People power pushes out Armenia’s boss, who was trying to do a Putin

The surge to oust Serzh

“I WAS wrong. The movement on the streets is against my rule. I’m complying with their demands.” These are not words often heard from an authoritarian ruler of a former Soviet republic. But thus spake Serzh Sargsyan, who has ruled Armenia for the past decade, as he resigned on April 23rd.

Only a week earlier, he had seemed resolved to face down the protests that broke out after he was installed as prime minister on April 17th. Mr Sargsyan had exploited Armenia’s shift from presidential to parliamentary government to keep himself in power after completing his second and final presidential term.

His manoeuvre resembled that of Vladimir Putin, Russia’s president, who sat out one term as prime minister in 2008 before returning as president in 2012 against a wave of protests. A similar kind of crowd, incensed by a similar kind of trickery, engulfed Armenia’s capital Yerevan. It was led by Nikol Pashinian, a journalist turned...Continue reading

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The EU’s top judges take on Poland

JUDGES in Europe have often been able to get to the parts that governments cannot reach. It took rulings by the European Court of Justice in Luxembourg to give full force to the four freedoms—movement of goods, services, capital and people—that politicians promised but struggled to deliver. Now, as the EU clashes with governments that undermine the rule of law, the ECJ may be about to help again. Two cases explain why.

The first, brought by a body that represents Portuguese judges, argued that pay cuts imposed on its members during a euro-zone bail-out undermined the rule of law. In February the ECJ dismissed this argument, but couched its verdict in tough language that emphasised the importance of shielding courts from external pressure. One European official says the ECJ is clearly preparing the ground to rule on the independence of national judiciaries elsewhere. The obvious candidate is Poland, where the nationalist Law and Justice (PiS) government has stacked the courts and politicised...Continue reading

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Turkey’s president hopes to turn huge building projects into votes

IF SIZE matters, which it does for Turkey’s president, Recep Tayyip Erdogan, then the $12.5bn building site on Istanbul’s northern fringe matters a lot. The construction zone, a sea of concrete and cement, spills over 76.5 square kilometres (29.5 square miles), dotted by dozens of buildings, including an ultra-modern passenger terminal. It already covers an area bigger than Manhattan. A roaring hive of steamrollers, cranes, dredges, lorries loaded with piles of rubble and 35,000 workers completes the scene. By October all this will have turned into a new international airport capable of accommodating 90m passengers a year, says Ahmet Arslan, Turkey’s transport minister. Capacity will rise to 150m in five years, making it the world’s biggest aviation hub. Just to the west, an even more ambitious project, a 45km-long canal, bridging the Black and Marmara Seas, may soon be under way. Mr Erdogan wants to break ground on the project later this year.

Turkey’s megaprojects have been a source of...Continue reading

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European political parties shift right

 

EVERY four years researchers at the University of North Carolina and other institutions ask experts to place Europe’s political parties on various spectrums. The latest version of the Chapel Hill Expert Survey reviewed 132 parties in 14 EU countries, including the five biggest. It finds that since 2014, socialist, Christian democrat and conservative parties have as a group moved towards more restrictive immigration policies and that the liberal, Christian democrat and especially conservative ones have increased their tendency to deploy anti-establishment or anti-elite rhetoric. There is still a gap between Europe’s mainstream and the fringes—but it seems to be narrowing.

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Europe stands up for global trade rules

FOR anyone seeking to understand what America wants and how it hopes to achieve it, the random early-morning grumbles of a 71-year-old man are rarely the best place to start. Yet Donald Trump’s Twitter account has its uses for Europeans frustrated by his administration’s trade policy. For while the president is often erratic, on international trade he has been admirably consistent: the rules are stacked against America, deficits are a result of weakness, and previous presidents have been played for fools. And, as Mr Trump frequently tweets (March 10th: “If [the Europeans] drop their horrific barriers & tariffs on US products going in, we will likewise drop ours… If not, we Tax Cars etc. FAIR!”), he will turn to the bluntest of instruments to right these wrongs.

Like a dutiful cop, the European Union is taking down this evidence to use against Mr Trump. In March America slapped tariffs on steel and aluminium from abroad, arguing that cheap imports threatened national security by eroding...Continue reading

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How Milan’s voters opted for the losers

IN RECENT years, as Italy has struggled economically, Milan has been happily out of step. It enjoyed a revival that reached a peak three years ago when it hosted Expo 2015. The universal exhibition left Milan with a clutch of renewed urban areas and rekindled its spirit of optimism. The city centre, ever stylish, nowadays feels flamboyantly affluent.

Since the general election on March 4th, however, Milan finds itself at odds with the rest of Italy in a rather less positive way. “We voted for the losers,” says Francesco Daveri, who heads the MBA programme at the city’s Bocconi University. The Milanese cast 36% of their votes for a centre-left alliance that managed to win only 23% of the vote nationally. The anti-establishment Five Star Movement (M5S), took less than a fifth of the vote in Milan (against almost a third in Italy as a whole) and, despite its regional origins, the nativist Northern League fared worse in cosmopolitan Milan than it did nationally.

Since the M5S, the...Continue reading

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Apple's Big Payday Will Only Go So Far

The U.S. tax overhaul freed up plenty of cash held overseas by the tech firm, but the latest iPhone cycle seems to have cooled early. Does this set up a potentially difficult report for the company’s fiscal second quarter?

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With Future Murky, Auto Investors Focus on Change Now

Hopes of structural change are driving auto stocks, not financial results.

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Trump voters were motivated by fear of losing their status

IN THE newly revived “Roseanne”, a popular sitcom about a white blue-collar family in the Midwest, the main character, Roseanne Connor, explains to her leftie sister why she voted for President Donald Trump. “He talks about jobs, Jackie”, she says. By putting these words in the mouth of the matriarch, the creators of “Roseanne” reflected the widely held assumption that blue-collar voters, especially in the rustbelt in the Midwest and north-east, voted for Mr Trump because they felt poor and feared they would get poorer. The reality seems to be more nuanced.

