Table Of ContentWhat Kamala says about Joe
Belarus’s shameful sham election
The sorry state of American diplomacy
Why locusts swarm
AUGUST15TH–21ST2020
Xi’s new economy
Don’t underestimate it
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Contents The EconomistAugust15th2020 5
The world this week United States
8 Asummary of political 21 The groundbreaking,
andbusinessnews predictable choice
22 Gridlock stymies stimulus
Leaders
24 Looting in Chicago
11 The Chinese model
25 Fighting over au pairs
Xi’s new economy
26 Census trouble
12 Belarus
28 LexingtonThe politics of
The sham of it
patriotism
12 American politics
What Kamala says
The Americas
about Joe
29 Mexico’s new crime
13 Microfinance
kingpin
Creditwhereit’sdue
On the cover 30 Bolivia blocked
14 Britain’seconomy
China’s strongman leader is Greyvgrowth 32 Crackup in the Arctic
shaping a new form of state
capitalism. Don’t underestimate
Letters
it: leader, page 11. Xi Jinping is
16 Onelderlycare,
blending market mechanisms Asia
technology,Lyndon
with Communist control to
Johnson,choralsinging, 33 Microfinance in Cambodia
remake the economy: briefing,
journalism 34 Indonesia’s environment
page 17. A vaguely worded
order from America’s president 35 Eating ant eggs in Laos
Briefing
is causing panic among millions 35 NIMBYism in Japan
of WeChat users, page 37. 17 China’shybrideconomy
36 BanyanSri Lanka’s first
Decoupling the Chinese and Bloomingfortheglory
family
American corporate worlds ofthestate
could harm American firms in
China
surprisingways,page55
37 Nobbling WeChat
•What Kamala says about Joe
38 Repression in Hong Kong
The presumptive Democratic
nominee’s choice of running- 40 ChaguanEducating the
mate reflects well on him: blind
leader,page 12and analysis,
page 21
•Belarus’s shameful sham
Middle East & Africa
electionAlexander Lukashenko
“wins” a phoney election. So far, 41 The sad state of Tunisia
the Western response has been 42 Lebanon after the blast
feeble: leader,page 12. Peaceful
43 Nigeria’s love of wigs
protest at a rigged vote is met by
43 An Ivorian election drama
brutal repression, page 45
44 Tanzania’s bad judges
•The sorry state of American
diplomacyDonald Trump
dismisses it as the “Deep State
Department”. Yet America
needs it more than ever, page 52
We are working hard to BartlebyThe decline
ensure that there is no dis- of the office romance,
ruption to print copies of page 57
The Economistas a result of
the coronavirus. But if you
have digital access as part of
your subscription, then acti-
vating it will ensure that you
can always read the digital
version of the newspaper as
well as all of our daily jour-
nalism. To do so, visit
economist.com/activate
1 Contents continues overleaf
6 Contents The EconomistAugust15th2020
Europe Finance & economics
45 Belarus’s bogus election 63 Which economies are
catching up?
46 Russia and the Baltics
47 The XXL Bundestag 64 Turkey’s currency turmoil
47 The trouble with bikers 65 Gold in India
48 CharlemagneTurkey’s 65 Financial-data privacy
othervillain 66 Funding worthy projects
67 Free exchangeEscaping
Britain thelowerbound
49 The no-growth Tories
50 GDP crash Science & technology
51 BagehotBoris and de 68 The rules of war in orbit
Gaulle 69 The butterfly effect
70 Who killed the woolly
rhino?
70 Why locusts swarm
International
52 American diplomacy ails
Books & arts
71 Pandemic photography
73 Nazi spies in America
73 Ahistory of democracy
74 Home Entertainment
Afizzing Brazilian classic
Business
55 Sino-American decoupling
56 America’s nuclear option Economic & financial indicators
57 Bartleby Farewell office 76 Statisticson42economies
romance
Graphic detail
58 The fate of Saudi Aramco
77 Howtheelectoralcollegefavourswhites
59 Superjumbo problems
59 Profits v purpose
Obituary
60 Schumpeter Dividend
78 Leon Fleisher, a pianist who had to reinvent himself
royalty
Economics brief
61 Minimum wages
Volume436 Number9207
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8 The world this week Politics The EconomistAugust15th2020
Áñez, a conservative, says 30 services. Tens of thousands of
people have died as a result. A people protested. World lead- Coronavirusbriefs
new election, in which Ms ers and international organisa- To 6am GMT Aug 13th 2020
Áñez is running and Mr tions pledged nearly $300m to
Weeklyconfirmedcasesbyarea,’000
Morales is not, is scheduled for help those affected by the blast.
