[Jan 4th 2025]

The world this week

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The world this week

The world this week
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The world this week

The world this week

None
1月 02, 2025 11:06 上午

Police shot dead a man who rammed a pickup truck into crowds of New
Year’s revellers on Bourbon Street in New Orleans, killing at least 14
people. The perpetrator was an American and former army worker who
supported Islamic State. The police think he may have had accomplices.
Potential explosive devices were found near the scene. The authorities are
investigating any possible connection to the explosion of a Tesla Cybertruck
outside the Trump hotel in Las Vegas, in which the vehicle’s driver was
killed.

Tributes were paid to Jimmy Carter, who died at the age of 100. Mr
Carter’s term as America’s president from 1977 to 1981 was best known for
an energy crisis, a botched attempt to rescue hostages from Iran and a
historic peace deal between Egypt and Israel. After his defeat to Ronald
Reagan in 1980, Mr Carter worked tirelessly on human rights, earning him
the Nobel peace prize in 2002. He was also a champion for Habitat for
Humanity, which deploys volunteers to build or improve homes.

The Iranian-backed Houthis continued to launch missiles at the heart of

Israel, despite America and Israel bombarding Houthi bases and
infrastructure in Yemen. One Houthi missile recently hit Tel Aviv, injuring a
dozen people. Meanwhile, American and French war planes struck Islamic
State targets in Syria.

MPS in South Korea voted to impeach Han Duck-soo, who had been
acting as interim president since the impeachment of Yoon Suk Yeol in
December. Mr Han had refused to fill three vacancies on the Constitutional
Court, which will hold Mr Yoon’s impeachment trial. The opposition
accused him of trying to delay the case. Meanwhile, a court issued an arrest
warrant for Mr Yoon, who has ignored requests to be interviewed by anti-
corruption officials.

A possible bird strike was thought to have caused the crash of a Jeju Air
flight at South Korea’s Muan airport, killing 179 people. It was the world’s
worst aviation disaster since 2018.

An Azerbaijan Airlines flight crashed in Kazakhstan, killing 38 people.

The plane had been trying to land in the Russian republic of Chechnya,
where it is thought to have been hit by Russian anti-aircraft fire aimed at
repelling a Ukrainian drone attack. Vladimir Putin apologised and admitted
that Russian defences were active in the area, without confirming they had
hit the aircraft.

Volodymyr Zelensky described Russia’s huge Christmas Day missile and

drone attack on Ukraine as “inhumane”. The Ukrainian president said
Russia had made a “conscious choice” to knock out the country’s energy
infrastructure. Meanwhile, Russian gas ceased to flow through Ukraine,
after the expiry of a gas-pipeline contract. The pipelines supplied about 5%
of the EU’s gas imports.
Finnish authorities seized a tanker carrying Russian oil that is suspected of
sabotaging underwater cables. In previous such incidents in international
waters, vessels were let go; the Finns directed the tanker to Finnish waters
and boarded it. Authorities found drag marks for dozens of kilometres on
the seafloor, suggesting the ship had trawled its anchor.

Appearing before a committee hearing in Germany’s Bundestag, the

country’s interior minister said it was too early to say what motivated the
recent attack on a Christmas market in Magdeburg, though she said the
suspect showed “signs of a pathological psyche”. A Saudi refugee is in
custody after ramming a car into the market, killing five people. The
committee grilled security and intelligence officials about warnings from
Saudi Arabia that the man was dangerous.

The inauguration of Georgia’s new pro-Russian president, Mikheil

Kavelashvili, was marked by protesters brandishing red cards (Mr
Kavelashvili used to play football for Manchester City). He was selected for
the position by the ruling Georgian Dream party, which forced the pro-
European Salome Zourabichvili out of the job. Ms Zourabichvili contends
that she is still Georgia’s “only legitimate president”.
Shortly before Christmas Joe Biden commuted the death sentences of 37
convicts on federal death row to life in prison, pre-empting Donald Trump,
who has said he will end a moratorium on federal executions. Mr Trump’s
team said that commuting the sentences was “abhorrent”. Mr Biden’s order
does not include the three prisoners convicted in separate cases of attacking
a synagogue, a black church and the Boston marathon.

Mr Trump asked the Supreme Court to postpone an impending ban on

TikTok in America so that his new administration can “pursue a political
resolution” of the issues at hand. The ban is due to be enforced on January
19th, the day before Mr Trump’s inauguration.

Turkey’s central bank cut interest rates for the first time in nearly two
years, lowering its main rate from 50% to 47.5%. The government recently
increased the minimum wage by 30%, which it described as a mark of fiscal
discipline. With annual inflation still running at more than 40%, unions
were demanding a 70% increase.

Stockmarkets fell in December, but despite that the S&P 500 had another
good year, rising by 23% in 2024. The tech-heavy NASDAQ was up by
30%. European markets did less well. The German DAX gained 19%, the
EURO STOXX 50 over 8% and the FTSE 100 nearly 6%. The CAC 40,
where French banks and luxury-goods companies are listed, fell by 2%.
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The world this week

The weekly cartoon

None
1月 02, 2025 06:07 上午

The editorial cartoon appears weekly in The Economist. You can see last
week’s here.

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this-week/2025/01/02/the-weekly-cartoon

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The Economist

This week’s cover

How we saw the world
1月 02, 2025 06:07 上午
THIS WEEK we consider the economy-policy team that Donald Trump has
assembled and how it will shape his second term. The raucous court of
advisers have disparate, sometimes contradictory goals. Some are MAGA
diehards—anti-trade, anti-immigration and anti-regulation. Others are
Republican mainstreamers who believe in low tax and small government.
And this time Mr Trump has also introduced a new faction that makes the
mix more volatile still: the tech bros from Silicon Valley. The contrasting
visions will translate into policy disputes that could hobble Mr Trump. Still,
that scenario is not foreordained. Tech’s arrival in Washington is a big risk.
It could also bring a big reward.

Leader: Tech is coming to Washington. Prepare for a clash of cultures

Finance & economics: Will Elon Musk dominate President Trump’s
economic policy?
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Leaders
Tech is coming to Washington. Prepare for a clash of
cultures
The fight over America’s economy :: Out of Trumpian chaos and contradiction, something
good might just emerge

Finland’s seizure of a tanker shows how to fight Russian

sabotage
Flagship effort :: The growing threat to undersea cables demands a robust response

To see what European business could become, look to the

Nordics
Northern lights :: The region produces an impressive number of corporate giants

Smarter incentives would help India adapt to climate

change
Living with heat, drought and floods :: It is the biggest test case for how hot, hard-up countries
can cope

The Starmer government looks a poor guardian of

England’s improving schools
Labour of fluff :: It is fiddling with what works and not yet dealing with what doesn’t

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The fight over America’s economy

Tech is coming to Washington.

Prepare for a clash of cultures
Out of Trumpian chaos and contradiction, something good might just
emerge
1月 02, 2025 08:01 上午
ALREADY THINGS have turned nasty. Donald Trump has not even got to
the White House, and his raucous court of advisers have rounded on each
other. In recent days Elon Musk and other tech tycoons have traded insults
with the MAGA crowd over highly skilled migration. What seems like a
petty spat over visas is in fact a sign of a much deeper rift. For the first
time, tech is coming to Washington—and its worldview is strikingly at odds
with the MAGA movement. The ways in which these tensions are resolved,
and who gains the upper hand, will profoundly affect America’s economy
and its financial markets over the next four years.

As in his first term, Mr Trump has assembled an economic-policy team with

disparate, sometimes contradictory goals. The MAGA diehards, such as
Stephen Miller, Mr Trump’s choice for deputy chief of staff, are anti-trade,
anti-immigration and anti-regulation, and are supported by an energetic
base. The Republican mainstreamers, such as Scott Bessent, Mr Trump’s
pick for treasury secretary, and Kevin Hassett, the head of the National
Economic Council, are primarily low-tax, small-government enthusiasts.
This time, though, there is a new faction that makes the mix more volatile
still: the tech bros from Silicon Valley.

David Sacks, a venture capitalist, has been appointed Mr Trump’s crypto

and artificial-intelligence tsar. He will hope to relax curbs on the crypto
industry and, together with other arrivals from Silicon Valley, to loosen
controls on AI to encourage faster progress. But the influence of the techies
goes beyond tech policy. Mr Musk has been tasked with running the newly
created Department of Government Efficiency (DOGE). Marc Andreessen,
a renowned venture capitalist, says he has been spending about half his time
at Mar-a-Lago as a “volunteer”. Scott Kupor, who worked for Mr
Andreessen, will take charge of the Office of Personnel Management,
which oversees public-sector hiring. Former employees of Palantir, the
Thiel Foundation and Uber have been appointed to roles in the state and
health departments and to the Pentagon, respectively. Once the revolving
door between Wall Street and the Treasury spun so fast that Goldman Sachs
was nicknamed “Government Sachs”. Mr Trump, by contrast, is trying to
put the tech into technocracy.

This is new for American politics. For years Washington was a place for
tech bosses to avoid, unless summoned by Congress for a scolding. Now
tech sees government as something to influence and disrupt. In theory this
could bring benefits for America. Like the rest of Mr Trump’s team, the
techies want to sharpen America’s economic and technological edge by
cutting red tape and boosting innovation. Bringing in experts to advise on
AI is a good idea, given its likely economic and strategic importance. And
everyone knows that government could be made more efficient.
Achieving all this in practice is another thing, though. One problem is that,
when tech and MAGA say they are signed up to America First, they mean
different things. Whereas the MAGA movement hopes to restore a vision of
the past, including an impossible return to a manufacturing heyday, tech
looks forward. It wants to accelerate progress and disrupt society, leaving
the world for which MAGA yearns ever farther in the dust.

These contrasting visions will translate into policy disputes. MAGA fears
that immigrants take jobs that Americans should be doing; tech wants the
best talent regardless of nationality. Tech has a libertarian bent that is
suspicious of government; MAGA loathes corporate power. Both groups
see China as a rival (apart from Mr Musk, for whom it is a place to make
and sell cars). But whereas MAGA thinks that foreigners exploit trade to
cheat America, tech has benefited from flows of talent, capital and custom.
Even if tech is safe from a first round of tariffs on goods, an all-out trade
war could ensnare the services it provides. Such contradictions and clashes
will make it hard for the tech crew to achieve their goals.

Mr Trump will make the backdrop more muddled still. Rather than
resolving the tensions between his team and setting a clear direction, he is
likely to act as an agent of chaos. He craves conflict and intrigue and will
relish the power he holds over the various factions at his court.

The tech contingent could also let itself down. It sees shrinking the state as
an engineering problem. But the history of sensible reforms that died in
Congress suggests it is more of a political problem—and one of which tech
has little experience. Worse, having won the president’s ear, the tech
tycoons may be tempted to seek cronyist favours. That is what investors
expect: the value of Mr Musk’s firms has soared since the election,
outperforming the market and making him at least $150bn richer. A
combination of infighting, botched implementation and self-dealing could
provoke a backlash that hobbles Mr Trump’s second term.

Out of chaos

Yet that dismal scenario is not foreordained. Instead of fighting each other
to a standstill, the factions on Mr Trump’s team could moderate each other
in some ways and reinforce each other in others, perhaps with benign
results for America. For example, the mainstreamers and the tech bosses
could limit MAGA’s worst instincts on protectionism and immigration,
while tech’s clever ideas for reform could be implemented in a way that is
politically astute. Everyone’s agreement on America’s need to deregulate
and innovate, meanwhile, could lend the programme useful momentum.

That may sound far-fetched. However, the stockmarket could help steer the
administration towards this compromise. Mr Trump is sensitive to share
prices, and will not want to endanger the roaring rally that has followed his
re-election. By providing a real-time gauge of whether investors think
Trumponomics will help the economy, the stockmarket could sway his
decisions. If so, the administration could feel its way towards policies that
boost growth. Tech’s arrival in Washington is high-risk. It could also—
conceivably—be high-reward. ■

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our weekly Cover Story newsletter.
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Flagship effort

Finland’s seizure of a tanker shows

how to fight Russian sabotage
The growing threat to undersea cables demands a robust response
1月 02, 2025 08:01 上午

GREY-ZONE OPERATIONS, hybrid warfare, slicing the salami: there are

many terms for Russia’s use of covert attacks that leave opponents unsure
how to respond. The latest theatre seems to be the Baltic Sea. Twice in the
past two months, commercial ships with Russian links have been accused of
damaging cables by dragging their anchors.

In November, after telecoms cables to Scandinavia were cut, the Danish

navy detained the Yi Peng 3, a Chinese freighter coming from a Russian
port, for a month. But China refused to co-operate, and the ship eventually
sailed on. Then, on Christmas Day, an electric cable between Finland and
Estonia was severed, allegedly by the Eagle S, a tanker shipping Russian oil
under a Cook Islands flag. Finland took a stronger approach: coastguards
boarded the ship and took it to a Finnish harbour. A vast array of Russian
spy gear was found on board. Finnish prosecutors are preparing criminal
charges.

Underwater infrastructure makes an attractive target for grey-zone attacks,

partly because much of it sits, literally, in a legal grey zone. Under the UN
Convention on the Law of the Sea (UNCLOS), countries have full
jurisdiction only within 12 nautical miles (22km) of their coasts.

Many pipelines and cables lie in their exclusive economic zones, or EEZs
(up to 200 nautical miles from the shore), where foreign ships engaged in
“innocent navigation” have a right to free passage. Ships engaging in
sabotage enjoy no such right, but proving that they are doing so usually
means stopping the ship, a chicken-and-egg problem. Under the treaty, the
country responsible outside territorial waters is the flag state, here the Cook
Islands. That is a loophole, but UNCLOS’s authors never imagined such
problems. Indeed, damage to underwater cables is regulated by a different
treaty dating from 1884.

Underwater gear is also hard to protect. Cables in the Baltic can be

hundreds of kilometres long. Many have underwater sensors to detect
damage, but navies must be quick to find the perpetrator. NATO has ample
naval resources in the area (every Baltic country save Russia is a member),
but these have been deployed mainly against traditional military threats, not
to protect civilian infrastructure. And Russia has a secret weapon: its “dark
fleet” of tankers and freighters, developed to evade Western sanctions after
it invaded Ukraine in 2022. These are often poorly maintained, badly
insured and owned (officially) by front companies in Caribbean or Gulf
countries. Besides threatening cables, they also menace the environment
with potential oil spills.

How to counter the threat? First, follow the Finns’ lead. Their coastguard
arrived so quickly that it seems to have caught the Eagle S red-handed, as
the ship’s crew hurriedly retracted its anchor chain. By impounding the
tanker, the Finns have imposed significant costs on its owners. And
bringing criminal charges under Finnish law against the owners (a company
in the United Arab Emirates) for deliberately damaging infrastructure, and
investigating suspected crew members, creates a deterrent to further
sabotage. Meanwhile, NATO has announced that it is beefing up its patrols
in the Baltic.

Next, cast the net wider. European countries should press the likes of China
and the UAE to ensure that ships under their flags do not engage in
sabotage, if they want their companies to be considered for lucrative
contracts on European maritime infrastructure. Coastguards should detain
underinsured ships, to help hunt down Russia’s dark fleet. A growing hybrid
threat requires a robust hybrid response. ■

Correction (January 2rd 2025): The original version of this story reported
that Russian spy gear had been found on board the Eagle S. Such gear was
reportedly present some months ago, according to Lloyd’s List, a shipping-
industry news organisation, but Finnish authorities did not find it when they
seized the ship. Sorry.
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Northern lights

To see what European business

could become, look to the Nordics
The region produces an impressive number of corporate giants
1月 02, 2025 06:06 上午

NORDIC COUNTRIES have long been considered exemplars of good

public policy. Politicians around the world admire Denmark’s social safety-
net, Finland’s hospitals, Sweden’s system of parental leave and Norway’s
prisons. What gets less attention is that these countries also excel at
nurturing world-beating businesses. They have only 0.3% of the world’s
population and generate about 1% of global GDP, but produce plenty of
corporate giants, from IKEA, the world’s biggest furniture-seller, to Lego,
its largest toymaker, and Novo Nordisk, Europe’s most valuable company.
The rest of Europe could learn from them. Politicians in Brussels are
perpetually searching for ways to invigorate the economy and nurture more
corporate giants. The Nordics offer a tantalising glimpse of what European
business could be.

Their corporate success is impressive. Our analysis shows that, when

compared with international rivals in the same sector, big Nordic firms tend
to be much more profitable while maintaining similar levels of revenue
growth. They are also less indebted and invest more in research and
development. Small wonder that over the past decade firms from all four
big Nordic countries have generated, on average, higher shareholder returns
than those from European companies as a whole.

One lesson from all this is to stay open. Nordic firms have thrived thanks to
their international outlook. Company bosses in Denmark and Sweden
proudly note how little of their total sales comes from their home markets.
Among the ten most valuable Nordic companies, the figure is just 2%,
compared with 12% for big firms in the rest of Europe and 46% for those in
America. This is partly explained by small domestic markets. But it is also
because of their openness to trade. Nordic companies tend to venture
abroad when still young. International competition helps sharpen business
models and perfect products. All the more reason for European politicians
to make the case for ratifying an agreement struck in December with
Mercosur, a big Latin American trade bloc.

Another lesson lies in finance. For decades the EU has been chasing a
capital-markets union, in the hope that deeper pools of money can boost
business. The aim is reasonable (even if, by itself, plentiful capital does not
ensure well-run businesses). Yet the experience of Denmark and Sweden,
which have some of the deepest capital markets in Europe, shows that there
is much that countries can do by themselves.

Clever reforms in those countries have helped put household savings to

work. Thanks to the pair’s well-designed pension systems, they account for
about a third of the EU’s total pension assets, some of which are invested in
local listed firms. In Sweden investment savings accounts (which are easy
to use and lightly taxed) have produced a booming retail-investing scene.
As a result, the country has become a hotspot for initial public offerings. In
the past decade it enjoyed more listings than France, Germany, Spain and
the Netherlands combined.

An openness to new technology matters, too. Nordic businesses routinely

top rankings of tech adoption in Europe, whether it is for enterprise
software, cloud computing or artificial intelligence. Public investment in
basic infrastructure, such as 5G networks, helps. So does a focus on digital
literacy in education. Nordic governments themselves are highly digitised,
too, which cuts bureaucracy for businesses. For years Denmark has come
first in the UN’s e-government index. Obtaining a value-added-tax number
there can take a day; in France it can take months.

Nobody’s perfect

The Nordic business landscape has its blemishes. Northvolt, a hyped

Swedish battery-maker, went bust because it stretched itself too thin. Nokia
was once the king of mobile, until it was usurped by the iPhone. And more
companies may disappoint as life in Northern Europe starts to look less
idyllic. Gang violence is a problem in Sweden; across the region, far-right
politicians are gaining ground. What is more, the world-spanning model of
Nordic companies will have to grapple with the dismal new economic
reality of rising trade barriers.

Despite all this, the Nordics show that countries can balance a business-
friendly environment with strong safety-nets. Many politicians in Europe
are fixated on trying to replicate the wonders of corporate America. But in
some ways they have a better model to emulate right on their doorstep. ■
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Living with heat, drought and floods

Smarter incentives would help

India adapt to climate change
It is the biggest test case for how hot, hard-up countries can cope
1月 02, 2025 08:01 上午

FEW PLACES illustrate the challenges of adapting to climate change as

clearly as the world’s most populous country. India was hot even before
people started to cook the planet, not to mention vulnerable to floods and
droughts. Now all these ills are getting worse. Minimum temperatures last
summer were the highest since 1901, giving heat-sapped Indians little
respite even at night. During the monsoon in 2024, floods destroyed
villages and brought towns to a standstill. In the dry season several big
cities nearly ran out of water, including Bangalore, the thriving technology
capital.
India is not yet rich, but is already shelling out a fortune to adapt to climate
change: 5.6% of GDP in 2021, up from 3.7% in 2015. Vast though these
sums may be, they barely match the scale of the problem. Humid heat
makes outdoor labourers less productive, costing India the equivalent of 7%
of GDP annually, by one estimate. Most Indian cities really will run out of
water if they don’t conserve it better, hydrologists predict. Yet in 2021
nearly half of big cities were doing nothing to recycle the life-giving liquid.

The keys to faster adaptation are information, incentives and effective

government. Better information allows more rational decision-making. For
example, in parts of Kerala where heavy rains cause deadly mudslides,
researchers have developed a cheap early-warning system using microdata.
Each farmer measures the rainfall on his land and feeds the information into
a local database far more granular than the national weather service can
provide. From this, an NGO works out which villages are so sodden as to
be perilously unstable, allowing precise and timely evacuation warnings.

Simple ideas, widely disseminated, can make a difference. In the crowded

slums of Mumbai, which can be five degrees hotter than the fancier
neighbourhoods nearby, NGOs have found that teaching people to plant
shade-giving trees on wasteland can reduce heat stress and give children a
cooler place to study. In the long run, better schooling would help, too.
Research suggests that education fosters the cognitive skills and curiosity
that help people adapt more deftly to the new situations that climate change
inevitably throws up—so, even after controlling for income, the well-
schooled cope better.

On incentives, India has great scope for improvement. It is the most water-
stressed country in Asia, yet hardly anyone pays a sensible price for the
stuff. As in many countries, farmers tap groundwater free—often using
subsidised electricity to power their pumps. Urban households are charged
little for water, and many fail to pay their bills. The result is reckless waste,
as farmers switch too slowly to drip irrigation and cities fail to capture
rainfall efficiently.

A hint of how sharper incentives would help can be gleaned from the
behaviour of big private companies, which are typically charged much more
than other customers for water. An entire ecosystem of firms has popped up
to offer them smarter sensors, analytical tools to improve water efficiency,
filters that can clean toxic wastewater, and so on. If water were properly
priced for everyone, far more Indian ingenuity would be applied to
conserving it.

India has lots of energetic green NGOs and innovative local fixes. Many
cities have water kiosks to cool gasping passers-by; a nifty scheme in
Bangalore channels urban wastewater to replenish rural aquifers, thus
helping farmers feed the city. But only the government has the power to set
broad incentives, and India’s lacks urgency (as do others). Neither the
ruling Bharatiya Janata Party nor its main rivals talk much about the
climate, and no one wants to pick a fight with farmers over water. At the
state and local level, authority is often confused. In Mumbai, for example,
streams, storm drains and sewers are each overseen by a different
department.

India needs a more joined-up approach: heat-resilient building codes to

encourage shade, ventilation and better materials; proper planning for the
millions whom climate change will push to migrate internally; better
information-gathering; and a price for water that makes people use it with
care.

The diabolical air in Delhi, though mostly unrelated to climate change,

might encourage greener policies. So might geopolitics. On December 25th
China confirmed plans to build the world’s biggest dam, high up in the
Tibetan Himalayas. Such a dam would let a giant, prickly neighbour, with
which India has come to blows, constrict the flow of the mighty
Brahmaputra river. The threat should not be overstated: most of the rain that
feeds the Brahmaputra falls on the Indian side of the border. But if the
shock jolts India’s government into taking climate adaptation more
seriously, it might yet prove to be a well-disguised blessing. ■
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Labour of fluff

The Starmer government looks a

poor guardian of England’s
improving schools
It is fiddling with what works and not yet dealing with what doesn’t
1月 02, 2025 06:07 上午

MANY PUBLIC services in Britain are in a wretched state. Yet England’s

schools are a clear exception. Pupils are increasingly numerate and literate,
compared with peers abroad. In maths tests for the OECD, a club of rich
countries, English teenagers bounded from 27th place in 2009 up to 11th by
2022. In reading, a recent test placed England’s primary schools fourth in
the world. Foreigners tour England’s classrooms in search of tips. They
include envious visitors from America, where trends in test scores are less
encouraging.
In education as in so much else, the Labour government that took office in
July talks a lot about the terrible problems the Conservatives left behind,
such as decrepit classrooms and staff shortages. It is less willing to admit
how far standards have risen in recent years—and how unfashionable Tory
policies, such as stiffer curriculums and exams, helped bring that about.
Instead of a vision for improving English education further, Labour
promises to tinker. At best that is a wasted opportunity; at worst, it will do
serious damage.

Labour’s approach to education typifies the government’s broader failings.

It has a juvenile fixation with social class. Thus far Labour’s big boast in
education has been levying value-added tax at 20% on private-school fees
from January 1st. Few believe the main aim is to raise money. Rather, it is
to squeeze institutions that the party deems shameless purveyors of
privilege. This unhelpful policy has stoked a furious row about places that
educate only 6% of Britain’s children. It reflects a misplaced priority: these
days plenty of state schools outperform private ones, despite having poorer
pupils and less cash.

Another tendency in education (as elsewhere) is deference to public-sector

unions, whose members make up much of Labour’s rank and file. The party
is right to fret that teachers are getting harder to recruit and retain. The
long-term answer is higher pay. But the government seems keener to offer
other concessions that put standards at risk. It has ordered schools
inspectors to issue vaguer, gentler (and thus less informative) reports. It
says it will reduce schools’ freedom to set curriculums and pay star teachers
better. Some school leaders have used their autonomy poorly. But others
have bred excellence.

Bridget Phillipson, the education secretary, has identified some serious

problems in state education. One is absenteeism: about a quarter of
secondary-schoolers are missing at least 10% of the time, twice as many as
before the pandemic. The share who miss half their lessons is going up.
Another is the buckling system for the one-fifth of pupils with special
educational needs, who are not doing any better than they were five years
ago, even though spending on it has soared. Yet in both these areas Labour
has little by way of convincing plans.
Indeed the prime minister, Sir Keir Starmer, has been no more able to
articulate a grand vision for the future of education than he has for the rest
of his government. Despite being out of office for 14 years, Labour took
power with an undercooked agenda and fuzzy, contradictory ideas about
what Britain needs. Compare that with Sir Tony Blair, who arrived in 1997
with a lucid view of education’s central role in making Britain fit for
globalisation.

Lacking a big idea, the government may keep meddling hamfistedly. In a

few months Ms Phillipson will hear back from a panel reviewing what
children are taught and how they are assessed. Some hope that the
government will shift the emphasis away from exams and towards nice-
sounding “life skills”, such as creativity and teamwork. Yet worsening
grades in places that have pursued such a trendy path—including Scotland,
which like Northern Ireland and Wales controls its own schools—suggest
this is a dismal dead end.

Rather than unpicking Tory reforms that improved literacy and numeracy,
Ms Phillipson would do better to entrench them and focus on absenteeism
and special needs. As things stand, the government risks harming one of the
few public services its predecessor left in good shape. ■
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Letters
Letters to the editor
On Taiwan, data in politics, Kevins, ultra-processed foods, Iran, Scotland, stockmarkets :: A
selection of correspondence

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On Taiwan, data in politics, Kevins, ultra-processed foods, Iran, Scotland, stockmarkets

Letters to the editor

A selection of correspondence
1月 02, 2025 06:06 上午

Letters are welcome via email to [email protected]

Excluding Taiwan

Your piece on “Which economy did best in 2024?” (December 14th)

omitted Taiwan, presumably because it is excluded from most international
statistics. According to the IMF, Taiwan grew almost a percentage point
faster than Spain, which topped your list of the best economies. Taiwan’s
stockmarket grew twice as fast as Spain’s index. Its inflation was slower,
nearly spot-on its 2% target. The unemployment rate has held steady below
3.5%.
This omission from global statistics continues a long pattern. Yet Taiwan
has ascended in less than a century from poverty to an economy marked by
high incomes and from martial law to being among the freest in the world,
according to the Bertelsmann Foundation. Perhaps it is time for believers in
liberalism to ditch the conspiracy of silence orchestrated by a communist
dictatorship against the developed country with the smallest and most
efficient state in the world.

E. Glen Weyl
Arlington, Massachusetts

Properly informed citizens

Bagehot (December 7th) was right to decry the lack of good data to support
effective decision-making. Without good information any policy is likely to
be at best an inspired guess, at worst a chimeric ectoplasm of the
policymaker’s mind. But maybe policymakers would actually prefer their
data to be less than perfect, so that they can make facts on the ground,
rather than being driven by present-day reality.
You can argue with the specifics, but the distortions of arguments on both
sides in the Brexit campaign, debates over the efficacy, or otherwise, of
vaccines or lockdowns during covid-19, and government unwillingness to
collect statistics on immigration all point to a similar conclusion. A political
predilection towards “my truth” rather than “the truth”.

Britain has an Office for National Statistics and an Office for Budget
Responsibility. Both have a remit to produce objective assessments. If we
are blind, as Bagehot argues, then we need these offices to be strengthened
and their work to be expanded and better communicated to us all as active
citizens. If politicians behave little better than solipsistic hobby-horse
riders, then good data is as essential to the proper functioning of a
democracy as the rule of law.

Simon Diggins
Rickmansworth, Hertfordshire

One doesn’t get the impression from Bagehot that “discovering an extra
Slough” in official data is a happy discovery. This is only the latest slighting
of the town. From the crematorium in “Brave New World” to an invitation
for “friendly bombs” to fall on it and the post-industrial grey of “The
Office”, Slough’s boosters must have quite the job going up against Aldous
Huxley, John Betjeman and David Brent. Despite this it has done well to
attract companies like DHL, Telefónica and Lego and provide the enterprise
the government so badly needs to pay for its promises.

Alexander McPherson
Toronto
Let’s talk about Kevins

I’ve long admired The Economist for combining both the predictable with
the unexpected. Your missives are logically rigorous (often iconoclastic) in
exploring the uncomfortable Cartesian contours of the underlying policy
debate. And yet there is also a very English, almost eccentric, predilection
for surprise by dabbling in life’s marginalia, before circling back to the
greater themes of our times. Two articles in your Christmas edition
(December 21st) illustrated this with gusto.

Charlemagne’s “We need to talk about Kevins: How an American name

became a European diagnosis” was wonderful. However, as a lifelong
member of the International Society of Much Misunderstood Kevins, I feel
compelled to reply on behalf of my blighted brethren across the West, and
now a growing throng of Chinese parents selecting the K word for their
kids’ English names.

Contrary to the article’s claim of Americanness, the name Kevin is

quintessentially Irish, Catholic and thus deeply European. Our common
patron is Saint Kevin of Glendalough, a sixth-century hermit who, we’re
told, lived to 120. Few modern Kevins have inherited the saint’s depth of
piety or asceticism, but we are certainly inspired by his longevity. Life-
extensionists, eat your hearts out.

It is true, however, that there is a growing reaction to this Kevinisation of

the world. The election of two Kévins to France’s parliament in 2022 was
noted as a remarkable first for the lower classes. Germans worry about
Kevinismus. And now Charlemagne warns us of a Kevinometer! Despite
this dose of class and cultural condescension, we Kevins are a robust lot;
we’ve seen it all before.

Our European friends are borrowing from more ancient English Kevin
tropes following the mass migration of Irish families as factory fodder for
William Blake’s dark satanic mills to escape the potato famines. These Irish
folks—Catholic, working-class and just plain “different”—became the butt
of English humourists who, hardly alone in the world, enjoyed ridiculing
the foreigners among them.

The late great Barry Humphries, whose humour absorbed the mores of the
English elite, built a career ridiculing his fellow Australians (which, in our
own national spirit of self-deprecation, we thoroughly enjoyed).
Nonetheless, in the deep subconscious of England’s upper crust, Australians
represented the triple-whammy: hardened convicts, Irish Catholics, and an
expendable British working class. No pilgrim fathers there. That’s why,
when I sought the prime ministership, Humphries pondered aloud whether
“Australia was ready for a PM named Kevin?”

Good-hearted banter aside, Charlemagne may be on to something about

these grands debats de les Kevins. Among the few countries where Kevin
maintains good stead across racial and class divides is the rugged
meritocracy of the United States (to which I say heartily, God Bless
America). But if this Euro-English anti-Kevin movement should become a
popular metaphor for repudiating brand America, or worse their own
working families’ aspirations for a better life, we’re in trouble.

People will have different views on American politics. But the American
people have spoken loudly through their democratic institutions. This same
America, for all its imperfections, remains the world’s oldest continuing
democracy. It liberated millions from occupation during the last war at
enormous cost to itself; it remains the largest, most dynamic economy on
earth; and it maintains the world’s most lethal and effective armed forces.

The international democratic project, where American leadership remains

crucial, is founded on a combination of three great philosophical traditions
which should unite, not divide, us. European rationalism, Anglo-American
empiricism, and a belief in the individual’s inalienable rights that flows
from centuries of Christian teaching on the intrinsic dignity of the human
person. The twin barbarisms of slavery and colonisation were ultimately
rolled back by this philosophical trifecta being unleashed around the
modern West and the Global South. They remain a formidable ideational
legacy for the democratic ideal worldwide, a fact that authoritarians know
well and fear greatly.

This brings me, briefly, to the second big surprise in your Christmas edition,
the obituary on the remarkable, unconventional and utterly quixotic Brother
Harold Palmer. More than 50 years ago, he built from scratch a medieval
hermitage and Romanesque chapel in the outer reaches of Northumbria
with the purpose of resuscitating the contemplative Christian soul in a
relentlessly secularising society. Whereas others wrestled with war and
peace, climate and artificial intelligence, Brother Harold, like his patron,
Saint Francis, called us back to the most elemental teleology of our
civilisation.

Many around the world no longer believe in either a liberal democratic or

social democratic order, or the complex web of values that underpin them.
Indeed, authoritarian states use every opportunity to foment division among
us, real or imagined.

My hope is that we Kevins, rather than becoming a cute meme for

underlying social and cultural cleavage within and between democratic
societies, keep playing our own small role in strengthening the sinews of
our shared democratic project. That way, yobs like us can all have a
constructive place in what Churchill famously called the worst form of
government in the world, except of course for all the others.

Kevin Rudd
Prime minister of Australia, 2007-10 and 2013
Brisbane

I was amused and a bit disappointed reading your piece on Europe’s

Kevins. Being Irish and living in Brazil, I gave my kids names that would
make a connection with Ireland so I called one of my sons Kevin. He was
born in 1989, before the Kevin craze in Europe. He now lives in Spain and
carries the curse inadvertently but with humour. A visit to Glendalough in
Ireland where St Kevin lived his hermit life would dissipate any notion of a
wastrel.

By the way, my name is Diarmuid, but since Brazilians cannot get their
tongue around my Gaelic name, just call me Jerry.

Jerry O’Callaghan
São Paulo
What is a processed food?

Everyone knows that greens are good for your health and red meat is not.
But everyone would laugh if I were to propose that red foods are dangerous
and green ones healthy. I could prove my thesis making use of a few
additional rules, such as postulating that some shades of red, tomatoes and
apples for instance, should not be counted as red.

The Nova classification system, which sorts foods into four categories
depending on the degree of processing they undergo, uses similar logic
(“Still processing”, November 30th). There is no scientific justification for
the assumption that the number of processing steps is of any relevance for
the health properties of foods. Making “ultra-processed” popcorn or chips is
exceedingly simple. Making “minimally processed” natural yogurt requires
some 20 processes.

Heating is the process that affects foods the most, but heating is afforded no
attention in Nova. It does not neatly fit into the processed or unprocessed
scheme. In some cases it is essential for public health, in others it may
induce carcinogens. And in a blatant example of the arbitrariness of the
Nova classification, putting a loaf of bread into a bag moves it from the
minimally processed to the ultra-processed category.

The flawed, but intuitively easy to grasp, label of ultra-processed food is a

handy justification for blaming food-related health problems on profit-
hungry food companies. And it enables politicians to divert funding from
serious research to meaningless eye-catching interventions.

Petr Dejmek
Emeritus professor of food engineering
Lund University
Lund, Sweden

The real Iranian regime

The By Invitation (December 23rd) from M. Javad Zarif, Iran’s vice-

president, was bothersome, in that he did not admit to any wrongdoing by
Iran to destabilise the region. Mr Zarif talked about the “sublime values” of
non-interventionism, sovereignty and territorial integrity. Iran has violated
these principles in Lebanon with Hizbullah, Yemen with the Houthis and
Iraq with various Iranian-aligned militias. All these groups are funded by
Iran with the goal of harming Israel.

Mr Zarif also talked of promoting a “safe and stable country where

minorities and women can thrive” in Syria. In Iran the presidential
campaign in 2024 did pledge to improve women’s rights, but the country
continues to take backward steps in this regard. Publicly admitting to some
harmful decisions would be a good first step for the regime. But no matter
what Mr Zarif believes, Iran will continue to destabilise the region as long
as people like Ali Khamenei are in power.

BEN JONES
North Las Vegas, Nevada

Mr Zarif offered a compelling vision of regional collaboration under a new

“dialogue association”. His column spoke of non-aggression pacts,
economic integration, infrastructure projects and energy security. One might
ask, why do we need security guarantees in the Strait of Hormuz? Only one
government has ever talked of blockading it.

