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Thecontents

[2020-03-18]

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Thedaytheworldstopped

Governmentsarestillstrugglingtogetaheadofthecoronavirus

OFTHESUPPOSEDfivestagesofgrief,humanity’sresponsetothecovid-19pandemichasseemedstuckinthefirstthree:denial(itwillnothappentous),anger(it’sanothercountry’sfault,orourgovernment’s)andbargaining(ifwemakemodestchangestoourwaysoflife,itwillleaveusalone).MondayMarch16thmayhavebeenthedaywhenthelastvestigesofthesecopingstrategiesevaporated.Muchoftheworldmovedontothenextstage,depression—theheart-sinkingrealisationthatbillionsofliveswillbeseriouslydisruptedforweeksandprobablymonths;that,beforeitisover,manypeoplewilldie;andthattheeconomicimplicationsarebeyonddire.(Formorecoverageofcovid-19seeourcoronavirushub.)

AsstockmarketsinAmericaexperiencedoneoftheworstdaysintheirhistory,inmanycountriestheincrementalsteppingupofrelativelymodestmeasuresagainstthevirusgavewaytoDraconianrestrictionsontravelandondailylife.Thisseemedtoresolveadebatebetweenadvocatesoftwoverydifferent

approaches.

SomeWesterngovernments,notablyAmerica’sandBritain’s,hadadoptedmuchmildermeasures.Britain'sapparentlycalculatedthat,sincetheworstwasstilltocome,therewasnopointinsowingpanicandresentmentamongitspeoplebyimposingrestrictionsthatwerestillpremature.Bothcountrieswereslowtoinstitutewidespreadtestingtogetabettersenseofhowmanypeoplewerealreadyinfected.“Relax,we’redoinggreat,”PresidentDonaldTrumptoldAmericansonMarch15th.Incontrast,threedaysearlier,BorisJohnson,Britain’sprimeminister,hadcalledthepandemic“theworstpublic-healthcrisisforageneration”buthisgovernment’sresponsedidnotinvolveclosingschools,asmanycountrieshaddone,norbanningmassgatherings.

Othercountrieshadalreadyinstitutedharshermeasures,andseemedtohavehadsomesuccess.ThecentralChineseprovinceofHubei,hometo60mpeople,hadineffectbeeninquarantinefornearlytwomonths.SouthKoreahadtestedhundredsofthousandsofpeopleandenabledpeopletocheckwhethertheymighthavehadcontactwiththeinfectedonawebsiteshowingtheirmovements.Europeancountrieshadbegunalsotoshutdown,startingwithItaly,siteofthecontinent’sworstoutbreak.

Inrecentdays,Chinahasstartedeasingrestrictionsandiscautiouslyhailingatleastapartialvictoryoverthevirus.Butthatmaybepremature,asasecondwaveofinfectionsre-importedfromabroadremainspossible.HongKong,SingaporeandTaiwanhavethisweekseenrenewedinfectionsafterapparentlysuppressingthevirus’sspread.

AfterMarch16th,thedifferencesbetweencountriesseemlessstark.MrJohnsontoldpeopletoworkfromhomeiftheycan,nottoholdbiggatherings,tosteerclearofpubsandrestaurantsandtoquarantinetheirwholehouseholdsfor14daysifonemembershowssymptomsofinfection(schoolsremainedopenforthetimebeing).Thechangeinapproachwasjustifiedbysaying,“Itlooksasthoughwe’renowapproachingthefastgrowthpartoftheupwardcurve”,and,inotherbriefings,byalarmatnewdatashowingtheextentofthecrisisinItaly.Britainisalsodiscouragingnon-essentialtravel,buthasnotbannedit.ThesamedayinAmerica,MrTrumpissuedtighternewguidelines,includingthatpeopleshouldavoidgatheringsoftenormorepeople.InFrance,PresidentEmmanuelMacrondeclared“weareatwar”withthevirus.

Meanwhile,thenumberofcountriesclosingtheirborderstoarrivalsfromcountrieswithinfectionshasgrowntoover80,includingAmerica,Australia,Canada,Japan,Russia.TheyalsoincludemembersoftheEuropeanUnionandoftheSchengenfree-travelzone,whichapproveda30-dayclosureoftheirexternalborders.

AjointstatementonMarch16thfromleadersoftheG7seemedtoheraldanewphaseofwelcomeinternationalco-operationafteraperiodwhensquabblingseemedmorenoticeablethanco-ordination.Itpromised“astronglyco-ordinatedinternationalapproach,basedonscienceandevidence.”Buteventhatappearedtowanttomakeapoliticalpoint,addingthattheapproachshouldbe“consistentwithourdemocraticvaluesandutilisingthestrengthsofprivateenterprise”,asiftoadd:“Areyoulistening,China?”

Infact,theboastsofinternationalsolidarityandasharedapproacharehollow.Countriesarestillpursuingdivergentstrategies,andinsomecasesbanningexportsofmedicalsupplies.Theyseemtobecompetingtoshowthattheirmethodstandsthebestchanceofsuccess.NotlongafterMrJohnsonannouncedBritain’slatestmeasures,forexample,MrMacron,unveiledFrance’smuchmoresweepingapproach.FromMarch17thnobodyistoleavetheirhomeexcepttoshopforessentials,attendmedicalappointments,ordojobsthatcannotbedoneathome.Schools,universities,cafes,cinemas,hairdressersandmuseumshadalreadyclosed.

