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 Contents The Economist November18th 2023 5

The world this week United States

8 A summary of political 19 Shutdown averted
- and business news 20 A code for SCOTUS
Leaders 21 Supper clubs
11 America and the world 21 Religious abortions
Next year's great danger 22 Counting school
12 Israel and Gaza - shootings
Hamas and the hospital 22 The FBI and Eric Adams
12 Japan's economy 24 Lexington Coming to
- Inflated hopes - America
14 Sudan
Dying in plain sight The Americas
15 Science funding 25 Mexico's foreign policy
On the cover Time to experiment 26 Poverty in Mexico
What a Trump victory in 2024 16 The British state 27 Venezuela's most
wou Id mean for the rest of the The Treasury trap - powerful gang
world: leader, page 11
Letters
How the young should invest
18 On Israel and Gaza
Markets have dealt them a bad
Asia
hand. But they could be playing
it better, page 63 30 Japan's opportunity
32 Taiwan's opposition
Will fentanyl spread to 32 Indian single malts
Europe? It kills tens of
33 Banyan The junta is losing
thousands every year in
America. Will Europe be next?
Charlemagne, page 46

Better ways to fund science China

Too much of researchers' time is 34 Biden meets Xi
spent filling in forms: leader, 35 Gloomy consumers
page 15. If scientific progress is 36 Chaguan Lessons from
slowing, perhaps new ways of - imperial China
paying for it could speed things
up again, page 71

The best films of2023 The

year's stand-out movies Middle East & Africa
featured cattle barons, chefs, 37 The end of the
composers, physicists and beginning of Gaza's war
whistleblowers, page 79 39 The regional reaction
40 War in Sudan

e
42 Africa's retail revolution

The world Ahead 2024

Our go-page guide to the
coming year, after page 42

➔ The digital element of your

subscription means that you
can search our archive, read
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►► Contents continues overleaf
6 Contents The Economist November 18th 2023

Europe Finance & economics

43 Spain's Catalan amnesty 63 Young investors
44 Gang violence in Sweden 65 Inflation-killers
45 Ukraine's women workers 66 Buttonwood Ray Dalio
45 The new Eleusis 67 Biden's trade failure
46 Charlemagne The fear 67 AI and pay
of fentanyl 69 Free exchange Green jobs

Britain Science & technology

49 The Treasury 71 How to revitalise science
52 Bagehot David Cameron 73 An ancient bacterium
74 Could new neurons treat
- Alzheimer's?

International Culture
53 Crisis upon crisis 75 "The Crown": fact or
fiction?
7.2. Eighty games
77 A history of wine fraud
77 War-crimes in Japan
78 Back Story Ridley Scott's
- "Napoleon"
Business
79 The best films of 2023
56 Europe's southern
powerhouse
Economic & financial indicators
58 Countdown to coP28
81 Statistics on 42 econon1ies
59 Bartleby Badly run
meetings
Obituary
60 What next for SoftBank?
82 Vivian Silver, campaigner for Israeli-Palestinian peace
60 Netflix's sports bet
61 The superyacht boom
62 Schumpeter Google's
- antitrust trial

-
Volume 449 Number 9372
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a The world this week Politics The Economist November18th 2023

French cities. In Washington after the Constitutional Court China than the ruling Demo­
290,ooo people took part in a ruled that shifting€6obn cratic Progressive Party. The
March for Israel, according to ($65bn) into an off-budget DPP's candidate, William Lai,
the organisers, the largest fund earmarked for the poli­ the current vice-president, is
pro-Israeli demonstration ever cies was unlawful. leading the polls.
in America.
Huge protests, sometimes Pakistan opened three new
violent, took place across border crossings with Afghan­
He's baaaack Spain against a plan by Pedro istan to expedite the expul­
Rishi Sunak, Britain's prime Sanchez, the prime minister, sion of Afghans living in the
minister, shocked pundits by to offer an amnesty to separat­ country illegally. Pakistan
bringing David Cameron back ists in Catalonia who organ­ blames Afghan migrants for a
Israeli troops entered Gaza's into government, appointing ised an illegal referendum on spate of terrorist attacks.
biggest hospital. Israel and him foreign secretary and independence in 2017. Mr More than 280,000 have left
America say that Hamas giving him a peerage. Lord Sanchez has forged a left-wing Pakistan since the order was
militants operate from tunnels Cameron led the country from coalition to stay in power after announced in early October.
underneath the buildings. So
far small caches of arms have
2010 to 2016, resigning after
losing the fateful Brexit refer­
an inconclusive election in
July in which his Socialist -
been found. Israel now has end um. Because he sits in the party came second to the con­ The buck stops here
effective control in northern House of Lords he cannot servative People's Party. The PP Sri Lanka's Supreme Court
Gaza. In the south a humani­ answer questions from MPs in failed to form its own coal­ ruled that the country's recent
tarian crisis is escalating. the House of Commons. Some ition, but wanted a new elec­ economic collapse was the
Meanwhile Israel lowered the of those MPs have raised con­ tion, rather than "a dictator­ fault of Gotabaya Rajapaksa,
death toll of the number of cerns about Lord Cameron's ship through the back door". who was president from 2019
people murdered by Hamas on past cosiness with China. to 2022, his brother Mahinda,
October 7th from 1,400 to Iceland declared a state of who was prime minister, and
1,200. The authorities are still As Lord Cameron was appoint­ emergency in anticipation of a several former senior
identifying the remains of ed foreign secretary, his prede­ volcanic eruption, which has officials. The court held that
the deceased. cessor, James Cleverly, was been preceded by a series of they had violated the consti­
moved to the home office to earthquakes. The town of tution with their "complete
America carried out fresh air replace Suella Braverman, Grindavik, which lies 53km (33 undermining of the rule of
strikes on facilities in eastern who was sacked. Ms Braver­ miles) from Reykjavik, the law", a decision that could
Syria that it says are being man had become a thorn in Mr capital, has been evacuated. leave them open to lawsuits.
used by militias aligned with Sunak's side, most recently for
Iran to carry out drone attacks her outspoken opposition to America's House of Repre­
on American forces. American what she describes as "hate sentatives passed a bill that
and coalition troops have been marches" in London in again postpones a govern­
attacked at least 40 times in support of Palestine. ment shutdown, but only
Syria and Iraq since early until early next year. The bill
October, though there have MPs in Parliament easily de­ was supported by 209 Demo­
been no casualties. feated a motion calling for a crats and 127 Republicans; 93
ceasefire in Gaza. However, 56 Republicans opposed it. It was
Josep Borrell, the European opposition Labour MPs defied the first big test for the new
Union's chief diplomat, the instructions of their leader, speaker, Mike Johnson.
warned of ''another genocide" Sir Keir Starmer, and voted for
in Sudan's Darfur region after the amendment. Eight shadow Joe Manchin announced that
the paramilitary Rapid Support ministers in the party quit Joe Biden andXiJinping he won't seek another term in
Forces and Arab militias mur­ their positions rather than be spoke for four hours at a re­ the Senate, putting the slim
dered between 800 and 1,300 sacked by Sir Keir for rebelling. treat near San Francisco, only Democratic majority at risk in
black Africans there. their second face-to-face meet­ next year's election. Mr Man­
Britain's Supreme Court ruled ing as leaders of America and chin has represented West
A former doctor from Rwanda against the government's China. They agreed to restore Virginia, an increasingly
went on trial for his role in the policy of sending asylum­ direct contacts between their Republican state, for the
genocide against Tutsis in seekers to Rwanda to be armed forces. China also Democrats since 2010, though
1994, 28 years after complaints processed and settled there. promised to help curb the flow he often scuttled Democratic
were first laid against him in The court decided there was a of precursor chemicals to bills by withholding his vote.
France in 1995. Sosthene Mu­ significant risk that they might make fentanyl, a synthetic
nyemana denies wrongdoing. be returned to unsafe opioid that has killed tens of Responding to allegations
countries. Mr Sunak said he thousands of Americans. that two of its justices had not
More than 100,000 people would forge a treaty with declared gifts they received,
marched in Paris against anti­ Rwanda and introduce emer­ Taiwan's two main opposition America's Supreme Court
semitism. The demonstration gency legislation to bring the parties, the Nationalist Party issued its first-ever official
brought together leaders from plan to fruition. (KMT) and Taiwan People's code of ethics, sort of, to clear
across the political spectrum, Party, agreed to field a single up any "misunderstanding"
except the hard left, which The German government's candidate in January's presi­ about the rules. The docu­
boycotted the event. Similar plan for spending on climate­ dential election. Both parties ment said nothing about how
marches took place in other change policy was in disarray, favour closer relations with the rules would be enforced.
The world this week Business The Economist November18th 2023 g

Japan's economy shrank by Wegovy, reduces the risk of profit in the latest quarter, year market in the first half of 2024,
2.1% on an annualised basis in having a heart attack, stroke or on year. The electronics con­ and hopes green investors will
the third quarter, or by 0.5% on dying by 20% in patients at tract manufacturer gets a big back the IPO. It laid out ambi­
the previous quarter, amid risk of cardiovascular disease. chunk of its income from tious targets for the business,
weak household consumption Apple and sales of the new targeting 30% average annual
and business spending. The The mining industry saw its iPhone 15 have been lower than growth in revenues from this
contraction suggests that biggest deal in years, when a expected, especially in China. year to 2031.
inflation, running at an annual consortium led by Glencore
rate of 3%, which is high by agreed to pay $9 bn for the The ratification of a pay deal
Japanese standards, is starting steelmaldng coal business of between the United Auto The Jetsons age has arrived
to cut into domestic demand. Teck Resources. The Swiss Workers and Detroit's car­ The first-ever flight of an
That complicates the central commodities company is makers hit a small bump in electric air taxi in New York
bank's path to ending its mas­ taking a 77% stake, with Nip­ the road when workers at took off from downtown Man­
sive monetary stimulus pro­ pon Steel of Japan and Posco of several General Motors' hattan's heliport. Joby Avia­
gramme and policy of negative South Korea owning the rest. factories rejected the new tion, which is developing
interest rates, which markets Glencore will eventually merge contract, though a majority at electric vertical take-off and
expect it to start undoing in its existing coal business with its biggest plant accepted it. landing aircraft for commer­

-
the coming months. its new assets and spin off the Meanwhile Stellantis, Chrys­ cial passenger service, per­
new entity on the stockmarket. ler's parent company, offered formed an exhibition flight. Its
Prices for the coking coal used voluntary redundancies to half air taxis are designed to be
Consumer prices in steelmaking have risen its non-unionised employees much quieter than regular
% increase on a year earlier
sharply this year. in America, because of "chal­ helicopters so as not to add to
12
lenging market conditions". urban noise. Joby aims to have
9 its service up and flying in
Salad days Continental said it would cut 2025, when passengers will be
6
A private-equity group took a jobs as part of its cost-cutting able to book their trips by app.
3 controlling stake in Joe & the drive. The German car-parts
0 Juice, a fast-growing purveyor supplier, one of the world's In another novelty, Netflix
2021 22 23
of sandwiches, organic juices biggest, expects the number of live-streamed its first sporting
Source: Refinitiv Datastream
and health shakes to the hip­ job losses "to be in the mid­ event. The Netflix Cup paired
ster crowd. The firm started in four-digit range". Four years Formula One racing drivers
Markets were cheered by news Denmark in 2002 and now has ago the corn pany warned that with PGA Tour professionals in
that America's annual 360 stores around the world in tens of thousands of positions a golf tournament. Carlos
inflation rate dipped to 3.2% the usual hipster hotspots, would be affected by the tran­ Sainz, a driver for Ferrari, and
in October, the first decline in such as London, New York, San sition to electric vehicles. Justin Thomas, a two-time
four months. Core inflation, Francisco and Stockholm. winner of the PGA champi­
which excludes energy and Renault gave more details onship, won the cup, which Mr
food prices, also slowed, to Foxconn warned that its rev­ about the future of Ampere, its Sainz dropped, breaking it into
4%. In Britain annual inflation enues will fall slightly in 2023, electric-vehicle division. The pieces. Netflix will pray that is
plunged from 6.7% in Septem­ even though it managed to French carmaker is aiming to not an omen for its foray into
ber to 4.6% in October, the post a surprise 11% rise in net float Ampere on the stock- live broadcasts.
lowest rate in two years. After a
dismal few months, America's
main stockmarkets have
roared back in November, as SURE.LY,
investors bet that lower
ALL PAIN INFLICTED
UPON INNOCENT CITIZENS
inflation makes it more likely ANYWHBRE IlJ T.RE WORW'./
that central banks have fin­ IS EQUALLY WRONG.
ished raising interest rates.

ED
Nvidia unveiled its latest
superchip for generative artifi­
cial intelligence, the H200.
Delivering 14-1 gigabytes of
memory at 4.8 terabytes per
second, it has nearly double
the capacity of its predecessor
chip. The company expects
revenue this quarter to
increase by 170%, year on year.
Its share price is up by 240%
since the start of January.
EXCEPT
Novo Nordisk's stock surged MY PAIN IS
after the company released the MORE EQUAL
full results from a study show­ 1HANHIS ...
ing that its weight-loss drug,
 Leaders 11
The
Economist

Next year's great danger

What a Trump victory in 2024 would mean for the rest of the world

A SHADOW LOOMS over the world. In this week's edition we

publish The World Ahead 2024, our 38th annual predictive
guide to the coming year, and in all that time no single person
more than three times the level today. Even if the Senate reins
him in, protectionism justified by an expansive view of national
security would increase prices for Americans. Mr Trump also
has ever eclipsed our analysis as much as Donald Trump eclipses fired up the economy in his first term by cutting taxes and hand­
2024. That a Trump victory next November is a coin-toss proba­ ing out covid-19 payments. This time, America is running budget
bility is beginning to sink in. deficits on a scale only seen in war and the cost of servicing
Mr Trump dominates the Republican primary. Several polls debts is higher. Tax cuts would feed inflation, not growth.
have him ahead of President Joe Biden in swing states. In one, for Abroad, Mr Trump's first term was better than expected. His
the New York Times, 59% of voters trusted him on the economy, administration provided weapons to Ukraine, pursued a peace
compared with just 37% for Mr Eiden. In the primaries, at least, deal between Israel, the UAE and Bahrain, and scared European
civil lawsuits and criminal prosecutions have only strengthened countries into raising their defence spending. America's policy
Mr Trump. For decades Democrats have relied on support among towards China became more hawkish. If you squint, another
black and Hispanic voters, but a meaningful number are aban­ transactional presidency could bring some benefits. Mr Trump's
doning the party. In the next 12 months a stumble by either can­ indifference to human rights might make the Saudi government
didate could determine the race-and thus upend the world. more biddable once the Gaza war is over, and strengthen rela­
This is a perilous moment for a man like Mr Trump to be back tions with Narendra Modi's government in India.
knocking on the door of the Oval Office. Democracy is in trouble But a second term would be different, because the world has
at home. Mr Trump's claim to have won the election in 2020 was changed. There is nothing wrong in countries being transac­
more than a lie: it was a cynical bet that he could manipulate and tional: they are bound to put their own interests first. However,
intimidate his compatriots, and it has worked. America also fac­ Mr Trump's lust for a deal and his sense of America's interests
es growing hostility abroad, challenged by Russia in Ukraine, by are unconstrained by reality and unanchored by values.
Iran and its allied militias in the Middle East and by China across Mr Trump judges that for America to spend blood and trea­
the Taiwan Strait and in the South China Sea. Those three coun­ sure in Europe is a bad deal. He has therefore threatened to end
tries loosely co-ordinate their efforts and share the Ukraine war in a day and to wreck NATO, per­
a vision of a new international order in which haps by reneging on America's commitment to
might is right and autocrats are secure. treat an attack on one country as an attack on
Because MAGA Republicans have been plan­ all. In the Middle East Mr Trump is likely to back
ning his second term for months, Trump 2 Israel without reserve, however much that stirs
would be more organised than Trump 1. True up conflict in the region. In Asia he may be open
believers would occupy the most important po­ to doing a deal with China's president, Xi Jinp­
sitions. Mr Trump would be unbound in his ing, to abandon Taiwan because he cannot see
pursuit of retribution, economic protectionism why America would go to war with a nuclear­
and theatrically extravagant deals. No wonder the prospect of a armed superpower to benefit a tiny island.
second Trump term fills the world's parliaments and board­ But knowing that America would abandon Europe, Mr Putin
rooms with despair. But despair is not a plan. It is past time to would have an incentive to fight on in Ukraine and to pick off
impose order on anxiety. former Soviet countries such as Moldova or the Baltic states.
The greatest threat Mr Trump poses is to his own country. Without American pressure, Israel is unlikely to generate an in­
Having won back power because of his election-denial in 2020, ternal consensus for peace talks with the Palestinians. Calculat­
he would surely be affirmed in his gut feeling that only losers al­ ing that Mr Trump does not stand by his allies, Japan and South
low themselves to be bound by the norms, customs and self-sac­ Korea could acquire nuclear weapons. By asserting that America
rifice that make a nation. In pursuing his enemies, Mr Trump has no global responsibility to help deal with climate change, Mr
will wage war on any institution that stands in his way, includ­ Trump would crush efforts to slow it. And he is surrounded by
ing the courts and the Department of Justice. China hawks who believe confrontation is the only way to pre­
Yet a Trump victory next year would also have a profound ef­ serve American dominance. Caught between a dealmaking pres­
fect abroad. China and its friends would rejoice over the evi­ ident and his warmongering officials, China could easily miscal­
dence that American democracy is dysfunctional. If Mr Trump culate over Taiwan, with catastrophic consequences.
trampled due process and civil rights in the United States, his
diplomats could not proclaim them abroad. The global south The election that matters
would be confirmed in its suspicion that American appeals to do A second Trump term would be a watershed in a way the first was
what is right are really just an exercise in hypocrisy. America not. Victory would confirm his most destructive instincts about
would become just another big power. power. His plans would encounter less resistance. And because
Mr Trump's protectionist instincts would be unbound, too. America will have voted him in while knowing the worst, its
In his first term the economy thrived despite his China tariffs. moral authority would decline. The election will be decided by
His plans for a second term would be more damaging. He and his tens of thousands of voters in just a handful of states. In 2024 the
lieutenants are contemplating a universal 10% levy on imports, fate of the world will depend on their ballots. ■
12 Leaders The Eco n o m ist N ove m ber 18th 2023

Israel and Gaza

Hamas and the hospital

Israel must meet and exceed the requirements of the laws of war

T HE C R ISIS at al-Shifa hospital in northern Gaza is a tragedy in

its own right and a microcosm of the awful trade-offs created
by Hamas's atrocities and Israel's invasion of Gaza. Some of Isra­
tion, by for example giving adequate notice to evacuate and en­
suring evacuation is feasible. In 2016-17 an anti-Islamic State co­
alition attacked a hospital in Mosul that IS used as a stronghold.
el's critics believe that any military activity near or in the hospi­ But the coalition gave a substantial warning period, by the end of
tal is a war crime because civilians may be killed. In fact, because which time the hospital was essentially non-functional, and
it appears likely that the hospital has been used by Hamas as a provided trauma centres within 10-15 minutes of the front lines.
military facility, Hamas has probably turned it into a legitimate All this suggests al-Shifa is a legitimate military target for the
military target. Still, as a matter of international law, morality I D F, providing its intelligence is correct. On November i6th Isra­
and self-interest, Israel must do more to protect civilians. That el said it had found an arms cache in the hospital; soon it will be­
matters at al-Shifa and beyond it. Even as Israel has won effec­ come clear if there is a Hamas tunnel complex, too. Israel says it
tive control in northern Gaza, the already grave humanitarian has sought to evacuate the hospital and supply incubators and
crisis is about to explode in the south where over 2m people are fuel to it. But in order for evacuation to be feasible, people need
at risk as winter looms (see Middle East & Africa section). somewhere safe to go. Israel therefore needs to go further by
Start with the hospital, a set of buildings providing more immediate support to the hos­
near the centre of Gaza city. It is surrounded by pital, supplying trauma and other medical fa­
the Israel Defence Forces ( I D F) which claims cilities nearby and ensuring those who are
that it made a "precise and targeted" raid on the evacuated have an alternative refuge.
complex. Around 1, 500 people are sheltering in This lesson of applying the letter of the law,
the hospital's grounds, including babies and and going beyond it, applies to Israel's cam­
critically ill patients. Because fuel and supplies paign more broadly. Security for Israel and a
are scarce, conditions are dire. Many innocent better future for Gazans will not happen under
lives have been lost. Fighting may kill more ci­ Hamas's rule. The I D F has now achieved some
vilians if they cannot get treatment or are hit by crossfire. of its narrow military goals. It is in effective command of north­
Israel says tunnels beneath the hospi tal form a Hamas mili­ ern Gaza. Yet over 11, 000 Gazans have died, accord i ng to the Ha­
tary headquarters. Hamas denies this, but it has a record of de­ mas-run authorities. In the south over 2m people face appalling
ceitfulness. There is also a pattern of violent activity: Amnesty conditions. For Israel's campaign to be legitimate and even par­
International reported that in 2014 Hamas tortured people with­ tially succeed, two other tests must be met: civilians need a safe­
in al-Shifa's grounds. On November 14th America said its intelli­ ty net and there must be a resumption of the peace process.
gence indicates that Hamas uses the hospital and tunnels be­ A crucial step is to open its border point at Kerem Shalom to
neath it as "a command-and-control node". let in aid and fuel deliveries. Israel should also create emergency
Using a hospital as a military base, as Hamas may well be, is a medical facilities, take patients to Israeli hospitals, and be pre­
war crime. But is attacking the fighters using it as a shield a war pared to set up temporary refugee camps in Israeli territory in
crime too? The laws of war establish that once a hospital is used the Negev desert. Israel is entitled to go to war with Hamas. But it
as a military facility it may lose its special protection. Any must do more to rebut the charge that it is going to war against
attacking force must nonetheless take a high degree of precau- the Palestinian people. ■

J a pan's eco n o my

Inflated hopes
Rising prices and animal spirits are giving Japan a long-awaited opportunity

G LO BAL I NVESTORS are giddy about Japan again. Warren Buf­

fett made his first visit to Tokyo in more than a decade this
spring; he has built up big holdings in five trading houses that
outsiders falling for yet another Japanese false dawn. The mir­
acle of the 1980s ended with an asset bubble bursting and the
country sliding into decades of deflation, or excessively low in­
offer exposure to a cross-section of Japan Inc. Last month Larry flation, and stagnation. Every ten years or so since then, observ­
Fink, CEO of BlackRock, the world's biggest asset manager, ers, this newspaper among them, have warmed to a new prime
joined the pilgrimage to Japan's capital. " History is repeating it­ minister, identified promising signs of change and claimed to
self," he told Kishida Fumio, the prime minister. He likened the see the sun peeping over the horizon. Foreign investors flood
moment to Japan's "economic miracle" of the 1980s. Even disap­ back. Then a few years later they retreat, cold and disappointed.
pointing GDP figures released on November 15th will not dent in­ Is this latest promised dawn any different?
vestors' optimism (see Asia section). It really could be. Two external shocks and two internal shifts
Sceptics would say that the only history repeating itself is have coincided to change the landscape for the Japanese econ- ►►
Visit idai reland.com
14 Leaders The Eco n o m ist N ove m ber 18th 2023

► o my. The most palpable s hock has to do with p rices . Whereas u nc hanging. For Japan to make good on the promise of the mo­
most countries have been obsessed with keeping i n flation down ment, policymakers, executives and poli ticians must do more to
in recent years, Japan has been hoping i t might fi nally pic k up­ nurture the green shoots of dynamism. Fo r a start, the BoJ must
and s tay up. Global supply s queezes and a weak exchange rate execute a complex dance in the coming year. It must unwind u n­
have duly done what years of audacious monetary eas i ng could orthodox monetary policies that have outl ived thei r usefulness,
not achieve, and pushed the headline i n flation rate over the such as its yield-curve control, without suffocating the nascent
Bank of Japa n's 2% target. Ad mittedly, that is not the demand­ infl ation. I n time the highly indebted government will p robably
d riven i n flation that the BoJ woul d l i ke to see. Even so, it has have to fi nd a way to cope with ris i ng i n terest rates .
changed how fi rms, workers a nd consu mers think about prices The process of corpo rate refo rm must also continue. Japa­
and, crucially, wages . A path, albeit a narrow o ne, has opened to nese fi rms are now well versed i n the fo rms o f good governance,
a healthie r cycle of wage and consu mptio n growth . but they need to get better at the substa nce. Aroun d 40% of com­
The other shock is geopolitical . The war in Ukraine a nd the panies i n the TO P I X 5 00 trade below book value. In an u nstable
superpower stand-off between America and C h i na have spu rred world corporate l eaders must do more than just preserve the s ta­
a new wave of i nvestment in c ritical i ndustries and a reco nfigu­ tus quo. Luckil y they have plenty of room fo r manoeuvre, after
ration of regio nal supply c hains that Japan could benefit fro m . years of hoarding cas h o n thei r balance-sheets .
The internal shifts are subtler, but no l ess important. Co r­ Mr Kishida has promised to focus o n "economy, economy,
porate-gove rnance reforms that began u nder a p revious pri me eco nomy". Com pared with his p redecesso rs, he has s poken
minister, Abe Shi nzo, have become entrenched . Indeed, they more about supporting startups. Yet his latest economic pack­
have entered a pro mising new phase, as Japanese i nstitutional age, an nou nced earl ier this month, is heavy on o ne-off tax cuts
i nvesto rs-and even the Tokyo Stock Exchange-a re putti ng and s ti mulus meas u res that see m des igned to boost his popular­
mo re pressu re o n big companies to enhance thei r value. ity, rather than lo ng-term growth . He cou l d turn wo rds i n to
Another u n de rappreciated part of the story is generatio na l deeds by revis i ng tax codes to reward risk-taking i nvesto rs and
change. At o l d fi rms, bosses attached t o ways of do i ng bus in ess entrepre neurs and by withd rawi ng support fo r zombie i ncum­
that worked duri ng the glory days of the 1980s are exiti ng the bents. The pri me mi nister is right to tru mpet the need fo r new­
scene. You ng entrepreneu rs want to build a new Japan I nc . co mpany fo rmation. But he al so needs to play his part i n cl ear­
Yet much i n the Japanese economy remains u nchanged and i ng away co rporate dead wood. ■

Sudan

Dying in plain sight

The world is ignoring genocide and man-made famine in Sudan

T HE DESC R I P T I ONS are harrowi ng, the suffe ri ng u n i magin­

ab le. Earlier this month, gen ocidal gunmen we nt from ho me
to home fo r three days in a refugee camp in Darfur, Sudan, look­
olence) and caused what the U N describes as "one of the worst
humanitarian crises in recent history". Al most three-quarters of
hos pitals and cl i nics i n Khartoum have bee n shut because of
i ng for Masalit men and killing them. It was not the fi rst such at­ bombi ng or fighti ng. The few still fu nctio n i ng in parts of the c ity
tack, but by the ti me they had finished, say locals, between 800 co ntrol led by the RSF have been starved of food and med ical sup­
and 1, 300 membe rs of the black-African eth nic group had been plies by a blockade i mposed by the rival SAF . "Now we are rea l ly
killed . Unverified videos show streets filled with co rpses and seei ng a siege s ituation," says Claire Nicolet of Medecins Sans
terrified people c rowded into what appears to be a mass g rave, or Frontieres (MSF), an aid group.
being beaten by fighters from the mainly Arab Rap id Support There is l ittle hope that either side wil l agree to a ceasefi re.
Forces ( RSF) , a paramil ita ry g roup, which de­ Each still thin ks it has more to gai n from fight­
nies the a llegations. "There is a genocide hap­ i ng than talking. This is because the entire war
pening around us," says a weary aid wo rker. "It is little more than a fight for absolute power be­
feels pretty hopel ess ." This ethnic cleans ing is tween General Abdel- Fattah al- Burhan, who
just one of fou r horro rs affl icti ng Sudan . heads the SAF, and M uhammad Hamdan Dagalo
The second is civil wa r. Fighting b roke out (known as Hemedti) , the leader o f the RSF. The
seven months ago between the RSF and the Su­ two had previously worked together i n 2021,
danese Armed Fo rces (SAF), the official army, staging a cou p to b lock the emergence of a civil­
flatte n i ng parts of Khartoum, the capital, and ian-led government after the ousting of the
claiming more tha n 10, 000 lives. Front l i nes that had largely long-serving dictator, O ma r al-Bas h i r. But in Apri l each m ade a
been stable have begun to shift rapidly (see Middle East & Africa bid for absolute power.
section) . Armed by regular shipments of weapons flown i n fro m The third affliction is hunger. The civil war has devastated
the United Arab E mi rates (UAE) , the RSF has since gai n ed control Sudan's economy, destroyed i ts banking system, displaced its
of most of Darfur, where i t seems i ntent on eradicating the Ma­ people and divided it i nto rival areas o f control, dis ru pting sup­
salits . It also see ms to be gai n i ng contro l of Khartoum, where the p ly chai ns a nd d rivi ng up food p rices . As a result, 20m people do
remain i ng civilians are bes ieged . not have enough to eat. Of these, 6m are on the ve rge of famine,
The conflict has forced about 6 . 3 m people from their homes with 40% of p regnant women and breast-feedi ng mothers alrea­
(in addition to the 3.7m who had fled during p revious bouts of vi- dy near to starvi ng. Without hel p in the coming months, tens of ►►
 The Economist N ovem ber 18th 2023 Leaders 15

► thousands of people a re at risk of starving. But aid agencies are and, more recently, Gaza. "The silence has been deafening," says
struggling to bring in s upplies . The SAF controls Port Sudan, the Mathilde Vu of the Norwegian Refugee Counci l .
main i mport hub, and is blocking the flow of aid workers and Yet the worl d need n o t helplessly watch a disaster u n fold .
suppl ies to RS F-control led territory. Governments s houl d m eet a id agencies ' requests fo r funds .
The SAF is able to starve its people a nd the RS F is able to eth­ Ahead of the cli mate-change summit i n Dubai, America and its
nicall y c leanse Darfu r largely because of Sudan's fou rth afflic­ all ies s houl d press the DAE to halt its supply of weapons to a
tio n: the wider worl d's utter i ndifference. The African Union ap­ genocidal militia (the DAE cla i ms the flights carry assista nce) .
pears to be u n moved by the catastrophe and is retreating to a African l eaders should redouble their diplomatic efforts . The Se­
policy of " non-interference" i n the affairs o f its members, hav­ cu rity Cou ncil, divided as it is, ought to be able to pass a resolu­
ing p reviously sat idl e whil e 385, 000-600, 000 people died d u r­ tion u rging Sudan's warri ng parties to p rotect civil ians and let in
i ng a civil war over the Tigray regio n i n Ethiopia. The U N Security aid . This would also signal that war c ri mes wil l be prosecuted .
Cou ncil has been just as toothl ess and held only info rmal con­ The world is not short o f crises (see I n te rnational section) .
sultati o ns o n Sudan . This is not because its hands are tied by But i t is more co mplex and America holds l ess sway tha n i n the
s trategic i nterests o r deep divis ions between great powers, as 2000s, when it belated ly led effo rts to c u rb ethn i c c leans ing in
with Ukraine or Syria, but because o f gross neglect. Ameri ca has Darfu r. Yet g reat powers are g reat in part because they pay atten­
paid little attention, largely because it is distracted by Ukraine tio n . And Sudan is dying from n eglect. ■

Sci ence fu n d i ng

Time to experiment
Too much of researchers' time is spent filling in forms. There are better ways to fund their work

T H E TRA N S FORMAT I O N unleas hed by i ncreased fu nding fo r

sci ence duri ng the 20th centu ry is noth i ng short of remark­
ab le. In the early 1900s research was a cottage i ndustry mostly
and seeded the modern i nternet-has i nspired copycats i n B rit­
ai n a nd Germany. Tech b i lliona i res ' plans to fu nd pet p roj ects
co me thick and fast. On November 1st Eric Schm idt, a former
fu nded by private fi rms and philanth ropy. Tho mas Ed ison elec­ boss of Google, annou nced he was fu nd i ng a moonshot to build
trified the worl d from his i ndustrial lab at Menlo Park, and th e an "artificial -i ntelligence scientist" to s peed up biol ogy.
Carnegie Fou ndation was the pri n c i pal backer of Edwi n Hubbl e. The p robl em is that no one real ly knows whi ch app roaches
Advances in science d u ri ng the second wo rld war-from the de­ wo rk best. For example, many great scientific discoveries have
velopment of radar to th e atom bomb-led gove rn ments and co me not fro m fu nding bas ic science but from the pursuit of
co mpan ies to scale thi ngs up. By the mid-19 6os America's feder­ co m mercial technol ogy. The transisto r, for insta nce, emerged
al govern ment was spen d i ng o . 6% o f G DP on resea rch fu n d i ng fro m AT&T's Bell Labs . That is why governments should s ta rt
and the share of overall investment i n resea rch and develop­ treati ng the search for the best ways to fu nd science as though it
me nt rose to nea rly 3% . Inventions i nclud ing the i nternet, GPS were itself a scientific problem .
and s pace tel escopes followed . The fi rst step is to try new thi ngs . More mo ney could fu nd
That dynamism is fizz l i ng out. A g rowing body o f wo rk shows promising peopl e rather than specific p roj ects, enco u raging re­
that even as the wo rld spends more on research, searchers to take risks . Fu nders co uld move
the bang fo r each extra buck has fallen. One ex­ faster and bypass pee r review entirely, for ex­
pla nation for this is that the way science is ample by us i ng l otteries . Cou ntries s hould also
fu nded is out of date. Resea rchers must now learn from the best p ractices of others . Ameri­
contend with a dau nting amou nt of bu reauc ra­ can philanthropists give over three ti mes more
cy. The rate at which grant applicatio ns are ac­ to science than do their European counterparts .
cepted has fal len, meaning more of them must Europeans might benefit from changing that.
be made. Two-fifths o f a top scientist's time is Mo re important stil l is to fi nd ways to mea­
s pent o n things other than research, such as sure what is wo rking and what is not, and then
looking for money. One study found that researchers spent a adapt accord i ngly. Governments m ight consider appointing
co mbined 614 years applying for grants from a single funding " meta-scientists " or "chief economists" to do the nu mber­
body i n Australia i n 2014 a lone. Ris ky ideas are often put aside. cru nching across their various scientific agencies. One i ntrigu­
The cu rrent system is also monolithic. Western scientific i ng idea is to keep tabs on an "anti-portfo lio", or a list of projects
systems are dominated by handouts of p roject grants and peer that they do not fund, and track how they perform.
review. Most money flows to u niversities, and the academic ca­ None of this wil l be easy. Experi mentation comes with trade­
ree r ladder is such that researchers face i ncentives to pursue i n­ offs. More cash fo r DARPA-like bodies means l ess for other ap­
cremental advances, i n o rder to boost citations and gain tenure, proaches. Scientific funders say they want to experi ment, b ut
rather than breakthrough work. It is time for another shake-u p. they also face p ress u re to support research that can be easily ex­
A g rowing cadre of scientists, policymakers and philanthro­ plained, to keep poli ticians happy. In some cases more money
pists hopes to revamp science fundi ng. In 2022 America's C H I PS may be the o nl y solution . Still, the eco nomic retu rns to researc h
Act reformed the National Science Fou ndati o n ( N S F) to focus it are so large-at leas t ten times the original investment, by one
more o n techno logy. America's famed Adva nced Research Pro­ es ti mate- that fixing the sys te m is well worth the effort. Like
j ects Agency (today called DARPA) -which was founded in 19 58 science i tself, the way of fun d i ng it must also p rogress. ■
16 Leaders The Economist N ovember 18th 2023

Govern i ng Britai n

The Treasury trap

The finance ministry protects Britain from disaster-but also holds it back

W H E N DAVID CAMERON resigned as p rime minister in June MRI units per person in the OECD, a group of developed econo­
2016, hours after Britain voted to leave the E U , he said the mies. Yet the Treasury has allowed billions to be plundered from
country needed "fresh leadership". What it would like now is a N HS capital budgets to plug gaps in day-to-day spending. Its
nice lie-down. Rishi Sunak is the fourth Conservative to hold the "green book" process of evaluating proposed spending leads to a
top j ob since the then Mr Cameron quit. Jeremy Hunt is the sixth bias against transformative projects. Treasury officials thought
chancellor. In the 30 years before the Brexit referendum, big cab­ the M25 motorway around London should be two lanes wide,
inet reshuffles happened about once every two years; since then and opposed extending the Jubilee Line, on the London Under­
they have occurred once every six months on average. The latest, ground. Ministers were the ones to overrule them; both of these
to sack Suella Braverman as home secretary and bring the newly upgrades are thought to have been good value for money. Many
ennobled Lord Cameron back as foreign secretary (see Bagehot), other projects, particularly outside the south-east, got nowhere.
has triggered another bout of Tory infighting. Another revealing problem is that the Treasury doesn't worry
The Labour Party has its own fractures, most obviously over enough about Britain's measly rate of economic growth. This has
the war in Gaza. But in the face of sustained Tory tumult, it pitch­ many culprits, from B rexit to planning snarl-ups. But the Trea­
es itself as stability incarnate. It is more than 20 points ahead in sury is supposed to be the department that galvanises action. In­
polls, with a general election likely to take place next year; Sir stead, the path to promotion, say insiders, is to show that you
Keir Starmer, its leader, and Rachel Reeves, the shadow chancel­ can kill off spending bids. When interest rates were low, the
lor, promise to rebuild B ritain. Yet those hoping that a new gov­ Treasury passed up the chance to invest more. Twice-yearly fis­
ernment with a big mandate would be enough to solve Britain's cal events-Mr Hunt will deliver the next autumn statement on
problems a re misguided. The country's malaise goes deeper November 22nd-encourage fiddling and sow uncertainty. Cap­
than the individuals in office. Productivity has risen by a feeble ital allowances, an element of business taxation, have been
1.7% since 2008; in the previous 16 years it rose by a hearty 27%. changed on average every other year for the past four decades.
There are also problems with the way that the institutions of Short-termism and the neglect of growth would not matter so
state are run. None of these is more powerful than the Treasury. much were it not for a third failing: the department is a micro­

-� ·-..
In most countries the power of the finance manager. Britain is highly centralised and the
ministry is constrained. America has a separate .. ' Treasury is the uber-centraliser. Other govern ­
budget office. In Germany there is a ministry of ment departments and local councils must
economic affairs, responsible for long-term . jump through hoops just to show how they will
growth, and the powerful regional Lander. In .· . :_ :-· : , '. spend piddling sums. In February the levelling­

<-- . ;•1.
_ __

;;
·;i·;� : .. . . .
Britain the Treasury reigns supreme. Its 2, 000- up department was banned from deciding any
odd officials exert an extraordinary degree of new capital projects without approval. One­
�
. �� t.
• '

control over the best part of fltrn ($1.2trn) in third of the Treasury's officials are under 30;
I

public spending each year. It has sole responsi­ bright Treasury graduates end up telling every­
�-

bility for setting taxes. It doubles up as the economics ministry. one from army generals to scientists how to do their jobs. Fi­
No one doubts the Treasury's competence. Its power attracts nance ministries in other countries avoid this combination of
Whitehall's brightest minds. Many who attack it simply want immense power and callowness.
higher spending or are too sanguine about ballooning debt. Liz
Truss, who was prime minister for seven weeks last year, blasted Checking the exchequer
its failed "Treasury orthodoxy" because it doubted her plan to Some argue that the answer is to break the Treasury up. That
unleash growth through unfunded tax cuts. The unravelling of would be a mistake. It would be costly and disruptive. A failed at­
her premiership is testament to the value of Treasury rigour. tempt under Harold Wilson suggests a break-up might not stick.
But the disproportionate power of the Treasury means that Instead, the Treasury needs reform. Short-termi s m can be re­
its flaws ripple outward with particular force. And those flaws duced if chancellors accept constraints on their power. Big revi­
are meaningful (see B ritain section). The department contrib­ sions to important infrastructure projects should require Parlia­
utes to, and exemplifies, Britain's deeper-rooted problems. ment's approval. Capital budgets should be fixed for five-year
One is that it is itself prey to the short-termism that both Mr terms and tax changes limited to once a year at most. The Trea­
Sunak and Sir Keir say plagues Britain. Ministers ultimately sury's grip on the purse-strings s hould be loosened. Once bud­
make the decisions. But the Treasury has a culture of frugality gets and obj ectives are set, other government departments
that goes back to William Gladstone, a Victorian statesman who, should have more scope to spend the money. Cities have a limit­
as chancellor, was known for "saving the candle-ends". The way ed amount of fiscal freedom: they should have more.
the mighty finance department works is to focus narrowly on Hardest of all, the Treasury's culture needs to adapt. Its com­
keeping control of near-term spending, even if that means mitment to disciplined spending is vital, and it often displays
squashing projects that make sense in the long term. nimble thinking in a crisis. But that is not enough. Sir Keir and
The woes of the National Health Service (NHS) are partly the Ms Reeves say that revving up growth would be their number­
result of decades of low capital investment. Britain has crum­ one priority. So far they have had little to say about the depart­
bling hospitals and the fifth-lowest number of CT scanners and ment that could thwart them. That has to change. ■
Executive focus 17

S O S a r s p

( V )

Un ce T 976
ci h go II ri
C 0 2
C di n h or U I U 0 • 0 TST T

lo @i C c. 0)20 725 50 5
18
Letters The Economist November18th 2023

- and act, but this does not Israelis, but the only alterna- istically trying to achieve. Mr
Tough choices on Gaza justify the tremendous loss of tive is to start talking to Hamas N etanyahu has avoided any
The Economis t is u nwill i ng to innocent civilian life. now. Yes, Hamas would serious effort to make progress
confront reality. Your argu- Hamas has acted mon- proclaim a victory, but does towards a two-state solution.
ment in "Why Israel must fight strously and The Econo m ist has that really matter when the In fact he endeavoured to
on" (November 4th) that a n correctly called i t s o . The I s rae- lives of civilians on both sides weaken the moderate Palestin-
i nternational coalition of li government is also acting are at stake? Only by negotiat- ian leadership and has i nstead
Western and Arab countries is monstrously, and this ing can Israel secure its social strengthened Hamas with the
needed to govern Gaza is newspaper should have the contract with its citizens. expectation that Israel could
idealistic. Western and Arab courage to denounce it and call J O H N DAVEY perpetuate the expansion of
countri es do not have the will for different tactics . Portishead, Somerset the West Bank settlements and
to occupy Gaza. You also call GAB RI E L SA N C H I Z GA R I N keep the lid on incu rsions
for fair elections in the West London Mr Netanyahu is totally depen- from Gaza. The only outcome
Bank, hoping for " moderate" dent on hardline, right-wing, that will be benefi cial to Israel
leaders to emerge with a Far from seeking to strengthe n Jewish supremacist, coal ition is a political agreement that
"democratic mandate". Accord- Hamas, as you allege, partners to stay in power. The ends Israel's occupation and
ing to the best available polling Binyamin N etanyahu , Israel's aim of these coalition partners facil itates Pal esti nian
data , Hamas would win a fair prime minister, h it Hamas is a fu ll Israel i armed occu pa- self-determination.
election, a d isastrous resu lt. hard in three large-scale mil- tion of Gaza, followed by a M I C H A E L H I RST
Lastly, you bel ieve Israel itary operations in 2012, 2014 re-founding of all the settle- Pangbou rne, Berkshi re
should follow international and 2021. In 2005 he warned ments that were destroyed
law to sustai n broad support that Gaza would become when Israel pulled out of Gaza Pity the job of a n ewspaper
over months of fighting. But "Hamastan". In 2014 he said in 200 5 . G iven the choice edito r during war in th e Mid-
regardless of how Israel fights, "Ham as is I S IS". Afte r the between doing what is good die East. I thought your leader
it will not enjoy broad support. October 7th massacre of over for the country or keepi ng his was exceptional in not shying
Hamas is a pol itical move- 1, 000 Israel is and over 200 coalition partners happy Mr away from the fact that some-
ment and cannot be destroyed taken hostage, Mr N etanyahu's Neta nyahu always chooses times war is needed in order to
with force alone. Either there war cabinet di rected the Israeli the latter. make peace. The argument was
will be a long, arduous, Israeli- army to destroy Hamas. Once I look forwa rd to the day a bold one, particularly when
led occu pati on of Gaza or Gaza is free from Hamas, there when Israel is no lo nger gov- set against the chorus of rather
Islamist militants will return may be hope fo r peace. erned by him and his suprema- troubling j ihadi voices that
to powe r there. Neither option D R O PH I R FA LK cist supporters . Perhaps then, have found pu rchase in ou r
is remotely appeal i ng. It wou ld Fore ign pol icy adviser to the Israel wi l l be able to engage Western cap itals.
be better if The Economist prime minister of Israel with its partners and al lies in EVA N H O F F
provided a sober analysis of Jerusalem the international community London
that more real istic scenario. to rebuild Gaza free from the
S T EV E N BA RAN KO If Hamas was hid ing in Tel Aviv barbaric tyranny of Hamas and I appreciated the article ques-
South Bend, India na or Jerusalem, would Israel Islamic Jihad , and thus enable tioning the feasibility of a
bomb those Israel i cities to bits Israelis to live securely within two-state solution ("Still out of
The polarised, zero-su m way to get at them? When B ritain our borders. reach", November 4th) . I'm
in which governments and su ffered from despicable I RA AN D R EW GO L DMAN waiting for other news med ia
medi a on both sides are terrorism in the 1970s, was Beit Shemesh, Israel to take an honest look at the
depicting this confl ict is frus- peace achieved by the British viability of a Palestinian state:
trati ng. The debate is increas- government reducing the The public in many countries broken into pieces , lacking
i ngly bei ng monopolised by supposedly I RA-su pporting tends to support the little guy social cohesion and wretch-
radicals; criticism of one side West Belfast to rubble? agai nst the big, the weak ver- edly poor. Demography, geog-
implies a defence of the other. K I M MAT H E N sus the strong, David agai nst raphy and the pol icies of Israel
There should be no debate London Goliath ("The cu lture war over and its neighbours have all
about the atrocities and acts of the Gaza war", November 4th) . conspired to sink the plan.
terrorism committed by You refer to a social contract In its early days tiny Israel was By continuing to hold out
Hamas on October 7th. They between the state of Israel and the David and the much larger hope that it will work, aren't
were hei nous. Trying to j ustify its people. You also advocate Arab states surrounding it we really allowing Israel to
those atrocities with refer- developing a moderate leader- were the Goliath . Now that is avoid the most important and
ences to the wider conflict is ship among the Palestinians. reversed and Israel , with its hard est issues? True friends
akin to justifying rape by But potential moderate leader- mighty army pou nding Gaza is are honest when mistakes are
pointing to what the victim ships in the past have been increasingly seen as the being mad e. Who are Israel's
was wearing. You do not need undermined by extremists on Goliath , fai rly or unfairly. true friends today?
to understand the wider con- both sides. There is no evi- H UM PH REY TAYLOR B E N LAR R I M E R
text. Stating that Hamas's dence that either Israel or the Chairman emeritus Columbus, Ohio
atrocities were wrong does not Palestinians would have any Harris Poll
make one anti-Palesti nian . confid ence i n a fu ture moder- New York
However, the manner i n which ate leader's ability to resolve Letters a re welcome a n d shou ld be
a d d ressed to the Ed itor at
The Econom ist, The Adel phi B u i ld ing,
the Israeli government is the issues. It is more likely that You are correct to argue that
waging war is also wrong, and if Hamas is destroyed it would Israel must fight on while 1-11 John Adam Street, London WC2 N 6 H T
stating this does not make one eventually be replaced by yet adhering to i nternational law. Email: letters@eco nomist.com
a nti-Israeli. Of course Israel another extreme organisation. What Israel lacks is any clear More letters are availa bl e at:
Economist.corn/letters
has the right to defend itself It may be anathema to the idea of the result it is real-
 u n ited States The Economist N ovem ber 18th 2023 19

The s hutdown publicans have held back on ejecting Mr

Johnson for the same sin. "Johnson's going
Shut it all down (next year) to have a longer leash," says Kevi n Kosar, a
fellow at the American Enterprise I nsti­
tute, a think-tank. "What can he really do?
And how long can he d o it before they
come for him? It's not clear."
The House Freedom Caucus, which
WAS H I N GTO N , DC

The new Republican speaker halts shutdown drama for another few months counts dozens of hardline Republ icans as
members, denounced the deal "as it con­

I to be doing the same

N SA N ITY I S SA I D
thing repeatedly while expecting differ­
ent results. But perhaps a dose of i nsanity
haggle with Democrats , who control both
the Senate and the White House, over a
long-term solution. Mr Johnson recog­
tains no spending reductions, no border
security, and not a single meaningful win
for the American People". Yet the group
is healthy when it comes to understanding nised that he needed more time and that added that "we remain committed to work­
the Republicans who control the House of his party would get the blame for a shut­ ing with Speaker Johnson." Even they are
Representatives. I n September Kevin Mc­ down, so he moved a short-term fu nding not keen to endure another bout of chaos
Carthy, then the Speaker of the House, cut a package s i milar to the one that led to his and embarrassment.
deal to avoid a government shutdown by predecessor's ousting. Some of it is a matter of personality, too.
defyi ng far-right Republicans and relying N inety-three Republican representa­ Mr Johnson was a genteel , largely un­
heavily on Democratic votes to pass a tives-about two-fi fths of the troops-vot­ known representative from Louisiana; his
short-term funding bill. He was summarily ed against the bill. A similar number dis­ prominent predecessor had developed tox­
defenestrated . Six weeks later Mike John­ sented against M r McCarthy. But so far Re- ic relationships with many Democrats and
son, his replacement, defied hardl iners Republicans over the years . Some of those
and relied on Democrats to pass a tempor­ resentments persist. O n N ovember 14th,
a ry funding bill. Yet, for the moment, his the day the House passed its latest spend­
➔ Also in this section
job is safe. What gives? ing legislation, a Republican lawmaker
The explanation has a lot to do with the 20 A code for SCOTUS who helped remove Mr McCarthy from
chaos that ensued after Mr McCarthy's power accused him of elbowing him in a
21 Su pper clubs
ejection from the speakership by majority hallway. Mr McCarthy p led ignorance: " I f I
vote-the first in American history. The 21 Rel igious a bortions kidney-punched someone, they would be
deal that he cut maintained govern ment on the ground." M r Johnson's honeymoon
22 Cou nting school shootings
funding for roughly six weeks . Abou t half may be ending, but at least the marriage
of that time was wasted as Republicans 22 The FBI and Eric Adams has not degenerated into McCarthyesque
squabbled among themselves about select­ plate-throwing.
24 Lexi ngton : Coming to America
ing a replacement. That left l ittle time to The Johnson bill includes several small ►►
20 U nited States The Economist N ovember 18th 2023

► but meaningful d istinctions. Mr McCar­ SCOTUS Without alluding to any of this-or to

Code switch
thy's reprieve had funding expire less than Justice Samuel Alito's fishing trip to Alas­
a week before Thanksgiving, which was ka, paid for by a right-wing billionaire who
suboptimal for lawmakers who like their later brought business before the court, or
families. I n the holiday spirit, Mr Johnson to any other colleagues' apparent con­
did not want a funding extension so short flicts-the justices all signed o n to a code
that it c reated a new deadline before of conduct. Qustices Alito and Thomas
NEW YORK
Christmas- "a terrible way to run a rail­ contend they did nothing wrong.) The doc­
The Supreme Court gives itself a code
road ", i n his words. His temporary measure ument, the court w rote, is "substantially
of conduct. It's a start
extends fu nding into the new year. Its ex­ derived " from the code that applies to
piry would not turn the federal govern­
ment off all at once. Money would stop
flowi ng to parts of the fede ral government
F OR 50 Y E A R S all but n ine of America's
around 2, 000 federal judges have been
subject to a code of conduct laying out eth­
other federal judges. Justices should "up­
hold the integrity and independence of the
judiciary" and "avoid imp rop riety and the
on January 19th 2024; the rest would be cut ical guidelines for jurists' behaviour on appearance of impropriety". They are to
off on February 2nd. and off the bench . On November 13th the "perform the duties of office fairly, impar­
Democrats had been braced for much exceptions-the justices of the Su preme tially and dilige ntly" and may u ndertake
worse. Chuck Schumer, the Senate majori­ Court-annou nced that they had decided only app ropriate "extraj udicial activities".
ty leader, said M r Johnson's bill left him to join their lower-court peers . In five pages of commentary accompa­
cautiously "heartened ". Pramila Jayapal, The new rules do n o t arrive in a vacu­ nying the code, the court acknowledged
chair of the Congressional Progress ive u m . Calls for the court to clean u p its act that some canons are "broadly worded
Caucus, even called the short-term legisla­ have followed investigative reports from general p rinciples informing conduct"­
tion "a very big win" because it kept fund­ ProPublica and other publications uncov­ not "specific rules" -and requ ire justices
ing at the (argu ably p rofl igate) levels that ering several justices' ethical lapses. Jus­ to exercise "j udgment" and "discretion".
was set back when Democrats had full con­ tice Clarence Thomas, the main target of The document also notes that, since the
trol of govern ment. That sort of p raise does those articles, failed to declare decades of Supreme Cou rt is a "un ique institutional
not help Mr Johnson 's relationship with luxury travel on the tab of Harlan C row, a setting", the existing code cannot be adopt­
conservative House members . generous donor to conservative causes. Mr ed without tweaks . For example, justices
The real challenge comes in January, Crow also bought a home Justice Thomas must recuse themselves from cases in
when Mr Johnson will have to corral his owned in Georgia and footed the tuition which they have a fi nancial interest o r
raucous Republican caucus and reach a bill for his grandnephew's private school . " personal bias or prejudice". B u t unlike
long-term spending deal with Democrats . A Senate com mittee found last month judges who can be easily replaced, justices
The rami fications are not just over politi­ that another friend of Justice Thomas ap­ have no such substitutes and have a "duty
cal embarrassment or even the annoyance parently forgave "a substantial portion" of to sit" whenever possible. "Much can be
of a federal shutdown. The White House's a $267,230 loan financing the justi ce's Pre­ lost", the code says, "when even one j ustice
requ est for $106bn in mil itary fu nding for vost Marathon motor coach (which he has does not partici pate in a particular case."
Ukraine, Israel, the I ndo-Pacific and border referred to as his "land yacht") . This too Another revision may have been made
security remains stalled. Solid majorities was not declared. And although his wife to avoid impugning justices who have en­
in the House and Senate su pport fu rther Virginia lobbied President Donald Trump's joyed the largesse of wealthy donors.
assistance to Ukraine, the largest benefi­ chief of staff to help overturn the 2020 Whereas the code for other fede ral judges
ciary and the country in g reatest need of election outcome, Justice Thomas opted bars them from "convey[ing] the impres­
additional aid. M r Schumer hopes to bring not to recuse himself from cases challeng­ sion" that someone is "in a special position
up the package after Thanksgiving, but Mr ing the election results and involving Mr to influence the judge", the Supreme
Johnson has said he wants to "bifu rcate" Trump's role in the riot at the Capitol on Court's rules qualify this phrase with
Israel and Ukraine. January 6th 2021. " knowingly". As long as a justice is un­
M r Johnson's election has not p roved a aware that his actions are raising eye­
boon for America's allies. Although the brows-by c reating the impression, say,
new speaker has adopted some p ro-Uk­ that he is under the influence of an ideo­
raine rhetoric in recent weeks, he had con­ logical benefactor-he or she remains in
sistently voted against sending aid to the compliance with the new code.
country. Mr Johnson has alluded to more There is a bigger hitch: no one other
oversight of su pport for Ukraine, which than the justices themselves gets to decide
may be an unnecessary but acceptable when the code has been breached or how
compromise. Despite being a consistent violations will be handled. By contrast, re­
supporter of Israel, he also suggested pair­ form measures pending in Congress would
i ng new military aid with spending cuts at allow citizens to complain about j ustices
the I nternal Revenue Service, a long-run­ going rogue and to have their claims re­
ning Republican bugbear. This unserious viewed by panels of lower-court j udges.
offer-which would actually increase defi­ Sti l l , the j ustices' move is a step in the
cits-is not encou raging. right direction and demonstrates some re­
The uncertainty is worrying. "You've sponsiveness to public perceptions that
got a lot of Republicans who I know, know, not all is well at One First Street. And the
i n their hearts and minds-they support code closes on an encouraging note that
U kraine. But how do they deal with Trum p may pave the way for further self-improve­
a n d h i s shall-we-say rather enthusiastic ment if the justices wish to examine and
su pporters?" said Adam S m ith, the top emulate the "best practices ... of other feder­
Democrat on the House Armed Services al and state courts". Until then, though,
committee. "There's not much policy here America's highest judges will have to keep
and a lot of politics." ■ Watch, dog a closer eye on themselves . ■
The Economist N ovem ber 18th 2023 United States 21

Life and a utonomy further along of the two cases: on Decem­

ber 6th the Indiana Court of Appeals,
Su p o n that Religious which sits one rung below the state's high­
est court, will take it up. Similar challenges
C H I CAGO
abortions have been brought by religious leaders in
Florida and Missouri.
Why su pper c l u bs a re booming
The religious case for abortion might
B on a Friday night, the diners are
N EW Y O R K
E F O R E T H E main course comes out surprise many. After Roe v Wade guaran­
Some progressives are arguing for a
teed the right in 1973, religious activity on
religious right to abortion
asked to pause for some entertainment. the issue became synonymous with anti­
'Tm not one to just throw a dinner
party with nothing," says the host, and T H E BOOK O F Exodus contains a section
about liability. It is a bit outdated, enu­
choice Catholics and evangelicals. But be­
fore Roe, liberal Protestants and Jews had
then a musician stands up and sings. merating damages if someone's bull gores long agitated for reproductive choice as a
The assembled guests, seated along two another person's slave. But one parable is matter of conscience. Some understood it
long tables, whoop. Each person attend­ relevant to abortion debates today, since it as a moral obligation in certain cases given
ing has paid $90 for the meal, which elucidates how Judaism understands the the responsibility of parenthood; they ar­
consists of six courses plus paired unborn . If a pregnant woman is hit and gued that the interests of the already-born
wines and cocktails. The banquet is suffers a miscarriage, the perpetrator must superseded those of "potential life". In 1967
themed loosely around Shabbat, the pay a fine. If she dies, however, the penalty a group of ministers and rabbis set up a re­
Friday evening meal for observant Jews. is death. The tale is said to differentiate be­ ferral and counselling network called the
The scene is not, however, at a fancy tween the value of a fetus and a person . Clergy Consultation Service on Abortion;
restaurant, but in an art gallery. Paint­ Other Jewish texts also hold that life within six years it had assisted nearly half a
ings depicting different foods line the doesn't begin at conception. million women . The Indiana chapter said
walls. The host, Allan Weinberger, who The justification for outlawing abor­ it aimed to "help women through what
is also the gallerist, notes which have tion is to protect fetal life; some states' some have called 'their deepest crisis "'.
already sold, and that the painter is bans say this explicitly. Yet that rationale The plaintiffs in Indiana and Kentucky
among the crowd. rests on a religious belief about when life cite the Religious Freedom Restoration Act
The meal at Mr Weinberger's gallery begins. What about people whose faith ( R F RA) , which empowers religious objec­
was provided by TxaTxaClub, a business maintains that it starts later? Indeed Jew­ tors to seek exemption from a law if it "sub­
started in Chicago in 2021 by two res­ ish law authorises, and even requires, an stantially burdens" the exercise of their
taurateurs, Liz Bendure and Daniel abortion if a mother's health-physical or faith. Two dozen states, including Indiana
Parker. The two met working at an mental-is jeopardised. Jews disagree and Kentucky, as well as the federal gov­
organic restaurant in Logan Square, the about what degree of risk warrants the pro­ ernment, have a R F RA on the books. To
heart of Chicago's hipster belt. But cedure. But the general principle is that her fend off a R F RA claim, the govern ment
when the pandemic closed dining well-being takes priority. must show that its application of the law is
places, their lives were thrown into In Indiana and Kentucky, several Jewish the "least restrictive" way to ensure a
chaos. "We kind of lost everything," women are seeking religious exemptions "compelling" state interest (ie, protecting
says Ms Bendure. Starved of work, they from their states' abortion bans in court. fetal life) .
started running supper clubs for a The restrictions, they say, make it impossi­ The plaintiffs have a strong case, not
dozen or so people in their garden. ble to get an abortion when their faith least because of the disagreement about
Within a year they were serving larger might mandate one. The lawsuit in Indiana when life begins and whether one is at
crowds in "underused" spaces. Art is joined by a Muslim and a woman who stake from conception . Even setting aside
galleries work well because they are describes herself as a non-theistic believer that minefield, the Supreme Court has
empty at night, and the owners like to in the sanctity of bodily autonomy. It is the made it much easier for religious objectors
bring in punters with fancy taste. But to prevail in recent years. The court has
they have also cooked in warehouses said that the government undermines its
and at a furniture store. case for withholding religious exemptions
The past few years have been tough by granting secular ones. All abortion bans
for the restaurant industry. Last year allow the procedure if a mother's life is at
there were roughly a tenth fewer eating risk; Indiana lets victims of rape or incest
places open in America than there were have it. Neither Indiana nor Kentucky
in 2019. Supper clubs and the like are stops I V F clinics from discarding unused
thriving, however. Yelp, which runs a fertilised embryos. Those are big carve­
table-reservation website, says open­ outs, says Elizabeth Sepper, a law professor
ings of "pop-up" restaurants (without at the University of Texas at Austin: "If
permanent premises) more than dou­ states cared about their interest in protect­
bled in the year to March. One reason ing fetal life, they would pursue it in all the
why is simple: spending is back, but relevant cases, and they're not."
costs have soared. Wages in "food and The Supreme Court's deference to reli­
drinking places" have climbed by a gious objectors over the past decade has
third since 2020, according to the Bu­ principally served conservative Christians,
reau of Labour Statistics. In restaurants, such as plaintiffs who did not want to offer
says Mr Parker, "the financial always insurance coverage for contraception, or
becomes the focus". Staff must be paid bake wedding cakes for gay couples. But
all day long, even when tables are emp­ progressives are religious too, and they
ty. A pop-up is far more efficient, and have had some luck with religious-liberty
less risky. Just try not to damage the art. claims i n lower courts. In 2019 an activist
Fanatica l ly p ro-choice was acquitted of illegally aiding unautho- ►►
22 United States The Economist N ovem ber 18th 2023

► rised migrants in the Arizona desert, an act Eric Adams possible illegal foreign donations from
that he said was compelled to do so by his people with ties to Turkey. During a press
Unitarian faith. Abortion providers may
well make R F RA claims on the basis that
Mayor culpa? briefing on November 14th Mr Adams said:
"We don't do quid pro quo. We follow the
their faith obliges them to perform the pro­ law." He is not accused of any wrongdoing.
cedure for patients who need or ask for an New Yorkers first got wind that some­
abortion. Doctors in states that have re­ N EW Y O R K
thing was up on November 2nd, when F B I
stricted transgender health care could con­ agents searched the home of Mr Adams's
An F B I investigation raises questions
ceivably say the same. top fund-raiser. That morning the mayor
about Hizzoner's honour
Some conservatives were against the had landed in Washington, DC , to meet
federal R F RA before it passed in 1993. They " 5 0M ET H I N G 's A LWAYSgoing to be going lawmakers and White House officials to
were suspicious that pro-choice progres­ on in the city and you have to be fo­ discuss his city's migrant crisis. For more
sives would harness the law. The us Con­ cused, no distractions and grind," said Eric than a year Mr Adams has called on the fed­
ference of Catholic Bishops lobbied Adams, New York City's mayor, recently. eral government to help the city cope with
against it. Eventually the anti-abortion That is no easy task at the best of times. It is 130,000 refugees. Mr Adams abruptly can­
camp came around, and states enacted especially hard to do while dodging ques­ celled his meetings and returned to New
their own versions. In fact Indiana's was tions about an alleged F B I investigation. York. Then on November 10th the New Yo rk
signed into law by its governor at the time, The probe is reportedly looking into Times revealed that the F B I had seized Mr
an anti-abortion evangelical named Mike questionable donations made to Mr Ad­ Adams's mobile devices. The F B I is also
Pence. He may soon have regrets. ■ ams's 2021 mayoral campaign, including said to be looking into whether Mr Adams
pressed the fire department to fast-track
the opening of the new Turkish consulate,
despite some unresolved safety issues. Mr
N ot d o i ng thei r homework Adams pooh-poohed any impropriety.
New York City has strong campaign-fi­
nance laws. ''They work because otherwise
we would not know about these contribu­
The federa l gove rnment i s b lind to the fu l l extent of schoo l shootings
tions," says Susan Lerner of Common

Apublishes data on thegovernment

M E RI CAS F E D E RA L
number of
school shooting differently. "People
think that a school shooting is some­
Cause, a watchdog. The Adams administra­
tion is not the first to be the subject of in­
people injured in car crashes, each pro­ thing where it's this deranged person vestigations. Back in 1932 Jimmy Walker,
duct recalled for containing peanuts and who's coming into the school," Mr Ried­ who also prided himself on promoting city
the "walkability" of every neighbour­ man says. "But really, the most common nightlife, resigned amid corruption allega­
hood in the country. But there is no circumstance . . .is a dispute between tions. More recently, prosecutors looked at
federal record of gun crime in schools. students, usually taking place in a hall­ whether Bill de Blasio's campaign tried to
School shootings call to mind massacres way or parking lot." dodge contribution limits.
such as that in Uvalde, Texas, in 2022, The government's lack of insight At the same press briefing Mr Adams
when a former student killed 19 pupils stems in part from the Dickey Amend­ warned that upcoming budget cuts would
and two teachers. But there is an incident ment, which in 1996 banned federal be steep because housing migrants is ex­
of gun crime in an American school funds from being spent to "advocate or pensive. "It's going to be extremely painful
every day on average. The full, devastat­ promote gun control". The Centres for for New Yorkers, and that is why we con­
ing impact is poorly understood. Disease Control and Prevention could tinue to say we need help." But it may be
David Riedman, a data analyst from not treat gun violence as a public-health harder to stay focused and grind while the
Orlando, wants to change that. He starts issue and conduct proper research. The feds are sniffing around. ■
his day by sifting through dozens of restriction was scrapped in 2018, but its
Google news alerts on school shootings. effects linger in America's haphazard
He then feeds these reports into a data­ approaches to protecting children. Many
base which includes every time a gun is schools have installed metal detectors
brandished or fired on school property. and bulletproof glass, for example. But
The Eco nom ist has worked with Mr Ried­ 70% of shootings happen outside, ac­
man, and spoken to teachers, students cording to Mr Riedman, limiting the
and parents, to explore a month of gun protection security measures provide.
crime in America's schools. Four Democratic senators are backing
Gun violence in schools is increasing, a bill that would define "school shoot­
but by how much is hard to say. There ing" for the first time in federal law and
were at least 264 incidents in the first require the government to collect data on
nine months of this year, almost three every incident. Republicans in Congress
times the number in the same period in say that will not make students or par­
2018, according to Mr Riedman. Other ents feel safer. Mr Riedman disagrees.
sources vary, because each defines a "We need to be adjusting policy in real
time," he says. A clearer understanding
of gun crime in schools could point to
f) M ore on school shooti ngs the security interventions that save lives.
It may also help galvanise politicians to
See our full, interactive investigation into a enact the one thing that most experts
month of gun crime in America's schools at agree is guaranteed to make schools
economist.corn/school-shootings safer: stricter gun control.
The NYC mayor
UNWRAP TH E
G I FT of LOVE
N o a pps. No o n l i n e profi les. S i m p l y strategic d a t i n g .
As the n a t i o n ' s l e a d i n g l u x u ry match m a k i n g f i r m , Selective Search
i s revo l u t i o n i z i n g how busy, s uccessfu l people find l ove.

S E L E C T I V E S E A R C H®
E X E C U T I V E SEARCH ME ETS PERSO N A L M ATC H M A K I N G
24 U nited States The Econom ist N ove m ber 18th 2023

Lexington I Coming to America

The newly elected presiden t of Saffron ia is gran ted and audience i n the West Wing
call "a journey". After H illary Clinton lost to Donald Trump in 2016
Mr Sullivan, who was Mrs Clinton's policy adviser on the cam­
paign, went away and re-examined his assumptions about eco­
nomics and foreign policy.
H is diagnosis was that the benefits of trade to American voters
had been oversold, that inequality was eating the American mid­
dle class, that the government had stopped believing it had a role
to play in fostering scientific and technological progress, and that
companies spent too much energy dodging tax. America could be
strong abroad only i f it was once again strong at home. Foreign­
policy wonks had ceded too much ground to international-eco­
nomics wonks. The answer is: a foreign policy for the middle
class. This does not sound promising.
In person Mr Sullivan is nice and just as bright and persuasive
as Wikipedia suggested. Most Washington grandees, whether
through insecuri ty or vanity, spend half of any meeting on just
how important they are. Mr Sullivan doesn't bother wi th that. But
it soon becomes clear that there's nothing doing on increased
market access. If Saffronia had rare earths or commodi ties re­
quired to help the green transition along then exceptions could be
made. But a free-trade agreement is not on offer. That's bad news,
evidently, for Saffronia. Might it be bad for America as well?

I the head of state of Saffronia, a midsized

MAG I NE Y O U RSE LF
country which looks to America for its security. You are on your
way to Washington for your first official visit, in the hope of open­
Part of the difficulty for Mr Biden and his foreign-policy team is
that what it calls the new Washington consensus-in favour of an
industrial policy to tackle climate change and boost the wages of
ing negotiations over a trade deal that would enrich the people middle-class Americans-will take ti me to pay off, if it ever does.
who just elected you. A closer trading relationship would also tilt Meanwhile, the link between domestic and foreign policy, about
Saffronia towards the United States, which already provides some which Mr Sullivan is surely correct, at least in a generic sense, is
security guarantees to your country, and away from China. This undermining America in the eyes of Saffronia (and many other
seems like what the Americans call win-win. countries too) right now.
Washington has its own way of measuring your i mportance:
who will take your meeting? First prize is an audience with Presi­ The home front
dent Joe E iden in the oval room with the big desk and the thick car­ On the plane home you become increasingly cross. How can
pet. Second prize-above the vice-president, the Senate or House America, where a U P S driver can expect a package of pay and bene­
majori ty leaders or members of cabinet-is the national security fits worth $170,000 a year, have convinced itself that the global
adviser, Jake Sullivan. economy which it did so much to create has screwed the working
Mr Sullivan's position is important and i mpossible. I mportant, man? Real wages for those at the bottom of the income distribu­
because for all the angst about decline, America is still the greatest tion have been rising modestly for a decade and have accelerated
military and economic power in history, and it falls to Mr Sullivan since 2020. Income inequality in the u s soared in the 1990s and
to co-ordinate simultaneous responses to what is happening in Is­ 2010s but has been flat since then. Sure, the needs to reorganise
rael, Gaza, Ukraine, Sudan, Myanmar, China and other potential the economy to slow climate change are real, as is the need to keep
conflagrations that you probably haven't thought about yet but he cutting-edge technology out of the hands of the People's Libera­
has. As is often the case with national security advisers, he is also tion Army. You would love to have America's economic problems.
the administration's foreign-policy brainbox. His job is impossi­ Besides, during your visit to Washington it became clear that
ble, because expectations that the president should manage the even with an Obermensch like Mr Sullivan co-ordinating the ad­
entire world are unrealistic. ministration's foreign policy, America itself might not be that
Great news! Your chief-of-staff confirms that Mr Sullivan has committed to American values. Republicans in the House of Rep­
time for you. He has both fewer hours available than most i mpor­ resentatives seem on the point of selling-out Ukraine for reasons
tant people, because of the absurd demands of his job, and more­ even they struggle to articulate. If they cannot carry on supporting
because reports suggest he works more than anyone else in Amer­ a country where not a single American soldier, pilot or sailor has
ica. You browsed his Wikipedia page on the plane coming over and been deployed, then what use are the security guarantees from
noted that he studied at Yale as well as Oxford, won Rhodes and America that Saffronia places so much trust in? China may be au­
Marshall scholarships, was a champion debater and had already thoritarian and overbearing, but it is at least dependably ruthless.
been the adviser to a vice-president and to two presidential cam­ Your next foreign trip is to Beijing. The meetings there will be
paigns before starting his current job. He is all of 46. You day­ stilted and scripted. The city has no vistas as stirring as the view
dream for a while about your children one day amassing a similar from the Lincoln Memorial over the reflecting pool. If there must
haul of credentials. be a contest between Americana and Chinese values, you would
When you get back to your briefing book, which contains rather be on the side that has Netflix, Taylor Swift and one person
copies of recent speeches and articles by Mr Sullivan, your sense one vote. But if Beijing makes you an offer, what will you say to the
of wonder turns to alarm. They describe what penitent celebrities people of Saff ronia? ■
 The Americas The Economist Novem ber 18th 2023 25

M exico's foreign pol i cy ing trade partner earlier this year. But that
is a result of tensions between China and
Missing in action the United States. Trade has surged despite
Mr Lopez Obrador, not because of him.
Where Mr Lopez Obrador has engaged
with the United States, he has done so
along mercantile lines. His crackdown on
M EX I CO C I TY
migrants making for the us border via
Mexico-a break from Mexico's friendly
A five-year absence from the world stage has damaged Mexico's clout
stance on refugees-seems to have earned

Aico's
N DRES MAN U E L LOPE Z O B RADOR, Mex­
president, is no globetrotter. His
Shannon O' Neil of the Council on Foreign
Relations, a think-tank in New York.
leeway from the United States on other
matters. He understands that Mexico
trip to San Francisco on November 15th to Mr Lopez Obrador is not interested in needs the United States, and that the
attend the summit of Asia-Pacific Econom­ this kind of engagement. He does not at­ United States-Mexico-Canada Agreement
ic Co-operation, an economic club of 21 tend G20 meetings or the U N's General As­ (US MCA) , which replaced the North Ameri­
countries, was only his seventh foreign sembly. He has stymied Mexican dip­ can Free Trade Agreement, acts as a guard­
jaunt in five years in office. Before going, lomats by cutting costs, reducing their tra­ rail. Mexico has co-operated on policy
he said: "I won't go the whole time. It's go­ vel budget by 42 % between 2018 and 2022. around fentanyl, a synthetic opioid that
ing to be, like, you arrive a day before, This has hurt Mexico's standing, says Artu­ killed 71 1 000 people in the United States in
sleep, participate, eat-and come home." ro Sarukhan, a former Mexican ambassa­ 2021, curbing imports of precursors (a rare
Since becoming president, he has not visit­ dor to the United States. ''A country that bilateral meeting between Mr Lopez Obra­
ed a single country outside the Americas. isn't a military or geopolitical superpower dor and Xi Jinping, China's leader, was
Foreign policy has never been easy for has two ways to navigate the international scheduled for November 16th on that sub­
Mexico, squished as it is between the dis­ system: sit at the table or be on the menu: ject) . Mexico has rightly argued for the
similar regions of North America and Latin we are the latter," he says. southward flow of guns to be stemmed.
America, each of which tends to view Mex­ Mexico's most important relationship But beyond that, Mr Lopez Obrador has
ico as part of the other. Close ties with the is with the United States. Alicia Barcena, turned his back on his northern neigh­
United States limit its relationship with Mexico's foreign minister, says it is a "posi­ bour. He was slow to congratulate Presi­
China. A lack of internal bodies to discuss tive moment" for the two countries. It is dent Joe Eiden on beating Donald Trump in
foreign policy-there is only one think­ true that there is some good news: Mexico 2020. He has hollowed out the security re­
tank focused on it in Mexico-means indi­ overtook China as the United States' lead- lationship, tearing up the bilateral security
vidual whim looms large. Even so, past ad­ framework that had been in place since
ministrations managed to carve out inter­ 2008. Co-operation was restarted under a
➔ Also i n this section
national roles for themselves, on disarma­ new, weaker agreement in 2021. In eco­
ment, free trade a nd climate policy. "Until 26 Mexico's wa r on poverty nomic matters he has failed to take enough
Lopez Obrador [Mexico] had a very strong advantage of the realignment of supply
27 Venezuela's most powerfu l ga ng
voice in multilateral organisations," says chains prompted by us-China tensions. He ►►
26 The Americas The Economist N ovem ber 18th 2023

► has formulated few policies to attract com­ Poverty in Mexico That left more money for rural people

A rare success
panies to Mexico. who plant trees and young people on ap­
Elsewhere Mexico's foreign policy has prenticeships, his signature programmes.
been erratic. In Latin America Mr Lopez He also brought in a universal old-age
Obrador has been guided by ideology, hug­ pension of 4,800 pesos, paid every two
ging close leftists old and new. Mexico was months. That rises to 6,000 pesos from
one of the few countries that recognised S A N C R I S TO B A L D E L A S C A S A S
January, as Mr Lopez Obrador ups spending
Nicolas Maduro's sham election win in in an election year. All told, the new ar­
Mexico's president has eased poverty,
Venezuela in 2019. Mr Lopez Obrador is a rangements reach fewer people, but those
but there is much more to do
vocal supporter of Pedro Castillo, Peru's in receipt get twice as much cash on aver­
H E N H E CAM E
to office in 2018, An­
former leader, who was ousted last year
after a bungled coup attempt. He is friend­ W dres Manuel Lopez Obrador pledged
age compared to previous schemes.
As ever with Mr Lopez Obrador, there is
ly with Colombia's Gustavo Petro and to put the poor first. It is one promise Mex­ a flip side. Extreme poverty has edged up
Chile's Gabriel Boric, but came away from a ico's president has managed, in part, to on his watch. Although the incomes of the
recent trip to both countries with little to keep. The number of Mexicans living in most vulnerable went up, their access to
show for it. He has failed to build rapport poverty has fallen from 52m to 47m during health care declined. Mr Lopez Obrador did
with Brazil, Mexico's natural rival for the his term, according to measurements not follow through on his campaign pro­
spotlight on the regional and global stage. made by the National Council for the Eval­ mise to create a universal health-care sys­
His policy of support for Central America uation of Social Development Policy, an in­ tem to replace the current formal job­
to address the causes of migration has had dependent government body. That would linked programme. But he nonetheless
little impact; it requires more money than count as success at the best of times. That it abolished Seguro Popular, an insurance
Mexico has to spend. coincided with a pandemic and Mexico's programme for those without formal jobs,
Farther afield, Mr Lopez Obrador has biggest economic contraction since the hurting the poorest. That left 39% of the
frozen Mexico's relationship with its main Depression makes it remarkable. population, some 50m people, without
European ally, Spain, because its govern­ Labour reforms were critical. The mini­ health care, up from 16% in 2018. The cost
ment spurned his demand for an apology mum wage was stagnant in real terms for of treatment for illnesses such as cancer
for the conquest of Mexico 500 years ago. years before Mr Lopez Obrador took office. pushes many Mexicans into poverty, or
He has flip-flopped on war in Ukraine, Since then, he has increased it by 90% to stops them escaping it, says Ms Krozer.
seeming to favour Russia in public com­ 207.45 pesos ($11.97) per day. Although only Although distributi ng money more ef­
ments even as his diplomats backed Uk­ the 45% of workers who hold formal jobs ficiently did let Mexico's president dole out
raine at the U N . In September he angered benefit directly, the increase does drag pay more cash overall, it also meant that the
many by inviting Russian troops to take up for others, says Alice Krozer of Colegio number of the very poorest households co­
part in Mexico's Independence Day parade. de Mexico, a university. The president also vered by handouts has dropped. Gerardo
Mr Lopez Obrador has just 12 months cracked down on outsourcing, which firms Esquivel, an economist and former adviser
left in power. "Foreign policy will change were abusing to avoid the legal require­ to the president, says Mr Lopez Obrador
when he has gone," says one diplomat. So ment to share profits with their employ­ could have avoided this by usi ng the data
what should his successor, most likely ees. When the law came into force, in April from Prospera to target his handouts. In­
Claudia Sheinbaum, of his own party, but 2021, it stood to benefit the 2.9m workers stead, he drew up a list of his own, which
perhaps Xochitl Galvez, the candidate of believed to be in illegal schemes. was aligned with his political goals.
the opposition coalition, do? Mr Lopez Obrador's handouts are a sec­ The poverty rate is likely to drop again
Mexico needs to start showing up. That ond factor. Although his government's so­ in 2024. The economy is recovering, and
means a president who travels more, be­ cial spending did not exceed that of his handouts have been increased, too. But Mr
yond the Americas, and a sufficiently predecessor until this year, more money Lopez Obrador's tools are reaching their
funded diplomatic corps. has been spent on the handouts them­ limits. The minimum wage cannot keep
The next president should act strategi­ selves. He managed this by slashing the rising at the current rate. Social pro­
cally, pursuing closer co-operation with number of programmes and abolishing grammes are already unaffordable.
the United States, especially on security Prospera, a lauded cash-transfer pro­ In any case the handouts are just a cu ri­

-
but also on economics. The world needs gramme that was conditional on children ta , a plaster, says Manuel Ramirez of Juven­
vast amounts of equipment to electrify attending school and medical appoint­ tudes Manos en Accion, an N G O based in
transport and boost renewable energy out­ ments, and thus expensive to administer. Chiapas, Mexico's poorest state. Candela­
put. Mexico is well placed to manufacture ria Lopez Gomez, a 48-year-old from Chia­
a fair chunk of it. But capitalising on that pas, says she would prefer the government
good fortune requires an ambitious for­ Measured improvement to pave roads and pipe in drinking water,
eign policy. Mexico must co-ordinate with Po p u l atio n l ivi ng in poverty*, % so she doesn't have to buy it in bottles.
the United States and Canada, as well as 50 More and better quality health and educa­
venturing abroad to lure multination­
Mexico
tion services are needed, too.
als. Both Ms Sheinbaum and Ms Galvez 40 Claudia Sheinbaum, Mr Lopez Obra­
have promised to attract investment, dor's likely successor, will have to raise tax­
though the latter is more convincing, as Colombia 30 es to afford the increasing cost of handouts
she can more easily step away from Mr Lo­ (though she claims she will not do so) .
pez Obrador's path. Peru More to the point, her government needs
20
Mexico must also renew other foreign to quicken Mexico's economic growth. G DP
U nited States
bonds, says Olga Pellicer, another former 10 has expanded at a paltry average of 2% a
diplomat. Relations with Spain (and so year over the last four decades. It would
Chi le
Europe) must be mended. A more active 0 also behove the next president to put an
role in multilateral institutions would 201 2 14 16 18 20 22 end to the clientelistic nature of the hand­
help. Whoever succeeds Mr Lopez Obrador Sou rce: National sta tistics * Natio nal poverty rate
outs on which much of Mr Lopez Obrador's
needs to put Mexico back on the map. ■ popularity rests. ■
 The Economist N ovem ber 18th 2023 The Americas 27

online. Once they arrived, the women were

told they owed the gang money, and forced
to work in brothels and on webcam sites.
Orders came direct from Tocor6n,
where Mr Guerrero ran Tren de Aragua like
a multinational. He vertically integrated by
controlling the migrants' recruitment,
transport and sexual exploitation. He dis­
patched managers to run foreign opera­
tions, rotating them to new countries
when the police caught on. Those lieuten­
ants were just as enterprising, says Ronna
Risquez, who published a book about Tren
de Aragua this year. In Bolivia they chased
efficiencies by forcing migrants to smug­
gle drugs. In Brazil they formed a partner­
ship with First Capital Command, the
country's largest gang.
Neighbourhood thugs were impressed.
Many joined Tren de Aragua, opening up a
more diverse array of criminal activities,
from loan-sharking to phone scams.
Through them, Tren de Aragua's ranks have
Organised crime swelled to 5,000 members, according to
Ms Risquez, making it one of the largest
The exodus economy crime outfits in South America today.
The reasons for the army's invasion of
Tocor6n are unclear. Tren de Aragua has
run amok for years. The gang may have be­
B O G OTA
come an embarrassment for Nicolas Ma­
duro, Venezuela's dictator, souring rela­
Venezuela's most powerful gang has built a human-trafficking empire across
tions with its neighbours. Negotiations
South America
with the United States on the removal of
Y T HE T I M E
B Venezuela's army poured
into Tocor6n prison, on September
20th, its target had already escaped. For
day, the gang had found a new business.
At first it merely charged smugglers a
fee to shepherd their human cargo out of
sanctions may be one plausible incentive
for a showy clampdown. In the past two
months the government has retaken six
more than a decade Hector Guerrero Flo­ Venezuela. But when the pandemic closed other criminal-controlled prisons, all
res, better known as Nifio Guerrero, ran borders in 2020 and those fees shot up, without bloodshed.
Tren de Aragua, the country's largest gang, Tren de Aragua saw an opportunity. The It is likely that the assault on Tocor6n
from his cell. Mr Guerrero left behind a pri­ gang set up its own smuggling operation, was pre-negotiated, says Humberto Prado
son with all the hallmarks of a narco-lair: hiring buses, laying on food and booking of the Venezuela Prisons Observatory, an
restaurants and bars, a casino, a baseball accommodation. Within months they had N GO. "We counted 3,000 prisoners. They
ground and a small zoo. bought their own transport companies and said they found 1,500. So where are the
But Tren de Aragua is no drug gang. Its hostels, and were soon offering multi-leg, other 1,500?," he asks. There was no shoot­
main earner is the movement of people. Mr multi-country packages. A few dollars got ing during the raid and only one (acciden­
Guerrero built his empire by exploiting you a journey into Colombia on foot. For tal) death. Inmates said Mr Guerrero and
many of the nearly 8m Venezuelans who $500 you would be driven across the conti­ his men had moved out days earlier. Their
left the country in the past decade, as nent to Chile. To facilitate all this, the gang whereabouts are a mystery.
hyperinflation and dictatorship took hold. started taking over border towns and brib­ Mr Guerrero is being hunted by govern­
The syndicate has industrialised human ing local officials. ments across South America, worried that
trafficking on a scale not seen before in Having control enabled the gang to get he is hiding out in their country. Wherever
South America, according to a recent re­ into a new, more lucrative industry: hu­ he is, the gang leader must diversify fast.
port by Insight Crime, a think-tank in man trafficking. As clients, migrants only Tren de Aragua's expansion was only possi­
Washington, DC. It is active in six coun­ ever paid once, and for a service with big ble because of the Venezuelan exodus, the
tries, with a network that stretches from overheads and slim margins. As victims, largest in Latin America's history. A quarter
the Caribbean to the Southern Cone. they could be exploited indefinitely. Real­ of the population has now left, leaving a
The gang got its start in 2011 after the ising this, the gang spread into cities and smaller pool of emigrants on which the
government handed over the policing of savagely monopolised the sex trade. They gang can prey. Those still moving are most­
jails to inmates in exchange for a reduction murdered local pimps and any sex workers ly headed to the United States, beyond the
of violence. Mr Guerrero took charge at To­ who refused to work for them, dumping extent of the gang's network. If Mr Guerre­
cor6n. His first revenue stream was a tax dismembered corpses on street corners ro is to survive the loss of his prison head­
called la causa, charging each prisoner a and spreading videos of the killings on so­ quarters amid a pan-continental crack­
monthly "stipend". Upon release, gang cial media. Would-be migrants became a down, it may well be with a less spectacu­
members started extorting from shops and pool of new forced prostitution. Thou­ lar ldnd of criminality. ■
jacldng cars. By 2018 Tren de Aragua had sands of young Venezuelan women were
taken control of illegal crossings at the bor­ trafficked to Bogota, Lima and Santiago. Correction. O u r a rticle on go ld p ro d u ction i n l ast
der with Colombia. With thousands of Most were promised jobs abroad. Others wee k's issue (':4 1 1 that gl itte rs") co nta i ned a cha rt
Venezuelans leaving their country every were tricked by "boyfriends" they had met wh ich confused to n n es a nd ki logra ms. So rry.
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30
Asia The Economist November 18th 2023

- -
--- - - - -

� --.- _ -� ...-- � -

J a pan's economy unleash corporate dynamism, its fall from

the top league could perhaps be halted.
A chance to rise again Investors are excited. Morgan Stanley,
an investment bank, reckons Japan has
"convincingly emerged from three decades
of economic stagnation". Warren Buffett
has built up large holdings in five Japanese
trading houses. Earlier this year, the
T O K YO
benchmark Nikkei stock index hit its high­
Wage and price inflation is coinciding with an exciting corporate renewal
est level since the bubble burst. "Japan is
O K I M ASA H I KO,
A a prominent Japanese
economist, once predicted it would
dieted, gradual institutional and genera­
tional shifts are bearing fruit and changing
undergoing a series of extraordinary eco­
nomic transformations," gushed Larry
take 30 years for his country's economy to Japan Inc from within. Fink, the C EO of BlackRock, an asset-man­
emerge from the "lost decades" that began This confluence of external shocks and agement firm, while in Tokyo in October.
in the early 1990s. At that time, an asset internal evolution represents a chance for The past 30 years have seen many false
bubble burst and the sun set on the model Japan to change its economic trajectory. dawns in Japan. There are reasons for scep­
that had helped Japan grow rapidly. The country's share of global G D P in P P P ticism this time, too. Japan's post-pandem­
Though the country remained rich, it slid terms has fallen from 9% i n 1990 to under ic recovery remains fragile: after growing
into deflation and its growth rate slowed. 4% today; its G D P per person in P P P terms 4.5% year-on-year in the second quarter,
Aoki reckoned generational change would slid from 81% of America's level to 64 % ov­ G D P contracted by 2.1% in the third quarter,
be necessary for a new model to coalesce. er the same period (see chart on next page) . according to data released on November
He started the clock at the moment the Goldman Sachs, a bank, projects that Japan 15th. Wages have not kept pace with price
bubble had definitively burst and the long­ will drop out of the top five economies by increases. Consumption is flat. The yen's
time ruling party, the Liberal Democratic 2050 and out of the top ten by 2075. A depreciation led the International Mone­
Party, first lost power: the year of 1993. shrinking population limits the upsides to tary Fund to project that Japan's nominal
Fast forward to 2023 and Aoki's words its growth. Even so, if Japan can reset infla­ G D P in dollar terms will slip this year from
ring prophetic. The world's third-largest tion expectations, boost productivity and third largest to fourth in the world, behind
economy is awakening from its decades­ America, China and Germany.
long torpor. After years of deflation or low Servicing Japan's massive government
inflation, Japan is seeing its fastest price ➔ Also in this section debt is already a heavy burden. It will be­
growth in more than 30 years. Wages, long come more of one if the Bank of Japan (BoJ)
32 Taiwan's election
stagnant, are rising faster than at any time moves away from its ultra-loose policy
since the 1990s. Both increases are driven 32 Indian single ma lts based on negative interest rates and yield­
largely by global supply shocks. But they curve control, as it hints it may do next
33 Banyan: The j unta is losing
are not the only changes afoot. As Aoki pre- year. Many firms that rely on interest-free ►►
 -
The Economist N ovem ber 18th 2023 Asia 31