Yasin Kay
London
Scotland the brave

The picture of the Clan Fraser headstone at Culloden Moor in your article
about heritage tourism in Scotland made me smile (“A clamour for clans”,
December 14th). Although much of the Scottish diaspora who visit Scotland
may be well-informed about Scottish history, there are many who are not. I
frequently walk or run across Culloden Moor, and I have been stopped on
numerous occasions and asked for directions to Jamie Fraser’s grave. I used
to point out that Jamie Fraser is a fictitious character in “Outlander”, which
involves time travel, and that consequently there is no grave. Tired of
continually being politely informed that I was mistaken, I now simply tell
people that it’s the one over there with all the flowers on it, and hope that
they enjoy their time in Scotland.

DAVID CADDICK
Inverness

Stockmarket prediction

Although I agree with Buttonwood that the valuation gap between

American and non-American equities will correct itself (November 23rd) I
am reminded of this apocryphal quote, often attributed to John Maynard
Keynes: “The market can stay irrational longer than you can stay solvent.”

Sunny Mahajan
Jackson, Tennessee
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Briefing
Young customers in developing countries propel a boom in
plastic surgery
Nip, tuck, lift, plump :: Falling costs and converging beauty standards spur new habits

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Nip, tuck, lift, plump

Young customers in developing

countries propel a boom in plastic
surgery
Falling costs and converging beauty standards spur new habits
1月 02, 2025 08:01 上午 | LOS ANGELES, SãO PAULO and SEOUL

LIKE MANY other members of the Lebanese community in the suburb of

Boston where he grew up, Peter Makhlouf goes to Beirut every summer to
visit family. Recently the annual trip has acquired an extra purpose. “At
some point [the women] all started to do cosmetic procedures,” he says.
They began with little tweaks, such as getting their lips plumped or teeth
whitened. Then came cheekbone-lifts, nose jobs “and so on”. The plastic
pilgrimage has become so common that Mr Makhlouf, who is 29, says he
no longer knows “anyone who hasn’t gotten plastic surgery”.
He is not alone. Cosmetic procedures have been getting cheaper, less
invasive and vastly more common in recent years, in middle-income
countries as well as rich ones. Roughly a fifth of people in places like Brazil
and China say they plan to purchase such treatments as anti-wrinkle
injections in the next five years. The young are especially keen. The
“medical aesthetics” business, already an $82bn industry, will almost
double in size over the next five years, to $143bn, according to projections
by Grand View Research, an American market-research firm.

As cosmetic interventions go mainstream, getting injected, lasered or

operated on may become “similar to getting an annual check-up”, says
Marcelo Araújo, a plastic surgeon in Brazil. Such touch-ups are already so
common among the young that they have developed slang terms for them:
“tweakments” and “upkeep”. Tiffany Demers, the founder of an app called
Upkeep, where young people can book cosmetic injections, says 18-year-
olds “don’t understand that this used to be stigmatised”. Today, she says,
“It’s like, you know, buying lipstick or a make-up product.”

Pixelated self-loathing

The boom in cosmetic treatments seems to have been spurred in part by the
pandemic. Anyone who spent hours in video-conferences can attest to the
distress of seeing one’s face gazing sallowly from a computer screen. Like a
mirror placed at an unflattering angle, Zoom calls highlighted sagging
cheeks, creasing foreheads and drooping necks. With money saved up from
lockdowns and time to recover during waves of social distancing, many
people decided to go under the knife. In America in 2021 four-fifths of
facial plastic surgeons reported an increase in patients seeking procedures
explicitly to improve their appearance on video calls. Business duly surged.
According to the International Society of Aesthetic Plastic Surgery
(ISAPS), an industry group, the number of cosmetic procedures carried out
globally, including non-invasive treatments such as filler injections, leapt
from 25m in 2019 to 35m in 2023.

The true numbers are in fact much higher, since ISAPS surveys only
certified plastic surgeons. In Iran, where nose jobs are commonplace, there
are only around 400 accredited plastic surgeons but some 2,000 doctors
offering cosmetic procedures. In China, where the industry doubled in size
between 2021 and 2025, and is expected to double again by 2030, there are
over six times more unlicensed plastic surgery clinics than licensed ones,
industry analysts estimate. A recent study by David Zargaran and others at
University College London found that over two-thirds of people
administering anti-wrinkle or filler injections in Britain are not medical
doctors.

The “Zoom boom” may have revved up the industry, but it has been long in
the making. When cosmetic surgery took off in the 1980s and 1990s, it was
the preserve of television stars. Falling costs and technology have
democratised it. “In the era of social media there’s an extent to which
everyone—even me, you, our friends and our neighbours—is public-
facing,” says Lara Devgan, a plastic surgeon in New York.

Patients often bring in photos of themselves altered through filters on

Instagram or applications like Facetune, an image-editing tool, and ask
doctors to transform them into their digitally enhanced selves. “You
construct a much better version of yourself on social media: you post selfies
taken at the right angle, with perfect make-up, with filters,” says Chang
Chia-jung, a Taiwanese influencer. “You want to become the version of
yourself that exists in the apps.” So-Young, a Chinese online marketplace
for plastic surgery, offers an app that lets users upload photos of themselves
and provides suggestions for what plastic surgeries they can undergo to
achieve more symmetrical faces. It then shows users certified surgeons in
their area.

Few women have done more to popularise plastic surgery than Kim
Kardashian, a reality-television star. A decade ago Ms Kardashian’s
curvaceous body defined beauty standards in the West. An era of
unnaturally pouty lips and exaggerated behinds followed. Between 2015
and 2023 the procedures that grew the most in demand globally were
buttock augmentations and lifts. Demand for the “Brazilian butt lift”, which
involves sucking fat out of one part of the body and inserting it into the
bottom, has skyrocketed even though it is a relatively dangerous operation.

But the era of tumescent bottoms may be flattening out. “Now we are in the
era of Ozempic and the ‘clean-girl look’, where everything is supposed to
look natural, but better,” says Vera Pizzo, a 22-year-old Brazilian who has
had several procedures. Ozempic, a diabetes and weight-loss drug, has led
to increasingly svelte figures on red carpets. Ms Kardashian herself has lost
a conspicuous amount of weight in recent years. In 2023 demand for breast-
implant removal in America grew nearly five times as much as for breast
augmentation (although from a lower base). Some of those who have lost
weight fast want smaller breasts to complement leaner physiques and tight
sports bras. “People have been all anti-boobs for the last year or so,” says
Lisa Cassileth, a plastic surgeon in Los Angeles. Demand for tummy-tucks
is also up as patients on Ozempic trim saggy skin from rapid weight-loss.

That the pendulum is already swinging back to skinniness suggests that

beauty standards are changing more rapidly than in the past. “It used to take
a while to disperse new beauty standards through advertisements and
magazines,” says Dr Araújo. But with social media, “As soon as a new
standard emerges, it can spread around the globe instantly.” Ms Pizzo
laments that it is becoming expensive to keep up with the Kardashians.
“You spend huge amounts of money and every few years you have to
change your look”, she sighs.

Faster-changing consumer preferences are stimulating innovation in the

products on offer. For instance, new anti-wrinkle injections are threatening
to unseat Botox, which has dominated the market for so long that it has
become synonymous with it. Revance, the firm that makes Daxxify, a rival
anti-wrinkle injection, claims its effects last nearly twice as long. Sales have
rocketed since it was approved by America’s Food and Drug Administration
in late 2022. Hyaluronic-acid fillers are losing ground to other dermal fillers
and new treatments that use the body’s own tissue, cells and blood platelets
—or in some cases, salmon sperm—to plump the skin. “Energy-based
devices” that use radiofrequency and ultrasound to target fat and skin
imperfections are also proliferating. These can, for example, freeze fat
without the need for painful and pricey liposuction.

All this bodes well for aestheticians. Better yet, as far as practitioners are
concerned, the industry is largely recession-proof. During the financial
crisis of 2007-09, aesthetic injectables sales contracted by only 2% globally
and the share-prices of firms in the industry fell by less than 20% on
average, even as the S&P 500 contracted by half. Argentina and Iran have
seen a surge in procedures despite dire economic conditions in both
countries. Only 7% of American consumers of injectables say they would
stop getting treatments during a recession. Most would simply switch to
cheaper providers.

The pool of potential customers is also set to expand. In 2021 McKinsey, a

consulting firm, surveyed 10,000 consumers in the world’s main aesthetics
markets and found that 15-20% of respondents intended to use anti-wrinkle
injections or dermal fillers within the next five years, which was double the
share of users at the time of the survey. The ranks of these “fence-sitters”
are composed chiefly of people aged between 20 and 50 who earn $50,000
to $100,000 a year. McKinsey reckons that around a third of them will
indeed take the plunge, mostly in countries with enough competition to
suppress prices.

Sausage-lip factories

Lower prices come in part from new, lower-cost business models. Non-
invasive treatments used to be administered by plastic surgeons or
dermatologists in clinics. But private-equity groups and venture capitalists
have been piling into the industry, investing in spas and beauty chains
where armies of nurses provide injections to much higher numbers of
customers. In America private-equity investments in medical aesthetics
grew by 30% per year between 2019 and 2021. Chains of investor-backed
“medispas” have also popped up in Brazil and China. These often partner
with digital influencers and give them free treatments in exchange for a post
that tags the clinic, says Sonya Esman, a digital influencer based in Los
Angeles. Thanks in part to such innovations, the American Society of
Plastic Surgeons (ASPS) reckons that average prices for hyaluronic-acid
injections fell by $79 in 2023 (to $715) and for Botox by $93 (to $435).
Sales have been growing rapidly (see chart).
Increasing numbers of people are also travelling abroad for touch-ups. The
number of foreigners who visited Turkey for medical procedures, mostly
plastic surgery, has ballooned like a bad implant, from 300,000 in 2013 to
more than 1.5m last year. The country has become so popular for hair
transplants, which involves grafting hair from the back of the head to the
top or the front, that the national carrier is sometimes referred to as Turkish
Hairlines. Price is the main draw. In Turkey a hair transplant costs $2,500
on average, compared with between $4,000 and $12,000 in Britain. In
Brazil a nose job will set you back by around $2,000, compared with
$7,600 in America.

Cheaper procedures with less downtime are making cosmetic treatments

accessible to a broader audience. Plástica para Todos (Plastic for All), a
Brazilian chain of plastic-surgery clinics founded in 2017, targets low-
income workers. Patients can pay for surgeries in 100 instalments. The
company runs adverts on Instagram where it boasts that getting plastic
surgery can be cheaper than buying an iPhone. In Argentina one of the
largest health-insurance providers offers a plan that includes one plastic
surgery a year.

Millennials, in particular, have embraced the new, cheaper tweakments.

Some two-thirds of the 20m people who booked treatments in 2018 on So-
Young, the Chinese app, were born after 1990. By the same token, 27% of
American patients receiving Botox in 2022 were 34 or younger, compared
with a fifth in 2015 (the idea is to prevent wrinkles before they form). In
South Korea a Gallup poll found that a quarter of Korean women in their
20s had had plastic surgery in 2020, compared with 5% in 1994. That
makes it the record-holder for plastic surgeries per person. Even men are
increasingly dabbling: they accounted for only 10% of the global market for
anti-wrinkle injections in 2018, but 15% in 2021.

An unfortunate sign of the industry’s popularity is the number of charlatans

it attracts. “People who are not trained are doing financial speculation on
the human body,” laments Juvenal Frizzo, a plastic surgeon in São Paulo.
Dr Frizzo and other plastic surgeons interviewed by The Economist say that
growing numbers of patients are seeking help with botched filler treatments.
These can range from the disfiguring, including faces that look like puffer
fish, to the dangerous: in extreme cases, filler can migrate into the eyes or
veins, leading to blindness, sepsis or skin necrosis. Operations are even
more risky. Since 2019 at least 29 British patients have died in Turkey in
botched cosmetic surgery.

Among rich countries, Britain stands out for its lax regulation. Whereas in
America only doctors, dentists or nurses can administer injections, in
Britain there is no national law stipulating any particular qualifications.
Many practitioners take only short courses in person or online before
starting to treat clients, often in premises not licensed or equipped for
medical procedures. In September a British woman died after receiving a
non-surgical butt lift (in which lots of filler is pumped into the buttocks) at a
beautician’s home.

Some procedures test boundaries in other ways. Chelsea (not her real
name), a 37-year-old estate agent in New York, spends over $30,000 a year
on injectables. But much of it does not go on her face. “Everything that I do
to my face, like Botox, filler or whatever, I also do to my vagina. But it
hurts so badly that you have to, like, be on tranquil anaesthesia to do it.”
She is one of 130,000 followers on Instagram of a plastic surgeon she calls
“the vagina whisperer”. “By the way, there’s another doctor who’s doing
designer assholes too, for guys,” she adds.

Social media give practitioners a way to advertise their specialisations

online. “When I went into practice, plastic surgeons could hardly
advertise,” says Gregory Mueller, who is based in Los Angeles and has
been operating since 1998. Industry associations would discourage their
members from advertising in newspapers or magazines or appearing on
television, he says, for fear of undermining their professional credibility.
Today some doctors have become celebrities in their own right, with
millions of followers on TikTok and Instagram, where they show before-
and-after photographs of patients to lure new clients. Some even live-stream
operations.

Social media are also spurring a convergence in ideals of beauty around the
world. Dr Devgan says that her patients increasingly have an “amalgamated
beauty standard” which features “the fuller eyebrows of South Asia”, “the
fuller lips of sub-Saharan [Africa]” and “a positive canthal tilt”, jargon for
the upward-arching eyes typical of East Asians. Demand for procedures
such as the “fox-eye”, in which threads are placed in the corners of the eyes
to pull them upwards, have been touted in the West by models and
celebrities. The popularity of the Brazilian butt lift is also part of this
mishmash.
Gangnam, a posh district of Seoul, South Korea’s capital, may vie with
Beverly Hills for the accolade of the most plastic-surgery clinics per square
kilometre. Some 400 of them are crammed into 37km2. Its emergence as a
rival pole to Los Angeles reflects the globalisation of the beauty industry. In
East Asia the most popular procedure, double-eyelid surgery, initially arose
from a desire to look more Western, says Tanimoto Naho, a sociologist at
Kansai University in Japan. Today Japanese and Chinese women look to
South Korea for inspiration, thanks to the popularity of Korean films and
pop music.

The look of K-pop stars is “girly, cute and pretty—being too mature is bad”,
says Leem So-yeon of Dong-A University in Busan. It involves few curves,
a V-shaped face, giant animé-style eyes and a tiny nose. When Inuma
Motoko, a 33-year-old Japanese beauty blogger, arranged her first plastic
surgery during the pandemic, she contacted a medical-tourism agency in
South Korea and travelled to Seoul. She has since undergone bone-shaving
surgery, in which the jawbone is trimmed to produce a sharper jawline, and
had the corner of her eyes cut open to make them look wider.

A crass audience
Many people undergo such grisly procedures because they believe that
being perceived as attractive will lift their career and marriage prospects.
Jin Hong-ryul, a plastic surgeon in Seoul, says the busiest time of year is
after university entrance exams in November, when many parents reward
their children for passing by buying them plastic surgery. Résumés in South
Korea usually include headshots. Many parents believe that “to be
successful, you should be attractive”, says Mr Jin. For models and
influencers, whose income depends on the number of likes they receive on
posts, the pressure is even greater.

Even those whose jobs do not depend on their appearance may feel pressure
to enhance it. In a paper from 1993, Daniel Hamermesh of the University of
Texas and Jeff Biddle of Michigan State University, found that “plain”
workers suffer an earnings penalty of 5-10% and “good-looking” ones earn
a premium of similar magnitude. Pretty waitresses get higher tips and
advertising firms with good-looking executives win more lucrative
contracts. This may not speak simply to the shallowness of bosses and
customers: people who are considered beautiful may also do better because
they are more self-confident.

As long as the pretty privilege remains, so will the temptation to nip, tuck,
lift and plump. Ms Chang, the Taiwanese beauty influencer, summarises the
problem: “Plastic surgery is addictive—once you start, you keep going.”
That should keep the business forever young. ■
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Asia
How 1.4bn Indians are adapting to climate change
Adapt or fry :: As heat, floods and drought get worse, people are getting creative

Economic bright spots are getting harder to find in

Thailand
Wheels of fortune :: Falling car production is a sign of a deeper malaise

Why you’re not on holiday in India right now

Tourism :: A fabulous destination for foreign tourists does little to lure them

Another accidental aircraft shootdown is a matter of when,

not if
Banyan :: The spread of conflict in Asia threatens the safety of air travellers

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Adapt or fry

How 1.4bn Indians are adapting to

climate change
As heat, floods and drought get worse, people are getting creative
1月 02, 2025 08:04 上午 | Bangalore, Mumbai and Wayanad

THE FLOOD waters were rising and Sukanya Ashin realised she had to get
out of her house. Her husband tried to open the back door, but it was
blocked by shifting mud. So they wrapped their two-year-old in a blanket
and waded through the front doorway, as their wardrobe floated off and the
houses around them started to slip down the hill. They found safety. But 17
of their neighbours died in the flood.
Adapting to climate change in India will be tough. The country is poorer
and hotter than the global average, and crams 1.4bn people onto a land mass
slightly larger than Argentina. In the first nine months of 2024 it suffered at
least one “extreme weather event”, such as a flood or a cyclone, on more
than 90% of days. July to October saw the highest recorded minimum
temperatures since 1901. India is the most water-stressed country in Asia,
says the World Resources Institute (WRI), an NGO (see map).

Regardless of future global emissions of greenhouse gases, all these

problems will get worse for years to come. Estimated spending on
adaptation rose from 3.7% of GDP in 2015 to 5.6% in 2021, a huge sum
that the Indian Institute for Human Settlements (IIHS), a research body,
nonetheless calls “grossly inadequate”. And the obstacles to adaptation are
not merely financial. India also needs political will and the spread of know-
how, old and new.

For Ms Ashin, adapting has meant moving. She lives in Wayanad, a

mountainous district in Kerala. A landslide, caused by heavy rain, destroyed
her village and her family’s eight-acre cardamom farm in 2019. Like all her
surviving neighbours, she has upped sticks and started afresh. “People who
used to own their own farms are now labouring on other people’s,” she
says. The World Bank predicts that climate change will force 10m-40m
people in South Asia to migrate within their countries by 2050.

To avoid future tragedies, researchers in Wayanad are devising early-

warning systems. Landslides are more common because extra heat causes
more seawater to evaporate, making the monsoon more intense. Sometimes
half a metre of rain is dumped on Wayanad’s slopes in a single day. At some
point, the soil “can’t hold that much” and collapses downhill, says C.K.
Vishnudas of the Hume Centre for Ecology and Wildlife Biology, another
NGO. If a village is below, it can be smothered by a wall of mud and debris
moving faster than the Indian speed limit. Another landslide in Wayanad in
July 2024 killed hundreds.

The Hume Centre has been gathering microdata about rainfall. It has laid a
grid over the map of Wayanad’s landslide-prone areas and trained farmers
in every square to operate rain gauges and upload measurements to a
WhatsApp group. This lets boffins at Hume estimate how water-sodden and
unstable each patch of mountainside has become, so that villagers can be
told when to evacuate, and where to.

Information is a tool to fight heat, too. No one knows how many people
perished in the heatwaves of 2024, but 33 poll workers died in one day in
one state during the country’s long election. The worst heatwaves in India
will be three times as common if global warming is kept to 1.5°C, and five
times if it hits 2°C, by one estimate.
The problem is most acute in cities, where the poor squeeze tightly under
tin roofs. Many run micro-businesses from home, frying snacks for sale or
operating machines that generate yet more heat. Slums are much hotter than
richer areas, which have more shade and open space. Temperatures in
October in Dharavi, a Mumbai slum that squashes 1m people into 2.4
square kilometres, are five degrees higher than in Matunga, a posher suburb
next door (see map). The effect of humid heat on outdoor workers costs
India the equivalent of 7% of GDP each year, estimates Luke Parsons of
Duke University.

More than 100 Indian cities, districts and states have drawn up “heat action
plans”, which involve planting trees, opening water kiosks in public spaces,
issuing warnings and so on. Chandni Singh of IIHS and her co-authors
assessed ten such plans and found them promising but inadequate. More
radical change is needed, she argues, starting with heat-resilient building
codes. Others call for a shift from concrete and glass to more naturally
ventilated buildings with courtyards and fans.

Of all the climate-aggravated threats to Indian livelihoods, water scarcity

seems the most urgent. With 18% of the world’s population, India has only
4% of the world’s fresh water, and 17 of its 28 states suffer “high” or
“extremely high” water stress, according to WRI. This is likely to grow
worse around population centres such as Bangalore, India’s tech capital.
Almost all Indian cities rely on costly engineering to bring in fresh water
from distant sources that “will completely run out” if conservation does not
improve, according to a new report from the Centre for Science and
Environment (CSE), a think-tank in Delhi. In March 2024 Bangalore came
close to running out of water: half its 14,000 boreholes ran dry. It avoided
disaster by penalising wastage, promoting recycling and paying for extra
water to be trucked into poor neighbourhoods. But the problem is far from
solved.

Bangalore sits on a dry plateau 600m above and 100km away from the
Cauvery river, its main water source. The liquid is pumped expensively
uphill through leaky pipes to supply a population of 14m (up from 5.6m in
2000). In the rainy season ill-designed drains overflow, streets flood and
water is wasted. During the dry season, the city’s thirst for river water
leaves the surrounding countryside parched.

By one estimate, only a third of the water Bangalore residents use is

recycled. Efforts are being made to increase this. Under one scheme, urban
wastewater is cleaned up—not to a level fit to drink, but enough to irrigate
crops—and used to replenish depleted rural groundwater.

Naveen Kumar, a pomegranate farmer, says he previously had to drill down

200m to find water, but now has to drill only a third as deep. He is relieved.
But he still worries that the water could run out one day, so he has switched
to drip irrigation. If all farmers were as prudent, less water would be
wasted, but incentives are skewed. Farmers pay nothing for water beyond
the cost of pumping it, and even that is subsidised. So the landowners
closest to canals often grow water-guzzling crops like rice and leave little
for the (often lower-caste) farmers farther away.

Donors, from the World Bank to big Indian firms (which are required to
give away 2% of their profits), are eager to fund water projects. Such
schemes hook up more downstream farmers to irrigation ditches and
persuade upstream farmers that they could make more money growing less
thirsty crops, such as exotic vegetables. This requires testy negotiation, says
Veena Srinivasan of Well Labs, another NGO. Farmers, in exchange for
being connected to a water source, must sign contracts agreeing to plant less
rice on their land. It also requires technology: Well Labs uses satellite
mapping and AI to measure what works.

Urban households underpay for water, too, but companies in Bangalore are
charged much more, and large buildings have to treat their own wastewater.
This creates a demand for water-management services, which the city’s
busy cluster of tech firms is eager to satisfy.

India is so big and decentralised that it will be hard to keep track of how
well it adapts to climate change. The rich, inevitably, will cope better, since
they can afford air-conditioning and homes on higher ground. But they have
to breathe the same air as everyone else, so the fact that air pollution in
cities like Delhi has grown unbearable could spur greener policies.
The most sophisticated cities will probably adapt most quickly. In
Bangalore people tend to pay their water bills, notes Aromar Revi of IIHS;
in poorer places they often don’t, making it hard to run a rational water
system. Water management is improving in most Indian states, but an
official survey in 2021 found that 22 out of 54 cities with more than 1m
inhabitants were doing nothing at all to recycle the precious liquid. Caste
prejudice does not help: some Indians recoil from using recycled water
because human waste is associated with ritual pollution. Still, Sunita Narain
of CSE offers a note of optimism. As climate change worsens and the need
to adapt becomes obvious, innovation will speed up, she predicts. She had
better be right. ■

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fortnightly subscriber-only newsletter, or visit our climate-change hub.

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Wheels of fortune

Economic bright spots are getting

harder to find in Thailand
Falling car production is a sign of a deeper malaise
1月 02, 2025 06:07 上午 | Singapore

IT IS NOT for nothing that Thailand is called the Detroit of South-East

Asia. In its heyday the country built a car-export powerhouse by combining
Japanese auto-making know-how with a competitive network of Thai car-
parts suppliers. It is still South-East Asia’s biggest carmaker. Yet the
production lines are not thrumming as they once did. On November 25th
the Federation of Thai Industries, a trade group, said the country’s annual
car output would probably sag to 1.5m units in 2024, 18% lower than in
2023 and 39% down from peak production a decade ago. Suzuki and
Subaru, two Japanese carmakers, are closing down factories in Thailand.
Partly this stems from a tough market. EVs built by Chinese firms in
Thailand have elbowed out Japanese competitors, which tend to rely more
on Thai parts suppliers. But the bigger culprit is stifling household
indebtedness, which has climbed ever higher since 2011, when the
government launched a tax rebate for first-time car- and homebuyers. Thai
households carry debt worth 92% of the country’s GDP, a bit shy of the
99% ratio America reached in 2007 (see chart).

It is not just the car market that is struggling. Silver linings in Thailand’s
economy are becoming increasingly hard to find. Growth is meagre.
Thailand’s working-age population began contracting in 2018, and the rate
of shrinkage is accelerating. High household debt is hurting consumers by
diverting income towards repayments: private consumption has stopped
growing and consumer confidence is low.

The Bank of Thailand (BOT) will struggle to fix this. In October the central
bank lowered interest rates to 2.25%, surprising economists; further cuts
could reduce interest payments for households. But that would risk
weakening the baht, which is already under pressure, given the gap between
Thai rates and those set by America’s Federal Reserve. The BOT is also
reluctant to lower rates much further, lest it be left without monetary-policy
ammo during a crisis, says Chitchanok Annonjarn at the Asian
Development Bank.

Political instability has not helped. In August Srettha Thavisin, then the
prime minister, was removed by Thailand’s constitutional court. One
veteran Asia private-equity investor (not usually the type to be scared) says
Thailand offers the worst of both worlds: high political risk in a low-reward
economy. On top of all this the country’s long-term competitive position is
in doubt. Despite a recent bounce in exports, Thai export industries, which
make up two-thirds of GDP, are dominated by old-school firms selling into
shrinking markets. Thailand assembles the bulk of the world’s hard-disk
drives. Attempts to pivot to more innovative product lines, such as the
manufacturing of semiconductors, are only now ramping up.

Since a military coup in 2014 halted its economic integration with the
world, Thailand “has lost a lot of time”, says Miguel Chanco of Pantheon
Macroeconomics, a consultancy. Competitors like Vietnam spent the decade
since then inking trade deals with South Korea and the EU. By contrast,
talks on a Thailand-EU free-trade deal were revived only in 2021.■
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Tourism

Why you’re not on holiday in India

right now
A fabulous destination for foreign tourists does little to lure them
1月 02, 2025 06:06 上午 | MUMBAI

Pack your trunks

SEEING THE Taj Mahal was on Bram van der Meij’s bucket list. His wife,
however, could not stomach the idea of the long journey. So the 75-year-old
Dutch-American made the trip on his own. He took in the “golden triangle”
of Delhi (which boasts fine food and architecture), Agra (the Taj Mahal)
and Rajasthan (palaces, forts, arts and crafts), before spending a few days in
Kerala.

Before all that, though, Mr Van der Meij found himself making a detour to
Nepal because of complications with his Indian visa. When he did make it
to India, the country’s bureaucracy and heavy-handed airport security were
off-putting, while the traffic and pollution were enough for him to decide
against returning soon.

Mr Van der Meij is the sort of tourist most countries fight over: someone
who is genuinely enthusiastic, visits for a long time, seeks to travel in
comfort and is willing to splash out a bit. And India, with its 43 UNESCO
World Heritage Sites, rich history, natural beauty and many delicious
cuisines, should be a magnet for travellers. Yet the continent-sized country
is an underachiever as a destination. Foreign tourist arrivals peaked in 2019
at 10.9m. That year Dubai (World Heritage Sites: zero) attracted 16.7m
visitors. In the first half of 2024 Dubai’s numbers grew by 11% compared
with 2019. India’s fell by 10%.

Overseas tourism is booming around the world, but India is being left
behind. Most countries see tourism as a valuable export industry that
generates foreign exchange, taxes and employment. It contributes about a
tenth of global GDP and accounts for one in ten jobs. Many countries in
Asia and the Middle East—including places such as Uzbekistan and Saudi
Arabia, which until recently were closed to tourists—are falling over
themselves to make it easier for tourists to visit. Several have abolished or
eased their visa regimes.

India, on the other hand, closed its few remaining overseas tourist offices in
2023. The budget for tourism promotion abroad was slashed by two-thirds
from 1bn rupees ($12m) that year to just 330m in 2024. Though domestic
travel is booming, tourism’s contribution to GDP declined from 5.8% in
2002-03 to 5.2% in 2019-20, according to the government’s figures. Rajiv
Mehra, the president of the Indian Association of Tour Operators, an
industry group, complains that the government “thinks that India is such a
destination that people will come running on their own”.

Indeed, the government is targeting 100m annual foreign tourist arrivals by

2047. That implies an average growth rate of 15% every year, well above
the 8.5% between 2001 and 2019. By then, it is possible that India will have
tackled some of the big, chronic problems identified by Mr Van der Meij
and which affect all Indians, not just visitors. But there are plenty of things
the government could do immediately.

The most important is marketing. India needs “to be in the consideration set
of tourists when they are choosing a destination”, says Pushan Sharma of
CRISIL Market Intelligence and Analytics, a research outfit. This includes
traditional efforts such as advertising and attending trade fairs, but also
inviting social-media influencers, who wield enormous clout among
youngsters, to visit the country.

Next, having intrigued travellers, India must make it easier for them to visit.
To its credit, the government replaced the onerous process of applying for
visas in person with online e-visas. But that was a decade ago and the
process remains unpredictable and fiddly; it requires using a website that
looks like it was designed during the dot-com boom. Most countries in
South-East Asia and the Middle East have slicker sites. Many offer either
visas on arrival or visa-free entry.

Lastly, it is important to make life easier for tourists when they do arrive.
India has made great leaps in digital infrastructure. Modern airports in big
cities are equipped with biometric gates that make it easier to get through
the multiple checkpoints. Electronic gates are speeding up passport control.
But these things work only for Indians, infuriating foreign travellers.

Getting first-timers into the country is crucial. Most visitors, despite the
hassles, have a good experience, says Neil Patil of Veena World, a tour
operator. Along with social media, recommendations from friends and
family are the chief reason people decide to travel to a given destination.
One happy tourist can net another five, reckons Mr Sharma. Even Mr Van
der Meij, despite his sub-optimal experience, would like to return once
India has fixed some of its problems. But “by then I will be 95 and I will be
happy to know what day of the week it is,” he says. Next time, he’s going to
Japan. ■

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Banyan

Another accidental aircraft

shootdown is a matter of when, not
if
The spread of conflict in Asia threatens the safety of air travellers
1月 02, 2025 06:07 上午

THE CRASH of Jeju Air flight 2216 in South Korea captured the world’s
imagination in the final days of 2024. The events leading to the loss of 179
souls—a bird strike followed by engine and perhaps landing-gear failure—
seem terrifyingly random. “It could have been me” is a thought that
doubtless passed through millions of minds. It will be months before the
full story becomes clear, but such accidents usually end up being attributed
to rare combinations of multiple factors. Investigations seek to unravel what
happened; airlines and regulators then apply those lessons to make future
flights safer. That approach has helped make flying the least dangerous
mode of transport.

Yet there is one risk to air travellers that has grown in recent years. It is one
that no amount of changes to aircraft design or pilot training or bird-noise
machines can reduce. And it is becoming ever more urgent. It is the risk of
passenger aircraft being shot out of the sky, and it disproportionately affects
routes between Asia and Europe, Africa and the Middle East.

On December 25th Azerbaijan Airlines flight 8243 was on a regular service

from Baku, in Azerbaijan, to Grozny in Russia’s Chechnya region. It never
made it. The aircraft instead plummeted to the ground on the shores of the
Caspian in Kazakhstan, killing 38 people. At the time of the incident, says
Russia, Grozny was under attack from Ukrainian drones. The evidence
points to an accidental shootdown by Russian air defences. In another
accident, on December 22nd an American warship shot down an American
fighter jet over the Red Sea.

The frequency of such events is growing. Four commercial aircraft have

been downed by missiles this century: Siberia Airlines flight 1812 was shot
down by Ukraine over the Black Sea in 2001. Thirteen years later Malaysia
Airlines flight 17 was brought down by Russian-backed separatists over
eastern Ukraine. Six years after that, Iran shot down Ukraine International
Airlines flight 752 as it took off from Tehran. The Azeri plane came to grief
just five years later.

A broad slice of the world is mired in conflict. Wars in the Middle East
involve Israel, Iran, Lebanon and the Houthi rebels in Yemen. Their missile
exchanges also affect airspace over Iraq, Jordan, Syria and the Arabian
peninsula, rendering a wide swathe of the Middle East vulnerable. To the
north, Ukraine’s airspace is closed while Russia’s is subject to regular
incursions by Ukrainian missiles and drones. The skies above Sudan, too,
are closed to commercial traffic and many airlines avoid flying over Libya.
The Red Sea is bristling with warships. With Russian airspace off-limits to
Western airlines, much of the air traffic between Asia and regions to the
west of it is squeezing into fewer available routes.
In October a passenger on an Emirates flight from Amsterdam to Dubai
filmed missile launches from her window when over Iran. In the early hours
of December 31st Russia downed 68 “military-grade weaponised drones”,
forcing the diversion of at least five flights, according to Matthew Borie of
Osprey Flight Solutions, an aviation risk-management company. Another
catastrophe is a matter of when and not if.

There are no easy fixes to the problem. The Convention on International

Civil Aviation, to which every country on Earth, except Liechtenstein, is a
signatory, already requires countries to “refrain from resorting to the use of
weapons against civil aircraft in flight”, and to promptly communicate
potential risks posed by conflict. Both civil and military aircraft have
transponders that answer ground-based queries, revealing whether they are
“friend or foe”.

But these systems are less effective in modern conflicts. Electronic warfare
can mask such signals, leaving air-defence forces guessing about the
identities of the planes above them. The use of drone swarms, along with
cruise and ballistic missiles, fills the skies with dangerous objects. And the
idea that Russia and Ukraine, or Israel and the Houthis, would issue
airspace-closure warnings before launching missiles at each other is a non-
starter.

What can be done? One answer is for Ukraine and Russia to make peace,
Israel and its neighbours to get along, Sudan to wind down its bloody civil
war and Libya to unfail. Another is for airlines to be braver about cancelling
or rerouting flights based on real-time intelligence, even at the risk of
annoying passengers and driving up fares. Neither answer offers much
reassurance. ■

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China
Xi Jinping has much to worry about in 2025
The year ahead in China :: A struggling economy, rising social tensions and Donald Trump
will test China’s leader

China approves the world’s most expensive infrastructure

project
Dam! :: It has China’s neighbours on edge

How China turns members of its diaspora into spies

Eyes everywhere :: America is on the hunt for these non-traditional agents. But its efforts risk
backfiring

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The year ahead in China

Xi Jinping has much to worry

about in 2025
A struggling economy, rising social tensions and Donald Trump will test
China’s leader
1月 02, 2025 08:04 上午

SOON AFTER he took power in 2012, Xi Jinping urged caution about

China’s prospects. “The further our cause advances,” he told fellow leaders,
“the more new situations and problems will arise, the more risks and
challenges we will face and the more unforeseen events we will encounter.”
As China’s economy flounders and social tensions increase—and with
Donald Trump about to enter the White House—the coming year will be
full of the kind of difficulties Mr Xi feared.
The possibility of Trump-induced tumult in the relationship between the
world’s two strongest powers is a big and immediate worry. Decisions made
by America’s next president and his mostly China-hawkish team will affect
matters that Mr Xi regards as critically linked to the Communist Party’s
grip on power. First is the economy. Mr Trump has threatened to impose a
60% tariff on imports from China, on top of a rise of 10% if China fails to
curb exports of fentanyl, a synthetic opioid that kills tens of thousands of
Americans a year. Some analysts say these increases could knock more than
two percentage points off China’s economic growth.

There is much uncertainty about how fast the tariffs will be raised and
whether Mr Trump is really determined to push them so high. But if
imposed as advertised, they could deal a hefty blow to China at a time when
the country is struggling to revive the badly battered confidence of
households and businesses amid a property-market slump and a scarcity of
jobs.

Mr Xi would have no easy remedies. He may respond by beefing up the

stimulus measures that he began unveiling in September, but the caution
that has settled in among consumers and investors suggests that he may
struggle to achieve the desired effect. He could allow the yuan to devalue in
order to keep Chinese exports competitive despite extra tariffs. But that
could further sap the confidence of investors and prompt capital flight. It
may also exacerbate tensions with major trade partners, many of whom
already think China is flooding their markets with cheap goods.

Another year in the economic doldrums would turn citizens gloomier. In

2024 their stress became more evident. One sign was a rise in random acts
of violence against members of the public, dubbed by China’s state media
“revenge on society” attacks. These have often involved knifings and the
driving of cars into crowds. Such incidents are hardly unique to China, but
the party is clearly worried. Officials have called for such cases to be dealt
with “severely, strictly and swiftly”: a phrase that often heralds brutal
justice with hasty, pro-forma trials that result in long jail terms or
executions.