Theworld’stwomostpowerfulcountries,AmericaandChina,aremeanwhileindulginginablamegame.AlsoonMarch16thMrTrumpirritatedChina’sleadersbyreferringto“theChinesevirus”.China’sforeign-ministryspokesmanurgedAmericatostopthe“despicablepractice”ofstigmatisingChina.ButChineseofficialshavealsobeenguilty,withonelendinghisnametoabizarreonlineconspiracytheorythattheviruswasmadebytheAmericanarmyandbroughtintoChina.TensionsbetweenthetwocountriesworsenedonTuesdaywhenChinaannounceditwasexpellingreportersfromtheNewYorkTimes,WashingtonPostandWallStreetJournal.Itdescribedthemoveas“reciprocal”—aresponsetoMrTrump’sdecisionlastmonthtocapthenumbersinAmericaofjournalistsworkingforfivestate-controlledChinesenewsoutlets.

Ifinternationalco-operationonthebattleagainstthevirusisgoingbadly,thenatleastcentralbanksandothermonetaryauthoritiesareworkingincahootstocontaintheeconomicfall-out.ThemovebyAmerica’sFederalReservetocut

interestratestoclosetozeroinanemergencyinterventiononSundayisinlockstepwiththedecisionsofmanyothercentralbanks.Therecord-settingcrashontheAmericanstockmarketsthefollowingdaywasareflectionofhowlittleimpactinvestorsandtradersthinkmonetarypolicycanhaveontherecession—orevendepression—thatmaybelooming.

Moreimportantarecentralbanks’effortstokeepcreditflowingbeforecompaniesandthebankstheyowemoneytoseizeup.OnMarch17ththeFedannouncedthat,asduringthefinancialcrisisof2008-09,itwillstartbuyingupcompanies’short-termdebt(“commercialpaper”).Butintheend,thebanksandcompaniesareprobablygoingtoneedtheirgovernments’help—eithertospenddirectlytokeepbusinessesopen,ortoprovideguaranteestothebanks.

Mostbigeconomieshaveannounced—orareabouttounveil—bigspendingpackagestosupporttheeconomy.AlsoonMarch17thBritain’sfinanceminister,RishiSunak,promised£330bn($400bn)inlending,grantsandguaranteestokeepbusinessesgoingthroughthevirus-inducedslump.Francehaspromised€45bn($50bn)tohelpbusinesses.MrTrump’sadministrationwantsCongresstoapprove$850bninextraspending.

Theplightoffinancialinstitutionsisnotyetnearlybadasitwasduringtheglobalfinancialcrisis.Butthedisagreementsoverhowtohandlecovid-19andhowtoattributeblameforitsspreaddonotaugurwellforfutureco-operationtostopfinancialsystemssinkingtothoselows.And,inthemeantime,everyantiviralandeconomicmeasuregovernmentsintroduceseemstoservepartlytoheightenthesensethatpolicymakersareflounderingagainstanadversarytheystilldonotunderstand;andhencetoworsenthemountingpanic.

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Business

India’sboomingstartupsceneisshowingsignsoftrouble[Mar12th2020]





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Siliconsubcontinent

India’sboomingstartupsceneisshowingsignsoftrouble

WHENITINERANTventurecapitalistslandatDelhiairport,manyheadstraighttoAerocity,anewdevelopmentofglass,steelandStarbucksnextdoorthatwouldnotlookoutofplaceinSiliconValley,SingaporeorShanghai.CyberCity,anothertechenclave20minutesawaybyUber(trafficpermitting),swarmswithyoungprogrammersinT-shirtsandjeansnotunliketheStanfordstudentsplottingthenextdisruptiveappatPhilzCoffeeinPaloAlto.Manyareoneandthesame.

WhatDelhi’stechparkslackinthesplendourofIndia’shistoricbusinesshub,insouthMumbai,theymakeupforinunpotholedroads,uninterruptedmobileconnectionsandstablebroadband.Between2017and2019thecapitalspawned2,562startups,accordingtoTracxnTechnologies,adataprovider.Otherclusters,notablyinBengaluru,Mumbai,Hyderabad,PuneandChennai,addedafurther4,500orsobetweenthem.Indianowhas80,000startups(seechart1).Theyraised$10bnin2019,upfrom$3.1bnin2012(seechart2).ThatputsIndia’s

venturecapital(VC)activitybehindAmerica($114bn)andChina($34bn)butaheadoflargereconomiessuchasGermanyorFrance.

Mostofthemoneyhasgoneintofamiliarplatforms:ride-hailing(Ola),fooddelivery(Swiggy,Zomato),onlinegrocers(bigbasket),carrental(Zoomcar),onlineeducation(Byju’s).Thefirstnewunicornof2020,HighRadius,offerssoftware-as-a-service(SaaS),anothertestedbusinessmodelwhichprovidescompanieswiththingslikeaccountingorcustomersupportviathecomputingcloud.

