Suspected jihadists are being killed in droves on Kenya’s coast

BALBINA, a woman from Mombasa, Kenya’s main coastal city, remembers fetching her neighbour Abdullah’s body from a police station. “It wasn’t so terrible,” says Balbina (not her real name). Surprisingly, “there was not even any blood.” The wound was hidden at the back of his head; his face was serene. He was killed by police, in what they claimed (but she does not believe) was a shoot-out. “Abdullah did wrong. He went to Somalia, maybe he killed innocent people.” But he deserved justice, she says, not to be shot in the back of the head without a trial.

Such stories are easy to find on the Kenyan coast, where young men are often recruited to fight for al-Shabab (“the Youth”), a Somali jihadist group. Some go to fight in Somalia; some carry out terrorist attacks at home. In recent years the government has cracked down on anyone it suspects might have joined al-Shabab. In December Haki Africa, a human-rights group, published the names of 81 people, almost all young Muslim men, who it says were killed or “disappeared” by police since 2012. The real number is probably much higher, says Francis Auma, the group’s co-ordinator, since...Continue reading

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Reforming Islam in Egypt

Islam’s ivory tower

FEW Egyptians dare challenge Abdel-Fattah al-Sisi, their authoritarian president. But one institution has stood up to him. “You wear me out,” Mr Sisi reportedly told Ahmed al-Tayeb, the grand imam of Cairo’s al-Azhar University, last month.

It has been over two years since Mr Sisi, an observant Muslim, lamented that some of his co-religionists were becoming “a source of worry, fear, danger, murder and destruction to all the world”. He urged Egyptian clerics to push back against the jihadists of Islamic State (IS). Egypt itself was a victim, he said: angry Islamists have attacked the government and an affiliate of IS battles the army in Sinai. To combat such extremism, “a religious revolution” was needed, said Mr Sisi—and al-Azhar, the Sunni world’s oldest seat of learning, should take the lead.

But the clerics, led by Mr Tayeb, have largely resisted Mr Sisi’s appeal. Though al-Azhar bills itself as moderate, critics say that it has allowed hardliners to remain in senior positions and failed to reform its curriculums, which include centuries-old texts often cited by...Continue reading

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Land invasions in Kenya portend election violence

AT KIFUKU, a cattle ranch in Kenya, the dry-stone walls are reminiscent of England; by the farmhouse, a pair of boats sit on an artificial lake. The farm has, however, been anything but calm of late. Since September dozens of cattle-ranchers, some with assault rifles, have driven their cattle onto the farm’s 8,000 acres (3,238 hectares) of grass. Buildings have been wrecked, staff beaten up and a police officer shot and injured. “We’re all extremely tired and frustrated and short-fused [and] scared,” says Maria Dodds, the owner. By February 12th relief had arrived, in the form of an armoured car filled with policemen.

The invasion of Kifuku farm is one of a series that have taken place since 2013 across Laikipia County, a fertile plateau between Kenya’s central highlands and arid north (see map). Much of it is covered by private ranches and nature conservancies owned by white Kenyans such as Mrs Dodds and international investors. The attacks appear to have escalated in recent weeks. A tourist lodge was burned down on the Suyian Ranch on January 29th; visitors had to be evacuated from the Mugie Conservancy earlier in the month after a staff...Continue reading

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James Mattis, America’s new defence secretary, has given NATO a warning

DURING his first month in office Donald Trump has often left allies concerned and confused. So when James Mattis, America’s new defence secretary, visited NATO’s headquarters in Brussels this week, he strove to calm anxious colleagues. Attending his first meeting of NATO defence ministers, Mr Mattis said that the administration strongly supports the alliance, which remains the “fundamental bedrock for the United States and the trans-Atlantic community”. (Previously, Mr Trump had described NATO as “obsolete” and not doing enough to fight Islamic terrorism.)

But Mr Mattis also stressed that the president is serious when he demands that other NATO members must spend more on defence. Otherwise, he warned, America might “moderate its commitment to the alliance”. This is hardly a new refrain from an American president. However, Mr Trump’s uniquely sceptical view of alliances raises the risk of ignoring it.

