The Economist - 2020_02_22 (February 22nd 2020).pdf -...

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Unformatted text preview: UPLOADED BY "What's News" vk.com/wsnws TELEGRAM: t.me/whatsnws How to prepare for a pandemic Shoot-to-kill in the Philippines Why the Bundesbank should relax Progress in the search for ET FEBRUARY 22ND–28TH 2020 Big tech’s $2trn bull run UPLOADED BY "What's News" vk.com/wsnws TELEGRAM: t.me/whatsnws “First Republic cares about us like family — we truly value the relationship.” C h r i s to p h e r W i l l i a m s , Chairman and CEO, The Williams Capital Group Ja n i C e s avi n W i l l i a m s , Co-Founder and Senior Principal, The Williams Capital Group (855) 886-4824 | firstrepublic.com | New York Stock Exchange symbol: FRC MEMbER FDIC aND Equal HouSINg lENDER UPLOADED BY "What's News" vk.com/wsnws TELEGRAM: t.me/whatsnws Contents The Economist February 22nd 2020 The world this week 7 A summary of political and business news 11 12 12 14 On the cover Investors think the techlash is over. That judgment is premature: leader, page 11. A deluge of data is giving rise to a new economy. How will it work? See our special report, after page 44. When economies change, so does the way they endure recessions. How will the next one look? Page 61 • How to prepare for a pandemic Experts predict that covid-19 will spread more widely; the world is getting ready, page 59 • Shoot-to-kill in the Philippines President Rodrigo Duterte’s bloody war on drugs has done nothing to dent his popularity. But does he have anything else to offer? Briefing, page 24 • Why the Bundesbank should relax Germany’s central bank once reigned over Europe. Now it finds itself caught between doveish ECB policies and a public that is mistrustful of them, page 69. Why the Bundesbank and the ECB should make up before the next recession hits: leader, page 12 • Progress in the search for ET The premier meeting of America’s scientists featured the rhizosphere, human emotions, mapping body cells and the search for extraterrestrial intelligence, page 75 16 Leaders Big tech A $2trn bull run Student debt Getting the maths right The Bundesbank and the ECB Couples therapy Britain’s legal system Johnson v the judges Climate philanthropy The great Bezos giveaway 27 28 29 29 30 32 32 34 The Americas 35 Uruguay’s next president 36 Pipeline protests in Canada Letters 22 On Clayton Christensen, Bernie Sanders, puberty blockers, private equity, police, China, sad songs Briefing 24 The Philippines The unacceptable face of democracy Special report: The data economy Mirror worlds After page 44 Charlemagne Poland is repeating the mistakes of other European countries, page 55 United States Twilight of the moderates Bloomberg enters the fray Trump’s approval ratings How to fight anti-vaxxers Bankrupt Boy Scouts The case of the kidney Gentrification in Washington, DC Lexington The other war on migrants 37 38 39 39 40 Asia Japan’s wilting economy The end of an Aussie icon Marriage in Pakistan A disputed election in Afghanistan Banyan Mandarin v dialects in Singapore China 41 The war against the virus 42 Twittering diplomats 44 Chaguan Workers, stuck in their villages 45 46 47 47 48 50 Middle East & Africa America’s Africa policy Who votes in Africa Delivering letters in Congo South Sudan’s conflict Jews in Egypt Arab states and the IMF 1 Contents continues overleaf 3 UPLOADED BY "What's News" vk.com/wsnws TELEGRAM: t.me/whatsnws 4 Contents 51 52 52 53 54 54 55 The Economist February 22nd 2020 Europe Macroneconomics Sexting in Paris China v Sweden A $50bn Russian verdict Orthodox schism Injustice in Istanbul Charlemagne Poland, land of immigrants 69 70 71 71 72 73 73 74 Britain 56 Judging the judges 57 Brexit and the Elgin marbles 58 Bagehot The imperial prime minister 76 77 78 Science & technology Extraterrestrial intelligence Crop yields and microbes Reading faces An atlas of the body 79 80 81 81 82 Books & arts The internet’s histories The legend of Levi Strauss Mountaineering wars Kurdish art Morality in Russia 75 International 59 Preparing for covid-19 61 63 64 65 66 67 Business The next recession Zuck in Brussels Apple’s troubles in China Force majeure Bartleby Overpaid bosses Schumpeter The CEO who loved me Finance & economics The Bundesbank Bloated central banks HSBC pivots east Michael Milken’s pardon Buttonwood The cash bug Tracing capital flows Student loans in America Free exchange Responding to covid-19 Economic & financial indicators 84 Statistics on 42 economies Graphic detail 85 Discrimination in China Obituary 86 “Mad Mike” Hoare, soldier of fortune Subscription service Volume 434 Number 9182 Published since September 1843 to take part in “a severe contest between intelligence, which presses forward, and an unworthy, timid ignorance obstructing our progress.” Editorial offices in London and also: Amsterdam, Beijing, Berlin, Brussels, Cairo, Chicago, Johannesburg, Madrid, Mexico City, Moscow, Mumbai, New Delhi, New York, Paris, San Francisco, São