The Economist (August 18th, 2018)

64 Pages·2018·7.172 MB·English

by  The Economist

TURKEY’S TURMOIL: HOW BAD IS IT?
Swampy tales from American politics
The prince and the carmaker
Airport queues, a passport to misery
AUGUST1M8TH–24TH2018 odern love
Dating in the digital age
Contents The Economist August 18th 2018 5
7 The world this week China
36 Reform experiments
Feeling the stones
Leaders
37 Overstressed children
9 Romance in the digital age
The government v parents
Modern love
38 Muslims
10 Emerging markets
And hell is just a sauna
Turkey’s turmoil
11 Saudi Arabia
The prickly prince Middle East and Africa
11 China’s reforms 39 Injustice in Kenya
TurkeyAn increasingly
Pilot error Too big to jail
autocratic country is at the
14 Infrastructure 40 Ethiopia’s prime minister
centre of an economic storm:
The bridges of decay Abiymania
leader, page 10. Currency
On the cover 40 Togo’s president turmoil and a row with America
Digital dating has changed Tough to unseat threaten to spill out of control,
Letters
the search for a mate, for page 43. Turkey’s crisis is not
41 Europe and the Arab world
16 On China, John Stuart Mill,
better more than for worse: Repeating past mistakes fundamentally contagious,
sin taxes, finance
leader, page 9. Internet page 61. The contrarian case
42 The Gulf crisis
dating is adding to the sum for emerging markets:
Competition over Kabul
of human happiness, though Briefing Buttonwood, page 62. Recep
42 Ugly art in Egypt
not without heartache, Tayyip Erdogan wants Turkish
19 Sexual selection
The oppressors can’t paint
page 19 artists to be more docile. But
Putting the data into dating
artistic freedom is hard to
crush, page 70
Europe
TheEconomist United States
online
43 The fall of the lira
25 Summer of scandal
Dailyanalysisandopinionto Turkey tantrum
Pythons and ostriches
supplementtheprintedition,plus 44 Russia’s neighbourhood
audioandvideo,andadailychart 26 West Virginia politics Big lake, small sea
Economist.com My kingdom for a couch
44 Ireland and Brexit
E-mail:newslettersand 27 The death penalty Ferry risky
mobileedition Cornhusker dues
45 Italy’s bridge disaster
Economist.com/email 27 The White House
Structural weakness
Printedition:availableonlineby Oh me, oh my
46 German UXB
7pmLondontimeeachThursday 28 Clerical sex abuse
Deadly sleepers
Economist.com/printedition Cardinal sins
46 Travel in Spain
Audioedition:availableonline 29 Lexington
todownloadeachFriday Indiana country The Guggenheim effect American politicsThe number
Economist.com/audioedition 47 Charlemagne of money scandals in Trumpland
Odyssey without end is overwhelming, page 25.
The Americas Another insider account of how
30 Migrants in Mexico the country is run, page 27
Britain
Staying south
48 Scottish public policy
31 The war on drugs
The not so brave
Volume428Number9105 Unlikely allies
49 Sterling’s slide
PublishedsinceSeptember1843 Crunch time
totakepartin"aseverecontestbetween Asia
intelligence,whichpressesforward,and 50 Bagehot
anunworthy,timidignoranceobstructing 32 Malaysian politics Frank Field’s other Britain
ourprogress."
Mahathir’s second act
EditorialofficesinLondonandalso:
33 Philippine-American
Amsterdam,Beijing,Berlin,Brussels,Cairo, International
Chicago,Johannesburg,Madrid,MexicoCity, relations
Moscow,Mumbai,NewDelhi,NewYork,Paris, 51 The global arms trade
Healing old wounds
SanFrancisco,SãoPaulo,Seoul,Shanghai, Masters of war
Singapore,Tokyo,WashingtonDC 33 Afghanistan’s endless war
52 The United Nations Arms
Ninety miles from Kabul
Bridge safetyIt is not just in
Trade Treaty
34 Police in India Italy that bridges are failing:
Honoured in the breach
Politicians’ pets leader, page 14. A deadly
collapse reveals cracks in both
35 Banyan
government and infrastructure,
The perils behind Korean
page 45. Crumbling
detente
infrastructure worries civil
engineers, page 67
1 Contents continues overleaf
6 Contents The Economist August 18th 2018
Business Science and technology
53 The future of computing 67 Construction technology
Quantum spring Abridge too far
54 Glyphosate and cancer 68 Archaeology
Bayer beware Adead parrot story
55 Passport queues 69 The wheat genome
Border-line ridiculous Breaking bread
55 Online retailing 69 Ancient plants
Suits you Enduring relationship
56 Golf and the media
Saudi ArabiaMuhammad bin Out of the woods ObituaryV.S. Naipaul,
Books and arts
Salman’s capriciousness is curmudgeonly genius, died on
57 Schumpeter
70 Creativity and censorship
hurting his kingdom: leader, August 11th, aged 85, page 78
The meaning of Musk
in Turkey
page 11. The arms market is
The art of survival
booming, and tilting in the
buyers’ favour, page 51. Elon Philosophy brief 71 Russian history Subscription service
Musk has pushed his firm to 58 John Maynard Keynes Tale of the century For our latest subscription offers, visit
Economist.com/offers
breaking point—and
Was he a liberal? 72 America’s warriors For subscription service, please contact by
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73 The ship that changed
Fear of the lira Telephone: [phone]
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Quantum computingThe Obituary
64 Forensic accounting
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65 Tax breaks in Africa The Adelphi Building, 1-11John Adam Street,
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Passport queuesTheir length
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The world this week The Economist August 18th 2018 7
ideaofmovingbordersfor secretaryofAlfredo Stroessner,
Politics
ethnicreasonssince the sec- the country’sdictatorfrom
ond world war. Adeal could 1954 to 1989.
