sabotage rival economies.
of telecoms equipment. The company leads the world in 5g, the
next generation of mobile networks, which are expected to be- Virtualised networks need not rely on one vendor, but can be
come the central nervous system of the global economy. built with components from many, allowing carriers to pick and
choose—and, if necessary, to steer clear of those made in China.
Yet by any measure America is losing the fight against Hua- They also create an opening for American tech firms, which play
wei, along with what President Donald Trump, steeped in zero- only a small role in the mobile-telecoms networks of today.
sum thinking, calls the “race to 5g”. The Chinese firm keeps on (Many of the components of Rakuten’s network are made in
growing; the rollout of 5g in China continues apace; and most of America.) Moreover, such networks are cheaper to develop,
America’s allies have so far ignored its entreaties to ban Huawei make and maintain than conventional ones, because they are
gear entirely from their national 5g networks on security made mostly from off-the-shelf hardware, controlled by soft-
grounds. Even so, the Trump administration
seems intent on doubling down on its strategy. ware—doing away with the argument of many
If hawks have their way, any chipmaker that mobile operators, that banning Huawei would
uses American technology, which nearly all do, force them to buy more expensive kit from Er-
will soon have to ask for permission in Wash- icsson and Nokia, its main competitors.
ington, dc, to sell its wares to Huawei.
Admittedly, virtualised networks will not
The problem with America’s strategy is that it solve all security problems, and the underlying
is trying to win today’s “tech cold war”, as some standard, called Openran, is not yet mature.
call it, with yesterday’s arsenal. In effect it is try- But it is early days for all 5g networks. It will take
ing to build an impenetrable wall around Huawei by any means years to roll them out fully and the covid-19 cri-
necessary. This is a fool’s errand in a hyper-connected world in sis has done nothing to speed up the process. So there is time.
which technology and talent can flow freely. It only provides ex- The Trump administration and other governments should do
tra incentives for Huawei—and China—to become technologi- all they can to accelerate the development of virtualised net-
cally self-sufficient. If America wants to win the race to 5g and, works by subsidising research and perhaps even mandating the
more generally, the battle for digital supremacy, it needs a new use of technical standards that allow mobile networks to be vir-
approach. Happily, the country’s own technology industry tualised. All this may sound far-fetched at a time when America’s
points the way: it has thrived on openness, software and a government appears stuck in the past and incapable of coming
healthy balance of competition and co-operation. And that ap- up with a coherent strategy. But as in many other domains, co-
proach is at last now being applied in telecoms. vid-19 creates room for new thinking. America will either pursue
a tech cold war with an uncertain outcome, or help create an in-
Mobile networks, long dominated by specialised hardware, dustry of the kind that American tech firms understand and have
are becoming defined by software. On April 8th Rakuten, a Japa- thrived in—letting Chinese companies join in only if they follow
nese online giant, launched the world’s first fully “virtualised” the rules. Sometimes establishing a robust, safe technology is
mobile network, built using general-purpose hardware and lots not about concentrating power so much as diffusing it. 7

12 Letters The Economist April 11th 2020

China’s response to covid-19 How China sees the world ment”, March 21st). Hopefully, without laying claim to Grif-
Regarding the letter from For all its high-mindedness, America can catch up with the fith’s Sinn Fein of 1905. If this
Taiwan’s representative about your leader dishing out equal rest of the world and deliver story tells us anything it is that
the response to covid-19 blame to America and China in these payments digitally in no one party has a claim on
(March 28th), no one cares their dispute over journalists future. There are already digi- Ireland’s history.
more about the health of our was wrong (“Stop deporting tal MasterCard and Visa sol- james green
compatriots in Taiwan reporters”, March 21st). Would utions that are, in effect, a Wicklow, Ireland
than China’s government. The you run a similar line if it was virtual pre-paid card that must
National Health Commission not China that had thrown be spent: there is no way to Corporate man
promptly notified the Taiwan American journalists out of the save the money. Digital fund- Your briefing on JPMorgan
region about the outbreak in country, but apartheid South ing also provides us with a Chase (“The house that Jamie
Wuhan. In mid-January, as Africa or fascist Italy instead? wealth of data on spending built”, March 14th) reminded
requested by the relevant Your position is not how the habits that are traceable with a me of a quote from Ralph
authorities on the island, West prevailed in two world pre-paid card. This data can be Waldo Emerson: “An institu-
experts from Taiwan visited wars or the cold war. And if you mined non-intrusively to tion is the lengthened shadow
Wuhan for first-hand experi- imagine that China’s party ensure supply chains run of one man.” Jamie Dimon has
ence of disease prevention and bosses see the present contest efficiently. certainly cast a long and illus-
control, medical treatment and with the West in any other way, j.p. carroll trious shadow over JPMorgan
pathogen detection. They also I invite you to read what they Payment Innovations Chase and the global financial
held discussions with experts say to each other in their public Blackhawk Network industry.
on the mainland and expressed literature in their own San Diego james mcsherry
heartfelt appreciation for their language. Creemore, Canada
reception and the information Feline foul-up
obtained during their visit. For Stalin, weakness was a I would like to give Bartleby a The connected world
provocation. The Chinese most sincere “thank you” for Thank you for the email update
Membership of the World Communist Party sees the making me laugh out loud, to subscribers about your
Health Organisation is based West’s willingness to indulge something I have not done in covid-19 coverage. As you say,
on sovereign statehood. The it—to hope economic devel- weeks, after reading his diary to be well informed is particu-
participation of Taiwan in the opment strengthens the case of a home worker (March 28th). larly important during these
activities of international for liberalisation and co-oper- I, too, have a cat and am now strange times. I spend most of
organisations is and must be ation—as just that, weakness. tutoring students online in- my time in Tahiti. Although we
arranged properly under the Whatever pragmatic and liber- stead of in person. My tuxedo are not, as yet, struck too badly
one-China principle. Based on alising voices were left in cat, Wicked, has made some by the pandemic, we are con-
the arrangement agreed be- China fell silent with the tri- interesting alterations to my fined, like most of humanity.
tween China and the who, umph of Xi Jinping. teaching documents, some of For a small territory, far from
medical experts from Taiwan which I found only after the rest of the world, that
can attend technical meetings The West will prevail only emailing said documents to imports a lot of food, equip-
at the who, and the who can by showing strength. China my charges. ment and fuel, there is a feel-
send experts to the island for should be welcome to develop frankie straccia ing of going backwards, to a
inspection or assistance. Such and grow rich, but on the terms Amherst, New Hampshire time when there were few
arrangements ensure that the that have served the world best ships docking here (regular
island’s response to public over the past two centuries, on The descendants of Sinn Fein flights have been suspended).
health emergencies is effective a rules-based, open and trans- It is a common misconception We don’t know whether ship-
regardless of wherever they parent basis. Enforcing reci- to think that the Sinn Fein of ping lines in the Pacific will
may take place. procity is a peaceful means to today is the same as the Sinn return as normal, so maybe we
work towards that end. China’s Fein of 1905 (“Shape-shifters”, should resume planting sweet
Since the outbreak of party leaders gain much more March 7th). The two large potatoes or taro.
covid-19, China has been open, from having their propaganda centre-right parties that have michel paoletti
swift and responsible in shar- agents overseas than the West dominated Irish politics since Tahiti
ing information and the latest gains from having journalists independence, the pro-treaty
progress with the who and the in China. America was right to Fine Gael and the anti-treaty Editor’s note: We invite our
wider international communi- enforce tit-for-tat expulsions. Fianna Fail, both claim to be readers to share their experi-
ty, and is co-operating with peter rowe the descendants of the old Sinn ences of covid-19, by writing to
other countries and regions. By Australian ambassador to Fein. The fact that they have [email protected]. We
taking swift and decisive South and North Korea, espoused peaceful political will choose a selection of the
measures to slow down the 2006-09 means since the end of the most interesting for publica-
spread of the virus, China has Sydney Irish civil war certainly gives tion in print and online.
done its utmost to protect not them a right to say they follow
only its own people but also Behind the digital curve in the footsteps of Arthur Letters are welcome and should be
people beyond its borders. Past experience has indeed Griffith, Sinn Fein’s founder. addressed to the Editor at
These important facts, and shown us that one problem The Economist, The Adelphi Building,
China’s efforts and sacrifice, with mailing cheques to work- On its party website, Sinn 1-11 John Adam Street, London WC2N 6HT
need to be understood and ers, as is happening in America Fein’s take on its past simply Email: [email protected]
appreciated. under the emergency covid-19 states that it emerged “as a More letters are available at:
measures, is that most people party of resistance of the Economist.com/letters
zeng rong will save this cash rather than nationalist people” in 1969
Spokesperson of the Chinese spend it (“Experimental treat-
Embassy
London

Briefing Covid and the company The Economist April 11th 2020 13

Sinking, swimming and surfing from what we’ve seen the bounceback can
be pretty quick.”
The pandemic and the damage done will accelerate trends that were already
reshaping business Unfortunately, many European coun-
tries and some American states immedi-
Sometimes change is so vast and dislo- more like a tsunami, or a war; its casualties ately began to impose social-distancing
cating that it is hard to tell disaster from had some hope of being treated as innocent measures and, soon thereafter, lockdowns.
opportunity. In March Ocado, a British on- victims deserving of support, rather than Businesses found themselves looking into
line grocer, saw its servers so overloaded the authors of their own fate. the abyss of a largely moribund economy.
that it suspected hackers. “We thought that According to the International Labour Or-
we were under a denial-of-service attack,” Second, most companies—particularly ganisation sectors now facing a severe de-
says Tim Steiner, the company’s boss. In in America—went into the crisis in pretty cline in output, and thus a high risk of lay-
fact, Britons were desperately trying to ar- solid shape; employment was booming, offs and furloughs, employ almost 38% of
range to get food and drink deliveries for order books were relatively full and the the global workforce: some 1.25bn workers
the weeks ahead. After Boris Johnson, the easing of America’s trade war with China (see chart 1 on next page).
prime minister, announced a national augured well. Third, within days of global
lockdown the site filled three weeks’ worth markets melting down China was tenta- Government handouts in America and
of delivery slots in an hour. tively reopening some factories and lifting Europe should ease the pain of some of that
some of its draconian lockdowns. This sug- unemployment—if fully implemented and
Companies for which the ill wind of co- gested a v-shaped recovery, or at worst a u- if the benefit systems work. But many of
vid-19 has blown some good have been very shaped one, something requiring not life- the proposed beneficiaries, such as flor-
much in the minority. In February, even as and-death measures but a battened-down ists, gyms and bakeries, will still go short.
stockmarkets began to crash, business Sufi stoicism: “This, too, shall pass.” As Whether they scrape by or go under, that
leaders could console themselves with Dara Khosrowshahi, who runs Uber, said will prolong the slump in consumer confi-
three observations. First, they bore no confidently as late as early March, “At least dence—as will the possibility of a second
blame for the crisis. Some downturns, such wave of illness after restrictions are lifted.
as the dotcom bust of 2000-01 and the fi- Also in this section One pessimistic Wall Street banker talks of
nancial crisis of 2007-09 are seen through a a future neither v-shaped, u-shaped or
quasi-biblical lens of retribution—just de- 15 Manufacturing at a distance even w-shaped, but “more like a bathtub”.
serts for orgies of speculation. This was
Yet even as they walk through the valley
of the shadow of death, chief executives
and corporate strategists are beginning to
look to the post-covid world to come. What
they think they see, for good or ill, is an ac-
celeration. Three existing trends—the de-
globalisation unpicking the business1

14 Briefing Covid and the company The Economist April 11th 2020

Labour isn’t working 1 was clear that the logic which saw a large
fraction of the world’s supply chains pass
Estimated impact of covid-19 crisis on economic output through the country needed re-examining.
% of global employment by sector*, April 2020 The former boss of a big American com-
pany’s Chinese operations says that in the
0 Education 20 40 Construction 60 80 100 past few years the trade war and other risks
of business disruption saw many global
Agriculture Arts† Manufacturing Wholesale and firms seek to reduce their dependency on
Low-medium retail trade China. One of their favoured strategies was
to put more business into factories else-
Low Medium Medium-high High where in Asia.
Source: ILO
*Before outbreak of covid-19 †Arts, entertainment and recreation But the acute stage of China’s covid-19
crisis made it clear how essential China re-
2 world that grew up in the 2000s; the infu- chairman of the Mahindra group, one of In- mains as a provider of inputs to such fac-
sion of data-enabled services into ever dia’s largest conglomerates, says that as tories elsewhere in Asia and around the
more aspects of life; a consolidation of eco- well as big corporations buying smaller world. “What people thought was a global
nomic power into the hands of giant corpo- ones, many smaller firms will look to supply chain was a Chinese supply chain,”
rations—look likely to proceed at a faster merge with peers. says Mr Mahindra. The quest for supply
rate than before, and perhaps to go further, chains independent of Beijing needs to go
too. Optimists—and business folk tend to Around the world, small and medium- further, and deeper.
look on the bright side—see this accelera- sized firms are particularly exposed. In
tion as offering new possibilities for rein- America, a survey published on April 3rd by Joerg Wuttke, president of the eu Cham-
vention, even resurrection. Pessimists see MetLife, an insurer, and the us Chamber of ber of Commerce in China, says that if
inefficiencies and insularity weighing on Commerce found that 54% of non-sole- there is one lesson people are drawing
profitability for many years to come. proprietor firms with fewer than 500 em- from the pandemic in this regard it is that
ployees were either closed or expected to “single source is out and diversification is
Seasick close in coming weeks. It has been a similar in.” In other words, companies do not just
Whether or not such doldrums lurk in the story in China. As well as driving unem- need suppliers outside China. They need to
future, the present is a mad swell of chop ployment, this has systemic implications. build out their choice of suppliers, even if
and change in which the fortunes of differ- Though such firms are often relatively in- doing so raises costs and reduces efficien-
ent regions and sectors vary wildly. efficient, the nimbler ones can play a role cy. Mr Mahindra expects to see new de-
in supply chains that would be hard to du- mand for production in Vietnam, Myan-
China’s economy shows distinct signs plicate. Aware of this, some big firms, such mar and possibly, if it can grasp the
of recovery. Bernstein, an investment firm, as Unilever, are attempting to buoy up sup- opportunity, India.
notes that many of the swanky metropoli- pliers by paying them more quickly.
tan restaurants it tracks there were full by For some, the need to have more suppli-
the first weekend in April. That said, many Much of this activity will happen on the ers looks like an opportunity to promote
migrant workers have yet to return to work. fly, as disasters and opportunities present possibilities at home. The government-
Air and rail traffic remain severely cur- themselves. As time goes by, though, the owned Development Bank of Japan plans to
tailed, as do car sales. The Chinese, though, currents of the great acceleration will begin subsidise relocation costs of companies
are at least making cars to sell. European to assert themselves. For companies en- that bring production facilities back to the
and American plants are shuttered. meshed in the comparatively freewheel- country. Rich Lesser, the ceo of Boston
ing, Anglo-American model of business Consulting Group (bcg), which advises big
Neither is the gloom within countries that has been in competition with Chinese- global firms, says that robotics and other
evenly spread. Some sectors are doing style state capitalism in recent years it will new approaches to manufacturing make
worse than others, and in all the fortunes of be a distinct shock. the case for moving factories closer to
the most and least resilient are far apart home more compelling, because they re-
(see chart 2 on next page). Should the com- Take China and its supply-chain pri- duce the cost difference. Just as previous1
ing recession not kill off animal spirits en- macy first. By 2017, when average Chinese
tirely, there will be lots of opportunities for manufacturing wages had become as high
corporate upheaval, takeovers and strate- as those in the poorer parts of Europe, it
gic shifts.  

China’s government may encourage its
state-owned firms to go global by buying
distressed car companies in Europe. The
share price of Daimler is less than half what
it was when Geely, a Chinese carmaker,
bought a 10% stake in 2018. Car companies
may also see offers from technology giants
keen to improve co-operation between
metal bashers and the engineers of autono-
my—currently wary at best. The healthier
airlines, such as Qantas and iag, owner of
British Airways, will snap up airport slots
from their bankrupt rivals and may try to
acquire others only just staying aloft. Priv-
ate-equity firms, which have mountains of
committed investor cash, may start buying
up fundamentally sound but impecunious
suppliers in various industries, aware that
when demand returns such companies
will see its first fruits. Anand Mahindra,

The Economist April 11th 2020 Briefing Covid and the company 15

2 information technology was put to work Viral variance 2 cious side-effects. Less dependence on
underpinning the spread of supply chains, China will mean less access to the rapid-
so today’s can be used to shorten them— Global stockmarket performance by sector*, % fire innovation that takes place there. The
potentially making companies more re- January 1st-April 3rd 2020, $ terms bigger the tech firms, the harder it will be
sponsive to local tastes. for startups to gain sufficient scale to chal-
And the range of the changes informa- Bottom quartile Median Top quartile lenge them. Not impossible; Zoom has
tion technology makes possible will only done well in a world where bigger compa-
increase: that is the essence of the second Health care -60 -40 -20 0 20 40 nies offer services along similar lines. But
current of post-covid acceleration. The more difficult.
growth of firms built on digital connec- Technology
tions with and between hundreds of mil- But though innovative businesses may
lions, or billions, of people, and which col- Consumer staples face challenges in the post-covid world,
lect reams of cloud-based data in the they may also help bring it into being. This
process, was central to the bull market that Communications is not just because pharmaceutical and bio-
met its end in February. That growth still tech companies are feverishly searching
has plenty of room to run. Materials for drugs and vaccines. It is because busi-
Responding to covid-19 has seen many ness can knit people together. Mr Lesser of
people and companies realise that it had Industrials bcg argues that companies which build a
more to offer them than they had realised. bond with “emotionally vulnerable” con-
Zoom, an online videoconferencing ser- Utilities sumers during the crisis may help reduce
vice, was serving 10m customers a day at their anxieties on the other side—anxieties
the beginning of the year, most of them in Consumer discretionary which might otherwise linger. Businesses
business meetings. Now it is providing will need to encourage people back to res-
200m people a day not just with meetings, Financials taurants, bars and boutiques when lock-
but with Tai Chi classes and “quarantinis”. downs end but fears persist. And because
Slack, which provides a medium by which Energy small companies are being badly hit, re-
far-flung colleagues can co-ordinate covery in these sectors will need to see new
things, has become part of dinner-table Source: Bloomberg *Companies with current market relationships formed.
conversation. It is not only young tech- capitalisation over $5bn
companies, and tech companies that were Mr Lesser recalls the anxiety he used to
previously mostly used by the young, that camps each side will want its champions. feel walking through Grand Central Station
have prospered. Microsoft’s Teams product If things look pretty good for big tech, after September 11th 2001. He would look at
is gaining many converts. No one expects the throngs and queues for coffee and
the amount of distance working ever again though, they look none too shabby for big quicken his step at the thought of another
to be as low as it was before the virus hit. everything else. As the world gets back on catastrophic attack. Eventually, though,
Restrictions put in place during the its feet, big firms will have better access to that fear subsided and the cavernous space
sars outbreak of 2003 helped accelerate capital markets, giving them an extra edge regained its appeal. This, too, shall pass. 7
China’s embrace of e-commerce. Covid-19 over smaller competitors. And across the
is having a similar effect, even in econo- world there will be one increasingly big
mies where e-commerce is already com- customer, too—the state. As Mr Mahindra
mon. Chris Grigg, boss of British Land, one says, “the only engine of consumption for
of Britain’s biggest retail and office land- the next 12 to 24 months will be govern-
lords, says that as a result of covid-19 his ment.” Big companies fit well with big gov-
company has brought forward by several ernment: they make its life simpler; they
years the time when it expects the share of lobby it more assiduously.
shopping done online in Britain to double
from its current 20%—already among the These trends will inevitably have perni-
highest levels in the world. The pandemic
may not just highlight the convenience of Manufacturing at a distance
online life; it may also make some of its
drawbacks less disturbing. Germans, who Still made in China
have historically well-founded privacy
concerns, are resistant to anything that HONG KONG
looks like “surveillance capitalism”. But
Karl Haeusgen, chairman of hawe, a maker Covid-19 is changing factories. Some of the new ways of doing things will be
of hydraulic pumps, says an app that permanent
helped maintain public health by tracing
covid-19 infections could make them less Many of the robots on factory floors running with no risk to the health of its
protective of their data. If that were the operate in cages, fenced off from their workers. In a call to investors on April 1st it
case, they might become converts to other human colleagues. The separation pre- reported that it was on target to provide Ap-
data-driven business, too. vents the machines, in the routine and ple with all the 5g iPhones it needs for the
This trend will be good news for giants mindless pursuit of a bolt, from crushing launch of the device this autumn.
of the tech scene such as Alphabet, Amazon the leg, hand or chest of a worker who hap-
and Apple. So will other factors. The need pens to get in the way. Many of the measures that made Chi-
for economic resilience will be added to na’s great reopening possible were boring-
the arguments against breaking up the big- Now factory operators do not just need but-important changes to existing proto-
gest tech companies. If the tech world to keep human workers at a safe distance cols; more hygiene measures, more separa-
splinters into rival Chinese and Western from robots; they have to keep them at a tion between workers, and screening
safe distance from each other, too. In Chi- (companies in China and elsewhere are try-
na, fences between workers are among the ing to get their hands on a lot of tests for
measures bringing factories back to life. sars-cov-2 infection).

Most Chinese factories are now back to But there has also been investment in
operating at around 80% of capacity. Some automation and remote operation that has
are pushing 100%. Foxconn, the Taiwanese brought forward improvements not ex-
contract manufacturer which assembles pected for some time to come. Anna She-
the majority of Apple’s iPhones in China, dletsky, the boss of Instrumental, a firm
says that with the help of tests for the virus which uses machine learning to help
and chest x-rays it has been able to get all its manufacturers improve their processes,
operations on the mainland back up and says that in electronics manufacturing1

16 Briefing Covid and the company The Economist April 11th 2020

2 “We’re going to do five years of innovating Ahead of the curve on human health and the world economy,
in the next 18 months.” the processes of a company like P2i that
Modern high-tech factories already Manufacturing purchasing managers’ index* fashions its own wares back down on the
have systems in place to control who virus’s own scale. But in truth it is merely
comes in or out and what they have on their Britain 55 accelerating a transformation that the
person. The procedures which identify world’s manufacturers were undergoing
workers now take their temperatures, too. United States already. As products become more com-
Many factories are also relying on a variety plex and their components more minute,
of “health code” apps developed by provin- 50 there comes a point when human hands
cial Chinese governments. These run and eyes cease to be useful instruments for
through portals inside WeChat and AliPay, Malaysia Mexico 45 their assembly.
two payment apps, to determine the work- China
er’s health status and travel history. Willy ↓ Manufacturing Germany For a glimpse of that future, look at the
Shih of Harvard Business School, who activity contracting 40 world’s most complex manufacturing op-
studies Chinese factories and supply erations, those that produce semiconduc-
chains, says such techniques were devel- J FMAM J J A SOND J FM tors. Chip factories have hardly felt the im-
oped during the outbreaks of sars and pact of covid-19 at all. This is because laying
h1n1, in 2003 and in 2009, respectively. 2019 2020 down nanometre-scale transistors by the
“Normally you change out of street clothes billion is far too complex for human minds
and go through a security check,” he says. Source: *Based on a survey of purchasing executives, to contemplate, let alone human hands to
“In many respects the [new protocols] are a IHS Markit activity compared with the previous month achieve, and so humans do not need to
small incremental addition.” gather together on a shop floor to do it.
Once inside the factory, the changes re- wasted time, money and materials. The
quired depend on what the workers are amount of detail captured by the system The world’s leading contract manufac-
making. Those in car factories are already also lets engineers from client companies turer of semiconductors, Taiwan’s tsmc,
spread out and do not need much reposi- inspect and manage production from half- runs its most advanced facilities from cen-
tioning—though some manufacturers are way around the world—which under co- tral control rooms in which humans man-
using fences to enforce separation. The vid-19 has become a primary selling-point. age machines that move the silicon being
parts the workers handle are regularly dis- engineered around in a hyperclean envi-
infected as they pass through the assembly Engineers at P2i, a client of Instrumen- ronment that human workers rarely visit.
process, says Tu Le, a consultant. At a tal’s which makes nanotechnology coat- In Wuhan, ground zero for the pandemic,
phone factory in Guangdong province, ings for electronic devices, can sit at their Yangtze Memory Technologies, a Chinese
though, changes in layout are immediately headquarters in Oxford inspecting work at chip company that is a darling of Beijing,
apparent. Workers no longer cluster factories in China at a level of detail previ- kept operating throughout the months of
around each step of the assembly process ously only accessible to someone on the lockdown which ended in April 8th, its
in dense u-shaped cells; instead they are spot. (Some of them have done the same controlling engineers shuttled in on spe-
spread out, increasing their safety at the ex- while quarantined in hotels just down the cial trains.
pense of some speed. road from the plant in question.) Neal
Harkrider, the firm’s chief operating offi- For the manufacture of chips and
Making it better cer, says it has started connecting its screens, all-but-complete automation is
The obsessive and precise standards of manufacturing equipment to the internet, unavoidable. In other contexts, the cost of
modern global production make it compar- so that it can make the adjustments that In- re-engineering systems and buying new
atively easy for factories to adapt in such strumental’s system recommends remote- kit has kept people in the loop and on the
ways. However well a production process is ly, closing the developmental loop. floor. They will not vanish overnight. But
adapted, though, things can still all go to covid-19 has provided a new spur for more
pot if less cautious suppliers have to shut There is a near miraculous irony to the factories to approach the machinic perfec-
down and the parts the factory needs from idea that the nanotechnology embodied in tion of chip foundries. That new distancing
them run out. As a result factories around the protuberant proteins and rna pro- between human and machine is likely to
the world have been stockpiling ferocious- gramming of sars-cov-2 is changing, long outlive the disease itself. 7
ly since news of the outbreak broke in Janu- through its decidedly macroscopic effects
ary, going against the nature of modern
just-in-time supply chains.