► capital would struggle to stay solvent, too. lish a list of firms that meet corporate-go­
Japan's workforce is still shri nking and Struggling to keep up vernance guidelines. Mr Yamaj i says that
ageing. Its firms continue to hoard cash . G D P p e r perso n, $'0 0 0 at PP P*, 2017 pri ces when C E0s approach him at the golf club to
Over 40% of firms l isted on Japan's T0P I X 70 grumble, he answers: "Good luck."
5 0 0 trad e below book value, compared These shifts have coincided with gener­
with u nder 5% on America's s & P 500. For­ 60 ational change in Japanese business. The
eign-investor i nterest has as much to do 50 average age of c Eos at firms in the Nikkei
with Japan's relative stability and cheap stock index has dropped by 12 years in a de­
40
currency as excitement about new growth. cade, according to Jesper Kol l of Monex
Yet those familiar flaws obscure other 30 Group, a b rokerage. Many are moving be­
T
developments. In recent decades "the fun­ Britain South Korea 20
yond old mores such as l i fetime employ­
damental problem of the Japanese econ­ ment and seniority-based pay. Young Japa­
omy was dynamism," says Hoshi Takeo of 10 nese are happy to switch jobs. The best and
the University of Tokyo. Too few new com­ � brightest increasingly join or start new
0
panies were formed, too many old ones I I
1 980 85 90
I I :;
95 2000 05
I I
10 15
I
firms. "We should be betting on these
hung around, prices barely changed and Sou rce: I M F * Purchasi ng-power pa rity
groups of people," says Namba Tomoko, a
talent was trapped within fi rms for life. vice-chair of Keidanren, a business group.
" Now we're seeing that begin to change." The startu p ecosystem is small relative
Start with p rices . Headline annual in­ see Japan thrive. American officials to Japan's G D P , yet increasingly vibrant.
flation has been above the BoJ's 2% target cheered as I BM , an American tech giant, "The old Japan is still there, but in parallel
for i8 straight months. Even if much of that entered into a joint venture with Japanese to that a new Japan coexists and grows,"
is due to higher import costs the psycholo­ counterparts to design ch ips in Japan. says Kushida Kenj i of the Carnegie Endow­
gy of price-setting is changi ng as a result. Japanese fi rms are poised to put thei r ment for I nternational Peace, an American
Firms have been forced to test the long­ cash to use. The growth rate for planned think-tank. Investment in startups rose
held assu mption that pushing up prices capital investments is at its highest level from 88bn yen in 2013 to 877bn yen in 2022;
would mean losing customers. "We came si nce the B0J began collecting survey data the number of Japanese venture-capital
to understand we can raise prices," says Ni­ in 1983 . The government is encouraging fu nds has quadrupled in that time.
inami Takeshi, the C EO of Su ntory, a big this trend: big subsidies have gone to the Where many Japanese entrep ren eurs
drinks maker, and the chai r of Keizai Doyu­ semicond uctor industry; the government were once content to be big in Japan, a new
kai, an influential association of corporate has pledged to spend 2trn yen ($13 . 2bn) , o r class of founders with global ambitions is
executives. The practice has become wide­ 0.3% o f G DP, p e r year for t h e next decade to rising. Shin Taejun, fou nder of Gojo, a
s p read: p rices for nearly go% of items fu el the green transition. With defence microfinance firm, wants i t to be "the
mon itored by the B0J are rising (see chart) . spending set to rise substantially, officials World Bank of the p rivate sector". Maeda
want to spur defence-industrial-d riven i n­ Yosuke, founder of Wota, which builds de­
Demographic opportunity novation of a kind that was formerly taboo. centralised water-treatment infrastruc­
Higher inflation has outsized impl ications Corporate-governance reforms that be­ tu re, aspires to "solve the global water cri­
for wages, which have stagnated for de­ gan over a decade ago have become en­ sis". Rather than inheriting his family's
cades. Inflation of 1% in Japan p roduces trenched . Pressure to enhance corporate construction firm, he decided to build his
wage growth of just 0.2%, but the sensitiv­ val ue and return on equ ity no longer own. "The old industrial structure can't
ity jumps when inflation exceeds 2%, reck­ comes solely from foreign activists-Japa­ solve the problems we want to solve," he
ons Ota Tomohiro of Goldman S achs. De­ nese institutional investors are also push­ says. Okada Nobu, founder of Astroscale, is
mographic change ought to p rovide anoth­ ing. The p ressure will increase. The gov­ leading global efforts to clean up debris in
er push. Though Japan's population started ernment an nounced an "asset-doubling outer space. Japan needs new "champi­
shrinking more than a decade ago, women plan" that seeks to encou rage Japanese sav­ ons", Mr Okada says. "We still refer to Sony
and old people entering the workforce ers to invest their cash holdings, with tax and Honda-let's forget about them."
largely offset the decli ne. But that trend incentives set to come into effect next year. This new generation also seeks to re­
has slowed in recent years, leaving em­ The J PX, which oversees the Tokyo Stock shape corporate cultu re. Ma ny young Japa­

-
ployers feel ing the crunch and needing to Exchange, is another force for change un­ nese want to shed the post-war model
entice workers with higher pay. Though der its new president, Yamaj i Hiromi. Be­ based on lifetime employment, male dom­
wage growth still lags price growth, if next ginning next year, the bourse plans to pub- ination and age-based hierarchies, says Ta­
year's annual shunto wage negotiations keshita Ryuichiro of Pivot, a media startup
produce big gains again, a long-awaited that focuses on the new Japan Inc. "Change
virtuous cycle of price and wage growth G etting dearer used to be seen as negative or traitorous,"
would be tantalisi ngly close. Japan, co nsumer pri ces*, % of items he says . " But we aim to portray pivot or
Geopolitical turbulence, from war i n i n c reasing o r decreasing in price change as positive." I n just over a year Pivot
Ukraine to tension between America, Ja­ 1 00 has racked up over 1m subscribers on You­
pan's security provider, and China, its larg­ Tube, where it broadcasts interviews with
est trading partner, has also changed the 80 founders, i nvestors and inventors.
landscape for Ja pan Inc. A growing nu mber Many Japanese executives and policy­
of executives recognise that "we can't keep 60 makers seem not only to understand that
the status quo," says Mr Niinami. As fi rms Japan stands at a significant juncture; they
40
prioritise supply-chain resilience and wor­ are determined to make the most of it.
ry about location risk, Japan stands to 20
" People who know Japan really well ask
benefit. Even if manufacturers do not build me, is this time different?" Mr Yamaj i says .
factories i n Japan, they may rely on its fac­ 0 "My answer is it could be-we should make
tory-automation firms to help build them I I I I I I I I I I I I I I I I
2001 05 10 15
I I I I I I I
20 23
it be." The opportunity may not p resent it­
elsewhere. America once perceived Japan Sou rce: Statistics Bureau of Japan *Excludes fresh food
self again soon. Unlike the sun, Japan's
as an economic rival, yet it n ow wants to chance to rise does not come every day. ■
32 Asia The Economist N ovember 18th 2023

Taiwan's e lecti on Ying-jeou, a former KMT president, the I n d i a n whisky

Swadeshi spirits
matter will be settled by public opinion.
Great for China Mr Ma, the K MT and the T P P will each
choose a polling expert to review public
polls and determine which leader would be
the stronger candidate; the decision will be
announced on November 18th. Taiwanese CUNCO LIM
commentators disagreed over which can­
TAI P E I Indian single malts are winning fans at
didate this favours.Yet Mr Hou swore to
The island-state's opposition unites home and prizes abroad
abide by the result: "No matter what the

T AIWA N W I LL hold presidential elections

in January that cou ld lead to a signifi­
cant relaxation of the island-state's defiant
outcome is, whoever gets to be the presi­
dent and who gets to be deputy, we will
work together to make the Republic of Chi­
T W E N TY- F I V E thousand barrels of whis­
ky are stacked high at the Paul John Dis­
tillery in Goa, treati ng workers and visitors
postu re towards China. That wou ld be a big na's land and people safe," he said . to the sed uctive aroma of grai n and spirit.
geopolitical event. And after Taiwan's The opposition parties also pledged to Mostly i mported Bourbon barrels , the cas­
main opposition parties annou nced o n establ ish Taiwan's fi rst coalition govern­ kets each contain 200 litres of single malt.
November 15th that they had struck an ment. The president would appoint its The d rink is made with Indian barley and
electoral pact, it looked a lot likelier. ministers of defence, mainland affairs and distilled and aged in cond itions most un­
Less than ten days before the dead line foreign affairs, they said. Other ministers like those in foggy Scotland. Goa is a tropi­
to register cand idates for the election, Hou wou ld be chosen separately by the parties cal beach parad ise on India's western
Yu-ih of the Nationalist Party, or KMT, and based on their relative success in concu r­ coast. The whisky, which Pau l John has
Ko Wen-j e of the Taiwan People's Party rent legislative elections. been p roducing in India since 2008, is
(TPP) said they would ru n on a joint ticket. Senior Chinese officials have made no nonetheless award-winning and delicious .
They had not agreed which of them will be secret of their d istaste for M r Lai, who is It is "as good as a Scotch", pronounces a
its presidential candidate. But as both are committed to continuing the policies of Dutch visitor to the distillery, Marco Nigh­
far friendlier towards China than the rul­ President Tsai Ing-wen, his party col­ olt, a whisky aficionado.
ing Democratic Progressive Pa rty ( D PP) , league. They include strengthening ties Many Indians like hard liquor. Spirits
victory for either would bring a big change. with America, asserting Taiwan's sover­ and the so-called " ready-to-drink" catego­
The D P P 's candidate, William Lai, Tai­ eignty and hardening the island's defence. ry, which includes things l ike p re-mixed
wan's vice-president, was leading the race Officials in Beijing recently called the D P P gin and tonic, accou nt for 40% of the Indi­
in late October with 33% of those polled. By candi date a "Taiwan in dependence liar" a n alcoholic-beverage market by volu me.
comparison, Mr Ko, a former mayor of Tai­ and " hoodlum to the extreme". In response Most of that is whisky, reckons N ita Kapoor
pei, was on 24% and Mr Hou 22%. (Te rry to the opposition pact, a mainland spokes­ of the International Sp irits and Wi nes As­
Gou, the bill ionaire fou nder of Foxconn man u rged Taiwanese to "j oin hands" with sociation of I n d ia, an i ndu stry body. I n
and an independent candidate, was poll­ the Chinese and oppose independence. fact, most of what passes for wh isky in In­
ing at 8%.) I f the opposition leaders can Whether the opposition candi dates can dia is nothing of the sort, but rather a mo­
succeed in pooling their vote-share, they indeed combine their votes is unclear, says lasses-based spirit with whisky-like fla­
would seem to enter the campaign ahead. Nathan Batto of Academia Sinica, a Tai­ vouring, colouring and b randi ng. Yellow­
They have not issued a joint policy plat­ wanese research institution. Mr Ko's Gen-z tinted spirits such as Bagpi per and Offi­
form. But both candidates have p reviously supporters may balk at his teaming up with cers' Choice are among the country's most
p romised to reset cross-strait relations by the conservative KMT. Some of the KMT's popular tipples. Scotch, by contrast, is sub­
reopening dialogue with China. The mai n­ local factions have seemed reluctant to ject to a 150% import duty and traditionally
land cut off formal talks with Taiwan be­ embrace M r Ko. The alliance could "ex­ reserved for the wealthy.
cause the pro-American DPP refuses to af­ plode", says Mr Batto. But if it holds, the op­ Yet I ndian demand for booze of all
firm that the island-state is part of China. position ticket will be formidable. That is kinds is growing with the country's econ­
The KMT p romises to end the spat by re­ good news for the Communist Party. ■ omy. Already the world's fifth-biggest alco­
tu rning to the "1992 consensus", a vague as­ hol market, India accounted for a third of
sertion that there is only one China, with --,,,,,
global growth in the ind ustry i n 2021-22,
multiple interpretations. Mr Ko says he according to I nternational Wine & Spirit
will not retu rn to the 1992 consensus, � Research (IWS R) , a market-analysis firm.
which is unpopular in Taiwan . But he has
proposed s i milar formulations, such as:
v� The ind ustry expects In dia's alcohol sales
to grow by around 6% a year, not least be­
"The two sides of the strait are one family". cause half of I ndians are u nder 25, the (of­
He and the K MT both advocate cross-strait ten disregarded) legal drinking age i n
exchanges and appeasing rather than re­ many states. Among premium drinks, con­
sisting ( o r, in their view, p rovoking) the sumption of Scottish single malts doubled
Communist Party. This might lower ten­ by volume between 2020 and 2022, accord­
sions with the mainland. It could also give ing to I WS R. Despite the tiny proportion of
China much greater i nfluence in Taiwan . Indians who drink Scotch, India is now its
The opposition deal follows months of biggest export market.
bickering and haggling between the KMT The combination of soaring demand
and T P P. Mr Ko, who i s popular among and high i mport costs has c reated an op­
younger voters, had insisted o n being the portunity for home-made premium p ro­
presidential candidate in the event of a ducts. The fi rst I ndian single malt, Amrut
deal. But the venerable KMT, which has far (or "nectar of immortality") , was launched
more seats i n Taiwan's parliament, was re­ i n 2004 and now has several competitors.
luctant to yield to the relative parvenu T P P. Paul John's parent company, John Distiller­
Under the terms of a deal brokered by Ma Co-operative Ko We n-je ies, set up its single-malt d istillery in Goa ►►
 The Economist N ovem ber 18th 2023 Asia 33

► in 2008, and began selling its first bottles first, beyond India's overall growth, is the ance" policy, the network of 4,000-odd
in India in 2015. It has since won over 300 fact that its services-led model has dispro­ shops run by the army for service members
international awards. Indri, a newer dis­ portionately benefited members of the and veterans has not been allowed to sell
tiller based in the northern state of Harya­ country's educated middle class. That is imported liquor since 2020. )
na, won "double gold best in show" at the manifest not only in booming premium­ Booze firms are gearing up to meet the
Whiskies of the World Awards in America booze sales but also the high-end bars rising demand. The Paul John distillery
in October. A barman at the Whisky Bar in mushrooming around the country. A sec­ plans to double its capacity of 25,000 bar­
the Radisson Blu hotel in Bangalore, In­ ond, related reason is that alcohol, long rels a year. Global firms, too, are angling for
dia's tech capital, reckons that four out of frowned on in polite society, is growing a piece of the action. Last year Diageo, a
every ten whisky orders he fields are for In­ more socially acceptable. multinational liquor behemoth, launched
dian brands. None is cheap. Indian single Last, Indians' growing confidence in its own Indian single malt, Godawan. Saze­
malts sell for as much as, and often more their country's progress is increasing en­ rac, an American whisky-maker and inves­
than, imported Scotch. thusiasm for home-made products. (Some tor in John Distilleries, has nearly doubled
Three factors are driving the boom. The have no choice: as part of India's "self-reli- its stake in the firm. Spirits are soaring. ■
The j unta is los ing

Mya nmar's a rmed opposition is growing more un ified. The West should help i t

I TDI D N OT take long before the world's

gaze drifted from Myanmar after, in
February 2021, its army chief, Min Aung
opposition fighters elsewhere. In Chin
state, in the west, a rebel army has over­
come outposts on Myanmar's mountain­
Shona Loong of the International In­
stitute for Strategic Studies (nss) , a
think-tank in Singapore. For the first
Hlaing, carried out a brutal coup. West­ ous border with India. In Kayin state, in time since independence in 1948, even
ern hopes for Myanmar's democratic the south-east, the Karen National Libera­ the majority-Barnar (and Buddhist)
future had been vested in the figure of tion Front has attacked the local military heartlands from which the army is large­
Aung San Suu Kyi and her National headquarters. A new front has also re­ ly recruited have risen in revolt against
League for Democracy. When the general opened in Rakhine state. Its main rebel it. Hatred of the armed forces is evident
threw her and her recently re-elected group, the Arakan Army, has been fighting across the country. Rising numbers of
government into jail, those hopes ap­ as a member of the Three Brotherhood army conscripts are defecting or surren­
peared to be conclusively snuffed out. Alliance way to the north, but has also dering to the militias.
To be sure, fugitive members of the now breached a ceasefire to resume at­ Repelled by the junta's violence,
elected government promptly formed an tacks on the Burmese army in Rakhine. Myanmar appears to be uniting in oppo­
administration-in-exile. And, back in These ethnic armies appear to be think­ sition. A new and diverse generation of
Myanmar, even Burmese who had never ing strategically and acting in concert. leaders is coming together to "break with
lifted a gun flocked to join resistance Several have also made common cause past social and political patterns", as
militias known as people's defence forc­ with the P DFs, whom they both train and Priscilla Clapp of the United States In­
es (P DFs) . Yet for many Myanmar-watch­ involve in their campaigns. The armed stitute for Peace, a think-tank, writes.
ers these efforts seemed too feeble and opposition is looking less raggle-taggle; Huge numbers of Burmese, across ethnic
disparate to promise much. Raggle­ the Burmese armed forces appear over­ divisions, want to stake out a more in­
taggle bands were surely no match for stretched and demoralised. With little in clusive, federal future-or at least one
Myanmar's powerful armed forces­ reserve, they may conceivably not have the not governed by their bullying generals.
witness the long struggles of the many strength to recover. It is high time the Western powers
ethnic militias scattered around the The junta has only itself to blame for re-engaged with Myanmar's struggle. In a
country's rugged periphery. the concerted nature of this assault. Since forthcoming book for the n ss, "New
It is time to revise that view. Since late the coup it has helped bring violence to 315 Answers to Old Questions", Aaron Con­
last month Myanmar's armed forces have of the country's 330 townships, calculates nelly and Ms Loong argue that the mis­
suffered astonishing setbacks. On Octo­ taken Western hopes pinned on the often
ber 27th, in an operation now known as illiberal and controlling Ms Suu Kyi are
the 1027 offensive, a coalition of ethnic now more likely to be realised by the new
armies, the Three Brotherhood Alliance, emerging leaders. The West should help
launched attacks on the junta and its and encourage them. Even if supplying
allies in northern Shan state, bordering arms to the Burmese opposition is out of
China. The alliance has overrun over 100 the question, providing it with satellite
outposts and seized towns that are key to internet access would help both its oper­
the regime's lucrative trade with China. ations and delivery of humanitarian aid
The biggest prize, Laukkai, the adminis­ to non-junta areas.
trative centre of the Kokang region, may Meanwhile, the West's near-absence
soon fall to the alliance. Laukkai is the in back-channel diplomacy is leaving the
base of notorious Chinese crime king­ field open to outside powers, including
pins and junta allies who run huge on­ China, which care little about democracy
line gambling and internet scams out of and rights. Much is at stake in Myanmar,
the town (much to the annoyance of the and not only for its 50m inhabitants.
Chinese authorities) . Democracy is also on the line. The West
These successes are mirrored by should come to its aid.
34
Chin a The Economist N ovem ber 18th 2023

America a nd C h i n a of a turbulent year, with pres i d e ntial elec­

tions in Taiwan (see Asia section) and
Flying Tigers, smiling dragon America. The meeti ng may have succeeded
where the last one failed, in putting "a
floor" under the rivalry, though the test
will come only with the next crisis. The
previous effo rt, launched on the margins
of the G 2 0 su mmit in Bali last year, was
WAS H I N GTO N , D C

Joe Biden and Xi Jinping rediscover the merit of direct contact. But will it last? blown off course by the appearance of a
Chinese spy balloon over America that Mr

F OR MONTHS China has accused America

of trying to contain its economy and en­
circle its territory. But in N ovember the
Mr Eiden said they had to "ensure that
competition does not veer into confl ict" ;
Mr Xi warned against the very notion of a
Eiden ordered shot down in February.
The leaders agreed to keep open li nes of
communication, Mr Eiden said, promising
Communist Party's propaganda changed contest, saying " major-country com peti­ that if "either one of us have a ny con­
tu ne: instead of denouncing this "new cold tion is not the p revailing trend of current cern ...we should pick u p the phone and call
war ", it hailed America's and China's times". Earth, he added, "is big enough for one another and we'll take the call." This
shared history of fighting Japan in the sec­ the two countries to succeed". will reassure Asian cou ntries that d read
ond world war, highlighting the role of Welcoming "some of the most con­ being sucked i nto the Sino-American rival­
American volunteer fighter pilots known structive and productive discussions we've ry or, worse, a war over Taiwan.
as the " Flying Tigers". State media also re­ had", Mr Eiden made some modest an­ The status of the self-govern i ng island ,
called Xi Jinping's fondness for a couple nouncements: the restoration of direct which China claims as its territory, is
that hosted him in rural Iowa i n 198 5 . contacts between their armed forces; ef­ acutely sensitive for China's leaders. Mr Xi
Mr X i , China's leader, brought that spir­ forts to curb the supply of precursor chem­ told Mr Eiden that Taiwan was the "most
it of detente to San Francisco for the sum­ icals to make fentanyl , a synthetic opioid ; potentially dangerous issue in u s -China
mit of the Asia-Pacific Economic Co-opera­ and future discussions on the dangers of relations", a senior American official re­
tion (AP EC) , hosted by President Joe Eiden. a rtificial intelligence (AI ) . counted. Mr Eiden did not repeat his past
The two leaders spoke for fou r hou rs at a Perhaps the best that can b e said for the off-the-cuff promises to defend Taiwan if it
country house outside the city, only their meeting is that it took p lace at all. It prom­ was attacked. But nor did he offer China
second in-person meeting as leaders of the ises to rekindle the habit of talking ahead new reassuring words about America's op­
world's two biggest powers. position to Taiwanese independence.
Both emphasised the fact that they have America, he said, has a "one-China policy"
➔ Also in this section
known each other for more than a decade, and 'Tm not going to change that".
since they were both vice-presidents. But 35 Gloomy consumers American officials have a rgued that M r
they disagreed on many things, not least Eiden was meeting Mr X i from a position of
36 Chagu an: A history lesson for Xi
the nature of their countries' relationship. strength , having overseen a strong eco- ►►
 The Economist N ovem ber 18th 2023 China 35

► nomic recovery, investments in green Consumer spending 5.6%, according to Syntun, a data firm.
technology and semiconductors, and the The e-commerce platforms did their
strengthening of America's alliances and Bromptons, best during the festival to appease, not in­
partnerships in Asia. In contrast, China's
not blusher
sult, the price sensitivity of their custom­
economy has "real problems", Mr Biden ers. Pinduoduo offered merchants on its
told donors on the eve of the summit. In­ platform extensive subsidies to help them
deed, Mr Xi sounded downcast, declaring: provide discounts to consumers. D.com,
"The global economy is recovering, but its H O N G KO N G
the closest rival to Alibaba, promised to
momentum remains sluggish." compensate customers if they found a
China's shoppers are gloomy and picky
Yet hamstrung by domestic politics and cheaper price for a product within 30 days
his own protectionism, Mr Biden struggles
to present Asian countries an attractive
counter-offer to China's economic entice­
Fhiscommerce
I V E YEARS ago Jack Ma, the founder of e­
giant Alibaba, briefly tried
hand at selling lipstick. To promote
of buying it. Consumers are also becoming
ruthlessly strategic. Some shoppers add a
luxury item to their purchases so they can
ments. Ahead of the APEC summit, his ad­ China's largest online shopping festival, meet the minimum spending threshold for
ministration abandoned plans to unveil a called "Singles' Day", Mr Ma attempted to a discount on their bill. They then return
digital-trade deal under his Inda-Pacific sell more lipstick in five minutes than Li the luxury item and keep the rest.
Economic Framework ( I PE F) , the already Jiaqi, a live-streaming salesman known as These marketing gambits have, it ap­
thin economic pillar of America's Asia the "Lipstick King". The king won. pears, boosted the volume of sales more
strategy. I P E F is regarded as a poor substi­ Five years on, Mr Li's crown has slipped than the value. The number of parcels deli­
tute for the Trans-Pacific Partnership, a a little. In September he lost his cool with vered from November 1st to nth rose by
trade deal signed by Barad< Obama in 2016 an online commenter who questioned the 23% year on year, according to the State
and ditched by Donald Trump in 2017. The price of an eyebrow pencil he was show­ Post Bureau. But the amount of spending
framework does not offer improved mar­ casing. "How is it expensive? It has been on e-commerce platforms rose by less than
ket access, but its trade element was in­ this price for years," Mr Li asked incredu­ 10%, according to most analysts.
tended to promote open data flows akin to lously. "Maybe you should look at yourself. Spending is not universally weak. Ac­
those between the United States, Mexico Has your pay risen? Have you been work­ cording to official figures released on No­
and Canada. Mr Biden has retreated under ing hard in these years?" vember 15th, retail sales (both online and
pressure from Democrats who oppose fre­ Mr Li, who later apologised, had off) rose by 7.6% in October compared with
er trade or want tighter regulation of big touched a nerve. He had also touched on a year earlier. That was faster than expect­
tech (see Finance & economics section). one of China's deeper economic difficul­ ed. Spending on restaurants, cars and
The resumption of high-level military ties. It is hard for firms to increase prices phones made big contributions. Huawei's
contacts, not only between theatre com­ when wage growth is weak. sales grew by 83%, according to Counter­
manders but also between policymakers, Although the unemployment rate in point, a research firm. That was thanks in
is welcome. Whether they help to reduce China's cities is only 5%, many households large part to Huawei's new Mate 60 phones,
dangerously close encounters between are not optimistic about their pay or their which boast chips made in China.
American and Chinese forces, in the air job prospects. According to the latest cen­ The fastest-growing retail category was
and at sea, is to be seen. The sides also re­ tral-bank survey, more people expect their sports and entertainment products. Sales
solved to pursue talks "to address the risks income to fall in the near future than to rose by nearly 30% compared with a year
of advanced AI systems", but there was no rise. Consumer confidence collapsed dur­ earlier. L ululemon, a maker of athletic
hint of a previously reported agreement to ing the pandemic-related lockdowns of wear, reported that its second-quarter rev­
restrict A I in autonomous weapons and 2022. It has yet to recover (see chart) . enue in greater China (including Taiwan)
nuclear command-and-control systems. The gloom is making customers picky grew by 61 % year on year. China also be­
Before the two presidents met, the State and cost-conscious. In October China came the biggest market for Brampton, the
Department announced that America and slipped into deflation, with consumer British folding bike. "People are willing to
China-the world's biggest emitters of prices falling by 0.2% compared with a concentrate their budget on something
greenhouse gases-had agreed to pursue year earlier. People are not squandering which can actually make them feel happy,"
efforts to triple renewable-energy capacity money by redefining their eyebrows. Dur­ says Chen Luo of Bank of America.

-
globally by 2030. Perhaps the most emo­ ing the Singles' Day festival-which now Chinese consumers are not only invest­
tionally resonant deal was the Chinese runs from late October to November nth­ ing in themselves. Spending on pet foods
promise to help curb the export of chemi­ spending on makeup and fragrance fell by during this year's festival increased by al­
cals to make fentanyl and pill presses to most 30%, according to Syntun. Young
make tablets. Fentanyl is claiming the lives people who cannot imagine supporting a
of about 70,000 Americans a year; Mr Bi­ B uyers be wary child instead lavish attention on their cats
den said he personally knew people who Ch i na, co nsu m e r con fidence and dogs. This affection extends beyond
had lost children to the drug. 1 30 food to fashion and gadgets. Mr Luo cites
The leaders also spent time talking the example of "smart" cat litters, which
about regional crises, with Mr Biden urg­ 1 20 help to remove bad smells.
ing China to help restrain both Russia's war Pets can also be used to market other
in Ukraine and Iran's support for Hamas 1 10 items. In 2016 Mr Li became the owner of a
and other allied militias in the Middle East. fluffy Bichon Prise, which he called "Nev­
1' Optimistic
They may not have agreed on much. But 1 00 er". Together with her pups and grand­
the long Biden-Xi encounter highlighted a pups she has her own collective brand,
� Pessimistic
notable absence from the A P E C summit 90 "Never's Family". But not everyone has
Vladimir Putin. He will not be pleased by been won over by Mr Li's pets-or his tear­
the sight of his greatest rival and his most 80 ful apology. For Halloween this year, at
important friend discussing Russia over 201 2 14 16 18 20 23
least one person dressed up as the Lipstick
his head. That in itself may count as a win Sou rce: National Bureau of Statistics
King, wearing a black top emblazoned with
for Mr Biden. ■ the question: How is it expensive? ■
36 Ch i na The Econom ist N ove m ber 18th 2023

Chaguan I Xi Jin ping repeats imperial errors

Lessons of a loya lty test tha t stifled innova tion

sat the exams and never passed. This focus on bureaucratic glory
crowded out other paths to social mobility. It was handy for auto­
crats, as test preparation left scholars "no time for rebellious ideas
or deeds", the book argues. The keju's Confucian values promoted
conform ity of thought and disdain for com merce. Over time, the
exams smothered the scientific curiosity that saw ancient China
develop many technologies before the West, including the com­
pass, gunpowder, movable-type printing and paper, known in
China as the country's " four great inventions".
The keju was scrapped in 1905, but its legacy lives on today, in
civil-service tests and in the fearsome gaokao, the college-en­
trance examination which rewards relentless toil. In the book's
telling, the curse of the keju spirit was broken once in China's his­
tory, when Communist Party leaders embraced market-based re­
forms after the disasters of Maoism and central planning (and re­
vived the gaokao, abandoned during the Cultural Revolution) .
During that reform era, lasting for 40 years after 1978, the book
credits the party with successfully balancing stability, economic
growth and technological progress. As in imperial times, a strong
state overshadowed a weak society. But the reform-era party also
praised private entrepreneu rs and allowed policy experiments by

0 knew how toGuenjoy

N E HO P ES i Youguang, a 16th-century Chinese bureaucrat,
success in the moment. By the standards of
regional governments. To harness the world's dynamism, officials
sought out foreign capital and international academic exchanges.
Then, in 2018, Mr Xi abolished the only term limits that con­
the time, he was old when he passed the Ming dynasty's most ex­ strained him as leader. His China is increasingly autocratic, statist
acting grade of test for mandarins, after decades of failed at­ and inward-looking. Private bu sinesses endure more meddling by
tempts. Alas, not long after securing ajinshi degree at 59, Gui died. party cadres, and youth unemployment is high. In a flight to safe­
The rigours of imperial China's civil-service examination sys­ ty, almost 2. 6m people applied to sit civil-service exams this year,
tem-the keju , used to select scholar-officials for over 1, 300 chasing 37,100 posts. Too often, in publi c institutions that once
years-are described in a new book by Yasheng Huang called "The boasted of being meritocratic, " merit" means fealty to one man.
Rise and Fall of the E AST : How Exams, Au tocracy, Stability, and Officials and university students must devote ever more hours to
Technology Brought China Success, and Why They M ight Lead to studying Xi J inping Thought and other dogma.
Its Decline". Arguing that the exams stifled innovation in ancient Ou tsiders wonder how ordinary Chinese can bear this more
ti mes, Professor Huang sees lessons for Xi J inping's China. controlling age. One answer is that, to some at least, equality of
The keju became more doctrinaire over time. First instituted in opportunity matters more than the pursuit of diverse, individual
587, the exams progressively shed such subjects as mathematics dreams. A good place to hear such views is the I mperial Examina­
and astronomy. Soon, they only tested candidates' mastery of tion Museum of China in the eastern city of Nanj ing. Its white­
dense Confucian texts filled with inj unctions to revere fathers, of­ walled, grey-roofed courtyards are surrounded by statues of prize­
ficials and monarchs. The curriculum narrowed again in the 14th winning test-takers from history. Civil-service exams are China's
century, requ iring candidates to memorise ultra-conservative "fifth great invention", signs declare. On this site in i mperial
commentaries on Confucian classics. The commentaries advocat­ times, 20,000 candidates took exams alone in tiny brick cells.
ed unquestioning obedience towards rulers. A final refinement
was added during the Ming dynasty: answers had to follow a rigid­ Suffering can be endured, but not unfairness
ly scripted format, the "eight-legged essay", described as "the Chaguan met Ms Xing, a medical student, praying at the God of Ex­
greatest destroyer of human talent" by Ch'ien Mu, a historian. aminations pavilion in the museum grounds. Yes, China teaches
The system was a blessing and a curse, the book suggests. At a to the test and maybe that limits innovation, she ventured. But
ti me when Europeans were recommended for public office by China is unequal, with very rich and very poor regions. In such a
well-connected relations or patrons, the keju offered diligent country, collective interests tru mp the "personal development"
commoners a path to advancement (women could not take the ex­ that is important to foreigners, she suggested. "Just as in ancient
ams) . Most tests were taken anonymously, enhancing public con­ times, people are equal when they are in the same exam."
fidence in them. Corrupt examiners, when unmasked, faced exe­ Inside the museum a young doctor, Ms Wang, pointed at a row­
cution or exile. By the time of the Ming dynasty (1368-1644), qual­ dy school group. In Western countries teachers can foster individ­
i fying tests for the keju attracted millions of candidates, helping to ual creativity, she said. "We have to stick to the tests, and we have
explain high levels of (male) literacy. With such a large pool of as­ no way to do tailored education." The poor, including her former
piring scholar-officials, serving mandarins knew that they were classmates from rural Henan, can change their destinies only with
replaceable, and thus vulnerable. Few dared to start palace coups. books and exams, she says. The party knows to take that sort of
Yet stability came at a cost, argues Professor Huang. Gui You­ stubborn, unflashy ambition seriously. Bold talk of delivering a
guang stands out for doggedness. But a dataset of 11,706 Ming-era prosperous, high-tech China for all may have to wait, as the econ­
keju candidates shows that exam-takers who reached the third and omy slows. But in these hard times, guaranteeing a fair shot for the
final stage of the keju got there in middle age, on average. Millions diligent is one promise that rulers can ill afford to break. ■
 M idd le East & Africa The Economist N ovem ber 18th 2023 37

Gaza battlefield. It is not just civilians who fled

The end of the beginning

to sou thern Gaza: some of Hamas's fighters
no doubt did the same. Israel has yet to find
the group's leader in Gaza, Yahya Sinwar, or
its milita ry chief, Muhammad Deif, both of
whom are thought to be hiding in the maze
of tunnels beneath the enclave. I s raeli
GAZA CITY A N D D U B A I
troops will spend the coming weeks blow­
ing up the entrances to those tu nnels and
The battle of northern Gaza is almost over
scouring the north for arms and mi litants .

A six weeks ago, was home

C I TY W H I C H ,
to nearly 1m people is now a hollow
shell. When The Economist was invited on
feet dislodged Hamas from power, at least
in the north of the enclave: the grou p that
has controlled Gaza s i nce 2007 is now scat­
At some point, though , Israel wi ll have to
turn its attention to the south. How much
it will be able to do there will depend on
November 14th to j oin an Israeli military­ tered and reeling. domestic politics and diplomatic p ressure.
supply convoy to al-Shati, a once-cramped All this raises two important questions. In recent days attention has been fo­
refugee camp in northern Gaza, none of its First, and most pressing, is how to alleviate cused on al-Shifa hospital, the largest in
90,000 residents was there. Many of the a hu manitarian disaster in southern Gaza. Gaza, and other such facilities. Israel says
camp's dense apartment buildings had Almost all of the territory's 2 . 2 m people are Ham as has an u nderground headquarters
been destroyed; others were badly dam­ now kettled in the south . A total siege im­ beneath al-Shifa. It also believes that some
aged. Armou red columns of the Israel De­ posed by Israel on its border crossings to of its 239 hostages were hidden there, at
fence Forces ( I D F) had torn up roads. Elec­ Gaza, and the anaemic flow of aid across least temporarily. On November 15th, after
tricity, water and sewage infrastructure no Gaza's border with Egypt, have left Gazans encircling it for six days, Israeli troops en­
longer exist. The situation is similar in desperately short of food and water. Fuel tered the hospital compou nd.
much of Gaza city and i n outlying towns. shortages have crippled hospitals and aid The situation was still u n folding as The
After six weeks of war and three weeks agencies. And winter has arrived, bringing Economist went to press, but i nitial reports
of ground fighting, Israel now has effective cold temperatures and rain that will fu r­ suggest the I D F found neither the leader­
control of the area north of Wadi Gaza, a ther add to the misery. ship of Hamas nor any of the hostages.
riverbed that bisects the 45km-long strip Second is what happens next on the Most of the 60,000 or so Palestinians who
(see map on next page) . The devastation had been sheltering at the hospital in the
heralds the end of one phase of Israel's war early days of the war had also vanished .
against Hamas, which began on October ➔ Also in this section When Israeli troops entered , only 1,500 or
7th after the Palestinian Islamist group car­ so people remained , a mix of medical staff,
39 The regional reaction
ried out a massacre that ended with around patients and d isplaced people.
1,400 Israelis killed or kidnapped. Weeks of 40 A genocida l m i l itia is w i n n i ng i n Sudan Most fled south-as did everyone else.
Israeli action have killed more than 11, 000 Once home to more than half of Gaza's
42 Africa's su perma rket revol ution
Palestinians i n Gaza. They have also, in ef- population, the north is now a deserted ►►
38 Midd le East & Africa The Economist N ovem ber 18th 2023

► wasteland. The Israeli troops in al-Shati re­ ate in Egypt, which is why they have usual­ left of the tunnels. Others may have fled
port only a few encounters with small ly done so in Israel, where the distances are south or retreated to the very centre of the
groups of civilians. There are no accurate shorter and procedures used to be more ef­ city. "We deal with about 90 or 100 build­
figures for how many people remain, clus­ ficient," says Tania Hari, the director of ings a day," says Lieutenant Commander
tered around hospitals and relief centres. Gisha, an Israeli N GO that lobbies for more Oz, a battalion commander. Dozens of bat­
Israeli and foreign sources believe they access to Gaza. "Kerem Shalom has to be re­ talions are on similar missions in and
number only in the tens of thousands. opened for Gazans to survive." around Gaza city.
The population of southern Gaza has Israeli generals know that they will not
doubled over the past month, an increase The next step be able to act in southern Gaza with the
that would strain basic services even with­ Whether to do that is one question for Isra­ same ferocity as in the north. Instead, they
out a near-total blockade of the enclave. An el as it decides how to proceed with its war. are planning a "more mobile" offensive.
estimated 1.5m people have been forced Accompanied by tanks, sniffer dogs and But any operation will probably hamper re­
from their homes, mostly from the north demolition squads, soldiers have spent ov­ lief efforts and cause an international out­
but also from the south. er two weeks going from house to house, cry, which is already mounting. At a sum­
Since October 21st, when Israel con­ searching for weapons and shafts leading mit in Saudi Arabia this month Arab and
sented to allow in aid deliveries via Egypt, to Hamas's tunnels. An officer explains the Muslim countries demanded an end to the
around 1,200 trucks have brought food, methodical procedure. Suspect buildings fighting (see next article).
medicine and other essentials through the are targeted with tanks or air strikes. Then, Some Western leaders have begun to
Rafah crossing (before the war, around 500 along with the dogs and sappers, soldiers echo that demand. Emmanuel Macron, the
entered Gaza each day) . Many people in the conduct inspections. They are not allowed French president, called for a ceasefire in
south are skipping meals and struggling to to venture into the tun nels. More shafts are an interview with the B B C . Joe Eiden still
find clean water. With shipments of fuel al­ constantly being found. rejects a permanent truce, though he is un­
most totally prohibited by Israel, some Pal­ Weapons and explosives left behind in der pressure from some in his party to
estinians have taken to burning furniture houses indicate that Hamas fighters left in push for a ceasefire. Talks are taking place
as firewood to cook. a hurry. It is unclear where they have gone. about a pause in the fighting in exchange
The lack of fuel has paralysed basic ser­ Some may be trying to survive in what is for the release of some of the hostages.
vices. Almost two-thirds of health-care fa­ A less brutal war could ease that pres­
cilities have stopped working. Sewage­ Reported Israeli
sure. The Palestinian death toll shot up by
pumping stations are offline. The Interna­ milita ry operations hundreds each day during the first weeks
tional Rescue Committee says that water­ 19:00 GMT, Nov 15th 2023 of the war. In recent days, though, the ca­
borne diseases like cholera and typhoid Erez crossin g sualty rate has decreased significantly, as
will inevitably start to spread. On Novem­ there is almost no one left in the north.
- - - - - - - - - -�
♦---- , -
ber 14th the U N said that aid deliveries : That could buy Israel more time to contin­
would soon cease; it lacked enough fuel I
I ue its ground campaign. So would a greatly
even to operate forklifts. 1
Refugee / expanded humanitarian effort.
!camp ,'
The next day a tanker with 23,000 litres \
I
I Israel must also consider what comes
of diesel entered Gaza from Egypt, the first I
I next in Gaza, something Mr Netanyahu has
AI-Shati refugee camp
such shipment Israel has allowed since the so far refused to do. For now, Hamas has
I

AI-Shifa hospital Gaza :

war began. That was better than nothing­ city : lost its ability to rule. It may also have lost
but barely. Israeli restrictions mean the I

'
I the support of the people it once governed.
fuel can be used only by the U N , not by hos­ I
I " [Gazans] blame Hamas for bringing this
pitals, where generators have run dry. Tom tragedy upon them," says an Israeli intelli­
I
I
I

White, the director of the U N aid agency in f � ( I S RA E L gence officer accompanying troops inside
Gaza, says the delivery covered just 9% of the strip. That is what one would expect the
his organisation's daily needs. Wad i Gaza riverbed 1/ t. l, l ,- :� I D F to say-but it rings true.
Burei/ ,
Heavy winter rains have also arrived. � ( Even before the war, it was difficult to
Some Palestinians found their tents had gauge public opinion in Gaza: Hamas ruled
I
I
I

collapsed during a downpour on Novem­ G a za Str i p ' I

as an authoritarian one-party state, and the
ber 14th; others are sleeping in the mud.
I
' last Palestinian parliamentary elections
,..
\

December and January are reliably cold ', were in 2006. It is even harder now. Anec­
and wet in Gaza, with night-time tempera­ Mediterra n e a n ... ... , , , dotal evidence, though, suggests that
tures dipping to 8° C. Sea ...
', , many people in Gaza are furious at their
Before the war began, around two­ \
ostensible rulers. Reached by phone in
I ,'
\

thirds of the trucks entering Gaza went I southern Gaza in recent days, numerous
through Kerem Shalom, a crossing with Is­ Palestinians described scenes of anger
I
I

rael. It has been closed since October 7th. ''

I

aimed at Hamas. Policemen have been

'
There is little support in Israel for helping I
I
I cursed and beaten while trying to jump
Gazans after Hamas's atrocities, and the I
I
queues for food and water.
far-right parties in Binyamin Netanyahu's That is not to say desperate Gazans feel
I
I
I

government are adamantly opposed to it. any warmth for Israel. Hamas was born in
I
I
I

So supplies must take a circuitous route Rafah c rossing ♦

I
Gaza; its most influential leaders, Mr Sin­
�
through Egypt. They arrive in its North Si­ Kerem war and Mr Deif, grew up in the refugee
nai province. Then they are trucked to an
Israeli border crossing, to be inspected for
EGYPT Sha lom
' N
camp near Khan Younis, the city that now
hosts untold Gazans displaced from the
arms, and then back to Rafah. The detour north. Israel may have dealt the group a fa­
adds 100km to the journey, and Rafah is Popul ation density, 2020 Low H igh tal blow. But a long period of miserable dis­
open for only a few hours each day. "Relief Sou rces: I nstitute for the Study of War; AEl's Critical placement would ensure that something
Threats Project; OCHA; Europea n Com mission; OpenStreetMa p
organisations find it very difficult to oper- else rises in its stead. ■
 The Economist November 18th 2023 M id d i e East & Africa 39

Western countries to accelerate their tran­

sition away from oil.
The outcome of the summit was divi­
sive. Some Arabs were pleased with the
tough rhetoric; others complained that
their governments are too passive about
the war. Take away military threats or eco­
nomic sanctions, and all that is left is
tough talk.
Everyone is acting out of self-interest.
The Saudis decided to go ahead with Ri­
yadh Season, an annual festival that is part
of Muhammad bin Salman's plan to loosen
the kingdom's cultural strictures. That has
brought them a heap of criticism: the
crown prince wants people in Riyadh to
have fun while people in Gaza are dying.
Such condemnation rankles with the Sau­
dis, who feel that they are being singled
out, as if they alone are partying while the
rest of the region mourns.
The M idd le East Yet much of the region is trying to act as
if it is business as usual. Even Iran has so
The region reacts far allowed a measure of pragmatism to re­
strain its actions. Though its militias have
carried out regular attacks on Israeli and
American targets, it has decided not to
waste Hizbullah, the Lebanese Shia group
D U BAI
that is its most powerful proxy, on an all­
Despite their condemnation of Israel, many Arab governments
out battle to support the Palestinians. On
would like to see Hamas gone
the sidelines of the summit Prince Mu­
HEY A L L
Tall want want the war to end. And they
someone else to end it. That
summit was revealing. Deep contradic­
tions sit beside the regional reaction to the
hammad held talks with Mr Raisi, their
first face-to-face meeting and the first visit
was the message, at once banal and contro­ war. Many Gulf states, for example, would to the kingdom by an Iranian president
versial, from the leaders of the 22-member like Israel to get rid of Hamas, even as they since 2012. It was a sign that the detente
Arab League and the Organisation of Islam­ fear that doing so will awaken extremism they struck in March still stands. No one
ic Co-operation (0 1 c) , a grouping of 57 in their own countries. They want to see wants a regional war-at least not now.
mostly Muslim-majority states. It was all Iran's "axis of resistance" of proxy militias In the long run, though, the events of
to show from an extraordinary summit on wounded, but worry about being caught in the past six weeks are a reminder that the
November nth in Riyadh, the Saudi capital. the crossfire. For several years they have Middle East's recent calm is fragile. The re­
The meeting came more than a month promoted the narrati ve of a new Middle gion is still at a crossroads between end­
into a Gaza war that remains a fixture on East, focused on economics rather than less conflict and ending its conflicts, and
television screens and in conversations ideology. They fret that a long war in Gaza the Gaza war has only sharpened the
across the Middle East. The plight of the will upset such plans. choice. "If the peace camp fails, it is only a
Palestinians captures Arab attention and Ebrahim Raisi, Iran's hawkish presi­ matter of time" before a wider war comes,
inflames emotion in a way that the plight dent, spoke for almost 40 minutes at the says Mohammed Alyahya, a Saudi fellow at
of Sudanese or Yemenis or Syrians does summit; beneath his clerical robe he wore the Belfer Centre at Harvard University. But
not. The joint summit ended with a sharp a keffiyeh, the headscarf that is a symbol of for it to succeed, Israel would have to make
statement reflecting that anger: it called Palestinian identity. At one point he urged concessions. That may seem far-fetched.
for an immediate ceasefire, implored Muslim countries to send weapons to the Although nothing would undermine Iran
member-states to "break the siege on Gaza" Palestinians. That suggestion was politely and its proxies more than a peace deal with
and urged an arms embargo on Israel. ignored. Several other participants urged the Palestinians, a right-wing Israeli gov­
It would be easy to dismiss the gather­ diplomatic and economic sanctions on Is­ ernment and a discredited Palestinian one
ing as a talking-shop, which the Arab rael but those, too, were swatted away. do not seem poised to revive the moribund
League often is. Several leaders denounced A few Arab countries have recalled their peace process.
the West's double standards when it comes ambassadors to Israel, but those with dip­ However peace talks are the best hope
to Palestinians. Fair enough. Yet they did lomatic ties are unwilling to sever them. other Arab states can muster. America has
so at a summit where Bashar al-Assad, one They have also ruled out using oil as a pushed them to commit to a multinational
of this century's worst war criminals, was weapon, as they did in 1973, when OP EC im­ force to secure Gaza after the war. At a press
invited to pontificate about Israeli war posed an embargo on countries that sup­ conference after the Riyadh summit an ex­
crimes: their own bit of hypocrisy. Parts of ported Israel during the Yorn Kippur war. asperated Faisal bin Parhan, the Saudi for­
the final communique were similarly iron­ "That is not on the table today," said Khalid eign minister, told reporters to stop asking
ic. Far from breaking Gaza's siege, Egypt al-Falih, the Saudi investment minister, at him about plans for a post-war Gaza. "The
has helped maintain it for almost two de­ another conference earlier this month. The only future, and this is the unifying posi­
cades. No one in the OIC sells weapons to Saudis need many years of stable oil rev­ tion of the Arab [world] , is an immediate
Israel-though some member-states do enue to finance their plans for economic ceasefire," he said. The longer the war drags
buy them from Israel. diversification. The last thing they want to on, Arab diplomats argue, the harder it will
Read between the lines, though, and the do is force an embargo that would spur be to imagine what comes next. ■
40 Middle East & Africa The Economist N ovember 18th 2023

Suda n The RS F's gains have been most dramat­

ic in Darfur. Since the end of the rai ny sea­
The forgotten war son about a month ago it has taken three of
the region's five main cities. Major military
bases have been captu red by the group or
deserted by SAF soldiers.
In October the RS F took Nyala, Sudan's
CAPE TOWN
second-largest city and a staging post for
arms from the CAR. SAF defences collapsed
While the world looks away and dithers, a genocidal militia is winning
after a pitched battle with a force led by

A D I STRACT E D WOR L D has paid little at­

tention to Sudan since war broke out i n
Africa's third-largest country in Apri l . The
sised from the Janjaweed militia that
slau ghtered black Africans in the 2000s.
And things could soon get worse. I n re­
Abdelrahim Hamdan Dagalo, the brother
and deputy of the RS F's command er, Mu­
hammad Hamdan Dagalo (better known as
West is focused on Ukraine's counter-of­ cent weeks the RSF has chalked up several Hemedti) . Three days of looting ensued .
fensive, China's war games and the war i n major victories. Military analysts suggest it Salah al-Din Limoun i , a lawyer in Nyala,
Gaza. African leaders, preoccupied b y their could try to take the res t of the country. says much of the city has been laid to
own domestic problems, have shown all Conflict monitors fear more genocidal vio­ waste. Residents are without electricity
the u rgency of a camel crossing the Sahara. lence. For those paying attention, the and water su pplies are disrupted.
The consequences of neglect are be­ stakes a re only getting higher. In early November a renewed assault by
coming starker. The conflict between e rst­ When war broke out, many foresaw the RS F brought the fall of a SAF garrison in
while bedfellows-the Rapid Support Forc­ stalemate. Yet today the RS F is winning. In the town of Ardamata, some 10km to the
es (RS F) , a paramil i tary group, and the Su­ August, in a sign of the RS F's tightening north of el-Geneina, the capital of west
danese Armed Forces (SAF) , the regu lar ar­ grip on Khartoum, General Abdel Fattah al­ Darfur state. The attacks by the RS F's new
my- is destroying the state they seized Burhan, the SAF's head , fled from his army armed d rones, which made short work of
together in 2021, in a coup aimed at pre­ headquarters in the capital . " Khartoum is the army's heavy artillery, followed clashes
venting a transition to democratic govern­ not the cap ital city any more," says Entisar earlier in the war that had forced the SAF to
ment. The IMF forecasts that Su dan's econ­ Abdelsadig of Search for Common G rou nd, retreat to its base.
omy will shrink by nearly a fifth this year. an international NGO based in Washi ngton
The war is deepening geopolitical rivalries and B russels. There is heavy fighting with­ Mass murder
in north-east Africa and the Persian Gulf. in the city. The RSF is reported to be close to Not for the fi rst time, in the days that fol­
Sudan has the world's largest nu mber of captu ring the army's remaining positions lowed the RSF and allied Arab militias car­
internal refugees. About 6 . 3 m have been in the capital. ried out a vicious campaign of killings
displaced si nce Ap ril alone, adding to the Though the SAF controls most of the ag­ against the local Masalit people, a black Af­
3.7m Sudanese who had al ready fled thei r ricultu ral lands in the east and the oil ter­ rican ethnic group. Men were separated
homes in previous conflicts and the 1.1m minal in Port Sudan on the Red Sea, the RS F from women, rou nded up and shot. Tribal
foreigners who had taken refuge in Sudan. has the gold mines i n the west and control leaders were arrested or assassinated. Vid­
Some 1.4m Sudanese have fled to neigh­ over the borders with Chad and the Central eos show young men c rawl ing on all fours
bouring countries s ince the war began. Aid African Republic (CAR) . It is extending its as sold iers beat and whip them; some show
agencies say that more than 6m people are control of the oil pipeline from South Su­ bodies scattered on the streets. U N officials
"one step away from famine". Two decades dan, on which Sudan's government de­ estimate that at least 800 people were
after ethnic cleansing in Darfur, a region in pends for transit fees. I n recent weeks the killed; local monitors put the toll as high as
the west of the country about twice the size RSF has been sighted in White Nile and Ge­ 1,300. These attacks follow earlier system­
of Britain, there is agai n credible evidence zira states, hi storically two of the army's atic massacres in el-Genei na, peaking in
of genocide-by the RSF, which metasta- strongholds (see map on next page) . June, that coincided with a mass exodus of
refugees to Chad. The UN is i nvestigating
more than a dozen mass graves . The RS F
denies any involvement in attacks on civil­
ians and said it is "firmly against any abus­
es or violations against any person".
Zal<ia Zakaria Alsafi, a local j ournalist,
says that the paramilitary troops headed to
Adarmata after the army base had fallen,
preventing Masalit men from leaving and
"searching for people by name to be killed ".
She says she saw 25 civilians being lined up
and shot. Hafez Idris, a lawyer in Ardama­
ta, says that at night the RSF has been bury­
ing the corpses that l itter the street. "There
are p i les of bodies which are visible from
outer space," says Nathaniel Raymond, a
conflict monito r at Yale University.
The R S F is at the gates of el-Fasher,
North Darfur's capital. Some of its troops
are on the north side, terrifying locals and
looting homes. All the while, a much larger
force is closing i n from the south. "They
are mobilising," warns Nimr Mohammed
W h i l e the world looks away Abdul-Rahman, the state governor. ►►
 -
The Economist N ovem ber 18th 2023 M id d i e East & Africa 41

► Meanwh ile, the SAF is holed up in bar- cial forces may have carried out missions
racks. Supplies of water, food and medi­ LI BYA 11111"'
against the RSF .) "While ongoing conflicts
cine are running out. Frightened residents Red i n Gaza and Ukraine have captu red the at­
are trying to flee. If Mr Dagalo conquers el­ Nile tention of the world," he argues, "the geo­
Fasher he will be able to claim control of all political ripple effects of Sudan's collapse
of Darfur and to secure a critical route for CHAD Darfur are being woefully underestimated."
supplies of fuel and arms from Libya. A International efforts to try to stop the
Western diplomat adds: "It is a matter of bloodshed have begun . Last month Saudi
time before it goes." Arabia, alongside America, restarted talks
The presence of tens, if not hundreds, in Jeddah between representatives of the
of thousands of civilians displaced from RS F and the SAF. On paper there was an
other parts of Darfu r, as well as heavi ly agreement to improve access for humani­
armed militias from the Zaghawa, another tarians. But it is hard to see how it has
ethnically African group, raise the pros­ made much difference.
400 km
pect of a humanitarian catastrophe in el­ Fighting was raging in Darfur while the
Fasher. " I f there were to be a fight it wou ld Areas of control, Nov 1 st 2023 belligerent bigwigs talked in Saudi Arabia.

[g_]
likely be very, very bloody and put civil ians ■ RSF SAF M ilitias and The RS F, and, accord ing to Emirati officials
in grave peril ," warns the U N 's Toby Har­ . rebel groups in private, its backers, see no point in a
So urce: Thomas v a n L1 nge
ward. Antony Blinken, America's secretary truce in a war it is winning. The SAF, mean­
of state, says an RS F attack would put hun­ while, maintains that its foe must disarm
dreds of thousands in "extreme danger". Anarchy, one way or another, would and wi thd raw to its bases . "There is a glar­
have profound consequences. A European ing mis match between the weakness of
Death on the Nile di plomat describes a scenario in which a [the SAF's] military position and their hi­
The RS F's advances in large part reflect the fractured Sudan is torn apart by a broader larious maxi malist negotiating position,"
u neven su pport outsiders have given the regional rival ry from the Gulf to the Horn says another European diplomat.
two sides . The Un ited Arab Em irates (UAE) of Africa. On one side there is a bloc backed No expert thinks it is easy to find a deal
reported ly provides the RS F with weapons, by the DAE-potentially encompassing that would suit such mendacious and self­
armoured vehicles and drones via Chad, Abiy Ahmed , Ethiopia's prime minister, interested combatants , never mind one
though there has been a UN arms embargo the RSF's Sudan, chu nks of Somalia and that would also take accou nt of the civi lian
on Darfur si nce the early 2000s. By one Chad . On the other is a Saud i-su pported victims of the generals' greed . Even so, the
count there were 168 airlifts from the UAE camp, embracing the SAF's Sudan, Dj ibou­ international response has still been
between May and September. (The UAE has ti , Eritrea and E gypt. "anaemic and ad hoe", says Mr Hudson.
denied sending arms to "any of the warring Cameron Hudson, a former American The UN Secu rity Cou ncil is paralysed and
parties".) Anti-ai rcraft missiles, reportedly official, imagines a scenario in which "tens the organ isation's leadership has shown
supplied by the Wagner Group, a Russian of millions of Sudanese flee across the con­ far less interest in Sudan than it has i n Ga­
mercenary outfit, have helped the RS F to tinent and the Red Sea to escape the cou n­ za. A joint African Union (AU) - U N peace­
erode the SAF's advantage in air power. try's descent into warlordism and ethnic­ keep ing mission to Darfu r withdrew in
Though Egypt has sporadically helped mil itia violence." Sudan's u ngoverned 2021 in the belief that blue hel mets were no
its fellow mil itary regime-most recently, spaces could draw in j ihadists, who are longer unnecessary. The AU and the conti­
say sources, by bombing a bridge u sed by currently fighting in the Sahe!, and Rus­ nent's leaders have been all but silent in
the RSF in Khartou m-it has done much sian mercenaries who are keen to give the the face of the sort of atrocities it once
less than the Em iratis. I ts government has Kremlin its long-sought foothold in Port pledged to stop. I GAD, a regional group, has
been distracted by an economic crisis at Sudan. (CN N has reported that, in response been weak, though Kenya's president, Wil­
home, which it wants the UAE 's help to fix, to Russian activity in Sudan, Ukraine's spe- liam Ruto, is keen to resume its efforts. He
and then by the war in Gaza to its north. met Mr Bu rhan in Nairobi on November
What might come next? Some analysts 13th. Neither the UAE nor Egypt has taken
fear a " Libya scenario" where the cou ntry is part in the talks in J eddah.
cleft i nto two parts , one on either side of Western officials claim that they have
the Nile. Yet Hemedti may not settle for a not neglected the conflict, noting that the
landlocked Darfur and a shell-shocked world is more complex than it was in the
capital . If the RSF takes Khartou m, then the 2000s, when America could more easily
next stop could be Port Sudan on the Red lead international responses such as the
Sea, a key location for both the RS F and its one i n Darfu r and i n what would become
Emirati backers. "The RS F cannot declare South Sudan. Yet it is hard to make the case
victory without access to the sea," says that Sudan has attracted sufficient urgency
Kholood Khair of Confluence Advisory, a or creativity. The White House has adopted
Sudanese think-tank. a de facto "do not d isturb us" policy, says
Even if the RSF makes further advances, Alex de Waal , a British researcher. Sudan is
however, its writ is u n likely to stretch not going to be high on America's agenda
across the whole country. Myriad smaller in its d iscussions with the UAE or Saudi
rebel groups would survive. The SAF will Arabia, especially since Hamas erupted
not evaporate; its hitherto reluctant back­ from Gaza on October 7th.
ers may stiffen their backbone if the SAF is The wars i n Ukraine and the Middle
about to lose its de facto capital on the Red East have d rawn global attention. Mean­
Sea. And the RSF militiamen are not exactly while i n Africa the grim effects of a huge
administrators. "They don't have a govern­ state's collapse are passing almost u nno­
ing strategy," says Ms Khair. "They can rule ticed. "Sudan has died ," says Mr Raymond.
but they can't govern." A l a nd of widows ''.And nobody wrote the obituary." ■
42 Midd le East & Africa The Economist N ovem ber 18th 2023

Aisle be there for you capital of Bayelsa State, the smallest of Ni­
geria's 36 states, rather than Abuja, the fed­
Africa's supermarket revolution eral capital, or Lagos, Nigeria's sprawling
commercial capital. "The Lagos consumer
has become a diva," explains Mr Enunwa.
"They are spoiled for choice." His decision
to start in a secondary city speaks to an un­
RUAKA
derappreciated trend. The urbanisation of
Africa-the continent where cities are
The rise of local chains reflects deeper trends on the continent
growing at the fastest rate-is often depict­

T o WA L K A LO N G the main road in Ruaka,

a town on the outskirts of Nairobi, is to
fixed hours. It often locates branches on
the left-hand side of the road leading out of
ed as a story of megacities like Lagos. But
more Africans (200m) live in towns with
glimpse the extremes of African shopping. the city, so that punters returning to swell­ populations of between 30,000 and
Market stalls selling vegetables and char­ ing satellite towns can pop in on their way 300,000 than in cities of more than 3m
coal spill onto the street. In the distance is home. Shelves in downtown stores are re­ (140m) . And small-town Africa is under­
a plush mall with a Carrefour, one of 20 plete with takeaways for Nairobi's yuppies, served by formal retail.
franchises of the French supermarket in who are marrying later, and living without
Kenya's capital. kids in newly built flats Living in a material world
Further up, though, is a Quickmart. The Kazyon capitalises on similar trends in The size of this market has also encouraged
Kenyan supermarket chain has 59 branch­ Egypt. The discount retailer, founded in Jumia, once dubbed the "Amazon of Afri­
es, an increase from 25 in 2020. It is not as 2014, has about 1,000 shops. It competes ca", to change tack. When it was founded in
fancy as the Carrefour, but nor is it as cha­ with traditional markets for customers, 2012 it sold investors on the prospect of de­
otic as the roadside kiosks. "We are a shop targeting unfashionable parts of cities. Its livering to the doors of millions of African
that is among the people," says Peter Kan­ loyalty scheme is the largest in any country online shoppers. They have proved elu­
g'iri, the C EO . "That's the difference." in Africa, says Hassan Heikal, its founder. sive; Jumia's share price has fallen by 90%
Since it opened in 2015 in Nigeria, Afri­ in almost five years. "I've read a lot of arti­
Lost in the supermarket ca's most populous country, Marketsquare cles about Jumia that say there is not
On average Africans buy more than 70% of has expanded to nearly 30 stores. Ebele enough demand in Africa," says Francis
their food, drink and cosmetics from infor­ Enunwa, the C EO , saw a huge potential cus­ Dufay, who became the C EO earlier this
mal vendors (see chart). Supermarkets tomer base among the 97% of Nigerians year. "The reality is much more complicat­
have historically served an affluent elite, who shop at open-air markets. "These are ed. The demand is scattered." He says that
opting not to compete for poorer custom­ not the nicest places to shop: dirty, untidy, it used to be the view of some in Abidjan,
ers. But local chains such as Quickmart disorganised, unsafe," he argues. "People where he ran Jumia's local operations, that
suggest that it is possible to fill the missing are screaming at you. It can literally give Ivorians living outside the capital were "a
middle in African retail. Their success re­ you a headache." bunch of peasants running naked who are
flects deeper changes in African econo­ "I had a bit of a nationalistic streak as never going to own a TV ".
mies and demography. well," says Mr Enunwa. In 2021 Shoprite, a Today Jumia gets almost half of its or­
Analysts have long tried to measure Af­ South African retailer, sold its outlets in ders in Ivory Coast from "up country". Pop­
rica's "middle class" by counting people Nigeria, a tacit admission that it had failed ular items include weed-sprayers, shoes,
within somewhat arbitrary income ranges. to crack the market. Its struggles had sever­ blenders and other electrical goods. "We
Newer analysis has incorporated data on al causes, including a decision to sign leas­ are literally bringing fridges to people for
ownership of bourgeois assets such as es priced in dollars, so the chain was stung the first time," says Mr Dufay. In small
fridges. Last year Fraym, an analytics firm, when the naira depreciated. It also found it towns teams of "}Force agents" help shop­
estimated that there were 330m people in tricky to repatriate funds. Yet at root, ar­ pers order goods and collect them from
what it called Africa's "consumer class", gues Mr Enunwa, was a belief that what bright orange pickup stations. In an ironic
roughly a quarter of the continent's popu­ worked in South Africa would work in Ni­ twist for one of Africa's e-commerce
lation of 1.3bn. Two-thirds were in just five geria. Its shops imported many South Afri­ giants, Jumia often prints catalogues for

-
countries (Egypt, Nigeria, South Africa, can items. "These were products that Nige­ these customers, many of whom often pay
Morocco and Algeria); most of the other rians did not know or care about." for their goods in cash.
third were spread across a further 15 states, Marketsquare began in Yenagoa, the The quiet revolution in African retail
including Kenya. has attracted investors' attention. Quick­
Yet any analysis, however sophisticat­ mart, Marketsquare and Kazyon are all
ed, risks implying there are tens of mil­ Trolley stars backed by private equity (P E) . Venture cap­
lions of Africans able to pile their trolleys Modern retail*, m a rket share, % italists and P E funds are also taking stakes
high. Even when adjusted for the different 75 in startups that modernise informal retail­
prices of goods in different places (so­ ers' payments systems and supply chains.
called "purchasing-power parity" ) , average South Africa FORECAST These investors are betting not only
G D P per person in sub-Saharan Africa in 50 that there will be more Africans with mon­
2022 was $4,400, according to the World ey to spend in the future, but that shopping
Bank, almost half of India's and about one­ habits are changing now. "The notion of
twelfth of Britain's. Annualised food-price 25 the 'rise of the African middle class' can
inflation in the region has been at least 10% give you distorted strategy," argues Charles
since Russia's invasion of Ukraine, squeez­ Morocco
Mwebeiha, a Ugandan partner and co­
ing household budgets. The average basket N igeria founder of Sango Capital, a fund based in
0
of goods bought at Quickmart is worth $6. Johannesburg. "You can't just look at what
201 5 18 20 22 24 26 28 30
Twenty-four of Quickmart's branches Africans have to spend-but how they
*I ncludes superm arkets and conven ience stores
are open 24 hours a day, serving the Ken­ Sou rce: Boston Co nsu lting G ro up
spend it." ■
yans who work in informal trades with no
 Vote-a-rama! Democracy in the spotlight
Beyond Gaza Turmoil in the Middle East
Multipolar disorder An undeclared cold war
Europe steps up Trump-proofing Ukraine
Green giants The new geopolitics of energy
ChatGPT at work A rtifical intelligence gets real
T H E WORLD AH EAD 2024 3

6 From the editor U N ITED STATES CH I NA EUROPE

21 U npopularity contest 9 An undeclared cold war 7 Ukraine fights on
L EAD E RS 22 Who to watch o End of the road? 8 Russia's pe rpetual war
z Democracy in danger 24 America's economy 41 Xi and the yes-men 59 Trouble i n t h e Caucasus
� Mu ltipolar disorder 24 Stretched supe rpower 42 China's economy 59 Baltics and Nord ics
.2. Middle East in turmoil 25 Free speech onl ine 44 Foreign firms' woes 6 0 Pol i tics and Olymp ics
10 Whither U kraine? 26 Small towns get bigger 44 Disaffected youth 6 0 Cent rists v populists
11 America's fateful choice 26 Cricket in America 61 E u rope's economies
12 The world economy 27 Cities get hotter MI D D LE EAST & AFRICA 62 Dara Massicot on
14 AI goes to work 28 Niall Ferguson and 45 Beyond Gaza Ukraine's trau ma
15 The green transition Condoleezza Rice on the 46 Despots v democracy
16 Beware "stealthflation" new cold war 47 The Palestinians' future B RITAI N
_£ Middle Eastern mus ic 63 B ritain votes
48 I ran's future 64 Tories in trouble
65
DRAW I N G O N 2024 TH E AM ERI CAS
17 The year ahead in colou r 29 Latin America's politics 48 Africa's economies B ritai n's economy
30 Mexican democracy 49 Chaos in the Sahe! 66 Ditching the King
S U PE RFORECASTS 31 Thriving startu ps 50 South Africa's election 6 6 The ailing N H S
� Forecasts for key events 31 G reen resources 68 Rachel Reeves on
32 Canadian polities I NTERNATIONAL Labour's economic plans
51 How to rig an election
ASIA 52 Global temperatu res
33 Ind ia's election 53 Green metals
34 I nd ian technology 54 Expanding B R I CS
35 Taiwan's election 54 Deep-sea mining
36 Central Asia's ties .22. A new arms race?
36 Energy l inkages 56 Regu lating A I
37 Indonesia after J okowi 56 How we d id in 2 02 3
38 S. Jaishankar on India's
- growing i n fluence

The Worl d Ah ead, The Ade l p h i, 1-11 J o h n Ada m Street, London WC2N 6HT. +44 (o) 20 7830 7000. eco n o m ist.com/worl d a head2024
worlda headed itor@econom ist.co m . Ed itorial close date: Nove m be r 3rd 2023
4 CO N T E NTS T H E WO RLD A H EAD 2024

TRE N DLI N E S FINANCE SCIENCE & TECH NOLOGY GRAPHIC DETAI L

69 A special section of trends 8 Strong labou r markets 2! What's n ext for A I 101 There is more to
to watch, in charts 84 G lobal minimum tax _22: Fighting obesity democracy than voting
� Poor cou ntries' debt 21 New d rugs to watch
BUSI NESS � Rol lercoaster markets 9 4 The year in space OBITUARY
n Decarbo n i s i ng i n dustry -
88 Trade and tari ffs 22_ A solar eclipse 102 Reflections on
,M_ E nergy islands � Are central bank digital 2i A global crop pandem i c paperless ness
� Companies adopt AI currencies dead? � Jennifer Holmgren on
-
76 The next tech platform -89 Commodities to watch rei nventi ng the carbon
]i u s -China chip wars economy
'1 1 Chi nese EVs pull ahead
� Going back to the office CULTU RE
78 Tourism rebounds -
97 A l 's im pact on Hollywood
7.:i. I ndian investment � New m useums
7.:l Sel f-drivi ng cars 99 Books to watch for
80 Decoupl ing from China 99 Musicals' moment
82 Timnit Gebru on labour -
100 African arch itectu re
and AI 100 Music in China

I
The
Eco nomist
'

EDITO R: Tom Standage MANAGING EDITOR: Yvon ne Ryan D EPUTY EDITORS: Rob Gifford, Leo Abruzzese
COUNTRIES EDITOR: Alasdair Ross I N DUSTRIES EDITO R: Martin Adams INDUSTRI ES CONTRIB UTORS: Barsali Bhattacha ryya, Ana Nicholls
CREATIVE DIRECTIOR: Stephen Petch ART DIRECTORS: Maddie Roberts, Cameron Weaver, Anita Wright PICTURE EDITOR: Joa nne Banks CHARTS/MAPS: Helen Atkinson, Elizabeth Lees, Sarah Leo, Matt McLean, Adam Meara, Lloyd Parker
RESEARCH : Lisa Davies, David G riffiths, David McKelvey, Christopher Wilson EDITORIAL EAG LE EYES: Sheila Allen, James Baer, Patrick Lane, Simon Strachan
M EDIA SALES: Phil Wrigley PRODUCTION: Andrew Rollings, Mela nie Smith, Bra ndy Ritenou r

ILLUSTRATIO NS: Cover: Jerome Berthier, Inside: Alvaro Bern is, Cristiana Coucei ro, Lau ren Crow, Ben Denzer, Mel H aasch, Olivier Heiligers, Shi ra l nbar, Sam Isla nd, Cha nta l Jahchan, Kai, Nate Kitch,
Alberto Miranda, Mariano Pascua l, Celina Pereira, Agnes Rica rt, Rob en Robin, Israel G Va rgas, George Wylesol

PHOTOGRAP HS: Nico Froehlich; David G uttenfelder/New York Times/Redux/Eyevine; Getty Images; Jos h Valcarcel/ NASA, Born pas & Parr; Ademola Olaniran and Jide Atobatele;
The Metals Company/Richard Ba ron; REX Shutterstock; Prod Antzou lis; Olivier Cul mann/Tendance Floue
6 T H E WO RLD A H EA D 2024

energy-resources map.
Lithium, copper and nickel
The World Ahead 2024 matter much more, while oil
and gas, and the regions that
From the editor dominate their supply, matter
less. Competition for green
resources is reshaping
geopolitics and trade, and
creating some unexpected

Larmed at you fast.

I F E COM E S
Whether it's the upsurge in
conflict, the redrawing
winners and losers.
Meanwhile, a "greenlash" is
under way among voters who
of the global energy-resources regard climate-friendly
map or rapid progress in policies as an elite conspiracy
artificial intelligence (AI ), the against ordinary people.
world is changing at mind­ 8 . Economic uncertainty.
boggling speed. From the Western economies did better
situation in the Middle East to than expected in 2023 but are
the adoption of electric not out of the woods yet, and
vehicles to the treatment of interest rates staying "higher,
obesity, things look very for longer" will be painful for
different from the way they did companies and consumers
just a year or two ago. Our aim alike, even if recessions are
is to help you keep your avoided. (Keep an eye on the
worldview up to date-and tell banks, and their exposure to
you what might be coming commercial property, where
next. To kick things off, here things could go bad.) China
are ten themes to watch in the may fall into deflation.
coming year. 9 . AI gets real.
Businesses are adopting it,
1. Vote-a-rama! regulators are regulating it and
Elections all over the world, for techies continue to improve it.
more voters than ever before, Debate will intensify over the
will put a spotlight on the best regulatory approach-and
global state of democracy. whether arguments over
There will be more than 70 "existential risk" are a decoy
elections in 2024 in countries that benefits incumbents.
that are home to around 4.2bn Unexpected uses and abuses
people-for the first time, towards eventual EU member­ derailed by war in Ukraine and will keep popping up. Worries
more than half of the global ship. This is the right thing to now Gaza. Russia, too, is abound about Al's effect on
population. But while there is do, as well as insuring against distracted and losing jobs and potential for election
more voting than ever, there is the risk that Mr Trump regains influence. Frozen conflicts are meddling. Its biggest actual
not necessarily more power and withdraws support. thawing and local cold wars impact? Faster coding.
democracy: many elections 4. Middle East turmoil. are heating up around the 10 . Uniting the world?
will be neither free nor fair. Hamas's attack on Israel, and world. Instability in the Sahel Perhaps ideological
2 . America's global choice. Israel's retaliation against is rising. The world is differences will be put aside as
Voters, and the courts, will Gaza, have upended the region preparing for more conflict the world enjoys the Paris
give their verdicts on Donald and scotched the idea that the now that America's "unipolar Olympics, astronauts (maybe)
Trump, who has a one-in-three world could continue to ignore moment" has ended. looping around the Moon, and
chance of regaining the the Palestinians' plight. Will it 6. A second cold war. the men's T20 cricket World
presidency. The result may become a wider regional As China's growth has slowed, Cup. But it is just as likely that
come down to a few tens of conflict-or offer a new chance tensions rise over Taiwan, and those hoping for some global
thousands of voters in a for peace? For America, the America continues to limit unity will be stumped.
handful of swing states. But overstretched superpower, this Chinese access to advanced
the consequences will be is also a test of whether it can technologies, the "new cold Read on for more detail on all
global, affecting everything adapt to a more complex and war" rhetoric has hardened. these trends-and check out
from climate policy to military threatening world. But Western companies trying "Trendlines", a data-heavy
support for Ukraine. Indeed, 5. Multipolar disorder. to reduce their supply chains' selection of noteworthy
election-rigging in Russia may America's plan to pivot to Asia, dependency on China will find metrics to keep an eye on in
mean Vladimir Putin's fate and focus more on its rivalry it much easier said than done. 2024, from superhero movies
depends more on American with a rising China, has been Meanwhile both camps will to space-launch costs. We hope
voters than Russian ones. woo the "middle powers" of you will find The World Ahead
3. Step up, Europe. the global south, not least for 2 0 24 a helpful guide to
Accordingly, Europe must step Vladimir Putin's fate their green resources. navigating the coming year. •
up and provide Ukraine with 7. New energy geography.
the military and economic
will depend more on The clean-energy transition is
backing needed for a long American voters than minting new green super­ TOM STA N DAG E
fight, while laying out a path Russian ones powers and redrawing the Editor, The World Ahead 2 02 4
T H E WORLD A H EAD 2024 7

Democracy in danger

2 024 will be a stressfu l year for anyone who ca res about liberal democracy, pred icts Za nny Minton Beddoes

Africa will be the continent with the most elec­

tions, but its voters are increasingly disillusioned with
how democracy works. Coups are becoming more
common: nine regimes have seized power by force
since 2020. Polls suggest that growing numbers of Af­
ricans might be willing to go along with a military gov­
ernment. South Africa's election will be a reminder of
serial disappointment. Three decades after the AN C
swept to power in the first post-apartheid election, it
will limp to power again in a country ground down by
corruption, crime and unemployment.
The news is not all bad. Mexico will elect its first fe­
male president: both leading contenders are women,
and less populist than the incumbent. British voters
will (at last) have a choice between two competent can­
didates. Afteri 4 y ears of Tory rule a Labour win is like­

M ORE THAN half the people on the planet live in

countries that will hold nationwide elections in
2024, the first time this milestone has been reached.
ly, but few outside Britain will notice much change.
Some elections will have a disproportionate impact
beyond their country's borders. Whether Taiwan's 18m
Based on recent patterns of voter turnout, close to 2bn voters plump for the incumbent Democratic Progres­
people in more than 70 countries will head to the polls. sive Party or the Kuomintang ( KMT) , the more China­
Ballots will be cast from Britain to Bangladesh, from friendly opposition, will affect relations across the
India to Indonesia. Yet what sounds like it should be a Taiwan Strait and, as a result, the level of us-China ten­
triumphant year for democracy will be the opposite. sions. In the short term a KMT victory might reduce the
Many elections will entrench illiberal rulers. odds of conflict. But in the medium term Taiwanese
Others will reward the corrupt and incompetent. By far complacency might later increase the risk of Chinese
the most important contest, America's presidential adventurism and, potentially, a great-power clash.
election, will be so poisonous and polarising that it Nothing, however, will compare to America's elec­
will cast a pall over global politics. Against a backdrop tion, either for grim spectacle or potential conse­
of conflict, from Ukraine to the Middle East, America's quences. It is hard to believe the most likely outcome
future direction-and with it the world order Ameri­ is a rematch between two old men, both of whom the
can leadership has hitherto underwritten-will be on majority of voters wish were not candidates.
the line. It will be a nerve-racking and dangerous year. Donald Trump's very candidacy undermines Amer­
Some elections will be obvious shams. In Belarus or ican democracy. That the Republican Party would
Rwanda, for instance, the only question is how close to nominate a man who tried to overturn the results of
100% the incumbent's vote-share will be. Having ille­ the previous presidential election dims America as a
gally changed the constitution to remove term limits democratic beacon. A second Trump term would
in 2020, Vladimir Putin will doubtless win a third con­ transform America into a loose cannon with isolation­
secutive term (and fifth overall) as Russia's president. ist tendencies at a time of grave geopolitical peril. His
Most ballots cast will be in Asia. Its biggest demo­ fondness for strongmen, particularly Mr Putin, sug­
cracies- Bangladesh, India and Indonesia-will all go gests that his boast to end the Russia-Ukraine conflict
to the polls. Unfortunately, the danger is of growing il­ in 24 hours would be at Ukraine's expense.
liberalism. Under Narendra Modi, India is enjoying re­ Mr Trump may not become the nominee, and if he
markable economic and geopolitical success, even as America's does, he may well lose. But the odds of a second Trump
the prime minister condones anti-Muslim chauvin­ poisonous and term are alarmingly high. The consequences could be
ism and a dismantling of institutional safeguards. In­ polarising catastrophic-for democracy and for the world. •
donesia's president, Joko Widodo, seems focused on
entrenching a political dynasty. Bangladesh has alrea­
election will
dy taken an authoritarian turn, with opposition lead­ cast a pall over ZA N N Y M I N TO N B E D D O E S Editor-in-chief,
ers jailed and no dissent brooked. global politics The Economist
8 L EA D E RS T H E WO RLD A H EA D 2024

Multipolar disorder

In 2024 the world m ust try to break a vicio us cycle of insecu rity, arg ues Pa trick Pa ulis

across the Middle East. In 2024 this zone of impunity

could expand further across Africa and Russia's flanks.
Second, a trio of trouble is emerging featuring Chi­
na, Iran and Russia. They have much less in common
than Western allies do, and China is far larger and
more integrated into the world economy than the
others. But their interests intersect: all want to under­
mine American legitimacy and to evade actual or po­
tential sanctions. China buys Russian and Iranian oil.
None has condemned Hamas or the invasion of Uk­
raine. Their collaboration is likely to expand into tech.
China is pioneering ways to bypass Western finance:
half of its trade is now in yuan. Iran exports drones to
Russia; China and Russia collaborate on nuclear­
warning systems and patrols in the Pacific. In 2024 the
world will learn how far this nascent club might go.
s 2023 D R EW to a close, wars were raging in Africa,
A Israel and Gaza, and Ukraine. These crises are ex­
plosive in their own right. Combine them with a pres­
The final threat is the fragility of the Western co­
alition. The response to Ukraine's invasion was exhila­
rating: America and Europe united, public opinion
idential race in America and 2024 promises to be a was supportive and the principles of the 1945 order
make-or-break year for the post-1945 world order. were defended, even if non-Western countries were
The 2020s were destined to be dangerou s. The not fully onboard. Now, with a military stalemate,
West's share of world G D P has fallen towards 50% for cracks are showing. In America, Republicans are divid­
the first time since the 19th century. Countries such as ed over funding for Ukraine. Israel's invasion of Gaza is
India and Turkey believe the global institutions creat­ even more divisive: it has split the EU and America,
ed after 1945 do not reflect their concerns. China and which has vetoed a U N ceasefire resolution, fuelling
Russia want to go further and subvert this system. claims of double standards and Western illegitimacy.
Though America's economy is still pre-eminent, its Other crises could expose more splits : would Europe
unipolar moment has ended. Allies in Europe and Ja­ join America in fighting to defend Taiwan?
pan are in relative economic decline. There is tepid How these threats play out in 2024 partly depends
support among the middle class for America's global on the performance of the West's autocratic competi­
role, and an isolationist tilt in the Republican Party. tors. Just as the very different regimes of China, Iran
At the start of 2023 America was busy adapting to and Russia share some interests, they have some simi­
this reality, implementing the Eiden administration's lar vulnerabilities. All face economic difficulties and
foreign policy. The idea was to be a more selective, rely on intensifying repression. Vladimir Pu tin faced a
even selfish, superpower. Prioritisation had meant mutiny in 2023; Ayatollah Ali Khamenei is 84 and has
quitting Afghanistan and shifting resources to Asia to no clear successor; Xi Jinping relies on purges. All this
counter China. Alliances were rejuvenated in the Pa­ could sap their vitality and their claim to have a rival
cific and in Europe, where NATO was expanded and Uk­ model that others should emulate.
raine kept afloat. Energy and tech embargoes were But America's election is key. An isolationist pres­
used to weaken adversaries, at little cost to the West. ident would not drop treaties overnight but will be
Domestic industrial subsidies, though inefficient, tested quickly: think of China "inspecting" Taiwanese
were potent: in mid-2023 American factory construc­ ships or Russia "reinterpreting" borders. If America's
tion hit its highest rate since the 1950s. commitment falters, Europe will soldier on in Ukraine
By some yardsticks-oil and grain prices, Western but will struggle to provide funding or military mus­
combat casualties-geopolitical risk is tolerable. Yet cle. Asian allies will placate China and bolster their de­
the new dynamic is one of instability. In the 1990s fences. Middle powers such as South Korea and Saudi
many countries aspired to a self-reinforcing cycle of Arabia may seek nuclear weapons.
freedom, market economics and rules-based globali­ If America elects an internationalist at the end of
sation. Now there is an unpredictable cycle of popu­ 2024, much of the world will breathe a sigh of relief.
lism, interventionist economics and transactional But America faces a long slog to stabilise and then re­
globalisation. As a result, three threats loom in 2024. new a system of international trade and security. The
First, there is a growing zone of impunity where to-do list includes European enlargement; deepening
neither global powers nor global institutions tread. co-operation with India; and a two-state solution be­
You can walk 6,000km from the Red Sea to the Atlantic The final threat tween Israel and the Palestinians. Perhaps one day his­
through six African countries that have faced coups in torians will talk of the post-2025 order. •
the past 36 months. Azerbaijan has ju st fought a war
is the fragility
against Armenia involving ethnic cleansing, without of the Western
much blowback. Iran's proxies thrive in failing states coalition PAT RI C K F O U L I S Foreign editor, The Economist
THE WORLD AHEAD 2024 LEADERS 9

Don't give up on peace in the Middle East

But the process of getting there will be alarmingly fragile, says Edward Carr

Hamas has recently been working to increase its influ­

ence, and where young Palestinians have lost faith in
the PA and its do-nothing, election-avoiding presi­
dent, Mahmoud Abbas.
If Hamas retains control of Gaza, and the West Bank
is in flames, Israel will not be safe. It will strike Gaza re­
peatedly, whenever Hamas seems a threat, lest another
attack take place. No Palestinian leader will be in a po­
sition to talk to it, even if they wished to. The Arab
world, whose backing is vital for peace, will want to
keep its distance. The Holy Land will be in a state of
permanent semi-war.
However, that does not have to be the outcome. The
operation to destroy Hamas and its tunnels could last
several months. Imagine that at the end of it, Israel is
satisfied that Hamas's rule over Gaza has been broken.

