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The Economist June 20th 2020

On the cover

The pandemic has shown just how essential Jeff Bezos’s firm has become—and that it has vulnerabilities: leader, page 7 and briefing, page 15

¢ New world disorder

If America pulls back from global institutions, other countries must step forward: leader, page 8. Seventy-five years ago world leaders designed the peace even as they fought the war. Today's leaders should match them, see our special report after page 40. Covid-19 raises the risks of violent conflict, page 49

¢ The trouble with green finance Climate investing is booming, but its shortcomings are glaring: leader, page 9 and briefing, page 58

¢ Britain's pitiful pandemic

The country has the wrong government for the crisis: leader, page 11. Why it has the highest death-rate in the rich world, page 45.A life-saving drug,

page 47. Boris Johnson's poor management of the pandemic: Bagehot, page 48

~ We are working hard to ensure that there is no dis- ruption to print copies of The Economist as 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

The world this week

5 Asummary of political and business news

Leaders 7 Jeff Bezos

The genius of Amazon 8 Geopolitics

The new world disorder 9 India and China

Elephant v dragon

9 Climate change The trouble with green finance

10 Global trade Invisible hands



The pandemic Not Britain’s finest hour


12 On prosecutors, the media, mercenaries, Greek, carbon pricing, the Bible, Andrew Johnson

Briefing 15 Amazon’s future And on the second day...

Special report: The new world disorder

Missing 1n action After page 40

Chaguan China sees a world that is distracted by covid-19 and too economically weak to hold it back, page 36

19 20 21 22 22 23 24

25 26 28

29 30 31 31 32


34 36

37 38 39 39 40

41 42 43 43 44

United States

State finances

LGBT rights

Midwives in demand John Bolton’s bombshells New York’s mayor

The Maine Senate race

Lexington The joys of vegetable-growing

The Americas Latin America’s lockdowns Uruguay’s covid-19 success

Bello An American bid to lead the IDB


Sino-Indian clashes South Asian etiquette Singapore’s migrants North Korea

Banyan Racism in Australia


Who's boss in the South China Sea?

Beijing’s covid-19 outbreak

Chaguan The calculations behind bullying

Middle East & Africa Covid-19 testing in Africa Malawi's election re-run Football and war

Taxing African cities

The crisis in Syria


Poland’s opposition stirs Belarus’s slipper revolt Why furlough works Rustic France

Charlemagne The dining club that ate the EU

>> Contents continues overleaf

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4 Beenie The Economist June 20th 2020

Finance & economics 61 What will the Fed do next? 62 Dollar-swap lines 63 Stimulus in the euro zone 63 Poverty in China

64 The economics of reparations

65 Buttonwood Retail investors

Britain 45 Abad pandemic 47 The first drug that works

48 Bagehot Boris Johnson loses his grip


49 Covid-19 and war 66 Stranded mariners

67 Free exchange Reallocation and covid-19

Science & technology 68 A floating Arctic lab

Business 52 Luxury in the pandemic 53 Race in Silicon Valley 54 Bartleby Furlough v

recession 55 Samsung’s scandals és Books & arts 55 China’s business battles | 71 Spain’s tragic history 56 A peek inside JAB 72 Goths v Romans 57 Schumpeter Zoom and 73 Anarttist of the news gloom 74 Home Entertainment “The Prisoner” Briefing | 74 Climbing “The Magic 58 Green investing | | | ll | ya | Mountain”

Economic & financial indicators 76 Statistics on 42 economies

Graphic detail 77 Measuring conflict in the Sahel

Obituary 78 Lily Lian, a lost voice of Paris



Volume 435 Number 9199

Published since September 1843 Subscription service to take part in ‘a severe contest between For our full range of subscription offers, including The best way to contact our Customer Service Please intelligence, which presses forward, digital only or print and digital bundled, visit: team is via phone or live chat. You can contact us recycle and an unworthy, timid ignorance on the below numbers; please check our website obstructing our progress.” for up to date opening hours.