Mr Mattis did not go quite as far as his boss did, while a candidate, in arguing that America might honour its Article 5 commitment to collective defence only if the ally in need had paid its dues. But irresponsible as that...Continue reading

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Turkey’s snuggling up to Russia is likely to hurt it

AT ISTANBUL’S naval museum, around the corner from President Recep Tayyip Erdogan’s residence, reminders of one of Europe’s biggest geopolitical rivalries are everywhere. A bust commemorates Hasan Pasha of Algiers, a commander in a battle in which the Russian fleet burned the Ottoman one to a crisp. The remnants of the Mahmudiye, a galleon that led the siege of Sevastopol during the Crimean War, overlook rows of gilded boats used by the sultans. Such flare-ups are not just things of the distant past. In 2015 Turkish pilots shot down a Russian warplane, and the two powers appeared on the brink of another war. It would have been their 18th.

Instead, the two countries resorted only to insults and sanctions. Since then tensions have ebbed: in June last year Mr Erdogan apologised for the incident. Two weeks later, Russia’s president Vladimir Putin rushed to condemn a violent coup attempt against Turkey’s government. The two countries have subsequently signed a big gas pipeline deal, agreed to resume work on a nuclear plant in southern Turkey and pledged to increase bilateral trade by more than fivefold, to $100bn a...Continue reading

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Barred from the ballot, Putin’s rival is running anyway

Aleksei Navalny: poster boy

WITH little more than a year remaining before Russia’s next presidential elections, Aleksei Navalny, the country’s leading opposition politician, is hitting the campaign trail. Over the coming weeks he will embark on a tour from Siberia to the Black Sea, opening offices and recruiting volunteers. The fact that a Russian court recently ruled him ineligible to run has done little to change his plans. “Dance as if no one can see you, campaign as if you’re already on the ballot,” Mr Navalny quips.

The court’s decision is far from the final twirl in Mr Navalny’s ongoing foxtrot with the Kremlin. Even if he is barred from running for office, he cannot be written entirely out of Russian politics; his place within it does not depend on electoral success, but on support from young, urban Russians disenchanted with the rule of the current president, Vladimir Putin. And Mr Putin could let Mr Navalny run without fear that he might actually win. Letting him do so might provide useful window-dressing, making Mr Putin’s inevitable victory seem less dodgy. (Although Mr Putin has yet to declare his intention to run in 2018,...Continue reading

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Matteo Renzi plans to quit his job and win it back

MATTEO RENZI, Italy’s former prime minister, has never been one to shrink from a bet. On February 19th he is set to stake all his remaining chips by resigning as leader of the governing Democratic Party (PD). It will be the second time in three months he has quit a top job, having resigned as prime minister in December after losing a referendum on constitutional reform. But this time he is hoping that, in the ensuing contest, he will be victorious. Why should he need, or want, re-election?

Since he was elected party leader in 2013, Mr Renzi has faced dogged opposition from inside the PD. His adversaries include left-wingers who dislike his business-friendly policies and members of the party’s old guard. The latest disagreement is over the timing of the next election. Neither side can enforce a date: it depends on the president, Sergio Mattarella, who has refused to dissolve parliament until Italy has new electoral rules that apply compatibly to both houses. Provided a new electoral law can be agreed, Mr Renzi wants a vote soon afterwards so he can win back the premiership as the PD’s candidate; his critics want to delay so that he gradually...Continue reading

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How Moldova escaped the effects of a giant banking crisis

At least the wine is safe

MOLDOVA is a country of ignominious records. It is by far Europe’s poorest place. Among countries that bother to count foreign tourists, only Tuvalu welcomes fewer. To these dubious achievements, this little Romanian-speaking former Soviet republic added a new one in 2014. A leaked report revealed that up to $1bn, equivalent to more than an eighth of the country’s GDP, had been stolen from three banks. Relative to the size of its economy, that may be the biggest bank fraud of all time. What happened next, however, was surprising.

Following the theft economists had feared the worst, especially since two of Moldova’s biggest trading partners, Ukraine and Russia, were mired in financial crises of their own. Yet since then the country has coped remarkably well. GDP shrank by a mere 0.5% in 2015 (whereas Russia’s fell by 4% and Ukraine’s tanked by 10%). Last year Moldova grew by 2%, fast by European standards.

Some credit must go to the government, which swiftly offered a blanket guarantee of deposits. The state in effect issued debt to cover every deposit in banks that failed....Continue reading

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Greece’s creditors are now the main impediment to solving the country’s woes

IF HISTORY repeats itself first as tragedy and then as farce, it continues thereafter as endless iterations of Greek debt dramas. The script is wearyingly familiar. Greece’s European creditors are trying to close the second review of its third bail-out, which was signed in August 2015. That would enable them to lend Greece the funds it needs to meet €6.3bn ($6.7bn) of bond repayments due in July. But talks have run aground ahead of a meeting of euro-zone finance ministers in Brussels on February 20th. Bond yields have spiked, German ministers are issuing barbed comments, and dust is being blown off the Grexit files.