I F2023 WAS the year when the Palestinian conflict

shook the Middle East, 2024 will be the year when it
starts to become clear whether the Middle East can
Imagine that ordinary Palestinians will contemplate
the idea of living beside Israel in peace. And imagine
that even as the presidential campaign in America en­
shake the Palestinian conflict. Terrible as it is to write ters its final months, the Eiden administration still
after so much death, the region has not had a better has the drive and focus to undertake active diplomacy.
chance of peace in two decades. Unfortunately, nei­ There is a slender chance of all these things falling into
ther has the Palestinian conflict had a greater chance place, but if they do, a delicate transition may begin.
of spiralling out of control. Which will it be? It starts in the Palestinian territories, with leaders
Hamas's murder of i,400 Israelis will bring change who can combine legitimacy at the ballot box with an
in 2024 because it destroyed the strategic concept that acceptance of Israel's right to exist. Only that combina­
had allowed Israel and much of the Arab world to ig­ tion will produce a partner with whom Israel can cau­
nore the Palestinians' plight. No longer can anyone tiously begin to build trust. At the moment, while Pal­
pretend that a mix of financial incentives and Israeli estinians are seething with anger at Israel's assault in
air strikes can control Hamas. If Israel is to honour its Gaza, no such leader is available. But although Mr
founding promise to be a homeland where Jews are Abbas has engineered it so that he has no rivals today,
safe, it needs a new approach. successors may appear once he has gone.
The attack will also produce new leaders on both New leaders in Israel will have almost as daunting a
sides. Israel's military and intelligence chiefs will task. Not only must they win over traumatised Israelis
resign when the war is over. And its prime minister, to the idea of making peace, but they must also con­
Binyamin Netanyahu, will be forced from office. Not front the settler movement which was never so power­
only did this catastrophe take place when he was in ful as under Mr Netanyahu's last government. For as
charge, but his political brand as Israel's staunch de­ long as settlers are killing Palestinians in the West
fender lies in ruins. Meanwhile, Hamas's leaders are Bank, peace will remain out of reach.
likely to be killed by Israeli forces, and their counter­ It will be just as hard to create the security needed
parts in the Palestinian Authority (PA) in the West Bank in Israel and the Palestinian territories to allow peace
could end up being driven from power. New leaders to take root. In the past those who wished to destroy
bring change, too. peace were able to use violence to discredit moderate
A number of things could conspire to make this a voices within their respective camps.
change for the worse. One is the war itself. Israeli forc­ Nowhere is this problem harder than in Gaza. An Is­
es are killing thousands upon thousands of Palestin­ raeli occupation would only radicalise the Palestin­
ians, including many women and children. Hamas ians there. Some imagine an Arab peacekeeping force,
cannot defeat Israel, but it does not need to. Amid the perhaps of armed police rather than troops. The Arab
understandable fury this is causing in the Arab world countries that now have closer relations with Israel
and beyond, just surviving would mean that Hamas than they did in the past, through the Abraham ac­
emerges stronger in the eyes of Palestinians. If Israel cords, may help. But they will take a lot of persuading.
loses international support, it may be forced to stop The Middle East is the graveyard of plans for peace.
fighting sooner than it is ready. If Palestinians are rad­ Hamas's attack It is a harsh and violent part of the world. But in 2024
icalised, Hamas could rise from the ashes to become a destroyed the you should cling to one hope. After two decades of
symbol of resistance. notion that the stagnation ended on October 7th with terrible vio­
Another danger is that the violence spreads. Hiz­ lence, the pursuit of peace is the only fresh idea left. •
bullah, an Iranian-backed militia, could open a second
Palestinians'
front in the north, across the border with Lebanon. plight could
More likely is popular unrest in the West Bank, where be ignored E DWARD CARR, Deputy editor, The Economist
10 L EA D E RS T H E WO RLD A H EA D 2024

Time for Europe to step up

As a long wa r looms, American support for Ukra ine ca n n o longer be depended upon, arg ues Christopher Lockwood

2023, and by July 31st had narrowly overtaken America

as Ukraine's largest cumulative supplier of military
aid. However, it has done this by running down its own
reserves of tanks, ammunition and missiles. Without
further big investments in defence procurement,
Europe will not be able to maintain this pace. And al­
though contractors can ramp up production at exist­
ing facilities, that will not be enough. To get them to
invest in new facilities, they will need big, multi-year
commitments from governments.
The story is better on non-military commitments,
and in particular funding to help Ukraine cover the
gaping budget deficits created by increased military
spending and war-ravaged tax revenues. In June, the
E U promised an extra €5obn ($53bn) to Ukraine in fi­
nancial aid for 2024-27. That pushes Europe far above

I T S E EMS C L EAR that, barring a last-minute miracle,

Ukraine's counter-offensive, once the source of so
much optimism not just in Kyiv but across the West,
America in total assistance pledged. According to the
Kiel Institute for the World Economy, America's com­
mitments by the end of July amounted to $6gbn,
failed in 2023-and badly so. After five months of bloo­ against $155bn for the Europeans (the E U plus Britain,
dy and expensive effort, the results by early November Norway and Switzerland). But Ukraine's budget defi­
were minimal. No major town had been taken, and cit, of roughly 20% of G DP, means that it needs some­
only around 400 square km (154 square miles) of terri­ thing like $42bn every year to stay afloat. Then there is
tory had been liberated, less than 0.1% of Ukraine's reconstruction on top of that. Accordingly, €5obn over
total land mass. Russia still occupies about 18% of four y ears is not enough. European governments can
Ukraine, around half of which it took in 2014-, when it easily afford to do better. But will they want to?
annexed Crimea and grabbed the eastern Donbas; the The fact is that America can no longer be depended
rest is what is left of the territory it seized after the upon to lead this fight. The new speaker of the House
invasion of February 2022. of Representatives, Mike Johnson, began his term by
All this portends a long and grinding war of attri­ blocking President Joe Biden's attempt to get authori­
tion, and Ukraine's backers must be ready for it. Russia sation for a fresh package of $61bn in military support
certainly is. Vladimir Putin's strategy rests on waiting for Ukraine (though Mr Johnson has also said that he
for the West to grow tired of what increasingly looks does not want to see Mr Putin prevail). Donald Trump
like an open-ended commitment. A long war plays to is an even bigger mystery, having often contradicted
his strengths. A brutal dictator who has progressively himself over Ukraine, as with so much else. Mr Eiden,
silenced dissent, he does not worry much about public who has done an excellent job of backing Ukraine so
opinion. Russians anyway show little sign of turning far, may find the politics of fighting the Republicans
against the war, despite heavy casualties, in part be­ over it too difficult as the election in November nears.
cause a high oil price has blunted the effects of West­ All G7 countries agreed to produce bilateral security
ern sanctions. Russia will gorily soldier on. But in guarantees for Ukraine, but none has yet done so.
Europe, and above all in America, the danger looms So Europe will, like it or not, have to step up and
that voters and policymakers will tire of the burden. take on more responsibility for supporting Ukraine.
Too much, it now appears, was promised of the That means providing more cash as direct financial as­
counter-offensive, and there has been too little prep­ sistance, but also investing much more heavily in mil­
aration for a long war. That will have to change. Nei­ itary kit so that Europe can arm Ukraine without leav­
ther Ukraine nor Russia has any interest in a peace that ing itself defenceless. It can also help by speeding up
leaves the situation on the ground looking anything Ukraine's integration with the E U itself. It was formally
like it does now. For Ukraine, allowing Russia to hold accepted as a candidate in June 2022, but formal acces­
onto the territory it has taken is unacceptable, not least sion talks have still not started. At their summit in De­
because of the economic impact of losing most of its cember 2023, the E U 's leaders should give the green
southern coast. But for Russia the invasion still looks light to the start of detailed negotiations, while also
like a failure, because it does not fully control any of making it clear that these must not be allowed to drag
the four provinces it annexed in September 2022. So do Europe can on for years. Bound into the huge European economy,
not expect either side to try to settle in 2024. also help by Ukraine has a far better chance of holding the line
This new reality requires new policies, above all speeding up against Russia-and outlasting Mr Pu tin. •
from Europe's leaders, who have to understand that
the task of supporting Ukraine is quickly passing to
Ukraine's
them. Although America started out as the main arms integration C H RI STOPH E R LOCKWOOD Europe editor,
supplier to Ukraine, Europe increased its support in with the EU The Economist
T H E WORLD A H EAD 2024 L EADERS 11

Unprecedented, uncharted, not unthinkable

A merica will need a new vocab ula ry to discuss the forthcom ing presidential election, says John Prideaux

an election year, and the extent to which the contest to

choose the president is not really a national election.
If the vote is close, as most presidential elections
are now, then the result will come down to what hap­
pens in six states: Arizona, Georgia, Michigan, Nevada,
Pennsylvania and Wisconsin. This means states with a
combined population of 50m people, a bit more than
Spain but fewer than Italy, will choose the next presi­
dent. A bigger swing in either direction could bring a
few more states into play: Minnesota, New Hamp­
shire, North Carolina, perhaps even Florida.
The federal cases against Mr Trump are unlikely to
be litigated by November 5th, the day of the election,
because Mr Trump's legal strategy will be to delay and
then to appeal. As a result, for the first time, America
will have a presidential candidate on the ballot who
B presidential election willillness
A R R I N G U N FORES E E N or death, the 2024
be a rematch between Joe
stands accused of federal and state crimes. Words like
" uncharted" and "unprecedented" were worn out by
Biden and Donald Trump. This will be confi rmed by the end of Mr Trump's first term. America will need
the party primaries, which in 2024 will be completed new ones for this election.
much earlier than usual. Normally the incumbent It is hard to overstate how important the outcome
president is chosen as his party's nominee without will be for America and the rest of the world. America's
much of a fight. On the Democratic side that will hap­ next president will face some predictable problems.
pen again. But the Republican side, where one candi­ The trust funds that pay for Social Security and Medi­
date is so far ahead already that he has been able to care (health care for pensioners) are running out of
skip the early debates, will be much weirder. money. Nuclear proliferation in Iran and North Korea
In a typical primary cycle, Americans have to wait will be in the in-tray again. And there is the looming
until the end of March, or beyond, to know who the question of Taiwan. China-watchers in the West be­
challenger is likely to be. This time the Republican lieve there is a narrow window, which overlaps with
primary could in effect be finished by the end of Febru­ the next presidency, during which the People's Libera­
ary. Americans would then be subjected to a full eight tion Army would have the advantage in a conflict over
months of a general election campaign between two the island. The president chosen in 2024 will thus be
unpopular candidates-while America's allies around in charge in the moment of maximum danger.
the globe hold their breath. Most crises, though, are of the unexpected sort. In
If the primaries are less relevant than usual, the at­ 2016 Mr Trump campaigned on ending American en­
tention of politically engaged Americans (particularly tanglements in the Middle East. Less than a year later,
those who do not wish to see a second Trump presi­ he gave the order to launch 59 Tomahawk cruise mis­
dency), will shift from Trump the candidate to Trump siles at targets in Syrian territory. The last year of his
the defendant. The former president's federal trial for presidency was consumed by mishandling the spread
attempting to overturn the 2020 election starts on of a new virus. Mr Biden's presidency has been steadier
March 4th, the day before ''Super Tuesday", when 13 and more successful, but the subjects that have de­
states will vote in the Republican primary. manded most of his attention-the bungled retreat
His campaign will take advantage of this timing, from Afghanistan, Ukraine's invasion of Russia and a
portraying the cases against Mr Trump as a left-wing war between Israel and Hamas-were unforeseen.
plot to prevent him from winning a second term and A second Trump win, though, would be predictably
inviting his backers to vote for him (and donate to his awful. Plans will be laid over the next 12 months to staff
legal fund) as an act of defiance. One of Mr Trump's fa­ his administration with true believers. The full effect
vourite political techniques is to turn whatever he is hard to imagine. What would it mean for foreign
stands accused of back against his accusers. Thus, policy, or action on climate change? Would other
while he is actually on trial in a federal court for under­ countries elect nationalist populists in imitation
mining American democracy, he will claim that the again, as Brazil did in 2018?
real threat to democratic freedom is the federal court. For America, the questions are even bigger. What
The coronations of the candidates will take place in It is hard to would it mean for the country's democracy to re-elect a
Milwaukee, where the Republicans will hold their con­ overstate how man who governed as Mr Trump did, who was im­
vention in July, and Chicago, where Democrats will important the peached twice by the House of Representatives-and
gather in August to enthuse about four more years of who tried to overturn the result of the last election? •
Mr Biden (at the end of which their candidate would be
outcome will
85 years old) . The choice of locations is another re­ be, for America
minder of the outsized importance of the Midwest in and the world JOH N PR I D EAUX United States editor, The Economist
12 L EA D E RS T H E WO RLD A H EA D 2024

Soft landing? Don't count on it

Infla tion has fallen, but the world economy will rema in vu lnerable i n 2 024 , predicts Hen ry Curr

with a big asterisk: it is being supported by extraordi­

nary levels of government borrowing. At the time of
writing the federal government's deficit is running at
an annual rate of over 7% of G D P . Debate rages about
whether interest rates have entered a "higher-for-lon­
ger" regime. The answer depends on whether the bor­
rowing binge continues. It probably will: Congress will
not confront it in a presidential-election year. And the
first order of business for the next occupant of the
White House will be renewing Donald Trump's 2018
tax cuts, many of which expire in 2025 and which even
Democrats will be reluctant to let lapse in full.
Economies without freely borrowing governments
look more vulnerable. As well as the likely recession in
Europe, the world economy is suffering from China's
growth slowdown. Whether China rebounds and es­

Ftaryfy policy
O R S O M E time the world economy has seemed to de­
gravity. Despite the fastest tightening of mone­
since the 1980s, America's economic
capes "Japanification" will depend on the degree to
which the government continues to open the stimulus
taps. But the recent deterioration of China's economic
growth probably accelerated in 2023. Europe has most­ policymaking-in everything f rom ending zero-covid
ly weaned itself off Russian gas without economic ca­ to the technology crackdown-suggests it would be
tastrophe. Global inflation has fallen without big surg­ unwise to expect a well-calibrated stimulus. And Chi­
es in unemployment, in part because labour markets na faces fiscal constraints owing to the indebtedness
have so far cooled mainly by shedding job vacancies of its local governments.
not jobs themselves. As the year ends, optimists who All the while, the gradual worsening of geopolitical
predicted a "soft landing" are taking victory laps. tensions between America and China, and the global
Yet the world economy will remain fragile in 2024. tide of protectionism, are throwing sand in the gears
Though inflation will be lower, it will remain too high. of trade. The number of protectionist measures in
Economic policy still faces an excruciating balancing place is up from about 9,000 a decade ago to around
act. And even if America continues to dodge a reces­ 35,000 today, according to Global Trade Alert, a charity.
sion, the rest of the world looks vulnerable. Although some economies in Asia benefit from the re­
Inflation's recent fall has been a relief to central location of supply chains outside China, the duplica­
bankers. But in big, rich economies it is unlikely to tion of investment and loss of the gains from speciali­
continue declining all the way to their 2% targets un­ sation are weighing on the global economy's potential
less a recession strikes. For one thing, labour markets growth. Even winners, such as fast-growing India,
still look too hot and nominal wage growth too high. show a worrying drift towards homeland economics.
For another, economies will have to contend with the Poor countries that are not in a position to benefit
effects of more expensive oil. Just when it seemed as if from the redistribution of investment are suffering
the supply shocks of the pandemic era and Russia's in­ from high indebtedness, low growth and a strong dol­
vasion of Ukraine had dissipated, with supply chains lar. In 2024 the IM F will continue to struggle to work
unclogged and economies rebalanced, a barrel of oil out how to provide debt relief to countries that are
has risen in price by about a third since the summer, heavily in debt to China and other lenders who do not
thanks to production cuts in Saudi Arabia and else­ subscribe to traditional principles for debt restructur­
where. A price fall was halted by Hamas's attack on Is­ ing. And if America's deficits continue to propel its
rael. The resulting pricier petrol could raise fears of a economy while global growth disappoints, expect the
"second wave" of inflation. dollar to rise still further, exacerbating their woes.
The major central banks will probably not raise in­ The possibility of Mr Trump's re-election to the
terest rates further, instead treating any oil-driven in­ White House brings the potential for all of these trends
flation rebound as temporary. But, fearful of prema­ to be magnified. A second Trump term would probably
ture declarations of victory, they will not be keen to cut mean even deeper tax cuts-and hence bigger defi­
rates, either. On recent evidence America's economy cits-and a further escalation of the trade war. As in
can withstand tight money, even if big companies refi­ 2016, stockmarkets might rally if Mr Trump wins in
nancing debts and households who have run down November, but it would be no good-news story. By the
their pandemic-era savings are beginning to feel Major central end of 2024 it might feel less as though the global
squeezed. But high i nterest rates may be tipping the al­ banks will economy has landed softly, and more like the start of
ready-wobbly euro-zone economy i nto recession, and another wild ride. •
fear of inflation could stop its policymakers from cut­
probably not
ting rates in response. raise interest
Even the robustness of America's economy comes rates further H E N RY C U RR Economics editor, The Economist
# M od ern M BA

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14 L EA D E RS T H E WO RLD A H EA D 2024

The adoption decision

Generative A I holds much prom ise fo r businesses. Just don 't expect adoption overn ight, says Rachana Sha nbhogue

ca's big banks between 2020 and June 2023 cited A I in

the job description, and around 8% of patents regis­
tered by big tech firms in 2020-22 were A I-related.
Yet not all businesses will be enthusiastic adopters.
Outside the tech world, only a third of global managers
tell McKinsey they are regularly using generative AI for
work; about half have tried the technology but have de­
cided not to use it, and about a fifth have had no expo­
sure to it all. AI adopters, in short, are outnumbered
two-to-one by the wary and the reluctant.
Start with the wary. Some businesses are taking a
cautious approach, since much about the technology
still needs ironing out. Chatbots are prone to "halluci­
nations", or making up things that sound dangerously
plausible. And writers, artists, photographers and
publishers are challenging AI models' use of their data

W 2022
H E N C H ATGPT was first launched at the end of
it quickly became a sensation. Within two
in court. Some businesses are wary of being exposed to
legal risk by making use of the models, or the reputa­
months 100m users were posing all sorts of entertain­ tional risk of taking hallucinations seriously. JPMor­
ing queries ("Write me a rap song using references to gan Chase, a bank, has banned the use of ChatGPT,
SpongeBob SquarePants" ). The number of people Goo­ though it is experimenting with AI in other areas.
gling "artificial intelligence" surged, and the mania set Other businesses are reluctant to dip their toe in
off investors' enthusiasm for all manner of AI projects. the water at all. Differences in behaviour between
Yet the real promise, these investors and entrepre­ firms at the productivity frontier and those that are
neurs are betting, lies with its use in business. Here, less productive are not unusual. Lags in technology
too, it could be more rapidly adopted than past innova­ adoption can be long. Even though the internet began
tions. But that does not mean it will happen overnight. to be used by companies in the early 1990s, for in­
The potential is exciting. According to McKinsey, a stance, it was not until the late 2000s that even two­
consultancy, three-quarters of the business uses of thirds of businesses in America had a website. Many
generative AI will fall into four areas: customer opera­ firms have outdated systems-think of the Japanese
tions, marketing and sales, software engineering, and bank that still uses CO B O L-which can make adopting
research and development. Navigating a complex tax cutting-edge technology a tall order. Managers in the
code or summarising a legal document could become public sector, or in heavily regulated industries such
a breeze. Type in the right prompt and a first draft of as utilities, may feel little impulse to innovate. Those
marketing copy could magically appear. Already many sectors make up a sizeable chunk of economies: in
coders rely on Copilot, a coding tool from Microsoft, to America they collectively account for a quarter of G DP.
help them write software. Studies show that profes­ Reluctance can also stem from workers. Although
sional workers with below-average performance tend the technology promises to do away with drudgery,
to experience the most benefit from using generative some people worry that it may ultimately replace
A I , promising a big increase in output for firms. them. A survey by BCG, a consultancy, finds that front­
Helpfully, too, many generative AI tools will be eas­ line workers are more likely to be concerned, and less
ier to access than previous technologies. This is not likely to be optimistic, about generative AI than man­
like the advent of personal computers or smart­ agers or leaders are. In some cases, unions may act to
phones, where employers needed to buy lots of hard­ slow the adoption of the technology; some may go as
ware, or even e-commerce, where retailers needed to far as the writers' guild in Hollywood, which was on
set up physical infrastructure before they could open strike for much of 2023, in part because of concerns
an online storefront. Many businesses may find that about Al's impact on jobs.
they can work with AI specialists to design bespoke How then should the AI-curious boss think about
tools. And firms such as Microsoft and Google are em­ the technology? It helps to make a clear-headed assess­
bedding generative A I into their office software, mean­ ment of the gains to be had, and the costs of using a
ing that anyone opening up a document or a spread­ still new and risky technology, before deciding wheth­
sheet will soon be able to make use of the tools. er to be an enthusiastic adopter, or a wary or reluctant
Many of the largest companies are already experi­ one. Most important of all, your workers need to be on
menting. Morgan Stanley, a bank, is using A I to build a Two other board. So pay attention to their fears-and convince
tool to help wealth managers. Eli Lilly, a pharmaceuti­ camps are them of the joys of experimentation. •
cal firm, has struck a deal with a startup that runs "au­
tonomous labs" to identify promising molecules,
emerging:
which the drugmaker will then develop, test and com­ the wary and RAC HANA S HA N B HOG U E Business affairs editor,
mercialise. Around 5% of vacancies posted by Ameri- the reluctant The Economist
TH E WORLD AH EAD 2024 L EA D E RS 1 5

Tran sfer window

The g reen transition will transform the global econ om ic order, predicts Matthieu Favas

U9M2CZ

fer eventually. Energy i mporters in Africa, E urope and

Asia will have to pay top dollar for their hydrocarbons.
After renewed volatility amid geopolitical worries in
late 2023, prices for these are likely to swing again in
2024. A rebounding global economy will demand
more oil j ust as Asia and Europe compete for gas. Bar­
ring a global crash, importing nations from Germany
to Japan may face high prices for a decade or more.
The effects of electrification will also be nuanced.
The rush to hit decarbonisation targets will create vast
demand for the metals-cobalt, copper, lithi um and
nickel-that are vital ingredients in green power sta­
tions, grids and electric cars. In 2024 this prospect may
tru mp near-term worries about the economy, causing
metals prices to go up again. Yet with clean technol­
ogies still in flux, demand adapting to rising prices

T to a carbon-neu tral world should

H E T RA N S I T I O N
make all countries better off, at least in theory.
Many will rely less on fuel imports, yielding big sav­
and new supply arriving in big lumps, the market for
many of these m inerals may go through rapid boom­
and-bust cycles, wrongfooting exporters. Many such
ings and insulating their economies from swings in countries, new to mining, lack the well-run sovereign
hydrocarbon prices. Those that export the metals funds, hedging mechanisms and fiscal prudence
needed for new Teslas, turbines and terawatt-hours of needed to manage volatility. The difficulty and cost of
grid capacity will earn ju icy rents. Even former petro­ turning mines on and off, and the geographic disper­
states may thrive if they can use revamped refineries sion of deposits, make it unli kely that an O P EC of met­
and pipelines, as well as wind and sun, to make hydro­ als will emerge. That suggests that only the savviest
gen. And everyone would welcome a planet that stops few will grow rich flogging green resources.
getting hotter and more dangerous every year. And the boom will not last for ever: once there are
In practice, the transition to net zero will be turbu­ enough windmills turning and electric cars on the
lent. Changing energy-consu mption patterns and the road, appetite for green metals will stabilise at a lower
reshu ffling of trade flows will both crown new win­ level. More durable rents will flow to countries that
ners and create new losers. In 2024 this divergence, can exploit strong sun, winds and rivers to generate
hitherto masked by the effects of covid-19, a flagging plenti ful green electricity they don't need. In some
global economy and China's deceleration, will start to cases the unequal endowment of resources will exac­
become more visible-but not always in the ways you erbate regional differences: expect the windy North
might expect. It is not si mply the case that providers of Sea and the sunny Mediterranean to do well, while
fossil-fuel resources will lose and providers of green cloudy continental Europe struggles. Luckiest will be
resources will win. There will be winners and losers in countries that can combine several types of resources
both camps. to guarantee a continuous supply of renewable energy.
During the transition the world will continue to Those with small populations may use any surplus
guzzle hydrocarbons. The International Energy Agen­ they produce to lure energy-hungry industries, such
cy predicts that oil demand will peak before 2030, but as steelmaking or data storage, to their shores. Others
green backlashes seen in 2023 suggest it may not ebb will seek to export the excess, either in the form of
so soon. Meanwhile investor pressure and doubts over electrons or liquid fuels.
long-term demand mean that only state-owned firms The energy superpowers of the transition will be
in the Gulf and Latin America are spending big on new those that ignore critics and do everything: flog fossil
supply. This will concentrate still-meaty oil rents in fuels, dig out metals and turbocharge renewables. No
the hands of fewer exporters. Eventually the Organisa­ country does all that yet. The Gulf states talk a lot about
tion of the Petroleu m Exporting Countries (O P E C) , a solar and hydrogen but have yet to make either happen
cartel whose members disagree on how best to handle at scale. Chile mines vast amounts of copper and lithi­
the transition, could i mplode, allowing low-cost pe­ um but does not exploit its 6, 500km of coastline,
trostates to grab even more market share. southern storms and sunny deserts to generate elec­
Demand for gas will persist longer still, allowing tricity in volume. America has shale oil and gas and
the trio that exports most of it in liquid form-Ameri­ ever more renewables, bu t faces opposition when it
ca, Australia and Qatar-to cash in. Even coal will re­ Only the comes to m ining for green metals in its backyard. The
tain its lure into the 2040s. As long as energy-hungry savviest few transition's biggest prizes are still to play for. •
Asia devours it, Australia and Indonesia, best placed to
serve the region, won't mind the dirty dollars.
will grow rich
But as oil riches continue to flow, many petrostates flogging green MATTH I E U FAVAS Commodities editor,
will fail to future-proof their economies, and will suf- resources The Econom ist
16 L EA D E RS TH E WO RLD A H EA D 2024

The scourge of "stealthflation"

Companies have found s neaky ways to ra ise prices, says Leo Mira n i. Where will it end?

varied their prices with seasonal demand. But the abil­

ity to track demand in real time means prices can be
adjusted from minute to minute: Uber and other ride­
sharing apps charge more when demand is high.
Surge pricing is now infecting other industries. In
September a British pub chain announced that pints of
beer would cost more in the evenings and on week­
ends, or during big sporting events. Prices of tickets for
concerts, sporting events and theme parks are also
constantly tweaked. In theory, this is a triumph of the
invisible hand of the market if you want to pay less,
buy when demand is low. But disgruntled consumers
complain that the line between charging what the
market can bear and profiteering is a thin one.
Then there is the seemingly unstoppable epidemic
of tipping. Foreigners visiting America have for years

Ta free lunch.
rs, economists like to say, no such thing as
H ERE AS
Buy your lunch in a branch of McDon­
been caught out by the country's pervasive tipping cul­
ture and its eye-watering expectations. At 20%, Amer­
ald's, however, and you may find there is no such thing ica's average tip rate is the highest in the world. The
as free relish, either. Outlets in some countries now justification is that service workers can legally be paid
charge for ketchup and other condiments. Yet McDon­ as little as $2.13 per hour, so it is up to customers to do
ald's is not alone in hitting customers with unexpected the decent thing to ensure waiters, bartenders and the
charges. Amid a surge of inflation, firms have found like can earn a living wage. Touchscreen-based check­
several stealthy ways to raise prices. Could 2024 mark outs mean customers are being asked to pay tips more
a turning-point in this invidious trend? often, and in unlikely places. They may find them­
A classic example is the technique of "unbundling", selves being asked for tips at convenience stores, by
a ruse pioneered by low-cost airlines. Long ago they self-service machines and even on websites.
began charging extra fees for things that used to be in­ Some hotels add gratuities for staff to the bill auto­
cluded, such as in-flight food and checked luggage. matically, thus taking the tip as a hidden fee. But it is
Then came charges for seat selection, or for any cabin not just America. Asking for tips has spread to other
bag larger than a sock stuffed with spare underwear. countries, because of the ubiquity of apps and contact­
Lately things have got really out of hand. Some air­ less payment systems. Australians grumble that food­
lines now apply a "technology development charge" delivery apps now add automatic tips. Indians are
for the privilege of booking online which, oddly, de­ often baffled by prompts to tip taxi drivers.
pends on distance travelled-those web servers have Might the fever of stealth price-rises finally break
to work much harder, you see, to deliver long-haul in 2024? Perhaps. Falling inflation may temper the use
tickets. Others charge for printed boarding passes, air­ of outlandish methods to maintain margins. Govern­
port check-ins, or in-flight blankets. It is only a matter ments are making noises about regulation: in Ameri­
of time before airlines start selling tickets for the shut­ ca, President Joe Biden wants to crack down on "junk"
tle bus to the plane, levying a fee per item of clothing fees. And consumers are pushing back. Americans
worn, or charging to use the loo. (Ryanair's boss, complain of "tipping fatigue". B MW recently scrapped
Michael O' Leary, once actually suggested that last one. ) its seat-warmer fees in response to customer anger.
The practice has spread. Hotels and resorts often Airbnb has revamped its platform to make extra fees
charge a "check-in fee", takeaway joints a "packing fee", more visible. There is, surely, an opportunity for firms
and ride-hailing apps a "safety fee". Airbnb, a short­ prepared to offer simple, "no hidden extras" pricing.
term rental platform, has been criticised for adding ex­ Yet it seems more likely that having discovered
cessive service fees and cleaning fees. myriad methods of padding prices, companies will
But extra fees are not limited to services: they are keep doing so. Airlines are experimenting with un­
also being applied to physical products. B MW intro­ bundling perks from business-class tickets. B MW and
duced a monthly fee of $18 to activate seat warmers on Mercedes-Benz plan to go ahead with other fee-based
some of its cars, with "unlimited" access for a one-off "extras". Demands for tips still abound. Indeed, one
fee of $415. Mercedes-Benz charges $60 a month, or American airline now lets passengers tip their cabin
$600 a year, for the option to boost the acceleration of crew. The cross-pollination of stealthflation tech­
some of its electric vehicles. Imagine if this catches BMW charged niques evidently has some way to go. Expect to experi­
on. Want to use your smartphone camera's zoom? Pay $18 a month to ence more outrage in 2024. •
up. Need to use your oven at its maximum tempera­
ture? Sorry, that is for premium subscribers only.
activate seat
A second way businesses are sneakily boosting rev­ warmers on L E O M I RA N I Asia correspondent,
enue is "surge" pricing. Airlines and hotels have long some of its cars The Economist, Mumbai
T H E WORLD AHEAD 2024 17

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 Standing with
Satoru Komiya customers i n ti mes
of need
President and chief executive
Tokio Mari ne Group

To kio Ma ri ne bel i eves i ns u ra nce has two critica l roles:

to g ive peopl e confid ence to overcome th e u nexpected,
and to hel p solve society's biggest i ssues.
I n an i ntervi ew with Satoru Kamiya, the grou p's
chief executive, we hea r how the i n surer i s worki ng to
d evelop a resi l ient and susta i nable society.

I n the age of volati l ity, uncertainty, com plexity and ambiguity, tec h nol ogy bri ngs new risks. We work with c ustomers to mitigate the
how is Tokio Marine Group's pu rpose hel ping it dea l with potentia l negative impacts of i m plementation. Second, we have to th ink
emerg i ng risks? how we as a business can use technology to fu rther enhance our services.
S i nce ou r fo u n d i n g i n 1 87 9, we have a lways worked to del i ve r o n Generative Al shows the need for th is dual pers pective. Its im mense
o u r pu rpose "to be there with o u r custo m e rs i n ti mes of n eed': possi b i l ity must be bala nced with the obligation to protect a nd
sta n d i n g by t h em t h ro u g h d i sasters a n d when they a re ste p p i n g properly use data a n d i ntell ectual property. I nternal ly, we a re ex plori ng
i nto u n c h a rted territory. h ow it can support a nd en ha nce our peopl e's decision-ma ki ng.
Th is age of unprecedented change bri ngs a need for i n novat ive Exte rna l ly, we a re looki ng at how our clients a nd soci ety a re pla n n i n g to
sol uti ons to the chal len ges we face. As a compa ny founded i n Japa n, i m plement Al a nd th in king how to support them in ma nag i ng the risk.
we have experienced ma ny major natu ra l catastrophes over our
1 40-p lus yea rs . Despite occ upying only 0.25% of the wo rl d 's a rea As we see more extreme weather events and an i ncreas ing
a nd contri buti ng 6% of g loba l G DP, J apa n acco u nts for more than n u m ber of natura l catastrophes, how ca n To kio Marine G rou p
20% of globa l economic losses from natu ral d isaste rs. Th rough these contribute to achievi ng a sustainable future?
experien ces, we have lea rnt that to d eal with great advers ity we must This is the bigg est c h a l l en g e the i n s u ra n ce i n d ustry faces. We n eed to
a lways del iver on our com m itments a nd work with our clients a nd b u i ld res i l i ence in m itigating a n d recovering fro m major eve nts wh i l e
com m u n ities to create a more resi lient society. wo rk i n g to a d d ress thei r root cau ses. We have deployed satel l ites a n d
d rones t o provide ra pid damage a ssessment, a n d c reated pa ra m etric
i ns u ra nce to speed payment. We a re also wo rk i n g with our c u sto mers
"We need to build resilience i n m itigating to hel p th e m bu i ld res il ience i n their b us i nesses a nd l ives.
and recoveri ng from major events wh ile At the same t i m e, we m ust dea l with the c l i m ate cris is a n d use the
working to add ress their root causes:' power of i n s u ra n ce to fa ci l itate the tra nsition to net ze ro. F rom s ha ri n g
Satoru Kom iya, president and chief executive, Tokio Mari ne G ro u p
data t o u n derwrit i ng a n d i nvesting i n new g reen projects, i n s u ra n ce
plays a critica l rol e.
Th is p h i losophy and des ire to c reate a susta i na b l e society is
To be pa rt of the solution, we have b ee n expa n d i n g o u r ra n ge refl ected in the desig n of o u r new H Q bui l d i ng in central Tokyo,
o f services i n a reas l i ke loss control, ri sk d etection, recovery a nd sched u l ed fo r co m p letion in 2028. By u s i n g Japa nese ti mber a n d
reconstru cti o n, a n d rec u rrence p revention, with new tec h n ol og ies renewa b l e energy for the co nstruction, w e a i m t o red u ce emissions
adva n c i n g our effo rts to d o what we do we ll eve n better. by ha lf co mpa red with tra d itional methods. Th e b u i l d i n g wi l l sta nd
a s a sy mbol of o u r com mitment as a g rou p to rea l is i n g a s u sta i na ble
How is Tokio Marine G roup using new tech nology to imp rove the society fo r yea rs to co me.
resi l ience of its customers and the cities they live i n ? We rema i n com m itted to solvi ng society's big gest iss ues, helping to
We a re a lways th i n ki n g a bout how we can be ro bust a n d a g i l e accelerate prog ress while giving people and bus inesses the confidence
throu g h t h e best mix of people a n d tec h nology. Tech nology evo lves, they need to move forwa rd in a world fu l l of ris k a n d possibil ity.
but o u r peo ple's a b i l ity to use it for better outcomes is what m a kes the
rea l d ifference.
Insurance has a lways used data to eval uate risk, a nd we must view
each new tech nological evol ution from two perspectives. Fi rst, new
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20 T H E WORLD AHEAD 2024

Superforecasts
Masters of prediction

Forecasts for key events in 2024, from the superforecasters at Good Judgment

OURNALISTS A N D commentators often

J make predictions about the future using
"'
What will the result of the United States
"'
What will the world's annual GDP
ambiguous, carefully chosen words. Other presidential election in 2024 be? growth be in 2024?
forecasters prefer the more precise
language of numbers. Good Judgment, a Democratic nominee Less than 0% 4%
forecasting firm, has recruited many such wins the electoral and popular votes 63% •
people to its team of superforecasters, Between 0% and 1.5% 12%
who work together to provide detailed, wins the electoral vote,
specific forecasts. Here are their but not the popular vote 2% Between 1.5% and 3% 62%

-
predictions for events in 2024. ■
Between 3% and 4.5% 22%
Republican nominee
wins the electoral and popular votes 10% More than 4.5% 0%

"' w ins the electoral vote,

I

What will the outcome of Britain's

next general election be?
but not the popular vote
"'
How many seats (out of 543) will the
Conservatives win a majority of seats
"'
-
1% the ruling BJP-led National Democratic
I Alliance win in the next Indian general
Conservatives win a plurality of seats Will the euro zone experience two election?
• 3%
consecutive quarters of negative
Labour win a plurality of seats 22% GDP growth? 271 or fewer 6%

Labour win a majority of seats 74% Yes 14 % Between 272 and 298 24%

No, but there will be at least one Between 299 and 325 47%

"'
- -
quarter of negative growth 82%
Between 326 and 352 21%
When will Russia and Ukraine sign There will be no quarters
or announce an agreement to end the of negative growth 4% 353 or more 2%
current conflict?

- "'
October 2023 to March 2024 1%
I
April 2024 to September 2024 8% What will China's annual GDP Forecasting winner
growth be in 2024? Congratulations to Zane Stucker, a legal

-
Not before 1 October 2024 91 % professional based in the New York metro
Less than 1.5% 2% area, who has won The World Ahead
■ 2023 forecasting challenge organised in

"'
Will a Quad country or China publicly
Between 1.5% and 3%

Between 3% and 4.5%

4%

38%
collaboration with Good Judgment. Like
previous winners, he has been invited to
join Good Judgment's professional
accuse the other of using a weapon su perforecasting team. Could you be a
against its military or other forces? Between 4.5% and 6% 54% superforecaster, too? Test your own
prediction skills i n our 2024 forecasting
Yes 21% No 79% More than 6% 2% challenge, which runs until October 2024
• at gjopen com/economist
.

LAST YEAR'S P R EDICTIONS N igeria and Turkey, Vlad imir Putin was not ousted, and
there was no election in Britain, no clash over Taiwan,
The Good J udgment team had a good year i n 2023, a nd no nuclear device detonated by Russia. The ninth
correctly forecasting the outcomes of the eight question related to the end of the war in U krai ne. The
questions that were resolved. G lobal growth was 3%, superforecasters predicted it would be after October
China grew by 5%, ruling-party candidates won i n 1st 2024. Events in 2023 did not prove them wrong.
T H E WORLD AH EAD 2024 21

➔ Also in this section

22 Who to watch
24 The economy

24 Foreign pol icy

25 Free speech o n l i ne

26 Small towns

26 Cric ket i n America

27 Hot cities

28 Niall Ferguson and

Condoleezza Rice
on the new co ld wa r

towards an octogenarian rematch between Pres ident

Armageddon Joe Bi den and his predecessor, Donald Tru m p. The

main issue in the election wi ll not be anyth ing

election
conventional, like the economy or foreign policy, but
whether ei ther man is fit to serve in the office. The
year-long unpopularity contest wi ll see Mr Biden
argue that his predecessor is an existential threat to
the republic. Mr Tru mp, unashamed by the attempted
i nsurrection on January 6th 2021 or the many related
criminal i ndictments he is fighting, will argue that
the current president is too old and weak to deal with
America's problems . Both men will portray the other
as a harbi nger of the end of the country-and most
members of thei r parties will subscribe to these
A d ivisive u n popula rity contest looms
competing eschatologies.
between Joe Biden a nd Dona ld Tru mp
The cu rrent president will tout " Bidenomics" and
argue that his massive spending on infrastructure has
Wash ington bureau
ID R E E S KAH LOO N improved the lives of worki ng people. Mr Trump will
chief, The Economist, Washington, D C point to the discontent over inflation, which has
eaten away at Americans' real d isposable incomes

A S K VOT E RS how they really feel and you find that

the state of America's union is unusually dismal.
In September 2023, when the Pew Research Centre
since M r Bid en took office, and the size of the national
debt, which has also grown considerably. It is unlikely
that Mr Tru mp's policy proposals would improve the
asked Americans to reflect on their country's politics, country's fiscal position: he aims to leave entitlement
65% o f respondents said that they were always or programmes untou ched while cutting taxes and
often exhausted; 55% said they were typically driven triggering a trade war with the rest of the world
to anger; just 10% expressed frequent flashes of hope; through a 10% tariff on all imports. But both men
only 4 % found themselves regularly excited . When correctly see the road to the White House as ru nning
asked to describe pol itics in a single word , many through discontented working-class voters . Both of
plumped for d ivisive, corrupt, messy or bad. The their economic pitches will aim to curry favou r with
coming year is likely to bring even greater malaise. this bloc, regardless of actual feasibility.
In the presidential campaign, all signs point The strategy of Mr Trump, a man never confused ►►
22 U N IT ED STAT ES T H E WO RLD A H EA D 2024

► with a policy wonk, will be to whip Republicans into a Mr Trump subsumed by the America First movement, the
state of frenzy. His campaign rallies will echo the will whip Republican Party seems ready to give up on funding
''American carnage" that he invoked in his first Ukraine's war effort against Russia. Though both
inaugural address: that Mr Eiden is threatening to Republicans parties try to outdo each other on hawkishness
destroy America by failing to secure the sou them into a frenzy towards China, it is unclear whether Mr Trump would
border, failing to curtail crime or drug-overdose commit American troops to defending Taiwan. Allies
deaths, and giving in to the leftist flank of his party, in Europe worry about the permanent erosion of
which aims to turn America into a godless haven for America's central position in NATO .
abortionists, criminals, the diversity-equity-and­ Fighting back against the onslaught of Mr Trump's
inclusion bureaucracy and trans people. Rather than pugilism requires a kind of vigour that Mr Eiden
accept his loss in 2020, Mr Trump managed to seems to lack, and will probably lack in greater
convince most of his supporters that the election had quantity by the time of the election. The hope from Mr
been stolen. When the alternative to the Oval Office is Biden's supporters is that Mr Trump manages to
likely to be a prison cell, his rhetoric will be even defeat himself-through the constant reminder of
more extreme and corrosive to democracy in 2024. January 6th that the criminal trials will bring, and the
There are of course real differences in policy unpopularity of Republican positions on issues like
between the two men, but often in arenas that most abortion. American electoral margins tend to be slim,
American voters ignore. The two would lead foreign heightening the existential angst that members of
policy in wildly divergent directions. Though both are both parties feel. The outcome cannot be predicted
staunch protectionists, Mr Eiden is not the one year out. But an increase in the rates of
isolationist that Mr Trump is. Now that it has been exhaustion and anger looks very likely. •

The people to
watch in 2024

Some are well known, some are not

J A M E S B E N N ET Lexington columnist,
The Economist, Washington, DC

Tserved upwhen
I M E WAS American politics
electrifying or at least
surprising nominees to be president:
Barad< Obama, barely three years out of
the Illinois state legislature, storming past
Hillary Clinton; John Mccain overcoming
the scorn of conservatives; Donald Trump
doing that thing he did in 2016; and even,
lest you forget, Joe Eiden, once counted
out because of his age and past centrism, counts in four cases and four credibility of the prosecutors and of the
clearing the field in 2020. jurisdictions. In Fulton County, Georgia, legal system itself. He is busy portraying
Now comes the 2024 political cycle, a where he is charged over his efforts to Ms Willis and Mr Smith as villains. Beyond
triumph of recycling. President Eiden and overturn the 2020 election, the trial will be the prosecutors' own steely demeanours,
former President Trump are preparing to televised and streamed live. their best defence will be the revelations
star i n a sequel most Americans do not That will help make Fani Willis, the of their witnesses and other evidence.
care to see. That means that eyes will be on Fulton County district attorney, one of the In the end, in a country of 340m, a
the vice-president, Kamala Harris, as well. most important players in American small group will matter most. Mr Eiden
Because Mr Eiden is the oldest president politics in 2024, alongside Jack Smith, the won the popular vote in 2020 by nearly
ever, and would be 82 at his second special counsel who has brought federal 7m, but if about 44,000 votes in three
inauguration, voters will scrutinise Ms charges against Mr Trump in Florida, for states had gone the other way, he and Mr
Harris with unusual care. absconding with classified documents, Trump would have been tied in the
The sequel does, however, promise and in Washington, DC, for trying to electoral college. The non-partisan Cook
some new plot lines: for the first time in overthrow democracy. Acquittals i n these Political Report rates four states as toss-ups
presidential politics, courtroom action cases could help put Mr Trump back in the in 2024: Arizona, Georgia, Pennsylvania
will attract more attention than campaign White House, but it is not certain that and Wisconsin. In the suburbs of those
events, and may prove more decisive. Mr convictions would bar the door. states are some voters who have not yet
Trump, the first president or former That would depend on how successful sworn loyalty to one tribe. They will
president ever indicted, faces 91 felony Mr Trump proves in damaging the choose the next president. •
 A DV E RT I S E M E N T

M I N E RALS I NCOM E I NVESTM E NT FU N D of G h a n a (M I I F)

seeks partnerships with North American investors
for new opportunities in Ghana 's mining industry
Ghana's M I IF has stepped up efforts to attract North American 2006 through the Ahafo and
partners i nto the G h a n a i a n mining space. M I I F, the sovereign Akyem mines. Newmont's
minerals fund of Ghana, was created by law to manage the equity board recently approved a
interests of the Government of Ghana in mining companies and further investment in excess
collect and manage mining royalties due the state for purposes of of $1 billion in a project in
i nvestment. North Ahafo.
MI IF sees N orth America as a major growth pole for co­
investments and partnerships. Major North American mining com­ Diversifying the base
panies like Newmont and Piedmont are expanding their interests in The country's potential as an
Ghana. Piedmont is positioning itself in lithium mining in Ghana electric vehi cle ( EV) ma­
through Atlantic Lithium, an Australia n and U K-listed company nufacturing hub - thanks to
through which it will be an offtake conduit for Tesla. M I IF, for its part, lithium and manganese de­
just concluded an $32.9 Million equity investment into Atlantic posits - could be interest­
Lithium which will start production i n 2024. Likewise, Ml IF success­ ing to American investors.
fully took an equity position in 2021 in Asante Gold Corporation, a Tesla, t h ro u g h P i e d m o n t
Canadian-listed company, while acquiring Kinross Chirano Mine, a Lithium, looks t o off-take
Canadian mining company, in 2022. Ghanaian lithium for their
EVs. With eight automotive
Building North American ties companies already setting
" M I I F is working alongside our international partners, especially in up assembly plants in Ghana
Canada and the USA, to strengthen the value-offering of Ghana's including Toyota (Japan), Nissan (Japan), Volkswagen (Germany),
mining industry", says Edward Koranteng, CEO of M I IF. North Suzuki (Japan), Peugeot (France) and Sinotruck (China) - Ghana has
America is interesting to M I IF because of its extensive history of been earmarked as a high-potential EV hub.
mining and related capital activities, which have created more value M I I F is readying itself to i nvest $30 mi llio n i nto what is
from the mineral wealth in the region. potentially sub-Saharan Africa's largest salt project - the electro­
"Canada provides some clear best practice principles, especially chem Ada Songhor industrial salt operation. This 4 1,000-acre area
in the development of its capital markets. Ghana must still glean the could mine over ten million tons of 99.9%-quality industrial salt. M I I F
benefits that come from our mineral wealth the way Canada has is open to co-investment options in this project which is set t o be
done", says Edward Koranteng. The wealth creation that comes from listed on the Ghana Stock Exchange.
activities on the capital markets through initial public offerings M I I F has grown its assets u nder management from $ 170 million
( I POs), stock trading and exchange-traded funds (ETFs) are of in 2021 to $320 million in 2022, and 2023 projections set at $1 billion.
particular interest to Ghana. Ml I F is working on a gold-backed ETF to By 2030 to portfolio could top $6billion. "Good governance, good
be listed on the Ghana Stock Exchange, with discussions alongside treasury management, sound business development initiatives, and
Bank of Montreal for a listingon the Toronto Stock Exchange. an aggressive mining royalty collection approach have been crucial to
M l I F's interest in North America was piqued after acquiring over M 11 F's success," says Edward Koranteng.
20 million shares in Asante Gold, a Vancouver-based company For Koranteng, M 1 1 F's focus on sustainable development is
operating mines in Ghana. The company recently acquired the central to the fund's mission: "As a sovereign fund, sustainability is
Chirano Gold mine and operates Bibiani Mensin Gold Mine. Other central to our busi ness decisions. Partnering with North American
projects in its portfolio are the Kubi, Betenase and Fahiakoba mines. investors who equally value sustainability will bring long-standing
Incorporated in 2 0 1 1, the company is listed on the Canad ian value to investors and our countrY:'

IOIIIF
Securities Exchange and has seen its market capitalization grow to
$647 million in 12 years, thanks to its operations in Ghana. Asante
Gold is considering further investments in the country, including the M I N ERA LS
Ashanti I I project, which i nvolves exploration concessions on the I N CO M E
Asankrangwa gold belt. Newmont Corporation - the world's biggest INVESTMENT
gold mining company - started commercial operations in Ghana in FUND
24 U N IT ED STAT ES T H E WO RLD A H EA D 2024

Hard numbers healed supply chains, weighing on retail

prices. Most crucial, loosening in the once Overstretched
superpower
ultra-tight jobs market will lead to slower
wage gains. So by the end of 2024 inflation
will be weaker, even if not down to the 2 %
target. Indeed, the twin facts of slower
growth and quiescent inflation will pave
the way for the Fed to start cutting rates
again, possibly as soon as mid-2024.
The economy has dodged a recession,
The biggest question for the coming
With crises in U kraine and Israel,
but it is not out of the woods yet
year is how these trends will play into the
can America still defend Taiwan?
presidential election. President Joe Biden
and the Democrats have been frustrated by
u s economics editor,
S I MON RAB I N OVI TC H the low marks that American voters have ANTON LA GUAR D I A Diplomatic editor,
The Economist, Washington, DC given him on economic policy. Fewer than The Econo m ist, Washington, D C
four in ten adults approve of Mr Biden's

Alesson in humility forin forecasters.

M E RI CAS ECO N OMY 2023provided a handling of the economy, despite a
concerted push by his administration to W House his priorityentered
H E N JOE B I D EN the White
was to establish "a
Before the year began, almost all predicted highlight its achievements: avoiding a stable, predictable relationship" with
that it was heading for sluggish growth at recession, keeping unemployment low Russia and end America's "forever wars"
best, and a recession at worst. The logic and reining in inflation, as well as passing in the greater Middle East, to concentrate
was simple: beating inflation was bound laws boosting investment in green energy, on the economy at home and rivalry with
to be painful. Instead, America powered infrastructure and manufacturing. China abroad. It did not work out that way.
ahead at an annualised pace of roughly 2% But, fairly or not, this messaging has Russia invaded Ukraine; Hamas attacked
growth, even as inflation receded. not worked. Many people cannot look past Israel. As America helps its friends under
This has persuaded many analysts to the initial surge in inflation which took assault, can it still defend Taiwan?
ditch their gloom. Their median forecast place on Mr Biden's watch. Prices are no Strategists worry about a "window of
heading into 2024 is that America will longer rising quickly, but they are still vulnerability" in the Inda-Pacific this
avert a recession and get price pressures nearly 20% higher than when he took decade, as China's forces grow stronger
under control. This would qualify as a office in January 2021. That is the steepest and America's investments in new
"soft landing" after the inflationary scare increase under any president since Jimmy military equipment don't fully bear fruit
of recent years. But, given how wrong Carter's single term in the late 197os-an until the 2030s. Concerns about this gap
many were about 2023, it is worth asking if ominous precedent. will deepen with the approach of 2027, the
the same is possible about 2024. Three All is not lost for Mr Eiden. As long as year when Xi Jin ping, China's leader,
dangers stand out. inflation continues to recede, there may wants the People's Liberation Army to be
First, there is always a delay between be enough time for voters' perceptions to able to invade Taiwan if ordered to do so.
when central banks raise interest rates and change. Scores for consumer sentiment, But whether a war breaks out does not just
when the economy feels the effects. In as measured by surveys, have risen since depend on the military balance. Much will
2023 consumers and companies had mid-2022, even if they remain low by be determined by politics. And with both
savings that limited their need for historical standards. If the consensus is America and Taiwan holding elections in
financing; in 2024 they will have thinner correct this time, and America does avoid 2024, the danger period may start soon.
buffers, thus increasing their exposure to a recession, Mr Biden will have a Despite talk of America's decline, it
higher rates. Second, even though the propitious economic backdrop heading remains a military colossus, accounting
Federal Reserve may have finished raising into the election in November. But the for 39% of global defence spending at
interest rates, real rates will become downside risks to growth go against that market exchange rates. But as Australia's
progressively more restrictive as inflation scenario: the economy may end up being defence strategic review concluded in
falls. Finally, cracks are showing. more of a hindrance than a help in his April 2023, "The United States is no longer
Unemployment, though still low, is re-election bid. • the unipolar leader of the Indo-Pacific."
ticking up. Once an economic slowdown The changing balance places a premium
gets under way, it risks feeding off itself. on America's unparalleled network of
Still, there ought to be one alliances. Mr Biden has worked hard at
unambiguously positive factor for the After the spike repairing the damage to this network
economy in 2024: inflation will be less of a U n ited States wrought by his predecessor, Donald
Federa l fu nds rate*, Consumer prices,
concern. It has already tumbled from a Trump. N ATO has united, expanded and
year-on-year pace of 7% in mid-2022 to percentage points % change on a year earlier rallied to support Ukraine.
about 3%. Some worry that the "last mile" 9 9 Asian allies have helped, too. There is
of wrestling it down to the Fed's target of no NATO in the Inda-Pacific, but Japan is
2% will be especially challenging, perhaps 6 6 sharply boosting defence spending and
prompting the central bank to raise its America is building up its presence in
inflation target. It will have an 3 3 Australia. It is also weaving a "latticework"
opportunity to do so at the end of 2024, of ad hoe partnerships. These include the
when it launches a quinquennial review of 0 0
AU K U S deal with Britain to supply
its monetary-policy framework. But it is Australia with nuclear-powered
-3 -3
unlikely to be necessary. submarines and jointly develop other
A softening in housing rents is already weapons; a defence-industrial deal with
filtering into inflation readings, a process 2000 05 10 15 20 24 India to produce jet engines; and the
that will continue into 2024. Weaker *M id-po int of ta rget ra nge Sou rces: Blue Ch ip Economic Philippines' agreement to grant America
Indicators; CME Gro up; H aver Ana lytics
demand for goods will combine with fully access to several bases. Expect America to ►►
 T H E WORLD A H EAD 2024 U N IT E D STAT ES 25

► add more such strands in 2024.

Much depends on the perception of
America's credibility and capacity. On
credibility, critics of Mr Biden believe
America's pell-mell departure from
Afghanistan in 2021 signalled weakness to
America's foes. Similarly, others contend
that cutting aid to Ukraine would grant a
victory not just to Russia but to China,
too. As for capacity, the Pentagon long ago
abandoned the requirement that its armed
forces be able to fight two major regional
wars simultaneously. Instead it now seeks
to "deter and, if necessary, prevail in
conflict" against a major adversary, while
also being able to "deter opportunistic
aggression elsewhere".
In Europe Mr Biden has helped Ukraine
without sending American forces, and
deployed more units to Europe to deter
attacks on NATO . In the Middle East, he
sent two aircraft-carrier strike groups to
the region, and strengthened other forces,
to deter attacks by Iran and its proxies.
On the face of it, supporting friends is a Online safety judge temporarily blocked California's law
over First-Amendment concerns. A related

v free speech
cheaper way to preserve American power law in Arkansas was also blocked. The
than direct involvement in wars, as in Iraq worry is that these laws restrict the
and Afghanistan. But American defence publication of free speech.
firms are struggling to boost production to A second type of law attempts to
supply allies while replenishing depleted regulate how tech companies moderate
American stocks. War games suggest content. A law in Florida prohibits
America would run out of long-range social-media companies from
anti-ship missiles within days of a war "deplatforming" users. Texas's version of
State internet-safety laws,
with China over Taiwan. "We have a one­ the law would prevent companies from
meet the First Amendment
war military and a two-week industrial removing posts or banning users based on
base," notes Kori Schake of the American their political viewpoints. A federal judge
Enterprise Institute, a think-tank. TAMARA G I LKES B O R R u s public policy upheld Texas's law, but the policy in
Perhaps the biggest obstacle to correspondent, The Economist Florida was blocked by a federal judge. The
sustaining America's role in the world is tech firms argue that being able to decide
political dysfunction at home. ''America
first" Republicans have hampered normal T prevents
H E F I RST AME N DM E N T-which
the government from
what to publish and what to take down,
without government interference, are
budgeting and have grown especially "abridging the freedom of speech" -is constitutionally protected freedoms.
hostile to funding the war in Ukraine. If foundational to America's democracy. These cases will force America's legal
they succeed in cutting aid to Ukraine in Several states have recently passed system to reckon with complicated
2024 , allies everywhere will shudder­ legislation to regulate the tech industry questions. The idea that the government
doubly so if their champion, Mr Trump, is that may violate this fundamental right. In cannot limit speech (with exceptions such
again elected president. • 2024, tech companies will fight back. as defamation and obscenity) extends to
The big question is whether a country media companies and their right to edit
with First-Amendment protections can content. But does it include tech firms'
regulate tech at all. The Children's Online moderation of posts and feeds?
Privacy Protection Act (COPPA), which A further question centres on the
went into effect in 2000 , requires websites First-Amendment rights of children. The
to obtain parental consent before Supreme Court has ruled that children do
collecting, using, or disclosing personal not "shed their constitutional rights to
data from children under 13. Aside from freedom of speech or expression at the
this law, the tech industry operated with schoolhouse gate" and have a right to read
limited regulation for 20 years. Now controversial books. But it also says
statehouses on both sides of the political harmful materials can be restricted. How
divide have stepped in to fill this void. this applies to the internet is unclear.
The state policies can be split into two NetChoice, a trade organisation that
broad categories. One type of law claims to counts Meta, Google and other tech firms
protect children. California's governor as members, says the new laws are
signed the California Age-Appropriate unconstitutional. It has sued Arkansas,
Design Code Act in September 2 0 2 2 . It California and Texas, and shows no sign of
requires companies to be more careful bacldng down. At least one case, relating
about how they interact with children. to efforts by Florida and Texas to intervene
Florida and Connecticut have drafted in content moderation, may reach the
similar bills, but in September a federal Supreme Court in the coming year. •
26 U N I T ED STAT ES T H E WO RLD A H EA D 2024

Sm a l l is movi ng so uth, fu el l i ng u rba n

ren ewa l i n G eorgia, N o rth

bea utifu l Ca ro l i n a a n d Texas, even as

citi es i n the n o rth-east,
M i dwest a n d west sh ri n k. And
sma l l southe rn towns a re
growi ng fa stest.
Som e of th at is beca use of a
The places you haven't heard
th i rst fo r sm a l l -town l iving a nd
of are growing fastest
an a bi l ity to wo rk rem otely,
b ro ught o n by the pandem ic.
REB ECCA JACKSON I n 2020 m o re peo p l e moved to
So uthern co rrespo nd ent, places with fewe r than 30, 000
The Economist, Austi n res idents than to o n es with
mo re th a n 80,000. Even after
II EEP I N G A USTI N wei rd" has mask m a n d ates eased, the
K been m ore of a s l og th a n trend co ntin u ed . Census
l ocals a nti ci pated . I n u nd ated co u nts up to J u ly 2022 show
with S i l i co n Va l l ey refugees th at sm a l l metro a reas i n the
a nd M a n hatta n defecto rs, the South saw o.g new a rriva Is per
Texa n city once known fo r its 100 residents, w h i l e southern
coo l su bcu ltu re has b ecome a citi es h a d j u st o.6.
tech m etropol is. Amazon, Da p h n e, Al a ba m a, a fi s h i ng
A p p l e, Google, Meta a n d Tes la town on t h e G u lf coa st, fa red
set up shop there, offering j obs better tha n B i rm i ngh a m, a city
that made it a m agnet. From whose po pu lation d i d not
2010 to 2020 m etro po l ita n b udge. S parta n b u rg, So uth
Austi n's po pu lation grew by Ca ro l ina, h ad twi ce the
m o re than t h at of a ny oth er big i n - m igration rate of m u ch
city, by o ne-th i rd to 2.3 m . l a rge r C h a rlesto n .
I t has si n ee b u rst a t the This trend wi l l co nti n u e i n
sea ms. H ousi ng su p p ly has 2024. I n 2020 th e l oca l cou n c i l
fa i l ed to keep u p with o f a c l u ster o f 3 1 m id-sized
roc keting d e m a n d . I n towns in the Oza rk m o u nta i ns
Septe m b e r the Aust i n Board of north-west Arka nsas
of Rea lto rs sa i d the c ity i s sh ort offered m overs $10,000 a nd a
of 152,000 afford a bl e b icyc l e. N ow they no longe r
two-person ho mes. Loca l s a re need i nce ntives. At t h e cu rrent
getti ng priced o ut, h o m e l ess m igration rate, the a rea is
peo ple l i n e the downtown
stre ets a n d traffic is h e l l ish.
projected to d o u b l e in size,
hitt i ng 1 m residents by 2045. From long leg
to silly mid-off
Citi es across the S u n Be lt, The towns a re creating a m ore
fro m C h a rl otte to Da l l as, h ave cos m o pol ita n fee l by b u i l d i ng
seen an i nfl ux of n ewco mers hote ls and tra nsport services.
over the past d eca de. D u b bed In Septe m ber the cou n c i l was
the "n ew g reat m igration", it adve rtis i ng 11,000 n ew jobs. A
has been l ed by thousa nd s of go l d en age for h a m lets of th e
b l ack co l l ege g rad u a tes South is co m i ng.

A cricket World Cu p comes to America

Asia correspondent,
L EO M I RA N I
The Economist, Mumbai

I N 19 94 , W H E N America hosted the F I FA

men's football World Cup, just 20% of
Americans even knew it was happening in
their country. Today, nearly a third of
Americans who follow sports describe
themselves as "avid" fans of soccer, no
Cricket is doubt helped by two consecutive World
coming to Cup victories, i n 2015 and 2019 , by their
women's team.
the world's Three decades after football's first big
.... Welcom ing everyone most valuable American outing, cricket is starting its
sports market own journey in the world's most valuable ►►
 T H E WORLD A H EAD 2024 U N IT E D STATES 27

► sports market. In June 2024 the United

States will, jointly with the West Indies, Is your city Los Angeles, Miami and Phoenix have
hired "chief heat officers" to oversee

heatproof?
host the men's Twenty20 World Cup-the emergency response and adaptation
shortest and most popular form of cricket, plans. In 2024, which may be the hottest
in which each game lasts three hours, not year on record, more cities will appoint
five days. Around a third of the 55 matches such officials. Ever more will adopt new
will take place in America. The American technology such as cool pavements, which
team, as host, automatically qualifies for reflect rather than absorb sunlight. Trees
the tournament-its first-ever top-tier will be planted for shade. City officials will
competition-and is hoping it will be a open more cooling centres and try to coax
Extreme heat will bake America's cities,
coming-out party for American cricket. unsheltered homeless people, who are
but there are ways to prepare
For most Americans, cricket has (not among the most vulnerable to heat
unreasonably) a reputation as a sport with exhaustion, inside.
impenetrable rules. For now, it remains a West Coast correspondent,
A RY N B RA U N But 2024 will also bring political
niche interest pursued mostly by The Economist, Los Angeles challenges. In America there are no federal
immigrants and their children. Indeed, heat protections for workers. President Joe
the majority of the American cricket team
consists of players with roots in South Talmost biblicalisrains,
late again. Without the
H E MO N S OO N
there is nothing
Biden has directed the Occupational
Safety and Health Administration to create
Asia and the Caribbean. But that is still a to break the heat during a long stretch of a national standard for worker heat-safety,
group numbering some 6.5m people in days above 43° C (109 ° F) . The pavement is but that could take years. And if Mr Biden
America, a sizeable audience. scalding. Hospital wards are filling with loses the election, pending climate
A new professional tournament in burn victims. Even the cacti seem crispy. regulation may be scrapped. Things look
America called Major League Cricket (M LC) Many people venture out only in the early only mildly better at the state level. Just
debuted in 2023 to largely positive, if morning, before the sun rises. The rest of five states have enacted such worker
slightly bemused, media coverage. M LC the time they take refuge in air­ protections; all of them are run by
intends to organise its event back to back conditioned rooms: the invention that Democrats.
makes life in the desert possible. Some cities in Republican-led states
This was the scene in Phoenix, Arizona are taking matters into their own hands.
Cricket is not the only in July 2023. But what if the demand for "The state hasn't really addressed extreme
sport trying to raise electricity to power those air-conditioners heat or carbon mitigation at all," says Jane
its profile in America had stretched the grid to breaking point? A Gilbert, the chief heat officer for Florida's
study published in Environmen tal Science Miami-Dade County. Yet she was the first
a nd Tech nology, a journal, suggests that a in the world to hold her title, and, along
with the World Cup in 2024 to make it a five-day heatwave in Phoenix, with a with the may or, has made heat a priority
"summer of cricket" in America. And the blackout, could kill more than 13,000 for the county.
hope is that the momentum will build people and send more than half of the Miami and Phoenix at least know that
from there: in October the International city's residents to hospital. their summers will be hot. But climate
Olympic Committee announced that both This is Phoenix's worst-case scenario. change is also bringing extreme heat to
men's and women's cricket would be But heatwaves do not not need to cause places unaccustomed to it. The First Street
included at the Olympic games in Los catastrophic power loss to threaten Foundation, a non-profit group, reckons
Angeles in 2028. people's lives. The urban heat-island effect that an "extreme heat belt" will emerge in
Cricket is not the only sport trying to means that city centres can be much the centre of America over the next 30
raise its profile in America. In 2022 the hotter than surrounding areas because years (see map) . Perhaps these places, too,
United States hosted the World Athletics roads and buildings absorb and trap heat. will soon have heat chiefs of their own. •
Championship for the first time. The next
F I FA men's football World Cup, in 2026, -
will be hosted jointly by the United States, Burning u p
Canada and Mexico. And the rugby World Fo reca st n u m ber o f days exceeding a heat-index 1 1 1111 1 1111 1 1111 1
Cup will be staged in America for the first temperatu re* of 1 0 0° F (38° C) in 20 5 3 0 20 40 60 80 1 00
time in 2031.
The fact that the United States team is c=J
WA
unlikely to progress beyond the group No data
MT ME
stages of the cricket World Cup is beside ND
MN
the point. A cricket match framed against OR
ID
the skyline of a big American city is bound so WI
Ml
NY
WY
to generate publicity for the sport. And for
IA PA
the United States squad, playing against NV NE
OH
the world's best teams-with a global UT IL IN
KS MO
co WV
audience-is itself an opportunity unlike CA
KY
VA
any it has had before. NC
Building a new audience for a sport is, Los Angeles
after all, less like the action-packed
Twenty20 version of the game, and more
closely resembles its five-day incarnation,
the Test match: a slow accumulation of
small victories and close shaves that is a
test of endurance and determination as * H umi dity combined with air temperatu re Miami
much as it is of skill. • Sou rce: Fi rst Street Fou nd ation
28 U N IT ED STAT ES T H E WO RLD A H EA D 2024

By Invitation Five cold-war lessons

T between America and

rivalry
H E I NT E N S I FY I N G Military strength matters, as do allies ,
say Niall Ferguson and Condoleezza
weaponry, developing secure
su pply chains for critical
China has led to much talk of a materials and com ponents,
new cold war. Some say that is Rice of Stanford's Hoover Institution and rebuilding the defence­
going too far, but the two do i ndustrial base. Peace through
seem now to have little space strength really works.
for co-operation and rather Third, we need to engage in
more for con flict. effo rts to avoid accidental war.
The greatest difference with To th is day we benefit from
the first cold war is, of course, contacts between the
the origin of this rival ry. After Am erican and Russian armed
the second wo rld war, the two fo rces (established during the
superpowers settled quickly cold war) to prevent an
into confrontatio n. They had accident between them.
little in common. The Soviet Fourth, remember George
Union was a mil itary giant bu t Ken nan, the American
an economic recluse. China, d iplomat based in Moscow
co nversely, was brought into who wrote the "long telegram"
the international economy in 1946, predicti ng that the
afte r 1978. For 30 years it Sovi et Union's own internal
benefited from integration and contradictions would
access to foreign cap ital and eventually weaken it. Chi na is
know-how. Along the way, it eco nom ically stronger than
acquired an aptitu de for indi­ the Soviet Union but has many
genous i n novation , not just of its own contradictions: a
intellectual-property theft. deflating property sector, high
And China had been you th unemployment and
chipping away at American d isastrous demography.
power for years . But it took the The final lesson of the first
more direct approach of Xi cold war is that nothi ng is
Jin ping, who speaks of inevitable. Success today will
surpassing America in fro ntier requ ire democracies to come
technologies and refers to the to terms with their own flaws
Tai wan Strait as Chinese arousing resentment. would do well to understand it and contrad ictions-not least,
national waters, to shock In the cold war and after, and to take its lessons to heart. the fractu res in society
America into u nd erstanding the Marshall Plan, the Peace Five stand out. amplified in online echo­
the challenge ahead. Co rps, the American-backed The fi rst is that allies chambers. Fai lure to safeguard
China has bu ilt an "green revolution" in I ndia n matter. China has clients that the legitimacy of institutions
impressive global network of agricu lture a n d the P E PFA R are beholden to it in one way that protect freedom has led to
telecoms infrastructure, port initiative to tackle H I V/A I D S or another. Russia, the most plummeting confidence i n
access and military bases (or showed that America cou ld important, has become a democracy itself.
rights to build them) in client improve the lives of people liabil ity because of Vlad imir Yet democracies have been
states. Chinese influence has abroad. The question today is Putin's war on Ukrai ne. counted out before by
steadily evolved from pure how far it can take advantage America, meanwhile, is authoritarians who mistook
mercantilism to a desire for of Chinese missteps with an blessed with a European the cacophony of freedom for
politic al influence. America equally effective strategy. alliance revitalised by its firm weakness and assumed that
has been slow to react. Too From the 1940s to the 1980s response to Russia's the suppression of dissenting
often it resorts to cajoling of the Hoover Institution, where aggression, a stronger NATO voices i n their own societies
other cou ntries to resist we are both fellows, fostered and close allies in Asia. was a sign of strength . The best
Chinese investment, while the study of the cold war. I ts Second, deterrence requires cold-war leaders u nderstood
offering few alternatives. archives remain crucial to military capability to match that the authoritarians were
The truth is , though , that scholars of the period. We rhetoric. China h as been wrong. If this generation of
China's foreign-investment improving every aspect of its leaders can show s imilar
strategy is beginning to show military capability, just as the resolve, the outcome of this
cracks. Its "loan-to-own" For deterrence, military war in Ukraine and wargaming new superpower rival ry­
approach , its reliance on about Taiwan have revealed whether it is a second cold
Chinese rather than local
capability must match weaknesses in the West's. The war or something new­
workers and its infrastructure rhetoric. Peace through West must respond by should be another victo ry for
construction failures are strength really works procuring more advanced the free world. •
T H E WORLD AH EAD 2024 29

➔ Also in this section

30 Mexica n democracy
31 Thriving sta rtups
31 Green resources
32 Canadian pol itics

of its G D P . But 2024 looks set to be the year when the

A libertarian old divisions between left and right recede. Pol itics in
the region will become far more complicated.

wave?
The fi rst reason for this is the rise, in Argenti na, of
Javier Milei . A self-described "anarcho-capitalist", the
rad ical libertarian was due to go head-to-head with
Sergio Massa, the economy min ister, in the
presidential election ru n-off on N ovember 19th. A win
would make Mr Milei the first avowedly libertarian
p resident in Latin America (and, indeed , the world) .
His rise has been meteoric. Even in the event of a loss
to Mr Massa, he has upended the status quo in
Argentina, long dominated by the left-wing populism
of the Peronist movement, by making free-market
The old divide between left and right
ideas popular. Much of his appeal is due to the fact he
may be disru pted in 2024
is an outsider: the economist and former TV pundit
entered Argentina's Congress only i n 2021.
EMMA H OGAN Americas editor, The Economist Mr Milei often talks in a populist mode. But his
proposals are far more sweeping and radical than

L has long been dominated by

AT I N A M E R I C A
left-wing political parties. During a commodities
boom in the early 2000s, a series of left-wing
those of most right-wing populists. They include
dollaris i ng Argentina's economy (and scrapping the
central bank) , slashing public spending by at least 15%
governments in the region came to be known as the of G D P and reducing the number of government
"pink tide" for their statist policies and social ministries from 18 to eight. He tal ks of achieving a
handouts boosted by a sudden influx of cash. This zero p ri mary deficit (ie, before interest payments)
was followed, however, by a "blue tide" of right-wing within a year. And although Mr Milei is pro-free-trade,
leaders, such as Mauricio Macri in Argentina and Jair he advocates pulling Argentina out of Mercosur, a
Bolsonaro i n B razil , who pushed back in the 2010s. free-trade agreement. He regularly bashes the
By the start of 2023 it seemed that another era of governments of B razi l and China, the country's top
progressive politics had dawned , as 12 of 19 cou ntries two trading partners , for being left-wing.
were run by left-wing governments. That represented The second reason for the new complexity is that
a whopping 92% of the region's population and 90% many of the left-wing governments are going into ►►
30 TH E AM E R I CAS T H E WO RLD A H EA D 2024

► 2024 with much weaker mandates. Consider Mexico. Latin America only the tax reform has passed, in a watered-down
It has a presidential election in June. Claudia seems set for a version . Mr Petro has also been tarnished by scandals
Sheinbaum, of the ruling Morena party, is likely to involving members of his family and his staff.
win (see next story) . Ms Sheinbaum is seen as the mixed political In Chile, Gabriel Boric, a millennial social
hand-picked successor of Andres Manuel Lopez picture in the democrat who came to power on the back of huge
Obrador, the president since 2018 who has combined near future protests against inequality, has seen his approval
left-wing rhetoric with fiscal hawkishness. Although ratings drop because of rising crime and a weakening
most Mexicans think his record on issues such as economy. He also backed an attempt to rewrite Chile's
public security, corruption and the economy is poor, constitution that faltered in 2022, with 61% of voters
he has high approval ratings, of above 60%. It is rejecting it in a plebiscite, many of them because they
unlikely that Ms Sheinbaum, if she wins, will be able felt it leaned too far left. A vote on another draft is due
to sustain such high levels of support. She will have to in December 2023. Mr Boric has surrounded himself
compromise, work with the opposition and curb with capable politicians, but the wrangling over the
some of her more radical plans as a result. constitution has overshadowed his presidency and
Similarly, in Colombia, some believe the limited his successes.
government of Gustavo Petro, that country's first So it seems unlikely that any new tides, pink or
avowedly left-wing president, is unlikely to last until blue, will sweep the region in 2024. Instead, Latin
the end of its term in 2026. Mr Pet ro reshuffled his America seems set for a mixed political picture in the
cabinet in April 2023, in order to try to push through near future. Perhaps the biggest question is whether
his ambitious reforms of the tax, health and pension other countries will follow Argentina's example-and
systems. But he has been stymied in his efforts. So far include a wild card like Mr Milei in the mix. •

First lady

Mexico wi ll el ect its fi rst

fem a le president

S A RA H B I R K E
Mexico City bureau chief,
The Economist, Mexico City

M EXI C O 'S E L ECTI O N S on J u n e 2 n d 2 0 24

will go down in history. Never before
have there been so many voters on the
electoral roll or so many posts up for
grabs. Mexicans will elect a new president
and all 628 members of the two chambers ..-. After AMLO
of congress, as well as nine state
governors, multiple local legislatures and
other local positions-around 20,000 shockingly high at around 30,000 a year, president's protegee, and has promised to
roles. And it is almost certain that the top have fallen slightly, but disappearances continue his idiosyncratic mix of policies.
job will go to a woman for the first time: (mainly murders without a body) have She is, however, less confrontational
both the ruling Morena party and the main risen significantly to around 9,500 a year. than her mentor and would bring her own
opposition coalition are fielding female The economy is stable, but Mr Lopez approach to governance, indicating she
presidential candidates. Obrador's anti-business actions have would be more business-friendly and
Despite the democratic significance of undercut the commercial benefits of environmentally conscious. Her
these elections, they are taking place proximity to the United States. The list of administration's adept management of
under difficult conditions. President wrong-headed policies is long, including security led to a faster drop in the murder
Andres Manuel Lopez Obrador's divisive backing fossil fuels, empowering the rate in the capital than elsewhere.
rhetoric and erosion of democratic norms armed forces and an ill-planned shake-up She would also face more checks on her
have taken their toll. He has sought to of the school curriculum. power. Morena and its allies are unlikely
weaken the authority of the Instituto But Mexicans may not see a radical to win the super majority in congress that
Nacional Electoral, the electoral body. change from their next president, who they had between 2018 and 2021, so
Though his policies have reduced poverty, will assume office on October 1st. Claudia negotiation and compromise will be
the picture is nuanced. Social handouts Sheinbaum, the Morena candidate, seems necessary. Turbulence is likely, both
have often been used to secure votes. and likely to prevail over Xochitl Galvez, of the before and after the elections. Criminal
the number of people with access to opposition . Ms Sheinbaum, who was groups have become increasingly brazen,
health-care services has declined on his mayor (equivalent to state governor) of threatening and killing local candidates
watch. Reported murders, although still Mexico City from 2018 to June 2023, is the who refuse to co-operate with them. •
T H E WORLD A H EAD 2024 TH E AMERICAS 31

Latinnovation lack of legal recourse when things go

wrong. Kavak, based in Mexico, is a
platform on which people buy and sell
second-hand cars. Its founders realised
buyers did not have confidence in sellers
to tell the truth, so they stepped in as a
middleman. Similar platforms exist for
property. Loft, in Brazil, buys, remodels
and sells apartments and houses. Users
can sell their pad to Loft, apartment-swap
Startu ps flourish around the
or simply list property on its website.
region's pain points
Brazil has long been the most
established startup hub, followed by
Bureau chief for Mexico,
SARA H B I R K E Mexico, Colombia, Chile and Argentina.
Central America and the Caribbean, Expect some countries to produce their
The Economist, Mexico City first unicorns ( companies valued at over

S Latin America inbeenrecent

TA RT U PS HAV E a bright spot for
years. The
$1bn) and more cities, not just capitals,
becoming startup centres too. Other
countries will also see more activity as
number backed by venture capital more startups expand across regional borders.
than doubled between 2020 and 2023 to Nu bank, a Brazilian firm, is one
over 2,500, according to LAVCA, an example to watch. In mid-2023 it became
association for regional investors. In 2021 Brazil's fourth-largest bank by number of
Latin American startups attracted around customers (it has 8om) and has expanded
$16bn in investment, roughly as much as
in the previous ten years combined.
to Colombia and Mexico. The region is
home to millions of unbanked people, and A resource
blessing?
Startup activity exploded during the plenty of banks that stick to traditional,
pandemic. As elsewhere, people confined expensive models.
to their homes wanted to shop, consult What will still be lacking in 2024 is
doctors and much more without leaving substantial official support. Governments
the house. Many existing firms did not around the region have cheered on
have online portals, or at least not innovation, but none offers anything like
user-friendly ones. It helped that the support services for entrepreneurs
SoftBank, a Japanese investment that made successful startup hubs of
Latin America could lead
behemoth, had launched its first fund for countries like Israel or Singapore. Slow
the way on green power
Latin America in 2019, worth $5bn. Other bureaucracies and out-of-date rules
funds followed suit. continue to frustrate. Even so, startup
Since then investors have calmed activity will continue to thrive. Latin America
AN A LA N K E S
down. Global economic conditions have Entrepreneurs in the region point out that correspondent, The Economist, Sao Paulo
been a factor, too. In 2024 startu p funding they have to be resilient to get to where
will probably stabilise at around its
pre-pandemic level. But the number of
startups will increase. More will find
they are. Turning the region's obstacles to
their business advantage is what makes
Latin America's startups so dynamic. •
Fabundant Latin America has been
O R C E N TU R I ES
dogged by the resource curse. Its
natural resources have never
backing from venture capital, including translated into a lasting, society-wide
local funds, which are now proliferating.
As elsewhere, many Latin American - ascent into broader prosperity. Many are
hoping this will change with the global
startups aim to make life more Starting to motor transition to clean energy. The region
convenient-groceries or takeaway food Latin Ame rica, c u m u lative n u mber of sta rtu ps holds more than half the world's lithium,

■
delivered to your door, for example. The receivi ng ventu re-capita l fu n d i ng, '000 used in electric-vehicle batteries;
likes of Cornershop, a Chilean app that 2.5 produces over a third of its copper, for
started in 2015 and was bought by Uber in electrical wiring; and churns out more
2020, and Rappi, a Colombian app, are
now used across the region. Both have ■ Other ■1 2.0
than half its silver, crucial for solar panels.
It is also home to around half of the
expanded to do more, including delivering ■ Argenti na world's biodiversity and a quarter of its
small parcels and running errands. Colom bia forests. In the coming years, regional
But startups also reflect the particular Chile leaders hope that Latin America can take
1 .5
"pain points" faced by people in Latin M exico off as a green power.
America. Logistics is one fertile area. The ■ Brazil Its resources are not just material.
region's postal services are shoddy and, Thanks to ample wind and sun, and strong
slow and a lot goes missing. E-commerce rivers, more than a quarter of its primary
startups such as Mercado Libre have energy currently comes from renewable
established their own logistics arms. sources, twice the global average.
Startups are likely to expand into According to the Global Energy Monitor, a
business-to-business deliveries, San Francisco-based charity, 320 gigawatts
especially if Mexico attracts more of solar- and wind-power projects are
manufacturers seeking to move expected to come online by 2030, an
operations from China. 201 3 15 17 19 21 23* increase of 460% over existing solar and
Sou rce: LAVCA *To J u ne 30th
Another pain point is low trust and wind capacity. The infrastructure to ►►
32 TH E AM E R I CAS T H E WO RLD A H EA D 2024

► transmit this energy is expanding, too. I n

2024 B razil will auction transmission Trump to the brunt of the pain , however, before the
campaign begins. The central bank

the rescue?
lines which, together with two auctions in reckons that by the second half of 2024
2023 , could bring in as much as $14bn . growth will have picked up and inflation
Latin America could also become a will have fallen to below 3% (from 8% in
significant low-cost producer of so-called mid-2022) . Voters have short memories.
"green" hydrogen, mad e from renewable The second reason is more cynical , and
sources , a clean alternative to fossil fuels relates to America. Mr Trudeau portrays
for some uses. Brazil's congress is soon Canada as a bulwark against populism,
expected to pass regulatory frameworks J usti n Trudea u may fi nd a n u n l i kely
and Donald Trump has been a useful foil .
for offshore wind and green hydrogen, A su rvey in 2020 found just 14 % of
a lly i n his bid for a fou rth term
which could unlock billi ons of dollars in Canadians would vote for Mr Trump if
investment. A quarter of all green­ they had the option. I f he becomes the
hyd rogen proj ects are in Latin America, Former staff correspondent,
J AM ES YAN Republican nominee, expect Mr Trudeau
the highest share globally. Chile plans to The Economist, Vancouver to brand Canada's Conservatives as an
produce the world 's cheapest by 2030, and offshoot of Tru mpism.
be among the top th ree exporters by 2040.
The region is also at the forefront of T mi nistertime
H E LAST a Canadian prime
won a fourth successive term,
Perhaps anticipating this line of attack,
Pierre Poilievre, the Conservative leader,
cl imate-fi nance innovation . In 2022 Chile in 1908, the country boasted a population has been wary of picking fights on
became the fi rst cou ntry in the world to smaller than that of modern-day Toronto. culture-war issues such as im migration.
issue bonds with a redu ced interest rate if Justin Trudeau , who has led Canada since In 2024 Canada is projected to admit
it meets sustainabi lity goals, rais ing $2bn. 2015 and is now in his thi rd term , is 485 , 000 permanent residents-a new
Urugu ay followed suit, raisi ng almost convi nced he can eke out another victory. record. But instead of call ing for a
$4bn. In 2023 Ecuador conducted the That is despite trai ling the opposition red uction , the 44-year-old opposition
world's largest debt-for-natu re swap, wi th Conservatives in the polls fo r most of leader proudly touts his pro-immigration
the savings going towards protecting the 2023 . If he can pu ll it off, he will have credentials. H e often invites his wife, an
Galapagos is lands; the country's departing bested his father, Pi erre Tru deau, who immigrant from Ve nezuela, to join him on
president has called biodivers ity a new narrowly lost a fourth campaign in 1979 . the stump. In his speeches he p refers to
"curren cy". The trend will co ntinue in The younger Mr Trudeau is not obl iged focus on bread -and -bu tter issues such as
2024 , including a sustainable-bond issue to call an election until 202 5 , thanks to a affordable housing and urban safety. So far
i n Brazil worth an esti mated $2bn. pact his mi nority Liberal govern ment he has kept a lid on the most excitable
The continent will offer two case struck with a smaller left-leaning party. eleme nts of his base.
studies of whethe r fossil-fuel-dependent Even so, the prime mini ster may well be But what happens south of the border
economies can qu ickly go green . In tempted to go to the voters in late 2024, for always fi nds its way into Canad ian public
August, Ecuadoreans voted to ban oil two reasons. discou rse. As America's fractious general
drilling in part of the Amazon rai nforest, The first concerns the economy. Si nce election in November d raws near, expect
givi ng the state oil firm a year to shut 2022 Canada's central bank has increased Mr Trudeau to invoke the spectre of
down operations. The referendum was the its ben ch mark interest rate ten times in a "northern popu lism" as a way of
first time in history that a cou ntry's bid to cu rb inflation. That put a damper on consol idating the left-of-centre vote
citizens voted to halt oil production. It business activity and raised mortgage beh ind his Liberal Party. It might not work.
could cost Ecuador, whose ma in export is rates for new borrowers . The economy But for a government that is looki ng long
crude, some $14bn in lost income over the unexpectedly contracted in the second in the tooth, it cannot hu rt to keep
next two decades . Gustavo Petro, quarter of 2023. Canadians wi ll have bo rne attention focused elsewhere. •
Colombia's unironically named president
since 2022, has also pledged to end oil
exploration , even though oil and its
derivatives account for a third of exports.
Despite all the optimis m , the shift will
not be an easy o ne. Old reliances die hard.
B razil and Guyana are pouri ng money into
oil exploration. Deforestation of the
Amazon in Bolivia and Venezuela has
rocketed. Moving up the value chain , from
extracting raw materials to manu facturing
green technologies , requ ires investment
and expertise. And tra nslating any of this
i nto a broad i ncrease in prosperity will
linger as a challenge. But the green
transition offers the region a historic
opportunity to tu rn the resource curse
i nto a blessing. •

A quarter of all green­

hydrogen projects are
in Latin America
T H E WORLD A H EAD 2024 33

➔ Also in this section

3 4 I ndian techno logy
3 5 Taiwan's election
3 6 Central Asia's ties
3 6 Energy linkages
37 After Jokowi
3 8 S. Jaisha nkar
on I ndia's growing
influence

has grown from the world's tenth-largest economy to

More Modi its fifth (it could be third by 2027). It has become a key
partner in America's pushback against China. But
there have also been persistent allegations from
critics at home and abroad that Mr Modi has repressed
political dissent and marginalised Indian Muslims.
The coming year could be critical for the future of
India's democracy-and its relations with the West.
Leaders of Mr Modi's Bharatiya Janata Party ( BJ P)
deny eroding Indian democracy. They point to his
78% approval rating and his government's record in
tackling infrastructure, corruption and other
problems that hindered growth under the Indian
National Congress party, which ruled for 55 of the 76
years since India's independence. The BJ P says its
N a rendra Modi's expected re-election
wil l i nspi re fea r as wel l a s hope
"Hindutva" ideology seeks not to marginalise
Muslims but to restore a national identity suppressed
J E R EMY PAG E
Asia diplomatic editor, under Mughal and British rule.
The Economist, Delhi Mr Modi's opponents say he is undermining
India's secular constitution by pandering to its 80%
N A S P E EC H
I on India's independence day in August
2023, his tenth as prime minister, Narendra Modi
declared the country to be at a turning point. A new
Hindu majority while encouraging discrimination,
and violence, against its 14% Muslim minority. They
accuse him of harassing critics, muzzling journalists
world order, he told the crowds, was emerging in the and eroding judicial independence. Such abuses,
wake of the covid-19 pandemic. India was poised to critics say, mask a slew of failures, including botched
shape this new order, thanks to its "trinity" of agricultural reforms and a shortage of good jobs,
demography, democracy and diversity. "The world can especially for young Indians.
see a spark for itself in this beam of light that is Opposition concerns were spelled out recently by
emanating from India," he said. Rahul Gandhi, a Congress parliamentarian who was
India may indeed be at a turning-point with a given a two-year jail sentence in March, later
general election due in 2024-just not quite in the suspended by the Supreme Court, for mocking Mr
way that Mr Modi suggests. Since he took office, India Modi's name. "The concept of India, the concept of ►►
34 ASIA THE WO RLD A H EA D 2024

► free elections, the concept of free speech , they a re A BJ P victory M r Modi has also proposed holding national and local
now under mortal threat," Mr Gandhi said. "We are looks likely. elections simultaneou s ly, in what critics see as
now fighting for the soul of I nd ia." another move to centralise power.
A BJ P victory looks likely. I n the last general But it has So far, Western cou ntries have been reluctant to
election in 2019, it won 303 of 542 seats in struggled criticise Mr Mod i in public. America, in particular,
parliament's lower house, with 37% of votes. It now in richer sees India as a partner i n its efforts to counterbala nce
controls the central government and about half of southern states China. When Mr Modi visited America in June,
I ndia's 28 states and eight union territories. But it has President Joe Biden p rioritised defence deals.
struggled in richer southern states. It lost Karnataka, a Privately, though, some Western officials worry
technology hub, to Congress in May. that by fail ing to champion democratic values in
It also faces a more concerted national challenge I nd ia, they u ndermine their own efforts to defend the
after 26 opposition parties, includ ing Congress, ru les-based order against Chi na, Russia and other
formed a coal ition in July, called the I ndian National autocracies. Western a nxiety was piqued fu rther in
Developmental Inclusive Alliance, or I N D I A. Stil l , it September when Canad a accused Indian officials of
will struggle to match the electioneering firepower of i nvolvement in the killing of Hardeep Singh Nijjar, a
the BJ P, which opinion polls suggest will win another Sikh activist and Canadian citizen , in Vancouver. The
majority, or lead a coalition government. Indian government has denied involvement.
Either way, the political pitch could skew further In his speech in Augu st, Mr Modi prom ised that
in the BJ P's favou r with a revision of electoral India would be a developed cou n try by 2047, the
bou ndaries due in 2026. That could expand the lower centenary of i ndependence. For his domestic critics
house to around 75 3 seats , with most new ones going and foreign partners al ike, the question is not just
to populous northern states, where the BJ P does wel l . how developed it wi ll be-but how democratic . •

Ctrl-Alt- Del h i ski l led techn i ca l labo u r to b u i l d

s u c h services fo r its own
globa l repository fo r D P I
prod u cts. The U N Deve lopment
Some of India's d igita l syste ms,
i n cl u d ing its vacci nation
citizens. Aad ha a r, its Progra m me, the Worl d Ba n k data base and identity system,
d igita l -identity system , now a nd the Bi l l & Mel i nd a Gates have proved vu lnerab le to
covers nearly the enti re Fou ndati on, a mong others, h ave data lea ks. The success of U PI
po pu lation of 1 -4bn. shown su pport. o bscu res th e fact that its
India plans to export its Transactions on its Un ited The ta rgets are chiefly in providers h ave yet to work out
e-gove rnment technology Paym ents I nterface (U PI ) a re Africa a nd As ia . In 2024, more how to ch a rge users without
to other cou ntries growi ng ra pid ly-m ore tha n a re l i kely to adopt I n d i a's d rivi ng away m erchants a nd
1o bn payments and tra nsfe rs id entity system or its paym ents buyers. N ot every cou ntry has
were made in Augu st 2023, u p tech nol ogy. Li nkages wi l l grow the techn ica l ca pa city to
Asia corres pondent,
LEO M I RAN I from 1 bn in October 2019. between U P I and hom e-grown i m pl ement and mai nta i n
The Economist, M u m bai D igi locker, an on l i ne wa re house systems in oth er cou ntri es, com p l ex d igita l projects
for officia l d ocum ents such as especia l ly those with a l a rge without expensive outside

B U RI ED O N page 22 of the
29- page G20 leaders'
declaration (exc l u d i ng
d rivers' l ice nces and tax record s,
has made dea l ing with India's
ti re some b u reaucracy easier.
n u m ber of I nd ia n m igra nts,
m a k i ng rem itta nces easier.
The growi ng vis i bil ity a nd
s u p port. I n 2024, India hopes
to see its tech nol ogy
celebrated . It sho u ld a lso be
a nnexu res), prod uced i n N ew Buoyed by the su ccess of adopti on of I nd ia's technology prepa red to have its
Del h i in Septem ber a n d such i n novations at home, the wi l l a l so bri ng greater scrutiny. ro bustness tested.
endorsed by the worl d's govern ment of Narend ra Modi,
biggest econom ies, i s a secti on the prime m i n ister, wa nts to
with the anod yne title of export its tech nologies to other
"Technologica l Tra n sform ation poor cou ntries. He sees it as a
a nd Digita l Pu b l i c mea ns to extend I n d i a's
I nfrastru ctu re". It is fi l l ed with infl u ence, d i plom ats rel ish
the sort of forgetta ble j a rgon win n ing goodwi l l at low cost,
that big d i plomatic s u m m its tech d oye ns see it as a n
a re notorious for prod ucing. It end orsement o f their a b i l ities.
is a lso somethi ng that the But to rea p these rewa rds, I n d i a
world s ho u ld expect to hea r a needs a mecha nism to
l ot m ore a bout in 2024. institutiona l ise its efforts. So fa r
The state m ent d efi nes it has re lied on b i l ate ra l
d igita l pu blic i nfrastru ctu re agreeme nts, a slower a n d l ess
( D P I ) as "a set of sha red d igita l fl ashy way of goi ng about thi ngs.
systems [that] ca n enable The G20 offered the perfect
del ivery of services at soc ieta l stage to boost the profi le of D P I .
sca le." That m e a ns th ings l i ke Among I nd ia's achievem ents at
biom etric identity system s, the s u m m it was the adoption of
d igita l payme nts a nd d ata a fra mework for "the
m a n age ment. Over the past d evelopment, deployment and
decade I nd ia has ta ken governance of DP I" a n d
adva ntage of its h uge pool of end orsement o f its plan for a
T H E WORLD A H EAD 2024 ASIA 35

Facing the
dragon

The next president will determine how

the island prevents and prepares for war

A L I C E su China correspondent, The Economist, Taipei

0 new
N J A N UARY 13TH 2024
Taiwan's voters will elect a
president. The stakes are high. Tensions
between China and America may reach a critical point
in the next four years. America's intelligence agency,
the C I A, has said that Xi Jinping wants China's military
to be ready for an invasion of Taiwan by 2027.
Taiwan's next president will determine the island's
strategy to prevent that invasion, and preserve its
sovereignty and democracy.
Taiwan's two main parties, the ruling Democratic
Progressive Party (DPP) and opposition Kuomintang
( KMT) , have outlined opposing cross-strait strategies.
The pro-independence DPP favours strengthening ..... We hope not to figh t them on the beaches
relations with America and its allies while building
military deterrence through increased defence
spending and reform. The pro-unification K MT cross-strait exchanges, could reduce tensions in the
promises to relieve tensions by reopening dialogue short run. China might lift bans on Taiwanese
with China on the basis that the two sides of the strait agricultural products, which would allow the KMT to
belong to one country. The KMT has said that this vote show Taiwanese voters it can deliver improved
is a choice between "peace or war", while the DPP calls relations with the mainland. But China's military
it a choice between "democracy or autocracy". Both build-up at home would continue-as would its
parties suggest that the other's election will lead to determination to take Taiwan by force if it does not
Taiwan's demise, either by provoking a Chinese attack give up its sovereignty peacefully.
or by accelerating unification. The danger of a KMT victory is that it might lull
China has long made clear which it prefers. The Taiwan into a false sense of security, just at the time
Communist Party calls the DPP "separatists" and has when it most needs to prepare for potential war. Hou
put sanctions on several of its leaders. Over the past You-yi, the KMT's candidate, says he is committed to
eight years of DPP rule, Beijing has steadily increased Taiwan's defence. But he has also said that he would
its "grey zone" activity against Taiwan-aggression roll back Taiwan's recent reform of conscription,
that falls short of warfare but probes Taiwan's which is due to be extended from four months to one
defences, such as cyber-attacks, disinformation and year in 2024. He has accused the DPP of inciting
incursions into Taiwan's airspace. After Nancy Pelosi, tensions with China and suggested that a KMT-led
then speaker of America's House of Representatives, Taiwan would not need to strengthen its military,
visited Taiwan in 2022, China fired missiles over because it would no longer face a Chinese threat. This
Taiwan in a mock blockade. If William Lai, the DPP's is may sound nice as a promise, but it is not true.
candidate, wins in January, China may respond with a Taiwan's current president, Tsai Ing-wen of the
similar show of force or go further, enforcing a longer A victory for DPP, has had a more difficult and realistic message for
blockade, interfering with Taiwan's internet or her people: that in order to prevent war, they must
creating more crises in the Taiwan Strait.
the KMT could unite and prepare for it. The aftermath of the 2024
A victory for the KMT, which has sent senior relieve tensions election will show whether Taiwanese voters are
leaders to meet mainland officials and facilitates in the short run ready to do so. •

WHAT I F? been arrested ahead of an election in Janu ary. What if

the PTI wins the election? Mr Khan's ousting by senior
Im ran Khan was removed as Pakistan's p rime minister genera ls has made him a hero among people wea ry of
by a vote of no-confidence in 2022. He was sentenced economic and socia l chaos, and of milita ry medd ling.
in 2023 to three yea rs in jail for corru ption, and banned B ut a PTI win would be unpopu la r with the genera ls,
from politics for five yea rs. Many in his PTI pa rty have who might then try to intervene once again.
36 ASIA TH E WO RLD AH EAD 2024