Paulo, Seoul, Shanghai, Singapore, Tokyo, Washington DC For our full range of subscription offers, including digital only or print and digital combined, visit: Economist.com/offers You can also subscribe by mail, telephone or email: North America The Economist Subscription Center, P.O. Box 46978, St. Louis, MO 63146-6978 Telephone: +1 800 456 6086 Email: [email protected] Latin America & Mexico The Economist Subscription Center, P.O. Box 46979, St. Louis, MO 63146-6979 Telephone: +1 636 449 5702 Email: [email protected] One-year print-only subscription (51 issues): Please United States..........................................US $189 (plus tax) Canada......................................................CA $199 (plus tax) Latin America.......................................US $325 (plus tax) PEFC/29-31-58 PEFC certified This copy of The Economist is printed on paper sourced from sustainably managed forests certified to PEFC © 2020 The Economist Newspaper Limited. All rights reserved. Neither this publication nor any part of it may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of The Economist Newspaper Limited. The Economist (ISSN 0013-0613) is published every week, except for a year-end double issue, by The Economist Newspaper Limited, 750 3rd Avenue, 5th Floor, New York, N Y 10017. The Economist is a registered trademark of The Economist Newspaper Limited. Periodicals postage paid at New York, NY and additional mailing offices. Postmaster: Send address changes to The Economist, P.O. Box 46978, St. Louis , MO. 63146-6978, USA. Canada Post publications mail (Canadian distribution) sales agreement no. 40012331. Return undeliverable Canadian addresses to The Economist, PO Box 7258 STN A, Toronto, ON M5W 1X9. GST R123236267. Printed by Quad/Graphics, Saratoga Springs, NY 12866 UPLOADED BY "What's News" vk.com/wsnws TELEGRAM: t.me/whatsnws UPLOADED BY "What's News" vk.com/wsnws TELEGRAM: t.me/whatsnws Say hello to Everything. Data can change the world. But only if we do something with it. Our Data-to-Everything Platform helps you remove the barriers between data and action, so you can turn real-time data from countless sources across your organization into positive outcomes—for your business and for yourself. Say goodbye to the old limitations. When you bring data to Everything, anything is possible. splunk.com/d2e UPLOADED BY "What's News" vk.com/wsnws TELEGRAM: t.me/whatsnws The world this week Politics Mike Bloomberg took part in a Democratic presidential debate for the first time, after a surge in his opinion-poll standing qualified him for inclusion. The other candidates attacked him over lewd comments he has made in the past and his billionaire status. Mr Bloomberg will reportedly sell his media company if he is elected president. More than 2,600 former lawyers and officials from the Justice Department signed a letter calling on William Barr to resign as attorney-general. Mr Barr recently intervened to reduce the recommended sentence in the case of Roger Stone, a disgraced confidant of the president. Using the power of the presidency Mr Trump pardoned a Who’s Who of business and political felons. These included Michael Milken, the “junkbond king”, who was imprisoned in the 1990s, and Rod Blagojevich, a former governor of Illinois, whose prison sentence for trying to sell a Senate seat was commuted. Opening a new front The un-backed government of Libya pulled out of peace talks with representatives of Khalifa Haftar, a rebellious general, after his forces attacked the port of Tripoli. The government is based in the capital, which has been under siege by General Haftar’s forces for a year. Turkey has intervened on the side of the government. Egypt, Russia and the United Arab Emirates back General Haftar. The eu said it would patrol the eastern Mediterranean, enforcing a long-ignored un arms embargo on Libya. Recep Tayyip Erdogan, Turkey’s president, said it is “only a matter of time” before he launches an operation to stop the Syrian army’s offensive on Idlib, the last rebel-held province in Syria. The regime of Bashar al-Assad, which is backed by Russia, has rejected Turkey’s demands to pull back. Turkey, which has troops in the area and supports some of the rebels, fears a new influx of refugees. The un says its aid operation is “overwhelmed”. Dozens of people were killed in Burkina Faso and Mali in ethnic or jihadist violence. They include 24 people gunned down in a church in northwestern Burkina Faso; jihadists were blamed for that attack. The deterioration in security comes after France promised to send another 600 troops to help stabilise the region. The Economist February 22nd 2020 7 an oil company it bankrupted and dismantled in 2003-07. The firm’s seizure was a battle between President Vladimir Putin and Mikhail Khodorkovsky, the ceo of Yukos, who had political ambitions. Russia will appeal against the verdict to the Dutch supreme court. A Turkish court acquitted a group of civic activists who took part in protests to