help Serbia acceptthe in-
dependence ofKosovo, which Bolder than before
used to be one ofitsprovinces. The Taliban were pushed out
ofGhazni in Afghanistan, five
An unwelcome return daysaftertheylaunched a
An outbreakofEbolain the brash assaulton the city. The
north-eastofthe Democratic attackbythe emboldened
RepublicofCongo claimed insurgentstookthe govern-
more lives, bringingthe death mentin Kabul bysurprise.
toll to atleast41. The director- Also, dozenswere killed by a
general ofthe World Health Vermont’sDemocraticprim- suicide-bomberatan educa-
Organisation appealed foran aryforgovernorwaswon by a tion centre in the capital. Suspi-
end to fightingin the region, transgenderwoman. Christine cion fell on IslamicState.
Ahighwaybridge collapsed in which hashindered aid work- Hallquist, a formerelectricity
Genoa, Italy, duringa rain- ers. Itisthe second outbreak of executive, isthe firsttrans- The UNaccused Chinaof
storm, killingatleast38 people. the disease in the countrythis genderperson from either placinga million ethnicUighur
The reasonsforthe collapse year. The firstwasdeclared to partyto run asa candidate for Muslimsin re-education
are underinvestigation. Italy’s be overin July. governor. She facesan uphill campsin the western region of
populistgovernmentvowed to taskunseatingPhil Scott, the Xinjiang, where formerin-
spend more on infrastructure— Forthe firsttime in weeks Republican incumbent. matessaytheywere forced to
somethingsome ofitsmem- Israelallowed commercial eatporkand pledge loyalty to
bershad previouslydismissed goodsto passthrough itsbor- Arallybywhite nationalists the CommunistParty. AChi-
asunnecessary. dercrossingwith Gazaat in Washington failed to live up nese official denied it, saying
Kerem Shalom. Israel had to itshype. Onlytwo dozen thata fewcriminalshad been
America continued to demand blocked all buthumanitarian marchersturned up. placed in vocational schools.
thatTurkeyrelease a pastor, deliveriesin response to
AndrewBrunson, who isbeing incendiarykite and balloon Fuel in a crisis
held on dubiousterrorism attacksbyPalestinians. Atruce PresidentNicolásMaduro said
charges. Donald Trump said wasrecentlyannounced. thatthe official price ofpetrol
American sanctionswould Egyptistryingto brokera inVenezuela, which isclose to
tighten until MrBrunson is long-term ceasefire between zero, will rise to international
freed. Turkey’spresident, Israel and Hamas, the militant levels. He hopesthe higher
Recep Tayyip Erdogan, retaliat- group thatcontrolsGaza. price will reduce queues. The
ed byraisingtariffson Ameri- almost-free petrol isalmost
can goodsand vowingto Tunisia’spresident, Beji Caid neveravailable to ordinary
boycottApple. Turkish smart- Essebsi, said he would in- Venezuelans, since regime
phoneswill do, he said. troduce a bill to give women croniestend to grab itand sell
and men equal inheritance iton the blackmarketata
Protestersin Moscowde- rights. Religiousconservatives colossal mark-up. The govern-
nounced the imprisonmentof objected. Lawsinspired bythe mentarrested 14 more people Taiwan’spresident, Tsai Ing-
agroup ofteenagersbelonging Koran restrictwomen to half fortheiralleged role in an wen, made a political speech
to a political discussion group ofwhatmen get. attemptto assassinate Mr in America, the firsttime in 15
called “NewGreatness”. The Maduro, bringingthe total yearsa Taiwanese leaderhas
teenagerswere sentenced to Time for a confession numberofarreststo 26. done so. MsTsai’svisitto the
up to two yearsforextremism. Catholicpriestsin Pennsylva- United Stateswasherfirst
niaabused hundredsofchil- Costa Rica’ssupreme court since Congresspassed an act
The European Commission dren overseveral decades, ruled thatthe country’sban on enablinghigh-rankingTaiwan-
gave Polandone month to accordingto a reportbya same-sexmarriage isunconsti- ese and American officialsto
change itsnewlawsthatgive grand jury. The reportde- tutional and told the legislative travel to each other’scountry.
the governmentmore influ- scribed howseniorchurch assemblyto change the law China complained.
ence overthe appointmentof officialssystematicallycov- within 18 months. Ifthe legisla-
judges. The commission says ered up the abuse. Almostall ture doesnotact, the ban will The postmasterin the village
theyviolate EUruleson the the crimeshave passed the automaticallylapse. In Janu- ofOdhanga in the Indianstate
independence ofthe judiciary. statute oflimitationsfortrials arythe Inter-American Court ofOdisha wassuspended after
IfPoland failsto act, the com- to be held. ofHuman Rights, which is itwasdiscovered thathe had
mission mayturn to the based in Costa Rica’scapital, failed to deliverthousands of
European CourtofJustice. KrisKobach became the San José, decided thatthe letters. Although he wasselec-
Republican candidate for two-dozen countriesthatfall tive in the mail he junked and
Serbiaand Kosovosaid they governorin Kansasafterthe within itsjurisdictionmust admitted the charges, he
mightnegotiate border incumbent, JeffColyer, con- acceptgaymarriage. expressed little regret. Most of
changesto move ethnically ceded defeatin the recent the letterscan’tbe salvaged.