Another problem is new product intro-
duction (npi), a vital part of the business
cycle in the electronics industry which is
roughly 10% of Chinese manufacturing by
value. During npi, engineers from compa-
nies abroad fly in to tweak and tune the de-
velopment of new products—something
which today’s all-but-closed Chinese bor-
der makes impossible.

This has afforded Ms Shedletsky’s com-
pany a nice opportunity. The firm sells a
system which uses machine learning to ex-
amine images of every single item a factory
makes at every single stage of its assembly.
It lets users explore the causes of any flaws,
thereby increasing yields and reducing

United States The Economist April 11th 2020 17

White House v virus Yet several criticisms of how the White
House is responding persist. The first
Bigger than Trump comes from state governors, who say they
are bidding against each other and against
The list of early mistakes made by the federal government in responding to the the federal government for supplies. The
virus is long. Now that the White House has taken charge, how is it doing? governors of Kentucky, Ohio, Louisiana,
Washington, Michigan, Illinois, New York
When the Trump administration took That accounting will come later, and Arkansas have all said this is the case.
office in January 2017 it inherited, though. Right now, the White House is run- Before the federal government stepped in,
among other things, plans to make cheaper ning a response focused on getting materi- a handful of states went as far as arranging
ventilators and 20m reusable face masks, al to the states being hit first by the virus. their own flights carrying protective equip-
should the country need them. Nobody fol- Though the cdc has not held a public brief- ment. While states were waiting for the
lowed up. In 2018 John Bolton, the nation- ing for a month, it is sending Epi-Aids, federal government to do something, go-
al-security adviser, “streamlined” the Na- teams of epidemiologists, around the vernors were banding together to place a
tional Security Council and, in the process, country to find new outbreaks. The Federal large order of gear from China.
closed its pandemic preparedness office. Emergency Management Agency (fema) is
The following year, the administration de- flying in kit from China. The president’s Since fema began flying medical equip-
cided to no longer embed an epidemiolo- son-in-law, fresh from an attempt to bring ment in from abroad, the competition has
gist from the Centres for Disease Control peace to the Middle East, has again been not gone away. Distribution of supplies, ac-
and Prevention (cdc) with China’s cdc. handed the keys to the West Wing. cording to Rear Admiral John Polowczyk,
who is in charge of the White House’s logis-
The consequences of these decisions, This is an improvement on the torpor tics effort, is still being done by private
like the consequences of President Donald that continued until the middle of March. companies rather than by the feds, follow-
Trump’s insistence up until four weeks ago ing the template used during Hurricane
that covid-19 was less serious than season- Also in this section Katrina. The problem this time is that the
al flu, can only be guessed at for now. It emergency is not confined to one or two
seems likely that covid-19 would always 18 Race and covid-19 states, so everyone is bidding against each
have hit America hard, as it has most other other for the same stuff. J.B. Pritzker, the
rich countries that did not feel the impact 19 The navy’s woes governor of Illinois, says that once equip-
of sars. It also seems possible that America ment brought in on fema flights arrives in
will suffer more than other rich Western 19 The intelligence community America, governors are still placing bids
democracies. If so, some portion of this ex- with private distributors for it.
ceptional excess mortality will be attribut- 20 Sharing a home during a pandemic
able to the president’s public-health advice They are not the only ones: cities, hos-
and to decisions he avoided until too late. 21 Prison gerrymandering pital systems and care homes are all trying
to secure their own supplies. “It’s a cage
22 Lexington: A river runs through it match,” says an employee of one of the
country’s largest hospitals. State procure-
ment officers swap tales of middlemen1

18 United States The Economist April 11th 2020

2 calling up with offers of millions of face might contradict him in public. He has One possibility is that the higher death
masks at a few bucks over their retail price. blamed the World Health Organisation for rate so far for black Americans may follow
A second accusation is that the federal mistakes his own administration made, from the disease’s tendency to strike cities
government is doling out scarce equip- and threatened to cut its funding. early. Michigan’s biggest city is Detroit,
ment to reward friendly governors. “How which is 80% black. The state’s governor,
can it be that Kentucky and Florida get 100 The White House is as bizarre as ever. Gretchen Whitmer, says Detroit’s large air-
percent or 100 percent-plus of what they The president had no chief-of-staff for port probably made it vulnerable to im-
need while Massachusetts doesn’t?” Eliza- much of March. In less than a week he has porting contagion. New Orleans also gets
beth Warren asked Vox, a news website. “I got rid of the inspectors-general of the in- plenty of visitors. The city held its two-
think anyone would look at that and say it’s telligence community and the watchdog week-long Mardi Gras in mid-February be-
Donald Trump playing politics once again.” overseeing the $2 trn federal stimulus. The fore carriers of the virus—many being
The president has encouraged this impres- Navy fired the captain of an aircraft-carrier asymptomatic—worried much about min-
sion, too. “If they [state governors] don’t for reasons that seem to have more to do gling. Mr Wagner calls that a “super-
treat you right, I don’t call,” he told the with politics than with carrying aircraft. spreader event” as 1m or so people partied
White House press corps on March 27th. The Navy secretary then had to resign. But at close quarters. Some participants’ cos-
This does not seem to be true of how the virus is bigger than Trump. 7 tumes were even coronavirus-themed.
fema is working. The agency is largely Now, officials fear cases are rising so fast
staffed by career civil servants who served Race and covid-19 they will soon overwhelm hospitals. The
the last president and, in many cases, the city’s population is below 400,000, but it
one before him. fema allocates medical kit Woes compounded has already seen 171 deaths.
according to a formula that considers need
and the likelihood of an outbreak, insulat- CHICAGO AND NEW ORLEANS In addition to living in cities that co-
ing the process a bit from political consid- vid-19 struck early, African-Americans
erations. If Florida has received what it High death rates for African-Americans share several other vulnerabilities to the
asked for, that might be because it has a highlight a racial health gap disease. Black Americans are, on average,
large population in care homes and is at poorer than other ethnic groups. Those
high risk. There is, though, a cost to the im- As covid-19 extends its deadly reach into who live in overcrowded homes or who
pression that the president is distributing new hotspots such as Detroit and New work in blue-collar jobs and must keep
supplies in a haphazard and political way. Orleans, its proliferation has been accom- toiling outside their houses cannot isolate
What is harder to quantify is the extent panied by a disturbing trend. The disease themselves as easily as better-off folk. The
to which this administration’s trade war appears to be taking a greater toll on black poor and uninsured—African-Americans
has slowed the current supply of equip- Americans. African-Americans make up are likeliest to go without coverage—may
ment to hospitals. At the same time as Mr 14% of Michigan’s population. Yet as of also seek medical care too late.
Trump issued an executive order banning April 6th they accounted for some 33% of
the export of certain categories of medical confirmed coronavirus cases and 40% of The long-standing residential segrega-
equipment from America, the federal gov- the state’s 617 deaths. Louisiana, which has tion of some black communities makes
ernment was trying to secure supplies of the second-highest share of African-Amer- things worse. People in places with high
the same gear made abroad. According to icans among states, was home this week to levels of violence may make different cal-
various people who worked with state go- ten of the 20 worst-hit counties in the culations about the risk posed by a mere vi-
vernors to secure supplies, shipments country, ranked by deaths per 100,000 resi- rus. A counsellor who works with violent
were held up in China. Exports to America dents, according to Gary Wagner of the men in parts of Chicago says “shooting
have become politically sensitive for party University of Louisiana at Lafayette. He goes on” despite the virus. Public-health
bosses in a way they used not to be. says one county had a mortality rate more lockdowns are hard to enforce.
Firms making gear in China are also than double that of New York City.
concerned about being sued in American More important, though, is the link be-
courts for equipment that does not protect Fatal disparities tween race and chronic ill-health. Chica-
the wearer. Chinese exporters of medical go’s mayor, Lori Lightfoot, recently noted
gear now require a new licence. That has that before the pandemic white residents
created another layer of bureaucracy for were expected to live nearly nine years lon-
suppliers with scruples, and a trade in fake ger than black ones, who are likelier to suf-
permits for those without. The constraint fer from chronic health problems such as
on supplies from China does seem to have respiratory illness, high blood pressure, di-
eased a bit after the president sent a tweet abetes and obesity.
at 1am, when maga hat-wearers were
tucked up in bed, praising Xi Jinping and In Detroit chronic conditions are de-
calling the virus by the name most other pressingly common. About 45% of adults
people use, rather than the “Wuhan virus” were obese in 2017 (the figure for New Or-
or the “Chinese virus” which he had pre- leanians was 36%). America’s national rate
ferred, though that may be a coincidence. of obesity was 30%, according to one mea-
Some of the president’s critics can only sure by the Centres for Disease Control and
see the virus through a Trump lens. This Prevention. Those with existing problems
suits the president, who has boasted wish- risk deadly complications once infected
fully about the great ratings his daily press with the virus. Officials in Louisiana said
briefings are getting. Mr Trump has indeed that 97% of those who died with the virus to
been incompetent and irresponsible. He March 29th had an underlying condition.
continues both to offer unfounded medical
advice, most recently on the use of an anti- Covid-19’s spread may further expose
malarial drug, and to shush any expert who this racial health gap. Ms Lightfoot says
that Chicago’s black residents—who make
up less than 30% of the city’s population—
live lives that are so much shorter that they
account for 72% of its deaths. “Those num-
bers take your breath away.” 7

The Economist April 11th 2020 United States 19

The navy “the perception that the Navy is not on the recruitment, retention and morale are un-
job, the government’s not on the job.” And likely to be helped by Mr Modly’s instruc-
Seasickness he might also have “emboldened our adver- tion to sailors that “you’re under no obliga-
saries to seek advantage”. tion to like your job, only to do it”.
Covid-19 takes out an aircraft-carrier,
and a navy secretary Then, in an intemperate speech aboard Then came covid-19, which has spread
the Roosevelt on April 6th, Mr Modly told its across several vessels. Tight quarters make
Several hundred sailors thronged the incredulous crew that Captain Crozier had warships “a Petri dish of virus”, says a for-
cavernous belly of the uss Theodore Roo- either deliberately leaked the letter to the mer carrier strike group commander. Sail-
sevelt, a 100,000-tonne nuclear-powered media, or was “too naive or too stupid to be ors aboard the uss Ronald Reagan, a carrier
aircraft-carrier. “Captain Crozier! Captain a commanding officer”. Mr Modly mock- moored in Japan, have also tested positive.
Crozier!” they chanted, as the command- ingly called the captain—who had tested That does not mean America’s fleet would
ing officer, Brett Crozier, walked forlornly positive for covid-19 a day earlier—a “mar- be paralysed in a crisis—warships can lose
down the gangway into a warm Guam eve- tyr” and accused him of “betrayal”. Worst of much of their crew and remain viable—but
ning on April 3rd, bidding farewell to his all, he said, the letter had caused “a big con- it may keep many in port.
warship. “Now that’s how you send out one troversy in Washington, dc”.
of the greatest captains you ever had,” re- Mr Modly’s own brief tenure only came
marked a sailor in the crowd. The result is Mr Modly later apologised for his re- about because of the last mess. In Novem-
the latest civil-military calamity of this ad- marks, but they reinforced the sense that ber his predecessor, Richard Spencer, was
ministration, culminating in the departure Captain Crozier’s offence was to have em- fired after resisting what he called Mr
of Donald Trump’s second navy secretary barrassed the administration rather than Trump’s “shocking and unprecedented in-
in five months. violated protocol or undermined readi- tervention” in the case of a Navy Seal who
ness. On April 7th, under pressure from had been accused of war crimes. In a part-
In mid-March the Roosevelt was exercis- lawmakers, and largely disowned by the ing letter to the president, Mr Spencer said
ing in the South China Sea, fresh from a vis- Pentagon, Mr Modly resigned. that this meddling had put at risk “good or-
it to Vietnam. Then covid-19 struck, forcing der and discipline”. The navy now looks
the ship to Guam. On March 30th, as the vi- Even before this episode, it was clear more rudderless than ever. 7
rus raged through a crew of over 5,000, that America’s globe-girdling navy was not
Captain Crozier sent an imploring four- in tip-top shape. In January the Pentagon’s The intelligence community
page letter to his colleagues. The spread of inspector-general scrutinised a dozen de-
the disease was “ongoing and accelerating”, stroyers and found deficiencies with train- The spooky state
he warned, and sailors had to be evacuated ing. In one case it concluded that “the ship
from the confined quarters. “We are not at will not be able to conduct gunnery sup- WASHINGTON, DC
war,” he urged. “Sailors do not need to die.” port”—including trifling matters “such as
identifying where the ship is shooting”. A sacking reveals the president’s goals
At first navy leaders expressed support, Shoddy seamanship in the Seventh Fleet, for America’s intelligence services
insisting that Captain Crozier would not based in Japan, resulted in two warship col-
face retaliation for sounding the alarm. A lisions that killed 17 people in 2017. The On april 3rd Donald Trump fired Mi-
day later he was removed. Thomas Modly, fleet was also rocked by a separate corrup- chael Atkinson, the inspector-general
America’s acting secretary of the navy, of- tion scandal, leading to reprimands for at for America’s intelligence community (ic).
fered a jumble of reasons. The captain had least ten captains and admirals, and the Mr Atkinson’s sin seems to have been fol-
“undermined the chain of command” and first-ever conviction of a serving admiral lowing the law. He told Congress, as he was
“created…panic on the ship” by copying for a federal crime. legally bound to do, about a whistle-
20-30 people on his letter. He had created blower’s complaint regarding Mr Trump’s
American warships are ageing—57% are phone call with Ukraine’s president, over
All is not gravy in the navy more than 20 years old. Crumbling ship- which Mr Trump was impeached last year.
yards and relentless operations have made Mr Atkinson’s sacking highlights, obvious-
it harder to maintain them. The navy is also ly, Mr Trump’s vindictiveness. But it also
short of more than 6,000 sailors, though reveals, more interestingly, what he wants
from the ic.

The phrase “intelligence community”
refers to a long list of America’s federal in-
telligence-gathering services. There are no
fewer than 17, including the Central Intelli-
gence Agency, the Federal Bureau of Inves-
tigation and the map-making National
Geospatial Intelligence Agency, as well as
the intelligence arms of the armed forces
and several cabinet departments. Oversee-
ing them is the Office of the Director of Na-
tional Intelligence, a cabinet-level co-ordi-
nating position created after the attacks of
September 11th 2001.

Tension is inherent to the relationship
between any president and the ic. Presi-
dents are politicians. Intelligence analysis
ought to be apolitical and dispassionate.
Analysts must sometimes deliver informa-1

20 United States The Economist April 11th 2020

2 tion that presidents do not want to hear. by an American ally to Russia’s foreign The one with the global pandemic
Some presidents have mistrusted the ic: minister. In August 2019, after an Iranian
Richard Nixon believed it was filled with rocket launch failed, Mr Trump tweeted an next day #StayHomeBrett was one of the
Ivy Leaguers who looked down on him. image of the launch site that probably
Some sidelined it: when a small plane came from a spy satellite or drone. top ten trending hashtags nationally.
crashed on the White House lawn two years
into Bill Clinton’s presidency, some in the Some harms from this behaviour are This small episode caught people’s at-
ic joked that it was the head of the cia try- clear. Revealing sensitive information
ing to get a meeting with the domestically makes others warier of sharing it with tention because it highlights the broader
focused president. Some have challenged America, which risks leaving America less
it: Barack Obama, one analyst recalled, informed about its adversaries. A president problems that a swathe of Americans have
used to listen to his daily brief, and then with more respect for the ic might not have
ask “the hardest question—the one you ignored its warnings about covid-19 and in coping with the coronavirus. These are
hoped he wouldn’t ask you.” sprung into action sooner. Senior ic offi-
Mr Trump, by contrast, seems to want cials seem less likely, with Mr Grenell as house-sharers. According to the Pew Re-
an ic that is personally loyal to him, and dni, to warn of election interference—at
therefore politicised, rather than analyti- least in Mr Trump’s favour. search Centre, in 2017 just under a third of
cal and independent. He came into office
primed to distrust the ic, which first raised Other harms are more nebulous and adults lived in households with other
concerns over his campaign’s links with harder to forecast. Because the ic works in
Russia. That mistrust—intensified by his the shadows, its successes tend to be secret adults who are not their spouses or part-
suspicion for civil servants who have and its failures evident only in retrospect.
served under multiple administrations, as Perhaps Mr Trump will be lucky. Perhaps ic ners, up from just over a quarter in 2004.
opposed to political appointees whose ca- professionals’ habits of clear-eyed analysis
reers he controls—has only deepened over and co-operation with allies will persist, Over the past 15 years, household shar-
the course of his tenure. despite ructions at the top. But analytical
James Comey, a former director of the independence is an essential part of a func- ing—think of the sitcom “Friends”—has
fbi, got the axe after declining to say that tioning intelligence service, and any ac-
Mr Trump was not personally under inves- tions that weaken it risk weakening the ser- soared with the rising cost of housing and
tigation for his campaign’s links with Rus- vice—particularly as senior professionals
sia, and, reportedly, for failing to promise leave, and those who remain learn to toe rent. According to Pew, 30% of those under
Mr Trump “loyalty” at a private dinner. In the line in order to survive.
February Joseph Maguire was forced out as 35 are house-sharers, compared with 12%
acting Director of National Intelligence This may reverse under a different pres-
(dni) after a subordinate told Congress that ident. So could, with enough time and reas- of people aged 35 to 54. They are concen-
Russia is intervening to help Mr Trump win surances, other countries’ wariness to
this year’s election. He replaced Mr Ma- share their secrets. But a second Trump trated in the largest cities. Zillow, a proper-
guire with Ric Grenell, a caustic political term could leave the ic less a collection of
operative with no intelligence background. independent analysts than an institution ty-database company, estimated in 2018
The president uses opprobrium to in- with broad powers to operate in secret for
timidate those he does not fire. He has pub- the president’s personal and political bene- that 40-50% of adults in southern Califor-
licly derided ic officials who disagree with fit—without, as Mr Atkinson’s sacking
him as “extremely passive and naive”, ac- warns, any real oversight. 7 nia’s large cities as well as New York lived
cused the ic of using its powers to “surveil
and abuse the Trump campaign”, com- Living spaces in shared households, compared with less
pared American intelligence professionals
to Nazis and, according to Andrew McCabe, Please shower on than 20% in North Dakota and Iowa. Coast-
a former fbi acting director, taken the word entry
of Vladimir Putin over American analysts’. al cities also have by far the highest number
Mr Trump has similarly scant regard for House-sharers are finding covid-19
the intelligence product. Ideally, presi- restrictions hard to deal with of coronavirus cases, so the reaction of ur-
dents do not ask their analysts for advice;
presidents tell them what they want to do, In late march, a text message appeared ban house-sharers will play a vital role in
and ask them to forecast what is likely to on Twitter from a student at Brigham
happen depending on how they decide to Young University in Salt Lake City. She how America copes with the disease.
do it. Douglas London, a 34-year veteran of asked her flatmate not to invite guests to
the cia’s clandestine service, explains that their shared space during the coronavirus Which is worrying because they face
Mr Trump “just wants to see intelligence epidemic, since her immune system was
that aligns with his beliefs, as opposed to compromised. “I’m glad that you are seek- special difficulties. In families, parents can
information he can ponder to inform his ing to stay safe,” came the reply, “however,
decision-making”. you can’t prevent me from having people (in theory) persuade children into good be-
The president can be dismissive of in- over. So you can expect to see Brett over of-
telligence that fails to confirm his views. ten, and if that’s an issue for you, you can haviour. But house-sharers are indepen-
He recently mocked the ic’s findings on stay in your room.” Not surprisingly, this
current Russian electoral interference as was retweeted everywhere, the Salt Lake dent adults. As the Salt Lake student put it,
“rumour” and “disinformation”. He can City health department weighed in (“Brett
also be cavalier. Soon after taking office, he could do his part in flattening the curve by “you can’t prevent me.” Yet one roommate
revealed classified information provided visiting virtually,” it scolded) and by the
can put a whole household at risk.

So house-sharers have suddenly been

forced to start thinking about questions

like: are visitors allowed? Partners? What

happens if someone gets the virus?

Most households are answering such

questions piecemeal. “Each of us had

slightly different ideas about how to abide

by the stay-at-home order,” says Sarah Fre-

drick, who shares a house in Washington,

dc, with five other professional women.