Thispenchantforthefamiliarisunderstandable.AndtheplatformsworkinIndia—justabout—withouttheneedtofixitsricketyphysicalanddigitalinfrastructure.Buttheirgrowthislimitedinacountryrichinpeoplebutpoorindisposableincome.And,likecounterpartsintheWest,fewofthemmakeanymoney(seechart3).Thereasons—andjustifications—arethesame,too:heavyinvestmentsarenecessarytoacquirenewcustomersandachievescale.

Bharatbiltzscaling

Thesuccessofthisstrategyishardtogauge.Informationonrealisedreturns—thecashVCsgetfromtheirinvestmentsasopposedtounrealisedcapitalgainsfromswellingvaluations—remainsscant.Whatlittlethereissuggestsanearabsenceofcashreturns.Peoplewhohavereviewedpitchbooksusedtoraisemoneysayasmuch.True,onlyafewfundshavebeenaroundthedecadeorsorequiredforinvestmentstoripen.Butitmayhavesomethingtodowithweakoperatingperformance.OyoRooms,aseven-year-oldfirmwhichsellstech-infusedbudget-hotelfranchisesandhasexpandedfuriouslyacross800citiesinIndiaandabroad,hashadtosackworkersandfacesquestionsaboutitsviability.

Individualcompanies’valuations—includingOyo’s,longputat$7.5bn-10bn—arethusincreasinglyviewedwithsuspicion.Manyare“markedtomyth”ratherthantomarket,aslocalwagsputit.Thatinturnhelpsexplainwhycleanexits,throughapubliclistingoraprivatesale,arerare.Walmart’sFlipkartdealaccountedfor80%ofthetenbiggestexitsin2018,accordingtoBain,aconsultancy.Lastyear’stoptenrakedinjust$4bn.HalfweresalesofsecondarystakesbyoneVCfirmtoanother.Onlyone,ofa24-year-olde-merchantcalled

Indiamart,wasapublicoffering.

Investor-unfriendlybureaucracypresentsmorehurdlestodivestment.AtermsheetrelatedtoincorporatinginIndia,fromtheIndianbranchofanAmericanVCfirm,canrunto12pages,remembersanexecutiveatahotstartup;onefromitsAmericanofficerelatedtoincorporatinginAmericatookupasinglepage.SomeofthosewhoinvestedinFlipkartareenmeshedinafightwiththegovernmenttorecoverawithholdingtaximposedontheirreturns.

TolistonIndia’smainexchangesfirmsmustdemonstrateafewyearsofprofits.LawsimpedethosewhosemanagementisbasedinIndiafromfloatingoverseas(theapproachofmanysuccessfulIsraelistartups)withoutfirstgoingpublicathome.Complexandmutableleviesonshareshandedtoinvestorsandstaffineffectgivethegovernmentfirstdibsonafirm’scash.

Despiteitspro-businessrhetoric,thenationalistgovernmentofNarendraModihasmadelifeharderforstartupsinotherways.LikeallofIndiaInctheycontendwithcomplexandconstantlychangingrules.Somearedraconianandindiscriminate.InDecemberthegovernmentblockeddigital-paymentsprovidersfromcollectingfeesfrommerchantswhousetheirservices,hurtingthebusinessmodelofPaytm,India’sbiggestunicorn.Italsolaunchedapublicpaymentssystemthatcompeteswithprivateproviders.Flipkarthasfounditselffacingrestrictionsonwarehousinganddiscounting,slappedwithacomplextransactiontax,andunderinvestigationbythecompetitionauthoritiesforlong-standingsalesarrangements.

Thecost,complexityandchaosofIndia’sVCworldispromptingmanystartupstotrytoincorporateelsewherewhiletheyremainsmall.AnanalysisbyTracxnshowsthatof73SaaSfirmsthathavereceivedatleast$20meachinfunding,50haveheadquartersoutsideIndia.ManyfleetoSingapore,whereexpatriatemanagerscancatchasix-hourflighttoDelhiorMumbai,whichplentydoonaweeklybasis.Americaisluringthemwithitsvastmarket,betterprotectionofintellectualproperty,lowertaxesandadeepnetworkofanalysts,VCfirms,lawyersandbankers.IfIndiaistounleashitshugestartuppotential,itmustfirstaskitselfwhysomeofitsentrepreneursandventurecapitalistsaresoeagertoleave.■

ThisarticleappearedintheBusinesssectionoftheprinteditionundertheheadline"Siliconsubcontinent"



TheAmericas

CanChilereinventitself?[Mar12th2020]






Remodellingthemodel

CanChilereinventitself?

WALKNORTH-EASTalongtheAlameda,themainavenueofChile’scapital,Santiago,tothewell-heeledneighbourhoodofProvidencia,andforseveralmilesthesceneoneithersideisoneofdesolation.Hundredsofbusinessesareboardedup,someoperatingthroughdoorsbetweenshutters.TheBaquedanometrostationandalargehotelnexttoitarepartlyburnedout.Pavementshavebeenrippedup,leavingearthandrubble.Trafficlightsaredisabled.Wallsandstatuesareplasteredwithgraffiti.Manydenounceas“murderers”,variously,SebastiánPiñera,Chile’scentre-rightpresident,theCarabineros(thenationalpoliceforce),thestateandcapitalism.Othershailacomingrevolution,oratleastanewconstitution.