On April 23rd the Proceedings of the National Academy of Sciences published a study suggesting that white, Christian and mostly male voters turned to Mr Trump because they felt that their dominant status was at risk, not because they felt left behind economically. Diana Mutz, a political scientist at the University of Pennsylvania, used a representative group of around 1,200 voters polled on the same wide-ranging set of questions in October 2012, just before the...Continue reading

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Hope I save before I get old

IF YOU reach the age of 65 in the OECD, you can expect to live for another 19 years  or so (more if you are a woman, less if you are a man). If you stop work earlier than 65, and live a bit longer than average, you could easily be retired for 25-30 years, almost as long as you were in work. But people find it very hard to get interested in pensions, even though their financial future depends on them; retirement is too distant a prospect and the issue seems too complicated.

This blog has written a lot on the subject so it is time to summon some farewell thoughts. The executive summary: pensions are more expensive to fund, employers are less willing to do so, so you will need to save more (a lot more) and/or retire later. 

All pensions are paid for by the next generation. This may seem counter-intuitive; aren't we contributing money every month? State pensions are paid for by current taxpayers (yes, there is a US Social Security...Continue reading

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The euro area’s economy loses momentum

ECONOMISTS have spent the past decade wringing their hands over the health of the euro area’s economy. Last year, in a welcome respite, it expanded by a robust 2.3%, outstripping forecasts and matching America’s growth rate. But it has appeared less rosy-cheeked since.

Symptoms include moderation in a number of monthly indicators. Industrial production fell in January and February, as did business confidence; retail-sales growth was disappointing. The purchasing managers’ index (PMI), an output survey regarded as a good early indicator of GDP growth, has fallen from exuberant—and perhaps unsustainable—levels at the turn of the year, though it still points to decent growth (see chart).

Germany, the bloc’s largest economy, has not been immune. A summary indicator compiled by the Macroeconomic Policy Institute, a German think-tank, which includes production, sentiment and interest-rate data, suggests that the probability of a recession has risen, from 7% in March to 32% in April. A...Continue reading

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The lapsing of Finland’s universal basic income trial

THE concept of a universal basic income (UBI), an unconditional cash payment to all citizens, has in recent years captured the imagination of a wide spectrum of people, from leftist activists to libertarian Silicon Valley techies. Proponents see a neat solution to poverty and the challenges of automation; detractors argue it would remove the incentive to work. Trials of UBI have been launched, or are about to be, in several countries. Most are publicly funded, although Y Combinator, a Silicon Valley startup accelerator, is starting a privately funded experiment in America.

Finland was one of the first movers. In January 2017 it began a trial for 2,000 people, each receiving €560 ($680) a month. That drew legions of foreign journalists and camera crews. This week, however, international media attention abruptly centred on the ending of the experiment in December 2018. Headlines suggested that it had been “scrapped” or had “failed”. The truth is more nuanced.

The trial...Continue reading

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A market-design economist wins the John Bates Clark medal

Parag Pathak penned a pupil-picker paper

BOSTON parents were fed up. To get their children into public schools they had to submit a list of their preferences. Spots were allocated first to those who put a school top. Only then would schools consider pupils who put them second or third. Sounds fair? Hold on. The best schools are popular. Picking them risks rejection. Good schools are sought after, too. If put second they may also fill up, leaving only places at worse schools. Should parents aim for the best and risk mediocrity, or settle for the good?

On April 20th the American Economic Association (AEA) awarded the John Bates Clark medal, given annually to a leading economist under 40, to Parag Pathak of the Massachusetts Institute of Technology. He researches market design—eg, creating mechanisms to allocate resources without money, such as school places in Boston. Solutions he devised there have been applied widely, from New York to New Orleans. The AEA says...Continue reading

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Donald Trump is sending shockwaves through global commodities markets

Technology can tackle investors’ flaws

TECHNOLOGY has transformed finance. Consumers bank and buy their insurance policies online. They use technology to manage their pensions and other investment portfolios. But can tech improve returns? Only if it is used wisely.

If it is cheaper to trade, then costs will take a smaller chunk out of long-term returns. Technology also allows fund managers to replicate stockmarket indices, giving investors access to broadly diversified equity portfolios for a fraction of a percentage point in annual fees.

But the ease and cheapness of trading, along with the vast range of options available, create a terrible temptation. Worldwide there are nearly 7,400 exchange-traded funds (ETFs) and related products. These funds are not used only by “buy and hold” investors. Nearly half of the top 20 traded securities on American markets, by value, are ETFs.

Just because you can trade does not mean you should. And just because there is a fund specialising in smaller Vietnamese companies, or one...Continue reading

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Many results in microeconomics are shaky

MICROECONOMISTS are wrong about specific things, Yoram Bauman, an economist and comedian, likes to say, whereas macroeconomists are wrong in general. Macroeconomists have borne the brunt of public criticism over the past decade, a period marked by financial crisis, soaring unemployment and bitter arguments between the profession’s brightest stars. Yet the vast majority of practising dismal scientists are microeconomists, studying the behaviour of people and firms in individual markets. Their work is influential and touches on all aspects of social policy. But it is no less fraught than the study of the world economy, and should be treated with corresponding caution.

For decades non-economists have attacked the assumptions underlying economic theory: that people are perfectly informed maximisers of their own self-interest, for instance. Although economists are aware that markets fail and humans are not always rational, many of their investigations still rely on neoclassical assumptions as “good...Continue reading

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A new NAFTA may be agreed on soon

The new NAFTA model has many moving parts

ONE year ago, a member of President Donald Trump’s administration drafted a short executive order to withdraw America from the North American Free-Trade Agreement (NAFTA), a trade deal with Canada and Mexico. The obvious interpretation was that Mr Trump was irresponsibly bullying the Mexicans and Canadians into giving America better terms. A kinder view held that he was aiming at a domestic audience. Congress was dragging its feet at the time over the confirmation of Robert Lighthizer, the president’s chosen trade negotiator. Mr Trump’s threats were a way to kick it into action.