October 18th. 800
Other
America imposed sanctions on 600
Mexicanprosecutors began a 11Chinese officials, including Latin America
400
corruption investigation into a Hong Kong’sleader Carrie
US
former president, Enrique Lam, for their role in suppress- Europe 200
Peña Nieto. They are looking ing dissent in the territory. In
0
into claims that before he retaliation, China announced
Mar Apr May Jun Jul Aug
Joe Biden namedKamala became president Mr Peña sanctions against 11Americans,
Harris, a senator from Califor- used bribes from Odebrecht, a including lawmakers. Hong Confirmeddeaths*
nia, as his running-mate. The Brazilian construction firm, to Kong police arrested Jimmy Per 100k Total This week
daughter of a Jamaican-Ameri- help finance the election cam- Lai, a newspaper tycoon, Belgium 85 9,900 41
can economist and an Indian- paign in 2012, and that during alleging that he “colluded” Britain† 69 46,706 390
American cancer researcher, his presidency he paid legisla- with a foreign power. Mr Lai, Peru 65 21,501 1,273
Spain 61 28,579 82
she is the first black woman or tors to vote for a big energy the owner of Apple Daily, has
Italy 58 35,225 44
Asian-American on a major- reform. often suggested that America
Sweden 57 5,774 17
party presidential ticket. should support democracy in
Chile 53 10,205 413
Democrats largely praised her Alexander Lukashenko Hong Kong. United States 50 165,717 7,122
as a safe, charismatic choice, claimed a sixth election victory Brazil 49 104,201 6,945
though some queried her in Belarus, with 80% of the Chinaeased sweeping re- France 46 30,247 75
respect for civil liberties, not- vote. Huge crowds protested, strictions on entry to the coun- *Definitions differ by country
†Excludes August revision
ing her record as a tough-on- saying the count was rigged try by foreigners, which it
Sources: Johns Hopkins University CSSE;
crime prosecutor. and the real victor was Svetlana imposed in March in response UN; The Economist
Tikhanovskaya, an ex-teacher. to covid-19. Citizens of 36
The director of America’s Police arrested and beat thou- countries, including Britain, Thenumberofcasesinthe
counter-intelligenceservice sands. Ms Tikhanovskaya, who France and Germany, who United Statespassed 5m.
warned that Russia was using a had promised to free political already hold a Chinese resi- Brazilreached over 100,000
“range of measures” to under- prisoners and hold a fair elec- dence permit will be allowed to deaths in total.
mine Mr Biden’s campaign, tion, fled the country after a apply for visas. They will still
primarily because of his sup- long involuntary interview have to be tested and endure 14 New Zealandinvestigated the
port for Ukraine. with the security services. Her days of quarantine. possibility that its first
supporters assume she was infections for 102 days had
Chicagoendured a night of threatened. Her husband, who Alex Azar, America’s secretary come from freight. The people
looting, after police officers was barred from standing, of health, became the highest- involved had not travelled.
shot and injured a black man remains in jail. ranking American official to Auckland was locked down.
who they said was firing a gun visit Taiwansince America
at them. Bridges were raised to Tanzaniabanned the broad- established formal diplomatic Masksbecame compulsory
stop looters roaming. casting of news produced by relations with China in 1979, outdoors in Paris and Brussels.
foreign media without the and ended them with Taiwan.
Seattle’scouncil voted to slash government’s permission. Russia said that it had ap-
the police budget and refocus Local journalists working for Mahathir Mohamad, a two- proved a vaccineagainst the
the city’s force on “public foreign media or with foreign time prime minister of Malay- coronavirus. Scientists else-
safety”. The police chief, correspondents must now be siawho was ousted from pow- where had doubts. The drug,
Carmen Best, said she would accompanied by an official er earlier this year after a rift named Sputnik V, appears
resign, decrying an “over- minder, as in North Korea. within his coalition, founded a simply to have skipped all but
arching lack of respect” for her new political party that says it the first stages of testing for
officers. She was the first black Rebels in northern Mozam- will champion ethnic Malays safety and efficacy.
woman to hold the job. biquecaptured the port city of and fight corruption. Dr Ma-
Mocímboa da Praia, killing hathir, who is 95, says his The estimated death toll in
The Milne ice shelf, the last one dozens of soldiers and sinking previous party, Bersatu, which Englandwas reduced by 5,377,
that was intact in the Canadi- a navy patrol boat. The jihadist is now led by the incumbent or 12%. A review found that
an Arctic, split apart during a insurgency threatens the prime minister, Muhyiddin anyone who had died follow-
heatwave. The breakaway piece development of offshore gas- Yassin, has been hijacked by ing a positive test was being
made up 40% of the ice shelf’s fields, Africa’s biggest energy defenders of kleptocracy. included in the tally, regardless
surface area. project. of how, or when, they died.
After a special consultative
Protests by allies of Bolivia’s The government of Lebanon congress gave the go-ahead,
former president, Evo Morales, resigned in the wake of a dev- the Afghangovernment said it For our latest coverage of the
over the postponement of an astating explosion in Beirut. would release a further 400 virus and its consequences
election due to covid-19, have The outgoing prime minister, Taliban prisoners, in addition please visit economist.com/
blocked roads and exacerbated Hassan Diab, blamed a “system to the 4,600 it has recently coronavirus or download the
shortages of oxygen. The inter- of corruption” for bankrupting freed. The decision paves the Economist app.
im government, led by Jeanine the country and crippling basic way for a peace conference.