They have come to an arrangement based

on trust, rather than rules. Partners are al-

lowed, visitors aren’t. But there are no pro-

tocols about (for example) shopping. 1

The Economist April 11th 2020 United States 21

2 Others rely on explicit rules. Everyone members may visit other households that ciologists, found that if prison-based ger-
who enters the house must change clothes have achieved it, too. There are also rules rymandering were done away with and the
and shower, says Brad Marriner. He shares for domestic chores, though not as strin- incarcerated were counted where they
an apartment in New York with another gent as in another Oakland house, which lived before they went to prison, several
man; both have partners in other two-per- requires five people to do the shopping: districts with prisons would lose represen-
son apartments, making a circle of six peo- two to buy goods (they wear two layers of tation and several urban districts would
ple in three houses, all of whom have clothing, taking off the outer layer after gain it. Their research showed a “substan-
signed up to common rules. “There’s a lot leaving the store); two to disinfect pur- tial likelihood” that Philadelphia would
of laundry and showering,” he says. chases outside the house; one to clean the gain an additional majority-minority dis-
A communal house in Oakland, Califor- fruit and vegetables. It takes hours. trict in the state house.
nia, has gone further, drawing up a 12-page
list of rules for what Jeremy Blanchard, a That is extreme. But the big public- The Census Bureau does not intend to
house member, describes as “gold-stan- health problem lies not in shared house- change its policy for the 2020 count. So
dard quarantine”: no one can be closer than holds that go too far but in irresponsible states are taking matters into their own
six feet to any outsider for 22 days; every- ones that do not go far enough. How shar- hands. In 2019 a state lawmaker proposed a
one must wear a mask outside; no one has ers respond will determine not only how bill to end the practice in Pennsylvania. It
covid-like symptoms and so on. If the quickly covid-19 passes, but also whether, has not made much headway but momen-
household reaches the gold standard, its afterwards, millions will continue to live tum is building elsewhere. At least eight
in households that are an infection risk. 7 other states have legislation on the table.
Prison gerrymandering Last month Colorado’s governor signed a
person for the county while the home dis- bill ending the practice. Seven other states,
Ghost constituents trict could lose government funding. Mr including New York and California, have
Holbrook, who had been locked up 300 passed bills ending the practice. Anamosa,
NEW YORK miles away from home, reckons that “no a small city in Iowa, changed its law in
one should benefit or profit from people in 2009 after a candidate was elected with just
Counting the incarcerated counts cages. However, if anyone wants the bene- two votes; one was his wife and the other a
fit from my incarceration, it should have neighbour. Most of the district residents
Robert holbrook was17 years old when been the community I harmed.” were prison inmates who could not vote.
he went to prison in1991. For the next 27
years he was incarcerated in several state A 2018 study by Brianna Remster and Wanda Bertram of the Prison Policy Ini-
prisons in Pennsylvania. He was impris- Rory Kramer, two Villanova University so- tiative, a research group, says that as more
oned at sci Greene, a supermax prison in people focus on gerrymandering in gen-
the south-western corner of the state, dur- A long distance from home eral, it is becoming “easier for folks to un-
ing the 2010 census. Since 1790, the Census derstand how taking people out of their
Bureau—which began its decennial count home communities and reallocating to
on April 1st—has registered incarcerated their prison cells, for the purposes of redis-
people as residents of the counties where tricting can really change how political
their prisons are located, not the last ad- power is allocated.”
dress before their arrest. This is important
because states then use the census data to Mr Holbrook was released in 2018. He is
draw legislative maps. A prison can bump now a registered voter and paralegal but ac-
up a state legislative district’s population, cording to the census is still technically
even in places where prisoners cannot considered a resident of Greene County. 7
vote, which in America means everywhere
apart from Maine and Vermont.

Critics call this practice prison-based
gerrymandering. Mr Holbrook, an African-
American man from the outskirts of Phila-
delphia, was counted as a resident of
Greene County, a mostly white rural area.
He, two other formerly incarcerated people
and the naacp Legal Defense Fund filed a
lawsuit in February in a Pennsylvania state
court over this practice.

The lawsuit asserts that prison gerry-
mandering has two unconstitutional ef-
fects. First, it inflates the political power of
the voters in counties with prisons, mainly
in rural, mostly white districts. Second, it
dilutes the political power of voters in the
incarcerated person’s urban home district.
Pennsylvania’s prison population is pre-
dominantly black or Latino and comes
from Philadelphia and Pittsburgh.

Prisons can also lower the income per

22 United States The Economist April 11th 2020

Lexington A river runs through it

Fly-fishing is compatible with social distancing—and a lesson in American strengths and strains

The northern central railroad, running up from Balti- Fly-fishing’s success in America reflects above all the country’s
more, has long been synonymous with great deeds. It was a natural bounty. Within a few decades of the technique being main-
route for escaped slaves, heading for Pennsylvania. It carried Abra- ly practised by British officers, homesick for their own chalk
ham Lincoln to Gettysburg in 1863, and bore his body, 17 months streams, Americans were fly-fishing in diverse conditions for bass
later, on a leg of its journey home to Illinois. It is a hiking trail now, and many species of salmon and trout. This led them to innovate;
shaded by sycamore and willow. But for the pen-and-brush duo be- some American fly patterns were based on native American lures.
hind this column, the old railroad remains auspicious, as the ac- Yet the fly-fishing establishment remained concentrated on the
cess-point to a deep pool of the Gunpowder river, where trout lie. Anglocentric east coast. This encouraged an unwarranted inferior-
ity complex, which was compounded by the fact that early Ameri-
It is not the best fishing spot on the Gunpowder. That is a couple can fishing scribblers and fly-tiers tended to be British. The first
of miles upstream, near the reservoir which, thanks to a decades- great writer, Theodore Gordon, initially wrote for a British journal.
old agreement between the local anglers and city of Baltimore, re-
leases a steady flow of water into the river. But any fish caught in But even then America was showing its genius for popularising
that stretch must be put back. And the dispensation for angling in elite culture. This was partly a reaction to the snooty Anglos. “Our
Maryland’s coronavirus lockdown rules applies only to fishing for fish are too Republican, or too shrewd, or too stupid, to under-
food. So that is what Lexington, his nine-year-old son, and “Kal”, stand the science of English trout fishing,” wrote a peeved angler in
this newspaper’s cartoonist-in-chief, were set upon, one glorious 1830. A similar urge drove baseball to supplant American cricket
recent afternoon, with an eagerness whetted by days cooped up. around this time. Yet the growth of a New World fly-fishing tradi-
tion, more capacious than the British one, reflected above all
They kept 12 feet apart, mind, while chatting and scrambling America’s vast socioeconomic, as well as piscatorial, possibilities.
down the riverbank. This seemed not only sensible but represen-
tative of what fly-fishing is. It is a solo activity. Yet the technical de- An exploding rail network opened up new angling paradises to
mands of casting a long line to deliver a feathered hook to the wa- thousands of first-generation fishers. The connection between in-
ter with, ideally, the delicacy of an insect alighting make its frastructure and wilderness was sometimes overt; the owners of
practitioners prone to lively exchanges of information: on rods, the Denver and Rio Grande Railroad offered a $20 gold piece to any-
water, flies and so forth. An American master angler, Lee Wulff, one who caught a 10lb trout alongside its tracks. Other entrepre-
called fly-fishing “the most social of all the solitary sports”. Pon- neurs also seized the opportunity fly-fishing presented. Wiscon-
dering this, your columnist took his place on a sandbar dotted with sin’s fly-tying industry would soon produce over 10m lures a year.
beaver tracks, and began casting across the bottom of the pool, to While the east-coast elite maintained an exclusive idea of fly-fish-
where a jumble of rocks rose promisingly from its gravelly depths. ing, it had become a mass hobby.

Maryland’s dispensation reflects the exalted place angling oc- The inevitable downside of this growth, overfishing and pollu-
cupies in America. Around 50m Americans go fishing each year; tion, led to a pushback in the late 19th century. In the name of con-
not far off as many as voted for Donald Trump. A minority of them servation, private fishing clubs grabbed areas that had previously
fly-fish. Yet the sport’s elite reputation, which came with it from been open to the public. Such enclosures at least led to better man-
18th-century Britain, and the commitment of its devotees, have agement—which was then applied nationally in the emerging
made it especially influential and revealing. Presidents from Gro- conservation movement that fly-fishers had thereby helped
ver Cleveland to George H.W. Bush have been devoted to it. Three launch. America’s angling lobby has sometimes erred from its
have written books on fly-fishing: including Herbert Hoover and strong environmental record. To maintain bipartisanship, it has
Jimmy Carter, who spent the day after his crushing electoral defeat said little about the ominous threat of climate change to America’s
in 1980 building an ingenious contraption to dry his fly-lines. rivers. And rainbow and brown trout—which the Lexington team
was after—are two of America’s most invasive species. But as the
Gunpowder, once a stagnant trickle, goes to show, the billion-dol-
lar angling industry remains a powerful force for conservation.

An angle on fishing
American fly-fishing is still evolving. Recent decades have seen a
big expansion in saltwater fly-fishing, pioneered by Lefty Kreh, a
Marylander who helped broker the Gunpowder agreement. It has
also become fashionable, due to interest from Hollywood and so-
cial media. Apparently, it does well on Instagram. Fly-fishing has
been America’s fastest-growing category of fishing in recent years.

Anchored in local topography, hydrology and culture, it has
meanwhile retained local differences amid such national trends.
According to Walter Wiese, a fishing guide in Montana, east-coast
anglers, being accustomed to small rivers and trees, tend to be
nimble but not big casters; west-coasters tend to be the opposite.
Fly-fishing is a story of oscillating tensions between the masses
and elite; tradition and innovation; regional against national con-
cerns: it is an American parable.

It can be frustrating, too. After several hours flogging the river,
Lexington had caught nothing. His son had meanwhile landed a
plump brown trout. Fishing always sorts the men from the boys. 7

The Americas The Economist April 11th 2020 23

Latin America and covid-19 universal, taxpayer-financed health care in
1993, has ten times the number of inten-
Bracing for a battering sive-care beds it did before then. This year
Peru’s health budget as a share of
MEXICO CITY AND QUITO gdp—3.3%—is two-thirds higher than in
2015. Across Latin America and the Carib-
Despite recent improvement, the region’s health systems are not ready bean, public and private health spending is
about 8.5% of gdp, compared with an aver-
Aprocession of disappointments mayor, Cynthia Viteri, told municipal vehi- age of 12.5% in the oecd, a club of mainly
awaits residents of Guayaquil, Ecua- cles to park on runways to block incoming rich countries. The region has recent expe-
dor’s largest city, when illness strikes. flights. She contracted the virus. rience of fighting outbreaks of infectious
Those who report symptoms of covid-19 to disease, including cholera in1991, swine flu
the health-care hotline get appointments Other parts of Latin America wonder in 2009 and the Zika virus in 2016. Most
scheduled for several weeks later, by which whether Guayaquil’s horrors will soon be countries have competent health-care
time they will probably have recovered or theirs. “No health system in the world” can technocrats. The Pan American Health Or-
died. With ambulance services over- cope with covid-19 once the rate of trans- ganisation, the world’s oldest internation-
whelmed, stricken people arrive at hospi- mission gets beyond a certain point, notes al health body, founded in 1902, helps gov-
tals in pickup trucks, only to find there are the director of a public hospital in Mexico. ernments learn from each other.
no empty beds. When somebody dies at Northern Italians have discovered the
home, the corpse joins a long waiting list truth of that. But the capacity and compe- But Latin America’s safety net has short-
for removal. The city has run out of wooden tence of health-care systems matter a lot, comings, which covid-19 will expose. Frag-
coffins. Some relatives dump loved ones’ and in Latin America they vary greatly, both mentation, red tape and corruption will
bodies in the sweltering streets. between countries and within them. “You enfeeble its response in some areas. Gov-
have Europe and Africa on the same conti- ernment budgets support world-class ur-
Guayaquil is the first place in Ecuador nent,” says Alejandro Gaviria, a former Co- ban hospitals and crumbling rural clinics.
where covid-19 has struck with force. That lombian health minister. In several countries, bare-bones publicly
is probably because the country’s Pacific financed health care operates alongside
coast takes a long school holiday starting in In general Latin American health sys- plush private provision for the rich. The
early February, five months before the An- tems, though still smaller and less well course of the pandemic may sharpen griev-
dean region, including Quito, the capital. managed than those of Europe, have ma- ances about inequality that drew millions
Guayaquileños flew to and from Europe tured greatly. Colombia, which introduced of protesters onto the streets of many Latin
after the novel coronavirus began spread- American countries late last year.
ing but before cancelling trips became the Also in this section
norm. The hospitals and bureaucracy The delay in the arrival of the pandemic
could not cope with the disease they 24 A farcical naval battle from Europe and Asia has given the region
brought back. In desperation the city’s valuable time, which some governments
25 Bello: Self-isolating Bolsonaro have taken advantage of. El Salvador an-
nounced a national lockdown when it had
three covid-19 cases. With 15 confirmed1

24 The Americas The Economist April 11th 2020

2 cases on March 12th, Ecuador suspended Breathing rooms Mexico’s Mr López-Gatell. Brazil and Mexi-
large events and shut schools a day later. co, which have large manufacturing sec-
Peru’s government locked down the coun- Medical equipment per 100,000 people tors, are repurposing factories to repair old
try on March 15th. On the same day, with 75 Pre-covid-19 pandemic, 2020 machines and test new ones.
confirmed cases, Chile announced the clo-
sure of schools and universities. 0 10 20 30 40 50 60 Scarcity raises the risk that the poor will
Other countries have responded more suffer far more from the pandemic than the
sluggishly. In Brazil governors and mayors United States rich. Brazil’s private health system, which
have stopped commerce even as the coun- serves mainly the richest quarter of the
try’s president underplays the crisis (see Argentina population, has half the ventilators and in-
Bello). Mexico, keen to protect the incomes tensive-care beds. Perhaps made sensitive
of informal workers, merely exhorts its Brazil by last year’s protests, some governments
citizens to stay home. Nicaragua is in a are taking steps to narrow the gap. In Chile,
class of its own. Schools remain open. Colombia Mexico and Colombia they have declared
European sports channels are in talks to states of emergency that give them the
broadcast games from the country’s foot- Ecuador Intensive-care beds power to tell private hospitals how to allo-
ball league, which plays on. This month the Chile Ventilators cate beds. Argentina’s health minister
authoritarian government sponsored biki- backed off from his claim that “all beds are
ni pageants and food festivals. Mexico public, whether they are public or private.”
Countries that took early action have no But he has taken control of all purchases of
doubt slowed the disease’s progress, but Peru equipment. A debate on the public take-
the region’s relatively low numbers of con- over of private hospitals “is coming to Latin
firmed cases are deceptive. As Ecuador Sources: National statistics; press reports America pretty soon”, says Mr Gaviria.
counted 98 deaths nationwide on April 1st,
Guayaquil’s civil registry was processing lated decrees. Chile’s president, Sebastián In such expedients may lie the seeds of
40 death certificates per day more than Piñera, has invoked a constitutional clause change. Every government in the region is
usual. Brazil counted 2,369 hospitalisa- that lets him spend money equivalent to learning a hard lesson about the value of
tions of covid-19 patients in the four weeks 2% of the budget to deal with a calamity. investing in public health. The problem is,
to April 4th. But in the same period the Mexico’s army has taken charge of procure- covid-19 is destroying the prosperity that
health ministry reported 18,000 more ad- ment, logistics and 35 hospitals. would help make it happen. 7
missions for respiratory illnesses than
during the same period last year. Chile’s  But such urgency will not compensate A battle in the Caribbean
relatively high number of confirmed for long-standing failings. Several coun-
cases—5,116 as The Economist went to tries, including Mexico, Argentina and Ec- Bolivarian farce
press—reflects a high level of testing. uador, have fragmented public-health sys-
tems, which leads to inefficiency and Venezuela’s navy takes on a peaceful
Young, but not fit confusion among patients. Mexico, for in- cruise ship, and loses
The resilience of Latin America’s health stance, has separate federally run hospital
systems depends partly on whether its networks for private-sector workers, It was, on the face of it, a mismatched
young population will need less care than government workers, veterans, oil workers contest. The anbv Naiguatá, a Venezue-
ageing Europe’s citizens. But its youth are and another for workers in the informal lan patrol vessel, was armed with a 76mm
not as healthy as Europe’s. The “monstrous economy and the poor. In Peru hospitals
burden” among young Mexicans of diabe- are run by the health ministry, social-secu- naval gun, a German-built anti-aircraft sys-
tes, hypertension and obesity—all of rity institutes, regional governments, the
which could worsen covid-19 cases—may police and the army. tem that sprays a cloud of tungsten bullets
wipe out the age advantage over countries
like Italy, says Hugo López-Gatell, Mexico’s Corruption and mismanagement make and a pair of deck-mounted machine guns,
coronavirus tsar. In Rio de Janeiro a quarter things worse. Ecuador’s social-security
of coronavirus-positive patients in hospi- agency paid $12 per mask for face-masks, among other weaponry. The rcgs Resolute,
tal have been under 40. which led to the sacking of a senior official.
Directors of some public hospitals in Co- a Portuguese-flagged cruise ship with an
Health systems are racing to equip lombia have stolen millions of dollars and
themselves for caseloads on a European starved their organisations of investment. 80-seat theatre, had the top speed of an oil
scale. As in other regions they are building Rural areas are underserved because the
field hospitals and graduating medical stu- private sector sees little prospect of profit tanker. But in the early hours of March 30th
dents early. Chile has suspended its re- there and neither national nor local gov-
quirement that migrant doctors requalify. ernments have stepped in. it was Venezuela’s Bolivarian navy whose
In Colombia private health insurers, which
provide most health care, have been agile. Such failings have left the region short ship ended up on the seabed—in the first
They offer online consultations and have of ventilators and intensive-care beds (see
rolled out home delivery of remedies to chart). Tumaco, a Colombian town with decisive naval skirmish in the Caribbean
non-covid-19 patients, largely through 250,000 people, has one public hospital
Rappi, an app-based service. This relieves and no ventilators. In late March Ecuador’s for 75 years.
pressure on the health system. Peru’s presi- government commandeered two ventila-
dent, Martín Vizcarra, set up a central com- tors from Lago Agrio, in northern Amazo- The Resolute, en route to Curaçao, a
mand to co-ordinate management of the nia, for use in a regional capital, but failed
pandemic and plan long-term reforms. to deliver 1,400 testing kits it had prom- Dutch island in the Caribbean, had been
Peru’s Congress has given the government ised. A baby with covid-19 died.
powers for 45 days to issue pandemic-re- drifting for a day in international waters
One disadvantage caused by the late ar-
rival of the pandemic is that Latin America near La Tortuga, a Venezuelan island, as it
was slow to join the international scramble
for N95 masks and ventilators. Many tinkered with its starboard engine. At mid-
governments, including those in the Euro-
pean Union, have banned their export. “We night it was approached by the Naiguatá
have suffered many difficulties finding
[ventilators], to the degree that we have had and ordered to come into port. As the Reso-
to obtain them in small quantities,” says
lute contacted its head office for instruc-

tions, the Naiguatá opened fire—a video re-

leased by the Venezuelan navy shows a

sailor firing an ak-47 in the howling wind

and darkness with Rambo-like enthusi-

asm—and rammed the cruise ship, accord-

ing to its parent company. 1

The Economist April 11th 2020 The Americas 25

2 Unfortunately for the Naiguatá, the Res- gallant sailors put in an “impeccable per- United States indicted Nicolás Maduro, the
olute’s placid appearance belies the fact formance” against the unarmed cruise dictator, and his inner circle for drug-run-
that its strengthened hull, built for polar ship, presumably by sinking with particu- ning and “narco-terrorism”.
cruising, can smash through metre-thick lar panache. The navy darkly added that the
ice—and, it turns out, puny patrol boats. Resolute, which boasts a jacuzzi and sauna, On April 1st Donald Trump announced
The Resolute brushed off the collision with might have been carrying mercenary com- that the United States was launching an
“minor damages”, whereas the Naiguatá mandos to attack Venezuelan bases. As evi- “enhanced counter-narcotics operation” in
rapidly took on water and sank, leaving 44 dence, it pointed to nefarious inflatable the eastern Pacific and Caribbean, involv-
sheepish sailors to be rescued. boats on its deck. ing an impressive array of warships and
Venezuela disputes this account. Its spy planes. The operation would “choke off
armed forces accused the Resolute of “cow- Venezuela’s thuggish regime may be es- the funds that go to that corrupt regime”,
ardly and criminal behaviour” by initiating pecially touchy now. In January the uss De- said Robert O’Brien, Mr Trump’s national
the collision in Venezuela’s national wa- troit, an American warship, conducted security adviser. The Bolivarian navy will
ters. The Bolivarian navy insisted that its “freedom-of-navigation” operations close be ready to repel any invaders—just as soon
to Venezuela’s coastline. On March 26th the as its sailors dry off. 7

Bello A president who is isolating himself

Jair Bolsonaro’s reckless handling of covid-19 will come back to haunt him

One by one the doubters have made and has a perpetual need to provoke, he of the virus, compared with 33% for Mr
their peace with medical science. greeted with hugs and selfies supporters Bolsonaro’s management of the crisis.
Only four rulers in the world continue to who attended a rally against Congress on
deny the threat to public health posed by March 15th. He launched a campaign urg- Calls for Mr Bolsonaro’s resignation
covid-19. Two are flotsam from the for- ing businesses to re-open and called for a have mounted. They have come not just
mer Soviet Union, the despots of Belarus religious “fast and demonstration” to take from the left but also from some of his
and Turkmenistan. A third is Daniel place in churches on April 5th. He has erstwhile supporters such as Janaina
Ortega, the tropical dictator of Nicara- mused about decreeing, illegally, an end to Paschoal, a São Paulo state legislator
gua. The other is the elected president of the lockdowns. He has twice come close to whom he once considered as his running
a great, if battered, democracy. Jair Bolso- sacking his own health minister, Luiz mate. Saying he was guilty of “a crime
naro’s undermining of his own govern- Henrique Mandetta, a conservative doctor against public health”, she added: “we
ment’s efforts to contain the virus may who publicly opposed the president’s call don’t have time for impeachment.”
mark the beginning of the end of his to loosen restrictions. Mr Bolsonaro is
presidency. seemingly jealous of the rising profile of a There can be little doubt that the
minister he claims “lacks humility”. president’s conduct constitutionally
Since the new coronavirus was first merits impeachment, a fate that befell
detected in Brazil in late February Mr Even by his own standards, Mr Bolso- two of his predecessors, Fernando Collor
Bolsonaro, a former army captain with a naro’s breach of his primary duty to pro- in 1992 and Dilma Rousseff in 2016. But
fondness for military rulers, has made tect lives has gone too far. Much of the for now Mr Bolsonaro retains sufficient
light of it. Dismissing its effects as “just a government is treating him like a difficult public support to survive. While polls
little dose of flu”, he said “we’re going to relative who shows signs of insanity. Key found a majority favouring Ms Rousseff’s
face the virus like a man, dammit, not ministers, including the cohort of generals ousting (for breaking the fiscal-responsi-
like a little boy.” He added, helpfully: in the cabinet, as well as the speakers of bility law to win re-election), 59% told
“we’re all going to die one day.” In the 15 both houses of Congress, have given some- Datafolha they don’t want Mr Bolsonaro
months since he became president, times ostentatious support to Mr Man- to resign. Her approval rating fell to
Brazilians have become accustomed to detta, who has the public on his side. A poll around 10%; he retains the support of a
his macho bravado and ignorance on this month by Datafolha found 76% ap- third of voters. Few in Brasília believe
issues ranging from the conservation of proval for the health ministry’s handling that the country wants or can afford the
the Amazon rainforest to education and distraction of impeachment while it is
policing. But this time the damage is under siege from covid-19.
immediate and obvious: Mr Bolsonaro
has coupled defiant rhetoric with active Mr Bolsonaro is sustained by a small
sabotage of public health. coterie of ideological zealots who in-
clude his three sons, by the faith of many
He claims to believe in “vertical isola- evangelical Protestants and by lack of
tion”, in the quarantining only of Brazil- information about covid-19 among some
ians aged over 60 in order to limit dam- Brazilians. The last two factors may
age to the economy. There are two change as the virus ploughs its fatal
problems with this. Young people die of furrow in the coming months. By April
covid-19 (10% of those it has killed in 8th Brazil had suffered 14,049 confirmed
Brazil are under 60), and enforcement of cases and 688 dead. And the president
such a quarantine would be impossible. may not be able to quarantine himself
from blame for the economic impact. By
The governors of Brazil’s most impor- his recklessness with the lives of Brazil-
tant states have gone ahead and imposed ians, Mr Bolsonaro has forced the pos-
lockdowns using their own powers. Mr sibility of his own departure onto the
Bolsonaro has encouraged Brazilians to political agenda. It is likely to remain
ignore them. A man who fears betrayal there after the epidemic fades.

