Table Of Content

The Russians who will take on Putin China’s brainy new team How to teach gifted children When astronomers write haiku MARCH24TH–30TH2018 Epic ail Contents TheEconomistMarch24th2018 3 37 Kenya’snewrailway 6 Theworldthisweek Offtoabadstart 37 FreetradeinAfrica Leaders Openingthemarket 9 Facebook 38 Nigeria’sinsurgency Epicfail Bringingbackthegirls 10 Egypt’selection Nochoice UnitedStates 10 TheFDA’snewcourse 39 Facebookanddemocracy FasterDrugApprovals Theantisocialnetwork 11 Sanitationandhygiene 40 Non-disclosure GuncontrolWhilenational Nowwashyourhands agreements politiciansdonothing,some 12 Putin’snextterm Let’snotmakeadeal Americanstatesareshowing ThestruggleforRussia moreinitiative,page42. 41 AmericaandTaiwan Onthecover Visitorswelcome Switzerlandoffersalessonin Thesocial-mediagiantfaces Letters 41 Illinoispolitics thebenefitsoftightergun thebiggestcrisisinits control,page43 14 Onrefugees,Britain, Theplutocrats’primary history.Hereishowitand theindustryshouldrespond: WarrenBuffett,alcohol, 42 Gunlaws leader,page9.Thecontroversy Russia Whatworks issparkinganoverdue 43 DebunkingaSwissmyth discussionaboutprivacyand Briefing Gunsandrösti theinternet,page39. 18 Russia 44 Lexington Studyingalgorithms Gorbachev’sgrandchildren Stormyatthebarricades systematicallyoffershopeof understandingtheopaque worldofdigitaladvertising, Europe TheAmericas page71.Europeanregulators 23 Infrastructure 45 Peru takeajabattax-shytech TheMalmo-Palermoexpress ThefallofKuczynski giants,page60 24 AbortioninIreland 46 CrimeinBrazil Russia’snextgeneration Don’tmentionthechurch MourningMarielle VladimirPutinisattheheight 25 Russiannervegas 46 Canada TheEconomistonline ofhispower.Butthestruggle Chemicalparalysis ThehomelessPM overwhatcomesnextisjust Dailyanalysisandopinionto 25 Turkey 47 Bello beginning:leader,page12.Mr supplementtheprintedition,plus WhatUbercosts Macrivpopulism Putin’selectionvictorydoes audioandvideo,andadailychart 28 Greece notmeanthatthereisnohope Economist.com DogdaysforMrTsipras forRussia.Anewgeneration Asia E-mail:newslettersand hasdifferentpriorities,page18 mobileedition 28 IsraelandtheBalkans 48 SanitationinBangladesh Economist.com/email Quietlydoesit Beatingthebugs Printedition:availableonlineby 30 Charlemagne 49 ThePhilippinejudiciary 7pmLondontimeeachThursday TeddyMacron Impeachykeen Economist.com/printedition 49 AdvertisinginPakistan Audioedition:availableonline Britain Blankslates todownloadeachFriday 31 Childrenincare 50 ElectionsinIndonesia Economist.com/audioedition Fromcradletocourt Red-bullfighter 32 TheBrexitnegotiations 51 RuralJapan Afishytransition Cityfolkmovein 33 Bagehot 52 Banyan Rethinkingopenvclosed HunSu,Cambodia’s realking Egypt’s election The Volume426Number9084 inevitable winner of a farcical MiddleEastandAfrica PublishedsinceSeptember1843 election should at least obey totakepartin"aseverecontestbetween 35 Egypt’selection the constitution: leader, page intelligence,whichpressesforward,and Sisivthesycophant 10. There are two candidates, anunworthy,timidignoranceobstructing ourprogress." 36 KurdsinSyria but no choice, page 35 EditorialofficesinLondonandalso: Femalefighters Beijing,Berlin,Brussels,Cairo,Chicago,Madrid, 36 TurkeytakesAfrin MexicoCity,Moscow,Mumbai,Nairobi,NewDelhi, NewYork,Paris,SanFrancisco,SãoPaulo,Seoul, Where to next? Shanghai,Singapore,Tokyo,WashingtonDC 1Contents continues overleaf 4 Contents The EconomistMarch24th2018 China Scienceandtechnology 53 XiJinping’ssidekicks 71 Studyingalgorithms Thehelmsman’screw ASkinnerboxforsoftware 54 Givingblood 72 Saturn Clot-hoppers Inconstantmoons 73 Astronomers’haiku Abstractart International 55 Teachinggiftedchildren 73 Autonomousvehicles Talentshows Adriverlesstragedy 74 Drugresistance China’snewteamAfirefighter Collateraldamage SaturnThe rings and inner andabrainboxwinimportant Business satellites of Saturn may be posts,page53.Acompelling 57 Pharmaceuticals(1) recent creations, page 72. lookattheflawsintheChinese TheFDA Booksandarts When astronomers write economy,page77 58 Pharmaceuticals(2) 75 Heritageandconservation haiku, page 73 GenericsinIndia Gospeltruths 59 WorkinJapan 76 AnEthiopianmemoir Subscription service Callingtime Thescentofalife For our full range of subscription offers, 59 Aerospace 77 China’seconomy including digital only or print and digital Enginetrouble Theundead cEocomnboinmeids,t .vciosimt/offers 60 Dropbox 77 Artandpunishment or call the telephone number provided below: Cloud$9bn PursuedbyaBear T+e4l4e p(h0o)n 2e0: 7+ 54746 ( 804)4 884 5 120 0983 or 60 DigitaxinEurope 78 Music,memory Subscription for 1 year (51 issues) Theoldone-two andmigration Print only Euro-zone countries €229 61 LiKa-shing Thedistantshore Denmark DKr1,709 Hungary HUF 78,042 Plasticfloweroftheflock Norway NKr1,839 GiftedchildrenNewresearch 62 Schumpeter 80 Economicandfinancial Poland PLN 1,011 isencouragingarethinkof Citizensofsomewhere indicators SSwweitdzeenrland SKSrF2r, 028996 howtoteachthem,page55 Statisticson42economies, Turkey TL814 plusacloserlookat Other Europe (ex UK) €229 Financeandeconomics stockmarkets Middle East – GCC US$352 65 Thescrambleforcobalt South Africa ZAR 4,670, US$285 Middle East and Africa US$285 Goblinmetals Obituary 66 Buttonwood 82 Ken Dodd CAPEcrusaders The last of Vaudeville Principal commercial offices: 67 Americantradepolicy The Adelphi Building, 1-11John Adam Street, London WC2N 6HT Steelbanned Tel: +44 (0) 20 7830 7000 68 Foreign investment Rue de l’Athénée 32 in Europe 1206 Geneva, Switzerland Capital control Tel: +4122 566 2470 750 3rd Avenue, 5th Floor, New York, NY 10017 68 Financial regulation Tel: +1212 5410500 Green tape America’s drug regulatorThe 1301Cityplaza Four, Food and Drug Administration 69 Technology and trade 12 Taikoo Wan Road, Taikoo Shing, Hong Kong is focused on speeding Pulp friction Tel: +852 2585 3888 medicines to market. Good: 70 Free exchange Other commercial offices: leader, page 10. American Monetary policy Chicago, Dubai, Frankfurt, Los Angeles, Paris, San Francisco and Singapore drugmakers are struggling with low productivity.The government wants to help, page 57. India’s successful makers of copycat drugs see their profits deteriorate, page 58 PEFC certified This copy of The Economist is printed on paper sourced from sustainably managed forests certified by PEFC PEFC/04-31-1267 www.pefc.org ©2018 The Economist Newspaper Limited. All rights reserved. Neither this publication nor any part of it may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or other- wise, without the prior permission of The Economist Newspaper Limited. Published every week, except for a year-end double issue, by The Economist Newspaper Limited. The Economist is a registered trademark of The Economist Newspaper Limited. Printed by Vogel Druck und Medienservice GmbH, Leibnizstraße 5, 97204 Höchberg, Deutschland. France, Numéro Commission Paritaire: 68832 GB. Encart d’abonnement de deux pages situé entre les folios 10 et 130. Rapp. Italia: IMD srl Via Guido da Velate 1120162 Milano Aut. Trib. MI 272 del 13/04/88 Poste Italiane SpA - Sped Abb Post DL 353/2003 (conv. L. 27/2/2004 n.46) art 1comma 1DCB Milano, Dir. Resp. Domenico Tassinari 6 The world this week The EconomistMarch24th2018 Politics presidentsincetheearly1960s Austin, Texas, blewhimself up and isa confidantofAungSan duringa police chase. Police SuuKyi, who isthe de facto are investigatingthe motive. head ofMyanmar’sgovern- ment, even ifthe president is Quelle surprise constitutionallyin charge. VladimirPutin easilywon a fourth term asRussia’spresi- Asuicide-bombertargeted dent, takingmore than 77% of crowdsata shrine celebrating the vote. However, there were the Persian newyearin Kabul, widespread allegationsof Afghanistan’scapital, killing stuffed ballot-boxes, and the atleast31people. main opposition candidate, TensofthousandsofBrazil- Alexei Navalny, wasnotal- Out of captivity iansprotested againstthe lowed to stand. Despite this, Mostofthe 110 Nigerian execution-style murderof MrPutin wascongratulated by Xi Jinpingtightened hisgrip on schoolgirlswho were recently Marielle Franco, a left-wing Donald Trump and byJean- powerin Chinabypromoting abducted byBoko Haram in citycouncillorin Rio de Janei- Claude Juncker, presidentof alliesto top governmentjobs. the town ofDapchi were freed. ro. MsFranco, who wasblack the European Commission. WangQishan, who hasled Mr The governmentinsiststhat it and gay, had accused the police Xi’scrackdown on corruption, did notpaya ransom fortheir ofabusesand wasa criticof NicolasSarkozy, a former wasmade vice-president, a return. The jihadistswarned the decision byBrazil’sgovern- presidentofFrance, was hitherto ceremonial position the girls’ parentsnotto put mentto putthe armyin charge placed underformal investiga- thatmaynowbe beefed up to them backin school. ofsecurityin the state of Rio. tion aspartofa probe into oversee relationswith Ameri- allegationsthathe received ca. LiuHe, MrXi’seconomic DozensofAfricanleaders America toughened sanctions millionsofeurosin illegal adviser, wasnamed asone of signed an ambitiousfree-trade againstVenezuela’sauthori- election fundingfrom the fourdeputyprime ministers deal. All 55 membersofthe tarian regime. Itadded four regime ofthe late Libyan dic- and given the briefofsupervis- African Union negotiated the currentand formerofficials to tator, MuammarQaddafi. ingthe People’sBankofChina agreement, but11did notsign, the listof49 whose American and otherregulatorybodies. includingNigeria, the con- assetsare frozen. Donald InSlovakia,the government The PBOC, in turn, will be tinent’slargesteconomy. Trump signed an executive headed byRobertFico headed byYi Gang, another orderbarringAmericansfrom collapsed in the face of newappointment, who, like Forthe firsttime Israel buyingorsellingthe petro, a widespread protestsoverthe MrLiu, hasstudied in America. admitted to bombinga sus- crypto-currencyissued by murderofa journalistwho pected nuclearreactorin Syria Venezuela’sgovernment. Only wasinvestigatinggovernment China’saircraft-carrierentered in 2007. Binyamin Netanyahu, the mostrisk-hungryinvestors corruption. the Taiwan Straitagain. This the prime minister, said the were buyingitin the first place. wasprobablyasa showof attackshowed thatIsrael will defiance to America, which preventitsenemiesfrom Cruel and unusual punishment hasangered Beijingbypassing developingnuclearweapons. The sackingofAndrew alawthatencouragescontacts McCabeatthe FBI, where he between American and Tai- Turkeycaptured the northern wasdeputydirectoruntil wanese officials. Taiwanese Syrian region ofAfrin after a January, wasseen bymanyas shipstracked the vessel. two-month battle with Kurd- an attemptto discredithim asa ishfighters. Meanwhile, Syrian witnessin RobertMueller’s The diplomaticeffortto ease governmentforcestookback investigation into Russian tensionson the Korean penin- more territoryin besieged meddling. MrMcCabe wason sula continued apace. Moon Eastern Ghouta, the lastrebel paid leave and wasfiredforan Jae-in, the presidentofSouth stronghold nearDamascus. alleged lackof“candour” in British and European Union Korea, held open the pos- dealingswith the media. He negotiatorsapproved the sibilityofthree-waytalks with He’s gone had been the targetofmuch of detailsofthe Brexittransition America and North Koreaifa Pedro Pablo Kuczynski Donald Trump’sinvective. Last proposalsthatwere agreed in summitplanned forApril resigned asPeru’spresident Decemberthe president December. Britain will formal- between the South and North after20 monthsin office. The tweeted thatMrMcCabe was lyleave the EUin March 2019, isproductive. Meanwhile, the country’scongresswasthreat- “racingthe clock” to retire with butbe bound byitsregulations Pentagon announced that eningto impeach him based afull pension. He wassacked until the end of2020. During South Korea and the United on evidence thata company 26 hoursbefore he wasdue to the transition trade dealscan Stateswill resume joint he founded had worked with receive thatpension. be negotiated with othercoun- militaryexercisesthatwere Odebrecht, a Brazilian con- tries. Butthe Irish borderques- postponed duringthe Winter struction companythatbribed Congresshurried yetagain to tion remainsunresolved; the Olympics. officialsacrossLatin America. passa bill thatwould avoid a “backstop” solution thatkeeps He had served asfinance governmentshutdown. Northern Ireland in the EU Myanmar’spresident, Htin ministerand prime minister in customsunion isin the docu- Kyaw, resigned with immedi- an earliergovernmentthat The suspectbehind several ment, fornow. In Britain Leav- ate effect. Rumourshave awarded contractsto explosive devices, mostly erssaid the deal betrayed the swirled formonthsthathe is in Odebrecht. MrKuczynski will contained in packages, that left fishingindustry, and threw fish poorhealth. Htin Kyawwas be succeeded bythe vice- two men dead and injured into the RiverThamesoutside the country’sfirstcivilian president, Martín Vizcarra. several otherpeople in ornear Parliamentin protest. 