Albanian regionsinto Kosovo close-run primary. MrKobach, Mario Abdo Benítez, a conser- Neithercan the postmaster’s
and ethnicallySerbian ones an outspoken supporterof vative formersenator, took job, asofficialshave stamped
into Serbia. MostEuropean Donald Trump, islikelyto win office asParaguay’spresident. theirauthorityand said he will
countrieshave abhorred the in November. Hisfatherwasthe private probablygetthe sack. 1
8 The world this week The Economist August 18th 2018
thathad been marked for marketso buoyant, zero-hours change. Backed byTencent, a
Business
closure. Mike Ashley, Sports contractsfell by12%. bigtechnologyinvestment
Direct’sboss, said he wanted company, Nio isone ofseveral
Stockmarketswobbled amid to turn the chain into the NewZealand’sParliament startupsin China with ambi-
worriesaboutTurkey’seco- “Harrodsofthe high street”. passed a lawbanningmost tionsto compete with Tesla.
nomicturmoil. Aftertaking a foreign non-residentsfrom
batteringin foreign-exchange The euro zone’seconomy buyingexistinghomes. The Meanwhile, Tencentreported
marketsthe Turkish lira stabil- grewby2.2% in the second measure targetsmostlyChi- adrop in quarterlynetprofit, a
ised asthe government quartercompared with the nese investorswho have been rare occurrence amongChina’s
broughtin measuresto stop same period lastyear. Al- speculatingin property, and tech giants. The company’s
short-sellingofthe currency though thatallayed fearsthat a who are blamed fora housing gamingbusinesshasstruggled
and trumpeted a pledge of trade rowwith America would crunch thathasseen prices to grow. Thattaskhasbeen
investmentfrom Qatar. The damage the region, itwasthe skyrocketin placeslike Auck- made harderbyChinese regu-
episode spooked investorsin euro zone’sslowestrate of land. Australiansare exempt- latorsobjectingto newtitles.
otheremergingmarkets. The growth in overa year. ed; otherforeignerscan still ThisweeksalesofTencent’s
Indian rupee hita newlow make limited purchasesof newestgame, “MonsterHunt-
againstthe dollar. The Russian newdevelopments. er: World”, were halted be-
rouble and South African rand Consumer prices cause regulatorshad received
also had a stormytime. Britain, % change on a year earlier Curiouser and curiouser “complaints”.
Elon Muskputmore flesh on
3
Ajuryin California awarded hisannouncementthathe Anew high for business
$289m to a schoolsground- 2 intendsto take Teslaprivate. Constellation Brands, an
keeperwith cancerafterfind- 1 He explained howhe arrived American drinkscompany
ingthatweedkillerhe used + atthe buy-outprice of$420 a which countsthe Corona beer
0
had notadequatelydescribed – share, and thatthe funding he labelamongitsassets, in-
the risksto human health. The 1 had “secured” would come creased itsstake in Canopy
2013 14 15 16 17 18
weedkillercontained glypho- from Saudi Arabia’ssovereign- Growth, the world’slargest
Source: ONS
sate and wasmade byMon- wealth fund, which, he said, publiclytraded cannabis
santo, a chemicalscompany Britain’sinflationratein- hastalked to him abouttaking company, to 38%. Canopy,
thatwasrecentlytaken over by creased to 2.5% in the yearto Tesla private. MrMuskisstill which isbased in Canada,
Bayer. The German com- July, the firsttime ithad quick- notoffthe hookaboutwheth- wantsto expand in countries
pany’sshare price plunged ened since November2017. The erhe followed the properrules thatpermitmarijuana for
afterthe jury’sdecision. biggestjumpsin priceswere to fordisclosinghisplans: the medical use, and also in places
transport-related costs. Sep- Securitiesand Exchange where itisallowed forplea-
He has the credentials arate employmentdata Commission hasreportedly sure. Canadianswill soon be
Uberappointed a newchief showed that300,000 more subpoenaed Tesla’sdirectors. able to buythe weed forrecre-
securityofficer, nine months people were in workin the ational use followingan act of
afteritadmitted thathackers second quarterthan a year Nio, a Chinese electric-car- Parliamentthatmadeitlegal.
had obtained the namesof earlier. The unemployment maker, filed an IPOto listits
57m passengersand drivers. rate, at4%, isatitslowestlevel American depositaryshares For other economic data and
MattOlsen isa formergeneral since 1975. With the labour on the NewYorkStockEx- news see Indicators section
counsel ofAmerica’sNational
SecurityAgency. The firm also
published itsearningsforthe
second quarter. With gross
bookingsforitscarsup by 41%
compared with the same
quarterlastyear, netrevenue,
afterpayingitsdriversand
othercosts, surged to $2.8bn.
Ubermade anothernetloss,
however.
Home Depotpublished its
quarterlyearnings. Seen as a
bellwetherforthe American
economy, the home-improve-
mentretailerreported a big rise
in netprofit, to $3.5bn, and
delivered an upbeatforecast.
House ofFraser, a British
department-store chain, found
abuyerjusthoursaftergoing
into administration. Sports
Directboughtall the com-
pany’s59 premisesfor£90m
($115m), includingthe stores
Leaders The Economist August 18th 2018 9
Modern love
Online dating has changed the search fora mate, forbettermore than forworse
THEinternethastransformed nersonline. Thissearchable spectrum ofsexual diversity isa
the way people work and boon: more people can find the intimacytheyseek.
communicate. It has upended There are problemswith the modern wayoflove, however.
industries, from entertainment Manyuserscomplain ofstresswhen confronted with the bru-
to retailing. But its most pro- tal realitiesofthe digital meatmarket, and theirplace within it.
found effectmaywell be on the Negative emotionsaboutbodyimage existed before the inter-
biggest decision that most peo- net, buttheyare amplified when strangerscan issue snap judg-
ple make—choosinga mate. mentson attractiveness. Digital datinghasbeen linked to de-
In the early 1990s the notion of meeting a partner online pression. The same problemsthatafflictotherdigital platforms
seemed freakish, and not a little pathetic. Today, in many recurin thisrealm, from scamsto fake accounts: 10% ofall new-
places, itisnormal. Smartphoneshave putvirtual bars in peo- lycreated datingprofilesdo notbelongto real people.