In 2025 expect the term “social work” to feature prominently in party

rhetoric. This is not so much about providing services for people in need,
but about ensuring order by strengthening the party’s grassroots control. Mr
Xi set the tone in November at the first meeting of the Central Social Work
Department. He said its functions were “vital to the party’s long-term
governance” and to “social harmony and stability”. The department’s work
could entail reinforcing efforts to ensure that party committees use their
voices in the management of private firms, and that they keep the
authorities informed of anything that could trigger unrest. With many firms
cutting wages or laying people off, the party wants eyes and ears in every
workplace.

State media occasionally admit that troubles are brewing. In December

Xinhua, the official news service, referred to a “complicated and
challenging environment of increasing external pressure and growing
internal difficulties”. But at the annual session of China’s rubber-stamp
parliament, the National People’s Congress (NPC), beginning on March
5th, delegates will be under pressure to sound upbeat. They will probably
repeat the phrase used by Mr Xi in his New Year address on December 31st:
“China’s economy has rebounded and is on an upward trajectory.”

Much attention will be focused on the target for economic growth in 2025,
which will be announced at the meeting. To bolster confidence, the
government may repeat the goal for 2024 of “around 5%”. Officials’ recent
calls for “extraordinary” efforts to buoy the economy suggest they are
preparing to aim high. One such measure could be an increase in the
headline budget deficit from about 3% of GDP to 4%, according to Reuters,
a news agency. This would mean extra government spending of about 1.3trn
yuan ($179.4bn), it reckons.

The NPC is likely to gloss over politics. Yet turmoil at the top of the armed
forces will be on the minds of many of the nearly 3,000 delegates, about
280 of whom are military personnel. In November Admiral Miao Hua, who
ranked fifth in the high command, was placed under investigation for
“serious violations of discipline”—often a euphemism for corruption.
Admiral Miao was thought to be close to Mr Xi. By targeting him, Mr Xi
may be trying to show that no one enjoys protection from his war on graft.
But it also raises questions about his control over the People’s Liberation
Army.
Admiral Miao is the highest-ranking of more than a dozen senior officers
who have been toppled in the past year and a half. Among them are a
former deputy commander of the ground forces and a former naval chief of
the military region that includes the South China Sea. The two men’s
removal from the NPC was announced on December 25th. The purges may
continue. The fate of the defence minister, Admiral Dong Jun, will be
closely watched. China has dismissed reports that he is in trouble, but he is
believed to be a protégé of Admiral Miao. Admiral Dong’s two
predecessors were expelled from the party in June for alleged corruption.

With so much bothering him at home, Mr Xi may be disinclined to take big

risks abroad. He would probably prefer to stand back while Mr Trump tries
to secure peace in Ukraine. The war complicates China’s relations with
Europe (which resents China’s supply of tech to Russia’s arms factories),
but it helps China by sapping Western resources. The question of how to
handle Ukraine could cause tensions between European countries and a
more isolationist America, the kind of feud that China likes. Mr Xi will
keep trying to browbeat Taiwan as well as rival claimants to territory in the
South China Sea, though he will probably seek to avoid a big conflict. Mr
Trump boasts of being war-averse, but Mr Xi may not fully trust him to
steer clear.

As Mr Xi sees it, risks at home and abroad can become entwined in

dangerous ways. “If we do not take preventive measures or address them
properly,” he told officials in 2016, “they will add up, escalate and evolve,
from minor ones to major ones, from regional ones to systemic ones, and
from international ones to domestic ones…eventually threatening the
party’s governance and state security.” China’s biggest festival, the lunar
new year, starts on January 29th. It will be the year of the snake. Mr Xi may
want to tread warily. ■

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Dam!

China approves the world’s most

expensive infrastructure project
It has China’s neighbours on edge
1月 02, 2025 06:07 上午

IT IS SOMETIMES called the “Everest of rivers” owing to its extreme

topography. One section of the Yarlung Tsangpo falls 2,000 metres over a
stretch of 50km (31 miles). But what interests Chinese officials is the
river’s hydropower potential. On December 25th Xinhua, the state-run news
agency, reported that China had approved plans to build the world’s largest
hydroelectric dam on the lower reaches of the Yarlung Tsangpo, which
flows from Tibet into India and Bangladesh (see map).
The dam could generate 300bn kilowatt-hours of electricity annually,
according to official estimates. That is enough to meet the needs of more
than 300m people and more than triple the capacity of the Three Gorges
dam, which is currently the world’s largest. The government hopes the new
dam will help China eliminate net emissions of greenhouse gases (or
become “carbon neutral”) by 2060. But the project faces many challenges.

According to reports, four to six 20km-long tunnels will need to be drilled

through the Namcha Barwa mountain to divert the flow of Yarlung
Tsangpo. That will be hard enough, but the dam’s construction site also sits
along a tectonic-plate boundary, making it prone to earthquakes and
landslides. The engineering task is one reason why the cost of the project is
expected to be as much as 1trn yuan ($137bn), which would make it the
most expensive infrastructure project in the world.

In order to build the Three Gorges dam the Chinese government resettled
over 1.3m people. It is not clear how many might be displaced by the new
dam, which will be in Medog county in the Tibet Autonomous Region.
Tibet is no stranger to dams. Dozens have been built there, often raising the
ire of locals who feel the government is exploiting the region. In February
2024 the authorities arrested hundreds who had been protesting against
another dam that threatened to leave villages and monasteries under water.
Similar concerns, as well as fears of harm to the local ecosystem, surround
the project in Medog.

Chinese officials play down these worries and say that downstream flows
will not be substantially affected. That is unlikely to reassure India and
Bangladesh, where the Yarlung Tsangpo is known as the Brahmaputra and
is depended on by millions. The three countries have no water-sharing
agreement. So the dam will probably add to concerns over China’s ability to
control the Brahmaputra, especially in India, which is among the most
water-stressed countries in the world (see Asia section).

At least one study (by Chinese researchers) suggests that a big dam on the
Yarlung Tsangpo could benefit all the riparian states—if they co-operate—
by enabling increased flows during the dry season. But sceptics point to
China’s handling of dams on the Mekong river, which have harmed the
environment and hurt fishers and farmers downstream. It will take at least a
decade to complete the new dam. India and Bangladesh might want to use
that time working out how to adapt. ■

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Eyes everywhere

How China turns members of its

diaspora into spies
America is on the hunt for these non-traditional agents. But its efforts risk
backfiring
1月 02, 2025 06:06 上午 | NEW YORK

AMONG EXILED Chinese dissidents, Tang Yuanjun was well known. He

had taken part in the Tiananmen Square protests of 1989 and landed in
prison as a result. He later defected to Taiwan, swimming to one of its
outlying islands from a fishing boat. America granted him asylum and he
settled in New York, becoming the leader of Chinese pro-democracy
groups. But in 2024 he was arrested by the FBI. He admits to having used
his position to collect information for China and to report on his fellow
activists. He did this so that officials in Beijing would allow him to return to
China to see his ailing parents.
China’s hacking of Western computer networks, such as its alleged breach
of America’s Treasury Department, has made headlines in recent years. So
too have its efforts to steal military and trade secrets. But China has also
been pursuing a more subtle campaign, one that involves bribery, blackmail
and secret deals, and which uses members of the diaspora to gather
information and further China’s interests. Britain recently got a taste of this
when the authorities there accused Yang Tengbo, a Chinese businessman, of
cultivating ties with Prince Andrew, the king’s brother, as part of an
influence operation. (Mr Yang has said the suggestion he is a spy is untrue
and has denied doing anything unlawful.)

America is China’s most important target. These types of activities fall

under the Foreign Agents Registration Act (FARA), an American law that
requires those engaging in political projects on behalf of a foreign actor to
register and disclose what they are doing. In recent years the Justice
Department has strengthened its enforcement of the act. The department
conducted 25 FARA inspections in 2023, the most since 1985. In 2024 there
were several high-profile cases involving China.

One involved Linda Sun, a former aide to the governor of New York who
was arrested in September for working as an “undisclosed agent” of China
and its Communist Party (CCP). Ms Sun allegedly blocked meetings
between Taiwanese officials and state leaders, removed references to
Taiwan from communications and hindered efforts to publicise China’s
persecution of ethnic minorities. In return, she is said to have received
millions of dollars in kickbacks and gifts. She has pleaded not guilty.

Home towns and home truths

The accusations against Ms Sun are straightforward. But many of China’s

influence operations occur in a grey area. Take the diaspora groups called
tongxianghui, or home-town associations, which bring together immigrants
from particular parts of China. They are ubiquitous in American cities—and
under scrutiny by the Justice Department. Association leaders often
mobilise voters before elections in America and have ties to local officials.
Some organise political activities, such as rallies in support of Xi Jinping or
protests against visits by Taiwanese officials.
This is all legal, so long as the organisers act independently. But the line
between voluntary action and agent work is fuzzy. Many overseas Chinese
support the CCP or, at least, are willing to help it because they have
businesses or family back home. Only when they receive covert funding,
instructions or supervision from Chinese officials do they cross the line into
being foreign agents. In 2022 the FBI arrested the head of a Shandong
home-town association—not because of his frequent trips to China and
friendliness with Chinese officials, but because they suspected him of
working with Chinese police to forcibly repatriate another immigrant.
Similarly, in 2023 two Chinese men were indicted for allegedly working
with Chinese police to operate a “clandestine police station” in a Fujian
home-town association in New York. One of them pleaded guilty in
December.

American authorities have struggled to combat these efforts without

alienating the Chinese diaspora. An anti-espionage programme launched in
2018, called the China Initiative, aimed to stop the country from using
“non-traditional collectors”, such as academics and scientists, to steal
America’s trade and technology secrets. Nearly 90% of the defendants
charged under the initiative were of Chinese heritage, according to a
database compiled by the MIT Technology Review. But many of the cases
involved questions of “research integrity”, with academics accused of
failing to fully disclose their Chinese affiliations. Only a quarter of all the
cases brought under the initiative ended in conviction.

America’s counter-intelligence efforts are meant to make the Chinese

diaspora feel safe, says a former official who worked on the China
Initiative. “What you don’t want to do is over-rotate to a situation where
being Chinese equals being a spy.” But the initiative left many academics
feeling targeted because of their Chinese heritage, says Gang Chen of the
Massachusetts Institute of Technology. In 2021 he was charged with failing
to disclose connections to Chinese educational programmes when
submitting a federal grant application. The indictment was widely criticised;
the charges were later dropped.

Many members of the Chinese diaspora welcome efforts to stymie CCP

influence. But Zhou Fengsuo of Human Rights in China, an activist group
in New York, warns that the heavy-handedness of America’s approach has
led to distrust of the government. He complains that exiled dissidents
receive little protection, making them easier targets for Chinese coercion.

In 2022 the Justice Department ended the China Initiative, saying it led to a
“harmful perception” of racial profiling. But in September the House of
Representatives passed a bill to revive it as the CCP Initiative. Such efforts
may intensify under Donald Trump, who has nominated China hawks for
important jobs. As America tries to counter the CCP, it may risk driving
more of the diaspora into its hands. ■

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United States
The Bourbon Street attack was part of a new pattern
Terrorism in America :: Why some experts fear a resurrection of Islamic State

Homelessness rises to a record level in America

Out for the count :: A surge in migration and disasters pushed many people over the edge

Duelling arguments take shape in the TikTok-ban case

The last ByteDance :: America’s Supreme Court is due to weigh the platform’s fate on January
10th

Overall, American states are becoming more democratic

Tocqueville updated :: But there are some notable outliers

RFK junior is half right about American health care

The upside of MAHA :: What would have to happen for the anti-vaxxer-in-chief to do more
good than harm

Jimmy Carter reshaped his home town

Above the fruited plain :: What the 39th president means to Plains, Georgia

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Terrorism in America
The Bourbon Street attack was
part of a new pattern
Why some experts fear a resurrection of Islamic State
1月 02, 2025 11:07 上午

SHAMSUD-DIN JABBAR, a 42-year-old American citizen and military

veteran from Texas, had worked as an IT specialist in the army and praised
the discipline and planning that it taught him. He had also worked in real
estate. He had a conviction for theft. And he had been married twice. Why
he rammed a rented Ford pickup truck into a crowd of revellers on Bourbon
Street in New Orleans in the early hours of January 1st, killing at least 14
and injuring 35, is mysterious and in a sense always will be.

But the FBI is investigating the attack as an act of terrorism: a black Islamic
State (IS) flag flew from the bumper of the truck driven by Mr Jabbar.
President Joe Biden said that security briefings he had received showed Mr
Jabbar was inspired by IS and wanted to kill for its cause. The fact that he
avoided detection suggests a fairly sophisticated conspiracy. “This is not a
garden-variety attack,” says Colin Clarke of the Soufan Center, a global-
security research group. After the crash police killed Mr Jabbar in a shoot-
out.

Since the heyday of IS’s so-called caliphate nearly a decade ago, the
number of violent plots that Muslim-Americans planned or carried out for
revolutionary groups has plummeted, from 94 in 2015 to just three in 2023,
according to data collected by Charles Kurzman of the University of North
Carolina at Chapel Hill (see chart). But if Mr Jabbar was indeed inspired by
IS, the New Year’s attack will have been the latest in a string of recent
successes for the group—and perhaps its most lethal strike on American soil
since the Pulse nightclub shooting in 2016.

Essentially, “2024 was IS’s year of resurrection,” says Bruce Hoffman, a

counterterrorism scholar at the Council on Foreign Relations, a think-tank.
On January 3rd 2024 an IS terrorist killed 95 civilians at an Iranian
ceremony to commemorate Qasem Soleimani, a top general assassinated by
America. (IS counts both America and Iran’s Shia theocratic regime as
mortal enemies.) The memorial bombing was followed by an attack on a
Roman Catholic church in Istanbul later that month and another particularly
bloody one at a concert in Moscow in March. Since last summer, American
intelligence services have foiled two big plots: one planned for a Taylor
Swift show in Austria and another for election day in Oklahoma City.

Why now? Extremist outfits organise in chaotic places and this year has
provided a bevy of them. After the Assad regime in Syria collapsed last
month the Biden administration said it was “clear-eyed about the fact that
IS will try to take advantage of any vacuum to reestablish its capability”.
Grievances over attacks on Muslim civilians also help extremist groups
recruit volunteers. The war in Gaza has “reinforced the ideology that the
West sees Muslim life as cheap and expendable,” says David Schanzer, a
professor at Duke University. Terrorism is asymmetric warfare amplified by
media; flashy complex attacks are a way for a weakened IS to reassert its
relevance.

Analysts who have been tracking terrorism for years see reasons to fret
these days—and the New Orleans attack only confirms them. Since the end
of the Obama administration the government’s focus on counterterrorism
has been eclipsed by great-power strategy and competition involving China
and Russia, as well as persistent conflict with Iran. Mr Trump’s promise to
slash federal budgets could further hinder the government’s ability to
collect intelligence, carry out operations overseas and stop home-grown
terrorist attacks, says Jason Blazakis, a professor at the Middlebury
Institute. Mr Trump’s MAGA cabinet’s tendency towards isolationism
could also give groups like IS and al-Qaeda room to grow abroad,
especially if America withdraws Special Forces and local army trainers that
have characterised counterterrorism strategy in recent years.

It is probably no coincidence that Mr Jabbar chose to carry out his attack on

New Year’s Eve, a night known for drinking and partying, indulgences that
are anathema to puritanical Muslim extremists. Bourbon Street, the hub of
New Orleans’s tourist district, exemplifies that spirit more than most
American places. As families searched for their loved ones at local
hospitals, news of a second deadly attack surfaced: this one in Las Vegas.
There, a Tesla Cybertruck exploded outside the Trump Hotel, killing the
person inside the vehicle. The authorities are investigating this, too, as an
act of terror. Like the car used in New Orleans, the Tesla Cybertruck was
rented on Turo, a car-sharing service. If IS is involved in that one too, its
ability to carry out two near-simultaneous attacks in distant American cities
will reinforce the impression that a movement that seemed to have been
defeated is once again a threat to take seriously. ■

Editor’s note (02/01/2024): The number of people killed by Mr Jabbar was

revised down from 15 following a clarification from the Orleans Parish
Coroner.

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Out for the count

Homelessness rises to a record level

in America
A surge in migration and disasters pushed many people over the edge
1月 02, 2025 06:06 上午 | Los Angeles

EACH YEAR for a few frigid days in January volunteers fan out across
cities, towns and rural areas to try to count every homeless person in
America. The method is imperfect: cities do their counting in different
ways, and many homeless people are transient or hide away in subterranean
tunnels and under highway overpasses. Researchers think the result is an
undercount. But this “point in time” survey offers the most complete picture
of homelessness that exists in America today. The results for January 2024,
released on December 27th, offer bleak news: the number of homeless
people in the country had risen to the highest level on record.
Between 2023 and 2024 homelessness increased by 18%, to roughly
771,000 people. That is nearly as many people as live in North Dakota. The
vast majority of the uptick comes from people living in shelters—picture
hotel rooms or rows of beds—rather than sleeping rough, as is common on
the West Coast and in some southern states. The report’s most shocking
revelation is that the number of homeless people in families with children
rose 39% year-on-year—a reversal of a slow but steady decline in the years
preceding the covid-19 pandemic. Three big things contributed to the surge:
a housing shortage that has driven up rents and home prices, an influx of
asylum-seekers that overwhelmed some cities, and disasters that displaced
people.
Estimates vary, but Moody’s Analytics, a consultancy, reckons America is
short about 2.9m affordable homes. It is no coincidence that many states
with consistently high rates of homelessness (California and New York) or
those that saw big increases this year (Hawaii and Massachusetts) have
some of the priciest housing in the country. A third of people counted were
chronically homeless, and may suffer from drug addiction or struggle with
mental illness, which make it harder to stay housed. But most people fall in
and out of homelessness depending on their finances. When pandemic-era
programmes that offered rental assistance and prevented landlords from
evicting tenants expired, more people may have been pushed onto the
streets.

When migrants arrived by the thousands in cities far from the southern
border they burdened already crowded shelter systems. Three places
absorbed the most migrants: Chicago, Denver and New York City. In
Chicago migrants camped inside police stations. Denver created a bussing
scheme of its own, sending people on to their final destinations rather than
allowing them to camp on the streets. The states those cities belong to—
Illinois, Colorado and New York—each saw corresponding rises in
homelessness. New York City attributes almost 88% of its increase to
asylum-seekers housed in the city’s shelters.

For an example of the ways in which disasters can increase homelessness,

look to Hawaii. In August 2023 a wildfire caused by broken power lines
razed the town of Lahaina, killing at least 102 people. Houses were burned
down to their foundations. Survivors lived out of shelters and hotel rooms
across Maui for months, if not longer. The blaze worsened an already dire
housing shortage on the islands, where the median listing price is nearly
double the nation’s. What happened on Maui has become a cruel pattern:
homelessness also spiked in Chico, California after a fire engulfed the
nearby town of Paradise in 2018.

There are two small reasons for hope. First, the count was carried out right
after migrant encounters at the southern border peaked and cities were
flailing. In the year since then, many newcomers have settled in; Denver
has wound down its migrant shelter programme, for example. That may
mean homelessness could decline in 2025. Second, the only bright spot
amid about 100 pages of grim analysis in the report showed that the number
of homeless veterans has declined by more than half since 2009 thanks to
better co-operation between cities and the federal Department of Veteran
Affairs. In the hunt for solutions, it makes sense to start there.■

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The last ByteDance

Duelling arguments take shape in

the TikTok-ban case
America’s Supreme Court is due to weigh the platform’s fate on January
10th
1月 02, 2025 06:06 上午 | NEW YORK

DAYS AHEAD of the showdown in TikTok v Garland—and a fortnight

before TikTok could vanish from Americans’ smartphones—the legal
debate over the wildly popular social-media site is coming into focus. On
one side of this Supreme Court dispute are the Biden administration and
lawmakers who warn that TikTok’s links to the Chinese government
threaten national security. On the other are ByteDance (TikTok’s parent
company), free-speech advocates, some of the estimated 170m Americans
who regularly scroll the app and Donald Trump, the president-elect.
The case, slated for oral argument on January 10th, may give the justices a
bout of cognitive dissonance. The Supreme Court tends to defer to Congress
and the executive branch when concerns about national security arise. Yet
the justices also aggressively police freedom of speech.

Lawyers found their Christmases ruined when the Supreme Court ordered
initial briefs due on December 27th. Their new year’s plans were
complicated by a January 3rd deadline for final filings. The question: does
the Protecting Americans from Foreign Adversary Controlled Applications
Act, a law approved last April by 360-58 in the House and 79-18 in the
Senate, and signed by President Joe Biden, violate the First Amendment?

Senator Mitch McConnell submitted a feisty amicus brief defending the

law, which will remove TikTok from app stores on January 19th unless it is
sold to a non-Chinese company. “The right to free speech enshrined in the
First Amendment”, he writes, “does not apply to a corporate agent of the
Chinese Communist Party.” To hold otherwise means Nikita Khrushchev
would have had a constitutional right “to buy CBS and replace The Bing
Crosby Show with Alexander Nevsky” (he did not say whether this would
have been a good exchange).

The Biden administration says that ByteDance permits China, a “foreign

adversary”, to “harvest sensitive data about tens of millions of Americans”
and to acquire “a potent tool for covert influence operations”. It says the
law thwarts such influence without infringing on the First Amendment.
Mandatory divestment “does not involve speech at all”—just a change of
ownership. Lawyers for ByteDance and for individual TikTokers insist
otherwise. “No arm of the Chinese government has an ownership stake—
directly or indirectly—in TikTok Inc. or ByteDance,” the company says.
The ban will harm the 17% of adults who “regularly get news from TikTok”
and cut off the flow of clips from American creators, who uploaded 5.5bn in
2023.

The American Civil Liberties Union, Electronic Frontier Foundation and

Knight First Amendment Institute at Columbia University say the ban
would close “a vast universe of expressive content, from musical
performances and comedy to politics and current events”. The Cato Institute
dusts off John Stuart Mill’s “On Liberty” to argue that even “propaganda”
deserves protection: the First Amendment “foreclose[s] public authority
from assuming a guardianship of the public mind”.

Mr Trump, whose previous scepticism about TikTok has softened as he has

amassed 14.7m followers on the platform, tells the justices he “is uniquely
situated” to “vindicate” the “free-speech rights of all Americans”. As “one
of the most powerful, prolific, and influential users of social media in
history”, and with his “consummate dealmaking expertise”, Mr Trump
should have the chance to broker a “negotiated resolution”. He wants the
Supreme Court to pause. But for all its boasting, Mr Trump’s brief takes no
position on the legal questions in the case. Without a legal justification, the
court has no basis for delaying the reckoning. So if the app survives, its
salvation will have little to do with the incoming president’s intervention.

Many experts see TikTok’s days ticking to a close. Raffi Melkonian, a

Supreme Court litigator, thinks the Foreign Adversary Law should be struck
down but suspects the justices will not do so. Genevieve Lakier, a First
Amendment scholar at the University of Chicago law school, says the
justices tend to view freedom of speech “very narrowly when claims of
national security are invoked by the federal government”. But she hopes the
court does not “shut down such an enormously important speech platform”.
A TikToker known as “stephen rigatoni” agrees. “I feel like if I sat down
and had one singular Coors Light with the Supreme Court”, he said in a
recent video, “we could figure it out.” ■

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Tocqueville updated

Overall, American states are

becoming more democratic
But there are some notable outliers
1月 02, 2025 06:07 上午 | WASHINGTON, DC

THE RESIDENTS of Bristol, Tennessee and Bristol, Virginia share a

border, a downtown and even a NASCAR speedway. But thanks to the
quirks of American federalism, the 27,800 Bristolians who live in the
Volunteer State, as Tennessee calls itself, reside in what one ranking
determines to be America’s least democratic state, while their 16,800
neighbours to the north live in one of the most democratic.

This, at least, is the portrait drawn by the State Democracy Index,

developed by Jake Grumbach, a political scientist at the University of
California, Berkeley, who has been measuring the strength of electoral
democracy within America’s 50 states over the past 24 years. For the 12th
year in a row Tennessee has come in dead last.
To score the condition of a state’s democracy, Mr Grumbach focuses on
four main components: which citizens are eligible to vote and how
burdensome it is for them to do so, how responsive state policies are to
public opinion, the fairness of electoral maps, and finally how secure the
state’s elections are.

It may come as a surprise that since Mr Grumbach last measured the health
of America’s states, up to the end of 2018, his model’s assessment of state-
level democracy has modestly improved. Both Democrat-led and
Republican-led states have seen upticks on average. Much of this is thanks
to a slight decrease in the prevalence of partisan gerrymandering. The
expansion of postal and early voting in the midst of the covid-19 pandemic
and afterwards also improved Mr Grumbach’s scores. Yet a stark partisan
divide remains: 19 of the 20 worst-performing states in the index voted to
the right of the nation in the most recent election, and in all but two of them
Republicans control the governorship and both chambers of the legislature.

Twenty states have seen their democracy scores decrease since 2018. And
the variance among state scores has increased substantially. For example,
Tennessee is now an underperforming outlier even among Republican
states, which are on average two standard deviations more democratic than
the Volunteer State. The explanation is straightforward, says Sekou
Franklin, a political scientist at Middle Tennessee State University: “There’s
a non-democratic political culture that’s taken hold of the state.”
Gerrymandering is one expression of this. For years the Republican
supermajority in the state legislature has gone to battle with Democratic
cities like Nashville, the state’s capital, and Memphis, a familiar pattern in
other states too. In 2022 state legislators split voters in Nashville across
three redder congressional districts. Over the years, they have also passed a
series of laws restricting local-government authority.

In Mr Grumbach’s model one of the best things a state can do is to produce

fairer legislative maps. In 2024 Republicans won just under two-thirds of
the vote in Tennessee. Yet they won eight of the state’s nine congressional
districts on election day. All else being equal, were Tennessee
gerrymandered less severely, Republicans today would probably have a
slim one-seat majority in the US House of Representatives rather than a
hefty five-seat advantage. The spread of early and alternative voting may
have improved America’s democracy, but rigged district maps undermine
those gains. ■

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The upside of MAHA

RFK junior is half right about

American health care
What would have to happen for the anti-vaxxer-in-chief to do more good
than harm
1月 02, 2025 06:07 上午

IT IS NOT hard to construct a scenario in which Donald Trump’s plans to

“Make America Healthy Again” (or MAHA) do the opposite of that. His
proposed secretary of health, Robert F. Kennedy junior, is one of the
country’s more prominent vaccine sceptics. The man who would be in
charge of the Centres for Medicare and Medicaid Services, which provides
health coverage for two in five Americans, is Mehmet Oz, a TV doctor who
has talked about the medical benefits of communicating with the dead and
invited a Reiki healer to assist him during surgery. Dave Weldon, a former
congressman and doctor, who has also cast doubt on the safety of vaccines,
would lead the Centres for Disease Control and Prevention (CDC), which
oversees the country’s vaccine schedules. Unless the Nixon-to-China theory
applies to public health, these are not the people America would want in
charge in a pandemic—or even just a regular epidemic.

At the same time, a central part of the MAHA agenda is something most
experts agree on: America’s main health problem is chronic diseases, and
far too little is being done to prevent them. Mr Kennedy has some sensible
ideas about how to tackle that. So it is worth exploring what positive
changes his tenure could bring about.

About 60% of American adults have a chronic illness, such as diabetes,

heart disease or cancer; 40% have more than one. In 2016 these conditions
cost America $3.7trn (or 20% of GDP) in medical spending and lost
productivity. Yet the health-care system is focused on treating rather than
preventing these conditions. Mr Kennedy wants to cut unhealthy foods from
the American diet. He thinks the CDC should be doing more about chronic
diseases. And he wants a bigger share of government-funded research to
focus on them.

To achieve this ambitious agenda, Mr Kennedy, who does not have much
experience running anything, would need to be clever about navigating the
federal bureaucracy. He has talked about firing hundreds of staff, such as
the entire nutrition department of the Food and Drug Administration (FDA),
and about pausing research on infectious diseases at the National Institutes
of Health (NIH) to focus fully on chronic disease. In reality, though, lots of
government employees have civil-service job protection. And the existence
of many departments is mandated by law. Congress also has a say on the
distribution of funds within some of them.
The things that prevent chronic diseases are no secret, says Georges
Benjamin from the American Public Health Association: healthy diets, less
tobacco and alcohol, more sport at schools and better screening for
precursors, such as high blood pressure, blood sugar or early signs of cancer
(see chart). Of those, reforming America’s food system is closest to Mr
Kennedy’s heart. He wants to purge the American diet of processed foods
packed with additives such as artificial colours and other chemicals. But the
federal food programmes with the biggest footprint are under the purview
of the Agriculture Department. They include school meals (which 29m
children benefit from) and the Supplemental Nutrition Assistance
Programme (formerly known as food stamps), which covers 42m people.
The national dietary guidelines, coming up for review in 2025, are a joint
production by the Health and Agriculture Departments. Brooke Rollins, the
nominee for agriculture secretary, may bow to the many Republicans in
Congress who are from farm states that stand to lose if potato crisps or the
myriad foods sweetened with corn syrup are blacklisted.

Mr Kennedy would have more control over improving food safety and
nutritional labels on foods, which are regulated by the FDA—especially if
he sticks to his promise to shield health-policymaking from corporate
influence. More stringent regulation of the chemicals used in processed
foods would force food companies to use fewer of them. But hiring the
many more people that the FDA would need for this is probably a non-
starter in an administration bent on small government (to say nothing of Big
Food’s influence in Congress). Standards for nutrient information on food
packages that are designed with industry participation, as is the case in
America, typically result in puzzling information and baffled consumers.

But, as Mr Kennedy has acknowledged, changing what Americans eat is

more complicated than telling them which foods are bad or restricting food-
aid dollars to healthy foods. Fresh fruit and vegetables are rarely stocked by
the corner shops where many poor Americans buy their food; shelves there
are laden with tobacco, alcohol and cheap processed foods. Programmes
that have been found to boost the availability of healthy food in such fresh-
food deserts typically involve some form of subsidy to shop owners. This
sort of intervention could pay off in the long term but would be hard to sell
politically.

It is, though, the sort of intervention that Jay Bhattacharya, a Stanford

University health economist picked by Mr Trump to lead the NIH, could
prioritise for research on the best ways to make people eat more healthily.
That would fit with Mr Kennedy’s plans to shift NIH research towards
chronic diseases and nutrition. Of the 11,000 research projects funded by
the NIH in 2012-2017 only 8.5% focused on studying prevention of the risk
factors that account for 70% of deaths in America. Poor nutrition is the
leading risk factor for ill health, but nutrition research accounts for just 4%
of NIH spending.

This matters. When the expert committee in charge of updating America’s

dietary guidelines convened in 2024 to discuss what to do with ultra-
processed foods (UPFs), it concluded that the research on their effects was
too thin to recommend anything specific. The world’s most rigorous clinical
trial on how UPFs affect health was done at the NIH in 2019. Resources for
such trials were cut to the bone in 2022.

If he is confirmed by the Senate, Mr Kennedy will quickly realise that to

have a meaningful impact on chronic disease he needs co-operation from
public-health services, which fall under the CDC, and state health
departments (to which the agency allocates 70% of its budget). They carry
out campaigns to encourage people to eat healthy diets, stop smoking and
drink less. They also run free clinics where people without health insurance
are screened for cancer, diabetes and high blood pressure.

Mr Kennedy has toned down his trashing of vaccines, even denying that he
is opposed to them—no doubt to improve his chances of Senate
confirmation. But once he bags the job, he could well focus a lot of his
energy on anti-vaccine strategies. That would not make America healthy at
all. As Jerome Adams, who was surgeon-general in Mr Trump’s first
administration, wrote on X, “Chronic diseases are important—but you can’t
die from cancer when you’re 50 if you die from polio when you’re 5.”■

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Above the fruited plain

Jimmy Carter reshaped his home

town
What the 39th president means to Plains, Georgia
1月 02, 2025 08:10 上午 | PLAINS

Back to the beginning

IN HIS MEMOIR Jimmy Carter recalls trying to copy the habits of black
boys. In his poor peanut-farming community his closest confidants did not
share his skin colour, and he wanted to fit in. But Mr Carter lived in the big
house; his friends in tenant shacks. In Plains, Georgia, it still seems a
wonder that the white child who was always out of place in the Jim Crow
South became America’s 39th president. On December 29th he died, at 100,
a mile from where he was born.
As Mr Carter rose in politics the people of Plains began to take pride in
their quiet town. Locals started to “keep their yards clean”, says Boze
Godwin, the former mayor and Mr Carter’s pharmacist. Before the 1976
Democratic primary, 98 Georgians went to New Hampshire to knock on
doors for him. Town records claim it was the first time that so many
volunteers from a candidate’s home state travelled the country to campaign.
Mr Godwin remembers his parents taking the train north with the “Peanut
Brigade”.

Local lore says that once you get the red Georgia clay caked between your
toes, you can’t get it out. So when Mr Carter left Washington after one term
as president he returned to his boyhood town. At Maranatha Baptist Church,
where a dozen rows of pews are lined with raspberry-coloured velvet, he
led Bible study. His lessons lured tourists who then ate and shopped
downtown. It was his “Sunday school economy” that kept Plains viable
while other country towns withered, says Philip Kurland, a businessman
who talked politics with Mr Carter for decades.

Mr Carter shaped Plains in other ways, too. In fact, he made it as much of

an anomaly in the Deep South as he was. By inviting black people home for
supper and helping women become deacons at the church he “let people
know that new things were acceptable”, says one resident. But standing at
the pulpit each week, year after year, the former president never talked
politics, says Nelle Ariail, a friend who keeps a collection of his
handwritten poems in a drawer.

This week a motorcade will take Mr Carter’s coffin north to Atlanta,

following the highway past the peanut fields that still nourish the region.
Although the county just barely voted for Kamala Harris—Mr Carter’s
family says he hung on in hospice care to cast his ballot for her—locals say
that Donald Trump carried the town. Today the road to the big city is dotted
with placards for the incoming Republican president. To some people in
Plains it is a sign of how much has changed; to others a reminder of how
little. ■

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The Americas
Venezuela’s Nicolás Maduro looks set to take the throne
The coming coronation :: Relying on a fabricated election victory, the incumbent will be
sworn in again

Why Spanish firms have cooled towards Latin America

Turning off the tap :: Slow growth and messy politics are largely to blame

Failure to prepare for climate change is costing Honduras

dear
No Master in Disaster :: Weeks after the most recent storm, the country is still in emergency
mode

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The coming coronation

Venezuela’s Nicolás Maduro looks

set to take the throne
Relying on a fabricated election victory, the incumbent will be sworn in
again
1月 02, 2025 09:53 上午 | Caracas

“THEY ARE preparing for the coronation,” says a bakery manager in

Caracas, Venezuela’s capital, as teams of cleaners spruce up the streets
outside. On January 10th Nicolás Maduro will be sworn in for his third term
as president in the National Assembly’s building nearby. His inauguration
will defy the popular will. In July a clear majority of Venezuelans voted
against him, only for the electoral authority, which the regime controls, to
declare that Mr Maduro had won the election with 52% of the vote.
It will not be the first time that he has donned the presidential sash amid
controversy. The previous election, in 2018, was also a sham, with key
opposition leaders barred from taking part. But this time the rigging went
further. The opposition had collated and published tens of thousands of
receipts from voting machines to prove that its candidate had won. All in
vain. “We have to accept that Venezuela is about to become a full-blown
dictatorship,” says a Western diplomat in Caracas.

In protest, most European governments will send no representative to the

ceremony. Even countries in the region that were once sympathetic,
including Brazil, Colombia and Mexico, will not be represented at a high
level. All are expected to send only their resident ambassadors. The United
States, which has had no diplomatic relations with Venezuela’s government
since 2019, will be absent.

Other regional autocrats, such as the presidents of Cuba and Nicaragua, will
almost certainly turn up. President Vladimir Putin will be represented by
Vyacheslav Volodin, speaker of the Duma, Russia’s parliament. China, Iran
and Turkey will probably send special envoys. Foreign leftist “solidarity”
organisations have been invited to Caracas for an “anti-fascism conference”
that will coincide with the inauguration. The regime will cite their presence
as proof of international support.

The real winner of the election, Edmundo González, who is 75, is in exile in
Spain. According to the opposition’s count, this previously little-known
former ambassador won 67% of the vote to Mr Maduro’s 30%. He has
pledged to return to his home country in time for what should have been his
own inauguration. “I’ll be back to Venezuela by land, air or sea,” he
promised on December 17th. Mr González was a stand-in for the hugely
popular opposition leader, María Corina Machado, whom the regime
banned from running, but she still rallied millions of anti-regime voters.