One year on, with Mr Lighthizer long since in place, America’s attitude to NAFTA seems no less hostile. Its threat of withdrawal still hangs over the talks, and in March Mr Trump waved the stick of tariffs on steel and aluminium in case a deal to revise NAFTA could not be reached by May 1st. This tough talk may yield an agreement within the next few...Continue reading

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Can the euphoria of the Korean summit last?

IT WAS easy to forget that this was a man who has threatened the world with nuclear war, used summary executions and foreign hit jobs to eliminate his rivals and presided over some of the worst human-rights abuses in recent history. Kim Jong Un, the leader of North Korea, was all smiles as he walked towards the line that separates the northern and southern halves of the demilitarised zone dividing the two Koreas on the morning of April 27th. Mr Kim literally stretched a hand across the frontier, shaking that of Moon Jae-in, the South’s president, before stepping into the South. In a winningly unscripted move, he persuaded Mr Moon to re-cross the line into the North with him, before heading south again.

The meeting marked the first time a North Korean leader has travelled to the South since the end of the Korean war in 1953. (South Korean presidents have twice visited Pyongyang for summits, in 2000 and 2007.) There were Kodak moments galore: the first handshake, an inspection of a South...Continue reading

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The News Is Good for Baidu

China’s search-engine giant has found a way to make its users stick around: tailored news content generated by artificial intelligence.

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Saudi Arabia is pushing out foreigners to create jobs for locals

EVER since the local laundrette replaced its Asian workers with Saudis, his Parisian silk shirts have come back as nylon cast-offs, says a lawyer in Saudi Arabia. The new hire at his chemist, a bashful Saudi girl, shies from his request to spray colognes on his hand. He himself has hired four Saudi lawyers in order to comply with the kingdom’s drive to replace foreigners with Saudis. They are useless, he says.

“Labour pains,” tuts Ahmed Kattan, the deputy labour minister. As part of Crown Prince Muhammad bin Salman’s “Saudisation” efforts, Mr Kattan has slapped monthly levies on migrants (based on the size of their families) and the Saudis who hire them. He has also barred foreigners from 12 sectors of the economy, including baking and optometry. The scheme, he says, will reduce the kingdom’s dependence on about 8m predominantly unskilled foreigners, who far outnumber Saudi workers. He reckons this will cut Saudi Arabia’s jobless rate to 10% by 2022 (from around 13% today),...Continue reading

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Unstable neighbours and bad policy are just two of Jordan’s problems

PERCHED on a hill beneath a ruined Crusader castle, Karak feels a world away from Amman, Jordan’s crowded and expensive capital. The sleepy city is surrounded by lush farms and sits astride the tourist trail, both of which should provide jobs. Yet it has been buffeted by the problems that afflict the rest of the kingdom. Mayhem in Syria and Iraq has hurt farm exports. A terrorist attack by Islamic State (IS) in 2016 sent tourists fleeing. Earlier this year protests broke out in Karak and other cities over the perpetually troubled state of Jordan’s economy.

The spark was a package of price rises announced in January as part of an IMF-backed reform programme. Bread prices nearly doubled and fuel taxes climbed from 24% to 30%. Such measures are necessary: Jordan spends $1.2bn a year (9% of its budget) to subsidise food, fuel and water. The debt-to-GDP ratio hit 95% last year, in part because just 3% of Jordanians pay income tax. But austerity is compounding their pain. The unemployment...Continue reading

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As a Libyan warlord sickens, a power struggle grips his country

THE most important story in Libya this year is unfolding in a Paris hospital. Khalifa Haftar, the general who rules the east of the divided country, checked into the Val-de-Grâce military hospital earlier this month. His condition is a mystery. There are reports that he suffered a stroke and may be in a coma—or even dead. His spokesman insists he merely needed some tests and will return home in a “few days”, though he said that weeks ago. The French government is tight-lipped. But reality may now matter less than perception. General Haftar has not been seen since early April. His grip on eastern Libya is faltering and his allies are scrambling to find a successor.

It is a stunning fall for one of Libya’s most powerful and polarising figures. General Haftar (pictured above) backed the coup that in 1969 brought Muammar Qaddafi to power, but eventually ran afoul of the dictator and wound up in exile in America. He returned to Libya during the uprising that toppled Qaddafi in 2011. In early 2014,...Continue reading

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Africa has plenty of land. Why is it so hard to make a living from it?

SURROUNDED by tangled shrubland, Wisdom Mababe’s farm in central Zambia seems incongruously neat. “In 2002, when I started, it was bare bush,” he says. Each year since, he has bulldozed an area the size of 40 football pitches. Maize grows in ordered rows; cattle graze behind a fence. “The land, the water, it’s in abundance,” he gushes. Beyond his fields, the tall grass waves.

For most of its history, sub-Saharan Africa has been short of people, not land. In 2011 the World Bank estimated that the region had 200m hectares of suitable land that was not being used for crops—almost half of the world’s total, and more than the cultivated area of America. That potential excites many. “Africa is the future breadbasket of the world,” says Ephraim Nkonya of the International Food Policy Research Institute, a think-tank in Washington, DC.

Yet such aggregate figures may deceive. Most of Africa’s spare land lies in just a few big countries, such as Sudan and the...Continue reading

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Guinea’s President Alpha Condé hints that he may scrap term limits

Alpha Condé, husband to all women

THE main road from the Sierra Leone border to Guinea’s capital is lined with more than just potholes. Armed men sit in the shade at makeshift checkpoints and take turns to extort money from passers-by. Despite all the correct paperwork, your correspondent was robbed eight times in under an hour. “Your bag looks suspicious,” said one guard, clasping his Kalashnikov. It was just a bag full of dirty laundry, but the guard shook his head. Clearly stinky socks were a threat to national security. Fortunately, he had a solution. “Give me 40,000 francs ($4.50),” he said.