The review covers everything from health care to military wages. But thanks to pressure from the IMF—which has not yet joined the bail-out, as it did the previous two—Greece faces more pressing demands: to pass tax and pension reforms worth 2.5% of GDP, to kick in after the bail-out expires. Alexis Tsipras’s hard-left Syriza government will struggle to get these measures through parliament, but the alternative is to call elections that Syriza would probably lose to New Democracy, a centre-right party. Thousands of farmers wielding...Continue reading

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The urge to elect an insurgent is helping Marine Le Pen and Emmanuel Macron in France

THE tumbrels are rolling again in France, and the crowd is restless. One by one, political leaders of the ancien régime, who had confidently been preparing to face each other at the presidential election this spring, have been carted off to the guillotine on a wave of revanchist fury. France is in the grip of what might be called “dégagisme”: a popular urge to hurl out any leader tainted by elected office, establishment politics or insider privilege. Less clear is which sort of outsider French voters want instead.

This impulse is by no means unique to France. Casualties of an anti-establishment rage are still nursing their wounds in America, Britain, Poland and other liberal democracies. But the list of French victims of this howl of anger is particularly star-studded. In recent months it has included a sitting Socialist president (François Hollande, who read the mood and declined to seek re-election), a former centre-right president (Nicolas Sarkozy, who lost his party’s primary) and two ex-prime ministers (Alain Juppé and Manuel Valls, both also dispatched in a primary).

The hostility...Continue reading

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Why Kim Jong Un’s brother was murdered

THE last time Kim Jong Nam made the headlines he was also at an airport, travelling under a false name. In 2001 “Fat Bear”—the Chinese alias used by the son of North Korea’s leader at the time, Kim Jong Il—was arrested after arriving in Tokyo on a forged Dominican Republic passport, on his way to Disneyland. This time it was “Kim Chol” who was waiting for a flight from Kuala Lumpur to Macau on February 13th when two women assumed to be North Korean agents attacked him. He is said to have died on his way to hospital. 

As The Economist went to press, the results of an autopsy had not yet been released. Rumours suggest that Mr Kim was poisoned, with a needle, spray or toxic cloth to the face. Malaysian police said they thought six people had been involved in the attack; they have detained two women and one man, travelling on Vietnamese and Indonesian passports.

The 45-year-old Mr Kim had once been Kim Jong Il’s favourite son: witnesses described a 10,000-square-foot playroom filled with toys. Before each birthday, North Korean diplomats would be sent on a month-long hunt for exotic presents. A cousin...Continue reading

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America’s affirmation of the one-China policy pleased Taiwan, too

THE idea that China and Taiwan might be separate countries, rather than estranged parts of “one China”, is anathema in Beijing. So on February 9th, when Donald Trump told his Chinese counterpart, Xi Jinping, that America would respect the one-China policy after all (having previously questioned this polite fiction), Chinese officials were profoundly relieved. So, oddly, was Taiwan’s government, which thought that questioning the policy had been bad for Taiwan and scrapping it would have been worse.

That is remarkable. After all, Taiwan’s ruling Democratic Progressive Party rejects the one-China policy and says the island is already independent. Tsai Ing-wen, Taiwan’s president, cannot even bring herself to utter the words “1992 consensus”—the name for a deal between China and the Kuomintang party (KMT), now the island’s opposition, which affirmed the notion of one China but said the two sides had different interpretations of it. So why was her government pleased?

Since coming to office last year, Ms Tsai has presented herself as cautious, responsible and predictable—as different as possible from the previous DPP president,...Continue reading

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The leader of Cambodia’s opposition resigns

AT A wedding in the southern province of Kandal, the resignation of Sam Rainsy, the country’s longtime opposition leader, is announced in passing by a teenager scrolling through Facebook. The apparent departure of a figure who has been central to Cambodian politics for 20 years created a kerfuffle among Cambodia-watchers when it emerged this week. The wedding guests simply shrug.

The apathy reflects the disconnect between Mr Sam Rainsy, who describes himself as the “national and international symbol of resistance” to Cambodia’s authoritarian government, and the country from which he has been absent since 2015 in order to avoid arrest on various charges. As local elections approach in June, with parliamentary elections looming a year on, this cosmopolitan former banker campaigning from Paris was always going to struggle to energise the provinces.