Stanning for Council, has sat down with the five leaders
twice since Russia's invasion. Ties with The green hand
the Stans of friendship
the West will continue to grow.
Kazakhstan-long close to the Kremlin
but now feeling vulnerable along its
7, 600-kilometre border with Russia-will
be particularly receptive to Western
overtures. The interests of China, Europe
and the Central Asians overlap in
promoting the Middle Corridor, a
Ca n Centra l Asia red u ce The energy transition cou l d create new
transport route from China to Europe
its ties with Russi a? and u nexpected l i n kages i n the region
bypassing Russia, along which trade has
soared in response to the war. There will
freelance correspondent,
J OA N NA L I L L I S , be progress on removing bottlenecks and Banyan columnist,
DOMI N I C Z I EG L E R
The Econ omist, Almaty expanding transport links in 2024 . Ties The Economist, S ingapore
with the Arab world are also expanding,

R uss 1 A's WA R in Ukraine has rattled its

traditional allies in post-Soviet Central
Asia. These countries are bound to
after an inaugural Central Asia-Gulf
Co-operation Council summit in 2023.
But some dependencies are here to
T o FOC U S O N LY On China's great-power
contest with America risks missing
other shifts that will prove every bit as
Moscow by formal ties of politics, stay. Kyrgyzstan, Taj ikistan and important to Asian nations. The biggest
economics and energy supply, as well as Uzbekistan rely on Russia for has to do with the region's energy
informal ties of family, culture and migrant-labour remittances. They may transition. In 2024 burgeoning energy
language, and they have looked askance at become more dependent in 2024, as linkages across Asia could rewrite the way
Russia's invasion of another ex-Soviet conscription in Russia intensifies labour the region deals with itself, in ways that
neighbour. Yet even as they seek shortages. Energy links will persist too: both reinforce and undermine a narrative
alternative alliances, in some ways they Kazakhstan exports over go% of its oil via of China's dominance.
are becoming even more tightly entangled Russia, and is eyeing a deal to import gas; Take the fast-growing economies of
with their former colonial master. Uzbekistan has already signed one. South-East Asia. Their energy demand is
The default position in the capitals of The risk of sanctions contagion will expected to increase by a thi rd by 2050. Yet
the five Central Asian republics, known as remain high. Trade with Russia has the same nations have made promises to
the "Stans" (see map), has been to profess boomed as Central Asian states have acted cut emissions to next to nothing. That will
neutrality over the war and refuse to give as middlemen for many goods. Uzbek and be a tall order, given that renewables
Russia diplomatic cover, beyond Kyrgyz firms have been penalised for account for a mere 15 % of Asia's power
abstaining from U N votes condemning its sanctions-dodging. Western efforts to generation to date. In Indonesia, Malaysia
aggression. That will continue in 2024. encourage Central Asian compliance with and the Philippines, coal remains king.
But so will Central Asia's efforts to sanctions on Russia will grow in 2024 . The region has potential for
cultivate relations with other partners. Central Asia is proof that Russia's renewables. The Mekong river already
Chief among them is China. President invasion of Ukraine has disconcerted its generates plenty of hydropower, in Laos
Xi Jinping hosted the first China-Central allies, who are wooing, and being wooed above all-albeit, right now, at a
Asia summit in 2023, and relations will by, alternative partners. But the region's significant envi ronmental cost to the
deepen further in 2024. Not to be outdone, symbiotic ties with Russia, forged over mighty river. The huge island of Borneo,
President Joe Eiden welcomed the Central centuries, should not be underestimated. divided between Indonesia and Malaysia,
Asian leaders to Washington for their first Russia will not retreat from a region it is also rich in hydropower potential. Yet
summit with an American president. considers its backyard. Its influence in such generation is a long way from the
Charles Michel, chairman of the European Central Asia will remain strong in 2024 . • region's key industrial and urban centres.
Hence the need for a network of
Selected rai lways & long-distance cables and cross-border
f]F0�:k w -•
_____......- -----. ...,, M oscow)
tra nsport routes
- M id d le corridor
energy interconnections. Europe's grid,
with 400-plus interconnections, brings
......_.._,___ RU SS I A
B E LA RU ■ - Other huge savings by matching demand wi th
·---- Proposed connection spare capacity. A better-connected
Kyiv
• • Yekateri n b u rg
N ovosibirsk /
South-East Asian grid, currently
non-existent, could slash clean-energy
prices, turbocharging the energy
transition. In addition, rolling out a
�\... . super-grid could foster wider habits of
co-operation in a region marked by prickly
. . . . · · :::!,.. nationalism and bureaucratic sloth.
-z�a
Black
0.-iStanbu l ••·· · ..
For years you could not go wrong
·· . · betting against Asian interconnections.
·· ··. .. ..
Yet the mood is changing fast-in part
u because of higher hydrocarbon prices, in
�<9� • Almaty part because grid technology has come on
.. �
�
■ Bishke k
in bounds. A series of interconnection
Ba ku ruli r,i Tas h kent ■ KYR_� YZSTAN
agreements were signed in August at a
Cospwn 'l<l1t1yl
I RAN Sea �};q,\I CH INA regional summit in Bali. In a promising
Ashga bat • pilot project, Laos now sends electricity
Teh ra n •
(� via Thailand and Malaysia to Singapore. ►►
 T H E WORLD A H EAD 2024 ASIA 37

► That i sland country, with little space for

its own renewables, is in talks with the
Malaysian state of Sarawak regarding an
und ersea cable from Borneo. In 2024 it
will look more closely at connecting
similar cables to Cambodia and to planned
solar farms on nearby I ndonesian islands.
All this could supply nearly a third of
Singapore's power needs in future.
Such projects can strengthen regional
coherence, a boo n i n a n era of great-power
tu rbu lence. Energy projects can also
provide valuable cou nterweights to an
often assertive China. Thanks to abundant
sun and wind, Australia has potential for
"green" hyd rogen , mad e by splitti ng water
using renewable energy. Ambitious plans
are being touted in the Pilbara region of
Western Australia for a huge
renewable-energy hub. Japan and South
Korea are interested in taking hydrogen
and ammonia (a way to store hydrogen in
a more portable form) . The technology is
untested at scale, bu t if it works, the
geopol itical consequence wi ll be to d raw
After J okowi justice is Jokowi's brothe r-in-law) made
an exception to the ru le preventi ng
cand idates under 40 from ru nning for
th ree natu ral democratic partners closer. president or vice-pres ident. Mr Gibran
Something si milar is at play in was the only putative candidate under 40.
atte mpts by Australia and other Many observe rs decried the ru ling as
pro-American countries to loosen Chi na's und emocratic and nepotistic.
grip on the su pply and processing of rare The two front-runners are very
earths and critical mi nerals , several of different. Mr Prabowo is the leader of the
which are ind ispensable for renewable Gerindra party, the third-la rgest in
The leader wil l cha nge, the
technologies. Some in democratic parl iament. He lost to J okowi in 2014 and
pol icies probably not so much
Mongolia want to use its abu ndance of 2019 . Both ti mes, he rejected the result. A
rare earths to move closer to Western former army general , he has been accused
powers as a counterbalance to its problem S U E- L I N WO NG South-East As ia of human-rights abuses in the 1980s and
of being uncomfortably squeezed between correspondent, The Economist, Si ngapore 199os-accusatio ns he strongly denies .
its giant neighbours , China and Russia. B u t many Indonesians do not know or
None of these efforts poses any
immediate threat to Ch ina's dom inance i n
several fi elds critical t o the energy
Ireleleaving
N DO N ES I AS P R ES I D E NT Joko Widodo is
his decade in office on a high. A
ntless focus on curati ng his public
care about Mr Prabowo's past, and he
enj oys strong support from the middle
class. Known for his fiery personality, Mr
transition. It rema ins the biggest persona, cou pied with the cou ntry's Prabowo has emulated Jokowi's soft­
solar-panel exporter, Ev-battery supplier strong econom ic growth, means he is spoken style as he tries to win over voters .
and critical-minerals processor. But the well-liked : his popularity hovers around Mr Ganjar, a former governor of Central
transition offe rs welcome new options to 80%, according to surveys. That in turn Java, has the backing of the P DI - P, Jokowi's
Asian countries in China's shadow. In the means that Jokowi , as he is universally party and the country's biggest. He has a
coming year, they will grab them. • known , will be pivotal in deciding who the ten-year track record in Central Java, a key
country's next leader will be when the province, where he is popular, and has
world's third-largest democracy goes to articulated a clearer set of sophisticated
the ballot box o n Valentine's Day 2024. policies than any other candidate.
Prabowo Subianto, the current defence The third cand idate, trailing far behind
minister, is leading in the polls, with in the polls, is Anies Baswedan, a former
Ganjar Pranowo close behind. Yet as well governor ofJakarta and former education
as wooing the electorate, they must also minister. Both Mr Ganjar and Mr Anies
court Jokowi . Both men have said they will have selected running mates from rival
continue his signatu re policies, i ncluding factions of a powerful Muslim
development of I ndonesia's booming organisation, Nahdlatul Ulama, which
nickel i ndustry and other ambitious claims to have over 10om members. It
infrastructure p rojects , most notably represents an important voting bloc.
carving a new capital city out of the In the u npredictable world of
j ungles of Borneo. I ndonesian politics, anything could
Although Jokowi has not officially happen between now and the election.
endorsed a candidate, many believe that Surveys suggest no cand idate will win
he backs Mr Prabowo. The most obvious outright in the first rou nd i n February, so a
sign is that Jokowi's eldest son, Gibran run-off in June i s likely. But I ndonesian
Rakabuming, was selected as Mr elections are won more on personalities
Prabowo's vice-presidenti al candidate, than policies, so whoever wins, conti nuity
after the constitutional court (whose chief is more likely than major change. •
38 ASIA T H E WO RLD A H EA D 2024

By Invitation India's growing influence

A s I N D IAitsLOO KSp residency

2023 , G20
back at S. Jaishankar, India's minister for
external affairs, says his country has
India brings to the table.
Recently, it has initiated the
and Ch a ndrayaa n -3 lunar International Solar Alliance
mission surely rank as maj or an increasingly important global role and the Coalition for Disaster
accomplishme nts . They Resilient Infrastructure, wh ile
contribute to a national mood proposing a global grid for
driven by a rapid post-covid-19 renewables and greater
recovery and robust growth. reliance on millets for food
The India n G20 presidency security. Ind ia's own
witnessed a refocusing on the performance in embracing
chal lenges of growth and renewables and strengthening
development. It was expressed energy efficiency has been
as an action plan to achieve remarkable. At the same tim e,
Sustai nable Development d rawing on its own trad itions,
Goals, a gree n development prime minister Narend ra
pact, refo rm of international Mod i's Mission Li F E (Lifestyle
fi nancial institutions, fo r Environment) initiative
promotion of digital public seeks to enhance the wel l­
infrastructure and being of the planet through
encou ragement of women-led changes in our daily lifestyl e.
development. Convening a I nd ia's i ncreased vis ibil ity
global south gathering was a abroad is also becau se of what
prelude to ensuring the is changi ng at home. The
permanent G20 me mbership pandemic saw not j ust a
of the African Union. massive public-health
In the past d ecade, India's response but deep reforms as
" neighbourhood first" well. Establ i shing digital
approach has built new infrastructu re on scale has
connectivity and deeper transformed delivery of
contacts. The rapid response to socio-economic benefits and
Sri Lanka's economic crisis public services. So, too, has the
reaffirmed the larger goodwill qual ity of governance si nce
from pandemic-era support. 2014 , making it easier to do
The concept of the "extended bus iness and promoting ease
neighbourhood" put down of livi ng. This is now
deeper roots in AS EAN , the partners on agreed issues is restored and the Line of buttressed by a nationally
Gulf, Central Asia and the was evident in the Quad Actual Control fully respected. integrated infrastructu re
Indian Ocean. From the Pacific mechanism, the Inda-Pacific The world is now initiative, improved skill
to the Caribbean, intens ified Economic Framework, B RI CS addressing over-concentration development and
engagement is enabling a expansion and creative Middle that emerged in the encouragement of innovation
larger I nd ian footprint. East initiatives. international economy. and start-ups .
In that process, India Some challenges require Participating i n resilient and The deepening of Indian
demonstrated during 2023 determination and staying the reliable supply chains has democracy has also nurtured
how to navigate the east-west course. Delegi timisi ng and consequently become a key authentic and grounded
polarisation around Ukraine counteri ng terrorism is still a Indian goal . Similarly, politics. While valuing cu lture
and bridge the north-south work in progress . This is a ensu ring trust and and heritage, the embrace of
developmental divide. The matter on which double transparency is vital in the technology and modernity are
impact of skewed standards cannot be digital domain. India is equally visible in the progress
globalisation, covid damage, countenanced. Relations with preparing for an era of of the last decade. Today's
conflict in Ukrai ne, big-power China, too , can become normal artificial intelligence and the India is one of cashless
competition, climate events only when peace and arrival of new tools of payments, of SG networks , of
and now violence in the tranquillity in the border areas influence. We support a lunar landings and of digital
Middle East have certainly re-global isation that is delivery. It is equally one of
made the world far more diversified , democratic, fair women's political representa­
volatile and unpredictable. To We support a and market-based. tion and "leaving no one
rise in such challenging A world increasingly behind ". This is a society that
circumstances requires nimble
re-globalisation that is focused on green growth and is now more confident,
and " mu lti-vector" I ndian diversified, democratic, sustainable development is capable and responsive. This is
diplomacy. Working with fair and market-based now recognisi ng the value that an India that is more Bharat. •
T H E WORLD AH EAD 2024 39

➔ Also in this section

40 End of the road?
41 Xi and the yes-men
42 China's economy
44 Foreign firms' woes
44 Disaffected youth

growth slowing, includ ing inside China, leaders in

An undeclared Beijing will charge America and other rich Western
countries with erecting p rotectionist barriers to free

cold war
trade and imperilling the future of globalisation.
In service of their second goal, Chinese rulers will
call their country an upholder of the status quo. By
this, they mean that China is a defender of the "basic
principles" of the existing world order, as enshrined
in the United Nations Charter. This selective reading
of the U N 's found ing documents favours articles that
defer to the inviolability of sovereign states, and
downplays those relating to individual rights.
Chinese officials will also cast their country as a
supporter of the World Trade Organisation, or at least
China's Com m u n i st Pa rty rulers wi l l seek to exploit
of those WT0 rules that opened rich-world markets to
globa l d ivisions-wh ile preaching harmony
China after its accession in 2 0 01.
At times, these twin messages will blur and
Beij ing bureau chief,
DAV I D R E N N I E overlap. Because the rich world still has some
The Economist, Beij ing know-how that China needs, Chinese leaders will,
from time to time, deny that they harbour any animus

C H I NA W I L L pursue two contradictory goals

in 2024. Xi Jinping and other Communist Party
at once

bosses will seek to rally and lead a bloc of countries

towards the West. They may offer to co-operate on
climate change and other global goods-only, that is,
if America and allies stop such hostile acts as
that are sceptical of an American-dominated world condemning Chinese rights abuses or controll i ng
order. But even as China's rulers prepare for an age of exports of semiconductors and other technologies.
division and great-power competition, they will This balancing act is hard. I n 2024, it will be made
present their country as a defender of global unity. still more challenging by two things: the war in
To advance their first goal, Chinese leaders wil l Ukraine and a presidential election in America.
accuse America a n d its allies of stoking a new cold For China, the war offers risk and opportunity. In
war. They sense an opportunity to dislodge the West 2024 Chinese officials will tell leaders from Africa,
from the centre of world affairs. Their criticisms will South Asia and elsewhere that high food and energy
have an economic component, too. With global p rices are caused by Western sanctions, and accuse ►►
40 CH I N A T H E WO RLD A H EA D 2024

► American arms and energy firms of profiteering at For China, the peninsula in 2014. Instead, China will stress the need
Europeans' expense. China will claim neutrality in the war in Ukraine to take Russia's "legitimate security concerns" into
Ukraine conflict (as it does in the Middle East) . I t will account, then offer to help rebuild Ukraine.
then deepen ties to the Russian regime of Vladimir offers risks and The American election in November, meanwhile,
Putin, a troublesome but vital partner. opportunities poses a dilemma. America's dysfunctional politics
China gains from an isolated Russia forced to turn strengthen Chinese arguments that the West is in
away from markets in Europe and face eastwards. decline, and that liberal democratic values are a dead
China is ready to step up purchases of oil, gas, end. China, like Russia, will be thrilled by isolationist
minerals and weapons, paying with its own, rhetoric from the candidates, if it signals a return to
non-convertible yuan. Though China's leaders will the sort of 19th-century world order that they favour,
not humiliate Mr Putin or challenge Russia as a with great powers enjoying impunity in their
provider of security in its former-Soviet backyard, respective spheres of influence. But a wild American
they can now expand their influence in Central Asia campaign presents dangers, as candidates out-hawk
or the Arctic without fear of a Russian veto. one another on China. Arguably, Mr Xi's best hope is
Should 2024 bring talks to end the war in Ukraine, that American democracy looks terrible during the
China will seize the chance to play peacemaker. Mr Xi 2024 election, but that China does not dominate
will be helped by the Ukrainian government's headlines. That will require restraint from Chinese
insistence that he must be at the table, as a guarantor propaganda chiefs and "wolf-warrior" diplomats.
of any possible settlement. In such talks China's Shared resentment of the West is the force that
stance will be cold, unsentimental realism. Mr Xi will binds China to its closest partners, an otherwise
not endorse any Russian claim to all Ukraine. Indeed, motley bunch. But making that scorn too explicit
because China claims to set great store by the could backfire, if China ends up centre-stage in
principle of territorial integrity, it has never American politics. Though Xi-era statecraft is not
recognised Russia's annexation of the Crimean known for its subtlety, 2024 poses an exquisite test. •

Less money, that it has contributed to dangerous debt

levels in poor countries, some of which
always there, could now become as
important as the economic part.

more message
are now teetering on the edge of default. It may be pouring less concrete, but
During the scheme's first decade, Chinese China has not lost its desire to lead the
lenders paid little attention to human global south. It will always be a developing
rights, corruption or risk assessments. country, no matter how rich it gets, says
Deals were often secret, resulting in plenty Mr Xi : "We will continue to do our utmost
of white elephants. When debt needs in raising the representation and voice of
restructuring, China tends to go it alone, developing nations in the global
shunning other lenders and driving a hard governance system." That may sound
X i J i n pi ng's offer t o poor
bargain behind closed doors. benign, but Mr Xi's words have a deeper
cou ntries is chang i ng
That has turned some countries off. meaning. He is trying to rally poor
Meanwhile, a lack of consistent returns on countries around his own vision of global
ROG E R MCS H A N E China editor, their investments has disappointed governance, one that rejects universal
The Economist Chinese banks. But far from scrapping his values. He has staked out China's claim in
project, Mr Xi is trying to make it more several new foreign-policy proposals,

N OT LO N G after he assumed power in

2012, Xi Jinping began talking about
reviving the historic Silk Road, a network
sustainable. Now, he says, China should
seek "small but beautiful" projects-less
risky, more profitable and with a focus on
such as the Global Development Initiative,
Global Security Initiative and Global
Civilisation Initiative.
of trade routes that once connected east green energy and digital infrastructure. These projects may appeal to countries
and west. Little did the world know that This is not just a concession to the global that resent American bullying and
these musings would turn into Mr Xi's concerns of the day, but a sign that the Europe's colonial legacy. They represent a
signature foreign policy. In the years that normative part of the plan, which was beefing up of the implicit message that
followed, China laid thousands of miles of has long existed, that China's
tarmac and poured an ocean of concrete, development model, which downgrades
building ports and pipelines across the human rights, is better for poor states
globe. In 2023 the country celebrated the End of the road? than the one put forward by arrogant
tenth anniversary of this infrastructure Ch i na, overseas-development fi n a nci ng, $bn Western democracies. Beseeching
binge, which came to be known as the Belt 90 countries to hold free elections or respect
and Road Initiative ( B R I) . free speech is interfering in their internal
More than 150 countries signed on to affairs, say officials in Beijing. They regard
the scheme, under which China doled out 60 liberal values as a form of racism
hundreds of billions of dollars in loans propagated by the West.
and grants. Many receiving countries China preaches a moral relativism that
badly needed the infrastructure China has 30 is music to the ears of autocrats. Its pitch
helped provide. But there have been plenty will only grow louder in 2024. America
of problems, too. So the anniversary and its allies should not underestimate
festivities were accompanied by a 0 the allure of China's message. Many
reassessment. The B R I is changing, along 2008 10 12 14 16 18 20 21 countries are unhappy with the current
with Mr Xi's message to the global south. Sou rce: Boston U niversity G loba Development Pol icy Centre
world order. Those who see value in it
The strongest criticism of the B RI is must come to its defence. •
T H E WORLD A H EAD 2024 C H I NA 41

Xi and the to breathe a sigh of relief in 2023. His

sweeping reshuffle of the top echelons of
before he appointed them? If he had no
inkling of their wrongdoing (the

yes-men
government-and, a few months earlier, Communist Party bans officials from
of the Communist Party's high having extra-marital affairs) what does
command-had surrounded him with that suggest about the rigour of his
people he knew well and trusted. His vetting? Mr Xi has repeatedly stressed how
abandonment late in 2022 of China's tough this process should be.
draconian "zero-covid" approach to There has been no sign that Mr Xi
tackling the pandemic had led to a surge of himself is in political trouble.
deaths, but officials were confident that an State-controlled media still fawn over him
How to read the comings and goings
economic rebound would help to buoy the as usual. More details may emerge about
in the president's team
public mood. Mr Qin and General Li in the coming
But growth failed to reignite. And by months. Reports will be sanitised to avoid
JAM E S M I L E S Senior China correspondent, summer, flaws were appearing in Mr Xi's any suggestion that Mr Xi made any
The Economist political arrangements. First the foreign mistake when appointing the two men, or
minister, Qin Gang, disappeared. A few showed any lack of judgment in his choice

C weather-relatedXiandJinping,
H I NAS L EA D E R, is fond of
nautical
weeks later the defence minister, General
Li Shangfu, followed suit. Such a purge
of close advisers.
But among Mr Xi's underlings, more
metaphors. He often talks of fierce storms had not been seen in years. surprises are possible in 2024. The
that could impede the country's rise. In In secret briefings, cadres were president still has no designated
recent months, Mr Xi has warned officials reportedly told that Mr Qin had "lifestyle successor. Tensions could emerge as
to brace for '·numerous major tests" amid issues" involving a mistress and a would-be candidates jockey for
"high winds, rough seas and daunting love-child. General Li was said to be under attention-or simply when yes-men
waves". These are certainly testing times investigation for alleged corruption in a compete with each other, regardless of
for the team he installed in late 2022 and previous job. The clear message to China's their long-term ambitions.
early in 2023 to help him navigate the ruling elite was that their political demise One person to watch is Cai Qi, who
country's growing economic, diplomatic showed Mr Xi's probity and resolve: he became Mr Xi's chief of staff in March
and social challenges. Two prominent would have no hesitation in punishing his 2023. He ranks only fifth in the
members of the team have already fallen. own favourites if they misbehaved. seven-member Politburo Standing
The coming year will not be plain sailing But among senior officials, the Committee ( P B S C) . But his closeness to Mr
for Mr Xi's other underlings. shake-up is likely to have raised Xi, with whom he worked in Fujian
The president might have been hoping questions: how much did Mr Xi know province in the 1980s and 1990s, and later
in Zhejiang province, is evident. He
oversees matters relating to party
propaganda and ideology, as well as Mr
Xi's personal security.
Li Qiang, the prime minister, who was
also appointed in March 2023, ranks
second in the P B SC , but his influence is
less wide-ranging-his job focuses mainly
on the economy. Many analysts regard
him as an unusually weak holder of this
title, despite his close work with Mr Xi in
Zhejiang in the early 2000s. And with the
economy in trouble, it will be hard for Mr
Li to impress his boss.
It will also be hard for Mr Xi to burnish
his own image. It is likely to have been
dented by the country's economic malaise
and its chaotic exit from nearly three years
of strict pandemic controls-after
scattered small-scale protests against the
zero-covid policy, during which a few
protesters even dared to call for Mr Xi
himself to step down. In 2024 China's
president will face the challenge of
managing tense relations with the West.
But he faces high winds and daunting
waves at home, too. •

WHAT I F? half? The fragi le economic recovery would stop, with

impl ications for the world economy. More dangerous
China's property sector has been in d isa rray for the for the Communist Pa rty wou l d be the impact on
past two years. Many la rge develope rs have defa u lted. social sta bility. People do not ta ke to the streets to
Sa les a re way down. But a fu l l-sca le col la pse has so fa r protest aga inst one-pa rty ru le. But they might do so
been avoided. What if China's home prices fel l by to protest aga inst a big fa l l in the i r main investment.
42 C H I N A T H E WORLD A H EA D 2024

The hardest
target

Chi na's rulers w i l l face a trade-off

between confidence and cred i b i l ity

S I MON cox China economics edito r, The Eco n o m ist

I of 2024 China's p rime minister, Li

N TH E S P R I N G
Qiang, and his colleagues will face an awkward
dilemma. They will have to choose between reviving
the morale of entrepreneu rs o r safeguarding the
credibility of the rul ing Communist Party. Thei r
choice will be revealed in Beijing in March, when Mr
Li will read out his fi rst report on the work of the
government to China's legislature. The report will be
fu ll of party boilerplate, but it will also contain a
consequential nu mber: China's official economic P rasad of Cornell Un ivers ity in 2014.
growth target for 2024. But 2024 would be the wrong year to make such a
Such targets are easy to rid icule as a relic of central gestu re. China's entrepreneurs will still be recovering
planning. In today's China, economic growth is the from the p roperty slump that began in mid-2021, the
alchemical result of countless decisions by lockdowns that hobbled the economy in 2022 and the
households, firms and officials. Surely even the party d isappointing recovery of 2023. They will need the
can not engineer it to with i n half a percentage poi n t? reassurance that an official growth target can p rovide.
In fact, China used to miss its growth target by a So what number should Mr Li annou nce in March?
wide margi n, exceeding it by several percentage China's economy struggled in 2023 to reach the
poi nts in some years (see chart) . But recently, it has official target of around 5%, and inflation fell
been a closer run thing. The target has therefore dangerously low. Econom ists worried that falling
loomed larger in policymaking. In 2023, for example, p rices would erode profits and deter i nvestment,
the government's fear of falling short of its 5% goal further weakening demand . Low i nflation is,
prompted monetary and fiscal easing. however, an invitation as well as a th reat. It is a sign
Many economists worry that these efforts to meet that the economy has capacity to grow faster, if only
an a rbitrary target distort China's policymaking, spend ing were stronger. Mr Li's first growth target
resulting in reckless lending or wastefu l should therefore entice the p rivate sector to spend, by
infrastructure projects. Some have urged China to signalling that the government will do the same if
drop its growth target altogether. Doing so "would necessary. The way to do that is to set a growth target
serve as a clarion call that the government's p riorities of at least 5%.
have shifted away from growth at all costs," said Eswar That would be tougher than the same target was in
2023, because the economy will be i nto its second
year of recovery. It cannot cou nt on the rebou nd that
results from removing social restrictions and
Wide of the mark releasing pent-up demand. But after a disappointing
China, % change on a year earlier reopening, China p resu mably still has some ground
to make up. And if the economy ru ns hot at the end of
GDP - G D P target rate - Consumer prices
15
2024, putting upward pressure on wages and prices,
that would not be all bad . It would help d ispel fears of
12 deflation and reduce the burden of China's debts.
The bigger worry is that a despondent, weakened
9 China m ight fall short of such a target, even with extra
government stimulus. That would be bad in itself. It
would also be embarrassing for the Communist Party,

� I Y'\I .iA'LJI ., I: 1 1. L -�� :

6
Some denting the credibility of its economic management.
economists But setting an easy target entail s risks of its own . It
have urged could depress private-sector expectations further,
making a sub-par outcome more l ikely. I n 2024, the
China to drop Communist Party should know that reviving
2004 06 08 10 12 14 16 18 20 23*
its growth p rivate-sector confidence is more important than
Sou rces: Haver Analytics; E I U *Forecast
target safeguarding its target's credibility. •
The torch ignites, but no sparks fly. A welder lab constructed in fully spatial 3 D, to run
fuses steel plates with care and precision-but experiments, analyse resu lts and test endless
without the blast of heat i n his face. Rather variations-without the constrai nts of space ECO NOM I ST Economist Impact
than a helmet, he's wearing a virtual reality or time.
I M PACT
insights
(V R) headset, building muscle memory and
l mmersive environments can benefit o n-the­
confidence before stepping into a dangerous I n J u ne Eco n o m i st I m pact p u bl ished
job training and reskilling. I n manufacturing,
and costly session at a machine shop. "Towa rds a S u ccessfu l M etaverse", a
the use of such technologies has been linked
H is metaverse classroom is OcuWeld, a with increases in productivity and operational stu dy s u p ported by M eta, h ighl ighti n g
first-of-its-kind VR environment for training efficiency by 30% and 40% respectively, th e e merging social a n d economic
welders whenever and wherever their according to an I nfo rmation Tec hnology & va l u e of th e m etaverse, and the
schedu les allow. "We have found it eases I nnovation Foundation report published in ma rket, orga n isationa l a nd consu m e r
stress and empowers students to maintain Fe bruary 2023. areas t o be a d d ressed t o h e l p rea ch its
their engagement and enthusiasm," says Mary fu l l p ote ntia l . I n Decembe r, to better
As metaverse technologies evolve and
Kelly, president and CEO of Strata Tech, which e n a b l e lead e rs to seize o p portu n i ti es
scale, they wil l not only make existing
commissioned the app. a nd a d d ress o bstacles, Eco n om i st
industries more productive, but invent
I m pact wi l l l a u n ch its I n cl usive
The skilled labour industry is just one entirely new o nes. The benefits to the global
M etave rse I nd ex. An evo l ution of
sector seeing a positive impact. Metaverse economy could reach up to $3.6trn per year
technologies-a longside breakthroughs
th e I ncl usive I n ternet I n d ex fi rst
in additional G D P by 2035, according to
i n artificial intelligence (A l)-a re maki ng it research conducted by Deloitte. l a u nched in 201 7, the I nd ex wi l l p rovide
possible for people and businesses to learn, a resea rch -backe d d iagn osti c for
"Schools and leaders need to take steps now m a p p i n g th e existi ng l a nd scape a n d
trai n and build in new ways.
to prepare today's learners for future jobs," areas ri p e fo r i n n ovati on .
I n education, GoStudent i n Europe has says Alex Swartsel, managing director of
launched GoStudent VR, an immersive Jobs for the Future, a US-based non-profit
language learning platform. Additionally, they organisation. It has fou nd early success
are worki ng on an "A l lesson plan generator" partnering with community colleges to
tailored to individual student needs. US-based implement aug mented reality training
Purdue Global is using virtual simulations to prog rammes.
trai n nursing students to make decisions with
To maximise the benefits of these Read "Towa rd s a
vi rtual patie nts amid the sights, sounds and
technologies, i nd ustry, governments, S uccessfu l M eta verse"
distractions of a hospital.
academia and civil society should work a n d learn m o re
"Training tough judgement calls in VR is as together to ensure early enthusiasm is a bo ut the I n cl u s ive
close to real-world experience as we can get accompanied by a rigorous focus on their M etave rs e I nd ex
without involving real-life patients," says safe and responsible development. Cross­
M elissa Burdi, a vice-president and dean of sectoral g roups such as the X R Association
nursing at Purdue Global. are already maki ng collaboration a reality.

Meta
Students at South Korea's Pohang University People are experiencing meaningful i mpact
of Science and Technology use a "digital today from i mmersive technologies, and
twin" laboratory, a replica of an existi ng these innovations are just getting started.

Produced by El Studios for Meta

44 CH I N A TH E WO RLD A H EAD 2024

The new after three years of isolation during the

global pandemic, foreign executives are
abroad. A series of raids on foreign
due-diligence firms have raised questions

normal
still trying to determine what the new about whether such companies can carry
normal is for doing business. Economic out normal background inquiries on
growth has petered out, making the Chinese firms and executives. Access to
market less appealing to global retailers. official data sources has been limited. In a
President Xi Jinping's ideological support major blow to China's image as a global
for Russia in its war against Ukraine has business hub, Dentons, a global law firm,
scared investors. Fund managers now said in August that it would drop its
demand higher returns to justify the partnership with a domestic Chinese law
Don't expect life to get easier for
increase in geopolitical risk; many are firm. Insiders say data rules, and fears
foreign firms doing business in China
simply not earning enough and are over arbitrary detentions, played a part.
allocating capital elsewhere. The government is well aware of the
China business and
D O N W E I N LAN D Executives making their first trips to complaints among foreign companies.
finance editor, The Economist, Shanghai China in three years cannot help but think Business-minded technocrats such as Li
that things have changed for the worse. Qiang, China's new prime minister, are

I of a few days in September

N T H E S PA N
2023 , word spread that two businessmen
working for global firms were not
Top-tier cities such as Beijing and
Shanghai feel distinctly less international
than they did before the pandemic.
trying to ease the pain. In September the
central government announced it would
relax some data-transfer rules, at least for
permitted to leave China. One of them, the The pandemic years were an now. It has also postponed tough taxation
head of a Chinese investment-banking inward-looking period for China's rules for foreigners for another few years.
division at Nomura, a Japanese bank, political leaders. They have emerged far In 2024 multinationals will hope for a
appeared to have been snagged in a more paranoid about America and other few more pro-business concessions from
corruption investigation. He had been hit foreign rivals. This has led them to Beijing. But they should also not be
with an "exit ban", meaning he could travel prioritise security above economic surprised when more executives are hit
within the country but could not leave. growth-and spurred the introduction of with exit bans. China's covid years
Days later news broke that a senior new laws and regulations that make it reshaped the way its rulers view the
executive at Kroll, a due-diligence firm, much harder for foreign firms to do outside world. They are less concerned
was subject to similar conditions. business in the country. about how they are viewed by outsiders
According to the Wall S treet Jou rnal, he has New data laws, for example, mean it is and are unlikely to back down from their
been stuck in China since July. unclear what information it is safe to send emphasis on security over growth. The
Nearly a year into China's reopening, from a branch office in China to recipients new normal, it seems, is here to stay. •

Eati ng yo u ng peop l e have m oved

back in with th e i r pa rents,

bitte rness becom i ng "fu l l -ti m e c h i l d re n".

M a ny h ave a p p l i ed to gra d u ate
school to p u t off j o b - h u nting.
When they fi n ish, th ey wi l l be
co m peti ng with record - h igh
n u m bers of gra d u ates ( m ore
The Communist Party will
tha n 11 m i n 2023).
struggle to inspire the young
Som e h ave sought the "i ron
rice bowl" of a governm ent
ALICE s u C h i n a correspond ent, positi o n . I n 2023 some 2.5m,
The Economist, Ta i pei t h e h igh est n u m ber i n a
deca d e, a pp l i ed fo r the
II A T REE CAN NOT grow c ivi l - serv i ce exa m . Others a re
J-\sky- h igh in a gree n h o u se, a p p lyi ng fo r degrees or j o bs
a nd a l azy person ca n n ot a b road, or fl eei ng via
a cco m p l i sh great thi ngs," sm uggl i ng ro utes th rough
bel l owed th e People's Daily South- Ea st Asi a or South
n ewspaper i n a m essage to ... Applying, themselves Am erica. The UN refugee
C h i n ese yo uth. The age n cy re ports growi ng
Com m u n i st Pa rty has n u m bers of C h i nese a syl u m ­
re peated ly ex horted th e b ittern ess", o r suffer fo r a the ted i u m of the rat race. see kers, with 116,000 i n 2022,
you ng to e m b race suffering for worthy cau se, wi l l conti n u e i n M a la ise wi l l spread i n 2024 a s seve n ti m es more th a n in 2012.
the sake of nati on a l 2024. B ut C h i n ese youths wi l l C h i n a's economy co nti n ues to I f the state loose ned u p, it
rej uvenati o n . C h i n a's p e rs i st i n n ot d o i ng so. struggl e. The u rba n yo uth­ m ight re i nvigorate th e yo uth.
presi d ent, Xi J i n p i ng, says they M r Xi's rheto ric has i nsp i red u ne m p loyment rate h it a reco rd B u t th e opposite is m ore l i kely.
shou ld work i n th e m ore on l i n e m oc kery tha n h igh of 21 .3% in 2023 before th e I n a year of pol iti ca l
cou ntrysi d e, where ru ra l patriotic s p i rit. You ng n etize ns statistics b u reau d eci d ed to u n certa inty, bookend ed by
l a bo u r stre ngth ens the i r ta l k often a bo u t "lying fl at" a n d sto p p u b l ish i ng the n u m bers i n e lectio ns in Ta iwa n a nd
sacrifi c ia l s p i rit. H is ca l l s fo r " l etting it rot"-youth sl a ng fo r A ugust. I t is u n l ike ly t o i m p rove Am erica, the i n stinct wi l l be to
you ng peo p l e to "eat ex ha u stion a n d a d es i re to q u it in th e co m i ng yea r. So me j o b l ess stiffe n controls.
T H E WORLD AH EAD 2024 45

➔ Also i n this section

46 Sha m elections
47 Palestin ians' future
47 Middle Eastern
music
48 I ra n's fut u re
48 Struggl ing
economies
49 Chaos i n the Sahel
50 South Africa votes

civil war. Then came the terrible massacre in Israel on

Beyond Gaza October 7th , perpetrated by Hamas , and a long and

ongoing Israeli war i n Gaza. After a long period of
relative quiet, the Middle East's oldest conflict roared
back to life and brought the enti re region to the brink
of broader violence.
The consequences of the Gaza war will define
2 0 24. Some of those seem contradictory. On the one
hand , fragile detente between Iran and Saud i Arabia
will continue. The events of October were a reminder
of I ran's reach: its proxies fired missiles at Israel from
G aza, Lebanon and even far-away Yemen, while other
militias attacked American bases in Syria and Iraq.
Gulf states reacted with fear: they did not want to be
targeted, as Saudi oil fields were in 2019 . They will
The M id d le Ea st's new ba lance of power
strive to keep the peace with Iran, though it will be a
hollow o ne. Tal k of big Gulf investments i n I ran wil l
Middle East
G R EGG CA RLS T ROM remain j ust talk.
correspondent, The Econom ist, Dubai At the same time, efforts toward I s raeli-Saud i
normalisation have been delayed, but not completely

A T ITS START, 2023 was supposed to be a year of

regional de-escalation in the Middle East. Saudi
Arabia agreed to a detente with I ran i n March; it was
d erailed. Mu hammad bin Salman, the Saudi crown
p rince and d e facto ruler, has both economic and
security interests in reaching a deal with Israel .
also tal ki ng with America about a three-way deal that N egotiations will continue, but they will be quieter
would have seen it normalise ties with Israel . Civil and more complicated than before. The Saudis will
wars in Libya, Syria and Yemen had ground to a want more concessions towards the Palesti nians from
stalemate. Prosperous and stable, the Gulf states were I srael. There wil l be much to renegotiate-and an
the new centre of power in a region exhausted by election year in America is a bad time to do that. Tal ks
conflict-and they wanted everyone to settle down are unlikely to conclude in 2024.
and focus on economic growth . Outside the Gulf, many Arab countries will be
So much for that idea. A month after the nervous as the new year begins. Egypt is one example.
Saudi-Iranian deal, Sudan tipped into a gruesome I t now h as two active wars on its borders (in Gaza and ►►
46 M I DD L E EAST & A F R I CA T H E WO RLD A H EA D 2024

► Sudan) and one frozen but u n resolved (in Libya) . I t America might Russia appeared to content itself with taking j abs at
also must repay $29bn of external debt i n 2024, a su m wish to be done perceived Western hypocrisy, while China seemed
equivalent to 85% of its foreign reserves. King confused and disinterested.
Abdullah of Jordan is worried that a long conflict in with the Middle America might wish to be done with the Middle
the Holy Land will spark unrest among his own large East-but the East-but the Middle East is not done with America. It
Palestinian population , who are already a ngry about a Middle East is will have a chance to consolidate its role as a regional
stagnant economy. not done with power. Before the Gaza war, it had been discussing a
These regimes will be focused on survival . They mutual-secu rity pact with Sau di Arabia. That may
will try to parlay the Gaza crisis into opportunity. America now look much less attractive to leaders in
Egypt, for example, might seek fi na ncial aid as Washington. The Saudis have sought to sit out any
compensation for its role as a p rovider of possible regional conflict, wh ich suggests that a
hu manitarian aid for the enclave. d efence treaty would hardly be mutual . That, too, wil l
For years , Arab countries had talked of a new need t o be negotiated anew-but President Joe B iden
balance of power in the region . America seemed will have little time to do so.
distant, while Russia and China tried to accu mulate The Gulf states were not wrong to believe that
both hard and soft power across the Middle East. The economics is a pressing issue for the Mid dle East.
attack on October 7th has brought the region's biggest Where they were mistaken was in believing that the
crisis in decades . As a resu lt, Ame rica has sent two region's frozen conflicts wou ld remain frozen . With
aircraft-carrier groups , an array of missile-defence luck, the coming year will bring new efforts to resolve
batteries and planeloads of troops, as its secretary of them, starting with the endless feud between Israel is
state embarked on some frantic shuttle diplomacy. and Palestinians . •

Despots v possible exception of Mau ritania, the

elections wi ll be farcical. Results are
of a th reat than j ihadism. Under i ts laws,
Saudi Arabia should hold mu nici pal

democracy
decided in advance. Autocrats will record elections every four years. But
huge victories and extend the ir Mu hammad bin Salman, the de facto
rule-wh ile the region 's more-or-less ruler, views them as a slippery slope that
democracies of Iraq, Kuwait, Lebanon and might lead to demands for accountabil ity
Morocco co ntinue to flou nder. Ah , but we and representati on . . No one dares ask him
offer stability, say the despots . why he has veered from the ti metable.
Think again. Denied the safety-valve of Gulf despots will continue to bankroll
M iddle East autocrats offer sham
de mocratic participation, their regi mes fellow strongmen i n Egypt and Tun i s ia.
elections. Real ones are too dangerous will be haunted by the spectre of President Abdel-Fattah al-Sisi seeks to
insu rrection . An Israeli-Pal estinian war is sec u re his th ird term by ba rring credible
reawakening the Arab street for the thi rd alternatives. Having locked up his rivals in
N I CO LAS P E L HAM
Mi ddle East time i n a decade. Bearing the flag of Tu nisia, Kais Saied , the i n cu mbent, wi ll
correspondent, The Econo m ist Palestine, malcontents will challenge wi n a second term. The Gulf states wi ll
unaccountable and corrupt rulers. Only also work with their nemesis , Iran, to
U DG I N G BY E L ECT I O N
J
cycles , the Middle greater rep ression wi ll stop a domino prevent democracy spreading there.
East is a paragon of democracy. Egypt effect, starting with the Palestinian Ahead of parliamentary elections in April ,
will hold an election in December 2023 , Authority, then Jordan and Egypt. the Council of Guardians wi ll vet the
followed in 2024 by Algeria, Iran, The Gu lf states will also tighten cand idates to ens u re that only yes-men
Mauritania and Tunisia. Sadly, with the controls. They view democracy as no less (and yes-women) can stand.
Kuwait's democracy wi ll limp on ,
paralysed by the stand-off between the
royal palace and parliament. Armed
factions will tighten their grip in Lebanon
and Iraq. As Lebanon's most powerful
militia, Hizbullah will continue to veto
the appointment of a president. Its
counterparts i n I raq lost power i n an
election in 2021 but seized control
regardless. They will not let democratic
niceties get in the way.
Western powers will mostly watch
from the sidelines. Having failed to spread
democracy in I raq, they have scant
appetite to try elsewhere in the region. Aid
for democracy projects wil l continue to
fall. In a few places the demand for
representation might rise again . But with
grievances escalati ng and avenues for
dissent largely curbed, the worry is that
Hamas might offer an alte rnative model.
Just as it was beginning to ebb, expect
j ihad ism to surge again. •
TH E WORLD AH EAD 2024 M I D DL E EAST & AFRICA 47

What next? Bank. Then, on a quiet autumn morning,

Hamas militants crossed the border into
Israel and massacred more than 1,400
which controls parts of the West Bank, to
return to run Gaza.
That is a best-case scenario. But the PA
people, most of them civilians. Israel might not want to return to Gaza with the
declared war immediately. Thousands of help of Israeli tanks. And even if it did, it
air strikes and, later, a ground invasion might find that it is unable to govern the
have laid waste to Gaza and killed more territory (it has already lost control of bits
Palestinians than any war since 1948. of the West Bank) . That would leave Israel
The coming year will reshape in charge of security and basic services,
Palestinian life in a way unseen since perhaps with the help of a jerry-rigged
Three factors wil l determine the outlook
2007, when Hamas seized control of Gaza. government of local notables. Instead of
for the Palestinian territories
How it will turn out is impossible to reuniting the Palestinians, the war could
predict, but three important factors will reinforce their split.
Gregg Carlstrom, Middle East do much to shape the outcome. That points to a third question: the fate
correspondent, The Econo m ist, Dubai The first is when, and under what of the PA and its leader, Mahmoud Abbas.
circumstances, Israel will end its war in Half of Palestinians want to dissolve the

F OR MORE than a decade, life in the

Palestinian territories was painfully
static. The occupied West Bank was ruled
Gaza. The army says it will stop when it
has removed Hamas from power. It will
certainly hope to kill the group's leaders.
PA, which they see as hopelessly corrupt,
and 80% want Mr Abbas, who will soon
start the 20th year of his four-year term, to
by the corrupt nationalists of Fatah, and But Hamas has tens of thousands of resign. He is unlikely to listen, and he
blockaded Gaza was run by the corrupt militants and even more supporters. Israel lacks a clear successor. Various
Islamists of Hamas. Residents of the West could find itself stuck in a long guerrilla apparatchiks hope to replace him, such as
Bank endured the daily abuses of war, and the residents of Gaza stuck in a Majed Faraj, who heads the PA's
occupation. Those in Gaza suffered long displacement. intelligence services, and Jibril Rajoub, a
occasional short wars, and longer periods The second is what will follow the war. former security chief, but none is popular.
where life was calm but miserable. There America and Israel hope the Gulf states Optimists hope that there might be a
was no progress towards a two-state will step in with money for reconstruction silver lining in a blood-soaked 2023: that
solution-nor any reconciliation between and, perhaps, troops for an international the PA (flawed, corrupt but much more
the two estranged Palestinian factions. peacekeeping force. They would probably moderate than Hamas) could emerge
Everything changed in 2023. Even do the former; the latter is a harder sell. strengthened, and a shocked Israel could
before October 7th, it was the deadliest Arab leaders will, in turn, urge the re-commit itself to peace talks. But these
year on record for Palestinians in the West Fatah-run Palestinian Authority (PA), days, optimism is in short supply. •

Arabic k i ngd o m , XP M us i c Futu res,

attracts gl oba l h eavy- hitte rs.

rhyth ms The UAE wi l l i ntrod uce a n ew

system to protect intel lectu a l
property ( I P) i n 2024-the fi rst
of its k i n d i n the M id d le Ea st.
Egypt has a l so a n n o u nced
The Middle East's music p l a n s to c reate a new IP offi ce .
industry has huge potential The potentia l of the
m a rket- a nd the pre se nce of
so m u c h loca l ta l e nt-i s a l so
A N N HAN NA N ews ed itor, attracti ng i nternati on a l
The Economist i nvestors. I n Augu st th e
wo rld's b iggest record

M us1c HAS a lways s p i l led

o u t of Ca iro's cafes. B ut
the l ilting ton es of tra d itio n a l Y8M6A7V
co m pa ny, U n iversa l M u si c
G ro u p, a cq u i red C h a b a ka, a
fi rm i n the UAE w h i c h
songs a re n ow bei ng rep l a ced rep resents 1 50 a rtists a c ross
by the ra p p i ng of m u s icia n s .... Local talen t t h e reg i o n . Reservoi r M e d i a , i n
s uc h a s Wegz, a 25-yea r-o l d N ew Yo rk, h a s tea m ed u p w ith
Egypti a n h i p- h o p a rtist. H i s PopAra b ia i n Abu D h a b i to
m u s ic i s po p u l a r across the T h i s growth is n ot j u st J a n u a ry 2020 a n d August 2023, a cq u ire 100Co p i es, an Egypti a n
region. I n 2022 h i s so ng " E l co nfi n ed to Wegz. Reven u es a nd by 143% in th e U n ited Ara b reco rd l a b e l w h i c h p l ayed a
Ba kht" ("Lu ck") wa s strea m ed from record ed m u si c i n th e Em i rate s (UAE) . Oth er gen res, sign ifi ca nt ro l e i n the
45 m tim es-the m ost ever M i dd l e Ea st a nd n o rth Africa such as Kha l eej i pop fro m the po p u la risati o n of mahraganat,
record ed by Angh a m i, the rose by 24 °/o i n 2022, says I FPI, a G u lf, a re growi ng, too. a ge n re th at corn b i n es
l ea d ing Ara bic tra d e body. I n 2021 it wa s the Govern m e nts wa nt to tra d ition a l e l em ents with
m u s i c - strea m i ng pl atform. I n worl d's fa stest-growi ng m a rket. ca pita l ise. Sa ud i A ra b ia's offi c i a l e lectron i c beats.
2023 he beca m e t h e fi rst Ara b H i p-hop is d rivi ng the tre n d . m u sic strategy, l a u n ch ed i n 2021, M a ny in the i nd ustry hope a
a rtist to a n no u nce a world tou r Spotify, a n oth er stre a m e r, says i nc l udes b u i ld ing 130 record i ng l oca l sta r wi l l a c h i eve a globa l
with Live N ati on, a n Am erica n hi p-hop con s u m pti o n shot u p stu d i o s by 2030. An i n d u stry b rea kth ro u gh h it. That m ay
concert p ro moter. by 4 79% i n Egypt between confere nce hosted i n the we l l h a ppen i n 2024.
48 M I DD L E EAST & A F R I CA TH E WO RLD A H EA D 2024

Struggling
•
economies

Cou ntries wil l scri m p o n investment,

d ragging down futu re growth

K I N L EY SALMO NAfrica correspondent,

The Econo m ist, Dakar

S growth
U B -S A H A RAN A F RI CA$
prospects for the coming year are
modest. The region's G DP expanded by 4%
in 2022 and 3 . 3% in 2023, and the I M F
reckons on 4% in 2024. Alongside
population growth of about 2.6%, that is

It's all about direct confrontation with either America

or Israel. Its regional satellites will
not a combination for widespread
prosperity. Worse, the region may not

the succession
struggle to find a balance between surpass these modest rates any time soon.
projecting strength while stopping short Most African economies lack what they
of provoking an impetuous war which need for transformational economic
might blow their deterrence capabilities. growth: a well-educated workforce,
Iran will encourage Hizbullah in Lebanon, reliable roads and electricity, and
the Hou this in Yemen and pro-Iranian well-resourced, clean government. When
Shia militias in Iraq to sabre-rattle and starting from a low base-and with access
launch sporadic missile strikes on to enough finance-poor countries can
The calculations of I ra n's
American and Israeli targets. spark stellar economic growth through big
supreme l eader
Internally, the regime will project improvements in electricity, roads and
uncompromising power, while literacy. But when finance is tight, and few
N I CO LAS P E L H AM Middle East demonstrating sufficient flexibility to of the drivers of growth are in place, they
correspondent, The Economist absorb domestic discontent. The dress can undershoot their potential for long
code, the emblem of the Islamic Republic periods. That may well be the fate of many

A sEast, one issue continues

rages in the Middle
CON F L I CT AG A I N
to fixate
since the revolution in 1979, will ease. Men
will go out in shorts and women cast off
African countries in the coming years.
Cash has dried up for most African
Ayatollah Ali Khamenei, Iran's 84-year-old their veils, even as surveillance cameras economies, points out the I M F , making
supreme leader-the survival of his keep watch. Some will receive fines, but as investing in the future difficult. First, the
regime. War in Gaza; escalation in the with satellite dishes in the 1990s, the mix of covid-19, the war in Ukraine and
region's Shia heartlands of Iraq, Lebanon regime will continue to give way to social debt-fuelled spending, often with poor
and Yemen; America's floating military pressure. Economically, Iran's oil sector returns, has left many with heavy debts.
bases off its shores; and above all, the will continue to benefit from high prices Some, such as Ghana and Zambia, are
ructions of his disgruntled population: resulting from regional tensions. already in default and working through
all his challenges will be seen through Many challenges await Mojtaba's painful I M F programmes. ►►
the prism of ensuring that his system, succession. Iran's various satellites could
wilayat a l -faqih, or clerical rule, continues break ranks and lash out, as Hamas did in
after his death. October in southern Israel. Its Lebanese
The answer to all of them is Mojtaba, counterpart, Hizbullah, might seek to The burden bu i ld s
the supreme leader's 54-year-old second emulate its incursion, in the north. Israel's Africa, ave rage externa l govern ment
son and unofficial successor. As the senior strategists could try to seize the window of debt service as % of reve n u e
chaplain to the Islamic Revolutionary opportunity afforded by the presence of so FOR ECAST
18
Guard Corps, the regime's praetorian many aircraft-carriers to precipitate an
guard, he sits at the apex of the republic's American attack on Iran. There is a 15
two principal pillars, its military and considerable risk they will miscalculate.
12
clerical establishment. As he enters his Shia clerics might balk at blessing a
dotage, the father will entrust ever more dynasty-the very thing they staged a 9
power to his son. Ambitious clerics will revolution to overthrow. Above all, Iran's
prove their loyalty by calling him 87m people might seek to slough off a 6
ayatollah, the senior scholarly rank stubborn theocracy that they increasingly
3
required of any successor. Diplomats in consider an anachronism. Still, the
Iran will study his place in official mayhem raging elsewhere in the region 0
ceremonies to track his growing power. will remind Iranians of the costs of 2000 05 10 15 20 24
In the region, Iran will continue to try upheaval. Mojtaba will get closer to taking Sou rce: World Ban k
to escalate without being dragged into the helm. •
 T H E WORLD A H EAD 2024 M I D DL E EAST & A F R I CA 49

► Fully 19 countries in Africa are forecast

to spend more than a fifth of their Of chaos the guns in 2024. The conflict in the
central Sahel-in which jihadists linked to

and coups
revenues in 2024 servicing external debt. al-Qaeda and the Islamic State attack
Among them are oft-lauded economies civilians, fight against government forces
such as Ethiopia, Ivory Coast and Kenya. and each other-will probably grow even
On average, across Africa, 17% of revenues more violent. Jihadists see the recent coup
will be spent on external debt service in in Niger as a chance to gain ground from a
the coming year (see chart on previous distracted army, and the army will then
page) . Alas, the continent's record at probably pursue a more scorched-earth
increasing tax revenues, the other side of The future looks gri m i n the Sahel,
approach against jihadism.
the equation, is poor. the world's most confl ict-hit region
In Burkina Faso the government's
A second problem is that countries that "total war" strategy, which involves
still want to boost growth by borrowing arming tens of thousands of men in
and investing face soaring costs. Rising K I N LEY SALMO N Africa correspondent, civilian militias, is already spiralling into
interest rates have locked most countries The Economist, Dakar chaos and spurring ethnic massacres. And
in sub-Saharan Africa out of global debt in Mali over 10,ooo U N peacekeepers will
markets. None has issued a typical
dollar-denominated bond since early
2022. Even if they manage to borrow
D RAW A N ARC across Africa south of the
Sahara, and it passes through not just
a belt of junta-run countries but the most
leave by the end of 2023, having been
blamed for failing to stop the jihadists. A
peace deal they had, in fact, been helping
commercially, any debt-funded projects conflict-ridden region in the world. This to maintain between the government and
will need to achieve even higher returns. arid stretch, known as the Sahe!, takes in Tuareg separatists-a related but distinct
There are few options. Ghana was jihadist conflict in Burkina Faso, Mali and conflict to that with jihadists-is already
borrowing $3bn a year from the market, Niger; rampant banditry in northern collapsing into open war.
but the IMF's whole programme is just Nigeria; the fight against the terrorists of In Sudan further clashes are almost
$3bn over three years, points out Ernest Boko Haram and its offshoots by four certain between the Sudanese armed
Addison, the governor of Ghana's central countries around Lake Chad; civil war in forces and the Rapid Support Forces, a
bank. "Obviously the IMF and World Bank Sudan; smouldering ethnic conflict in paramilitary group, as is more ethnic
are not an alternative to the market." northern Ethiopia; and, to the south, the cleansing in Darfur. The two at least have
One erstwhile alternative for Africa terrorists of al-Shabab in Somalia. clear leaders, holding out the possibility,
was loans from China. Yet those too are The devastation is shocking. In Mali, however remote, of a sudden peace deal,
drying up. Disbursements from Chinese Niger and Burkina Faso, known as the in a way that is impossible to imagine in
loans fell in 2022 to roughly 10% of their central Sahe!, more than 10,000 people the jihadist conflicts elsewhere.
total in 2016. With China's economy were killed in armed conflict in 2022. By Though most of these conflicts are
struggling, a rebound seems unlikely. September 2023 that total had already separate, some countries such as Niger are
A final problem is that Africa's big been surpassed. In northern Nigeria, more battered by more than one. Refugees spill
economies are too weak to pull others up. than 7,000 people were killed in 2022. In in all directions. Some wars are spreading.
South Africa is in a prolonged rut, badly five months of conflict in Sudan more In Ethiopia the fighting between Tigray
hampered by a plague of electricity than 9,000 people were slaughtered. A and the government officially ended, but
blackouts and an often incompetent conservative tally of the number of people clashes with other ethnic groups, such as
administration . The IMF forecasts just forced from their homes in the region, the Amhara and Oromo, appear to be
1.8% growth in 2024. As for Nigeria, the excluding Somalia, comes to 15m. . spiralling. And states such as Benin and
fund forecasts 3.1% growth next year, There will be n o sudden silencing of Togo are already suffering attacks from
helped in part by President Bola Tinubu's jihadists crossing over from Burkina Faso.
decision to end a wasteful fuel subsidy All this violence has gone hand in hand
and interfere less in foreign-exchange The conflict in the with political chaos, most recently
markets. That has excited investors. through coups in Burkina Faso, Chad,
Yet Nigeria is still battered by jihadism
central Sahel will Mali, Niger and Sudan. If the violence
and kidnapping, and Mr Tinubu's probably grow spreads in 2024, expect political chaos to
government is muttering about even more violent do so as well. •
controlling petrol prices again. Debt
remains a headache. In 2022 Nigeria spent
96% of tax revenues servicing it. Even
without burning $1obn a year on the fuel M A U RI TAN IA
subsidy, it will still spend over 60% of MALI N IGER
C HAD SU DAN
revenues on debt service in 2026.
There are some bright spots. Senegal,
which expects to begin pumping natural
gas for export in 2024, should do well.
Benin and Rwanda continue to grow
healthily, as do other countries that are
not reliant on natural resources. And
rising oil and mineral prices could give C
:· ' .. .
- .\l . ·

:.:.:.:-f .
countries dependent on pumping and
digging a boost, too. Yet because many of Violent events, 2022-23 *
' SOMALIA
CONGO
I nvolv ing
Africa's commodity producers are poorly
governed, high prices are unlikely to
■ Jihadist grou ps and affi liates

TANZANIA
Govt. forces, m ilitias a n d others
transform ordinary lives. For many, the 1 ,000 km
Sou rce: ACLE D *To October 1 8th
future, again, looks like a struggle. •
50 M I DD L E EAST & A F R I CA TH E WO RLD A H EA D 2024

From apartheid in government departments, municipalities and the

presidency are corrupt, according to Afrobarometer, a

to apathy
pan-African pollster.
Other parties ought to be able to capitalise on this.
The Democratic Alliance, the main opposition party,
wants a "moonshot coalition" with smaller parties.
But the compact will struggle to get anywhere close to
50% of the vote; its members are too dissimilar and its
leaders too divided. For many black South Africans,
who make up more than 80% of the population, the
ruling party is still the devil they know. Those who
stop voting for it often choose to stop voting
altogether, rather than opt for another party.
Thirty years after the end of white rule,
So if the ANC can pick up enough votes using its
South Africa faces a defining election
formidable grassroots machine, it should stay in
power, even if it requires a coalition with smaller
JOH N MC DE RMOTT Chief Africa correspondent, parties. The widely feared scenario, in which the
The Economist, Cape Town AN C's vote share falls so low that it must team up with
the Economic Freedom Fighters, an ANC offshoot led

Smillions
OME O F TH E happiest queuing ever took place in
South Africa on April 27th 1994. On that day
lined up to elect Nelson Mandela in the
by Julius Malema, a rabble-rouser, is seen as unlikely.
Despite failing to deliver the "new dawn" after Mr
Zuma that he promised, Cyril Ramaphosa will almost
country's first general election under multiracial certainly remain as president.
democracy. Some 86% of eligible voters turned out. The lack of alternatives to the ANC reflects the poor
But when South Africans go to the polls in 2024 health of South African politics. Some 70% of South
there will be no sense of jubilation. The country is Africans say they are dissatisfied with the way
profoundly fed up with corruption, crime and democracy works. A stunning 72 % say they would
joblessness. Analysts expect turnout to be even lower ditch democracy for an unelected leader if he-and in
than the 49% who cast their ballots last time, in 2019. the patriarchal world of South African politics, it
It is possible that less than a quarter of the post-1994, would be a he-could deliver jobs and combat crime.
"born free" generation will bother to vote. A stunning 72 % Since 1999 there has been a Mandela-shaped
How many-and which-South Africans turn out would opt for a chasm in South African politics. The country is crying
will determine whether Mandela's African National out for the sort of intelligent and pragmatic
Congress (AN C) wins less than half of the vote in a
strongman, if leadership he embodied. The A N C may have one last
general election for the first time since 1994. Under he created jobs triumph in 2024. But the battle for the soul of South
the country's system of proportional representation, and cut crime Africa is only just beginning. •
that would mean the ANC losing its majority in
parliament and the possibility of a coalition
government. But an even bigger question looms: what
is the future of South African democracy itself?
In many ways life is better than in 1994. A liberal
constitution protects rights and liberties. Most South
Africans think racial tensions have eased somewhat.
There is a basic welfare state. Black children do better
at school. But there is justified disappointment with
30 years of ANC rule. Democracy's benefits have been
fewer than expected, and skewed towards the elites,
white and black. When Ipsos, a pollster, asked people
from 29 countries in 2023 about the direction of their
country, only Argentina and Peru had a higher share
saying things were going wrong.
And little wonder. South Africa's rates of
unemployment, murder and inequality are among the
highest in the world. Adjusted for inflation, G DP per
person is lower than in 2008. Electricity blackouts are
frequent. Anyone who can afford private solutions to
public problems pays for them. In 1997 there was
roughly the same number of private security guards
as police. Today there are almost four times as many.
Behind all of this is the mismanagement and graft
of the AN C. Though corruption was at its most brazen
between 2009 and 2018 under Jacob Zuma, it predated
and outlasted the former president. The nature of the
ruling party, which sees no distinction between itself
and the state, and views the private sector as a malign
force to be shaken down, means that patronage and
venality are inherent to its modus operandi. At least
80% of South Africans believe that some or all people
T H E WORLD A H EAD 2024 51

➔ Also in this section

52 Globa l te mperatu res

53 Green meta ls

5 4 Expanding B R I CS

5 4 Deep-sea m i n i ng

55 A new a rms ra ce?

56 Regu lati ng A l

56 How w e d id in 2023

strategy. Regi mes that practise what Mr Cheeseman

Distorting and Mr Klaas call "cou nterfeit democracy" tend to last

longer than pu re dictatorships. Holding elections

democracy
makes them seem more legitimate, so they are less
l i kely to be ostracised internationally. And allowing
an opposition gives them someone to demonise.
Several elections in 2024 will illustrate this sad
truth . In some cases, the deception will be obvious.
Paul Kagame, pres ident of Rwanda, won 99% of the
vote last ti me, so it is safe to say he will be re-elected
in August. In Mali elections due in February were
delayed for "technical reasons". Voting is impossible
i n j ihad-racked parts of the country and few expect
the j unta that seized power in 2021 to step aside.
A global guide to the election-rigging
Most election-riggers are more subtle. They want
tricks that will be used in 2024
to cheat just enough to win, but not so much that their
country's reputation takes a nose-d ive. Rather than
RO B E RT G U EST Deputy editor, The Economist crudely stu ffing ballot boxes on election day, they try
to tilt the playing field beforehand, in various ways.

M EN RIS E to great fortu ne "more through fraud

than through force", argued Niccolo Machiavell i ,
a 16th-century adviser to unscrupulous princes.
This starts with steps that are not directly tied to
elections, such as handsomely paying the police and
army to ensure their loyalty, co-opting judges, turning
Modern potentates can find similar advice in "How to the public broad caster into a propaganda megaphone
Rig an Election", a book by Nie Cheeseman and Brian and hound ing watchdog groups into bankruptcy with
Klaas. " I n many countries around the world the art of meritless tax probes. Some leaders deploy convoluted
retaining power has become the art of electoral legal argu ments to evade term limits , as in El
manipulation," argue the two academics (who, to be Salvador and Russia.
clear, do not approve) . All this sets the scene for stage two : nobbling the
Only a handful of autocratic regimes, such as election itself. By fiddling with electoral boundaries,
China and Eritrea, d ispense with elections entirely. rulers can make opposition votes count for less. By
Most at least pretend to offer voters a choice, while not updating the electoral roll, they can keep dead
making sure the oppos ition cannot win. It is a shrewd people registered-and the dead generally vote for the ►►
52 I NT ER N AT I ONAL T H E WO RLD A H EA D 2024

Only a handful of
autocratic regimes Baked Alaska
dispense with
elections entirely

► ruling party. Permits for opposition rallies will take

months to process; ruling-party rallies proceed
without a hitch. Some regimes quietly sponsor bogus
opposition candidates to split the anti-incumbent
vote. Expect plenty of this in Russia in 2024.
Real opposition parties are kept off balance with a
Global average tem peratures may pass
thousand bureaucratic shoves. In Zimbabwe in 2023,
a significant threshold in 2024
strict but selectively enforced limits on campaign
spending, combined with a sudden 20-fold increase
in registration fees for candidates, left the opposition CATH E RI N E B RAH I C Environment editor,
with little cash for campaigning, while the president The Economist
swanned around in a helicopter. On election day
itself, a mysterious shortage of ballot papers in
opposition strongholds forced voters to queue until W temperature
H E N W I LL the annual global average
rise by more than above °
1.5 C
the small hours. No such delays afflicted ruling-party pre-industrial levels for the first time? There have
strongholds, where ferocious "volunteers" (who been individual days when the global average
actually worked for the security services) sat outside temperature has exceeded that threshold, but so far
polling booths checldng ms and conducting an "exit no single year has, on average, been that hot overall.
poll" to make sure everyone voted for the president. This may change in 2024, when the steady, century­
All these tricks will be copied by others in 2024. long rise in temperatures driven by greenhouse-gas
Popular opposition candidates are often barred emissions syncs with a natural cyclical warming
from running for office-it is astonishing how many pattern for the first time in nearly a decade.
can't seem to fill in their paperwork properly. Some Meteorological agencies collect temperature data
are locked up; not for political reasons, of course, but from across the globe and throughout the year to
for ordinary crimes such as fraud-one of the charges determine the annual average global surface
for which Alexey Navalny is serving 30 years in temperature. That number, published each January,
Russia. Rahul Gandhi, the main opposition leader in has been rising since early in the 20th century, but not
India, was sentenced to prison for defamation in 2023 systematically. The line zigzags (see chart) . This is
and barred from political office; he managed to get the because global warming, driven by greenhouse gases,
ruling suspended in time for the world's biggest-ever is happening at the same time as natural variations in
election in 2024, but it wasted months that could have the global climate system, which cause some years to
been spent campaigning. be hotter or colder than others.
If Bangladesh were to hold a fair election in 2024, The largest such hot-and-cold cycle is the El Nino
the opposition led by Khaleda Zia would probably Southern Oscillation (E N SO ) , a pattern that begins in
win. But Ms Zia is under house arrest after being and above the waters of the equatorial Pacific and
convicted of corruption, and the ruling party is affects the weather in the tropics and beyond. E N SO
expected to triumph. The last time Belarus held a alternates between three states: La Nina, neutral and ►►
presidential election, the wife of a disbarred and
jailed opposition leader almost certainly won by a
wide margin, but the incumbent despot Alexander
Lukashenko says she didn't, and he has both guns and Hotting u p
Vladimir Putin on his side. The next election, in G lobal l a n d and ocea n tem peratu re,
February 2024, will be "fair, unlike elections in the d iffe rence fro m 1 901 -2000 average, 0 c
United States", Mr Lukashenko says. 1 .0
Many people fret that technology-especially e El Nino La Nina
A I-will make election-rigging easier. The volume
and verisimilitude of fake videos of opposition
leaders doing unspeakable things will surely increase
in 2024, and that may sway some voters, especially in 0.5
countries with low literacy and declining press
freedom, such as India and Pakistan. But ruling
parties already had ample tools to spread
disinformation, so the effect may be marginal. 0.0
Institutions matter more. In a country with
ingrained democratic habits and robust checks and
balances, it is hard for a leader to alter the result, as
the United States discovered in 2020. For institutions
to survive, however, voters need to care about them. -0.5
If, in 2024, Americans re-elect the man who tried to *
1 900 20 40 60 80 2000 23
overturn the 2020 election, they will have to live with
Source: NOAA *January-August
the consequences. •
 T H E WORLD A H EAD 2024 I N TERNATI O NAL 53

► El Nino. The two extremes are typically cooler (La This El Nifio year after an El Nino is the record-breaker. But the
Nina) and hotter (El Nino) than average; both bring is forecast to boreal summer of 2023 brought serious climate fevers
enhanced probabilities of wild weather extremes. in both the oceans and the atmosphere. Starting in
From mid-2020 to early 2023, E N SO was in a La be a strong July, daily temperatures rose to new heights. As a
Nina pattern. As well as exacerbating some one, bringing result, when all the data are in and published in
remarkable weather events, including record­ a greater January, it may turn out that 2023 was the hottest year
breaking floods in Pakistan in 2022, this unusually likelihood ever. If it was not, then 2024 almost certainly will be.
long La Nina temporarily depressed global average So will either year's average exceed the Paris
temperatures, masking some of the warming caused of extremes threshold? The Paris agreement talks of a rise in
by industrial emissions. There will be no such temperatures "above pre-industrial". Naturally, when
reprieve in 2024. In June 2023, E N S O flipped into a the threshold is passed depends on what is used as
much-anticipated El Nino state, which will add to the pre-industrial average (temperatures are now
global warming. And this El Nino is forecast to be a measured with a precision that is not available from
strong one, bringing a greater likelihood of extremes. the proxies used to estimate averages before the
The last such event was in 2015-16. It brought steam engine) . So some predict it will happen in 2024,
record-breaking global temperatures in 2016, an others that it could take one more El Nino cycle.
annual record that still stands. There are two Paris signatories will, however, have a little longer
possibilities. El Nino is an end-of year phenomenon before the overshoot of 1. 5 ° C will technically have
that starts in the later days of the boreal summer and been reached. The deal refers to a vaguely defined
peaks at Christmas and the new year (it was named long-term average, taken over several years. So there
after Baby Jesus by Peruvian fishermen who noticed will be a few more ups and downs before that average
the way its warmer Pacific temperatures chased exceeds the threshold. Not many, though-climate
anchovies into deeper, cooler waters) . Typically, the models suggest the game will be up in the 2030s. •

Full metal cranking up output of the fuel in liquefied

form, will pocket the proceeds. But so may
cobalt is a by-product of the extraction of
other minerals. In recent years that has

jackpot
Argentina. And African countries, allowed Indonesia, the largest exporter of
meanwhile, could see their share of the nickel, another battery metal, to become a
global gas market double by 2050. big and growing supplier of cobalt as well.
More durable riches may be earned The world's fourth-largest producer of
through exporting the billions of tonnes nickel, by the way, is New Caledonia, a
of metal the planet needs to build new, French territory of 3 0 0 , 000 people in the
low-carbon infrastructure. Chile and Peru Pacific that holds 7% of global reserves.
already supply much of the world's When it comes to lithium, the king of
The energy tra nsiti on wi l l m i nt new
copper; their vast remaining reserves will battery metals, Latin America, Australia
fortu nes i n su rprisi ng places
be tapped as the roll-out of everything and China look like the obvious
green, from wires to wind turbines, boosts champions (Latin America alone hosts
MATT H I E U FAVAS Commodities editor, demand for the red metal. Declining 60% of known resources) . But they may
The Economist copper content of ores in ageing mines is face unexpected competition. In March,
raising costs, however, and pushing Iran said it had discovered what may be

A materialises, will not

economy, if it
N ET-Z E RO G LO B A L
just be
miners to riskier frontiers. Barrick Gold, a
Canadian firm, wants to invest $7bn in a
the world's second-largest deposit.
Atlantic Lithium, an Australian firm, is
carbon-neutral. It will also consume far copper mega-project in the volatile developing Ghana's first lithium mine.
fewer raw materials. Going from here to borderlands between Pakistan and Iran. And in September a huge deposit was
there, however, will require a heap of The Democratic Republic of Congo is found in America, on the Nevada-Oregon
them. In the next few decades, supplying already well known as the world's biggest border. Demand for "green" metals will
them will create new fortunes. source of cobalt, used in electric-car redraw the global mining map in ways that
A planet moving towards a cleaner batteries. Less well known is the fact that are hard to predict. •
energy system will still need dirty fuel.
And even when oil consumption peaks,
countries that can produce high-quality
crude at low cost will be strengthened O resome
rather than weakened, as their market Share of globa l reserves, Jan 2023, % ■ Asia Pacific Eu rope ■ Latin America ■ North America Africa
share and pricing power rise in tandem.
Gulf giants such as Saudi Arabia and the Lith i u m Tota l 26m ton nes Cop per 890m tonnes Nickel 1 02m ton nes
UA E will be obvious beneficiaries. Less on
the radar is tiny Guyana, where recent Australia 24%
discoveries-enough for it to extract 1.2m
barrels a day, or 1.1% of global supply, by
2028-could allow it to produce more oil
per person than any country in the world.
Appetite for natural gas, a cleaner
alternative to coal in fossil-fuel-fired
power plants, may last longer still. As
Europe has weaned itself off Russian gas,
Sou rce: U SG S
America, Australia and Qatar, which are
54 I NTERNATIONAL TH E WO RLD A H EA D 2024

More BRICS Deep d own (1sA), a U N body set up in 1994.

in the wall
But it has been m u l l ing m i n ing
a nd d i rty rules for three decades. In 2024
one of two thi ngs is l i kely to
ha ppen : e ither the ISA wi l l
p u b l ish its rules, most l i kely at
a meeti ng in J u ly, or com pa n ies
Deep-sea miners are due wi l l decide to go a head
The grou p wi l l host its la rgest-ever to get down to work without it.
O ne fi rm in pa rtic u l a r, The
su m m it i n 2024
M eta l s Com pa ny (TMC), says it
HAL HODSON Specia l proj ects is ready to sta rt. In tests, it has
JO H N M C D E RMOTT Chief Africa writer, The Economist a l ready gathered thousa nds of
correspond ent, The Econom ist tons of nod u l es. It has had the

W H E N TH E B RI C S meet in Ru ssia in
October 2024 they will need a bigger
M I N I N G IN TH E deep is a n
a rresti ng prospect. It
involves robotic va cu u m s the
right to fi le a n a ppl ication to
m i ne its ccz concession si nce
J u ly 2023 , afte r the ISA fa iled to
stage than ever. Leaders of the five size of com bine ha rvesters m eet a two-yea r d ead l i ne to
countries that gave their name to the lowered thousands of metres fi n a l ise its ru les. If those ru les
bloc-Brazil , Ru ssia, India, China and onto the a byssa l pla ins of the a re not put in place i n 2024
South Africa-wi ll be joined by those fro m Pa cific ocean. They ru m b l e then TMc's hand may be forced .
an additional six. The admission of a long the sea bed, sucki ng u p Without a fl ow o f nod u l es, a nd
Argentina, Egypt, Ethiopia, Iran, Saudi nod u l es o f m a nga n ese, copper, the resu lti ng reve n u es, it wi l l
Arabia and the United Arab Emirates will cobalt a nd n ickel -meta ls r u n out of m oney.
reflect how geopolitics is changing: the whose su pply is crucial to TMC says it wi ll s u b m it a n
world is becoming more mu ltipolar and effo rts to el ectrify the globa l a ppl ication to m ine after the
middle powers more assertive in eco nomy. These nod u l es sit J u ly m eeti ng, new ru l es or not.
challenging the Western-led order. But the unatta ched on the sea bed Either outco me wi ll create
summit will also show the li mits of what a tha n ks to m il l ions of yea rs of co nfl ict. Environmenta l gro u ps
heterogeneous "global south" can achi eve. accretion of meta l partic les i n wa nt deep-sea m i n ing to be
In the 2010s the bloc was derided by the o n e of t h e sti l l est places on the ba n ned enti rely, a rgu i ng that
West. The economies of China and India planet. A patch of the Pa cific access to gree n meta ls does
grew rap idly but stagnation elsewhere ocean seabed ca l l ed the not j u stify damage to deep-sea
meant the B R I C S became synonymous Cla ri on C l i p perton Zo ne (ccz) ecosystems. B ut m i n i ng m eta ls
with u nderperforming emerging markets. holds nod u l es conta i n i ng on l a nd a lso ca u ses d a m age,
Othe r forums, such as the G20, were better q u a ntities of these meta ls that for exa m pl e in the I ndonesia n
places to th rash out thorny gl obal issues. a re ro ughly eq u iva l ent to a l l ra i nforest. As it considers
The B RI cs lacked a pu rpose. terrestri a l rese rves. m in i ng's i m pact on the ocea n,
Not any longer. Rising tensions Col l ecti ng th is meta l mea n s the ISA wou ld do wel l to weigh
between the West and China, and Ru ssia's goi ng th rough the I nter­ the h a rms of sourci ng meta l s
invasion of Ukrai ne, mean emerging nati ona l Sea bed Authority on l a nd , too.
powers see the B RI CS as a veh icle fo r more
independent foreign policies. Fo r China,
the drivi ng force beh ind expansion, the
bloc is a pote ntial cou nterweight to the G7.
The group will forgo becoming
B RI S I E SAU C E and reta i n the B RI C S name. It
looks , at fi rst glance, to be a formidable
outfi t, accounting for 46% of world
population and 29% of G DP . It wil l include
two of the three largest oil producers , and
the most powerful countries in the Gulf,
Lati n America and, arguably, Africa. A
bigger B RI CS will have a l ouder voice to
critique the Western-led o rder.
Yet the bloc is too economically d iverse
to embrace a currency union or free-trade
area. Its members also have diffe rent
political systems and contradictory
strategic ai ms. So it will never have a
unified position on, say, reform of the U N
Security Cou ncil-due to b e d iscussed at
the organisation's annual meeting in New The B RICS
York in September. U ltimately, the BRICS
are the geopolitical version o f Manchester
lacked purpose.
United or Paris Saint Germain: 11 players But not ... Into the abyss
that are less than the sum of their p arts. • any longer
T H E WORLD A H EAD 2024 I N TERNATI O NAL 55

A new
nuclear era?

A nuclear test by one of the big three

powers could start a new arms race

Diplomatic editor,
A NTO N LA G U AR D I A
The Economist, Washington, DC

Sof ansoonunderground
E I SMOLOG I C A L D ET ECTORS around the world could
twitch not to the tremors of earthquakes, but
nuclear explosion, at Novaya
Zemlya in Russia's Arctic region, or Lop Nur, in the
Xinjiang region of China. Then, soon enough, a blast
at the Nevada National Security Site in America.
None of the big three powers has detonated a
nuclear device since 19 9 6 , the year the Comprehensive
Test Ban Treaty (CT BT) was negotiated. Yet satellite
imagery suggests intense activity at their test sites. A
detonation at any of them could start an arms race
more dangerous than that of the cold war.
Nuclear arms-control has been eroding since
America withdrew from the Anti-Ballistic Missile
Treaty (which limited anti-missile defences) in 2 0 0 2 .
But nuclear dangers have become more acute with
Russia's invasion of Ukraine and its threats to use
nuclear weapons. America and Russia have stopped
exchanging information under the New START Treaty, fresh data, having conducted just 45 tests, compared
which limits each side's long-range "strategic" nuclear with 1, 030 by America and 715 by Russia.
weapons. Russia is deploying tactical nuclear Russia probably has the greatest political incentive
weapons to Belarus, and in late 2 0 2 3 it set out to to test a weapon. It says the rationale for revoking the
reverse its ratification of the C T BT. According to the CTBT is to mirror America. If so, Russia would not test
Pentagon, China's stockpile of nuclear weapons will if America refrains from doing so. But President
grow from 5 0 0 warheads to more than 1, 000 by 203 0 . Vladimir Putin also says the warheads for new
America and Russia are still abiding by the limits weapons may need testing. The deciding factor may
of New STA RT (for instance, a maximum of 1, 5 5 0 be the war in Ukraine. The worse Russian forces
deployed strategic warheads, out of total stockpiles of perform on the battlefield, the likelier Mr Putin is to
5 , 000 each) . But after decades of two-sided nuclear reach for nuclear weapons. An underground test
stability, the new three-sided rivalry-"an existential would be a less risky form of escalation.
challenge for which the United States is ill-prepared", A new arms race would be hard to stop. Nuclear
says a bipartisan commission of experts-will put agreements are usually based on parity. Russia and
pressure on President Joe Biden to build up America's China will each insist on parity with America. But
stockpile. For now, his administration is just America may want more than either, to fend off the
modernising existing forces. A Republican successor two combined.
might conduct a test, and expand the arsenal after Counting warheads is hard enough. But if limits on
New START expires in February 2 0 2 6 , if not sooner. their numbers are gone, it will be harder to control
How likely is a test? Computer simulations can do
A new arms other technologies such as hypersonic missiles, anti­
a lot using data from previous tests. But they do not race would be satellite weapons and artificial intelligence. The arms
provide certainty. China has the greatest appetite for hard to stop race could become a stampede. •

WHAT I F? 1454, which it might have, the fl ash would a rrive in

2024. What if Betelgeuse exploded in a su pernova?
Betelge use, a red supe rgiant sta r, is 570 l ight yea rs For a few months, it cou ld be visi b le by day, outshining
away. When its core col lapses, as it must within a l l sta rs. It wou ld have no practica l impact, so some
100,000 yea rs or so, it wi l l become the brightest thing wou l d look u p simply in wonde r. Others, as of old,
in the ga laxy. If that col la pse ha ppened in the yea r might see it as a worrying portent.
56 I NT ERNAT I ONAL TH E WO RLD A H EA D 2024

AI' s regulatory even threaten humanity's survival.

National laws might be able to deal
with simpler A I applications and L LMS, but
challenge frontier models may require global
rules-and an international body to
oversee them. Microsoft, for instance, has
advocated for an agency similar to the
I CAo; OpenA I has called for "an IAEA for
superintelligence" ; AI researchers,
meanwhile, are keener on a C E RN-like
Setting u p a global agency to oversee A l
entity. A compromise would be to create
is as com plex as the technology itself
something akin to the Intergovernmental
Panel on Climate Change, which keeps the
LU DWI G S I EG E LE European business world abreast of research into global
editor, The Economist, Berlin warming and develops ways to gauge its
impact. Ursula von der Leyen, the

I N TE RNATIO NAL BO D I ES often start small.

The International Civil Aviation
Organisation (ICAO ) , established in 1944,
president of the European Commission,
has endorsed the idea, as has a group of
tech executives.
held decades of discussions before it Yet this is unlikely to be the last word.
began to set air-traffic rules. In 19 52 the An International Panel on AI Safety, as
European Organisation for Nuclear decide what ldnd of global body they want some call it, could lead to the creation of
Research, or C E R N , started life in unused to regulate another technology: artificial other global organisations. Based on
offices at the University of Copenhagen. intelligence (AI). research about the international
And until 1979 the International Atomic Discussion of AI often blurs three types institutions spawned by other major
Energy Agency (IAEA) , the world's nuclear of risk. AI -powered software that, say, technologies, the authors of a recent
watchdog, was based in a hotel in Vienna. interprets medical images, may not be research paper imagine an entire
These three organisations, each perfectly accurate. Large language models constellation of bodies. These range from
embodying a different way to govern a (L LMs) , which power "generative AI" an "AI Safety Project" for risk research to a
powerful technology, are now the services such as ChatGPT, may display "Commission on Frontier AI" to build
preferred templates for a new global prejudice or bias. And some fear that the consensus around critical questions. As
entity. The I CAO is mainly a standards­ most powerful "frontier models" could be Margaret Levi of Stanford University, one
setter; C E RN is a research outfit; the IAEA is used to create pathogens or cyber­ of the authors, puts it: "a single institution
a nuclear cop. Over the coming y ear, the weapons, and might lead to superhuman cannot do it all." Expect to have to learn
world's governments are expected to "artificial general intelligence" that could the meaning of even more acronyms. •

How we d id m eant we we re wrong.

Recessi ons co u ld sti l l ha ppen in
S ud an's p resid ent and
vice- president "co u ld spel l

i n 2023 2024, of co u rs� but that is the

point of the j oke : any p red icti on
tro u b l e"-and in fact a c ivi l wa r
bro ke o u t in Apri l. In
of a recession wi l l co m e tru e Argentina, we s u ggested
eventu a l ly. Ti m ing m atters. keep ing an eye on J avie r M i l ei,
China's a b ru pt d ropp ing of who who is ind eed in a run-off
its zero-covid r u l es in Dece m ber for p resid ent in N ove m ber.
You win some,
2022 a l so ca u ght u s o ut. We had In techno logy, a s
you lose some
ex pected some l oosening antici pated , A p p l e revea led its
d u ring 2023, b u t not a tota l m ixed -rea l ity headset, the
TO M STAN DAG E Ed itor, reversa l of the p o l i cy (tho ugh Vision Pro-but d id not u se the
The World Ahead 2024 we d id s u ggest it a s a w i l d -card wo rd "m etaverse", instea d
"What If? " item). N or d i d we preferr ing the term "spatia l

E CO N O M I STS, AS TH E old joke

goes, have s u ccessfu l ly
p red i cted nine of the l a st five
pred i ct Octo ber's su rprise
atta ck on I s ra e l by H a m a s.
We d i d better el sewhere. rematch, the BRICS s igned u p
co m p u ting". We d id not,
however, foresee the "i Phone
m om ent" fo r a rtifi c i a l
recessi ons. The m a in thing we The wa r in U kra ine d i d ind eed new m e m bers, a rgu m ents over inte l l igence (Al), na mely the
got w rong in The World Ahead becom e a grind ing sta l e m ate, "EsG" investm ents intens ifi ed l a unch of ChatG PT in late
2023 was being too gloomy with Russia trying to string out and YI M BYS ga ined gro und, a l l as N ovem ber 2022, wh i eh
a bo ut Western econo m i es, the confl ict in the ho pe that we ex pected . (Acrony m s !) a b r u ptly cata p u lted Al into the
p red i cting a brief rece ss i on in Western s u p po rt wo u ld When i t ca m e to el ecti ons, c u l tu ra l m a instrea m .
America, a d eep one in the EU cru m b l e. The wa r a cce l e rated we sa i d Rece p Tayyi p Erd ogan So have we a sked a chatbot
and a l ong one in B rita in ad o ption of renewa b l e energy, wo u l d p roba b ly win in Tu rkey, for its p red icti ons fo r 2024?
d u ring 2023. But a m i l d winte r ha stening the cl ean-energy and Peter O b i wo u ld p ro b a bly N o, beca u se we think hu m an
in Eu rope (which s oftened the transiti on by five to ten yea rs. l ose in N igeri a, m u ch a s we exp e rtise ha s the ed ge over
econo m i c b l ow of high energy There wa s m u ch ta l k of "Pe a k m ight w i sh otherwise. Sad ly we m achine l ea rning, fo r now at
pri ces) and the strength of the China", A m erican pol itics were right on both co unts. We l ea st. But who knows what
l a bo u r m a rket in Am erica settl ed into a Bid en-Tru m p noted that tensions between m ight ha p pen in futu re?
T H E WORLD A H EAD 2024 57

➔ Also in this section

5 8 Vlad imir Putin's
perpetual war

59 Trouble in the
Caucasu s
5 9 Baltics and Nordics
60 French pol itics
60 Centrists v pop u lists
61 Europe's economies
62 Da ra Massicot on
U kraine's trauma

south, in Zaporizhia province. A combination of

Stuck in the mud weary units, limited ammunition and wet weather
will slow offensives during the winter, though some
small-unit infantry attacks will continue.
The winter is likely to see a new and intense
campaign of long-range strikes from both sides.
Russia has been stockpiling missiles and is likely to
attack Ukraine's power grid again. Ukraine has been
accumulating drones and will keep up strikes on
Russian-occupied Crimea, aided by a small injection
of American-supplied ATACM S missiles. It might also
widen its attacks to include Russia's power grid, in
part to establish a form of deterrence. The strikes may
help Ukrainian morale but their strategic impact is
likely to be modest.
The war may be heading for an im passe
The crucial question for 2024 is which side can
rebuild more high-quality forces the quicker. That is
S H AS H A N K J OS H I Defence editor, The Economist partly a matter of manpower. Russia's army has fallen
short of its recruitment targets, but scraped together
"WE DO N OT assess that the conflict is a enough troops to hold the line through the summer. If
stalemate," insisted Jake Sullivan, America's it wants to go on the offensive, as it did in the winter
national security adviser, in late August 2023. of 2022-23, it may need to conduct a larger wave of
Ukraine, he said, was taking territory "on a mobilisation. It also has a large pool of conscripts,
methodical, systematic basis". Alas, the evidence now though committing these to war would involve
suggests that Ukraine's counter-offensive has stopped significant political risks. Ukraine must also decide
well short of its stated minimum goal, and that the whether it conscripts men in their younger 20s, many
war may indeed have entered a period of military of whom have so far avoided the draft.
stalemate. The coming year will be a difficult, Men also need weapons and ammunition. Russia
dangerous period for Ukraine. ramped up defence production in late 2022, and is
Its counter-offensive, which began in June, made might produce more than 2m shells during 2024,
modest progress on the flanks of Bakhmu t, an eastern along with hundreds of new and refurbished tanks.
town that Russia had captured in May, and in the North Korea is also sending a massive number of ►►
58 E U RO P E TH E WO RLD A H EA D 2024

► shells, boosting Russian fi repower further. Western Orikhiv

governments i nvested later, so Ukraine is u nlikely to
have an advantage in artil lery ammunition-the _
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� . ... ....._ .
single most i mportant factor at the tactical - ,,...,u.i1 1!
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level-until late 2023 or early 2024. .
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U kraine will not get another massive i nflux of -•:11,

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equ ipment, as it d id in spring 2023. I nstead the focus 1 /
will be on Western help with repairing equi pment. A / Tokmak _ l S km

key decision for Western governments is whether I 1---------,

they re-open production lines for weapons that they November 1 st 2023
themselves no longer operate, or pass on sensitive Russia n-con trol led
intellectual property to Ukrai nian factories . The Russian o perations*
arrival of America's G rou nd-Launched Small­ ■ Claimed as Russian­
co ntrol led
Diameter Bomb (G LS D B) in early 2024 will replenish
Ukraine's a rsenal of longer-range missiles. It will also ■ Ukra i n i a n advancest
Sea o f Azo v
RUSSIA
• Russian fortifications*
receive F-16 jets, though they are u nlikely, on their •J.
�!• �
. ••
�.,�
-
*Areas Russia operated i n or Black
.

own , to have a transformative effect on the battlefield. attacked, but doesn't control Crimea
Sea
Timing is important. Each side will hope to take tsince May 1st 2023 *Bui lt/ Ukrainian territory ·.,- ·
expanded Feb 2022-Oct 2023 annexed in 2014 ··· 75 km
the initiative. Ukrai ne wants to keep a spring
offensive on the table but will struggle to muster the So urces: Institute for the Study of Wa r; AEl's Critical Th reats Project; Brady Africk; OpenStreetMap
land power to do this. Vlad imir Pu tin , Russia's
president, wi ll also wan t his army to keep up involving many units across a wide front.
symbolic offensives , like the one u nder way around If neither s ide can generate a meani ngful offensive
Avdiivka in the east. But constantly throwing poorly threat in 2024, the war is likely to be dominated by
trained troops into gri nding battle wi ll weaken the facto rs beyo nd the battlefield . The Black Sea may
Russian army without movi ng the front line. become increas ingly cen tral, with Russia attacking
A key challenge fo r 2024-and one that will shape cargo ships and Ukraine striking at Russia's fleet and
the subsequent yea r-is whether Ukraine's partners facil ities . A NATO summit in Washington in Ju ly will
can expand and reform train ing. Its summer offens ive be viewed as a test of Western su pport. Russia's
highl ighted many probl ems . Some will need to be strategy is simple: keep going until Ukraine's partners
fixed if the next seri ous offensive is to be mo re grow weary. The West intends to stay the cou rse.
success ful. Ukrai ne's battal ions and brigades, for Opti mistic officials argue that the war is accelerati ng
instance, need far more staff officers capable of Ru ss ia's political decomposition. Bu t pessi mists warn
plan n ing and commanding complex operati ons that Mr Pu tin can keep this up for years. •

Mr Putin's Re: Ru ssia, a th ink-tank, reckons that in

the war's fi rst year Russia received $ 59obn

perpetual war
in export revenues, mostly from oil and
gas . That is $16obn more than the annual
average over the previous decade. In the
second year, revenues were still some
$ 6obn above that average. War costs a re
estimated at over $1oobn a year. Turmoil
in the Middle East, which could push up
The Russian leader cannot keep
oil prices , would benefit Mr Pu tin.
funding the war for ever
This income lets him keep up the
appearance of normality at home. But the
longer the war goes on the harder this will
A R KA DY OST ROVS KY Russia editor, be. To fight a long war, Russia needs more
The Economist men , officers and weapons. That i n turn
will requ ire mass mobilisation and central

I will hold a
N MARC H V LA D I M I R PUT I N planning of military production . Neither
3-6-1-6-675-1-3

presidential election designed to is easy i n a country with Russia's poor

demonstrate su pport for his regime's demography and pervasive corruption .
3-6-1-6-675-1-3

i nvasion of Ukraine two years earlier. His Mr Pu tin will not have a p roblem
achievements i n those two years should ... D ictator perpetuo declaring himself winner of the election.
not be u nderestimated. Hundreds of His p roblems may start a fterwards , as the
thousands of people have been killed, futility of his war exposes the hollowness
millions displaced. Most of them are and strengthened NATO . Russia's budget of his triumph. That is by no means a
Ukrainians fleeing Russian m issiles. But for 2024 s hows a 70% i ncrease in m ilitary given. But if Mr Pu tin's hopes are dashed,
as many as 1m educated Russians may spending, to 6% of G D P and a third of all Donald Trump does not return to the
have fled thei r country, fearfu l of spending. He has long framed his war in White House, and Ukraine conti nues to
repressions and mobilisation . Ukraine as part of Russia's struggle against receive support, his problems wil l only
Mr Putin has strangled Russia's nascent the West, so even if fighting were to get mount. I n the past Mr Pu tin dealt with any
civil society, isolated the country from the less intense, spending will not go down. decline i n his approval rating by starti ng a
West, made it more dependent on China So far, money has not been an issue. war. That option has already been used. •
T H E WORLD A H EAD 2024 E U RO P E 59

Russia's waning in the composition of the Soviet Union

and in its decomposition. Now it marks
what could be the last spasm of the system
the streets and swept away the corrupt,
Moscow-backed Karabakh clan. In 2 0 2 0 ,
Russia's president, Vladimir Putin, gave
influence which has kept the Caucasus, one way or
another, connected to Moscow.
Azerbaijan and Turkey the green light to
retake territory around Nagorno­
A century ago, as the Bolsheviks Karabakh. But he also placed troops inside
captured the Caucasus, they placed Nagorno-Karabakh as "peacekeepers",
Nagorno-Karabakh, a mountainous swath notionally to protect Armenians, but
of land rich in Armenian history, into actually to retain influence.
Soviet Azerbaijan as a reward for gaining But as he contemplated his war against
The war in U kraine is changing the
access to the Azeri oilfields. Seventy years Ukraine, Mr Pu tin cared more about his
balanee of power in the Caucasus
later, as the Soviet Union weakened, relationship with Turkey and Azerbaijan
Nagorno-Karabakh demanded to be than about poor, democratic Armenia. He
A R KADY OST ROVS KY Russia editor, reunited with Soviet Armenia. When the allowed Azerbaijan to cleanse Nagorno­
The Economist empire collapsed in 1991, a war erupted. Karabakh of Armenians who had relied on
Armenia, backed by Russia, gained control Moscow's protection.