save a park in Istanbul from development in 2013 of conspiring to overthrow the government. President Recep Tayyip Erdogan’s repression of civil society worsened after the Gezi Park demonstrations. Prosecutors immediately re-arrested one of the activists on charges of taking part in an attempted coup in 2016. No hiding place Government forces in Cameroon were blamed for an attack that killed 22 civilians including 14 children in an English-speaking region. The government said the incident was an “unfortunate accident” during a firefight with rebels. Terror on the streets A gunman went on a shooting spree in the German city of Hanau, killing at least ten people and himself. The suspect was reported to have published racist videos and manifestos before the attack. Xenophobic terrorism in Germany appears to be growing; earlier this month police arrested 12 men suspected of planning attacks on mosques. The British government set out plans to overhaul the immigration system. Workers from eu countries would be treated the same as non-eu workers if the plan becomes law. Fewer low-skilled migrants would be admitted, though the definition of “skilled” would expand. A Dutch appeals court reinstated an international court’s ruling that Russia owes $50bn to the shareholders of Yukos, na is the real sick man of Asia”. A day earlier, America designated five Chinese state-linked news organisations as “foreign missions”. Afghanistan’s electoral commission announced the results of the presidential election, five months after the vote was held. It said the incumbent, Ashraf Ghani, had won with 50.6% of the vote, narrowly avoiding a run-off. His closest rival, Abdullah Abdullah, dismissed the results as fraudulent and declared himself the winner. Time for a haircut imf officials held a round of talks with Argentina. The imf said the country’s debt position was now “unsustainable”, meaning that private creditors must make a “meaningful contribution”. The imf expects Argentina to repay the money it lent the government in full. In Canada a protest by indigenous groups and environmentalists against a proposed pipeline to transport gas to the Pacific coast shut one of the country’s busiest rail routes, disrupting passenger and freight trains. Despite a fall in daily numbers of newly confirmed infections, many places in China maintained tight controls to curb the spread of covid-19. In Wuhan, where the new coronavirus was first discovered, officials banned outdoor activities. Beijing required anyone entering from another province to undergo 14 days of quarantine. In Japan, the quarantine of a cruise ship, the Diamond Princess, wound down, with hundreds of passengers allowed to leave. Over 600 others had been infected with the virus; two people died. Russia all but barred visits by Chinese citizens. China announced the expulsion of three China-based correspondents of the Wall Street Journal. It said this was in response to the newspaper’s publication of an opinion piece under the headline “Chi- Jair Bolsonaro, Brazil’s president, appointed General Walter Braga as his new chief of staff, bringing to nine the number of men in the 22-member cabinet who come from the armed forces. Mr Bolsonaro is a former army captain. He has remarked that the third floor of his presidential office “is now completely militarised”. All those military minds in the presidential palace are trained on the biggest threat to Brazil in the next 20 years: France. A leaked document from the defence ministry suggested that although China, Russia and even Venezuela could be considered bigger menaces, the top brass is worried that France might try to interfere in the Amazon, possibly launching an invasion from next door French Guiana. France is Brazil’s main military partner. UPLOADED BY "What's News" vk.com/wsnws TELEGRAM: t.me/whatsnws 8 The world this week Business The European Commission published its wide-ranging digital strategy that, among other things, seeks a “guarantee” of human oversight over artificial intelligence and a raft of measures, such as data sharing, to restrain America’s tech giants. Mark Zuckerberg, Facebook’s boss, visited Brussels to push his alternative plan on regulating socialmedia content, which emphasises monitoring standards and systems rather than holding firms liable for content. The coronavirus outbreak in China caused Apple to lower its sales forecast for the quarter. The company said it was “experiencing a slower return to normal” than it had expected in a country where most of its products are assembled. Its renowned just-in-time supply chain has been disrupted by the restrictions on movement. hna group, one of China’s most acquisitive conglomerates until the government told it and others to rein in their debt-fuelled spending, was reportedly on the verge of collapse. The group’s main asset is Hainan Airlines, which, along with other carriers in the region, has been hit hard by the coronavirus, complicating hna’s debtrestructuring scheme. A year after its