Cambodia’s strongman prime minister, Hun Sen, had threatened a week earlier to teach Mr Sam Rainsy “a lesson”. The courts had already convicted him in several dubious cases. Next the ruling Cambodian People’s Party (CPP) drafted a law that would allow the authorities to dissolve...Continue reading

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Japan’s government tries to free its soldiers from pacifist shackles

Handy in a conflict but no use in a fight

MASAKI TOMIYAMA’S fight seems quixotic. He was happy for his son to join one of the world’s biggest, best-equipped armies, but cannot abide the idea that he might have to do any fighting. “I was very angry when I heard my son was being trained to kill people,” says Mr Tomiyama—so angry, in fact, that he decided to sue the Japanese government for violating the country’s pacifist constitution. “I will never allow him to go to war—that’s not why he signed up.”

Japan’s constitution, cobbled together by the Americans in a few hectic days in 1946, prohibits the maintenance of land, sea or air forces. But at the height of the Cold War it seemed otherworldly for a rich ally of the West, with unresolved territorial disputes with all its neighbours, to have no armed forces at all, so in 1954 the government set up the “Self Defence Forces”.

The SDF was to exist “to protect the peace and independence of Japan”. But it was controversial all the same. For decades the biggest opposition party wanted it abolished. Such was the controversy, recalls Noboru...Continue reading

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Red v green in Vietnam

FISHING boats in Dong Hoi, a tranquil provincial capital on the central coast of Vietnam, are decorated with bits of cactus. These prickly charms are said to protect seafarers from storms and other perils, but they did not ward off the misfortune that struck the town last spring. In April the tides spewed thousands of dead fish onto Dong Hoi’s beaches. Authorities dithered for months before naming the culprit: a new steel mill up the coast which had flushed its pipes with toxic bilge.

Nearly a year later, Dong Hoi—like all the settlements on a 125-mile stretch of affected coastline—is still tallying the cost of that calamity. Worst affected are its fishermen, whose red and blue skiffs cluster serenely on the town’s wide river. Some locals refuse to eat their catch, for fear of lingering toxins; others pledge to eat only fish caught far out to sea, or at depths thought to have escaped the poison. Freezers in many seafood restaurants are now stocked with chicken and pork.

The disaster has sapped tourism, too. The town was flattened during the war with America (except for a charred church facade, now preserved as a memorial), but has...Continue reading

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The axing of Michael Flynn reveals deep problems in Donald Trump’s government

THE king, wrote Charles de Marillac, the French ambassador to the court of Henry VIII, was so fickle he rendered even his word “as softened wax [that] can be altered to any form”. He was so suspicious he did “not trust a single man”. Some of the dramatic twists of Donald Trump’s month-old administration, including the removal on February 13th of Michael Flynn as national security adviser (NSA) after he allegedly made inappropriate comments to the Russian ambassador and fibbed about them, would have seemed familiar to de Marillac. They are not merely the teething troubles of an unusually messy administration, but seem rooted in Mr Trump’s idiosyncratic management style.

Demanding Mr Flynn’s resignation, due to an “erosion of that trust” which the president had formerly invested in the tough-talking former military-intelligence officer, was in fact one of Mr Trump’s better decisions. Abrasive, hot-headed and highly partisan, Mr Flynn was ill-chosen for the job. Yet the fact that Mr Trump so recently hired him, and the circumstances of his firing, which have flooded out of the administration in leaked reports from unhappy officials, are...Continue reading

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A new effort to narrow the route to permanent residency in America

Proud to become an American

DURING his presidential campaign, Donald Trump vowed to construct a wall along America’s southern border with Mexico to curtail illegal immigration. He often gave one caveat: this “big, beautiful wall” would have a “big, beautiful door” for those entering the country lawfully. Now, though, fellow Republicans have begun arguing that the door for legal immigrants should be made smaller.

There are two main paths for immigrants to become legal permanent residents in America: work and family. A new bill called the Reforming American Immigration for Strong Employment (RAISE) Act, proposed by two Republican senators, Tom Cotton of Arkansas and David Perdue of Georgia, would restrict the family route, which is sometimes referred to as “chain” migration. Unveiled on February 7th, the bill would allow legal permanent residents to sponsor their spouses or children under 18 for residency, but not more distant or adult relatives, as green-card holders can now. It would also cap the number of refugees offered residency at 50,000 a year and stamp out the diversity lottery, which distributes 50,000...Continue reading

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How immigrants are helping Detroit’s recovery

A trainee entrepreneur

“WE ARE proud of our Muslim community in Michigan,” says Rick Snyder, the state’s Republican governor, sitting in his office in the grandiose Cadillac Place, the former headquarters of General Motors. Ever since his first state-of-the-state address in 2011, Mr Snyder has emphasised the importance of welcoming people from across the world to this large midwestern state. Thanks to once-plentiful jobs in the car industry, greater Detroit has the largest Arab-American community in America. Almost half the population of Dearborn, a suburb that is home to Ford Motor Company, is from the Middle East. Hamtramck, another Detroit suburb, is the first city in America with a majority-Muslim city council.