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© 2020 The Economist Newspaper Limited. All rights reserved. Neither this publication nor any part of it may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of The Economist Newspaper Limited. The Economist (ISSN 0013-0613) is published every week, except for a year-end double issue, by The Economist Newspaper Limited, 750 3rd Avenue, 5th Floor, New York, N Y 10017. The Economist is a registered trademark of The Economist Newspaper Limited. Periodicals postage paid at New York, NY and additional mailing offices. Postmaster: Send address changes to The Economist, P.O. Box 46978, St. Louis, MO. 63146-6978, USA. Canada Post publications mail (Canadian distribution) sales agreement no. 40012331. Return undeliverable Canadian addresses to The Economist, PO Box 7258 STNA, Toronto, ON M5W 1X9. GST R123236267. Printed by Quad/Graphics, Saratoga Springs, NY 12866

The world this week Politics

Brazil reported a record 35,000 new cases of covid-19 ina day. Even that grim figure is widely regarded as an undercount. India is now recording tens of thousands of new infections each week. In America, Florida, Texas and Arizona Set daily records for new cases. Al- though many places are easing lockdowns, Anthony Fauci, the leading adviser to the White House on infectious diseases, warned that the pandemic is far from over: “The numbers speak for themselves.”

Beying went into “wartime mode’ to battle an outbreak of covid-19, the first in the Chi- nese capital after eight weeks with no cases reported of local transmission. Many of the cases are linked to a wholesale food market.

A court in China sentenced the country’s former insurance regulator, Xiang Junbo, ton years in prison for accepting 18m yuan ($2.5m) in bribes. Mr Xiang had also served as depu- ty governor of the central bank.

At least 20 Indian troops were killed in a fight with Chinese soldiers in the Galwan valley, the first combat deaths on the disputed Sino-Indian border in A5 years. China did not say how many of its soldiers died. The brawl involved nail-studded clubs and stones rather than guns. Tensions have increased since April, when the Chinese army encroached on Indian- claimed territory.

North Korea blew up the building used for meetings between its officials and those from South Korea. It said the explosion was retaliation for unflattering leaflets about its Supreme leader, sent over the

border via balloons by defec- tors, whom North Korea called “rubbish-like mongrel dogs”.

Acourt in the Philippines found Maria Ressa guilty of libel for alleging links between a businessman and ajudge. Ms Ressa is the boss of Rappler, a news website that is critical of the country’s strongman presi- dent, Rodrigo Duterte. Her lawyer Said the message to other journalists was “Keep quiet, or you ll be next.”

Steven Mnuchin, America’s treasury secretary, said his government will nominate Mauricio Claver-Carone, a Staff member of Donald Trump's National Security Council, to lead the Inter-American Development Bank. All the bank’s four presidents since its founding in 1959 have been from Latin America. The us has 30% of the bank’s shares, the largest stake of any country.

Venezuela’s Supreme Court removed the leaders of two Opposition parties, Justice First and Democratic Action. It replaced them with men whom the parties had previously expelled for being stooges of Nicolas Maduro, the country’s dictator.

America’s Supreme Court ruled that the 1964 Civil Rights Act makes it illegal to fire workers for being gay or transgender. More than half the states al- lowed such discrimination. The 6-3 majority decision was written by Neil Gorsuch, a Trump appointee.

The White House tried to stop publication of a book by John Bolton, a former national security adviser, claiming that it contained classified infor- mation. The book says that Donald Trump tried to per- Suade Xi Jinping, China's presi- dent, to buy American farm goods to help his re-election campaign. It also alleges that ina meeting with Mr Xi, Mr Trump said he approved of China's policy of putting U1- ghur Muslims in internment camps. OnJune17th Mr Trump signed a bill that imposes

sanctions on Chinese officials who were responsible for the Uighurs’ internment.

A white policeman in Atlanta who shot dead a black man when he took the officer's Taser weapon was charged with murder. Republicans in the Senate unveiled their own set of police reforms. These are less radical than those put forward by Democrats but Support the creation of a data- base to track police officers with a record of misconduct.

Boris Johnson, Britain’s prime minister, announced that Britain’s Department for International Development would be folded back into the Foreign Office. British aid will now focus less on ending poverty and more on advancing British foreign- policy goals.

