The Economist (May 22, 2021)

88 Pages·2021·27.689 MB·English

Green boom or green bubble?
The threat from Italy’s right
Narendra Modi’s vanishing act
Ventilation innovation: oxygen enemas
MAY22ND–28TH2021
Race in America
A SPECIAL REPORT
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Contents The Economist May 22nd 2021 5
Theworldthisweek Asia
7 Asummary of political 19 Japan’s Olympic gamble
andbusiness news
20 Reopening Australia and
New Zealand
Leaders
21 Mysterious jars in Laos
9 Ayear after George Floyd
21 Political turmoil in Samoa
Race in America
22 BanyanIndia’s vanishing
10 The economic recovery
prime minister
Disappearing workers
10 Italy’s nationalists
China
Forgotten, but not gone
23 The return of Confucius 
11 The green boom
Hot air 24 Xi who must not be
named
12 The Horn of Africa
Onthecover Brothersin blood 25 ChaguanPoor husbands,
rich wives
Amovement to end racial
disparities emerged from the Letters
murder of George Floyd. How 14 On tax, crime,
can it succeed? Leader,page 9. Somaliland, energy, UnitedStates
America is becoming less racist diplomacy, Warren 26 Biden and the safety net
and yet more divided by Buffett,Germany
28 America unmasked
racism, see our special report
after page 38.Joe Biden’s plans 29 Woke at work
Briefing
to Europeanise America’s 29 The movebombing
16 Israel and Hamas
safety net,page 26.Riots may
Fourthtimeunlucky 30 Child­parent divorce
have helped Donald Trump:
31 LexingtonJoe’s modest
graphic detail,page 73.
Special report: Middle East medicine
For more coverage of race in
RaceinAmerica
America, visit
What it means to TheAmericas
https://www.economist.com
/race-in-america be an American 32 Riots shake Colombia
After page 38
33 Identity crisis in paradise
Green boom or green bubble?
34 Quechua pop music
Sustainable investing is rife with
greenwashing. Genuine
transparency, not box-ticking, is
the cure: leader, page 11,and
analysis, page 57
MiddleEast&Africa
The threat from Italy’s right 35 Eritrea on the march
Matteo Salvini’s Northern
36 Verbal clickbait
League could hook up with the
37 Cattle conflict in Nigeria
far-right Brothers of Italy. Europe
should worry: leader page 10, 37 Is Iran spoofing ships?
and analysis, page 39 38 Morocco rattles Spain
Narendra Modi’s vanishing act
As a second wave devastates SchumpeterThe name is
India, the prime minister is Bezos, Jeff Bezos. Could
nowhere to be seen: Banyan, an mgmdeal be the
page 22 outgoing boss’s parting
shot? Page 56
Oxygen enemasLives may be
saved by a novel approach to
ventilation, page 65
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Contents continues overleaf
012
6 Contents TheEconomistMay22nd2021
Europe Finance&economics
39 Italy’s right-wing parties 57 Agreen bubble?
40 Germany and Namibia 59 The microchip shortage
41 Money-laundering in the 59 Bitcoin lurches
Balkans 60 Buttonwood The fear
41 Poland’s new deal index
42 natoand phone-hacking 61 Replacing libor
43 Charlemagne Greece, 62 Free exchangeEconomic
the model student convergence
Britain Science&technology
45 The economy warms up 63 rnapesticides
46 Acovid-19 variant 64 Protecting citrus trees
47 BagehotForeign policy in 65 Squeezing toothpaste
amulti-ethnic country 65 Novel medical ventilation
66 China and Mars
International Books&arts
48 Parenting during the 67 Wittgenstein’s
pandemic “Tractatus”
68 JohnsonWhy study
languages?