1 TheEconomistMarch24th2018 Theworldthisweek 7 tobetween$18and$20a 1.5%and1.75%.TheFedsig- persontobeinthecar,as Business share,fromthe$16to$18ithad nalledthatratesmayincrease happenedinthisinstance,in initiallyannounced. morethanexpectedoverthe theeventthatanythinggoes Facebookwasembroiledina mediumtermbecauseofthe wrong. crisisoveritsprivacypolicies, Blockbustertrial strengtheningeconomy,but afteritemergedthatdataon ThedistrictcourtinWashing- stucktoitsexpectationsoftwo IvanGlasenberg,thebossof 50musershadbeenharvested ton,DCthatwilldecidethe moreraterisesthisyear. Glencore,saidthatWestern fromanappforpsychological fateofAT&T’sproposed$85bn carmakerswerefallingbehind testsandthensharedwith takeoverofTimeWarner Britain’sinflationratefell Chinainstockpilingsupplies CambridgeAnalytica,a startedproceedingsinthecase. sharply,to2.7%,butwages ofcobalt,oneofthekey politicaldata-miningfirm. AT&TarguesthatFacebook, grewby2.6%,thefastestpace elementsinthebatteriesthat CambridgeAnalyticaalleged- Amazon,Apple,Netflixand innearlytwo-and-a-halfyears. powerelectriccars.Glencore lyusedthedatatocreatevoter Google(theFAANGs)have hassignedacontracttopro- profilesduringthe2016presi- completelytransformedthe Lloyd’sreportedanannual videaChinesefirmwitha dentialelectioninAmerica, relationshipbetweencontent pre-taxlossof£2bn($2.6bn),its thirdofitscobaltoutputover enablingtheTrumpcampaign providersanddistributors,and firstsince2011.Lloyds,an thenextthreeyears.Mr tocraftmessagestopotential thatitneedstobuyTimeWar- insurancemarketbasedin Glasenbergsuggestedhewas supporters.Facebookbanned neranditsstableofbroadcast London,washitby£4.5bnin preparedtosellGlencore’s theappin2015.Itsaidithad programmingtostayinthe claimsrelatedtonaturaldisas- cobaltminestoChinaifthe been“deceived”andpromised game.TheJusticeDepartment tersin2017,includingtheworst pricewasright,andwarned totightenupitsrulesondata. ischallengingthedealon hurricaneseasoninyears, thatChinawouldusethe PoliticiansinAmericaand antitrustgrounds,anunusual earthquakesinMexicoand materialtoboostitsown Britaincalledfortighterregu- movegiventhatthemergerisa wildfiresinCalifornia. electric-vehicleindustry. lationofsocialmedia.Face- verticalone,combiningtwo book’ssharepriceswooned. businessesthatdonot Atragicfirst Letuspay competedirectly. Adriverlesscarbeingtested TheChurchofEnglanddecid- byUberkilledapedestrianin edtogiveparishionersthe Marketcapitalisation Salesforce,theworld’sfourth- Tempe,Arizona.Itisnotthe choiceofmakingcontactless $trn largestsoftwarecompany, firstfatalcollisioninvolving payments.Fasterwaysof madeitsbiggestacquisitionto autonomouscars,butitisthe payingforeventslikewed- 1.0 Alphabet datebyagreeingtobuyMule- firstaccidentresultinginthe dingsandchristeningsmay 0.8 Softinadealvaluedat$6.5bn. deathofapedestrian.Police appealtoyoungerpeople, 0.6 MuleSoftprovidesaplatform andfederalsafetyagencies whotendtobelesskeenon 0.4 forbusinessestointegratedata launchedinvestigations,and cash.Butofferingsintheaisles Amazon 0.2 fromthecloudaswellasfrom Ubersuspendedalldriverless haveyettomovewiththe 0 in-houseservers. testing.Criticsraisedconcerns times.Acollectionplate 2017 2018 thatsafetyhasbeen passedamongworshippersis Source:ThomsonReuters TheFederalReserveraised compromisedintherushtoget stillquickerthanadebitcard. Investorsworriedabout therangeforitsbenchmark autonomousvehiclesonthe Alphabet,theparentcom- interestratebyaquarterofa road.ManyAmericanstates For other economic data and panyofGoogle,beingcaught percentagepoint,tobetween allowtestingbutrequirea news see Indicators section upinanyregulatoryblowback aboutdataprivacyalsosentits share price down. Thathelped Amazon, which hasseen its share price rise bya third since the startofthe year, pass Alphabetto become the world’ssecond-most-valuable listed company. Amazon is worth $770bn (still some way behind Apple, at$870bn). The European Commission proposed levyinga 3% taxon revenuesofbigtechnology companies, such asGoogle and Facebook, thatoperate in Europe, buthave “little orno physical presence” in the region. The proposal isan interim measure and requires unanimityamongthe EU’s memberstatesto be adopted. Amid strongdemand, Dropboxraised the price of its IPOon the NASDAQexchange Leaders The EconomistMarch24th2018 9 Epic fail The social-media giantfaces a reputational crisis. Here is howitand the industryshould respond LAST year the idea took hold Facebookisnotabouttobebannedorputoutofbusiness, that Mark Zuckerberg might butthe chancesofa regulatorybacklash are growing. Europe is run for president in 2020 and inflictingpunishmentbya thousand cuts, from digital taxesto seek to lead the world’s most antitrust cases. And distrustful users are switching off. The powerful country. Today, Face- American customerbase ofFacebook’s core social network book’s founder is fighting to hasstagnated since June 2017. Itsshare ofAmerica’sdigital ad- showthathe iscapable oflead- vertisingmarketisforecastto dip thisyearforthe firsttime. The ing the world’s eighth-biggest network effect that made Facebook ever more attractive to listed companyorthatanyofits2.1bn usersshould trustit. newmembersasitgrewcould workin reverse ifitstarts to NewsthatCambridge Analytica (CA), a firm linked to Presi- shrink. Facebookisworth $493bn, butonlyhas$14bn ofphysi- dentDonald Trump’s2016 campaign, gotdata on 50m Face- cal assets. Itsvalue isintangible—and, potentially, ephemeral. bookusersin dubious, possiblyillegal, wayshaslit a firestorm IfMrZuckerbergwantsto do rightbythe publicand his (see United Statessection). MrZuckerbergtookfive days to re- firm, he must rebuild trust. So farhe has promised to audit plyand, when he did, he conceded thatFacebookhad let itsus- some apps, restrictdevelopers’ accessto data still further, and ersdown in the pastbutseemed notto have grasped that its help people control which appshave accessto theirdata. businessfacesa widercrisisofconfidence. Aftermonths of Thatdoesn’tgo nearlyfarenough. Facebookneedsa full, in- talkaboutpropaganda and fake news, politiciansin Europe dependent examination of its approach to content, privacy and, increasingly, America see Facebookasoutofcontrol and and data, includingitsrole in the 2016 election and the Brexit in denial. Congresswantshim to testify. Expecta roasting. referendum. Thisshould be made public. Each yearFacebook Since the news, spooked investorshave wiped 9% offFace- should publish a reporton itsconductthatsetsouteverything book’sshares. Consumersare belatedlywakingup to the dan- from the prevalence offake newsto privacybreaches. gersofhandingoverdata to tech giantsthatare run like black Next, Facebookand othertech firmsneed to open up to out- boxes. Already, accordingto the PewResearch Centre, a think- siders, safelyand methodically. Theyshould create an indus- tank, a majorityofAmericanssaytheydistrustsocial-media tryombudsman—call itthe Data RightsBoard. Partofits job firms. MrZuckerbergand hisindustryneed to change, fast. would be to setand enforce the rulesbywhich accredited in- dependentresearcherslookinside platformswithoutthreat- The addiction game eningusers’ privacy. Software isbeingdeveloped with this in Facebook’s business relies on three elements: keepingusers mind (see Science section). The likes of Facebook raise big glued to theirscreens, collectingdata abouttheirbehaviour questions. How does micro-targeting skew political cam- and convincingadvertisersto paybillionsofdollars to reach paigns? Whatbiasesinfectfacial-recognition algorithms? Bet- them with targeted ads. The firm hasan incentive to promote tertheybe answered with evidence instead ofoutrage. material thatgrabsattention and to sell adsto anyone. Itscul- The board orsomethinglike itcould also actasa referee for ture meldsa ruthlesspursuitofprofitwith a Panglossian and complaints, and police voluntary data-protection protocols. narcissisticbeliefin itsown virtue. MrZuckerbergcontrols the Facebook, forexample, isplanningto complyworldwide with firm’svotingrights. Clearly, he getstoo little criticism. some ofthe measurescontained in a newEuropean law, called In the latestfiasco, itemerged thatin 2013 an academicin the General Data Protection Regulation. Amongotherthings, Britain built a questionnaire app forFacebookusers, which thiswill give usersmore powerto optoutofbeingtracked on- 270,000 people answered. They in turn had 50m Facebook line and to stop theirinformation beingshared with third par- friends. Data on all these people then ended up with CA. (Full ties. Adherence to such rulesneedsto be closelymonitored. disclosure: The Economistonce used CA fora market-research project.) Facebooksaysthatitcould nothappen again and that Thumbs down the academicand CAbroke itsrules; both denydoinganything Tech hasexperience ofactingcollectivelyto solve problems. wrong. Regulators in Europe and America are investigating. Standardson hardware and software, and the namingof inter- Facebookknewofthe problem in 2015, butitdid notalert indi- netdomains, are agreed on jointly. Facebook’srivalsmaybe vidual users. Although nobodyknowshowmuch CA benefit- warybut, ifthe industrydoesnotcome up with a joint sol- ed MrTrump’scampaign, the fusshasbeen amplified by the ution, a governmentclampdown will become inevitable. left’sdisbeliefthathe could have won the election fairly. Facebook seems to think it only needs to tweak its ap- Butthatdoesnotgive Facebooka defence. The episode fits proach. In fact it, and otherfirms that hooverup consumer an established pattern of sloppiness towards privacy, toler- data, should assume thattheirentire businessmodel is atrisk. ance ofinaccuracyand reluctance to admitmistakes. In early Asusersbecome betterinformed, the alchemyoftaking their 2017 MrZuckerbergdismissed the idea thatfake newshad in- data without payingand manipulatingthem forprofit may fluenced the election as“prettycrazy”. In SeptemberFacebook die. Firmsmayneed to compensate people fortheirdata orlet said Kremlin-linked firmshad spenta mere $100,000 to buy them payto use platformsad-free. Profitswon’tcome aseasily, 3,000 advertson itsplatform, failingatfirstto mention that butthe alternative isstark. IfFacebookendsup asa regulated 150m usershad seen free postsbyRussian operatives. It has utilitywith