Yousef al-Otaiba, a diplomat from the United Arab Emir- ates, wrote in an Israeli news- paper that any unilateral an- nexation of West Bank territory would harm Israel’s relations with Arab countries. Itis thought to be the first-ever Opinion piece written by an official from the Gulf foran Israeli newspaper.

America imposed new sanc- tions on Syria that target any person, company or institu- tion—Syrian or foreign—that does business with or provides Support to the regime of Presi- dent Bashar al-Assad.

There were more demonstra- tions in Lebanon. The govern- ment began injecting more American dollars into the market in an effort to support the local currency. Early talks with the IMF over a bail-out package have been shaken by concerns that the government is not serious about reform.

A judge overseeing a corrup- tion trial in the Democratic Republic of Congo was mur- dered. Police initially said that the judge had had a heart at- tack, but an autopsy showed he had died from brain injuries after being stabbed in the head.

The Economist June 20th 2020 5

Coronavirus briefs To 6am GMT June 18th 2020

Weekly confirmed deaths by area, ‘000 30 Europe

Latin America

Mar Apr May Jun

Confirmed deaths per 100,000 people

log scale a Sweden Britain 100 Belgium— | France Brazil US 10 Mexico Russia Germany

0 10 20 30 40 50 60 70 8/7 Days since one death per 100,000 people

Sources: Johns Hopkins University CSSE; UN; The Economist

A randomised trial conducted by scientists at Oxford found that dexamethasone, a cheap steroid drug found in many countries, reduced the death rates for patients on ventila- tors by 35% and by 20% for those needing oxygen.

The president of Honduras, Juan Orlando Hernandez, said he and his wife have covid-19.

The remaining lockdown restrictions were lifted in France, enabling bars and restaurants to reopen fully. In England all shops were allowed to open their doors to customers again.

Next year’s Oscars ceremony was postponed by two months until April 25th. It is not yet clear whether the event will be held ina theatre or virtually.

The English Premier League resumed its season, three months after it was suspended. The football matches are being played behind closed doors.

+ For our latest coverage of the virus and its consequences please visit coronavirus or download the Economist app.

The world this week Business

The Federal Reserve clarified its new bond-buying strategy, announcing that it would acquire individual corporate bonds on the secondary mar- ket. This comes on top of its purchases in exchange-traded funds, which include some junk-rated funds that track debt. But the central bank's latest move comes almost three months after it first announced emergency mea- sures to shore up markets. Questions have been raised about the length of time it has taken to roll out some of its programmes.

Stockmarkets rallied in re- sponse to the news from the Fed, making up for some of the heavy losses they racked up in the week ending June 12th, which was the worst for the S&P 500 and Dow Jones Indus- trial Average since mid-March.

The Trump administration Said it would let American tech firms work with Huawei on creating international stan- dards for 5G. The decision represents a long-expected easing of the sanctions placed on the Chinese provider of telecoms networks and equip- ment over national-security concerns. America did not have much choice. Huawei’s size and expertise makes it one of the companies integral to setting the rules on interna- tional networks.

America’s Justice Department put forward proposals that roll back the immunity of social- media firms for content post- ed on their platforms. Donald Trump signed an executive order recently rescinding the protections after he gotintoa spat with Twitter, butitis unlikely to be upheld once it is challenged in court.

Robert Lighthizer, the us trade representative, confirmed that America had pulled out of talks with the Eu that had sought to find common ground on taxing tech companies. Amer- ica argues that such levies will disproportionately hit its global giants, suchas Apple and Google, and has threatened

to retaliate with sanctions if European countries impose their own digital tax.

Facebook launched a payment service on its WhatsApp plat- form in Brazil. Brazilians can link their credit or debit cards to WhatsApp Pay to send money to each other or buy goods from small firms. Face- book had hoped India would be the first country to use the facility nationwide, but be- came bogged down in regu- latory objections there.