Mr Snyder and Mike Duggan, the mayor of Detroit, are making population growth a gauge of their efforts to revitalise a state that is slowly recovering from a “lost decade” and a city devastated by the largest municipal bankruptcy in American history. Between 2000 and 2010 Michigan lost nearly 800,000 jobs, income per head fell from America’s 17th-highest to 39th, and residents fled. In the same period the...Continue reading

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The last Howard Johnson’s restaurant is for sale

Last but not least

“DOES HoJo still serve fried clams?” asked a Howard Johnson’s patron, using the nickname for the restaurant chain. He recently ate there for the first time in nearly 40 years. Back then, “HoJo” could be found on almost every highway and byway and felt as ubiquitous as McDonald’s or Starbucks are today. At its height in the 1970s, Howard Johnson’s had more than 1,000 restaurants and was the biggest food chain in America. Only the army fed more people. Now, only one is left. The last one standing is in Lake George, a summer tourist spot in New York’s Adirondacks.

Howard Deering Johnson, the chain’s founder, started his food empire in 1925 with an ice-cream shop outside Boston. He was an early pioneer of franchising. At one point in the 1960s, a new restaurant opened every nine days. Growth coincided with the rise of the car, the highway system, the middle class and family holidays. Each franchise had to adhere to the “Howard Johnson’s Bible”, which dictated everything from decor to the amount of tartare sauce; and each had to use food prepared by central commissaries, which was delivered...Continue reading

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Latino students may help keep the doors open at black colleges

THE mascot at César E. Chávez High School in Houston, Texas, is the lobo, Spanish for wolf. Most of the pupils are Latino. The school is not the traditional pipeline for black colleges, yet last week Texas Southern University (TSU), a historically black university, visited the place to pitch the benefits of its institution. The university, which was founded in 1927 to educate black scholars when they had little access to higher education, has seen a steady increase in Latino enrolment. Over the past six years the share of Latinos at TSU has doubled, from 4% to 8%. Austin Lane, the university’s president, expects that figure to double again inside ten years.

TSU is not alone. In 2013 the University of Pennsylvania’s Centre for Minority Serving Institutions looked at the changing face of historically black colleges and universities (HBCUs). Although many are still majority-black, the report found that a quarter have at least a 20% non-black student population. Some of the growth is from white, Asian-American and international enrolment. The strongest growth is coming from Latinos, especially in places, such as Texas and...Continue reading

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The view from a midwestern county that relies on free trade, but loves Donald Trump

FOR too long American workers have been ignored, President Donald Trump declared on February 13th, as he promised to “tweak” trade relations with Canada and to transform an “extremely unfair” relationship with Mexico. Flanked by the Canadian prime minister, Justin Trudeau, Mr Trump made plain that he stands by a campaign pledge to rewrite the North American Free Trade Agreement (NAFTA), a 23-year-old pact underpinning trade between Canada, Mexico and the United States.

Demonising NAFTA helped Mr Trump to the presidency. But in reality millions of American jobs are supported by that pact. One of them belongs to Chris Gambrel, who builds vast diesel engines in Seymour, Indiana. It would be odd to think of Mr Gambrel, a skilled and brawny employee of Cummins, an engine-maker, as ignored or “forgotten”. He is proud of the “world-class” engines that he produces: 95-litre behemoths powerful enough to pull a cargo train. Three-quarters of them are exported to foreign customers for up to $1m apiece.

Free-trade rules, notably those provided by NAFTA, helped persuade Mr Gambrel’s bosses to build the giant engines in Seymour,...Continue reading

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Tracking the fortunes of the white working-class

IN 1922 Donald Trump’s father, Fred, left high school at 16 to work for a carpenter. He was a “very smart guy” who could “add five columns of numbers in his head”. Construction came naturally to him, too. By 1971 he had amassed a multi-million-dollar fortune. Working-class success stories like Fred’s are rare in America, and becoming rarer. The president wants to see more of them.

At his inauguration he declared that America’s “forgotten men and women” will “be forgotten no longer”. And he has vowed to bring back jobs to states that have been “hurt so badly” by globalisation. By America’s forgotten people, he means above all white working-class men: three-quarters of white men who left school at 18 and voted in November did so for Mr Trump, the highest share of any demographic group.