ple’s pockets, where singletons can mingle free from the con- Thisnewworld ofromance mayalso have unintended con-
straintsofsocial orphysical geography. Globally, at least200m sequencesforsociety. The factthatonline datershave so much
people use digital dating services every month. In America more choice can breakdown barriers: evidence suggests that
more than a third of marriages now start with an online the internetisboostinginterracial marriagesbybypassing ho-
match-up. The internet is the second-most-popular way for mogenous social groups. But daters are also more able to
Americansto meetpeople ofthe opposite sex, and isfast catch- choose partnerslike themselves. Assortative mating, the pro-
ingup with real-world “friend ofa friend” introductions. cess whereby people with similar education levels and in-
Digital datingisa massive social experiment, conducted on comes pair up, already shoulders some of the blame for in-
one ofhumanity’smostintimate and vital processes. Its effects come inequality. Online dating may make the effect more
are onlyjuststartingto become visible (see Briefing). pronounced: education levels are displayed prominently on
dating profiles in a way they would never be offline. It is not
When Harryclicked on Sally hard to imagine datingservicesofthe future matching people
Meeting a mate over the internet is fundamentally different bypreferred traits, asdetermined byuploaded genomes. Dat-
from meeting one offline. In the physical world, partners are ingfirms also sufferfrom an inherent conflict ofinterest. Per-
found in familynetworksoramongcirclesoffriendsand col- fectmatchingwould leave them bereftofpayingcustomers.
leagues. Meetinga friend ofa friend isthe norm. People who The domination ofonline datingbya handful offirms and
meetonline are overwhelminglylikelyto be strangers. Asa re- theiralgorithmsisanothersource ofworry. Datingapps do not
sult, datingdigitallyoffersmuch greaterchoice. Abar, choiror benefitfrom exactlythe same sortofnetworkeffects asother
office mighthave a fewtensofpotential partnersfor anyone tech platforms: a person’sfriendsdo notneed to be on a specif-
person. Online there are tensofthousands. icdatingsite, forexample. Butthe feedbackloop between large
This greater choice—plus the fact that digital connections poolsofdata, generated byever-growingnumbersofusers at-
are made onlywith mutual consent—makesthe digital dating tracted to an ever-improvingproduct, still exists. The entryinto
marketfarmore efficientthan the offline kind. Forsome, thatis the marketofFacebook, armed with data from its2.2bn users,
bad news. Because ofthe gulfin pickinessbetween the sexes, a will provide cluesasto whetheronline datingwill inexorably
fewstraightmen are doomed neverto getanymatchesat all. consolidate into fewer, largerplatforms.
On Tantan, a Chinese app, men express interest in 60% of
women theysee, butwomen are interested in just6% ofmen; While you were swiping
thisdynamicmeansthat5% ofmen neverreceive a match. In Buteven ifthe marketdoesnotbecome evermore concentrat-
offline dating, with a much smallerpool ofmen to fish from, ed, the process of coupling (or not) has unquestionably be-
straight women are more likely to couple up with men who come more centralised. Romance used to be a distributed ac-
would notgeta look-in online. tivitywhich tookplace in a profusion ofbars, clubs, churches
For most people, however, digital dating offers better out- and offices; now enormous numbers ofpeople rely on a few
comes. Research has found that marriages in America be- companiesto meettheirmate. Thathandsa small number of
tween people who meet online are likely to last longer; such coders, tweaking the algorithms that determine who sees
couplesprofessto be happierthan those who metoffline. The whom across the virtual bar, tremendous power to engineer
whiffofmoral panic surrounding dating apps is vastly over- mating outcomes. In authoritarian societies especially, the
blown. Preciouslittle evidence existsto showthatopportuni- prospectofalgorithmicallyarranged marriagesoughtto cause
tiesonline are encouraginginfidelity. In America, divorce rates some disquiet. Competition offers some protection against
climbed until justbefore the adventofthe internet, and have such a possibility; so too mightgreatertransparency overthe
fallen since. principlesused bydatingappsto match people up.
Online datingisa particularboon forthose with very par- Yetsuch concernsshould notobscure the good thatcomes
ticularrequirements. Jdate allowsdatersto filterout matches from the modern wayofromance. The rightpartnerscan ele-
who would notconsiderconvertingto Judaism, forinstance. A vate and nourish each other. The wrong ones can ruin both
vastlybiggermarkethashad dramaticresultsforsame-sex dat- theirlives. Digital datingoffersmillionsofpeople a more effi-
ersin particular. In America, 70% ofgaypeople meettheirpart- cientwayto find a good mate. Thatissomethingto love. 7
10 Leaders The Economist August 18th 2018
Emerging markets
Turkey’s turmoil
An increasinglyautocraticcountryis atthe centre ofan economicstorm
THEREwasatimewhenpeo- Andtheoneswith problemsthatare mostsimilarhave shown
ple thought that a secular, more alacrityin tacklingthem. The factthatArgentina’scentral
democraticTurkeywould even- bankacted to raise interestratesisa source ofcomfort.
tually accede to the European For Turkey itself, there is a fairly standard blueprint to fol-
Union and join the club of low when an economy gets into such straits: raise rates to re-
wealthyliberal statesknown as duce pressure on the currency and tackle inflation, and seek
the West. There wasa time, too, outemergencyfinancingfrom the IMF,tied to a setofinvestor-
a few years ago, when Turkey friendly policies. Argentina did just that earlier this summer,
wasa darlingofemerging-marketinvestors. helpingto nip itscrisisin the bud.