Shop till you drop = Retail sales US, % change on previous month

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Retail sales in America surged last month by 17.7% over April, more than double the amount that had been expected. That followed a14.7% decline in April. Sales were still down by 6.1% compared with May last year. Itis thought that the government’s stimulus mea- sures to households helped

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fuel the shopping spree, and that consumers might not spend so much when the mon- ey runs out.

In America’s biggest IPO So far this year, Royalty Pharma raised $2.2bn when it listed on the Nasdaq exchange. The company invests in the rights to royalties on future drug sales across the life sciences, combining scientific expertise with capital investment for the industry. Royalty’s share price leapt by more than half on the first day of trading.

Acknowledging that demand for energy will remain weak in the aftermath of covid-19 and that governments “will acceler- ate the pace of transitiontoa lower carbon economy’, BP Said it would write down the value of its oil and gas assets in the second quarter by between $13bn and $17.5bn. To buttress its balance-sheet the energy giant reportedly raised $12bn through a sale of hybrid bonds.

In its first forecast for 2021, the International Energy Agency said that demand for oil would increase by 5.7m barrels a day next year to 97.4m. That is still below the average for 2019, mostly because the aviation industry will still struggle in

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The Economist June 20th 2020

| exit from lockdown” saw its

demand for oil in April rebound back almost to the level it was at a year ago.

In a rare admission of cor- porate wrongdoing on homi- cide-related charges, PG&E pleaded guilty to 84 counts of involuntary manslaughter in relation to the Camp Fire disas- ter in California two years ago. The electric utility’s faulty equipment sparked the infer- no. Its chief executive (who was not in charge at the time of the fire) pled guilty to each one of the deaths of the 84 victims of the fire as their names were read out alphabetically. The company is soon to exit bank- ruptcy protection.

Everybody Hertz

Hertz postponed a sale of new Shares after the Securities and Exchange Commission raised objections. A judge had earlier allowed the sale to proceed, an unprecedented ruling fora company that has filed for bankruptcy protection. The car-hire company had warned potential buyers of the stock that they stand to lose their shirts unless there is a signif- icant and “currently unantici- pated improvement” in its business, which has been hammered by the pandemic.

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The genius of Amazon

The pandemic has shown just how essential his firm has become—and that it has vulnerabilities

N THE SUMMER Of 1995 Jeff Bezos was a Skinny obsessive work- Line in a basement alongside his wife, packing paperbacks into boxes. Today, 25 years on, he is perhaps the 21st century’s most important tycoon: a muscle-ripped divorcé who finances space missions and newspapers for fun, and who receives adulation from Warren Buffett and abuse from Donald Trump. Amazon, his firm, is no longer just a bookseller but a digital conglomerate worth $1.3trn that consumers love, politicians love to hate, and investors and rivals have learned never to bet against. Now the pandemic has fuelled a digital surge that shows how important Amazon is to ordinary life in America and Europe, because of its crucial role in e-commerce, logistics and cloud computing (see Briefing). In response to the crisis, Mr Bezos has put aside his side-hustles and returned to day-to-day management. Superfi- cially it could not be a better time, but the world’s fourth-most- valuable firm faces problems: a fraying social contract, financial bloating and re-energised competition.

The digital surge began with online “pantry-loading’” as con- sumers bulk-ordered toilet rolls and pasta. Amazon’s first-quar- ter sales rose by 26% year on year. When stimulus cheques ar- rived in mid-April Americans let rip on a broader range of goods. Two rivals, eBay and Costco, say online activity accelerated in May. There has been a scramble to meet demand, with Mr Bezos doing daily inventory checks once again. Ama- zon has hired 175,000 staff, equipped its people with 34m gloves, and leased 12 new cargo air- craft, bringing its fleet to 82. Undergirding the e- commerce surge is an infrastructure of cloud computing and payments systems. Amazon owns achunk of that, too, through Aws, its cloud arm, which saw first-quarter sales rise by 33%.