Despite appearances, Guinea has grown less corrupt under Alpha Condé, who has been president since 2010. In the year he was elected the country ranked a woeful 164th out of 178 countries on an index of corruption compiled by Transparency International, a watchdog. Now high-level graft has ebbed a bit. By 2017 Guinea had moved up to 148th, grabby border police...Continue reading

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The DJs in Kenyan cinemas who tell you what is happening on-screen

AS THE lights in the cinema go down and the patrons take their seats, the familiar Warner Brothers logo lights up the room and the soundtrack starts. This, however, is no ordinary cinema. The roof is of corrugated tin; the seats are tree trunks. The viewers watch a flat-screen television. As the movie, “Deep Blue Sea 2”, begins, Fred Ndichu, the DJ, starts his work. In a booth with an ancient computer, a wad of qat (a mild amphetamine) sticking out of his rapidly moving mouth, he begins to narrate. “Beautiful”, he shouts in Swahili, as a great white shark tears apart a flailing fisherman on-screen.

Mr Ndichu’s cinema, named the innocuous “Heshima Youth Group” to deter bribe-demanding cops, is in Mathare, a rough neighbourhood of tin shacks in eastern Nairobi. Similar establishments exist across the city, and in some other African countries. At the weekend the shack fills up with men watching English Premier League football. On weekdays it is given over to cinema....Continue reading

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The Ronny Jackson car crash

IN THE words of Herbert Stein, chairman of Richard Nixon’s Council of Economic Advisors, “If something cannot go on forever, it will stop.” The uncertainty over Ronny Jackson’s future could not go on forever. Nominated by Donald Trump to be Secretary of the Department of Veterans Affairs, he was due to appear before a Senate committee this week. But on April 23rd, allegations surfaced that Mr Jackson overprescribed drugs, drank on duty and was a nightmare to work with. The Senate Veterans Affairs Committee postponed his hearing.

On the evening of April 25th those allegations grew more specific. The committee’s minority staff released a document based on “conversations with 23 colleagues and former colleagues” alleging, among other things, that Mr Jackson doled out prescription drugs without prescriptions (a practice that allegedly earned him the nickname “Candyman”), drank while on call, wrecked a government vehicle while drunk,  described as “toxic,” “abusive,” “incapable of not losing his temper,” and prone to...Continue reading

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America's tech regulator gets five new commissioners in one go

THE Federal Trade Commission, the agency responsible for data privacy and antitrust enforcement, had a staid 2017. Amazon’s $13.7bn acquisition of Whole Foods grocery chain sailed past it after a short review. No acquisitions made by Google or Facebook were examined, despite mounting concerns that tech giants are able to buy up new firms before they ripen into true competition. The FTC was short-staffed for most of the year: thanks to presidential foot dragging and partisan spats, just two out of five commissioners were in place. As The Economist went to press, the Senate was due to confirm five new commissioners at once, the first time that has happened.

The interrogation of Mark Zuckerberg, Facebook’s CEO, may have proved tepid, but it saw lawmakers grappling with big questions for the first time: what exactly Facebook (and, by extension, its tech firm brethren) is, and what, if anything, should be done about the power it holds? The FTC’s new chairman, Joseph Simons, an...Continue reading

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The assisted-dying movement gathers momentum in America

Pacific rest

THREE years ago John Radcliffe, a jovial retired lobbyist in Hawaii, was diagnosed with terminal stage four colon and liver cancer. He has since undergone 60 rounds of chemotherapy but doctors suspect he has just six more months to live. His illness often leaves him feeling exhausted but, undeterred, he has spent the past few years pushing to pass one last bill: Hawaii’s “Our Care, Our Choice Act”, which allows doctors to assist terminally ill patients who wish to die. Earlier this month, as Mr Radcliffe beamed behind him in a colourful lei, Hawaii’s governor signed the bill into law making Hawaii the seventh American jurisdiction to approve an assisted-dying law.

Like the laws in California, Washington, Vermont, Colorado and Washington, DC, Hawaii’s law is modelled on legislation in Oregon, which was the first state to allow assisted dying, in 1997. It permits an adult, who two doctors agree has less than six months to live and is mentally sound, to...Continue reading

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The Supreme Court seems inclined to uphold the president’s travel ban

ONE year ago, stung by what he termed “ridiculous” judicial defeats for his travel ban and sanctuary city policies, Donald Trump tweeted, “see you in the Supreme Court!” On April 25th, Mr Trump followed through on that promise. Trump v Hawaii asks whether the third version of the president’s restrictions on travel from primarily Muslim countries is consistent with immigration law and the constitution. After lower courts repeatedly froze Mr Trump’s edicts for discriminating against Muslims, the travel ban found a friendlier audience among the nine justices.

First up at the podium was Noel Francisco, the solicitor-general. The latest restrictions, announced in September, were based on a “worldwide, multi-agency review”, he told the court, and applied to countries that fail to provide enough information to vet their travellers. The proclamation “omits the vast majority of the world”, he said, including the “vast majority of the Muslim world”. If...Continue reading

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Marco Rubio offers his Trump-crazed party a glint of hope

THE episode that encapsulated the Republican establishment’s capitulation to Donald Trump had been planned as a repudiation of him. It was when Senator Marco Rubio, in a bid to salvage his sinking candidacy in the 2016 Republican primaries, suggested that Mr Trump had a small penis. Formerly known as a high-minded conservative, Mr Rubio also mocked the Republican front-runner’s hair and “orange” skin. “Donald Trump likes to sue people,” he told a crowd in Virginia, ahead of the round of primaries that more or less sealed Mr Trump’s capture of the Republican nomination. “He should sue whoever did that to his face.”