ThetroublebeganonOctober6thwitha30-peso(four-cent)riseinthepriceofpeak-hourmetrotickets.Thatsetoffmassfare-dodgingbyschoolpupils.DayslatermuchofthemetroinSantiagosufferedarsonattacks(byforeignagitators,claimedthegovernment,withoutevidence).DeclaringthatChilewas“atwar”,MrPiñeraimposedastateofemergencyfortendaysandsentthearmyontothe

streetsforonlythesecondtimesincethedictatorshipofGeneralAugustoPinochet(1973-90).Thatpromptedpeacefulprotests,includingamarchinSantiagoofperhaps1mpeople—inametropolitanareaof7m.Atthesametime,supermarketsandpharmacieswerelootedandseveralchurchesandpublicbuildingsburned.MuchofthedamagewasinpoorerareasontheperipheryofSantiagoandothercities.Atleast30peopledied.Theeconomywashurt,too:growthlastyearwasbarelyabove1%.Thegovernmenthadforecast2.6%.

Themalcontentsarealooseconfluenceofyoungpeople.Inthecapitalnearly200,000neitherworknorstudy.Chilehasanintellectualproletariatofgraduatesfromlow-gradeprivateuniversities,manyofwhomhavelargestudentdebt.OverthepastdecadeanarchistgroupsthatspecialiseinattackingthepolicehavegrowninSantiago.Thentherearefootballhooligansandthefootsoldiersofthedrugtrade,whooperateinpoorbarrios.Thefactthatmanyofthesepeopleareoutsidethepoliticalsystemhasmadeitharderforthegovernmenttoknowwhomtonegotiatewith.

ThingscametoaheadonNovember12thwhen,someChileansfeared,thecountryfacedachoicebetweenanarchyandmartialrule.“Manypeoplecalledme,desperate,saying‘Theyareburningthecity’,”MrPiñerasaidinaninterviewinlateJanuary.“Ihadtwochoices:tocallonthearmedforcesagain,orgiveanotheropportunityforpeace,dialogueandagreements.Itwasaverydifficultdecision.”

Accordingtoseveralsources,thistimethemilitarycommandersbalkedatinterveningwithoutimmunityfromprosecution.“Thearmedforceswouldhaveobeyedapresidentialorder,”insistsMrPiñera.Forwhateverreason,hedrewback.Thegovernmentswiftlynegotiatedcross-partyagreementsforaplebiscite,tobeheldonApril26th,onwhethertosetupanassemblytowriteanewconstitution.Itrushedthroughanincreaseinpensionsforthepoorestandataxincreaseonthebetter-off,andpromisedothermeasures.

Allthisreleasedsomeofthetension.Theprotestsfadedduringthesouthern-hemispheresummerholidays.Butnowtheyhaveresumed,whilevandalismneverreallystopped.

SeveralothercountriesinLatinAmericasawstreetprotestslastyear,thoughnotonthesamescale.ButChile?Overthepast30yearsitcametobeviewedastheonecountryinLatinAmericaonthepathtodeveloped-countrystatus.The

protestsareabigblowtothatconfidence,andthreatentohaltChile’sprogress.Buttheymightalsobethespurbywhichitfinallyjoinstheglobaltoptier.

Chile“couldbecomeacountrywithamoresolidandsustainablesocialcontractthatresolvesthelegacyissues[leftbythePinochetdictatorship],”asMarioMarcel,thepresidentoftheCentralBank,putsit.Henotesthatthoseobstacleshavecontributedtowhateconomistscallthemiddle-incometrap,inwhichsociopoliticalshortcomingsslowgrowthandpreventcountriesreachingdevelopedstatus.

Butifviolencecontinuesandthestateisunabletocontainitbydemocraticmeans,andifconservativesblockchange,othersfearadarkerfuture.Chilecouldface“aclassicPeronistmomentinwhichacountrysuccessfulingrowthhascontradictionsitcan’tmanage”,saysÓscarLanderretche,aneconomistalignedwiththeSocialistParty,referringtotheperiodinthe1940sinwhichArgentinaembracedpopulismanddictatorship.

Middle-of-the-roadrage

InmanyrespectsChilehasbeenasuccessstorysincedemocracyreturnedin1990.Governedbythecentre-leftfor24ofthoseyears,ithascombinedeconomicgrowth,politicalstability,fairlystronginstitutionsandexpandingsocialservices.Thosebelowtheofficialpovertyline(of$206permonth)fellfrom45%ofthepopulationinthemid-1980sto9%in2017.Some65%ofChileansaremiddle-class,upfrom24%in1990,accordingtotheWorldBank’sincomecriteria.SinceChilejoinedtheOECD,aclubofmainlyrichcountries,in2010,itseliteshavetakentosuggestingthatithaslittleincommonwithitsneighbours.