C Ukraine or the horrors

Russia's invasion of
OM PA R E D WITH
of Hamas's
over not just Nagorno-Karabakh but also a
large surrounding area of Azerbaijan.
As well as betraying those Armenians,
Russia hopes to exploit their exodus to
attack on Israel and the ensuing conflict, Nagorno-Karabakh became a rallying foment regime change in Armenia itself.
the one-day war waged in September 2023 cause for majority-Christian Armenia, a Mr Putin is also hoping to keep a foot on
by Azerbaijan against its ethnic-Armenian source of trauma and grievance for the ground by controlling a corridor
enclave of Nagorno-Karabakh may seem Azerbaijan and a tool of leverage for linking Turkey to mainland Azerbaijan
like a blip. This final episode in a long Russia. Turkey, a majority-Muslim nation that might cut through Armenia.
cycle of violence between Azerbaijan and that stood with Azerbaijan, blocked its Azerbaijan and Turkey hold all the
Armenia gave Azerbaijan control of a border with Armenia in 1993, making it cards, however, and neither wants to make
region that has wished to be separate from more dependent on Russia. In 19 98 a more unnecessary concessions to Moscow,
it since before the Soviet collapse, and belligerent and thuggish regime, run by particularly when its influence is
prompted the exodus of most of the Armenian warlords from Nagorno­ declining. Nor do they want to side with
Armenian population. Karabakh, seized political power in the West. Instead they want to establish
But this short war is part of a huge shift Armenia itself and drew closer to the their own power-base in the Caucasus.
that has changed the balance of power in Kremlin. Russia saw Armenia as an One consequence of Russia's war has
the former Soviet Union and in the world, important counterweight to Georgia, been the rise of middle powers such as
and that will continue well into 2024 . which was leaning towards the West. Turkey. Another has been to weaken its
Nagorno-Karabakh play ed a key role both But in 2018 young Armenians took to influence in the post-Soviet world. •

Frie n d s i n Eu ropean
Vlad i m i r Putin ha s bro ught
Iceland
the N o rd ics a round to the NATO members
the north Ba lti cs' way of thinking. In 2024,
with Finl and and Swed en having Norway
By j o in in g d ate
1 949-1 991
jo ined NATO, co-ord inati on of AT LA N T I C Sweden· Est. Russia 1 992-2022
the N o rd ic-Ba ltic region's O CEAN Baltic Lat. ■ Apri l 2023
d efence aga inst the R u ss i an Sea Lith
The war in Ukraine has Russian­
threat wi l l get und er way. control led
brought Baltic and Nordic !
I n fa ct the N ord i cs were
countries closer together Caspian
a l ways to ugher than the i r Sea
i m age. Finland has a b i g
MATT STEI N G LASS D e p u ty conscri pt a rmy. Swed en's Fra nce
E u rope ed itor, The Economist,
Turkey
ho m e- m ade fighte r j ets and
Amsterd a m su b m a rines a re worl d -cl a ss. Portug al
N orway p l ays a cruc ia l nava l Spain

B Y THE EN D of the co ld wa r, ro le in the N orth Atl anti c and Mediterranean Sea

the N ord i c countries had the A rcti c. Denm a rk p lans to
becom e sym b o l s of how to m eet NATO's no rm of spend ing the Ba ltics; it p l a n n ed to regi ons have been to ugher
transcend geo pol iti ca l confl ict. 2% of G D P on d efence by 2030. conq u e r the m back. B ut Ru ssi a n than other pa rts of Eu rope in
N o rway brokered peace d ea ls The wa r has l ed NATO to atrocities i n U kra i n e h ave m a d e b l ocking Russ i an to u rists.
fo r G u ate m a la and Pa l estine, change its strategy. The a l l i ance givi ng u p gro u nd u na ccepta ble. Nea rly every pa rty and
and "getting to Denm a rk" u sed to accept that a Russ ian NATO n ow says it wi l l d efen d pol iti ci an across the
beca m e s l ang for perfecting inva s i on wo u l d ove rrun m u ch of "every i nc h o f territory", a nd is N o rd i c- B a ltic reg ion now
l i b e ra l d e m o c ra cy. The Ba ltic d e p l oyi ng m o re fo rces to d o so. agrees on stand ing to ugh
co untri es, by contra st, Fighting has b ro u ght the aga inst Russ i a . That has
e m e rged from Sovi et Putin has brought region togeth er eco no m i ca l ly pu shed el ectora l contests onto
occu pation afra id Russian too. The Ba ltics q u ickly c ut thei r othe r terra in. Al l thi s has m a d e
i m peri a l ism wou l d retu rn. Yet
the Nordics around rem a i n i ng l i n ks to Ru ssi a's the two regi ons m ore eq u a l :
the ir wa rnings were often seen to the Ba ltics' way el ectri ca l grid a n d hoo ked u p the Ba ltics a re no l onger s u ch
as post-co m m unist pa rano i a . of thi nking with Pol a n d a n d Fi n l a nd . Both j uni o r pa rtne rs.
60 E U RO P E TH E WO RLD A H EA D 2024

Right EU are

The EU goes to the pol ls i n J u ne. Expect

a nother cl ash of centrists v popu l i sts

STAN LEY P I G NAL Charlemagne columnist,

The Econom ist, Brussels

E L ECTI O N S IN E U RO P E , to paraphrase
Mark Twain, do not repeat themselves,
but they do rhyme. From Germany to Italy
to Slovakia, there is a familiar pattern.
Centrist parties that have held power for
decad es increasi ngly vie agai nst

Spectator sport Front-ru nners include Edouard

Ph ilippe, an ex-pri me min ister; Gerald
Darmanin, the interior minister; and
hard-right rivals that would once have
been deemed beyond the political pale. It
wi ll be the same story on June gth as
B runo Le Maire, the finance minister. Polls elections fo r the Eu ropean Parl iament are
suggest that Mr Philippe is best placed. But held across the E U 's 27 member states.
othe rs will fancy their chances , including National ist parties of various hues will
Jean Castex, another ex-prime minister, or fare wel l , but the centre is likely to hold.
even Gabriel Atta l , the ambitious Sensible pol icies emanating from Brussels
34-year-old ed ucation m inister. on everything from supporti ng Ukraine to
Mr Macron wi ll not endorse a cutting ca rbon emissions should carry on
The Olym pics will briefly
successor this far ahead of the vote, (mostly) un changed , after the customary
pause the pol a risi ng pol itics
preferring to show that his grip remains fight over who gets what top eu ro-j ob.
firm. His refo rm agenda at home will Polls from Lisbon to Helsinki indicate
SOPH I E P E D D E R Paris bureau chief, include an atte mpt to reach full that the centre-right (known as the
The Economist, Paris employment and further dirigiste "green European People's Party, or E P P) should
planning", including investment in public once again emerge as the largest bloc. But
TMacron
H E YEAR 2024 will be when E mmanuel
seeks to re-establish h is
transport, new nuclear reactors and
battery production . A rebuilt Notre Dame
alo ngs ide fellow ce ntrists of the
centre-left (Socialists & Democrats) and
leadership i n Eu rope, and France begins to cathedral will open five years after the fi re. liberals (Renew) , it wi ll probably lose a
look ahead to the race to succeed him. Ms Le Pen, for her part, will turn the vote little grou nd. Hard-right parties such as
Both will take place against the backd rop for the European Parliament in Ju ne into a those of Giorgia Melani in Italy, Viktor
of the Paris Olympics, which will serve as a call for a mid-term sanction of M r Macron. Orban in Hu ngary and Marine Le Pen in
global showcase for France and a test of its Her National Rally party could well top France, by co ntrast, wil l pick up seats in
abi l ity to come together as a nation at a national voting, wh ich would revive the newly expanded 720-strong chamber.
fractious and volati le time. worries about a resu rgent hard-right vote The centrist outfits wi ll probably have
In 2017 the freshly elected French ahead of 2027. It cou ld also p rompt Mr enough heft to cobble together a majority.
president laid out his vision for a more Macron to ditch his prime minister, That wou ld be good news for Ursula von
"sovereign" and autonomous Eu rope in a Elisabeth Borne. der Leyen, p resident of the European
speech at the Sorbonne. In 2024 M r Differences over the Israel-Gaza Commission since the previous elections
Macron wil l try t o revive that pioneering conflict wil l deepen pol itical divisions . in 2019 . Though the top j ob in Brussels is
drive. As Europe commem orates the 80th The main l eft-wing alliance may split. decided by the E U 's 27 national leaders, the
anniversary of the D-Day landings , he wil l Worries about sectarian tension and European Parl iament must then approve
u rge it t o wake u p t o new geopolitical anti-Semitis m will also i ntensify. France their choice. If the E P P wins most votes,
risks, not least the danger that America is home to Eu rope's biggest Jewish and Mrs von der Leyen will be a shoo-in for
will agai n elect a p resident less committed Muslim populations. another five years . But a poor showing by
to European security. Expect to hear plenty Despite polarised pol i tics, France will centrist parties may force her to enter
about Eu ropean "strategic autonomy". Mr try to come together for the Olympics, some kind of pact with hard-right parties
Macron will also champion U kraine's from July 26th to August 11th. A glitzy to secure a maj ority.
i ntegration into the EU and NATO . opening ceremony will be staged in Paris Should M rs von der Leyen stay on,
H is cou ntry, meanwhile, will start to along the River Seine. The lead-u p to the expect more of the same from B ru ssel s .
think about his successor. I n 2027, when games will be marred by arguments over M o s t notably, continued staunch support
the next presidential election is due, Mr unfinished transport l ines , expensive for Ukraine. Working with America, the
Macron will have to step aside after two tickets and terrorism fears . But once the commission helped craft 11 rou nds of
terms . The big question is who from the action begins the French will enj oy the sanctions against Russia. Moves to b ring
b road political centre can replace h i m and spectacle. Mr Macron wil l be sorely hoping the war-torn cou ntry and u p to eight
take on Marine Le Pen on the hard right. that the unifyi ng spirit can last. • others (mainly in the Western Balkans) ►►
 T H E WORLD A H EAD 2024 E U RO P E 61

► into the E U will continue, though it will be

many years before formal accession. Growing apart Next up is demography. Already,
companies across Europe are struggling to
More contentious will be the next find enough workers. The vacancy rate,
tranche of carbon-cutting regulations. the ratio of how many vacancies there are
Populists across Europe grumble about to the total number of jobs in the
green policies, and will fancy their economy, exceeded 4% in Austria,
chances if the E U elections are turned into Germany and the Netherlands in the
a referendum on rapid emissions cuts. second quarter of 2023 (the euro-zone
The Eu's commitment to reach net-zero average was just above 1% a decade ago).
emissions by 2050 will require more Europe's econom ies wi l l And each year, large cohorts from the
money (of which Europe is short) and diverge in new ways baby-boom generation enter retirement.
more regulation (of which it has a The euro zone has 23m people aged 60-64,
seemingly inexhaustible supply) . Even the but only 18m aged 15-19. Among the big
centrist parties sometimes balk at green C H R I STIAN O D E N DA H L European countries, the gap is largest in Germany,
plans put forward by Brussels. economics editor, The Economist Italy and Poland. There is hardly any gap
The elections could also trigger spats in France or Scandinavia, and just a small
over the top jobs. Mrs von der Leyen
staying on would provide continuity. But
her team of 26 commissioners, including
F O R TH E past decade or so, economic
fortune favoured Europe's north. The
Scandinavian countries, plus Germany,
one in Belgium and the Netherlands.
Not all European countries can
compensate for the shortfall with
powerful briefs guiding the bloc's Poland and even Britain, all boasted increased migration. The war in Ukraine
attempts at building an industrial policy, decent growth and employment. The forced many people to flee westward,
will be refreshed. There will also be a new south, by contrast, was hit first by the euro giving the Czech, German and Polish
president of the European Council, who crisis in 2010-12 and the subsequent economies a new source of workers. In
chairs meetings of E U leaders and painful adjustment, and then by the 2024, immigration will dominate the
represents the bloc abroad, as Charles pandemic, which hurt its tourism-heavy political debate again, as labour shortage
Michel, the Belgian incumbent, leaves economies more than most. As Europe intensifies, more Ukrainians decide to
after five years. A fresh foreign-policy faces new challenges such as climate return home and migrants from outside
chief will also be appointed and, across change and geopolitical upheaval, its Europe continue to arrive on its shores.
town, a new secretary-general of NATO. countries' economic fortunes are Finally, the growing geopolitical rivalry
The closer Europe gets to the vote, the diverging in new ways that will start to between America and China-and, by
more its own debates will be over­ become visible in 2024. extension, democracies and
shadowed by America's elections later in Start with climate change. Europe aims autocracies-will have economic
the year. The mere prospect of a to become the first carbon-neutral repercussions across Europe. Countries
triumphant Trumpian candidate­ continent. For that to happen, it needs to with strong trade links to autocracies may
especially The Donald himself-would make its electricity supplies carbon-free, see their supply chains disrupted, or find
turbocharge French calls for "strategic then revamp industry, heating and themselves subjected to economic
autonomy", whereby Europe relies less on transport to run on green energy. It is a tall retaliation. Germany and Italy have
America for defence and other needs. For order. For some, this green transformation already been through one such shock,
all the importance of the E U elections in may boost growth, as investment namely Russia's attempted blackmail with
June, those across the Atlantic in increases demand and geography creates gas supplies. They, along with a few
November will do more to determine the opportunities. Places with lots of eastern European economies such as
future shape of the union. • renewable-energy potential, like those Poland, trade intensively with autocracies,
along the windy coast of the North Sea or unlike, say, France or Sweden. The E U,
in practically all of sunny Spain, may see a which aims to make economies converge,
green boost to growth. has seen divergence before. But the new
But legacy industries will struggle. kinds that will hit the continent in 2024
Processes such as cement- or steelmaking will be much harder to manage. •
use fossil energy that is hard to replace
cheaply with green energy. On the global
market where such products are traded, -
other producers will have much lower Two-speed Eu rope
energy costs than European ones, because EU27 and Britain, average yea rly G DP cha nge, %
they either have natural gas today or will
Size= popu l ation 2019-28, forecast
enjoy abundant green electricity and

.
4
hydrogen tomorrow. In heavy industry,
Growing /
/,

Germany is Europe's largest energy user, faster H un gary

/
Rom a nia /
consuming around twice as much as the / 3
next largest, Italy and France. Croatia •
. �
• / .
.
Esto nia / Po land
Latvia • .__,/ / /
The car industry, too, faces new / 2
competition as combustion-engine cars
/
"/

• f-- G reece* • / ,.� Sweden

.�;.,•/ '--- czech Rep.
are phased out and electric vehicles (Evs) . ••
take over the market. The EU's recently
announced probe into China's subsidies to • Fra nce " �
(- Germ G a ny Growing
/
its E V industry shows how nervous Europe Italy / Brita i n slower
/ 0
is about this new competitor. Countries -1 0 2 3 4
with big car industries-the Czech 2009-1 8
Republic, France, Germany, Slovakia and
Sou rce: I M F *2009-1 8 = -2.8%
Spain-stand to suffer as a result.
62 E U RO P E T H E WO RLD A H EA D 2024

By Invitation The trauma of war

T and diplomaticeconomic
H E M I L ITA RY,
cost of
Dara Massi cot of the Carnegie
Endowment says Ukrainians need help
Ukraine has an emerging
societal openness to caring
Russia's invasion of Ukraine for veterans. Mental-health
has been evident for nearly to recover, mentally and physically awareness is growing, partly
two years now. But there are because of generational
many other unseen costs of the change and partly from the
fighting, including the mental war itself.
and physical scars of high­ The government and NGos
intensity combat accumulated are actively seeking support to
by combatants on both sides. improve care for veterans and
As Ukraine and its their families. For example,
supporters make long-term they want to use modern
plans for their country's technology such as
reconstruction, the Ukrainian smartphone apps to ease
government is pursuing policy veterans' access to care.
solutions for the care of its Many international
soldiers to help them heal and partners are willing to provide
cope. It will need help to this type of help and share best
provide trauma-informed care practices. With financial
on a large scale. support and knowledge
There are many groups in transfer during international
Ukraine experiencing different exchanges under way since the
types of trauma: millions of war began, Ukraine is trying to
soldiers and their families; bring best practices for
health-care providers and trauma-informed care back to
other first responders exposed the country.
to combat conditions and In contrast, Russia lacks
casualties; internally and partners to assist with veteran
externally displaced persons; care, and secrecy impedes
and prisoners of war. appropriate policy
Ukraine faces several development. While
challenges in supporting the discharged Russian veterans
mental-health needs of its are few at present, doctors
citizens, and will need a great quietly warn that those
deal of external help in order returning home lack support
to do so. First is the scale of the soldiers and their families to soldiers and civilians. Treating and abuse drugs and alcohol.
problem: the government access care and benefits is physical polytraumas Some commit violent crimes.
estimates that it will have a cumbersome. There are not (amputations, burns, Providing trauma-informed
veteran population of 1.8m by enough specialised clinicians traumatic brain injuries, loss care is an essential part of
the end of the war, or sm if to provide therapy. of hearing or eyesight, and Ukraine's recovery.
immediate families are The second challenge is the spinal injuries) is Governments assisting
included. This means that severity of the trauma caused resource-intensive and Ukraine's reconstruction can
around 11% of Ukraine's by the nature of the war itself: Ukraine does not have codify this support for the long
pre-war population will have the intensity and duration of sufficient capacity. term by including it in their
been directly affected by combat, the prevalence of The Ukrainian government recovery packages.
combat trauma. injuries from artillery and is raising domestic awareness International organisations
Officials estimate that, landmines, and systemic war of these challenges and the and N G0s play an important
since 2014 , a quarter of crimes committed by Russian importance of seeking help, role already, working with
veterans have developed forces. These circumstances but there is still a social stigma their Ukrainian counterparts
post-traumatic stress create complex and about getting support for in raising awareness,
disorders (PTS D) of some sort. intertwined physical and mental-health disorders. Even providing support and
Yet because every last soldier is mental trauma for Ukrainian after Russia's invasion of continuing to train Ukrainian
needed, even those Ukraine in 2014, PTS D was not medical professionals, at
experiencing severe mental commonly treated, partly home and abroad. Together,
distress are often given only a Around 11% of Ukraine's because soldiers viewed we can help Ukrainians
short break before being sent military psychological support affected by the trauma of
back to their unit.
pre-war population will with suspicion-an echo of the war to rebuild their lives,
The bureaucratic process be directly affected by Ukraine's Soviet past. even as they look to rebuild
for wounded Ukrainian combat trauma It is encouraging that their country. •
T H E WORLD AH EAD 2024

➔ Also in this section

64 Tory gri ef
65 The economic
outlook
66 Repu blicanism
66 The N HS
68 Rachel Reeves
on Labour's
economic plans

- - -
_-,�·-r<" · ·
-

elections in May, because a bad result for the To ries in

A long-awaited those wou ld hobble it for an autu mn campaign.

Second, said Sir Kei r, it will get dirty. That looks a

battle
safe enough bet. The Tories portray Sir Keir as an
indecisive metropolitan who is soft on crime and
migration. Labour portrays Mr Su nak as a weak, aloof
moneybags who surveys the country from a
helicopter. Neither man-a teetotal banker and a
pescatarian human-rights lawyer-is a brawler by
d isposition. They wi ll slug it out nonetheless.
Third, he said the election will be dominated by
the economy. No great surprise there, either. The state
of the economy overtook health as voters' most
important issue in January 2022 . Labour wil l focus on
Two men who a re not natu ra l brawlers
the cost-of-living squeeze. Rachel Reeves , the shadow
wil l fight it out for power
chancellor, likes to riff on Ronald Reagan's question
from the American p residential election in 1980,
British political
M ATT H EW H O L E H O U S E asking: "Ask you rself this : are you and you r family
correspondent, The Economist better off than you were 13 years ago?"
Labour has outl ined a p rogramme of subsidies and

A conference in Liverpool in home-bu ilding deregulation which it claims can

1
T TH E LA BOU R PARTY S
October 2023 , Sir Keir Starmer spo ke at a breakfast kick-start growth. It has held a lead in polls as the best
for business leaders. His host asked the Labour leader p arty to manage the economy since Liz Truss's
for predictions for the year ahead. d isastrous mini-budget of October 2022. But the lead
First, Sir Keir said, his party would be ready to fight is hardly hegemonic. Expect the Tories to hammer
a general election in May 2024 . The election must be away at voters' l ingering doubts about Labour's fiscal
held by January 2025, and the date is in the gift of rectitude. A proposed programme of £28bn ($34bn) a
Rishi Sunak, the prime mi nister. Many in the year in green subsidies , announced by Labour i n 2021
Conservative Party think October is their best option when borrowing costs were low, has become a
as that would allow inflation to abate and i ncomes to liability the Tories will seek to exploit.
recover. But Labour officials think Mr Sunak is more The state of publ ic services will figu re heavily, too.
l ikely to want to align with the local-government Waiting lists for the National Health Service ►►
64 B RI TA I N T H E WO RLD A H EA D 2024

► continued to rise throughout 2023 , despite Mr Sunak's The Tories p ropose only modest changes to B ritain's deal with
pledge to bring them down. The cou rts are still say Sir Keir is the E U , the Tories probably none. And with the
overloaded and there is a backlog of urgent repairs to Scottish National Party's popularity slidi ng, the
school buildings. Yet do not expect either party to indecisive, and prospect of a second independence referendum is
propose radical public-service reforms. Keen to avoid soft on crime slim. In swathes of foreign and defence policy-such
racki ng up spending commitments , the Labour Party and migration as support for NATO and Ukraine, relations with China
has announced only a handfu l of small tax-rises on its and America, and trad e-the d ifference between
favourite bogeymen (private schools, oil giants , rich Labour and the Tories is o nly in emphasis .
foreigners) to fund narrow programmes. Sir Keir's party enjoyed a consistent double-digit
Mr Sunak knows that voters overwhelmingly tell poll lead in the fi rst year of Mr Sunak's tenure. If that
pollsters that they want change. He will therefore holds, it will create an asymmetric contest. With
attempt to shake off the past 13 years of Conservative noth ing to lose by gambling, it will be in the To ries '
rule and position h imself as the "change" candidate, interest t o fight an agile campaign, pivoting between
and pai nt Sir Keir as an agent of a failing status quo. issues until they find an attack that lands.
One by-product is to tu rn B ritain's net-zero pledges Labour will be cautious and discipli ned . Its leaders
into a battlegrou nd . Mr Sunak has said that dead lines know all about complacent centre-left parties that
to phase out internal combustion engines will be throw away a wi n nable election before they acquire
deferred . It is a carefully cal ibrated message : voters in the ruthlessness to win: Labour losing in 1992 before
Conservative-held seats in the formerly left-leaning fi nally winning in 1997; the Democrats losing to
" red wall" of northern England are pa rticularly reliant Donald Tru mp in 2016 before wi nn ing in 2020; the
on their cars. Sir Keir, for his part, thinks tackling Australian Labor Party, too, in 2019 and 2022. S i r Keir's
climate change is a vote-win ner, and says Labour wi ll tas k, they say, is to win without tasti ng the bitterness
"speed ahead" with green industries. of an un necessary fi rst defeat. Qu ibble with the
This will be the first election since 2010 without selection bias behind this thesis, bu t do not discou n t
the crosswinds of Europe and Scotland. Labour wi ll the psychological effect i t wi ll have on a campaign . •

Tory grief Rights wi ll form the centrepiece of their

man ifesto. Sir Keir's record ru nning the
Crown Prosecution Service wi ll also
Wages may be goi ng u p, but so are
mortgage costs for the swing voters who
helped the Tori es to victory in 2019 .
featu re. When Boris Johnson wrongly After the electio n, in which Labour will
accused Sir Kei r of personally fail i ng to wi n its first big majority since 2005 ,
prosecute J im my Savile, a celebrity depression will set i n . Rather than fight
paedophile, Mr Su nak distanced hi mself on, Mr Sunak will resign. It will be little
from the com ments. Now Sir Keir and solace that his position was close to
Savile are regu larly mentioned in the same impossible. Politics is often about
breath by party apparatchiks. (Labour will punishment rather than policy. Voters
As the election looms, the Conservative
repay the favour by digging into the discipline parties when they screw up.
Party faces u p to its mortality
finances of Akshata Murty, Mr Sunak's When Liz Truss's chaotic 49-day tenu re as
wife, who is a bill io nai re.) prime minister ended, so did the
D U N CAN ROB I N SON Political editor and Bargaining comes next. Things have Conservatives' chances in the election .
Bagehot colu mnist, The Economist im proved , Tory MPs will argue. When it This will n o t stop h e r launching a n
comes to the economy, they will be ill-fated b i d for the Tory crown during the

G RI E F P U RPO RT E D LY has five stages :

denial, anger, bargaining, depression
and acceptance. With a general election
half-right. Inflation, which peaked at
almost 11% , will fall to a far more
digestible level. That will mea n strong
autumn leadership contest, however.
(Some people never move past denial.)
Acceptance is the fi nal stage.
coming in 2024, the Co nservative Party real-wage growth, an all-too-rare treat for Oppos iti on can be an opportunity, if
will ru n through them all . British voters in the past 15 years. But there handled well. The party's remaining MPs
Denial will come fi rst. Whatever the will be no electoral dividend for the Tories. will face a choice: to appeal to their party
date of the election, the campaign will or to the cou ntry. Sir Keir, the new prime
kick off at the start of the year. Rishi Sunak minister, will have shown it is possible for
is seen as the Conservatives' best hope. a party to recover from a big defeat i n just
The plan is still for a presidential Left and left behind one parliamentary term. The speed o f the
campaign, with Mr Su nak faci ng off Brita i n, voting i n tention, % Conservative recovery will depend on
against Sir Kei r Starmer, the Labou r leader. whether, for new leader, they opt for one
But if he is a presid ent, he is an 50 of James Cleverly or Tom Tugendhat, two
i ncreasingly unpopular one. Mr Su nak was moderates ; or Kemi Badenoch, a cultu re
once more popular than his party; by 40 warrior; or Suella B raverman, a nativist.
spring, he will comfortably poll below his The fragile hegemony of the
party. All is not lost, Tory spinners will 30
Conservative Party, which lasted from
i nsist. Eve nts happen. Wars break out. 2010 to 2024 , has shattered. Obituaries for
Something may turn up. Conservative the Tories will be w ritten , just as they were
When nothing does, the anger will 20 i n the mid-noughties, when Labour was
begin . The Conservatives once bridled at utterly dominant under Sir Tony Blair. The
their reputation as "the nasty party". In 2020 21 22 23 obituaries were wrong then, and they will
2024 they will embrace it. A pledge to be again. Political parties may d ecline, but
Sou rce: The Economist's U K po l l tracker
leave the European Convention on Hu man they can always reinvent themselves. •
T H E WORLD A H EAD 2024 B RITA I N 65

Stagnation
continuation?

Britain's economic outlook is better

than expected, but hardly rosy

GAVI N JACKSO N Finance and economics

correspondent, The Economist

T 2023.OUThe
HE TLOOK for Britain was bleak at the start of
country was on its fourth prime
minister in four years, after the brief rule of Liz Truss
ended in financial turmoil. Even that political
instability was a minor worry for many Britons, given
high energy prices, rising interest rates and falling
wages. Yet in the end, the worst that could be said for ... Linger on the sidewalk where the n eon lig h ts a re pretty
Britain's economy in 2023 was that it went sideways.
Growth was minimal-G DP increased by around
0.5%-but stagnation, not disaster, was the outcome. the Resolution Foundation, a think-tank. Many
Can Britain expect to do better in 2024? Many of homeowners have not yet felt the pinch as they have
the challenges of the past year have faded. The cost of been on fixed-rate mortgages, which typically last two
natural gas has fallen sharply, a big cause of the fall in to five years. Even if the bank does not raise interest
inflation from 10% in December 2022 to a forecast rates in 2024 it will still feel for many as though
4.5% in the same month of 2 0 2 3 . Continued strength monetary policy is tightening.
in the labour market means wages are now growing in There could be some wiggle room later in the year
real terms. The Bank of England has either finished to deliver pre-election tax cuts. But current fiscal
raising interest rates-from 0.25% in 2022 to 5.25% in policy, alongside the government's tax and spending
July-or will do so soon. decisions, is set to take money out of Britons' pockets.
Yet many Britons, other than pensioners, will still Subsidies for energy use will end, as will direct
see their household incomes fall, says Adam Corlett of payments to poorer households. Tax thresholds, too,
have been frozen in cash terms, so that much of the
increase in real wages will go to the government
rather than to workers.
Through the roof The long-term structural factors behind Britain's
Brita in, fixed-rate mo rtgages u p for renewa l, economic sluggishness are unlikely to change, either.
by initi al effective interest rate, '00 0 Productivity, as measured by output per hour worked,
has risen by only 6% since 2010. With already high
U nder 2% 2-2.5% ■ Ove r 2.5% employment and a shrinking working-age
400
- -- population, Britain would have to triple its
-
-
- productivity growth to achieve the same

-1
300
improvement in G DP as before the pandemic, reckons
-
200 Bert van Ark, an economist at Manchester University's
Productivity Institute.
1 00 Inflation could prove to be less sticky than
Many Britons expected, giving the Bank of England room to ease up
on monetary tightening. But overall, even if the
I I I I
0 will still see outlook is better than it was a year ago, Britons can
2022 23 24 their household still only cross their fingers and hope it continues not
Source: ONS
incomes fall to be as bad as originally feared. •

WHAT I F? election in 2024, the prime minister, Rishi Suna k,

agrees that, in exchange for not running candidates for
For years Nigel Farage has outflanked the Tories from the Reform U K pa rty in Tory-held seats, M r Fa rage can
the right. B ut they have now embraced some of his run as a Tory in a safe seat. The pa rty is defeated by
po licies. What if N i gel Farage became leader of the La bou r and, in disa rray, ma kes him leader, splitting it
Conservative party? It might go like this. Ahead of the pe rmanently between moderates and radica ls.
66 B RI TA I N T H E WO RLD A H EA D 2024

Throne out? does not, but must pretend to) . But chiefly
it is a problem for anyone trying to work Emergency
room
out what is happening with Britain's
monarchy. Because it is fiendish.
The monarchy has never been easy to
understand. It is governed by laws and
customs dating back a millennium or
more that cover everything from the king's
power over Britons (minimal) to his power
over swans (maximal, provided they are
Commonwealth realms are The N HS will continue to
mute and in the River Thames) . It even
moving to ditch the king be a political hot potato
governs what his queen is allowed to think
about (anything she likes, apart from her
CAT H E R I N E N I X EY Britain correspondent, king's death, for that is high treason). G E O RG I A BANJO Britain correspondent,
The Economist Understanding all that, however, is a The Econo m ist
doddle compared with understanding the

C Papua New
name the King of Tuvalu? Or of
AN YOU
Guinea? Or Belize? Probably
tangle of laws and customs governing the
monarchy abroad. This, says Sathnam Fopening
E W COU N T R I ES are as devoted to their
health system as Britain. During the
not. How about the King of Canada? That Sanghera, author of "Empireland: How ceremony of the London
one's easier. It's also a clue. For they are all Imperialism Has Shaped Modern Britain", Olympics in 2012, jiving nurses enthralled
King Charles III. Never a man short of is "incredibly confusing". a stadium-and bemused a global
titles (he has also, at various times, been One source of confusion is how the television audience-proclaiming their
the "Great Steward of Scotland" and the Commonwealth fits in. In practice, it pride in the National Health Service ( N H S) .
Tolkienish "Lord of the Isles", and is doesn't. Today it is little more than a club In adverts broadcast during the covid-19
currently "Defender of the Faith" ), Charles with occasional sports days. To leave the pandemic the British government urged
III is the head of 15 realms including Commonwealth, all a country needs is "a the public to lock down not only to save
Australia, the Bahamas and Grenada. A letter... on headed notepaper", says Philip lives but, in larger letters, to "protect the
third of the world's monarchies have him Murphy, a historian at the University of N H S". The health service will play an even
as their king. For now, at least. London. But kicking out a king is bigger role than usual in the general
In 2024 some will start trying to change constitutional. It is far more complicated election expected in 2024.
that. In the coming year, Jamaica hopes to and may need referendums-which, as But it will take centre stage for all the
hold a referendum on kicking Charles out. Britons know, can backfire. That may be wrong reasons. The year will begin with
Australia expects to hold nationwide putting some countries off. another terrible winter: not enough
consultations on becoming a republic. Still, the process is gathering pace. And ambulances, and old ladies dying on
Increasing discontent will also be heard in if countries do kick Charles out, many trolleys in hospital corridors. Nurses will
realms like Antigua and Barbuda (which people will be relieved-including, not be jiving for the N H S but handing in
has promised a referendum on the royals possibly, some royals. As Prince Philip their notice, continuing a trend of record
within two years) and Belize. once told journalists in Canada: "We don't departures. Waiting lists will continue to
This burst of republicanism creates come here for our health." If countries did tick up. Calls for further privatisation will
several problems. It is a minor problem for want rid of them, he added, then "let's end be steadfastly ignored, but taken a little
the royals (who care a bit about all this) the thing on amicable terms." In 2024 , more seriously than they were before. At
and for the British government (which those terms may start to be drawn up. • some point Britons will start to notice that
patient outcomes, already bad, worsen
whenever doctors go on strike (as they
have done intermittently since March,
with no resolution in sight).
The N H S is not the only public service
in crisis. Crumbling schools, prisons and
courts will all worsen in 2024. These
problems typically build up beyond the
glare of flashing blue lights, though many
of the underlying causes-a lack of
predictable funding, cuts to capital
expenditure-are the same. In a stagnant
economy and with little political benefit,
long-term investment is unappealing to a
government. Solutions, it follows, tend to
be short-term patches.
If it wins the election, the Labour Party
will have some difficult decisions to make
over which parts of the wider health
system-general practice, social care or
capital projects-need the cash most. In
theory, the service will remain free at the
point of use. In practice, a growing
number of Britons are not getting the
treatment they need. The political toll that
takes is likely to become clear. •
ADVERTISEM ENT
68 B RI TA I N T H E WO RLD A H EA D 2024

By Invitation Labour's economic plans

Apublication
s for this
MANY W R IT E RS
will know,
Rachel Reeves, shadow chancellor of
the exchequer, outlines Labou r's plans
It means rebuilding our
economy so it is stronger and
accurately predicting what is more resilient in a volatile
going to happen in the next for Britain's national finances world. It means a new
12 months is a fool's game. industrial strategy for Britain
During the two and half years I that can strengthen our ability
have been shadow chancellor to make, do and sell more here
we have had the fallout from a and that seizes on the
global pandemic, a war in opportunities of the future,
Europe following Russia's such as clean energy, artificial
illegal invasion of Ukraine, a intelligence and life sciences.
global energy crisis and central It means getting Britain
banks across the world having building again by taking on
to respond to sharp rises in our antiquated planning
inflation. And, at the time of system. And it means
writing, Hamas has launched a investing in British industries
terrorist attack against the so we can create decent,
state of Israel and triggered the well-paid jobs that give
most dangerous conflict in the families the security they need
region for decades. to pay the bills today and plan
There has been uncertainty for the future.
at home as well as on the Government cannot deliver
global stage. Over the past 13 this mission alone, and nor
years Britain has had five can business. That's why I have
prime ministers, seven promised a new partnership,
chancellors of the exchequer, with government and business
four general elections, a vote to working side by side to unlock
leave the European Union and the opportunities in our
Liz Truss's disastrous mini­ economy and to draw on the
budget. Insecurity has become talent and effort of millions of
the watchword for British working people in every part of
politics-and that insecurity the country.
has come at a price. And economic stability can
With every new shock to be realised only if we bring
the global economy, Britain there is less money in our change and for a new back stability to the nation's
suffers more deeply and for economy, less money in our economic model. finances. When I worked at the
longer than our international towns and cities, less money At the heart of Labour's Bank of England, I learnt a very
peers. In 2024, we are for our public services and less pitch for the next general simple lesson: your sums must
predicted to have the lowest money in people's pockets. election is a mission to deliver always add up. As chancellor of
growth and the highest After 13 years of chaos and the strongest sustained growth the exchequer I will never
inflation among G7 countries, instability under the in the G7, with good jobs and spend what we cannot afford. I
according to the latest Conservative government, productivity rising in every will introduce a new set of
forecasts from the I M F . We are Britain is worse off. Working part of the country. It is the fiscal rules which will apply to
falling behind in the global people are worse off. most important mission for us every decision taken by a
race for the industries and jobs Government incompetence because economic growth is Labour government. We will
of the future, with European has become a drag on the only way we can support not borrow to fund day-to-day
countries and America economic performance. But, in new industries, increase spending and we will reduce
charging ahead. this age of insecurity, there is wages, revitalise high streets, the national debt as a share of
When I talk to chief one certainty facing us in the bring down household bills total economic output.
executives and other business next 12 months: a general and reform our public services. In the coming year the
leaders-and I have spoken to election. It is a chance for the Delivering that mission can British people have the chance
more than 500 since I was first British people to vote for only be achieved by a future to vote for a stronger, more
appointed-they tell me the Labour government that puts secure future, to vote for an
same thing, time and time economic security first: economy built on financial
again: that although they want security for our national stability and economic
to invest in Britain they are put economy and security for security. And with that, we can
off by the turmoil in
A new set of fiscal family finances. I t is an make working people better
Westminster. Missing out on rules will apply approach that I call off-and get Britain's future
this private investment means to every decision "securonomics". back on track. •
70 TREN DL I N ES TH E WO RLD AH EAD 2024

I S ENTHUS IASM FO R AI
CHATB OTS I N DECLI N E ? Photovoltaic ce ll efficiency, %
Cha tG P T attracted 100m users 35
within two months of its
30
launch in November 2022, but
user visits peaked in mid-2023 25
and have since levelled off.
This may indicate flagging 20
enthusiasm for chatbots in
15
general. Or it may just signal
that users have become more
201 3 1 5 17 19 21 23
discerning, and have switched
Source: NREL
to other chatbots that are
better suited to particular
tasks . Another possibility is WI LL P E ROVS KITE
that the mid-year decline is the SOLAR CELLS TAK E OFF?
resu lt of school hol idays: Most photovoltaic cells are
watch to see if the nu mbers made of silicon, and convert
tick up again in late 2023. sunlight to electricity with an
efficiency of about 23%.
Perovskite cells, which use
Monthly unique visitors, m
other elements in a particular
250 crystal structu re, cost more but
ChatG PT
200
offer h igher efficiency: over
25%, and ove r 30% when
1 50 combined in a "tan dem" cell
Bing 1 00
with silicon. So the extra
expense can be worth it,
Google Ba rd 50 particularly in situations
0
where space is tight. Firms in
America, Britai n, South Korea
2022 2023
and Sweden aim to start sell ing
Source: Simi larweb
perovski te cells in 2024.

Amount saved, in euros,

in the European Union
by new sola r and wind
capacity in troduced
s ince the beginn ing
of the energy cris is

WH EN WI LL REN EWABLES result of the accelerated pace all existing capacity in

Global electricity generation, GWh
OVE RTAKE COAL? of renewable capacity America, and is expected to
Renewable supplies of energy, add itions" and "the plateau ing have added two Americas' FOR ECAST 1 2
such as solar and wind power, of electricity generation from worth of solar capacity in 2023.
will soon overtake coal-fired coal". Adoption of renewables Meanwhile, use of coal for
8
power stations to become the in Europe has been accelerated generation rose by 1.7% in
world's largest single source of by the war in Ukraine: E U 2022, as high natu ral-gas
electricity, according to the countries added 41 gigawatts prices p rompted gas-to-coal 4
N uclear
International Energy Agency (GW) of solar capacity in 2022, switching. But use of coal in
(I EA) . But when? Having and are expected to add more Europe and America in 2023 Oil
0
previously said it would be i n than S 0GW i n 2023 . China and 2024 is p red icted to drop
20 1 4 16 18 20 22 24
2025 , the I EA now thinks it added 107Gw of solar capacity sharply, more than offsetting a
Sou rce: IEA
could happen in 2024, "as a in 2022, roughly equivalent to s light i ncrease in Asia.
T H E WORLD AH EAD 2024 T R E N D LI N ES 71

WI LL SUP ERH E RO FI LMS

S ha re of top ten fil ms' worldwide box-office revenue, % World coffee market
MAKE A COMEBACK?
60kg bags, m
Superheroes may have met 1 80
70
their match-at the box-office, Su perhero films
that is. I n 2023 superhero films
were overshadowed by 1 60
" Barbie", whose plastic heroine 60
battled the patriarchy with
frequent wardrobe changes, Oppen heimer 1 40
rather than su perhuman
powers, and "Oppenhei mer", a 50
biopic of an non-super (but Spider-Man: 201 0 15 20 22*
No Way Home So urce: ICO, yea rs begi nn ing Oct *Estimate
very clever) hu man. Much
speculation ensued about
whether the appetite for Barbie 40 WILL YOUR CU P OF COFFEE
endless superhero fl icks from GET MORE EXPENS IVE?
Marvel, and its i mitators , had Consumption of coffee is now
cooled. The scene is thus set outstripping production ,
30
for a showdown in 2024, when according to the International
superhero releases include Coffee Organisation . The gap
"Capta in America: Brave New could widen in 2 0 2 4 : extreme
World ", " Deadpool 3" and two 20
weather in Brazil in late 2 0 2 3
Spider-Man spin-offs, "El may reduce harvests of arabica
Muerto" and "Madame Web". beans, wh ile El Nifio threatens
They face off against "Mickey to depress yields of robusta
17'', Bong J oon Ho's follow-u p 10 beans in Indonesia. Coffee
to "Paras ite"; "Challengers", prod ucers may need to
Luca Guadagnino's tennis consider cu ltivation in new
drama ; "It Ends wi th Us", based areas as the planet warms , and
on Colleen Hoover's book; and 0 encourage coffee-drinkers to
"Glad iator 2", Ridley Scott's 201 4 15 16 17 18 19 20 21 22 23* embrace a thi rd species , called
follow-u p to his epic of 2000 . l iberica , which is more
Sou rce: I M Db *To Septem ber 1 5th
Let battle co mmence. heat-tolerant.

WI LL ROBOTAX IS TU RN the industry, and comme rcial

Global wild poliovi rus cases Robotaxis, m iles per
THE CO RN ER? rol l-outs in more cities. More
d isengagem ent, '000
200 After much hype five years ago, wi ll follow in 2024. Bu t
1 80
plans for self-d riving robotaxis Americans' trust in self­
1 50 were delayed and scaled back, driving cars fell for the second - Cru ise
I
I

as ironing ou t the bugs from year running in 2 0 2 3 , - Top-three I

I 1 20
compan ies
1 00 the technology proved harder accord ing to a su rvey by J.D. I

than expected. But they have Power. People who have ridden 60
50
since made quiet progress , in one, however, were more
with the distance between positive. The question for 2024 0
0
"disengagements" (mistakes is: can robotaxis get better
20 1 9 20 21 22 2 3* 201 5 1 8 19 20 21 22 23
requiring i ntervention by a more qu ickly than perceptions
Sou rce: WHO *To Septem be r 23 rd So urce: I DTec h Ex
safety driver) ticking up across of them get worse?

WI LL WI LD POLIO B E
ERADICATE D?
2024 could be the first year
without wild polio. Pakistan
and Afghanista n are the last
countries where the disease is
endemic. Cases have dwindled
(the chart shows the number of
cases, not thousands or
millions) and are limited to
small geographical areas.
Eradication programmes have
a good chance of eliminating
the wild virus in the coming
months. The focus is s hifting
towards eliminati ng a new
form of the disease,
vaccine-derived polio,
which is on the rise.
72 T R E N D L I N ES T H E WO RLD A H EAD 2024

various d iffe rent ways, all have

Quantu m volume achieved
a fatal flaw: the delicate
Log scale
2 16 quantum states on which they
depend "decohere" after a
2 12
fracti o n of a second.
A better measure may be
so-called "quantu m volume"
2a
( QV) , which depends on the
"width" of a computer (its
24
number of qubits) and its
"d epth" (the number of
2020 21 22 23
Sources: I BM; Qua ntin uum operations they can perform
before decohering) . A
computer with 14 qubits that is
WI L L QUANTUM COM PUTI NG able to execute 14 operations is
B ECOM E USEFUL? said to have a QV of 2 to the
A race is under way to harness power of 14 , or 16, 384.
the spooky, counter-i ntuitive The maximu m QV ach ieved
laws of quantu m physics to is ris i ng stead ily, but the
build a new ki nd of computer. volume needed to perform
For some tasks a quantum useful operations, not j ust
computer could ou tperfo rm small-scale tests , remai ns
any non-quantu m machine unclear. I B M , a leader in the
that could eve r be bui lt, field, has set itself a QV target
blazing th rough calculations of 2 to the power of 100. Like
in cryptography, chemistry artificial intelligence, which
and fi nance. But when will a disappointed for decades
useful machine arrive? before its sudden, spectacular
One measure of a quantum success, qu antum computi ng
computer's capabil ity is its is likely to go from useless to
number of quantum bits , or ubiquitous very quickly-j ust
qubits . But existing mach ines, as soon as researchers figure
which implement qubits in out how to tu rn up the volu me.

WH E N WI LL C H I NA TAKE TH E
Wo rldwide num ber of coups Attem pted ■ Successful LEAD I N CAR EXPO RTS?
20
The switch to electric vehicles
(Evs) has reshaped the car
industry. In many ways, E Vs
have more in common with
smartphones on wheels than
they do wi th combustion­
engine vehicles; they contain Increase in Chinese car
fewer movi ng parts and are exports fro m 2 0 1 9 to 2 023
1 946 60 70 80 90 2000 10 2 3*
mechanically much less (1 2 months to A ugust)

Sou rces: Centre for Systemic Peace; Pratibha Thaker, EIU *To August
complex. Incu mbent
manufacturers, which excel at
build ing engines and
WI LL TH E NUMBE R OF COU PS shows no s ign of abati ng, so gearboxes, have lost their
CONTI N U E TO RI SE? further cou ps are possible. But competitive advantage.
Coups are back, and in where? Analysts at B M I , a Chinese manu facturers
sub-Saharan Africa in research firm, reckon South spotted an opening-and have
particul ar, after a l u ll in the Sudan is at most risk, followed charged i nto it.
2010s. You can walk from the by the Central African Some time in 2024 China
Red Sea to the Atlantic entirely Republic, much of which is no wil l overtake Germany and
M onthly passenger-car exports, m
within cou ntries that have had longer under government Japan to become the world 's
coups in the past three years. control. S BM I ntelligence, a largest car exporter, driven by 0.5
Of 18 attempted coups since Nigerian firm, reckons the demand for EVS . Ad mittedly, 0.4
2021, n i ne have succeeded. chances are h ighest in the Chinese car exports include a
Coups tend to occur for one of Democratic Republic of Congo. lot of vehicles made by Tesla, 0.3
two reasons: either a collapse And keep a n eye on Equatorial an American firm, in its 0.2
of security, as i n N iger and Guinea, which is ruled by Chinese factory. But Tesla, the
Mali, where generals claimed Africa's l ongest-standing world's biggest maker of EVS, 0.1
to be restoring order; or when leader, Teodoro Obiang wil l be overtaken by BY D , a
0
an u npopular leader outstays Nguema Mbasogo, now 81 Chi nese fi rm , which will sell 19 20 21 22 23
his welcome, as i n Gabon. years old . A succession crisis more vehicles, both within So urces: UN Comtrade; govern ment statistics
I nstability i n the Sahel could trigger a coup. China and globally.
T H E WORLD AH EAD 2024 73

➔ Also in this section

74 Energy islands
75 Al adoption
76 H eadset battles
76 Chip wars
77 The EV race
78 Rem ote working
78 Tou rism re bou nds
79 I ndian investment
79 Self-drivi ng cars
80 Co nscious
decoupling
82 Timnit Gebru
on labour a nd Al

fossil-fuel inputs , like coal and natural gas, are not

Now for the easily replaced by electricity. The only viable

alternative for many ind ustrial firms today is to use

hard part
carbon-captu re equi pment bolted onto existing kit,
but this is expens ive and cu mbersome. Fossil inputs
can be replaced by hydrogen and ammonia made with
clean energy, bu t these have been slow to take off.
That is why these sectors a re called "hard to abate".
But the di rty little secret is that heavy industry is the
biggest global emitter of net greenhouse gases (G H Gs) ,
on a par with the much more visible, coal-guzzling
electricity sector. Cement- and steelmaking each
contribute 5% of global emissions, compared with 1%
for aviation, wh ich attracts far more criticis m.
The process of d ecarbon is i ng i ndustri al
In its baseli ne scenario for 2050 , BloombergN E F, a
activi ties is getti ng u nd er way
research fi rm, p redicts there wil l be "almost no
emissions abatement from industry" without
V IJAY VAIT H E E SWARAN Global energy and significant technological and policy changes . The
climate-innovation editor, The Economist challenge is compounded by the i ndustrial boom to
come in India and other emerging economies .
T revolution
H E F I RST shots of the nascent "brown-to-green"
will be fi red in I n the global effort
2024 .
But the wheels are turning at l ast. For example, the
First Movers Coalition, a group of multinational
to tackle climate change, governments have focused companies , has agreed to buy clean technologies in
on cleaning up the generation of electricity by seven hard-to-abate sectors, including cement and
promoti ng renewables , and greening transportation steel, to seed the market and d rive down p rices. Other
by boosti ng electric cars . So far, industrial sectors public-private partnerships, focused on trad e
such as steel, cement, manu facturing and corrid ors , ports and shipping, are in the works.
petrochemicals have escaped serious scrutiny. The technology itself is also improving. Areas to
That is because it can be difficult and costly to watch i nclude new cement-making method s that do
tackle emissions from i ndustrial activities. Many not require "cl inker" (a carbon-intensive i nput) ; the
i nvolve high-temperatu re heat or chemical p rocesses production of low-GHG steel through the application
(such as steelmaking in blast furnaces) for which of electrified methods; and energy-storage ►►
74 B U S I N ESS T H E WO RLD A H EA D 2024

► technologies that can store intermittent renewable Press releases The final big force is a shift in global finance.
power cheaply and release it on demand as about green Recoiling from the excesses of " EsG" activism, which
high-temperature heat. With the right support, called for spurning legacy industries, many investors
reckons Bill Gates, an early investor in numerous infrastructure are shifting to a more pragmatic approach. BlackRock,
decarbonisation startups, "we will see the beginning will give way to the world's biggest asset manager, has even launched
of real industrial change". real shovels in an explicitly brown-to-green materials fund. Look for
That points to policy. The coming year will reveal if the ground other investors to follow suit.
the Eu's pioneering effort to impose carbon The coming year will show how much the
border-adjustment taxes will take hold. If it does, decarbonisation of heavy industry is really hotting up.
several American senators stand ready with matching Given its sheer scale, it will require the eventual
proposals. This approach would, albeit more clumsily redirection of trillions of dollars, which would have
than co-ordinated carbon pricing, encourage otherwise gone into carbon-spewing infrastructure
manufacturers and exporters around the world to for legacy industries, into greener capital stock
decarbonise in order to retain access to big markets. instead. This shift will spark renovation and
Investment in carbon capture and hydrogen in decarbonisation in the rich world, and leapfrogging to
America slowed in 2023 thanks to uncertainties about cleaner industries in the emerging world.
how the Inflation Reduction Act, its landmark climate As Larry Fink, BlackRock's boss, puts it, "We need
law, will be implemented. As the regulations around to pass through shades of brown to shades of green."
its generous subsidies are clarified, expect press As this happens, profit-minded climate investors may
releases promising green infrastructure to give way in see that sectors considered hard to abate today will in
2024 to lots of real shovels in the ground. time become hard to resist. •

Power from several wind farms offshore and then

send it onshore through one large cable.
accom modation for crews (and even
tourists), spare parts for wind turbines

archipelago
Energy islands could also feed power to and, crucially, devices called electrolysers,
multiple countries based on demand. which turn water into hydrogen and
Elia's "Princess Elisabeth Island" will oxygen using electricity. Producing
be the world's first such electric-network hydrogen would be a key source of
node. It will gather up to 3. 5Gw from a revenue. Industries like steelmaking
nearby offshore-wind zone. The power could use it to reduce carbon emissions.
will be processed by two substations on But the project has hit some snags. In
the island and sent to Belgium through a June 2 0 2 3 Denmark again postponed a
Europe needs to bu ild energy
cable, as well as to Britain and Denmark. tender to build the island owing to its
islands. But what sort?
Costing an estimated€2bn ($2.1bn) , the anticipated cost. The Danish state, which
five-hectare island will take a couple of is meant to own slightly more than 50% of
LU DW I G S I EG E LE European business years to build. Based on sand-filled the island, would have had to cough up
correspondent, The Econom ist, Berlin concrete caissons resting on the seabed, it nearly€7bn on its own. The government
will also have a small harbour and a has now gone back to the drawing board.
"Q B L I V I O N ", A F I LM starring Tom helicopter pad for maintenance visits. This does not mean the islands are
Cruise and released in 2013, was Others have even bigger goals. doomed, but their final design is
quickly relegated to the fate of its title. Denmark plans to build an island 80km off uncertain. Even Elia's smaller plans may
Still, it was memorable for one thing: its coast that will be more than twice the turn out to be overkill. They could end up
gigantic contraptions of alien origin called size, to have space for all sorts of add-ons: resembling boring old oil platforms. •
"hydro-rigs". They hovered over the Earth's
oceans and sucked up water. Europe's
ambitious plans to build an archipelago of
artificial "energy islands" in the North and
Baltic seas evoke a similar sci-fi vibe.
Some will be huge, the size of dozens of
football fields, designed to collect the
power generated by hundreds of
surrounding wind turbines. In March
2024 Elia, a Belgian power-grid operator,
will start building the first one 45km off
the country's coast. But does Europe
require such pharaonic projects?
You need not be an engineer to see the
benefit of such islands. Today each
offshore wind farm has its own cable
connecting it to the grid on land. But as
Europe gears up to produce 300 gigawatts
(GW) from its northern seas by
2050-enough to power all of the
continent's homes-this method will
become increasingly inefficient. It is
much cheaper first to gather the electricity
T H E WORLD AH EAD 2024 B U S I N ESS 75

AI goes to work

Generative Al will go m a i n strea m .

Data-centric firms will benefit first

GUY SCRIVEN u s technology editor,

The Economist

W H E N N EW technologies emerge they

benefit different groups at diffe rent
times. Generative artificial intelligence
(AI) first helped software developers, who
could use GitHub Copilot, a code-writing
A I ass istant, from 2021. The next year came
other tools , such as ChatG PT and DALL- E 2,
which let all manner of consumers
instantly p roduce words and pictures.
In 2023 tech giants gai ned , as investors
grew more excited about the p rospects of
generative AI . An equally weighted
share-price index of Alphabet, Amazon, an AI chatbot to assist u sers of its The third reason is talent. AI gurus are
Apple, Meta, Microsoft and Nvid ia grew by productivity software, such as Wo rd and still in high demand . P red ictLeads , a
nearly 80% (see chart) . Tech fi rms Excel. It launched the same thing for its research firm, says about two-thirds of
benefited because they supply either the Windows operating system. Google will s&P 500 firms have posted job adverts
AI models themselves , or the infra­ follow suit, injecting AI into Google Docs mentioning A I . For those companies, 5%
structure that powers and del ivers them. and Sheets. Startu ps will pile in, too. In of adverts now mention the technology,
In 2024 the big beneficiaries will be 2023 venture-capital investors poured up from an average of 2 . 5 % over the past
companies outside the technology sector, over $36bn into generative A I , more than three years . But the market is easing. A
as they adopt A I in earnest with the aim of twice as much as in 2022. survey by McKinsey, a consu ltancy, found
cutting costs and boosting produ ctivity. that in 2023 firms said it was getting easier
There are three reasons to expect to hire for A I - related roles.
enterprise adoption to take off. Which firms will be the early adopte rs?
First, large companies spent much of H igh on Al Smaller ones will probably take the lead.
2023 experimenting with generative AI . Big Al -focused technology companies* That is what happened in p revious waves
Plenty of firms are using it to write the Share prices, January 1 st 2023 =1 00 of tech nology such as smartphones and
fi rst d rafts of documents, from legal 200 the cloud. Tiddlers are usually more
contracts to marketing material. JPMorgan nimble and see technology as a way to
Chase, a bank, used the technology to gain an edge over bigger fish.
1 80
analyse Federal Reserve meetings to try to Among larger companies, data-centric
glean insights for its trading desk. firms, l i ke those in health care and
1 60
As the experimental phase winds financial services, will be able to move
down, firms are planning to deploy fastest. That is because poor data
1 40
generative AI on a larger scale. That could management is a big risk for deploying A I .
mean using it to summarise recordings of Managers worry about valuable data
meetings or supercharging research and 1 20 leaking out through AI tools. Firms
development. A survey by KPMG, an audit without solid data management may have
firm, found that four-fifths of firms said 1 00 to reorganise thei r systems before it is
they planned to increase their i nvestment F M A M A S 0 feasible to deploy generative AI. Using the
i n it by ove r 50% by the middle of 2024. *Equally weighted basket of Alphabet, Amazon, technology can feel like science fiction,
Second, more AI p roducts will hit the Apple, Meta, M icrosoft and Nvidia but getting it to work safely is a much
Source: Refin itiv Datastrea m
market. I n late 2023 Microsoft rolled out more humdrum affair. •

WHAT IF? a nd aggression. B ut the EU has had enough, and its

n ew Digital Services Act a l lows it to police soc i a l
Since Elon M u s k took over Twitter-now rena med m e d i a . What if the E U takes X t o task? M r M u sk, who
X-i n 2022, the soci a l - med i a platform has had a claims to be a free-speech absolutist, m ight balk and
problem with nasty posts. Ameri ca's gove rnment is i n p u l l X out of Europe. That could h asten the platform's
no h u rry to do a nyth ing a bout o n l i n e misi nformation decl i n e by c utti ng off users a nd advertisers.
76 B U S I N ESS TH E WO RLD A H EA D 2024

Head to head smart specs called Google Glass, which

flopped. Plans for high-tech glasses called Chip wars,
continued
Iris seem to have gone the same way. Its
latest gambit is a partnership with
Samsung, a South Korean giant, and
Qualcomm, an American chipmaker. The
three are working on a mixed-reality
project which may produce a headset.
Smaller firms are creating their own
niches. Valve, an American video-game
The fight to control the next Semiconductors will remain central
company, makes V R headsets for gamers,
big tech platform intensifies to America's tech rivalry with China
as does Pico, a Chinese-owned VR firm.
Pica's parent company, Bytedance, also
TOM WA I N W RI G H T Technology and media owns TikTok, an app that has aroused China business and
D O N W E I N LA N D
editor, The Economist suspicion in America-a situation that finance editor, The Economist, Shanghai
might make it hard to sell a device that

T2024 is Apple's
eagerly awaited gadget of
H E MOST
Vision Pro, a sleek
tracks your eyeballs.
Don't expect any headset to take the A the Huawei Mate 60 Pro
s s o o N AS
handset went on sale on August 29th,
headset that can transport users to the world by storm just yet. Worldwide sales technologists raced to smash it open and
middle of a "Star Wars" battlefield, or of video headgear will grow by a third in see how it worked. The Chinese
simply project the world's biggest Excel 2024, but will still total only 18m units, telecoms-equipment maker had somehow
spreadsheet into their office. The magic forecasts Omdia, a market-research succeeded in creating a new SG
goggles combine virtual reality (V R) with company. (Smartphone sales will exceed smartphone-something few thought it
"mixed reality", using front-mounted 1bn. ) Apple's Vision Pro will probably sell could accomplish. Huawei had been
cameras to show the user a live video-feed fewer than 200,000 units, because of forced to give up making such devices in
of the outside world, onto which supply constraints on components, as 2020 after American sanctions blocked it
computer graphics can be superimposed. well as the price tag. I t "will be a hit with from buying advanced semiconductors or
The device is controlled with eye developers in 2024 and then consumers in the equipment needed to make them.
movements and hand gestures. Apple calls 2025", predicts Dan Ives of Wedbush Sales of Huawei smartphones, which at
it the most ambitious product it has ever Securities, an investment company. one stage even outsold Apple's iPhones
made. At $3,499 its price is ambitious, too. The thing to watch in 2024 is what globally, collapsed. Yet as they sifted
Apple will be jostling for consumers' those developers find to do with the through the innards of the Mate 60 Pro,
attention with various rivals. Chief among device. Smartphones took off only after engineers discovered a Chinese-made
them is Meta, formerly known as the launch of apps that turned chip that seemed to show that American
Facebook, which had a big hit with its internet-connected phones from novelties sanctions had been overcome by
Quest 2 headset during covid-19 into vital everyday tools. Headsets, used indigenous innovation.
lockdowns, when the metaverse was mostly for gaming, still lack compelling This chip, the Kirin 9000s, was
briefly more enjoyable than real life. It use cases for most people. But as manufactured by SM I C , the leading
launched an upgraded Quest 3 late in 2023, programmers begin to play around with Chinese chipmaker, and its appearance
offering mixed reality. The Quest 3 is more the Vision Pro, that could change. In the was a deeply symbolic moment. China's
basic than Apple's device, but at $499 will months ahead, tech-watchers will have tech war with America began in earnest in
outsell it. Fancier models will follow. their eyes on Apple's new gadget-and it 2019 when Donald Trump's administration
Google may re-enter the headset race. A will have its four internal cameras looking banned the sale of high-end chips to
decade ago it launched camera-toting right back at them. • Huawei. In 2022 President Joe Eiden built
on the framework of those sanctions to
introduce a blanket ban on the sales of
advanced semiconductors to all
companies in China. Since then leaders in
Beijing have retaliated by banning the
sales of some chips made by Micron, an
American firm, to Chinese companies, on
security grounds. They also began
restricting exports of gallium and
germanium, two rare metals needed to
make state-of-the-art chips.
Huawei's new phone, and the chip that
powers it, are thus seen in China as
signalling a paradigm shift. "People can
see from this that American sanctions
cannot stop China's technological
progress," read an editorial on September
12th in the People's Daily, a government
mouthpiece. Photos on local social media
showed children bowing in front of
Huawei advertisements in Shenzhen. In
America, the Mate 60 Pro was used as
evidence both to argue that sanctions on
China were failing and should be ►►
 T H E WORLD A H EAD 2024 B US I N ESS 77

► abandoned and to argue that they should and other Chinese chipmakers because Chinese companies have found clever
be tightened. In fact, it highlights just how E U V machines are made only by ASML, a workarounds to get their hands on chips
difficult it will be for Huawei and other Dutch company, and are covered by via u nderground markets. For this reason,
Chinese firms to make new breakthroughs American sanctions. America is likely to step up global
in 2024 and beyond. Impressive as it is, in short, the Kirin enforcement of its sanctions. The Eiden
The performance of the Mate 60 Pro is 9000s probably marks the boundary of administration has already dragged allies
on a par with Samsung's Galaxy s20, a what China can achieve without E U V such as Japan, the Netherlands and South
handset released in 2020 and powered by technology, which it will have to develop Korea into the fight, to the displeasure of
a chip manufactured by TSMC of Taiwan, on its own . That is likely to take many companies in those countries. In 2024 it
the world's leading chipmaker. Being three years-and TSMC will continue to race may expand that group, perhaps in places
years behind may not sound like a lot, but ahead in the meantime. The Mate 60 Pro is such as the Middle East, where Chinese
SMI C is using a previous generation of not the decisive blow in the tech war that firms are rumoured to be buying chips.
lithography machines, based on a it seemed. And other aspects of the That may hamper Chinese firms'
technology called ouv, to etch its chips. phone's innards signal the direction the ability to create new high-tech products,
Industry observers reckon that the tech war will take in 2024. from smartphones to the specialised
Kirin 9000s represents the limit of DUV The handsets were found to contain systems needed to train artificial­
technology. TSMc's superior chips are memory chips made by SK Hynix, a South intelligence models. But it will also sap
made using more advanced EUV Korean firm. It says it has not done the patience that America's friends have
technology. And that is off-limits to SMI C business with Huawei in years. But for its tech war. •

China charges
ahead

Its lead i n battery-ma king wi ll make

it the worl d's biggest ca r exporter

H A L H O DSON Special projects writer,

The Economist

C vehicles
OMB U STI O N E N G I N ES in motor
account for about 15% of
carbon-dioxide emissions each year.
Eliminating them requires the
electrification of transport, which in turn
requires batteries in unprecedented .... Saving the pla net
quantities. In 2024 the outlines of a new
global battery-production infrastructure
will come into focus in China, Europe and 2022 the Chinese government had poured about one-third of the cost of production .
America-a network of factories capable around $3obn into supporting the market All told, Benchmark calculates that
of churning out batteries in sufficient through consumer incentives alone; EV American automakers will receive $14obn
amounts to store the energy required to manufacturers received further support in subsidies over the next decade. In early
propel the global fleet of vehicles. through local governments. These 2023 the European Union proposed a
The majority of battery factories, subsidies created competition between similar measure, the Green Deal Industrial
existing and plan ned, are in China. Many many new EV companies. Most have now Plan, which opened the way for
in Europe are being built by Chinese firms. gone bust, leaving winners such as BYD member-states to offer subsidies of their
Benchmark Mineral Intelligence, a firm of and CATL in a strong position. China's own, as well as providing some funding.
analysts, says that China will have 69% of pre-existing strengths in the electronics Thanks to these stimulus efforts, it
global battery-production capacity by supply chain also gave EV manufacturers a now looks as though both Europe and
2030, down from 78% in 2022, but still boost. By 2010 there were already more America will have sufficient
sufficient to make enough batteries for than 100m electric bikes in China, thanks battery-production capacity to cover
90m cars every year. Europe and America, to government bans of petrol-powered domestic demand for EVS by 2030. China
in contrast, are each forecast to have motorcycles in city centres. is set to have three times more battery
around 14 % of global capacity by 2030, Europe and America have only recently capacity than it needs to service its home
enough for 19m vehicles each. started to catch up. In America the market. As 2024 begins, China is poised to
China holds this lead in part because Inflation Reduction Act ( I RA) , passed in become the world's largest car exporter for
its government has been supporting 2022, provides tax breaks for EV buyers, the first time. And no matter how much
electric-vehicle (Ev) manufacturing and but only if the car contains no parts from money Europe and America spend trying
adoption for longer. Tax breaks for EV China or Russia. The I RA also offers to catch up, China's battery dominance
purchases began in the early 2010s, and by battery-makers a tax credit which covers will last for the foreseeable future. •
78 B U S I N ESS T H E WO RLD A H EA D 2024

Out of office - No escape from

travel chaos
Home, and not alone
Fu ll-time d ays per week working from h ome
Latest week average, Apri l-J u ne 2023*
Plan ned by emp loye r • Desired by employees
• Actual

As the fight over remote work heats

Canada
0 0.5 1 .0
•· --•
1 .5 2.0 2.5 3.0

Demand is recovering faster than su pply,

u p, reality will set in for landlords Bri tain which means delays and higher prices
U nited States
RAC H A NA S H AN B H OG U E Business affairs Australia T H OMAS L E E- D EV L I N Global business
editor, The Economist
Germany ••--• correspondent, The Economist

Wto toilcovrfromn-19theirforced
HEN office workers
spare rooms and
So uth Africa
Si nga pore
N O B O DY E NJ OYS starting or ending a
hard-earned holiday by wasting hours
kitchen tables, it triggered the biggest in an airport waiting for a flight. Alas, that
shift in professional life for decades. And, Sweden is what many travellers will face in 2024.
as with any big shift, the consequences are People have recovered their appetite
Spa i n
still working their way through corporate for whizzing around the world. The U N
hierarchies and the financial system. In Mexico World Tourism O rganisation estimates the
2024 reality will start to set in, for global number of travellers will be at 95%
Ch i n a
workers, bosses and landlords. of pre-pandemic levels in 2023, up from
Managers and their employees do not Italy 63% in 2022, driven by a post-pandemic
quite see eye to eye on the vexed question Malaysia "revenge tourism" boom. Business travel
of where work should be done. According is also rebounding faster than expected:
to a survey by W F H Research, a group of France the Global Business Travel Association

. --•
academics, full-time workers with at least Japan now anticipates a return to pre-pandemic
a secondary education in America, Britain levels of business-travel spending in 2024,
and Canada work, on average, a day and a South Korea rather than its previous estimate of 2026.
half a week from home. And, on average, For the airline industry, however,
Sou rce: WF H Research *Based on worker su rveys
they want to double their time doing so. restoring eapaci ty has not been
Employers, however, have different ideas. straightforward. Reversing the mass
Everyone from Goldman Sachs, a Wall environmental standards will stay in high lay-offs triggered by the pandemic is
Street giant, to Zoom, of video-calling demand, the offices most likely to stay taking time. With demand for flights
fame, is asking its reluctant workers to empty are in older buildings. outstripping supply, prices have risen
show up to the office more often. None of this is welcome news for faster than inflation, padding airlines'
No one is expecting, or even looking landlords. Their refinancing costs have profits. But operations are buckling under
for, a return to five days a week. The most gone up as well, as interest rates have the pressure. In America, the share of
likely outcome is that bosses and workers risen. In America most commercial­ flights delayed continues to rise.
meet in the middle, with a little less work property loans are owed to smaller Flying will not be the only pain point
done remotely than employees would lenders, which are especially under strain for travellers in 2024. Cities around the
prefer. But a lot depends on whether rising after the collapse of Silicon Valley Bank in world are cracking down on short-term
interest rates eventually weaken the March 2023. And financing costs for less rentals like those accessed through
economy. If unemployment starts rising desirable office space are likely to be Airbnb. A new law that came into effect in
and workers are no longer in short supply, higher still. The yields on commercial New York in September requires hosts to
bosses will drive a harder bargain. mortgage-backed securities, for instance, register with the city and be present
The shift to remote work has so far had are higher for low-quality offices than during a guest's stay. Airbnb calls the law a
a curiously muted effect on the they are for "prime" properties. "de facto ban". Berlin, Paris and Rome have
commercial-property industry. Offices are Expect to see more of these buildings also implemented restrictions, and others
certainly less busy than they used to be: being sold at a discount, so that they can including Vienna will follow suit in 2024.
according to Kastle, a firm that operates be refurbished or demolished. Those that Municipal governments hope these curbs
swipe-in systems for offices, occupancy in have sufficient light and the right will ease pressure on rents and house
America is roughly half what it was before plumbing may be turned into homes. prices for residents. For travellers, the
the pandemic. Yet the long duration of Though this is unlikely to be financially result is less choice and higher prices.
office leases means that vacancy rates, viable for most unwanted offices, the China could yet throw out a wild card.
though rising, have been relatively low. number of conversions in places like The World Travel and Tourism Council, a
Goldman Sachs reckons that 12 % of leases London and New York is growing. In trade group, forecasts that Chinese
will come up for renewal in 2024, more Manhattan, 25 Water Street, which used to outbound travel-and-tourism spending
than twice as many as in 2023. house a newspaper and a bank, is being will reach roughly nine-tenths of 2019
The bank reckons that remote working converted into a residential block with levels in 2024, up from half in 2023. But a
could contribute to an extra 46m square 1,300 flats, a spa, a swimming pool-and a flagging Chinese economy could derail
feet (4.3m square metres) of office space co-worldng space. The pandemic may be that recovery. That would be bad for
lying vacant in America-equivalent to all over, but in 2024 the remote-work businesses counting on Chinese demand.
the floor space built in 2022. W hereas revolution will continue to change how For other tourists, however, it might mean
swish offices that comply with tightening and where people work and play. • a less crowded return to globetrotting. •
TH E WORLD AH EAD 2024 B US I N ESS 79

Missing money involvement. According to one recent

estimate, 36. 5% of bank-sanctioned
funding is for roads and bridges and
crashed to a 20-year low, reflecting
insufficient "animal spirits", concludes
Mahesh Vyas, managing director of the
another 20% for power. Chemicals, often Centre for Monitoring I ndian Economy.
an indicator for b roader manufacturing, There is much debate about potential
represent just 2.3%, down from 3.4% over reasons for the investment hesitancy.
the past decade. Foreign portfolio Narendra Modi, the prime minister, and
investment only recently turned pos itive his administration have been aggress ive
after more than two years of outflows, and in pushing investment. Fourteen sectors
foreign direct investment fell by 16%, to receive di rect production-linked
Sluggish i nvestment is holding India
$71bn, in the fiscal year to March 31st 2023. incentives. Taxes have been cut overall.
back. Wi ll 2024 be different?
The paucity of investment has come The new bridges and roads are intended to
despi te a strong recovery in the financial provide the crucial underpinnings for
TOM E ASTO N South Asia business and health of companies, which have reduced manufacturing to come. Because these
finance editor, The Economist, Mumbai their leverage, and banks, which have efforts a re still unfolding, it is still early

S possibility of offsetting
growth, and the
TRO NG H EA D LI N E
China as a
written off bad loans and now produce
better returns than thei r Western
counterparts. There is room to borrow for
days, the government says.
A counter-argument is that, even with
improvements, the Indian business
location for global production, have raised growth, and demand as well. India, says climate remains difficult. The touted tax
expectations for India. It is the world's Barclays, is at "a breakout moment". changes have too many tiers and leave too
fifth-largest economy, and potentially Perhaps. A jump in money spent on much discretion in the hands of feared
larger than Germany by 2025, so it would new projects earlier in 2023 suggested revenue agents. Tariffs a re altered
be reasonable to assume that businesses, something similar, yet the numbers overnight. And the playing field is not
foreign and domestic, are pouring in cash. proved illusory, boosted by large one-time seen to be level, with a few local gi ants
New factories pumping out iPhones, wind orders for ai rcraft by Indi a's two big perceived to have gamed the system.
turbines and batteries suggest they are. airlines. New announcements have since Of the $12obn-worth of projects
But behind the headlines the reality is scheduled to be completed by the end of
more subdued. Investment as a fraction of March 2023, only $72bn were finished.
G D P , which exceeded 40% in 2008, is now The largest completed in the quarter
34 %, says Barclays, a bank. The money is ending in September was a steel plant on
not going into factories, research and
Investment as a fraction which work began in 2003. All of which
other parts of private business, but rather of GDP has fallen from over suggests that India's breakout may still
infrastructure, often wi th government 40% in 2008 to 34 % now come-but for wary bus inesses, not yet. •

Wheels broad a d o ption of AVs wi l l i n ch

c l oser in 2024.
gia nt, a nd Po n .a i a lso both
with s m a l l operatio n s i n B eij ing
a l ready h ave " l evel 2'' system s
that ca n stee r, b ra ke a nd

with i n wheel s In the co m i ng yea r ro botaxis

wil I s p read beyo nd test zo nes
a nd oth er cities, h ave s i m i la r
expa n s i o n p l a n s-i n Ba i d u's
c h a nge l a n es. But M e rced es­
B en z i s lead ing the way with
a n d powerfu l se lf- d rivi ng ca se to 65 citi es by 2025. D rive P i l ot, a " l evel 3" system
features wi l l beco m e ava i l a b l e Esta b l i s h i ng a robotaxi that d oe s n ot req u i re consta nt
to m o re m oto rists. T h e p u rs u it b u si n ess req u i res yea rs of s u pervision. Al ready ava i l a b l e
of a uto n omy h a s s p l it i n to three i nvestm ent, a n d the p ros pects i n G e rm a ny, it wi l l becom e
Self-driving cars are inching
ca m ps : fi rms wo rk i ng on fu l l y rem a i n u n certa i n . M a ny ava i l a b l e i n severa l A m e ri ca n
towards wider adoption
a uton o m o u s ro botaxis; ca rma kers th i n k a fa ster rou te states i n 2024, a s a $2, 500-a­
ca rm a ke rs focused on va rious to profit i s to a d d self-d rivi ng yea r s u bsc ri ption o pti o n in
S I MO N WRIGHT I nd u stry ed itor, fo rms of d river ass i sta n ce; a n d tech to o rd i n a ry cars . So m e some of the fi rm's fa n c iest
The Economist Tes la, which d oes i t s o w n th i ng. m od e ls . Cr u c i a l ly, M e rced e s
H a i l i ng rob otaxi s wi l l a ss u m es fu l l l ega l l ia b i l ity

A H I G H - PERFORMAN C E sensor
is n ot n eed ed to d etect th e
l ist of m issed ta rgets fo r the
becom e m o re co m m o n p l a ce.
Waym o ( owned by Al pha bet)
a n d Cru ise ( G M's AV a rm), have
when D rive Pi l ot is o n . Oth e r
carma kers a re n ot fa r beh i n d :
Fo rd, Ste l l a nt i s a nd oth ers a re
widespread a d o pti o n of long been testing veh i c l es . They l i kely to l a u nc h s i m i l a r " l evel 3"
self-d riving ca rs. Genera l have been c h a rgi ng fo r rides i n system s i n 2024.
M oto rs once p ro m i sed Sa n Fra n c isco a ro u nd the cl ock, And that l eaves Te s l a .
a u to n o m o u s veh i c l es (Avs) i n with n o need for safety d rive rs Despite m u ch hype, its
a b u nd a n ce b y 2019. Ford a nd (th o ugh Cru i se's l i ce nce wa s self-d rivi ng syste m is " l evel 2'',
Lyft, a ride- h a i l ing fi rm, h a d s u s p e n d ed i n Octobe r a fter a n req u i ri ng co n sta nt su pervi sion
recko n ed 2021 wa s m o re accid ent i nvo lving a ped estri a n) . a n d hands o n the steer i ng
p l a u s i b le. Fo r a d ecade, E l o n I n 2024 s u ch veh i cl es, wheel. M r M us k cl a i m s the
M u s k has l o u d ly p roc l a i med a l ready operating in Au sti n, Los n ext version, l i kely to be m a d e
that fu l ly a uton o m o u s Tes l a s Ange l es a nd P h oe n ix, a s wel l a s ava i l a b l e i n 2024, p rovid es a fa r
were a yea r away at m ost. Avs from Am azo n's Zoox, m ay h igh er l evel of a uton omy.
Ta ki ng a nap beh i n d the whee l po p u p i n other Am erica n cities Perha ps it wi l l. O n e way or
o n a ted iou s ly l o ng d rive i n cl u d i ng Atl a nta , M i a m i a nd a n oth er, th e d riverl ess j o u rney
rem a i n s a d ista nt d rea m . But Seattle. I n C h i n a, Ba i d u, a te ch is cre e p i ng eve r c l oser.
80 B U S I N ES S T H E WO RLD A H EAD 2024

Conscious
decoupling

Ca n the high-tech su p p ly cha i ns that

bind America and C h ina be u nta ngled?

M I K E B I R D Asia business and finance ed itor,

The Economist

G introduced the world to the

WYN ETH PALT ROW
concept of "co nscious uncoupli ng" in 2014 during
her divorce from Chris Martin. Much mockery
ensued . But in 2024 it is not an actress and a rock sta r
who want to gently step back from a n interdependent
relationsh ip. America and China now face that
challenge, as relations become inc reas ingly chilly.
The most common term for it is "decoupli ng",
though the American government p refers
"d e-risking", and applies it narr owly, to a few areas of
advanced manufactu ring. But whatever you call it, the
diffi culties in making a separation work are clear.
I n some respects , decoupling is under way. The
Rhodiu m Group, a research fi rm, says that the an nual
level of greenfield investment by Chinese compan ies
in America d ropped to below $1bn from 2019 to
2022- less than investment by Norway and Spain . I n the content of solar panels destined fo r America is
2023 , Mexico s u rged past China to retake its histo rical stil l often Chi nese. In August, the Department of
pos ition as America's largest trading partner. Commerce said five large Chi nese fi rms were skirti ng
America wants to bring production of some tariffs by manufacturing in South-East Asia.
semiconductor manufacturing back home, and is The reorientation of massive, low-margi n contract
subsid is ing fi rms to invest. It also wa nts to move manufacturers also ill ustrates the challenges of
supply chains to friend lier Asian countries, but that decoupling. Foxconn, a Taiwanese giant with
sometimes clashes with business reality. factories in China which lists Apple, Dell and H P
Take solar-panel production. America i mposed among its clients, aims to expand in I ndia. Bu t it
steep tariffs on Chinese solar-panel makers, and pul led plans for a $2obn chip making venture in
buyers switched to producers in South-East Asia. But Guj a rat in July, after ru nning i nto d ifficulties .