itsreturnson capital capped, itsearnings maydrop also repeatedlymisled advertisersaboutitsuserstatistics. by80%. Howwould youlike that, MrZuckerberg?7 10 Leaders TheEconomistMarch24th2018 Egypt’selection No choice TheinevitablewinnerofEgypt’sfarcicalelectionshouldatleastobeytheconstitution THEelectioninEgypt,which ofdollarsofaidfromtheGulfdidMrSisipursueeconomicre- begins on March 26th, will forms—andthenunderpressurefromtheIMF,whichbailed have two candidates. One is Egyptoutin2016.Heisstillthrowingmoneyatwastefulmega- Abdel-Fattah al-Sisi, the presi- projects,such asadubiousnewcapital in the desert, while dent, an ex-military man who Egypt’sschoolsandhospitalscrumble.Thearmyismuscling seizedpowerinacoupin2013. into even more areas ofthe economy, crowdingout private The other is Moussa Mustafa firms.MrSisi’svowtocutredtapehascometolittle. Moussa,whosepartyfawningly As the largest Arab state, Egypt matters. That is why the supportsMrSisiandwhorefusestotakepartinadebatewith West has lavished alms and arms on it, and overlooked its thepresidentbecausethatwouldbedisrespectful(seeMiddle leaders’abuses.Butdonors’billionshavenotboughtstability. East&Africasection).Theelection,inotherwords,isafarce. IslamicStatecontinuestoattackchurchesandmosquesand Why,then,shouldEgyptiansbothertovote?MrSisi’sbig beheadciviliansinSinai.AthirdofyoungEgyptianshaveno claimisthathehasrestoredorder.In2011massprotestsledto jobs.Thepoliceandsecurityservicesroutinelytorturethein- theoverthrowofHosniMubarak,adrearydespot.Thenext nocent.Thisisarecipeformoreupheavalonedayinthefuture. year Egyptians elected Muhammad Morsi of the Muslim Brotherhood,whotriedtograbdictatorialpowersandputhis NotanotherMubarak Islamistchumsinchargeofpracticallyeverything.Hefailed Egyptianvotersdeservearealchoice.Alas,theywillnotget onlybecausethen-GeneralSisitoppledhim.Allthisupheaval one.(Andindeed,manyaresofedupwithturmoilthatthey sentinvestorsandtouristsfleeing.MrSisi,whowonanelec- saytheypreferthepredictableruleofastrongmantothemess- tionin2014,deservescreditfortakingpainfulstepstostabilise inessofdemocracy.)GiventhatMrSisiissuretowin,thereare the economy, such as cutting subsidies and devaluing the severalthingshecandotoeasethetensionsthatthreatentorip Egyptian pound. Without his firm hand, his supporters say, Egyptapart.Hecouldorderthearmytoputmoreeffortinto Egyptmighthaveturnedoutlikewar-tornIraq,SyriaorLibya. fighting terrorists and less into dodgy money-making. He ThefactthatsomeotherArabcountriesaredoingworse could help non-crony businesses grow and hire by tackling doesnotmeanMrSisiisdoingagoodjob,however.Heover- corruption and red tape. The IMF and otherdonors should sawthemassacreofhundredsofMrMorsi’ssupporters,and twisthisarmtopursuesuchreforms. thejailingoftensofthousandsofdissidents.Seriouscandi- Most important, Mr Sisi should overrule his most syco- dateswhowantedtorunagainsthimwerearrestedorbullied phanticsupporters,whowanttoamendtheconstitutiontolet into dropping out. Those journalists who have not been him run fora third, fourth orfifth term. Perpetual dictators lockeduparebarredfromaskingEgyptiansbasicquestions, bringstagnationandrepression,notpeace.ConsiderMrMub- suchas“Whowillyouvotefor?” arak’s30-yearreign—andthewayitended.Egyptneedsasys- Freedomwillfollowprosperity,saysthepresident.Butheis temthatallowsthetransferofpowerfromoneleadertothe unlikelytobringmuchofeitherbythetimeheismandatedto nextwithoutviolence.Theconstitutionlaysoneout.MrSisi leaveofficein2022.Onlyafterblowingthroughtensofbillions shouldobeyit.7 TheFDA’snewcourse Faster Drug Approvals America’s drug regulatoris focused on speeding medicines to market. Good REGULATORS can be both a criticiseMrGottlieb,whoonceworkedintheindustry,forstill NewFDAregulations* helpandahindrancetothe being its accomplice. Instead, he should be applauded. No- 40 medicalindustry.Astrongregu- bodyexpectstheFDAtosolveAmerica’smessed-uphealth- 30 lator increases confidence in caresystem,butitsgoal—ofmakingitcheaperandeasierfor 20 drugs and devices, reassuring promisingdrugstoreachpatients—isastepintherightdirec- 10 payers and patients alike. That tion(seeBusinesssection). 0 2008 10 12 14 17 explainswhytheChinesedrugs OnethingMrGottliebhasbeendoinglessofisissuingnew *Economicallysignificant regulator recently adopted regulations,whichhavedippedtoatwo-decadelow.Instead, tougherstandards.Yetrulescanalsoimposetoogreataburden hehasconcentratedontwobroadareasthatwillhelpthede- onfirms,slowinginnovationandreducingcompetition. velopmentoftherapiesandmedicines.Thefirstistoadaptthe The head of America’s Food and Drug Administration FDAtonewtechnologies.Thereisaclinicalrevolutioninsuch (FDA),ScottGottlieb,hasspenthisfirstyearinofficetiltingthe areasasgenetherapyandprintedorgans.TheFDAiskeento balanceawayfromrulemakingandtowardsefficiency.Some harness the potential of new technologies, whether that1 TheEconomistMarch24th2018 Leaders 11 2meansusinginformation from wearablesin drugtrials oren- adrugmakermighthave to showonlyan improvementin a ablingfasterapproval fornewdigital therapeutics. biological proxyforthe disease, such asthe presence oftoxic The second focushasbeen on gettingmore drugsto market. proteinsin the brain. Thisapproach isalreadyin place forcan- The agencyhasapproved a record numberofgenericdrugs in cerdrugs. Itswideradoption oughtto encourage innovation. the pastyear. Byincreasingthe amountofcompetition, the Inevitably, acceleratingthe path to marketforpharma firms idea isto bringthe price ofcopycatdrugsdown. The profitsof involvesa trade-off. Itmaywell be betterto give people the op- Indian generics firms, which have been making hay in the tion ofa treatmentin five yearswhose efficacyisknown with American market, are expected to sufferasa result. 80% certaintythan to wait20 yearsforone with 99% certainty. UnderMrGottlieb, the FDAisalso doingitsbestto limit the Butthe shiftincreasesthe riskthatmoneywill be spent on new extraordinaryburden ofintroducingnewdrugs. The average drugsthatend up beingno more effective than existing ones. costofbringinga newmedicine to markethasjumped to $2bn, Thisriskisparticularlyhigh in America, where the idea ofpay- up from $1.2bn in 2010. After repeated expensive failures, ingformedicineson the basisoftheiractual performance is manyfirmshave cutfundingfortreatmentsforneurodegener- seen asan affrontto patientchoice. To getthe benefit offaster ative diseasessuch asAlzheimer’s. innovation while minimisingthe riskofunnecessaryspend- In response, the FDAwantsto find waysto accelerate clini- ing, thatattitude hasto change. The FDAisdoingitsbitto speed cal trials. Itisalso lookingatloweringthe standard ofefficacy, innovation. Butbuyersofdrugsneed to do more to tie pay- though notsafety, which isrequired to approve certain treat- mentsto health outcomes. The realityofpayingtoo much for ments. Instead ofhavingto demonstrate thatlong-term out- anynewmedical technologythatdoesnotworkwell is that comes, such ascognitive function fordementia, are improved, there islessto spend on the thingsthatdo. 7 Sanitationandhygiene Now wash your hands Lessons from a poorcountryabouthowto see offdisease FORadventuroustravellers,it lyclosetothelatrines,thatseemstobefine.Researchershave Child mortality rate is merely an embarrassing found thatgermsdo nottravel farunderground. Whatmatters Under5yearsold,per1,000 live births nuisance. Butamongpoorpeo- ishavinglotsofwaterpumpsand lotsoftoilets. The more con- 150 ple diarrhoea isa killer. As many venienttheyare, the more people will use them. Bangladesh 100 as half a million children are Asecond lesson isthathardware isnotenough—the soft- World 50 thoughtto die everyyearfrom ware ofhuman behaviourisjustasimportant. Bangladesh’s 0 entericdiseases, including chol- neighbour, India, has subsidised and built a great many la- 1990 2000 10 16 era and dysentery. Repeated in- trines. Despite thateffort(and although the country isroughly fectionsalsoweakenthem, layingthem open to attack from twice aswealthyasBangladesh perhead) manyIndians con- otherkillerssuch aspneumonia. Diarrhoea can even change a tinue to defecate in the open. Bangladesh’sgovernmentand population’s appearance. One reason Indian children are charitieshave builtlatrines, too, buttheyhave worked harder shorter than sub-Saharan African children from families of to stigmatise open defecation. Often theyinstall latrines for similarmeansisthattheyfall sickmore often. the poorand then prod richerfolkinto followingtheir exam- So itisdelightful to reportthatone ofAsia’spoorestcoun- ple. Anew, surprising, findingisthatthisworksbetter than ex- tries, Bangladesh, ismakinghuge progressagainstthis scourge pectingpeople to copytheirsocial superiors. (see Asia section). In one partofthe countrywith particularly Manyliveshave been saved byparentsdoingsomething good data, deathsfrom diarrhoea and otherentericdiseases simple. Beginningin the 1960sAmerican militarydoctorsand have fallen by90% in the pasttwo decades. Alongwith a far- researchers in Dhaka developed a therapy for acute diar- reaching vaccination programme and steady economic rhoea—a sweet, salty oral rehydration solution. This is now growth, thathashelped drive down the numberofchildhood dirtcheap and widelyavailable. Atthe lastcount, fully 84% of deaths. In 1990 the under-five death rate in Bangladesh was Bangladeshi parentswith stricken children fed itto them (only 54% higherthan the world average. Nowitis16% lower. athird sawa doctor). Thinlypopulated African countries are In a countrywith more than 160m inhabitants, thisrepre- strugglingto match that. One promisingidea isto distribute the sentsa vastdecline in human misery. And Bangladesh’ssuc- sachetsalongwith Coca-Cola—which getseverywhere. cessholdslessonsforotherpoorcountriesthatare trying to beatbackdisease. The firstisthatcheap, simple, imperfect sol- Bog standard utionsare often good enough. The simplest message is about the importance of basic hy- In an ideal world, with limitlesscash and universally good giene. Bacteria often live on people’shands, and multiplyon governance, everybodywould drinkchlorinated waterout of food. Amotherin a poorcountrywho hand-feedscool por- taps and flush their sewage through pipes into treatment ridge to herinfantcan introduce manymore germsthan the plants. In the real world, however, youcan go a long waywith nipperwould getfrom drinkingwaterfrom a tap. Randomised half-measures. Bangladeshi villagesare studded with small pit controlled trials in Bangladesh and elsewhere have shown latrinesand tubewellsforwater. Mostare builtbythe house- thatteachingmothersto wash theirhandsand reheatfood can holders themselves, orby labourers whom they pay out of wipe outmostbugs. The trainingischeap. The benefits, in dis- theirown pockets. Although the tubewellsare often alarming- ease avoided and livessaved, are enormous.7 12 Leaders TheEconomistMarch24th2018 Putin’snextterm The struggle for Russia VladimirPutin is atthe heightofhis power. Butthe struggle overwhatcomes nextis justbeginning THE ballot-stuffing, blatant areunder40.MrPutinhasstartedinstallingyoungtechnocrats and in full viewofthe cam- in the Kremlin and governmentministries. eras, only underlined Vladimir He mayhope thatthe technocrats’ loyaltywill preserve his Putin’simpunity. The official re- legacy. But Russia lacks the institutions that transfer power sulton March 18th gave him 77% peacefullyfrom one leaderto the next. Adepartingleader can- ofthe vote, on a turnoutof al- notbe confidentthathe and hisfamilywill be safe. Anew most70%. Butthe unofficial one leadercannotuse the debased currencyofelectionsto estab- would not have been very dif- lish