One question is whether the digital surge will subside. Shops are reopening, even if customers have to pay at tills shielded by Perspex. Yet the signs are that some of the boom will last, because it has involved not just the same people doing more of the same. A new cohort has taken to shopping on- line. In America “silver” customers in their 60s have set up digi- tal-payment accounts. Many physical retailers have suffered fa- tal damage. Dozens have defaulted or are on the brink, including J Crew and Neiman Marcus. In the past year the shares of ware- housing firms, which thrive on e-commerce, have outperformed those of shopping-mall landlords by 48 percentage points.

All this might appear to fit the script Mr Bezos has written over the years in his letters to shareholders, which are now pored over by investors as meticulously as those of Mr Buffett. He ar- gues that Amazon is in a perpetual virtuous circle in which it spends money to win market share and expands into adjacent industries. From books it leapt to e-commerce, then opened its cloud and logistics arms to third-party retailers, making them vast new businesses in their own right. Customers are kept loyal by perks such as Prime, a subscription service, and Alexa, a voice-assistant. By this account, the new digital surge confirms Amazon's inexorable rise. That is the view on Wall Street, where Amazon's shares reached an all-time high on June17th.

Yet from his ranch in west Texas, Mr Bezos has to wrestle with

those tricky problems. Start with the fraying social contract. Some common criticisms of Amazon are simply misguided. Un- like, say, Google in search, itis nota monopoly. Last year Amazon had a 40% share of American e-commerce and 6% of all retail sales. There is little evidence that it kills jobs. Studies of the “Am- azon effect” suggest that new warehouse and delivery jobs offset the decline in shop assistants, and the firm’s minimum hourly wage of $15 in America is above the median for the retail trade.

But Amazon's strategy does imply huge creative disruption in the jobs market even as the economy reels. In addition, viral out- breaks at its warehouses have reignited fears about working con- ditions: 13 American state attorneys-general have voiced con- cern. And Amazon's role as a digital jack-of-all-trades creates conflicts of interest. Does its platform, for example, treat third- party sellers on equal terms with its own products? Congress and the EU are investigating this. And how comfortable should other firms be about giving their sensitive data to AWS given that it is part of a larger conglomerate which competes with them?

Amazon's second problem is bloating. As Mr Bezos has ex- panded into industry after industry, his firm has gone from be- ing asset-light to having a balance-sheet heavier than a Soviet tractor factory. Today it has $104bn of plant, including leased as- sets, not far off the $u9bn of its old-economy rival, Walmart. Asa result, returns excluding AWS are puny and the pandemic is squeezing margins in e-commerce further. Mr Bezos says the firm can become more than the sum of its parts by harvesting data and selling ads and subscriptions. So far in- vestors have taken this on trust. But the weak e- commerce margins make it harder for Amazon to spin off Aws. This would get regulators off its back and liberate Aws, but would deprive Ama- zon of the money-machine that funds everything else.

Mr Bezos’s last worry is competition. He has long said that he watches customers, not competitors, but he must have noticed how his rivals have been energised by the pandemic. Digital sales at Walmart, Target and Costco probably doubled or more in April, year on year. Independent digital firms are thriving. If you create a stockmarket clone of Amazon lookalikes, including Shopify, Netflix and UPS, it has outperformed Amazon this year. In much of the world regional competitors rule, not Amazon; among them are MercadoLibre in Latin America, Jio in Indiaand Shopee in South-East Asia. China is dominated by Alibaba, and brash new contenders like Pinduoduo.

Imitation is the sincerest form of capitalism

The world’s most admired business is thus left having to solve Several puzzles. If Amazon raises wages to placate politicians ina populist era, it will lose its low-cost edge. If it spins off Aws to please regulators, the rump will be financially fragile. And if it raises prices to satisfy shareholders its new competitors will win market share. Twenty-five years on, Mr Bezos’s vision of a world that shops, watches and reads online is coming true faster than ever. But the job of running Amazon has become no easier, even if it no longer involves packing boxes. @

Leaders 7

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8 Leaders

The Economist June 20th 2020


The new world disorder

If America pulls back from global institutions, other countries must step forward

EVENTY-FIVE years ago in San Francisco 50 countries signed

the charter that created the United Nations—they left a blank space for Poland, which became the 51st founding member a few months later. In some ways the UN has exceeded expectations. Unlike the League of Nations, set up after the first world war, it has survived. Thanks largely to decolonisation, its membership has grown to 193. There has been no third world war.