Those daysare longgone. Politically, the countryhas been Turkey has so far done little more than fire-fight, offering
tiltingawayfrom the Westforyears: becomingmore stridently some help to the banking system, making it harder to specu-
Islamist, picking fights with NATO allies and transforming it- late againstthe lira and drummingup promisesofinvestment
selfinto a virtual autocracyunderPresidentRecep Tayyip Er- from allies such as Qatar, which will provide dollars but not
dogan. Economic-policy orthodoxy has been junked. High credibility. MrErdogan’sresistance to higherinterestrates, and
growth rates have depended on foreign borrowing: the the fact that turning to the IMF would require some bowing
amount of corporate foreign-currency debt has more than and scrapingto America, dentthe chancesthatTurkey will get
doubled since 2009. MrErdogan, who believesthathigh inter- ahead ofthings. Thatcould be the difference between a man-
est rates magically cause inflation rather than cure it, has aged adjustment and a chaotic collapse, in which defaults
stopped the central bankfrom actingsensibly. spread and banksteeter.
Both these trends have now come to a head. Turkey is
gripped by a currency crisis, precipitated partly by America’s He blames America
imposition ofsanctionsoverMrErdogan’srefusal to release a MrErdogan mayyetsee sense. Buthisautocraticstyle fosters
pastor, Andrew Brunson, who is absurdly accused of terror- bad policies. He hasundermined the institutionsthat oughtto
ism. President Donald Trump has made matters worse by stand up to him. The central bank, which should be indepen-
vowingto slap highertariffson Turkish metals. The lira haslost dentand technocratic, defersto a leaderwith crackpot views.
afifth ofitsvalue thismonth, furtherfuellinginflation, increas- The finance ministryisrun bythe president’sson-in-law. The
ingthe burden offoreign-currency debts and threatening the media, which should be pointingout MrErdogan’s mistakes,
health ofTurkey’sbankingsystem. Relationswith America are are so cowed thattheyrepeathisconspiracytheories instead.
poisonous. Mr Erdogan blames Turkey’s economic problems Deprived ofreal news, manyTurksbelieve theirproblems are
on a plot by foreign enemies and has imposed retaliatory ta- caused bya Western plot. With no one to curb him, Mr Erdo-
riffson American cars, alcohol and even cosmetics. gan isfree to indulge hisworstinstincts.
The crisisposesthree typesofrisks: forotheremerging mar- In normal times, Turkey’sWestern alliesmighthelp bytell-
kets, nervousthatinvestorswill flee ascontagion spreads; for ingMrErdogan to change course. ButEuropean governments
Turkey’seconomy, which isstaringata deep recession; and for are scared to upsethim, lesthe open the gatesand let Syrian ref-
the West, whose fraying bonds to Turkey could finally break. ugeesflood into Europe. And MrTrump isengaged in a ridicu-
On each count, howbad could thingsget? louschest-thumpingcontestwith the Turkish leader, with each
man tradingthreatsand stirringup patrioticangeragainst the
When Erdogan sneezes other. Neitheriswillingto backdown, forfearoflooking weak.
Start with the least-bad news. The lira’s collapse has caused In the short run Turks will suffer far more from the crisis.
wobbles in other emerging markets that may share one or Manyare alreadyfeelingpooreraspricessoar. In the longrun,
more ofTurkey’straits, includingan inadequate savings rate, a however, America will suffer, too. Turkeyisan important ally
big current-account deficit, lots of foreign-currency debt and in a crucial place, straddling the crossroads between Europe,
high inflation. The South African rand swooned; the Indian ru- the Middle Eastand Asia. Ifitfallsouttoo badlywith the West,
pee hit a record low this week; Argentina, which has already itmaydrifteven closerto Russia orChina. MrTrump isrightto
had itsown currencycrisisthisyear, raised interest ratesagain. pressforthe release ofMrBrunson, butwrongto use tariffsto
Sharesin bankswith exposure to Turkish borrowersfell (see Fi- thatend. The rules-based tradingsystem dependson countries
nance section). notusingsuch bluntweaponsindiscriminately. And the NATO
The environment for emerging markets has become less alliance isundermined when America’spresidentneedlessly
forgivingasthe tighteningofmonetarypolicyin America has inflamesdisputeswith tetchymemberstates.
boosted the dollarand asconcernsgrowaboutChina’secon- MrTrump and MrErdogan need to find a face-savingway
omy. Buta cascade ofcurrencycrisesstill seemsunlikely, main- foreach to declare victoryand dial down the aggression, asMr
lybecause Turkey’sfrailtiesare so acute. Ofthe bigemerging- Erdogan haspreviouslydone with Russia and MrTrump with
market economies, only Argentina and Egypt (both now North Korea. That would create room forthe West, including
wardsofthe IMF) also have a double-digitinflation rate; none the IMF, to help Turkeystep backfrom the abyss. Itwill be hard
hasa current-accountdeficitasbig, although Pakistan’scomes to save a countrywhose leaderdoesnotunderstand why itis
close. Other markets have more room for policy manoeuvre. in trouble. ButTurkeyistoo importantto be abandoned. 7
The Economist August 18th 2018 Leaders 11
Saudi Arabia
The prickly prince
Muhammad bin Salman’s capriciousness is hurting his kingdom
ELON MUSK, a mercurial en- region. Monthslater, aspartofan anti-corruption drive, hun-
trepreneur, wantsto take Tes- dredsofSaudi princesand tycoonswere locked up in a luxury
la, his electric-car firm, private. hotel in Riyadh until theysurrendered a bigchunkof theiras-
That will cost billions. Where sets. No doubt some of them were guilty of something, but
will he find the money? On Au- there wasno due process. To outsiders, itlooked asif property
gust 13th Mr Musk gave an an- rightsin Saudi Arabia depend on the prince’swhim.