69 Rudyard Kipling
70 Art and memory in
South Korea
Business
51 Streaming’s big deal Economic&financialindicators
52 Tycoons in Hong Kong 72 Statistics on 42 economies
53 Post-pandemic shopping
Graphicdetail
53 Wages at McDonald’s
73 Aviolent protest that helped Republicans
54 Tier-two tech firms
56 SchumpeterAmazon
Obituary
beyond Bezos
74 Asfaw Yemiru, saviour of Ethiopia’s poor
Volume 439Number 9246
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The world this week Politics TheEconomistMay22nd2021 7
Haram, to battle separatists in states may limit abortion. The
the south­east instead. Some case centres on a law in Mis­ Coronavirus briefs
criticised the move, saying it sissippi that bans most abor­ To 6am GMT May 20th 2021
risks turning a political tions after 15 weeks of preg­
Weekly confirmed cases by area, m
problem into an insurgency. nancy. It will be the first such
3
case that the court will rule on
India
Ethiopiadelayed a national with a 6­3 conservative major­
2
election scheduled for June ity, and will be heard during its
Western Europe
5th, citing logistical difficul­ next term, which starts in
1
ties. It is the second delay to a October. In Texas, meanwhile,
Other
poll that should have taken a new law banned abortion US
0
place last year.  after six weeks of pregnancy. 
2020 2021
The fighting in Israeland Gaza
ebbed, as international pres­ The European Unionagreed to The United States Congress Vaccinationdoses
% of adults with
sure for a ceasefire grew. More open its borders to tourists passed a bill to tackle hate Total ’000 1st dose 2nd
than 230 people have been from the rest of the world, so crimes aimed at Asian-Amer- Israel 10,537 97 91
killed, most of them Palestin­ long as they have completed a icans. It gained wide support Bhutan 482 95 0
ian. Israel said the toll in­ course of covid vaccination, or among both parties.  UAE 11,594 89 56
cluded 150 militants. The come from places with a suit­ Mongolia 2,469 88 33
Malta 431 80 40
violence spilled into the West ably low infection rate. That Chinalanded a spacecraft on
Maldives 452 74 36
Bank, where at least 20 Pales­ might be good news for British Mars, becoming only the sec­
Britain 57,358 71 39
tinians were killed in clashes travellers, though quite what ond country ever to set down a
Bahrain 1,507 66 50
with Israeli forces. The Israeli the British government’s new rover successfully on the
Chile 16,735 65 53
army also exchanged fire with policy is on holidaying abroad surface of the planet. The
UnitedStates 275,535 64 47
militants in Lebanon. is anybody’s guess. Chinese space agency released
Sources:JohnsHopkins University CSSE;
photographs from the mission, OurWorldinData; United Nations
Ebrahim Raisi and Ali Larijani, A cyber­attack forced the and said it was going well. 
two leading conservative computer system for Ireland’s Indiarecorded 4,529 deaths
candidates, filed their papers health service to be shut down. Cyclone Tauktae struck India, for May 19th, the most of any
to run in next month’s presi­ The government rejected causing heavy rains, high country during the pandemic.
dential election in Iran. All demands to pay a $20m winds and flooding along the Recorded cases fell, although
300 candidates will be vetted ransom to a criminal gang, west coastbefore making infections are thought to be
by the theologians on the thought to be from eastern landfall in the state of Gujarat. surging in the hinterland. 
Guardian Council.  Europe. Details of patients’ At least 19 people died on land;
records were reportedly leaked another 26 died, and scores America’s Centres for Disease
Spain deployed troops in its online. Micheal Martin, the were missing, when a barge Control said that people who
enclave of Ceuta, on the prime minister, said it was a sank off the coast of Mumbai.  are fully vaccinated no longer
Moroccan coast, when 8,000 “heinous attack”. need to wear a maskin most
migrants breached border Samoa’sSupreme Court ruled situations. Some health pro­
fences. Morocco did little to Chileans voted for candidates that an attempt to invalidate fessionals criticised the cdc
stop the influx. It is upset with to a 155­seat constitutional an election last month was for causing confusion. States
Spain for accepting Brahim assembly, which will draft a unlawful. That could end the decide on mask mandates.
Ghali for covid­19 treatment. new constitution to replace the 22­year run of Tuilaepa Sailele Maryland and Virginia imme­
Mr Ghali leads Polisario, which Pinochet­era one currently in Malielegaoi as prime minister diately ended the require­
fights for the independence of place. Some 64% of those who and clear the way for Fiame ment to mask up; California
Western Sahara, a territory were elected are independents, Naomi Mata’afa to become the and New Jersey are delaying
claimed by Morocco. broadly from the left. Right­ Pacific island nation’s first their dates to go maskless. 
wing parties in Chile’s female head of government. 