hislegitimacy. Thus, even those MrPutin favours maywell ferent. The election wasnota genuine exercise ofchoice so end up rejectinghim, ratherashe consolidated hisposition by much asa ritual acknowledgmentofwho holdspower. After rejectinghispredecessor, BorisYeltsin, who firstbrought him 18 years, MrPutin isnotjustthe presidentbutthe tsar. to power. Asimportantaslastweekend’svote, however, isthe strug- There isno guarantee thatthe cominggeneration will suc- gle to come. Thatwill be overthe future ofRussia. And, asim- ceed in makingRussia more normal. Russian historyis shot pregnable asMrPutin looks, itbeginstoday. through with failed attempts to find a settlement with the West—in which the country has veered between aspiration The gun has fired and hostility. The fortressmentalitythatMrPutin has fostered MrPutin cannotlegallyrun again forpresidentin 2024. Draw- has instilled feelings ofjealousy, resentment and victimisa- ingon a mixofpersuasion and brutal repression, he could tion. The main opposition leader, Alexei Navalny, who was force through changesto the constitution to lethimself stand barred from lastweekend’selection, hassaid thathisbiggest again, asXi Jinpinghasjustdone in China. Orhe may retire enemyisnotMrPutin and hiscronies, butthe debilitating con- from hisdailydutiesinstead, asDengXiaopingdid, in the hope viction amongordinaryRussiansoftheirown powerlessness. ofexertingpowerfrom behind the scenes. Butthen again, ifMr Ifthe securityservicesattemptto exploitfearin order to cling Putin startsto showa lackofresolve orcunninghe could find to theirprivilegesand theirpower, the Russian people maybe- himselfpushed aside atthe end ofhisterm. have astheirwillingaccomplices. Alreadythe elitesin Russia are jockeyingforposition. The outcome ishighlyuncertain. Atworst, the countrycould yet It’s everyone’s business embrace an even more extreme form ofthe nationalism that The struggle forRussia will be determined inside Russia. But hasdefined the politicsofMrPutin. He portraysRussia asas- the Westhasa partto play. Itisworth rememberinghow the sailed byenemies, and arguesthatithasnothingto learn from SovietUnion wasundermined notjustbythe militarymight foreign ideas like human rights and open democracy. That ofthe West, butalso byitseconomic, cultural and moral ap- viewhasalreadyfuelled a newcold warand led to rows over peal. Ittookdecadesforcommunism to crumble, buttoday’s manipulated electionsand political assassinationsabroad. In Russia iseconomicallyweakand MrPutin hasa greaterneed Crimea, Ukraine and Syria itfuelled real wars. to derive legitimacyfrom conflictathome and abroad. Butthere isan alternative. Arisingelite in its30sbroughton, Even asthe Westtargetshim and hiscronieswith sanctions in part, byMrPutin himselfyearnsforRussia to be a more and protestsathisaggressions, ittherefore needsa counter- “normal” country. Forthem much about his rule is archaic. narrative forthe Russian people. The aim should be to remain Theycringe athisconservative agenda, histraditional values, engaged with ordinaryRussianswhile containingMrPutin’s Orthodoxyand isolation. aggression, justasWestern diplomatsdistinguished between This new generation will play a central part in shaping the Sovietregime and itscitizens. Even asthe Kremlin restricts whatcomesafterMrPutin’snextterm. Ourbriefingthisweek Russian contactwith the West, the Westshould encourage it. describes its members, who range from regional governors Thatwill notbe easy. Itishard to punish MrPutin without and businesspeople to independent politicians. They have alienatingall Russians. Cultivatingthe newelite could justify a their differences and their rivalries, naturally, but they also purge bytheirenemies. And the Westislessofa model than it have more in common with each otherthan theydo with the was. Disillusion with the European Union and strife in Ameri- elderswho are theirbosses. Theytend to see the end ofthe ca overthe presidencyofDonald Trump, which MrPutin does cold warin the 1990snotasRussia’sloss, butasa victoryfor hisbestto foment, have tarnished the West’sappeal. common sense. Well-travelled and informed, theydo not suf- ThisweekMrTrump played into thatweaknesswhen he ferfrom the inferioritycomplexthatled MrPutin’sgeneration uncriticallycongratulated MrPutin on hisre-election, without to copythe Westand, later, lash outagainstit. Their parents raisingRussia’sabusesathome and abroad. Thatwasa mis- grewup with shortagesand measure successin termsof mon- take. The message thatmightisrightonlyfrustrates the rise of ey. Theytake material comfortforgranted. Havingwatched as more open young Russians and justifies the repressive in- publiclife hasbeen corrupted byMrPutin’slies, propaganda stinctsoftheiropponents. Thisisbad notonlyforRussians but and graft, theysee the benefitsofrules, lawsand transparency. also foreveryone else. Andrei Sakharov, a Russian Nobel prize- Duringthe nextsixyearsofMrPutin’spresidency, thiselite winninghumanistand nuclearphysicist, putitbest. A country will assertitselfin everywalkoflife. Think-tanks and journal- thatviolatesthe human rightsofitsown people, he argued, ism increasinglyreflecttheirideas. SixofRussia’s85 governors cannotbe safe forthe outside world. 7 14 Letters The EconomistMarch24th2018 thevice-chairman,producea kind. Then it’s, “You’re not The American-heartland Longmemories “conundrum.”Thecompany listeningto me, it’slike this”. We read Lexington’scolumn Bagehot’scolumnontheinco- boastsdozensofexemplary Whatwe need are absti- on Emmanuel Makender, one herenceofthegovernment’s leaderswithproventrack nence crèchesin pubs, areas ofthe first“LostBoys” from policyofapost-Brexit“global recordsinacquisitionsand where teetotallerscan meet Sudan to come to America in Britain”wasexcellent(March capitalallocation.Schumpeter othernon-drinkersand don’t 2000, with greatinterest 17th).Butonefactornot hasjoinedalonglistofcritics feel wildlyoutofwhackwith (March 3rd). We are Emman- mentionedthatmayfurther declaringthatWarrenBuffett one’sdrinkingcompanions. I uel’s“American parents”. Our undermineBritain’shopethat haslosthistouch,fromthe shall hangon to mypintsof familywill neverforgetthe day itcantradealoneisitslegacyin mid-1970stothepresentday. lime and soda. we picked up Emmanuel atthe itsformercoloniesandother PROFESSORLAWRENCECUNNINGHAM LUCY SAUNDERS airport. Ouroverwhelmed emerging-marketcountries. GeorgeWashingtonUniversity London heartsimbued with fear, won- Myfamilyhasstrongconnec- Washington,DC deringwhatin the world were tionswithIndianbusinesses, Russia’s one-trackrecord we thinkingwhen we said we andwearetoldtimeandagain Soberarguments would welcome a refugee into thatBritainleftIndiamuch While springcleaning, I came ouralreadychild-filled home? poorerattheendoftheEm- The marketfornon-alcoholic acrossThe Economistfrom July Iam notsure who wasthe pire.WhenIwasresearching drinkshasindeed been long 26th 2014. Yourleaderon mostscared. The LostBoys inChinasixyearsago,afair ignored (“Onlythe beergets Russia, “Aweb oflies”, was huddled in the middle ofthe chunkofmyinterviewees, drunk”, February17th). Yetthe particularlyprescientgiven circle, orthe group ofhost whowereallgraduatesofthe trend towardssobrietycontin- recentevents. Yourchilling familiessurroundingthem. LondonBusinessSchool, ues. Apoll from YouGov portrayal ofVladimirPutin Ourfearswere quicklydis- remindedmebitterlythatthe showed that3.1m Britons spreadingfalsehoodsto whip pelled when Emmanuel came BritishburntdowntheirImpe- attempted DryJanuarythis up supportathome and blunt home. Ourkidsshowed their rialSummerPalacein1860. yearand 72% ofthose who anyWestern response was new“brother” howlight Thesenegativebeliefsand tookpartare likelyto maintain spot-on. Yourecognised that switcheswork, howto turn on attitudescanmatterinbusi- lowerlevelsofdrinkingsix Russia’spropaganda campaign afaucetand a hostofother ness,andarewidespread. monthsafter. Demographical- isto sowdoubton all sources amazinginventions, including MAUREENGAZELEY ly, 16-24 yearoldsdrinkless ofinformation: “In a world of the telephone, hot-waterheat- London than anyotherage group. liars, mightnotthe Westbe er, a computer, and Emman- Butthe marketingoflow- lying, too?” Ifthishad been uel’sfavourite, a hotshower. alcohol versionsofbeerand heeded bypoliticiansperhaps MrBuffetthas still gotit We helped Emmanuel wine iswrong. Simplywater- yourotherprediction would through school, with home- Schumpeterclaimed that ingdown orremovingalcohol nothave come true. Ifthe work, studyingforvocational Warren Buffett’sBerkshire from the staple offeringsof world “doesnotstand up to tests, gettinghisfirstjob, open- Hathawayis“enough ofa beerand wine reinforcesthe him today, worse will follow”. inga bankaccount, wiring conundrum to perplexeven perception thatdrinkingalco- BRANDON DUNCAN moneyto Sudan. Agroup of the world’sgreatestvalue hol isthe desirable norm. It San Francisco familiesin ourchurch helped investor” (March 10th). Yet showsa lackofunderstanding him with thingsboth small Berkshire isrun with the ofthe positive reasonswhy (clothes, shoes, home-baked taxable shareholderin mind. people choose to forgo alcohol. goodies) and large (several Itspractice ofacquiring The brandsthatcan come up familiescontributed towards companiesatpurchase-price with excitingpropositionsthat the down paymenton Em- discountsand holdingthem aren’tdefined solelybytheir manuel’sfirsthome a few foreverproducesenormous lackofalcohol will be the milesfrom ourhouse). cumulative deferred taxes. By winnersin thisnewmarket. A Butwe can honestlysay reinvestingthe resulting non-drinkerisfarmore likely thatEmmanuel gave usmore capital, ratherthan paying to champion a productmade than we evergave him; a dividends, shareholdersare with theirtastesin mind, and deeperappreciation for spared the related taxes. Even notjustpromoted as“booze- perseverance amid suffering, ifBerkshire onlybeatan index free booze”. On behalfofrighteouscepha- resilience amid disappoint- fund byone point, itwould be LUKE D’ARCY lopodseverywhere, I must ment, industriousnessamid the clearlysuperiorinvest- UK President expressmyindignation. The opportunityand love amid mentaftertax. Momentum Worldwide covercartoon forthe February hateful violence. Moreover, and contraryto London 24th issue ofVladimirPutin’s So now, 18 yearslater, Schumpeter’sassertions, invasive octopuswasa sucker Emmanuel isstill smiling. His Berkshire avoidscompetitive Asan accidental teetotaller, the punch rightin the tentacles. photo ison a shelfnextto takeoversthatstoke premi- problem isn’tso much the MICHAEL SINGER those ofourothersixchildren. ums, rarelypaysmuch more availabilityofchoice; itis Rockville, Maryland7 We talkregularly. I joke, than marketvalue, and very mixingthose who do drink “Emmanuel, youdrive a nicer often obtainsa purchase-price with those who don’t. Since I carthan me.” He smilesand discountpreciselybecause, as quitdrinkingI have been Lettersarewelcomeandshouldbe admits, “itistrue.” Lexington noted, many“familiesand amazed to find howlittle even addressedtotheEditorat concludesthatrefugees“make entrepreneursare happyto practised tipplersneed to TheEconomist,TheAdelphiBuilding, 1-11JohnAdamStreet, the countrystronger, aswell as passon theircrown jewels” to drinkbefore theirconversation LondonWC2N6HT better.” Thatistrue indeed. Berkshire’sstewardship. becomesrepetitive and their E-mail:[email protected] STEVE AND LOIS KROGH Nordo the agesofMr abilityto listen deteriorates. It Morelettersareavailableat: West Chicago, Illinois Buffettand CharlesMunger, takesjusttwo drinks. Ofany Economist.com/letters