26 Asia The Economist April 11th 2020

Also in this section
27 Justice in Uzbekistan
28 Taiwan on alert
28 Sexist dress codes in Japan
29 Judges v jury in Australia
29 South Korea’s covid election
30 Banyan: Pacific boltholes

Singapore and covid-19 S$10,000 ($7,000) or both. Singapore,
which had won praise from the World
No way out Health Organisation (who), among others,
for its measured but effective approach to
SINGAPORE the coronavirus, is no longer able to pre-
serve a semblance of normality.
Not even the efficient city-state has been able to avoid a lockdown
Singapore had been able to take a less
“No escape,” reads the pest-control apart and no more than ten people were draconian approach because of its initial
van parked near the entrance to s11 supposed to gather in one place. Even bars success in containing the disease. On Janu-
Dormitory @ Punggol, a residence for mi- had been able to keep going, as long as they ary 22nd it began taking the temperatures
grant workers in Singapore. Its warren of served food. Schools, too, had continued to of air passengers arriving from China, the
low-slung metal-clad buildings houses operate. All will now be closed. Anyone day before the Chinese government
some 13,000 male labourers, 63 of whom meeting people with whom they do not live stopped travel into and out of Wuhan. Soon
have been moved to hospital after catching risks six months in prison, a fine of afterwards it began banning visitors from
covid-19. The rest are among the 20,000 areas badly affected by the virus. By the end
migrant workers ordered to remain in Home-grown of March the government had advised
compounds like s11 for two weeks to stop against all non-essential journeys abroad,
the spread of the coronavirus. Faced with a Singapore, daily new confirmed cases of covid-19 closed its borders to non-residents and
sudden spike in new cases, almost all of 125 suspended all religious services.
them contracted locally (see chart), the
government has decided to adopt much Local 100 All the while efficient contact-tracing
more stringent measures to slow the Imported 75 teams—including members of the police
spread of the virus. and the army—identified and isolated
50 thousands of people possibly infected with
For most Singaporeans, the new regime, the virus. Members of the armed forces
instituted on April 7th, will not be quite as 25 have been making up to 2,000 calls a day to
strict. They will be allowed out of their hunt for potential carriers. Those told to
homes to buy food and medicine and to ex- Jan Feb Mar 0 stay at home for 14 days have been moni-
ercise. This “circuit-breaker”, as the gov- tored assiduously to ensure compliance.
ernment calls it, will remain in place for at 2020 Apr (Uncooperative types face prosecution or
least a month. Previously, shops and res- the loss of their residency rights, if they are
taurants had remained open, although pa- Source: Singapore Ministry of Health not citizens.)
trons were supposed to remain a metre
Yet in spite of everything, the virus con-
tinues to spread. The effort to find and iso-
late cases linked to the initial outbreak in
Wuhan was successful. But from March, as1

The Economist April 11th 2020 Asia 27

2 many Singaporeans returned home be- Justice in Uzbekistan former political prisoners. It is headed by
cause of the proliferating coronavirus re- Azam Farmonov, an activist who was once
strictions in other countries, some infec- Blind obedience jailed in the notorious Jaslyk prison camp,
tions clearly slipped through the net. which Mr Mirziyoyev has closed.
Hence the new restrictions. “One impor- TA S H K E N T
tant objective is to apply brakes from time Mr Farmonov wants a proper airing of
to time to slow down the momentum of The government is reforming the the abuses that took place in Jaslyk and in
this transmission,” explains the health judicial system—up to a point the justice system more broadly under Ka-
minister, Gan Kim Yong. rimov, who died in 2016. “Karimov’s repres-
Singapore’s approach continues to “If justice perishes, human life on sions repeated Stalin’s repressions,” he
evolve. Take face masks. Initially Singapor- Earth has lost its meaning,” intoned says. If they are not exposed, “no one can
eans were advised that they did not need to Shavkat Mirziyoyev, Uzbekistan’s presi- say something like this won’t happen
wear them unless unwell. Then on April dent, quoting Immanuel Kant, a philoso- again.” Human Rights Watch, a watchdog,
3rd, in his third televised address on co- pher. Mr Mirziyoyev was explaining to estimates that10,000 people were jailed for
vid-19, Lee Hsien Loong, the prime minis- parliament his plans for reform of the jus- political reasons; many remain behind
ter, said that the government would no lon- tice system. Anyone entering an Uzbek bars. Mr Farmonov expects resistance to
ger discourage their use and would, in fact, courtroom, he said, should be “fully confi- any reckoning from the police, jailers and
distribute reusable ones to every house- dent that the principles of legality and jus- judges who took part. Examining the mis-
hold. Singapore’s testing regime may alter tice are unfailingly upheld”. That is a tall deeds of the past could also be awkward for
too. Currently people’s travel history and order in a country in which, until he came Mr Mirziyoyev, who served as Karimov’s
symptoms are among the factors consid- to power in 2016, the courts served a dicta- prime minister for 13 years.
ered before they are tested for the corona- torship. And although the courts are in-
virus. But health officials say the approach deed being overhauled, there are limits. The case that most clearly embodies
is reviewed regularly and that wider testing these tensions is that of Gulnara Karimova,
might be adopted in future. Mr Mirziyoyev has appointed a young Karimov’s daughter. In March a court jailed
The government has not said much British-educated justice minister, Ruslan- her for 13 years after a closed trial. Her sen-
about how it thinks the pandemic will play bek Davletov. Fully 80% of prosecutors tence, on charges of running crime rings,
out in Singapore. Unlike Britain’s, for ex- were replaced after Mr Mirziyoyev con- extortion and money-laundering, will run
ample, it has not shared the models it is us- demned their rampant bribe-taking. The concurrently with a term she was already
ing to predict the number of cases or government has decreed that evidence ob- serving for extortion, embezzlement and
deaths. Singapore has a relatively vulner- tained by torture (common under Mr Mir- tax evasion. The Justice Ministry insists Ms
able population by the standards of the re- ziyoyev’s predecessor, Islam Karimov) is Karimova’s rights were respected, but has
gion, since the virus poses a greater risk to inadmissible. A special council has been not explained why her trial was not public.
elderly people and some 10% of residents set up to boost judicial independence. Ms Karimova, a former singer and socialite,
are over 65. The migrant workers quaran- received several plum diplomatic postings
tined in crowded dormitories are another These reforms may be paying off: the from her father. She fell from grace in 2014,
group to watch. And as the number of cases number of acquittals, previously near zero, while he was still president, and was de-
rises it becomes harder to trace the con- has risen. Remarkably, a court recently tained without trial. She has been indicted
tacts of the sick, hampering one of the most overturned the conviction of Chuyan Ma- in America over an “extensive corrupt brib-
effective elements of Singapore’s response. matkulov, one of dozens of Karimov-era ery scheme”.
Planning is under way for a long cam- political prisoners released under Mr Mir-
paign against covid-19. Officials intend to ziyoyev. The Justice Ministry has also per- Conducting Ms Karimova’s trial “be-
turn parts of Singapore Expo, a convention mitted the establishment of Huquqiy hind closed doors, and in violation of due-
centre with some 100,000 square metres of Tayanch (Legal Support), a rights group process norms, does a disservice to the Uz-
floor space, into a quarantine facility for re- that campaigns for the rehabilitation of bek government’s efforts to show that the
covering patients. One of Changi airport’s court system has fundamentally im-
four terminals will suspend operations for The last anyone has seen of Ms Karimova proved”, argues Steve Swerdlow, a lawyer.
18 months to save running costs, suggest- Advocates of reform also worry about two
ing that the government does not expect air other recent closed trials. In January Kadyr
travel to recover fully for a long time. Yusupov, an ex-diplomat who suffers from
A good indicator of how confident the schizophrenia and who was arrested after a
authorities are about their handling of the suicide attempt, was jailed on espionage
epidemic will be provided by the timing of charges. In March, Vladimir Kaloshin, a
the next election. It is due within a year, journalist for a military newspaper, re-
and the government had been rumoured to ceived a 12-year sentence for treason after
be on the verge of calling a snap poll before proceedings that featured no defence wit-
the virus put such considerations on hold. nesses. His daughter, Anastasiya Episheva,
The publication of new electoral bound- says it was “not a trial but a travesty”.
aries last month set tongues wagging
again. So too did the introduction of a bill These investigations were led by the
in parliament on April 7th to ensure a safe State Security Service, a feared intelligence
election in spite of covid-19. Among other agency which Karimov used to silence dis-
measures, the legislation would allow citi- sidents, but which Mr Mirziyoyev has
zens whose movements have been restrict- reined in. Some observers suspect that
ed for reasons of public health to vote from these secret policemen, whom the presi-
wherever they have been told to stay. With dent once labelled “mad dogs”, are trying to
the election, as with the virus, Singapore’s prove their worth by uncovering phantom
government is leaving little to chance. 7 plots. Whatever their motivation, the intel-
ligence services’ continued clout creates a
“climate of fear” and “adversely affects” ju-
dicial independence, a un rapporteur con-
cluded last year. 7

28 Asia The Economist April 11th 2020

Taiwan on alert Sexism in Japan

Strait and harrow Heels at high water

TOKYO

Japanese women rebel against painful dress codes at work

With the world distracted, China Ishikawa yumi worked eight-hour their feet into heels at work or have
heightens military tensions shifts as an usher in a funeral parlour, witnessed colleagues having to, accord-
always in heels. Her employer insisted. ing to a survey. Female staff at Taka-
The tanks queued patiently with the Her toes bled. “Why do we have to hurt shimaya, a department store, must pa-
cars, delivery trucks and bright yellow our feet at work, when men can wear flat rade around the shop in 5cm heels. The
taxis before rolling serenely through the shoes?” she complained on Twitter. The former defence minister, Inada Tomomi,
traffic lights. The drill, in Yuanshan, a town tweet exploded. felt obliged to totter about in heels even
south-east of Taipei, was intended as prac- on the deck of a visiting American air-
tice at repelling a Chinese invasion. Some Encouraged, she gathered 18,800 craft carrier.
of the tanks, covered in webbing, hid in a signatures on a petition calling for a ban
copse, about as inconspicuously as is pos- on employers requiring women to wear Dress codes at many Japanese firms
sible for a 50-tonne vehicle. The unit had high heels, which she submitted to the are rigid. Some ban glasses for women
good reason to be rehearsing. In recent government last June. Ms Ishikawa (but not men), on the grounds that they
months China has been rattling more sa- became the face of the #KuToo cam- are unflattering. This is especially unrea-
bres than usual at Taiwan, which it consid- paign—a pun on Japanese words for sonable for those who find contact
ers part of its territory. With covid-19 sub- shoes (kutsu) and pain (kutsuu), with a lenses uncomfortable. “Women have
siding in China but consuming America, nod to the #MeToo movement. always been told to follow the dress code,
some in Taiwan feel vulnerable. even if it causes pain,” says Ms Ishikawa.
More than 60% of Japanese women Japanese bosses, who tend to be older
China sends around 2,000 bomber pa- with jobs have been forced to squeeze men, often expect their female under-
trols a year into the Taiwan Strait, which lings to gaman (endure it).
separates the two countries, according to High on the agenda
Taiwan’s defence minister. These are tak- The government has dug in its heels.
ing increasingly menacing routes. In 2016, A former labour minister, who received
when Tsai Ing-wen, an opponent of reuni- Ms Ishikawa’s petition last year, insists
fication with China, was first elected Tai- that wearing high heels at work is “neces-
wan’s president, China began sending sary and appropriate”. The petition itself
bombers to circumnavigate the island as a has received no official response to date.
show of force. Last year it deliberately sent Japan ranks the second lowest out of the
fighters across the mid-point of the strait 29 rich countries in The Economist’s
for the first time in two decades. In Decem- glass-ceiling index, which measures
ber China’s first domestically built aircraft equality for women in the workplace.
carrier, the Shandong, was sent through the
strait two weeks before Taiwan’s presiden- But corporate Japan is slowly re-
tial election, in which Ms Tsai won a sec- sponding to #KuToo. In late March Japan
ond four-year term. Airlines announced that its female flight
attendants can kick off their heels and
China has not let the coronavirus get in swap skirts for trousers if they choose.
the way of this muscle-flexing. “Our air op- All three big mobile-phone operators
eration command centre has had alarms on have relaxed their rules on heels. Ms
a daily basis since February,” says Alex- Ishikawa is collaborating with a shoe
ander Huang of Tamkang University. That company to produce chic heel-less
month, even as the epidemic raged in Hu- shoes. “Society is changing,” says Ms
bei province, Chinese jets probed Taiwan- Ishikawa. “We can’t be ignored.” Point-
ese airspace several times, prompting Tai- less rules about footwear may soon be
wan to scramble its own planes. given the boot.

On March 16th China conducted its first warned Taiwan’s deputy defence minister American aircraft-carrier that was exercis-
night-time exercise near Taiwan, sending a on March 30th. “We are all ready and have ing near China weeks ago, is stuck in Guam
clutch of fighter jets and surveillance air- made the best preparation.” thanks to a coronavirus outbreak among its
craft, which can peer farther than ground- crew (see United States section). In March
based radar, well past the mid-point of the It helps that America has been under- the Chinese army held two weeks of exer-
strait. The same day Taiwan’s coastguard lining its support for Taiwan. On February cises with Cambodia, even as America and
said that Chinese speedboats—probably 12th America sent two b-52 bombers up Tai- its allies were cancelling drills. The effects
part of the maritime militia, a paramilitary wan’s east coast, two days after Chinese jets of the virus aside, the military balance is
force that sometimes uses fishing ves- had crossed the median line. An American shifting. “Based on current trends, and bar-
sels—had rammed one of its cutters near warship has also sailed through the Taiwan ring …technological breakthrough, Ameri-
the Kinmen islands, a part of Taiwan barely Strait in each of the past three months—an ca will probably have lost the ability to de-
5km from the mainland. expression, the navy says, of America’s fend Taiwan within the decade,” says
“commitment to a free and open Indo-Pa- Brendan Taylor of the Australian National
“At the height of outbreak of the pan- cific”. Last year America agreed to sell Tai- University. “Policymakers should be wor-
demic worldwide, if the Chinese Commu- wan a whopping $8bn-worth of weapons, ried about the growing risk of strategic cri-
nists attempted to make any military ad- including 66 f-16 fighter jets. sis during this window.” 7
venture leading to regional conflict, they
would be condemned by the world,” But the uss Theodore Roosevelt, an

The Economist April 11th 2020 Asia 29

Criminal justice in Australia Politics in South Korea

Judges v jury Voting amid
the virus

SYDNEY SEOUL

An appeals court overturns a cardinal’s conviction for sexually abusing choirboys The government presses on with an
election—and tries to game it
The jury that in 2018 found George Pell Seven judges had doubts
guilty of sexually assaulting two choir- At first glance it looked like any old
boys deliberated about its verdict for five shadow of a doubt”, acknowledged the sur- campaign event. A crowd thronged
days. But it did not think about the evi- viving choirboy, as he accepted the court’s around a stage in a narrow street in central
dence carefully enough, Australia’s High decision. But the Survivors Network of Seoul. Dancers in bright pink hoodies per-
Court ruled on April 7th. It overturned the those Abused by Priests, a support group, formed a lacklustre routine to a k-pop
conviction and ordered Mr Pell, a cardinal took the decision as a sign that “the power- tune. But the dancers wore face masks that
who used to be the Vatican’s top financial ful have won.” Victims may lose their faith matched their hoodies. Spectators, though
manager, released. If the jury had been in the criminal justice system, argues the hard-pressed to keep the officially recom-
“acting rationally on the whole of the evi- group’s coordinator for Australia, Steve mended two-metre distance from each
dence”, the seven judges ruled unanimous- Spaner. If fewer of them come forward as a other, had covered their faces, too. And
ly, it “ought to have entertained a reason- result, he fears, crimes will go unpunished. when the candidate, Hwang Kyo-ahn, took
able doubt” about his guilt. to the stage, he sported a clear perspex
Australia has long wrestled with claims shield over his mouth and nose.
The charges date to 1996, when Mr Pell of sexual abuse of minors. In 2018 the
was Archbishop of Melbourne. He was ac- prime minister, Scott Morrison, issued a Last weekend marked the start of cam-
cused of molesting the boys in the cathe- lengthy apology to survivors. After the paigning for South Korea’s legislative elec-
dral’s sacristy, or dressing-room, after a High Court’s ruling, Daniel Andrews, the tions, which will go ahead as planned on
Sunday mass. The guilty verdict was ini- premier of Victoria, issued a statement tell- April 15th despite the covid-19 pandemic.
tially subject to a gagging order, in order ing victims: “I believe you.” Yet some of the The prospect of queues at polling stations
not to prejudice possible future proceed- cardinal’s supporters feel that justice has and of sharing booths, pencils and ballot
ings. Only months later were the media al- eluded them, as well. An innocent man was boxes has prompted several other coun-
lowed to report on it. A little over a year ago imprisoned by a biased jury, they say, and tries, including Britain, France and some
the prelate began his six-year jail sentence, the judges who heard the initial appeal up- American states, to cancel or postpone
which was upheld by an appeals court in held its decision. “Nobody is safe” in such a elections. But the South Korean authorities
the state of Victoria last year. system, one pundit railed. believe the outbreak is at bay. On April 6th
the country recorded fewer than 50 new
The High Court was troubled, however, While some consider it unseemly for cases for the first time since late February.
by the other courts’ reliance on the testi- judges to overrule a jury, others would like
mony of a single witness. One of the two to entrust them with more authority. Victo- Nonetheless, to minimise the risk of in-
choristers died in 2014, so the conviction ria is the only state in Australia that does fection for voters and poll workers, the Na-
was “wholly dependent upon the accep- not allow well-known defendants to be tional Election Commission has instituted
tance of truthfulness and reliability” of the tried by a judge alone, if they fear that the elaborate safeguards. All voters will have
surviving one, the High Court’s judges ob- public mood is against them, notes Mat- their temperature taken before entering
served. Even though the witness was “cred- thew Collins, a barrister. Nick Papas, Victo- their polling station (those found to have a
ible and reliable”, they said, the jury should ria’s former chief magistrate, would like fever or other symptoms will be directed to
have had its doubts. the state to adopt the same procedure. 7 a separate polling booth). They will also
have to wear a face mask, sanitise their
Cardinal Pell’s lawyer had pointed to the hands and put on vinyl gloves before pick-
“sheer unlikelihood” that he would have ing up a ballot paper and entering the
found himself alone with the boys amid booth. Election stewards will ensure peo-
the “hive of activity” in the cathedral. In- ple keep away from each other while queu-
deed, evidence from other witnesses ing and voting. Door knobs, pencils and
should have raised logistical questions ballot boxes will be sterilised often.
about whether he could have committed
the crimes of which he was accused, the These measures seem to have reassured
court said. As a result, the ruling conclud- citizens sufficiently to persuade them to
ed, there was “a significant possibility that show up: in a poll on April 2nd 73% ex-
an innocent person has been convicted”. pressed their intention to vote, more than
in the run-up to the previous legislative
Australian judges do not like to over- election, in 2016. There are some grumbles:
turn their juries’ decisions, for fear of dent- more than half the 170,000 voters who live
ing faith in criminal justice, says Rick Sarre abroad will not be able to cast their ballots
of the University of South Australia. Rul- at the South Korean embassy in their coun-
ings like this are fairly uncommon. To try of residence, owing to pandemic-relat-
some, the acquittal is a sign of a system ed restrictions. Koreans in Canada and Ger-
working. But it has rattled many Austra- many are mulling a constitutional appeal.
lians. As the cardinal walked free, vandals
emblazoned the words “no justice” over Back home, the grumbling is less about
the cathedral in Melbourne. the complications of the pandemic and
more about the machinations of politi-
It is hard to “satisfy a criminal court that cians. The election will be the first since
the offending has occurred beyond the the National Assembly amended the elec-1

30 Asia The Economist April 11th 2020

2 toral law to strengthen the proportional el- previous election. The Revolutionary Divi- is distributing posters depicting it and
ement of the hybrid electoral system. Of dends Party, for instance, wants to run the Minjoo as bride and groom.
the 300 seats in the unicameral assembly, country like a corporation, dismantling the
253 are filled on a first-past-the-post basis. parliamentary apparatus to save money “These decisions undermine the very
The remaining 47 are allocated based on a and giving cash handouts to encourage idea of the reform,” complains Kim Jong-
second vote, for a party. The formula for people to go on dates and get married. cheol of Yonsei University. “They shouldn’t
awarding them used to favour the two be allowed to do that.” But the electoral
main parties, which won 59% of the party- The big parties, including the ruling commission says no rules are being bro-
list vote in 2016, but ended up with 82% of Minjoo (Democratic) party, which came up ken. The constitutional court can only get
the seats in the assembly. But now the rules with the reform, are doing their best to un- involved if the government asks for a rul-
have been tweaked to help smaller parties. dermine it by creating “satellite parties”, ing, which seems unlikely given Minjoo’s
The reform has prompted the formation which will compete only for party-list eager embrace of the satellite-party
of several new parties. Thirty-five will be seats. After the election, these will co-oper- scheme. South Koreans may be beating co-
competing for seats, 14 more than in the ate, or even merge, with their big sibling. To vid-19, but they have not yet worked out
hammer the point home, Minjoo’s satellite how to tame wily politicians. 7

Banyan Locked out of the bolthole

The eternal, fanciful allure of the South Pacific

As a distracting sidebar to much pornographic in its representation of the mind when you hear Fiji’s strongman,
grimmer stories, newspapers around young princess. It is but a short hop to Paul Frank Bainimarama, warning those
the world have been publishing tales of Gauguin’s paintings of Tahitian girls over a tempted to break the current curfew: “It
tourists stranded in palm-fringed places, century later, today among the world’s doesn’t matter how famous you are, it
unable to catch a flight home. A 19-year- most expensive paintings. Tourism bro- doesn’t matter how rich you are... No one
old Briton trapped on a tropical island chures depicting island women with is immune to our laws.” With weak
after a stint volunteering for a charity frangipani blooms behind their ears play health systems and many vulnerable
told the bbc, “I think people assume, to the same idea. citizens, South Pacific countries cannot
‘You’re in Fiji, you’re on the beach sip- risk an outbreak of covid-19.
ping cocktails, it’s just a holiday.’ Every- The fantasy has in fact been lethal,
thing is in lockdown and we spend our bringing infectious disease with it. The But what about New Zealand? One-
days looking for ways to get home.” Some English and French captains who were the percenters who have long prepped for
hapless travellers have been told by their first Europeans to visit Tahiti bickered the apocalypse—whether caused by
governments that the only way to get over which crew had introduced syphilis disease, nuclear war or the breakdown of
back to their families is to charter a (probably the English). It was a killer. society—have always seen it as the place
private jet at their own expense. Tahiti later suffered devastating epidemics to ride out the end of days. The devasta-
of smallpox, dysentery, scarlet fever and tion Cyclone Harold inflicted this week
That is exactly what some much measles in quick succession. Gauguin on Vanuatu only highlights smaller
richer people have been doing, albeit infected three child brides and a string of countries’ vulnerability. New Zealand, in
heading in the opposite direction. Scruti- adolescents with syphilis. Missionaries contrast, is far from global tensions, has
neers of flight-tracking websites report carried death too. When Robert Louis a clean environment and a phlegmatic
an increase in private jets leaving Ameri- Stevenson visited the Marquesas in 1888, folk not inclined to sharpen their pitch-
ca, in particular, for the vast, remote so many had died no one remembered the forks. Peter Thiel, a Silicon Valley mogul
South Pacific. They include two Gulf- old songs and dances, and coffins had with land on South Island, has long
stream jets that left Los Angeles earlier become prestige items. The population of praised the country’s survivalist attri-
this month and landed in Tonga. The Hawaii fell from perhaps 250,000 in butes. Rising S, a Texan maker of dooms-
Polynesian kingdom is supposedly Cook’s time to less than 40,000 by the end day bunkers, has sold several 150-ton
closed to air traffic. In Fiji, the rumour of the 19th century. Bear this history in models to American tycoons and
that Nicole Kidman was holed up on shipped them to New Zealand to be
Wakaya Island, where Keith Richards buried underground.
once fell head first out of a coconut tree,
proved unfounded. But others have gone Too bad if you’re among the filthy rich
to ground there. Agents report a rise in who thought of New Zealand only recent-
superyacht charters, too, by billionaires ly: it has tightened its laws to restrict
and their families looking for “remote” foreign ownership of property. But even
locations in which to self-isolate. if you already own a bolthole, you need to
get ahead of the looming catastrophe.
The South Pacific’s allure is fuelled by Few anticipated Jacinda Ardern, the
fantasy: that of a pure, even erotic, in- prime minister, closing borders so
nocence, compared with the disease, promptly last month. And how on earth
pollution and corruption of Western do you decide which of your family and
civilisation. The trope dates to the West’s staff to bring? And—oh lord—which
first encounters with the Pacific. “Poe- pets? No exceptions: the pets must spend
dua”, the first portrait in oil of a Pacific at least ten days in government quaran-
islander, by John Webber, an artist on tine. A converted nuclear-missile silo in
Captain James Cook’s Endeavour in the Kansas, whose prices are reported to be
late 1770s, is less ethnographic than rising, starts to look more appealing.