Ms Machado is in hiding in Venezuela. Throughout December she issued a

series of recorded audio and video messages reminding Venezuelans of
what they had achieved on election day. In one of them she directly
addressed the army and police, calling on them to defect to her side. On
January 1st she put out another message, hinting at mass demonstrations
around inauguration day. “This is the most important task of our lives,” she
said.

All this is reminiscent of 2019, when the then head of the elected National
Assembly, Juan Guaidó, called for mass protests on the streets. Mr Guaidó
had been recognised as Venezuela’s legitimate leader by the United States
and around 60 other countries, on the basis that Mr Maduro had usurped
power. Mr Guaidó even managed to convince Donald Trump’s
administration that Venezuela’s army was ready to defect. A small uprising
took place, but only a few dozen soldiers actually joined Mr Guaidó. The
effort fell flat.

The emperor has no clothes

Now the Maduro regime taunts the opposition, saying that Mr González
will be just another Mr Guaidó. That does not wash. Unlike Mr Guaidó, Mr
González can rightly claim to have been directly elected Venezuela’s leader
by popular vote. The July election has exposed Mr Maduro’s deep
unpopularity, and his regime’s willingness to commit fraud. “They have
been unmasked,” says Luisa, a teacher in Caracas.

That does not mean the regime’s fall is imminent. The army is still the
ultimate arbiter of power in Venezuela. There has been no sign that its
generals, who have long profited from Mr Maduro’s crony capitalism,
intend to drop their loyalty to him. So far the lower ranks, who are heavily
spied on, seem to have had little opportunity to plot a takeover. At the end
of December, 162 of the 1,794 political prisoners in Venezuela were from
the armed forces, according to Foro Penal, a local human-rights group.

Large street protests seem unlikely. Hours after the government announced
its victory in July, tens of thousands went out to demonstrate. The regime’s
response was swift. In the following days around 2,000 people, including
more than 100 teenagers, were jailed. There have been no big public
demonstrations since. In August Mr Maduro appointed the feared boss of
the ruling Socialist Party, Diosdado Cabello, as interior minister, a move
seen as giving a green light to more repression. A law to punish those who
voice support for international sanctions against the country was approved
in November, with penalties of up to 30 years in prison and confiscation of
all property. Military checkpoints have been stepped up nationwide. All
foreigners are questioned in detail at border entry points; several have been
detained.

So it is probable that Mr Maduro will be reinaugurated without serious

obstacles. But that will not end his problems. Ten days later Donald Trump
will be inaugurated in Washington. His choices for his foreign-policy team
point to a hard line against Mr Maduro.

Marco Rubio, nominated as secretary of state, is a Cuban-American and

fierce opponent of the region’s three current leftist dictatorships.
Christopher Landau, the nominee for deputy secretary of state, knows
Venezuela well—his father was ambassador there in the early 1980s—and
is a vocal critic of the regime. Another hawk, Mauricio Claver-Carone, has
been named as Mr Trump’s special envoy to Latin America. He was an
architect of the United States’ recognition of Mr Guaidó as president and
planned “maximum pressure” on Venezuela in the first Trump
administration; sweeping sanctions were then imposed on the country’s oil
and finance sectors. Joe Biden’s administration lifted some of them as part
of negotiations in 2023 whereby the regime agreed that fairer elections
would be held.

Some have speculated that Mr Trump’s instinct this time round might be to
do a deal, perhaps one in which the Maduro regime accepts Venezuelans
deported from the United States in exchange for the continuation of looser
oil sanctions. But if the maxim that “personnel is policy” holds water, that
seems unlikely. Mr Trump’s appointments suggest that his administration
has already decided that the only viable solution for Venezuela is one where
Mr Maduro is dethroned. What is not yet clear is how Mr Trump hopes to
do it. ■

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Turning off the tap

Why Spanish firms have cooled

towards Latin America
Slow growth and messy politics are largely to blame
1月 02, 2025 06:07 上午

FEW ECONOMIES performed as well as Spain’s in 2024. Latin America’s

investment-promotion agencies might have been expecting an influx of
euros from the Iberian peninsula, with the rising profits of Spanish firms
spilling into Latin America as investors expand in markets that are
culturally and linguistically familiar.

No such luck. Spanish investment into almost every country in Latin

America plummeted in 2024, according to DataInvex, an arm of the
Spanish trade ministry that tracks foreign direct investment (FDI). Some
€2.2bn ($2.3bn) poured into Brazil from Spain in 2023, but in the first nine
months of 2024 a measly €446m arrived. Spanish investment in Chile, often
measured in billions, was worth just €235m in the same period.

Other countries which usually get hefty Spanish investment saw a similar
trend, including Argentina, Chile and Uruguay. Mexico is the exception.
Spanish investment broke €2.6bn in the first nine months of 2024, on track
to double the 2023 total. Its potential as a non-Chinese manufacturing base
from which to serve the market in the United States explains the surge.

Lourdes Casanova of Cornell University says Spain no longer views Latin

America as a land of opportunity. The region’s growth has been
disappointing. High inflation has suppressed disposable incomes. As
Spanish firms mainly operate in Latin America’s service sectors, they are
particularly sensitive to income trends. Depressed real wages, stubborn
unemployment and persistent inequality do not inspire confidence in the
region’s market potential. And even when firms make profits, most Latin
American currencies are weak; so this money has less of an impact when
calculated in euro-denominated company accounts in Spain.

Messy politics has not helped. Ties between Spain and Argentina have been
strained since May, when Argentina’s president, Javier Milei, called the
wife of Spain’s prime minister, Pedro Sánchez, “corrupt”. Spain withdrew
its ambassador from Buenos Aires in response. The post was vacant for five
months, before Spain grudgingly reinstated its ambassador in late October.
Such spats do not necessarily curb investment, but they are not useful. In
2024, after 25 years of negotiations, a free-trade agreement between South
America’s Mercosur trading bloc and the EU was at last signed by all
parties. But the EU must still ratify it, and that is not a certainty.

If money were pouring into Latin America from other places, Spanish
reticence would be less troubling. China has been an important source of
FDI in the region, but this is aggravating relations with the United States.
Donald Trump, its president-elect, will probably toughen the country’s
stance towards Chinese investment in countries that then sell products on to
the United States. Latin America risks getting caught in the crossfire. The
new apathy of Spanish firms leaves the region particularly exposed. ■

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No Master in Disaster

Failure to prepare for climate

change is costing Honduras dear
Weeks after the most recent storm, the country is still in emergency mode
1月 02, 2025 06:07 上午 | LA CEIBA

A bridge abridged

“WE DON’T HAVE anything left,” says Julio Balico García, a farmer from
Río Viejo, a village in Honduras’s Atlántida department on the country’s
Caribbean coast. When a tropical storm called Sara hit Central America in
mid-November, his concrete house was washed away. Only one jagged wall
remains.

The storm wreaked havoc nationwide, leaving six dead and displacing over
6,000 people across Honduras. It was far from the most damaging storm to
have hit the country; Hurricane Mitch killed 7,000 Hondurans in 1998. But
Sara highlights even more starkly the extent to which the governments of
Honduras and the countries around it are unprepared for a warmer future,
with more damaging storms smashing their way out of the Gulf of Mexico
more often than before. Without better adaptation, storms like Sara and
other extremes of weather could reduce Honduras’s GDP by 5.4% by 2050,
according to the World Bank. Further climate change may push the costs
even higher.

Storm-shocked

Weeks after Sara made landfall, Honduras remains on an emergency

footing. At least 11 bridges have been destroyed, cutting off 2,500 villages.
“We should not still be in emergency mode,” says Edgardo Amaya, head of
the Municipal Emergency Committee in La Ceiba, a port city that is
Atlántida’s capital. Though tropical storms are common in the region—
Honduras recorded 18 of them as well as 16 hurricanes this season—they
continue to take the authorities by surprise, hitting ever harder and more
widely. “No one is fully prepared,” says Darwin Cantarero from the
Permanent Contingencies Commission in Colón, one of the worst-hit
departments.

Honduras and its Central American neighbours are doing very little in terms
of long-term planning for climate-risk mitigation and adaptation; and few
risks loom larger than the increased intensity and frequency of storms as the
world warms. Instead, held back by high levels of crime, political
corruption, mass emigration and deep poverty—in the Western hemisphere
only desolate Haiti is poorer—Honduras lurches from one emergency to the
next.

When destroyed infrastructure is rebuilt, it is often done without ensuring

that it can survive the next storm. In La Ceiba locals are stuck in traffic
because Sara split one of the city’s two main bridges in half; the same
bridge had been destroyed by previous hurricanes, in 2020. “Had the project
been designed with climate change in mind…the lifetime cost would have
been much lower than the total cost with reconstruction,” says Eduardo
González, a climate-change expert at the Central American Bank for
Economic Integration.
Treating climate disasters on an event-by-event basis is economic nonsense.
Politicians in the cash-strapped country may think they cannot afford to
adapt to climate change, but what Honduras truly cannot afford are the
recurrent setbacks as a result of failing to invest in resilient infrastructure.
The World Bank has estimated that such resilience would cost 3% more
upfront but would reap returns of $4 for every $1 spent. The need for
adaptation will become clearer and more urgent as extreme-weather events
become more powerful and frequent.

The effects of inadequate climate adaptation could reach beyond Honduras

and Central America. A devastated agricultural sector might cause regional
food prices to soar. Supply chains may be disrupted. And climate refugees
will increase. Between 2000 and 2020 the rate of Hondurans emigrating
doubled. The first wave was caused by Hurricane Mitch in 1998, which
resulted losses equivalent to 60-70% of annual GDP and led the United
States to grant “temporary protected status” to fleeing Hondurans. One
study suggests that hurricanes in Central America and the Caribbean
already spur emigration to the United States that is about 6% higher on
average than it would otherwise be.

Sara is part of a worrying pattern of intensifying climate events across the

region. Storms bring more rainfall than they used to, and droughts are even
more severe. Climate change makes oceans hotter, which in turn makes the
storms that form over the water even fiercer, points out Diego Obando
Bonilla, a climate professor at Zamorano University. According to the
World Meteorological Organisation, a UN agency, 2023 was a record year
for climate-related hazards in Latin America and the Caribbean, resulting in
extreme heat, hurricanes and droughts.

Wake up, dozy leaders

Honduras seems to be less prepared every time a climate disaster strikes.

The impact compounds, leaving the country more vulnerable with each
storm. Solutions are available but are rarely implemented. Honduras needs
better territorial planning, particularly to avoid construction in high-risk
areas. Commercial farmers should invest in new technologies and practices
to improve water management. They should also use sustainable materials
and conserve or plant trees that can act as shock-absorbers when extreme
weather inevitably arrives.

The country’s political leaders have yet to learn these lessons. Foreign
governments, development banks and NGOs are focusing more on climate
adaptation, but they alone cannot make Honduras better prepared. Some of
the country’s officials, meanwhile, simply cling to faith. “It’s in God’s
hands,” says Colón’s governor. ■

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Middle East & Africa

The era of multilateral peacekeeping draws to an unhappy
close
Out with a whimper :: The order replacing it in Africa is likely to be worse

Eastern Congo is as wretched as ever

The endless war :: Peace talks have collapsed yet again, as rebel groups continue to make
mayhem

Syria’s new rulers have inherited an economic disaster

Road from ruin :: A legacy of mismanagement and lingering sanctions will make it hard to
rebuild the country

The fate of minorities in post-Assad Syria

All together now? :: The country’s new rulers have yet to include other groups in their
government

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Out with a whimper

The era of multilateral

peacekeeping draws to an unhappy
close
The order replacing it in Africa is likely to be worse
1月 02, 2025 08:06 上午 | Nairobi

THE NEW YEAR was supposed to herald a bright new era of multilateral
co-operation. A slimmed-down peacekeeping force convened by the African
Union (AU) but paid for primarily by the UN was to begin battling against
jihadists in Somalia on January 1st, replacing a mission reluctantly funded
by the European Union. The arrangement was meant to pave the way for
similar operations elsewhere, with the African troops fighting local
insurgencies henceforth guaranteed reliable international funding. The UN
Security Council endorsed the new Somalia mission on December 27th. But
it is unlikely to live up to its lofty aims. As 2024 drew to a close, diplomats
had yet to establish who would pay for it or which countries would
contribute peacekeeping troops.

The story highlights broader challenges facing multilateral peacekeeping in

Africa. As geopolitical competition intensifies, it is becoming harder for the
UN and the AU to arrange, let alone fund, robust peacekeeping missions.
As African governments turn to less savoury alternatives like mercenaries
to deal with new security threats, peacekeeping is becoming yet another
casualty of today’s messy, multipolar world.

Why should anyone care? Peacekeepers have been accused of propping up

weak and illegitimate regimes. Too often they have failed to stop atrocities,
or to enforce the agreements they were deployed to monitor. Reports of
corruption and sexual abuse abound. Yet Africa, which hosts more
peacekeepers than any other region, will probably suffer if their importance
continues to decline.

This has been some time in the making. Peacekeeping in Africa had some
success in the 2000s, helping to prevent countries such as Liberia and Sierra
Leone relapsing into civil war and nudging them to move towards elections.
Yet no new UN peacekeeping mission has been launched in Africa since
2014. In 2023 peacekeepers withdrew from Mali, after a decade fighting
jihadists there in vain. Congo’s government wants UN troops to leave. And
though a UN report in September called for an independent force to protect
civilians in war-torn Sudan, neither the Security Council nor the AU is
close to authorising one.

One problem highlighted by the fraught Somalia peacekeeping task is

money. The UN resolution authorising the mission postpones the question
of funding until the middle of 2025. The UN’s overall peacekeeping budget
fell by more than $2bn between 2016 and 2024, down from $8bn to around
$6bn, even as peacekeepers had to handle increasingly complex threats.
Nicholas Haysom, who heads the UN’s mission in South Sudan, notes that
his troops are expected simultaneously to grapple with “six mini civil
wars”, mediate local peace deals and help prepare the country for elections.
“If you over-ask and under-resource, you won’t get the results you want,”
he says.
That undermines the legitimacy of troops whose job, after all, is to keep the
peace. “Civilians tend to judge missions by the security they offer, or fail to
offer,” says Comfort Ero, who runs the International Crisis Group, a
Brussels-based think-tank. Many Congolese consider the UN, whose troops
arrived 25 years ago, incapable of deterring the armed groups that still
harass them.

Another problem is the changing character of conflict in Africa. Though the

role of peacekeepers has expanded from a narrow focus on monitoring
ceasefires to “peace-building” and preventing atrocities, the strict limits on
letting them actually fight often make them look feeble. Conflict often
straddles national borders. Many of the groups involved are jihadist
extremists. Faced with such adversaries, many African governments are less
interested in negotiation and consider peacekeepers ineffectual. “What is a
peace mission if you are facing terrorism?” asks one frustrated AU
diplomat.

Until recently, peacekeeping had at least stayed fairly free of geopolitical

rancour. In the Security Council “peacekeeping was one of the last things
which was consensus-based,” says Arthur Boutellis, a former peacekeeper
and author of a new book on the subject. Yet in 2018 Russia and China
began to abstain on UN resolutions concerning peace operations. The trend
intensified after Russia invaded Ukraine in 2022. Russia has since helped
orchestrate the closure of the UN mission in Mali after troops from Wagner,
Russia’s mercenary outfit, arrived there. Wagner fighters are said to have
threatened UN officials in the Central African Republic (CAR).

Many AU governments have become stridently nationalistic in voicing their

disdain for multilateralism. The AU’s new Somalia mission is hampered by
a dispute between Somalia and Ethiopia, which has thrown into doubt the
participation of Ethiopian troops who were the backbone of the previous
mission. A mooted civilian-protection mission in Sudan was scuppered in
2024 over objections from Sudan’s rulers. In 2004, by contrast, the AU had
been able to override similar objections by Omar al-Bashir, Sudan’s dictator
at the time. “With a clear, coherent political strategy, the region can
convince a host government to accept a peacekeeping mission, or at least
acquiesce,” argues Solomon Dersso of Amani Africa, a think-tank in
Ethiopia. No such consensus exists on the continent today.

So the role of peacekeepers will probably continue to diminish. “I don’t

think we are going to see a major, multidimensional UN peacekeeping
mission again for a while,” says Mr Boutellis. Donald Trump is widely
expected to slash America’s contribution to UN peacekeeping, which could
reduce its shrunken budget by another third. The proposed funding
mechanism for new AU missions may die on the vine.

Private military companies, such as Russia’s Africa Corps (a rebranded

Wagner) and Turkey’s Sadat, are likely to benefit. So are countries offering
to hire out their own soldiers. Rwanda, which has intervened to help
governments in Mozambique and CAR, hopes to hawk its troops to other
countries. The United Arab Emirates, already a big supplier of arms to
Africa, is thinking of setting up a foreign legion. Where multilateralism still
exists, it will probably be through ad hoc coalitions that will have to offer
more robust fighting mandates than conventional peacekeepers have.
“Basically, what these governments want are forces which operate more
like mercenaries,” says Mr Dersso.

This more fragmented security landscape will probably be worse for

Africans. For all their faults, most peacekeeping missions at least had a
mandate to protect civilians and pay attention to human rights. Private firms
or national armies taking their place rarely have such qualms. ■

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The endless war

Eastern Congo is as wretched as

ever
Peace talks have collapsed yet again, as rebel groups continue to make
mayhem
1月 02, 2025 06:06 上午 | Kinshasa

INTENSE NEGOTIATIONS in the past six months to end decades of chaos

and bloodshed in eastern Congo collapsed in mid-December, when at the
last minute Rwanda’s president, Paul Kagame, refused to endorse a new
deal. He had been expected to shake hands on it with Congo’s president,
Félix Tshisekedi, in Luanda, capital of Angola, whose president, João
Lourenço, has been entrusted by the African Union (AU) with the task of
mediation. The upshot is that a Rwandan-supported rebel group known as
M23, as well as an array of lesser guerrilla outfits, will continue to
immiserate eastern Congo’s people. At least a million of them in the North
Kivu district have fled since a resurgence of fighting in recent years (see
map).

The M23 is a well-armed group named after the date of a long-abandoned

peace deal signed on March 23rd 2009. It is led by Congolese Tutsi officers.
Sharing the same ethnicity as Mr Kagame, they hark back to their families’
flight from the genocide of 1994 in Rwanda, when at least half a million
people, most of them Tutsis, were murdered by the regime that then
governed the country. The group gets arms from Rwanda and some help
from Uganda. It is supported by 3,000-4,000 Rwandan troops, though Mr
Kagame has never openly admitted this in the face of numerous reports,
including those issued by the UN and America’s State Department.

Congo’s government began in earnest to pursue a dialogue a year ago, after

repeatedly failing to defeat M23 by force of arms. The M23 rebels and their
Rwandan allies continue to surround the city of Goma, the region’s hub,
and have recently captured swathes of North Kivu. In April M23 conquered
Rubaya, which hosts tantalum mines that are said to account for a good
15% of the world’s supply of a mineral used in smartphones; its sales fill
the group’s coffers.

Congo’s regular army, which is riddled with corruption, has been no match
for M23, though it is propped up by a ragtag bunch of local militias known
as Wazalendo, a Swahili word meaning “patriots”.

In the past year international pressure to end the fighting has grown. In July
2024 America brokered a humanitarian truce which widened in August into
a general ceasefire declared by Angola, the AU’s mediator. The ceasefire
has been endlessly broken but Congo’s government has continued to argue
that it must be upheld.

As clashes persisted, Congolese and Rwandan spy chiefs hammered out a

plan to defuse the conflict. The government in Kinshasa, Congo’s capital,
agreed to eradicate the Forces Démocratiques de Libération du Rwanda
(FDLR), a militia active in eastern Congo whose original leaders included
Rwandan army officers of the majority Hutu ethnicity responsible for the
genocide of 1994. Rwanda considers the continued existence of the FDLR
an existential threat. In return, Mr Kagame is said to have promised to
withdraw from North Kivu the Rwandan troops who have been helping
M23, despite his previous denials that they were there at all.

The issue that scuppered the deal was Mr Kagame’s last-minute insistence
that Congo’s government should talk directly to M23 as part of an overall
deal, a course that Mr Tshisekedi has consistently refused to follow.
“Between peace and the M23, Rwanda has chosen the M23,” said Congo’s
foreign minister, Thérèse Wagner, after the deal collapsed.
Rwanda’s government argues that it has always promoted the idea that
Congo should negotiate directly with M23, though apparently this was
never formalised in the draft agreement. It has also repeatedly complained
about links between the Hutu-led FDLR and senior Congolese army
officers. Independent observers reckon that Congo’s notoriously
incompetent and venal army would find it hard to curb the FDLR even if it
tried to. Moreover, the observers say, the FDLR is a key part in the
Congolese coalition preventing M23 from capturing Goma.

Daniel van Dalen, an analyst for Signal Risk, a South Africa-based

consultancy, says Rwanda wants to drag out a diplomatic to-and-fro for as
long as possible: “They knew dialogue with M23 was never going to be
accepted [by Congo],” he says. “It’s a stall tactic.” That is little comfort to
the people of eastern Congo. ■

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Road from ruin

Syria’s new rulers have inherited

an economic disaster
A legacy of mismanagement and lingering sanctions will make it hard to
rebuild the country
1月 02, 2025 08:06 上午 | DUBAI

Construction workers wanted

THERE ARE few tougher jobs in Syria. On December 30th the country’s
interim government named Maysaa Sabrine to head the central bank. A
former deputy governor of the bank and the first woman ever appointed to
the job, her nomination sent two reassuring messages: that Syria’s new
rulers recognise the need for technocrats, even those who were part of
Bashar al-Assad’s regime; and they will not ostracise women from public
life.
They need all the expertise they can find. The institution Ms Sabrine leads,
like the Syrian economy, is a shambles. Foreign reserves are thought to
have dwindled to as little as $200m, less than a month’s-worth of imports.
The central bank is under Western sanctions. So is Syria’s largest
commercial bank. The Syrian pound has lost 99% of its value since the start
of the civil war in 2011. At 13,000 pounds to the dollar (see chart 1), a
quick trip to the market requires bags full of banknotes.

Read all our coverage of the war in the Middle East

Economic mismanagement was a defining feature of the Assad regime,
which ruled Syria for 53 years. Hafez al-Assad, the president from 1971
until 2000, wanted a Soviet-style planned economy. There were no private
banks, tight controls on imports and inefficient public industries. His son
Bashar flirted with the idea of a more open economy, but it was short-lived.
Civil war pushed Syria even further into misery. GDP fell from $60bn in
2010 to less than $9bn today. The World Bank reckons that 69% of Syrians
live on less than $3.65 a day.
The immediate challenge for Syria’s new leaders is to find hard currency.
Oil illustrates the problem. Until 2011 Syria pumped around 400,000
barrels per day, exceeding domestic demand. The surplus, mostly shipped to
Europe, accounted for 30-45% of Syria’s $12bn in annual goods exports.
Since the war began, however, production has dropped below 100,000
barrels per day (see chart 2).

Agriculture has suffered, too. Syria was once a net exporter of wheat,
though a long drought left farmers struggling even before the war. Harvests
have shrunk by nearly half since 2010, and Syria will need to import an
estimated 1.6m tonnes of wheat this year. Other sectors have disappeared
altogether, particularly tourism, which brought in $4bn annually.

As the war dragged on, Mr Assad was increasingly desperate for dollars.
His regime made it a crime to use currency other than the pound,
punishable by up to a decade in prison. Firms that needed dollars to pay for
imports had to source them from state-controlled exchanges, which took a
big cut. The regime found creative ways to shake down citizens: it required
Syrians visiting from abroad to exchange $100 at unfavourable rates, and
forced men to pay thousands of dollars to avoid conscription.

To its credit, the interim government has put a halt to such extortion. But it
has few good alternatives. It will take time to boost production at oilfields
that have been neglected for years (the largest are controlled by a Kurdish
militia, beyond the writ of the interim government). The war did extensive
damage to farming infrastructure. Tourists will not rush back.

In the short term the country will have to rely on aid and remittances from
its large diaspora. Officials also hope to secure central-bank deposits from
friendly Arab states. Asaad al-Shaibani, the interim foreign minister, plans
to visit Saudi Arabia on his first trip abroad. Ahmed al-Sharaa, the country’s
de facto ruler, is trying to manage expectations. “Syria needs a year for
citizens to feel drastic changes,” he said in an interview last month with a
Saudi television network, an assessment that is probably too optimistic.

The obvious way to get Syria’s economy growing is to start post-war

reconstruction. After 14 years of fighting, the scale of the damage is
enormous. Take Aleppo, Syria’s second city. A World Bank assessment in
2022 found that 137,000 of its 660,000 homes had been damaged, while
25% of its bridges are unusable and 35% of its hospitals damaged. Its
power plant, the largest in Syria, is out of service.

Fixing all this will provide jobs for hundreds of thousands of Syrians.
Expertise and raw materials may come from Turkey, which has good
relations with Syria’s new rulers and a big, politically connected
construction industry. Investors there are optimistic. Shares of Limak, a
Turkish cement firm, are up by 17% since Mr Assad fled. But Turkey lacks
the money to pay for reconstruction, which may cost between $250bn and
$400bn.

That will probably have to come from wealthy Gulf states. It is hard to see
Donald Trump’s America stumping up much, nor a European Union (EU)
stretched by its commitments to Ukraine. But some worry that Gulf states
will funnel money to pet projects and favourite groups.

For now, it will be difficult for anyone to fund the government because it is
covered by a thicket of sanctions. America has blacklisted roughly 700
people and firms in Syria. Other sanctions take aim at the country itself. In
2019 Congress passed the Caesar Act (named after a Syrian army defector
who documented regime atrocities) that targeted energy and construction.
Hayat Tahrir al-Sham, the Islamist outfit led by Mr Sharaa, is banned as a
terrorist group by America, Britain and the EU.

Some of these measures will need review. In 2011 America slapped

sanctions on Syriatel, the main mobile-phone operator, because it was
owned by Rami Makhlouf, the regime’s key financier (and Mr Assad’s
cousin). Two years later it blacklisted the country’s biggest airline for
smuggling Iranian weapons. Those measures made sense at the time. Today
they may be a drag on needed investment.

America says it is willing to reconsider many of its sanctions, including its

$10m bounty on Mr Sharaa. European officials have promised to do the
same. But Syrians complain they are not moving fast enough.

America’s Caesar Act outlined conditions whereby Syria could escape from
sanctions, calling for a halt to bombing of civilians and the release of
political prisoners. Most of those demands have been met. But on
December 23rd, two weeks after Mr Assad fled, Joe Biden signed a
military-spending bill that extended the act until 2029. Sanctions are easy to
impose but hard to remove—even when they target a regime that no longer
exists. ■

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All together now?

The fate of minorities in post-Assad

Syria
The country’s new rulers have yet to include other groups in their
government
1月 02, 2025 06:06 上午 | Nubl and Zahraa

Celebrating, for now

FOR YEARS Ahmed al-Sharaa, Syria’s new de facto leader, and Hayat
Tahrir al-Sham (HTS), the Sunni jihadist group he commands, besieged
Nubl and Zahraa, two Shia towns in the Sunni heartland half an hour north
of Aleppo, Syria’s second city. Yet within days of HTS’s toppling of Bashar
al-Assad’s regime in December, busloads of Shias flocked back there. The
jihadists at the gates searched their luggage with rare politeness. In return,
the Shias paid obeisance to their erstwhile foes by draping the town hall in
the rebels’ tricolour. “We were all Assad’s oppressed,” explains the local
imam.

Such scenes are encouraging as observers ponder what kind of Syria Mr

Sharaa and his men will forge. If Mr Sharaa revives Islam’s historical role
as the defender of the region’s religious mosaic and oversees the return of
millions of refugees, Syria could become a model of religious pluralism.
But if he gives free rein to radical fighters high on their recent success, he
could revive militant jihadism in a region where it has been on the wane,
unleashing more instability and war.

Read all our coverage of the war in the Middle East

Since the rebels’ takeover of Damascus, violations such as the torching of a

Christmas tree or the slaughter of Alawite judges who had served under Mr
Assad have made headlines. But overall Mr Sharaa has been surprisingly
keen to accommodate other faiths, including those previously close to his
enemies. He has hosted Christian patriarchs and Walid Jumblatt, the leader
of the Druze in Lebanon, in the old presidential palace. The Alawites on the
coast, Mr Assad’s home, retain their arms. Other Sunni militias in the north
still run their own municipalities.

As in Nubl and Zahraa, minorities across the country have welcomed his
outreach. Christians who took down their Christmas decorations as the
rebels approached Damascus have decorated the capital’s old city walls
with lights and trees. “We respect all customs and traditions,” says a
masked jihadist outside a club filled with revellers drinking and dancing to
ring in the new year. Punters in the city’s bars have reworked the rebels’
anthem, “Syrians, raise your heads”. “Syrians, raise your glasses,” they
sing.

But will the peace last? Some hope that the men who flocked south from
Idlib, Mr Sharaa’s fief in the north, to celebrate the new year in Damascus
will be seduced by the cosmopolitanism of the world’s oldest city. Others
recall the return of Ruhollah Khomeini, the Iranian ayatollah, to Tehran in
1979. He lured Iran’s leftist intellectuals into a false sense of security before
imposing his puritanical Islamic Republic. Yet others draw comparisons
with Mr Assad, who flirted with a political opening before unleashing his
father’s thugs on the emerging cultural salons. Many Syrians are keeping
their bags packed in anticipation of a hurried departure. The first boatload
of secular Alawites has already washed up in Cyprus, according to an
observer there.

Mr Sharaa’s record is hardly reassuring. As al-Qaeda’s emir in Syria a

decade ago he turfed thousands of Christians out of Idlib, removed the
copper crosses from their church doors and grabbed their property. He also
closed the city’s bars.

Mr Sharaa now says that his rule in Idlib “is not suitable for all Syria”. But
the education ministry has ordered the curriculum be brought in line with
conservative Islam. Some of the fighters parading around Damascus wear
Islamic State patches on their fatigues. Mr Sharaa has yet to appoint any
non-Sunnis to senior ranks in his government. His top military and security
posts are all occupied by fellow Salafis, who follow a puritanical brand of
Sunni Islam. The lower ranks, meanwhile, are drawn from the totalitarian
state Mr Assad left behind.

A national dialogue Mr Sharaa is convening in January will be an early test.

Several groups have said they will boycott it, as their leaders have not been
invited. Dissolving Syria’s myriad militias and folding them into a new
army without sparking a new civil war will be another challenge. If he can
broaden his base and establish a semblance of representative rule, Mr
Sharaa may yet build a more inclusive Syria. But the road will be long and
rocky. ■

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Europe
Finland seizes a tanker, getting tough on hybrid warfare
Arresting spectacle :: Russian-linked attacks on undersea infrastructure are rising

A Prague-Berlin train loses its old-world dining cars

Closely watched trains :: The looming end of the Knödelexpress

Elon Musk’s praise for the far right infuriates most of

Germany
Muskular intervention :: A badly written op-ed may have set the terms of the election
campaign

Serbia and its neighbours are still far from joining the EU
Europe’s missing pieces :: Donald Trump could bring the region yet more upheaval

Why Canada should join the EU

Charlemagne :: Europe needs space and resources, Canada needs people. Let’s deal

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Arresting spectacle

Finland seizes a tanker, getting

tough on hybrid warfare
Russian-linked attacks on undersea infrastructure are rising
1月 02, 2025 08:05 上午 | Tallinn

FINLAND’S SEIZURE on December 26th of the Eagle S, a Russian-linked

sanctions-busting “dark fleet” tanker, could mark a turning-point in
Europe’s response to the Kremlin’s hybrid-warfare campaign. The ship had
been dragging its anchor along the seabed, trying to damage the 170km
(106-mile) Estlink 2 power cable, which links Finland and Estonia. The
shutdown of the cable led to a sudden drop in electricity supply to Estonia.
Suspecting sabotage, the Finns sent coastguards to board the almost 20-
year-old vessel, registered in the Cook Islands, and sailed it to Finnish
waters for investigation.
A few days later Finland’s Bureau of Investigation confirmed that the
dragging track was “dozens of kilometres” in length. The anchor has not
been found. The damage to Estlink 2 will take months to repair. It is the
first time a government has impounded a commercial ship for undersea-
cable damage. There have been at least two similar incidents in recent
months. Finland’s move represents a growing shift towards a tougher
approach.
In mid-November the Yi Peng 3, a Chinese-flagged bulk carrier, was
suspected of severing two fibre-optic cables in Sweden’s exclusive
economic zone. The Danish navy detained the vessel and Swedish police
boarded it, but were only allowed to observe a lacklustre investigation by
Chinese officials. After sitting between Sweden and Denmark for a month
the ship was allowed to continue its voyage. Germany’s defence minister,
Boris Pistorius, had no doubt it was sabotage: “Nobody believes that these
cables were accidentally severed.” Another Chinese ship, the Newnew Polar
Bear, damaged the Balticconnector gas pipeline in October. Chinese
authorities claimed this too was an accident.

Besides the acute threat of damage to infrastructure from such ships, there
is also evidence of espionage. Eagle S and Swiftsea Rider, another dark-
fleet tanker used by Russia to evade sanctions, share the same ship
managers and have a similarly opaque ownership structure. Both were
kitted out as “spy ships”, according to an investigation by Lloyd’s List
Intelligence, a shipping information service. They were crammed with high-
tech intelligence-gathering equipment used to monitor NATO ships and
aircraft. It is not clear who would have operated the equipment on the Eagle
S, but it is unlikely to have been the Georgian and Indian seafarers who
made up most of its crew.

On December 30th NATO held a hastily convened meeting at its Brussels

headquarters to discuss ways of countering the threat in the Baltic. In a
statement the alliance said it would enhance its military presence “to
maintain vigilance, increase situational awareness, and deter future
incidents”. Other measures are under consideration too. In May NATO
established a new Maritime Centre for Security of Critical Undersea
Infrastructure.

The tough response of Finland and Estonia was welcomed by other Baltic
allies and by NATO’s new secretary-general, Mark Rutte, who are frustrated
that not enough has been done until now to deter Russian sabotage. The
Latvian prime minister, Evika Silina, told the BBC on December 29th that
“we should stop them [dark-fleet tankers] going through the Baltic Sea…
Our government has the power to seize those ships which do not obey
international law.” It was no coincidence, she added, that the Eagle S
carried Russian spying equipment. In an interview with The Economist on
December 16th the prime minister of Estonia, Kristen Michal, called
Russian hybrid attacks “the first and utmost security threat in this region”.
The challenge, he said, is “to catch those carrying out attacks and then to
call Russia out”.

The seizure of the Eagle S sets an important precedent, says Charlie

Edwards of the International Institute for Strategic Studies, a think-tank. “In
the past we have been too cautious. NATO hasn’t really had a strategy
which has had any deterrent impact on the dark fleet.” Some 70% of
Russia’s oil is shipped through the Baltic and Black Sea, he notes, and up to
12 dark-fleet tankers pass through the English Channel every day. NATO
navies track them but do nothing to impede them. The Eagle S has also
been accused of dropping “sensor-type devices” while transiting the
Channel.

Mr Edwards believes that part of the excessive caution stems from an

overgenerous interpretation of the protection to freedom of navigation
provided by the UN Convention on the Law of the Sea (UNCLOS).
However, that freedom is based on the concept of “innocent passage”. If a
ship threatens peace, good order and security, it forfeits that right. Dark-
fleet ships that are likely to have inadequate insurance against
environmental or other damage, which are believed to have conducted
sabotage and which are packed with spying gear seem hardly innocent.

Keir Giles, a Russia expert at Chatham House, another London-based think-

tank, says it is vital that Russia’s expanding hybrid war against Europe be
exposed. The past year has seen mysterious fires at defence-industry
facilities, packages exploding in warehouses and a plot to kill the boss of
Germany’s biggest arms firm, Rheinmetall. With attacks on undersea
infrastructure, he says, it is only through seizure of a vessel that evidence
can be gathered and culprits brought to court.

That appears to be the approach the Finns are taking. Finnish prosecutors
are preparing charges (of aggravated interference with telecommunications
and aggravated vandalism) against the operators and owners of the Eagle S.
Until now, Russia has regarded such “grey zone” activities as relatively
low-risk, given the difficulties of attribution. The Baltic was complacently
described by some as a “NATO lake” after the recent admission to the
alliance of Sweden and Finland. Russia sees it differently. Finland and
Estonia have shown how Russia’s strategic calculus could be challenged.
Will others follow their example? ■

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Closely watched trains

A Prague-Berlin train loses its old-

world dining cars
The looming end of the Knödelexpress
1月 02, 2025 06:07 上午 | PRAGUE

Civilisation on wheels

IN RECENT YEARS the tardy and loss-making operations of Deutsche

Bahn have become a symbol of the woes of the German economy. In
contrast, Ceske Drahy (CD), the Czech Republic’s profitable and (mostly)
punctual national railway, is going from strength to strength. In 2023 it
carried 164m passengers, 7m more than in 2022, and invested almost 11bn
koruna ($454m) in new trains.