swer: from Saudi Arabia, prob- In many ways, Prince Muhammad is trying to change the
ably (see Schumpeter). It is a kingdom forthe better. He hasloosened religiousand social re-
common refrain. When visionarieswantsomeone rich to back strictions: Saudi women can nowdrive, and everyone can go
something bold, they turn to Muhammad bin Salman, the to the cinema. He has pursued economic reforms aimed at
crown prince who runsthe oil-rich kingdom. He hascommit- eventually weaning the Saudi economy off oil, and encour-
ted $45bn to a Japanese tech fund and plansto build an ultra- ages Saudi women to go out to work. All this has made him
modern cityon the Red Sea costing$500bn. IfPrince Muham- popular, especiallyamongthe youngand amongwomen.
mad wantsto investin electriccarstoo, whynottake hiscash?
One reason forcaution isthatwhatthe prince gives, he can Areformer, butreckless
suddenlytake away. Thismonth, afterCanada’sforeign minis- Yetbydoingthingsthatare wrongand foolish, he needlessly
tertweeted thatSaudi Arabia should notlockup peaceful dis- alienates potential supporters at home. Even as he lifted the
sidents—hardly an unusual statement for a Canadian politi- ban on women drivers, forexample, he waslockingup wom-
cian—Prince Muhammad wasfurious. Instead ofignoring the en who had campaigned for it. He needlessly alienates for-
tweet, he retaliated wildly. Saudi Arabia expelled the Canadi- eigners, too. Last year the Saudi authorities detained Leba-
an ambassador, cutoffbilateral trade, ordered Saudi students non’sprime ministerfortwo weeks—an extraordinarybreach
outofCanadian universitiesand told sickSaudisto shun Ca- ofdiplomaticnorms. In Yemen, where Prince Muhammad is
nadian clinics. State media lambasted Canada’shuman-rights fightinga proxywaragainstIran, Saudi bombshita school bus
record; social media portrayed Canada asa drug-addled dysto- on August 9th, killingdozensofchildren. The war, now in its
pia. MrMusk, who ishalf-Canadian, hasbeen warned. fourth year, hasdevastated Yemen and shamed alliessuch as
Prince Muhammad’sfurywill nothurtCanada much. Just America and Britain, which supplySaudi Arabia with arms.
0.2% ofitsexportswentto Saudi Arabia lastyear. The immedi- Few Saudis are brave enough to tell Prince Muhammad
ate pain will be feltbySaudi studentswho mustsuddenly find when he ismakingmistakes. Hisalliesoughtto speak up, but
another college and Saudi patients who must take their ail- theyare silenttoo. Thisisa grave mistake. Saudi Arabia isthe
mentselsewhere. In the longerrun, the main damage is to Sau- largest Arab economy and home to Islam’s holiest sites. Suc-
di Arabia’sreputation—and thathasreal consequences. cessful reform there would help stabilise the whole Middle
Investors like predictability. Prince Muhammad offers the East. Foreign leaders should advise Prince Muhammad to
opposite. Lastyear, withoutwarning, Saudi Arabia led an eco- calm down and stop damaginghiscountryand hisreputation.
nomicblockade ofQatarthatcontinuesto disrupttradein the Ifhe doesnot, theyshould stop sellinghim weapons. 7
China’s reforms
Pilot error
China is conducting fewerlocal policyexperiments underXi Jinping. Thatis a shame
COME December, it will be allowedpeasantstofarmtheirown plotsand sell their crops.
Chinese policy pilots 40 yearssince the Commu- When outputsoared, he made thisofficial policy. In 1980, to the
Provincial-level
nist Party endorsed Deng Xiao- horror of Maoists, he set up “special economic zones” along
600
ping’s proposal for reform. the coastto carryoutfree-markettrials. These too proved a suc-
400 What followed was an eco- cess, and were eventuallyreplicated nationwide.
200 nomictransformation on a scale Deng’spragmatism helped rescue China from the dogmatic
and ata pace thathad never be- ditch into which Mao had forced it. His successors, though
0
201011 12 13 14 15 16
fore been witnessed in human spooked bythe collapse ofthe SovietUnion, keptexperiment-
history. One of the secrets of Deng’s success was his encour- ing even in the political realm in the 1990s and early 2000s.
agement of experimentation (see China section). He did not People in some places were even given a bit more leeway to
dismantle Mao’s disastrous “people’s communes” in one go. choose local leadersin grassrootselections.
He did so overseveral years, allowingdifferentplaces to trydif- The freedom to tinker has never been unlimited, and va-
ferentmethods. He turned a blind eye when local authorities rious autocratic habits have undermined some experiments. 1
14 Leaders The Economist August 18th 2018
2One is secrecy. State media are often ordered to keep quiet gestexperimentsbecause anyone adverselyaffected by them
aboutpilotprojectsin case theygo wrong. Resultscan often be might retaliate by accusing the reformers of graft. The other
published onlyin classified journals; leakersface years in jail. reason is to do with Mr Xi himself. The man who would be
IfChina’sexperimentswith a lessdraconian family-planning president-for-life hasshown little interestin letting hissubor-
policyhad been debated more openlyaftertheirlaunch in the dinates do their own thing. When China-watchers call him
1980s, more heed mighthave been paid to theirfindings: thatit “chairman ofeverything”, theyare onlyhalf-joking.
was pointless (as well as cruel) to punish parents for having Ratherthan stiflingexperimentation, MrXi should unleash
more than one child. Mostwanted small familiesanyway. it. Several areas are crying out for fresh thinking. Many state-
owned firmsare woefullyinefficient. Whynotprivatise some
Fearoftrying and see whathappens? Chinese farmerslackcleartitle to their
Nonetheless, asin anycountry, letalone one asvast and varied land. Perhaps some places could try giving them property
asChina, a suck-it-and-see approach yieldsbetterresults than rights? Rural migrantsare treated assecond-classcitizens in big
decidingeverythingcentrally. Alas, underPresidentXi Jinping, cities, deprived of public services. If their grievances are not
experimentation ofanykind hasbecome harder. In 2010—two dealtwith, theycould destabilise China. Whynotask some of
yearsbefore MrXi tookover—around 500 policy-related pilot these citiesto tryscrappingthe pernicioushousehold-registra-
projectswere beingcarried outatthe provincial level, reckons tion system thatisthe rootcause ofthe migrants’ woes?