Two years on, Mr Rubio is plotting a more elevated response to the earthquake Mr Trump has triggered on the right. In an hour-long interview he describes his plan for a new “reform conservative movement” devoted to addressing the economic disruption and social disaffection that the president vigorously described. In offering himself as an optimistic Reaganite, Mr Rubio...Continue reading

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The unusual process for staffing the White House

Up Pompeo

THE drama in the average congressional committee hearing makes Samuel Beckett’s plays look like fast-paced thrillers. But the afternoon session of the Senate Foreign Relations Committee on April 23rd contained a genuinely exciting reversal. Reporters were prepared for the committee to deliver a historic rebuke and vote to recommend that Mike Pompeo should not be confirmed as secretary of state, something that has never happened before. Republicans hold a one-seat majority on the committee; Rand Paul, a Republican from Kentucky, was expected to side with Democrats to protest against Mr Pompeo’s hawkishness. Moments before the committee convened, Mr Paul changed his mind, tweeting that he had “received assurances” the Mr Pompeo agrees that the Iraq war “was a mistake, that regime change has destabilised the region and that we must end our involvement with Afghanistan”. That cleared a path for his confirmation by the full Senate, filling a vacancy in the...Continue reading

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Scott Pruitt embarks on a campaign to stifle science at the EPA

SCOTT PRUITT, the administrator of the Environmental Protection Agency (EPA), is still standing after a fusillade of scandals that would have felled a lesser cabinet member. As soon as he took up his post, Mr Pruitt lodged in a luxury flat owned by a lobbyist, paying $50 per night only on the evenings he slept there—a remarkable bargain for Capitol Hill. Mr Pruitt denied any impropriety, but it emerged this week that he had met his landlord’s husband, also a lobbyist representing a pork manufacturer before the agency, contradicting his earlier claims. Mr Pruitt struck similar sweetheart deals in his previous job as attorney-general of Oklahoma. But since coming to Washington, other furores show that Mr Pruitt has let his newfound prominence get to his head.

He spent lots of taxpayer cash on first-class airline tickets, tripled the size of his security detail (which accompanied him on holiday to Disneyland) and installed a soundproof phone booth in his office, costing $43,000—which the Government...Continue reading

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A corruption spat in Russia endangers crime-fighters in Central America

IN A region where the rule of law is shaky, the International Commission against Impunity in Guatemala (CICIG) has become something of a beacon. Set up in 2006 to aid the country’s weak prosecutors, the UN-backed body has aided investigations that led to the removal and jailing of a president, and the dismantling of death squads and drug-trafficking rings. These successes have earned it enemies—including the current president, Jimmy Morales, who tried to get its head fired last year after it accused him of accepting illegal campaign funding. On April 20th, following a public apology by a group of businessmen who made the contributions, the president demanded that CICIG’s founding agreement be investigated. Guatemala’s “net centres”, groups of online trolls paid to smear opponents of the powerful, have raised their output.

With one in five members of congress under investigation, Mr Morales is not the only powerful Guatemalan who would like to see CICIG go. Yet every time its...Continue reading

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The violent end of Daniel Ortega’s decade of quiet

RARELY has a political movement so young been blessed with a symbol so potent. In 2013 the Nicaraguan government began installing garishly coloured metal “trees of life” around Managua, the capital. Advertised as a gift to the people from Rosario Murillo, the first lady, the 140 sculptures cost $25,000 each to install. They consume $1m worth of electricity a year. The contract for maintaining them belongs to a company owned by a relative of the president, Daniel Ortega. So when demonstrators began thronging the city’s streets on April 18th, they were surrounded by fitting targets for their ire. Banding together, they tugged on chains to uproot Ms Murillo’s beloved trees (see picture)—and perhaps the country’s political future too.

Days after the protests began, one of the trees was still lying atop a roundabout. Passing cars honked in satisfaction at the subversive sight. Several young Nicaraguans sat on it as though it were a sofa; others scavenged along the ground for light bulbs to take...Continue reading

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An involuntary celibate goes on a killing spree in Canada

The Incel Rebellion’s grim toll

HIS classmates thought he was harmless. But on the afternoon of April 23rd Alek Minassian, a 25-year-old computer programmer from Toronto, drove a van into lunchtime strollers, careering along for more than a kilometre, killing ten and injuring 14 others. His aim, apparently, was to murder women, because women would not have sex with him.

Beforehand, Mr Minassian posted a message on Facebook proclaiming: “The Incel Rebellion has already begun! We will overthrow all Chads and Stacys! All hail Supreme Gentleman Elliot Rodger!” Canadians googled furiously to find out what this might mean.

They found that “incel” is short for involuntarily celibate. Members of this movement are furious that women (sometimes referred to as “Stacys”) won’t sleep with them. They also resent “Chads” (men who find it easy to get sex). They mostly confine themselves to grumbling in online chat-rooms. Some swap alarming fantasies of...Continue reading

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The son of an ex-dictator’s secretary is elected president of Paraguay

Now it’s my turn

OPINION polls gave Mario Abdo Benítez a lead of 10-25 percentage points ahead of Paraguay’s presidential election on April 22nd. So it was no surprise when Mr Abdo Benítez, the son of the private secretary to Alfredo Stroessner, Paraguay’s dictator from 1954-89, was declared the winner. However, his margin of victory was much smaller than predicted: under 4% on a turnout of 61%. Both figures were the lowest since the return to democracy in 1989.

The president-elect’s Colorado Party has now won six of the seven elections since Stroessner’s fall. By 2023, it will have ruled for 70 of the past 75 years. The party closed ranks after a bitter primary in December, when Mr Abdo Benítez defeated Santiago Peña, the dauphin of the outgoing president, Horacio Cartes.

The main opposition, an awkward coalition of the conservative Liberal Party and the left-wing Frente Guasú, ran a ragged campaign. Its presidential candidate, Efraín Alegre,...Continue reading

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Mario Vargas Llosa explains why his politics changed

IT IS not every novelist who sits down to write a serious work of political philosophy. But Mario Vargas Llosa has always been as much a political as a literary animal. He describes “La Llamada de la Tribu” (“The Call of the Tribe”), published in February as its author turned 82, as an account of his own intellectual history. That is a journey from youthful flirtation with communism and existentialism; enthusiasm for and then disenchantment with the Cuban revolution; followed by a conversion to liberalism in the British sense. This stance makes him exceptional among Latin American intellectuals, many of whom are still bewitched by anti-imperialism and socialism.

The book is an account of the lives and thought of seven liberal philosophers. Apart from Adam Smith, they include Karl Popper and Isaiah Berlin, both of whom the author met (as he did Margaret Thatcher, who impressed him too) while living in London in the 1970s. Also on the list are France’s Raymond Aron and José Ortega y Gasset of...Continue reading

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Women could make Asia rich

“WOMEN hold up half the sky,” Mao Zedong used to say, when not harassing peasant girls. They also hold up 41% of China’s GDP, the biggest share in the Asia-Pacific (see chart), says a new report by the McKinsey Global Institute, the consultancy’s think-tank.