One popular route runs every two hours from Prague to Dresden and Berlin
via the glorious peaks, forests and medieval towns of the Elbe valley. In
2024 CD started replacing the route’s EuroCity trains with faster
“ComfortJet” models (maximum speed 230km per hour, or 143mph). The
new trains boast wireless mobile-phone chargers in first class, better
wheelchair access and haptic buttons for the blind. Sadly, they will scrap
the old-world dining cars that led Germans to call the EuroCity trains the
Knödelexpress (dumpling express).

The fare on the Knödelexpress includes typical Czech dishes such as

svickova na smetane (sirloin roast in cream sauce) with knedliky
(dumplings), palacinky (pancakes) and jablecny zavin (apple strudel),
prepared by a chef and served by a uniformed waiter. The dining carriage is
furnished with white tablecloths, frosted-glass lamps and red faux-leather
seats. The air is of an old-world hospoda (pub) in Prague where time
stopped in the early 20th century.

For now the ComfortJets, made by Germany’s Siemens and the Czech firm
Skoda, are still using the old dining cars: the manufacturers have not
finished the new bistro cars that will replace them. These have 18 seats
instead of 30, and employ “a modern kitchen with chilled food technology
and a multi-modal convection oven”. They will have none of the
Knödelexpress’s charm.

On a recent trip from Prague to Berlin, every seat in the EuroCity’s dining
car was taken before the train left the station. Some tables discussed the
Knödelexpress’s looming demise. Others traded tips on how to hold costs
down by ordering your meal during the Czech leg. Svickova na smetane sets
you back €9.10 (around $9.50) if ordered on Czech territory; cross the
German border and the price jumps to €13. Fortunately, Hungarian and
Polish railways will still run old-world dining cars. The fare may be goulash
and pierogi, but the feeling is similar: white tablecloths, and not a sandwich
or instant coffee in sight. ■

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Muskular intervention

Elon Musk’s praise for the far right

infuriates most of Germany
A badly written op-ed may have set the terms of the election campaign
1月 02, 2025 06:06 上午 | BERLIN

ALICE WEIDEL could hardly have hoped for better publicity. With federal
elections due on February 23rd, Ms Weidel is running for chancellor as co-
head of the hard-right Alternative for Germany (AfD) party. In an op-ed on
December 29th in the Sunday edition of Welt, a conservative paper, Elon
Musk, the world’s richest man and a confidant of Donald Trump, called the
AfD “the last spark of hope” for Germany. The country, he claimed, is
“teetering on the brink of economic and cultural collapse”. He had a right to
speak out about German politics, he said, because he has invested heaps of
money in the country. (A multibillion-dollar plant in Brandenburg
producing cars and batteries for Tesla, his electric carmaker, opened in
2022.)

The AfD is polling at 19%, putting it second behind the centre-right alliance
of the Christian Democratic Union and Bavaria’s Christian Social Union, at
about 30%. It is not the first hard-right European party to attract Mr Musk’s
support: earlier in 2024 he praised Giorgia Meloni, the Italian prime
minister. Mr Musk said she was “even more beautiful on the inside than she
is on the outside”. She in turn called him a “precious genius”. He is said to
be considering a donation to Britain’s anti-immigrant Reform UK party.

Mr Musk’s love-note to the AfD may have been counterproductive. It

certainly incensed Germany’s leaders, already anxious about Mr Trump’s
second term in office. “I can’t remember a comparable case of interference
in the election campaign of a friendly country in the history of the Western
democracies,” said Friedrich Merz, the CDU leader and chancellor
candidate, on December 29th. Olaf Scholz, the current chancellor and
candidate for the Social Democrats, noted in his New Year’s Eve speech
that Germany’s fate is decided by its citizens, not “by the owners of social
media”. Mr Musk owns X, a social-media platform. His recent posts there
have been childishly offensive: one called Frank-Walter Steinmeier, the
German president, an “anti-democratic tyrant”; another called the
chancellor “Oaf Schitz”.

The op-ed editor of Welt, Eva Marie Kogel, quit in protest after Mr Musk’s
article was published. The piece had been accompanied by a rebuttal by Jan
Philipp Burgard, the paper’s incoming editor-in-chief, calling Mr Musk
“fatally wrong”. The rebuttal’s headline calls the AfD “partly xenophobic
and antisemitic”; Mr Burgard also blasts its anti-Americanism and its
endorsement of leaving the European Union. Yet like Ms Kogel, many
Germans found it wrong to have run Mr Musk’s piece at all.

Mr Musk’s op-ed was poorly argued. Yet the furore around its publishing
seems unexpectedly to have shaped the early phase of the campaign. In the
long run this may not prove terribly important: social-media algorithms,
misinformation and Russian influence campaigns could have far more
impact, as Michael Hanfeld, a German pundit, argued in the Frankfurter
Allgemeine Zeitung, a daily. But for the moment, the affair has had the odd
effect of aligning the AfD with an American oligarch, making the
Alternative for Germany seem slightly un-German. ■

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Europe’s missing pieces

Serbia and its neighbours are still

far from joining the EU
Donald Trump could bring the region yet more upheaval
1月 02, 2025 06:06 上午 | Belgrade

Checked ambitions

AT A SUMMIT in Brussels of leaders from the European Union and the six
western Balkan states on December 18th, Aleksandar Vucic (pictured),
Serbia’s president, was asked what he expected from the meeting.
“Nothing!” he snorted. He was sorry, he added, that it meant he would miss
a church festival the next day.

Mr Vucic has sounded miserable lately. Facing the latest in a series of mass
protests, he may think Serbs are ungrateful. Serbia’s GDP per head is
almost 90% higher than when he came to power in 2014. In 2024 the
leaders of France, Germany, China and the European Commission all
visited and lavished him with praise. Since Russia’s full-scale invasion of
Ukraine, thousands of Russians have moved to Belgrade, bringing money,
talent and business. Mr Vucic has satisfied anti-Western nationalists by not
imposing sanctions on Russia, while placating the West by letting Serbian
companies sell arms to Ukraine.
Western leaders have given Mr Vucic a pass for rigging elections, arresting
activists and putting spyware on journalists’ phones. They want him to
restrain Milorad Dodik, the secessionist Bosnian Serb leader, and the restive
Serbs of northern Kosovo. And they want their electric-vehicle battery-
makers to have access to Serbia’s huge lithium deposits. In 2022 the
government shelved a proposed mine after huge protests. But last July it let
plans go ahead just before signing a strategic partnership with the EU, and
protests resumed. Many Serbs distrust the government on safety.

Another safety issue has set off more protests. In November a canopy
collapsed at a railway station in the city of Novi Sad that had been
refurbished by Chinese companies, killing 15 people. The problem is deeper
than any one disaster, says Srdjan Cvijic of the Belgrade Centre for Security
Policy, a think-tank: “We have a ruling elite that has completely captured
the state.”

Mr Vucic constantly criticises EU leaders, although their countries are

Serbia’s biggest investors and donors. He calls them “hypocrites” for
supporting the territorial integrity of Ukraine but not, by his lights, that of
Serbia (ie, by recognising Kosovo’s independence in 2008). In June he
sponsored a jingoistic conference of ethnic Serbs from throughout the
region. Mr Vucic says he wants to preserve peace while also pursuing a
nationalist agenda. Like many right-wing populists, he hopes Donald Trump
will tilt American policy in his country’s favour. Mr Trump might indeed
abandon America’s habitual efforts to restrain Balkan extremists, if only for
lack of interest, allowing Serbian nationalists to wreak havoc in Bosnia and
Kosovo.

All six western Balkan states are trying to join the EU. But many distrust
EU pledges to move forward as they complete their alignment tasks. “We
pretend the process is a meritocratic one,” says Kristof Bender of the
European Stability Initiative, a think-tank in Berlin, but geopolitics counts
for more. Ukraine and Moldova abruptly won candidate status after Russia
attacked Ukraine in 2022, whereas North Macedonia has been stymied
since 2009—first by Greece, then by France, now by Bulgaria. Balkan
people know the bloc has no real appetite for enlargement, says Mr Bender.
Its reluctance “undermines pro-democracy and pro-EU forces and
strengthens nationalists like Mr Vucic”. ■

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Charlemagne

Why Canada should join the EU

Europe needs space and resources, Canada needs people. Let’s deal
1月 02, 2025 06:07 上午

AS INTERNATIONAL CONFLICTS go, none did so little to disrupt the

global order as the “whisky wars” that pitted Canada against Denmark for
four decades. Flaring up in 1984, the unlikely spat involved a one-square-
kilometre island in the middle of an icy Arctic channel marking the border
between Greenland (now a self-ruling part of Denmark) and the Canadian
territory of Nunavut. Both sides assumed the rock was theirs. What might
have been considered a casus belli by lesser countries became, for the
northern duo, an exercise in diplomatic civility. Canadian officials visiting
the island marked their territory by leaving whisky and flags; Danes
asserted sovereignty by snaffling the booze and leaving their own schnapps
for Canadians to enjoy. In lieu of shots fired, polite letters were
occasionally exchanged. When the quarrel grew tiresome a working group
spent years agreeing to split the island down the middle, ending all
hostilities in 2022.

With enemies like these, who needs friends? As it turns out, both Europe
and Canada may be in the market for upgraded alliances. Donald Trump’s
return to the White House on January 20th brings with it the prospect of
tariffs and jingoistic bluster. Nerves are jangling on both sides of the north
Atlantic. Places on the fringes of the European Union are rethinking their
ties to the club. Switzerland has agreed to a closer alliance, and Iceland will
hold a referendum in 2027 on joining. Greenland, which left the EU in 1985
after gaining autonomy from Denmark, might consider rejoining, given Mr
Trump’s obsession with it. But Canada may have the most to fret about. Mr
Trump is goading his neighbour by suggesting it is about to become
America’s 51st state and referring to its prime minister as “Governor Justin
Trudeau”. Officials from Ottawa and EU capitals have been trading notes
on how to handle another bout of Mr Trump. Charlemagne, who enjoys
both European and Canadian heritage, has a ready solution to both places’
woes: the EU should invite Canada to become its 28th member.

The (not entirely straightforward) case for CanadEU predates Mr Trump. It

is, in short, that Canada is vast and blessed with natural resources but
relatively few people, while the EU is small, cramped and mineral-poor.
Sure, EU rules reserve membership to “European states”. Yet despite a
residual attachment to the frontier spirit, Canadians can be thought of as
honorary Europeans. The country has endured three sets of colonists from
the old continent, starting with a brief Viking incursion. Like Europeans,
Canadians believe that markets work but must be tempered by welfare
states. Their governments offer similar deals to citizens: high taxes, messy
parliamentary politics (Canada may soon have a new “governor”, given Mr
Trudeau’s unpopularity) and good living standards for nearly all. Both trade
openly, fret about global warming and dislike guns, the death penalty and
Russian aggression.

But Europe has more to gain from a tie-up with Canada than access to
Quebec’s strategic maple-syrup reserve. Europeans can be sold on
enlargement by the prospect of their union tripling its surface area while
adding only 40m Canadians to a population of 440m. The EU would go
from having a population density not far from China’s to that of America—
assuming enough Greeks or Belgians volunteer to live in rather chilly
conditions. Europe is short of energy, too; Canada has lots of oil, gas and
hydro power. A rich new joiner would help the EU’s finances.

France, historically reticent to enlarge the EU, would jump at the chance of
a new French-speaking member—though it might settle for letting in just
francophone Quebec, which is again mumbling about seceding. Welcoming
King Charles III, the Canadian head of state, to EU confabs would please
those who still mourn Brexit. Europeans could learn from Canada how to
allow immigration in a fashion that the population embraces rather than
tolerates, though a housing crunch has frayed that consensus of late.
Canada’s inclusive treatment of its indigenous peoples, at least in recent
decades, could be emulated by Europeans (though First Nations Canadians
might fairly object to closer ties with ex-colonists). Canada’s ties to the
Pacific, thanks in part to large migrant inflows from Asia, would round out
Europe’s regional focus. The euro would look far more global if it were
accepted in Vancouver.

Europe has a few lessons of its own for Canada, which might show off the
benefit of EU membership to its own populace. The Brussels antitrust
machinery has done a fine job keeping competition vibrant in areas such as
banking, airlines and telecoms, giving Europeans a better deal than
Canadians get. Canada talks about cutting carbon emissions but has yet to
really do so, while Europe’s emissions are down over one-third from their
peak. EU countries have figured out how to create a single market (flawed
as it is) that makes it easier to trade between them than it often is for
Canadian firms to trade across the 13 provinces and territories of their own
nation. European members of NATO as a whole now spend over 2% of
GDP on defence, meeting the target set by the alliance in 2014. Canada is at
a meagre 1.4%.

Maple syrup, meet Belgian waffle

Alas, Europe still insists the EU is for Europeans. Canada would be reticent
to join a customs union that would jeopardise its vital trading ties with
America. Oh well. If CanadEU remains but a geopolitical thought
experiment, that does not preclude an ever-closer relationship. Canada
already takes part in several European schemes, such as military mobility
and space travel. More could be done: Canada’s gas cannot reach EU shores
because of a lack of LNG shipping infrastructure. The Canada-EU trade
deal, enacted in 2017, is the bloc’s most ambitious, but remains in
“provisional” application; ten EU countries have yet to ratify its most far-
reaching measures. Short of bringing Canada into the club, Europeans could
start by getting that deal over the line. ■

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Britain
Labour lacks good ideas for improving Britain’s schools
Show your work :: Making private ones a bit more expensive is not an inspiring start

Inflation in Britain looks irritatingly persistent

Guess who’s back? :: Worse, the risk has appeared just as growth is sputtering

Britons brace themselves for more floods

Wet, wet, wet :: A warming planet is making a soggy island soggier

The four worst words in British politics

Bagehot :: Saying “not a good look” is not a good look

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Show your work

Labour lacks good ideas for

improving Britain’s schools
Making private ones a bit more expensive is not an inspiring start
1月 02, 2025 08:05 上午

IN MID-DECEMBER Tim Jonas’s daughter said goodbye to friends and

teachers at her private school in Wakefield, in Yorkshire. Mr Jonas, a web
developer, says his family can no longer cover the nine-year-old’s fees, now
that Britain’s Labour government is adding 20% in value-added tax (VAT).
None of the 44 state primaries in Wakefield could guarantee her a place, so
she is going to one a few miles out of town. Mr Jonas feels “fairly positive”
about the move, now it is under way. But he regrets having to pull his
daughter out of a school where she was happy and doing well.
After two years of bitter debate, VAT on school fees came into force on
January 1st. For all the heat it has generated, the best bet is that the change
will have less impact than diehards on both sides have made out. Yet that
ought to worry Labour, which insists that making private education pricier
was a good way to spend its first months in charge of schools. A party that
once prioritised “Education, education, education” seems to be strikingly
short of good ideas.

Fees at most private schools are going up at once, though by varying

amounts. Hoity-toity places such as Eton are passing parents the full 20%.
Some others say they are making efforts to limit increases, but that they
expect to phase in the lot over time. VAT-reclaim rules will permit some
schools to make savings (when businesses start charging customers VAT
they stop paying tax on some of their own expenses). But even then most
schools will have to make spending cuts, or draw on savings, if they wish to
keep fee increases below 15%.

The effect on enrolment will take some years to become clear. Although
some children are moving already, parents try to avoid withdrawing them in
the middle of an academic year, or when they are working towards big
exams. The government’s best guess is that private schools’ rolls will
eventually fall by 6% or so, putting about 100 schools out of business
(Britain has about 2,600, with around 600,000 pupils, 6% of school-age
children). It expects both that children will be moved to state schools and
that some parents will not choose private education in the first place.

For the moment these guesses seem reasonable. In private, headteachers say
they are more worried about a diminishing inflow of new pupils than about
an exodus of existing ones. The Independent Schools Council, an industry
group, says that the number of 11-year-olds entering private secondary
schools fell by about 5% last September, according to a survey of some 700
institutions. It thinks that worries about fees were the main reason.

Parents with children at the very poshest schools will have the least trouble
finding extra cash. Smaller, humbler institutions are likeliest to shrink. The
changes spell particular trouble for children with special educational needs,
predicts Tony Perry of Education Not Taxation, a group that opposes the
reform. Their parents sometimes stretch their finances to afford private
education, having concluded that local state schools cannot give their
children the help they need.

The most important question is whether the levy’s benefits will outweigh its
hassles. Labour is probably right that taxing fees is going to raise about
£1.5bn ($1.9bn) annually (even if lots of children flee to state schools,
parents are likely to spend a chunk of what they save on stuff that is subject
to VAT). But even if all that money goes to education, it would raise state-
school budgets by a meagre 2%.

Labour’s still-vague plans for improving state schools do not inspire

optimism. It has talked a lot about hiring 6,500 more teachers; last summer
it said this would be one of its “first steps” in office. But that is only one
teacher for every four schools. And ministers have yet to explain how or
when this will be fulfilled. England’s schools are short-staffed not because
politicians have refused to budget for more people, but because too few
want teaching jobs for the pay on offer. Fixing that will probably require
raising teachers’ pay far further than Labour looks willing to do.

With inspections, the problem is not foot-dragging but acting too rashly. In
September it ordered Ofsted, the schools inspectorate, to stop giving
schools overall grades (such as “Excellent” and “Inadequate”). That
delighted teachers, who hated the old system; their opposition had
intensified since early 2023, when a headteacher whose school faced a
downgrade committed suicide. Yet they may like the new-style inspections
even less. Leaked proposals suggest that Ofsted may soon start handing
schools scores in up to ten woolly subcategories. The idea seems to be to
paint a “broader picture” of each institution’s strengths and weaknesses. But
it will mean only more criteria for teachers to worry about, more bumf for
parents to sift through and more work for an inspectorate that has long
looked short of cash.

Labour’s latest announcements tinker with freedoms enjoyed by schools

with “academy” status (some 80% of secondaries and more than 40% of
primaries). The previous Conservative government handed these schools
more autonomy, hoping this would push up results. But draft laws published
on December 17th would give politicians more control over their lessons,
and stop them from hiring staff without teaching qualifications (or who are
not in training). Talk of requiring academies to respect centralised pay
scales provoked particular confusion: Labour had to clarify that schools
paying above average were not being asked to cut teachers’ salaries. How
any of this will benefit children has not yet been well explained.

“Everyone is scratching their heads,” says Tom Richmond, a policy analyst

who has worked in the Department for Education. “We’re seeing lots of
announcements—but what we’ve not had yet is a plan.” For good or ill, the
Tories’ reforms were driven by a strong “vision” of what high-performing
classrooms look like, notes another analyst (who prefers to go unnamed for
fear of making enemies in the new administration). “What is Labour’s
‘dream school’?…I don’t actually know.”

For people worried that Labour would rip up the reforms of the past 15
years, drift at the Department for Education is tolerable. England’s schools
have been rising up international league tables. Big changes would exhaust
teachers at a time when hanging on to them is hard enough. Labour’s base
includes plenty of ideologues who would dismantle standards and water
down discipline, given half a chance. To its credit, the government seems to
have mostly resisted their worst ideas.

Yet threats to young brainpower are mounting. Around a quarter of

secondary-school pupils are “persistently” absent, twice as many as before
the pandemic; the share who are missing more than half the time is going
up. Services for children with special educational needs are in crisis; the
rising costs threaten to bankrupt local councils. The fight over private
schools has distracted policymakers from more important matters. Time to
get back to class. ■

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Guess who’s back?

Inflation in Britain looks

irritatingly persistent
Worse, the risk has appeared just as growth is sputtering
1月 02, 2025 06:54 上午

FEW WOULD call 2024 a brilliant year for the British economy. But one
pleasant surprise was that inflation fell further, and faster, than most
forecasters had expected. In early 2023 it was in double digits, but by April
2024 it was down to 2.3%, just 0.3 percentage points above the Bank of
England’s target. On May 22nd, the day that figure was released, Rishi
Sunak called a surprise summer election. The prime minister brazenly
credited the drop to his government’s steady hand. Most voters thought
otherwise and sent him to a heavy defeat at the polls six weeks later.
Inflation fell as low as 1.7% by September. But heading into 2025, the old
adversary is returning: the rate was back up to 2.6% by November (the
latest month for which it has been published). That partly reflects swings in
food and energy prices that have whipsawed headline measures. More
troubling, a range of other closely watched gauges have started rising, or
have stopped falling while still well above 2%.

Clearest is core inflation, which excludes volatile food and energy prices.
Annual core inflation fell sharply in the first half of 2024, but has bounced
around 3.5% or so since May. The core rate tends to be a better indicator
than headline inflation of trends in the months ahead, since the prices of
what it measures—haircuts, cars, rent—usually move more slowly than
those of fuel or groceries.
Also worrying is that households and businesses no longer expect inflation
to fall by much. Firms polled by the Bank of England say that they expect
to raise prices by 3.8% over the next year, up from 3.3% when asked in
August. Consumers’ expectations for inflation over the next 12 months have
also risen recently, according to surveys by the central bank, Citibank and
GfK, a market-research company.

Worse, consumers also expect longer-run inflation to be higher (see chart

1). Adjusting a Bank of England survey for a shift in sampling around the
pandemic, Pantheon Macroeconomics, a consultancy, reckons that five-year
inflation expectations are close to their highest since the bank’s survey
began 15 years ago. A survey by Citigroup, a bank, and YouGov, a pollster,
shows a similar rise. There is little central bankers fear more than rising
long-run inflation expectations; unless households and firms believe that
inflation is anchored near its target, short-term rises can easily spiral out of
control. Reining in post-pandemic inflation would have been far more
painful had Britons not seen the Bank of England’s target as credible.

So why is inflation persisting, and might it get worse? To start, in some

sectors inflation never dropped by much (see chart 2). Rents are still rising
at record rates. Inflation in services other than housing has been falling, but
gradually and from a high level. Wages, which ultimately feed in to
consumer prices, are also still rising much faster than before the pandemic
(see chart 3). The jobs market may now be softening a bit, though how
much is hard to tell. (The official survey on which unemployment figures
are based is widely distrusted after its response rate collapsed during the
pandemic.) Rising unemployment would cool inflation, but painfully.

The decline in inflation that did take place was concentrated mainly in
goods. Partly, that tracked worldwide moves in the prices of widely traded
commodities and manufactures as stretched supply chains recovered from
the pandemic. The peculiarities of lockdown also pushed the prices of some
goods to unsustainable heights; people trapped indoors, often flush with
savings and banned from bars, restaurants or going on holiday,
compensated by buying more consumer goods. Some normalisation was
bound to happen. But several years on, goods inflation has started to pick
up again. A Donald-Trump-instigated global trade war could also easily
snarl supply chains all over again.

Another inflationary jolt is also due in 2025, from the spending promised in
Labour’s first budget in October. So far, most attention has been paid to tax
rises: in employers’ national insurance (a payroll tax), on capital gains and
on inherited farmland. But Rachel Reeves, the chancellor, revved up
planned spending by nearly twice as much as taxes, with borrowing
plugging the gap. That extra cash will start hitting the economy over the
next year; the Office for Budget Responsibility, the fiscal watchdog,
reckons this stimulus could raise inflation by 0.4 percentage points in 2025.

To make matters worse, just as inflation is proving stubborn growth has

slowed, to zero in the third quarter of 2024 after a strong showing in the
first half of the year. That raises the dread prospect of stagflation. After a
decade of meagre growth, Ms Reeves’s instinct to stimulate the economy is
understandable. But another wrestle with inflation, although at a much
reduced level, would destabilise the economy too. And a government that
owes many of its seats to public anger over inflation should understand the
perils of rising prices better than most.■

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Wet, wet, wet

Britons brace themselves for more

floods
A warming planet is making a soggy island soggier
1月 02, 2025 06:06 上午

THE BRITISH are fond of talking about the weather. What they really
enjoy, though, is grumbling about the rain. Luckily, they have ample
opportunity and a rich vocabulary, according to Alan Connor, author of a
new book about rain in Britain. A heavy downpour can be “pissing, tipping,
chucking or bucketing it down”. In the Midlands you might call it a
“plothering”. In the West Country you still hear “mizzle” (between mist and
drizzle) and “letty” (just enough to make outdoor work trying).
The grumbling won’t be letting up. Britain is getting wetter and, as a result,
its inhabitants are being subjected to more frequent and devastating floods.
After recent deluges, public agencies have warned Britons to get prepared
and published data showing who is most at risk (see map).

On islands between an ocean and a continent, the weather is unusually hard

to predict (one reason why it is so worthy of discussion). Nevertheless, the
pattern is clear. The 18 months to February 2024 were the wettest since
rainfall was first continuously measured in 1836. The past two summers
have been pretty wet. Last winter was very wet. In September, which is
usually wet, England got twice as much rain as normal. Ten counties had
their wettest September on record. Gloucestershire took a dumping of
212mm, about what you’d expect in a monsoon month in India.

All that rain made for saturated ground when the next plothering arrived.
The floods in November and December were not especially bad by recent
standards. Still, several people died and hundreds of homes were ruined.
Further bad weather caused the cancellation of New Year events in many
places.

Britain is not alone. In many countries storms are becoming more frequent
and intense, partly because the air can hold more water as the planet warms.
Not all are being hit with more floods, though. To see why you need to view
the landscape through the eyes of a raindrop.

Each makes a journey. Some run quickly into streams, others seep slowly
into aquifers. Rivers draw their water from a network of tributaries, like
veins on a leaf. And it is in this that Britain suffers for its beauty. It is
marked out by “unusually short and steep river catchments”, says Olivia
Shears of the Climate Change Committee, a watchdog. That makes its
rivers rise terrifyingly fast. On December 7th the Northumbrian Aln surged
fiercely in the wee hours and swept away Tom Voyce, a former England
rugby player, as he tried to escape from his car.

Not everything can be blamed on God. Many low-lying areas near rivers
have been given over to housebuilding or intensive farming. That has not
only put people at risk but severed the link between rivers and their natural
flood plains, explains Trevor Hoey of Brunel University. Public agencies
have sometimes been slow to issue warnings (although catastrophes in
Spain and Germany show this is hardly a British problem alone). During a
storm in December the Met Office, a weather and climate agency, showed
off a new early-warning system: in near-unison some 3m phones across
Wales and south-west England emitted a sustained siren-like burst.

Such innovations are hugely welcome. What is more striking, though, is the
sense of what little politicians can do as the effects of climate change wash
up on doorsteps. Britain spends £1bn ($1.3bn) a year on flood defences.
That is nowhere near enough to prevent more drastic floods, and it is
unlikely to increase. Few experts think it is in any case worth persevering
with ever-costlier engineering. Instead, the focus is shifting to natural
techniques, like nurturing woodland or peatland alongside rivers to slow the
flow of water.

And to softening the blow for the unlucky ones. Even those who have
bought a house in the middle of a flood plain can get reasonably priced
insurance thanks to a state-backed scheme. Yet many still don’t, says
Catherine Butler of Exeter University, probably because they haven’t heard
of it or don’t grasp the risks. As the rain gets heavier one thing is certain:
Britons are going to need their full lexicon.■

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Bagehot

The four worst words in British

politics
Saying “not a good look” is not a good look
1月 02, 2025 06:06 上午

ANY TOURIST needs a few phrases to get by in a foreign land. Visitors to

the Palace of Westminster are no exception. If someone says something
ridiculous, reply that the idea is “for the birds”, an Americanism that is
popular among inhabitants of SW1 and nowhere else in Britain. If someone
has done something outrageous, suggest that perhaps they have “thrown a
dead cat on the table”—a cunning ruse to distract from other matters. Most
important, when asked about any controversial action by the government,
simply reply: “It is not a good look.”
It is a fail-safe phrase that can be applied to practically anything. Cancelling
Latin lessons in state schools was “not a good look”, said one commentator.
Jailing people for inciting riots online was “not a good look”, according to
Nigel Farage, a populist upstart. Rich farmers whining about inheritance tax
was “not a great look”, declared a radio host (using a common variation).
Scrapping the winter fuel allowance of up to £300 ($375) for pensioners
was, a lobby group insisted, “not a good look”. When Sir Keir Starmer, the
prime minister, sacked Sue Gray, his chief of staff, after only a few months,
that was “not a good look”. But when Ms Gray negotiated a pay package
worth more than Sir Keir’s, that too was “not a good look”.

No phrase better encapsulates the miserable state of Britain’s political

discourse, in which perception always trumps actual policy. Debating
whether something is a “good look” drowns out whether something is a
good idea. Before Christmas, the government confirmed it would not offer
compensation to women who say they were not properly informed that in
2018 their state-pension age would increase to 65, the same as for men.
Backbench MPs griped to journalists. “A relative texted me and said, ‘What
have you got against pensioners?’” said one, before adding, naturally, that it
was “not a good look”. The notion of giving pensioners billions for failing
to check their retirement age was crackers, but that fact was almost entirely
absent from the debate. It is much easier to call something a bad look than a
bad idea.

The appeal of the phrase is obvious. MPs who rely on it can hide behind an
imagined voter, rather than exercising their own judgment, reducing
themselves to one-person parliamentary focus groups. For analysts, it offers
a crutch of faux objectivity. Saying that a policy is wrong or immoral is
banned for supposedly objective observers. So say it is a bad look to
maintain your credentials as a shrewd political operative. Such an attitude
breeds a cynical indifference to the consequences of politics. Whether
things are actually important comes second to whether voters notice. If
people found New Labour’s mantra in the 1990s that “What matters is what
works” a dismal philosophy, then “What matters is what plays well” is even
worse.
If looking shrewd is the intention, the effect is often the opposite. A focus
on appearances leads to naive analysis. Elon Musk, an American
technomogul, is mulling donating up to $100m to Reform UK, the party Mr
Farage leads. It would be a momentous sum for Britain’s poundshop
politics, in which British politicians routinely debase themselves for a few
thousand. Yet the debate shifted from an ethical question into the optical
one of whether, if the government acted to block a donation, voters would
see that as a stitch-up by the establishment trying to thwart a challenger.
Britain is either happy to welcome money from the likes of Mr Musk or it is
not. Refusing to ban it because it would appear unfair is the worst way to
make a decision.

Questions about judgment become ones about looks. Sir Keir’s love of
freebies, which erupted over the summer after it emerged the soon-to-be
prime minister had accepted well over £100,000-worth of clothes and free
tickets to football matches and Taylor Swift gigs, was framed as a problem
of perception. Jess Phillips, a junior minister, conceded it was not a good
look. But the problem was not the perception; it was the reality. It was
possible to purchase a couple of hours in the next prime minister’s company
for the price of a few tickets at an Arsenal away game.

If Labour is attacked for how it looks rather than how it governs, that is
only fair. Sir Keir does have a clear political vision: one of a man folding
his arms and tutting, for ever. While in opposition, Labour hammered Rishi
Sunak, Sir Keir’s Conservative predecessor, for flying around the country in
a helicopter. Perhaps the prime minister of a G7 country should be allowed
to move from A to B quickly. No matter. A rich man in an expensive
chopper? That’s a bad look, cried Labour.

“It was worse than a crime; it was not a good look!”

A politics based on appearance has its limits, as Sir Keir has found in office.
Praise for his incoming government focused on its manner, rather than on
its plans for power. Sir Keir was “reassuring”. He had made the party
“credible”. Its politicians were “grown-ups”. For many, the main sin of
Boris Johnson was not that he was an incompetent prime minister who
made bad decisions. It was that he made Britain look bad. Mr Johnson was
“not a good look” in human form. By contrast Labour offered, in Sir Keir’s
own words, a platform to “Make Britain Serious Again”. It promised, in
short, a good look.

It was not a vision of politics that involved deep thinking about policy,
which is why, after half a year in power, Labour still lacks a coherent
programme of government. It has reduced itself to hiring a bunch of
throwbacks from Sir Tony Blair’s government. Ironically, that government’s
reputation as image-obsessed spin-merchants belied an obsessive focus on
policy detail. By contrast, today Sir Keir oversees a government that knows
it must look the part, but has little idea how to act it. Six months of stasis is
the result. There is only one way to describe this: it is not a good look. ■

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International
Why people over the age of 55 are the new problem
generation
Ageing disgracefully :: Baby-boomers are keeping their bad habits into retirement

Young people are having less fun

Gen ZZZ :: Youthful excess continues to decline

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Ageing disgracefully

Why people over the age of 55 are

the new problem generation
Baby-boomers are keeping their bad habits into retirement
1月 02, 2025 06:07 上午 | HILTON HEAD, SOUTH CAROLINA

THE WORDS “retirement community” summon up images of easy chairs,

overcooked food and endless daytime TV. Latitude Margaritaville, a
community being built near Hilton Head Island in South Carolina, quickly
disabuses these. “There was a toga party this past weekend,” says Lynette, a
resident. “There was a live band, and it was a riot.” Barbie, another of the
community’s “ambassadors” (residents employed by the developers to help
sell it to potential newcomers), compares living there to “starting college all
over again”. There are, she says, “drinks on the driveway, cocktails on the
concrete”.
If Margaritaville’s residents are representative of their age cohort, there will
be a lot more to the toga parties than fancy dress. Whereas young people in
rich countries these days are addicted to their phones, more anxious than
previous generations and far less likely than them to use mind-altering
substances or to party recklessly, their grandparents belong to a generation
that experimented with sex, drugs and rock’n’roll. As they reach older age,
they are not giving up their old habits.

Among those for whom time’s winged chariot is hurrying a little nearer,
drug and alcohol use—and abuse—have surged. And since many have also
long since struck coyness from the statute books, sexually transmitted
diseases are also spreading. The prevalence of gonorrhoea, to name but one,
among Americans aged 55 and up has increased by more than six times
since 2010. “Today, older adults are more likely to participate in the hookup
culture of casual encounters and condomless sex, which might be further
encouraged by the availability of drugs for sexual dysfunction, the
commonality of living in retirement communities, and the increased use of
dating apps for seniors,” noted Janie Steckenrider in a paper in the Lancet.

Similar increases are evident elsewhere. Though in the four years to 2023,
the number of new syphilis infections among young adults in England fell
slightly, cases in those over the age of 65 grew by 31%. That is despite it
having already shot up in the previous five years. (Happily this trend does
not apply to HIV, the number of new infections of which is falling
globally.)

In the past, revolutionary and reckless youth worried politicians. These days
the oldest strain public services, wreak havoc on national politics and
account for a growing share of social problems. Elderly revellers are
numerous: the number of people over 65 is growing across the rich world.
In Britain they are more than a fifth of the population. And they want to
have fun. In a way, those over the age of 55 but under the age of 75—
roughly speaking, the baby-boomers and some of what is referred to as
“Generation X”—are the new problem generation.

What makes them so reckless? For one thing, there’s the attitudes to drink,
drugs and sex. In the two decades to 2023 the proportion of people aged 18
to 34 in America who “ever have occasion to use alcoholic beverages”
declined from 72% to 62%, according to Gallup, a pollster. Yet among those
over 55 alcohol use increased to 59% from 49%.

Similar trends are visible almost anywhere you look across the rich world.
“While younger Australians are drinking at less risky levels, there’s been a
significant increase in risky drinking by older Australians,” reported the
Alcohol and Drug Foundation, an Australian charity, in 2022. Such has
been the shift that older Australians are now more likely to drink at
dangerous levels than people in general. In France alcohol consumption has
dipped among all groups in recent years. But it is the young who are
forsaking it the most. “There is a loss of wine transmission within families,”
complained Bernard Farges, the head of France’s wine-producers industry
group, in an interview with Les Echos, a financial newspaper.

What applies to alcohol also applies to other mind-altering substances. In

America cannabis use has risen sharply among older cohorts—perhaps
unsurprisingly, given that it is now legal in a majority of states and the
baby-boomer generation used cannabis the most when they were young.
(Both Barack Obama, a member of a high-school “Choom Gang”, and more
recently, Kamala Harris, have admitted extensive youthful use.)

But the trend is almost as dramatic elsewhere. In Spain the share of people
aged 55-64 who report having used cocaine in the past year has increased
eight-fold in 15 years. In England people well into their 50s are “getting
back on it like they used to” at festivals, says Fiona Measham, an academic
at the University of Liverpool who studies drug and alcohol use.

Then there’s sex. Divorce rates in the rich world are generally falling (in
large part because far fewer people are getting married in the first place, and
those who do tend to wait until they have found a good match). But they are
rising among pensioners. In 2022 more Japanese couples divorced after at
least 20 years of marriage than ever before, even though the rates have
declined among younger groups. More than one in four Americans over the
age of 60 lives alone. That does not, however, necessarily mean that they
are having less sex. One study from the Netherlands found that the
percentage of people over the age of 75 who report being sexually active
leapt from 16% in 2014 to 27% less than a decade later.

Sexy oldies

The behaviour of the boomers stands in striking contrast to that of their

children, who are proving surprisingly tranquil. But this is a generation that
has always been chaotic. On both sides of the Atlantic, the baby-boomers
and then Generation X were born to parents who had rushed out of war and
into prosperity in the 1950s and 1960s, marrying young, having children
early and raising them with a bare minimum of attention. They grew up
breathing the fumes of leaded petrol (long associated with impulsive
behaviour) and watching social mores collapse. They had access to
contraception, abortion and pop music.