10 The world this week Business The EconomistAugust15th2020
than $600) and defer the The$765mloanthattheAmer- Following its biggest-ever loss
Britain collection of payroll taxes. The icangovernmentsaiditwould earlier this year, SoftBank
Peopletemporarilyawayfrompaid work
order’s intent may be to providetoKodaktoproduce swung back to a quarterly
m
concentrate minds; the extra genericdrugswasputonhold profit, of ¥1.25trn ($12bn),
2017 2018 2019
benefits depend on contribu- untilallegationsofwrong- mostly because the value of its
10
2020 8 tions from cash-strapped doingareresolved.Thecom- holdings in tech companies
6 states. pany’ssharepricesoaredwhen rose and it sold a large chunk of
4 theloanwasmadepublic,but its telecoms assets. The Japa-
2
Mr Trump also issued orders thetimingoftheannounce- nese conglomerate is also
0
banning ByteDance, the Chi- menthasledtoclaimsofinsid- considering selling some or all
Jan Feb Mar Apr May Jun
nese owner of TikTok,from ertradingthatarebeinginves- of Arm, a British chip designer
Source:ONS
America within 45 days and a tigatedbyregulatorsand it bought in 2016 for $32bn.
Britain’seconomyplunged similar decree curtailing Congress.Kodakisco-operat-
intorecessioninthesecond American firms from doing ingwiththeinquiries;itsstock Steve Easterbrook, who was
quarter,asgdpcontractedbya business with WeChat. As with hasplungedby70%sinceits sacked by McDonald’sas chief
record20.4%comparedwith many of Mr Trump’s dictums, post-announcementpeak. executive last November for
thepreviousthreemonths.In the legality of the president’s having a romance with an
thefirsthalfof2020theBritish latest orders is questionable, employee, was sued by the
economywashittwiceashard though they undoubtedly Have a great holistay company, which claims he had
asAmerica’sandfaredworse create uncertainty for the Airbnbis reportedly preparing three additional sexual rela-
thanGermany,Italyand companies involved. The share to file documents for an ipo, tionships with staff. McDon-
France.Therewasasliverof price of WeChat’s parent com- which could take place later ald’s said that if it had known
positivenews—growthpicked pany, Tencent, was hammered this year. The home-rentals about the extent of Mr
upagaininJune.Thatwillbeof following his pronouncement. firm has said that demand is Easterbrook’s “inappropriate”
littlecomforttothosefacing picking up, especially for behaviour it would not have
theendoffurlough.Figures Despite a big drop in quarterly properties that are closer to agreed to the compensation
alsoshowedahugedropinthe profit, Saudi Aramcosaid it home for holiday-makers. package it paid him.
numberofpeopleinemploy- would still pay a shareholder
ment,andredundanciesareat dividend, most of which goes Teslaannounced a five-for- Sumner Redstonedied, aged
aseven-yearhigh.Thegovern- to the Saudi government. The one split of its stock. From 97. The media mogul’s empire
ment’sjob-retentionscheme oil company’s net income in August 28th each shareholder spanned Paramount Pictures,
willsoonstarttowinddown, the three months to June 30th will receive four extra shares Viacom and cbs. Feuds among
thoughmillionsstilldepend was $6.8bn; in the same quar- for each share they hold, at the family and management over
onit(seechart). ter last year it made $24.7bn. reduced price. With the value the ownership of his compa-
Unlike other oil companies, of its stock tripling since the nies entangled Mr Redstone in
Aramco has not written down start of the year, the intention legal proceedings for years,
Come dine with me assets because of lower oil is to make the shares more and his mental competency
The hospitality industry in prices, but it will slash spend- attractive to small investors. was challenged as he got older.
Britain has been missing all ing. Occidentalcut the value of Apple recently split its stock, as He once said that success is
those absent workers. A gov- its assets this week, and report- its share price has also rocket- built on failure, frustration and
ernment scheme to help the ed a quarterly loss of $8.4bn. ed in value. sometimes catastrophe.
industry by subsidisingmeals
in restaurants, pubs and cafés
during August was used by
10.5m diners in its first week.
Each customer gets up to £10
($13) deducted from his meal
on Mondays to Wednesdays;
the restaurant claims the
money back from the Treasury.
America’s unemployment
ratefell again in July, to 10.2%.
Employers created 1.8m jobs,
fewer than the 4.8m that were
added to the payrolls in June,
when lockdowns eased.
With Democrats and Repub-
licans at loggerheads over a
new stimulus package,
Donald Trump issued an exec-
utive order that, among other
things, would reinstate the
additional unemployment
benefits that ceased in July
(though at $400 a week rather