And yet the UN is struggling, as are many of the structures, like the World Trade Organisation (WTO) and the Nuclear Non- Proliferation Treaty (NPT), designed to help create order out of chaos. This system, with the UN at its apex, is beset by internal problems, by the global struggle to cope with the rise of China, and most of all by the neglect—antipathy even—of the country that was its chief architect and sponsor, the United States.

The threat to the global order weighs on everyone, including America. But if the United States pulls back, then everyone must step forward, and none more so than the middling powers like Japan and Germany, and the rising ones like India and Indonesia, which have all become accustomed to America doing the heavy lifting. If they hesitate, they will risk a great unravelling—much like the nightmare in the 1920s and 1930s that first impelled the allies to create the UN and its siblings.

The UN is bureaucratic and infuriating. Its agencies fall prey to showboating and hypocrisy, as when despots on its Human Rights Council censure Israel yet again. The Security Council gives vetoes to Brit- ain and France, much diminished powers since 1945, but no permanent membership to Japan, India, Brazil, Germany or any African country. Alas, it looks virtually unreformable. |

Nonetheless, the global order is worth sav- ing. AS Dag Hammarskjold, a celebrated secre- tary-general, said, the UN “was not created to take mankind to heaven, but to save humanity from hell.” Our special report this week explains how the UN does that essential job, as do many other multilateral institutions. Its peacekeepers protect 125m people ona budget only a bit bigger than New York City Police De- partment’s. It says it is helping provide life-saving assistance to 103m. For all the Security Council's flaws, it would be missed.

That is because, left to themselves, countries drift into antag- onism. Witness the fatal clash of Indian and Chinese forces this week over a border dispute both sides are too proud to defuse (see Leader). Multilateral endeavours like the UN, NATO and the NPT Cannot ensure peace, but they do make war less likely and more limited. France and its allies are helping contain the con- flict spreading across the Sahel.

Without a multilateral effort, old problems are likely to deep- en—even Syria, after nine bloody years, will one day be ready for the UN envoy’s plans for peace. Meanwhile new problems are more likely to go unsolved. The pandemic is an example. The vi- rus not only calls for global solutions, like treatments and vac- cines, but it also aggravates local insecurity (see International section). Itis the same with climate change and organised crime.

Protecting the system from the forces of disorder is easier Said than done. One threat is antagonism between America and

| ad ae Vint

China, which could create gridlock in global bodies, exacerbated by competing parallel financial and security arrangements. An- other is that America may continue its careless treatment of multilateral institutions—especially if President Donald Trump behaves as badly in a second term as a devastating new book by John Bolton, his former national security adviser, says he has in his first (See United States section). Mr Trump has undermined the World Health Organisation and the wTo, and this month said that he would pull outa third of the American troops stationed in Germany, enfeebling NATO and limiting America’s scope to pro- ject power from Europe into Africa.

Happily, the world has not yet reached the point of no return. For decades the middling powers have depended on America for the system’s routine maintenance. Today they need to take on more of the work themselves. France and Germany have created an alliance for multilateralism, an initiative that is open to other countries. Another idea is for nine democracies, including Ja- pan, Germany, Australia and Canada, which together generate a third of world GDP, to forma “committee to save the world order”.

Although America is dominant, other countries can still get things done—with or without help from the White House. Some- times the aim is to bind in America. After a chemical-weapons attack on Sergei Skripal, a Russian ex-spy living in Britain, West- ern countries’ imposition of sanctions on the Kremlin swept up America, too. The Quad is an emerging coalition between India, Australia, Ja- pan and America, which are all alarmed at Chi- nese expansion, including in the South China Sea (See China section).

Sometimes, however, the world must work

without America even if that is second-best.

After Mr Trump walked away from the Trans-Pa-

cific Partnership, a huge trade deal, the other members went

ahead on their own. Stymied at the WTo, countries are instead

forming regional and bilateral trade arrangements, such as one

between Japan and the European Union and another between 28 countries in Africa.