More subtle trends may also be in play. For a start, those retiring today are
far richer than in the past. In 1993 just over half of people over the age of
65 in Britain owned their homes outright. Now three-quarters do. Second,
they now have fewer responsibilities. From the 1970s onwards, as female
participation in the labour market increased, grandparents took on more
child care. But in the past decade birth rates have plunged, meaning more
older people have no children or grandchildren at all. And those who do
may be expected to do less now than in the past. Paid-for child care has
expanded and in some countries the government provides subsidised
nursery places. In the Netherlands, for example, just 2% of grandparents
report having to do “intensive” child care. That leaves more time for
boozing.

What are the consequences of all this? When youthful excess is rising, it is
often seen as a symbol of social decline. Fewer people worry about their
ageing parents being wreckheads than the other way round. Similarly,
government surveys of drinking, gambling, smoking and the education
campaigns intended to stop it focus on youth. America’s Substance Abuse
and Mental Health Services Administration, which surveys drug use in that
country, splits its studies into two groups: under 25s and the rest. But in
fact, as viewers of “Shameless”, a TV show set in Chicago (though based
on a British show) about a middle-aged drunk, can plainly see, the carefree
life comes at a cost, for individuals and for society at large.

Newly single old people—perhaps those attending the toga parties at

Margaritaville—may need to be reminded, or perhaps even told for the first
time, how easily infections can spread. “Folks are connecting in loving
relationships and, quite honestly, in hookups,” says Imara Canady, of the
AIDS Healthcare Foundation, a charity which recently launched an
advertising campaign encouraging older people to get tested for HIV and
other sexually transmitted diseases.

Middle-aged drug taking has consequences, too. In England and Wales

deaths of people over 50 made up more than a third of all drug-misuse
deaths in 2022, up from just 13% two decades before. Many of those dying
come from a thinning cohort of ageing heroin addicts, who have been using
for decades. But not all. Deaths caused by cocaine are now far more
numerous among the old than among the young. No fewer than 38 people
over the age of 50 died from overdosing on ecstasy—a drug usually
associated with teenage rave culture—in the four years to 2022. Ms
Measham from the University of Liverpool also runs a charity that provides
testing kits for people to make sure their illegal drugs are not contaminated.
She says older ravers are often less careful than the young. “Younger people
are seeking information or advice,” she says. “Older people clearly don’t
think they need to.”
Infection and early death are only some of the more obvious problems. A
minority of the reckless old are causing more direct mischief themselves:
they make up a growing proportion of people arrested and convicted of
crimes. It is well known that America’s prisons are increasingly full of older
inmates. What is less well understood is that this is not entirely due to
inmates ageing inside. Older people make up a larger share of newly
convicted criminals these days, too. From 1992 to 2022, among men
arrested, the share over the age of 50 tripled, from 5% to 15%, according to
data from the FBI. In absolute terms, the number increased by nearly 40%,
even as arrests of other age groups tumbled. Similar trends are seen in other
countries.

Older folk seem in some ways more prone to political violence, too. A
generation ago, the idea of pensioners rampaging was laughable. But when
anti-immigration riots broke out across England in August 2024, one of
those arrested in Liverpool was William Nelson Morgan, a 69-year-old
grandfather. At his court hearing, it was recounted that he shouted at
officers arresting him: “I’m fucking 70.” The police officer retorted: “Well,
why are you at a fucking riot?” Similarly, of those arrested and charged
after the riots in Washington, DC, on January 6th 2021, almost half were
older than 40, and the oldest was 81. Of the women arrested (a smaller
number) fully a third were in their 50s, far outnumbering any other age
group.

Perhaps this is because baby-boomers tend to be an unhappy lot. Surveys

suggest that they are more pessimistic about the future than the young
almost everywhere. People have always grown more pessimistic as they
age, yet there is reason to think this generation is especially—and weirdly
—glum. A study by Pew, a think-tank, published a decade ago found that
“When it comes to quality-of-life assessments, data suggest the boomers
generally have been downbeat, compared with other age groups, for the past
two decades.” The more recent data do not seem to mark improvements.
Moreover, some rather harder data suggest the baby-boomers (and Gen X)
are in essence miserable generations. British figures show, for example, that
in the decade to 2023, suicide rates rose sharply for those aged 45 to 65,
while falling for those older and younger.

Clearly, not everyone is thriving in old age. Although baby-boomers are

doing financially well in aggregate—they own half of the wealth in
America, according to the Federal Reserve—many are feeling a pinch.
People over 60 in America account for more than a quarter of foreclosures,
up from just one in ten 20 years ago, and there has been a similar rise in
bankruptcies, data from the New York Fed show. All of those divorces are
expensive.

And the flip side of having to do less baby-sitting of grandchildren is that

there are fewer youngsters around to help keep grandma and grandpa
company. “Isolated and lonely older adults have longer stays in hospitals as
well as higher emergency hospitalisation and re-hospitalisation rates and are
more likely to be admitted earlier into residential or nursing care,” reported
a study published by the European Centre for Social Welfare Policy and
Research, a Vienna-based think-tank, in 2022.

Toga and tonic

It is all enough to make one turn to drink. When Jimmy Buffett wrote
“Margaritaville” in 1977, he was just 31. It seems fair to say he could not
have realised what he was setting in motion. The song is a bittersweet
lament for the life of a beach bum, helped along by alcohol. “But there’s
booze in the blender/And soon it will render/That frozen concoction/That
helps me hang on.” Buffett died in 2023, at the age of 76. Today, though,
Margaritaville is a real place. Or many of them. It is a chain of bars, a
holiday resort and now, most pertinently, it is a group of three retirement
communities: there are two in Florida, as well as the one in South Carolina.
It is a place that perhaps best represents the ambitions of the baby-boomer
generation in retirement.

For most of the post-war period crime, alcoholism, drugs and pregnancy
were all rising among the young. And then at some point it stopped. The
generations now ageing disgracefully were disgraceful in youth, and in
middle age. If they’re behaving badly now, there is really not much to be
done about it. If they choose to frolic at toga parties, no one will stop them.
Except, ultimately, time. ■
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Gen ZZZ

Young people are having less fun

Youthful excess continues to decline
1月 02, 2025 06:07 上午

Sober thoughts

IN SEPTEMBER the Night Time Industries Association, a British trade

group, issued a sobering press release. Since 2020, it revealed, 37% of
Britain’s nightclubs had closed. Many shut during the pandemic and never
reopened, but closures continue. If clubs do not stop closing, the NTIA
predicted, by the end of the decade there will be almost nowhere left for
Britons to get drunk, belt out “Mr Brightside” and then vomit in a gutter on
the walk home at 2am.

Higher labour costs, tighter planning laws and more noise complaints are
probably all playing their roles. But a key explanation is that their chief
audience, the reckless young, are staying at home. Between 2011 and 2021,
the proportion of British 16- to 24-year-olds who had not consumed one
alcoholic drink in the past year doubled, from 19% to 38%. Another survey,
of children aged between 11 and 15, found that, in 2021, 60% had never
even tried a drink (two decades before, the figure was 39%). No wonder
nightclubs are struggling.

The trend towards youthful sobriety holds true for much of the rich world.
In 2024 illicit drug use among adolescents dropped to historical lows in
America, according to a nationwide survey published on December 17th by
the University of Michigan. Drinking fell, too. The researchers found that
even cannabis use is now declining fast among the young, despite weed
having been made legal in almost half of states over the past decade.
European surveys show continuing drops in drug and alcohol use too.

Why is youthful excess dying out? There is no single explanation. Children

are more closely watched than in the past, and a higher share of young
adults are from more abstemious immigrant cultures. Age ID checks at bars
are more common; Netflix and Fortnite are cheaper than cider; and dating
apps are better than finding love on the sticky floors of a place called
“Snobs”. The trend is clear and seems likely to last. It’s their parents who
are the problem now. ■
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Business
Why are Nordic companies so successful?
Way of the Viking :: From Lego to Novo Nordisk, many of Europe’s top firms come from the
region

Netflix has big ambitions for live sport

Playing offence :: Christmas NFL games are just the start

Meet Silicon Valley’s shrewdest talent spotters

Follow the money :: An elite group of early-stage investors make supersized returns

America’s marijuana industry is wilting

Weed Inc :: Donald Trump seems to want looser rules on pot. Why are investors not excited?

China is catching up with America in quantum technology

Party-state entanglement :: But its state-heavy innovation model comes with risks

Beware the dangers of data

Bartleby :: Numbers have an authority that disguises their flaws

MAGA’s war on talent frightens CEOs—and angers Elon

Musk
Schumpeter :: American businesses’ ability to tap the world’s human capital is under threat

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Way of the Viking

Why are Nordic companies so

successful?
From Lego to Novo Nordisk, many of Europe’s top firms come from the
region
1月 02, 2025 08:05 上午 | BILLUND AND COPENHAGEN

FROM THE dining room on the ground floor of “Carl’s Villa” in

Copenhagen, guests are treated to views of a charming garden adorned with
classical statues. The art nouveau house was built in 1892 by Carl Jacobsen,
son of the founder of Carlsberg. Since then the brewer, which these days
uses the house for meetings, has become one of the biggest in the world.
Jacob Aarup-Andersen, Carlsberg’s current boss, admits that the company’s
success is part of a bigger puzzle about Danish firms. Just last night at
dinner, he says, someone asked him how a country so small could produce
so many large companies.
What is true of Denmark is true of Finland, Norway and Sweden. The four
largest Nordic countries account for about 1% of the world’s GDP and 0.3%
of its population. Yet they have produced an impressive list of corporate
giants. Lego is the planet’s biggest toymaker by revenue; IKEA is its
biggest maker of furniture (and, thanks to Swedish meatballs, its sixth-
largest restaurant chain). The Nordics are home to leading manufacturers of
everything from machinery (Atlas Copco) and telecoms equipment (Nokia
and Ericsson) to seatbelts (Autoliv) and lifts (KONE). The region has also
produced the world’s biggest music-streaming company (Spotify) and its
largest buy-now-pay-later service (Klarna). Novo Nordisk, a Danish pioneer
in weight-loss drugs, is Europe’s most valuable firm, even after its shares
slumped in December in response to disappointing trial results for a new
drug.
Nordic firms have outperformed those from the rest of Europe over the past
decade. In all four countries, listed non-financial firms have generated
greater shareholder returns than the European average over the past ten
years (see chart 1). Today Nordic firms make up about 13% of the MSCI
Europe, an index of the continent’s most valuable companies, up from 10%
five years ago. That is now about the same share as German firms.

Nordic companies also stack up well against their global peers in the same
sectors. We compared the region’s 20 most valuable listed companies with
their main overseas rivals on a number of measures. On average the Nordic
firms generated operating margins that were seven percentage points higher
than the median of their peer set in 2023, with returns on invested capital
five percentage points higher. Debt relative to operating profits (before
depreciation and amortisation) was lower for 14 of the 20 companies we
examined when compared against their rivals. Annual sales growth was
about on par with the competition.

Of course, not every Nordic business has been a success. Northvolt, a

battery-maker, recently collapsed into bankruptcy. Nokia’s handset business
was crushed by the iPhone. There is also an element of luck to the Nordics’
success. The region is blessed with access to vast natural resources,
including timber, iron ore and—particularly in Norway—oil and gas. Even
so, the outperformance of Nordic companies is striking. What explains it?

One factor is that Nordic businessmen, like their Viking ancestors, are
foreign adventurers. “Our smallness is a blessing in the sense that it makes
the international outlook obligatory,” says Mr Aarup-Andersen. Among the
Nordics’ ten most valuable companies for which data are available, the
median share of revenues generated at home is just 2%, compared with 12%
for their counterparts in the rest of Europe and 46% for those in America.
Anders Boyer, chief financial officer of Pandora, the world’s largest
jewellery-maker by volume, says that his firm went from a single store in
Copenhagen to a global operation in seven or eight years. Today Denmark
accounts for 1% of its sales.
A second factor is that Nordic firms have long been enthusiastic adopters of
technology. Shortly after the second world war Lego’s founder changed the
toymaker’s material of choice from wood after playing with a new-fangled
plastic-moulding machine (it cost a year’s worth of sales). Today that spirit
persists. Data from Eurostat, a statistics agency, show that 45% of firms in
the European Union that employ more than ten people pay for cloud-
computing services. The average across the four Nordic countries, which
top the ranking, is 73% (see chart 2).

The Nordic fervour for technology is also visible in the region’s thriving
startup scene. Among European cities, only London, Paris and Berlin attract
more venture-capital funding than Stockholm, which has far fewer people.
Helsinki is awash with games developers, including Rovio, maker of
“Angry Birds”, and Supercell, creator of “Clash of the Clans”. Nordic
entrepreneurs these days may find it less daunting to take risks knowing
that, should they fail, they will have access to generous unemployment
benefits and well-functioning public health-care and education systems.

Government policy more broadly is a third factor underpinning the success

of Nordic firms. Although lofty personal-tax rates fund generous welfare
systems across the Nordics, the rate on company profits is about the same
as in America. Each year the Heritage Foundation, a conservative think-
tank in Washington, compiles an index of the economic freedom of
countries, which captures things like how open markets are, using measures
such as tariff rates, and how freely businesses can operate, by assessing
regulations. Denmark, Norway and Sweden all make the top ten. In
Denmark in particular hiring and firing workers is easier than elsewhere in
Europe. The Danish government’s embrace of digitisation has also made it
easier to do business there. As Vincent Clerc, the boss of Maersk, a Danish
shipping giant, points out, “You can get a VAT number within a day.” In
France that can take months.

A fourth factor in Nordic outperformance is patient shareholders. According

to McKinsey, a consultancy, four-fifths of large Nordic companies have
long-term ownership, compared with three-fifths in Europe and only a fifth
in America. Business dynasties play a prominent role in the region. Maersk
and Lego are still controlled, respectively, by the founding Moller and
Kristiansen families, though both firms are run day-to-day by outsiders. In
Sweden the Wallenbergs, whose fortune originated in banking, own large
stakes in various companies, including Atlas Copco and Ericsson. Other big
Nordic firms, including Carlsberg and Novo Nordisk, are controlled by non-
profit foundations.

Such arrangements have prevented foreign firms from snapping up Nordic

companies, giving them more time to grow. They have also made it easier
for companies to invest in their long-term success. McKinsey reckons that
four-fifths of listed Nordic companies spend more on research and
development than their rivals do elsewhere in the West. Lars Fruergaard
Jorgensen, Novo Nordisk’s boss, has said that his main focus is how the
company will look in ten to 20 years.

That is just as well, because the Nordic business model may come under
strain in the years ahead. Given their reliance on operations abroad, Nordic
firms are particularly exposed to choppier geopolitical waters. Some have
already been affected. In 2023 Carlsberg’s business in Russia was seized by
the country’s government and placed under “temporary management”. In
December the brewer agreed to sell the operation to two local employees at
a steep discount. Maersk has had boats and container terminals hit by
Houthi missiles in the Red Sea, forcing its ships to avoid the Suez Canal,
adding time and expense.

Doing business abroad is set to become harder still during Donald Trump’s
second term. On the campaign trail the president-elect vowed to slap a 10%
tariff on imports from all countries. The threat may not materialise—since
the election Mr Trump has focused his ire on Mexico, Canada and China—
but a more sceptical view of trade is certain to permeate American
policymaking in the years ahead. That could be a problem; a third of the
sales of the ten most valuable Nordic companies are generated in America.

Handling all this will require one last characteristic of Nordic companies.
Niels Christiansen, chief executive of Lego, invokes Charles Darwin in his
assessment of why the region’s firms do so well. “It’s not necessarily the
strongest that survives,” but “the one that will adapt to changes.” As global
businesses prepare for Mr Trump to return to the White House, those words
are wiser than ever. ■
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Playing offence

Netflix has big ambitions for live

sport
Christmas NFL games are just the start
1月 02, 2025 06:06 上午

Game time

THE HOLIDAY season is a time for family, food—and, at least for some
people, American football. As in previous years, teams in the National
Football League (NFL) played on Christmas day, watched live by millions.
Unusually, though, the broadcaster this year was Netflix, which live-
streamed two games (and a musical interlude by Beyoncé).

That it went off with only minor hitches was a gift for the company.
Netflix’s previous forays into live sport have at times been shambolic. A
celebrity boxing match in November between Jake Paul and Mike Tyson
was beset by technical problems. “We crashed the site,” Mr Paul bragged
after he beat his 58-year-old opponent. A live golfing event featured broken
microphones and an animal-rights protester.

Netflix has big ambitions for live sport. American Football is set to stay in
the streamer’s Christmas line-up for at least the next two years. World
Wrestling Entertainment (WWE) Raw, a hit show, will leave traditional TV
for a weekly spot on the streaming site from January 6th. Netflix has also
bagged the American rights for the next two women’s football (soccer)
World Cups.

Netflix used to insist it would stay on the sidelines when it came to

screening live sport. Cost was one reason. Broadcasting rights are
expensive: the NFL pocketed $75m a game from Netflix for this year’s
Christmas screenings, and the decade-long WWE deal cost a knockout
$5bn. Then there were the technical challenges. Handling so many
concurrent viewers is a headache for a streaming service designed for
fragmented viewership.

But big sporting events attract prestige and, more important, subscribers.
For all its mishaps, Jake Paul v Mike Tyson drew a record-breaking
audience—and 1.4m new subscriptions, according to Antenna Data, a
research firm. Live sport offers ample downtime before and during games,
making it well-suited to ad breaks, a lucrative source of revenue. Even
subscribers to Netflix’s ad-free packages were shown commercials during
the NFL broadcast.

Challenges remain. To the relief of Netflix’s engineers, though perhaps not

its bosses, viewing figures for its Christmas NFL games were good but not
exceptional. The audience peaked at more than 27m, around half that drawn
by Jake Paul v Mike Tyson. By comparison, the Super Bowl, the NFL’s
biggest annual event, attracts well over 100m viewers. Streaming to such
multitudes could be technically fraught.

Still, Netflix has plenty of other options. Besides American football and the
usual roster of classic Christmas films, the streamer had another hit
programme on December 25th: a recording of a crackling log fire. ■
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Follow the money

Meet Silicon Valley’s shrewdest

talent spotters
An elite group of early-stage investors make supersized returns
1月 02, 2025 06:06 上午 | SAN FRANCISCO

WHAT DO SAM ALTMAN and David Sacks have in common? Certainly

not politics. Mr Altman, co-founder of OpenAI, is part of the transition
team of Daniel Lurie, the Democratic mayor-elect of San Francisco. David
Sacks, an entrepreneur and polemical right-wing podcaster, will on January
20th become Donald Trump’s crypto and artificial-intelligence (AI) tsar. Yet
both have the distinction of being among Silicon Valley’s best spotters of
entrepreneurial talent. According to data from TRAC, a venture-capital
(VC) firm, few are as good at picking promising startups at the very earliest
stage.
Messrs Altman and Sacks stand out because of the whopping number of
successful startups they have backed right from the beginning, when most
investment tends to come from a founder’s friends and family. TRAC
reckons that 28% of Mr Altman’s 322 early-stage investments have made at
least ten times the original stake, and 27 have become unicorns, with
valuations over $1bn. Mr Sacks’ hit rate is just as good. Of his 92 bets
monitored by TRAC, 27% have produced more than ten-fold returns, and
17 have become unicorns.

The two men are among the best of an elite group of 250 or so early-stage
investors who, according to TRAC, generate supersized returns. The list
features a number of other well-known names, including Elon Musk, boss
of Tesla and SpaceX; Jeff Bezos, founder of Amazon; and Marc Andreessen
of Andreessen Horowitz, a VC giant. Jessica Livingston, co-founder of Y
Combinator, a venture firm, is one of the dozen or so female early-stage
investors among the 250 (the small number reflects the underrepresentation
of women in Silicon Valley generally). Though she has made only 13 early-
stage investments, 31% of them have made a return of more than ten times.

TRAC’s methodology is novel. Whereas most VC firms use gut instinct and
inside knowledge to spot the most promising entrepreneurs, it uses a range
of quantitative metrics to identify the most consistent talent scouts instead.
That includes the multiple they return on their investments, assuming their
stakes could be liquidated at current values, and the share of their portfolios
that do follow-on fundraisings. If two or more of them back a startup in a
field where they have a proven record, that is a strong predictor that the
startup will be worth backing, TRAC says. Its modus operandi is to invest
alongside them if it can.

At first glance, some of the superstars on TRAC’s list look like one-hit
wonders. Sara Deshpande of Maven Ventures, a VC firm, has generated
very high returns mostly from a single company, Embark Trucks, a self-
driving outfit that later went bust. But TRAC’s data suggest she has done
well in steering many of her startups to the next funding round.

TRAC does not oversell itself. “I’m a nobody in VC,” said Joe Aaron, its
co-founder, when first contacted by your correspondent. The firm uses a
variety of information sources, but the data are patchy, he admits. It’s a
small fund. One of its early investments, a fintech company called Human
Interest, became a unicorn in 2021. But the fund sometimes struggles to
make investments owing to competition with better-known firms that are
able to write bigger cheques.

The surge of investment into AI may open up new opportunities. TRAC has
already identified two names it believes are worth following, even if they
do invest as a pair. They are Nat Friedman and Daniel Gross, two Silicon
Valley investors known for their AI expertise. “I see them in almost every
AI company I look up,” says Mr Aaron. One day their names could be up
there with Messrs Altman and Sacks. ■

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Weed Inc

America’s marijuana industry is

wilting
Donald Trump seems to want looser rules on pot. Why are investors not
excited?
1月 02, 2025 06:19 上午

Burning cash

NO AMERICAN PRESIDENT has been as ostensibly pro-pot as Donald

Trump. During the campaign he declared support for various cannabis-
reform measures, and said he would vote in favour of recreational use in a
November ballot in Florida. Yet despite his victory, weed stocks continue to
perform poorly. What killed the buzz?

Expectations for a cannabis boom had been building to a high. In 2012

Washington and Colorado became the first states to allow pot to be sold for
recreational use. Another 22 have followed since then. That created a
sizeable market: in 2024 Americans spent about $29bn on legal marijuana
(some for medical use).

With President Joe Biden vowing during his 2020 campaign to

decriminalise the herb, investors expected reform to sweep the country. The
share prices of listed cannabis firms surged to record levels after his
election. Money poured into startups. Towards the end of 2020 Casa Verde,
a cannabis-investment firm co-founded by Snoop Dogg, a rapper, raised
$100m.

Mr Biden, though, never followed through on his promise of

decriminalisation, and reform at the state level has slowed. Florida’s ballot
measure failed. So did efforts in South and North Dakota. Meanwhile,
America’s weed industry faces fierce competition from the illicit trade—
which is thought to be more than twice as big and is not burdened by taxes
and regulations—as well as from products made with intoxicating hemp, a
less potent but legal cannabis variety. Wholesale prices for legal pot are at
record lows.

The result has been a slump in America’s weed industry. Total revenue
growth was less than 1% in 2024. Profits have cratered. The American
Cannabis Operator Index, which tracks the market value of firms in the
industry, has fallen by more than 90% since February 2021.

Investors remain unconvinced that Mr Trump will prioritise wide-reaching

cannabis reform. The withdrawal of Matt Gaetz, a vocal proponent of
federal legalisation, as Mr Trump’s nominee for attorney-general after
allegations of sexual misconduct (which he denies) blunted what hopes the
industry had.

Still, some relief may soon come in the shape of tax reform. Because
marijuana is designated as a “schedule-1 substance”, companies selling it
cannot deduct normal business expenses from their tax bill. In December
the Drug Enforcement Administration held preliminary hearings on whether
to change that; these are expected to conclude in March. Allowing tax
deductions would go some way towards improving pot-sellers’ profitability.
That would give investors cause for cheer, even if Mr Trump’s other pro-pot
promises go up in smoke. ■

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Party-state entanglement

China is catching up with America

in quantum technology
But its state-heavy innovation model comes with risks
1月 02, 2025 06:07 上午 | Hefei

IN A SMALL shop in the eastern Chinese city of Hefei, one of the rarest
pieces of technology in the world is on display. The quantum computer in
the showroom of Origin, a Chinese startup, looks ready to be plucked from
the shelf and fired up. Only 20 such devices are produced globally each
year. It is unclear what in the showroom is for sale, but none of it is
supposed to be seen by foreigners. During your correspondent’s visit, which
was agreed on in advance, the company panicked at the sight of a foreigner,
abruptly cancelled interviews and notified the police.
Few industries outside of arms-making are so sensitive. Quantum
computers could one day perform calculations in minutes that would take
the world’s cleverest supercomputers billions of years or longer.
Communications using quantum bits, or qubits, are ultra-secure. Although
the commercial opportunities remain uncertain, spies and soldiers have
taken a keen interest in quantum technology.

This is why China closely guards its industry. Little is known about how its
supply chain for components works, and the Chinese government restricts
exports of some related technologies. America, too, protects its quantum
secrets. In October the Treasury Department imposed stringent restrictions
on American investment in China’s quantum industry.

Both countries have developed areas of strength. China is the undisputed

leader in quantum communications. In quantum sensing, another sub-field
focused on detecting faint changes in magnetic fields, the two are neck and
neck. But in quantum computing—the sub-field with the biggest potential
—America holds a wide lead. Quantum computers made by its companies
have far higher qubit counts than Chinese ones, an important metric for
gauging their power. In December Google made waves with a new quantum
chip that can correct for many of the errors made by the computers.

China may be closing the gap, however. Although the country still relies on
Western suppliers for many of the components needed to make quantum
computers work, such as specialised lasers, that is changing. As Chinese
companies get better at manufacturing the necessary equipment, Western
producers are expecting to sell less of it there, says Jean-Francois Bobier of
BCG, a consultancy.

One example of this is dilution refrigerators, which produce the ultra-low

temperatures needed to operate quantum computers. During 2024 several
Chinese companies and labs announced breakthroughs. In September, for
example, a company called Zhileng Low Temperature Technology said it
had created a refrigerator capable of hitting record-low temperatures that
meets all the requirements for quantum computing.

Given all the secrecy, it is hard for outsiders to verify how well Chinese-
built dilution refrigerators perform and whether they are good enough to run
quantum computers. If the claims are true, however, they represent an
important achievement for China. Dilution refrigerators are a fixture of the
quantum supply chain. For many years BlueFors, a Finnish company, has
supplied most of the refrigerators used in the world’s quantum computers.
In September America’s government introduced export controls on high-
performance cooling systems, along with other quantum components.

Quantum interference

China and America’s quantum rivalry pits two starkly different models of
innovation against one another. In America large tech companies—
including Google, IBM, Intel and Microsoft—are the driving force behind
innovation in quantum computing, alongside startups backed by venture
capital (VC). University research plays an important role, but government
involvement is limited.

In China, by contrast, private-sector investment is modest but the state is

omnipresent. Much of the research takes place in the labs of state-controlled
universities; half of quantum publications are funded by the National
Natural Science Foundation of China, a body tied to the central
government. The most prominent quantum startups are all either controlled
or supported by the state. The University of Science and Technology of
China in Hefei invests in many of them, including Origin, and acts as a
connector between labs, companies and policymakers. Meanwhile, Chinese
tech giants including Alibaba and Baidu have given up their research in the
field and handed their equipment over to the government.

China’s approach could have advantages. A recent survey of experts

conducted by the Information Technology and Innovation Foundation
(ITIF), a think-tank based in Washington, suggests that reliable state
investment might be more important than private-sector funding when it
comes to developing quantum computing. Participants in the ITIF survey
said that the fragmentation of funding sources in America leads to a lack of
co-ordination and slows innovation.

Some American investors are anxious to start seeing returns from the
money they have poured into quantum computing. There is also talk of
reluctance among Western manufacturers of components to scale up
production owing to limited demand and uncertain future prospects for the
industry, notes Edward Parker of the RAND Corporation, a research-and-
consulting firm based in California. He notes that the best gear is still made
in the West, but adds that China’s top-down, government-led model may
have benefits when it comes to developing a large-scale supply chain for a
technology with unclear time horizons and payoffs.

Perhaps. But China’s model also carries risks. The system has fostered less
competition, with firms having little incentive to outdo each other. What is
more, state co-ordination means resources are focused on the specific
approaches to quantum technology that the government thinks will succeed.
This could pay off in a big way for China’s rulers. But there is also a chance
they are placing losing bets. ■

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Bartleby

Beware the dangers of data

Numbers have an authority that disguises their flaws
1月 02, 2025 06:07 上午

MANAGERS ARE better equipped than ever to make good decisions. They
are more aware that human judgment is fallible. They have oodles of data
about their customers and products. They can use artificial intelligence (AI)
to analyse, summarise and synthesise information with unprecedented
speed. But as the pendulum swings inexorably away from gut instinct and
towards data-based decisions, firms need to be alive to a different set of
dangers.

In a recent paper Linda Chang of the Toyota Research Institute and her co-
authors identify a cognitive bias that they call “quantification fixation”. The
risk of depending on data alone to make decisions is familiar: it is
sometimes referred to as the McNamara fallacy, after the emphasis that an
American secretary of defence put on misleading quantitative measures in
assessing the Vietnam war. But Ms Chang and her co-authors help explain
why people put disproportionate weight on numbers.

The reason seems to be that data are particularly suited to making

comparisons. In one experiment, participants were asked to imagine
choosing between two software engineers for a promotion. One engineer
had been assessed as more likely to climb the ladder but less likely to stay
at the firm; the other, by contrast, had a higher probability of retention but a
lower chance of advancement. The researchers varied the way that this
information was presented. They found that participants were more likely to
choose on the basis of future promotion prospects when only that criterion
was quantified, and to select on retention probability when that was the
thing with a number attached.

One answer to this bias is to quantify everything. But, as the authors point
out, some things are mushier than others. A firm’s culture is harder to
express as a number for job-seekers than its salary levels. Data can tell an
early-stage investor more about a startup’s financials than a founder’s
resilience. Numbers allow for easy comparisons. The problem is that they
do not always tell the whole story.

There are other risks, too. Humans bring the same cognitive biases to their
analysis of numbers as they do to other decisions. Take confirmation bias,
the propensity to interpret information as support for your point of view. In
another experiment Itai Yanai of New York University and Martin Lercher
of Heinrich Heine University asked computer-science undergraduates to say
what general correlation they expected between wealth and happiness,
before showing them a fictitious dataset of the relationship between these
two variables for 1,000 individuals. Faced with an identical graph, students
who expected a positive correlation were much more likely to see one in the
data. Beliefs influenced interpretation.

Plenty of people struggle with basic data literacy: consumers are less likely
to participate in competitions with higher numbers of contestants, even
when the odds of winning a prize are exactly the same. In a world giddy
with excitement over AI models, relying on algorithms may seem like the
sensible solution to this. In one more experiment, Hossein Nikpayam and
Mirko Kremer of the Frankfurt School of Finance and Management and
Francis de Véricourt of ESMT Berlin found that managers were
unimpressed when other decision-makers ignored machine-led
recommendations and exercised their own judgment. They blamed them if
the outcome was bad, and did not reward them if it was good. People used
to say that nobody ever got fired for buying IBM. It’s not hard to imagine
“nobody gets fired for following the algorithm” becoming the modern-day
equivalent.

But there are times when humans have an advantage. Datasets reflect back
the world as it is, for example, not the world as it might be. It’s harder to
evaluate radically new ideas by looking at existing patterns. In the early
days of HBO, a pioneering TV channel, executives operated on a mixture of
instinct and contrarianism to commission programmes that broke the
mould: profane comedy specials, a prison drama that killed off a main
character in the first episode. Other networks turned down the idea of a
violent mobster in therapy; HBO did not. Relying on data might have led to
more explicable decisions, but they would also have been safer.

None of this is to say that instinct trumps data, or to claim that humans
make better decisions than machines. Far from it. But it is a warning.
Numbers promise rigour, certainty and objectivity. They have flaws, too. ■

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Schumpeter

MAGA’s war on talent frightens

CEOs—and angers Elon Musk
American businesses’ ability to tap the world’s human capital is under
threat
1月 02, 2025 06:06 上午

FOREIGNERS ARE taking good American jobs. Some of the very best,
frankly. Five of America’s eight trillion-dollar technology giants are run by
people born in other countries. Jensen Huang of Nvidia hails from Taiwan;
Hock Tan of Broadcom, another chip titan, comes from Malaysia. Microsoft
and Alphabet, Google’s corporate parent, are run by two Indians, Satya
Nadella and Sundar Pichai. Elon Musk, boss of Tesla, is South African.

This is not just true of big tech. Of the 100 most valuable American
companies, more than 30 have chief executives who are not sons and
daughters of Uncle Sam (though some, including the tech quintet, are
naturalised Americans). Many of the most American brands have been
entrusted to non-native bosses: Citigroup’s top banker is Scottish; Pepsi’s
pedlar-in-chief is a Spaniard; the main Marlboro man is a Pole.

American businesses have long been a magnet for the world’s cleverest and
its most industrious, be it in the corner office, at the lab bench or on the
factory floor. Forget the dollar’s status as the global reserve currency:
America’s enduring ability to attract human capital is its most exorbitant
privilege. It is now imperilled by the nativist wing of Donald Trump’s
Republican Party.

Most parts of the Trumpian coalition view illegal immigrants as bad, with
the possible exception of some pro-Trump farmers, builders, restaurateurs
and hoteliers, who employ them by the millions. Many believe that they
should be deported. Nativists accuse them of stealing American jobs. The
techno-Trumpists led by Mr Musk, the president-elect’s biggest donor and
first buddy, worry that they are Democrats at heart who, if granted
citizenship, would turn swing states a woke shade of blue. Either way, both
groups arrive at the same conclusion. Give me your tired, your poor, your
huddled masses? No, thank you.

Opinions begin to diverge when it comes to your trained, your pros, your
hoodied maths aces. Yes, please, say Mr Musk and his Silicon Valley pals,
who regard such clever clogs as the key to the innovation that keeps
America First in perpetuity. Nuh-uh, retort the nativists, who would prefer
to see this well-paying work go to real Americans, which is to say those
who got there first. The dispute turned ugly just in time for Christmas, and
also arcane. Ugly, because one side took to bashing Indians,
overrepresented among techies, while the other blamed American culture
for venerating “mediocrity over excellence”, in the comparatively mild
words of Vivek Ramaswamy, a venture capitalist whom Mr Trump has
tasked alongside Mr Musk with cutting government waste (and whose
parents came from India). Arcane, for it touched on the fine print of
immigration policy: “H-1B”, a category of visa for skilled workers, trended
on X, Mr Musk’s social-media mouthpiece.
Lots of companies rely on H-1Bs to bring in brainiacs from abroad. If
applications exceed the annual quota of 85,000 in the first days of the
registration window, as happens most years, new visas are handed out by
lottery. To load the dice, large firms often apply for more H-1Bs than they
need. In the latest round Microsoft and Google lodged more than 1,000
applications apiece. Amazon filed nearly 4,000 through the e-empire’s
various affiliates.

Some of the heaviest users of H-1Bs are the American arms of Indian IT
outsourcing firms. TCS, Infosys and Cognizant have between them filed
nearly 280,000 petitions over the past 15 years (including renewals). The
workers they bring in often stay briefly to meet clients and learn how their
systems operate before being sent back abroad to do actual work, observes
William Kerr of Harvard Business School. They are also paid less than
other H-1B holders. In 2024 the median salary of an H-1B worker at TCS
was $82,000, compared with $160,000 at Microsoft.

For fans of H-1Bs the answer to such gaming is to raise the cap or remove it
altogether. This could be especially life-changing for startups, which cannot
afford to spam the system in the same way. So big tech, little tech and non-
tech tend to support loosening the rules. At the same time, MAGA
immigration hardliners sniff a ruse by business to employ cut-price
foreigners instead of Americans. Some would love to see the system
scrapped.

Mr Trump seems in two minds. On December 28th he told the New York
Post, his favourite tabloid, “I’ve always liked the visas, I have always been
in favour of the visas.” Yet amid the covid-19 pandemic during his first
term he suspended new work permits, including H-1Bs, to MAGA cheers
and America Inc’s dismay. Proponents of those curbs, including Stephen
Miller, his mass-deportation-loving deputy-chief-of-staff-to-be, still have
his ear.

Alien evasion

Any fresh curbs on immigration, skilled or not, would come at a time when
MAGA ideas risk hurting firms’ ability to secure human capital in other
ways. A recent study by Britta Glennon of the Wharton School at the
University of Pennsylvania found that after a temporary dotcom-era
increase in the H-1B cap expired in 2004, creating a visa deficit,
multinationals compensated by hiring 0.9 workers abroad for every visa
rejection at home. In 2007 Microsoft opened a development centre in
immigrant-friendlier Canada. Within a year it employed over 300 people
from 45 countries.