Sebastian Heilmann ofthe UniversityofTrierin Germany. By The worryisnotjustthatfresh experimentswith local de-
2016 the numberhad dropped to about70. mocracyare all butunthinkable underMrXi. Itisthat count-
One reason isfear. Since he came to power, MrXi has been lessgood ideasofall kindswill neverbe tried, will neverprove
waginga fierce campaign againstcorruption—sometimes justi- theirworth and will neverspread. Wise leadersrecognise that
fied, but brutal. Bureaucrats have become less willing to sug- theydo nothave all the answers. DoesMrXi? 7
Infrastructure
The bridges of decay
Itis notjustin Italythatbridges are failing
CONCRETE can last a very The riskofdeterioration inherentin reinforced concrete can
long time. The roof of the be accelerated bymanyfactors. Shoddyworkmanship in the
Pantheon in Rome isthe world’s firstplace doesnothelp. In the case ofbridgesdesigned in the
largest unreinforced concrete 1960s, the loads placed on them have become far higher be-
dome; it was completed in cause traffic volumes are greater, cars are bigger and lorries
around 125AD by Hadrian, an much heavier. Extreme weathercan also playa part, not least
emperor. Butconcrete structures because concrete expandswhen itgetshotand contracts in the
can also fail, with tragic conse- cold. Floodsare able to undermine foundations. In the normal
quences. Although itistoo earlyto knowthe cause of itscol- course ofthings, most bridges built usingreinforced concrete
lapse, something clearly went very wrong with the Morandi may survive individual events. But if they have been weak-
bridge in Genoa, which wascompleted in 1967 and crashed to ened and thatvulnerabilityhasnotbeen detected byregular
the ground on August14th with the lossofatleast38 lives. inspectionsand repaired, forwhateverreason, a vital margin
In Italyitselffingersare alreadybeingpointed: at the oper- ofsafetyhasbeen removed.
ator of the bridge, at the bridge’s designer, at politicians at
home and abroad (see Europe section). Butthe Genoa disaster Concreting the world
also carriesa warningthatstretcheswell beyond the country’s So it is not just in Italy that questions should be asked about
borders. Concrete, on which the Morandi bridge relied, hasbe- monitoringand maintenance regimes. Bridgesthroughout Eu-
come the world’smostwidelyused buildingmaterial. The sort rope, America and Asia are all showingsignsofdeterioration.
reinforced with steel is found in all manner of construction. Aslongago as1999, one studyshowed that30% ofroad bridges
And unlike the stuffin the dome ofthe Pantheon, reinforced surveyed in Europe had some sort of defect, often involving
concrete comeswith a problem. corrosion oftheirreinforcement. And a reportthisyear found
The reinforcing is done by encasing steel bars—or the ties that more than 54,000 out ofthe 613,000 bridges in America
thatsupportbridges, asin the design ofthe Genoa structure— are rated “structurally deficient”. These dodgy bridges are
within the concrete. The difficultywith usingmetal is thatit in- crossed 174m timesa day.
troducesa potential weakness. Tinycrackscan develop in con- In manycases, structuresthatmighthave been expected to
crete from battering by the weather, vibrations from traffic, lasta centuryorso will nowprobablyhave to be replaced in
movementsin the foundationsand othercauses. These cracks half the time because of various forms of structural deterio-
allowwaterto creep inside the structure, and once in contact ration. Newtechnologieswill help with much closermonitor-
with the metal contained therein, cause itto corrode. Thatpro- ing; new materials will allow stronger replacements (see Sci-
cesscan dramaticallyweaken the structure. Bridgesare ofpar- ence section), which might turn out to be a cheaper option
ticular concern because they can be subjected to unusually than restoration. With the world covered in reinforced con-
large stressesand strains, and manyspan longdistances with crete, thisisa problem thatspanscountries. The failure ofthe
nothingbelowthem forsupport. Morandi bridge showsthatitmustnotbe ignored.7
16 Letters The Economist August 18th 2018
togrowatitspresentrate.The Perhapssomeoftheblame utorofadded sugarto the diet
China expands
long-standingSino-Indian liesclosertohome. itisrightthatsoda taxes are
Aswell asEurasia and Africa, borderdispute,whichChina FERGUSGREEN partofanti-obesitystrategies
China’sBeltand Road Initia- deliberatelykeepsalivewith London thatreach the whole
tive hasalso reached the frequentprovocation,also population atminimal cost.