China The Economist April 11th 2020 31

Traditional medicine says 90,000 people from 64 countries
joined a recent conference-call to learn
Fighting it the Chinese way from Chinese tcm specialists how they bat-
tled the virus. In mid-March state media
BEIJING quoted a Tanzanian health official saying
that China’s use of tcm for covid-19 may be
Unproven treatments for the coronavirus have strong official backing “a model” for Africa to follow.

Wang dashan (not his real name), a was turned into a tcm hospital for people China’s government does not promote
bus driver from Hubei province, with mild symptoms). On March 23rd a se- using only tcm. Those with serious symp-
thinks a herbal broth may have saved his nior official from the government’s tcm toms of covid-19 are given conventional
life. The yellow-brown tonic, made by a administration said more than 90% of all treatment. tcm practitioners seldom deny
large state-owned company, was one of sufferers of covid-19 had received tradi- that what they call “Western medicine” is
several traditional remedies that doctors tional therapies, and these had been “effec- useful, especially for acute illness. But the
used to treat Mr Wang during the two tive” 90% of the time. She offered no data to government does claim that tcm is more
weeks that he spent with covid-19 at a support this claim. than just a palliative or placebo. In a white
makeshift hospital in Wuhan, the provin- paper issued in 2016, it called tcm a “medi-
cial capital. He says his cough and fever The epidemic has subsided in China. On cal science” and said the time had come for
subsided a few days after he started drink- April 8th Wuhan, the worst-affected city it to “experience a renaissance”.
ing it. He does not think he would have got where the covid-19 outbreak took off, lifted
better on his own, though most patients its cordon sanitaire (it closed its 16 field tcm is about far more than herbal reme-
with the coronavirus recover. hospitals, including the tcm one, in dies such as Mr Wang’s soup (among its in-
March). Now China is keen to promote its gredients are betel nuts, almonds and
Around the world officials are advising remedies abroad. tcm practitioners have Ephedra sinica, a plant used in China for
people to be wary of alternative treatments joined Chinese medical teams sent to help centuries to treat flu). It includes acupunc-
for covid-19. The opposite is true in China, manage outbreaks in Cambodia, Iraq and ture and moxibustion (the burning of dried
where remedies known as traditional Chi- Italy. The government says it has donated plant materials near the skin). It can also
nese medicine, or commonly, tcm, are be- traditional medicines to other countries, apply to slow-motion kung-fu-like exer-
ing heavily promoted by the state. In Janu- too. Global Times, a newspaper in Beijing, cise known as qigong, which is supposed to
ary, as the crisis escalated, the health cultivate a mystic energy in the body
ministry listed tcm treatments among Also in this section known as qi—tcm blends into the occult.
those it recommended for the disease. It Patients at Wuhan’s tcm field hospital per-
sent nearly 5,000 specialists to Hubei to 32 The blow to beekeepers formed mass qigong routines.
administer them to patients (including
sufferers at a sports centre in Wuhan that 33 Chaguan: A window almost closed For most people, all this is harmless. But
the government’s hard sell of tcm presents
two main dangers. One is that some people
prefer it to conventional treatments that,
unlike tcm therapies, are proven to save1

32 China The Economist April 11th 2020

2 lives. The other is of a threat to wildlife. An- Beekeeping their hives could not set off either. Many of
imal parts are often considered vital com- the insects died of starvation. “In previous
ponents of tcm. The government bans the The honey trap years, our relatives would go south for
use of endangered species, but there re- spring flowers and rapeseed. But no one
mains a widespread belief that tiger penis, Apiarists feel the sting of covid-19 can go this year,” says Ms Zhang.
rhinoceros horn and other parts of rare ani-
mals have powerful medicinal properties. Zhang yali remembers the pains of liv- In mid-February the central govern-
The use of animals sometimes involves ing in the Chinese countryside when ment announced measures to make it easi-
appalling cruelty. One of the tcm remedies she was growing up. On the mountainside er for agricultural workers and goods to
that the health ministry has recommended in rural Shanxi, the northern province move around. But there are still obstacles
for use in the treatment of covid-19 patients where her family lived, snakes and scorpi- of various kinds, including frequent health
includes powdered bear bile. In China this ons lurked. If they did not bite, the mosqui- checks. Woe betide the beekeeper required
is often extracted from live bears kept in tos certainly would. But the Zhangs could to self-quarantine—that can mean separa-
grim farms even though its active ingredi- not move their isolated home to the safety tion from bees. Even those who manage to
ent can be created synthetically. In Febru- of a village, because only the mountain was go about their business normally will
ary China banned the sale of wild animals free of pesticides. What worried the Zhangs struggle to make up their losses. Margins
as food—close contact in markets between more than the odd sting were chemicals are thin at the best of times. Wang Baorong,
live specimens and merchants may have that might kill their bees. a beekeeper in Yunnan, normally makes
helped the coronavirus to leap from animal about 1,000 yuan ($140) a month, about av-
to human. But the new rules do not prevent Pesticides have long plagued China’s erage for a rural household in the poor
trappers and breeders from selling animal honey-making industry, which is by far the southern province. “Beekeepers have to
parts for use in tcm. world’s largest. This year, however, co- rely on heaven to eat,” he says.
There is huge demand for it, fuelled by vid-19 has been a bigger headache for the
the government’s health-insurance country’s 250,000 beekeepers, who pro- Some may be able to supplement their
schemes which cover some tcm remedies. duce around one-quarter of the global sup- income by turning to a growth industry for
Spending on tcm accounts for 40% of Chi- ply. Many of them are itinerant, moving owners of bees: pollinating farmers’ crops.
na’s drug market, according to analysts at their colonies around the country on lor- In parts of China wild bee populations have
Jefferies, a bank. Nearly 15% of China’s hos- ries in search of pollen and nectar. For been falling because of pesticide use, cli-
pitals specialise in traditional treatments. many days, restrictions imposed to curb mate change and diseases such as de-
Of more than 8.4m hospital beds in 2018, the epidemic made this difficult. formed-wing virus, forcing farmers to pol-
1.2m were in such facilities. There are more linate by hand. It is a labour-intensive
than 700,000 people who practise tradi- The average honey bee flies for more process and results in lower yields.
tional medicine or dispense it. than 1,500km in her lifetime. Many of Chi- (Around one-third of China’s pear trees are
China’s leaders support this partly for na’s beekeepers travel about twice that dis- pollinated in this way.) But Ms Zhang says
reasons of national and cultural pride. tcm tance in a season, criss-crossing the west- that regions where demand for these ser-
has ancient origins, drawing on treatises ern and southern plains. But late in January vices is highest, such as Xinjiang in the far
dating back 2,000 years or more. President local governments began to limit people’s west and Inner Mongolia in the far north,
Xi Jinping has been particularly keen to movements. Many keepers who had taken are too far away to make it worthwhile for
promote such pride and redefine the Com- advantage of the cold weather, when bees her family to travel there.
munist Party as an embodiment of ancient huddle in their hives, to leave their colo-
wisdom. China must “adhere to using Chi- nies and visit relatives, found themselves The economy is slowly recovering. Tra-
nese medicine alongside Western medi- stuck. They were unable to return to take vel is getting easier. But for itinerant bee-
cine” in the fight against the coronavirus, their bees on the road. Those united with keepers it is too late to catch the early
he said last month. blooms of spring. Ms Zhang grumbles that
Officials do not say that traditional rem- Back when the bees were busy life even before covid-19 was “mediocre”—
edies can cure covid-19. But they do claim not helped by her father’s poor health. “We
that tcm can reduce death rates by prevent- must practise the spirit of the bees, live and
ing patients with mild or moderate symp- learn, keep busy and grow old,” she says. 7
toms from developing more serious ones.
They also say that tcm can speed up recov-
ery. A website set up by China Daily, a state
newspaper, called “Fighting covid-19 the
Chinese way”, says that tcm can “remove
the trash which causes illness”, leaving the
virus “no room to survive”.
tcm enjoys some cover from the World
Health Organisation. Last month the who
deleted advice it had posted on its website
saying that herbal remedies were not effec-
tive against the coronavirus and might be
harmful. It said the statement it had issued
was too “broad”. In a report published in
2014 it said that traditional medicine was
“an important and often underestimated”
resource and that such remedies, if of “pro-
ven quality, safety and efficacy”, could help
plug gaps in health-care provision. That,
however, would rule out much tcm. 7

The Economist April 11th 2020 China 33

Chaguan A window almost closed

A Chinese film-maker is reduced to helping individual strangers download his latest documentary

If independent documentary-makers in China are squeezed sighs. “There are still many corrupt officials.” Mr Jiang’s film has
much harder by the authorities, their plight will soon be a ques- no voice-over. The contrast is striking with state television docu-
tion fit for philosophers. Namely, if a film has no viewers, in what mentaries featuring bossy, relentless narrators declaiming upbeat
meaningful sense does it exist? slogans. This is film-making that is content to show, not tell.

For some years now, the makers of non-fiction films have un- Reached by telephone, Mr Jiang insists that he has cautious,
derstood that, without the letter of approval from censors that they limited ambitions for his work. Many of those who appear in his
call a “dragon seal”, their work will reach only a handful of hardy new film are his own relatives, for he was born in the mountains of
Chinese fans—perhaps via a semi-underground film screening at rural Hunan in1985. China’s millions of pneumoconiosis sufferers
a bar near a university, or in a small festival sponsored by a foreign need more help from health officials, he says. “I want more people
diplomatic mission. Losing money is taken for granted. to know about them. To see them.” A film-maker since 2009, he
supports his documentary projects by videoing weddings and
Even so, documentary enthusiasts were shocked to realise in commercial events. He did not consider entering this film for a
late March that a respected film-maker was quietly distributing his foreign festival, as too much attention can be troublesome. Mr
latest work by sending individual strangers instructions on how to Jiang did not ask censors to approve the work, knowing that they
get it from the internet, without paying. These download links ar- would either say no, or demand a long list of edits. “I’d have to turn
rived as private messages from the director, Jiang Nengjie, to film- my film upside down, and I don’t want that.”
lovers who clicked a button marked “Want to watch” when reading
about his new project on Douban, a leading review site. Mr Jiang’s Some Chinese film-promoters have given up all ambitions, as
documentary is called “Miners, the Horsekeeper and Pneumoco- political controls tighten remorselessly under President Xi Jin-
niosis”. It is about coal workers afflicted with a fatal lung disease. ping. In January the China International Film Festival, an influen-
Shot over eight years, the film takes viewers down illegal mine tial event first staged in the eastern city of Nanjing in 2003, an-
shafts in the central province of Hunan, inside shabby rural clinics nounced it was suspending operations indefinitely. Organisers
and, finally, into a village home where children watch their father called it impossible to hold a truly independent film festival, after
fighting to breathe, like a man drowning on dry land. The work has 20 years of relative openness.
sparked a revealing debate. There have been scattered attacks from
nationalists on Weibo, a microblog platform, one of whom de- Karin Chien co-founded dGenerate, a film-distribution com-
manded Mr Jiang’s arrest for his “enraging” refusal to show China’s pany, to bring uncensored Chinese works to worldwide audiences.
good side. Overall the film has a high rating from Douban’s users. A “That was in 2008, and we didn’t know then it was a golden age,”
supporter earned 40,000 likes and 2,000 comments with a post on explains Ms Chien. Technology helped. She watched hundreds of
Weibo expressing shock that Mr Jiang was giving work away free. independent films emerge from China as artists, poets and other
“Shit, independent film-makers have it so rough!” it said. Some us- writers picked up digital video-cameras. She recalls the ingenuity
ers sent Mr Jiang the cash equivalent of a cinema ticket. of the Beijing Queer Film Festival which in 2014 staged a screening-
on-rails by telling festival-goers to take a specific train, to bring
This is not dissident art. The documentary offers no political laptops and sit in the same carriage. There, memory sticks were
opinions about the Communist Party. It eavesdrops on miners handed out so all could watch the opening film together. Since
who talk of the authorities with wary cynicism and resignation, about 2014, alas, she has seen a steady stream of film-makers emi-
rather than love or conspicuous dislike. The state is mostly con- grate from China. Some others surrender to commercial forces.
spicuous by its absence. To avoid unseen inspectors, miners move
at night and dig illegal pits on mountain tops in weather too cold Letting the invisible be seen, and the voiceless be heard
for any official to brave. “Corruption cannot be solved,” a villager The power of documentaries to shake public opinion in modern
China has been shown more than once. In 1988 state television
broadcast “River Elegy”, a six-part call to embrace outside influ-
ences and break with stifling traditions. The questions it raised
were echoed by the protesters in Tiananmen Square the next year.
In 2015 “Under the Dome”, a scathing documentary about air pollu-
tion, was viewed online hundreds of millions of times and praised
by China’s new environment minister, before censors swooped. It
is hard to imagine either work being screened today.

Independent documentaries offer a sense of immediacy and of
bearing witness “on the spot”, says Kiki Tianqi Yu, a Chinese film-
maker who is a lecturer in London. Film–makers document his-
tory that the government will not, she adds. Those Chinese who
are likely to hear about and see non-approved documentaries are a
rather privileged bunch: university students, intellectuals, art-
lovers, urban professionals and the like. Mr Jiang’s new film lets
them hear a gruff ex-miner lament: “My poor little boy. I can’t die.
His life will be difficult if I die.” Soon after his 50th birthday
though, sensing that his end is near, he tells the camera, “I spat out
blood yesterday. Damn it.” Perhaps only a few thousand people in
China will see the film. But just for a moment, a father’s pain and
fear bridges the gulf that separates urbanites from poor villagers in
China, a horribly unequal society. Reason enough for art to exist. 7

34 Britain The Economist April 11th 2020

Also in this section
35 Labour’s new leader
36 Bagehot: Missing Boris

Covid-19 absence. He is chairing a daily meeting of
the “c-19” cabinet, which, aside from the
Patient number one prime minister and senior officials, is
made up of Rishi Sunak, the chancellor of
Covid-19 tests Britain’s prime minister, and its constitution the exchequer, Michael Gove, the cabinet
office minister, Matt Hancock, the health
After a week or so of sickness, during experimental treatments. Downing Street’s secretary, and Mr Raab. Those four run the
which they seemed to stabilise, pa- polite rejection of the offer allowed it to re- subcommittees on the economy, the wider
tients suffering from covid-19 often then iterate its support for the institution at the public sector and critical infrastructure,
take a turn for the worse. So it has been with centre of the effort to combat the disease: health and foreign relations. Much busi-
British politics. On April 5th, 13 days into a “We’re confident the prime minister is re- ness is done over Zoom, a videoconferenc-
new life of strict lockdown and a daily ceiving the best possible care from the Na- ing app, as Mr Gove is self-isolating at
rhythm of crisis meetings and press con- tional Health Service.” home after a member of his family fell ill.
ferences, Downing Street announced that So is Dominic Cummings, Mr Johnson’s se-
Boris Johnson had been hospitalised. The For every covid-19 patient who has so far nior aide, who has symptoms of the virus.
virus was attacking government itself. been discharged alive from critical care,
another is dead. Those who, like Mr John- Up to now, the government’s perfor-
The prime minister worked from his son, don’t require ventilation in their first mance has been mixed. Mr Johnson’s ap-
bed, but the following afternoon his condi- 24 hours have a much better chance of sur- proval ratings soared as the crisis hit Brit-
tion deteriorated. He was given oxygen vival. And Mr Johnson is somewhat youn- ain, in common with other leaders, in
treatment, and taken into an intensive care ger than the average patient: 55 compared evidence of the “rally round the flag” phe-
unit “as a precaution”. He relayed a mes- with 60, and, though overweight, with no nomenon that often occurs during crises.
sage that Dominic Raab, the foreign secre- underlying health problems. Yet as Derek Some aspects of the management of the
tary and first secretary of state, should de- Hill, professor of medical imaging science crisis are going well—the nhs has, for in-
putise for him “where necessary”. at University College London, says, “There stance, rapidly expanded places in inten-
is no doubt this turn of events means Boris sive care units, and the lockdown has
As The Economist went to press, his of- Johnson is extremely sick.” worked better than many had feared. But
fice said he was “stable overnight and re- the government has faced criticism for
mains in good spirits”. He has not been put Mr Raab now runs a war government moving too slowly in imposing social-dis-
on a ventilator. Donald Trump said he had from his desk in the Foreign Office. He said tancing measures and over its failure to im-
directed American drugs companies to the prime minister has left “very clear plement a widespread testing regime to
provide the prime minister’s doctors with plans” for running the government in his track the spread of the virus.

Divisions have appeared within the cab-
inet. There has been rivalry between Mr
Gove and Mr Hancock over who takes pre-1

The Economist April 11th 2020 Britain 35

2 cedence in the campaign to combat co- Labour’s new leader
vid-19, and on April 7th Mr Raab distanced
himself from a promise by Mr Hancock to Socialism with a barrister’s face
reach a target of 100,000 tests every day by
the end of the month, implying that Mr Sir Keir Starmer is a rare creature: a left-wing Labour leader who looks electable
Hancock would be held accountable if the
target is not met. George orwell’s lament in 1937 that so- lies from the shadow cabinet and drafted in
Disunity in government is never a good cialism is a magnet for “sandal-wearers sensible, more moderate types.
thing; in a time of crisis, when the leader is and bearded fruit-juice drinkers” has held
absent, it can be disastrous. And the gov- up well in recent years. Tony Blair, who Anneliese Dodds, the new shadow
ernment has a critical decision coming up. avoided mentioning the word, dragged an chancellor, is a former academic and mep.
By April 13th, ministers will need to de- unwilling Labour Party rightwards while Ed Miliband, a former party leader, is back
cide whether to extend or relax the initial wearing good suits; Michael Foot and Je- as shadow business secretary. Charlie Fal-
three-week lockdown. Chris Whitty, the remy Corbyn, the furthest-left leaders in coner, Mr Blair’s justice secretary, is the
chief medical officer, said there should be the past half-century, put the least effort shadow attorney-general. Lisa Nandy, one
no talk of relaxation until Britain is beyond into looking electable. of Sir Keir’s leadership rivals, is the new
the peak of the outbreak, but Mr Sunak is shadow foreign secretary; unlike Mr Cor-
known to be deeply worried about the Sir Keir Starmer, who succeeded Mr Cor- byn, she is a strong critic of Vladimir Putin.
speed with which the economy is shrink- byn on April 4th, may be a rare experiment Angela Rayner, who left school without
ing. Gus O’Donnell, a former cabinet secre- in recent history: a self-described socialist qualifications, is the new deputy leader;
tary, says the civil service will hanker for whom voters can picture in office. He has she is on the left but never fit in with Mr
the prime minister to return and wield his credible executive experience as Britain’s Corbyn’s gang. Rebecca Long-Bailey, Mr
authority. former public prosecutor. His dispatch- Corbyn’s favoured candidate, is shadow
Should Mr Johnson’s health worsen, the box interrogations as shadow Brexit secre- education secretary.
constitution could prove to be a problem. It tary outshone Mr Corbyn’s ramblings. He
makes no provision for a prime minister’s has good suits. Yet Sir Keir’s policies are well to the left.
long-term absence or death. The Cabinet He will retain manifesto pledges to rena-
Manual, a handbook for government last Voters can imagine Sir Keir as prime tionalise railways and utilities, to end priv-
updated in 2011, is silent on the issue. minister by a margin of 42% to 27%, ac- ate contracting in the public sector and to
Britain’s security state has sought to fill cording to Opinium, a pollster. The compa- increase taxes on top earners and compa-
the gaps left by the constitution. During the rable figures for Mr Corbyn in the 2019 elec- nies. He also wants to abolish university
cold war, the prime minister would ap- tion were 29% to 59%. tuition fees, scrap the current welfare re-
point “nuclear deputies” responsible for gime and place new constraints on military
retaliation if London were vaporised. The His task, says Neil Kinnock, Foot’s suc- intervention to prevent “illegal wars”.
practice was revived by Tony Blair after 9/11. cessor, is to prove the party is in “decent
Mr Raab will chair the National Security and sensible hands” by making a rapid The challenge for Sir Keir is enormous.
Council in the prime minister’s absence. break with Mr Corbyn’s regime. He has al- The party’s performance in last year’s elec-
Mr Johnson’s instructions to Britain’s nuc- ready made two moves designed to do that. tion was its worst since 1935. To get a work-
lear submarine fleet in case Britain is He has apologised to Jewish groups for the ing majority, it would need a swing of
wiped from the map—known as the letters anti-Semitism that thrived under his pre- around 10% at the next election, similar to
of last resort—will remain in force. decessor, and he has purged Mr Corbyn’s al- Mr Blair’s landslide victory in 1997. The
But the death of a prime minister in of- campaign will be a tricky one because the
fice, which has not happened since 1865, Labour’s bright new hope targets include a wide variety of seats—
would cause serious problems, according professional and manufacturing, north
Vernon Bogdanor, professor of history at and south, renters and homeowners, notes
King’s College London. Mr Raab’s title of Alan Wager of Kings College London.
first secretary of state is a largely honorific
indication of seniority and does not entitle The pandemic may heighten voters’ en-
him to claim the top job. A man with a rep- thusiasm for public services, which will be
utation for coldness in a parliamentary good for Labour. But it will also leave Brit-
party that favours collegiality, he would ain indebted, and thus present hard
not be a popular choice. choices on public spending. “Since 2010 La-
The queen appoints as prime minister bour has struggled to rebuild its reputation
whoever can carry the support of the House for economic competence, and the crisis
of Commons—normally the leader of the clearly doesn’t remove the need for us to
largest party. Conservative Party rules re- convince voters we can once again be
quire that the leader is elected by the mem- trusted to manage the economy,” says
bership. That would take too long, so a de- Spencer Livermore, who ran the party’s
cision would need to be made on whether election campaign in 2015.
the new prime minister should be chosen
by the cabinet or by a ballot of Conservative The party must take care not to appear
mps, which is how the party got its leaders opportunistic, warns Peter Mandelson, an
before 2001. Speed is of the essence, and the architect of Mr Blair’s centrist New Labour.
cabinet would be faster, but given the rival- Voters’ support for a more protective state
ries within it, hostilities might break out “should not be mistaken for a headlong
into the open. mps, along with the entire embrace of big-state socialism”, he cau-
nation, will be fervently hoping that it does tions. Sir Keir’s arrival may clarify whether
not come to that. 7 British voters shunned socialism because
of the policies, or their advocates. 7