Though not as inimical to the nativists as firms that offshore factories,

which Mr Trump’s running mate has threatened with tax rises, such
unAmerican behaviour may also invite retaliation. Meanwhile, buying
human labour embodied in imported goods would be curtailed by Trumpian
tariffs. The MAGA preference for hiring locally runs up against a real
shortage of both skilled and unskilled labour. It could also be self-defeating,
given that economists reckon skilled foreigners in particular create many
more jobs than they take. No wonder even bosses appalled by Mr Musk’s
right-wing antics are cheering him on in the visa fight. ■

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Finance & economics

Will Elon Musk dominate President Trump’s economic
policy?
Prepare for battle :: He will face challenges from both America firsters and conservative
mainstreamers

What investors expect from President Trump

Place your bets :: Shareholders are over the moon; bondholders are readying the whip hand

China’s firms are taking flight, worrying its rulers

Footloose factories :: Policymakers at home and abroad are anxious about offshoring

Manmohan Singh was India’s economic freedom fighter

Defying export fatalism :: India’s most consequential finance minister, who later became PM,
has died aged 92

Would an artificial-intelligence bubble be so bad?

Free exchange :: A new book by Byrne Hobart and Tobias Huber argues there are advantages
to financial mania

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Prepare for battle

Will Elon Musk dominate

President Trump’s economic
policy?
He will face challenges from both America firsters and conservative
mainstreamers
1月 02, 2025 08:07 上午 | Washington, DC

TO GET A full sense of the disruptive potential of Donald Trump’s

economic agenda, look beyond the limelight hogged by Elon Musk to the
wider cast of characters in the president-elect’s orbit. Russ Vought, a budget
director, promises to “break the bureaucracy to the presidential will”. Peter
Navarro, a trade adviser, muses about cancelling America’s trade deal with
Canada and Mexico. Andrew Ferguson, an antitrust official, rails against
big tech firms for suppressing dissident speech.
These are just a few of the voices in the universe of people who will shape
Trumponomics. Presidents normally have an assortment of officials and
advisers contributing to their economic team. In Mr Trump’s case, though,
the team is unusually large, stretching from business magnates to academic
iconoclasts. How do they fit together? And how will they seek to reshape
the American economy?

It is useful to divide Mr Trump’s acolytes into three groups: conservative

mainstreamers, America firsters and tech tycoons. In many cases there is
overlap. Most agree that America needs fewer regulations, smaller
government, lower taxes, less immigration and a tougher stance on foreign
opponents. Virtually all bring extensive experience, whether in government
or the private sector, to the table. But their priorities and prescriptions vary
widely. Supporters of Mr Trump believe that, when refracted through his
Oval Office, these disagreements will make for better decisions. If managed
poorly, they could just as easily lead to chaotic governance.

As in Mr Trump’s first administration, conservative mainstreamers hold a

clutch of prominent offices. They can be expected to counter the most
extreme protectionist impulses that course through Trumponomics. Scott
Bessent, a hedge-fund manager, is due to run Treasury. Kevin Hassett, a
respected economist and senior adviser in Mr Trump’s first term, will lead
the National Economic Council (NEC). Howard Lutnick, chief executive of
Cantor Fitzgerald, a broker and investment bank, has been nominated as
commerce secretary. And Doug Burgum, former governor of North Dakota
and a serial entrepreneur, will lead the interior department.

Investors and diplomats alike breathed a sigh of relief at these

appointments, especially after Mr Trump’s more controversial nominees for
positions such as defence secretary and attorney general. “He has kept the
clown car away from the economy,” is how one diplomat in Washington,
DC, puts it. There are echoes with the moderating roles played in the first
Trump administration by Steven Mnuchin as Treasury Secretary and Gary
Cohn in the NEC, both alumni of Goldman Sachs, a bank.

But the mainstreamers appear more willing to go along with Mr Trump’s

agenda this time around. Mr Hassett has said that 10% universal tariffs
would deliver “pretty significant” benefits for America, helping to onshore
global production. Mr Bessent, for his part, has talked about tariffs as a
“negotiating position”—implying that he sees value in such levies, even if
not as an end in themselves. Mr Lutnick, a man with brawler instincts, has
gone even further. “You’ve got to tariff the rest of the world. Keep them the
heck out. Bring the manufacturing back here,” he said in an interview
before the election. Even so, investors are still counting on the
mainstreamers to sand down the roughest edges of Trumponomics. The
challenge for Mr Bessent, in particular, will be to push back against tariffs
without undermining his own standing. “He will need to channel the
market, to make it look like the opposition is coming from the market, not
from himself,” says a former Trump adviser.

America firsters represent the backbone of Trumponomics. Their goal of

maintaining American dominance of the global order has been Mr Trump’s
guiding principle since entering national politics a decade ago. And unlike
during his first term, when there was a scramble to staff his administration,
which brought in many officials who did not share Mr Trump’s views, most
this time have been vetted for ideological fealty. That makes the America
firsters a more formidable group now, from the high priests leading the way
to the wonks implementing their vision.

Their supremo is Stephen Miller, deputy chief of staff in the White House,
where he will be responsible for policy. In Mr Trump’s first term, Mr Miller
was best known as a hardline adviser on immigration, helping to craft
controversial rules that separated parents from children. Mr Miller will
again spearhead a crackdown on immigration, which may end up having a
greater impact on the economy than any other element of Trumponomics.

But he will also have a broader role. After leaving office, Mr Miller
established the America First Legal Foundation to fight what many
conservatives see as overreach of the administrative state. During the
election campaign, he was a loud defender of tariffs, endorsing a strategy of
using them as a tax on imports while cutting taxes on made-in-America
production. And he has got into the weeds of legislative strategy. He has
called for a phased approach, pushing for an immigration package within
Mr Trump’s first month in office before moving on to a tax bill. Some
Republican representatives fear the two-step plan will drain momentum for
tax cuts, but Mr Miller is in the driving seat. He will be able to rely on his
ally, Vince Haley, to help push things forward as director of the Domestic
Policy Council, a post that oversees all departments.

Absent from Mr Trump’s administration, to the surprise of many, is Robert

Lighthizer, architect of his first-term trade war with China. An adviser
involved in the transition says that should not be read as a weakening of Mr
Trump’s desire to use tariffs against China and other countries. Jamieson
Greer, a protégé of Mr Lighthizer, will be the country’s trade representative.
Before the election Mr Greer called on Congress to revoke China’s status of
permanent normal trading relations with America, a move that would
cement higher tariffs and signal that decoupling from China is the new
normal. “Trump likes Lighthizer, and I’m sure at some point he will be back
in,” says Stephen Moore, an economic adviser to the president-elect.
One America firster making a triumphant return to the White House is Peter
Navarro, again in a role advising Mr Trump on trade and manufacturing. An
ornery former academic, Mr Navarro was often a one-man team in Mr
Trump’s White House, sidelined from major trade talks. But insiders say he
remains deeply trusted by Mr Trump (not least because he spent time in
prison for refusing to testify to Congress about the riot of January 6th,
2021). He remains one of the staunchest proponents of extensive tariffs.

For the actual delivery of Trumponomics, the pivotal actor may well be
Russ Vought, who has been nominated as director of the Office of
Management and Budget. In normal times the OMB has a claim to being
the most powerful agency in Washington, since it co-ordinates the
president’s budget and helps direct other agencies. In Mr Vought’s hands it
will be even more potent. “Russ has been the guy for the last four years that
has been developing the plan to take down the deep state,” Mr Miller
recently effused about him.

2025: as projected?

That is only slight hyperbole: having led the OMB in Mr Trump’s first term,
Mr Vought knows his way around the bureaucracy; and as one of the
creators of the controversial “Project 2025” agenda, he has indeed spent the
past four years thinking about how to change things. He wants to curtail the
independence of federal organs such as the Department of Justice (DoJ),
end employment protections for career civil servants and get the president-
elect to hold back, or impound, Congress-approved spending to slash the
budget. Mr Vought may also be deeply involved in trying to shred the
Inflation Reduction Act, Joe Biden’s clean-energy law that many
Republicans loathe. Despite that sentiment, some Republicans in Congress
will fight to maintain it because they have witnessed it catalyse big
investments in their regions. “Repeal is something that the grassroots wants
and that has been promised to them, and Russ is going to be extremely
influential in advocating that view,” says Michael Strain of the American
Enterprise Institute, a think-tank.

The newest group in Mr Trump’s economic firmament is the tech tycoons.

The most visible are Mr Musk and Vivek Ramaswamy, a biotech billionaire
and former Republican presidential candidate, who together will lead the
Department of Government Efficiency. Despite its official-sounding name,
DOGE will be an advisory commission that draws its power from Mr
Musk’s proximity to Mr Trump. The goal is to shrink the federal workforce,
reduce regulation and slash spending. DOGE’s arrival on the scene has
stirred up excitement among a large subset of Republicans, who see almost
revolutionary potential in Mr Musk’s zeal, energy and clout. “In five years
in Congress, I’ve been awaiting a fundamental change in the dynamic. It
has arrived,” Dan Bishop, a representative from North Carolina, recently
exclaimed.
Beyond Mr Musk, there are several tech experts now connected to the
administration. Some are purely informal. Marc Andreessen, co-founder of
Andreessen Horowitz, a venture-capital giant, said in December that he had
spent half his time since the election at Mr Trump’s Mar-a-Lago compound,
offering views on economic and tech policy, as well as helping hire
officials. One of Mr Andreessen’s ideas—that “big tech” firms (established
companies such as Meta or Google) are too powerful, limiting space for
“little tech” startups—has already helped shape Mr Trump’s view of the
industry. Still, once the administration is up and running, and the centre of
gravity shifts to the White House, opportunities for informal consultation at
Mar-a-Lago will probably diminish.

Other tech tycoons will have more permanent perches. David Sacks, part of
the “PayPal mafia” that was involved with the payments firm in its early
days, will be the White House tsar on artificial intelligence and crypto, a
position that will give him access to Mr Trump without the hassle or
scrutiny that comes with a normal confirmation process. Mr Sacks will, in
turn, have a team of advisers rooted in Silicon Valley, including Sriram
Krishnan, a tech whiz with Andreessen Horowitz. Some in the industry
believe more power may lie with Michael Kratsios, named as director of the
Office of Science and Technology, owing to his longer relationship with Mr
Trump. A rough division of labour could have Messrs Kratsios and
Krishnan advocating for looser regulation on AI companies, while Mr
Sacks pushes for greater legal clarity for crypto firms.

Mr Trump has nominated Scott Kupor, a managing partner at Andreessen

Horowitz, to serve as director of the Office of Personnel Management,
which oversees government hiring and helps divvy up resources. That could
make Mr Kupor one of the conduits for the efficiency drive that Messrs
Musk and Ramaswamy want to unleash. It also suggests that Andreessen
Horowitz has replaced Goldman Sachs as the launchpad for business
bigwigs who want to enter the administration. Deregulation is, generally
speaking, good for their ventures—directly so for those with large crypto
holdings. Some like Mr Musk are in line for hefty defence contracts. Many
also share a techno-libertarian belief in smaller government as a good thing
in its own right, and see Mr Trump as likely to roll back Joe Biden’s statist
policies.
America first, second and third

It is possible to conjure a scenario in which the three groups pull in the

same direction: the America firsters as the motor, propelling the
administration forward; the mainstreamers as the shock absorbers,
cushioning bumps along the way; and the tech tycoons providing tools for a
speedier ride. For a glimpse of how this might work in practice, consider
energy. As Secretary of the Interior, Mr Burgum will try to tie together both
Mr Trump’s “drill, baby, drill” mantra and the quest to retain America’s tech
supremacy. Much easier permitting rules, it is hoped, will boost oil-and-gas
production, to the benefit of the AI industry. He will be supported by the
deputy secretary of Treasury, Michael Faulkender, who served in Treasury
in Mr Trump’s first term and spent the past few years at the America First
Policy Institute, a think-tank. He has helped craft blueprints, ready for day
one, to encourage drilling.

A similar dynamic could emerge in regulation. Mr Trump has appointed a

series of veterans who buy into the tough-on-big-tech, soft-on-little-tech
stance. At the DoJ, Gail Slater will be the next leader of the antitrust
division. Ms Slater was an economic adviser to J.D. Vance, the incoming
vice-president who is known for his antipathy to Silicon Valley giants. Yet
she also previously served as general counsel at the Internet Association, an
industry group, where she argued that government interference stifled
innovation. At the Federal Trade Commission (FTC), the main anti-
monopoly regulator, Mr Trump has elevated current commissioner Andrew
Ferguson, whose dissenting opinions indicate a higher bar for challenging
deals than his Biden-appointed predecessor, Lina Khan. Mr Trump has also
added Mark Meador, an antitrust lawyer who joined the DoJ in Mr Trump’s
first term, to the FTC as a new commissioner, cementing its Republican
majority. Mr Meador has been a pointed critic of big-tech firms and, as an
adviser to Senator Mike Lee of Utah, drafted a bill that would have forced
Google to break up its advertising business.

It is, however, just as easy to conjure an alternative scenario, where the

various splits between advisers and officials slow things down. The most
obvious division is between America firsters and mainstreamers on tariffs.
Although their disagreements are less pronounced than in Mr Trump’s first
term, the president-elect enters office with a much more radical plan. If he
is serious about slapping punishingly high levies on countries, whether foes
or allies, Messrs Bessent and Hassett will have their work cut out. “There is
going to be a tug of war between the more traditional Reaganite free-
marketeers and the voices that believe in big government driving the
economy,” says Mr Moore.

A dispute has already flared up about immigration. The tech tycoons know
all too well how essential it is for America to attract skilled workers from
around the world, whereas the most extreme of the America firsters see
immigration of any sort as an affront to the native-born. After the
appointment of Mr Krishnan as an AI adviser, some xenophobes on social
media bridled at the apparent clout of the Indian-born entrepreneur, though
he is an American citizen. That, in turn, triggered a debate about the H-1B
visa programme, a big recruitment channel for tech firms in need of high-
skill workers. Mr Musk and his friends want to expand issuance and speed
up processing times; Mr Miller believes foreigners with H-1B visas
displace Americans and so wants to restrict them.

Hawkishness towards China may also cause rifts. China is home to Tesla’s
busiest factory and is its second-biggest market. That does not
automatically mean Mr Musk will take China’s side. In other ventures,
including SpaceX, his rocket business, Mr Musk’s interests are firmly in the
American camp. But it could still make him a voice for moderation.
Similarly, Mr Lutnick’s business is intertwined with China: his firm has
helped Chinese companies sell stocks in America and has a joint venture
with a Chinese state-owned enterprise. Such ties stand in contrast to the
deeply held views of Mr Navarro, co-author of “Death by China”, a book
about China’s threat to America’s economic dominance.

Even tax cuts—an axiom of Trumponomics—may cause problems. Steve

Bannon, Mr Trump’s chief strategist at the start of his first term, recently
called for tax rises on corporations and the wealthy. Mr Bannon is not part
of Mr Trump’s administration, and the president-elect would like to do just
the opposite. At the same time, Mr Bannon is beloved by many in the
America-first camp. His views offer a preview of possible dissent to come.

The stresses of governance are certain to expose more fault lines. In the
abstract any card-carrying Republican can get behind the idea of shrinking
the government. In practice, questions about what to cut are vexing. Mr
Trump has vowed not to lay a hand on Social Security. But Republican
lawmakers who have met Messrs Musk and Ramaswamy say nothing will
be sacrosanct. That Mr Trump has tapped Mr Miller’s wife, Katie, to join
DOGE suggests that the America-first camp wants to keep a close eye on
the tech tycoons.

Mr Musk goes to Washington

DOGE’s supremos have already had a taste of how frustrating legislative

battles can be. In December, when Congress ended up passing a budget
without lifting the debt ceiling—against the wishes of Messrs Trump and
Musk—the latter offered distinctly muted praise of Mike Johnson, the
Republican speaker of the House of Representatives. He did “a good job
here, given the circumstances”, Mr Musk said. The problem is that the
circumstances will not get any better. Politics is rough. Even if Mr Trump’s
new team is better-prepared and more cohesive than in his first term, it is
about to face an almighty test. ■
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Place your bets

What investors expect from

President Trump
Shareholders are over the moon; bondholders are readying the whip hand
1月 02, 2025 08:10 上午

FOR INVESTORS who bought on the rumour, it is nearly time to sell on

the news. They have spent months gripped by uncertainty over what
America’s next president will do in office, as rumours have flown thick and
fast. How high will tariffs rise, and how strongly will other countries
retaliate? Will he really keep campaign-trail promises of mass deportations,
sweeping deregulation or trillion-dollar tax cuts? What will it all mean for
growth, inflation and asset prices? With Donald Trump’s inauguration on
January 20th, answers will at last start to arrive.
As to which rumours market participants have found most convincing, The
Economist’s conversations with analysts, bankers and fund managers have
yielded a number of common themes. All of them expect at least some new
tariffs; few have any idea where tit-for-tat retaliation might end. None think
a wave of mass deportations, and consequent shock to America’s labour
market, is likely, though they worry that restrictions on future immigration
might cause inflation to rise. They hope that fiscal hawks in Congress and
on Mr Trump’s economic team will keep America’s deficit, which is already
at 6.4% of GDP, from widening too much further. Yet confidence on this is
low, and a big fear is that additional borrowing might cause turbulence in
the market for Treasury bonds, also destabilising other asset prices.
To see how investors are parsing these and other uncertainties, look at how
markets are priced ahead of Mr Trump’s second term. The most
straightforward judgments come from currency traders, who are betting the
dollar will remain mighty. They have been bidding up its value relative to a
basket of rich-world peers for months, but did so especially quickly after
election night (see chart 1). Meanwhile, the currencies of Mexico and
Canada, on whose goods exports Mr Trump has threatened 25% tariffs,
have been hammered.
The foreign-exchange market, therefore, takes Mr Trump’s tariff threats
seriously. Traders expect exporters’ currencies to face less demand, as new
levies raise the dollar prices of their goods. They are also betting that the
greenback will strengthen across the board—perhaps owing to its safe-
haven appeal in a more volatile world, perhaps because blanket tariffs will
induce Americans to send fewer dollars overseas. At least for now, few
believe that Mr Trump’s long-professed desire for a weaker dollar, to boost
American exports, has much chance of being realised.

Stockmarkets offer more wide-ranging predictions. The clearest is that

American firms, in aggregate, are set to trounce those everywhere else, with
share prices having risen by 3% since Mr Trump’s election. Although they
have fallen a little over the past fortnight, investors still value listed
American companies at multiples of their underlying earnings that have
rarely been exceeded. This is a bet on their continued ability to generate
ever higher profits. Compare that with the valuation multiples assigned to
other big stockmarkets in Europe, Japan and Canada. All are close to, or
below, those assigned to American shares in late 2022, when the consensus
view held that a recession was imminent.
America First, then—though investors have been discriminating about
precisely which industries will race ahead. Since Mr Trump’s re-election
share prices have diverged (see chart 2). The winners by some way have
been “consumer discretionary” firms, including Amazon and Tesla, which
do well when shoppers have spare income. Their success suggests
shareholders are counting on Mr Trump to keep wallets bulging, perhaps by
extending cuts to personal-income tax made in his first term. (Tesla’s
investors probably also owe much to the friendship of its boss, Elon Musk,
with the president-elect.) Shares in IT and financial firms, likely to face
lighter regulation, have also done well.

The losers include industries that Mr Trump has seemed to favour. His
promise to “drill, baby, drill” has not buoyed oil and gas firms, whose
production is constrained by low oil prices rather than a lack of permission
to drill. Nor has his former career in real estate boosted that sector; it has
been hit by higher borrowing costs from rising bond yields. Share prices for
materials firms, which rely on imported commodities and machinery that
may soon be subject to higher tariffs, have slumped.

With share prices still rising overall, none of that will much bother Mr
Trump. Instead, if he is to face trouble from the markets, it is most likely to
come from Treasury bonds. Their yields have already climbed, with the ten-
year borrowing cost now 4.6%, up from 3.6% in September. One big fear is
that the inflationary effects of policies Mr Trump has proposed, such as
tariffs and reduced immigration, will force the Federal Reserve to keep
interest rates high. Another is that fiscal laxity will lead to bumper Treasury
issuance, forcing prices down and yields up.

One way of gauging these fears is to examine the “term premium” on

government bonds. This is the component of borrowing costs that is not
attributable to expected changes in the Fed’s short-term interest rate. In
other words, it is the extra yield investors demand above the risk-free rate
as compensation for the chance that government-bond prices crash—in
response to high inflation, say, or unsustainable borrowing. Roughly 80% of
the recent increase in Treasury yields has come from a rising term premium.

None of this suggests that government-bond yields are about to soar, a

prospect that even the most nervous market participants think unlikely.
More plausibly, having spent so long trying to guess what the next four
years will hold, investors will shortly have a shot at influencing the answer.
A turbulent Treasury market would be sure to hit share prices, a measure of
presidential success that Mr Trump famously holds in high regard. Whether
or not bondholders have listened to the right rumours, if enough of them
start selling on the news, expect the news to change. ■
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Footloose factories

China’s firms are taking flight,

worrying its rulers
Policymakers at home and abroad are anxious about offshoring
1月 02, 2025 10:24 上午 | KUALA LUMPUR

FOR DECADES, China has put foreign capital to work. Officials pushed
Western companies to trade technology for access to its vast market,
helping build Chinese rivals that were often better and always cheaper.
These upstarts began shipping goods westwards. The resulting “China
shock” is often blamed for causing dislocation and despair in America’s
heartlands. Now, though, it is China’s turn to worry. Its manufacturers are
taking flight.

In the year to June, Chinese firms invested a record $177bn in non-financial

assets abroad. More than four-fifths is likely to have been ploughed into
“greenfield” projects, in which assets are built rather than bought, mostly in
emerging markets. The total flow is equivalent to 1% of China’s GDP,
about as much as Japanese conglomerates spent offshoring their low-value
manufacturing each year in the mid-1980s. That wave of outbound foreign
direct investment (FDI) remade global manufacturing, helping South-East
Asian countries climb the value chain.

Chinese FDI, by contrast, is causing anxiety abroad and at home. China’s

firms have resisted hiring local workers, buying from local suppliers or
sharing tech. Chinese officials, meanwhile, fret about domestic industry
being “hollowed out”.

American and Chinese policies led to the investment spree. Tariffs

introduced by Donald Trump in his first term as president encouraged
Chinese firms to shift their goods’ country of origin so as to skirt duties. At
the same time, operating in China became harder. Labour costs soared.
Weak consumer spending and huge, state-sponsored growth in loans to
manufacturers dragged producers into price wars.

Hence why Chinese firms are pouring cash into factories in emerging
markets, including some making higher-value-added goods such as electric
vehicles (EVs) and chips. It is a shift from 2014-16, when another
investment surge occurred after the state urged firms to “go out”. Investors
bought trophy assets in the West, such as the Waldorf Astoria hotel, to store
cash, notes Thilo Hanemann of Rhodium Group, a research firm. In 2016
rich countries received 80% of China’s outbound investment. By 2023 their
share was 30%.

The beneficiaries this time have been countries that act as “connectors”,
through which China can retain access to Western markets. Many are in
South-East Asia. Vietnam receives investment for low-value-added-goods
production; Indonesia gets cash for critical minerals. Malaysia and Thailand
are home to EV projects. Considering that all these countries want to make
advanced goods, such flows should be welcome. Capital for factories or
data centres is less flighty than money that trades emerging-market debt.
Shovels in the ground have larger multiplier effects than acquisitions of
existing businesses. Foreign investment brings spillovers, as technology and
skills are shared.
Yet China’s splurge brings few of these benefits. Chinese firms prefer to
import their own workers. The country’s recruitment platforms posted more
than 418,000 new vacancies for positions involving overseas travel between
January and November. Even in Germany, where skilled labour is readily
available, a fifth of the workforce at CATL’s battery-making plant are
Chinese. Locals “rarely make up more than half” of the workforce on
Chinese-owned projects, says Ong Kian Ming, a former Malaysian deputy
minister. A rule that projects should have an 80:20 split of local to foreign
workers could never be enforced, a Malaysian official sheepishly admits.

Lock and key

China’s officials want to keep knowledge at home. The commerce ministry

has told EV firms that core technology should not leave the country. In
December the state began making firms obtain licences to export sensitive
tech. Regulators want to limit foreign operations to “screwdriver” plants, in
which workers assemble Chinese parts. Reliance on Chinese imports is
reflected in trade imbalances. Members of the Association of South-East
Asian Nations (ASEAN) ran a deficit of $144bn with China in the first ten
months of 2024, 38% higher than in the same period in 2023.
To make matters worse, Chinese firms are crushing rivals. With a factory
comes market access. Chinese carmakers doubled their market share in
Thailand, home to a new BYD plant, to 11% in 2023, squeezing not only
competitors but also small firms that make parts. Suzuki, a Japanese
carmaker, was among the 2,000 producers to shut factories in Thailand in
the year to June, a 40% increase from 2022-23. A leading Thai auto-parts
maker has warned upstream suppliers may be wiped out.

This is sowing dissatisfaction in countries that receive Chinese money. The

country’s investors, says an official in Kuala Lumpur, “cannot just use our
land without hiring our people or buying our products”. Malaysia will begin
taxing firms based on how many foreigners they employ. ASEAN is also
wrapping up a new trade agreement with China that is said to include
commitments to share tech.

Faced with such pressures, Chinese investors might start to localise their
operations. A representative at CATL’s plant in Thuringia, Germany,
recently boasted its canteen now serves German food, alongside Chinese
dishes. Asian officials are optimistic that entrants will establish new supply
chains. But Chinese firms must also contend with politics at home. And the
more localised overseas production becomes, the more Chinese
policymakers see it as a threat to the domestic economy.

Although some Chinese economists argue that relocating low-value

production will free China to focus on higher-value manufacturing, local
governments want to hold on to even low-value exports. An official in
Jinjiang, China’s “zipper capital”, told state media that migrating companies
will fail to replicate the city’s supply chains. Officials in Jiaxing, a steel
town, have quizzed firms on their offshoring intentions, warning of risks to
economic stability from “disorderly outbound investments”. A state think-
tank has urged officials to “keep the main part of leading enterprises in
China as much as possible”.

Chinese policymakers are in more of a bind than in 2016, when they last
worried about hollowing out. Then they throttled outbound flows, notes
David Lubin of Chatham House, a think-tank. The state introduced foreign-
exchange caps and a traffic-light system to limit and prohibit overseas
investment, reducing flows by 35% in a year. Now China benefits from
skirting American tariffs, notes Mr Lubin.

Xi Jinping, China’s leader, still wants supply chains to be “self-determined

and self-controlled”. He would prefer low-value industry to move to
China’s poor interior. The National Development and Reform Commission,
China’s economic planner, has praised Chongqing and Yunnan for attracting
firms from richer areas. “Against the backdrop of the accelerated
reconstruction of the global industrial chain,” wrote the department, China
should use the “economic depth of a big country and retain the roots of the
manufacturing industry.” Politics caused firms to take flight. It could yet
summon them home. ■

Correction (January 1st 2025): An earlier version of the first chart was
wrongly labelled. It suggested that China’s outbound non-financial
investment ranged from $240m to $550m, rather than $24bn to $55bn.
Sorry.

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Defying export fatalism

Manmohan Singh was India’s

economic freedom fighter
India’s most consequential finance minister, who later became PM, has died
aged 92
1月 02, 2025 06:07 上午

IT IS FITTING that Manmohan Singh, who unshackled Indian trade as the

country’s finance minister, was the son of an importer. His father’s firm in
Peshawar procured dry fruit and spices from Afghanistan. As a boy, Mr
Singh would fill his pockets with raisins that classmates tried to steal. From
an early age, he appreciated the fruits of international commerce.

Clever and studious, Mr Singh probably did well in the school-leaving

exams he took in 1947. But he would never find out. In breaking free from
colonial rule, India was also breaking violently in two. Peshawar would
become part of Pakistan. To take his exams, Mr Singh had to cross a city
scattered with corpses. Amid the chaos, the results were never announced.

He fled with his family to northern India, where he had little money but lots
of aspirations, much like the new republic itself. India’s investment needs
were vast. Industrial equipment and other capital goods would have to be
bought overseas, leaving little hard currency for anything else. State
planners policed imports and protected homegrown alternatives.

Lacking textbooks, Mr Singh travelled alone to Delhi in 1948 to retake his

exams. Decades later he described this period to his daughter, Daman.
There was much he could not remember and plenty he might have liked to
forget. But he recalled with precision his exam result: 694 out of 850.

Even better results would follow at Punjab University and then Cambridge
and Oxford. Amid his success, he was quietly confident and confidently
quiet. One don remembers his “excessive diffidence”. In a letter, Mr Singh
moaned that he had spent several pounds on crockery. That he occasionally
had to entertain half-a-dozen people was worth writing home about.

Aloofness would normally have barred him from becoming a politician, let
alone prime minister. Yet his modesty was in fact a prerequisite. A self-
assertive man would never have been acceptable to Sonia Gandhi, the
foreign-born leader of the Congress party, who wanted to hold power
without holding office after her party’s surprise success in the 2004
elections.

Besides, in his writing and decisions, this supposedly diffident man could
be trenchant. Mr Singh’s research took on the “export fatalism” that cursed
India’s economic strategy. Previous scholars had argued there was little
room for growth in India’s principal exports, such as jute and tea. Hard
currency would stay scarce, according to this view, which in turn justified
steering investment towards industries that replaced foreign goods, rather
than those that served foreign markets.

Mr Singh did not accept this fatalism. Blame for India’s stagnant exports
lay not just with global forces outside India’s control, but with “stumbling
blocks” that Indian officials had left in exporters’ way. “Official policy has
been far too slow in recognising the necessity of a sustained export drive,”
he wrote in 1963. As finance minister almost 30 years later, he had a chance
to put his ideas into action. In 1991 the country was on the brink of a
financial crisis. To secure an international loan, the central bank had to air-
lift gold to London.

It was clear that India needed to cut spending by reducing the budget
deficit. Mr Singh also believed it could “switch” spending by devaluing the
rupee. The cheaper currency attracted foreign demand for India’s exports
and discouraged spending on imports. These two measures might have been
enough to solve the immediate crisis. But Mr Singh seized his chance to do
more. The rupee devaluation gave him cover to cut import tariffs and
remove export subsidies. He also gave firms freedom to grow without a
licence. The reforms reinforced each other, as Montek Singh Ahluwalia, his
ally, has pointed out. India, for example, found it easier to attract
investment from Japan when it became possible for Japanese expats to
import food items from their home country.

Mr Singh’s legacy is vast. Lant Pritchett of the London School of

Economics and co-authors have tried to add up all of the additional goods
and services India produced from 1993 to 2002 that an unreformed
economy would not have. Converted into today’s dollars and appropriately
discounted (as benefits were spread over years) the total could exceed
$1.5trn.

As prime minister from 2004 to 2014, Mr Singh reaped some of what he

had sowed. The economy grew briskly until a spate of corruption scandals
paralysed government decision-making. Foreign capital was often plentiful.
Dollars poured in from exports of IT services, an industry the fatalists did
not foresee. India’s foreign-currency reserves, $1bn in 1991, exceeded
$280bn by the end of his tenure.

Despite this change, India is still insecure about its position in the global
division of labour. Its tariffs are higher than most of its Asian peers. It
refused to join the Regional Comprehensive Economic Partnership, an
Asian trade deal, because it feared Chinese competition. Some economists
doubt India can ever emulate East Asia’s industrial success, given its
restrictive land and labour laws. Mr Singh has passed away. Export fatalism
lives on. ■

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Free exchange

Would an artificial-intelligence
bubble be so bad?
A new book by Byrne Hobart and Tobias Huber argues there are
advantages to financial mania
1月 02, 2025 06:06 上午

A LITTLE OVER a decade ago Seth Klarman, a hedge-fund titan, worried

that an asset-price bubble was emerging. He identified Tesla as one of the
firms best exemplifying exuberance in the market. At the time, Elon Musk’s
electric-vehicle company was worth around $30bn. Today its stockmarket
value is $1.3trn.

Identifying a speculative frenzy, and when it might end, is a difficult task

for even the most talented investor. That does not stop lots of them—
talented and untalented alike—from trying. America’s tech-heavy
NASDAQ index of share prices has quadrupled over the past decade. With
valuations looking steep and excitement about artificial intelligence at
extraordinary levels, investors are once again talking about a potential
bubble.

But what if it is not just investors who get bubbles wrong? Economists
usually malign financial manias for misallocating resources, with capital
directed to inefficient corners of the economy. Now, though, a growing
body of research suggests that bubbles may have advantages, even when
many of the investors involved lose money. Byrne Hobart, a financial-
newsletter author, and Tobias Huber, a tech investor, make the case in a
recently published book, “Boom: Bubbles and the End of Stagnation”. They
argue that a culture of risk aversion, shaped by ageing populations, has led
to economic stasis. Financial exuberance may help escape this trap, they
suggest, by driving investment in technologies that offer potentially
spectacular rewards for the world.

The economic definition of a bubble is surprisingly loose. One is said to

occur when asset prices rise above any plausible underlying value, simply
because investors expect to sell the assets at a higher price in the months or
years to come. For Charles Kindleberger of the Massachusetts Institute of
Technology another factor was crucial: a bubble had to pop. Booms are not
typically thought to have wider benefits for society, and the subsequent
crashes impose heavy costs on investors who bought into the rally.
The worst implosions result in economic downturns.

In their book, Messrs Hobart and Huber take unusual turns, touching on
René Girard, a French philosopher, and the similarity of financial bubbles to
Christian teaching on the revelation. But their argument is grounded in
history. Although investors made losses, the railways laid during a British
mania for trains in the 1840s ended up being useful, for instance, as did
high-speed internet infrastructure built in the dotcom bubble of the late
1990s.

The authors are not alone in their view that the social benefit of some
bubbles outweighs the costs to investors. Number-crunching by Randall
Morck at the University of Alberta finds that corporate research-and-
development spending provides much more of a boost to the broader
economy than it does to investors’ returns, which suggests that what looks
like wasteful capital allocation from a financial perspective is rather more
benign from an economic standpoint. Similarly, Bill Janeway, an economist
and venture capitalist, has suggested that “productive bubbles” exist. These
help explore uses for new technologies even if most of the ventures
involved end up failing.

A bubble popping is never pleasant for investors who bought into the rally,
but not all are equally dangerous for the economy. William Quinn and John
Turner, both of Queen’s University Belfast, divide instances of financial
mania into categories based on their underlying cause, the source of the
market enthusiasm and their size. Instances in which banks become heavily
involved and those that are triggered by political shifts, such as changes to
regulation or taxation, can leave deep economic scars, the worst of which
remain visible for decades (think of America’s housing bubble, which built
in the mid-2000s, or Japan’s land and stockmarket frenzy, which emerged in
the late 1980s). By contrast, bubbles that suck in little leverage and have an
obvious technological spark, such as the British bicycle mania of the 1890s,
which led more than 100 initial public offerings by cyclemakers, tend to
have much less wounding economic consequences, and sometimes even
boost innovative activity. The arrival of speedier personal transport brought
important economic benefits.

Shift up a gear

What does this mean for the current artificial-intelligence frenzy? The
enthusiasm is very much a stockmarket, rather than a banking,
phenomenon, as can be seen in the spectacular recent performance of
companies including Broadcom, Microsoft and Nvidia. It is also pretty easy
to identify spillovers that could benefit society more widely, whether in the
consumer surplus generated by technological advancements or the physical
infrastructure provided by associated investment in electrical grids.

But the challenge, even for Mr Janeway’s productive bubbles, is that the
boundaries of a frenzy are rarely tidy. Market exuberance tends to spread.
Heightened growth expectations in one industry buoy those in others. Credit
investors are already being enticed by the current excitement, for instance.
They are rushing to finance the data centres and other commercial-property
infrastructure required by fast-growing artificial-intelligence firms. The
longer a frenzy lasts and the bigger a bubble grows, the more it will begin
to have implications for other parts of the economy.

Indeed, a bubble of considerable duration and scale, where asset values are
surging and sentiment is excited or even manic, will eventually draw in
more staid and conservative investors. If enthusiasm about new tech means
that investors everywhere become more excited about the potential for
global economic growth, it will influence every facet of financial markets,
including bank lending. Apologists for financial frenzies are right to point
to the potential upsides of manic episodes. There is, nevertheless, a reason
that people more often focus on the downsides. ■

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Science & technology

The other billionaire space company
Lift-off at last? :: Might Blue Origin at last become a contender in the private space race?

New firefighting tech is being trialled in Sardinia’s ancient

forests
Smoke and sensors :: It could sniff out blazes long before they spread out of control

Cancer vaccines are showing promise at last

The long shots :: Trials are under way against skin, brain and lung tumours

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Lift-off at last?

The other billionaire space

company
Might Blue Origin at last become a contender in the private space race?
1月 02, 2025 08:10 上午

IT HAS BEEN a long time coming. Assuming there are no last-minute

delays, then in the next few days Blue Origin, a firm run by Jeff Bezos,
Amazon’s founder, will make the first launch of its New Glenn rocket from
Cape Canaveral in Florida. If everything goes smoothly, then almost a
quarter of a century after it was founded, Blue Origin will reach orbit for
the first time—and the private space industry may have another contender.