White men are also Mr Trump’s most loyal supporters. While his approval ratings languish at 49% nationwide, among working-class white men they are at 69%, according to YouGov, a pollster. This group also forms a big chunk of the labour force: non-Hispanic white men aged 25 to 65 with a high-school diploma or less make up 23% of male workers.

Mr Trump has little of his father’s precision with figures. A year ago he reckoned that the unemployment rate—rather than hovering around 5% as the official statistics showed—was “probably 28,...Continue reading

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What to expect from Ecuador’s elections

WHEN Rafael Correa first ran for Ecuador’s presidency in 2006, supporters at his rallies brandished belts in homage to their candidate, whose surname means “belt” or “strap”. “Dale correa,” or “give them a whipping,” the crowds roared. It was a demand to punish what they regarded as the corrupt elites who had governed Ecuador since the return of democracy in 1979. Mr Correa promised he would. He won that election and then two more. His presidency brought a rare spell of political stability. Living standards rose and public services improved. But few would say that he kept his promise to clean up government. This year’s national elections, which begin on February 19th, are shrill with accusations of corruption. 

Mr Correa, who has a respectable approval rating of 42%, is not a candidate. He is counting on Lenin Moreno, a former vice-president, and his running mate, Jorge Glas, the current vice-president, to carry on his “citizens’ revolution”. Mr Moreno, who shares his alarming first name with 18,000 other Ecuadoreans, hopes to win in the first round by capturing the bulk of Mr Correa’s support and...Continue reading

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The blacklisting of Venezuela’s vice-president

THE statement by the United States Treasury Department was blunt. It alleges that Tareck El Aissami, Venezuela’s vice-president, is a “prominent” drug trafficker, who amassed great wealth through his connections to gangs across Latin America, including Mexico’s vicious Zetas. Among the now-frozen American assets linked to him are three lavish apartments in the Four Seasons complex in Miami and a Gulfstream jet. If the allegations are true, Mr El Aissami’s carefully cultivated image as a true believer in the socialist ideology of Venezuela’s government is just a cover.

As normally happens when any outsider accuses anyone in the Venezuelan regime of wrongdoing, the country’s leaders have closed ranks. The foreign ministry accused the United States government of committing “an international crime”. Mr El Aissami himself denounces the allegations as untrue, “miserable and vile”.

But rumours of malfeasance have swirled around the dapper politician since he came to prominence under President Hugo Chávez in the early 2000s. He was interior minister, and then governor of the coastal Aragua state. Defectors accuse him of...Continue reading

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Justin Trudeau charms Donald Trump

A good hombre, apparently

GIVE Justin Trudeau credit for emotional intelligence. Paying his first visit to Washington after Donald Trump took office, on February 13th, the Canadian prime minister brought his host the perfect gift: a photograph of the president in his youth with Mr Trudeau’s father, Pierre, a glamorous prime minister of the 1970s. The subtle caress of Mr Trump’s vanity seemed to go down well. Mr Trudeau went home with Mr Trump’s promise that Canada has little to fear from his plan to renegotiate the North American Free Trade Agreement (NAFTA), which gives Canada, Mexico and the United States preferential access to each other’s markets.

Before the meeting, the Canadians were nervous. Mr Trump’s repeated threats either to renegotiate NAFTA or to rip it up were aimed almost entirely at Mexico (which, unlike Canada, has a big trade surplus with the United States). Yet Canada has almost as much to lose if the United States rescinds the 23-year-old agreement or demands one-sided revisions. The value of Canada’s trade worldwide is equivalent to 65% of its GDP; the United States buys three-quarters of...Continue reading

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A Peronist on the Potomac

A PRESIDENT is swept into office after whipping up a wave of grievance and resentment. He claims to represent “the people” against internal exploiters and external threats. He purports to “refound” the nation, and damns those who preceded him. He governs though confrontation and polarisation. His language is aggressive—opponents are branded as enemies or traitors. He uses the media to cement his connection with the masses, while bridling at critical journalism and at rebuffs to executive power. His policies focus on bringing short-term benefits to his political base—hang the long-term cost to the country’s economic stability.

Donald Trump? Yes, but these traits come straight from the manual of Latin American populist nationalism, a tradition that stretches from Argentina’s Juan Perón to Venezuela’s Hugo Chávez and beyond. Yes, Mr Trump is a billionaire capitalist whereas Chávez was an anti-capitalist army officer. But populism is not synonymous with the left: conservatives such as Peru’s Alberto Fujimori used its techniques, too. “Post-truth” politics and “alternative facts” have long been deployed in Latin America, from Mr...Continue reading

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Zimbabwe’s new “bond notes” are falling fast

HOW much is an American dollar worth? The glib answer is exactly one buck. But that is far from the case if the dollar in question is one of Zimbabwe’s “bond notes”, the world’s newest currency that is not officially a currency.