In fact, Mao was subtly mistranslated, points out Perry Link, a China scholar. He actually said that women “can” hold up half the sky. McKinsey also thinks Asian women can make a bigger economic contribution. It finds “quite impressive” signs of progress in many countries, says Anu Madgavkar, one of the report’s authors. In Japan the percentage of women in the labour force has increased quickly in the past ten years; in the Philippines 142 women hold professional or technical jobs for every 100 men; China boasts 114 of the world’s 147 female, self-made billionaires (America has 14).

But China could add 13% to its GDP by 2025, relative to a baseline, if it increased women’s employment, hours and...Continue reading

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A rare victory for #MeToo in Japan

Fukuda has lost interest in reporters

WHEN a female reporter for TV Asahi told Shukan Shincho, a magazine, that Junichi Fukuda, the finance ministry’s top bureaucrat, had repeatedly sexually harassed her, the reaction was galling. Taro Aso, the finance minister, said he had no plans to investigate Mr Fukuda. When the reporter provided audio recordings as evidence, Mr Fukuda said he couldn’t be sure the voice was his. “I only hear my voice through my own body,” he explained. For its part, TV Asahi apologised for the fact the reporter had told her story to the magazine—failing to note that she had done so only after she had come to one of her own managers and he had advised her to keep quiet. (The company did eventually lodge a formal complaint with the ministry.)

The #MeToo movement has barely touched Japan. “This is a land of men,” says a (male) former official, who says there are “many, many” such cases. The imbalance between men...Continue reading

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Kazakhstan’s government squelches the least hint of dissent

TO THE untrained eye, the activity looked innocent enough. Patriotic Kazakhs marked a public holiday in March by displaying balloons of the same turquoise colour as the national flag. The hitch was that Mukhtar Ablyazov, an exiled oligarch, had urged citizens to display turquoise balloons to demonstrate their support for his political movement, Democratic Choice of Kazakhstan (DVK by its Russian acronym), which a Kazakh court had banned days before as “extremist”. It was unclear how many of the balloon-flaunters even knew about Mr Ablyazov’s call. But the police concluded that it was safest to haul them in for interrogation, just the same. After all, Nursultan Nazarbayev, the 77-year-old strongman who has ruled this oil-rich Central Asian state for nearly three decades, tolerates no challenge, however trifling, to his autocratic rule.

Mr Ablyazov first angered Mr Nazarbayev in 2001 by founding a reform movement. He was soon jailed on corruption charges, then pardoned and released. In...Continue reading

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A series of grotesque rapes infuriates Indians—again

The noose is not the answer

ON APRIL 25th a court in the city of Jodhpur sentenced a 77-year-old religious leader known as Asaram Bapu to life imprisonment for the rape of a 16-year-old girl. That, after a five-year trial, a judge should uphold the word of a poor, provincial woman against a bearded Hindu holy man who is not only venerated by millions, but cultivated by powerful politicians, including at one time Narendra Modi, the prime minister, seems to suggest that in India justice can, after all, prevail.

Yet the public mood remains grim, and for good reason. In recent weeks the country has been battered by a particularly ugly sequence of crimes, as well as by what appear to be glaring cases of miscarried justice. The most shocking involves the kidnap, gang rape and brutal murder of an eight-year-old girl from a community of nomadic herders who migrate seasonally from the highlands of Kashmir to the plains of Jammu. As disturbing as the crime itself was its motive—an...Continue reading

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China and India are trying to get along better

DRAGONS are lithe and prickly and cunning. When excited they breathe fire. Elephants are tubby, lumbering and shy. They never forget a slight, and when angered grow fierce and implacable. If the metaphorical animals typically used to depict them are anything to judge by, it is not surprising that China and India, the world’s two most populous countries, tend to compete more than co-operate.

For decades each has claimed bits of the other’s territory. Each nurses a long list of irritants; each dislikes the other’s friends; each suspects the other is up to no good. Sometimes, as in a brief border war in 1962, India and China have clashed. At other times they have professed a fickle friendship. But most of the time the two giants just peer warily at each other over the Himalayas—which is why the two-day “informal” summit between their leaders, to be held in the Chinese city of Wuhan on April 27th-28th, marks a striking departure from the norm.

Both countries are billing the...Continue reading

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North Korea’s despot has one goal: survival

ADMIT it. The world’s commentators, Banyan included, have underestimated North Korea’s leader. Kim Jong Un was preparing this week to meet South Korea’s president, Moon Jae-in, on the southern side of the demilitarised zone between their two countries, on April 27th, just after The Economist went to press. Even six months ago, no one imagined Mr Kim capable of leading a diplomatic dance that has drawn in not just South Korea but America and China. He is proving to be an adept young dictator.

This week’s summit is due to discuss a formal peace treaty that has eluded leaders of North and South Korea since the Korean war ended in an armistice in 1953, entrenching the bitter division of the peninsula. It is also meant to pave the way for a summit between Mr Kim and President Donald Trump, in late May or early June at a venue that has yet to be announced.

Some still rub their eyes at the prospect of the first-ever meeting between a North Korean leader and a...Continue reading

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Crypto money-laundering

AS LONG as dirty money has been around, so has money-laundering. Between $800bn and $2trn, or 2-5% of global GDP, is washed annually, estimates the United Nations Office on Drugs and Crime. Criminals have swapped money for precious metals, mis-stated invoices, rinsed cash through casinos or simply strapped it to their bodies and flown to places where banks don’t ask questions. Now they have a new detergent: crypto-currencies.