That is quite a big “if”. Getting all the way to orbit with a brand-new rocket
is a rare feat. Blue Origin also hopes to recover the rocket’s first stage by
landing it on a drone ship in the Atlantic Ocean. Doing that on a maiden
flight would be unprecedented: that kind of partial reusability was
pioneered by SpaceX, Elon Musk’s rocket firm, and it required several
attempts before eventually sticking the landing in 2016. (In a nod to those
long odds, Blue Origin has named the booster So You’re Telling Me There’s
A Chance.)

Admittedly, Blue Origin will not be starting entirely from scratch. Since
2021 the firm has been flying tourists (including Mr Bezos himself) above
the Karman Line, the 100km boundary that marks the edge of space. The
New Shepard rockets that power those missions are capable of landing for
later re-use. But going into orbit is much harder than crossing the Karman
Line. It requires not only flying much higher, but also accelerating sideways
to around 28,000 kilometres per hour.
New Glenn is, therefore, far bigger and more capable than New Shepard
(see diagram). At 98 metres tall it is just two metres shy of one commonly
used definition of a skyscraper. Only three rockets currently flying—
SpaceX’s Starship and Falcon Heavy vehicles, and NASA’s Space Launch
System—produce more thrust. New Glenn is designed to carry 45 tonnes to
orbit, roughly double the capacity of SpaceX’s workhorse Falcon 9.

But amid all the excitement, many observers will be wondering what has
taken Blue Origin so long. The firm’s motto is gradatim ferociter, or “step
by step, ferociously.” In contrast to Mr Bezos’s hard-charging management
style at Amazon, at Blue Origin the gradatim has been much more visible
than the ferociter. The firm was established in 2000. Contemporaries such
as SpaceX (founded in 2002) or Rocket Lab (2006) have been flying to
orbit for years—more than 400 times in SpaceX’s case, which has
established itself as the planet’s most capable space organisation.

The problem is not lack of ambition on its owner’s part. In 2019, two years
before he stepped down as Amazon’s CEO, Mr Bezos gave a presentation
advocating the construction of giant space-going cities, of the sort proposed
by Gerard O’Neill, an American physicist, in the 1970s. (Mr Bezos went to
Princeton University, the institution where O’Neill taught.)

Moving humans and their industry off Earth, said Mr Bezos, would allow
the population to grow to a trillion people. That would mean “a thousand
Mozarts and a thousand Einsteins”, he said in 2023, and allow Earth to be
run mostly as a nature reserve. Blue Origin was founded to provide the
cheap access to space necessary to make that idea a reality.

The tortoise and the hare

One reason for the subsequent slow progress might have been that Mr
Bezos was too busy with his day job at Amazon to pay close attention to his
rocket company. Many of the managers he hired to run Blue Origin were
from the sleepy “Old Space” establishment. “Blue Origin’s approach was to
say ‘We’ll hire the best in the business’,” says Simon Potter at BryceTech, a
firm of analysts. SpaceX, he says, “started from the assumption that the
whole [aerospace] business was broken anyway”, and so did things its own
way.

Caleb Henry of Quilty Space, another firm of analysts, thinks Blue Origin
might have been too well-funded for its own good. Mr Bezos was already a
billionaire when he founded the firm, and has made regular donations over
the years. By contrast Mr Musk had to run SpaceX on a comparative
shoestring, at least at first, with the firm almost going bust in 2008. Even
now, says Mr Henry, SpaceX retains a scrappy, high-pressure start-up
culture. “I think the work-life balance at Blue Origin is attractive to many
people,” he says. But it has perhaps meant less progress than the boss would
have liked.

Mr Bezos himself has admitted that Blue Origin has been too slow, and has
said he quit as Amazon’s chief executive partly to speed things up. In 2023
Bob Smith, Blue Origin’s CEO, was replaced by Dave Limp, an Amazon
executive.

Mr Limp has been trying to inject some vim and urgency. A much-delayed
contract for Blue Origin to supply engines for the Vulcan-Centaur rocket
operated by United Launch Alliance (ULA), a joint venture between Boeing
and Lockheed Martin, seems at last to be running smoothly. And, on paper
at least, Blue Origin’s plans for New Glenn are now ferocious indeed.
“They are talking about maybe ten launches [in 2025] and 24 the year
after,” says Mr Henry. That kind of ramp-up for a new rocket is, he says,
“simply unheard-of”.

Assuming New Glenn makes it into space, one question will be whether it
can take some market share from SpaceX’s cheap and reliable Falcon 9,
which dominates the commercial-launch business. Blue Origin has not
disclosed pricing, but one industry-watcher talks of seeing a contract that
put a launch at $68m. That is roughly the same as a Falcon 9, despite New
Glenn offering double the payload.

The firm already has a minimum of one customer. In 2022, alongside ULA
and Arianespace, a European firm, Blue Origin won a slice of the biggest
launch contract in history, awarded by Amazon to fly the more than 3,000
satellites needed by its Kuiper project, which plans to provide fast internet
access anywhere on Earth. (Complaints from Amazon shareholders
eventually led to SpaceX being awarded a few flights as well.)

Catch-up on the high frontier

Blue Origin has other products in the pipeline, too. New Glenn’s test flight
was supposed to carry a pair of probes to Mars, but delays to the rocket
mean those will have to wait until spring 2025 to launch. The payload will
instead be a “Blue Ring” spacecraft, a space-going tugboat designed to
ferry satellites to their desired orbits, refuel them and even function as a sort
of orbital computing platform, services for which Blue Origin hopes there
will one day be a big market. The firm has plans for a private space station
called the Orbital Reef, and has been asked by NASA to build a crewed
landing craft for the agency’s Artemis Moon missions.

Blue Origin has not officially said when New Glenn will make its debut.
Federal Aviation Administration notices suggest early on the morning of
January 6th, British time, although bad weather or mechanical problems
could see things slip. Meanwhile, the competition is not standing still.
Rocket Lab’s diminutive Electron rocket is due to be joined by the mid-size
Neutron at some point in 2025. SpaceX’s enormous Starship, presently
being tested, is designed to undercut everything else on the market. Still, if
Mr Bezos’s firm can at last bring some ferocity, then the space industry may
get a big new competitor. ■

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Smoke and sensors

New firefighting tech is being

trialled in Sardinia’s ancient forests
It could sniff out blazes long before they spread out of control
1月 02, 2025 06:07 上午 | Sardinia

Too little, too late

THE FIRES went on for three relentless days in the summer of 2021,
scorching over 13,000 hectares of western Sardinia. Residents “saw their
whole world go up in flames around them,” says Carlo Poddi, a forestry
expert on the island. Although they began with a roadside car accident that
was immediately reported to firefighters, the conditions—temperatures over
40°C; an ongoing drought; and strong, hot sirocco winds blowing from
Africa—made the blaze difficult to stop.
Fires like those are bound to become more common and vicious in a
warming world, says Mr Poddi, walking through the forest of Santu
Lussurgiu, one of the areas hit that summer. So the island is preparing.

As part of those preparations, Mr Poddi’s team at MEDSEA, a Sardinia-

based environmental non-profit organisation, has installed 20 fire-detection
sensors in the Santu Lussurgiu forest. These are part of a pilot programme
by Dryad Networks, a German forest-monitoring company, that began in
2022 and is sponsored by Vodafone, a telecoms firm.

The sensors, which hang from branches three to four metres off the ground
like green Christmas-tree ornaments, collect information about everything
from concentrations of carbon monoxide and hydrogen to temperature,
humidity, and air pressure. These data are then sent off to be analysed by
bespoke artificial-intelligence (AI) models trained on data collected from
forests around the world. If any anomalies are spotted, a call for action is
sent to the emergency services.

Until now, fire detection on Sardinia has been carried out the old-fashioned
way: by sight. During fire-risk season, from June 1st to October 31st,
observers in lookout towers work to spot telltale smoke plumes snaking out
of the greenery. But in most of these cases, says Carsten Brinkschulte,
Dryad’s chief executive, the fire is noticed only once it has started to
spread. Dryad’s sensors work more like a sense of smell, identifying the
airborne chemicals caused by smouldering before flames and smoke are
visible. This allows firefighters to intervene before the blaze is too large to
control, says Mr Brinkschulte, and to have a clearer sense of where to tackle
it.

The company’s sensors cost $100 per unit. They are designed to be installed
at intervals of a few hundred metres in strategic locations where fires are
most likely to occur. Since around 85% of wildfires are accidentally caused
by humans, these high-risk positions include along power lines, hiking
paths, roads and railways. This sort of strategic deployment can make
sensors tens of times cheaper than alternative wildfire suppression methods,
says Mr Brinkschulte. Once installed, the sensors can last for up to 15 years
in the field and can have their firmware updated remotely.
Since every environment is different, and what passes for an anomaly in
one region may represent business as usual in another, the AI model has to
be tailored to incorporate factors such as local variations in wind speed,
humidity, and temperatures. A system designed for an Italian forest would
not work equally well for one in Canada, says Bogdan Diaconu at the
Constantin Brâncusi University in Romania, who is not involved with
Dryad. Mr Poddi says the ultimate test for Sardinia will be if the sensor
networks can be deployed with equal effectiveness along the coastal pine
forests near the island’s beaches. These environments—though equally
susceptible to fires—are very different from those in Santu Lussurgiu.

Dryad has thus far run 50 pilot programmes to test its technology, from
Spain to Indonesia, with positive preliminary results. In a pilot programme
in Lebanon, for example, the sensors detected a small illegal fire caused by
a farmer burning dry grapevines within 30 minutes of when it was started,
whereas traditional sighting techniques would have taken several hours.

A handful of other companies around the world have had similar successes
with analogous technology. Together with N5 Sensors, an American firm,
Hamburg-based Breeze Technologies has installed sensors across forests in
California. Their highly sensitive detectors are deployed at intervals of
between two and five kilometres and can smell wildfires from within five to
15 minutes after the initial burn, says Robert Heinecke, the company’s boss.
These sensors also measure polluting particulate matter (PM2.5 and PM10)
in the air. Their results have been confirmed in projects throughout
America, Canada, Germany and Peru.

To make a real difference in the effective early detection of fires, however,

sensor networks like these will need to be installed in large numbers, says
Mr Brinkschulte. Even so, the sensors will only be able to do so much on
their own. Their real impact will depend on how well they are integrated
with other existing firefighting measures, from mapping and data-analysis
tools to the ability to promptly deploy firefighters. What’s more, says Dr
Diaconu, the risks of time-wasting false positives from such sensitive
systems are very real.

Overcoming such challenges will yield substantial rewards. Ankita

Mohapatra runs a research laboratory at California State University in
Fullerton that has also filed a patent application for similar fire-detecting
sensor networks. “All the various technologies can and should work
together to build a robust solution,” says Dr Mohapatra. Early fire detection
will allow for quicker decision-making and communication with nearby
towns that may need to be evacuated. This could save lives.

For now, Dryad has also received a European grant of €3.8m ($4m) and
invested an additional €1.2m of its own to build an autonomous system
capable of deploying camera-carrying drones to the site of sensor-spotted
smouldering. The drones will deliver live feeds from above so as to help
firefighters decide how best to intervene. “Eventually”, says Mr
Brinkschulte, “we want to digitise the forest.” ■

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The long shots

Cancer vaccines are showing

promise at last
Trials are under way against skin, brain and lung tumours
1月 02, 2025 08:10 上午

TOWARDS THE end of the 19th century William Coley, a surgeon in New
York, made a surprising observation. One of his patients, close to death with
a neck tumour, recovered after catching a serious bacterial skin infection.
Intrigued, Coley tried to replicate the finding, injecting patients with a
cocktail of killed bacteria to get their cancers to regress. He ended up
treating over a thousand patients in this way, often successfully.

Coley’s reasoning was that infection could trigger the immune system to
fight cancer. That idea, controversial during his lifetime, would not become
more widely accepted by scientists until the 1950s. Today it is driving
efforts to create a new generation of therapies known as “cancer vaccines”
that aim to train the immune system to recognise tumours and fight their
spread. Trials are now under way against cancers found everywhere from
the skin and ovaries to the brain and lungs. After half a century of
disappointing dead ends, promising results are starting to emerge.

Cancer can begin from almost any cell in the body. The immune system
usually tries to prevent it from spreading by monitoring the body for
abnormal cells. White blood cells known as T-cells, for example, attack
tumours by recognising foreign proteins known as non-self antigens on
their surfaces. So-called natural killer cells and macrophages can also
identify and destroy cancerous cells by searching for the unfamiliar
molecules they carry, or after they are tagged by antibodies.

If the cells in a cancer evolve to evade the immune system, however, they
can then grow, replicate and spread around the body. This outflanking
manoeuvre, however, is now offering oncologists new targets for their
drugs. When scientists first began to sequence the DNA of tumours, in
2008, they found that cancer cells contained hundreds, if not thousands, of
mutations that distinguished them from their healthy neighbours. Some of
these mutations in cellular DNA cause cancer cells to produce abnormal
proteins, known as neoantigens, which can set the immune system’s alarm
bells ringing.

The idea behind a cancer vaccine, then, is to introduce these neoantigens

directly into the body, thereby training the immune system to see any cancer
that carries them as a foreign body, ripe for elimination.

Harder than it sounds

To make such a vaccine, scientists first need to take a sample of a tumour,

sequence its genome and find all its genetic mutations. This information is
analysed to predict which neoantigens are likely to elicit the strongest
immune response from the body. A vaccine can then be created that will
trigger the immune system to create antibodies against those specific
abnormal proteins. This is done by introducing a short-lived sliver of
genetic information, known as RNA, which, once injected, instructs the
body’s cells to manufacture the neoantigens. The resulting immune
response will then hopefully target the original tumour.

The theory is solid, but creating such a bespoke vaccine quickly enough to
be of use is a different matter. “Not many years ago,” says Alan Melcher, a
clinical scientist at the Institute of Cancer Research in London, “I would
have said, hang on, that’s never going to be technically possible.”

The fact that this is now possible within as little as six weeks—albeit at a
cost—is in no small part due to the accelerated development of mRNA
vaccines (which carry a molecule of messenger RNA) during the covid-19
pandemic. The vaccines that were used against covid-19 caused the body to
build one of the constituent proteins of SARS-CoV-2, which the immune
system then used to create antibodies. Cancer vaccines would do something
similar for the proteins that tumours produce.

Some promising early results have been published. A personalised mRNA

cancer vaccine for melanoma (a type of skin cancer) developed by Moderna
and Merck, two American pharma firms, known as mRNA-4157 (V940),
recently completed phase 2 trials in patients who have had advanced
tumours surgically removed. Three years after treatment, the risk of cancer
recurrence or death had fallen by nearly half. This is a promising finding for
a phase 2 trial, but a definitive answer on the vaccine’s usefulness will have
to wait until the results of later-stage trials are known.

Many think such vaccines could be most effective in combination with

other immunotherapies—which work in a variety of ways to enhance or
modulate the immune system’s response to cancer. “We are giving a lot of
these cancer vaccines with immunotherapy to try and prime the immune
system,” explains Sarah Danson, a specialist in early-phase cancer research
at Britain’s National Institute for Health and Care Research. Indeed,
mRNA-4157 (V940) was given alongside the current standard of care,
which includes another form of immunotherapy, a drug known as Keytruda
(pembrolizumab).

Moderna and Merck announced in June 2024 that they had initiated further
studies of mRNA-4157 (V940) in patients with non-small cell lung cancer,
renal cell carcinoma (a type of kidney cancer), urothelial carcinoma (a
cancer of the urinary lining) and cutaneous squamous cell cancer (a type of
skin cancer) in order to test its effectiveness against different tumours. The
firms BioNtech and Genentech are also jointly evaluating personalised
vaccines in a range of cancers. There is already a hint in the data that their
vaccine, known as autogene cevumeran, may reduce the risk of pancreatic
cancer after surgery.

Glioblastoma—the most common brain cancer, and one for which no useful
treatments exist—is also being targeted. In work by academics at the
University of Florida, an mRNA-based cancer vaccine tested on only four
people produced evidence that the vaccine had triggered a strong immune
response to the tumour. Tests on dogs with brain tumours have also been
promising: they lived a median of 139 days after treatment, compared with
the more typical 30-60 days expected without. These results on humans and
dogs also suggest that a personalised vaccine can trigger an immune
response in a “cold” tumour—one that the immune system typically does
not recognise or fight.

The hope is that cancer vaccines will advance to the point where they
reduce the need for more invasive treatments such as chemotherapy or
surgery. For Dr Danson, it is even possible that therapeutic cancer vaccines
could one day be used for prevention—with vaccines against neoantigens
common in different cancers given to those most at risk of developing them.
In October 2024 scientists at the University of Oxford were given funding
to create a preventative ovarian cancer vaccine which aims to recognise and
attack the earliest stages of this cancer.

It will not all be plain sailing. Personalised cancer vaccines are complicated
and expensive to make. Creating off-the-shelf cancer vaccines such as the
ovarian-cancer vaccine could help. Another example—one that is further
ahead—is BioNtech’s mRNA vaccine candidate for non-small cell lung
cancer. Again, this vaccine presents the immune system with common
tumour markers found in various types of cancer. This work is still only in
early safety trials.

Important scientific questions also remain unanswered. For one thing, says
Elad Sharon, a clinical and translational director at the Dana-Farber Cancer
Institute in Boston, it remains unclear why the immune system will
overlook a neoantigen if it is produced by a tumour, but will leap into action
when it is delivered by vaccine. Pharma firms also need to rigorously
evaluate their neoantigen-picking techniques, to ensure the best candidates
are chosen.

Time to shine

More than a century after he carried out his experimental treatments,

Coley’s instincts have proved sound. But just how effective modern vaccine
candidates will turn out to be remains unknown. A study published in 2009
assessed developments in the field and wondered whether that would be the
year of the cancer vaccine. It was not. 2025, however, may be a different
story. ■

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Culture
The Colombian powerhouse behind some of streaming’s
biggest hits
Luces, cámara, acción! :: If you enjoyed “Narcos” or “One Hundred Years of Solitude”, you
have Dynamo to thank

Why do rebels and revolutionaries love “Paradise Lost”?

Sympathy for the devil :: John Milton’s epic poem has galvanised rabble-rousers for centuries

What Haruki Murakami’s fans get wrong about him

Strange and familiar places :: He is not so much a surrealist as a dogged observer of solitude

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Luces, cámara, acción!

The Colombian powerhouse behind

some of streaming’s biggest hits
If you enjoyed “Narcos” or “One Hundred Years of Solitude”, you have
Dynamo to thank
1月 02, 2025 08:10 上午

TWO OF THE biggest Latin American television shows of recent years

have depicted Colombia. One, “Narcos” (2015-17), showed the country at
its worst: Netflix’s bilingual drama chronicled how Pablo Escobar became
“the king of cocaine”. Undeterred by subtitles, viewers in 52 countries
watched as the drug baron made mountains of blow and blew up his
enemies. Parrot Analytics, a data firm, says that “Narcos” is one of the top
60 most-streamed series of the past decade. It even sparked a “narco-
tourism” boom in Escobar’s home city of Medellín.
The other title, “One Hundred Years of Solitude” (2024), is rather different,
based as it is on Colombia’s most celebrated novel. Netflix says that its
adaptation of Gabriel García Márquez’s work is its priciest show in Latin
America to date (though it has not revealed how much it cost). The magical-
realist drama made its debut on December 11th; subscribers spent more
than 31m hours watching the programme in the week of its release.

Besides Colombia and Netflix, a third factor connects these two hit titles: a
production company called Dynamo. Founded in Bogotá in 2006, the firm
combines shrewd commissioning and budgeting with an emphasis on
authenticity and regional talent. In the past four years Dynamo’s titles have
made more than $20m for Amazon Prime Video and $600m for Netflix,
Parrot Analytics reckons. It is at the crest of a wave of local, independent
production companies making entertainment for a global audience.

To date Dynamo has made 49 feature films and 26 television series, shot in
Colombia, Mexico and Spain. Even before “One Hundred Years of
Solitude” was released, in 2024 three Dynamo titles ranked in the top 20%
of Spanish-language shows made in Latin America: “Distrito Salvaje”
(“Wild District”, 2018-19), a corruption drama set in Bogotá; “Frontera
Verde” (“Green Frontier”, 2019), about a detective investigating murders in
the Colombian Amazon; and “El Robo del Siglo” (“The Great Heist”,
2020), which retells how thieves made off with $33m from Colombia’s
central bank in 1994. “Pimpinero: Blood and Oil”, about petrol smugglers
on the Colombia-Venezuela border, was released on Amazon Prime Video
in November. Dynamo says it is the most expensive film ever made in
Colombia.

According to Ampere Analysis, a research firm, there are about 3,000

production companies worldwide. Streaming has increased the
opportunities for small outfits, which are behind around 60% of new series
each year. Stacy Perskie founded Redrum in Mexico in 2009 and has
produced “Narcos: Mexico” and an adaptation of Mexico’s national novel,
“Pedro Páramo”, which is even more confusing than Márquez’s
masterpiece, for Netflix. After “Squid Game”, a thriller from South Korea,
shot to the top of Netflix’s chart in 2021, Hwang Dong-hyuk, its creator, set
up his own production firm. (The second season of the dystopian show was
released on December 26th.)

Such companies have benefited from streamers’ wish to commission work

from a variety of countries—a strategy that Netflix has spearheaded. In
2011 the platform began looking for new subscribers in Latin America, and
sought ideas from independent studios in the region. Production companies
quickly learned to pitch and make shows in which “each episode was like a
little film,” says Mr Perskie.

Dynamo has an unusual financing model. (Its co-founders, Andrés Calderón

and Diego Ramírez Schrempp, came from the world of business and
finance, not entertainment.) Rather than chase money on a project-by-
project basis, Mr Calderón set up a private-equity fund in 2006. The idea
was to encourage investment in Colombia’s emerging cinema industry.

Back then, he “didn’t know anything about films”. What he knew was how
to raise money: he brought in several million from private investors,
including pension funds. With that cash, Dynamo made its first dozen
projects. It helped, too, that Colombia had passed a law to subsidise the film
industry in 2003. Dynamo was able to produce content cheaply: each
project had a budget of between $500,000 and $1m.
Dynamo courted Latin American talent. In 2009 it produced “Rabia”
(“Rage”), a romantic thriller by Sebastián Cordero, an Ecuadorian director,
and Eugenio Caballero, an Oscar-winning Mexican set designer. (Mr
Caballero helped to bring Márquez’s fictional town of Macondo to life in
“One Hundred Years of Solitude”.) Dynamo began to collaborate with
studios farther afield by co-financing productions.

The company was instrumental in establishing Colombia as a film and TV

hub. Mr Calderón persuaded the team behind “Narcos” that the drama
should be shot on location. “My attitude was: ‘Let’s do it here, let’s show
the real Colombia’,” he says. Crew members and actors from Latin America
were hired. To improve accuracy, Mr Calderón set up a meeting with César
Gaviria, Colombia’s former president, who was in office when Escobar was
apprehended and later killed. (He also appears as a character in the series.)

Francisco Ramos, Netflix’s vice-president for Latin America, says the

show’s success debunked the idea that only Americans and Britons could
make prestige television. “Narcos” marked a “turnaround”, says Silvia
Echeverri, director of the Colombian Film Commission, as Hollywood
consequently saw Colombia as a viable place to shoot. An uptick in
productions followed, helped by a 40% tax rebate on foreign films.
(Dynamo lobbied for the law, which came into effect in 2012.)
Dynamo seeks entertaining yet nuanced stories about Latin America. The
titles in its catalogue—which includes westerns, political comedy and true-
crime capers—eschew predictable storylines. “Wild District”, Netflix’s first
Colombian original, probes the challenges of reintegrating former guerrilla
fighters into society. “Green Frontier” is a police thriller that touches on
subjects such as the environment and indigenous people in the Amazon.
(What could have been a tedious polemic is instead gripping.) Several
shows have earned acclaim as well as viewers: “Falco”, a police series, won
an International Emmy in 2019.

In 2025 streamers are hoping to economise—which means they may focus

on proven franchises and inexpensive formats such as reality TV and avoid
risky bets on dramas. Dynamo’s total production budget peaked in 2022 at
$80m. (For comparison, A24, a leading American independent
entertainment company, had an estimated film budget of $115m that year.)

Behind the scenes in Bogotá

Yet Dynamo is used to parsimony, and quality productions are cheaper to

make in Bogotá than Burbank. The company has momentum: demand for
Spanish-language content has more than doubled in the past four years.
Beyond the second season of “One Hundred Years of Solitude”, the firm is
tight-lipped about its work. It hopes, however, to make television of the
same scale and ambition as its American counterparts. Mr Calderón says
Dynamo is “ready to do ‘Game of Thrones’”. ■

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Sympathy for the devil

Why do rebels and revolutionaries

love “Paradise Lost”?
John Milton’s epic poem has galvanised rabble-rousers for centuries
1月 02, 2025 06:06 上午

Satan, coming in hot

IT IS HARD not to like Satan. He is Western culture’s original rebel, the

bad boy who dared to defy the authority of God. He also has the best lines.
“Better to reign in Hell than serve in Heav’n,” Satan declares in “Paradise
Lost”, an epic poem by John Milton. God, by contrast, says boring things
about goodness. “Heav’n’s awful monarch” is, in fact, a bit of a tyrant.
Satan and his band of rebels will not submit to “forced hallelujahs”.

“Paradise Lost” (1667) retells the story of the fall of man; Milton sought to
“justifie the wayes of God to men” by probing themes of sin and innocence,
moral obedience and free will. But as Orlando Reade, an academic, writes
in a new book, Milton’s poem has found other earthly meanings. From the
French revolution to the Arab spring, readers have turned to “Paradise Lost”
in times of political struggle.

The poem has inspired revolutionaries around the world partly because it
was written in the wake of a failed revolution. During the English civil war,
Milton championed the parliamentary cause against the absolute monarchy
of Charles I. After the king’s execution in 1649, he joined the new
republican government and wrote treatises in defence of deposing the king.
Royalists attacked him as a monster.

When the monarchy was restored in 1660, Milton’s political career came to
an immediate end. He was imprisoned and fined and subsequently devoted
himself to his work. By this time, he had gone blind. He composed
“Paradise Lost” by dictating it to his secretaries.

A century later the poem was picked up by agitators in America. Thomas

Paine quoted the poem in “Common Sense”, a pamphlet calling for the
colonies to throw off the British yoke: “Never can true reconcilement grow
where wounds of deadly hate have pierced so deep.” Thomas Jefferson, too,
copied quotations from the poem into his commonplace book. He especially
liked Satan’s rousing speeches, which influenced his lines lambasting the
tyranny of George III in the Declaration of Independence. “Did Jefferson
intuit that Satan’s enemy, the distant tyrant, bore some resemblance to the
King of Britain?” wonders Mr Reade. “Or did he simply admire Satan’s
deathless commitment?”

Paine and Jefferson were hardly alone in sympathising with Milton’s devil.
In France the Jacobins hailed Milton as a “friend of liberty”; in Britain the
Romantic poets saw Satan as the poem’s hero. “The reason Milton wrote in
fetters when he wrote of Angels & God, and at liberty when of Devils &
Hell, is because he was a true Poet and of the Devil’s party without
knowing it,” wrote William Blake, suggesting that Milton, though devoutly
religious, secretly preferred Satan, too.

Later the poem fired up campaigners for equality. Mary Wollstonecraft, a

feminist writer, criticised Milton’s sexist depiction of Eve. (Is Eve’s
disobedience, like Satan’s, a rejection of tyrannical rule?) Jean Louis
Vastey, a Haitian essayist, argued that it was not the rebellious Haitians but
their former colonial masters who were “like the infernal spirits”.
Abolitionists likened slavery to Milton’s hell. Malcolm X, a black activist,
read the poem in prison and felt it chimed with the teachings of the Nation
of Islam, to which he then belonged. Satan was symbolic of the evil white
man: “Milton and Mr Elijah Muhammad were actually saying the same
thing.”

For a 17th-century religious work that goes on for 10,565—admittedly

spectacular—lines of unrhymed iambic pentameter, its legacy is
remarkable. It is fascinating to read the different, often contradictory,
interpretations. And the text remains relevant in the 21st century. Jordan
Peterson, a Canadian psychologist beloved by right-leaning “bros”, has said
“Milton’s great poem was a prophecy.” He sees Satan as a resentful figure
—similar, he feels, to today’s aggrieved leftists.

The poem’s final book ends with Adam and Eve banished from Eden, and
an assertion that “to obey” God “is best”. Tyrants, fancying themselves
godlike figures, rather like that message. So when an Arabic translation of
“Paradise Lost” was published in Syria in 2011, a state newspaper argued
that the poem shows the inevitable failure of revolutions. Do not resist, for
you might end up like Satan and Beelzebub, his second-in-command,
floating in hell’s burning lake like “two lizards in a jacuzzi” (as Mr Reade
puts it). Bashar al-Assad’s subjects seem to have preferred a different
interpretation, and overthrew him in December. Their “stubborn patience”,
unlike Satan’s, was ultimately rewarded. ■

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Strange and familiar places

What Haruki Murakami’s fans get

wrong about him
He is not so much a surrealist as a dogged observer of solitude
1月 02, 2025 06:07 上午

Murakami, a singular writer

PHILIP ROTH never really left New Jersey. Saul Bellow could not keep his
characters out of Chicago. And Haruki Murakami’s narrators—unmarried,
often middle-aged men with solitary habits—continually slip into eerie
netherworlds.

The alternative realm in the Japanese writer’s latest novel is the same one in
which the narrator was marooned at the end of “Hard-Boiled Wonderland
and the End of the World” (1985). It is a town surrounded by an
impregnable wall and governed by an inscrutable, imposing Gatekeeper. In
“Hard-Boiled Wonderland” this locale—where the nameless narrator reads
“old dreams” from unicorn skulls in a library—was part of the narrator’s
subconscious. It was a place he had created in his own mind.

In “The City and Its Uncertain Walls” characters find their way into that
world. As a teenager, this narrator falls in love with a girl whose “real self”
is in the alternative world; she vanishes; he matures, and one day he falls
into a hole and wakes up in the other place. For the rest of the book the
narrator flits between the two realms.

Mr Murakami links the novels throughout. (Both Raymond Chandler’s

detective fiction and Jorge Luis Borges’s fantastical prose experiments
seem to be influences.) In an afterword he writes that the tales stem from
the same novella, “The City, and Its Uncertain Walls” (1980), and that the
two novels are complementary. What distinguishes them is tone. “Hard-
Boiled Wonderland” is a propulsive page-turner. “The City and Its
Uncertain Walls” is more meditative: the work of an older author confident
that he has earned readers’ attention over his long career.

The novelist is 75; this is his first new novel in six years (and it is not
entirely new). If this is Mr Murakami’s last work, how will he be
remembered? He is best known for his mordant surrealism. But the flights
of fancy work only because they are grounded in a detailed reality.

The archetypal Murakami protagonist is an observer. Stories happen to

them: they rarely instigate conflict or set out looking for adventure without
being prodded. Failure and unrequited longing define their romantic lives.
The writer’s principal concern has always been the pain and necessity of
learning to be alone, and the worthwhile difficulty of establishing real
connections. Those concerns are universal. Mr Murakami’s compassionate
rendering of them is why millions seek solitude to read his books. ■

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Economic & financial indicators

Economic data, commodities and markets
Indicators ::

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Indicators

Economic data, commodities and

markets
None
1月 02, 2025 06:07 上午
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Obituary
Jimmy Carter was perhaps the most virtuous of all
America’s presidents
The pilgrim from Plains :: The humble peanut farmer who went to the White House died on
December 29th, aged 100

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The pilgrim from Plains

Jimmy Carter was perhaps the

most virtuous of all America’s
presidents
The humble peanut farmer who went to the White House died on December
29th, aged 100
1月 02, 2025 06:07 上午

Jimmy Carter in 1976

TO THEIR CONFUSION, and often to their regret, Americans seemed

faced with two Jimmy Carters. One was the man whose presidency, won by
a squeak and relinquished amid the humiliation of the Tehran hostage crisis,
seemed an essay in naivety. This was the chief executive who once
addressed the nation in a grey cardigan, sitting by a guttering fire; who, at
the peak of the energy crisis in 1979, as Americans queued miserably for
petrol, wanly criticised their malaise; who, at the peak of the cold war,
attempted to effect a thaw by writing a personal letter to the exiled nuclear
physicist Andrei Sakharov; and whose bid to rescue the hostages ended with
a helicopter crash in the desert. This was also the man who, out fishing, was
said to have been assailed by a “killer rabbit”; and who admitted to Playboy
magazine that he had often committed “adultery in my heart”, inciting a
wave of mockery from sophisticates on both coasts.

Like Bill Clinton after him, he was southern through and through, brought
up in the woods and swamps around Plains, Georgia. Unlike Mr Clinton, he
was unintellectual, a peanut-farmer and one-term governor of Georgia
whose formation had been in the navy, not university. In a crowded
Democratic primary field in 1976 his country freshness, like his drawl and
his grin, marked him out, as did his surprising ambition; but Cartermania
barely survived the novelty of his inauguration walk to the White House.
To his supporters he represented the confident, booming New South, at last
emerging from segregation; to the doubters he was a hick with straw in his
hair, soon floundering in the quagmires of Washington and the world. The
“Georgia mafia” who came with him were also an amateurish bunch,
typified by his tubby, venal budget director, Bert Lance; his good ol’ boy
chief of staff, Hamilton Jordan; and his younger brother Billy, who traded
on his high connection to promote a brand of beer and, from his service
station in Plains, dispensed the sort of mischievous platitudes that
presidents can do without.

Yet scarcely had Mr Carter left the job than he seemed completely different:
both effective and impressive. He threw himself into Habitat for Humanity,
a charity that builds houses for the poor, raising the roof-beams himself
with hammer and nails. Through his Carter Centre, set up in 1982, he
became a tireless advocate for peace and democracy, travelling the world to
monitor elections, end wars and promote human rights. In short order, he
became America’s conscience and its moral ambassador. When he disagreed
with his successors—as with George W. Bush over Iraq—he said so loudly.
In 2002 he won the Nobel peace prize, gaining a stature he had never had in
his brief troubled spell at 1600 Pennsylvania Avenue.

Yet these were the same man. There was no side to Mr Carter, and no
dissembling. The landmarks of his foreign policy—the Camp David accords
between Egypt and Israel in 1978, the Salt II disarmament treaty with the
Soviet Union and the return of the Panama Canal to Panama, all criticised
by many as giveaways at the time—were typical of a man intent on peace
for its own sake. Almost his first act as president, after all, had been to
pardon all those who had evaded the Vietnam draft, an attempt to heal one
of the deepest fissures in America. He believed, with equal conviction, in
the union of all men as brothers. In the Jim Crow years he had not hesitated
to play with the black farm boys who lived on the same dirt road; as
governor of Georgia he had made a point of choosing black candidates as
judges and putting black portraits in the state Capitol. Now, prickly foreign
leaders were invited to sit with him on the Truman Balcony in rocking
chairs and talk about their grandchildren.
Working with Congress seemed harder. He did not understand the arts of
schmoozing and doing favours, and offended Capitol Hill with attacks on
pork-barrel spending. As a result, although he managed to set up the
Department of Energy in 1977 to deal with the energy crisis, he struggled to
get either an energy reform bill or petrol rationing passed. On the economy,
in years dogged by stagflation and unemployment as well as soaring oil
prices, he seemed torn between charity and frugality, and neither worked.
As inflation shot up into double digits, he imposed price controls; later he
brought in credit controls and austerity, which drove America into
recession. As someone who had experienced poverty and failed harvests,
his uncomplicated aim was to help those in need; but he never found a
consistent way to do so while in office.

Surrounded by the high life of Washington, he kept his lifelong predilection

for woodworking and quiet fishing, for introspection and making things
from scratch. In the same way, amid a maelstrom of clashing policy advice,
simple Christianity was his guide: to walk humbly, love his neighbour and
do right by him.

America was not used to this. Religious as the country was (and is),
presidents usually came in the safe, muted colours of Episcopalianism or
Presbyterianism. God could be turned on or off, to suit the times. A
Southern Baptist who had preached and taught Sunday school, whose Bible
was kept to hand and whose God was permanently present, was a curiosity
and an embarrassment to more secular types. Mr Carter did not proselytise
as president, but behaved as he believed: his autobiography was called
“Keeping Faith”. Nor was he doctrinaire, severing his ties with the Southern
Baptist Convention because it would not grant equality to women. His last
act in the Oval Office was to pray for the freedom of his people; his last
visitor there reminded him that no citizen had been killed in war during his
administration. That was, for him, sufficient consolation.

In Russia, he might have been called a holy fool. In America, his career
raised the disturbing thought that it might be impossible for a really
effective president to also be a really good man. ■
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