-
Foxconn is investing heavily in Vietnam, but
continues to grow in China. In 2023 , the company
acqu ired land for further production in Henan
Cha i n reaction province and began p roduction at two other sites .
U n ited States, % of tota l m a n ufactu red goods Wistron, another Taiwanese manufactu re r with
i m po rted fro m selected Asia n co u ntries* factories in China, ended its own presence in India
after a decade and a half, selling its operations to Tata,
201 8 2022
an I ndian conglo merate. Wistron did not confirm the
40 60 80 reason for its move, but I ndian media reports
•
30 50 70
China suggested that even with the cou ntry's lower labour
costs , it struggled to turn a profit.
3 6 9 12
Vietnam Many Western firms are relying on such
I n d ia • manufacturers to do their decoupling for them . Those
fi rms' abil ity to rearrange their supply chains wil l
Taiwan • make the d ifference between successful d e- risking

.. •
and messy half-separation.
Thailand South-East Asian countries l ike Vietnam will
America wants benefit. With no intention of limiti ng trade and
Malaysia
i nvestment flows to and from China, they a re of
* Bangladesh, Ca mbod ia, Chi na, India, I ndonesia, M a lays ia, Pa kista n, Phili ppines,
supply chains g rowing i nterest to both China and America. The two
Singa pore, Sri La nka, Ta iwan, Tha i land a nd Vietna m in friendlier sides i n the trade war may both end up losing, while
Sou rce: Kearney
countries the non-combatants win big. •
Our world is trying to tell
us something. For hu mans
to thrive, we must reth ink
our values and systems � 1· Julie Ann Wrigley
to craft a framework for a � Global Futures Laboratory"
healthy future relationship Arizona State University
with our planet that isn't at
odds with prosperity. Better
is possible. Join us!
Reshaping our relationship with our world
g lobalfutures.asu .edu
82 B U S I N ESS T H E WO RLD A H EA D 2024

By Invitation Sto pp ing harmful AI systems

T H E F I E LD of artificial
i ntell igence (AI) cycles
th rough what are called AI
The labou r movement has a vital role
to play, says Timnit Gebru of The
are also organ ising with their
lower-paid counterparts, not
only to advocate for better
summers, epochs where every Distributed AI Research Institute working cond itions but also to
other news head line seems to stop their organisations from
be about AI and there is ample d evel oping harmful AI
fu nding for the field, and AI systems. From Google workers
winters, which come from the p rotesti ng against the
disappointment of company's involvement in
undel ivered overpromises d eveloping computer-vision
du ring the su mmers. We are technology for d rone warfare
currently in perhaps the most in partnership with the
intense AI summer ever, where American government, to the
j u st the mere mention of "A I " N oTechForApartheid
gets startu ps 15-50% more campaign started in
fu nds in investment. partnership with Google and
But just like past su mmers, Amazon employees, tech
even the cu rrent hype cycle is workers are protesting against
an "AI summer" only for those the use of their labour in
profiting from buil d ing these creati ng harmful technology.
systems or the researchers The labou r movement's
who get fu nd ing to work on pushback against the
the domi nant paradigm of the p rol iferation of harmful AI
day. For many people in the AI systems is not limited to tech
pi peline-from the exploited workers: many indu stries that
workers supplyi ng and are affected by the potential
labelling data that power these uses of AI syste ms have j oined
systems and the content the fight. AI was a key topic of
moderators who fi lter out toxic contention in the historic
content, to the marginalised stri kes by writers and actors in
groups who live in apartheid Hollywood in 2023 . Concept
states bei ng overpoliced artists h ired lobbyists and filed
because of AI -it is a class-action lawsuits against
nightmare that s hows no signs con1panies that generated "AI
of abating. art" using their work as
A number of cou ntries however, is the labour improve their working trai ning data, without consent
around the world are movement. cond itions and cu rb the or compensation. Creatives
scrambli ng to propose Those working on the development and deployment refused to accept studio terms
regulation pertain ing to A I , repetitive task of providing of harmfu l AI systems. stipulating that their material
a n d some have passed laws. examples to train or evaluate For example, i n 2023 could be used to trai n
Many are feeling the p ressure systems like ChatG PT or DALL- E Kenyan workers employed by generative-AI systems that
to act because of the cu rrent do not expect an all-knowing third-party outsou rcing could then put them out o f
fascination with AI and daily machine on the horizon. They companies for the likes of work or devalue their labour.
headlines about the utopia clearly see h ow hiding the Meta, OpenAI and ByteDance, G iven widening
that its boosters promise, or extent to which thei r labour established the fi rst African inequalities arou nd the worl d ,
the doom that, some predict, it powers these systems helps Content Moderators Union, the climate catastrophe
will bring to humanity. multinational corporations a nd one o f them sued Sama, an pushing more people into the
G roups p arroting sell the supposed power of outsourcing company, for margins , and the growi ng
unfounded claims about the their technology, while union-busting. As noted by n umber of refugees, which is
i mpending AI utopia o r exploiti ng millions of people Adrienne Williams, a former p roj ected to rocket while tech
apocalypse have brainwashed around the world. These Amazon delivery driver who billionaires amass more
students at some of the workers are organising to campaigned for better working money than ever, the labour
prestigious universities that conditions, the less labou r that movement is only going to
supply Sil icon Val ley's companies are able to exploit, grow in importance d uring
engineers and scientists, and The current cycle the less they are able to 2 0 2 4 . It h as a vital role to play
have i nfluenced multil ateral develop harmfu l A I systems, as it becomes one of the key
organisations and
is an "AI summer" because it would not be ways in which the
governments . O ne group they only for those profitable to do so. development of harmful AI
have not influenced so far, profiting from it Higher-paid tech workers systems can be curbed. •
T H E WORLD AH EAD 2024

➔ Also i n this section

84 Globa l m i n i m u m tax
85 Poor cou ntries' debt
85 Rol lercoaster
ma rkets
88 Trade and ta riffs
8 9 Are CBDCs dead?
8 9 Com modities

of people aged 16-64 who are actually in a job. Th is

The rise of the "working-age employment rate" is at an all-time high

in around half of O E C D countries. Even in cou ntries

hoarders
synonymous with high unemployment, such as Italy
and Portugal , employment rates are smashing
records. Labour markets , to a greater extent than at
almost any tin1e in recent economic histo ry, are
d eliveri ng for workers , especially those on low
i ncomes and with poor skills.
This strength confu ses many economists. Wasn't
there supposed to be a "jobspocalypse", with positions
eliminated by the millions, as companies deployed
artificial intell igence and robots? In fact the latest
research fi nds that in many cases the opposite could
Rich-worl d l abou r ma rkets wi l l rem a i n
be happening. Companies that adopt technology
stro ng-even i n the event o f a recession
often end up hiring more workers, not fi ring
them-possibly because they are able to grab more
Senior economics
CALLUM W I L L I AM S market s hare and , therefo re, need more people to
writer, The Economist, San Fra ncisco service orders. O ne recent paper looks at Japanese
manufacturing between 197 8 and 2017, and fi nds that

A l ifting of lockdowns i n 2021 , rich-world

FT E R T H E
labour markets roared back to life faster than
anyone had exp ected. I n 2022 and 2023 they
an increase of one robot p er 1 , 0 0 0 workers boosts
fi rms' employment by 2 . 2% .
Three structural factors set the scene for this jobs
continu ed to strengthen , breaking records in the boom. The first relates to d emographics. Rich-world
process. The economic outlook for 2024 is uncertain: populations are ageing rap idly. Older people are, o n
will the post-pandemic expansion come to an end? average, less likely to be registered as u nemployed
Even if the world falls into recession, though, expect than younger fol k, in part because they are more
labour markets to remain strong. Finding a job will s killed. They may also feel more s hame at being out of
rarely have been so easy. work. The second factor is policy. I n recent decades
The u nemployment rate across the rich world , at governments h ave cut out-of-work benefits, in some
less than 5%, is at historical l ows. For a broader cases to the bone. The returns o n fi nding a j ob are
measure of labour-market health, consider the s hare therefore relatively h igher. And third , technological ►►
84 F I NA N C E TH E WO RLD A H EA D 2024

► improvements-including platforms such as Indeed

and Linkedin-have made it easier for people to find
work that is right for them. N o m o re to the botto m" in which fo r
yea rs governm ents have
Thus primed, labour markets were able to deliver
huge numbers of new jobs from 2021 to 2023. offs h o re s l a shed corporate-ta x rates to
attract investm ent. Tho ugh at
Consumers, flush with government stimulus fi rst only a handfu l of big
payments and accumulated savings, and looking to co untries wil I enfo rce the
make up for lost time, splurged on labour-intensive The global minimum m ini m u m tax, m ore wil l fol low.
services such as hotels, restaurants and Even as pl ans fo r a globa l
corporation tax comes
entertainment. Total demand for labour across the m ini m u m tax move fo rwa rd in
into force
rich world quickly outpaced the available supply of 2024, however, another
workers, showing up in a surge of unfilled i m portant pa rt of the big
vacancies-and howls from employers about a labour MARK J O H NSON Internationa l inte rnati ona l tax deal co u ld fa l l
shortage. Wage growth across the rich world has for correspond ent, Th e Economist a pa rt. For yea rs governm ents
months hovered at almost 5%, year on year. have co m p l a ined that
With demand and supply still so out of whack, it
would probably take a deep recession to truly damage
jobs markets. Demand for labour has ebbed in recent
M ORE THAN 130 co untries
stru ck a h i sto ric d ea l in
2021 that so ught to change the
fa st- rising s a l es of d igita l
prod u cts and se rvices have
a l l owed b ig fo reign fi rms to
months, but so far this has largely resulted in a way b ig co m panies a re taxed . m a ke a m int fro m thei r c itizens
decline in vacancies rather than a fall in employment. This agreem ent p rom ised to witho ut setting u p loca l o u tfits
In Australia vacancies on Indeed have fallen from a lter how co untries d ivvy u p they can tax. To ta c k l e thi s, the
their peak by over 20%. Yet the working-age the right to tax m u ltinationa l agreem ent in 2021 granted
employment rate keeps rising to new record levels. com pani es' p rofi ts. It a lso gove rnm ents a fi rm er right to
Vacancies still have a long way to fall before reaching d ecreed that no big fi rm tax s o m e of the profits that the
a historically normal level. In the average rich country sho u ld pay tax at a rate l owe r wo rld's l a rge st co m panies ea rn
for which there are data, there are still about a third than 1 5%, no matter whe re it fro m se l l ing stuff in thei r
more unfilled positions than before the pandemic. books its profits (an i d ea m a rkets. I n exchange
There is another reason to expect continued known a s the "gl o b a l m ini m u m co untries agreed to d ro p pl ans
labour-market strength. During the depths of the tax"). B u t the fanfa re to i m pose new taxes of the i r
lockdowns many companies let workers go, only to und e rpl ayed q u ite how m u ch own o n tech gi ants, wh ich
struggle to rehire them when the economy opened up of the nitty-gri tty wa s sti l l to wo u l d m a ke d o ing b u s iness
again. Bosses do not want to make the same mistake be worked out. In 2024, a c ross bord e rs m ore co m p l ex.
twice. So, assuming any recession is fairly mild, they however, so m e e l e m ents of The p ro b l e m is that m ost
may be inclined to hoard workers, even if they cannot thi s big d ea l wi l l at l ast sta rt to co m panies affected by these
really afford it. have an i m pact. provisions a re Ameri can- and
This theory of "labour hoarding" is consistent with The changes that a re Am erica's Congre ss is unwi l l ing
the data, which show that unemployment across the corn ing soonest re late to the to grant fo re igners m o re rights
rich world is even lower than expected given the globa l m ini m u m tax. In 2024 to tax its fi rms ( even though
current rate of G D P growth. In 2023 some rich laws that bring it cl oser wi l l go J oe Bid en's ad m inistrati on was
countries, including Germany and New Zealand, into force in B r ita in, the E U , inst ru m enta l in a rranging the
actually fell into brief, shallow recessions. Is there J a pan and e lsewhere. M ost of global d ea l ). I f thi s rem a ins the
any sign that the labour market has cracked? Hardly. these p l a ces a l ready tax case by the end of 2024, so m e
Firms will have another reason to keep workers if com panies m o re than 15%. B u t 30 co untries m ay p ress ahead
they can. As baby-boomers retire, the available pool of fro m now on they w i 1 1 a l so with new ta riffs. That co u l d
labour is shrinking fast. Someone willing and able to sta rt co l lecting "top- u p" taxes pro m pt angry Amer ican
work is an increasingly prized commodity, meaning fro m big fi rms that u se l ega l pol itici ans to hit back with
the labour shortage could, over time, turn from a loopho l es to shift profits to l ev i es of thei r own. As 2024
temporary phenomenon to a permanent one. places s u ch as Ca ri b bean tax s l id es to a close, efforts to
Whatever happens in 2024, the world of ultra-hot havens whi ch cha rge l owe r avo id a costly ski rm i sh wi l l
labour markets is likely to endure. • rates. The idea i s to ha lt a "ra ce grow m ore fra ught.

N ice work
O ECD, ave rage u nem ploym ent rate, %
9

4
...l\r

201 8 19 20 21 22 23
Sou rce: OECD

干刂 一土
T H E WORLD A H EAD 2024 F I N AN C E 85

Another year deal that writes down debts. The world's

fragmenting geopolitics now plays out in
creditors, China and India, refuse to sit in
the same room. Each stage that was once a

in limbo
miniature in each creditor meeting. bureaucratic formality now takes months.
Beijing refuses to play by Western Progress will continue to be slow or will
financiers' rules, but as the world's biggest stop altogether. Lebanon, Mozambique
creditor, it is too big to ignore. At least 21 and Venezuela have all been in default for
countries were in default or seeking more than three years; none has even
restructuring but only Zambia managed to managed to started negotiations.
get a deal done involving China. More countries now borrow from their
Many other poor countries will remain own banks and populations in their own
Geopolitical tensions have frozen
stuck as relations between their lenders currency. Sri Lanka and Zambia face the
the process of debt restructuring
fray. Governments have to agree on a deal formidable challenge of restructuring this
before private lenders can start domestic debt in order to keep their
International
C E RI AN RI C H MO N D J O N E S negotiating. Sri Lanka's biggest official international deals moving forward. This
economics correspondent, The Economist requirement is, perhaps, the only thing in

Twere a triumphago,of multilateralism.

W E N TY YEARS debt restructurings
international finance on which China, the
I M F and Wall Street can agree. A light
touch will not satisfy the I M F . Too heavy,
Governments and banks, watched over by and the banking system will crash.
the I M F , worked together to reduce the So it is hardly surprising that many
debts of countries that could no longer pay countries on the brink of restructuring,
their bills. In return, poor countries such as Pakistan and Sri Lanka, are
agreed to the kind of free-market reforms clinging to the pretence of solvency
that had made their creditors prosper. An however they can, often with unstable
official "Heavily Indebted Poor Countries" dollars deposited by China or Gulf
( H I PC) plan made write-downs of huge countries in their central banks. But the
swathes of debt routine and relatively developing world is engulfed in the worst
painless. Restructurings were proof of debt crisis since the 1980s. Ignoring
globalisation going well, and of the insolvency has steep costs too. It makes
benevolence of rich countries at the helm. restructuring, whenever it is done, more
Not any more. In 2024 the collapse of painful. But, with restructurings frozen, in
that system will continue. It has been at 2024 that will seem to many countries like
least three years since China agreed to a a price worth paying. •

Rollercoaster well as the destination, of asset prices.

In October 2023 American stocks, as
interest rates, although not without some
wild gyrations along the way.

ride
measured by the level of the s&P 500, are But the destination is only half the
hovering at around 4,100 points. If she had story. The journey matters just as much. It
been able to peer through the gap in the is hard to imagine that even higher rates
curtain, your correspondent would have will not break more things in America's
seen, at various points in 2021, 2022 and financial system, perhaps enough of them
2023, that stocks at the end of 2023 would to upset economic growth. Already alarm
be largely unchanged from their level at bells are ringing in the commercial­
the time. property sector, and the value of many
When violent u ps and downs bring
But that would not have revealed much bank assets will have fallen further in 2023
you back to where you started
about their ups and downs along the way. as rates climbed. The so-called "shadow
In 2021, with the bull market roaring, banks" which have sprung up in corporate
Wall Street
A L I C E F U LWOO D investors might have assumed a serene loan-making might struggle if growth
correspondent, The Economist plateau. In 2022, with shares plunging like starts to slow.
a falling knife as interest rates were jacked Still, many of these risks are already

Iscientist a novel
N TH E GA P I N T H E CU RTA I N ",
11

written by John Buchan in 1932, a

picks five subjects who are
up, they might have thought monetary
tightening had stopped. Instead, the
three-year chart of American stocks looks
apparent. None has dimmed growth or
investor enthusiasm yet. The
pollyanna-ish story is that of the "soft
shown the front page of a newspaper, one like a rollercoaster, with steady climbs and landing" in which growth remains robust,
year in the future-the figurative gap in violent plunges. inflation floats gently back to Earth and
the curtain of time which gives the book Now the situation is stranger than even the Federal Reserve can start trimming
its title. Two see their own obituaries and science fiction might predict. Despite rates from their elevated levels in 2024 or
spend the next year driving themselves extreme and continuing increases in 2025. This scenario would surely fuel a
mad in their efforts to prevent their fate. interest rates, which caused the failure of surge to new all-time highs (stocks are
As the day arrives one realises he was several medium-sized banks in the spring around 13% shy of that level now).
mistaken: it was not his obituary, but one of 2023, unemployment is still just 3.8%. Peeking through the curtain to October
for a man of the same name. And despite continued strong economic 2023, in 2021 or 2022, might not have
Hugh Hendry, an eccentric hedge-fund growth, inflation has become much more helped an investor understand the wild
manager, has called this the "best manageable. During 2023 markets have unpredictability of post-pandemic
investment book ever written" because it embraced this unusual mix of strong financial markets. In 2024 markets may
taught him to worry about the journey, as growth, moderate inflation and rising finally chart new territory. •
ADVERTISEM ENT
ADVERTISEM E NT
88 F I NA N C E T H E WO RLD A H EA D 2024

Building
new walls

An onslaught of protectionism wil l

change trade, b u t not diminish i t

C E RI AN RI C HMO N D J O N ES International economics

correspondent, The Economist

Whave
HAT'S GO I N G on with global trade? should
2 023
been a disaster. America and China entered
an all-out trade war, with export bans, import tariffs
and investment restrictions. Europe agonised over a
riposte to the Inflation Reduction Act (I RA), America's
plan to kickstart manufacturing with $1trn in
subsidies and tax incentives. India threw up import
bans of its own. War in Ukraine played havoc with
grain supplies and shipping. The World Trade
Organisation, enfeebled by America's disengagement
under Donald Trump, looked on in horror. Predictions
about the death of trade came thick and fast.
And yet the world ended up buying more from
China, relative to the country's G DP, in the first nine ...._ Still sa iling
months of 2023 than in the same period in any
previous year. As a portion of its G DP, China bought
just as much from the rest of the world as it did in make aluminium, after a similar ban in 2020 on
20 2 2 . India's manufacturing share of G DP rose for the nickel, a crucial component of green batteries. In
first time in five years. Including intermediate goods, 2024, other countries will follow suit, though few
America bought as much as from China relative to its foreign firms will want to go to unstable countries.
G DP as it had in the previous five years. In 2024, policy In June, policymakers in Washington, DC, carved
and reality will continue to diverge. Though out green minerals from the I RA's tariff regime, as
protectionism will continue to flourish, firms and long as the exporting country has a free-trade
countries will carry on adapting, not retreating. agreement with America. More developing countries
For a start, expect more intermediated trade. could start negotiating similar arrangements. Should
Tensions over Taiwan, the source of 65% of the China's economic slowdown continue to cool its
world's semiconductors, as well as concerns about demand for green commodities, the West could
military uses of AI and a battle over the supply of benefit from lower global prices (though poor
rare-earth metals, make an economic thaw between producers such as Turkmenistan and Zambia, which
the West and China unlikely. But laws to scrub China rely heavily on exports to China, could suffer) .
from supply chains will make Western companies Many things will not change. China has long
nervous and eager to find alternatives. Chinese firms protected its chipmakers and car industry, but trade
are looking for ways to skirt the West's trade barriers. has continued. The West's new industrial policies will
Both will settle on countries friendly to both but take years to pay off. Europe's desire to reduce its
allied to neither. More goods made in China, or by reliance on Chinese cars, particularly E VS, will take
Chinese companies, will be traded via countries like Firms and time. It will be a while before new factories in
Vietnam, which is already prospering as a result. America's rustbelt start producing chips and EVS. That
The race to build the hardware of the green
countries is good news for trade in 2 02 4 . But it also means that
revolution will add to the need to adapt. In 2023 , will adapt, the logic of national security will drive trade for years,
Indonesia banned the export of bauxite, necessary to not retreat regardless of the economic merit of the argument. •

WHAT I F? contagion. But what if new pressures developed

i nto a full-blown crisis? Centra l-bank officia ls say
In 2023 a number of financial institutions, including inte rest rates wi l l remain higher for longer than
Sil icon Va l ley Bank in America and Credit S u isse in expected, as America's economy rema ins strong.
Europe, col la psed as depositors fled. Interve ntion by Sma l l banks hold lots of bonds and a re exposed to
regu lators on both sides of the Atlantic ha lted any comme rci a l property. Things could tu rn ugly q u ickly.
T H E WORLD AH EAD 2024 FINANCE 89

Are CBDCs changed , for two reasons . First, Facebook's

a n nouncement of a global digital currency Through
dead? the roof
called Libra i n 2019 , and the rise of
cryptocurrencies such as B itcoin,
prompted fears among central bankers
that the bank-based financial system
wou ld lose clout to d igital alternatives.
Second, many countries grew
enamou red with the idea o f instantly
settled cross-border C B DC payments to
They solve few p roblems, A trio of com mod iti es cou ld
reduce fees and even sidestep the dollar.
a nd create new ones get very hot i n 2024
Interest in building new cross-border
payment methods grew after the West
ARJ U N RAM A N ! Global business and imposed sanctions on Russia for its MATTH I EU FAVAS Commodities editor,
economics correspondent, The Economist invasion of Ukraine. The Atlantic Council, The Economist

N nature
EW TECH N OLOG I ES have changed the
of money many times in the
a think-tank, now says that 130 cou ntries,
rep resenting over 98% of global G D P , are
exploring a CB DC. F O R MUCH of 2023 commodity markets
were treading water. Russ ia's invasion
past. The Lydians invented coi ns in the More recently, though, there have been of Ukrai ne, on top of supply-chain snarls
seventh century BC; paper money emerged mu rmurs of dissent. "What actual from covid-19, had sent raw-material
in seventh-century China. Cred it and problem wou ld a C B DC solve?" asked Neel prices soaring in 2022. But a subdu ed
debit cards spu rred a shift away from Kashkari, president of the Min neapolis economic outlook turned a busy market
paper money and cheques. In the 2010s , Federal Reserve, in May. Libra was bori ng. Some excitement returned in late
smartphone-based payments took off. Use scrapped becau se of regulatory push back, 2023 , as oil prices perked up. But worries
of cash is now plummeting: its share of and cryptocurrencies have failed to gain about demand kept ind i ces on the floor.
retail transactions in ten of the world's wide adoption . Cross-border C B DC In 2024 supply p roblems, together with
biggest markets fell from about three­ projects have struggled to find sources of resu rgent demand, could cau se th ree
quarters to one-half fro m 2011 to 2021, liquidity ou tside traditional capital markets to take off. The first is crude oil .
according to McKinsey, a consultancy. ma rkets, and remai n in the pilot stage. Most analysts reckon that new supply will
As the world goes cashless, central After doing their homework, central combi ne with sl ow economic growth to
bankers have been pondering the next bankers from Sweden and Denmark to cau se a gradual decline in price, from
evolution of mo ney. Some are keen on Japan have expressed scepticis m . more than $go i n September 2023 to $80 a
"central ba nk digital cu rrencies" (C B DCs) . Sweden's Riksbank released a goo-page barrel or less du ring 2024. But that could
Most money i s already d igital, so what is report in March argu ing that the case for a prompt Saudi Arabia, the world 's biggest
different about a C B DC? It is a liabi lity of a C B DC was weak, citing the nation's already producer, to announce deeper output
country's central bank, rather than of a advanced payment system. An economist red uctions than the 1m barrel-per-day
commercial ban k. So C B DCs do not come at a maj or central bank observes that cut-equivalent to 1% of global d emand­
with the run risk of commercial banks . But digital-payment systems al ready provide it adopted in Ju ly. I ran's production may
not all are the same. Chi na's e-C NY has most of the benefits of a C B DC. also be dented by sanctions or shi pping
programmable rules ; Brazil's is only for C B DCs also pose new questions . For problems . That cou ld set the stage for a
retail use. Yet all major C B DCs are inter­ example, if they are safer than squeeze when economic growth returns .
mediated by commercial banks , easing the commercial-bank deposits, customers Some metal markets also look
manage ment bu rden for central banks. may flock to CB DCs in times of stress, vulnerable. Those for cobalt and l i thium,
In 2016 , CB DCs were barely on the which might i nc rease financial i nstability. two green metals on everyone's radar in
central-banking agenda. But things That is why maj or C B DCs have caps on 2022, look well su pplied . Instead watch
holdings and offer no interest, relegati ng copper, prices fo r which fell during 2023
them to the sidel ines. Technological because of low Chinese growth . The
Conventional digital­ innovation will continue, and some new hottest of all metal markets could be the
and i mproved type of C B DC may yet ultra-niche one for uranium . The search
payment systems already become i mportant. But that is unlikely to for steady sources of low-carbon power
provide most of the happen in 2024. Expect the POMO around and the war in Ukraine have made
benefits of a CBDC CB DCs to continue to fade. • governments hu ngrier for atomic energy
j ust as coups and confl icts have d isrupted
uranium production. Prices for the metal ,
already at their highest for a decade, cou l d
rise further a s market deficits remain .
The third area to watch is the market
for grain . Russia's invasion of Ukraine did
not j olt the market for long: wheat prices ,
at $12 a bushel i n March 2022, h it $ 5 in
autumn 2023 . But Ukraine, the world's
fifth-biggest exporter of the grai n , now
exports 35% l ess. B umper crops from
Russia have made u p the difference, but
bad weather and escalati ng tensions cou ld
jeopardise that. Stocks at large exporters
have been fal li ng for years . Buffe rs against
shocks are slim. •
 -
-
T H E WORLD A H EAD 2024 91

➔ Also in this section

9 2 Fighting obesity
9 3 New med ici nes
94 The yea r i n space
95 A solar eclipse

95 Crop d iseases
9 6 Jen nifer Holmgren
on rei nventing the
ca rbon economy

Start with size. For the past few years, the accepted

What's next dogma of AI research has been that bigger means

better. Although computers have got smaller even as

for AI research?
they have become more powerful, that is not true of
large language models (LLMs) , the size of which is
measured in billions or trillions of "parameters".
According to SemiAnalysis, a research firm, GPT-4, the
LLM which powers the deluxe version of ChatG PT,
required more than 16,000 specialised GPU chips and
took multiple weeks to train, at a cost of more than
$10om. According to Nvidia, a chipmaker, inference
costs-getting the trained models to respond to users'
queries-now exceed training costs when deploying
an L LM at any reasonable scale.
How a rtificia l i ntel l igence m ight
As A I models transition to being commercial
i mprove in the year a head
commodities there is a growing focus on maintaining
performance while making them smaller and faster.
A B BY B E RTI CS Science correspondent, One way to do so is to train a smaller model using
The Economist more training data. For instance, "Chinchilla", an L LM
developed in 2022 by Google DeepMind, outperforms

I N TE REST I N artificial intelligence (AI ) reached fever

pitch in 2023. In the six months after OpenAI 's
launch in November 2022 of ChatGPT, the internet's
OpenAI 's GPT-3, despite being a quarter of the size (it
was trained on four times the data). Another approach
is to reduce the numerical precision of the parameters
most famed and effective chatbot, , the topic that a model comprises. A team at the University of
"artificial intelligence" nearly quadrupled in Washington has shown that it is possible to squeeze a
popularity on Google's search engine. By August 2023, model the size of Chinchilla onto one GPU chip,
one third of respondents to the latest McKinsey without a marked dip in performance. Small models,
Global Survey said their organisations were using crucially, are much less expensive to run later on.
generative A I in at least one capacity. Some can even run on a laptop or smartphone.
How will the technology develop in 2024? There Next, data. AI models are prediction machines that
are three main dimensions on which researchers are become more effective when they are trained on more
improving A I models: size, data and applications. data. But focus is also shifting from "how much" to ►►
92 SCI E N C E & T EC H N O LOGY TH E WO RLD AH EAD 2024

► "how good". This is especially relevant because it is There is "no narrow dataset tailored to that task. For instance, an
getting harder to find more training data: an analysis reason to L LM could be fi ne-tu ned usi ng papers from med ical
in 2022 suggested that stocks of new, high-quality text jou rnals to make it better at answering health-related
might dry up in the next few years. Using the outputs believe ... that questions. The third approach is to embed L LMs in a
of the models to train future models may lead to less this is the larger, more powerful architectu re. An LLM is like an
capable models-so the adoption of L LMS makes the ultimate neural engine, and to make use of it for a particular
internet less valuable as a source of training data. But architecture" application, you need to build the car around it.
quantity isn't everythi ng. Figuring out the right mix of One example of this is " retrieval augmented
training data is still much more of an art than a generation", a technique that combines an L LM with
science. And models are increasingly being trained on extra software and a database of knowledge on a
combinations of data types, including natural particular topic to make it less likely to spit out
language, computer code, images and even videos, falsehoods . When asked a question, the system first
which gives them new capabilities. searches through its database. If it fi nds something
What new applications might emerge? There is relevant, it then passes the question, along with the
some "overhang" when it comes to AI, meaning that it factual information, to the LLM, requesting that the
has advanced more quickly than people have been answer be generated from the information supplied.
able to take advantage of it. Showing what is possible Providing sources in this way means users can be
has turned into figuring out what is practical . The more confident of the accu racy of responses. It also
most consequential advances will not be in the allows the L LM to be personali sed, like Google's
quality of the models themselves, but in learning how N otebookLM, which lets users supply their own
to use th em more effectively. databases of knowledge.
At present, there are th ree main ways to use Am id all the focus on Ar 's commercial potential,
models. The first, "prompt engi neering", takes them the hunt for arti ficial general intelligence continues.
as they are and feeds them specific prompts. This L LMs and other forms of generative A I may be a piece
method involves crafti ng input phrases or questio ns in the puzzle, or a step on th e way, but they are
to guide the model to produce desired outputs. The probably not the final answer. As Chris Man ning of
second is to "fi ne-tune" a model to improve its Stanford Un ivers ity puts it: there is "no reason to
performance at a specific task. This involves givi ng a believe ... that this is the ultimate neural architectu re,
pre-existi ng model an extra round of training using a and we will neve r find anything better." •

Curing obesity development, according to STAT, a medical

news site. Most fi rms are chas i ng the same
to conti nue. G LP-1 drugs are general ly
regarded as safe but there are risks of
idea, namely glucagon-like peptide 1 gastrointestinal complications such as
(G LP-1) agonists. These mimic the pancreatitis and bowel obstructions.
hormones the body produces after a meal , Another quibble is du rabil ity. The drugs
thus regulating glucose in the blood, have to be taken continuously to keep
which is why G L P-1 drugs worked so well weight off. Amgen, which is developing a
to treat diabetes. longer-lasting drug, will get results from
Unexpectedly, though, G LP-1 d rugs also phase-2 trials in the coming year.
work on weight loss. They do this by Human trials may also start in 2024 on
Expect a b u m per yea r for
slowing down the rate of "gastric a one-time gene-therapy G LP-1 drug,
weight-loss d rugs
emptying", keeping people fuller for which triggered a 23 °/o weight loss in obese
longer. They also affect the brai n's mice. Biotech Fractyl Health, based in
NATAS HA LO D E R Health editor, hypothalamus, which controls hunger. Lexington, Massachusetts, injected the ►►
The Economist And they seem to make fat more likely to
break down. Although G LP-1 will probably

F OR D ECAD ES, weight-loss drugs have

been a disappoi ntment, delivering
ineffective or even dangerous treatments.
continue to be the primary target for new
medications, some firms are exploring
additional cellular targets in the hope of
The recent arrival of drugs that are both making ever more effective drugs that
effective and safe is therefore a medical shed ever higher percentages of body fat.
milestone. Some now talk of a long-term Ray Stevens, the boss of Structure
future in which obesity might be cured . Therapeutics, says the challenge is to
That is no small claim: obesity is a serious ensu re patients tolerate the medicine and
global problem, with 1.1bn people, or find it easy to use. A number of firms,
roughly 14 % of the world 's population, including his, are chasing oral versions of
being obese. G LP-1 drugs . They are betting that oral
In 2024 the two companies, Novo drugs wil l be cheaper to make and deliver,
Nordisk and Eli Lil ly, will battle for and will be more tolerated by patients,
domi nance of what could be a $77bn who don't l ike injecting themselves . Novo
market by 2030. Their drugs Wegovy Nordisk hopes to deliver a new oral
(semaglutide) and Mou nj aro (ti rzepatide) version of semaglutide as early as 2024.
are goi ng to be blockbusters . The size of The drugs have proved so popular that
the market is attracting a lot of demand has continual ly exceeded supply.
competition and i n novation. More than Supply is likely to improve in 2024, but
70 other obesity treatments are in shortages of the med ications are expected
 T H E WORLD A H EAD 2024 SC I E N CE & TECH N OLOGY 93

► drug into the pancreas, allowing mice to cardiovascular events, such as strokes and e nh ance or amplify the body's own
make their own G L P-1 agonists . This sort of heart attacks , by 20%. Given widely, gut-peptide systems. Those who h ave
research wil l need many years of work weight-loss i njections i n America could been lucky enough to be able to get hold of
before it is deemed safe and effective in prevent hundreds of thousands of heart prescription G L P1 drugs are, says Mr
hu mans. Gene therapy also poses the failu res. Globally, such d rugs could Ahmed, "reasonably happy with them, as
challenge that, unlike with a med ication , transform public health. In 2024, more long as they don't expect too much weight
patients cannot stop taking it if there are data on the health impacts of obesity loss". The catch, though, is that you have
unwanted side-effects. medici nes will bolster the case for to keep taking them . He says one patient
One factor driving interest from prescribing these drugs. has likened the psychological need to take
doctors is that obesity is increasingly seen Ahmed Ahmed , a reader i n metabolic the drug to an opiate addiction . But
as a med ical, rather than cosmetic, surgery at Imperial College London , says eventually, taking a cheap oral d rug every
concern. A recent paper on Wegovy he expects a flurry of consumer interest i n day may become widely accepted . For
showed that it can reduce the risk of major nutraceuticals, such as konj ac fibres, that now, the revolution is just beginning. •

Medical marvels

Treatments a rrivi ng in 2024 wil l use

genetic sci ssors a nd other n ew tricks

NATAS HA LO D E R Health editor,

The Economist

N EW M E DI CI N ES to treat sickle-cell
disease and beta thalassaemia, two
genetic blood d isorders, will make
head lines i n 2024 . Most notable of these is
the first CRIS PR-gene-ed ited drug, which
made its hi storic arrival in late 2023 . Gene
editing uses molecu lar scissors to edit
D NA. It is a more precise form of
modification than gene therapy, an older
technology that uses a viral vector to inj ect
a working gene into a cell. Gene editing
has moved astonishingly quickly through year will see progress in efforts by Crispr change a single base in the genome
drug pipelines-much faster than gene Therapeu ties and Caribou Biosciences to withou t damaging the DNA molecule
therap ies, which have been slow and develop off-the-shelf cell products that itself. Look fo r news of its early-stage
di fficult to develop. can treat cancer and other diseases. wo rk, on a treatment to lower cholesterol
For sickle-cell disease, the gene-edited The workhorse of the immu ne system, levels. Meanwhile another treatment,
therapy, exa-cel , developed by Crispr the T-cell, can be gathered from donors E BT-101 from Excision, which aims to u se
Therapeu ties and Vertex, is likely to be and reprogrammed, via gene ed iting, to gene ed iting to eliminate H I V i nfection
approved just ahead of a gene-therapy fight cancer without triggering an from the body, will complete enrolment of
drug from Bluebi rd Bio, lovo-cel . I n both immune rejection by the patient's body. patients for its first phase-1 trial in 2024.
cases, stem cells are first extracted from a This approach means that powerful CAR-T Other coming highlights in the year
patient's body. They are then either edited treatments no longer have to be ahead include a hotly anticipated decision
(exa-cel) or transfected with the viral manufactu red ind ividually, and on a new antibiotic for urinary-tract
vector (lovo-cel) , and returned to the body, expensively, for each patient. infections, many of which are resistant to
where they correct the genetic defect. The Crispr Therapeu ties is developing existing antibiotics ; two "pentavalent"
effects are said to last a lifetime. similar technology to create replacement meningococcal vacci nes that protect
But these d rugs will cost more than insulin-producing cells in the pancreas. against a wide range of serotypes of
$2m per patient. Even in America some There are also effo rts to develop "in vivo" meningitis ; and an i nnovative
patients will struggle to get hold of them. gene ed iting, to allow gene-editing " microinvasive" eye implant that
I n poorer cou ntries, where most patients treatments to be delivered into the body continuou sly releases minuscule
with sickle-cell disease live, they will be by packaging them i n lipid nanoparticles. amounts of a drug for glaucoma, an eye
impossible to obtain. Gene-editing technology is advancing disease. It p romises to deliver far better
The great flexibility of the gene-editing in other ways , too. Verve Therapeutics is results than eye drops, which patients
technology, and its ability to target focusing on cardiovascu lar disease using a often forget to apply regularly. Yet another
non-genetic diseases, means it has a more precise approach to gene editing exciti ng new treatment to keep an eye on,
particularly bright future. The coming known as "base editing", which can you might say, i n the coming year. •
94 SCI E N C E & T EC H N O LOGY T H E WO RLD A H EA D 2024

Do look up Astronauts are

due to return
altitude from 2,700km to 25km, to study Europa's
magnetic field and icy shell, and the nature of the
water and rocks underneath.
to the Moon­ In December the Indian Space Research
well, sort of Organisation aims to build on the success of its
Cha ndrayaan-3 mission in August 2023, which landed
a spacecraft near the Moon's south pole, by launching
Sh ukrayaan to Venus. This will be the first dedicated
mission to Earth's "evil twin" since Japan's A ka tsuki in
2010. Scientists hope to study everything from the
chemistry of Venus's atmosphere to its lava
flows-and find out whether or not the planet
harbours phosphine (a molecule suspected to be
The launches, missions and rockets
present, which is normally associated with life).
to watch for
Closer to home, private companies will be testing
out new rockets. Blue Origin, Jeff Bezos's company,
A L0K J H A Science editor, The Economist could test its New Glenn rocket for the first time in
2024. It is a reusable heavy-lift vehicle, capable of
B theTHMoon
Y E E N D of 2024, astronauts are due to return to
for the first time in more than half a
placing 45 tonnes into low-Earth orbit, compared
with 64 metric tonnes for SpaceX's Falcon Heavy, or 95
century. Well, sort of. As part of NASA's Artemis II tonnes for the expendable s 1s. Rocket Lab, a startup,
mission, four astronauts-Reid Wiseman, Victor plans to fly its reusable Neutron rocket for the first
Glover, Christina Hammock Koch and Jeremy time. ArianeGroup's Ariane 6, an expendable rocket,
Hansen-will travel 7,400km beyond the Moon, may also make its maiden flight in 2024.
swing around and return to Earth, without landing on All these rockets, though impressive, will
the lunar surface. Their ten-day voyage will test the eventually be dwarfed by SpaceX's reusable Starship
Space Launch System (s1s) rocket and the Orion which, when it works, will be capable of lofting 150
spacecraft for future missions. As well as being the tonnes into orbit. Expect to see more trials of that
first humans to reach the vicinity of the Moon since behemoth in 2024. •
those of Apollo 17 in 1972, Mr Glover, Dr Koch and Mr
Hansen will be the first black man, first woman and
first non-American respectively to leave Earth orbit.
The earliest that Artemis II can launch is
November, and it may be delayed to 2 0 2 5 . It will
certainly be beaten to the Moon in May by the latest
mission in the Chinese Lunar Exploration Programme
(known as Chang'e) . Like Cha n g 'e s before it in 2020,
Cha ng'e 6 aims to deliver a robotic lander to the
Moon's surface, collect a few kilograms of rocks and
bring them back to Earth. The target location is on the
far side of the Moon and the mission will also carry
instruments from France, Italy, Pakistan and Sweden.
In September Japan will attempt to join the Mars
club by launching its Martian Moons Exploration
(M M X) mission to study the planet's moons, Phobos
and Deimos. Because the moons are too small to
gravitationally capture the spacecraft, MMX will
instead enter a "quasi-satellite orbit" around them. It
is due to land on Phobos in 2025 to scoop up rock
samples for return to Earth by the end of the decade.
In October NASA plans to launch Europa Clipper, a
probe dedicated to studying the habitability of one of
Jupiter's moons. The observation in 2012 of water
vapour near Europa's south pole reignited interest
among planetary scientists in studying the big moons
of Jupiter and Saturn, which seemingly harbour
subsurface oceans of water, and could be home to
alien life. When it arrives at Europa in 2030, Eu ropa
Clipper will perform 45 fly-bys of the moon, varying in .... Heirs to Apollo

WHAT I F? 2024, not only would the skies be lightened, but a flood
of neutrinos wou ld be picked u p in the specia lised
Celestia l phenomena can sometimes bring terrestrial detectors which look for such things in su bterranean
enlightenment. What if a flood of particles from caverns and under iceca ps-and possi bly traces of
space revealed new physics? Were radiation from the mysterious da rk matter, too. A new intel lectual dawn
su pernova explosion of a nearby sta r to hit the Ea rth in could brea k deep below the su rface.
T H E WORLD A H EAD 2024 SC I E N CE & TECH N OLOGY 95

Lights out Total eclipse path C

April 8th 2024
Sou rce: NASA

80%

70%
U T 0
60%
One event that is guaranteed
50%
to happen in 2024
40%

G EO F F REY C A R R Senior editor, science

30%
and technology, The Economist

T OTA L S O LA R eclipses are elusive.

The 20%

tracks of the shadows cast when, from Sun covered

Earth's point of view, the Moon passes in
front of the Sun, can be calculated
millennia in advance. But those shadows
may fall on the ocean, or in sparsely North America, that on April 8th an Island, off the coast of Newfoundland, at
populated regions. eclipse is coming their way. 5. 13pm and 46.9 seconds local. By this time
Of the 17 total eclipses since 2000, two And it is a good one, which is why it is totality will last two minutes 53.5 seconds.
were visible only from Antarctica and the being called the Great North American Once, eclipses were events of fear and
sea surrounding it. A third could, just, be eclipse. When the shadow of totality portent. Now they are a good excuse for a
seen at the North Pole. And the track of a makes landfall near Mazatlan, on Mexico's party. From one coast to the other,
fourth brought visitors from all over the Pacific coast, at 11.07am local time, totality Mexicans, Americans and Canadians will
planet to Easter Island, which jostles with will last four minutes and 27 seconds. It flock to the track of totality, open a beer or
Tristan da Cunha for the title of "most maxes out at a mere second longer in two and watch the show. Though they are
remote inhabited territory". Durango province and then starts slowly no longer deemed portentous, eclipses are
Some eclipse-watchers consider all shrinking. As the shadow crosses the still awesome. Your correspondent has
this a challenge, and enjoy making their border from Mexico to Texas near Radar seen four, including Easter Island's and
way to places that they would otherwise be Base, totality will be down to four minutes one of the Antarctic manifestations.
unlikely to visit. Most people, however, 26.9 seconds. By the time it passes However noisy the crowd is beforehand,
are content to wait for an eclipse to come Indianapolis it will last precisely four the black hole in the sky punched by the
to them. So it is excellent news for readers minutes and will carry on shrinking until Sun's obliteration is guaranteed to reduce
of The Econo m ist, half of whom live in it grazes the southern tip of South Bird everyone to thoughtful silence. •

The next fung u s that ca u ses wh eat b l ast

destroys enough rice a yea r to
thrive in ra in, spe l l ing tro u b l e
for countries l i ke Ind ia a s
bi osecu rity effo rts to rea c h
H awa i i . Pesticides affo rd s o m e

pa ndem ic? feed 6om peop l e. Potato b l ight,

a water mou l d , ca u se s u p to
m onsoons becom e m o re erratic.
G l o b a l wa rm ing a l so increases
protecti on, b u t th ey a re pricey
and ene rgy-intens ive.
$10bn in l osses annua l ly. S p u d s the range of path ogens, by The best way to sto p
a re ravaged too b y b l ac k l eg, a ena b l ing them to s u rvive in d isea ses, so fa r, h a s been to
bacteri a l d i sease, and potato h itherto hosti l e regi ons. genetica l ly engineer res i stant
Plant diseases are spreading
vi ru s " Y". S u c h pathogens b ring Fungi can travel h und reds of crops. Scienti sts at the J ohn
globally. More scrutiny is
chaos to a food syste m a l read y m i le s as s pores in the wind . Innes Centre, a pl ant- science
needed to halt them
wea kened by wa r, c l i m ate Viruses and b acteria jou rney institute in B rita in, fo und two
change and export bans. with insects. The l a rgest j u m ps genes that confe r resistance to
CAIT LI N TAL BOT Socia l - m ed i a A p l ant pand e m i c co u l d ti p a re m a d e with the h e l p of wh eat b l a st. C ro p s b red with
ed itor, The Economis t th e worl d towa rd s m as s h unger. h u m ans. When d isea ses a rrive those a re safe. B ut the fungu s
In 2024, that looks ever m o re in fi e l d s, m eth o d s of attac k are wi l l, in time, evo lve to

W H EAT B LAST, a funga l

d isease, i s poised to tu rn
the world's b rea d ba sket into a
l i ke ly. M o st fa rmers re ly on
m onocu ltu res, w h i c h a re
effic ient b ut vu lne ra b le. If one
d evious. B l a st fungus u ses
specia l ised infecti on ce l l s to
generate p ress u re a ro und 40
overco m e the m .
G reater scrutiny i s needed
to stop it. A b l u ep rint i s offe red
c ha l ky m ess. It has spread p lant is infected , the whole cro p ti m es that of a ca r tyre to b rea k by the tracking of avian fl u ,
m o re than 1 5, 000km in a can be l o st. So m e d i seases open the l eafs cutic l e. Once wh i ch th reatens h u m an
d ecad e-fro m Brazi l to ins i d e, it k i l l s young p l ants h ea lth . Scienti sts, pou ltry
Argentina , and then Za m b ia with in fo u r d ays. fa rmers and the Wo rld H ealth
and Bangladesh. I t m ay yet get Sh i pm ents of gra in a re O rganisati on col l a b orate to
to Ind i a, the second- b iggest ins pected for d i sea se, b u t sto p its s p re a d . Without
p rod u cer of wh eat.
A bluepri nt is pathogens m anage to h itc h h i ke s i m i la rly dyna m i c s u rvei l lance,
Cro p- ki l l ing d isea ses a re offered by the anyway. Coffe e r u st, a funga l wh eat wi l l be defencel ess
s p read ing fast. The sa m e tracking of avian flu d i sease, eva d ed Am erica's w h en d i saster stri kes.
96 SCI ENCE & T EC H N O LOGY TH E WO RLD AH EAD 2024

By Invitation Reinventing the carbon economy

C ARBO N I S A main
component i n the make-u p
of all living things. is the
It
This must be the year we get serious
about a circular carbon economy, says
countries dealing with
d isproportio nate impact.
If we decide to break free of
primary i ngredient in the Jennifer Holmgren, C E O of Lanzatech the current system , we can
th read s in our clothes, the i nvest the money for disaster
materials in our homes and relief into expanding circular
the fuel we u se to power technology. Forward-thinld ng
vehicles. It is also the source of governments are al ready
our biggest environmental making these investments,
challenges. such as the Eu ropean Union's
It is best known in its strategy for sustainable and
gaseous form, carbon dioxide, circular textiles, and subsidies
a potent greenhouse gas that is in America's Inflation
overheating our planet. Most Reduction Act for technologies
of the carbon in the Earth's l i ke carbon capture and
atmosph ere is a by-product of utilisatio n . In emerging
industrial processes l ike the econom ies such as India,
production of fossil fuels, leaders are exploring carbon
refining of petrochemicals and recycl ing to better co ntrol
manufactu re of metals which their domestic resources and
feed into ou r carbon­ su pply chains .
dependent global supply Consumer education will
chains. This linear carbon be c ritical for this transitio n ,
economy is out of balance: it as shoppers pay more
depends on energy- i ntensive attention to thei r pu rchases'
industries to extract environmental impact. When
non-renewable resou rces people vote wi th their dollars,
underground to make companies wi l l offer more
necessary, yet disposable, su stainable p rod ucts. Global
things. Our " take, make, waste" brands like Ad idas , H &M Move
system is deeply entrenched in and Zara already sell products
society-but is untenable. made with recycled carbon ,
To protect life on Earth, we a n d in 2024 more options will
must rein1agine this extractive, con1e to market.
linear carbon economy as a Some energy-intensive
circular model. We must chemicals like ethanol, a carbon economy. To meet such industries will embrace new
rebrand the many forms of critical i ngredient for everyday a huge challenge, we need a circu lar technologies , and the
carbon-rich waste as valuable, products typically sourced gigatonne-scale solution. local jobs that follow. Others
abu ndant resources rather from virgin fossil carbon . Our Getting there requires will cli ng to the linear status
than inevitable, harmfu l bioreactor hardware can be collaboration between quo by focusi ng solely o n
liabilities. Instead of pull i ng attached to any facility consu mers , industry and storing carbon emissions. To
virgin fossi l carbon out of the generating carbon waste, government to enact systemic push back against i ndustry's
ground to make things we including oil refi neries, steel change. We are running out of call to inaction , we must
discard, we can reduce mills and land fill sites . Four time, but we can make su pport myriad solutions that
emissions and make more commercial facilities are significant progress in 2024 . accelerate the transition to
sustainable products by already operational , with two The decisions we more environmentally
capturi ng and reusing the more starting production by collectively make over the friendly business models.
gigatonnes of carbon already 2024. Combined, these six coming year will determine To bring the circular carbon
above ground. plants can abate 5 0 0 , 0 0 0 how quickly we can redesign economy to life, we must resist
Companies like mine ton nes of carbon each year. our carbon economy. If we let the urge to do things the way
provide carbon-recycling However, our industries are "business as usual" continue, we've always done them.
technologies to make this a l ong way from a truly circular we wil l bake i n even more Technology that got u s into
circular carbon economy a warming for years to come, this situation will not get us
reality. We capture and the extreme heat and out of it. If we commit
i ndustrial-waste carbon at the We must reimagine natural d isasters we saw ou rselves to rethinki ng our
source, p reventing it from intensify in 2 0 2 3 will escalate. systems, we can make
entering the atmosphere. We
our linear carbon Wealthier nati o ns causing the meaningfu l progress toward a
transform it i nto more economy as a most emissions will have to circular carbon economy i n
sustainable versions of circular model foot the bil l for poorer 2 0 2 4 . Let's get t o work. •
T H E WORLD AH EAD 2024 97

➔ Also i n this section

98 New m useu ms
99 I nteresting books
99 M usical s' moment
100 Architecture
in Africa
100 Ch i n ese m usic

in seconds. Songs can be created in the style of singers

Once u p on d ead or alive. More than 3 , 0 0 0 books on Amazon

name ChatG PT as the author or co-author, lending

AI time ...
new meaning to the term "ghostwriter".
It is still early days, but 2024 will be a preview of
what is to come. Three things are worth watching. The
fi rst is how AI will be used to tell new types of stories,
as storytelling becomes more personalised and
i nteractive. Films will change and so wil l gaming, an
industry where people can choose thei r own
adventures more easily than moviegoers can. The
amount of entertain ment available wil l also bal loon.
Like the arrival of the i nternet, which led to an
explosion of " user-generated content" being posted to
Alwi l l transfo rm every aspect of
social media and YouTube, generative A I will
storytel l ing, in Hol lywood a nd beyond
contribute to reams of videos and other material
p roliferating online. Some predict that as much as
ALEXA N D RA S U I CH BASS Culture editor, 90% of o nline content will be AI-generated by 202 5 .
The Economist Curation and good search tools will b e vital, and there
will be debates about whether, and how, to label

R EU N IO N S OFFE R a chance to reflect on how much

has changed . One will happen during the coming
year in Hollywood when "Here" premieres, b ringing
A I -generated content.
No one is quite s ure how the natu re of storytel ling
will change, but it is sure to. David Thomson, a film
together the actors, director and writer behind historian, compares generative A I to the advent of
" Forrest Gump" 4 0 years later for a new, unrelated sound . When movies were no longer silent, it altered
film. Set in a single room over decades, " Here" is very the way plot points were rendered and how deeply
much a film of the here and now. The stars , Tom viewers could connect with characters. Cristobal
H anks and Robin Wright, wil l be "de-aged" using new Valenzuela, who runs a company called RunwayM L,
AI tools , renderi ng them more youthful in some which offers AI-enhanced software tools to creative
scenes and enabli ng the film-makers to see the types, says A I is more like a " new kind of camera",
transformation in real ti me while shooting. offeri ng a fresh "opportu nity to rei magine what
Generative AI now means images can be produced stories are like". Both are right. ►►
98 CU LTU RE TH E WO RLD AH EAD 2024

► The Hollywood writers' strike shone a spotlight on It will be a few from authors, musicians, actors and artists about how
the question of whether A I would start producing years before their words, music and images have been used to train
scripts. For now, studios have agreed to concessions AI systems without consent or payment. Perhaps they
and will not bypass writers' rooms to employ ChatGPT a blockbuster can agree on some sort of licensing arrangement, in
instead. It will probably be a few years before a is produced which AI companies start paying copyright-holders
full-length blockbuster is produced entirely by A I . entirely by AI for content to train their models. But that will not
Instead, the second big development to watch is happen without an intense legal brawl.
how A I will be used as a time-saving tool. Generative A I presents bigger questions about the future of
AI will automate and simplify complex tasks like stories and the nature of collective storytelling. For
dubbing, film-editing, special effects and background example, will generative A I simply imitate previous
design. For a glimpse of the future, watch "Everything hits, resulting in more derivative blockbuster films
Everywhere All at Once", which won the Academy and copycat interpretations of pop songs that lack
Award for Best Picture in 2023. It featured a scene that depth, rather than original stories and art forms? And
used a " rotoscoping" tool offered by RunwayM L to edit as entertainment becomes more personalised, will
out the green-screen background and make a talking there still be stories that become part of humanity's
rock more believable. It compressed into hours what collective consciousness and move large numbers of
might have otherwise taken days of video-editing. people, who can talk about them together?
The third thing to watch for is more dramatic As creators grapple with Ar's rise, they will channel
clashes between creators (otherwise known as their anxieties about technology into thei r work. Look
copyright-owners) and those who run AI platforms. out for more "Terminator" -style clashes between man
The coming year is likely to bring a deluge of lawsuits and machine. Li fe imi tates art-and art life. •

Night at the
museum

From robots in Seoul to Go-Go m usic

a nd Sha kespea re

IM0G E N WH ITE Co-ordinating editor,

Cultu re, The Eco no m ist

T H E PAN D EM I C plunged the world's

104,000 museums into crisis. Though
masks are now off and lockdowns are over,
spi ralling living costs and expensive travel
mean many cultu ral institutions are still
suffering from what industry figures call ..... To the last syllable of recorded time
"the tourism equ ivalent of long covid".
In London, big venues like the British
Museum and Tate Modern reported visitor Japan, meanwhile, Nintendo's former increase its size by two-thirds.
numbers in 2022 well below the heights of factory site in Kyoto will reopen as a In February, a small but mighty
2019. Despite this gloom, some countries museum of video-game history. museum will open in Washington, DC,
have recovered well. Attendances at In 2024 Adriano Pedrosa, a Brazilian dedicated to Go-Go music, a style
Danish and Polish museums have curator, will be the first Latin American to entwined with the history of the city's
rebounded to pre-pandemic levels. In organise the Venice Biennale, the world's black community. In recent years
Seoul, the National Museum of Korea was most important contemporary-art gentrifiers malting noise complaints have
more popular in 2022 than 2019. gathering. His region's galleries are threatened the genre's survival. Built on a
The Korean capital's culture-lovers booming. In March in Argentina, the budget of less than $100,000, the space
may be thrilled, then, by the opening of Latin American Art Museum of Buenos will push back, loud and proud.
the country's first Robot & AI museum, Aires is opening a second site in Escobar. Across the pond in London,
delayed from 2023. The building's In late 2024, the Museu de Arte de Sao Shakespeare buffs will be able to visit a
designers, Melike Altinisik Architects, Paulo's 180m reais ($36m) expansion will new immersive museum dedicated to the
used robots to construct the orb-shaped bard, due to make its debut in spring on
2, 500-square-metre museum. Elsewhere the site of the freshly excavated Curtain
in South Korea, a new museum dedicated Playhouse, where "Romeo and Juliet" was
to Park Seo-bo, the founder of performed in the late 1590s. Head there to
Dansaekhwa, a monochrome abstract-art
Nintendo's former factory explore the wordsmith's life through
movement, will welcome guests in 2024 site in Kyoto will reopen whizzy installations and A I trickery. All
on Jeju Island, south of the mainland. In as a video-game museum the world's a stage, indeed. •
T H E WORLD A H EAD 2024 CU LTU RE 99

Robots, Russia H isto ry" Martin S ixsmith wil l look back

over a thou sand years to pu t the Russian

and romance
p resident's agg ression i n con text. Peter
Pomerantsev's "How to Win an
I n fo rmation War " will apply the
perspective of a p ropagandist d uring the
secon d world war to the con fl ict.
For those hoping for a few hou rs of
d ivers ion, the re wil l be plenty o f n ovels to
l ook forward to. Bestse l l ing au thors
What to expect from the
includ ing Perciva l Eve rett, Yan n Martel ,
biggest books of 2024
David Nicho l l s , Ki l ey Reid, Cal m To ibi n
a nd Amor Towles will retu rn with new
RACH E L LLOYD Deputy c u l tu re editor, s to ries i n 2024. Jam es Patte rso n will be
The Economist completing an u n fi ni s hed manus c ri pt l e ft

I N 202 3 , B E STS E L L E R lists con ti nued to be

popu l ated by medical to mes i n the wake
beh ind by Michael C ric hton , the au tho r of
"Ju rassic Pa rk".
An u nseen work by Gabriel G arcia
of the pandemic and by sci entists Marquez , who died in 2014, wi ll also be
sou n d i ng the alarm about climate change. released. I n " En Agosto Nos Vemos"
I n 2024 there will be a d isti nct ch ange of (" U ntil Au gust") , a novel l a of fewe r tha n
tack, as other top ics take the l ead . English at Col u mbia Unive rs i ty. 150 pages, the late N obel lau reate told the
Arti ficial i ntell igence (A I ) is one o f Geopol itics will also dominate tal e of a middle-aged woman 's affa i r. H is
them . Several books wil l look at how i t publ i s he rs' fro ntl i s ts. Dale Copelan d , a child ren opposed its publ ication but now
m ight reshape t h e wo rl d : "A I Needs You ", a professor o f international relati o n s , wi ll say i t h as the au tho r's trad emark "capaci ty
" humanist manifesto fo r the age of A I '' by chronicle h ow commerce has shape d fo r inventio n , his p oetic la nguage [and]
Verity Harding, fo rmerly of Google Ame rica's foreign pol i cy; Jim Sci utto o f his captivati ng sto rytel l ing". True o r not,
DeepM ind ; "The H ea rt a n d the Chip: Our C N N wi ll exp l o re "The Retu rn of G reat Garcia M arquez wil l p robably e nj oy a
B right Futu re with Robots " by Da nie la Rus , Powers : Russia, Ch ina and the Next Wo rld resu rgen ce, a s an ad aptat ion of his most
d i recto r o f the A I l ab o ratory a t M I T ; a n d War". Several authors wi l l focus o n the wa r celeb rated wo rk, "One H u n d red Yea rs of
" Litera ry Theory fo r Robots ", a n in Eu rope. Eu gene Fi n kel , who was born i n Solitu de", i s also in produ ction at Netflix.
exa min ation o f h o w machine inte l l igence Ukra ine, will offe r a "deeper hi story of I f you want a fa ntastical tal e, who better to
wil l in fluence the way we read, write and Rus s i an violence agai nst civilians" in the tu rn to than the Colombian master of
th i n k , by D e n n is Yi Te nen , a professor of country; in "Putin and the Return of magical rea l i s m? •

Al l -sing i ng, hit the stage i n 2024. Seve ra l w i l l

be a d a ptati ons of existi ng fi l m s
Florence a nd the M a c h i n e, a
British i n d i e b a n d , a nd Thom as
book tickets to "42 B a l l oons",
p l ayi ng i n S a l fo rd, Engl a nd , in

a l l -dancing or sto ri es. "Sta rter for Te n",

David N ichol ls's n ovel a bo ut
Ba rtl ett, an Osca r- no m i n ated
songwriter, wrote the tunes;
the s p ri ng. It rei m agi nes the
true story of La rry Wa lte rs
te l evision q u izzes, was tu rned M a rtyn a M ajok, who wo n a who, u na b l e to become a p i l ot
into a hit fi l m i n 2006; its m us i ca l Pu l itze r p r ize i n 2018, pen ned owing to bad vis ion, rea l i sed
iteration wi l l be pe rformed at the script; Ra chel C h avki n, a h i s d rea m of flyi ng in 1982 by
th e B ri sto l O l d Vic i n B rita i n . I n To ny awa rd wi n ner, wi l l d i rect. attach i ng h e l i u m bal l oo n s to
A spate of new m usicals
Am erica, fa ns of "The Rea l - l ife fig u res h ave a l so h i s pati o c ha i r. He asce n d ed to
wi l l cheer the s p i rits
Notebook" a nd " Water fo r i ns p i red fo rthcom i ng s hows. 16,000 feet a nd , after 45
E l e p ha nts" ca n watc h "Al i" wi l l h ave its p rem iere i n its m i n utes of d rifti ng ove r
RAC H E L L LOYD Deputy c u l tu re a l l - s ingi ng, a l l -d a nci ng vers i o n s s u bj ect's h o m e tow n of Ca l iforn ia, safely ca m e back
ed itor, The Economis t on B roadway. " E l Otro Oz", a Lo u isvi l le, Ke ntu cky, i n the d own to Ea rth. "It was
b i l i ngu a l prod u ction b i l led a s a a utu m n . I t c h ro n i c l es the someth ing I h a d to do," h e sa i d .
u s 1 cALS ARE fi nd i ng th ei r
M rhythm aga i n . Afte r a n
off-b eat cou p l e of yea rs,
" M ex ica n fol k- i nfu sed m us i ca l
i n s p i red by 'The Wiza rd of Oz ,
wi l l open off- B roadway.
"'
boxer's s u p rem acy i ns i d e th e
ri ng a nd h i s c ivi l - rights a ctivism
outside it. The re ce nt wave of
T h a t desi re t o esca pe wi l l
reso nate with m a ny i n 2024, a s
peop l e th e world ove r fa ce
attend a n ce on B roadway a n d I n Bosto n, m ea nwh i l e, m ed ia i nvo lving M a ri lyn s l uggish eco no m i c growth a n d
in th e West End is a p proa c h i ng "Gatsby" wi l l h ave its p re m iere. M o n roe-wh i c h has i n c l u d ed pol iti ca l i nsta b i l ity. I n ha rd
o r exceed i n g p re-pa n d e m i c A ste l l a r creative tea m h a s " B l on d e", a fi l m ; a m us i ca l ti m es the reverie offe red by a
l evel s. Theatres a re o n ce aga i n ada pted F. Scott Fitzgera l d's vers i o n of "So m e Li ke It H ot"; m us i ca l, o n stage or screen, i s
bolsteri ng the eco no m i es of c l a ss i c ta l e of wea lth, dece it a n d a nd J a m es E l l roy's novel "The a p pea l i ng. Co n s i d e r that i n
N ew Yo rk a n d Lo n d o n . The l o nging: Fl o rence Wel c h of Encha nters"-wi l l conti n ue with 1929, the yea r the Depress i o n
m u s ica l gen re, long d eri d ed a s "S m a sh", a Broa dway m u sica l . bega n, a l l o f t h e t e n h igh est-
u ncoo l , h a s b een give n a boost So m ewhat confus i ngly, it i s gross i ng fi l ms in Am erica we re
b y "Ba rb ie", 2023's biggest fi l m , In hard times based o n a tel evision seri es of m us i ca ls. As so m eo n e
which was pa rtly i n s p i red by 2012-13 w h i c h wa s itself a bout fa m o u sly o nce a sked :
the tech n i co l ou r m u s i ca l s of
musicals, on stage the creation of a Broadway " What good is sitti ng/Alone i n
the m i d -2oth centu ry. or screen, offer an m u s ica l o f M on roe's l ife. yo u r room?/Com e h ea r th e
A host of p rod uctio n s wil I appea l i ng reverie For a m o re s u rrea l ya rn, m us i c p lay."
100 CU LTU RE T H E WO RLD A H EA D 2024

Constructive pre-colonial traditions and post-colonial

modernity. For Benin's new seat of Hear me roar
progress
democracy, Mr Kere drew inspiration from
the palaver tree, a typical meeting spot.
The J Rc's complex is based on a traditional
Yoruba village; its fac;ade of woven steel
nods to their traditional crafts.
The new buildings will provide space
for cultural diplomacy, too. At the J RC,
visitors will eventually be able to see
Three buildings exemplify a new era In China female rock stars are becoming
Yoruba artefacts on loan from the British
for west African architecture increasingly pop ular
Museum and other Western institutions,
says Seun Oduwole, the architect behind
C LAI R E MCQU E Assistant culture editor, the project. Mr Kere describes the AN O NYMOUS Freelance correspondent,
The Economist German-run Goethe-Institut as "a Beijing
marketplace to exchange ideas without

Ttall
H E H ISTO RY of colonisation still stands
across west African cities. Benin's
tension". A baobab tree, a symbol of
Senegalese resilience, stands at its centre. A T A MUS I C festival in the Chinese city
of Shijiazhuang in mid-October, a fan
politicians pass laws in a French-built These buildings reflect surging interest in the crowd waved a banner that read "Let
villa. Modernist architecture was brought in African architecture. Western-trained all women embrace bigger, limitless
to Ghana by British colonists. If public African architects are winning prominent dreams". Though its earnestness clashed a
buildings help shape a country's identity, commissions and awards. In 2023, for the little with the smash-it-up attitude of
perhaps it is no wonder the region is first time, more than half of the some of the bands, it was clearly a
looking for new ones. In 2024 several participants at the architectural biennale sentiment close to the hearts of many of
gra nds projets will be completed across in Venice were from Africa and the those present. As 45-year-old Helen Feng,
west Africa, heralding an exciting new era diaspora. Ideas are travelling in both lead singer of Nova Heart, an electronic
of architecture that represents democracy, directions, particularly because of climate rock band, strode out on stage, men and
modernity and sustainable development. change. Ancient building methods from women in the mosh pit screamed "Niu bi,
A new National Assembly will grace Africa's hot, dry regions are inspiring niu bi", a crude term most politely
Porto Novo, Benin's capital, and an elegant designers trying to protect city-dwellers translated as "You're a bad-ass".
cultural centre for the Goethe-Institut will from extreme heat around the world. The early stages of China's post-Mao
be finished in Dakar, Senegal's capital. Nurturing a pipeline of architects from music scene in the 1980s and 1990s were
Both are designed by Francis Kere, the first the continent will take time. Africa is dominated by male artists. It was then
black architect to win the prestigious home to few architecture schools relative subsumed in a sea of cutesy boy bands and
Pritzker prize. Nigerians will have a to the size of its population, though some ditzy girl bands all dancing in time. Now
cultural space to marvel at, too. The new ones have opened in recent years. A female musicians and all-female bands
colourful John Randle Centre (J Rc) will culture around architecture has not yet are making themselves heard. Observers
open to visitors in Lagos with a mission to taken root, explains Lesley Lokko, who of China's music scene expect more
celebrate the culture of the Yoruba, one of curated the Venice show. Funding remains outspoken female musicians to come to
the country's largest ethnic groups. A a perpetual barrier. But architects who the fore during 2024.
sloping, grass-roofed building, it will be overcome these hurdles are making a Not surprisingly, they write songs
the first public museum to open in mark on west Africa's fast-growing about the empowerment of women,
Nigeria's largest city since 1957. metropolises. Expect more innovative breaking out of stereotypes. "I can be
Through design, these projects bridge structures to come. • beautiful, all I have to do is change," sang
Ms Feng at a recent music variety show.
"Screw that, I don't really want to change,"
she continued, to roars from the crowd.
The Hormones, an all-female band from
the southwestern city Chengdu, said in a
recent interview, "We should go out there
and express ourselves more. With more
women doing this, the negativity around
female bands will decrease."
But musicians, like everyone, have to
keep one eye on politics. Censorship has
increased with President Xi Jinping's
crackdown on civil society. Singers are
sometimes asked to submit lyrics and
spoken remarks for approval before
performances. Women are especially in
the spotlight. A feminist movement that
challenged the Communist Party over
misogyny was crushed in 2015. Since then,
Chinese authorities have kept a close eye
on women's groups, wary of any
disruption to social stability. Some leeway
is permitted in music, for now-but
... Bring ing it a ll back home bad-ass rock stars walk a fine line. •
T H E WORLD AH EAD 2024 1 01

Graphic deta i l
There i s more to democracy than voting

2024 is the biggest election year in history, but the quality of democracies varies widely

Cou ntries with an election in 2024, by democracy score

US, Nove mber 5th Domestic Britain A win fo r Labou r cou ld
Autho rita ria n Hyb rid Democ racies Elections not fully politics are li kely to remain pai nfu lly see the Conservatives u n ravel, but
regi mes regi m es polarised, but who wins matters wi ll a lso expose Labou r 1s sch isms.
• • • •
Flawed Fu l l free and fair
0 greatly for foreign pol icy.
2 3 4 5 6 7 8+

South Africa The ANC m ay fal l short

Mexico, J uly More na's re-election of a m ajority, which wou ld be a political --�
as ru l i ng pa rty is almost assured, earthq uake wea kening p resident
and M exico wil l have a woman Cyril Ra ma phosa .
president for the first time. _____
Indonesia
280m

Pakistan
245m

Bangladesh
175m
Pa kistan, February The increasingly
u n popu lar Pakistan M usl i m League
(Nawaz) will proba bly retain power India, April-May I n elections to
with the help of the mil itary. determ i ne who ru les ove r 1 , 4 bn people,
Narend ra Mod i 1s BJ P is seeking a th i rd *Europea n Pa rlia ment elections
consecutive term. tMu nicipal elections

4.178N
Editor,
J OAN H O EY , to be free and fair, and all member states. Eight of the ten
E I u Democracy I nd ex sections of society to be most populous countries in
represented in a competitive the world-America,

Ioraccou
N 2024 CO U NT R I ES
nting for 4. 2bn people,
more than half the world's
party system . Without these
things, democracy is a sham.
Many undemocratic
Bangladesh, Brazil , India,
Indonesia, Mexico, Pakistan
and Russia-will hold
N um ber of people l ivi ng i n countries
population of 8 .1bn , will go to countries have held elections with an election i n 2024-eq uivalent
elections in 2024 .
the polls to elect governments , for d ecades without power I n half of these, elections
to 51% of the global popul ation
p residents, governors and changing hands, while many are neither free nor fair, and
mu nicipal representatives. democratic countries change 4 bn many other prerequisites of
Based on the number of governments but fai l to deliver d emocracy, such as freedom o f
potential voters, 2024 wil l be what voters want. When speech and association , are
the biggest election year since political systems become 3 absent. I n countries such as
the advent of universal u ncompetitive, as they have in Bangladesh, Pakista n and
suffrage. According to our many mature d emocracies, Russia, where opposition
calculations, 76 countries are people can lose confidence in 2 forces are subject to various
due to hold nationwide democracy itself. forms of suppression by the
elections of some form. According to the ruling party, election s are not
But quantity is not the same Democracy Index, produced l i kely to bring about a change
as quality. When it comes to annually by E I U , a sister of government. Elections i n
democracy, elections are organisation of The Economist, 0 America, India a n d I ndonesia,
necessary but not sufficient. voting wil l be free and fair i n 1 900 50 2000 24
all classified by the E I U i ndex
Elections are meant to allow only 43 of the 76 countries that I ncludes nationwide municipa l or regiona l elections
as "flawed democracies", at
people to choose who governs are due to hold elections in i n 2024, a nd from 1950-2023 only for countries with least allow for the possibil i ty
them . That requires elections 2024. Of these, 27 are E U over 100m people. Sou rces: EIU; V- Dem; U N of change. •
102 T H E WO RLD A H EA D 2024

But you'll pay a dollar to admire

such things today.
Obitu a ry Tickets for the stagecoach were fine,
Lines on paperlessness handwritten things,
Allowing you to proceed from New York
to Elizabeth, New Jersey with
maximum inconvenience and
a minimum of springs,
As several airlines prepare to phase out paper boarding passes in 2024 , our o bituarist Clinging to the roof in a blanket, since
invokes the spirit ofOgden Nash to lament the decline ofpaper tickets ofall kinds only wimps or the chronically sensitive
travelled inside,
And whiskey was not supplied.
A N N W RO E Obituaries editor, But tickets in their true pomp came with
The Economist the age of steam,
When countless slow-scribbling clerks in
A mantelpiece doth furnish a room, shirtsleeves with eyeshades and cigar
but of late mine has been looking stubs parked behind their ears gave
decidedly bare, way to one swift machine,
For lack of invitations there. And whatever you needed, whether train
Proper ones I mean, stiff and shiny, with or ship or show
gilt edges and copperplate font, Was pressed out as promptly as the
The sort we all want ancients did it, aeons and aeons ago.
To impress the Armstrong-Baxters when
they call, or the Finkelstein-Ferrers, A train ticket was a companion, one you
And make them wildly jealous. could needlessly but pleasurably pat
As it sat in your pocket, or stick in the
Well, I have to admit there's a lot band of your hat
to be jealous about, Where any inspector could read it and,
For such a card evokes visions of if a considerate chap,
splendour both inside and out, Would not disrupt your nap.
Oak panels and Aubusson carpets, marble But now, when you must prove that you
terraces and sweeping lawns, black tie have paid to travel from Great Neck
and beautiful women, silver salvers via Des Moines to Yellowstone,
and carriages at eleven, the proof is in your phone,
And a good deal else I'd choose for my Which when you are rudely woken
section of heaven. may turn out to have died
In the course of the ride.
Alas, though, the last two summonses So where once a ticket gave you firm
did not come by the usual post, reassurance that the trip you had
But popped up on my screen as virtual planned and packed and considered
as the Holy Ghost, taking out a second mortgage for
One paperless wedding and one soiree, as a symphony by Mahler. would actually occur,
floating from their envelopes in misty How evocative they were of the brouhaha Now all seems queasier.
landscapes of roses and bounding deer, of theatre, the smoky dive or the
To hover limply here. hushed hall, and the pause I blame boarding passes for the
No proper RSV P , just the options of before the baton falls, or the applause! modern manner
"Will Come" or "Will Not", Alas, alack for my old paper friends, Of conducting all life's meaningful
In tones both rude and curt, drowned in the flux to which all events by phone and scanner,
And nothing grand or beautiful to put history tends! For they were the first to convince us
up on my shelf that "Have QR code, will fly"
To generally enhance myself. Talking of which, the ancient Was not pie in the sky,
Romans knew how to put on And that moreover we would save the
Now take card concert tickets, or I wish a family-friendly show, planet, and stop destroying trees,
that someone would, And if you cared to go With habits such as these.
And not insist that they were waved To see Christians turned into salami Personally I'd rather learn the number of
in their faces from a screen, which by ravening lions, or a gladiator my seat, and whether aisle or window,
is no good minced in a net, and the gate, from a piece of reliable
When they are hidden deep in emails Your ticket was a free clay token, nicely white card I am given
that resist my feverish scrolling stamped up with your row and seat. Than from some algorithm.
and scrolling and scrolling As for the ancient Greeks, they could offer
And the third bell's tolling. you an evening of Aeschylus or However, this is the age we live in,
Besides, such tickets also had Euripides or some other learned, and we must accept the proposition
mantlepiece cachet, bearded head That reality has inverted from its
Tasteful, though tidy, in an For one solid coin of lead. previous position:
understated way, Those tickets, like ours, ended up in the Digital now being substantial,
Proving that I would just as soon go to gutter or the jakes, or otherwise tossed and card and paper
a Pinter play or a jazzmen's gala away, Just so much mist and vapour. •
 The view from Google Cloud
Leveraging Al i n the sky
Lufthansa Group a nd Google Cloud
developed a system that pulls data
into the cloud for ana lysis by artificial
intell igence, ta ki ng i n crew avai labil ity
The story is a l l too com mon a m o ng globa l fi rms i m pediment to their i m p lementati o n . And a nd locations, passenger demand,
strugg l i ng to keep up with ra pidly evolving 29% iden tified em ployee resista n ce to n ew a i rcraft maintenance status a nd
technol ogy, as well as i n creased com petition, tech n o l ogy as a problem . Despite recognisi ng weather. Suggested scenarios-for
supply chain d isruptions and a l l the other th is, o n ly one out of fo u r respondents said t h e i r exa m p l e, a partic u l a r a i rcraft for
chal lenges of tod ay's econo my. N ew research com p a n i es offe red tech nology tra i n i ng. The a specific fl ight-a re then sent to
d eveloped by Econom ist I m pact a n d spon sored soluti o n : i nvest i n tra i n i n g progra m m es and h u m a n operations controllers to
by Google Cloud reveals why tech n o logy foster com m u n ication that gives e m p l oyees a s u p port faster decision- m a king,
adoptions fa i l , a n d what co m pa n ies can d o way to vo ice co ncerns and managers a c h a n ce h e l p ing to red u ce costs a nd opti m ise
a bout it. to cou rse-correct. the overa l l passenge r experience.
Align technology investments with Fol low proven methodologies for m anaging U n leashing the power of data
business obj ectives corn plex projects SEVE N - E LEVE N JAPAN's (SEJ) new
As m a ny as 85% of s u rvey respondents sa i d Successfu l tech n o logy a d o ptions fol low platform, Seve n Centra l, cuts the
thei r fi rms p u rchase tech nology t o h e l p them esta b l i shed m ethodologies for p roject time needed to share data with
m eet i n creasing customer dema nds, ena ble m a n agement, such as Stage Gate or Agi le, stores, vendors and customers
flexible work and attract n ew talent. Yet 67% yet the majority of businesses s u rveyed a re fro m more than one day to j u st
a lso sa id new tech n o logy p u rchases fa i l ed n ot using t h e m . Such method o l ogies give a few min utes, using the cloud.
to d e l iver aga i nst these objectives. Cross­ com pan ies a ccess to i n d ustry best practices and With Google Cloud's ful ly ma naged
fu ncti o n a l tea ms wh ose mem bers come from flex i b i l ity fo r m eeti ng unique orga n isati o n a l , service, SEJ d ra matica lly shortened
both tech nology and business departments ca n leadersh i p a n d tech nology n eeds. Project development time com p a red with
solve this problem. m a nagement should a lso e m phasise peo ple. on-prem ise tech nology. Rea l -ti me
" I m plementations a re usua l ly more people-and data and rapid d evelopment
I n c l u d e a l l i m pa cted parties in
have enabled S EJ to l a u nch new
d ecision-making p rocess-related th a n technol ogy- rel ated/' Ian P.
ca pabil ities such as 30- m i n ute
The C-su ite d o m i n ates nearly a l l p roposa ls for Rifkin, d i rector of d ata a n d systems i n tegration
deliveries a nd Al-powered o rders.
n ew tech nology p u rchases. J ust 5% of such at B ra ndeis U n iversity, to ld researchers.
proposa ls come from department or b u s i n ess­ Perform mu lti-faceted post-adoption
u n it heads. Decision-making tea ms that i n c l u d e a ssessments
a l l pa rties ca n help. Seek views fro m m i d d l e What worked? What d i d n't? H ow ca n lessons
m a nagers, tech nical experts a n d frontl i n e
lea rned aid futu re tech n o logy i nvestments?
wo rkers. 'The highest-paid person i n a roo m i s
Cost-ben efi t a n a lysis tools h e l p orga n isations
n ot always the best person t o m a ke a decision/
u ndersta nd the fi na ncial i m pact of
Ch risto p h er Rosenqvist, a senior resea rch
i m p l e m en tati on, while usage data and u ser
fel l ow at the Stockh o l m School of Economics,
su rveys measure e q u a l ly critical fa cets of
to ld resea rchers.
tech n o l ogy i m p l ementati o n . Too freq uently,
Tra i n employees global fi rms fa i l to a c h i eve their o bj ectives with
Some 3 1 % of respondents ci ted a poor n ew tech n o logy adoptions. H owever, rese a rch­
u ndersta n d i ng of new tech n o l ogies as a n backed best practices point the way to s uccess. Spons ored by Go gle Cloud
From 10 IQ 5 to robotaxi.
Excellence goes autonomous.

Hyundai i ntrod uces the I O N I Q 5 robotaxi.

The I O N IQ 5 is p rove n wo rldwide fo r its p rowess in e l ectrificatio n a n d s u sta i na b i l ity.
With its g l oba l awa rd -w i n n i n g D N A, H y u n d a i now beg i ns a pivota l j o u rney with t h e
I O N I Q 5 ro botax i , a l eve l 4 a uto n o m o u s veh i c l e t h a t ca n d rive without a d river.
M o re tha n 3 0 senso rs i nc l u d i n g Li DAR, a n d a c o m p u t i n g system a l l ows the ro bota x i
t o d etect 360 ° a n d m a ke opt i m a l d e c i s i o n s . H y u n d a i is beg i n n i n g prod u ct i o n o f t h e
I O N I Q 5 ro botax i , w h i c h is set t o l a u n c h i n Las Veg a s d u ri ng t h e fi rst h a l f o f 2024.

Computer generated i mages shown, a n d actual production model may va ry.

The vehicle is n ot ava i l a b l e for p u rchase.
y I
 Eu rope The Economist N ovem ber 18th 2023 43

Cata l o n i a min ister (1982-1996) . Mr Sanchez refused to

use the word for weeks while negotiating.
Spaniards on the verge of a When he finally broke the taboo, he p re­
sented it as a high-m inded opportun ity to
nervous breal<down turn the page on the Catalan conflict­
while adm itting he wou ld not have done so
if the parliamentary maths had turned out
diffe rently. But in a speech on November
MADRID A N D BARCELONA
15th he said more frankly than ever before:
A amnesty for Catalan separatists riles the country
"The circumstances are what they are. It's

A B U S MARKED "Sanchez traitor" d rivi ng

past the Prado. Talk of a "coup" and a
"dictatorship through the back door". Bois­
demont, to return from exile in Belgium.
The prospect of this amnesty has
brought Spain's politics, at an angry sim­
time to make a virtue of necessity."
What are those virtues? The deal in
question consists of two documents: a
terous p rotests every night in front of the mer at the best of times, to a raging boi l . Mr fou r-page political agreement between
Socialist party headquarters. Spain is see­ Sanchez's solid control over his party is ex­ Ju nts and the Socialists, and the amnesty
ing its biggest constitutional clash in pected to ensure that he wins a vote in par­ bill itself, released several days later, on
years. And it is not likely to end soon. liament to reinstall him as prime minister, November 13th . The Junts-Socialists deal
The crisis has been gestating for which was due to be held on N ovember reads as though written by Junts, even re­
months. In July's general election, the con­ 16th shortly after The Economist went to ferring-as Catalan independence narra­
servative opposition People's Party ( P P) press. But if Mr Sanchez does indeed get a tives i nvariably do-to an 18th-centu ry de­
came first, but fell short of a majority even new term , it will come at a heavy cost. feat in which the region lost much of its
with support from the hard-right Vox par­ Mr Sanchez had insisted before the self-governance. Coming to the p resent
ty. But the Socialist party of the incumbent election that any amnesty would be u n­ day, it says that a commission will investi­
prime ministe r, Pedro Sanchez, fel l even constitutional, a view shared by many gate the use of politically motivated crimi­
shorter, despite its alliance with Su mar, a other Socialists, including Felipe Gonza­ nal p rosecutions against separatists. This
farther-left party. Since then, however, M r lez, modern Spain's longest-serving prime is a big concession to Junts, and earned a
Sanchez h a s w o n support from five region­ rare public rebuke from a clutch of judges'
al parties, including two Catalan separatist organisations over fears that their inde­
➔ Also in this section
ones that held an i l legal i ndependence ref­ pendence would be subsumed .
erendu m in 2017. Junts per Catalunya ("To­ 44 Gang violence in Sweden But the p revailing view in Madrid-that
gether for Catalonia") held out for the big­ the deal "was cut as though by a tailor" for
45 U kra ine's women workers
gest prize: an amnesty for hundreds of Junts, in the words of one P P leader-is
people prosecuted for the referendum. It 45 The new Eleusis hardly u n iversal in Catalonia. The docu­
would allow, most n otably, its leader and ments make no mention of a Catalan "na­
46 Cha rlemagne: The fea r offenta nyl
Catalonia's former president, Carles Puig- tion", something the separatists crave (be- ►►
44 Europe The Economist N ovember 18th 2023

► cause it would, in their view, grou nd inde­ Sweden criminal responsibility is 16, gangs are re­
pendence i n i nternational law) . And the cruiting ever-you nger teenagers as drug
only mention of a future independence
referendum is in fact a major concession
Gang of rivals couriers and, occasionally, as assassins.
Police say that some of the recruitment
by Junts: the agreement says Junts will happens via chat apps. School-age children
seek another vote under Article 92 of the follow accounts that post lists of tasks and
constitution-which only the prime min­ S TO C K H O L M
prices. They often have to deliver drugs; ve­
ister may initiate, and i n which "all citi­ ry rarely they may be handed a gun and a
The country is suffering a grim wave of
zens" (not just Catalans) could vote, in ef­ description of a target. With no training,
gang violence
fect dooming it to failure.
That means, at least for now, a renu nci­
ation of unilateral action-a concession
0 ersN OCTO B E R 15TH thousands of follow­
of siftyy, a Swed ish rapper, tuned
they are likely to miss.
The crime wave is a tricky politic al is­
sue for the government. Ulf Kristersson,
that has infu riated the p ro-independence i nto his Instagram channel for what he the centre-right prime minister, led his
hard core. Clara Ponsati, a separatist mem­ said would be an important livestream . Moderate party to power in an election l ast
ber of the E u ropean Parliament who went They found themselves watching a beard­ year by blaming gang violence on the cen­
i nto exile with M r Puigdemont, calls it an ed man brandish a gold-plated A K-47 wh ile tre-left Social Democrats , who had been
" insult to the people who trusted and pro­ hurling insults at rival gang members . The running the country since 2014. Conserva­
tected him" and a "humiliation". The Cata­ man with the golden gun was Mustafa tive voters expect a right-wing cabinet to
lan National Assembly (ANC), the main " Benzema" Alj iburi, a leading member of a tackle cri me, especially as it depends on
grassroots organ isation for the indepen­ Swed ish narcotics network known as Fox­ support from the hard-right, anti-immi­
dence cause, says the deal "continues the trot, thought by police to be the cou ntry's grant Sweden Democrats .
[Catalan] submission to Spain". The biggest supplier of illegal drugs. Mr Aljibu­ The government has indeed lengthened
group's p resident, Dolors Feliu, told The ri, who is bel ieved to be living in I raq, criminal sentences, though many are still
Eco n o m ist before the agreement became staged the appearance to dispel rumours of shorter than those in other northern Euro­
publ i c that the ANC may c reate a new inde­ his death-and to th reaten enemies, in­ pean countries. Mr Kristersson says he
pendence party if the deal was insuffi­ cluding a Swed ish prosecutor. wants to adopt " Danish penalties for Swed­
cient-as it now says it is. The livestream looked rid icu lous, but ish crimes ", a nod to Denmark's tougher
The am nesty bill includes an unprece­ the threats were serious. For years Sweden rules, which can allow for doubling sen­
dented n-page p rologue explaining its pur­ has suffered from high rates of gang-relat­ tences if the perpetrator of a crime was part
pose. It makes repeated reference to the ed violence, but for the past two years it has of a gang. Mr Kristersson is also giving the
rule of law and the i mportance of the con­ been relentless. In the fi rst ten months of pol ice more powers. A new law allows
stitution (which guarantees the territorial 2023 there were 324 shootings in Sweden, them to request electronic s u rvei llance
integrity of Spain) . In other words, it is in­ 48 of them fatal . The rate of gun crime is based on evidence that the target is in­
tended to render the law bul letproof before several times higher than in neighbou ri ng volved i n organised crime; previously they
a challenge at the constitutional cou rt. countries. Gangs have taken to attacking had to be suspected of a specific crime.
More than 300 referendum supporters the homes of rivals with hand grenades Some parties have been floating less
now facing trial will see thei r charges an­ and dynamite; there have been 139 explo­ practical ideas. The Sweden Democrats
nulled, as will 70-odd police in trouble for sions this year. The government is tough­ have suggested that children as young as 13
their part in the government's brutal b reak­ ening laws and spending more on policing. should face adult penalties for severe
i ng-up of the referendum in 2017. But it is behind the curve. crimes, including life in prison, and that
The way Mr Sanchez has repeated ly In early September a 13-year-old boy gang members with non-Swedish back­
trampled through red lines and gone back from one of Stockholm's richer and safe r grounds be deporte d . The Social Demo­
on categorical promises has gravely dam­ suburbs was found i n a forest south of the crats' leader mooted the idea of using the
aged the country's convivencia, peaceful co­ city, shot in the head . Prosecutors have not army-though what it cou ld do about ado­
existence between people of different plac­ released details, but say the murder was lescents joining gangs is not clear.
es and politics. But Mr Sanchez not only gang-related. Because the minimum age of Curtailing gang violence through law
has a grip on his party that will prevent an­ enforcement will be a slog. Many of the
ti-amnesty voices from prevailing; he has criminal networks' top figures, l i ke Mr Al­
also populated other parts of the state with j iburi, are not even in Sweden. The boss of
allies. This i ncludes the constitutional the Foxtrot network, a 37-year-old Ku rdish
court that will scrutinise the amnesty, and Swede named Rawa Majid, lives in Turkey.
which now has a left-leaning majority. Mr In late October five people connected to
Sanchez's opponents seem to take it for Foxtrot, reportedly includ ing 5iftyy, were
granted that the court will wave the amnes­ arrested in Tunisia. On October 31st anoth­
ty through. The P P controls the Senate but er man reported to be a member of Foxtrot
it can only delay, not block, the law. was killed in the Bosnian city of Sarajevo.
Hence efforts to internationalise the As police well know, success in a drug
dispute. The right wants the European Un­ war is usually temporary. In 2020 Dutch
ion to inte rvene ; many take it for g ranted and French police cracked an encrypted
that the bloc will take disciplinary action network called Encrochat which drug net­
as it has against Hungary and Poland for works had been using to communicate.
rule-of-law backsliding. But two European Swedish prosecutors used the evidence to
Commission spokesmen played down any send dozens of figures from gangs then
such talk this week. Mr Sanchez has gam­ dominant, such as Bandidos and Satuda­
bled and won before. He now hopes tem­ rah, to prison. The effect, according to one
pers will cool with time, as they have be­ detective, was simply to open up territory
fore. But each time he takes another u n ­ for someone new. A few years later Foxtrot
precedented step, he makes that harder. ■ Et i n suburbia ego was run n i ng the show. ■
 The Economist N ovem ber 18th 2023 Euro pe 45

U krai n e area has been struck by Russian cruise

Dancer in the darl<

missiles. "It's very scary," says Anna. "But
as long as I'm underground I can't hear it."
Ukraine has a way to go when it comes
to equality of the sexes . The participation
rate of women in the labour force has been
TERN IVKA
in decline. It fell from 54 % in 1990 to 48 %
on the eve of the invasion. Women are over
As Ukrainian men head off to fight,
represented in education, domestic work
women take up their jobs
0 hold. Covid-19shetookhasherplaced
KSANA SAYS her l ife on
mother and her
and tou rism, professions in which salaries
tend to be low. The gender pay gap has nar­
rowed from 26% seven years ago to 18.6%
husband two years ago. Russian artillery today, but remains well above the E U aver­
took her father and her oldest son this age of 12.7% in 2021.
spring. ''I've immersed myself in my work," Until as late as 2017, when it was finally
she says , 480 metres u nder the outskirts of repealed, a law dating from the Soviet e ra
Ternivka, a town in eastern Ukraine. The had banned women from 450 p rofessions,
whites of her eyes glow in the surround ing ranging from lorry-d river to welder. The
darkness. Back in Bakh mut, the site of one next year Ukraine gave women in the
of the war's most vicious battles, Oksana, armed forces the same rights as thos e of
aged 49, was a dance teacher at a board ing They ea n do it male sold iers. Around 43,000 women a re
school for im poverished children. Today, currently in the army, including 5,000 in
with her former house and home town de­ than 100 of the new workers are now doing combat positions.
stroyed , her school closed and her closest just that. Oksana operates and maintains a Stereotypes persist. "Women should
relatives dead, she is a coal mi ner. conveyor-belt that carries coal to the sur­ pu rsue thei r ambitions in other areas,"
After the Ru ssians invaded , Oksana (the face. Other women are working as safety muses Mr Zabielin, the mine di rector, in
mine asked that the full names of its work­ inspectors and electricians. More a re com­ his office. "A woman is the keeper of the
ers not be us ed) escaped to Poland, where ing on board. Olena, whose husband, a for­ home and the fami ly." But he concedes that
she worked as a d ishwasher and a cook. But mer miner, commands a platoon near Lu­ the mine will probably have no choice but
she missed Ukraine. Friends told her the hansk, is training to operate the trains that to hire more of them. Many men will never
Ternivka mines were looking for new connect sections of the mine. Anna, who come back from the front, and Ukraine will
workers, and she signed up. Her new job recently turned 18, will look after the cages need a large army even after the war ends.
pays better than most, she says , and offe rs that carry the mi ners between levels. Te r­ "Our neighbour", he says, referring to Ru s­
a good pension. The work also helps her nivka is well behind the front lines, but the sia, " is not going anywhere." ■
block out the memories, she says , taking a
break from shovelling coal. "I want to for­
get everythi ng."
The war has upended the lives of cou nt­
less Ukrai nians, as well as the labour mar­
Soft powe r, th e n a nd n ow
ket. Some 4.8m people lost their jobs al­
ELEFSINA
most overnight when Russia attacked. Un­
A new i n ca rnation of the a ncient Eleusi n i a n mysteries
employment is estimated to have eased to
18.4 % i n October this year, from more than
30% in the spring of 2022, but remains well
above p re-war levels. Hundreds of thou­
I N T H E P E RPETUAL rival ry between
ancient Greek cities, one of the assets
boasted by Athens was control of a numi­
been one of three Eu ropean "capitals of
cultu re" during 2023.
The year-long festival's focus was not
sands of workers have been conscripted. nous place called Eleusis, about 20km to merely on the under-visited archaeolog­
As more Ukrainians are called up, demand its west. For centu ries , seekers of illumi­ ical site, but also the hardscrabble new
for workers in sectors traditionally domin­ nation p rocessed along the Sacred Way town of some 30, 000 blighted by steel­
ated by men is growing. from the foot of the Acropolis to a seaside works, cement factories and oil refin­
Step forward Ukraine's women. The temple where they underwent a secret eries, as wel l as a graveyard for ships.
conflict has made collecting good data im­ rite. I t was forbidden on pain of death to This grim backdrop has not deterred bold
possible. But there are signs that women disclose what happened . All that is experimentation. Katerina G regos, the
are increasingly powering Ukraine's hob­ known is that having fasted for three doyenne of Greece's contemporary-art
bled economy. Of the 3 6 , 000 small- and days, initiates would quaff a drink and curators, invited c reative types from nine
mediu m-sized companies registered i n then be presented with "thi ngs enacted, countries to assemble a show that used
Ukraine so far this year, 5 1% a r e r u n by things shown, things said" that celebrat­ underwater film clips, random industrial
women, says Yulia Svyrydenko, the econ­ ed the return of the goddess Persephone artefacts, gravestones and wrappings
omy minister. More women are starting to from her abduction to the u nderworld. from munitions to comment on m igrant
work in industry, construction and min­ For the past year, modern G reece's labour, shipwrecks and arms factories.
ing. "We will see this on a larger scale, once mandarins have tried to turn the loca- Next month's closing ceremony will
we start reconstruction," she says. tion, now called Elefsina, into a new be a beginning, not an end, insists Nana
At the mining complex near Ternivka intangible asset, hosting their own won­ Spyropoulou, the festival's administra­
the army has conscripted 600 men, about a drous variety of happenings, from multi­ tor. The stress will be on the use of semi­
tenth of the total workforce, says the direc­ media installations and dance displays ruined buildings which have been re­
tor, D mytro Zabieli n . To make up for the to a conference of scholars, i ncluding habbed. Buffing up the whole of the
shortage, about 300 women have joined. psychedelic medicine bu ffs, who debat­ Sacred Way, part of it now a motorway, is
The mine had employed women before the ed the Eleusinian mysteries. Elefsina has not yet planned ; but it should be.
war, but none worked u nderground. More
46 Eu rope The Econom ist N ove m ber 18th 2023