Such data as there are suggest that crypto-laundering is still a small share of the whole. But crypto-currencies’ attractions—global availability, the speed and irreversibility of transactions and the ability to hide identities—are plain. Rob Wainwright, head of Europol, Europe’s police agency, has estimated that 3-4% of the continent’s annual criminal takings, or £3bn-4bn ($4.2bn-5.6bn), are crypto-laundered. He thinks the problem will get worse. America’s Drug Enforcement Administration believes international gangs are using crypto-currencies...Continue reading

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Regulating virtual currencies and ICOs

THE pattern is familiar. Computer geeks develop technology that threatens to overturn established markets and habits. Regulators then scramble to understand and tame the beast. This is what is happening in the financial world in the wake of an explosion of crypto-currencies. Over the past year the pool of virtual currencies has both deepened, from $30bn to $400bn, and widened, with the spread of “initial coin offerings” (ICOs, a form of fundraising in which investors in young companies are issued with virtual tokens). Hedge funds, students and pensioners have all been caught up in the crypto craze.

This worries authorities, because the crypto-sphere is far from risk-free. Valuations can leap and plunge: after a giddy rise, between December and February the price of bitcoin dropped from nearly $20,000 to less than $7,000. (It is now around $9,000.) Several ICOs have turned out to be scams. Legitimate tokens are in danger of being stolen. Some crypto-currency exchanges have been...Continue reading

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Shell's Earnings Have Gas, Could Be More Well-Oiled

Shell’s first-quarter net profit surged thanks to higher prices and natural gas output. The company’s strategic shift into natural gas makes sense long term, but has a cost now as oil rebounds.

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Facebook Stays in the Friend Zone

The social network’s first-quarter report showed that about 48 million daily active users signed up during the period, suggesting that the world’s largest social network isn’t easily unplugged despite its recent problems.

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A Healthier Viacom Makes a CBS Deal Trickier

Struggling media company Viacom’s revival won’t make reaching a deal with CBS any easier.

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Higher Rates Hide a World of Easy Money

The 10-year U.S. Treasury yield has returned to 3% for the first time since early 2014 and markets are clearly sensitive to higher rates. But the bigger picture is that investors are still living in a world with very low rates.

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Resurgent Twitter Is No Free Bird

Twitter’s strong first-quarter results support the case for a recovering business, but much was already priced in.

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Emmanuel Macron tries to win over Donald Trump on Iran

THE young French president, Emmanuel Macron, turned up in Washington, DC, this week for his state visit keen to make something of the oddly close link he has forged with Donald Trump. Top of his list was an effort to persuade the American leader not to walk away from the Iran nuclear agreement. Mr Trump has threatened to do this on May 12th, and may well still do so. Yet, for the first time, the American president hinted that he might be interested in a European idea, promoted by the French president, of brokering an add-on deal to cover wider American concerns about Iran. If this can keep Mr Trump on board, it would be a big diplomatic coup for Mr Macron.

The French president’s proposal is one that France, Britain and Germany have been working on closely together. The idea would be to widen the existing agreement, made in 2015 with the Europeans, Russia, America and China, with a side deal. This would cover Iran’s ballistic missile programme and its regional interference, as well as...Continue reading

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Singaporeans are in the dark about their next prime minister

A PILLAR of stability, Lee Hsien Loong, son of Singapore’s independence leader, Lee Kuan Yew, has run the country since 2004. Despite a decline in his party’s popularity, the manicured electoral system has returned him to office time and again, most recently in 2015. The country is now more than halfway to the next election, which must be held in 2021 at the latest. As it nears, a tricky subject looms: who will replace Mr Lee? He plans to stand once more before stepping down as prime minister ahead of his 70th birthday in 2022. The question has the government on edge.

Mr Lee will almost certainly win the next election. The ruling People’s Action Party has held power since before independence more than half a century ago. It holds 83 of the 89 elected seats in Singapore’s parliament. Predicting the identity of the next prime minister is trickier. But a cabinet reshuffle this week provided clues. Three older ministers, all in their sixties, stepped down. Younger colleagues were...Continue reading

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Kim Jong Un says he will stop testing missiles

DONALD TRUMP was characteristically emphatic: “This is very good news for North Korea and the World—big progress! Look forward to our Summit.” The tweet came on April 20th, shortly after North Korean state media reported that their country would close down the Punggye-ri blast site and stop testing missiles. South Korea also welcomed the move, which comes on the eve of a summit planned for April 27th between Kim Jong Un, North Korea’s dictator, and Moon Jae-in, the president of South Korea, with another one scheduled to take place by early June, for Mr Kim and Mr Trump.

Spring is definitely in the air. On April 19th Mr Moon said that the North Korean leader was no longer insisting on the withdrawal of American troops from the Korean peninsula as a precondition for giving up his nuclear weapons. Unlike in previous years, Mr Kim has not issued any condemnations of the military drills that America and South Korea have been performing since the beginning of the month. Nor has he...Continue reading

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The best books on finance and economics

THE late Hans Rosling is best known for his Ted talks (here is one on the wonders of the washing machine). Sadly he died last year but before he did so, he worked with his son and daughter-in-law to write "Factfulness: Ten Reasons Why We're Wrong About the World - And Why Things Are Better Than You Think." It is a wonderful book, full of humour and humility, and it paints an optimistic picture of progress.

Take his 13 question test and you will probably be surprised. For example, has the proportion of people in the world living in extreme poverty over the last 20 years almost doubled, stayed the same, or almost halved? Over the last 100 years, has the number of deaths per year from natural disasters more than doubled, stayed the same or more than halved? In both cases, the answer is the most optimistic one; the latter statistic is particularly remarkable given the increase in the size of the population over the last century. 

Perhaps because the...Continue reading

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A federal judge orders Donald Trump to reinstate DACA

ON APRIL 24th, Donald Trump suffered a third setback to his effort to undo Deferred Action for Childhood Arrivals (DACA). The programme, introduced by Barack Obama in 2012, shields undocumented immigrants brought to America as children from deportation. Twice in recent months, federal judges in California and New York have concluded that Mr Trump’s decision in September 2017 to ditch DACA was illegal. Both rulings effectively wiped out the end-date of March 5th the Trump administration set in the autumn. 

The decision this week from Judge John Bates goes further than either of the previous injunctions. As well as requiring Mr Trump to process renewals of existing DACA enrollees, Judge Bates orders the president to invite and approve first-time applications from so-called Dreamers who have yet to register for the programme. 