36 Britain The Economist April 11th 2020

Bagehot Missing Boris

The illness of a man who once divided the nation has united it Rooms) and the weekly cabinet meeting.
His visibility has had the desired effect. Despite the lockdown
Boris johnson has always believed that history was not made
just by vast impersonal forces but by great men and women that has put Britons in effect under house arrest, in the past few
who change its course through their sheer talent and willpower. weeks they have rallied not just around the flag but around the per-
His admiration for Winston Churchill and Margaret Thatcher son of the prime minister, with more than 70% agreeing that he is
springs from this worldview; so did his decision to reject the belief doing a good job. The news that he has been brought down by the
widespread in the establishment that Britain’s destiny lay in the virus, at least for the moment, has had an even more powerful uni-
European Union and to lead the country out of it. fying effect. Neighbourhood social-media groups were full of mes-
sages praying for his life. That the illness of a man who once so di-
Just as Mr Johnson was fulfilling his ambition, with a recently vided the country has brought it together is a measure of how
acquired 87-seat majority in Parliament and grand plans to build a vulnerable Britons feel.
new one-nation Conservatism that might yet win him member-
ship of the great-men club, the vast impersonal forces hit back. On Mr Johnson’s illness is powerful evidence that nobody is safe:
March 27th Mr Johnson revealed that he had covid-19. On April 6th not the young, the middle-aged nor the healthy. The prime minis-
he went into intensive care. The government is in the hands of his ter belongs to a group well represented in critical care: men who
cabinet and the first secretary of state, Dominic Raab. Mr Johnson’s are over 50 and overweight (his promise to his girlfriend to lose a
Brexit plans have been sidelined in order to fight a rearguard ac- few pounds and practise yoga seems to have been abandoned). But
tion against a disease that is locking down the country and tanking he has always prided himself on his robustness and endurance. He
the economy. The prime minister who wanted to be defined by is rarely ill; indeed people who have worked closely with him say
Brexit will be defined by covid-19. he regards illness as a sign of personal weakness. He is built like a
rugby player and enjoys the rough-and-tumble of physical sports;
Mr Johnson’s condition is all the more shocking because he is he invented an idiosyncratic version of tug-of-war that involves
normally such a force of nature. He has been blessed (or cursed) pulling the other team into a swimming pool. He is a vigorous if ec-
with Falstaffian appetites: witness his two marriages and a third in centric tennis player and when mayor, would cycle around the
the offing; his five acknowledged children and another on the way; city, though being prime minister put paid to that.
his string of mistresses; his enthusiasm for food, wine and, of
course, cake; the mound of books and articles that he has produced His illness is also an alarming proof of how vulnerable the ma-
while also pursuing his political career; and his extraordinary abil- chinery of government is. Mr Raab is struggling to project his au-
ity to light up a room. He has also been an omnipresent figure in thority. There are long-simmering rivalries between cabinet min-
British public life for several decades: editor of the Spectator, star isters and tensions between the Department of Health and the
columnist on the Daily Telegraph, mayor of London, principal Treasury about how much longer Britain can keep the lockdown in
Brexiteer, foreign secretary and tormentor-in-chief of his prede- place. The decision by Michael Gove, the cabinet-office minister,
cessor, Theresa May, until he finally got the job he always wanted. to self-isolate because a member of his family has come down with
the virus is yet another blow to the government: he is an experi-
He had thrown himself into the role of wartime prime minister enced and competent minister who is central to the campaign
with his usual brio. He has been broadcasting to keep up morale, against covid-19.
driving the government machine and taking the big decisions. He
led daily press briefings, visited hospitals and worked15-hour days Number 10 is struggling to cope with the effects of the virus and
fuelled by vegan food. Even after he succumbed to the virus, and the difficulty of running government by video. Mr Johnson’s two
was forced to retreat into the flat above Number 11 Downing Street leading advisers, Dominic Cummings and Eddie Lister, are both
to self-isolate, he continued to work long hours, chairing the daily working from home. And although Mr Raab has responsibility to
Cobra meetings (named after one of the Cabinet Office Briefing take decisions while Mr Johnson is ill, if the prime minister dies, it
is not clear how another one is to be appointed. The Cabinet Office
manual sets out what the procedure should be if the monarch dies,
but has nothing to say about the demise of the prime minister.
When, God willing, Mr Johnson is back in the job, that gaping
omission will need to be remedied.

Together, afraid
Sometimes nations are brought together by joyful moments, like
the 2012 Olympics or the queen’s Diamond Jubilee, when Britain
united around a common sense of patriotism and hope. Some-
times they are frightening ones, when the country is gripped by a
common sense of vulnerability and anxiety. The second world war,
to which the queen referred in a speech to the nation on April 5th,
was one of those. So is this.

The sense of despondency that currently hangs over the nation
may soon be dispelled. Mr Johnson was probably transferred to in-
tensive care earlier than another patient would have been out of an
abundance of caution. He has not, according to Number 10, been
put on a ventilator. News that he is improving, if it comes, will
lighten the public mood just as news of his illness has darkened it.
Britons are praying that it comes quickly. 7

Loosening up

Special report South Korea The Economist April 11th 2020 3

Loosening up

South Korean society is going through profound social and economic change.
But the transformation is still fragile, and covid-19 is not helping, says Lena Schipper

The tension between traditional top-down economic and so- around the world now seek to learn from the South Korean ap-
cial decision-making and a more individualistic, bottom-up proach to curbing covid-19.
approach has been apparent in South Korea since it democratised
more than three decades ago. In the past two months, however, On the face of it these two episodes tell two very different sto-
two things have happened that have highlighted this tension. ries about the country. The remarkable response to the virus looks
like a lesson in the benefits of the old Korea—a strong, bossy state
On February 10th, in what feels now like a different era, the combined with individual willingness to compromise and show
world looked on in amazement as “Parasite”, a rip-roaring, icono- self-discipline for the benefit of society as a whole. When the gov-
clastic South Korean film, won the Oscar for best picture. It was the ernment suggested that people stay at home, there was widespread
first non-English-language movie ever to capture that honour. The compliance from the start and little grumbling—unlike in Ameri-
director, Bong Joon-ho, won best director, too. The success of ca and in many European countries. Though the government nev-
“Parasite” is a sign of a flourishing arts scene in South Korea, and a er mandated social isolation, it made use of expansive powers in
potent symbol more broadly of the loosening of social and eco- tracing infections, sifting through people’s mobile-phone data
nomic norms there. It is a brutal and darkly comic farce about class and credit-card records without a warrant, something it was al-
war. Daggers and dingy basements feature prominently. Asked lowed to do following legal changes prompted by the outbreak of
after the ceremony how he was able to make such a film, Mr Bong mers, another coronavirus, that killed 38 people in 2015.
replied, in English:“Because I’m a fucking weirdo.”
But even here, it feels like something has changed. People were
Yet even as Mr Bong, the weirdo who was until recently on a happy to follow the government’s plan to beat the pandemic partly
government blacklist, was being invited to the presidential palace because of the transparency with which it was communicated.
to celebrate, the novel coronavirus was working its way through That marks a sharp contrast even with 2014, when a ferry full of
South Korea. Suddenly, the country’s impassioned debate about schoolchildren sank and a bungled official response infuriated the
the clash between individual freedom and social obligation was public. The government then sought to muzzle those who com-
put on hold. The pandemic clearly demanded a strong, competent plained. The protests that followed, now known as the “candle-
state response. It also required individuals to sacrifice for the com- light movement”, prompted South Koreans to question their rela-
mon good. Both Koreans and their government responded well to tionship with authority and forced officials to become more
the crisis. Testing was widespread. The contacts of infected people responsive. The president at the time, Park Geun-hye, was im-
were aggressively traced. Official recommendations to wash peached in 2016 and imprisoned for corruption in 2018. When
hands and practise social distancing were followed. Governments Moon Jae-in took over from Ms Park, he promised to create a “fair”1

4 Special report South Korea The Economist April 11th 2020

2 and “just” society, to make government more accountable and to flicts erupt, says Kim Joong-baeck of Kyung-hee University. “My fa-
end the corrupt practices which had contributed to her downfall. ther still believes in patriarchy and Confucianism and remembers
Parliamentary elections on April 15th, in which 300 seats in the poverty. I barely do, and my teenage son doesn’t at all. How are we
National Assembly are up for grabs, will show if South Koreans supposed to understand each other?” He believes that the country
think that Mr Moon has lived up to his promises, in fighting the is going through a stage of what sociologists call “anomie”, a mis-
pandemic and in other areas. His administration has had its own match between individual expectations and the guidance they re-
share of scandals and he has come under fire for initially down- ceive from society. “We’re living through this process of transfor-
playing the virus. Responding to a poll early in the outbreak, South mation, and nobody quite knows where it will lead.”
Koreans professed much more faith in the centre for disease con-
trol than in the president’s office. Economic change can be wrenching, too. Even before covid-19
Yet South Korea’s social transformation cuts deeper than poli- hit, the export-led model that powered South Korea’s economic
tics, and covid-19 is unlikely to halt it. The country’s arts scene and rise had come under scrutiny. Growth has slowed markedly: in
pop culture are just the most visible examples of the new model 2019 the economy grew at a rate of just 2%, the lowest in a decade.
Koreans are devising for themselves. In 2018 the country exported Competition from China and the stalling of globalisation have
more “cultural products” (which include music, television dramas hurt the chaebol, South Korea’s big conglomerates, which have
and films) than home appliances (such as televisions) for the first long been the engines of its economy.
time (see chart overleaf). The nature of those cultural exports is
changing, too. bts, the country’s—and the world’s—biggest boy The pandemic has already pummelled South Korea’s open
band, are much more interesting than many of their equally pretty economy. In the short term, it will be crucial to try to minimise the
peers. One recent album is based on the psychoanalysis of Carl damage from the inevitable recession. But once South Korea
Jung. “Parasite” itself is no cheesy k-drama; its plot cuts to the emerges from the virus-induced slump, it needs to get back to
heart of social divisions and inequality in South Korea and beyond. looking for new sources of growth. One place to look is its bur-
When covid-19 has receded, South Koreans will go back to chal- geoning startup scene. 7
lenging old structures and rigid expectations. Women are leading
the way. They have plenty to complain about. Among rich coun- New economic models
tries, South Korea is arguably the worst place to be a working wom-
an. Women still earn less than two-thirds of what men do. Their Another way to work
participation rate in the paid workforce lags that of men by 20
points. And they shoulder the vast bulk of unpaid labour in the A growing startup industry offers a glimpse of a different future
home—not only cooking but also tirelessly coaxing their children
to study for exams. Sexism is a huge problem. In 2018 two-fifths of Coupang, an e-commerce firm and South Korea’s most valu-
young women surveyed by the city of Seoul said they had suffered able startup, occupies the upper 20 floors of a skyscraper in
violence from a partner. In another survey, 70% of the women Jamsil, a district in southern Seoul. The lower floors are still used
polled said they had been sexually harassed at work. The gulf be- by affiliates of Hyundai, the country’s second-biggest conglomer-
tween what Korean men and women want from a marriage is so ate, whose engineering arm built and operates the building. Cou-
great that many women refuse to get hitched or have children. pang employees joke that it is easy to spot anyone who works for
South Korea has the world’s lowest fertility rate: the average num- Hyundai in the weekday-morning jostle for the lifts. Most workers
ber of children a woman can expect to have in her lifetime is 0.92. in the building are in classic startup attire of jeans and expensive
That probably will not change until men do. trainers: “The Hyundai guys are the ones in suits.”
Social transformation is not easy. When it happens fast, con-
The government hopes that companies such as Coupang will
RUSSIA eventually change more than just dress codes. Starting with the
“creative economy” initiative launched by the Park Geun-hye ad-
CHINA Korean GDP per person ministration in 2013, it has been pouring money into seed capital,
incubators and networking opportunities for budding entrepre-
Chongjin 2011$ prices, ’000 40 neurs. Last year it announced an extra 12trn won ($9.9bn) of ven-
South 30 ture-capital support by 2022. It is encouraging banks and other
NORTH large firms to do the same in a bid to diversify the economy away
Sinuiju KOREA 20 from its reliance on the chaebol. It has also co-opted those con-
glomerates into the strategy, encouraging them to invest their own
Pyongyang Hamhung 10 money, resulting in big chaebol such as Samsung and Hyundai
Nampo launching their own startup incubators. The government also
Wonsan North 0 makes it easy for small businesses to borrow money, guaranteeing
Demilitarised a large portion of bank loans. The interest differential for smaller
Zone 1950 75 2000 15 and larger companies is one of the smallest in the oecd.

Panmunjom Behind all this is an urgent need to preserve long-term growth.
South Korea grew rich thanks to an export-led model that priori-
Incheon Seoul tised large conglomerates and a handful of key manufacturing in-
dustries. But growth in exports and overall gdp has slowed to-
SOUTH wards the oecd average over the past decade, even though income
KOREA per person is still a third below the richest half of oecd countries.
Yellow Daejeon Productivity in the service sector, which is 60% of the economy, is
Daegu only half that in manufacturing. Small and medium-sized firms1

Sea Gwangju Busan J A P A N Kobe

Mokpo Hiroshima

200 km Jeju Fukuoka

Source: Maddison Project

The Economist April 11th 2020 Special report South Korea 5

2 are much less productive than large ones. Fixing that will require
structural changes. “The chaebol-led growth model is broken,” says
Randall Jones of Columbia University. “Improving productivity
means moving towards a more startuppy, digitalised model.”
If that is the long-term challenge, for now South Korea faces a
more immediate problem. The covid-19 pandemic is ravaging the
economy, domestically and around the world. The current global
turmoil is extremely worrying for a country so dependent on trade.
How big the impact will be will depend on how long the pandemic
lasts and what governments do to counter the economic effects,
says Park Sangin of Seoul National University. But there is no
doubt that it will be very bad indeed.

Won loss
The short-term fallout has already rattled the South Korean econ-

omy. In March the stockmarket and the value of the won against

the dollar slumped to their lowest levels since 2009, in the tail-end

of the global financial crisis. The country’s airlines had 92% fewer

customers during the second week of March compared with the

same period in 2019 and are unlikely to recover them soon, given

tightening travel restrictions around the world. Consumer confi-

dence has plummeted; shops, bars and restaurants are expecting a

drop in sales of up to 80% for the first quarter of 2020. Many are al-

ready struggling to pay rent. A “nice landlord” movement has gath-

ered pace across the country as building owners have lowered or

waived rents for struggling shopkeepers, hoping to be reimbursed

by the government. Delivery companies like Coupang, by contrast,

have struggled to keep up as demand for home deliveries has

soared by nearly 50%.

Factory closures in China, where industrial output fell by more Startup city

than 20% in January and February following the covid-19 outbreak,

have had knock-on effects on Korean firms that depend on parts

from there. Hyundai, which makes more than half the country’s

cars, saw a13% drop in global sales in February compared with 2019 work, the shock from the virus may be only temporary, says Mr

and disruption to the production of around 120,000 vehicles as Park. Christophe André of the oecd reckons that South Korea could

Chinese suppliers shuttered their factories. The situation is likely emerge more quickly from the slump than other economies be-

to grow worse as the virus closes factories elsewhere, though the cause it has good economic fundamentals and the fiscal space to

slow resumption of production in China, where the epidemic has finance its stimulus plans. But he worries that the pandemic will

levelled off for now, may improve things. strengthen existing hostility to globalisation around the world.

Supply-chain disruptions and infections have also hit the mak- That could spell long-term damage for its export-heavy economy.

ers of semiconductors, smartphones and display panels. Samsung When South Korea makes it through the pandemic, it faces

and lg have had to pause production on several occasions during daunting long-term challenges. The country is ageing rapidly. The

the outbreak as cases were discovered at their plants. Since the fac- working-age population is declining, and the government now be-

tories are designed to run round the clock, that is likely to hit their lieves that the total population may already have peaked, correct-

sales volumes for the year. ing projections made as late as 2019 that this would not happen for

What about the longer term? Much will depend on what gov- another ten years. South Korea has the highest rate of relative pov-

ernments do, both in South Korea and elsewhere. Historically, the erty among old people in the oecd, with 44% of over-65-year-olds

country has rebounded quickly from eco- living on less than half the median income

nomic shocks. After the Asian financial in 2017 (the equivalent rate in Japan, which

meltdown of 1997, it took just two years for faces similar challenges, is less than 20%).
gdp to return to its pre-crisis peak. The Song and dance, not wash and dry
At current projections, the reserves of the

country also emerged more quickly than South Korea, exports, $bn national pension fund, whose payouts are

others from the global financial crisis of 15 hardly generous as it stands, may be ex-
2008, because its banks were in better hausted within the next three decades. It

shape than a decade before and because the 12 does not help that many firms press work-

government responded aggressively, with Home appliances* 9 ers to retire in their mid-50s, long before
a mix of fiscal and monetary stimulus. they are ready.

It is responding to the covid-19 outbreak Cultural exports† 6 To expand or even sustain existing lev-
equally vigorously. Among other mea- els of welfare provision, the country will
sures, the government launched a stimu-
3 have to find ways of improving growth

lus package of 11.7trn won, a financing plan 2013 14 0 rates. Unlike in previous decades, counting
worth 100trn won to help small businesses 15 16 17 18 on the chaebol is unlikely to be enough. Ex-
and a fund to stabilise bond and equity Source: South Korean ports still account for over two-fifths of
markets, similar to one it set up to cope Ministry of Trade, *Includes televisions, refrigerators, washing gdp and are dominated by the chaebol, with
with the crisis of 2008. If these measures Industry and Energy machines and others †Includes music, semiconductors, cars and smartphones1
broadcasting, films and others

6 Special report South Korea The Economist April 11th 2020

2 the most important products for export. However, all of these are Men and women
vulnerable both to competition from China and to new trade barri-
ers, if the world turns away from globalisation. Last year exports Battle lines
shrank by more than 10% on the previous year. So as well as mak-
ing better use of female talent, South Korea needs in the long run to Women have taken their fight against misogyny into the open
improve the productivity of the small and medium-sized firms
that employ close to 90% of workers. Enterprising women are everywhere in South Korean film and
Can the startup economy deliver? Like everything in South Ko- television. In “The Handmaiden”, a film by Park Chan-wook,
rea, its development has been swift. When Coupang was founded two women team up to take revenge on their male tormentors and
in 2010, the country barely had a startup industry. Just five years eventually elope as a couple. “Crash-landing On You”, a television
ago, there were only 80 startups that had raised more than $1m series that had the country glued to its screens this year, features a
from investors. Today there are nearly 700, including around 200 chaebol heiress who cuts ties with her family to set up her own
that have raised more than $10m and ten “unicorns” valued at business and ends up romancing a North Korean pianist. The driv-
more than $1bn (Coupang is valued at $9bn). In 2019 investors ing force in “Parasite” is the twenty-something daughter of a poor
poured more than 4trn won ($3.3bn) of venture capital into South family who is fed up with life in a dingy basement.
Korean startups, triple the amount they invested in 2013.
Enterprising women are increasingly visible in the real Korea,
Startup upstarts too. More young women are earning university degrees than men.
The rapid development of the industry has transformed Seoul, the More than 70% of women between 25 and 34 are active in the work-
capital, where it is concentrated. Teheran-ro in Gangnam, just force. Young women are far more vocal than previous generations
down the road from Coupang’s office in Jamsil, has turned from a in challenging the conservative social mores that hold them back.
concrete desert into a bustle of co-working spaces and expensive
coffee shops. Smaller clusters have sprung up all around town. Under the post-war dictatorship, South Korea’s growth model
“When I moved back from America in 2013, there was very little go- relied on a clear division of labour: men did military service and
ing on,” recalls Lim Jung-wook, a venture capitalist. “Now I bump went out to work, women raised the children and did the house-
into a founder every time I go to lunch.” The scene is still small, but work. What paid work women did tended to be subordinate to
it is growing. Venture-capital investment accounted for 0.36% of men’s, serving, for instance, to pay for their brothers’ education.
gdp in 2018, according to data from the Korea Venture Capital As- Adverts often stated that applicants must have completed military
sociation, higher than the estimate for China (0.26%) but trailing service, effectively excluding women. Such rules were abolished
the United States and Israel, at 0.64% and 1.75%. as part of the democratisation of the late1980s. And Korean women
are now far too well-educated to submit meekly to second-class
Starting your own business is increasingly seen as an alterna- status. But they still face barriers in the labour market, and are ex-
tive to a job at a chaebol or in the civil service. “Ten years ago no Ko- pected to do the bulk of housework and child care. Many are ex-
rean mother would have wanted her child to set up a startup,” says tremely unhappy about this. A rising number are opting out of
Nathan Millard of g3 Partners, a consulting firm. “That has marriage and motherhood entirely.
changed.” Partly, that is because there are now many prominent
examples of entrepreneurs who have made serious money. Jung Se-young and Baeck Hana, two twenty-something women1

Coupang’s founder, Bom Kim, became a billionaire in 2018 de- Difficult Korea path
spite nagging questions about the company’s profitability. The net
worth of Bang Si-hyuk, the bookish founder of Big Hit Entertain- Glass-ceiling index, 29 OECD countries
ment, the production company behind bts, is estimated at nearly
$800m. Such role models may encourage others who wish to do GMAT exams taken by women, % of total, 2018-19 40
their own thing rather than spending decades scaling the hierar- 20
chy of a big company. Japan OECD average South Korea 0

For now, startups are a long way from replacing the chaebol as Finland
the engine of growth. Their share of the economy remains tiny: the
total of venture capital that flowed into the industry in 2019 was Gender wage gap*, %, 2018 or latest 40
just over half of Samsung Electronics’ profit in the final quarter of 20
the year (and Samsung had a bad year). But startups do not need to South Korea OECD average 0
replace conglomerates to boost growth. Mr Jones hopes that they
can spread some of their attitudes—to innovation, and to digital Belgium
technology—to more traditional parts of the service sector, im-
proving productivity across the board. Women on company boards, % of total seats, 2019 40

In a small way, that is already happening. Fabrictime, a startup 20
run by two young women out of Dongdaemun fashion market in
eastern Seoul, uses an online video platform to showcase fabrics 0
produced in the market to international designers, opening up a
global market to fabric wholesalers whose marketing budget South Korea OECD average Iceland
would never previously have allowed expansion outside Korea.
Sources: European Institute for Gender Equality; Eurostat; MSCI ESG Research; *Male minus female wages,
However, the pandemic may put a dampener on the scene’s GMAC; ILO; Inter-Parliamentary Union; OECD; national statistics; The Economist divided by male wages
growth. Past experience suggests that economic crises tend to pro-
mote consolidation. This is because large, cash-rich businesses
(such as the chaebol) are more likely to survive. Even if South Korea
avoids a long slump, the pandemic may entrench the economic
structure which the country was just beginning to challenge. And
it is not just economic change that is under threat. 7

The Economist April 11th 2020 Special report South Korea 7

2 who live on their own in Seoul, are a case in point. Last year they set 77% in 2015 for those aged 25-29, and from
up a YouTube channel about single living after meeting at a femi-
nist discussion group. They regale their 40,000 subscribers and Only 2% of 7% to 38% for those aged 30-34. That brings
tens of thousands more casual viewers with tales of blissful holi- South Korea in line with many European
days free of the obligation to cook for a roomful of male family
members. They also offer practical advice for living a happy and babies are born countries and Japan.
successful single life, including investment advice and budgeting out of wedlock, The expectations placed on a South Ko-
tips for solo living in Seoul’s expensive housing market. compared with
The two women are part of a wave of feminist activism that has 40% on average rean wife are burdensome. She faces in-
swept South Korea. In early 2018 a state prosecutor, inspired by the tense pressure to look after her husband’s
global #MeToo movement, spoke out on national television about extended family, deferring to her mother-
being sexually assaulted by one of her bosses. Others followed her
lead, resulting in cases against several high-profile men, including across the OECD in-law and preparing endless snacks. And
a theatre director and a provincial governor. Since then tens of it is still taboo to have a child unless mar-
thousands of women have taken to the streets and to the internet
to protest against sexual harassment, illegal spycam videos and ried. Only 2% of Korean babies are born out
the country’s restrictive abortion laws. More radical ones like Ms
Jung and Ms Baeck have cut their hair, thrown away their make-up of wedlock, compared with 40% on average across the oecd. “Even
and sworn off relationships with men.
though people’s lives have changed a lot, the traditional idea of
Toute seule in Seoul
Ditching make-up is still a fringe position, but the reluctance to what marriage will be like has not,” says Lee Do-hoon of Yonsei
marry is not. In 2018 only 44% of women surveyed still felt that it
was necessary for them to tie the knot one day, down from 68% in University. “That is stopping them from getting married in the first
1998. (Some 53% of men in 2018 still believed it necessary.) The per-
centage of women who are not married rose from 30% in 1995 to place.” Growing up in a conservative part of the country, Ms Jung

remembers being appalled as a teenager by how poorly her moth-

er, a housewife, was treated by other relatives. “I always knew I

didn’t want to end up like that,” she says.