What,then,promptedthesocialexplosion?“Therearemanytheories,”saysMrPiñera,abillionairebusinessman.“Iagreewithallofthem,andtheyarecontradictory,whichmeanswelackashareddiagnosis.”Thefirsttheory,favouredontheright,istheslowingofeconomicgrowthsince2014.InMrPiñera’sfirstterm(from2010to2014)growthaveraged5.3%ayear,boostedbyreconstructionafteranearthquake.Hewonhissecondtermin2017bypromisingarepeatbutfailedtodeliverit.Asecond,relatedtheoryconcernsrisingexpectations.ItseesdiscontentastheconsequenceofChile’ssuccessincreatingamiddleclassthatdemandsmoreofgovernment.

Athirdview,commonontheleft,isthatthecountryisrebellingagainstinequality,which,itisclaimed,isentrenchedbyPinochet’s“neoliberal”economic“model”.Thisgaveprivateenterprisefreereinandconfinedthestatetoasubsidiaryrole,eveninprovidingsocialservices.ByOECDstandards,thoughnotthoseofLatinAmerica,incomeinequalityisindeedwide(seechart1).“Youcan’tgothroughaprocessofrapidgrowthandcapitalistmodernisationandpersistwithpre-capitalistlevelsofinequalityandabsenceofmeritocracyandsocialmobility,”saysMrLanderretche.Yetincomedistributionhasimprovedthiscentury.

MsBacheletintroducedasafetynetintheformofabasicpensionforthepoorof110,000pesos.Followingtheprotests,thegovernmenthasraisedthisto160,000pesos.Thatdoesnothelpmiddle-classretirees.Significantly,PinochetdidnotrequirethearmedforcestojoinAFPs.Thegovernmentspendsmoreonpensionsforthesecurityforcesandonthosewhoremainedinthepre-1981

system(morethan2%ofGDP)thanitdoesforthewholeoftherestofthepopulation(lessthan1%),pointsoutRobertoZahler,aformerCentralBankpresident.Governmentandoppositionareclosetoanagreementthatwouldaddemployercontributionstopensionaccounts.

Thedictatorshipsetupasegregatedhealthservice.Allthoseinjobspayacontributionof7%ofsalaryforhealthcare.Intheory,theyarefreetousethattojoinprivatehealthschemes(withnowaitinglists)knownasIsapres.Butthesedemandoftenlargeadditionalpayments.TheIsaprescreamoffpeople“withbetterhealthandmoremoney”,accordingtoCarolinaVelascooftheCentrodeEstudiosPúblicos,athink-tank.Some77%ofthepopulationreliesonthepublicsystem(knownasFonasa).Thisisshortofmoneyanddoctors,sowaitinglistsarelong.“InChile25,000peopleayeardiewhilewaitingformedicaltreatment,”saysGermánCodina,themayorofPuenteAlto,apoordistrictinSantiago,whoisfromPresidentPiñera’sNationalRenovationparty.

Thenthereistheproblemofmedicines.Fonasaprovidessomefreebutthereare“queuesofuptoeighthourstogetthem,andsometimestheydon’thaveit”,saysMsVelasco.In2009thethreemainpharmacychains,whichcontrol90%ofthemarket,werefoundguiltyofpricecollusion.Eventoday,pricesofover-the-counterdrugsarewildlyinflated.Totakeoneexample,asteroidnasalspraycosts$51inSantiago,comparedwith$22inLimaand$13inMadrid.

Thisprice-gougingispartofawiderpatternofabusebybusinesses.Waterandfishingrightsareheldasprivateproperty,inpracticeinperpetuity.Untilrecentlycartelsflourishedinindustriesrangingfromtoiletpapertobusesandchickens.Manyoftherichavoidtaxes.Thetop1%paynomorethan15%oftheirincome,accordingtoRodrigoValdés,whowasfinanceministerunderMsBachelet.“TaxlawyersinChilehavehelicopters,asignthatweareintrouble,”hesays.

Successivegovernmentshavetriedtodealwiththeseproblems,butnotfastenough.Theyfacedobstinateresistancefromtherightandbusinesslobbies.Congressapprovedatoughcompetitionlawin2009thatmakespricefixingacriminaloffence.Butitisnotretroactive.“Manypeoplewon’tthinkanythinghaschangeduntilsomeoneisinprison,”saysEduardoEngel,aneconomistattheUniversityofChile.

“Thosewhorefusedtolistenorwhoblockedchangearecomplicitinwhathappened,”saysMrCodinainPuenteAlto.Theconstitution,drawnupbythedictatorship,hasbeenamendedmorethan40timesandnowcarriesthesignatureofRicardoLagos,aSocialistpresident.Butitstillgivesundueprotectiontovestedinterests.Ascoreof“organiclaws”canonlybechangedwithafour-seventhsmajorityofCongress.TheConstitutionalTribunal,whichhasa

conservativebias,hasshieldedtheIsapresfrompriceregulation,forexample.