Charlemagne I Holding back the scourge

Fen tanyl kills tens of tho usa nds every yea r i n A merica. Will Eu rope b e next?
America, roughly one for every adult. A cohort of patients hooked
on pills soon discovered they were available illicitly when pre­
scriptions ran out. (Mexican cartels were eager to help, often using
the requisite chemicals from China.) Europe, by contrast, broadly
resisted, in part thanks to universal medical care. Unlike Ameri­
cans, those with ailments could get the procedures they needed to
alleviate pain, instead of turning to painkillers for a qu ick fix.
What addiction there was could be tackled with opioid-substitu­
tion treatment schemes.
Alas, that may not be enough to keep E urope out of fentanyl's
deadly clutches. The au thorities have two concerns. One is around
heroin, which E urope's 1m users of illicit opioids are most often
hooked on. Nearly all of the stuff injected or snorted in Europe is
derived from poppies grown in Afghanistan. The Taliban, since re­
turning to power, have enforced production cuts of perhaps 95%
this year, which is expected to severely curtail the availability of
cheap heroin in Europe, come 2024. Facing a dearth of supply,
drug gangs are expected either to mix fentanyl into what little her­
oin they have, to give it extra potency, or to peddle the synthetic
drug as a wholesale replacement. A sim ilar shortage of heroin
after the last Taliban crackdown in the early 2000s caused fenta­

0 museu
N TH E N O RTH ERN edge of Paris, far from the brasseries and
ms, lies a cautionary tale of what happens when lm­
nyl to take root in Estonia, so far the only part of Europe to have
faced a durable outbreak of addiction. This replacement theory is
now being tested in Ukraine, where the heroin supply has been
manity trips up. Beneath a slew of motorway interchanges near disrupted by war but synthetic drugs remain relatively available.
the Porte de la Chapelle, dozens of dead-eyed drug addicts aim­ The shortage of heroin might coincide with a glu t in illegal fen­
lessly wade through a makeshi ft campsite of tents and trash. tanyl shipments to Europe. Unlike cocaine or heroin, which re­
There is no hope left here, j ust the stench of excrement and de­ quire elaborate manufacturing and smuggling operations, the
spair. On a recent visit, your columnist was too reticent to ask the drug is cheap to make and ship. Europol, the E u's law enforcement
hollowed-out souls wandering by which poison had caused their arm, has warned that Mexican cartels are co-operating with crimi­
fall; but the place is known as la colline du crack, or crack hill. Social nal networks in Europe to expand the market for drugs including
workers come and go; the authorities otherwise turn a blind eye. fentanyl. (What problems Europe currently has with synthetic
Police have moved the encampment around over the years, better opioids are overwhelmingly caused by pills made legally being
to keep the inconvenience of human misery away from gentri fy­ misused.) Antony Blinken, America's secretary of state, has
ing neighbourhoods nearby. warned his European counterparts that either they already have a
Many cities in Europe have pockets of such squalor. Yet for all problem with fentanyl-like drugs but don't know it yet, or they
the harm caused to society by drugs commonly scored on the will soon have one. The switch from one type of opioid to another
streets of Paris, Berlin or Warsaw, none can match the ravages of can be sudden, and all but irreversible in the case of fentanyl, giv­
fentanyl, a narcotic that has devastated swathes of America. As en the huge margins gangs can make from it: a single kilogram can
any recent visitor to down town San Francisco m ight attest, the ef­ generate over $1m in profits, much more than other drugs. Some
fects of this synthetic opioid, vastly more potent even than heroin, factors that were once thought to have protected Europe may
cannot be confined to small areas on the fringes of the city. Drugs prove fleeting: Canada has state-funded health-care systems to ri­
of fentanyl's ilk currently kill around 70,000 Americans a year, val any in Europe, yet it too has fallen prey to fentanyl.
more than died in the wars in Vietnam, I raq and Afghanistan com­
bined. In Europe, that brand of j unk never really took off: no more The drugs do work, sadly
than 200 people are thought to overdose from it every year. Largely Europeans have one sizeable advantage in their fight against fen­
as a result of the fentanyl gap, Europe has less than a tenth as many tanyl, says Keith Humphreys, an addiction expert at Stanford Uni­
drug deaths as America, despite its bigger population. The ravage versity: they have seen the ravages opioids have caused in Ameri­
that hasn't happened is a qu iet policymaking triumph for Europe. ca, and know how important it is to keep the genie in the bottle.
But governments fret that this may not be the case for long. Con­ The authorities are monitoring wastewater for traces of the drug,
cern is mounting that the fentanyl onslaught may soon find its the better to stamp out any outbreaks. What little fentanyl police
way across the Atlantic. come across is subject to rapid crackdowns. Doctors are careful
Why has fentanyl thus far spared Europe when it caused such about prescribing addictive painkillers unnecessarily. Treatment
devastation in America? Given the drug's origins-it was synthe­ of fentanyl addiction is better understood, too.
sised in Belgiu m in 1959, as a legal painkiller-it might have been Europe can allow itself a little crowing. The welfare state, ma­
expected to be discovered by junkies there first. But it took Amer­ ligned by many on the political right as having turned European
ican no-holds-barred capitalism to help turn it into a phenome­ econom ies sluggish, turns out to have upsides, too: it played its
non. From the 1990s on, doctors there prescribed painkillers willy­ part in sparing its citizens the worst ou tcomes in li fe. Only a few
nilly, incentivised by unscrupulous pharmaceutical firms. By 2015 have fallen between the cracks, in Paris and beyond. But ensuring
some 227m prescriptions for opioids were made out every year in that this remains the case will require vigilance and grit. ■
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 Brita i n The Economist N ovem ber 18th 2023 49

The fi n ance m i n istry brightest minds. Some who criticise it sim­

ply want higher spending and are too san­
Treasury island guine about ballooning debt. As Ms Tru ss
proved, every government needs a depart­
ment that says "no".
But c ritics of the Treasury are not en­
ti rely wrong. The Treasury's strengths are
weaknesses, too. In Britain's centralised
The most powerful department in the British government is competent,
system, the department wields huge power
controlling and often counterproductive
over the vast sweep of activities underta­
itself". In a lecture in 2014 that has become ken by the state. Its means of controlling
REFORMING
canon among officials, Lord Macpherson spending can be penny-wise but pound­
THE BRITISH
set down the tenets of the department's foolish. The department often cannot see
STATE
"orthodoxy". It includes support for mar­ the merits of schemes needed to raise long­

0 wasS EatPTHeathrow
N E M B E R 28TH 1976 Denis Healey
airport waiting to fly
kets and free trade and scepticism of gov­
ernment i ntervention. Above all is ad her­
ence to "sound money" (controlling i n fla­
run p rosperity. Its officials grip the purse
strings so tightly that other parts of gov­
ernment a re infantilised.
to a meeting of the I M F when news reached tion) and disciplined spending.
him that the pound was tumbling. The There is much to like about this set of Drum Court doctrine
chancellor rushed back to Whitehall to an­ beliefs . The last entry in Lord Macpher­ The Treasury is 800 years old but owes its
nounce that he would ask the fund for a son's list of "disasters" refers to Liz Truss's modern form to William Gladstone. Dur­
£1.9bn ($3. 9bn) loan, around 5% of the gov­ brief and shambolic administration. Be­ ing fou r spells as chancellor (sometimes
ernment's budget. Britain is bust, was the fore becoming prime minister last year, Ms combined with terms as p rime minister) ,
blunt verdict of The Economist. The Treasu­ Truss railed against " failed Treasury ortho­ the Victorian statesman waged a war on
ry was blamed for the loss of fiscal credibil­ doxy" and its "abacus economics", promis­ debt, earning a reputation for "saving the
ity that might have reassured the markets. ing instead to "unleash growth". It did not candle-ends". Pricey ships were the biggest
This was no isolated trauma. From de­ go wel l . Few doubt the department's com­ worry then-Glad stone could bore the
valuations to bank bail-outs, economic cri­ petence; its power attracts Whitehall's Commons for hours on naval-spending es­
ses have helped shape the psyche of B rit­ timates.) Public spending still accounted
ain's finance ministry. "The disasters of for less than a tenth of G D P .
➔ Also i n this section
1967, 1976, 1992, 2008 and September 2022 I n t h e 20th century t h e role of the
are etched i n the collective conscious­ 52 Bagehot: David Cameron state-and of the Treasu ry-swelled (see
ness," said Lord Macpherson, the depart­ chart 1 on next page) . Children were to be
➔ Read more at: Economist.corn/Brita i n
ment's top official in 2005-16, last year. taught, the sick treated, the elderly cared
It is the Treasu ry's j ob to steer Britain T h e Su preme Cou rt on Rwa nda for. I n many other countries, power was
from the rocks. Its officials obsess over de­ dispe rsed as the state expanded. Spending
Do n't forget dementia
signing ways to "save the government from was devolved to regional tiers of govern- ►►
 -
so Britain The Economist N ovem ber 18th 2023

► ment or managed by a budget office sepa­ that you can kill spending bids, says one
rate from the fi na nce ministry. Some coun­ State of pay official. Meeting the fiscal rules often i n­
tries created the cou nterweight of an eco­ Brita i n, government fi na nces a s % of G D P volves unhelpfu l short-term wheezes.
nomics ministry, responsible for fostering 250 Problems also arise from the way rules
long-term growth . In Britain , barri ng the are applied . I n 2018 Diane Coyle and Mari­
odd short-lived challenge, the Treasury has 200 anne Sensier, two economists, concluded
reigned su preme. It controls the best part that the Treasury's "Green Book" p rocess
of fltrn-worth of publ ic spend ing i n B rit­ 1 50 for evaluating proj ects resulted in a bias
ain each year. against some parts of the country. Using
The Treasury organ ises itself arou nd 1 00 local land values and productivity mea­
two annual set pieces-the spring budget sures skews expected benefits towards
and autu mn statement-at which the 50 London and the s ou th-east. Projects else­
chancellor announces tax-and-spending where with a relatively high benefit-cost
decisions. Jeremy Hunt will present the 0 ratio-like electrifying railways in Leeds or
next autu mn statement on November 1 850 1 900 50 2000 22 the Midlands-are less likely to get fund­
22nd . As well as these events, triennial Sou rce: OBR
ing. The value of creating clusters by join­
spend ing reviews are used to set depart­ ing up transport networks is missed. The
mental budgets. Since 1997 chancellors department reviewed the Green Book i n
h ave embraced fiscal ru les to signal their countries . Leaky roofs sap morale and pro­ 2020; Ms Coyle thinks little has changed.
credibil ity to taxpayers and lend ers. Al­ ductivity in hospitals . Yet sha rp cuts to Even in London and the south-east, the
though the p recise words change, the rules capital spending are pencilled in for after Treasury has long been sceptical of
typically target debt and the deficit falling the electio n . And even after capital budgets schemes that p romise transformation . I n
as a share of G D P over a fixed period. have been allocated, they are raided to plug the 1980s Treasury officials argued that the
The Treasu ry's adherence to d isciplined gaps in day-to-d ay spending. A total of M25, the orbital motorway arou nd London,
spending looks particularly appos ite now £4.3bn was siphoned off between 2015 and only needed to be two lanes wide. In the
given strains on the public finances. Earli­ 2019 ; in the coming budget an other £6oom 1990s they strenuously opposed the exten­
er this year public debt exceeded G D P fo r will be moved , reckons the Hea lth Serv ice sion of the Jubilee Line, part of the London
the first time since 19 60 . Treasury officials Journal. In theory that is ba nned; in prac­ Underground, to Canary Wharf. They later
are fretting about rising servicing costs , tice the Treasury turns a blind eye. acknowled ged that they were mistaken on
says Torsten Bell o f the Resol ution Founda­ A stopgap approach extends to tax poli­ both counts.
ti on, a thi nk-tank. By 20 26-27 those cos ts cy. In thei r budget statements, chancellors Healthy scepticism about "spend-to­
could exceed flo8bn (or 4 % of G D P) , almost like to " pull a rabbi t ou t of the hat". Capital save" bids can bleed into an instinctive dis­
as much as Britai n's education budget. allowances, an element of busi ness tax­ tru st of any preventive p rogrammes. The
Yet the Treasury must grapple with an­ ation , have bee n changed on average every publ ic-health grant, wh ich l ocal authori­
other profound worry. Since 2008 Britai n's other year for the past four decades . I n ties use for schemes focused on drug use,
econ omy has grown at about 1% per year. March Mr H u n t fi ddled agai n, this time i n ­ drinking and smoking , has been cut by a
Produ ctivity has stalled, increasing by just troducing " full expens ing", which allows fifth in real terms si nce 2015, desp ite being
1.7% si nce 2007, compared with 27% in the businesses to deduct investments in ma­ th ree to four times cheaper than other in­
previous 16 years. Investmen t is too low chi nery. That was welcome, except that the terventi ons with the same health benefits.
(see chart 2) . Subdued growth means lower change was temporary (lasting only three The department should care more about
wages and tax receipts . The Treasury can­ years) , negati ng much of the benefit. "save now, spend more later" decisions
not be blamed for all of these problems. Some argue that all of this can be says Pau l Kissack, a former official .
But its power means that its institutional blamed on the myopia of ministers . To a The second, con nected problem is that
flaws have a disproportionate effect. On poi nt. But such decisions also emerge from the Treasu ry does not prioritise economic
th ree counts, the way the Treasury works an institution geared around near-term growth. Ms Truss was wrong to style the
makes B ritain's problems worse. spend ing targets . That is the rhythm to department as an ti-growth (officials sim­
The fi rst problem is that the Treasury which the machine hu ms . Teams worki ng ply doubted her tax cuts wou ld "u nleash"

-
puts too much val ue on short-term savings on long-term goals, like improving public­ much) . Behind closed doors the Treasury
over long-term outcomes. Take i nfrastruc­ sector productivity, get little say in bud­ argues for causes that could boost growth
tu re. In March Mr Hunt decided to delay by gets. The way to get promoted is to show without costing money, like planning re­
two years the Birmingham-to-Crewe leg form and a pragmatic relationship with the
and the last London bit of HS2, a high­ European U nion , says Tim Leunig, a for­
speed rail p roject, as well as several road Low and behold mer adviser to two chancellors . But the
proj ects . I n the Treasu ry's calculus, that I nvestment*, % of G DP Treasury treats its role as an economics
meant Mr Hunt could meet nearer-term 25 ministry as subord inate to its finance one.
spend ing limits and stick to his fiscal Several chancellors have tried to tilt the
United States France
rules. In the real world , it pushed up the 23 balance. But over the past 15 years , it is hard
overall cost of the scheme and deferred the to point to a strong record of pro-growth
benefits . (The northern leg of H S2 was can­ 21 policies . George Osborne, who took charge
celled altogether i n October.) in 2010 , hoped to be a radical p ro-growth
Other areas get similar treatment. In 19 chancellor but that aim was u ndermined
2021 a target for raising public R& D spend­ by his " fiscal machismo" in cutting bud­
17
i ng was pushed back by two years , forci ng gets more steeply than was needed , says
proj ects to be abandoned. A core problem 15 Paul Johnson, who heads the I nstitute for
for the National Health Service is low capi­ ...l\r Fiscal Studies, a think- ta nk. The Treasury
tal investment. Britain has the fi fth-lowest I I I I I I I I I I I I I I I I I I I I I I I I I I

1 997 2005 10 15 20 22 was also slow to acknowledge that low

number o f CT scanners and M RI units per Sou rce: OECD *Public a nd priva te
public and p rivate i nvestment would be
person in the 0 E C D, a club of 38 mostly rich disastrous for p roductivity. With hind- ►►
11
 The Economist N ovem ber 18th 2023 B rita i n 51

► sight, we probably could have borrowed in Europe, the cabinet often gets more say son for chancellors to tinker with the tax
more and invested more," Lord Macpher­ on fiscal decisions than in Britain. system at every spring budget and autumn
son said i n October. The easy answer to these three pro­ statement. They could set out a tax strategy
This would all matter less if not for the blems i s to b reak the mighty department at the start of each parliament, with chang­
third p roblem: how jealously the Treasury up. That would bring Britain into line with es scheduled only once a year, and taxes
guards its power. Its grip o n Whitehall other countries, and is an idea that has ad­ could be automatically indexed to infla­
owes much to Gordon Brown, who ruled it vocates on the left and the right. I n a forth­ tion. Britain needs fewer rabbits.
as chancellor for a decade from 1997. The coming review of the civil service, Lord Second, the Treasury could relax its grip
department "lost one empire" through his Maude, a Tory grandee, suggests moving on spending. Britain owes much to Glad­
decision to cede operational control of control over spend ing to the Cabinet Of­ stone's efforts to establish control . But de­
monetary policy to the Bank of England, fice, a department he once ran . partments, agencies and councils-not
Mr Brown wrote in his memoir. But it as­ Yet it is n o t obvious that countries with only b right graduates in the Treasury­
sumed a n "even bigger" one, extending its other models do any better. Mergers and should be able to manage p rogrammes.
tentacles across government. splits tend to absorb an absu rd amount of Once a budget and outcomes are agreed ,
Mr Osborne handed responsibility for attention in Whitehall , and often don't ministries should take more decisions.
forecasting to the Office for Budget Re­ last. Labour, which has a comfortable lead Third , the Treasu ry needs to change the
sponsibility, an independent watchdog, of around 20 points in the polls, in any case way it assesses proposals. David Gauke,
and declared that "the micromanagement appears uninterested in such a rad ical who served as chief secretary to the Treasu­
wou ld stop". Few think it has. The Trea­ break. Rachel Reeves , the shadow chancel­ ry in Theresa May's government, suggests
sury's 2, 000-or-so officials exert huge in­ lor, is pushing an agenda of supply-side creati ng a new independent body, along­
fluence over an array of complex activities . and public-service reform while retaining side the O B R , to evaluate the likely impact
However bright, many lack experience. A "iron discipline" on spendi ng. of policies o n long-term goals like redu c­
third are u nder 30, and a quarter leave their ing demand for public services or boosting
jobs each year. Departments complain of Money and bunnies growth. Scru tiny would happen on an an­
old hands being bossed around by recent However, to raise Britain's economic­ nual basis before a decision is made, with
graduates in the Treasury. growth rate, which she wants to be the fast­ policies scored from one to five. Cu rrently
Overzealous control man ifests itself in est in the G7, Ms Reeves would need to no external body does this. Studies have
several ways. Once spending is allocated, change the institution she aspires to lead . found the standard of evaluation by de­
app roval is needed for " novel" and "con­ Several ideas come to mind. First, chancel­ partments and the Treasury to be poor.
tentious " changes. Moving as little as £ 5 m lors could accept more constraints on thei r Andy Haldane and Jim O'Neill, two
between p rogrammes can requ ire lengthy power, in order to give taxpayers and in­ economists cou rted by Tory and Labou r
negotiations. In one case during the pan­ vestors more certainty. The consensus on pol iticia ns, have separately argued that ad­
demic, the Department for the Environ­ fu nding HS2 survived 15 years before it was herence to tod ay's rules is unhelpfully con­
ment, Food and Ru ral Affa i rs needed Trea­ unceremoniously sh redded in October. strai ning investment and growth . Al­
sury app roval to roll over a subsidy pro­ Changes to the scope and budget of big though borrowing is al ready high, Lord
gramme to help abattoirs slaughter pigs. proj ects cou ld require parliamentary ap­ O'Neill says there is a case for carve-outs
The scheme was worth less than flm. proval, says JP Spencer, a former Treasu ry from the fi scal ru les for investme nts p ro­
Despite saying it wants to let go, the official who advises Labour. ven to have the biggest effect on long-run
Treasury always tends to "snap back to the Capital budgets cou ld be set for the growth. This approach could go alongside
old Gladstonian model of 'we'll give you whole five-year parliament, and p roperly tighter control of current spend ing.
thruppence and see how you get on "', says ring-fenced. Plans cou ld be changed-fo r The Treasury prides itself on stopping
Ms Coyle. Such bureaucracy is not only a example, if managing t h e business cycle bad things from happening-"God's work",
huge waste of time. It li mits departments' requi red more active fiscal policy. But vital as a former official calls it. It has often pro­
abil ity to deal with actual problems. investment would not be raided every time tected Britain from disaster. It also needs
And not just departments. The Treasury things got tough. Nor is there a good rea- to set a course for long-term prosperity. ■
is slowly moving towards block grants for
some devolved authorities i n English cit­
ies, which then get to decide how to spend
the cash. But the default remains a beg­
gi ng-bowl culture in which councils sub­
mit lengthy bids for tiny sums of money. I n
the past seven years English councils have
been asked to compete for 36 separate pots
for pedestrian and cyc l i ng schemes. Other
departments also micromanage funding as
it moves down the chain, but the Treasury
sets the culture. A review of research fund­
i ng found that it insists on stifling levels of
bureaucracy, putting British innovators at
a disadvantage.
Trusting i ndividual departments to
make decisions works better, according to
an O E C D stu dy. Dutch ministries, for exam­
ple, follow a rigorous collective p rocess for
agreeing on budgets and setting goal s .
They then have more freedom t o decide
how to meet those goals, with an i n-house
fi nance function keeping track. Elsewhere
52 Brita i n T h e Econom ist N ove m ber 18th 2023

Bagehot I Aesthetics over achievement

David Camero n 's return marks the triumph of image over reality in British politics
France and Germany to take the lead on negotiating a peace.
Liberals cling to a distorted vision of Mr Cameron's politics,
hailing him as a bulwark against populism. Centrists rejoice that
Ms Braverman has departed, but it was he who first promised the
impossible on immigration. H is government pledged to bring the
numbers of newcomers down to fewer than 100,000 per year
while also staying in the E U , which demanded free movement of
people. Between the government's promise to cut immigration
and Britain's membership of the club, something had to give. That
thing was Britain's membership of the E U .
Mr Cameron's image i s one o f a successful political strategist
brought low by one error: the Brexit referendurn. In fact Mr Cam­
eron's philosophy of fiscal conservatism combined with social lib­
eralism was never a popular vision. In 2010 Mr Cameron could not
win an outright majority even after a gargantuan recession. In
2015 it required a tantrum in Britain's Celtic fringe-when south­
west England deserted the Liberal Democrats and Scotland
ditched Labour-for Mr Cameron to scrape the smallest winning
majori ty since the 1970s. Mr Cameron won significantly smaller
vote shares than either Theresa May or Boris Johnson. There are
not many Carneroons in Britain. Outside some newspaper op-ed
pages, there never were.

D AV I D CAM E RO N always looked the part. Even the most power­

ful man on Earth was taken aback by the ease with which the
jacketless, tieless British prime minister behaved. Barad< Obarna,
After the chaotic experimentation of Liz Truss's government,
Mr Cameron's own economic policy might be painted as cautious
conservatism. It was anything but. Austerity was a radical experi­
a former American president, noted that Mr Cameron "possessed ment, and it largely failed. The size of the state was not sustainably
an impressive command of the issues, a facility with language and reduced; his tax cuts have been unpicked; years of underinvest­
the easy confidence of someone who'd never been pressed too ment, which began under him, have resulted in decrepit schools
hard by life". Mr Cameron had the attributes to be an excellent and hospitals. Only by comparison does he look cautious.
prime minister: intelligence, diligence, a quick wit and a smooth Old allies have praised Mr Cameron's sense of duty in returning
manner. Instead, he managed to be one of the worst. to government. But he did not have to disappear from public li fe in
Seven years after Lord Cameron left office in 2016, in the wake the wake of Brexit. Mr Cameron once chided a prospective MP for
of losing the Brexit referendurn, the former pri me minister has re­ cheekily asking whether he might be made a m inister. "You will
turned to front-line politics as foreign secretary. (He has been hur­ find that being a backbench Member of Parliament is the greatest
riedly ennobled, to do the job from the House of Lords.) The deci­ honour you can have in life," said Mr Cameron. "When I cease to be
sion of Rishi Sunak, the prime minister, to fire Suella Braverman, a prime minister I will return with great pride to the backbenches as
hard-line home secretary, cleared the way. James Cleverly, a bar­ Member of Parliament for Witney, for the rest of my life." In reality,
rel-chested reservist, was shunted to take Ms Braverrnan's spot, Mr Cameron served for eight weeks on the backbenches before
leaving a vacancy as the country's top diplomat. And so, on the leaving. When he would have been most useful, during the years
morning of N overnber 13th, the familiar figure of Mr Cameron of screeching over Brexi t between 2016 and 2019, he deserted his
wandered through the door of 10 Downing Street again. post. Now he is bored with private life, he has returned.
Mr Cameron's return is a peculiar one, given his record. A man
who bungled British foreign policy will help shape it once more. A Manners maketh the mandarin
government struggling to figure out how to repair public services After the clownshow of Mr Johnson's tenure as prime minister,
has appointed the man who, more than any other, caused their Westminster wallahs proj ect a dignified air onto Mr Cameron. Yet
current difficulties. A man who deserted his office is now painted he embarrassed himself out of office. Practically every senior Brit­
as an example of duty. In British politics, the appearance of com­ ish politician attempts to fill their boots once they have left Parlia­
petence is more important than the evidence of it. Aesthetics ment, but most do so quietly and effectively. In contrast Mr Cam­
trump achievement. Nothing demonstrates this more than the re­ eron lobbied on behalf of Greensill Capital, a failed supply-chain
naissance of Mr Cameron. payments company, in simpering text messages to cabinet minis­
A plausible manner hides many of Mr Cameron's flaws. In for­ ters at the height of the pandemic ("I know you are manically bu­
eign policy his errors were numerous. For half a millennium Brit­ sy-and doing a great job, by the way") .
ain aimed to ensure Europe did not unite against i t; as a result of This ldnd of record is clearly no obstacle to high office. Mr
the referendum he promised to call in 2013, Mr Cameron managed Cameron has returned largely because Mr Sunak is desperate. He
it in three short years. He was too doveish on China. Chinese firms may reassure some wavering southern Conservative voters, who
were cajoled into investing in British infrastructure, from tele­ provided the former prime minister's narrow base. Mercifully, he
corns to nuclear power stations-investment that has now largely will do less damage as foreign secretary than he did as prime min­
had to be scraped away like an unwanted Artex ceiling. When ister. But the fact is that Mr Cameron maintains a good reputation
Vladimir Putin invaded Crimea in 2014, Britain was supposedly in certain quarters because of how he comes across rather than
one of Ukraine's security guarantors; yet Mr Cameron allowed what he actually did. I t still helps to look the part. ■
 I nternational The Economist N ovem ber 18th 2023 53

M o u nting crises Jin ping in California on November 15th .

Another sh ift is growing convergence
Everything, everywhere, all at once between America's adversaries. "There
really is an axis that is emerging between
Russia, China, No rth Korea and I ran, which
rejects their vers ion of the American-led
international order," says Stephen Hadley.
He sat on America's National Secu rity
Council in the 1970s and the Pentagon in
How diplomats and generals are running out of bandwidth
the 198os before becoming national securi­

A N I S RA E L- HAMAS war in Gaza threatens

to sp read across the Middle East, with
America and Iran facing off in the back­
and Ru ssia are more assertive, and work­
i ng more and more together. So too are
non-aligned powers, including India and
ty adviser to George W. Bush in 2005. The
war in Ukrai ne has cemented the partner­
ship between Russia and China (although
ground. The Ukraine war, Eu rope's largest Tu rkey, which have growing clout to shape they are not formal allies) . Iran and North
si nce 194 5 , shows no sign of endi ng. Chi­ distant events and believe that a new and Korea have both supplied Russia with
nese jets and warships now menace Tai­ more favourable order is emerging. And weaponry in return for milita ry technolo­
wan i n growing numbers and with i ncreas­ the possibility of a war d irectly between gy. The result is greater entanglement. A
ing frequency. Looming elections on the major powers hangs over the world, forc­ crisis involving one enemy is i ncreasi ngly
island are likely to bring more tension. ing countries to keep one eye on the future l ikely to d raw in another.
Civil conflict in Mali, Myanmar and Sudan even as they fight fi res today. The m ix is
has worsened in recent weeks , too. stretching the capacity of Western dip­ Massively multiplayer game
Such a concatenation of crises is hardly lomats, generals and leaders to its limits. Moreover, each crisis not only involves
u nprecedented. Sergey Radchenko, a his­ The large powers are becoming more more enemies, but also more players i n
torian, points to the examples of the Soviet polarised on issues where they might once general . The leaders of Australia, Japan,
i nvasion of Hungary and the Suez crisis have pushed i n the same d irection. In the New Zealand and South Korea have all at­
overlapping in 195 6 , crises in Lebanon and Middle East, for instance, Russia has tended the past two NATO summits i n
the Taiwan Strait i n 1958 and the tumultu­ moved closer to Hamas, tearing up years of Europe. U kraine's counter-offensive this
ous years of 1978-79, with the Chinese inva­ careful diplomacy with Israel . China, year could not have happened without an
sion of Vietnam, the Islamic revolution i n which i n past wars issued bland state­ infusion of South Korean shel l s . Tu rkey
I ran and the Soviet Union's i nvasion o f Af­ ments urging de-escalation, has exploited has established itself as an important arms
ghanistan. In 199 9 , I ndia and Pakistan, the crisis to criticise America's role in the supplier throughout the region, reshaping
newly armed with nuclear missiles, waged regio n . Few Western countries tal k to Rus­ conflicts in Libya, Syria and Azerbaijan
a war over Kashmir while NATO bombed sia any longer. And even dialogue with Chi­ with its military technology and advisers.
Serbian forces in Yugoslavia. na is strained, despite the need to tackle European countries are planning more in­
But America and its allies cannot inter­ joint p roblems l i ke climate change-not­ tensively how they might respond to a cri­
vene in today's crises as easily or cheaply as withstanding the fanfare which accompa­ sis over Taiwan. Crises thus have more
they once did. Adversaries such as China nied a meeting between Joe Bi den and Xi moving parts to them. ►►
54 Internationa l The Economist N ovem ber 18th 2023

► That reflects a broader shift in the dis- to solve all of these global problems. In a gan," she says, referring to a revolution in
tribution of economic and political power. book published in 2021 Colin Kahl, who re­ Kyiv in 2014, "that I just didn't know if we
The idea of "multipolarity", which refers to cently stepped down as the Pentagon's would have the bandwidth for all of this."
a world in which power is concentrated not policy chief, and Thomas Wright, a senior One change is that competition has
in two places, as in the cold war, or in one, official in Mr Biden's National Security turned to conflict. The war in Ukraine has
as in the American-dominated 1990s, but Council, noted that international co-oper­ been especially debilitating for diplomacy.
in several, has entered the diplomatic ation seized up during the covid-19 pan­ Baroness Ashton recalls that when the Uk­
mainstream. In September, Subrah­ demic as countries rushed to close borders raine crisis began in 2014, her negotiating
manyam Jaishankar, India's influential and shield themselves. "For all practical team for nuclear talks with Iran in Vienna
foreign minister, noted that America, fac­ purposes the G7 ceased to exist," they not­ included Russia's deputy foreign minister.
ing the "long-term consequences of Iraq ed. "Pandemic politics ultimately dealt the She would travel to Kyiv to condemn Rus­
and Afghanistan" -a nod to two failed final blow to the old international order." sia's meddling and he to Moscow to con­
wars-and relative economic decline, "is The new world disorder is putting the demn the European Union. "Then we'd fly
adjusting to a multipolar world". The argu­ institutional capacity of America and its back and al l sit down and carry on with the
ment is debatable. In a recent essay, Jake allies under stress while stretching their Iran talks." Such fleet-footed compartmen­
Sullivan, America's national security ad­ military capabilities. Start by considering talisation would now be impossible.
viser, argued that his country is actually in the institutional pressure. The cold war, America's National Security Council is a
a stronger position now than it was while Mr Hadley argues, was an "organised bare-bones operation, in part because Con­
mired in those wars. But America's image world". There were global challenges, he gress is loth to fund White House staff. In
has undoubtedly suffered. acknowledges, but many were subsets of an essay published in 2016, Julianne Smith,
the larger superpower struggle. "For post­ now America's envoy to NATO , recalled her
The dial tone cold-war national security advisers," he time as deputy national security adviser to
A poll conducted in February by the Euro­ says, "it's more like cooking on an eight­ Mr Eiden when he was vice-president. "A
pean Council on Foreign Relations, a burner stove with every burner having a typical day would often involve four to six
think-tank, found that more than 61% of pot, and every pot just about to boil over." hours of back-to-back meetings on any­
Russians and Chinese, 51% of Turks and A world in which more crises occur to­ thing from Syria to cybersecurity to North
48% of Indians expect a world defined by gether poses two sorts of challenges to Korea," followed by 150-500 emails per day.
either multipolarity or Chinese domi­ those tasked with managing them. One is "My ability to plan, think beyond the next
nance. In his final state-of-the-union the tactical problem of fighting several day in the office, or significantly deepen
speech in January 2016, Barad< Obama, fires at once. Crises tend to have a centra­ my knowledge of any single issue was vir­
then America's president, insisted that on lising effect, says a former senior British tually non-existent."
"every important international issue, peo­ diplomat, with prime ministers or presi­ The expectation that top officials repre­
ple of the world do not look to Beijing or dents taking personal charge of issues that sent their country in a crisis often puts
Moscow to lead-they call us." Seven years might otherwise be scattered among for­ enormous pressure on a handful of people.
on, things are less clear-cut. eign and defence ministries. Even in pow­ Antony Blinken, America's secretary of
The result of all this is a sense of disor­ erful states, bureaucratic bandwidth can state, has spent almost every waking hour
der. America and its allies see growing be surprisingly limited. shuttling between Middle Eastern capitals
threats. Russia and China see opportuni­ Diplomats, immersed in crises, often over the past six weeks. He recently flew
ties. Middle powers, courted by larger ones perceive that their own times are unusu­ from the Middle East to Tokyo, for a meet­
but concerned by the growing dysfunction ally chaotic. Catherine Ashton, who was ing of G7 foreign ministers, then to India,
of institutions like the World Trade Organi­ the European Union's de facto foreign and on to San Francisco. Mr Sullivan is also
sation and the United Nations, see both. "A minister from 2009 to 2014, points out that spread thinly (see Lexington) .
kind of anarchy is creeping into interna­ she was dealing with the Arab spring, Iran's Even if diplomats can successfully spin
tional relations," wrote Shivshankar Me­ nuclear programme and the Serbia-Kosovo multiple plates, the concurrence of crises
non, who served as India's foreign secre­ dispute at the same time. "I can remember presents a larger, strategic problem when it
tary and national security adviser, in an es­ very clearly, when the Ukraine crisis be- comes to military power. The current crisis ►►
say published last year. It was "not anarchy
in the strict sense of the term", he ex­
plained, "but rather the absence of a cen­
tral organising principle or hegemon."
That tendency has been compounded
by several other trends. One is the climate
crisis, which increases the risk of conflict
in many parts of the world and, through
the green transition, is creating new sourc­
es of competition, such as that for critical
materials crucial for wind turbines and
electric vehicles. The other is the pace of
technological change, notably the advance
of artificial intelligence at a breathtaking
rate, with unpredictable consequences. A
third is globalisation, which knits crises
together in new ways. A war over Taiwan,
for instance, would cause acute disruption
to the semiconductor industry and thus to
the world economy.
The fourth is a rising tide of national­
ism and populism, which infects attempts
 The Economist N ovem ber 18th 2023 Internationa l 55

► in the Middle East shows that military means: America's defence budget is virtu­
power is a scarce resource, much like dip­ ally flat in real terms, while Chinese de­
lomatic bandwidth. Even in recent years, fence spending has soared. But the risk, ar­
Pentagon officials would boast that they gued critics, was that the one-war standard
were finally rebalancing naval power from would tempt enemies to open a second
the Middle East to Asia, after two decades front-which could then force America to
of counterinsurgency in Afghanistan and either back down or resort to unappealing
Iraq. Now, under the pressure of events, options, like nuclear threats.
the trend is reversing. What risks do America and its allies run
When the uss Dwigh t D. Eisenhower and by being so stretched across diplomatic
its escorts entered the Red Sea on Novem­ and military realms? If the war in Ukraine
ber 4th it was the first time an American stays an open sore in Europe and the Mid­
aircraft-carrier had operated in the Middle dle East remains ablaze, the West will
East for two years. The exercises it con­ struggle gravely should another serious
ducted earlier with the uss Gerald R. Fo rd crisis erupt. One risk is that adversaries
marked an unusually large show of force. If simply capitalise on chaos elsewhere for
the war in Gaza drags on or widens, Amer­ their own ends. If America were bogged
ican naval forces may need to choose be­ down in a Pacific war, for instance, Iran
tween sticking around, creating gaps in would surely feel more confident of get­
other parts of the world, including Asia, ti ng away with a dash for nuclear weapons.
and emboldening Iran. Even more worrying is the prospect of
Meanwhile, Western officials increas­ active collusion. European military plan­
ingly think the war in Ukraine could drag tery to intercept Israel-bound missiles ners give weight to the possibility that Rus­
on for another five years, with neither Rus­ launched from Yemen. Ukraine's con­ sia might conduct menacing manoeuvres
sia nor Ukraine prepared to give in, but sumption of interceptors is likely to rise during a crisis over Taiwan in order to di­
neither capable of breaking the stalemate. sharply over the winter as Russia, having vert American attention and tie down its
As the 2020s roll on, the red lights begin to stockpiled missiles for months, unleashes allies, preventing them from lending a
flash. Many American intelligence offi­ barrages against Ukraine's power grid. hand in Asia. As in the cold war, each crisis,
cials, and some Asian ones, believe that the America can probably satisfy both of its no matter how parochial or trivial, might
risk of a Chinese attack on Taiwan is great­ friends for the moment. In recent weeks come to be seen as a test of American or
est in a window at the end of this decade. France and Germany have both pledged to Chinese power, drawing each country in.
Earlier, China will not be ready. Later, Chi­ increase assistance to Ukraine. But if either Then there are the surprises. Western
na will face the prospect of demographic war-or both-drags on, there will be a intelligence agencies have their hands full
decline and a new generation of Western pinch. ''.As time goes on, there will be trade­ watching China and Russia. Few expected
military technology. offs as certain key systems are diverted to Hamas to throw the Middle East back into
Israel," writes Mark Cancian of the Centre turmoil as it did on October 7th. Civil wars
Shelling out for Strategic and International Studies, a and insurgencies in the Democratic Re­
Even without a war, the West's military ca­ think-tank in Washington. ''A few systems public of Congo, Mali, Myanmar, Somalia
pacity will come under enormous pressure that Ukraine needs for its counter-offen­ and Sudan have all been neglected, dip­
in the coming years. The conflict in Uk­ sive may not be available in the numbers lomatically, even as Russian influence in
raine has been a reminder of both just how that Ukraine would like." the Sahel continues to grow. Meanwhile on
much ammunition is consumed in big The bigger problem is that, realistically, November 10th dozens of Chinese ships
wars, but also how meagre Western armou­ America could not arm itself and its allies circled Philippine vessels, blasting one
ries-and their means of replenishment­ at the same time. "If us production lines with water cannon, as the latter attempted
really are. America is dramatically upping are already struggling to keep pace with the to resupply an outpost on Second Thomas
its production of 155mm artillery shells. exigencies of arming Ukraine," notes Is­ Shoal in the South China Sea, which China
Even then, its output in 2025 is likely to be kander Rehman of Johns Hopkins Univer­ claims as its own. If the confrontations
lower than that of Russia in 2024. sity in Baltimore in a recent paper on pro­ worsen, the terms of America's defence
The violence in Ukraine and Gaza illus­ tracted wars, "they would be completely treaty with the Philippines may eventually
trates these stresses. Israel and Ukraine are overwhelmed in the event of an actual pro­ oblige it to intervene.
fighting two different sorts of war. Ukraine tracted, peer-to-peer conflict with an ad­
needs long-range missiles to strike Cri­ versary such as China." Dexterity needed
mea, armoured vehicles to allow infantry These challenges point to deeper ten­ Amid disorder, strategists talk about the
to advance in the face of shrapnel, and de­ sions in American defence strategy. From importance of "walking and chewing
mining gear to punch through vast mine­ 1992 American military planners held to gum". It is a uniquely American metaphor
fields. Israel wants air-dropped smart what was known as the "two-war" stan­ that once referred to performing two trivial
bombs, including bunker-busters, and in­ dard. America's armed forces had to be rea­ activities at once, and now explains the im­
terceptors for its Iron Dome air-defence dy to fight two simultaneous medium­ portance of geopolitical multi-tasking.
system, which are being fired at a prodi­ sized wars against regional powers-think Others are available. In his forthcoming
gious rate. But there is overlap, too. Iraq or Iran-rather than simply a single book, "To Run the World", Mr Radchenko,
Last year America dipped into its stock­ big war. In 2018 the Trump administration the historian, quotes Zhou Enlai, China's
pile of shells in Israel to arm Ukraine. In changed this to a "one-war" standard: in premier, identifying America's predica­
October it had to divert some Ukraine­ practice, a commitment to be able to fight ment in 1964: "If there were just a few more
bound shells to Israel. Both countries also either a war in Europe or in Asia, but not Congos in Africa, a few more Vietnams in
use the Patriot missile-defence system, both at the same time. Mr Biden's adminis­ Asia, a few more Cubas in Latin America,
which takes out planes and larger missiles. tration stuck with this approach. then America would have to spread ten fin­
So do other allies in the Middle East: on Oc­ The aim was to instil discipline in the gers to ten more places.. .we can chop them
tober 19th Saudi Arabia used a Patriot bat- Pentagon and to bring ends into line with off one by one." ■
56
Busi ness The Economist November 18th 2023

Eu rope's energy transition spewing heavy industry.

A place in the sun

The Mediterranean has always been a
conduit for energy. From the days of Ro­
man dominance to the 19th century it was
manpower in the form of slaves. Today it is
mostly natural gas. Half-a-dozen pipelines
connect Europe to Africa and the Middle
East. The E U depends on the region for over
P A L M A , M A L L O RC A
a third of its natural-gas imports. In the age
How the Mediterranean can become Europe's southern energy powerhouse
of renewable energy, countries on the Med

T vel at a new attraction on the Mediter­

O U RI STS O N MA L L O RCA might now mar­ ma, the island's capital.
Boundless possibilities, or hot air? The
boast some of the best conditions on Earth
for harvesting natural forces.
ranean island: a miniature economy en­ same question also hangs over a wider Solar capacity shows vast potential (see
tirely energised by "green" hydrogen. At its green-hydrogen economy, which Euro­ map on next page) . Spain basks in a daily
heart, two solar plants power an electrolys­ pean governments hope to see emerge in average of 4.6 kilowatt-hours (kwh) of sun­
er, which splits water into oxygen and hy­ the Mediterranean basin, turning the re­ light per square metre and Morocco in
drogen, creating carbon-free fuel. The hy­ gion into a sun-fuelled counterpart to a 5.6kwh, double what Germany can expect.
drogen can then propel buses, be injected wind-driven northern dynamo already Sparse populations mean that Spain and
into the island's gas grid, and power fuel taking shape around the North Sea. The Portugal have ample land for such plants,
cells at hotels and the port. "The project prize is large. If plans for Europe's southern as do the deserts of north Africa and the
shows what is possible," says Belen Lina­ powerhouse go well they will give the con­ Middle East. In parts of Morocco and Mau­
res, head of innovation at Acciona Energia, tinent access to plenty of cheap renewable ritania both sun and wind are abundant,
a renewable-energy firm that is one of the energy and allow it to clean up its carbon- forming rare sweet spots where electrolys­
project's investors. ers can run virtually non-stop. "There are
There is one snag: the hydrogen has yet only ten such locations around the world,"
➔ Also in this section
to materialise. Because of a design flaw, the explains Benedikt Ortmann, who runs the
electrolyser, which is made by Cummins, 58 COP28's c limate conundrum solar business of BayWa, a German energy
an American firm, has been recalled. Im­ and construction company.
59 Bartle by: How to wreck a meeting
porting green hydrogen, which is derived Tapping this reservoir of renewable en­
from renewable sources, is impractical. 60 What comes next for SoftBank? ergy is not a new idea. In the early 2000s an
Buses and fuel cells stand unused. A newly association backed by dozens of corpora­
60 Netflix lays a bet on sport
elected local government also appears less tions, mostly German, came up with the
interested. The previous administration 61 Swelling sa les of superyachts idea of plastering the Sahara with giant so­
talked "a lot of hot air", according to a quote lar plants. But support for Desertec, incor­
62 Schum peter: Google in the doc k
i n the local press by the new mayor of Pal- porated in 2009, quickly evaporated main- ►►
 The Em.munist Novelfll be:r 18:tll 2023

► Ly b eca.lllSie of the mst of llhe technol.om•­ thus the cost of cap ital Air liq1:dde, a Rrench. firm rtlha.t i.s the
Th.e development of betIBF a.ndl Yet tihe bi�eSI: problem is Jioki.ng both worid"s l.a!rgest producer of tindmtriaL gas­
cheaper means. of ha.westiog the sm1i"s rays sides of the maFket,, w.h.id1 starts whli es­ es, is lob�ing hard a.gai.risn a project tha.t
is belitindla revival ofthe Wea. AcrordiDg to tabJishing pbysi.cal roonections.. Most of would devalue its own network of hyd ro­
the [ri.temat:i.onal Renewable !Energy Ageri.­ the hydrogen wiJL first need to be tr.ms­ ge11 pipe,ii[les.
cy, the average cost of electricity from util­ poned by ship,, probably io the form of.am­ Europe 11.ls no c hoice but to confront
ity-scale sofar plants declined from $0_4s monia (liquid tir.ydrogeo, w. hich bas to b e the myriad (i)roblems if h wants h> meet its
peF . kwh i.m 2010, to 1)0_05 wtyear_ kept at -25,3°C, i s triclcy to move around) . ambitious urgets to, red.uce ca[lbo o emis­
Traosp,on:iog the eoergy north, to But shipping capacity is Limited_ Ja.mes sions. Steps already taken includ.e me
whe:re irt is. needed,, is mow also more feasi­ Kneebooe of the Florence Schoo.I of Regu.­ EurO!llean Gommission·s faunch of .h.aU a
bie_ Desertec's pfari. invoJved umdersea ca­ latioo estimates th.at,, even i.f it were tech.­ d02ie11 i nitiatives from a "'lhyd:rogem acceJ­
bl.es. which It.a
. ve U mi.ted. C'apadty. But now nkally p,ossi. 'ble, repurposiog th.e entire ex­ er�tor" to sprea.d the use of die gas to, a.
di.ea:, and. efficieol eleotrolysers C'a n con­ istimg global fleet of vessels a.bJe to tr.ms.­ �Eu ropean bydrogem bank" to j um p-stain
vert electtidtj• into hydrogen at source_ port Liquefied maJtural gas could only de.liv­ tra.de. More imponant, the commission
Tkis, ca.R then be traruported as a gas or a er some (i5m tonnes perye.M. That Leaves a .has. all.lowed subsicl ies to flow by relaxi ng
derivative. such as Li.q uid! ammonia. A m­ reliamce on pip elines. sta.te-aidl rules, so member countries, cam.
alj•sts expect that in a few years g:reelil !hy­ support fi rms. in their e-fforts to decarbo­
drogen from norrth Africa. wiU cost nHder Pipe dll'ea.ms nise. Foods have also been earmarked for
:S:1..50 Iller kilogram, pmba.bly makililg it El::pens a.re d ivided over whether existiDg hydrogen JipeJioe.s, such. ais a 3,300km Unk
ch.eaperthao "bfoe'" hydrogen, whid1isde­ gas networks can be upgraded for .lqrdro­ from. AJgeria and Tumisi.a. to, Austria aind
Fived from natural gas amd requires the re­ gen. aa:d buiildi ri.g aew pipe.l i.nes i.s expen­ Germa11y. Hydrogen projects in north. Afri­
sulting G11rbon to be captmed a.ri.d stored. sive. Geopol.iticaL tunm.oi.l m.ry deter iri.­ ca will beri.eit from investment from i.rnsti­
Demand for energy from die south is ve-stm.eots im pipelines as well as hydrogen tutions such as rtlhe Europe.m B.an!k for Re­
m.ud1. more hlkely to materialise rtlhaR !iln prnd1.1cticm. Alm three ro□idms identified construclion a.nd Devefoprnenlt.
the days of Desertec, too. HydrogeR imd its by the EU through whi.ch hydrngeR oould Some membeF states waiot to move fast­
derivatives will be badly needed as carbon­ Dow i.o th.e .Mediteuaneao basin cross eli. Sparn a.nd FortugaL .have embarked on
free feedstocks foir Europe's steeJ and troubJesom.e terrhoi:y. Hydrogen pip,ed am.'bhious [lational strategies aimi ng to
chemicals industries. Of the rom tmmes from Mauritania would ideaUy go through transfoirm the lberi.m peninsula into a
that ·!he EU .h.as set as a consumption target Western Sahara but Morocco's rootrol of g;reen-hyd'.l!'ogen hub. B111t it is Genm,any,
t,r 2030, m1.11ch wiU come born !its sou diem the region is di.sputed . An aLte:r.utive un­ which w�m have to import up to 70% of the
fringe a.ndl morth Africa. der con:sideJiaJtion is m offshore route vi.a h}1drogea needed to decarboRise its.
The Mediterranean·s pos1t100 as the Gaoaiy [sfands.. mighty heavy iod11s1Jy, that is keenest.
Europe's south.em powerhouse is not. Once built, pipelines are vnlnerable to Germany has set aside over €8bn ($S.6bm)
however. a given.. !Europe has to jump-start pohtical imterfe:Iremce. lo Novem ber 2021 to he[p its 6mis go green and on November
a market fo1 a new source of enerm• a.md do Algeri.ai's rocky relations with Morocco Led 14th its government a.n.nouoced further
so in a dereguEated arena with many com­ to a cutting off of diplomaitic relations and subsidies for buildi ng a network of hydro­
peting pbyers. ··n·s a chicken-,m:d:-egg pro­ am ioterrn(i)tion of gas flows through rtlhe geo pipe]inesa IR a show oheal a coup.le of
blem," says Kiirsten WestplltaL of the Ge:r­ Maghreb--Europe pm pel.rine, whkh conrniects years ago,, lhe countJry's foreigm office em­
mao Assod.aiti.o!ll of Eri.ergy and W.aiter lR­ A�e.r:fa's ga.sifie.lds: with Spain, via its ri.eigh.­ barked oo Mhydrogen d�piomacy"',, oom­
dustries, a lobby group. SimuJtameo11S.llj• bou:F"s territory. -plete witih ha.If a dmen ·hydrogen embas­
M
@mping up demand and supp11y is a de]i­ Clooe:r to . h ome, th.ings are no less com­ sies in key countries. More recently, th.e
ca.te ba.landng a.et Gomp,anies ne hesitant pilica1ed. Ao agreeme.ot for an underwater ministIJ• of economic affa.ri.rs spawned
rto commit lhemselves to s:igoi .mg long­ pipeline oonnecti mg Barreiooa to Mar­ H1Glob,d. ai :pla.tfmm fortra:diog hydrogen.
rterm offtake ag;Ireemeots if they are unsure seiUe, whence hydrogen could be tr.ms,­ Most im portant, GeFmany seems to ,1c­
aibout tihe future avaiLability and. p:rkimg o( ported from Spain dirough exis tia:g irn:fra­ knowledge rt:h.1t it meeds to give in order to
byd'.l!'ogien. This� �o tum,, di:scou.rages pro­ structarevia France to German}', coul.d sil:i]l

-
get. It aippears not just happy to see the in­
du.cas from m.alking crucial investment get ca.ught up i n a sp,at between Germany staUacion of sol.a1i pia.n ts , ain.d. elecnoly:ser
decisions. Jt does nm .hel·p that poliil:ica..l ti.n­ aRd France over whether Ruden power farms in Africa,, 'but is ready to help ueaite
sta'brnty iio nortl:J. Africaincreases risks and should be co:nsidBed �g:reen·. Moreover, JocaJI jobs, upgrade grids and lbu.iLd desali­
nation plants (e.lectrolysers need a Lot of
Solarimidialion , Me.an wind ')leedl
pure water}. [m time Germa.ny may evem ac­
kWh perSl'.jLmE! ,',,(.! 100n ::i oo,,e gmlllld ce1:u that parts of its hea.vy industry 00111.fd.
nElre pe- oot', /98a ls>el, me1Jes mivate to where the hydrogen is pro­

-=-■
2023 pe- lB:OITKIL 2023 duce<:I. �The im'l! ustri.aL map aLway-s follows
=-- 1 12.7 the energy ma.p," observes Simone Tugiia­
piena of Bruegei, a thiok-tamk.
Such schemes are vital. iJ Germany is to
avert a. dependency oo unpredictabJe au­
tlmriurtan regiLmes for energy, as iit did.
with Russia and gas. 10, avoid a repeat
with hydrogen, GermillRy Reeds to b uild.
true p.anners.h.ips,,� says: An.ru-eas Goidt!l:m.1.
of E:rfu.rt Urn.iversi.ty. If all goes to pfam aind
Europe's southem dynamo gets up to,
speed, -pl.a:ces like MalJorca wi.11 be buzzi.mg
not just because of its bea.ches and! oight­
Jife, but wirtlh the energy sparked by hyd. ro­
geo electro11ysers. ■
58 Busi ness The Economist N ovember 18th 2023

Climate change world's largest methane emitter) says it

will, for the first time, include the gas in its
A gulf between them? national climate plan. The EU has also just
agreed strict curbs on methane emissions
from fossil fuels, including imports. A
credible side deal involving many big oil

-
companies "would mean more than an
ambitiously worded diplomatic commu­
D U BAI

A climate summit in the world's oiliest region will be

dominated by three big fights nique" from official proceedings, reckons
Mr Krupp. Mr Al Jaber has been pres­

T H E U N ITED ARAB EMI RATES, venue for

COP28, the latest climate su mmit con­
vened by the United Nations, is a contro­
Cleaning bill
Worldwide clean-energy investment
sing big oil and gas firms hard in private to
commit to slash methane emissions.
The prospects for improved climate fi­
versial choice. Some 70,000 climate advo­ needs per year, $trn* nance are gloomier. Emerging economies
cates, diplomats and other hangers-on will ■ Energy efficiency & end use Grid and storage will complain about the failure of the rich
attend an event that begins on November ■ Low-emissions power ■ Clean-energy supply world to keep its promises. The $1oobn
30th in Dubai, one of the gleaming cities that was due to have been provided by 2020
built on wealth that fossil fuels have Advanced China Rest of world by rich countries has yet to turn up in full.
brought to the region. The fact that the economies At cop27 in Egypt last year a "loss and dam­
world's most important climate gathering 2 age" fund was agreed in principle, to com­
will be hosted by a leading oil producer has pensate vulnerable countries (which often
sparked outrage among environmental­ contribute the least emissions). After an
ists. That the summit's president, Sultan Al acrimonious process, negotiators recently
Jaber, runs ADNOC, the UAE's national oil agreed to give the World Bank a temporary
company (Noe), is proof, whisper conspi­ role in hosting this new facility but failed
racists, that the fix is in on behalf of Big Oil. 2022 26- 46- 2022 26- 46-
30 50 30 50
2022 26- 46-
30 50 to agree to fund it. The EU may annou nce
Yet from Abu Dhabi on the Persian Gulf, Source: International Energy Agency *2022 prices some funding for it at coP28.
the shipping route to global markets for Armond Cohen, head of CATF, an envi­
the world's greatest concentration of oil re­ ronmental group, calls $10obn "the tip of
serves, to Fujairah on the Gulf of Oman, an As methane is the main component of the iceberg" compared with the trillions of
entrepot abuzz with tankers carrying Rus­ natural gas, tackling emissions from the dollars needed annually by 2030 and be­
sian oil evading Western sanctions, comes energy industry would have a significant yond to transform energy systems, mostly
a sense of vulnerability to climate change. impact. And often the payback is quick in energy-hungry economies of the devel­
The region is short on water and home­ since methane neither vented nor flared oping world (see chart 1) . Carlos Pascual of
grown food. The rising heat of summer is during gas extraction can be sold, says S&P Global, a financial-data firm, insists
becoming inhumane. The cities built on Bjorn Sverdup of the Oil and Gas Climate "those trillions of dollars will not come
these desert sands are at risk from a rising Initiative (OGCI ) , a consortium of a dozen from the public sector, so we have to lever­
sea level. That the UAE shares the threat leading oil and gas firms. Its members have age the private sector." Rumours suggest
from increasing global temperatures reduced their methane emissions roughly that the UAE wants to play a catalytic role
makes the gathering no less fraught. by half since 2017, from a leakage rate of by launching a $25bn global climate-fi­
So low is trust among many delegates 0.3% of total marketed gas to 0.15% in 2022, nance fund seeded with its own oil riches.
that the talks may break down. That would using technologies that monitor leaks and The third arena of battle is the ugliest.
be alarming. A UN report analysing the na­ improve operations. They have pledged to Much blood will be spilt over the question
tional climate-action plans of the 198 par­ keep that level below 0.2%. of whether fossil fuels should be "phased
ties to the cop found them woefully inade­ Rumours suggest that many Noes are down" or "phased out" and whether the
quate for achieving the goal of limiting the resistant but Mr Sverdup reports that " mo­ use of "abatement" technologies (which

-
global temperature rise called for in the mentum is building for action at cop" even enable the capture and storage of GHG
Paris agreement of coP21 in 2015. In short, among those companies. As part of a deal emissions from energy use) should permit
the stakes are high. Amid the summit's struck this week with America, China (the the continued use of fossil fuels.
myriad technical and procedural goals, A deal is hard to reach because the le­
three big topics cry out for action. gitimate climate ambition of a rapid end to
The first is the task of cracking down on Fossil remains burning fossil fuel runs into the equally le­
emissions of methane, an overlooked Worldwide energy demand by scenario gitimate reality of fossil dependence (see
greenhouse gas (GHG). The second is the chart 2). As Mr Cohen observes, "You can
- Actual Announced policies
need to fill massive shortfalls in climate fi­ wish fossil fuels away, but they still com­
Announced net-zero pledges - Net-zero 2050
nance. And the third is an ideological bat­ prise 80% of world energy supply and are
tle over how and how fast to end the use of Coal Oil Natural gas growing." A new scenario from the I EA, a
fossil fuels. The outlook for meani ngful tonnes, trn b/d, m metres 3, trn global forecaster, for achieving net-zero
progress can be summed up as good, bad 6 1 20 6 emissions envisions a significant amount
and ugly, respectively. of fossil-fuel use even in 2050 (albeit at
The good news surrounds methane, a much lower levels than today) , making a

\
4 \ 80 4
GHG that is much shorter-lived in the at­ mockery of talk of rapid phase-out.
mosphere than carbon dioxide but causes 2 40 2 At least the direction of travel is clear if
at least a quarter of atmospheric warming. not the pace, with fossil fuels likely to peak
Fred Krupp, head of E DF, an environmental 0 0 0 and decline in coming decades as efficien­
group, insists that addressing methane "is 201 0 50 2010 50 201 0 50
cy, renewables and alternative clean fuels
the single fastest opportunity available to Source: International Energy Agency
take off. But when it comes to technologies
slow the rate of global warming". for abatement of emissions like carbon ►►
 The Economist N ovem ber 18th 2023 Business 59

► capture and sequestration ( ccs) , scepti­ technologies need a big push now. rigs to replace burning natural gas.
cism runs deep in some quarters, includ­ The UAE wants to play a leading role on Huge solar farms run by Masdar pro­
ing countries that want a fast end to fossil climate innovation, too. I t has been in­ duce the world's cheapest renewable ener­
fuel and which think this will be a "get-out­ vesting heavily in decarbonisation. A big gy. This Emirati clean-energy giant, in
of-jail-free card" for dirty energy. ccs project capable of removing G H GS which A DN 0C has a stake, is the world's
If negotiators can agree to allow well­ equivalent to the annual emissions of half second-biggest developer of clean energy.
monitored use of abatement, it would per­ a million petrol-powered cars was un­ It has committed to installing 100 giga­
mit a managed end to fossil-fuel use that veiled in September. ADN 0C recently watts of renewable-energy capacity global­
spares consumers painful supply shocks. brought forward its net-zero G H G target for ly by 2030, up from 15 gigawatts in 2021.
The I PCC, the U N's official climate-science its operations by five years to 2045. I t How did this green behemoth emerge in a
body, makes clear that technologies for stopped routine methane venting and flar­ land flush with oil riches? It was started
"negative" emissions could well be needed ing long before its peers. The company is back in 2006, before the solar revolution
at massive scale in the second half of the spending nearly $4bn on undersea cables took off and climate tech became fashion­
century, which means nascent abatement to ship carbon-free electricity to offshore able-by Mr Al Jaber. ■
Called to disorder

The very many ways in wh ich meetings sabotage the workplace

I N J A N UARY 1944 the Office of Strategic

Services, an American wartime in­
telligence agency, issued a short docu­
reflect instructions in a revised edition.
• Call hybrid meetings whenever pos­
sible to maximise inefficiency. If you are
if you hold a senior role. Nothing will
happen until you get there except for
some awkward interchanges about week­
ment. The "Simple Sabotage Field Man­ in the room together, initiate side con­ end plans. If discussions have started,
ual" offered advice on how ordinary versations to sow confusion among re­ ask for a recap. If you have co-conspira­
citizens in occupied Europe could dis­ mote attendees. tors, stagger arrival times so that you are
rupt the German war machine. • If you are on Zoom, unmute yourself constantly going back to the beginning.
To cause physical damage, the guide slowly or not at all. Pretend not to be able • Don't have an agenda. Just turn up
tells the "citizen-saboteur" to use every­ to hear anything even when you can. Look and look expectant. If there is pre-read­
day items like salt, nails, pebbles and baffled. Put on eight different pairs of ing, don't do it. Never agree on action
candles as weapons. This bit of the guide head phones. Shrug theatrically. Entire items or take minutes.
is a window into historical derring-do: geological eras can pass in this way. • If there is an agenda, take advantage
dried-up sponges that can expand to plug • Alternatively, dial into the meeting on of "the law of triviality", a rule of thumb
sewer systems, jammed locks on un­ your phone, unmute yourself and put the coined in 1957 by Cyril Northcote Parkin­
guarded buildings, various references to phone in your pocket. Go for a long walk. son. This refers to an imaginary commit­
emery dust. If this is done right, a single person can tee whose members are asked to decide
But the guide also outlines a less force tens of others to abandon a meeting. on proposals for a nuclear power plant
direct sort of sabotage, which is alarm­ • Always turn up to meetings a few and a new bike shed. Lacking expertise in
ingly familiar to anyone who works in an minutes late. This is especially important nuclear power, the committee nods the
office today. This form of obstruction plant through. Where everyone is an
involves behaviour that confuses, de­ authority, like the bike shed, endless
moralises and delays. Manager-sabo­ debate ensues. Whatever your version of
teurs should ensure that three people the bike shed is-coffee machines, Ox­
have to approve things when one would ford commas-bring it up early.
do. Employees should spread disturbing • If you are giving a presentation after
rumours. Everyone should "give lengthy someone else, take an absolute age to
and incomprehensible explanations find it. Faff around in the wrong folder.
when questioned". At some point a war­ Act as if you can't see the slide-show
time effort to hurt the Nazis appears to button until someone else points it out.
have been mistaken for a serious guide • Say things like "there are no bad
on how to run the modern workplace. ideas", so that everyone offers up their
No bit of the manual is more recog­ own bad ideas. At the end ask "does
nisable than its advice on how to turn anyone have anything else?" and wait for
meetings into weapons of mass dis­ as long as it takes for someone to fill the
traction. Hold them when there is more silence. Hopefully, it will be about the
important work to be done, it urges. Talk coffee machine and everything will kick
as often as possible and at immense off again. Conclude by saying that you
length. Reopen questions that have think it has been a very useful meeting
already been decided. Bring up irrelevant (il Bartleby but don't specify in what way.
issues whenever you can. If you are behaving like this inad­
It's hard not to read all this and pon­ In a new subscriber-only podcast series, vertently, listen to the latest episode of
der if your own organisation is being our Bartleby columnist searches for Boss Class, our management podcast, to
targeted by an enemy. And once that the secrets of being a good manager. find out how to run a meeting better. If
thought enters your mind, you also start Learn more at economi st.com/bossclass you are trying to cause disruption, your
to wonder whether all sorts of behaviour cover is blown.
60 Business The Economist N ovem ber 18th 2023

Ventu re ca pita l and expanded its cash pile from $25bn two
years ago to $34bn, equal to a quarter of its
Son rise, Son set interest-bearing debt. The initial public of­
fering of Arm, in which SoftBank retains a
90% stake, has also made its portfolio
more liquid.
Mr Son is now itching to start writing
cheques again, having declared SoftBank
ready to switch back into "offence mode".
SoftBank is ready to splurge again
The firm has done only 23 deals so far this
u IS EYES were very strong. Strong, year, compared with 125 last year and 251 in
H shining eyes." So Son Masayoshi ex­ 2021, according to PitchBook, a data pro­
plained his decision back in 2000 to invest vider. Mr Son has his eyes on AI, which he
$2om in a Chinese e-commerce startup predicts will "surpass the total intelligence
founded by Jack Ma. By the time SoftBank, of humankind by ten times in ten years".
Mr Son's investment group, finished sell­ The danger is that the investment giant
ing most of its stake in Alibaba earlier this is entering the market at its frothiest.
year, it had made $65bn from the gamble. Valuations of AI companies have rocketed
Less successful was the Japanese billion­ in recent months as investors have piled
aire's bet on Adam Neumann, the charis­ into competitive fundraising processes. As
matic founder of WeWork, an office-rental a result, SoftBank is also looking to carve Sport and media
firm that declared bankruptcy on Novem­ out novel investment opportunities for
ber 6th. SoftBank is estimated to have
torched around $14bn backing it.
itself, says Alex Clave 1, co-head of the
group's Vision Funds.
Netflix tees off
Mr Son's career has been a tale of He gives the example of GreenBox, a
soaring highs and crushing lows that have new joint venture between SoftBank and
followed the hype cycles in tech. A strategy Syrnbotic, a robotics company, that will de­
of doling out big cheques to buzzy firms velop and rent out automated warehouses.
The world 's biggest streamer takes
has served SoftBank well in the upswings In September SoftBank was also reported
a swing at live sport
but poorly in the downswings. Now, after a to be in discussions with OpenA I, the start­
bruising year, the indefatigable Mr Son is
jumping on tech's latest craze for all things
artificial intelligence (AI). It promises to be
up behind ChatGPT, and Jony Ive, a design­
er of the iPhone, to fu nd the development
of an AI device powered by Arm's chips.
F ROM KOREAN horror to Palestinian ro­
mance, N etflix covers every genre-al­
most. Among tens of thousands of hours of
a wild ride. Yet other elements of SoftBank's ap­ video on its servers, the world's largest
SoftBank, which began life as a software proach to investment will remain. "We streaming platform has long ignored the
distributor in Japan, reinvented itself amid usually put our eggs in fewer baskets," says category that draws bigger audiences to
the dotcom boom of the 1990s as an invest­ Mr Clavel, a pattern he expects to continue. television than anything else: live sport.
ment vehicle, buying stakes in hundreds of Mr Son's willingness to trust his gut is also That changed at 3pm on November 14th
startups, including Yahoo, a once-popular unlikely to change. in Las Vegas with the Netflix Cup, a celebri­
search engine. At the height of dotcom In a decade's time, when Mr Son's prog­ ty golf tournament which was streamed
mania, Mr Son was briefly the richest man nostications on AI have been tested, he will live to the company's 250m subscribers.
in the world. After the bubble burst, he re­ be 76, pointing to another question hang­ The unconventional show, featuring teams
oriented SoftBank around mobile internet, ing over SoftBank: succession. Mr Son, made up of professional golfers and For­
launching a telecoms business in Japan in who hopes the business will endure for at mula One racing drivers, was billed as a
2005, buying a majority stake in Sprint, an least 300 years, began talking publicly of one-off. It may turn out to be a warm-up for
American carrier, in 2013, and acquiring handing over the reins in 2015. A string of something bigger.
Arm, a British designer of smartphone potential successors have since left and Netflix says the purpose of the cup was

-
chips, in 2016. SoftBank continues to revolve around its to promote "Full Swing" and "Drive to Sur­
A year later Mr Son launched SoftBank's enigmatic founder. If it is to last, Mr Son vive", its successful docu-series about golf
Vision Fund, a $1oobn war chest bank­ must ready it for a future without him. ■ and racing. Lately the company has been
rolled in part by Saudi Arabia's sovereign­ active in a niche that it calls sports shoul­
wealth fund, and began pouring capital der-programming, commissioning factual
into loss-making startups. Despite some Poor vision series such as "Break Point" (following pro­
notable flops, including WeWork, by the Soft Ba n k Visi on Fu nd s*, cu m u lative net retu rn fessional tennis players) and "Unchained"
summer of 2021 the investment binge fro m investm ents si nce i n ception, $bn (tracking the Tour de France) , as well as
looked like a resounding triumph, with the 75 profiles of stars such as David Beckham.
Vision Fund and its successors having Showing sport itself has not tempted
60
made a cumulative gain of $66bn. Since the streaming giant. Rights are wildly ex­
then, a collapse in tech valuations has 45 pensive-America's National Football
flipped that into a $6bn loss (see chart) . 30
League ( N F L) earns more than $1obn a year
SoftBank is doubly exposed to higher from its media deals-as well as low mar­
interest rates, which decrease the value of 15 gin: the more value broadcasters get out of
startups whose profits lie mostly in the fu­ 0 the games, the more the leagues demand
ture and increase the cost of debt, of which when the rights come up for renewal. Last
-1 5
the investment group has plenty. In May year Ted Sarandos, Netflix's co-chief exec­
s&P Global, a rating agency, downgraded 201 8 1 9 20 21 22 23 utive, said the company was "not anti­
SoftBank's credit deeper into junk territory. *Vis ion Fund 1 , Vision Fu nd 2 sports, we're just pro-profit".
Sou rce: Com pany reports a nd LatAm Funds
To ease jittery investors, it has sold assets That wording left the door open to a dif- ►►
 The Economist N ovem ber 18th 2023 Business 61

► ferent approach-and the Netflix Cup sug­

gests one. By owning the tournament, Net­
flix will keep any upside. "If they create val­
ue, they will enjoy the fruits of that, as op­
posed to creating value for another sports
league who might turn around and ask
them for an increase," says Brandon Ross
of LightShed Partners, a research firm. Net­
flix has reportedly explored buying small
sporting outfits such as the World Surf
League on this basis.
The bigger question is whether the
company might one day bid for rights to
established leagues. Analysts increasingly
believe that it will, though they disagree on
when. "Netflix's next frontier has to be
more sports rights," says Michael Nathan­
son of MoffettNathanson, another re­
search company, who sees the golf cup as a
test of sport's ability to attract viewers to
the platform, and of Netflix's ability to exe­
cute live programming. He sees rights to
A l ifestyl e on th e ocea n waves
America's National Basketball Association,
ROM E
which come due for renewal in 2025, as a
The surprisingly b uoyant ma rket for l uxury sailing vessels
possible future target. Mr Ross thinks that
is too soon.
Netflix downplays all such talk. But it
has more reason than in the past to bid for
E tech barons and
V E N O L I GARC H S ,
other super-rich folk might have been
expected to reconsider spending hun­
billionaires dropped to 2,640 from 2,668
in 2022, according to Forbes magazine. A
yearning for the lonely sea and the sky
sports. Since its subscriber growth stalled dreds of millions of dollars on a su- could be another explanation. The pan­
early last year, leading to a plunge in its peryacht amid gathering global turmoil. demic first hit sales but has since fos­
share price, N etflix's executives have In 2020, as covid-19 spread, "I spent my tered what Fortune Business Insights
racked their brains for new ways to expand. days doing worst-case scenarios and terms an "increase in the desire for se­
Last year the company introduced adver­ drawing up the budgets to go with them," clusion and social distancing among
tising, which it had previously dismissed. say s Giovanna Vitelli, chairwoman of affluent individuals". Ms Vitelli detects a
This year it has cracked down on users Azimut Benetti, the world's biggest mak­ deeper psychological effect of the pan­
sharing passwords, which it once encour­ er of such craft. Then Western sanctions demic: "a realisation that life is short and
aged. Sport could help to attract new sub­ on Russia after its invasion of Ukraine that it can give us surprises".
scribers, particularly in foreign markets lost her a tenth of her customers. The latest designs reflect that intro­
where the streamer has struggled to break Rather than sinki ng, the makers of spective mood. There is less emphasis on
through. Cricket turbocharged the early superyachts are riding a wave. Recent ostentation and more on customising
growth of Disney+ in India-though it events, says Ms Vitelli, are "unexpected". vessels to suit the tastes and enthusi­
proved so expensive that Disney eventual­ Her firm's turnover has surged by around asms of owners and their families. Own­
ly dropped it. 20% since the start of 2022, as has that of ers are also considering their outsized
Netflix's newish ad business also makes the entire sector. A recent survey by environmental impact. Solar panels,
sport more attractive. Sport appeals to ad­ Fortune Business Insights, a market­ wind turbines and hybrid-propulsion
vertisers, who say that it engages audi­ research firm, found that "Most, if not systems are increasingly common on
ences like nothing else, while being reli­ all, yacht-brokerage firms are reporting luxury yachts.
ably brand-safe (some clients balk at show­ record sales at the world's leading ship­ Jeff Bezos, the boss of Amazon, may
ing off their products alongside, say, the yards." Future Market Insights, another be setting a new trend. He took delivery
bloody drama of "Squid Game" ) . Live ac­ market-researcher, expects the industry's in April of Ko ru, the world's largest sail­
tion means commercial breaks can't be annual revenues to more than double ing yacht at 127 metres. There is a draw­
skipped; fans are loth to slip out to put the over the next ten years, to $19. gbn. back to relying on wind power. Ko ru is
kettle on for fear of missing the action. And In the past surging sales have been followed everywhere by a diesel-engined
sport offers advertisers unmatched scale, the result of ever more would-be mari­ support vessel carrying extra supplies
with N F L games reliably drawing more ners joining the ranks of the mega-rich. and even a helicopter pad. At 75 metres it
than 20m concurrent viewers in America Yet this year the number of the world's almost qualifies as a mega-yacht, too.
on Sunday nights.
If Netflix were to take to the field it
could be game-changing. Sports-rights shrink. "The entire [sports] content world ing contest, was a technical fiasco. The
holders have cashed in following interest right now.. . is hoping that Netflix gets i n­ Netflix Cup again demonstrated that live
from deep-pocketed streamers such as Ap­ volved in bidding for sports rights," says television is tricky to pull off. Presenters
ple, Amazon and Google (which last year Mr Ross. ''And all of the traditional media struggled to explain the complicated for­
bought N F L rights for YouTube) . But they buyers are praying that Netflix doesn't." mat of the tournament, microphones mal­
are nervous that old-media bidders are Netflix, meanwhile, is simply praying functioned and within the show's first ten
tightening their belts. Disney (which owns that its live-streaming technology holds minutes an animal-rights protester burst
E S P N , a giant sports network) and Warner up. Its first live show, a comedy special onto the course, before being wrestled out
Bros Discovery are both aggressively eco­ with Chris Rock in March, went well. But in of shot. W hether or not Netflix can do
nomising as their legacy cable networks April a live episode of "Love is Blind", a dat- sport, it can certainly do drama. ■
62 Busi ness The Econom ist N ove m ber 18th 2023

Schumpeter I The trustbusters of tech

How does the man who defeated Microsoft view the Google a n ti- monopoly trial?
than insisting on exclusivity. Microsoft subsequently leapfrogged
I BM. Mr Boies' role in the I BM case drew the attention of the oo] 's
prosecutors, who recruited him years later to take the lead in their
anti-monopoly battle against Microsoft. The government's victory
in that case may have so distracted Microsoft that it helped Google
steal a march in the internet-search business .
Whether Google i s similarly hobbled i n the future will depend,
above all, on an issue that is at the crux of the oo] 's case. That is the
annual payments that Google provides to Apple, maker of the
iPhone, other smartphone-makers such as Samsung, who use Al­
phabet's Android operating system, and providers of browsers
such as Mozilla, to ensure it is their default search engine. The
amounts are staggering. During the trial it emerged that Google's
payments were as high as $26bn in 2021. The New York Times re­
ported that $18bn of that went to Apple. This week, an economist
testifying in Google's defence disclosed that Google pays Apple
36% of the revenues it earns from search advertising via Apple's
Safari browser, suggesting it generates advertising revenues of
$ 5obn from Safari alone. The DOJ argues that these payments pre­
vent competitors from challenging Google, and that because they
are generated from digital-advertising revenues that Google
shares with the recipients, the latter have less incentive to offer

F if you have forgotten that Google, owned by

O RG I V E YO U RS E L F
Alphabet, is on its third month in the dock during the biggest
anti-monopoly trial since America's Department of Justice ( DOJ )
competing search products. It likens the deals to Microsoft's prac­
tice in the 1990s of bunding its Internet Explorer browser with its
Windows operating system, making rival browsers such as Net­
won a conviction against Microsoft, another tech giant, a quarter scape harder to install. Mr Boies, who zeroed in on bundling in the
of a century ago. Though some in antitrust circles hoped it would Microsoft case, says it is not only harmful to competi tors. It hurts
be the "trial of the century", so far the proceedings, which are ex­ consumers, because it deprives them of choice.
pected to wrap up shortly, have had little of the S turm u nd D ra ng of Google rejects that claim. It says that default search engines
the historic Microsoft showdown. The excitement may increase can be changed with a couple of clicks. They are not sticky. For in­
when the verdict is announced next year. For now, no one can con­ stance, the top search globally on Microsoft's Bing, a rival, is
fidently predict the outcome because Amit Mehta, the judge, "Google", suggesting users willingly switch to their preferred plat­
keeps his cards close to his chest. But in the meantime, Schumpe­ form. Nor are they exclusive; Bing, too, pays Apple for space on Sa­
ter spoke to someone once lionised by Va n ity Fa ir, a magazine, as fari. Google argues that its default payments help lower the cost of
"The Man Who Ate Microsoft". How does David Boies, the govern­ phones and other devices to consumers. It says its success in
ment's lead trial lawyer in the Microsoft case, see the similarities search comes from innovation, not from an illegal monopoly.
and differences between the two antitrust battles? Will that narrative prevail? Mr Boies says an antitrust trial is
Mr Boies makes clear that he has not been present in the Dis­ part "morality play", in which the successful prosecutor should
trict of Columbia courtroom to witness the Google trial. At 82, he is seek to destroy the defendant's credibility. At the start of the
still busy, including serving as counsel on two pending cases Google trial, the oo] 's lead lawyer, Kenneth Dintzer, raised the
against Google (which suggests he may not be an impartial observ­ trustworthiness question, accusing Google of trying to conceal
er) . Yet he says media coverage of the trial is sufficient to form documents under attorney-client privilege and turning off the
some opinions, and two things stand out. First, like Microsoft, history function on group chats. But on the witness stand weeks
Google came to court with a history of innovation and consumer later, Sundar Pichai, Alphabet's boss, proved unflappable. He dem­
success, effectively saying "Trust us, we know what's best for con­ onstrated none of the brittle defensiveness B ill Gates, then the
sumers." Second, the D OJ may not have challenged that trustwor­ boss of Microsoft, had showed during his depositions.
thiness forcefully enough. "During the Microsoft case, even if you
were a casual observer, you were constantly confronted with at­ Search and destroy
tacks on Microsoft's credibility. I haven't seen that in the press," he So the verdict will come down to how Judge Mehta views the de­
says. He is not alone. Broadly, the feeling is that the D OJ has not yet fault payments. His decision may rest on whether he buys the
dealt Google a spectacular knockout blow. oo] 's argument that they foreclose competition, or Google's de­
Mr Boies has had some setbacks in an otherwise illustrious ca­ fence that they benefit consumers by improving the product. De­
reer, including representing The Weinstein Company, co-founded feat will cost both sides a lot. If Google loses few believe it would
by Harvey Weinstein, a former Hollywood producer jailed for rape. be broken up, but the status of default payments would be thrown
But when it comes to antitrust, he has played starring roles in two into doubt. If deprived of Google's cash, Apple might build a rival
trials that have helped shape the tech landscape for 50 years. He search engine. A loss for the D OJ would be yet another setback for
first led I BM's successful defence against an antitrust case in the the Eiden administration's efforts to move antitrust cases beyond
1960s. Though the personal-computer giant won, it was so rattled a focus on consumer welfare. It might try to console itself that a
by years of investigations, he says, that it gave Microsoft, then an loss would prompt Congress to write new laws to rein in big tech.
upstart, ca rte bla nche to sell its Windows software widely, rather But given the woeful state of bipartisanship, dream on. ■
 Fi nance & econom ics The Economist N ovem ber 18th 2023

Pe rson a l fi n a n ce The constant refrain of the asset- man­

agement industry-that past performance
How the young should invest is no guarantee of future returns-has
rarely been more apt. Should market re­
turns revert to longer-run averages, the dif­
ference for today's young i nvestors (de­
fined as under-4os) would be huge. Includ­
ing both the lacklustre years before the
1980s and the bu mper ones thereafter,
Markets have dealt them a bad hand. They could, however, be playing i t better
these long-run averages are 5% and 1.7% a

Y as well as everyone
O U N G I N V ESTO RS ,
starting to save, have no shortage of les­
sons to learn. The main ones are classics.
ised real returns of 6.3%-a vastly better re­
sult than the 0% of the preceding 80 years.
That golden age is now almost certainly
year for stocks and bonds respectively.
After 40 years of such returns, the real val­
ue of $1 i nvested in stocks would be $7.04,
Begin early to give the magic of compound­ over. It was brought about in the first place and in bonds $1. 9 6 . For those investing
ing time to work. Cut costs to stop that by globalisation, quiescent inflation and, across the 40 years to 2021, the equivalent
magic from being u ndone. Diversify. Do most of all, a long decline in i nterest rates . figures were $17.38 and $11. 5 2 .
not try to time the market unless it is your Each of these trends has now kicked into This c reates two sou rces of danger for
job to do so. Stick to your strategy even reverse. As a consequence, youngsters investors now starting out. The first is that
when prices plu mmet and the sky seems to must confront a more difficult set of in­ they look at recent history and conclude
be falling i n . Do not ruin it by chasing hot vestment choices-o n how much to save, markets are likely to contribute far more to
assets when the market is soaring, others how to make the most out of markets that their wealth than a longer view would sug­
are getting rich and you are getting j ealous. offer less and how to square their moral gest. A corollary is that they end up saving
To this time-worn list, add an altogeth­ values with the search for retu rns. So far, too little for retirement, assuming that in­
e r more dispiriting lesson specific to to­ many are choosing badly. vestment returns will make u p the rest.
day's youngsters: you will not enjoy any­ The second is even more demoralising:
thing l i ke the returns you r parents made. that years of unusually j uicy retu rns have
Even accounting for the global financial ➔ Also i n this section not merely given i nvestors unrealistically
crisis of 2007-09 , the fou r decades to 2021 high hopes, but have made it more l i kely
65 Lessons from i nflation-killers
were a golden age for investors . A b road in­ that low returns lie ahead.
dex of global shares posted an annualised 66 Buttonwood: Ray Dalio Antti I lmanen of AQ R , a hedge fun d , sets
real return of 7.4 %. Not only was this wel l out this case in "Investing Amid Low Ex­
67 Joe Biden's trade fa i l u re
above the figure of 4 . 3 % for the preceding pected Retu rns", a book published last
eight decades, but it was accompanied by a 67 What Al means for y our pay year. It is most easily understood by consi­
blistering ru n in the bond market. Over the dering the long decline in bond yields that
69 Free exch a nge: Green jobs
same period, global bonds posted annual- began in the 1980s. Since p rices move in- ►►
 -
64 Finance & economics The Economist N ovember 18th 2023

► versely to yields, this decline led to large posed to inflation and the opportunity cost
capital gains for bondholders-the source C ash is trash of missing out on returns elsewhere. The
of the high returns they enjoyed over this United States, Vanguard, retail investors' months following Vanguard's survey at the
period. Yet the closer yields came to zero, average asset allocation, 2022, % end of 2022 provide a case in point. Share
the less scope there was for capital gains in ■ Cash ■ Equity ■ Bonds ■ Other prices surged, making gains that those
the future. In recent years, and especially who had sold up would have missed. More
recent months, yields have climbed sharp­ Gen Z (born after 1996) broadly, the long-run real return on Trea­
ly, with the nominal ten-year American sury bills (short-term government debt
Treasury yield rising from 0.5% in 2020 to Millennials (1981-1996) yielding similar rates to cash) since 1900
4.5% today. This still leaves nowhere near has been only 0-4 % per year. In spite of
as much room for future capital gains as Gen X (1965-1980) central banks' rate rises, for cash held on
the close-to-16% yield of the early 198os. modern investment platforms the typical
The same logic applies to stocks, where Baby-boomers (1946-1964) return is even lower than that on bills.
dividend and earnings yields (the main Cash will struggle to maintain investors'
sources of equity returns) fell alongside in­ Silent generation and older(born in or before 1945) purchasing power, let alone increase it.
terest rates. Again, one result was the The second trap is the mirror image of
windfall valuation gains enjoyed by share­ I
0 25 so 75 1 00 the first: a reluctance to own bonds, the
holders. Also again, these gains came, in Source: Vanguard
other "safe" asset class after cash. They
essence, from bringing forward future re­ make u p just 5% of the typical Gen Z port­
turns-raising prices and thereby lowering folio, compared with 20% for baby-boom­
the yields later investors could expect from stocks over "safe" government bonds, has ers, and each generation is less likely to in­
dividend payouts and corporate profits. fallen to its lowest level in decades (see vest in them than the previous one. Com­
The cost was therefore more modest pros­ chart 1) . Without improbably high and sus­ bined with young investors' cash holdings,
pects for the next generation. tained earnings growth, the only possible this gives rise to a striking d ifference in the
As the prices of virtually every asset outcomes are a significant crash in prices ratio between the two asset classes in gen­
class fell last year, one silver lining ap­ or years of disappointing returns. erations' portfolios. Whereas baby-boom­
peared to be that the resulting rise in yields All this makes it unusually important ers hold more bonds than cash, the ratio
would improve these prospects. This is for young savers to make sensible invest­ between the two in the typical millennial's
true for the swathe of government bonds ment decisions. Faced with an unenviable portfolio is 1:4. For Gen Z it is 1:6.
where real yields moved from negative to set of market conditions, they have a stron­ Given the markets with which younger
positive. It is also true for investors in cor­ ger imperative than ever to make the most investors grew up, this may not be surpris­
porate bonds and other forms of debt, sub­ of what little is on offer. The good news is ing. For years after the global financial cri­
ject to the caveat that rising borrowing that today's youngsters have better access sis, government bonds across much of the
costs raise the risk of companies default­ to financial information, easy-to-use in­ rich world yielded little or even less than
ing. "If you can earn 12%, maybe 13%, on a vestment platforms and low-cost index nothing. Then, as interest rates shot up last
really good day in senior secured bank funds than any generation before them. year, they took losses far too great to be
debt, what else do you want to do in life?" The bad news is that too many are falling considered properly "safe" assets.
Steve Schwarzman, boss of Blackstone, a victim to traps that will crimp their already But even if disdain for bonds is under­
private-investment firm, recently asked. meagre expected returns. standable, it is not wise. They now offer
Even so, the long-term outlook for higher yields than in the 2010s. More im­
stocks, which have historically been the A little flush portant, they have a tendency to outpace
main source of investors' returns, remains The first trap-holding too much cash-is inflation that cash does not. The long-run
dim. Although prices dropped last year, an old one. Yet youngsters are particularly real return on American bonds since 190 0
they have spent most of this one staging a vulnerable. Analysis of 7m retail accounts has been 1.7% a year-not much compared
strong recovery. The result is a renewed by Vanguard, an asset-management giant, with equities, but a lot more than cash.
squeeze on earnings yields, and hence on at the end of 2022 found that younger gen­ The name of the third trap depends on
expected returns. For America's s&P 500 erations allocate more to cash than older who is describing it. To the asset-manage­

- -
index of large stocks, this squeeze is pain­ ones (see chart 2). The average portfolio for ment industry, it is "thematic investing".
fully tight. The equity risk premium, or the Generation Z (born after 1996) was 29% Less politely, it is the practice of drumming
expected reward for investing in risky cash, compared with baby-boomers' 19%. up business by selling customised pro- ►►
It could be that, at the end of a year d ur­
KWSF

ing which asset prices dropped across the

Worth life and limb? board, young investors were more likely to You weren't there
U nited States, equity risk premium* have taken shelter in cash. They may also U nited States, Vanguard, retail investors' median
Percentage points have been tempted by months of headlines equity allocation by tenure of account, 2022, %
8 about central bankers raising interest 90
rates-which, for those with longer memo­
6
ries, were less of a novelty. Andy Reed o f
80
4 Vanguard offers another possibility: that
2
youngsters changing jobs and rolling their
pension savings into a new account tend to 70
0 have their portfolios switched into cash as
-2 a default option. Then, through inertia or 60
forgetfulness, the vast majority never end
-4
up switching back to investments likely to 1 982 90 95 2000 05 10 15 22
1 999 2005 10 15 20 23 earn them more in the long run. Year account opened
Source: Bloomberg
*S&P S00's 12-month forward-earnings
yield minus ten-year Treasury yield
Whatever its motivation, young inves­ Source: Vanguard
tors' preference for cash leaves them ex-
 The Economist N ovem ber 18th 202 3 Finance & economics 65

► ducts in order to capture the latest market (see chart 3 on previous page) . The results Yet they may be getting ahead of them­
fad and flatter investors that they are can­ show that investors who opened accounts selves. Last year The Econo m is t calculated a
ny enough to beat the market. during a boom retain significantly higher measure of "inflation entrenchment". We
Today's specialised bets are largely equity allocations even decades later. The found that the disease, symptoms of which
placed via exchange-traded funds ( ETFS), median investor who started out in 1999, as first appeared in America, was infecting
which have seen their assets under man­ the dotcom bubble swelled, still held 86% the whole rich world. We have repeated the
agement soar to more than $1otrn globally. of their portfolio in stocks in 2022. For analysis, looking at core inflation, unit la­
There are ETFS betting on volatility, canna­ those who began in 2004, when memories bour costs, "inflation dispersion", infla­
bis stocks and against the positions taken of the bubble bursting were still fresh, the tion expectations and Google-search be­
by Jim Cramer, an American television per­ equivalent figure was just 72%. haviour. We rank ten countries on each in­
sonality. More respectably, there are those Therefore it is very possible today's dicator, then combine the rankings to form
seeking to profit from mega-themes that young investors are choosing strategies an "inflation-entrenchment" score.
might actually drive returns, such as age­ they will follow for decades to come. Mr Il­ Overall, the data show that inflation is
ing populations and artificial intelligence. manen's treatise on low expected returns entrenched, maybe more so than in 2022.
An enormous subcategory comprises strat­ opens with the "serenity prayer", which The country with the worst score then,
egies investing according to environmen­ asks for "the serenity to accept the things I Canada, would have been only third-worst
tal, social and governance (ESG) factors. cannot change, the courage to change the now. Things are not looking good in the
Niche strategies are nothing new, and things I can, and the wisdom to know the Anglosphere, even after recent improve­
nor are their deficiencies. Investors who difference". It might be the best investment ments. But there are bright spots, such as
use them face more volatility, less liquidity advice out there. ■ Italy and Spain. In Japan and South Korea
and chunky fees. Compared with those fo­ the war might be nearly over. What can
cused on the overall market, they take a strugglers learn from the inflation-killers?
greater risk that fashions will change. Even Price rises Start with the problem countries. In
those who pick sensible themes are com­ Australia, our worst performer, the jobs
peting with professional money managers. Keep fighting market is on fire. Over the past year labour
However the ease with which ETFS can costs, measured by how much employers
be customised, advertised and sold with a pay workers to produce a unit of output,
few taps on a phone screen is something have risen by a chunky 7.1%-faster than in
that previous generations of investors did any other country sampled. Nor does any­
SAN F R A N C I S CO
not have to reckon with. So is the appeal to where else have more "inflation disper­
Lessons from countries that are
morality accompanying their marketing. sion", which we define as the share of con­
winning their battle with inflation
ESG vehicles are presented to youngsters as
the ethically neutral option. If there are in­
vestments that will save society and the
C the TH E nightmare be over? Across
OU LD
O EC D club of rich countries, con­
sumer prices across the economy that are
rising by more than 2% year on year.
Other Anglophone countries have dif­
planet while growing your savings at the sumer-price inflation fell from a peak of ferent problems. Data from researchers at
same time, what kind of monster would 10.7% in October 2022 to 6.2% in Septem­ the Federal Reserve Bank of Cleveland,
buy the ordinary, dirty kind? ber. The latest data from America and Brit­ Morning Consult, a data firm, and Raphael
This both overstates the difference be­ ain offer more encouragement. And wage Schoenle of Brandeis University provide a
tween ESG and "normal" funds, and papers growth is slowing. As a consequence, share cross-country gauge of what people expect

-
over their impact on costs and returns. Ac­ prices are rising. Investors hope that the to happen with prices. Canadians think
cording to a recent study by the Harvard world has turned a corner, and that central that consumer prices will rise by 5.7% over
Business School, funds investing along bankers will soon cut interest rates. the next year, the most of any country in
ESG criteria charged substantially higher our sample. Canadians are also googling
fees than the non-ESG kind. Moreover, the terms related to inflation most often.
ESG funds had 68% of their assets invested S ti l l u p Down Under America does not do very badly on any
in exactly the same holdings as the non­ Se lected cou ntries, Q3 2023 or latest measure. Equally, it does not do very well.
ESG ones, despite charging higher fees Inflation's stickiness may reflect the
across their portfolios. Such funds also Ran kin g* Core inflation t Inflation fact that fiscal stimulus across Anglo­

-
shun "dirty" assets, including fossil-fuel Out of ten % i nc rease on ex p ectations* phone countries in 2020-21 was about 40%
co untries a year earlier %
miners, whose profits are likely to generate more generous than in other rich places. It
higher investment yields if this shunning
forces down their prices.
Australia 1111 at■ was also more focused on handouts such
as stimulus cheques than on measures to

-
2 Brita in 3 .0
Next to the vast difference between the keep businesses alive, which may have fur­
investment prospects of today's young­ 3 Germany 1111 2.4 ther stoked demand. Indeed, a new paper
sters and those of their parents, the bene­ 4= Can ada 3.7 a• by Robert Barro of Harvard University and
fits to be gained by avoiding these traps 4= U n ited States at■• Francesco Bianchi of Johns Hopkins Uni­
may seem small. In fact, it is precisely be­
cause markets look so unappealing that 6 France 3.3 ■s versity finds evidence for a link between
fiscal expansion during the covid-19 pan­
young investors must harvest returns. 7= Ita ly 111B 3.9 demic and subsequent inflation.
Meanwhile, the investment habits they are
forming may well last for some time. Van­
7= Spain 11111 3 .9 Monetary policy is another factor at
work. When covid struck, central banks in
9 South Korea 3.3 3.1
guard's Mr Reed points to evidence that in­ America, Australia, Britain and Canada re­
vestors' early experiences of markets shape 10 J apa n 2.8 1 .5 duced interest rates by one percentage
their allocations over many years. *Th ree i nd icators not shown : Google-sea rch behavio ur, i nflation point on average, twice as big a cut as in
Ordering the portfolios of Vanguard's d ispersion a nd u n it labour costs tco nsumer prices. Excl udes other countries in the rich world. This ex­
retail investors by the year their accounts energy a nd food *over the next 12 months tra stimulus may have pushed up inflation.
Sou rces: Federa l Reserve Ban k of Cleveland; G oogle Trends;
were opened, his team has calculated the Morn ing Consu lt; OECD; Raphael Schoenle; The Economist
In the past year or so English-speaking
median equity allocation for each vintage countries have also received lots of mi- ►►
66 Fina nce & eco n om ics The Eco n o m ist N ove m ber 18th 2023

► grants, which in the short term can be in­ countries had lived with low inflation for sharp last year in Italy and Spain as in other
flationary, because new arrivals compete so long that it may have seemed a natural countries, which may have prevented peo­
for housing, driving up rents. Estimates by state of affairs. Therefore, following a jump ple from anticipating further inflation.
Goldman Sachs, a bank, imply that Austra­ in inflation in 2021-22, behaviour may have France, with a perkier economy, is
lia's current annualised net-migration rate shifted in a disinflationary direction more somewhere between the Anglosphere and
of 500,000 people is raising inflation by quickly. By contrast, in places like B ritain, Asia. Germany is a different story. Once, its
around half a percentage point. which experienced inflation surges in workers were known for their pay re­
So why are countries elsewhere doing 2008, 2011 and 2017, people may have devel­ straint. Now, with an uber-tight jobs mar­
better? Japanese people expect prices to oped a more inflationary mindset. ket, unit labour costs are rising by over 7%
rise by just 1. 5% over the next year; South In Europe inflation expectations have a year. Price dispersion is also unusually
Koreans have better things to do online fallen a long way from their peak. The pic­ high. In what will be a source of satisfac­
than to search for information about infla­ ture is particularly rosy in parts of the con­ tion in many European capitals, German
tion. Recent history could play a role in ex­ tinent. Owing to a combination of policy economists are increasingly looking at
plaining this. Before covid, rich Asian and luck, energy-price rises were not as southern European countri es with envy. ■

Ray Dalio is a monster, s uggests a new book. Is it fa ir?