Zimbabwe adopted the US dollar as its official currency after the spendthrift regime of President Robert Mugabe printed so many of its own notes that it caused hyperinflation in 2008. The economy briefly stabilised; but old habits die hard. Last year the government again spent far more money than it raised, much of it on imports, causing scarce greenbacks to flow out of the country.

By the end of the year there were so few dollars still circulating that banks were limiting withdrawals to $50 a day, crippling the economy. The central bank decided to issue a new currency, called “bond notes”, pegged to the American dollar. Two months on, the new notes, nicknamed “bollars”, are rapidly losing their value. People have discovered that they are not, in fact, convertible into real dollars. So they cannot be used to pay for imports—a real problem in a country that does not make much. Shops accepting...Continue reading

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Time for Nestlé to Make Major Cosmetic Changes

Selling out of cosmetics giant L’Oréal looks like an easy win for Europe’s most valuable company

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Why Bond Market Isn't Convinced About Surging Growth

Bond markets appear to be dithering about reflation. More strong data will be a test.

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Lenovo's PC Prowess No Solace for Smartphone Slide

The world’s biggest personal computer maker is yet to find ways to make money on its smartphones.

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A half-victory for tolerance in Indonesia

Still standing, despite the slander

MILLIONS of Indonesians went to the polls on February 15th to elect local leaders, from Aceh in the west to Papua in the east. Voters braved the floods and landslides of the rainy season to cast their ballots in a massive exercise of democracy. But the day was dominated by the race for governor of Jakarta, the capital, which had become a test of tolerance in the world’s most populous Muslim country. The embattled incumbent, Basuki Tjahaja Purnama, is a Christian of Chinese descent and thus a member of two tiny minorities.

Islamists tried to turn voters against Mr Basuki, known to all as Ahok, by accusing him of insulting the Koran. On the day, Ahok came first but fell short of an absolute majority, with 43% of the vote, according to unofficial results. This means the election will be decided by a run-off on April 19th. Ahok will face Anies Baswedan, a former education minister, who had been trailing in early polls but ended up taking 40% of the vote. Agus Yudhoyono, the son of a former president, got just 17%. He is now out of the race.

Speaking at his ramshackle campaign...Continue reading

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Trump abandons the “two-state” formula for Israel

Trump has Bibi’s back

DURING eight years in which a glacial chill fell on relations between the administration of Barack Obama and a series of right-wing Israeli governments, American officials talked of Israel’s prime minister, Binyamin Netanyahu, as a political coward unwilling to stand up to zealots on his own side.

The contrast to that scorn was rather striking as Mr Netanyahu arrived at the White House on February 15th for his first official visit to a White House run by Donald Trump. True, Mr Trump urged Israel to show some restraint, telling his guest at a press conference to “hold back” on building Jewish settlements on territories occupied by Israel in 1967 “for a little bit”, pending peace talks that the new president said should be widened to include Arab states. But such admonishments are tiny—and could easily have been scripted by aides to Mr Netanyahu. For the prime minister likes to cite American sensitivities to the expansion of settlements—and what he calls his unrivalled ability to navigate them—as a way to face down hardliners in his coalition who would have him disavow any prospects for...Continue reading

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If Car Industry Retools, Parts Makers Will Reel

Barriers to trade are bearing down on the auto industry. Parts makers have the most to lose.

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Cisco's License to Buy

The latest results at Cisco Systems are a good indicator of why investors seem eager to give the tech giant some room to roll the dice.

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AIG Protects Its Downside

American International Group took a surprisingly large charge against some insurance lines in the fourth quarter, but the risk is limited.

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In Era of Big Beer, Heineken Needn't Get Drunk With Deals

The Dutch group has turned itself into an attractive emerging-markets play, making a fresh brewery megadeal unlikely.

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North Korea’s dictator challenges Donald Trump

IF NORTH KOREA’S test of a ballistic missile on February 12th was intended as a provocation, Donald Trump, unusually, failed to take the bait. For once, the president’s Twitter account stayed silent. When Mr Trump was given the news, he was entertaining Japan’s prime minister, Shinzo Abe, at Mar-a-Lago, his resort in Florida. In a joint appearance, Mr Abe described the launch as “absolutely intolerable” and demanded that North Korea comply with a raft of UN Security Council resolutions that have so far done little to restrain its missile and nuclear programmes. Mr Trump did not refer to the missile test directly, but pledged that America would stand “100%” behind “its great ally” Japan.