WhenMsBacheletproposedanewconstitutiontoovercomesuchresistancein2015thiswasgreetedwithacollectiveyawn.Nowithasbeenseizedonasawayoutofthetroubles.Opponentsfearthatanewcharterwillleadtothecreationof“rights”thatareimpossibletofulfilandtofiscalirresponsibility.ButthelawfortheAprilplebisciteonsettingupaconstitutionalconventionstipulatesthatthenewdocumentmustcommandtwo-thirdssupportinthatbody,aswellasapprovalinasecondreferenduminwhichvotingwillbecompulsory.“Themechanismrequiresreachingagreements,”saysGiorgioJackson,aleft-winglegislator.“Sothere’snotmuchtimeforradicalisationorspaceforpolarisation.”ThereislittledemandtoweakentheCentralBank’sindependenceorChile’sstrictfiscalrules.

Theproposalforanewconstitutionhassplittheright.Somewhowereinitiallypanickedintobackingitnolongerdo.Despitesuchresistance,EugenioTironi,apoliticalconsultantwhoranthecampaignthatdefeatedPinochet’sattempttostayinpowerthroughaplebiscitein1988,thinksthatifturnoutinAprilisatleast60%theconventionwillbeapprovedby60%ormoreofthosevoting.

MrPiñerahasseemedtoveerbetweenthedemandfororderfromhisownpoliticalbaseandforchangefrommuchofthecountry.Botharenecessary.Thescaleoftheprotestsandviolencespreadfearamongbusinessfolk.“Wehaveaverybasicconcern,”saysBernardoLarraínofSofofa,abusinesslobby.“DoestheChileanstatehavetheabilitytomaintainpublicorder,sothatpeoplecangettoworkandcompaniescanoperatenormally?”TheCarabineroswereoncerespected.TheyhavebeentarnishedbyrecentcorruptionscandalsinacountrywithmuchlessgraftthanmanyofitsLatinAmericanpeers.Inthefaceofsometimesextremeprovocation,theyhavebeenexposedasincompetentaswellasbrutal.Almost1,900peoplewerehurtbyplasticbulletsorbuckshot,including445witheyeinjuries,accordingtotheNationalHumanRightsInstitute.At60,000,theforceistoosmall.“Thepolicepolicethemselves,”saysLucíaDammert,apoliticalscientistattheUniversityofSantiago.“Thepoliticalworldhasn’tputanylimitsonthem.”Reformingthepoliceisnowwidelyseenasessential,butwilltakeyears.

Becauseofitsmacroeconomicprudence,Chilehasmoneytorespondtosomeofthedemandsformorepublicspending.Thiswillriseby9%thisyear,thoughmuchofthatwillgoonrepairingthedamage.Inaddition,MrBrionesis

preparingaplanfor“agradualandmoderate”increaseintaxesandpermanentspending.“Thelistofdemandsisinfinite,wehavetoprioritise,”hesays.“WeareChile,notSweden.”

Willthatbeenough?Muchwilldependonwhethertheconstitutionalconventiontakesoff,onwhetherlarge-scaleviolenceresumesandonhowquicklytheeconomyhitsitsstrideagain.“Ofcoursethere’smoreuncertaintyandinvestmentdecisionsarebeingpostponed,”saysMrLarraín.Nevertheless,atleastbeforefactoringincovid-19,theCentralBankthinksChilewillavoidrecessionandthattheeconomywillgrowbyaround1%thisyear,helpedbyfiscalandmonetarystimulus.

AswiththestudentrebellioninFranceinMay1968,Chile’seventshaveshakenacountrythatseemedtobeprogressing,placingboththesurvivalofitspresidentanditspoliticalstabilityindoubt.MrPiñerasayshehasbeenreadinganewbiographyofGeneralCharlesdeGaulle,whoweatheredthe1968protestsasFrance’spresidentbutbowedoutshortlyafterwards.MrPiñerainsistshewillsoldierontotheendofhistermin2022.

“Wedon’tyetknowwhetherthiscrisiswillbeawayofimprovingChileorwhetheritwillgetworse,”headmits.Thecountrylacksarecentpopulisttradition,butsomeoftheelementsarethere.“Thepeople,united,functionswithoutparties”,proclaimsalargegraffito.ThenextfewmonthswilldeterminewhetherChileseeksasaviourorfollowsapathofimprovingitsinstitutions.Timealonewillnotheal:thereisnogoingbacktothecountryofOctober5th.■

ThisarticleappearedintheTheAmericassectionoftheprinteditionundertheheadline"Amodelcountryinneedofremodelling"






Booksandarts

“Medicareforall”andtheartofpoliticalbranding[Mar12th2020]






Johnson

“Medicareforall”andtheartofpoliticalbranding

LASTMONTHRonnieCowan,aWestminsterMPfromtheScottishNationalParty,wrotetoBritain’sDepartmentforWorkandPensionsonbehalfofsomeincensedpensionersinhisconstituency.Pensionersareoftenincensed,butthesecomplaintswerenotaboutinflation-indexingorretirementages;theywerelinguistic.Theirateretireesdidnotwanttheirpensionstobecalleda“benefit”.

InsomeotherAnglophonecountries,thismightsoundodd.Whatcouldbebetterthana“benefit”,which(America’s)Merriam-Websterdictionarydefinesas“somethingthatproducesgoodorhelpfulresultsoreffectsorthatpromoteswell-being”?InBritain,thewordmeansmuchthesameinmostcontexts,butitsotherdefinitionismoresalient:astheOxfordEnglishDictionaryhasit,“Thatwhichapersonisentitledtointhewayofpecuniaryassistance,medicalorotherattendance,pension,andthelike,undertheNationalInsuranceActof1911andsimilarsubsequentActs”.