T H E TOM E opens with Ray Dalio laying

into an employee he apparently knew
to be pregnant. He calls her an "idiot"
while, but the rise of h igh-frequency
traders and quantitative funds, which
often follow market "momentum", eroded
that there was no way of modelling histo­
ry since models could not account for the
"caprices of decision-makers". Mr Dalio
over and over, until she runs from the his edge. Returns for B ridgewater's flag­ began shouting at Mr Ferguson, who
room sobbing. The founde r of B ridgewa­ ship "Pure Alpha" fund have been pretty soon left. Mr Copeland writes that M r
ter Associates, the world's largest hedge paltry for the past 10 or 15 years. Dalio then sent round a poll asking who
fund, was supposedly "delighted". His The conclusions of the two intertwine: won the debate (Mr Dalio triumphed).
"probing" of this woman was evidence of the cult of Bridgewater is pointless. It is one of many anecdotes that are
his commitment to "truth-seeking" at B ridgewater's employees have time to supposed to reveal that Mr Dalio is un­
any cost. The meltdown, which had been waste on nonsense because the investing principled. Far from listening to un­
recorded, was uploaded to a library of process is simple, really. Mr Dalio might filtered criticism he uses his power to
fi rm meetings. He had it edited into a have been a gifted investor-since 1991 he silence others. But apparently M r Dalio
clip to be shown to future employees. has earned $58bn for those who have later solicited advice asking whether he
This is just the first of many damag­ bought into his funds-but his efforts to had behaved inappropriately. His em­
ing titbits in "The Fund", a new book codify investment rules and culture were a ployees implored him not to invite peo­
about Mr Dalio by Rob Copeland, a re­ waste of time. His legacy will fade. ple to B ridgewater just to shout at them­
porter at the New York Times. The book's Mr Copeland's deep reporting un­ advice to which he is said to have lis­
narrative builds to two points. One is that earthed damning tales, but they seem to tened. Mr Dalio's radical transparency
Mr Dalio's "principles", a philosophy he have been told so as to place Mr Dalio in might be strange and misguided, but
described as being centred on " radical the worst possible light. Take, for example, perhaps he is not a hypocrite.
transparency", are really little more than a passage where M r Dalio invites Niall The book's arguments about Mr Da­
time-wasting tools which he uses to Ferguson, a celebrated historian, to lio's investment process are harder still
bully employees. The system requires B ridgewater. M r Dalio supplied Mr Fergu­ to swallow. Macro funds that follow
meetings to be recorded, for employees son with a copy of his book, which offers a trends are a dime a dozen, and few come
to rank one another and for them to sweeping theory of economic history and close to touching Bridgewater's record.
upload complaints onto a platform. This a model of "the economic machine" -only As for the erosion of his edge, the earliest
is supposed to foster an " ideas meritocra­ for Mr Ferguson to tell the assembled staff momentum funds were established in
cy" but instead leads, at best, to petty the 1980s, before B ridgewater set up its
gripes about how the peas in the cafeteria first funds. They grew in the 1990s and
are too ''wrinkled" and, at worst, to a 2000s, when his edge was as sharp as
culture of fear. Mr Dalio is supposed to ever. How M r Dalio achieved what he did
have manipulated this system so that his is something of a mystery. Perhaps some
opinion always mattered most. of the magic could have been codified or
The second is that there is "no secret" captured. It was worth trying, anyway.
to Bridgewater's success. Mr Dalio's Mr Dalio dismisses M r Copeland's
hundreds of research staff write reports book out of hand. He has written that it is
he does not even read. M r Copeland "another one of those sensational and
claims M r Dalio made all the investing inaccurate tabloid books written to sell
decisions himself, or with some input books to people who like gossip". The
from lieutenants. Far from having a hagiography of Mr Dalio already exists:
codified set of rules, as he tells clients, he he penned his own tale in 2017. M r Cope­
uses hunches and simple "if then" state­ land seems to have written its foil, which
ments such as: if interest rates fall in a can find only the ill in Bridgewater's
country then you should sell its cur­ founder. The book is worth a read-but
rency. These worked, the story goes, for a only with that in mind.
 The Economist N ovem ber 18th 2023 F i n a nce & economics 67

I nternational com m erce In the wake of America's retreat, data lo­ At the same time as America is with­
calisation may follow. I n d ia and I ndonesia d rawing from multilateral deals, China is
Indo-Pacific Empty recently passed p rivacy laws without strict throwing its hat into the ring. The Asian
localisation requirements. That was i n no superpower has little chance of joining the
Frameworl< small part due to American advocacy, says Comprehensive and Progressive Trans-Pa­
Nigel Cory of the I nformation Technology cific Partnership, which succeeded the
and I n novation Foundation , a think-tank. TPP. But the Regional Comprehensive Eco­
S I N G APO RE
Without such pressure, cou ntries will be nomic Partnership, a 14-member trade deal
more l ikely to take a nationalistic path. that came i nto effect last year, will bind
Joe Biden's trade failure benefits China
American policy in Asia is now focused Asian economies more tightly to it.

A T T H E AN N UA L Asia-Pacific Economic
Co-operation summit in San Francis­
co, all eyes were on the meeti ng between Xi
on l imited bilateral deals that support Mr
Biden's in dustrial policy, which seeks to
boost domestic manufacturing. The visit
I n the contest between America and
China for influence over Asian trade, only
one side is making progress. Few Asian
Jinping and Joe Biden. But when it comes by Joko Widodo, I n donesia's president, to governments started out with great hopes
to competition between the two great pow­ Washington this week is an early step in for the I PE F, which even its most ard ent
ers in Asia, the most consequential deci­ negotiations over minerals for batteries supporters conceded was no equivalent to
sions were to be made-or rather not (I ndonesia accounts for almost half the the formal trad e deals once pu rsued by
made-behind the scenes. nickel that was mined globally last year) . American negotiators. Yet the agreement,
Trad e negotiators had hoped the sum­ And the government of the Philippines is whenever it comes, will now fall short of
mit would yield an announcement on the pushing for a similar agreement. the low bar it faced. ■
Ind a-Pacific Economic Framework ( I P E F) ,
America's offering on trade to 13 regional
economies, intended as its main weapon Tech n ological progress
in the battle for econom ic influence in
Asia. Instead, a decision by the Biden ad­ What does AI mean for your pay?
min istration to halt discussions on digital
trade has frozen an important part of an al­
ready limited agreement. There will be no
announcement on the trade portion of
I P E F, one of the deal's four pillars. With
American elections now j ust a year away,
A dispatch from the front line of an economic revolution
fu rther p rogress will be d ifficult.
Digital trade is a large and growing cate­
gory, covering online services, cross-bor­
der flows of data and e-commerce. I n 2017,
A ROU N D A D ECADE ago Carl Benedikt
Frey and Michael Osborne, two econo­
mists, publ ished a paper that went viral. It
Yet at the same time, economists have
become more opti mistic. Recent studies
have fou nd that fewer workers are exposed
when Donald Trump withdrew from the argued that 47% of American jobs were at to automation than Messrs Frey and Os­
Trans-Pacific Partn ership (TP P)-a more risk of automation. A deluge of research borne supposed (see chart 1 on next page) .
comprehensive agreement than I P EF­ followed, which suggested the poorest and In 2019 Michael Webb, then of Stanford
Asian cou ntries had little hope of greater least-ed ucated workers were most vul ner­ University, showed that AI patents are
access to American markets . Support for able to the coming revolution. Such fears more targeted at skilled jobs than those for
opening up digital commerce was one of have intensified as artificial-intelligence software and robots . New A I seems better
America's last claims to international (AI ) capabilities have leapt ahead. On No­ at coding and c reativity than anything in
openness. Indeed, the USMCA agreement vember 2nd, speaking after Britain's AI the physical worl d , suggesting low-sldlled
with Canada and Mexico, signed by Mr summit, Elon Musk predicted : "There will jobs may be insu lated. In March Shakked
Trum p in 2018, p rohibited both customs on come a point where no j ob is needed." Noy and Whitney Zhang, both of the Mas- ►►
digital products and data localisation (the
practice of forci ng companies to store data
in the country where it is collected) .
But concerns about the sway of Ameri­
ca's tech giants have made Democrats , in­
cluding Elizabeth Warren , a left-wing sen­
ator, sceptical about looser digital-trade
rules. Those on both sides of the aisle want
to ensure they are not restricted when reg­
ulating artificial i ntelligence (AI) , says Sam
Lowe of Flint Global, a consultancy. Mr Bi­
den's change of heart reflects these shifts.
For l iberal economies in the region, this
is only the latest d isappointment. In 2020
Chile, New Zealand and Singapore signed a
pact covering issues from paperless trade
certificati o n to co-operation on future ar­
eas of interest, such as AI and fintech. Just
as the TPP grew out of a deal between N ew
Zealand and Singapore i n 2000, partici­
pants hoped to tempt America i nto b roader
agreements by getting the ball rolling
themselves. That now looks unlikely.
 -
68 Fina nce & eco n om ics The Eco n o m ist N ove m ber 18th 2023

► sachusetts Institute of Technology (M I T) , and the ability to develop a relationship)

published an experiment showing that J obmageddon matter much more in sales than in custom­
ChatG PT boosted the productivity when U n ited States, estim ated % of jobs er service, where the important thing is
writing of lower-ability workers more than exposed to a utomation by A l * getting the right answer quickly.
that of higher-ability workers. A I might even create sales superstars.
0 10 20 30 40 50
Although A I is still in its infancy, some Skylar Werneth has been in the industry
Frey and Osborne
industries have been eager adopters. A (201 3) for eight years and is now at Nooks, a start­
close look at three of these-translation, up that automates sales. Software analyses
customer service and sales-is broadly Manyika et a l. (2017) his calls, identifying which tactics work
supportive of the optimistic shift among Hawksworth a nd best. It also helps him call many people at
economists, though not without complica­ Berri man (201 8) once. Most customers do not pick up; diall­
tions. In translation, perhaps the first in­ M u ro, Maxi m and ing in parallel ensures Mr Werneth is talk­
dustry to be heavily affected by language Whiton (201 9) ing more and listening to dial-tones less.
modelling, workers have become copy edi­ Agrawa l, Gans and He reckons the tools Nooks offers makes
tors, tidying a first draft undertaken by AI, Goldfarb (2020) him three times more productive, earning
which eases the path of newbies into the Goldman Sachs him a solid amount more than before.
industry. In customer service, AI has resea rch (2023) What does this mean for labour mar­
helped raise the performance of stragglers. Elou ndou et al. kets? Sales representatives are given bo­
(2023)
But in sales, top performers use the tech to nuses based on the number of clients they
*Central estimate when range is given
find leads and take notes, pulling away Sou rces: Capital Econom ics; academic papers
bring in over a threshold. When productiv­
from their peers. Will AI boost the incomes ity grows across a firm, bosses tend to raise
of superstars more than those of stragglers, the threshold. Because not everyone is able
much as the internet revolution did? Or Customer service offers more difficult to meet it, low performers are pushed out
will it be a "great equaliser", raising the in­ terrai n for AI. Firms have been trying to of the workforce, since demand for pro­
comes of the worst off but not those of high automate it for years. Thus far they have ducts does not grow in parallel with sales
flyers? The answer may depend on the type mostly just annoyed customers. Who performance, as would be necessary to jus­
of employment in question. doesn't try to game the chatbot in order to ti fy retaining them. The result is a shrink­
speak to an actual human? The American ing set of highly productive salespeople. At
Roll the dice Customer Satisfaction I ndex has been fall­ least, given high turnover in the industry,
Roland Hall has been translating board ing since 2018, and workers also appear fed the shift to this state of affairs might mean
games and marketing material from up. Turnover in American "contact cen­ hiring fewer people, not mass firings.
French to E nglish for 27 years. He recalls tres" hit a record high of 38% last year.
that even in the 1990s software was used to But there may be consolation: the work­ Al caramba
render specific words from one language force is becoming more welcoming to the If AI eventually becomes superhuman, as
to another. Today the tools are more ad­ low-skilled. Erik Brynjolfsson of Stanford, many attendees at Britain's recent summit
vanced, meaning the types of job available as well as Danielle Li and Lindsey Ray­ believed possible, all bets are off. Even if AI
have split in two. One type includes texts mond of M I T, studied the roll-out of an AI advances in a less epochal fashion, labour
where fluency is less important. An exam­ assistant to more than 5,000 customer­ markets will see profound change. A study
ple might be a several-thousand-page support agents earlier this year. The assis­ by Xiang Hui and Oren Reshef of Washing­
manual for an aircraft, says Mr Hall, where tant offered real-time suggestions to work­ ton University in St Louis and Luofeng
readers simply need to know "what part to ers. This lifted the productivity of the least­ Zhou of New York University, published in
look for" and "do you turn it left or right". skilled agents by 35%, while the most­ August, found that earnings for writing,
The other type includes literary transla­ skilled ones saw little change. proofreading and copy-editing on Upwork,
tions, where the finest details matter. It would be reasonable to assume that a freelancing platform, fell by 5% after
The first type has been most affected by the impact on salespeople would be fairly ChatG PT was launched last November,
AI. Many workers now edit translations similar to the one on customer-service compared with roles less affected by AL A
that have gone through a machine similar workers. But that is not the case. Marc survey of 400 call-centre managers by Bal­

-
to that underlying Google's translation ser­ Bernstein of Balto, a firm that creates A I to found that the share using at least some
vice. They are paid at a steep discount per software for both sales teams and call cen­ AI grew from 59% in April to 90% by Octo­
word, but more work is available. Lucia Ra­ tres, notes that "style points" (ie, charisma ber. Mr Bernstein thinks that although "to­
tikova, a Slovakian who specialises in con­ day AI is not capable of replacing a human
struction and legal translations, reckons [in call centres] ... in ten years, quite possi­
that such work now makes up more than P hone up bly five, it will be there."
half of listings on job sites, up from a tenth U n ited States, rea l hourly wages, Jan 2007 = 1 00 The fl ipside of A I disruption is new jobs
a few years ago. A larger pool of businesses, 1 30 elsewhere. Modelling in 2019 by Daron
many eager to expand into global markets, Acemoglu of M I T and Pascual Restrepo of
are taking advantage of the drop in price. Cal l-centre worker Boston University suggests that the impact
,/ 1 20
I f machines are able to do what humans of automation is worst for workers when
do more cheaply, employers will turn to 1 10 productivity gains are small. Such "so-so"
computers. But as prices fall, overall de­ automation creates little surplus wealth to
mand for a service may rise, and possibly 1 00 increase the demand for workers in other
by enough to offset the increased use of parts of the economy. Our investigation of
machines. There is no law to determine 90 industries at the front line of AI change
which effect will dominate. So far in Amer­ suggests that the new tech has a shot at
ica the number of translators has grown, 80 leading to much greater efficiency. The pic­
yet their real wages have fallen slightly (see I I
2007 09
I I I
11
I I I
13
I I
15
I
17
I I
19
I I
21
I I •
23
ture on inequality remains murkier. Better
chart 2)-probably because the profession Sou rce: Bureau of Labour Statistics
to be a superstar than a straggler, then,
now requires rather less skill. even i f only to be safe. ■
 The Economist N ovem ber 18th 2023 F i n a nce & economics 69

Free exchange I Tough climate

Politicia ns a re overpromising when it comes to g reen jobs

at the U n iversity of Oxford, a British u n iversity; Stanley Whitting­
ham of ExxonMobil, an American oil fi r m ; and Yoshino Akira of
Asahi Kasei, a Japanese chemical firm. Yet none of these cou ntries
dominates p roduction of such batteries. China does. Research
produces its own set of externalities (positive ones) , since knowl­
edge tends to be shared. As companies would rather not give com­
petitors a leg-up, that makes it u ndersupplied .
The most efficient climate-change policy-taxing carbon and
subsidising research-is unselfish. As Dani Rod rik of Harvard
University, an advocate of industrial policy, has noted , not only is
the social return from investing in green research higher than the
private one, so is the international return higher than the national
one-meaning that both companies and governments tend to un­
derinvest in it. The greenest policies may therefore not c reate
many j obs. By contrast, greenish policies that create jobs may at
least have the merit of making climate action acceptable to voters
leery of spending on things that benefi t other countries.
But as the rich world proceeds along this path, difficulties will
emerge. Economists have traditionally criticised industrial policy
on the grounds that govern ments are bad at it. Their ineptitude
comes in two forms. First, pol iticians struggle to " pick winners".
They lack the abil ity to identify which tech will win out. Although
" W H E N I TH I N K cli mate, I think jobs-good-payi ng, union in the late 2000s the American govern ment offered a loan guaran­
jobs," proclaims Joe Eiden, America's president. Ursula tee to Tesla, which eventually emerged as a successful electric-ve­
von der Leyen, the head of the European Commission, says that hicle maker, it also offered support to Solyndra, a solar-power fi rm
her "Green Deal" offers a " healthy planet" for future generations, that went bankrupt. This lack of knowledge among politicians
as well as "decent jobs and a solemn p romise to leave no one be­ contributes to the second problem: rent-seeking. Indu strial policy
hind". Sir Kei r Starmer, Britain's probable next prime minister, offers a way for companies to capture public fu nds via lobbying.
p romises to back "a new energy company that will harness clean Govern m ents fail to cut off weak businesses, since doing so means
British power for good B ritish jobs". The state will intervene. The admitting that they wasted public money in the fi rst place.
planet will be saved. Jobs will come. And they will be good . The new economics of ind ustrial pol icy, as put forward by Reka
Politicians across the rich world agree that industrial policy­ Juhasz of the University of British Columbia, Nathan Lane of the
wheezes which aim to alter the structu re of the economy by boost­ Univers ity of Oxford and Mr Rodrik in a paper this year, rests on
ing particu lar sectors-deserves to make a comeback. Just about the idea that such problems can either be solved or have been ex­
all agree that it should focus on cli mate change. But is there actu­ aggerated. A d isciplined government that cuts off bad investment
ally any logic to combining the two? Indu strial policy seeks pros­ can avoid waste. Clarity and transparency when it comes to goals
perity in the form of economic growth and jobs; climate policy will help pol iticians jettison failing companies.
seeks lower emissions and the p revention of global warmi ng.
Marrying two aims often means neither is done well. As politi­ Striking a blow
cians pour tril l ions of dollars into green industrial policy, they Maybe. But this is where cli mate and i ndustrial policy become un­
will increasi ngly have to choose between the two objectives. comfortable bedfellows. A firm could deliver good jobs while not
The argument i n favour of any climate-change measure starts being any greener than its competitors. Is that a failure or a suc­
with externalities (those costs or benefits not borne by producers) . cess? Is an investment that cuts emissions while displacing work­
There is a missing market for pollution, since emitting green­ ers a worthwhile one? Moreover, it is unclear whether, say, guaran­
house gas is free. It is thus oversupplied, despite the fact that it teeing a loan to a loss-making clean-tech firm, such as the bail-out
hu rts others. One way to tackle this is by putting a p rice on carbon, for Siemens Gamesa, a German wind-turbine maker, which was
as many countries are doing. Yet doing only this might encou rage confirmed on November 14 th, is throwing good money after bad or
i nvestment in malting dirty technologies more efficient, and as a i nvesting i n the climate. Recent strikes by American carmakers
result allow fossil fuels to extend their lead over clean tech. were partly motivated by the idea that manufacturing cleaner
Hence the need to combine carbon p rices with subsidies for electric vehicles will mean fewer jobs than assembling thei r pet­
clean-tech research. I n a paper published in 2016, Daron Acemoglu rol-powered cou nterparts-a difficult situation for a government
of the Massachusetts I nstitute of Technology and colleagues argue committed to green industrial policy. Such policy seeks to im­
that, under such a regime, subsidies would do most of the work i n p rove i nternational competitiveness, deliver high-paying work,
redirecting technological p rogress towards clean energy. Only make the economy grow, revitalise poorer regions and cut emis­
after alternatives to polluting tech had become better and cheaper sions at the same time. I n reality, these goals are often opposed.
would carbon pricing take over by encouraging their uptake. The more ambitious industrial policy becomes, the more diffi­
Would such a regime, prudent though it m ay be, satisfy the po­ cult it will be for politicians to exercise the control advocates say is
litical desire for green jobs? Consider the lithium-ion battery, required. Many governments, including America's , also want in­
which powers electric vehicles. I n 2019 the chemistry Nobel prize dustrial policy to bolster national security. Taken together, such
went to three scientists for developing it: John Goodenough , then aims risk an almighty mess. ■
 A key pi lla r i n CO P28's vision for
battli ng cli mate cha nge pla ces
respo nsibi lities on the en ergy secto r

A h e a d o f t h e C O P2 8 s u m m i t i n t h e UAE a t t h e e n d of s i m u lt a n e o u s ly d e c a r b o n i s i n g t o d ay's e n e rg y system

t h i s yea r, t h e re i s u n i ve rs a l c o n s e n s u s o n the t a rg e t . s o o u r e c o n o m i e s can c o n t i n u e to f u n c t i o n . T h i s e n ta i ls
O v e r t h e n ext s e v e n yea rs, n a t i o n s m u s t u n it e t o c u t a la rge role fo r t h e e n e rgy i n d ust ry, w h i c h n o t o n ly
e m issi o n s b y a lm ost h a lf-22 g i g a t o n s , o r 43% f r o m d o m i n ates t h e c u rrent system b u t a ls o h a s t h e v i t a l
t o d a y ' s levels-to l i m i t g l o b a l t e m p e ra t u re i n creases c o m p o nents to create a new one.
to 1 . 5 ° C a b ove p re - i n d u st r i a l n o r m s . The q u esti o n i s :
h o w t o a c h i eve s u c h ra p i d p ro g ress? A s C O P2 8 a p p ro a c h e s , d i scover h o w t h e e n e rg y
s e c t o r ca n t a ke a c e n t r a l ro le i n fast-tra c k i n g
Fo r the C O P2 8 o rg a n i se rs , the a n swer lies i n d e ca r b o n i s a t i o n a n d s h a p i n g a s u sta i n a b le f u t u re .
t w i n - t r a c k i n g : i n vest i n g i n t o m o r ro w 's w o r l d o f D o n't m i ss t h e c o m p lete sto ry: t h i s i s a j o u r n e y t h a t
elect r i f i ca t i o n , re n ewa b le s a n d n e w g re e n f u e ls w h i le d e m a n d s o u r atte n t i o n .

COP28
UAE
 Science & tech nology The Economist November 18th 2023 71

Payi ng for science "The main thing I'd like to see is far
more diversity in how we fund and organ­
Putting science under the microscope ise research," says Dr Nielsen. There are
plenty of ideas around. Some researchers
advocate giving out research grants via lot­
teries, or expanding the system of compet­
itive scientific or technological prizes.
Others prefer to found entirely new types
I f scientific progress i s slowing, perhaps new ways o f paying
of institutions, displacing the universities
for it could speed things up again
that dominate scientific research today.

H ow M IGHTscience be done on an alien

planet? Since the laws of nature are the
same everywhere, the aliens would make
what the authors say is a "discovery eco­
system in a state of near stasis".
Dr Nielsen and Ms Qiu are among a
And many see a chance to run a grand sci­
entific experiment, turning science's
methods inwards to work out how science
the same discoveries as humans have­ band of researchers concerned that scien­ itself might be improved.
that matter is made of atoms, say, or that tific progress is slowing. A paper published
life develops via evolution. But while the in 2020 by economists from the Massachu­ Following the Benjamin Franklins
results might be the same, aliens would be setts Institute of Technology (M I T) and The modern system of science funding-at
unlikely to have come up with the same Stanford University concluded that Ameri­ least in America, the world's leading scien­
methods for arriving at them. It would be can research productivity was falling, with tific power-is relatively recent. The Royal
remarkable if the little green men had in­ more effort required to produce smaller Society in Britain, the world's oldest na­
vented universities, funding committees, gains in knowledge. A second paper, pub­ tional scientific academy, was founded in
a tenure system and all the other accoutre­ lished in January this year, argued that the 1660 but limited its funding to an elite
ments of modern academic life. "disruptiveness" of both scientific papers group of fellows. Before the second world
This thought experiment, dreamed up and patents, as measured by citation pat­ war a good deal of American science was
by Michael Nielsen, a physicist, and Kanjin terns, fell by over 90% for papers, and paid for by rich industrialists and cor­
Qiu, an entrepreneur, was not merely a more than 80% for patents, between 1945 porate laboratories. The modern system in
flight of fancy. It was part of an essay pub­ and 2010 (see chart 1 on next page) . America owes much to the Rockefeller
lished last year pointing out that the way Foundation, a charity, in particular. It dis­
modern science is organised is not the bursed its money as grants for specific,
➔ Also i n this section
only way it could be done, and perhaps not well-defined projects, such as investigat­
even the best way. Experimenting with dif­ 73 Awa ken i ng a n a ncient bacteri um ing the cause of yellow fever. As govern­
ferent sorts of institutions, or novel ways ment funding rose after the second world
74 Could new ne urons treat Alzh eimer's?
to hand out research money, might help fix war (see chart 2) , America's government ►►
 -
72 Science & techno logy The Economist N ovem ber 18th 2023

► adopted a similar system. organisations such as I A RPA, which ap­

These days, over half the funding given A pproach i ng zero plies the same model to America's spy
to universities by the National Institutes of I m pact of resea rch papers*, 1 = max d isru ption t agencies rather than its armies, and ARPA
Health ( N I H ) -which, with its budget of 0.6
E , which pays for research into novel ener­
nearly $5obn, is the world's biggest funder - Socia l sciences gy technologies. The Economist calculates
of medical science-is given out as fixed­ - Tech nology that the total amount of cash handed out
term grants. Around 70% of the $8.6bn dis­ Physical sciences by such entities rose from about $4bn in
0.4
tributed in 2022 by the National Science - Biology and 2021 to nearly $6bn in 2022. The most re­
Foundation ( N S F) was structured the same biomedicine 0.2
cent addition to the family, founded in
way. A scientist applying for this money 2022, is A RPA-H , which covers health care.
must write a grant proposal, perhaps 15 Britain, Germany and Japan have al l tried
pages long, and ideally including some 0 to copy the model outside America in re­
early results to prove her project's worthi­ 1 945 60 70 80 90 2000 10 cent years, setting up ARIA, SPRI N-D and
ness. The proposal is given a score by other *Five years after publ ication Moonshot R& D, respectively.
researchers; this, in turn, helps a commit­ tAll subseq uent wo rk does not cite predecessors' work But how well the ARPA model can be
Sou rce: "Papers and patents are becom ing less d isruptive over
tee decide whether to fund it. Some 80% of time", by M. Park, E. Lea hey a nd R. Fun k, Nature, 2023
replicated is unclear. One former employ­
N I H funding, and 90% of N S F grants, go ee notes that DA RPA "no longer attracts the
through such peer review. same talent as it used to" and says there is
Silvana Konermann, a biochemist at tional Science Foundation in Switzerland "little interest" in studying cases of failure
Stanford University, notes that, with its are al l running similar trials. to figure out how to improve. The model
mix of short timelines and small grants, Rather than reforming existing institu­ may be less successful outside military re­
the system leaves researchers "constantly tions, another idea is to create new ones. In search, suggests a book chapter written by
thinking" about where their next cheque is his essay Dr Nielsen suggested an "Insti­ Pierre Azoulay and Danielle Li, a pair of
coming from. But skill at raising money is tute for Travelling Scientists". Inspired by economists at MIT, published in 2022.
not necessarily correlated with the useful­ Craig Venter, a biologist and entrepreneur America's armed forces are the end-users
ness of one's research. In October Katalin who has done much good science from the of the technologies DA RPA develops, and
Karik6 won a Nobel prize for discoveries deck of his yacht, the institute would be have a good understanding of what they
that led to mRNA vaccines. She had been based on a boat that would travel around need. End-users in other fields, such as en­
demoted early in her career by the Univer­ the world, picking up and dropping off sci­ ergy or health care, are less single-minded.
sity of Pennsylvania because of her failure entists with the aim of offering a relaxing Prizes, which offer a jackpot to anyone
to bring in sufficient money. atmosphere in which to master a new dis­ who can meet a scientific or engineering
And grants are becoming harder to win. cipline or meet unusual collaborators. goal, can also push research in new direc­
Between 2003 and 2015 the likelihood that A more hard-headed, if less relaxing, tions. The Clay Mathematics Institute's
a researcher would be funded by the N I H at source of inspiration is the Defence Ad­ $1m M illennium Prize Problems exist to fo­
least once over a five-year window fell vanced Research Agency (DA RPA), an Amer­ cus attention on unsolved problems in
from 43 °/o to 31%. One study estimated that ican military funding agency originally mathematics. So-called XPrizes have
researchers applying for grants from the founded in 1958 that has had a hand in de­ boosted research into everything from
National Health and Medical Research veloping everything from the internet to rainforest preservation to space flight. The
Council in Australia cumulatively GPS and voice interfaces for comput­ biggest, for removing carbon dioxide from
spent 614 years writing them in 2014. One ers. DARPA's $4bn budget sits outside the the atmosphere, has a total pot of $10om,
prominent biologist quips that if success rest of America's military-research bu­ paid for by Elon Musk, an entrepreneur. A
rates keep falling, more money will be lost reaucracy. Around 100 programme manag­ study in 2021 found that research topics
in wasted researcher time than the value of ers-described by Adam Russell, formerly that were associated with prizes gained
the grants themselves. one of their number, as "aliens" on account 40% more papers and 37% more new sci­
There are plenty of ideas for how to do of their often unconventional back­ entists than fields that were not.
things better. One criticism of having com­ grounds-can fund ambitious research Prizes also have the advantage of being
mittees decide where money goes is that problems however they see fit. At its best, it tightly focused. Adam Marblestone and

-
the need for consensus will suppress unor­ acts as a "force multiplier" on entirely new Sam Rodriques, a physicist and a biologist
thodox ideas. Sethuraman Panchanathan, fields of research, says Dr Russell. respectively, have been thinking along
the director of the N S F, is keen to try a pro­ In America, the idea has given birth to similar lines. They have proposed setting
posal called the ''golden ticket". Reviewers up a series of "focused-research organisa­
would be able to back a few risky ideas de­ tions" (FROS). Each F RO would have well­
spite disagreement from their colleagues. T he sinews of science specified goals and limited lifetimes, a bit
A more radical solution is to abandon U nited States, research fu nding by so urce like the Human Genome Project, which be­
committees altogether and hand out mon­ As % of G D P gan in 1990 and then shut down in 2003
ey by lottery. Some organisations are alrea­
dy experimenting along such lines. In 2013 ■ N on-profits U n iversities
1 .2 after the first draft of a human genome had
been published. The hope is that this
the Health Research Council of New Zea­ would prevent them from sliding into bu­
0.9
land began giving out around 2% of its an­ reaucratic complacency over time. Money
nual funding at random-though propos­ could come from governments or philan­
als had to first clear a minimum quality 0.6
thropists, for whom the prospect of bold,
bar. The Novo Nordisk foundation, in Den­ time-limited funding may prove attractive.
mark, is testing a hybrid system that re­ 0.3 Mr Marblestone's organisation, Con­
jects projects assessed as being of poor vergent Research, has helped launch six
quality, gives money to good ones, and ran­ F ROS. One is trying to map neural circuits
domly hands cash to some of those judged 1 95 3 60 70 80 90 2000 10 20*
in mammalian brains. On November ist Mr
middling. The Volkswagen Foundation in Sou rce: N ational Science Fou ndation * Estimate
Rodriques launched a F RO-like non-profit
Germany, the British Academy and the Na- called Future House that aims to create a ►►
 The Economist N ovem ber 18th 2023 Science & technology 73

► semi-autonomous "AI scientist" within Microbio logy An official report could not determine
ten years. It is backed by Eric Schmidt, a whether the oil rig had been drilling in the
former boss of Google. Mr Rodriques ex­ Roused from a wrong place, or whether the maps of the

salty slumber
pects it to spend $2om next year. In March mine were inaccurate. Either way, the di­
Rishi Sunak, Britain's prime minister, an­ saster created an entirely new environ­
nounced his intention to set up several ment. The water that flowed into the mine
such organisations-though exactly what contained less than 2% salt. But rock salt
they will study remains unclear. dissolves readily in water. When Dr Vree­
How a 125m-year-old bacterium was
And then there is the idea of funding land, then at the University of New Or­
awakened by an industrial disaster
people rather than projects. In theory, that leans, was granted access to part of the
EW S P EC I E S
would give researchers freedom to follow
their noses, pursue ideas that may not have
an obvious pay-off, and change course
N are generally found rather
than awakened. And they are typically
discovered in remote places like rainfor­
flooded mine in 1987, he found the water
within contained 32% salt, about nine
times more than seawater.
when something doesn't work. The idea is ests or Antarctic plateaus. But not so a spe­ For most creatures, that much salt
not new: the most famous example is the cies of bacterium described in a paper just would be lethal. But Dr Vreeland found a
Howard Hughes Medical Institute ( H HMI ), published in Extremoph iles. As Russell species of bacteria, one of a salt-loving
founded in 1953 in Maryland. Researchers Vreeland and Heng-Lin Chui, the paper's group called Ha lobacteriales, in his sam­
are generously funded for seven or more authors, point out, the bug is new to sci­ ples. The bug grew best in water containing
years, compared with four for the typical ence. But it is not new to Earth. In fact the 18% salt-and died when concentrations
N I H grant. Between them they have won microbe may have been slumbering for fell below 10%. Since the bacterium could
over 30 Nobel prizes, as many as Russia millions of years before being awakened by not have survived in the lake, how did it get
and the Soviet Union combined. an industrial disaster. into the water in the mine?
There is other evidence to suggest the The bacterium in question lives below Having access to only a small lab, and
approach works well. Dr Azoulay has com­ Lake Peigneur in southern Louisiana. The with comparatively few resources, Dr Vree­
pared the H HMI with the N I H's standard ground beneath the lake is rich in natural land decided to shelve the mystery and
funding programme. H HMI researchers resources. In 1980 it boasted a mine pro­ move on to other projects. During a visit to
produced nearly twice as much highly cit­ ducing rock salt, while a drilling rig run by China in 2016, though, he met Dr Chui, an­
ed work, as well as a third more flops, sug­ Texaco was moving about on the surface other expert in salt-loving microbes, and
gesting a willingness to take more risks. looking for oil. But on November 20th, the decided to return to his cold case.
Inspired, in 2021 Dr Konermann of Stan­ two operations came together accidental­ In the intervening years, scientists have
ford (an H HMI fellow herself ) started the ly-and spectacularly. The oil rig's drill found that some bacteria possess excep­
Arc Institute, which is run on similar lines. penetrated the third level of the salt mine, tional powers of self-preservation. When
creating a drain in the lake's floor. times are hard they can enter a form of sta­
The science of science Over the next few days the resulting sis, shutting down all biological activity
No one knows how fruitful any of these man-made sinkhole swallowed up the oil until things improve. The salt beneath
ideas will prove. Dr Russell argues it is vital rig, 11 barges, a tugboat, 35 hectares of land Lake Peigneur was formed by the evapora­
to try many things, "collect data" and build and part of a house. A canal that drained tion of a previous body of salty water. Some
"feedback loops" to improve the system. the lake into the Gulf of Mexico began of the salt is 125m years old, meaning it was
Kyle Myers, an economist at Harvard Busi­ flowing backwards as the water level fell, laid down during the heyday of the dino­
ness School, thinks funders should ap­ briefly creating the tallest waterfall in Lou­ saurs. The new species, the researchers
point chief economists to keep track of isiana, while muddy geysers erupted from suggest, is therefore antediluvian both lit­
how each approach is working. mine shafts. Somehow, all 50 people work­ erally and metaphorically. It was there be­
This turning of science's methods back ing in the mine managed to get out ahead fore the mine was flooded, trapped in wa­
on itself has been dubbed "meta-science". of the rising floodwaters. ter pockets within the salt crystals-and it ►►
It is a growing field of study, says Ilan Gur,
ARIA's boss. Dr Myers calculates that since
2015 there have been an average of nearly
60 randomised experiments studying the
scientific process. Two decades ago that
number would have been in the single dig­
its. More are coming: on September 28th
the N S F announced a partnership with the
Institute for Progress, a science-and-tech­
nology think-tank, to conduct meta­
scientific experiments.
Using science to decide how best to do
science is an idea with a pleasing symme­
try. Yet Dr Nielsen cautions that finding
out which funding method gives the best
bang for each buck may take a long time. In
the meantime, says James Wilsdon, who
runs the Research on Research Institute at
University College London, a diverse eco­
system of funders would bring its own
benefits. "If you can't get funded one way,
you have another," he says. That might
help prevent others falling through the
cracks in the way Dr Karik6 did. ■ It l u rks beneath
74 Science & techno logy The Economist N ovem ber 18th 2023

► may have been there for millions of years. cumulation of damage to its DNA. Oxygen davers and either stain them with chemi­
Exactly how long bacteria can remain i n is one sou rce of such damage. But the ele­ cals that bind only to you ng neu rons, or
suspended animation i s difficult to test, ment does not exist i nside rock-salt crys­ measure the genes that have been ex­
because experiments cannot reasonably tals , and is o nly very slightly soluble in pressed within brain cells to look for the
run for more tha n a few decades . But Dr brine. Ultraviolet light i s another danger, hallmarks of youth.
Vreeland claimed i n Natu re in 2000 that he but none penetrates below the ground . Dozens of such papers have been pub­
and h is colleagues had succeeded i n reviv­ Background radiation can also damage lished. But for every one that has found ev­
i ng another salt-loving bacterium that was genomes. But the only radioactive atom idence of neurogenesis, another has failed
250m years old. A study published last year fou nd in brine is potassium-40. With a to do so. The pro-neurogenesis camp
argued that, in some circumstances, a par­ half-life of over a billion years , it is o nly thinks the null results are down to poor­
ticularly resilient species called Deinococ­ mildly radioactive. And bacteria that l ive i n quality brain tissue or crude preservation
cus radiodu rans might be able to manage harsh envi ronments , includ ing Halobacte­ techniques. The antis argue that either hu­
300m years in stasis. riales, co ntain plenty of DNA-protecti ng mans do not grow these neurons i n the
And Dr Vreeland points out that the proteins to prevent damage. Now, thanks dentate gyrus, or if they do, there are too
conditions i n the salt mine might have to a human mistake, Dr Vreeland's bacteri­ few of them to be u seful.
helped th is latest species while away the um has been given an entire mine in which The research presented in Washington
aeons in relative safety. One problem faced to live, where it can fi nally reap the re­ strengthens the case for human neuroge­
by a somnolent organism is the g radual ac- wa rds of i ts p rod igious patience. ■ nesis. Mau ra Bold rini of Columbia Univer­
sity, Maria Llorens-Martin of the Universi­
ty of Madrid, Orly Lazarov at the Univers ity
Neu roscience of Illinois at Chicago and Ho ngjun Song of
the Univers ity of Pe nnsylvania p resented
The wisdom of youth evidence of young neu rons in the de ntate
gyruses of humans-though most of their
fi n d i ngs have not yet been peer reviewed.
Three of these researchers also studied
the brains of healthy older people or peo­
WAS H I N G T O N , D C
ple with Alzhei mer's disease. Thei r resu lts
suggested that the p roduction of the sup­
Newborn neurons might treat Alzheimer's disease-assuming they actually exist
0 disease
NE TH E first s igns of Alzheimer's
OF
is confus ion. Most people can
brains. Two stud ies published in 2021 and
2022 showed that encouraging neuro­
posed new neurons slows with age, and
falls precipitously in Alzheimer's d isease.
Previous studies by two of the groups also
park their car in a diffe rent space every ge nesis cou ld imp rove memory in such found that Alzheimer's patients with more
morn ing and find it agai n i n the eve ning. a n i m als. And a paper publ ished in April of these neuron s had better memories.
Those with Alzhei mer's fi nd this type of this year found that boosting neu rogenes i s But wh ile the new research strengthens
problem much harder. Memories of things also cau sed other cells known as microgl ia the case for human neurogenes is, it is not
they do often , like eating or taki ng medica­ to begin cleaning up tangles o f protei n , yet definitive. One group of researchers
tion, become tangled in their minds. called amyloid-beta plaques, that are char­ from Yale Univers ity questioned whether
The ability to di stingu ish between sim­ acteristic of Alzhei mer's disease. the staining technique used in one of the
ilar memories depends on a tiny strip of So far so promising-if you are a mouse. studies was accidentally tagging other
brai n tissue called the dentate gyrus. Stud­ But studyi ng neurogenes is in humans is brai n cells such as astrocytes. They are also
ies in mice have shown that the dentate gy­ tricky. M RI scanners cannot watch the concerned that the studies tend to find ve­
ms is one of the few bits of the brain to gen­ growth of individual neu rons. Scientists ry few progenitor cells. "Where a re all the
erate new neurons even in adulthood. must take samples of brain tissue from ea- mothers of these baby neurons?" asked Jon
Those new neurons are thought to help Arel lano, one of the sceptics.
keep similar memories distinct. There are other wrinkles . D r Song found
Whether something si milar happens i n a different set of genes expressed in the
humans is less clear. B u t a clutch of new re­ supposedly young human neurons from
sults described this week at the Society for those seen in neurons from other animals.
Neuroscience's conference in Washington, And the few young neurons that both Dr
DC, suggest that it might. And i f it does , Song and Dr Lazarov fou nd i n the brains of
then encouraging the process might off er a Alzheimer's patients looked very different
new treatment for Alzheimer's d isease. from the same neurons in healthy brains.
Until the 1960s scientists thought adu lt If the new cells are somehow defective, i n­
brains did not produce new neurons. Then creasi ng their number may not help.
evidence began to emerge of young neu­ But although not all the scientists at the
rons i n the brains of adult rats and mice·­ conference were convinced, some d rug­
specifically in the olfactory bulb, which makers appear to be. I n April, Biomed I n­
p rocesses smell , and the dentate gyrus . dustries , a pharmaceutical fi rm based in
These new neurons h a d developed from Californ ia, said that results from an early
neural progenitor cells, a type of undiffe r­ clinical trial suggested that a new drug that
entiated neuron akin to a stem cell, in a the firm claims i ncreases neurogenesis i n
process scientists call neurogenesis. mice improved memory i n people with
And there seems to be a link, at least i n moderate Alzheimer's. If subsequent trials
mice, between these new neurons and Alz­ prove to be equally encouraging, that could
heimer's disease. Mice genetically engi­ be further evidence that the neu rogenesis
neered to have Alzhei mer's-like symptoms theory of Alzhei mer's may indeed have
also have fewer young neurons in their Neu rogenesis in action something to it. ■
 Cu ltu re The Economist Novem ber 18th 2023 75

The roya ls hint to John Major, the then prime minis­

ter, that Queen Elizabeth II should abdi­
Historical friction cate. The short answe r to the question of
whether or not 'The Crown" is history is
clear: no. It is not.
The longer answer is more complicat­
ed. History might be problematic for "The
Crown", but it is also part of the appeal.
Much of "The Crown" might be nonsense, but it will change how history
Many viewers' interest is not just in the
is seen anyway
drama but in its historical backdrop. Peo­

FCrown",
EW S E R I E S have had the ability to i rritate
audiences as reliably as Netflix's "The
whose sixth and final season was
wondered how the sausage of history is
formed from the raw meat of the past are,
with each successive season, turned into
ple have found themselves fascinated by
forgotten facts, i ncluding the finer details
of the Suez crisis, the severity of the Great
released on November 16th. There has been amateur historical analysts, as they Google Smog of 1952 and the (to many astounding)
affection, too: at least 73m viewers world­ primary sources, fact-check phrases and fact that the late queen had, once upon a
wide, critical acclaim, a glitter of awards scrutinise photographs. Again and again, time, been young.
and whatnot. But irritation reigns. The se­ the same question is asked: is this history? In its defence, "The Crown" does not
ries has been criticised for its portrayal of It is not asked without cause. A great claim to be history. On the contrary, as its
Prince Charles (too scheming), the Queen deal of "The Crown"-even before you get new disclaimer explains, it is merely a "fic­
Mother (too nasty) and the Duke of Wind­ to the ghastly cameo by Princess Diana's tional dramatisation" that was " inspired
sor (too Nazi) . It has been called "crude", ghost-is mani fest historical bunkum. by real events" . In doing so it is following
"cruel", " intrusive", "impertinent" and sev­ Prince Philip did not, as was claimed in the in a grand dramatic tradition of playing
eral sorts of nonsense, including "pure second season, inadvertently cause his fast and loose with the facts. Had Shake­
nonsense", "nonsense on stilts", and "a sister to be killed in a plane crash (a fact speare had to slap a disclaimer on " Richard
barrel-load of nonsense". News that this that he found so offensive he reportedly III" he would have had to opt for something
season would feature Princess Diana's considered suing) . Prince Charles did not stronger even than that, like "highly fic­
ghost led one historian to call it "farcical­ tional dramatisation", says Emma Smith, a
just a sick joke". professor of Shakespeare studies at Oxford
There are two ways to look at "The ➔ Also i n this section University. To get cross with "The Crown"
Crown". One is as soap opera with added for not being history is, on this reading, a
76 Trave l l i ng the world th rough ga mes
sceptres, a royally expensive royal drama. simple category error: it never said it was.
(It was rumoured to be Netflix's costliest 77 An i ntoxicating history of wine fra ud Though i t is not quite so simple as that.
show yet.) The other is to see it as an ex­ For one thing, the " is it history?" question
77 Japan's wa r-c ri me tri bunals
cellent if impromptu education in what assumes there is something that is "his­
history is and what it is not-a historio­ 78 Back Story: Ridley Scott's "Napoleon" tory" that is true and beyond reproach and
graphical triumph if not a historical one. something separate and all made-up that is
79 The best fil ms of the yea r
Millions who hitherto might never have "drama". In fact, there is "a porous line ►►
76 Cu ltu re The Economist N ovem ber 18th 2023

► between history and historical fiction", It is also largely irrelevant. To write history, what I enjoy about mathematics" : the chal­
says Dan Jones, a historian and author. Not as one philosopher observed, "is the only lenge of solving a problem within a set of
for nothing was Herodotus, "the father of way of making it". Historians might com­ rules, the need to overcome obstacles and
history", also called "the father of lies". plain that Shakespeare's " Richard III'' is i n­ the victorious "aha" moment when a
W hen Thucydides, another Greek histori­ correct, or that "The Crown" takes creative solution is found.
an, wanted to quote a speech whose text he liberties, but both have something more As well as forays into probability and
did not have, he simply made it up and had powerful than accuracy: popularity. game theory, he explains dice rolls in Mo­
"the speakers say what was in my opinion In Shakespeare's day, people were alrea­ nopoly using Markov chains; the torus­
demanded of them by the various occa­ dy complaining that there were those who shaped playing field of video games like
sions". History has a long and august histo­ learn their history not from the chronicles Spacewar!; and how the geometries of fi­
ry of blending fiction and truth. but "from the play-books". This series con­ nite projective planes underpin the decep­
Modern historians are more careful and tinues that tradition . "The Crown" might tively simple game of Dobble. And in many
do not-or should not-make things up. not be true history in the technical, aca­ cases these explanations provide concrete
But it is foolish to imagine that sleight of demic sense of the term. However, that is advice to players.
hand and imagination are not involved in immaterial. It will change how history is In Monopoly, says Mr du Sautoy, the
writing history. One of the most essential seen nonetheless. ■ best properties to buy are the orange ones,
aspects of that art is also the least visible, followed by the red ones (and build three
namely what historians choose not to in­ houses on them) . In Risk, control of North
clude. Leaving things out is essential: there A global history of gaming America has the best risk-reward ratio,

Well played, sir

is a lot of past out there. As the historian generating a good supply of bonus armies
Gregory of Tours glumly observed : ''A great while being easy to defend . In backgam­
many things keep happening, some of mon, accept a double if you think you have
them good, some of them bad." That was in more than a 20% chance of win ning; offer
the sixth century; a whole lot more has one if you think you have more than an
happened since then . 80% chance of winning. Oh, and "TA L E S " is
History is therefore as much about the best starting word in Wordle.
what is unwritten as what is written . The The hybrid history-travelogue app­
creator and writer of "The Crown", Peter Around the Wo rl d in S o Games. roach is clunky at times, and some of the
Morgan, has complained that he is criti­ By M a rcus d u Sau toy. Basic Books; 384 entries are not games at all, but mini­
cised for what he included but not praised pages; $30. Fo urth Esta te; £ 16. 99 essays on game-related topics, from bio­
for what he tactfully omitted : "Speculation graphy to psychology. And despite its high­
HICH ARE
about paternity, affairs, this, that. It's un­
believable, all we could have written ." Wwhen playithengbest properties to buy
Monopoly, and how
concept framing, the book can be read in
pretty much any order; indeed, the author
Moreover, historical facts are tricky many houses should you build on them? suggests a game to randomise the order of
things. It is not necessary to endorse the W hich continent should you aim to take the chapters. (In an appendix, he then
"your truth" truthiness of Oprah Winfrey's over first in Risk? And what is the best works out how many possible options
infamous interview with Meghan Markle strategy when using the doubling cube in there are, which doubles as an illustration
to know that more than one historical nar­ backgammon? These are some of the ques­ of the technique of proof by induction . )
rative can be correct at the same time. Just tions considered and answered by Marcus Fun, unexpected, operating within
as a mountain might appear "to take on dif­ du Sautoy, a British mathematician and fixed but arbitrary rules, producing a range
ferent shapes from different angles of vi­ Oxford professor, in his sprightly, light­ of complex outcomes and offering insights
sion", so a simple historical "fact" can ap­ hearted history of games and gaming. that can be applied to everyday life-a good
pear differently to different people, wrote The narrative is organised geographi­ game combines all these elements. The
the historian E.H. Carr. That does not mean cally as a trip around the world, starting same can also be said of this book. ■
that there are no facts but-as the royals with ancient games from the Middle East­
themselves might say-"recollections may backgammon, the Royal Game of Ur, the
vary." Newspaper fact-checks of the series Egyptian game of senet-and ending up in
(and there are many) often start by har­ Europe with modern games such as Pan­
rumphing but tail into ho-humming. So demic and Dobble. Along the way the au­
much is debatable. thor considers many old favourites (Clue­
History does not sit preserved from the do, Scrabble, Risk), recent arrivals (Wordle,
pollution of fiction, like an insect in am­ Settlers of Catan) and less familiar games
ber. History and drama interact. There is, from a wide range of cultures and histori­
wrote Carr, a "two-way traffic between past cal periods, such as the African game of
and present". When Edward VIII abdicated, mancala and the Indian card game of ganji­
Winston Churchill turned to Shakespeare's fa, whose rules change at night.
"Richard II'' to see how to draft the instru­ The list is not exhaustive or compre­
ment of abdication; when Queen Elizabeth hensive but reflects his own collection . It
II was crowned, the man chosen to narrate includes a handful of video games (Prince
the footage was not an august elder states­ of Persia, Game of Life) and one sport (the
man but Laurence Olivier, an actor. Those Mayan ball game of pitz) .
close to the royals admit that the family All this is, of course, really an opportu­
has watched "The Crown" and been affect­ nity for Mr du Sautoy to sprinkle in plenty
ed by it. The series reportedly led the late of mathematical explanations, to provide
queen to think about how she had treated what he calls "a celebration of the mathe­
her sister, Margaret. matics that swims seductively just below
The debate over whether or not "The the surface of many of the games I love".
Crown" is history or not might be fraught. Playing games, he writes, "overlaps with When it's a l l fun and games
 The Economist N ovem ber 18th 2023 Cu ltu re 77

Fa ke wine Wa r crimes

Bottle shocl< The scales of

injustice

Vintage Crime. By Rebecca G i bb. J udgment at Tokyo. By Ga ry Bass. Knop(

Un iversity of Ca liforn ia Press; 282 pages; 892 pages; $46. To be publish ed in Britain
$30 and £25 by Pan Macm illan in Jan uary; £30

T o MAKE A 1945 Mouton Rothschild, mix

two parts Chateau Cos d'Estornel to one
part Chateau Palmer and California caber­
T H E WO R L D I S still haunted by 2oth­
century crimes so grave that any
attempt to bring the perpetrators to justice
net That was the strategy of Rudy Kurnia­ seems feeble. The trials at Nuremberg
wan, a wine fraudster, who poured his mix­ in 1945-46 did little to salve wounds left by
ture of wines into old bottles with fake la­ the Holocaust. And the Tokyo trials of
bels and sold them to gullible collectors. In alleged Japanese war criminals, which
2014 he was sentenced to ten years in an lasted two and a half years from 1946-48,
American prison and ordered to forfeit have not stopped outpourings of anger
$2om and to pay another $28m to victims. Not the rea l dea l across Asia whenever, for example, a
Deported to his native Indonesia in senior Japanese politician visits Yasukuni,
2021, Mr Kurniawan is now back in biographers have suggested that Beetho­ a Tokyo shrine to the war-dead, including
business. At fancy dinner parties, clients ven, a heavy wine-drinker, may have gone convicted war criminals.
ask him to create fake fine wines to taste deaf due to lead poisoning. The aftermath of wars has taken on
and compare with the real thing. Many Labels can be deceptive. When vine­ fresh significance with conflicts raging in
tasters reportedly prefer his concoctions. yards in Burgundy were ravaged by the Israel, Sudan and Ukraine. In much of Asia,
"Mr Rudy Kurniawan is a vinous genius," phylloxera parasite in the 1880s, French the second world war, which was fol­
one fawned. If a phoney bottle fulfils its winemakers began importing wine from lowed by tribunals that tried to dispense
purpose-to give pleasure-does it matter elsewhere and sold it as Burgundy. In 1889 justice, is still unfinished business. Japan's
that it is not what it claims to be? France passed the loi g rifle, which defined trials concluded 75 years ago. In a meticu­
Mr Kurniawan is one of the high-profile wine as fermented fresh grapes (and re­ lously researched history, Gary Bass, a pro­
scammers whose exploits are recounted in stricted producers from watering it down fessor at Princeton (and former journalist
"Vintage Crime", a history of wine fraud by or including additives). for The Econo m ist), looks at why attempts
Rebecca Gibb, a wine journalist and master However, the law did not prevent mer­ to produce a shared sense of justice failed.
of wine. The wine world shares similarities chants from buying low-quality grapes and Like Nuremberg, Japan's tribunal was
with the art world. It relies on the opinions turning them into wines labelled "cham­ for the most serious war criminals, those
of experts, whose belief in the authenticity pagne". Between 1907 and 1911 nearly half of guilty not just of breaking the laws of war
of a Chateau Lafite (or a Rembrandt) can all champagne bottles sold in France were but, in addition, of "crimes against peace"
dramatically alter its value. But experts can not genuine. Pressure from wine groups (ie, planning the war) . This was controver­
be duped. Many wine connoisseurs have eventually led to the creation of the appel­ sial then and remains so. For America the
vouched for dubious bottles. General con­ lation system, which drew borders around greatest crime was the attack on Pearl Har­
sumers do not question the labels on their regions to ensure that only wine from bour in Hawaii and elsewhere in December
wines. A study involving more than 6,000 there could be labelled as such. (The sys­ 1941. But, as aggressors always do-think
blind tastings found that non-expert tem relies on the concept of terroir, a spe­ Vladimir Putin in Ukraine-the accused
drinkers actually preferred cheaper wines. cific piece of land giving wine a taste that pleaded that they and Japan acted in self­
Another study found tasters perceived ex­ cannot be replicated elsewhere. ) defence. Even some of the 11 judges from
pensive wines to be higher quality only Naturally, scammers have continued to different Allied countries disputed wheth­
when the prices were revealed. flout the rules. In a case in 1974 that Ms er Japan's aggression was actually a crime.
Ms Gibb's history begins in Roman Gibb dubs "Winegate", merchants were Radhabinod Pal from India, for example,
times, when winemakers and vendors ad­ discovered selling cheap wines from the argued the law lets each country decide
justed wines with herbs and spices to make Languedoc region as pricey Bordeaux. what counts as self-defence.
them taste better. Only the rich could af­ When Austrian grapes failed to ripen in Few doubted that Japanese troops had
ford wines that did not require adultera­ 1985, winemakers added diethylene glycol been guilty of outrageous war crimes,
tion. Soldiers drank a blend of vinegary to sweeten their wine. exhaustively covered at the trials, which
wine and water, while slaves' wine was China is now the primary purveyor of heard months of harrowing testimony,
made from the skins of already-trodden knock-off wines, which often bear visibly including about the "rape" of Nanjing,
grapes. Pliny the Elder insisted that these fake labels (for example, saying the pro­ China, in 1937 and the Bataan death march
drinks "cannot rightly be styled wines". ducer is "Benfolds" instead of "Penfolds" ) . of prisoners-of-war in the Philippines in
Most additives were innocent, but not One survey found that more than a quarter 1942. The issue with these and other hor­
all. In the 1690s monks in Ulm, Germany, of outlets across 13 provinces sell fraudu­ rors was not whether they were crimes, but
began keeling over. A physician discovered lent bottles. No wonder some winemakers where responsibility lay-with the indi­
that a dodgy merchant had been sweeten­ demand to see their finest bottles smashed vidual soldier, his immediate commander,
i ng sour wines with lead monoxide. A new after drinking when they do tastings in his general, the prime minister or the man
law criminalised this practice, but drinkers China. An empty bottle bearing a coveted who had appointed the prime minister,
continued to imbibe toxic wine. Some label is a fraudster's dream. ■ Emperor Hirohito. ►►
78 Cu lture The Economist N ovem ber 18th 2023

► Before the tribunal convened it had objection that all the defendants were in­ Mr Bass's assertion that the tribunals'
been decided not to indict the emperor. nocent. Pal became a hero to many Japa­ failure played an important and largely
This led to a feud between the bibulous nese for saying the trials represented "for­ negative role in the mal<ing of modern Asia
chief American prosecutor, Joseph Kee­ malised vengeance" and could bring "only is true enough. But would it have made a
nan, and the court's president, Sir William an ephemeral satisfaction, with every pos­ difference had, say, the emperor been put
Webb, a pompous and cantankerous Aus­ sibility of ultimate regret". on trial? It is hard to believe that would
tralian. Webb found himself at odds with His dissent also covered events beyond have made the outcome more palatable in
most of the other judges. They failed to the scope of the trial : what he called the Japan, or that it would have changed much
reach unanimous verdicts. "inhuman blasts" at Hiroshima and Naga­ in the prosperous democratic country that
Of the 25 defendants who survived the sal<i in 1945. The killing of tens of thou­ Japan has become.
trial, all were convicted and seven were sands of civilians in these attacks, seen by In Tokyo justice was always going to be
hanged, including the prime minister, Tojo many as militarily unnecessary, was not a tempered with compromise and political
Hideki. But some of the judges dissented, war crime. That will always make the To­ expediency. For all their flaws, the trials
including Pal, who argued in a 1,230-page kyo trials seem lopsided to many Japanese. were not the problem. The war was. ■
The Napoleon complex

Sir Ridley Scott's "Napoleon ,, illustra tes the challenges of making a good biopic
VE RS I O N S
T wo of Napoleon Bonaparte
crop up on screen. The first is a titan
fiancee. Instead he is a gauche oddball.
Looking distinctly wizened for a 26-year­
will not like what a cannonball does to
Napoleon's mount at the siege of Toulon.
of history who marches vast armies old (Mr Phoenix is 49), he runs into Jo­ A closing note estimates that his wars
across Europe, forging his own destiny sephine (Vanessa Kirby), fresh out of a cost 3m human lives.
and the continent's. This is the figure Jacobin prison, at a louche ball in 1795. The film glosses over Napoleon's
with whom men of a certain age and type Along with their skimpy bodices, the industrial-scale looting and habit of
are often fascinated-such as would-be ladies wear red ribbons around their necks skedaddling when his armies got into
statesman Connor Roy, who in the TV in a ghoulish nod to the guillotine. bother. Still, Sir Ridley's verdict on his
show "Succession" tries to buy Napo­ "Why are you staring at me?" she asks subject, as both husband and leader, is
leon's shrivelled penis at auction. him. Romance-wise, it's downhill from cutting. To Napoleon's defenders, he was
The second Napoleon appears in there. Napoleon is a selfish, perfunctory a fiery champion of the Enlightenment
cartoons and comedies in a bicorne hat. lover, and both have affairs. "You are and a swooning romantic. In this in­
He is touchy about his height (in reality, empty," he bawls at Josephine at a formal carnation he is a warmonger and a pig.
average for his era) and talks in a panto­ dinner, angry at her failure to give him an The harsh judgment, however, is not
mime French accent (the actual Napole­ heir. "And you are fat," she volleys back. what hobbles the movie. Good films can
on had a Corsican twang) . One version Then they throw food at each other. be made about bad people. The problem
casts him as an embodiment of martial The battles are pretty nasty, too. When lies in Sir Ridley's answer to the other
power; the other lampoons it. the foes of France plunge through the ice challenge of biopics, namely how to edit
You might expect the hero of "Napole­ at Austerlitz, the underwater shots are such an overstuffed life for the screen.
on", a lavish film directed by Sir Ridley bloody yet balletic, as memorable in their Among his omissions is: why? His
Scott and released on November 22nd, to way as the scenes of carnage in Sergei malignant Napoleon is shorn of mys­
stand firmly in the potentate camp. Bondarchuk's "Waterloo" (1970) . The real­ tique, but his motivation is a mystery,
Oddly, he has a foot in both. The mis­ life Napoleon did not spare the horses, beside a hint of sexual neurosis, some
firing movie is a case study in handling and neither does Sir Ridley. If you were mummy issues and the odd mean re­
two big challenges of biopics, one peren­ squeamish about Russell Crowe's tussle mark about Corsicans. The same goes for
nial, the other especially acute now: how with a tiger in "Gladiator", another of the his appeal, to both Josephine and his
to shape a luminary's life into a story, director's sword-and-soundbite epics, you followers. His laws and reforms-a fig­
and how to judge and depict his flaws. leaf for conquest or an enduring legacy,
The real Napoleon-a general by 24, depending on your view-are neglected.
emperor at 35-lived on fast-forward. Sir As a statesman he is crass and petulant.
Ridley packs lots of the highs and lows "You think you're so great because you
into a two-and-a-half-hour extravaganza: have boats!" he yelps at the British.
victory at Austerlitz, calamity in Russia Biopics, like statues, are both homag­
and the finale at Waterloo, where a van­ es to historical figures and an argument
quished Napoleon (played by Joaquin about history itself. Implicitly they claim
Phoenix) is doomed to exile (again) . He that some individuals shape the world
weaves the triumphs and disasters into a rather than the other way round. Napole­
chronicle of Napoleon's passion for on did that as much as anyone; yet be­
Josephine de Beauharnais, his first wife. cause Sir Ridley prefers events to expla­
It's grisly stuff-and that's just the nation, his hero is a slight man in a big
love affair. This emperor is not like Mar­ film. For all his derring-do, he has a whiff
lon Brando's, the suavest to don the of the grouchy Napoleon in "Bill and
familiar greatcoat, in his case for "Desi­ Ted's Excellent Adventure" (1989) , who is
ree" (1954) , which chronicles Napoleon's teleported to modern America, hogs the
passion for, er, Desiree Clary, briefly his ice-cream and cheats at ten-pin bowling.
 The Economist N ovem ber 18th 2023 Cu ltu re 79

The best films of 2023 "Maestro"

Bradley Cooper was chastised for sporting
Pass the popcorn a prosthetic nose in his biopic of Leonard
Bernstein, but "Maestro", which he also
co-wrote and directed, is rich, sensitive
and sympathetic, and Mr Cooper brings
irresistible verve and pathos to the lead
role. Carey Mulligan sparkles even bright­
The year's standout movies featured cattle barons, chefs, composers,
er as Bernstein's loyal but conflicted wife.
physicists and whistleblowers
"Anatomy of a Fall" unruly student (Dominic Sessa) and a "Oppenheimer"
A man is found dead in the snow outside bereaved cook (Da'Vine Joy Randolph). A complex, upsetting, technically magnif­
his Alpine chalet. Did he jump from the Reuniting the director and the star of icent biopic of J. Robert Oppenheimer
attic window, or was he pushed by his "Sideways", a hit film of 2004, this hu­ (Cillian Murphy) . Christopher Nolan skips
wife? The winner of the Palme d'Or, the top mane, hilarious comedy already feels like between several different time periods to
prize at Cannes Film Festival, Justine a festive classic. examine the politics behind the Manhat­
Triet's courtroom drama is both a gripping tan Project and asks what kind of person
whodunnit and an unsparing examina­ "Holy Spider" would build a weapon that could destroy
tion of the sexual and professional ri­ A dogged journalist (Zar Amir Ebrahi- the world.
valries within a marriage. mi) investigates the case of a serial killer
who is murdering prostitutes in the Irani­ "Past Lives"
"The Boy and the Heron" an city of Mashhad, only to find that many A 12-year-old girl moves with her family
Hayao Miyazaki, a co-founder of Studio of the city's residents support the killer. from Korea to Canada, leaving behind her
Ghibli, has said that this will be his final Ali Abbasi's dark thriller may be an excori­ childhood sweetheart. Twenty-four years
film-and what a swansong it is. A cryptic, ating critique of lran, but it's relevant to later, they meet again in New York. Celine
cosmic fairy tale about letting go of the populist politics in the West, too. Song's bittersweet tale muses on fate,
past, "The Boy and the Heron" is compara­ ambition, and everything that is gained
ble to several of Mr Miyazaki's previous "How To Have Sex" and lost by moving to a new country.
visionary masterpieces. A heart-wrenching coming-of-age drama
about three British schoolgirls on a hedo­ "Poor Things"
"The Creator" nistic package holiday in Crete. Tara (Mia In Yorgos Lanthimos's wildly inventive
One of the few recent science-fiction McKenna-Bruce) seems to be having the adaptation of Alasdair Gray's satirical
blockbusters not to be based on a super­ time of her life, but Molly Manning Walk­ novel, a woman (Emma Stone) is brought
hero comic or film franchise, this impres­ er, the writer-director, uncovers the vul­ back from the dead by a mad scientist
sively gritty war epic stars John David nerability beneath the teenage bravado. (Willem Dafoe) with no memory of her
Washington as a soldier in the battle be­ previous life. On an uproarious whirlwind
tween humans and robots. Artificial in­ "Killers of the Flower Moon" tour of .fin de siecle Europe, she learns
telligence is Holly wood's current favourite Robert De Niro and Leonardo Dicaprio about society's conventions and shatters
villain, as "M3GAN" and the latest "Mis­ co-star in this devastating true-crime saga them all.
sion: Impossible" instalment showed. from Martin Scorsese. Mr De Niro is the
land-grabbing cattle baron who has "The Taste of Things"
"The Holdovers" dozens of Osage people murdered in Okla­ The foodie film to end all foodie films?
In 1970 a grouchy history teacher (Paul homa in the 1920s. Mr Dicaprio is the Much of "The Taste of Things" consists of
Giamatti) is forced to spend the Christmas low-life who poisons his dignified Osage mouth-watering French feasts being
holiday in a boarding school with an wife (Lily Gladstone). prepared, slowly and carefully, in an idyl­
lic 19th-century kitchen. As a side dish,
there is a tender middle-aged romance
between a brilliant chef (Benoit Magimel)
and his faithful cook Quliette Binoche) .

"Reality"
The true story of a young whistleblower,
Reality Winner (Sydney Sweeney) , who
was questioned in her home by F B I agents
in 2017. Every line of dialogue is drawn
from recordings made at the time, so Tina
Satter's drama has the naturalism of a
documentary and the tension of a thriller.

"The zone of Interest"

An extraordinary triumph from Jonathan
Glazer, this film dramatises the domestic
routine of Rudolf Hoss (Christian Friedel),
the commandant of Auschwitz concentra­
tion camp. He and his family bustle
around with their servants, ignoring the
industrialised mass murder being com­
mitted just over their garden wall. ■
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Economic & fi na ncia l i ndicators The Econom ist N ove m ber 18th 2023 81

Econom ic data

G ross domestic product Con sumer prices Unemployment Current-account Budget I nterest rates Cu rrency units
% change on year ago % change on year ago rate ba lance balance 1 0-yr gov't bonds cha nge on per $ % cha nge
latest qua rter* 2023t latest 2023t % % of GDP, 2023t % of G DP, 2023t latest,% year ago, bp N ov 1 5th on yea r ago
U nited States 2.9 Q3 4.9 2.0 3.2 Oct 4.1 3.9 Oct -2.9 -5.7 4.5 73.0
Chi na 4.9 Q3 5.3 5.5 -0.2 Oct 0.7 5.0 Octl=§ 1 .8 -3.8 2.5 §§ -1 4.0 7.24 -2.9
Japan 1 .2 Q 3 -2.1 2.0 3.0 Sep 3.2 2.6 Sep 2.9 -5. 1 0.8 55.0 1 51 -7.7
Britain 0.6 Q3 -0. 1 0.4 4.6 Oct 6.8 4.3 Juntt -2.5 -3.9 4.4 89.0 0.80 5.0
Ca nada 1 . 1 Q2 -0.2 1 .1 3.8 Sep 4.0 5.7 Oct -0.4 - 1 .3 3.8 63.0 1 .37 -2.9
E uro a rea 0.1 Q3 -0.2 0.7 2.9 Oct 5.6 6.5 Sep 2.2 -3.4 2.6 5 6.0 0.92 4.3
Austri a - 1 .3 Q2 -3.0* -0.3 4.9 Oct 7.7 5.5 Sep 2.6 -2.4 3.2 50.0 0.92 4.3
Belgiu m 1 .5 Q3 2.0 1 .0 - 1 .7 Oct 2.6 5.6 Sep -0.7 -4.6 3.2 5 4.0 0.92 4.3
France 0.7 Q3 0.4 0.9 4.5 Oct 5.7 7.3 Sep - 1 .3 -5.0 3.3 80.0 0.92 4.3
Germany -0.4 Q3 -0.3 -0.3 3.0 Oct 6.1 3.0 Sep 5.2 -2.4 2.6 5 6.0 0.92 4.3
Greece 2.9 Q2 5.1 2.4 3.8 Oct 4.0 1 0.0 Sep -6.5 -2.1 3.9 -37.0 0.92 4.3
Ita ly nil Q3 0.2 0.9 1 .8 Oct 6.3 7.4 Sep 1 .0 -5.3 4.4 3 8.0 0.92 4.3
Netherla nds -0.6 Q3 -0.8 0.2 - 1 .0 Oct 4.5 3.7 Sep 8.1 - 1 .9 3.0 5 7.0 0.92 4.3
Spain 1 .8 Q3 1 .3 2.4 3.5 Oct 3.5 1 2.0 Sep 1 .6 -4. 1 3.8 60.0 0.92 4.3
Czech Republic - 1 . 1 Q2 - 1 .2 n il 8.5 Oct 1 0.4 2.7 Sep* -1 . 1 -3.8 4.4 -5 5.0 22.5 4.0
Denmark 0.6 Q2 - 1 .2 1 .5 0.1 Oct 3.8 2.9 Sep 1 1 .1 1 .5 2.9 46.0 6.86 4.7
Norway 0.7 Q2 0. 1 1 .4 4.0 Oct 5.8 3.6 Aug** 1 7. 1 1 0.8 3 .8 49.0 1 0.8 -7.5
Poland 0.4 Q3 -5.5 -0. 1 6.6 Oct 1 1 .3 5.0 Oct§ 1 .0 -4.8 5.6 -1 38 4.04 1 1 .9
Russia 5.5 Q3 na 1 .1 6.7 Oct 6.2 3.0 Sep§ 2.8 -2.7 1 1 .9 1 54 89.2 -31 .9
Sweden - 1 .2 Q3 nil -0.6 6.5 Oct 6.0 7.7 Sep§ 4.6 -0.3 2.7 69.0 1 0.5 -0.9
Switzerl and 0.5 Q2 0. 1 0.8 1 .7 Oct 2.2 2.1 Oct 7.3 -0.7 1 .0 -1 1 .0 0.89 6.7
Tu rkey 3.8 Q2 1 4.6 3.4 61 .4 Oct 53. 1 8.9 Sep§ -4.6 -5.0 26.7 1 ,5 1 5 28.7 -35.1
Australia 2.1 Q2 1 .4 1 .9 5.4 Q3 5.6 3.7 Oct 2.2 0.5 4.5 77.0 1 .53 -3.3
Hong Kong 4. 1 Q3 0.3 4.2 2.0 Sep 2.0 2.8 Sep** 7.0 - 1 .5 3.9 1 6.0 7.81 0.1
I nd ia 7.8 Q2 1 1 .0 6.5 4.9 Oct 5.7 8.1 Apr -1 .3 -5.9 7.2 -3.0 83.2 -2.5
Indonesia 4.9 Q3 na 4.9 2.6 Oct 3.8 5.3 Q3§ 0.6 -2.5 6.7 -28.0 1 5,535 nil
Malaysia 3.3 Q3 na 4.0 1 .9 Sep 2.6 3.4 Sep§ 1 .7 -5.0 3.9 -4 1 .0 4.67 -2.6
Pakista n 1 .7 2023** na 1 .7 26.9 Oct 3 1 .8 6.3 202 1 -0. 1 -7.6 1 5. 1 ttt 222 288 -22.8
Philippi nes 5.9 Q 3 1 3.9 4. 1 4.9 Oct 5.7 4.8 Q3§ -4.6 -7.0 6.5 -1 05 55.8 2.5
Singapore 0.7 Q3 4.0 0.9 4.1 Sep 4.8 2.0 Q3 1 9.0 -0.7 3.0 -30.0 1 .35 1 .5
South Ko rea 1 .2 Q3 2.4 1 .3 3.8 Oct 3.6 2.1 Oct§ 2.2 -2.7 3.8 -6.0 1 ,301 1 .3
Taiwan 2.3 Q3 1 0.5 0.8 3.0 Oct 2.2 3.4 Sep 1 2.5 -0.4 1 .3 -44.0 32.1 -3.3
Thailand 1 .8 Q2 0.7 2.8 -0.3 Oct 1 .6 0.9 Sep§ 0.5 -2.7 2.8 1 3.0 35.5 0.3
Argentina -4.9 Q2 - 1 0.9 -1 .8 1 43 Oct 1 35.2 6.2 Q2§ -3.0 -4.8 na na 353 -54. 1
Brazil 3.4 Q2 3.7 3.1 4.8 Oct 4.6 7.7 Sep§# -1 .3 -7.6 1 1 .2 -200 4.87 9.4
Chile - 1 .1 Q 2 - 1 .2 -0.2 5.0 Oct 7.5 8.9 Sep§ff -4.3 -3.0 6.0 3 6.0 882 0.5
Col ombia -0.3 Q3 1 .0 1 .6 1 0.5 Oct 1 1 .8 9.3 Sep§ -4.0 -4.2 1 0.6 -265 3,983 20.7
Mexico 3.3 Q3 3.6 3.2 4.3 Oct 5.5 2.7 Sep - 1 .8 -3.8 9.5 3 2.0 1 7.3 1 2.0
Peru -0.5 Q2 1 .5 -0.3 4.3 Oct 6.5 6.1 Oct§ -1 .3 -2.9 7.1 -4 1 .0 3.77 1 .6
Egypt 3.9 01 na 3.8 3 5.9 Oct 37.5 7.1 Q3§ -1 .8 -6.7 na na 30.9 -20.9
Israel 3.4 Q2 3.1 0.8 3.7 Oct 4.4 3.2 Sep 4.8 -4.6 4.3 112 3.79 - 1 0.0
Saudi Arabi a 8.7 2022 na 0. 1 1 .6 Oct 2.3 4.9 Q2 3.2 - 1 .7 na na 3.75 0.3
South Africa 1 .6 Q2 2.4 0.7 5.5 Sep 5.7 3 1 .9 Q3§ -1 .8 -5.7 1 0.2 -4.0 1 8.2 -5. 1
Source: Haver Analytics. *% change on previous q uarter, annual rate. tThe Economist Intelligence U nit estimate/forecast. §Not seasona lly adj usted. *New series. **Year ending Ju ne. ttLatest 3 months. **3-month moving
average. §§S-year yi eld. tttDolla r-denominated bonds. Note: Euro area consumer prices are harmonised.

Ma rkets Com m odities

% cha nge on: % change on:
The Economist commodity-price i ndex
Index one Dec 30th index one Dec 30th % cha nge on
In loca l currency Nov 1 5th week 2022 Nov 1 5th week 2022 201 5 = 1 00 Nov 7th Nov 1 4th * month year
United States S& P 500 4,502.9 2.7 1 7 .3 Pakistan KSE 56,765 .3 4.5 40.4 Dol lar I ndex
United States NAScomp 1 4, 1 03.8 3.3 34.8 Si ngapore STI 3,1 32.1 0. 1 -3.7 All Items 1 48.8 1 5 1 .1 4.8 2.7
China Shanghai Comp 3,072.8 0.7 -0.5 South Korea KOSPI 2,486.7 2.7 1 1 .2 Food 1 32.2 1 3 5.3 5.4 -1 .5
China Shenzhen Comp 1 ,934.8 0.7 -2.1 Taiwan TWI 1 7, 1 28.8 2.3 21 .2 I nd ustrials
Japan Nikkei 225 33,5 1 9.7 4.2 28.5 Thailand SET 1 ,4 1 5 .2 0.2 -1 5.2 All 1 64.4 1 65.8 4.3 6.1
Japan Topix 2,3 73.2 2.9 25.5 Argentina M E RV 629,361 .5 7.6 2 1 1 .4 Non-food agricultu rals 1 1 5.4 1 1 6.5 1 .2 - 1 6.8
Britai n FTSE 1 00 7,486.9 1 .2 0.5 Brazi l BVSP* 1 23,1 65 .8 3.3 1 2.2 M etals 1 78.9 1 80.4 5.0 1 2.0
Canada S& P TSX 20,057.9 2.7 3.5 Mexico I PC 52,796.5 3.5 8.9
Sterl ing I ndex
Euro area EU RO STOXX 50 4,3 1 5.5 3.3 1 3 .8 Egypt EGX 30 24, 1 38.8 0.6 65.4
All items 1 84.7 1 85.1 2.5 -1 .9
France CAC 40 7,209.6 2.5 1 1 .4 Israel TA-1 25 1 ,723 .9 -0.6 -4.3
Germany DAX* 1 5,748.2 3.4 1 3.1 Saud i Arabia Tadawul 1 1 ,022.9 0.9 4.5 Euro Index
Italy FTSE/M I B 29,466.9 3.6 24.3 South Africa JSE AS 74,800.3 3.2 2.4 All items 1 54.5 1 54.6 2.3 -1 .8
Netherlands AEX 762.8 3.8 1 0.7 World, dev'd M SCI 2,975 .2 3.0 1 4.3 Gold
Spain I BEX 3 5 9,640.7 3.8 1 7 .2 Emerging markets M SCI 983 .5 2.7 2.8 $ per oz 1 ,963.9 1 ,968.7 2.2 1 1 .2
Poland WIG 73,688.5 3.0 28.2
Brent
Ru ssia RTS, $ terms 1 , 1 34.2 1 .9 1 6.9
$ per barrel 81 .7 82.6 -8.5 - 1 2. 1
Switzerland SM I 1 0,708.2 1 .1 -0.2 US corporate bonds, spread over Treasuries
Tu rkey BIST 7,665.9 -2.5 39.1 Dec 30th Sou rces: Bloom berg; CM E Grou p; Cotlook; Refi nitiv Da ta stream;
Australia Al l Ord . 7,3 1 6.7 1 .6 1 .3 Basis points latest 2022 Fastmarkets; FT; ICCO; ICO; ISO; Live Rice Index; LM E; NZ Wool
Hong Kong Hang Seng 1 8,079.0 2.9 -8.6 I nvestment grade 1 35 1 54 Services; Thompson Lloyd & Ewart; Urner Barry; WSJ. *Provisional.
India BSE 65,675.9 1 .1 7.9 H i h- ield 430 502
Indonesia I DX 6,9 58.2 2.3 1 .6 Sou rces: Refi nitiv Datastream; Sta ndard & Poor's Global Fixed Income For more cou ntries and add itiona l data, visit
Malaysia KLSE 1 ,466.8 0.6 -1 .9 Research. *Total return i ndex. econom ist.com/econom ic-a nd-financi al-ind icato rs
82
O bituary Vivia n Si lver The Economist November18th 2023

They got shelters later, which made them feel safer; but they were
not safe. The war with Gaza in 2014 was the worst. It lasted 50 days ,
the killing and mai mi ng, the destruction and deep psychological
damage on both sides . Yet the idea that war would bring peace had
been p roved false time and time again. When were the two parties
going to come to their senses, and stop this?
She had never expected to become a peace activist, though she
knew some cause would consu me her. When she was younger,
growing up i n Canada and, for a while, in New York, women's
rights were her chief passion. But a stint at Hebrew University i n
Jerusalem convinced h e r in 1974 t o move t o Israel , where h e r inter­
ests began to expand. She became one of the few female secretar­
ies , or chief decision-makers, at her fi rst ldbbutz, Gezer, and took
charge of building both there and at Be'eri, not usually a woman's
job. She also began to help the Bedouin she found camped almost
in her front yard at Be'eri, as poor as if they were in some pocket of
India or Africa. And she started to work with Palestinians in any
way she cou ld, because that gave peace more of a chance.
Her work burgeoned . She gave Palestinians jobs on the kibbutz,
and founded a group called "Creating Peace" which encou raged
cross-border links between traders and artisans. In 1998 she be­
came execu tive di rector of the Negev Institute for Strategies of
Peace and Development, later in partnership with Amal Elsana
Alh'j ooj , a Palesti nian ; i n 2011 they won an international award .
She spent a lot of ti me in Gaza in the late 1990s, making friends
there ; i t infuriated her when people said that Israel had "no partn­

A hundred ways to peace

er o n the other side". But when Hamas took over the strip in 2007,
everyth ing became hard . The Frid ay night phone calls she had or­
ganised, gathering her neighbours in a field to chat to Gazan
fri ends, had to stop. To make sure her Palestinian worke rs , who
now could not cross , we re not destitute, she had to take their mon­
ey to the checkpoint. She had to go there, too, to pick up the sick
Vivian Silver, peace activist, has been confirmed killed in Palestinians she wou ld then d rive to hospitals in Jerusalem.
the Hamas attacks of October 7th, aged 74 By 2014 she felt that noth ing was worki ng. I t was a momentou s
year for her. She turned 6 5 , reti red , and became a grandmother: a

S OM ET I M ES T RU T Hcould co me from the mouths of babes . This

ti me it came from Vivian Silver's two small sons. They had
made a friend of Nassar, a Palestinian labou rer who worked at
good time fo r soul-searching. For 40 years now she had been a
peace activist, and a proud me mber of the Left for just as long. But
the Left had not managed to end the seemi ngly eternal conflict be­
their kibbutz, and wondered why, after the second intifada, he tween Israelis and Palesti nians. What was the answer? As her fem­
wasn't working fo r them any more. S he explained that he had no inist brain eagerly suggested , it was to tu rn to woman-power. She
permit to come over now. "Why not?" one son wondered. " Because would help build up a move ment of Israeli and Palestinian women
there i s a big conflict between the Palesti nians and the Israelis." who would work together if they could, and wou ld also keep in the
"What is it over?" "Land," she told him. public eye by marching and appealing (including every Monday
I n H ebrew the words for "earth" and land" were the same. So outside the Knesset) , for negotiated agreement rather than war.
her son went off, fetched a bucket, filled it with earth , and re­ Her branch, the I s raeli side, now with around 4 5 , 000 Jewish
tu rned. "Here," he said. "G ive it to Nassar, so he can come back." and Arab-Israeli women, was called Women Wage Peace. From the
How simple peace could be, she thought. How uncomplicated, moment she joined, she lived and breathed it. The Palestinian
if it were only a matter of talking, sharing and hel ping. She spent branch was called Women of the Sun. In a mass rally on October
50 years with that thought in her head, trying all the ways she 4th this year they gathered at the "separation wall" in Bethlehem,
could think of to bring neighbours together. For neighbou rs they walked hand in hand to the Haas Promenade in Jerusalem and
were, with only four and a half kilometres separating her kibbutz, mustered on the shore of the Dead Sea, the W W P members in white
Be'eri , from the Gaza Strip. What was home to her was also home to shi rts with turquoise ribbons and the slogan " Peace is possible". At
them. No one i ntended to move anywhere. I t made no sense to the Dead Sea beach, against a fence hung with peace quilts, sympa­
fight, o nly to live in mutual respect and freedom. On the other side thetic female diplomats and representatives of Israel , Palestine,
were women like hers elf, mothers with children, who wanted the United States and several European countries sat at a rou nd ta­
nothing more than to bring them up happy, healthy and i n peace. ble to talk. It was a symbolic, triu mphant moment. The peace-wa­
S he would tell friends from Tel Aviv how quiet it was in the kib­ gers dispersed with hugs and laughter.
butz. Yet she endured four wars. In the conflict of 2009 s he was Three days later, Hamas broke into the Be'eri kibbutz. Her son
walking i n the fi elds when bombs began falling rou nd her. She Yonatan, now i n his 30s and i n Tel Aviv, had called his mother to
knew at once this was not a stray raid; a war had started. With no check she was safe. Even as the terrorists rampaged through ,
safe place near, she sim ply had to ru n , i n terror, the several kilo­ shooting from house to house, she made light of it. Then, wary of
metres home. In 2018 Palestinian ldte-bombs torched other green making any sound, s he switched to WhatsApp. She was typi ng in a
places s he loved, the Tel Gama archeological site and her local na­ cupboard i n her safe roo m ; the terrorists had now barged in.
tu re reserves. They were all turned to ash. I s rael's retaliation, as What, a n interviewer asked Yo natan later, would she have said
usual, was fierce. But what good did that do? about this new war, and the atrocities that had lau nched it? He
At the kibbutz they tried to live normally. There was no guard knew the answer at once, without equ ivocation. "That this i s the
on the gate, and most people d id not bother to lock thei r doors . outcome . . . of not strivi ng for peace." ■
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