Plans to vaccinate people coalition government failed to An easing of lockdown mea­
against covid­19 were set back get many seats. Cases of covid­19 continued to sures in Franceallowed bars
in many African countriesby spread across Asia, from and restaurants to offer out­
the halting of vaccine exports Police in Brazilsearched the Nepal, which has been hit by side dining and non­essential
from India, as it deals with its offices of the environment India’s surge, to Taiwan, which shops to open. New York City
covid crisis. The Serum ministeras part of an investi­ has had few cases so far. New also returned to a sense of
Institute of India, which was gation into wood­smuggling. infections are mounting in normality as many businesses
expected to supply most of The supreme court ordered the Thailand, Malaysia and else­ were allowed to reopen. And
Africa’s doses, has made no suspension of the head of the where in South­East Asia.  the unlocking of pubs and
shipments to the continent environmental enforcement restaurants for inside drink­
since March and is not expect­ agencyand several other offi­ In TaiwanTsai Ing­wen, the ing and eating made for good
ed to resume them before cials. Under the government of president, urged people to stop cheer in England. 
October. Jair Bolsonaro, deforestation panic buying and stay calm,
in the Brazilian Amazon has after new restrictions came
Nigeriasaid it would pull reached a 12­year high.  into force to curb an outbreak →For our latest coverage of the
soldiers and armed helicopters of locally transmitted cases. virus please visit economist.com/
from the north­east of the America’s Supreme Court said Masks have to be worn every­ coronavirus or download the
country, where they are fight­ it would hear an appeal that where and shops must keep Economist app.
ing the jihadists of Boko may affect the degree to which customers’ contact details. 
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8 The world this week Business TheEconomistMay22nd2021
Inanastonishingturn,at&t giants,whoremaincentredon andhigheroilprices,which Britain’srailways,mean­
decidedtospinoffWarner- oilandgas.Aseparateresolu­ pushedupthecostofenergy. while,aretofacethebiggest
Media,afilmandtelevision tionsubmittedbyFollowThis, AndrewBailey,thegovernorof setofreformssinceprivatisa­
companyitbattledtoacquire aDutchgreeninvestorgroup, theBankofEngland,saidhe tioninthemid­1990s.The
justthreeyearsago,combin­ wassupportedby30%of wascarefullywatchingthe governmentpublishedaplan
ingthebusinesswith shareholders,passinga dataandifinflationpersis­ thatwouldbringrailinfra­
Discovery,abroadcasterof thresholdunderBritishcom­ tentlyroseabovethebank’s2% structure,timetablesand
factualprogramming.The panylawwhichmeansShell targethewouldtakeaction, ticketpricesbackunderstate
combinedcompany’sbrands mustnowconsultwiththem. “noquestionaboutthat”. control,butstillcontracttrain
willincludehbo,cnnand operationstoprivatecompa­
numerousDiscoverychannels. Chinatolditsbanksandpay­ nies.Thehopeisthatthiswill
Japan
Togetherthepairspentmore mentcompaniesnottocon­ leadtoclearerlinesofcommu­
GDP, % change on previous quarter
oncontentlastyearthantheir ducttransactionsinvolving nicationbetweenthegovern­
6
rivalsandwillhavethebiggest cryptocurrenciesandwarned mentandtheprivatesector.
shareofAmericancableview­ 3 investorsagainstspeculating
ers.at&thasnowshedallits 0 inthem,becausetheyare Indonesia’stwobiggeststart­
mediaassets,leavingitto -3 disruptingthe“normal ups,GojekandTokopedia,
focusbackontelecoms. -6 economicandfinancialorder”. saidtheywouldmerge,creat­
Thepriceofbitcoin,ethereum ingaplatformthatspans
-9
andothercryptocurrencies ride­hailing,digitalpayments
2019 20 21
ApossibleBondtrade plungedinresponse.China’s ande­commerce.Thecom­
Source: Cabinet Office
Amazonis reportedly in talks centralbankiswelladvanced binedcompany,GoTo,will
to buy mgm, the studio behind Japan’seconomyshrankby indevelopingitsowndigital reportedlyseektofloaton
the James Bond franchise, for 1.3% in the first quarter over currency. stockmarkets later this year, in
$9bn. mgmis one of the few the previous three months. a dual listing which could see
big Hollywood film­makers The declaration of a second it valued at up to $40bn. 