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The Russians who will take on Putin China’s brainy new team How to teach gifted children When astronomers write haiku MARCH24TH–30TH2018 Epic ail Contents TheEconomistMarch24th2018 3 37 Kenya’snewrailway 6 Theworldthisweek Offtoabadstart 37 FreetradeinAfrica Leaders Openingthemarket 9 Facebook 38 Nigeria’sinsurgency Epicfail Bringingbackthegirls 10 Egypt’selection Nochoice UnitedStates 10 TheFDA’snewcourse 39 Facebookanddemocracy FasterDrugApprovals Theantisocialnetwork 11 Sanitationandhygiene 40 Non-disclosure GuncontrolWhilenational Nowwashyourhands agreements politiciansdonothing,some 12 Putin’snextterm Let’snotmakeadeal Americanstatesareshowing ThestruggleforRussia moreinitiative,page42. 41 AmericaandTaiwan Onthecover Visitorswelcome Switzerlandoffersalessonin Thesocial-mediagiantfaces Letters 41 Illinoispolitics thebenefitsoftightergun thebiggestcrisisinits control,page43 14 Onrefugees,Britain, Theplutocrats’primary history.Hereishowitand theindustryshouldrespond: WarrenBuffett,alcohol, 42 Gunlaws leader,page9.Thecontroversy Russia Whatworks issparkinganoverdue 43 DebunkingaSwissmyth discussionaboutprivacyand Briefing Gunsandrösti theinternet,page39. 18 Russia 44 Lexington Studyingalgorithms Gorbachev’sgrandchildren Stormyatthebarricades systematicallyoffershopeof understandingtheopaque worldofdigitaladvertising, Europe TheAmericas page71.Europeanregulators 23 Infrastructure 45 Peru takeajabattax-shytech TheMalmo-Palermoexpress ThefallofKuczynski giants,page60 24 AbortioninIreland 46 CrimeinBrazil Russia’snextgeneration Don’tmentionthechurch MourningMarielle VladimirPutinisattheheight 25 Russiannervegas 46 Canada TheEconomistonline ofhispower.Butthestruggle Chemicalparalysis ThehomelessPM overwhatcomesnextisjust Dailyanalysisandopinionto 25 Turkey 47 Bello beginning:leader,page12.Mr supplementtheprintedition,plus WhatUbercosts Macrivpopulism Putin’selectionvictorydoes audioandvideo,andadailychart 28 Greece notmeanthatthereisnohope Economist.com DogdaysforMrTsipras forRussia.Anewgeneration Asia E-mail:newslettersand hasdifferentpriorities,page18 mobileedition 28 IsraelandtheBalkans 48 SanitationinBangladesh Economist.com/email Quietlydoesit Beatingthebugs Printedition:availableonlineby 30 Charlemagne 49 ThePhilippinejudiciary 7pmLondontimeeachThursday TeddyMacron Impeachykeen Economist.com/printedition 49 AdvertisinginPakistan Audioedition:availableonline Britain Blankslates todownloadeachFriday 31 Childrenincare 50 ElectionsinIndonesia Economist.com/audioedition Fromcradletocourt Red-bullfighter 32 TheBrexitnegotiations 51 RuralJapan Afishytransition Cityfolkmovein 33 Bagehot 52 Banyan Rethinkingopenvclosed HunSu,Cambodia’s realking Egypt’s election The Volume426Number9084 inevitable winner of a farcical MiddleEastandAfrica PublishedsinceSeptember1843 election should at least obey totakepartin"aseverecontestbetween 35 Egypt’selection the constitution: leader, page intelligence,whichpressesforward,and Sisivthesycophant 10. There are two candidates, anunworthy,timidignoranceobstructing ourprogress." 36 KurdsinSyria but no choice, page 35 EditorialofficesinLondonandalso: Femalefighters Beijing,Berlin,Brussels,Cairo,Chicago,Madrid, 36 TurkeytakesAfrin MexicoCity,Moscow,Mumbai,Nairobi,NewDelhi, NewYork,Paris,SanFrancisco,SãoPaulo,Seoul, Where to next? Shanghai,Singapore,Tokyo,WashingtonDC 1Contents continues overleaf 4 Contents The EconomistMarch24th2018 China Scienceandtechnology 53 XiJinping’ssidekicks 71 Studyingalgorithms Thehelmsman’screw ASkinnerboxforsoftware 54 Givingblood 72 Saturn Clot-hoppers Inconstantmoons 73 Astronomers’haiku Abstractart International 55 Teachinggiftedchildren 73 Autonomousvehicles Talentshows Adriverlesstragedy 74 Drugresistance China’snewteamAfirefighter Collateraldamage SaturnThe rings and inner andabrainboxwinimportant Business satellites of Saturn may be posts,page53.Acompelling 57 Pharmaceuticals(1) recent creations, page 72. lookattheflawsintheChinese TheFDA Booksandarts When astronomers write economy,page77 58 Pharmaceuticals(2) 75 Heritageandconservation haiku, page 73 GenericsinIndia Gospeltruths 59 WorkinJapan 76 AnEthiopianmemoir Subscription service Callingtime Thescentofalife For our full range of subscription offers, 59 Aerospace 77 China’seconomy including digital only or print and digital Enginetrouble Theundead cEocomnboinmeids,t .vciosimt/offers 60 Dropbox 77 Artandpunishment or call the telephone number provided below: Cloud$9bn PursuedbyaBear T+e4l4e p(h0o)n 2e0: 7+ 54746 ( 804)4 884 5 120 0983 or 60 DigitaxinEurope 78 Music,memory Subscription for 1 year (51 issues) Theoldone-two andmigration Print only Euro-zone countries €229 61 LiKa-shing Thedistantshore Denmark DKr1,709 Hungary HUF 78,042 Plasticfloweroftheflock Norway NKr1,839 GiftedchildrenNewresearch 62 Schumpeter 80 Economicandfinancial Poland PLN 1,011 isencouragingarethinkof Citizensofsomewhere indicators SSwweitdzeenrland SKSrF2r, 028996 howtoteachthem,page55 Statisticson42economies, Turkey TL814 plusacloserlookat Other Europe (ex UK) €229 Financeandeconomics stockmarkets Middle East – GCC US$352 65 Thescrambleforcobalt South Africa ZAR 4,670, US$285 Middle East and Africa US$285 Goblinmetals Obituary 66 Buttonwood 82 Ken Dodd CAPEcrusaders The last of Vaudeville Principal commercial offices: 67 Americantradepolicy The Adelphi Building, 1-11John Adam Street, London WC2N 6HT Steelbanned Tel: +44 (0) 20 7830 7000 68 Foreign investment Rue de l’Athénée 32 in Europe 1206 Geneva, Switzerland Capital control Tel: +4122 566 2470 750 3rd Avenue, 5th Floor, New York, NY 10017 68 Financial regulation Tel: +1212 5410500 Green tape America’s drug regulatorThe 1301Cityplaza Four, Food and Drug Administration 69 Technology and trade 12 Taikoo Wan Road, Taikoo Shing, Hong Kong is focused on speeding Pulp friction Tel: +852 2585 3888 medicines to market. Good: 70 Free exchange Other commercial offices: leader, page 10. American Monetary policy Chicago, Dubai, Frankfurt, Los Angeles, Paris, San Francisco and Singapore drugmakers are struggling with low productivity.The government wants to help, page 57. India’s successful makers of copycat drugs see their profits deteriorate, page 58 PEFC certified This copy of The Economist is printed on paper sourced from sustainably managed forests certified by PEFC PEFC/04-31-1267 www.pefc.org ©2018 The Economist Newspaper Limited. All rights reserved. Neither this publication nor any part of it may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or other- wise, without the prior permission of The Economist Newspaper Limited. Published every week, except for a year-end double issue, by The Economist Newspaper Limited. The Economist is a registered trademark of The Economist Newspaper Limited. Printed by Vogel Druck und Medienservice GmbH, Leibnizstraße 5, 97204 Höchberg, Deutschland. France, Numéro Commission Paritaire: 68832 GB. Encart d’abonnement de deux pages situé entre les folios 10 et 130. Rapp. Italia: IMD srl Via Guido da Velate 1120162 Milano Aut. Trib. MI 272 del 13/04/88 Poste Italiane SpA - Sped Abb Post DL 353/2003 (conv. L. 27/2/2004 n.46) art 1comma 1DCB Milano, Dir. Resp. Domenico Tassinari 6 The world this week The EconomistMarch24th2018 Politics presidentsincetheearly1960s Austin, Texas, blewhimself up and isa confidantofAungSan duringa police chase. Police SuuKyi, who isthe de facto are investigatingthe motive. head ofMyanmar’sgovern- ment, even ifthe president is Quelle surprise constitutionallyin charge. VladimirPutin easilywon a fourth term asRussia’spresi- Asuicide-bombertargeted dent, takingmore than 77% of crowdsata shrine celebrating the vote. However, there were the Persian newyearin Kabul, widespread allegationsof Afghanistan’scapital, killing stuffed ballot-boxes, and the atleast31people. main opposition candidate, TensofthousandsofBrazil- Alexei Navalny, wasnotal- Out of captivity iansprotested againstthe lowed to stand. Despite this, Mostofthe 110 Nigerian execution-style murderof MrPutin wascongratulated by Xi Jinpingtightened hisgrip on schoolgirlswho were recently Marielle Franco, a left-wing Donald Trump and byJean- powerin Chinabypromoting abducted byBoko Haram in citycouncillorin Rio de Janei- Claude Juncker, presidentof alliesto top governmentjobs. the town ofDapchi were freed. ro. MsFranco, who wasblack the European Commission. WangQishan, who hasled Mr The governmentinsiststhat it and gay, had accused the police Xi’scrackdown on corruption, did notpaya ransom fortheir ofabusesand wasa criticof NicolasSarkozy, a former wasmade vice-president, a return. The jihadistswarned the decision byBrazil’sgovern- presidentofFrance, was hitherto ceremonial position the girls’ parentsnotto put mentto putthe armyin charge placed underformal investiga- thatmaynowbe beefed up to them backin school. ofsecurityin the state of Rio. tion aspartofa probe into oversee relationswith Ameri- allegationsthathe received ca. LiuHe, MrXi’seconomic DozensofAfricanleaders America toughened sanctions millionsofeurosin illegal adviser, wasnamed asone of signed an ambitiousfree-trade againstVenezuela’sauthori- election fundingfrom the fourdeputyprime ministers deal. All 55 membersofthe tarian regime. Itadded four regime ofthe late Libyan dic- and given the briefofsupervis- African Union negotiated the currentand formerofficials to tator, MuammarQaddafi. ingthe People’sBankofChina agreement, but11did notsign, the listof49 whose American and otherregulatorybodies. includingNigeria, the con- assetsare frozen. Donald InSlovakia,the government The PBOC, in turn, will be tinent’slargesteconomy. Trump signed an executive headed byRobertFico headed byYi Gang, another orderbarringAmericansfrom collapsed in the face of newappointment, who, like Forthe firsttime Israel buyingorsellingthe petro, a widespread protestsoverthe MrLiu, hasstudied in America. admitted to bombinga sus- crypto-currencyissued by murderofa journalistwho pected nuclearreactorin Syria Venezuela’sgovernment. Only wasinvestigatinggovernment China’saircraft-carrierentered in 2007. Binyamin Netanyahu, the mostrisk-hungryinvestors corruption. the Taiwan Straitagain. This the prime minister, said the were buyingitin the first place. wasprobablyasa showof attackshowed thatIsrael will defiance to America, which preventitsenemiesfrom Cruel and unusual punishment hasangered Beijingbypassing developingnuclearweapons. The sackingofAndrew alawthatencouragescontacts McCabeatthe FBI, where he between American and Tai- Turkeycaptured the northern wasdeputydirectoruntil wanese officials. Taiwanese Syrian region ofAfrin after a January, wasseen bymanyas shipstracked the vessel. two-month battle with Kurd- an attemptto discredithim asa ishfighters. Meanwhile, Syrian witnessin RobertMueller’s The diplomaticeffortto ease governmentforcestookback investigation into Russian tensionson the Korean penin- more territoryin besieged meddling. MrMcCabe wason sula continued apace. Moon Eastern Ghouta, the lastrebel paid leave and wasfiredforan Jae-in, the presidentofSouth stronghold nearDamascus. alleged lackof“candour” in British and European Union Korea, held open the pos- dealingswith the media. He negotiatorsapproved the sibilityofthree-waytalks with He’s gone had been the targetofmuch of detailsofthe Brexittransition America and North Koreaifa Pedro Pablo Kuczynski Donald Trump’sinvective. Last proposalsthatwere agreed in summitplanned forApril resigned asPeru’spresident Decemberthe president December. Britain will formal- between the South and North after20 monthsin office. The tweeted thatMrMcCabe was lyleave the EUin March 2019, isproductive. Meanwhile, the country’scongresswasthreat- “racingthe clock” to retire with butbe bound byitsregulations Pentagon announced that eningto impeach him based afull pension. He wassacked until the end of2020. During South Korea and the United on evidence thata company 26 hoursbefore he wasdue to the transition trade dealscan Stateswill resume joint he founded had worked with receive thatpension. be negotiated with othercoun- militaryexercisesthatwere Odebrecht, a Brazilian con- tries. Butthe Irish borderques- postponed duringthe Winter struction companythatbribed Congresshurried yetagain to tion remainsunresolved; the Olympics. officialsacrossLatin America. passa bill thatwould avoid a “backstop” solution thatkeeps He had served asfinance governmentshutdown. Northern Ireland in the EU Myanmar’spresident, Htin ministerand prime minister in customsunion isin the docu- Kyaw, resigned with immedi- an earliergovernmentthat The suspectbehind several ment, fornow. In Britain Leav- ate effect. Rumourshave awarded contractsto explosive devices, mostly erssaid the deal betrayed the swirled formonthsthathe is in Odebrecht. MrKuczynski will contained in packages, that left fishingindustry, and threw fish poorhealth. Htin Kyawwas be succeeded bythe vice- two men dead and injured into the RiverThamesoutside the country’sfirstcivilian president, Martín Vizcarra. several otherpeople in ornear Parliamentin protest. 