The statement was far more measured than some of his previous pronouncements on North Korea’s activities. After Kim Jong Un, the country’s leader, gave a typically bombastic New Year address in which he boasted of being in the “final stages” of preparations to test-launch a missile with the range to threaten America, Mr Trump tweeted back: “It won’t happen!” Mr Trump’s retort suggested that any such attempt would be met with a...Continue reading

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Angela Merkel’s conservatives are getting jumpy

WITH Wagnerian grandeur Germans from time to time like to speculate about Kanzlerdämmerung, or the twilight of the chancellor—the slow but tangible decline in authority that has affected many former heads of government. Since late January, the chorus intoning the twilight of Angela Merkel, the current chancellor, has swelled. Two events recently increased the polyphony of voices.

On February 12th Frank-Walter Steinmeier, the former foreign minister and a member of the Social Democratic party (SPD), was elected to the largely ceremonial office of federal president. Backed by Mrs Merkel’s conservative Christian Democrats (CDU) and their SPD coalition partners, Mr Steinmeier won by a comfortable majority in a secret ballot. But there were over a hundred abstentions, presumed to have come from rebels within Mrs Merkel’s party. “A slap in the face for Merkel,” quipped an editorial in the Tageszeitung, a left-leaning newspaper. “An exercise in humility for the conservatives,” harrumphed the Tagesspiegel, a conservative one.

This followed the announcement in late January by Sigmar Gabriel, SPD party leader since 2009 and...Continue reading

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Retail Zombies Haunt Industry

The lengthy list of retailers teetering on the edge of bankruptcy but not being allowed to die is holding the rest of the industry back.

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SoftBank Builds Fortress for the Future

SoftBank’s $3.3 billion purchase of Fortress Investment gives the company’s new venture fund an instant platform for investing.

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Podemos retreats to the hard left

WHEN Pablo Iglesias, the leader of Spain’s far-left Podemos, proposed to hold his party’s second Congress on the same February weekend as that of the ruling conservative Popular Party (PP) it was intended as a statement of his upstart movement’s new political stature. Yet the two events, held at sports venues just seven kilometres apart in Madrid’s southern suburbs, served to highlight the parties’ differing prospects. In a climate of self-congratulation, Mariano Rajoy, Spain’s prime minister, was re-elected as the PP president, unopposed and with a Soviet-style margin of 96% of the vote of delegates. Mr Iglesias triumphed, too, but only after a bitter internal battle against his more moderate number two, Iñigo Errejón. The outcome suggests that Podemos (“We can” in Spanish) may retreat to the hard left and the politics of permanent protest.

Mr Iglesias was easily re-elected as Podemos’s secretary-general; more importantly, his political programme was approved and his allies won 37 of the 62 seats on the party’s ruling council. Mr Errejón, who looked glum at the closing ceremony on February 12th, was relegated to third place in...Continue reading

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Banks on the move

Are thousands of banking jobs set to migrate from Britain into the eurozone? Patrick Lane discusses potential destinations with host Simon Long. Also: a currency catastrophe in Zimbabwe and the decline of the executive jet

GM's Adieu to Europe---And to Global Scale

The possible sale of GM’s European operations, including the Opel brand, to Peugeot is a rebuke to the bigger-is-better strategy of global car makers.

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This Year, Don't Fight the Fed

Investors still doubt Janet Yellen’s resolve to boost interest rates three times, but this is the year the Federal Reserve will get the economy right.

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Central Banks and the Wrong Kind of Inflation

Headline inflation may not be the best guide to where central banks will be headed

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Don't Ignore Politicians' Ire Over Orphan Drugs

Biotech investors can’t look past changing drug-pricing attitudes in Washington.

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PepsiCo Stock Loses Its Fizz

PepsiCo stock’s best days might be behind it after its recent rally stalled

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Credit Suisse's Universally Bad Idea

Credit Suisse’s results show its plans to spin off Swiss Universal Bank is a wasted effort.

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Toshiba's Problems Go Beyond Nuclear Accounting Mess

The iconic Japanese conglomerate Toshiba failed to release quarterly results on time. Investors are right to be losing faith.

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China's Noble Group Gambit Latest 'Go' Signal for Commodities

Investment talks come as Chinese chemical prices, feedstock costs and commodity futures move sharply higher.

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