Judge Bates grounded his ruling in the Administrative Procedure Act (APA), a federal law that sets...Continue reading

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Beware the Chinese Tech IPO Rush

Several Chinese household tech names are planning to list this year. The hype already looks out of control.

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Credit Suisse Finds Right Formula for Fickle Markets

Credit Suisse has spent the past couple of years focusing on what it could control and worrying less about what it couldn’t: that approach is bearing fruit.

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Why Wynn Remains a Risky Bet

Steve Wynn has left the firm he founded, but the risks from his legacy remain and new management aren’t saying and doing the right things to reduce them.

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How African Deals Entangled a Billionaire Media Mogul

Investors already attach such a governance discount to Vivendi that allegations of bribery in Africa at its parent company may not add much

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Can Throwing Darts Beat Hedge-Fund Managers' Stock Picks?

The Heard on the Street team is going toe-to-toe against the recommendations of hedge-fund managers who attend Monday’s annual Sohn Investment Conference.

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3% Isn't the Most Important Number in the Bond Market

Investors who are focused on 3% are missing the more important development in the market. The real action has been driven by expectations the Federal Reserve will keep raising interest rates, which has pushed the 2-year yield to 2.47% from 1.89% this year.

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The Next Challenge for Global Growth: Keeping Up With Demand

In the battle for economic supremacy, investors should quickly be realizing it’s increasingly about supply, not demand.

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Biogen Investors Are Losing Patience

Biotech giant Biogen needs to quickly rebuild its new drug pipeline, a risky and expensive undertaking, to win investors back.

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Donald Trump’s travel ban heads to the Supreme Court

ORAL arguments at the Supreme Court often make for excellent theatre: an hour of well-prepared lawyers clashing over an issue fundamental to American democracy, lashed by questions from merciless justices sitting a few feet away. That is what visitors to the Supreme Court are likely to see on April 25th, when the court convenes to hear Trump v Hawaii, the final case of the nine-month term. The justices will consider an uncommonly fraught matter of presidential power: whether the third version of Donald Trump’s restrictions on travel from primarily Muslim countries is consistent with the law and the constitution.

The challengers argue that Mr Trump’s latest travel ban is a direct descendant of his campaign-trail calls for a "total and complete shutdown" of Muslims entering America "until our country's representatives can figure out what is going on”. Singling out members of one religion for especially burdensome treatment based on a hunch that they may be terrorists violates the First Amendment’s Establishment Clause, the Fourth...Continue reading

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Elliott's New Korean Target May Prove Willing

The activist investor has published its proposal to revamp Hyundai. It may not get everything it asks for, but it could still generate some good returns.

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Handicapping the Next China Bubble

China’s central bank is embarking on a new easing cycle, and the nation’s bond market is suddenly on a tear. But in the past, China has had trouble easing without blowing big bubbles in more dubious assets than government bonds.

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Google Can't Keep Its Success Secret

Strong advertising growth shines fresh light on a controversial business, as spending jumps.

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The Next Winners From the Oil Rally

Oil-field-service providers like Halliburton, Schlumberger and Baker Hughes haven’t benefited from the shale boom as much as investors hoped, but that will change.

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Guatemala votes to demand 53% of its neighbour’s territory

IT SOUNDS like an outrageous act of provocation. In a referendum on April 15th, Guatemalan voters chose to file a claim at the International Court of Justice (ICJ) demanding sovereignty over 53% of Belize, their eastern neighbour. The Belizean government, however, responded with congratulations, saying the result “contributes further to the strengthening of democracy, peace and security”. It had reason to be sanguine: the most likely outcome is that nothing will happen.

Guatemala’s demand for a bigger chunk of Central America’s Caribbean coast is far older than Belize itself. In the 1700s Spain agreed to let Britain cut timber in the northern half of modern Belize. Britons searching for mahogany crept southwards. After Spain retreated from Latin America in the 1800s, Britain formally took over the entire territory, naming it British Honduras. The new state of Guatemala said it had “inherited” the region from Spain. Guatemala gave up its claim in 1859, in exchange for Britain...Continue reading

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How long will Latin America support “American values”?

THE last time the leaders of 30-odd countries from the Americas met, in Panama in 2015, the presidents of the United States and Cuba, longtime enemies, shook hands. When the group reconvened in Lima this month, the bonhomie was gone. Raúl Castro, who is due to step down as Cuba’s president on April 19th, did not come. His foreign minister, Bruno Rodríguez, attended in his stead and lambasted “United States imperialism”. Donald Trump, who ended the detente with Cuba, stayed home too. He sent his vice-president, Mike Pence, to denounce Cuba’s “despotic regime”. The stand-ins blasted each other with quotations from Latin America’s liberator, Simón Bolívar. Mr Pence: “A people that loves freedom will in the end be free.” Mr Rodríguez: “The United States seems destined by Providence to plague America with torments in the name of freedom.”

Mr Pence probably thought he had won the duel. On the biggest question facing the summiteers—addressing tyranny and hunger in Venezuela—the...Continue reading

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Anti-elitist politicians in Canada are courting immigrants

EVER since Doug Ford became the leader of Ontario’s centre-right Progressive Conservative Party on March 10th, he has been asked if he is Canada’s Donald Trump. The two have much in common. Big, beefy and blond, Mr Ford inherited a large product-labelling company, yet campaigns against elites who “drink champagne with their pinkies in the air”. He loathes regulation and taxes, and vows to repeal Ontario’s carbon cap-and-trade system. Two books about his late brother Rob, Toronto’s crack-smoking mayor, paint the surviving Ford as impulsive, undisciplined, indiscreet and a bully.

However, the comparison falls apart when it comes to immigration. Mr Ford bemoans the loss of 300,000 manufacturing jobs from Ontario, but blames an incompetent Liberal Party, not foreigners. Far from bashing immigrants, he aims to woo socially conservative ones. For example, he wants to repeal a sex-education curriculum for primary schools that lists six genders and four sexual orientations. Many immigrant parents...Continue reading

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