merger plan with Siemens was derailed by the eu’s competition regulator, Alstom announced that it was buying Bombardier’s trainmaking business, which Bombardier valued at €7.5bn ($8.1bn). Alstom supplies many rail systems around the world (it built half the trains on the London Underground). The deal should help the French group compete against China’s globally ambitious statebacked train manufacturer, which has reportedly said it could build Britain’s hs2 highspeed rail line in just five years. ubs appointed Ralph Hamers as its new chief executive. Mr Hamers currently heads ing, a Dutch bank. He will start his new job in November, taking over from Sergio Ermotti, who turned the Swiss bank’s fortunes around after the tumult of the financial crisis. Burdened with write-downs, hsbc’s pre-tax profit sank by a third last year, to $13.3bn. The bank announced yet another restructuring, slashing 35,000 jobs (analysts had expected 10,000), shedding $100bn in risk-weighted assets and shrinking its business in Europe and America in order to concentrate on Asia. A common purpose Royal Bank of Scotland also unveiled a new strategy, through which it will pare its investment-banking business and become a “purpose-led organisation” tackling green issues. rbs, still majorityowned by the taxpayer after its bail-out a decade ago, is changing its group name outside Scotland to NatWest. Morgan Stanley announced a takeover of E*Trade, an online trading platform that specialises in retail clients. The $13bn deal is one of the biggest in finance since the global crisis of 2007-09. In another big acquisition, Franklin Templeton, an asset manager, said it would buy Legg Mason, a rival, The Economist February 22nd 2020 for $6.5bn. The combined business will manage $1.5trn in assets. Japan seemed to be heading for a recession, as data showed the economy shrinking by 6.3% at an annualised rate in the final quarter of 2019. A rise in the consumption tax was blamed; an increase to the tax in 2014 led to a similar contraction. Britain’s annual inflation rate leapt to 1.8% in January from 1.3% in December, raising questions about the prospect of an interest-rate cut from the Bank of England. The Turkish central bank lowered its benchmark interest rate by half a percentage point, to 10.75%. That was the smallest in a series of cuts over the past year but keeps the bank on course to fulfil a pledge by Turkey’s president, Recep Tayyip Erdogan, to get the rate into single figures as he seeks a return to growth backed by credit. The cut complicates the government’s attempts to stabilise a weakening lira. Return of the jedi contract A judge slapped a temporary injunction on Microsoft from working on the Pentagon’s Joint Enterprise Defence Infra- structure project, giving a new hope to Amazon in its legal claim that it was not awarded the contract because of Donald Trump’s feud with Jeff Bezos, the company’s boss. Amazon’s cloud-computing business had been the front-runner in the bidding for the $10bn contract. In a court filing, Amazon itself came under fire from Oracle, which questioned the incentives offered to two former Pentagon employees. Biggest single gifts $bn, January 2020 prices 0 10 20 30 40 50 Warren Buffett 2006 Helen Walton 2007* Jeff Bezos 2020 Leona Helmsley 2008* James LeVoy Sorenson 2008* Source: The Chronicle of Philanthropy *Bequests Under pressure from a green workers’ group at Amazon, Jeff Bezos pledged to give $10bn to scientists, activists and ngos working to mitigate climate change. Amazon’s carbon footprint is substantial because of its vast delivery network and powerful data centres. “We can save Earth,” said Mr Bezos, who recently bought a sizeable chunk of earth when he paid $165m for a mansion estate in Beverly Hills. UPLOADED BY "What's News" vk.com/wsnws TELEGRAM: t.me/whatsnws UPLOADED BY "What's News" vk.com/wsnws TELEGRAM: t.me/whatsnws UPLOADED BY "What's News" vk.com/wsnws TELEGRAM: t.me/whatsnws Leaders Leaders 11 Big tech’s $2trn bull run Investors think the techlash is over. That judgment is premature I n 2018 a new word entered Silicon Valley’s lexicon: the “techlash”, or the risk of a consumer and regulatory revolt against big tech. Today that threat seems empty. Even as regulators discuss new rules and activists fret about the right to privacy, the shares of the five biggest American tech firms have been on a jaw-dropping bull run over the past 12 months, rising by 52%. The increase in the firms’ combined value, of almost $2trn, is hard to get your head round: it is roughly equivalent to Germany’s entire stockmarket. Four of the five—Alphabet, Amazon, Apple and Microsoft—are each now worth over $1trn. (Facebook is worth a mere $620bn.) For all the talk of a techlash, fund managers in Boston, London and Singapore have shrugged and moved on. Their calculus is that nothing can stop these firms, which are destined to earn untold riches. This surge in tech giants’ share pric...
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