1 TheEconomistMarch24th2018 Theworldthisweek 7 tobetween$18and$20a 1.5%and1.75%.TheFedsig- persontobeinthecar,as Business share,fromthe$16to$18ithad nalledthatratesmayincrease happenedinthisinstance,in initiallyannounced. morethanexpectedoverthe theeventthatanythinggoes Facebookwasembroiledina mediumtermbecauseofthe wrong. crisisoveritsprivacypolicies, Blockbustertrial strengtheningeconomy,but afteritemergedthatdataon ThedistrictcourtinWashing- stucktoitsexpectationsoftwo IvanGlasenberg,thebossof 50musershadbeenharvested ton,DCthatwilldecidethe moreraterisesthisyear. Glencore,saidthatWestern fromanappforpsychological fateofAT&T’sproposed$85bn carmakerswerefallingbehind testsandthensharedwith takeoverofTimeWarner Britain’sinflationratefell Chinainstockpilingsupplies CambridgeAnalytica,a startedproceedingsinthecase. sharply,to2.7%,butwages ofcobalt,oneofthekey politicaldata-miningfirm. AT&TarguesthatFacebook, grewby2.6%,thefastestpace elementsinthebatteriesthat CambridgeAnalyticaalleged- Amazon,Apple,Netflixand innearlytwo-and-a-halfyears. powerelectriccars.Glencore lyusedthedatatocreatevoter Google(theFAANGs)have hassignedacontracttopro- profilesduringthe2016presi- completelytransformedthe Lloyd’sreportedanannual videaChinesefirmwitha dentialelectioninAmerica, relationshipbetweencontent pre-taxlossof£2bn($2.6bn),its thirdofitscobaltoutputover enablingtheTrumpcampaign providersanddistributors,and firstsince2011.Lloyds,an thenextthreeyears.Mr tocraftmessagestopotential thatitneedstobuyTimeWar- insurancemarketbasedin Glasenbergsuggestedhewas supporters.Facebookbanned neranditsstableofbroadcast London,washitby£4.5bnin preparedtosellGlencore’s theappin2015.Itsaidithad programmingtostayinthe claimsrelatedtonaturaldisas- cobaltminestoChinaifthe been“deceived”andpromised game.TheJusticeDepartment tersin2017,includingtheworst pricewasright,andwarned totightenupitsrulesondata. ischallengingthedealon hurricaneseasoninyears, thatChinawouldusethe PoliticiansinAmericaand antitrustgrounds,anunusual earthquakesinMexicoand materialtoboostitsown Britaincalledfortighterregu- movegiventhatthemergerisa wildfiresinCalifornia. electric-vehicleindustry. lationofsocialmedia.Face- verticalone,combiningtwo book’ssharepriceswooned. businessesthatdonot Atragicfirst Letuspay competedirectly. Adriverlesscarbeingtested TheChurchofEnglanddecid- byUberkilledapedestrianin edtogiveparishionersthe Marketcapitalisation Salesforce,theworld’sfourth- Tempe,Arizona.Itisnotthe choiceofmakingcontactless $trn largestsoftwarecompany, firstfatalcollisioninvolving payments.Fasterwaysof madeitsbiggestacquisitionto autonomouscars,butitisthe payingforeventslikewed- 1.0 Alphabet datebyagreeingtobuyMule- firstaccidentresultinginthe dingsandchristeningsmay 0.8 Softinadealvaluedat$6.5bn. deathofapedestrian.Police appealtoyoungerpeople, 0.6 MuleSoftprovidesaplatform andfederalsafetyagencies whotendtobelesskeenon 0.4 forbusinessestointegratedata launchedinvestigations,and cash.Butofferingsintheaisles Amazon 0.2 fromthecloudaswellasfrom Ubersuspendedalldriverless haveyettomovewiththe 0 in-houseservers. testing.Criticsraisedconcerns times.Acollectionplate 2017 2018 thatsafetyhasbeen passedamongworshippersis Source:ThomsonReuters TheFederalReserveraised compromisedintherushtoget stillquickerthanadebitcard. Investorsworriedabout therangeforitsbenchmark autonomousvehiclesonthe Alphabet,theparentcom- interestratebyaquarterofa road.ManyAmericanstates For other economic data and panyofGoogle,beingcaught percentagepoint,tobetween allowtestingbutrequirea news see Indicators section upinanyregulatoryblowback aboutdataprivacyalsosentits share price down. Thathelped Amazon, which hasseen its share price rise bya third since the startofthe year, pass Alphabetto become the world’ssecond-most-valuable listed company. Amazon is worth $770bn (still some way behind Apple, at$870bn). The European Commission proposed levyinga 3% taxon revenuesofbigtechnology companies, such asGoogle and Facebook, thatoperate in Europe, buthave “little orno physical presence” in the region. The proposal isan interim measure and requires unanimityamongthe EU’s memberstatesto be adopted. Amid strongdemand, Dropboxraised the price of its IPOon the NASDAQexchange Leaders The EconomistMarch24th2018 9 Epic fail The social-media giantfaces a reputational crisis. Here is howitand the industryshould respond LAST year the idea took hold Facebookisnotabouttobebannedorputoutofbusiness, that Mark Zuckerberg might butthe chancesofa regulatorybacklash are growing. Europe is run for president in 2020 and inflictingpunishmentbya thousand cuts, from digital taxesto seek to lead the world’s most antitrust cases. And distrustful users are switching off. The powerful country. Today, Face- American customerbase ofFacebook’s core social network book’s founder is fighting to hasstagnated since June 2017. Itsshare ofAmerica’sdigital ad- showthathe iscapable oflead- vertisingmarketisforecastto dip thisyearforthe firsttime. The ing the world’s eighth-biggest network effect that made Facebook ever more attractive to listed companyorthatanyofits2.1bn usersshould trustit. newmembersasitgrewcould workin reverse ifitstarts to NewsthatCambridge Analytica (CA), a firm linked to Presi- shrink. Facebookisworth $493bn, butonlyhas$14bn ofphysi- dentDonald Trump’s2016 campaign, gotdata on 50m Face- cal assets. Itsvalue isintangible—and, potentially, ephemeral. bookusersin dubious, possiblyillegal, wayshaslit a firestorm IfMrZuckerbergwantsto do rightbythe publicand his (see United Statessection). MrZuckerbergtookfive days to re- firm, he must rebuild trust. So farhe has promised to audit plyand, when he did, he conceded thatFacebookhad let itsus- some apps, restrictdevelopers’ accessto data still further, and ersdown in the pastbutseemed notto have grasped that its help people control which appshave accessto theirdata. businessfacesa widercrisisofconfidence. Aftermonths of Thatdoesn’tgo nearlyfarenough. Facebookneedsa full, in- talkaboutpropaganda and fake news, politiciansin Europe dependent examination of its approach to content, privacy and, increasingly, America see Facebookasoutofcontrol and and data, includingitsrole in the 2016 election and the Brexit in denial. Congresswantshim to testify. Expecta roasting. referendum. Thisshould be made public. Each yearFacebook Since the news, spooked investorshave wiped 9% offFace- should publish a reporton itsconductthatsetsouteverything book’sshares. Consumersare belatedlywakingup to the dan- from the prevalence offake newsto privacybreaches. gersofhandingoverdata to tech giantsthatare run like black Next, Facebookand othertech firmsneed to open up to out- boxes. Already, accordingto the PewResearch Centre, a think- siders, safelyand methodically. Theyshould create an indus- tank, a majorityofAmericanssaytheydistrustsocial-media tryombudsman—call itthe Data RightsBoard. Partofits job firms. MrZuckerbergand hisindustryneed to change, fast. would be to setand enforce the rulesbywhich accredited in- dependentresearcherslookinside platformswithoutthreat- The addiction game eningusers’ privacy. Software isbeingdeveloped with this in Facebook’s business relies on three elements: keepingusers mind (see Science section). The likes of Facebook raise big glued to theirscreens, collectingdata abouttheirbehaviour questions. How does micro-targeting skew political cam- and convincingadvertisersto paybillionsofdollars to reach paigns? Whatbiasesinfectfacial-recognition algorithms? Bet- them with targeted ads. The firm hasan incentive to promote tertheybe answered with evidence instead ofoutrage. material thatgrabsattention and to sell adsto anyone. Itscul- The board orsomethinglike itcould also actasa referee for ture meldsa ruthlesspursuitofprofitwith a Panglossian and complaints, and police voluntary data-protection protocols. narcissisticbeliefin itsown virtue. MrZuckerbergcontrols the Facebook, forexample, isplanningto complyworldwide with firm’svotingrights. Clearly, he getstoo little criticism. some ofthe measurescontained in a newEuropean law, called In the latestfiasco, itemerged thatin 2013 an academicin the General Data Protection Regulation. Amongotherthings, Britain built a questionnaire app forFacebookusers, which thiswill give usersmore powerto optoutofbeingtracked on- 270,000 people answered. They in turn had 50m Facebook line and to stop theirinformation beingshared with third par- friends. Data on all these people then ended up with CA. (Full ties. Adherence to such rulesneedsto be closelymonitored. disclosure: The Economistonce used CA fora market-research project.) Facebooksaysthatitcould nothappen again and that Thumbs down the academicand CAbroke itsrules; both denydoinganything Tech hasexperience ofactingcollectivelyto solve problems. wrong. Regulators in Europe and America are investigating. Standardson hardware and software, and the namingof inter- Facebookknewofthe problem in 2015, butitdid notalert indi- netdomains, are agreed on jointly. Facebook’srivalsmaybe vidual users. Although nobodyknowshowmuch CA benefit- warybut, ifthe industrydoesnotcome up with a joint sol- ed MrTrump’scampaign, the fusshasbeen amplified by the ution, a governmentclampdown will become inevitable. left’sdisbeliefthathe could have won the election fairly. Facebook seems to think it only needs to tweak its ap- Butthatdoesnotgive Facebooka defence. The episode fits proach. In fact it, and otherfirms that hooverup consumer an established pattern of sloppiness towards privacy, toler- data, should assume thattheirentire businessmodel is atrisk. ance ofinaccuracyand reluctance to admitmistakes. In early Asusersbecome betterinformed, the alchemyoftaking their 2017 MrZuckerbergdismissed the idea thatfake newshad in- data without payingand manipulatingthem forprofit may fluenced the election as“prettycrazy”. In SeptemberFacebook die. Firmsmayneed to compensate people fortheirdata orlet said Kremlin-linked firmshad spenta mere $100,000 to buy them payto use platformsad-free. Profitswon’tcome aseasily, 3,000 advertson itsplatform, failingatfirstto mention that butthe alternative isstark. IfFacebookendsup asa regulated 150m usershad seen free postsbyRussian operatives. It has utilitywith itsreturnson