not to have been swallowed up state of emergency, which Lightattheendofthetunnel
by a media conglomerate.  urged people to stay at home, Eurostarsecured a bail­out Working 55 hours or more a
was mostly to blame. In a sign from investors, mostly in loan week is “a serious health haz­
Also joining the rush among that a recovery may be under guarantees. The rescue pack­ ard” according to the World
media companies to consoli­ way, exports in April grew by age was led by sncf, the Health Organisation, in a first
date, tf1and m6, two French 38% year on year. That was the French state railway group, global analysis of the effects of
broadcasters, announced their fastest pace in a decade, even if which is Eurostar’s majority working long hours. Working
intention to merge. The pair it is a comparison with trade in shareholder. The British gov­ at least 55 hours is associated
say that the deal will protect the depths of the pandemic.  ernment refused to take part; it with higher risks of stroke and
the independence of French sold its 40% stake in the com­ heart disease, compared with
content against the likes of Britain’s annual inflationrate pany in 2015. Eurostar hopes to working 35­40 hours. The
Disney and Netflix. Regulators leapt to 1.5% in April from 0.7% increase the number of trains disease burden is significant in
will be concerned by the 70% in March. The increase reflects it runs between London and men, people living in East and
share of advertising on French a jump in consumer prices the continent as travel South­East Asia, and middle­
tvthat they would control.  when shops re­opened in April restrictions ease.  aged or older workers.
The International Energy
Agency surprised many with
its “road­map” to net zero
emissionsby 2050. To reach
that goal, the iea’s report said
that no new oil or gas projects
should be approved, and that
the power generated by solar
and wind should increase
fourfold by 2030. Underlining
the challenge, for solar that
would be the equivalent of
installing the world’s largest
solar park nearly every day. 
Almost 89% of shareholders in
Shellbacked the manage­
ment’s plan to reach net zero
carbon emissions by 2050. The
company has come under
pressure from green activists
who say this does not go far
enough and from other in­
vestors who say Shell’s strategy
lacks the focus of American
012
Leaders 9
Race in America
Amovement to end racial disparities emerged from the murder of George Floyd. How can it succeed?
When george floyd was killed by Derek Chauvin a year eas of concentrated poverty. A government less inclined  to
ago, the sense of injustice was tinged with despair. Why, spend could relax zoning rules, making it easier to build apart­
many Americans asked, is this still happening in our country? ments near good schools. None of these policies is race­based,
Why, many foreigners asked, does the story of race in America but all of them would greatly reduce the disparity of outcomes.
never seem to change? Except this time was different. Mr Floyd’s These broad­based policies are not just practical, but moral
death prompted the biggest civil­rights protests in American too. Racial injustice is particularly searing in America because of
history. Mr Chauvin, unusually, was convicted of murder. And the horrors of slavery, the violence of Reconstruction and the in­
institutions in America and beyond looked at themselves in a stitutionalised racism of Jim Crow. African­Americans have had
different light. Something needed to change. But what exactly? legal rights to vote, to marry whom they want and to live where
The Biden administration and the Democratic Party have they choose for just the span of a single lifetime. 
made reducing racial disparities an organising principle of gov­ Yet not all African­Americans need help. Despite the disad­
ernment. That sounds straightforward, but it is not. Despite the vantages they face, the country’s large, thriving black middle
gains in legal and political rights made by African­Americans class is often overlooked in talk of race in America. Moreover,
since the civil­rights era, measures of relative poverty and black­ people who are not black also face prejudice and inherited dis­
white segregation have barely moved for half a century. Tackling advantages. How much better if government policy lessens Lat­
enduring injustices requires clear thinking about their causes.  ino, Native American, Asian and white poverty, too. To deny aid
Most racial disparities come about when three things collide: to people in the name of racial justice would be perverse.