But the battle against misogyny starts much earlier. “The prob-

lem is that nobody takes you seriously,” says Kim Na-yoon, a 17-

year-old who says she was sexually abused by a group of boys at

school and treated dismissively when she reported the incident.

“Everyone said it was my fault because I seduced them with my

mature body and sexy clothes,” she says. “The male police officer

they sent to take my statement asked why I didn’t just play it cool.” 1

K-pop’s intellectuals

The world’s most successful boy band make perfect posterboys for the new Korea

In a small restaurant in a quiet back- and developing their own image. to the heart of current changes in South
street in Seoul’s Gangnam district, the That has led them down lyrical paths Korea. Murray Stein, whose book about
walls and part of the ceiling are covered Jung inspired the album, likes to think of
in posters, postcards and key rings. On previously unseen in k-pop. “Dionysus”, the Greek god as a “loosener”. Dionysus
one shelf sits an enormous pyramid of the final track of “Map of the soul: perso- forces his followers to abandon rigid
coffee-cup sleeves. All the decorations na”, an album inspired by the theories of patterns of thought or behaviour that
show members of bts, South Korea’s Carl Jung, a Swiss psychoanalyst, which threaten to thwart their development.
most successful k-pop act and the high- topped charts all over the world in 2019,
est-grossing boy band in the world. They celebrates the creative potential of intoxi- Rather than put fans off, the public
are gifts from fans around the world for cation. The song, named for the Greek god soul-searching and the references to Greek
whom the restaurant, where the band of wine and other sensual pleasures, cuts mythology and psychoanalysis have
used to eat before they were famous, has struck a chord in a way that no previous
become a site of pilgrimage. k-pop act has ever managed. In 2019 bts
were the highest-paid boy band in the
So far, so unsurprising. Teenagers world, selling out stadiums from Seoul to
have projected their dreams onto k-pop São Paulo. Their latest album topped the
idols for years. But bts are not your charts not just in South Korea but also in
average k-pop band. Although their Britain and America. “The band’s story is
output has all the trappings of the very compelling,” says Hong Seok-kyeong
genre—slick production, perfectly cho- of Seoul National University. “Just these
reographed dance routines, rap inter- seven ordinary boys who grow together.”
ludes and ever-unconfirmed rumours
about band members’ relationships— Contrary to common narratives in the
they do not conform to the stereotype of West, the South Korean government’s
the flawless, manufactured idols who are efforts to promote Korean culture have had
expected to serve as blank screens for little to do with this success, says Ms Hong.
fans’ projections. Their producer, a “Western observers still find it hard to
graduate in aesthetics who set up his accept that a small east Asian country
production company after years of work- could generate this amount of cultural
ing as a songwriter, has given them influence without a five-year plan from
plenty of leeway in writing their songs the government.” But that is precisely what
bts appear to have done.

8 Special report South Korea The Economist April 11th 2020

retailer, says a previous employer explained a decision not to pro-

mote her by saying that she could always quit and live with her

husband whereas her male competitor had to support a family.

Coming back to the same or a similar job after maternity leave is

hard. As a result, there are still too many well-educated women

whose potential is being wasted. Improving their situation is a

goal in itself. It has also become vital for achieving the govern-

ment’s most pressing aim: generating enough growth to sustain a

rapidly ageing country.

Not everyone is happy to hear women loudly asking for more.

“There were problems with gender inequality in the past but those

feminists are all about getting advantages for women at the ex-

pense of men,” says Oh Serabi, a female writer and activist of an

older generation. “Women should work alongside men to make

society better, not fight them.” Some young men argue that it is

they who get the short straw. Women are exempt from military ser-

vice, which is universal and gruelling for men. Some men feel

blamed for structures they did not create. “We didn’t ask for the pa-

triarchy,” says Moon Sung-ho, who works with Ms Oh, “It’s unfair

of the feminists to target us just because we are men.”

Men’s attitudes have not caught up with women’s demands.

When men marry, they have more traditional expectations of gen-

der roles than women. Even in families where both partners work,

women spend more than three hours a day on housework and

Confronting the spycam problem child care compared with only half an hour for men. Men spend

nine hours a day at the office, against seven hours for women.

To many young women, change still feels frustratingly slow.

But the fact that inequality is now being openly discussed is pro-
2 Ms Kim says she only realised she had not been at fault when gress in itself, says Kim Ji-Yoon, a political talk-show host. “The
she met Yang Ji-hye, a bubbly 22-year-old who heads up a group of single most important achievement of the past couple of years is
young women battling sexism in schools. To Ms Yang, a big part of that these issues are now on the agenda.” It is becoming easier to
the problem is a lack of education about sex and equality. “Sex make different choices, says Ms Jung. “The influence of feminism
among teenagers is considered taboo, and not being able to talk is increasing,” she says. “Young people no longer want these con-
freely about it gives people unrealistic expectations.” Government servative traditions, and women are free to reject them.” That in-
guidelines on sex education in high schools still suggest pupils be creasing sense of possibility is not confined to gender roles. It is
taught that women should focus on their appearance and men on also making itself felt in politics. 7
making money to attract partners, and that a man who spends

money on a date may “naturally” expect sexual favours in return.

Gay sex or transgender rights are not even mentioned. Ms Kim’s Politics
middle-school sex education consisted of anti-abortion videos.

Activists focus less on the labour market. Many Korean women

A flickering legacyappreciate the government’s efforts to improve child-care provi-
sion and parental-leave arrangements. But some feminists decry

the motive they say underpins such policies. “They’re still trying to

push us into getting married and having babies,” says Ms Baeck.

Over the past 20 years the government has rapidly expanded

child-care provision. South Korea now spends about 1% of gdp on South Koreans are dissatisfied with the pace of political change
child care for very young children. Within the oecd club of rich
countries, only France and the Scandinavian countries spend On a windswept pier in Mokpo on the far south-western coast
more. Thanks to those generous state subsidies, the median dual- of South Korea sits the rusting hull of a ferry. It is what remains

income family with two children aged two and three spends just of the Sewol, which sank in 2014 on its way to the island of Jeju. Yel-

3% of income on child care, less than a tenth of the figure in Britain low ribbons still cover the gates to the pier, along with pictures of

or America. Parental leave allowances have also been expanded, the 304 people, mostly schoolchildren, who died in the disaster.

including for fathers (though take-up remains low). The wreck has become a symbol of how corruption and negli-

So a lack of affordable child care is probably not the main rea- gence by state institutions can fail citizens. The Sewol was over-

son why Korean women languish in the job market. The average loaded when it sank. Dangerous modifications had affected its sta-

woman still makes two-thirds of the salary of the average man and bility. Corrupt regulators had allowed it to sail anyway. The crew

is given fewer opportunities to advance. Informal arrangements to abandoned ship while most passengers were still on board. Most

limit the number of female employees persist in some companies; survivors were saved by private vessels rather than the coast guard,

several banks were recently fined for illegally changing the test whose officials seemed more concerned with keeping up appear-

scores of job candidates to ensure more men were hired. ances to superiors than saving lives. The then president, Park

Most discrimination is more subtle. Many bosses believe that Geun-hye, did not appear in public for hours after the ship began to

men’s jobs are more important than women’s because, they as- sink and seemed ill-informed about what had happened. She was

sume, men are the primary breadwinners. Julian Han, who man- later found to have encouraged the national intelligence service to

ages the homewares division at Lotte Mart, the country’s biggest keep tabs on people who spoke up about the official response. 1

The Economist April 11th 2020 Special report South Korea 9

2 Protests which began in the wake of the will probably mean fewer seats for Mr
tragedy eventually led to Ms Park’s im- No babies, baby
Moon’s Minjoo party and United Future,

peachment, criminal prosecution and im- South Korea, population forecast* the main conservative opposition party
prisonment. They became known as “the % of total population, by age group
(though both are looking for ways around

candlelight movement” and prompted a 80 the rules, using “satellite parties”).
fundamental reassessment of the relation- That may go some way towards break-

ship between citizens and the state, for the 15-64 ing the deadlock between the two major
first time since pro-democracy protesters 60 parties, as they will have to include a wider

brought down the military dictatorship in variety of views to build coalitions. Though

the 1980s. They also prompted a drive to re- 40 it probably won’t fix the partisan polarisa-

form the political system. Changes to the tion overnight, it may help.

electoral law designed to improve the 65+ 20 What of the relationship between citi-
chances of smaller parties were passed in 0-14 zens and politicians? Mr Moon was swept
December and will apply for the first time
into office on a tide of hope that the politi-
0 cal class would become less distant from
in the parliamentary election on April 15th.

The tragedy of the Sewol made South Ko- 2020 30 40 50 60 67 ordinary people. The former democracy ac-

reans question their relationship with au- Source: Korean Statistical Information Service *Median growth tivist and human-rights lawyer cultivated a

thority. Many were particularly appalled down-to-earth image, eating cafeteria

that the good behaviour of the children, lunches and going for iced coffee with his

who largely followed orders from the ship’s crew and their teach- aides. He promised to lead a government that was more responsive

ers to stay put as the ferry sank, may have played a role in causing to people’s demands. He vowed to tackle corruption, inequality

their deaths. Kim Hee-ok, who has worked with victims’ families, and the nepotism of the university admissions system, as well as

says the sinking was a moment of realisation. “That these parents aiming for de-escalation with North Korea.

could just lose their children, just like that—it showed how little Three years on, the Moon government’s plan to be less haughty

responsibility the state actually takes for people’s lives.” than its predecessor is looking shaky. In autumn 2019 the justice

The aftermath of the Sewol sinking marked the moment of poli- minister was forced to resign after just weeks in office over a nepo-1

ticisation for many youngsters who are now trying to shake up

South Korea’s stagnant political scene by running for parliament.

Shin Min-joo, a 25-year-old with cropped hair and several ear

piercings, wanted to invite victims’ families to her university for a

talk. The university authorities refused on the grounds that it

would be “too political”. “I realised that if I wanted politics to be

different I had to become a part of it,” says Ms Shin. In the election

she is running as a candidate for the Basic Income Party, a small

outfit with a socially liberal agenda advocating feminism and gay

rights alongside its main platform.

Aux armes, citoyens Remembering the Sewol
Son Sol of the Minjung Party, another small progressive group, has
a more conservative hairstyle but similarly ambitious plans: she
wants to become the youngest member of the National Assembly.
“Parliament is full of kkondae,” she says, using a slang term for
haughty old people. “None of them care about us, so we young peo-
ple have to look out for ourselves.” The Sewol played a big role in
forming her political views, too, but she says her background also
motivated her. “I’m from the countryside, my parents didn’t go to
college—when I got to university in Seoul I realised how unusual
that was.” Young people, she says, are frustrated by privileged older
politicians’ claims that all that is needed for success is hard work.
“Until last year, I wouldn’t even have been allowed to run in an
election because I was too young.”

In the previous election, the average age of those elected to par-
liament was over 55; only three candidates who were younger than
40 managed to win seats even though more than a third of eligible
voters were between 19 and 39 years old. Generational change is
proceeding only slowly in the two main parties. It is still not clear
whether politicians like Ms Shin and Ms Sol will actually succeed
in shaking up the party system from within, as young people are
beginning to do in Taiwan, or whether they will continue to be
sidelined like their fellow progressives in Japan, who, while toler-
ated, remain for ever on the outside.

The policy environment for change from below has become
more favourable. The recent electoral reform strengthens propor-
tional-representation provisions that are designed to ensure that
smaller parties win seats roughly in line with their vote share. That

10 Special report South Korea The Economist April 11th 2020

2 tism scandal. Mr Moon supported him long after the allegations How might reunification play out? For years, South Koreans
became known and later only offered a mealy-mouthed apology. looked to East and West Germany as an example. An economically
To some, the president is also falling back into old patterns of and politically weak North Korea would be “absorbed” by the
dealing with the judicial authorities: prosecutors investigating his South. Refugees would surge southwards. The cost to southern
political allies, including the former justice minister and an asso- taxpayers would at first be huge. But there would be new opportu-
ciate accused of meddling in a mayoral election, found themselves nities for southern firms to build modern infrastructure up north.
reassigned to provincial outposts. “This kind of stuff is extremely
demoralising,” says one disappointed left-wing professor. “People Mr Moon’s government, however, favours a more gradual pro-
think you have a better chance in politics if you’re morally corrupt, cess. His “new northern policy” envisions a phased opening of
and if that’s how these guys behave then why should I be a good North Korea through the rebuilding of railways, pipelines and
citizen? It ruins social trust.” roads, intensifying trade links across north-east Asia. Eventually,
The election on April 15th will show whether South Koreans the two Koreas would move towards a federal system and reunifi-
consider Mr Moon’s government a disappointment by the stan- cation. His plan is tactfully silent on its political implications.
dards the president set himself. But whoever is in charge will still
have to deal with the looming problem to the north. 7 The Kim regime insists that American troops should leave the
peninsula. China, the Kim regime’s patron, agrees. South Koreans,
North Korea who fear China, may not. In a future united Korea, northerners
would surely want the vote. That would spell the end of the Kim dy-
A god-king with nukes nasty, and perhaps the prosecution of Mr Kim himself. Would Chi-
na allow any of this to happen? To say that Mr Moon’s plan faces ob-
North Korea is changing, but its regime is still dangerous stacles is an understatement.

In the summer of 2019, South Koreans were shocked by the news How much would reunification cost South Korea? Estimates
that a North Korean woman, who had fled her country through range from around 3% to 12% of its annual gdp over several de-
China a decade before, had died with her young son in her flat in cades. The potential economic benefits to South Korea are uncer-
Seoul. Weeks passed before a building manager found the bodies. tain. In the German case, much of the fiscal aid to the East ended up
Authorities concluded she had starved. on the balance-sheets of West German landlords, construction
firms and consumer-goods producers. But North Koreans are
Though the case was unusual, it highlighted an important much poorer than East Germans were at the time of reunification,
truth. Much is made of how Koreans have thousands of years of when West Germans were only about twice as rich as their cousins
shared history and culture. But the split between the communist in the East. South Korea’s national income per head in 2018 was 25
North and the capitalist South after the second world war was deep times that of North Korea. What’s more, North Korea currently has
and traumatic. Today, people who flee the impoverished dictator- much stronger commercial links with China, which accounts for
ship of Kim Jong Un for the rich, free South find it hard to adapt to 90% of its trade, than with South Korea, so there is no guarantee
life in such a different society. This matters immensely if the two that southern aid would actually end up back in the South.
Koreas are ever to reunite.
Until North Korea either dramatically reforms or collapses, re-
The number of North Koreans making it to the South has de- unification is hard to imagine. For now, neither seems very likely.1
clined of late. Some 33,000 have settled in total, but the 1,047 who
registered for the first time in 2019 was the lowest number for near- Still foes, not bros
ly two decades. Tighter controls at the Chinese border with North
Korea, as well as increased efforts by China to repatriate refugees,
are major reasons. Another could be that the North Korean econ-
omy is going through a loosening of its own and heading in a less
Marxist direction. That has raised hopes of loosening in other ar-
eas, notably the 70-year military stalemate on the peninsula.

For a few heady months in 2018, change was in the air. In April
2018 Moon Jae-in and Kim Jong Un met for the first time in Pan-
munjom in the demilitarised zone and stepped hand in hand
across the border between their countries. South Korea (and much
of the world) swooned. The two leaders vowed to accelerate efforts
to reunify Korea by stepping up economic co-operation and inten-
sifying personal exchanges. They promised to reduce military ten-
sions and formally end the Korean war. They also said they would
work towards a “nuclear-free” Korean peninsula.

The “spirit of Panmunjom” rekindled discussion about the pos-
sibility of reunification. Despite the North’s appalling regime and
nuclear threats, most South Koreans favour the idea. They consid-
er North Koreans neighbours, not foes. Many have relatives on the
other side. However, interest in reunification is markedly lower
among South Koreans in their 20s and 30s, especially if asked
whether they would be happy to pay for it.

The Economist April 11th 2020 Special report South Korea 11

2 That said, the economic changes in the North are real. The famine charge of it was shot. By contrast, the cur-
in the 1990s that killed more than half a million people led to a
transformation of the country from below, as millions of North Most trade with rent god-king of North Korea has largely
Koreans began buying and selling things to survive, despite such refrained from interfering with the jang-
commerce being officially illegal. There are now hundreds of
illicit-but-tolerated markets, known as jangmadang, in the coun- China is through madang. His propaganda promises pros-
try. Kim Byung-Yeon of Seoul National University estimates that conglomerates perity. Though the vast majority of North
ordinary North Koreans earn at least two-thirds of their income that are “North Koreans remain poor, the grey economy
from such activities, possibly much more. Korea’s version and the gradual marketisation of state en-
There is no sign of political loosening, but Marxist economics terprises has provided many with a mea-
is now mostly a thing of the past in the North. Marketisation has
intensified under Kim Jong Un. Most trade with China is con- of the chaebol” sure of comfort unimaginable under Kim
trolled by conglomerates close to the armed forces and the party, Jong Il. North Korea is increasingly turning
which operate largely according to market principles. They are
“North Korea’s version of the chaebol”, argues Rüdiger Frank of the into a place where there is nothing money
University of Vienna. Those in charge pay a percentage of their
profits into state coffers in return for relative operational freedom cannot buy—as long as you have it.
(though this is not yet called “corporation tax”). This has created a
new class known as donju, “money men”, quasi-capitalists who are From the late 1990s, lively smuggling networks between North
loyal to the state but whose wealth also gives them some leverage.
Besides parking it in foreign bank accounts, they apparently invest Korea and China enabled tens of thousands of North Koreans to es-
their cash in Pyongyang’s property market, where de facto private
ownership of flats and apartment buildings is now common. cape, including, via an underground railroad through China and
An important consequence of these developments has been a
diversion of citizens’ loyalties from the state to smaller social South-East Asia, to the South. But political repression has intensi-
groupings such as the family, argues Hazel Smith of the School of
Oriental and African Studies in London. They cannot rely on the fied since the latest Mr Kim took power. Security along the border
state for their livelihood, even if they have to pretend to believe in
the greatness of their leaders to avoid being thrown in a gulag. with China has been tightened. China has built new fences and
This “obvious dissonance between rhetoric and reality” may
explain the current Mr Kim’s difference in focus. His father tried to video-surveillance systems, making it costlier to pay smugglers
stamp out the grey economy. At one point he tried to confiscate
traders’ savings by declaring old banknotes no longer to be legal and to bribe officials to turn a blind eye to illegal border crossings.
tender, though this reform was swiftly reversed and the official in
Atomic Khitan
Mr Kim sees economic growth partly as a way of keeping the
masses quiet, and partly as a way to finance his nuclear-weapons
programme. Under him, North Korea has conducted four nuclear
tests and over a hundred missile launches, including three of
intercontinental ballistic missiles in 2017. According to Siegfried
Hecker and colleagues at Stanford University, it probably has
around 30 nuclear weapons and sufficient fissile material for as
many more, though there is still some uncertainty over the degree
to which it can reduce the size of warheads to fit them onto its mis-
siles, and whether its long-range missiles could really hit the Un-
ited States.

If Mr Kim were actually to fire a nuclear weapon in anger, it
would be the end of his regime (and a great deal more besides). But
he appears to believe that possessing such weapons is his best
guarantee against external attack. Talks about disarmament that
followed the inter-Korean thaw in 2018 have not got far, despite
three meetings between Mr Kim and Donald Trump. Working-level
talks never got off the ground. In May 2019 Mr Kim resumed the
missile tests which he had promised to abandon the year before.

His “new path” represents something more worrying than a re-
turn to the status quo. America’s response to North Korea’s re-
sumption of missile tests has been weak and muted. That has in-
creased the risk that Mr Kim will grow overconfident and,
consequently, miscalculate, says Jenny Town of the Stimson Cen-
tre, a think-tank in Washington, dc. “It has become very unclear
what the red lines are. Which kind of provocation would spark a re-
sponse now?” she asks.

That uncertainty is one of several. Relations among allies in the
region are more strained than they have ever been. South Korea
finds the Trump administration’s transactional approach to alli-
ances both objectionable and frightening. Previous American
presidents regarded their troops in Korea (of whom there are still
28,000) as part of a broader strategy to keep the peace in Asia. Mr
Trump carps about the price tag. Negotiations between the two
countries over cost-sharing, which used to happen every five
years, have become a painful annual ritual. South Koreans have
been put out by American demands that they pay the entire cost of
its troop deployment, and by America’s use of public furlough
threats to South Korean staff at its bases as a negotiating tactic.
Both sides repeat, in public, that the alliance is “ironclad”. But Mr
Trump shows few signs of believing this.

The deteriorating relationship between America and China
adds a further complication. Back in 2017 and early 2018, the two1

12 Special report South Korea The Economist April 11th 2020

2 great powers looked relatively united in their desire to curb North accountable to those who elected them.
Korea’s provocations. China assisted efforts to mitigate the threat
from the North through strict enforcement of the international This process is far from complete. Many Koreans still feel they
sanctions designed to curb Mr Kim’s nuclear ambitions. Amid the
trade war between the two countries, however, such co-operation must follow a narrow script for success: get into a good university,
has waned.
All this means that the appropriate symbol for the inter-Korean get a job at a chaebol, toil uncomplainingly until retirement. The
mood over the next few years may lie not in Panmunjom, but at an-
other spot on the dmz. At the Imjingak Observatory, the unfinished pressure to do the same thing as everyone else is strong. “We care a
station for a “peace gondola” towers over a vast, mostly empty car
park. In the “unification pond” that was gifted by a wealthy donor lot more about external validation of our choices than about our
just last year, a few lifeless-looking carp float around below the
surface. And on the bridge that looks out over the bird-filled fields personal assessment,” says Suh Eun-kook, who studies life satis-
of the dmz, an elderly visitor who was born just across the border
with the North muses on the possibilities of reunification. “I still faction at Yonsei University in Seoul. “That is very disadvanta-
hope it’ll happen but it probably won’t.” 7
geous for personal happiness—but changing it takes guts.” It may
The future
also still turn out to be a bad decision, points out Paul Chang of
The limits of loosening
Harvard University. “There’s this cliché that South Koreans, partic-
Social transformation faces many obstacles
ularly South Korean parents, are crazy for being so competitive—
When park hye-soo was a young girl, her path to success
seemed clearly defined. “My parents said, study hard, get but actually it’s a rational response to a situation where there are
into a good university and everything will be fine, so I was a good
daughter and did that,” she says. “But when I finished I didn’t know not enough good jobs or places at the right universities.”
what to do and my parents didn’t either and I realised nobody had
ever taught me how to make decisions for myself.” Everybody doing the same sensible thing has apparently also

Ms Park, now in her 40s, is a child of the Asian financial crisis. helped South Korea weather the covid-19 pandemic. Still, the out-
When she left university in the late 1990s, South Korea’s economy
was in the doldrums and the model that had seemed obvious to her break has the potential to retard some of the developments dis-
parents no longer held the same promise for people of her gener-
ation. For Ms Park, who ended up becoming an artist, success re- cussed in this special report, perhaps severely.
quired abandoning most of the assumptions she had held about
what constituted it, and years of looking for a new version. Economically, deep crises, such as the one that is likely to result

Today her work is exhibited in London and New York as well as from the pandemic, tend to promote market consolidation. Large
Seoul and her country is lavishing awards on her. Her mother, who
for years was horrified by her daughter’s life choices, is at last companies usually find it easier to weather economic storms, both
proud of her. Ms Park won’t quite say that she is happy. “But I’m liv-
ing the life I want.” because they are more likely to have bigger cash reserves than

The journey that she has already made is one which her country smaller firms, and because they are more effective at lobbying the
still needs to complete. The increased willingness to challenge
prevailing conditions and to try something new is behind many of government to include industry-specific measures that benefit
the developments highlighted in this special report. In the 1980s
South Koreans went out into the streets to demand an end to mil- them in fiscal-stimulus packages.
itary dictatorship—and succeeded. At the end of the 2010s, they
took to the streets once more and succeeded in removing a govern- South Korean governments have a long-standing habit of turn-
ment which many felt had failed to live up to the promises of de-
mocratisation. Ms Park, the artist, is heartened by the increasing ing to the chaebol in hard times; it is not clear yet whether the cur-
willingness to discuss social constraints. “When I was young we
never talked about it,” she says. “Young people today do talk about rent one will be any different. If it is not, the pandemic could en-
things. They complain.”
trench the dualism of the economy that South Koreans had just
In South Korea, complaining has begun to work. It has expand-
ed the range of individual life choices that society will tolerate. begun shaking up, delaying long-term change.
Women are no longer obliged to get married or become domestic
helpers to their husband’s family. Young graduates have a wider As for social change, the consequences are more difficult to
choice of job options. At work, they are less oppressed by hierar-
chy. They can occasionally say no to an evening of drunken carous- predict. But in the short term, it looks as though the pandemic may
ing with the boss. Politicians are feeling the pressure to be more
slow progress there, too. The measures which the government has

so far taken to curb covid-19 affect different social groups in differ-

ent ways. Closing schools, for instance,

disproportionately affects women. There

“We care a lot are already reports of mothers quitting
their jobs to shoulder the additional re-

about external sponsibilities of caring for children and
validation of our other relatives at home during the day.
choices”
Depending on how long the epidemic
lasts and how widespread such responses

are, that could prove a setback in advancing

the goals of South Korean feminists, re-

inforcing traditional divisions of labour

and social roles.

