The Economist Latin America September 25, 2021

THE ECONOMIST is a global weekly magazine written for those who share an uncommon interest in being well and broadly informed. Each issue explores the close links between domestic and international issues, business, politics, finance, current affairs, science, technology and the arts. In addition to regular weekly content, Special Reports are published approximately 20 times a year, spotlighting a specific country, industry, or hot-button topic. The Technology Quarterly, published 4 times a year, highlights and analyzes new technologies that will change the world we live in.

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51 Números

en este número

8 min.
the world this week

Politics France reacted with fury to American, Australian and British plans to form a new defence pact in the Pacific. France was not invited to join. Australia is also cancelling a contract for French dieselpowered submarines in favour of American (or just possibly British) nuclear-powered ones. Jean-Yves Le Drian, the French foreign minister, called it a “stab in the back”, and withdrew his ambassadors from Washington and Canberra, though they are now being sent back following a make-up call between presidents Joe Biden and Emmanuel Macron. Germans got ready to vote in a general election on September 26th that will mark the end of Angela Merkel’s 16 years in power, as she is standing down. The polls have narrowed slightly, but the Social Democrats are still running ahead of Mrs Merkel’s Christian…

5 min.

ALMOST TEN years ago President Barack Obama visited Australia’s parliament to announce a pivot to Asia. “The United States is a Pacific power and we are here to stay,” he declared. This week the White House will echo with similar sentiments, as the leaders of the Quad countries—America, Australia, India and Japan—gather in person for the first time. There will be talk of a “free and open Indo-Pacific”, code for facing down an assertive China. The rhetoric will be familiar, but the reaction may not be: this time both friend and foe may actually believe it. The reason is AUKUS, an agreement announced last week for America and Britain to supply Australia with at least eight nuclear-powered submarines. The deal has caused waves because of its huge size and because it…

5 min.
the mess merkel leaves behind

ONLY OTTO VON BISMARCK and Helmut Kohl served longer as Germany’s chancellor than Angela Merkel has. Bismarck forged an empire, and invented Europe’s first public-pension and health-care systems along the way. Kohl oversaw the reunification of East and West Germany and agreed to the replacement of the beloved Deutschmark with the euro. Mrs Merkel’s achievements are more modest. In her 16 years in the chancellery she has weathered a string of crises, from economic to pandemic. Her abilities as a consensus-forger have served her country and Europe well. But her government has neglected too much, nationally and internationally. Germany has got away with it, for now; the country is prosperous and stable. Yet trouble is brewing. And as Mrs Merkel prepares to leave office when a new government forms after an…

3 min.
gas puzzlers

YET ANOTHER crucial global market has gone from glut to shortage at breakneck speed. Last September in Europe it cost €119 ($139) to buy enough gas to heat the average home for a year and the continent’s gas-storage facilities were brimming. Today it costs €738 and stocks are scarce. Even America, which has an abundance of shale gas, has seen prices more than double—albeit from a much lower level—and could see further increases if its winter is a cold one. The shortage has many causes (see Finance section). A cold European spring and a hot Asian summer boosted energy demand. Rebounding industrial production has lifted the global appetite for liquefied natural gas (LNG). Russia has been piping less gas into European stockpiles. Hawks suspect it of trying to spook the market…

3 min.
bail-outs and bedlam

CHINA’S VAST and opaque financial system has long posed a threat to its economy and the world. The agonies of Evergrande, a property firm with towering debts, are a reminder of how hard it is to manage the risks. The government is attempting to impose an orderly default on some of its creditors but faces the risk of contagion. The episode also highlights a bigger question of whether President Xi Jinping’s crackdown on business will make it even harder to create a reformed financial system that is safer, more open and more efficient. Part of what makes China’s financial industry daunting is its size. Banking assets have ballooned to about $50trn and they sit alongside a large, Byzantine system of shadow finance. Total credit extended to firms and households has soared…

3 min.
why georgieva should go

IN 2003 THE WORLD BANK launched a league table that assessed the ease of doing business in different countries around the world. By 2017 Li Keqiang, China’s prime minister, grumbled that his country was lagging behind its peers. At his urging, officials began freeing entrepreneurs from red tape—and crimson ink. They cut fees, streamlined approvals, and began to use electronic seals instead of the traditional ink stamp on many documents. China’s progress illustrates the power of the bank’s Doing Business rankings. Leaders have used them to motivate and monitor regulatory reforms, and like to boast about their country’s progress. The IMF cited the rankings last year in arguing for lending to Jordan. The data help guide investors. And they have informed 676 of the World Bank’s own projects (worth $15.5bn) in…