Defending the international order is necessary, too. China’s Stature is growing along with its contributions—it now pays 12% of the UN budget compared with 1% in 2000. Its diplomats head four of the UN’S 15 specialised agencies, and America just one. If other countries do not act, the system will come to reflect Chi- na’s expansive views of national sovereignty and resistance to intervention, even in the face of gross human-rights violations.

Some think the job of middling powers is triage, to keep the system going until America returns to the party under a different president. It is more than that. Although polls suggest that most Americans would like to play a bigger global role, there is no go- ing back to the “unipolar moment” after the Soviet collapse, when America ran the show singled-handed. Not only did that provoke a backlash abroad, exploited by Russia and China, but it also stirred up resentment at home.

At the time, President Barack Obama responded by asking like-minded countries to help America make the world safe. They shrugged. They must not make the same mistake again. @

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The Economist June 20th 2020


India and China

Elephant v dragon

A border clash between the world’s two most populous countries is insanely risky. Time to swap maps

N THE ANCIENT Chinese game of Go, clever players ignore little

battles in favour of strategic plays. Leaving local disputes unre- solved means that later, when the game tightens and the enemy is off-guard, you can snatch prizes at lower cost. In the 69 years since China truly became India’s neighbour by grabbing Tibet, the world’s two most populous countries have played a similar game. Even as their leaders summited and trade thrived, the Asian giants left a mess of territorial disputes to fester.

Mostly these claims, over some 130,000 square kilometres on either side of their 3,488km-long border, have not mattered much. Despite a Chinese “lesson-teaching” invasion in 1962, rare armed skirmishes and less rare fisticuffs between patrols, the border zone has remained relatively calm. Much

of it is too rugged and empty to fight over. So long as neither side shifts the status quo, what difference does it make if there are no proper markers on long stretches of border, but instead just a fuzzy “Line of Actual Control”?

A brutal clash on June 15th provided a loud and ugly answer (See ASia section). Details re- main sketchy. At least 20 Indian soldiers died, many after tumbling into an icy river. India says the Chinese also suffered casualties. China says little (see Chaguan). The death toll is the worst in any clash between the two since 1967, and the first loss of life since 1975.

Even worse, the skirmish cannot be explained away as an iso- lated incident. This spring China deployed far heavier forces than usual. It has pushed them forward not at one point but at many, say Indian sources, in effect seizing as much as 60 square kilometres of land that India views as lying on its own side of the line. A particular concern is China’s westward extension along the Galwan river, threatening a Strategic road that runs parallel to the border and forms the main link to India’s northernmost out-

posts. Not surprisingly, this is where the deadly clash erupted.

Why would China change the status quo, angering a big nuc- lear-armed trading partner? Because, say Indian cynics, India is distracted just now by a swelling pandemic and shrinking econ- omy, and saddled with a government better at chest-thumping than at strengthening its army or building alliances. Nonsense, say India’s critics. It is India that has changed the status quo, quli- etly expanding infrastructure in contested regions even as, after Stripping its part of Kashmir of statehood last August, its leaders boasted of soon “regaining” other parts, including a chunk that Pakistan gave to China 1n 1963.

China may also see an interest in teaching India that, should it continue to flirt with closer ties to America, it will pay a price. To their credit, officials on both sides have avoided whipping up popular anger, stressing instead the importance of implement- ing an earlier deal to pull forces back. Such gen- tlemen’s agreements have calmed tempers in previous clashes.

Yet whatever the efficacy of generals meeting in windblown tents, it is a reckless way to fix problems between two rising nuclear powers that are home toa third of humanity. India has previously suggested that, as a sec- ond-best to a formal agreement over where the border lies, the two sides should at least present maps showing their view of where the line of control runs in practice. China, perhaps think- ing itself the more astute Go player, has always refused to do so. This allows it to claim that any Indian move is a violation of its own understanding.

Itis time to stop playing games. China looks stronger just now but India, if pushed, will find ways to cause it pain. And the last thing the wider world needs is an escalating slugfest between a dragon and an elephant over a lofty patch of frozen earth. m

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