capital capped, itsearnings maydrop also repeatedlymisled advertisersaboutitsuserstatistics. by80%. Howwould youlike that, MrZuckerberg?7 10 Leaders TheEconomistMarch24th2018 Egypt’selection No choice TheinevitablewinnerofEgypt’sfarcicalelectionshouldatleastobeytheconstitution THEelectioninEgypt,which ofdollarsofaidfromtheGulfdidMrSisipursueeconomicre- begins on March 26th, will forms—andthenunderpressurefromtheIMF,whichbailed have two candidates. One is Egyptoutin2016.Heisstillthrowingmoneyatwastefulmega- Abdel-Fattah al-Sisi, the presi- projects,such asadubiousnewcapital in the desert, while dent, an ex-military man who Egypt’sschoolsandhospitalscrumble.Thearmyismuscling seizedpowerinacoupin2013. into even more areas ofthe economy, crowdingout private The other is Moussa Mustafa firms.MrSisi’svowtocutredtapehascometolittle. Moussa,whosepartyfawningly As the largest Arab state, Egypt matters. That is why the supportsMrSisiandwhorefusestotakepartinadebatewith West has lavished alms and arms on it, and overlooked its thepresidentbecausethatwouldbedisrespectful(seeMiddle leaders’abuses.Butdonors’billionshavenotboughtstability. East&Africasection).Theelection,inotherwords,isafarce. IslamicStatecontinuestoattackchurchesandmosquesand Why,then,shouldEgyptiansbothertovote?MrSisi’sbig beheadciviliansinSinai.AthirdofyoungEgyptianshaveno claimisthathehasrestoredorder.In2011massprotestsledto jobs.Thepoliceandsecurityservicesroutinelytorturethein- theoverthrowofHosniMubarak,adrearydespot.Thenext nocent.Thisisarecipeformoreupheavalonedayinthefuture. year Egyptians elected Muhammad Morsi of the Muslim Brotherhood,whotriedtograbdictatorialpowersandputhis NotanotherMubarak Islamistchumsinchargeofpracticallyeverything.Hefailed Egyptianvotersdeservearealchoice.Alas,theywillnotget onlybecausethen-GeneralSisitoppledhim.Allthisupheaval one.(Andindeed,manyaresofedupwithturmoilthatthey sentinvestorsandtouristsfleeing.MrSisi,whowonanelec- saytheypreferthepredictableruleofastrongmantothemess- tionin2014,deservescreditfortakingpainfulstepstostabilise inessofdemocracy.)GiventhatMrSisiissuretowin,thereare the economy, such as cutting subsidies and devaluing the severalthingshecandotoeasethetensionsthatthreatentorip Egyptian pound. Without his firm hand, his supporters say, Egyptapart.Hecouldorderthearmytoputmoreeffortinto Egyptmighthaveturnedoutlikewar-tornIraq,SyriaorLibya. fighting terrorists and less into dodgy money-making. He ThefactthatsomeotherArabcountriesaredoingworse could help non-crony businesses grow and hire by tackling doesnotmeanMrSisiisdoingagoodjob,however.Heover- corruption and red tape. The IMF and otherdonors should sawthemassacreofhundredsofMrMorsi’ssupporters,and twisthisarmtopursuesuchreforms. thejailingoftensofthousandsofdissidents.Seriouscandi- Most important, Mr Sisi should overrule his most syco- dateswhowantedtorunagainsthimwerearrestedorbullied phanticsupporters,whowanttoamendtheconstitutiontolet into dropping out. Those journalists who have not been him run fora third, fourth orfifth term. Perpetual dictators lockeduparebarredfromaskingEgyptiansbasicquestions, bringstagnationandrepression,notpeace.ConsiderMrMub- suchas“Whowillyouvotefor?” arak’s30-yearreign—andthewayitended.Egyptneedsasys- Freedomwillfollowprosperity,saysthepresident.Butheis temthatallowsthetransferofpowerfromoneleadertothe unlikelytobringmuchofeitherbythetimeheismandatedto nextwithoutviolence.Theconstitutionlaysoneout.MrSisi leaveofficein2022.Onlyafterblowingthroughtensofbillions shouldobeyit.7 TheFDA’snewcourse Faster Drug Approvals America’s drug regulatoris focused on speeding medicines to market. Good REGULATORS can be both a criticiseMrGottlieb,whoonceworkedintheindustry,forstill NewFDAregulations* helpandahindrancetothe being its accomplice. Instead, he should be applauded. No- 40 medicalindustry.Astrongregu- bodyexpectstheFDAtosolveAmerica’smessed-uphealth- 30 lator increases confidence in caresystem,butitsgoal—ofmakingitcheaperandeasierfor 20 drugs and devices, reassuring promisingdrugstoreachpatients—isastepintherightdirec- 10 payers and patients alike. That tion(seeBusinesssection). 0 2008 10 12 14 17 explainswhytheChinesedrugs OnethingMrGottliebhasbeendoinglessofisissuingnew *Economicallysignificant regulator recently adopted regulations,whichhavedippedtoatwo-decadelow.Instead, tougherstandards.Yetrulescanalsoimposetoogreataburden hehasconcentratedontwobroadareasthatwillhelpthede- onfirms,slowinginnovationandreducingcompetition. velopmentoftherapiesandmedicines.Thefirstistoadaptthe The head of America’s Food and Drug Administration FDAtonewtechnologies.Thereisaclinicalrevolutioninsuch (FDA),ScottGottlieb,hasspenthisfirstyearinofficetiltingthe areasasgenetherapyandprintedorgans.TheFDAiskeento balanceawayfromrulemakingandtowardsefficiency.Some harness the potential of new technologies, whether that1 TheEconomistMarch24th2018 Leaders 11 2meansusinginformation from wearablesin drugtrials oren- adrugmakermighthave to showonlyan improvementin a ablingfasterapproval fornewdigital therapeutics. biological proxyforthe disease, such asthe presence oftoxic The second focushasbeen on gettingmore drugsto market. proteinsin the brain. Thisapproach isalreadyin place forcan- The agencyhasapproved a record numberofgenericdrugs in cerdrugs. Itswideradoption oughtto encourage innovation. the pastyear. Byincreasingthe amountofcompetition, the Inevitably, acceleratingthe path to marketforpharma firms idea isto bringthe price ofcopycatdrugsdown. The profitsof involvesa trade-off. Itmaywell be betterto give people the op- Indian generics firms, which have been making hay in the tion ofa treatmentin five yearswhose efficacyisknown with American market, are expected to sufferasa result. 80% certaintythan to wait20 yearsforone with 99% certainty. UnderMrGottlieb, the FDAisalso doingitsbestto limit the Butthe shiftincreasesthe riskthatmoneywill be spent on new extraordinaryburden ofintroducingnewdrugs. The average drugsthatend up beingno more effective than existing ones. costofbringinga newmedicine to markethasjumped to $2bn, Thisriskisparticularlyhigh in America, where the idea ofpay- up from $1.2bn in 2010. After repeated expensive failures, ingformedicineson the basisoftheiractual performance is manyfirmshave cutfundingfortreatmentsforneurodegener- seen asan affrontto patientchoice. To getthe benefit offaster ative diseasessuch asAlzheimer’s. innovation while minimisingthe riskofunnecessaryspend- In response, the FDAwantsto find waysto accelerate clini- ing, thatattitude hasto change. The FDAisdoingitsbitto speed cal trials. Itisalso lookingatloweringthe standard ofefficacy, innovation. Butbuyersofdrugsneed to do more to tie pay- though notsafety, which isrequired to approve certain treat- mentsto health outcomes. The realityofpayingtoo much for ments. Instead ofhavingto demonstrate thatlong-term out- anynewmedical technologythatdoesnotworkwell is that comes, such ascognitive function fordementia, are improved, there islessto spend on the thingsthatdo. 7 Sanitationandhygiene Now wash your hands Lessons from a poorcountryabouthowto see offdisease FORadventuroustravellers,it lyclosetothelatrines,thatseemstobefine.Researchershave Child mortality rate is merely an embarrassing found thatgermsdo nottravel farunderground. Whatmatters Under5yearsold,per1,000 live births nuisance. Butamongpoorpeo- ishavinglotsofwaterpumpsand lotsoftoilets. The more con- 150 ple diarrhoea isa killer. As many venienttheyare, the more people will use them. Bangladesh 100 as half a million children are Asecond lesson isthathardware isnotenough—the soft- World 50 thoughtto die everyyearfrom ware ofhuman behaviourisjustasimportant. Bangladesh’s 0 entericdiseases, including chol- neighbour, India, has subsidised and built a great many la- 1990 2000 10 16 era and dysentery. Repeated in- trines. Despite thateffort(and although the country isroughly fectionsalsoweakenthem, layingthem open to attack from twice aswealthyasBangladesh perhead) manyIndians con- otherkillerssuch aspneumonia. Diarrhoea can even change a tinue to defecate in the open. Bangladesh’sgovernmentand population’s appearance. One reason Indian children are charitieshave builtlatrines, too, buttheyhave worked harder shorter than sub-Saharan African children from families of to stigmatise open defecation. Often theyinstall latrines for similarmeansisthattheyfall sickmore often. the poorand then prod richerfolkinto followingtheir exam- So itisdelightful to reportthatone ofAsia’spoorestcoun- ple. Anew, surprising, findingisthatthisworksbetter than ex- tries, Bangladesh, ismakinghuge progressagainstthis scourge pectingpeople to copytheirsocial superiors. (see Asia section). In one partofthe countrywith particularly Manyliveshave been saved byparentsdoingsomething good data, deathsfrom diarrhoea and otherentericdiseases simple. Beginningin the 1960sAmerican militarydoctorsand have fallen by90% in the pasttwo decades. Alongwith a far- researchers in Dhaka developed a therapy for acute diar- reaching vaccination programme and steady economic rhoea—a sweet, salty oral rehydration solution. This is now growth, thathashelped drive down the numberofchildhood dirtcheap and widelyavailable. Atthe lastcount, fully 84% of deaths. In 1990 the under-five death rate in Bangladesh was Bangladeshi parentswith stricken children fed itto them (only 54% higherthan the world average. Nowitis16% lower. athird sawa doctor). Thinlypopulated African countries are In a countrywith more than 160m inhabitants, thisrepre- strugglingto match that. One promisingidea isto distribute the sentsa vastdecline in human misery. And Bangladesh’ssuc- sachetsalongwith Coca-Cola—which getseverywhere. cessholdslessonsforotherpoorcountriesthatare trying to beatbackdisease. The firstisthatcheap, simple, imperfect sol- Bog standard utionsare often good enough. The simplest message is about the importance of basic hy- In an ideal world, with limitlesscash and universally good giene. Bacteria often live on people’shands, and multiplyon governance, everybodywould drinkchlorinated waterout of food. Amotherin a poorcountrywho hand-feedscool por- taps and flush their sewage through pipes into treatment ridge to herinfantcan introduce manymore germsthan the plants. In the real world, however, youcan go a long waywith nipperwould getfrom drinkingwaterfrom a tap. Randomised half-measures. Bangladeshi villagesare studded with small pit controlled trials in Bangladesh and elsewhere have shown latrinesand tubewellsforwater. Mostare builtbythe house- thatteachingmothersto wash theirhandsand reheatfood can holders themselves, orby labourers whom they pay out of wipe outmostbugs. The trainingischeap. The benefits, in dis- theirown pockets. Although the tubewellsare often alarming- ease avoided and livessaved, are enormous.7 12 Leaders TheEconomistMarch24th2018 Putin’snextterm The struggle for Russia VladimirPutin is atthe heightofhis power. Butthe struggle overwhatcomes nextis justbeginning THE ballot-stuffing, blatant areunder40.MrPutinhasstartedinstallingyoungtechnocrats and in full viewofthe cam- in the Kremlin and governmentministries. eras, only underlined Vladimir He mayhope thatthe technocrats’ loyaltywill preserve his Putin’simpunity. The official re- legacy. But Russia lacks the institutions that transfer power sulton March 18th gave him 77% peacefullyfrom one leaderto the next. Adepartingleader can- ofthe vote, on a turnoutof al- notbe confidentthathe and hisfamilywill be safe. Anew most70%. Butthe unofficial one leadercannotuse the debased currencyofelectionsto estab- would not have been very dif- lish hislegitimacy. Thus, even