secular economic trends, the aftershocks of slavery and segrega­ What is true of poverty is also true of police reform. Here
tion and present­day bigotry and racism. The first two are usual­ there have been notable advances in the past year, as cities and
ly the biggest causes of bad outcomes for African­Americans, states  have  trimmed  “qualified  immunity”,  a  broad  defence
but the third—racism today—gets most of the attention. available to police officers who kill civilians. Police killings of
This is backwards. Covid­19 has killed African­Americans at unarmed young men are often presented as overwhelmingly a
higher rates than whites or Asian­Americans. The causes are still racial issue, because police officers kill a disproportionate num­
unclear, but the blame is unlikely to lie with ber  of  African­Americans.  Even  before  Mr
racist doctors, nurses and insurers. Instead, for Floyd’s murder, the killings of Michael Brown
reasons that include past racism and present­ in Ferguson, Freddie Gray in Baltimore, Eric
day poverty, African­Americans are more likely Garner in New York and Breonna Taylor in Lou­
to suffer from pre­existing conditions and to isville rightly brought attention to this fact.
have to work outside the safety of their homes, Yet police officers kill Americans of all races
and less likely to have health insurance. more often than they should. Separating the
Racism remains a curse in America, though many police shootings that are justified from
it is less widespread than 30 years ago (see Spe­ those that should never have happened ought
cial report), let alone in the civil­rights era. But, since it is lodged to be a national priority. This would be easier if policing was un­
in bigoted minds, rooting it out is largely beyond the power of derstood as a civil­rights issue affecting all Americans.
any government. Poverty and the structural legacy of racism in A race­neutral approach will not always work. To create more
institutions are different. Take the Biden administration’s new diverse organisations, companies, all too often run by white
child tax credit, which looks likely to reduce child poverty by people, need to pay more attention to race in hiring. Unless elite
40% (see United States section). Because African­Americans are universities take positive steps, their intake will not be repre­
disproportionately poor, this race­neutral policy should halve sentative of the country. But where practical, a race­neutral ap­
the number of poor black children. proach to opening up opportunities is more likely to help Amer­
Given that the problem is racial disparities, why not target ica—and especially its African­American citizens. 
help directly at African­Americans instead? One reason is practi­ One year on from a terrible injustice, the United States is con­
cal. People are more likely to support measures that they them­ fronting not just its past but its future, too. In the next 50 years it
selves might benefit from. The child tax credit enjoys broad will be the first big, rich country where no single racial group,
backing. Were it designed to benefit only one group, support for ethnicity or religious denomination will be in the majority. The
it would plummet. Any administration that targeted policies on more politicians exploit the tribal fears of some voters, the more
African­Americans alone—using, say, reparations and more af­ turbulent this transition will be. The Republican Party’s enthusi­
firmative action—would soon be out of power. asm for rewriting voting rules in states such as Arizona and
By contrast, policies that help all poor Americans are popular Georgia shows how democracy could suffer.
and effective. Since the Affordable Care Act in 2010, 39 states Yet America also has the chance to set an example to other
have expanded the availability of Medicaid, the health­insur­ countries. A smooth transition is more likely if politics is not set
ance programme for low­income Americans. As a result, the up as a fight for resources between groups that people are born
share of uninsured African­Americans has fallen by 40% over a into and cannot leave. Instead, the country can make common
decade. A government that wanted to spend more could provide cause to shrink enduring racial disparities while helping all
baby bonds for poor Americans and vouchers to move out of ar­ Americans leave injustices behind. That must be the aim. n
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10 Leaders TheEconomistMay22nd2021
The economic recovery
The curious case of the disappearing worker
Whattodoaboutalabourcrunch
As rich countriesloosen lockdowns, aneconomicpuzzleis To get labour markets working better, governments should
emerging.  Businesses  are  voicing  ever­louder concerns considerthreeP’s:payments,passportsandpatience.Takepay­
about labour shortages, even as millions of peopleremainoutof ments first. In America businesspeople, almost to a pinstripe,
work. In America a surge of spending is creating job openings, areconvincedthatthe$300­a­weekboosttounemploymentin­
but few people seem willing to fill them. The numberofvacan­ surance (ui) explains the shortages. However, pundits do not
cies, at over 8m, has never been so high.  agreeonwhetherstimulushandoutsreallyleadpeopletoshirk.