ThisiswhereteachersofEnglishmighthelpfullynotethedifferencebetween

denotation(dictionarymeaning)andconnotation(associationsthatmaynotbepartofaformaldefinition).InBritain,“benefits”carryastrongconnotation.Formanypeople,abenefitismoneyhandedoutbythestate,oftentotheundeserving.Consider“BenefitsStreet”,adocumentaryseriesonChannel4thatwaswidelyaccusedofportrayingrecipientsofbenefitsasscroungers.

InAmericatheequivalenttermis“welfare”,whichhasbeenappliedtogovernmentaidforpoorfamiliessinceatleastthe1930s.Fromthe1960sand1970s,asRepublicansbecamethechampionsofsmallgovernment,theybegantocharacterisewelfare-recipientsasdisempowereddependentsonthestate,oreven,sometimes,asconnivingparasitesuponit.Campaigningforpresidentin1980,RonaldReaganfamouslytoldthestoryofahigh-living“welfarequeen”fromChicago(whoseexploitsturnedouttobesomewhatexaggerated).

Alotofthoughtgoesintothenamesofpolicies,whichpoliticiansnaturallywanttoresonateinapositiveway.Sometimesthatmeansrebrandingoldideas,orborrowingwordsfromanotherdomain.DemocratswhosaythestateshouldpayforeveryAmerican’shealthcareareacaseinpoint.“Universalhealthcare”,onewayofexpressingthatgoal,hasawhiffofsocialismaboutit.“Government-runhealthcare”isevenmoreoff-putting,afterReaganmemorablydecriedgovernmentastheproblemratherthanthesolution.

Hence“MedicareforAll”,toutedbyBernieSandersandElizabethWarren.Medicareisthehugelypopularhealth-careprogrammeforretirees;MrSandersandMsWarrenhaveborroweditssaintednametoproposeextendingcaretoeveryone.GeorgeLakoff,alinguistattheUniversityofCalifornia,Berkeley,andaleft-wingactivist,hasbeenpushingDemocratstoadoptmoreeffective“frames”fortheirpoliciesforyears,arguingthatRepublicansconsistentlyout-framethem.MrLakoffisalong-termadvocateof“MedicareforAll”.(Notably,proponentsofthepolicyhaveavoidedthenameofMedicaid,thehealth-careschemeforlower-incomeAmericans.“Medicaid”sharesthetaintof“welfare”;“Medicare”doesnot.)

Butrebrandingandrenamingpoliciesgetsyouonlysofar.Evenupbeatwordswithpositiveassociationscanbetarnishedanddiscredited.Afterall,“socialism”hasthesamerootasthefriendlyconceptof“society”.Evenmorestarkly,“communism”isarelativeof“community”,butnoamountofetymologycanmakeupfortheideology’scomplicityinthedeathsandimmiserationofmillions.

Evenwithoutsuchbaggage,theenemygetsavotetoo,assoldierssometimessay.Assoonasashinynewideaislaunched,opponentswilltrytoassociateitwitheverythingevilunderthesun.The“GreenNewDeal”,asetofleftish,climate-friendlyproposalssupportedbysomeAmericanDemocrats,hasbeenunderrelentlessRepublicanattacksincetheconceptwasfloated.DespitethebidtoinvoketheNewDealofthe1930s,formanyvotersitisnowsynonymouswithawildleft-wingpowergrab.

Taintingideasiseasierthandecontaminatingthem.Andthoughanewsloganmighthelpremovethestigmathathasaccrued,thecycleisliabletobeginagain,andbeforelongyetanothernewlabelisneeded.Politicalrebrandingissometimesnecessary,butitisnowherenearsufficient.Inotherwords,politicianscan’tprevailbylinguisticengineeringalone.Theystillhavetowintheunderlyingarguments.

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Graphicdetail

Instagrammayoffercluesaboutthespreadofthenewcoronavirus[Mar17th2020]






DailyChart

Instagrammayoffercluesaboutthespreadofthenewcoronavirus

INSTAGRAMISKNOWNmainlyforstylishselfiesandFOMO-inducingtravelpictures.Couldthephoto-sharingservicealsobeusedtotrackthespreadofapandemic?Asgovernmentsandhealth-careprovidersaroundtheworldseekoutsuspectedcarriersofthenewcoronavirus,thepopularsocialnetwork—whichpeopleusetosharepicturesandvideosofplacestheyvisit,andmoregenerallytosocialise—couldprovevaluablefortracingthepathofthevirus.

Thesocial-mediaplatformmayseemanoddtoolforstudyingthecoronavirusoutbreak.Itisolderpeople,afterall,whoaremostvulnerabletothevirus;mostInstagramusersareunder35yearsold.Butyoungpeoplecanbepowerfulcarriersoftheillness.Becausetheyoftenexperiencemildsymptoms,infectedyoungstersmaynotknowtheyareill.Iftheyaregregariousandeagertotravel,asInstagramusersoftenare,theyareevenmorelikelytospreadthedisease.Evenifglobe-trottingInstagraminfluencersself-quarantineafterlearningof

theirillness,theirtravelsfromavirushot-spotmayhaveinfectedpeoplealongtheway.