those MrPutin favours maywell ferent. The election wasnota genuine exercise ofchoice so end up rejectinghim, ratherashe consolidated hisposition by much asa ritual acknowledgmentofwho holdspower. After rejectinghispredecessor, BorisYeltsin, who firstbrought him 18 years, MrPutin isnotjustthe presidentbutthe tsar. to power. Asimportantaslastweekend’svote, however, isthe strug- There isno guarantee thatthe cominggeneration will suc- gle to come. Thatwill be overthe future ofRussia. And, asim- ceed in makingRussia more normal. Russian historyis shot pregnable asMrPutin looks, itbeginstoday. through with failed attempts to find a settlement with the West—in which the country has veered between aspiration The gun has fired and hostility. The fortressmentalitythatMrPutin has fostered MrPutin cannotlegallyrun again forpresidentin 2024. Draw- has instilled feelings ofjealousy, resentment and victimisa- ingon a mixofpersuasion and brutal repression, he could tion. The main opposition leader, Alexei Navalny, who was force through changesto the constitution to lethimself stand barred from lastweekend’selection, hassaid thathisbiggest again, asXi Jinpinghasjustdone in China. Orhe may retire enemyisnotMrPutin and hiscronies, butthe debilitating con- from hisdailydutiesinstead, asDengXiaopingdid, in the hope viction amongordinaryRussiansoftheirown powerlessness. ofexertingpowerfrom behind the scenes. Butthen again, ifMr Ifthe securityservicesattemptto exploitfearin order to cling Putin startsto showa lackofresolve orcunninghe could find to theirprivilegesand theirpower, the Russian people maybe- himselfpushed aside atthe end ofhisterm. have astheirwillingaccomplices. Alreadythe elitesin Russia are jockeyingforposition. The outcome ishighlyuncertain. Atworst, the countrycould yet It’s everyone’s business embrace an even more extreme form ofthe nationalism that The struggle forRussia will be determined inside Russia. But hasdefined the politicsofMrPutin. He portraysRussia asas- the Westhasa partto play. Itisworth rememberinghow the sailed byenemies, and arguesthatithasnothingto learn from SovietUnion wasundermined notjustbythe militarymight foreign ideas like human rights and open democracy. That ofthe West, butalso byitseconomic, cultural and moral ap- viewhasalreadyfuelled a newcold warand led to rows over peal. Ittookdecadesforcommunism to crumble, buttoday’s manipulated electionsand political assassinationsabroad. In Russia iseconomicallyweakand MrPutin hasa greaterneed Crimea, Ukraine and Syria itfuelled real wars. to derive legitimacyfrom conflictathome and abroad. Butthere isan alternative. Arisingelite in its30sbroughton, Even asthe Westtargetshim and hiscronieswith sanctions in part, byMrPutin himselfyearnsforRussia to be a more and protestsathisaggressions, ittherefore needsa counter- “normal” country. Forthem much about his rule is archaic. narrative forthe Russian people. The aim should be to remain Theycringe athisconservative agenda, histraditional values, engaged with ordinaryRussianswhile containingMrPutin’s Orthodoxyand isolation. aggression, justasWestern diplomatsdistinguished between This new generation will play a central part in shaping the Sovietregime and itscitizens. Even asthe Kremlin restricts whatcomesafterMrPutin’snextterm. Ourbriefingthisweek Russian contactwith the West, the Westshould encourage it. describes its members, who range from regional governors Thatwill notbe easy. Itishard to punish MrPutin without and businesspeople to independent politicians. They have alienatingall Russians. Cultivatingthe newelite could justify a their differences and their rivalries, naturally, but they also purge bytheirenemies. And the Westislessofa model than it have more in common with each otherthan theydo with the was. Disillusion with the European Union and strife in Ameri- elderswho are theirbosses. Theytend to see the end ofthe ca overthe presidencyofDonald Trump, which MrPutin does cold warin the 1990snotasRussia’sloss, butasa victoryfor hisbestto foment, have tarnished the West’sappeal. common sense. Well-travelled and informed, theydo not suf- ThisweekMrTrump played into thatweaknesswhen he ferfrom the inferioritycomplexthatled MrPutin’sgeneration uncriticallycongratulated MrPutin on hisre-election, without to copythe Westand, later, lash outagainstit. Their parents raisingRussia’sabusesathome and abroad. Thatwasa mis- grewup with shortagesand measure successin termsof mon- take. The message thatmightisrightonlyfrustrates the rise of ey. Theytake material comfortforgranted. Havingwatched as more open young Russians and justifies the repressive in- publiclife hasbeen corrupted byMrPutin’slies, propaganda stinctsoftheiropponents. Thisisbad notonlyforRussians but and graft, theysee the benefitsofrules, lawsand transparency. also foreveryone else. Andrei Sakharov, a Russian Nobel prize- Duringthe nextsixyearsofMrPutin’spresidency, thiselite winninghumanistand nuclearphysicist, putitbest. A country will assertitselfin everywalkoflife. Think-tanks and journal- thatviolatesthe human rightsofitsown people, he argued, ism increasinglyreflecttheirideas. SixofRussia’s85 governors cannotbe safe forthe outside world. 7 14 Letters The EconomistMarch24th2018 thevice-chairman,producea kind. Then it’s, “You’re not The American-heartland Longmemories “conundrum.”Thecompany listeningto me, it’slike this”. We read Lexington’scolumn Bagehot’scolumnontheinco- boastsdozensofexemplary Whatwe need are absti- on Emmanuel Makender, one herenceofthegovernment’s leaderswithproventrack nence crèchesin pubs, areas ofthe first“LostBoys” from policyofapost-Brexit“global recordsinacquisitionsand where teetotallerscan meet Sudan to come to America in Britain”wasexcellent(March capitalallocation.Schumpeter othernon-drinkersand don’t 2000, with greatinterest 17th).Butonefactornot hasjoinedalonglistofcritics feel wildlyoutofwhackwith (March 3rd). We are Emman- mentionedthatmayfurther declaringthatWarrenBuffett one’sdrinkingcompanions. I uel’s“American parents”. Our undermineBritain’shopethat haslosthistouch,fromthe shall hangon to mypintsof familywill neverforgetthe day itcantradealoneisitslegacyin mid-1970stothepresentday. lime and soda. we picked up Emmanuel atthe itsformercoloniesandother PROFESSORLAWRENCECUNNINGHAM LUCY SAUNDERS airport. Ouroverwhelmed emerging-marketcountries. GeorgeWashingtonUniversity London heartsimbued with fear, won- Myfamilyhasstrongconnec- Washington,DC deringwhatin the world were tionswithIndianbusinesses, Russia’s one-trackrecord we thinkingwhen we said we andwearetoldtimeandagain Soberarguments would welcome a refugee into thatBritainleftIndiamuch While springcleaning, I came ouralreadychild-filled home? poorerattheendoftheEm- The marketfornon-alcoholic acrossThe Economistfrom July Iam notsure who wasthe pire.WhenIwasresearching drinkshasindeed been long 26th 2014. Yourleaderon mostscared. The LostBoys inChinasixyearsago,afair ignored (“Onlythe beergets Russia, “Aweb oflies”, was huddled in the middle ofthe chunkofmyinterviewees, drunk”, February17th). Yetthe particularlyprescientgiven circle, orthe group ofhost whowereallgraduatesofthe trend towardssobrietycontin- recentevents. Yourchilling familiessurroundingthem. LondonBusinessSchool, ues. Apoll from YouGov portrayal ofVladimirPutin Ourfearswere quicklydis- remindedmebitterlythatthe showed that3.1m Britons spreadingfalsehoodsto whip pelled when Emmanuel came BritishburntdowntheirImpe- attempted DryJanuarythis up supportathome and blunt home. Ourkidsshowed their rialSummerPalacein1860. yearand 72% ofthose who anyWestern response was new“brother” howlight Thesenegativebeliefsand tookpartare likelyto maintain spot-on. Yourecognised that switcheswork, howto turn on attitudescanmatterinbusi- lowerlevelsofdrinkingsix Russia’spropaganda campaign afaucetand a hostofother ness,andarewidespread. monthsafter. Demographical- isto sowdoubton all sources amazinginventions, including MAUREENGAZELEY ly, 16-24 yearoldsdrinkless ofinformation: “In a world of the telephone, hot-waterheat- London than anyotherage group. liars, mightnotthe Westbe er, a computer, and Emman- Butthe marketingoflow- lying, too?” Ifthishad been uel’sfavourite, a hotshower. alcohol versionsofbeerand heeded bypoliticiansperhaps MrBuffetthas still gotit We helped Emmanuel wine iswrong. Simplywater- yourotherprediction would through school, with home- Schumpeterclaimed that ingdown orremovingalcohol nothave come true. Ifthe work, studyingforvocational Warren Buffett’sBerkshire from the staple offeringsof world “doesnotstand up to tests, gettinghisfirstjob, open- Hathawayis“enough ofa beerand wine reinforcesthe him today, worse will follow”. inga bankaccount, wiring conundrum to perplexeven perception thatdrinkingalco- BRANDON DUNCAN moneyto Sudan. Agroup of the world’sgreatestvalue hol isthe desirable norm. It San Francisco familiesin ourchurch helped investor” (March 10th). Yet showsa lackofunderstanding him with thingsboth small Berkshire isrun with the ofthe positive reasonswhy (clothes, shoes, home-baked taxable shareholderin mind. people choose to forgo alcohol. goodies) and large (several Itspractice ofacquiring The brandsthatcan come up familiescontributed towards companiesatpurchase-price with excitingpropositionsthat the down paymenton Em- discountsand holdingthem aren’tdefined solelybytheir manuel’sfirsthome a few foreverproducesenormous lackofalcohol will be the milesfrom ourhouse). cumulative deferred taxes. By winnersin thisnewmarket. A Butwe can honestlysay reinvestingthe resulting non-drinkerisfarmore likely thatEmmanuel gave usmore capital, ratherthan paying to champion a productmade than we evergave him; a dividends, shareholdersare with theirtastesin mind, and deeperappreciation for spared the related taxes. Even notjustpromoted as“booze- perseverance amid suffering, ifBerkshire onlybeatan index free booze”. On behalfofrighteouscepha- resilience amid disappoint- fund byone point, itwould be LUKE D’ARCY lopodseverywhere, I must ment, industriousnessamid the clearlysuperiorinvest- UK President expressmyindignation. The opportunityand love amid mentaftertax. Momentum Worldwide covercartoon forthe February hateful violence. Moreover, and contraryto London 24th issue ofVladimirPutin’s So now, 18 yearslater, Schumpeter’sassertions, invasive octopuswasa sucker Emmanuel isstill smiling. His Berkshire avoidscompetitive Asan accidental teetotaller, the punch rightin the tentacles. photo ison a shelfnextto takeoversthatstoke premi- problem isn’tso much the MICHAEL SINGER those ofourothersixchildren. ums, rarelypaysmuch more availabilityofchoice; itis Rockville, Maryland7 We talkregularly. I joke, than marketvalue, and very mixingthose who do drink “Emmanuel, youdrive a nicer often obtainsa purchase-price with those who don’t. Since I carthan me.” He smilesand discountpreciselybecause, as quitdrinkingI have been Lettersarewelcomeandshouldbe admits, “itistrue.” Lexington noted, many“familiesand amazed to find howlittle even addressedtotheEditorat concludesthatrefugees“make entrepreneursare happyto practised tipplersneed to TheEconomist,TheAdelphiBuilding, 1-11JohnAdamStreet, the countrystronger, aswell as passon theircrown jewels” to drinkbefore theirconversation LondonWC2N6HT better.” Thatistrue indeed. Berkshire’sstewardship. becomesrepetitive and their E-mail:[email protected] STEVE AND LOIS KROGH Nordo the agesofMr abilityto listen deteriorates. It Morelettersareavailableat: West Chicago, Illinois Buffettand CharlesMunger, takesjusttwo drinks. Ofany Economist.com/letters

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