Worker shortages are a growing problem elsewhere,too.Brit­ The evidence is hazy elsewhere, too. It might seem natural
ish publicans, who opened their doors to indoor drinkers on thatBritishpot­washerswouldprefertoearn80%oftheirsalary
May 17th, are searching for pint­pullers. In Australia vacancies on furlough than stand in a hot kitchen for 12 hours a day for
are 40% above their pre­pandemic level. Europe hasbeenslower 100%ofit.However,Australiaditcheditsjob­protectionscheme
to come out of its lockdown, but even there unfilled positions inMarch,andshortageshaveworsened.
from Switzerland to Germany are higher than before. Giventhisuncertainty,thesolutionisnottoslashwelfarebut
Some see news of worker shortages as welcome.Ifhumanla­ to redesign it so as to encourage work. Arizona is reallocating
bour is still in demand, then perhaps predic­ someofthemoneyusedforui,insteadoffering
tions of job­killing robots were wrong. Compa­ $2,000paymentstofolkwhomoveintoafull­
Job openings
ny managers are also having to work harder to United States, m timejob.Theevidenceonback­to­workbonus­
8
attract staff. McDonald’s is boosting wages (see esfrompastrecessionsisencouraging.
Recessions 6
Business section); England’s pubs are ditching Next is passports, which relates to immigra­
4
qualification  requirements;  other  firms  are 2 tion. Temporary border controls to stop the vi­
paying people just to show up for an interview. 0 rus make sense, but they should not last beyond
Underlying pay growth is strong, at more than 2001 05 10 15 21 the pandemic. In New Zealand annual net mi­
3% in America. A good thing, you might say. gration has fallen from 92,000 to 7,000. Austra­
After a year of lockdowns, who would begrudge workers a rise?  lia is losing migrants. Britain is also reckoning with Brexit­relat­
That is to ignore the downsides of labour­market snarl­ups. A ed immigration changes. That is why in many countries indus­
bidding war between employers could yet cause an inflationary tries, such as hospitality, that rely on foreigners face the most
spiral. And shortages ricochet around the economy. A builder acute shortages. Politicians must be clear that closed borders
that cannot find labourers will put up fewer new houses, in turn will come with a painful price tag—or change tack. 
hitting decorators. Businesses that are still recovering from the The last requirement is patience. Many people are avoiding
crisis may face another financial blow. work because of fear of contracting covid­19. These concerns
High inflation and bankruptcies may never happen. But to­ should fade as more of them are vaccinated. Some industries are
day’s worker shortages are also an enormous waste of talent. In­ seeing jobs wither, even as parts of the labour market, from de­
cluding those on furlough schemes, we estimate that 30m fewer livery drivers to remote yoga tutors, boom. Faced with change on
people in the rich world are working than before the pandemic. such a scale, people may take longer to find new careers. A mis­
For so many people to be idle comes at a huge cost, not only in firing jobs market is in no one’sinterest. Time and the right poli­
lost wages but also in terms of their health and dignity.  cies will clear the blockages. n
Italy’s nationalists
Forgotten, but not gone
The worrying tremors coming from Italy
In february we and many others breathed a sigh of relief after The government he leads can count on a large majority of seats
Mario Draghi agreed to become prime minister of Italy. For had in parliament, and the European Commission is about to start
not “super Mario” saved the euro, in 2012, with his promise that releasing a whopping €200bn ($245bn) or so in covid­19 recov­
he, and the European Central Bank he then headed, would do ery funds, to be paid out over the next three to four years. That
“whatever it takes” to stop the project unravelling? Those three sum is equivalent to 12% of Italy’s annual gdp, a tidy stimulus by
words were enough to calm markets, bringing down interest anyone’s standards but Joe Biden’s. The commission has been
rates on the debt of the zone’s weaker members. Over the nine broadly satisfied by the promises Mr Draghi has made about how
years since then, those countries have saved tens of billions of he will spend the money, and the reforms to Italy’s sclerotic gov­
euros thanks to reduced borrowing costs. ernment that he will aim to undertake. So far, then, so good.
With Mr Draghi at the helm, the yield on Italian debt is cur­ Yet Italian politics remain unpredictable. A recent uptick in
rently only around 1.2 percentage points above that of Germany. the number of migrants arriving by boat, mostly to the Italian is­
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