shoresofthe Caribbean limitsIndia’soptions.The“arc PATRICIO MARQUEZ
Paying foroursins
(“Gatewayto the globe”, July ofmaritimedemocracies” Lead public health specialist
28th). Often thoughtofas needtogettheiracttogetherif Yourarticle questioningthe PAUL ISENMAN
America’sbackyard, this therules-basedinternational efficiencyofsin taxes, on Former principal economist
region isincreasinglybecom- orderistosurvive. productssuch astobacco and ALAN FUCHS
ingAmerica’ssoftunderbelly. COMMODOREANILJAISINGH(RETD) sugarydrinks, deviated from Senior poverty economist
Yearsofstrategicneglectby Vice-president yourpreviousstrongsupport SHEILA DUTTA
Washington have provided IndianMaritimeFoundation forthe policy(“The taxesof Senior health specialist
Beijingwith opportunitiesto Noida,India sin”, July28th). Itisalmost All at the World Bank Group
build relationswith manyof unbelievable thatThe Econo- Washington, DC
itsnations. China hasbuilt a mistaired the idea ofsaving ROBERT MARTEN
Whatwould Mill say?
hostofnewembassiesacross moneybylettingsmokersdie London School of Hygiene and
the region, one ofthe biggest ten yearsearly. Youfailed to Tropical Medicine
ofwhich isin tinyDominica, a considerthe evidence about
countrywith just74,000 the effectoftobacco taxes on Youreported thatafterMexico
inhabitants. Caribbean gov- societyatlarge, and the poor in imposed a taxon sugary
ernmentshave relativelyfew particular. The health benefits drinks, salesfell by5.5% in the
natural resourcesto offer, but oftobacco taxesfarexceed the firstyearand 9.7% in the sec-
theyare happyrecipientsof increase in taxliabilityand ond. Mexico’smanufacturing-
roads, stadiums, schools, theyaccrue disproportionately industrysurveyshowsthat
hospitalsand yes, presidential to lower-income households. salesperhead fell byjust 3.8%,
palacesand parliaments. Asshown bycountry- and asa one-offeffectthat did
China’seconomicforaysin specificresearch from the notstrengthen overtime.
the South Pacifichave been World BankGroup, the poor Mexico’sbiennial household
shadowed bya creeping Itisa pleasure to read your tend to smoke more and are expenditure surveyindicated a
militarisation ofthatregion. A serieson liberal thought more price responsive on slightrebound in salesin the
similardevelopmentcould (“Againstthe tyrannyofthe average than richerindivid- second post-taxsurvey.
happen in the Caribbean in majority”, August4th). Butif uals, so theygeta fargreater Much recentevidence on
the yearsto come. Fornow, itis John StuartMill would have share ofhealth benefitsfrom these taxescomesfrom public-
too earlyto saywhetherChina viewed Donald Trump’spresi- highertobacco taxesthan they health researcherswho ignore
isstrengtheningitspresence in dencyasthe inevitable out- pay. When theyquittheir modellingissuesthatworry
the Caribbean asa tit-for-tat for come ofthe cluelessmajority’s familiesbenefitfrom the economists, such asthe stor-
America’snaval patrolsin the choice, he would have been reduction in passive smoking abilityofdrinksand quality
South China Sea. Butshould wrong. HillaryClinton, not Mr and the lowerlikelihood that downgradingaspricesrise,
Beijingwish to up the ante at Trump, won the popularvote theywill fall into extreme which makesquantity
some point, Washington bya majorityof3m. The elec- povertyfrom catastrophic responsessmaller. Small sin
should wonderwhyitslept toral college elected President medical expensesand lost taxesdo nothave the bigef-
while China developed a Trump. Ifanything, Mr earningsbecause oftobacco- fectsclaimed bysome studies.
critical strategicfoothold right Trump’spresidencydemon- related premature ill health, JOHN GIBSON
underitsnose. stratesthe frustration, not the disabilityordeath. Countries Professor of economics
WILLEM OOSTERVELD tyranny, ofthe majority. can increase the progressivity University of Waikato
Strategic analyst SHARONA MUIR oftobacco taxesbyspending Hamilton, New Zealand
The Hague Centre for Strategic Perrysburg, Ohio them on programmesto re-
Studies duce poverty, asin factmost of
ARussian proverb
In attributingblame forthe them generallydo. In the
China hasestablished itsfirm wave ofanti-liberal sentiment Philippines, forexample, the The piece offinancial acumen
ownership ofthe South China thatfollowed the 2008 additional taxrevenue gener- quoted byButtonwood (July
Sea and isunlikelyto cede any financial crisis(“The brains ated bythe sin taxreform in 14th), “bearssound clever,
space. Itwill eventuallyget trust”, August4th) youpointed 2012 hashelped expand health bullsmake money”, reminds
ASEANto do itsbiddingand to the concentration ofpower insurance coverage for15m me ofan old Russian saying:
the disjointed approach to amonga rulingliberal elite, low-income families. “Ifyouare so smart, whyare
preventthatisnotworking. which bred intellectual arro- Youalso underestimated youso poor?”
ASEAN’sfaultlineshave been gance: “the liberalsin charge the health and economic DANIEL GUPTA
cruellyexposed. Itisthe Indian before the financial crisis were effectsofthe obesityepidemic, Moscow7
Ocean where China needsto convinced thattheyhad all the particularlythe ominous
be checked asitexpandsits answers. In protectingwhat global trendsin child obesity
footprintthrough naval bases theyhad, theystopped think- caused bya poor-qualityfood Lettersarewelcomeandshouldbe
aspartofitsoverall strategy of ing.” Around thattime, The environmentofinexpensive addressedtotheEditorat
TheEconomist,TheAdelphiBuilding,
global maritime dominance. Economistran an advertising sugarydrinks, junkfood and
1-11JohnAdamStreet,
The Indian navycan contain campaign featuringa quote otherhighlyprocessed foods
LondonWC2N6HT
the presentChinese naval from LarryEllison: “I used to replacingtraditional diets. E-mail:[email protected]
presence butwould be hard think. Now, I justread The Since sugarydrinksare in most Morelettersareavailableat:
Economist.com/letters
pressed to do so ifitcontinues Economist.” casesthe single largestcontrib-