Toinvestigatehowthesocialnetworkmightbeusedtotrackthepandemic,TheEconomistidentifiedmorethan20,000Instagramuserswhopostedtotheplatformincitiesandtownswhichatthetimehadatleast50confirmedcovid-19cases.Wethenrecordedwheretheseuserstravelledtoaftervisitingthesehotspots,basedonsubsequentpostsinwhichtheytaggedtheirlocations,suchasacity,townorrestaurant.Wesurmisethat,althoughbynomeansalloftheseuserswereinfectedwiththevirus,theywereneverthelesspotentialcarriersofit,andthusofinteresttothosetryingtotrackthedisease.

Theresultingdatabaseincludedsome64,000Instagramposts.Butnotallofthemwererelevanttoouranalysis.SomeuserstaggedWuhan,thelikelysourceoftheoutbreak,insolidaritywiththosequarantinedthere,evenwhentheywerelocatedelsewhere.Toreducethenumberofinaccuratelocations,wediscardeduserstracedtoWuhan,aswellasthosewhichmentioned“coronavirus”,“covid19”,“epidemic”,“pandemic”orvariationsthereof.Wealsoomittedpostsmarked“latergram”or“tbt”(anindicationthatthephotoorvideowasold).Wewereleftwitharound53,000observations,publishedinover2,000citiesacross125countries.

WefoundthatthemovementsofInstagramusersidentifiedaspotentialcarriersofthecoronavirustendedtotrackthemovementofthevirusitself,asrevealedbycaselocationspublishedbyofficialsources.Someuserstravelledtovirus-freeplacesthatweresubsequentlyhitwithanoutbreak,raisingthepossibilitythattheybroughtthevirustherethemselves.OtherInstagrammersinoursampleofferedcluesaboutpossiblepathsoftransmission,suchasatriphomefromaholidayataSwissskiresort.

Aspublic-healthofficialsscrambletotrytocurbthespreadofthenewcoronavirus,havingaccesstoaccurate,real-timedataonthemovementofpeoplewhomightbeinfectedcouldprovelife-saving.Instagramandothersocial-mediaplatformsofferasteadysourceofinformationthatcouldbeusefulinmappingthepandemic—andperhapslimitingitstransmission.





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DunNamin’

WhyBritons’housenamesreflecttheirclassanxieties

INGEORGEORWELL’S“ComingUpForAir”(1939),anovelaboutamiddle-aged,middle-classEnglishmanbitteraboutthedestructionofgoodold-fashionedEnglishvalues,theleadcharactercomplainsabouthisarea,wherethehomesare“alikeascouncilhousesandgenerallyuglier.Thestuccofront,thecreosotedgate,theprivethedge,thegreenfrontdoor.TheLaurels,theMyrtles,theHawthorns,MonAbri,MonRepos,BelleVue.”

HousenamesinBritainareheldinlowesteem.Theyareeithersneeredatorignoredbycurrentresidents,whooftenprefernumbers.AcitationintheOxfordEnglishDictionaryfortheword“naff”says“itisnafftocallyourhouseTheGables,MonRepos,orDunroamin’.”Yetnosuchembarrassmentsurroundssmartpeople’shouses:BuckinghamPalaceisnot1TheMall.Thereason,arguesLauraWright,alinguistatCambridgeUniversity,inanewbook,“Sunnyside:asociolinguistichistoryofBritishhousenames”,is,asever,class.

HousenameswererareuntillateVictoriantimesbecausesingle-familyhomes

wereexceptional.Evenacenturyago,nineintenhomeswereprivatelyrented.Apost-warhousingboomcreatedhundredsofthousandsofhomes.By1939aquarterofhomeswereowner-occupied.Withthesurgeinhomeownerscameariseinhome-namers.

MsWrightclassifiestheseintofivegroups:thetransferredplacename(HanoverLodge);thenostalgicallyrural(OrchardHouse);commemorative(AlbertVilla);nameslinkedtonobility(GrosvenorHouse);andfads(Dunroamin’).Allshowastrivingtotalkuptheowner’ssocialstanding.ARoyalMailsurveyin2015found230homesnamedClarence,133Sandringhamsand67Balmorals.

InLondon,fancyapartmentbuildingswerenamedSo-and-soCourtintheearly20thcenturyasasignifierofluxury.Thatspreadtoblocksofflatsandcouncil-builttowersafter1945.Namesstartedbydenotingsophisticationuntiltheywereadoptedbyenoughpeopletobecome,well,abitnaff.(Somethingsimilarhappenedwithgardengnomes,whichDrWrightsayswerefirstinstalledinLongIslandin1924tocommemorateavisitbythePrinceofWales.)

Housenamesarelesscommontoday.Addressconventionshavebeenstandardisedandfewpeoplebuildtheirownhomes.Thosethatremainarenolessimbuedwithclassconnotations.In2017Savills,anestateagent,sawinterestinanewcountryhousegrowwhenitsnamechangedfroma“farm”toa“manor”.

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