Like most countries in the world, South Korea may look differ-

ent a few months from now. The challenge will be for its people not

to go back to how things were, but to keep reimagining the future,

even as they fight to hold on to their hard-won social and eco-

nomic gains. 7

acknowledgments A list of acknowledgments and sources is included in the online version
of this special report
offer to readers Reprints of this special report are available, with a minimum order
of five copies. For academic institutions the minimum order is 50 and for companies 100.
We also offer a customisation service. To order, contact Foster Printing Service:
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Middle East & Africa The Economist April 11th 2020 37

Iraq back on. Many firms rely on government

Dark times ahead contracts. Much of the sector is informal.

With a curfew in place, travel restricted and

the borders closed, commerce has slowed

considerably. Even before the virus, many

Iraqis struggled to get by. Such hardship,

along with blatant corruption, sparked big

protests, beginning last year.

A leaderless country faces covid-19, a slump and out-of-control militias Those have largely subsided as people

In sadr city, the vast shantytown east of oil-production cuts, which would provide keep their distance from each other. But
Baghdad, cars still pack the roads, pil- some relief to Iraq by raising prices. But
Iraq’s politicians are not taking advantage

of the calm. Since the prime minister, Adel

grims still pray at shrines and people still even if the price of oil jumps by half, Iraq Abdul-Mahdi, resigned in November, two
gather in shops. Many see covid-19 as either would still be looking at a sizeable budget
men have been put forward to take his

a Zionist hoax or a fast track to paradise, so deficit. As it is, the government cannot af- place. The first, Muhammad Allawi, failed
they feel no obligation to comply with the ford to pay salaries in the ever-expanding
to gain the backing of important Shia par-

government’s order to stay inside. The public sector (see chart on next page). It has ties and their associated militias. The sec-
government itself seems unprepared. Iraq around $60bn in cash reserves, but that
ond, Adnan Zurfi, is trying to win over parl-

claims to have just 1,122 cases of the virus, could run out by the end of the year, leaving iament, but he is opposed by Iran and is
but it is accused of minimising the num- it dependent on a loan from the imf, which
ber. Its public hospitals are not equipped to may not be forthcoming. The state’s 7m also unpopular with Shia politicians, who
handle a big outbreak. employees and pensioners are worried.
“Without salaries, that’s the end of Iraq,” cannot agree on a successor. Many are hap-
If the virus were Iraq’s only problem, says Mowaffak al-Rubaie, a former nation-
that would be enough. Alas, the country is al-security chief. py to leave the pliable Mr Abdul-Mahdi in
nearly bankrupt—the result of a precipi-
tous decline in the price of oil, which sup- That may sound alarmist, but Iraq does office as a caretaker.
plies more than 90% of government rev- not have much of a private sector to fall
enue. Its politics are also a mess, with Meanwhile, the militias that once
parties unable to agree on a new prime Also in this section
minister. Iraq’s militias are running amok, fought against is as part of the Hashd al-
while the jihadists of Islamic State (is) re- 38 Covid couture in Lebanon
group. America and Iran, which helped Iraq Shaabi, or popular mobilisation forces
muddle through past crises, are focused on 39 Why migrants fib about money
fighting each other. Fears are growing that (pmf), are fragmenting. Two men who held
the state will collapse, says an Iraqi official. 39 Africa’s debt crisis
them together—Abu Mahdi al-Mohandis,
Saudi Arabia and Russia are in talks over 40 Farming flops in Ethiopia
the pmf’s commander, and Qassem Sulei-

mani, the head of Iran’s Quds Force, its for-

eign legion—were killed by America in Jan-

uary. Now some militias want to integrate

with the army. More militant ones are go-

ing their own way. There are also signs of

trouble within the militias, with splinter

groups acting like criminal gangs. 1

38 Middle East & Africa The Economist April 11th 2020

2 Iran continues to use militias to wield Covid couture
influence in Iraq and try to push out Ameri-
ca. A rocket attack by militia forces on Lebanon gets comfortable
March 11th killed two American soldiers
and a British medic at an Iraqi military BEIRUT
base. America responded with strikes on
an Iranian-backed militia, Kataib Hizb- A stylish nation lets standards slip during the outbreak
ullah. On March16th militia forces attacked
another Iraqi base used by American sol- The oddities begin the moment you its lack of public space.
diers (causing no casualties). An unknown step outside in Lebanon, now in its The glamorous Lebanon of tourism
group called Usbat al-Thayireen claimed fourth week of near-total lockdown.
both attacks and issued threats against Streets once choked with traffic are ads and diaspora fantasies was always a
America, “suggesting that the [Quds Force] empty. At the entrance to a supermarket veneer. A clubgoer wearing designer
had assembled its proxy militias into a new shoppers don masks and plastic gloves, labels tosses her Mercedes keys to a valet
coalition,” says the Soufan Centre, a New while staff check their temperatures. But earning a few hundred dollars a month. A
York-based research body. the strangest sight is inside. Customers diner at a fancy restaurant steps outside
President Donald Trump says Iran “will stroll the aisles in sweatpants, pyjamas, for a cigarette and draws a crowd of
pay a very heavy price” if its proxies keep up even flip-flops. Asked about this unusu- beggars, some of them only children. An
their attacks. He has been consolidating ally dégagé fashion, one shopper ob- estimated 45% of Lebanese live on less
America’s position in Iraq. Of the 5,200 served, with mock horror, that the Leba- than $3,100 a year. More than 60% of the
American soldiers who were in the country nese were starting to dress like 2.8m accounts in local banks contain
at the start of the year, most have been gath- Americans. Her tracksuit top, coinciden- under 5m Lebanese pounds ($3,300).
ered into a few large bases, mainly in Kurd- tally, had the stars and stripes sewn on
ish and Sunni areas. Some have been with- one arm, a relic of more casual days The virus has not erased these dis-
drawn. European and Canadian soldiers, studying in America. tinctions, but rather inverted them.
part of the anti-is coalition, have left, citing Whereas the well-off huddle invisibly at
the outbreak of covid-19. is, meanwhile, is Depending on whom you ask, Leba- home, the poor must flaunt their desper-
active again. “It has a bit of a free pass right non’s 4m citizens are stereotyped as ation. Scores of people in Tripoli defied
now,” says Michael Knights of the Wash- either stylish or vain, bon vivants or curfew last month to protest about their
ington Institute, a think-tank. “They’re bet- parvenus. It is a stereotype, they admit, living conditions. A taxi driver in Beirut
ter prepared for the virus than any fighting rooted in some truth. A quick trip to the set his car on fire after being fined for
force. They’re doomsday preppers.” bakery might require a dab of make-up or violating rules that limit him to one
With no leader and outside powers pre- a splash of cologne. Banks used to offer passenger. A Syrian refugee tried to
occupied with their own interests, it is not loans for plastic surgery. Cars, clothes, self-immolate on April 5th. The cabinet
clear who will hold Iraq together. Grand champagne in clubs—public life was a has belatedly asked the army to dis-
Ayatollah Ali al-Sistani, Iraq’s spiritual ar- stage on which to show off. tribute 400,000 pounds to every needy
biter, has receded from politics. The Kurds, family, but it does not even know which
who have sought independence before, Until the curtain fell. Nightclubs were families need help.
may do so again if the central government first to close, then bars and restaurants.
cannot produce the cash promised to their Even the Sunday lunch, a regular gather- For those old enough to remember the
region. Sunni leaders are discussing carv- ing of family and friends, has been cur- civil war, lockdown feels familiar: long
ing out their own state, too. And the prot- tailed: a government decree issued on hours spent at home, quick sprints out
ests are likely to resume once the outbreak April 5th limited car travel six days a for supplies. The country’s joie de vivre
subsides. Politicians and analysts differ week and forbade it entirely on Sundays. was a reaction against hardship.
over how Iraq might collapse, but many With nowhere to go but the supermarket,
think it is only a matter of time. 7 no one can be bothered to dress up. Drive But this shock is different. Even be-
into the mountains outside the capital, fore the coronavirus arrived, Lebanon
Less money, mo’ problems Beirut, and the deserted roads are full of was mired in a monetary crisis. Thou-
tracksuit-clad families out for a stroll, sands of businesses had closed; more are
Iraq another oddity in a country notorious for now quietly going under. When the
pandemic passes, there may be less
Oil exports 4.5 Oil revenue 8 demand for designer clothes.
Barrels per day*, m 4.0 Per month, $bn
3.5
3.0 6
2.5
2.0 4

2

2015 17 20† 2015 17 0
20†

Public wages, Iraqi dinar, trn 2019

2005 4.5 2008 12.7 2012 29.2 43.4

Sources: Iraq Oil Report; LSE *Monthly average †To March

The Economist April 11th 2020 Middle East & Africa 39

Kenya Fiscal ill-health

Tall tales of the city Debt and disease

KAMPALA Bloated borrowing is complicating
Africa’s battle against covid-19
Why urban migrants understate how much they earn
Economic crisis and covid-19 are forc-
Some country folk do not understand grants strongly agreed that they would be ing hard choices on most of the world.
what life is like in town, says Roda Ra- asked to send back more money if their real But the dilemma facing indebted poor
dido, who lives in Nairobi, the Kenyan cap- incomes were known. Mr Baseler also countries is particularly acute. They can ei-
ital. She is right. Rural Kenyans typically spoke to the family and friends of mi- ther pay foreign creditors or allow more of
have no idea how much better off they grants. Parents thought that their children their citizens to die, say experts.
would be if they moved to a city. A survey by in the city were only making half as much
Travis Baseler of the University of Roches- as they actually were. This dilemma is not new. In 2016 Angola
ter found that people in western Kenya spent nearly six times as much servicing its
guessed that the average worker in Nairobi In a working paper Mr Baseler suggests external debt as it did on public health care.
earns about twice as much as the average ways in which this economy with the truth Fifteen countries in sub-Saharan Africa
worker in Bungoma, a small town near the is harmful. Because villagers never hear the spent more money paying creditors abroad
border with Uganda. In fact, the Nairobian true benefits of migration, they stay at than they did on doctors and clinics at
makes four times as much. Urban Kenyan home and forgo a big pay rise. In an experi- home. But now, faced with a slump in rev-
incomes are higher even after accounting ment to test this idea, he presented rural enues and skyrocketing borrowing costs as
for costlier rent and rood, and even when households with true information about investors seek relative safety, many African
comparing wages in similar jobs. the average income in cities, food prices governments are struggling to find the
and wages in typical jobs. Two years later money to fight the pandemic and shore up
Why do rural folk underestimate the re- migration to Nairobi from these house- their economies. Whereas rich countries
wards of working in a city? Many respon- holds was 33% higher than from a control are borrowing to spend about 8% of gdp on
dents had relatives who had worked in Nai- group, which was told nothing. stimulus measures, African ones are
robi, who could easily have told them. Yet spending just 0.8% of gdp.
for some reason they did not. When Mr Ba- City streets are not paved with gold, of
seler surveyed migrants in the capital, nine course. Newcomers often huddle in over- This is because the virus has thrown
out of ten said their loved ones back home crowded slums. Linda Adhiambo Oucho of petrol onto a slow-burning debt crisis. The
did not know how much they were earning. the African Migration and Development countries most at risk of default—and, by
Policy Centre, a think-tank in Nairobi, says definition, the least able to borrow afford-
Ms Radido understands why. She and that many migrants are surprised by the ably—are those with limited domestic sav-
her husband moved to Nairobi when he hardships of urban life, including the high ings and large external debts, such as An-
found work on a poultry farm on the city’s costs of rent, transport and electricity. gola, Ethiopia, Ghana and Zambia. But they
outskirts. Now the relatives she left behind Some families even send food from the vil- are not the only ones in trouble. Since 2010
in western Kenya pester her whenever they lage to struggling relatives in town. average public debt in sub-Saharan Africa
need a bit of cash. It is a common problem, has risen faster than in any other develop-
and makes urban migrants cagey about However, only a quarter of the migrants ing region, from 40% to 59% of gdp in 2018.
their wages. “People in the city do not want whom Mr Baseler surveyed said that their Most African countries have borrowed
to expose the kind of money they have,” she quality of life was lower in the city than at more than is prudent, said the imf last
says, for fear they will be overwhelmed by home. Over half said that it had improved. year; 18 were classed as being in debt dis-
requests for help. Moving to the city brings fresh opportuni- tress, or at high risk of it.
ties, as well as guilt-inducing phone calls
In Mr Baseler’s survey, 61% of urban mi- from needy relatives. 7 Many homeowners in Western coun-
tries are getting a mortgage holiday be-
On the road to something better cause of the pandemic. Might govern-
ments in Africa get the equivalent? The
previous big round of debt relief for the
continent came via the Heavily Indebted
Poor Countries Initiative, which reduced
foreign public debt of recipient countries
from about 100% of gdp in 2005 to 40% by
2012. At the time Western governments and
multilateral organisations, such as the imf
and World Bank, were the biggest lenders
to Africa. Now, though, China is the conti-
nent’s biggest bilateral creditor. Having
signed loans worth more than $146bn to
African governments since 2000, it may
not be as forgiving.

Africa’s debt burden does more than di-
vert spending from health care and stimu-
lus to loan payments. It also discourages
rich countries from helping out. Europe
and America, in particular, worry that any1

40 Middle East & Africa The Economist April 11th 2020

Bills coming due 40 African agriculture viduals linked to the ruling party. Many
30 such ventures may be what Mr Kamski calls
External government debt-service cost Dummy farms “dummy farms”: idle assets acquired to get
As % of revenue generous government loans.
O M O R AT E
Ghana The neglect of Ethiopia’s lowland areas
Ethiopia’s huge estates have been a big by those living in its highlands, long the
20 disappointment country’s power centre, worsened the situ-
ation. Bigwigs dismissed the concerns of
Ethiopia 10 The plan was to transform farming in local people. The government often deems
southern Ethiopia. Twelve years ago rangelands “unused”, ignoring the claims
Zambia 0 Fri-El, an Italian conglomerate, signed a of nomads who use them for grazing and
lease with the state government for 30,000 light agriculture. This brings farmers and
2010 11 12 13 14 15 16 17 18 19 hectares of farmland in South Omo to make cattle herders into conflict in South Omo
palm oil. But the palms needed more water and areas like it.
Sources: IMF; DSA than the copper-coloured Omo river could
supply and production was so disappoint- South Omo has also been deprived of re-
2 aid they provide to African countries ing that in 2011 its lease was cut by a third in sources it needs for development, which
would eventually end up in the pockets of size. Even a switch to cotton production makes farming even more difficult. The
Chinese lenders. did not help. Many bolls are left unpicked valley did not contain a sizeable bridge un-
The World Bank and imf have asked bi- owing to labour shortages. A ginnery lies til 2010. Shoddy construction meant it col-
lateral lenders to suspend debt payments idle for want of electricity. lapsed before it was finished the following
from the world’s 76 poorest countries. That year. Scant infrastructure is a headache for
would be a start, but would cover only a A decade ago rising food prices spurred companies such as Fri-El. The lack of local
quarter of sub-Saharan Africa’s total debt- investors to get land across Africa. In Ethio- petrol stations means it must transport the
service costs. Nevertheless, the appeal pia, where the government offered tax tens of thousands of litres of diesel it needs
seems to have fallen on deaf ears in China, breaks, low rents and vast tracts of alleged- each month more than 350km to its farm.
where officials say they will deal with Afri- ly empty farmland, more was leased than
can debt on a case-by-case basis. Analysts almost anywhere else. One study calculat- In recent years the government has
think China is loth to give up the political ed that around 1m hectares were allocated tried to improve matters. Since 2013 it has
leverage that comes with being owed so between 2005 and 2012; others suggested cancelled several big contracts, drawn up
much money. But, like other creditors, it two or even three times that. The idea was stricter requirements for investors and in-
may have to choose between orderly debt that poor, remote places like South Omo, troduced maximum landholdings. In 2016
relief or chaotic defaults. near Ethiopia’s south-western border, the state development bank temporarily
Even if China and other government would become paragons of development. suspended lending to commercial agricul-
lenders agreed to a pause on payments, Mechanised cotton estates would feed ture, after years of handing out question-
states in sub-Saharan Africa might still use Ethiopia’s burgeoning textile factories. No- able loans. The following year some re-
emergency funds to pay private creditors. mads would ditch their cattle for jobs as la- sponsibility for leasing land was returned
The states owe bond investors $115bn. bourers on commercial farms. from the federal government to the states
(Commodity traders and domestic invest- to give locals more say.
ors are owed, too.) Few commercial bonds Instead South Omo has become a cau-
are due for repayment before 2022, but in- tionary tale. No cotton farm in the local Yet officials have hinted that the gov-
terest must still be paid. If it is not, bond- area is operating anywhere near capacity, ernment wants to promote huge farms
holders could demand full repayment. Af- reckons Benedikt Kamski, who studies once more, this time by expanding wheat
rican finance ministers, hoping to protect such matters for the Arnold-Bergstraesser production to boost food security. The les-
their countries’ creditworthiness, want do- Institute, a German think-tank. In 2018 less son they should remember is that the de-
nors to help pay the interest while negotia- than 3% of the 90,000 hectares leased to in- tails matter more than scale or haste. 7
tions take place. vestors in three of South Omo’s districts
More than 100 international ngos have was being farmed, he found. Growing doubt
called for a cancellation of all debt pay-
ments in 2020. But multilateral banks are Many of the farms created in Ethiopia’s
reluctant to risk their own credit ratings sparsely populated lowlands were simply
and private bondholders are hard to corral. too big, and those leasing them lacked the
Lee Buchheit, a law professor at the Uni- capital to develop them. Karuturi Global,
versity of Edinburgh, suggests changing an Indian firm, signed a deal for 100,000
American and British codes to stop law- hectares in 2010, only for it to be cancelled
suits by angry bondholders against coun- five years later. By that point less than 2%
tries hit hard by covid-19. of its tract had been developed. In 2015, the
Even if lenders listen to the ngos and last year for which estimated data are avail-
suspend all debt payments this year, there able, less than a fifth of the total land leased
is still trouble ahead for African countries. in Ethiopia by local and international com-
Most collect relatively little tax. Low com- panies was being farmed.
modity prices have led to decreased rev-
enues. And the countries that borrow the Some investors were incompetent. “We
most also tend to be irresponsible spend- didn’t know what to do, we’re not farmers,”
ers. Once this crisis is over, a wall of pay- admits an estate manager in South Omo.
ments awaits them. 7 Others were crooked. In the region of Gam-
bella 335 out of 420 land deals were signed
in just three years after 2008, according to a
paper from 2016 by Fana Gebresenbet, an
Ethiopian academic. Most involved indi-

Europe The Economist April 11th 2020 41

Also in this section
42 Greece’s vulnerable economy
43 Russia’s missing leader
43 Turkey and covid-19
44 Charlemagne: Zoom diplomacy

Europe’s response to covid-19 By pitting frugal northerners, like the
Germans, Dutch and Austrians, against
Paying for it supplicant southerners, the row recalls el-
ements of the 2010-12 euro crisis. Yet the
BERLIN differences are at least as salient. During
the euro crisis the ecb waited until 2012 to
Once again, the euro zone is consumed by rows over debt act decisively; this time Ms Lagarde moved
quickly (after an early misstep), ensuring
It is “impossible to be more optimistic plan and relaxed its rules over what it can governments did not have to battle market
than [António] Costa,” Portugal’s presi- buy. Christine Lagarde, its president, said and health-care meltdowns at the same
dent once said about his country’s irre- there were “no limits” to its commitment. time. Moreover, most coronabond propos-
pressible prime minister. Yet on March als envisage a one-off issuance to pay for
26th Mr Costa’s bonhomie was nowhere to That was enough to calm the markets. specific aims like health capacity or wage
be seen. After eu leaders had held a frac- But like her predecessor, Mario Draghi, subsidies, rather than an ongoing commit-
tious video-conference on the covid-19 cri- whose “whatever it takes” intervention ment or the mutualisation of old debt. “You
sis he stood before cameras, his face like kept the euro together in 2012, Ms Lagarde don’t win the debate with the same old ar-
thunder, to declare: “If we don’t respect one wants governments to do more. Specifical- guments about Eurobonds, because this is1
another…no one has understood anything ly, she urges the euro zone to consider issu-
about the eu.” Attacks by Wopke Hoekstra, ing a jointly guaranteed, one-off “corona- No room for manoeuvre for some
the Dutch finance minister, on southern bond”. Nine governments, led by France,
Europeans’ overspending were “disgust- Italy and Spain, have made a similar plea. Immediate fiscal impulse, as % of 2019 GDP
ing” and “mean-spirited”. Things have not
got much better since then. Yet the euro zone remains divided along General-government gross debt, 2019, % of GDP
familiar lines. An all-night session of fi-
Some analysts forecast a slump of near- nance ministers on April 7th-8th failed to 012345
ly 10% in euro-zone gdp this year. But reach agreement after the Italians and
though rich countries like Germany have Dutch squabbled over debt mutualisation Germany 59.2
marshalled huge domestic responses, sol- and other matters. A smaller suite of mea-
idarity has been lacking. Border checks sures may yet be signed off. These include Denmark 33.0
were imposed and medical supplies hoard- an expansion of European Investment
ed. The eu has at least relaxed fiscal and Bank private-sector loans, eu financial Netherlands 48.9
state-aid constraints to give afflicted coun- support for national wage-subsidy
tries room to respond. And on March 18th, schemes, and perhaps credit lines from the Britain 85.2
with bond yields in Italy and Spain creep- European Stability Mechanism (esm), the
ing up, the European Central Bank an- euro zone’s bail-out fund. But these France 98.9
nounced a €750bn ($810bn) asset-purchase amount to a “nothingburger”, says Mujtaba
Rahman of the Eurasia Group consultancy. Greece 175.2

Italy 136.2

Belgium 99.5

Spain 96.7

Sources: Bruegel; European Commission