Islam in the West

The 30m Muslims living in Europe and America are gradually becoming integrated

Muslims have had a significant presence in the West for three generations, says Nicolas Pelham. Though both sides remain wary, they are getting closer



EVERY FRIDAY lunchtime, Washington’s Church of the Epiphany near the White House turns into a mosque. Hundreds of Muslims prostrate themselves in the direction of Mecca on carpets spread on the ground (pictured). The congregation includes Homeland Security and FBI agents, State Department bureaucrats and a posse of lawyers from the Department of Justice. The imam is a Treasury official. His sermons steer clear of politics.

America’s Muslims have come a long way since some of their ancestors arrived as slaves from West Africa in the 16th century. From the late 19th century to the 1920s a wave of well-off Arabs came to study and stayed on, entering the ranks of America’s middle class. In a nation of immigrants, Muslims found it easier to fit in than in Europe with its more settled population. Except in a few cities such as Dearborn, Michigan, Muslims in America are thinly spread, totalling about 3.5m, or 1.1% of the population.

Europe’s relationship with Islam has been longer, deeper and more conflicted. The religion had previously entered Europe in the eighth century in Spain under a caliphate and again in the early 14th century in south-eastern Europe under the Ottomans. Both times it came in by the sword and was driven out more than half a millennium later. In the 20th century the Muslims in Europe were different from America’s, too. Millions remained after the Ottoman armies were defeated, and new ones were brought in as soldiers and workers. European powers drafted some 3.5m Muslims from their colonies to fight two world wars. Most went home afterwards, but more arrived to repair the war damage.

In the two decades after 1945 western European governments recruited hundreds of thousands of migrant labourers from far-flung places. Britain brought in Pakistanis from the Kashmiri mountains and the highlands of Bangladesh’s Sylhet; France turned to its north African territories; and Germany imported workers from Turkey’s Anatolian hills. They were expected to leave when their work was done, but instead fetched their families. Germany took its time to grant them and their German-born children citizenship. More recently an outpouring of asylum-seekers from the Muslim world’s many conflicts has changed the demography. Between 2014 and 2016 alone about 1m migrants arrived in Europe, most of them Arab. Germany took in half of them.

They asked for workers, and people came

Leaving out Russia and Turkey, Europe is now home to about 26m Muslims, who account for about 5% of its population and are typically much younger than the locals. In many European cities Muhammad (in its various spellings) has become the most popular name for a child.

Precise numbers are hard to pin down. Besides, Muslims are not a homogeneous group; they differ by religious practice, culture and ethnicity. Their experience also varies from country to country. British law protects diversity in religion and practice, whereas in France the display of religious symbols, including the veil, is banned in most public institutions, including schools. Yet French Muslims tend to be less religious than British ones, and non-Muslims in France are happier to have Muslims as neighbours and more likely to marry one.

In some ways the 20th-century wave of Muslim arrivals in the West has done remarkably well. Many of them went from the mostly illiterate edges of the Islamic world to industrial cities. They often came from large families. Their children have gone a long way to closing the gaps in education, salary and lifestyles with their adopted countries.
Muslims are also becoming increasingly prominent in Western politics. In November’s midterm elections, Americans voted two Muslim women, Rashida Tlaib and Ilhan Omar, into Congress for the first time. London, Europe’s largest city, has a Muslim mayor, Sadiq Khan. The continent’s largest port, Rotterdam, has a Moroccan-born one, Ahmed Aboutaleb. And Muslims play a large part in Western entertainment, sports and fashion.

But the past two decades have been marred by violence and fear, too. Since 2000 more than 3,670 people have been killed in jihadist attacks in the West, 2,996 of them in America on September 11th 2001 alone. Over the same period 119 people died in anti-Muslim assaults. Jihadists make up a minuscule fringe of Muslims in the West, but those terrorist attacks turned Islam into a looming threat in many Western minds. Far-right parties fed on, and fanned, such fears. Even short of violence, the relationship between Muslims and their Western host countries was often wary or worse.

America’s Muslims until fairly recently considered themselves a cut above Europe’s. They were more middle-class, more integrated and enjoyed a more harmonious relationship with their chosen country. But a combination of America’s involvement in the Middle East, the jihadist reaction to it and a concurrent surge of white nationalism has disturbed the harmony. In a survey in 2017, 42% of Muslim schoolchildren in America said they were bullied because of their faith. One in five Americans would deny Muslim citizens the right to vote. President Donald Trump encouraged such hostility during his election campaign, pledging a “total and complete shutdown of Muslims entering the United States”. Soon after coming to office he tried to impose a visa ban on six mainly Muslim countries. And last month he stirred fears of Muslim immigration again by suggesting that prayer mats had been left at the Mexican border where he wants to build a wall.




This report will explore how Muslim identity has been moulded by external and internal pressures since the mass migration to the West began in the 1950s. It will trace the impact of the laissez-faire approach Western governments initially adopted to the incoming faith and then of increasingly interventionist policies as the Muslim population grew and the relationship became more troubled. It will explore how Muslim communities have responded to policies designed to aid assimilation or improve security.

The report will also look at the generational shifts within Muslim communities as their members have adapted to life in the West. Flexibility and pluralism helped Islam flourish as a global religion for 1,400 years, but recently in the West Muslims have had to devise a theology for living as a small minority among non-Muslims, not as rulers. This is still a work in progress. The first generation of Muslim immigrants largely accepted the West as they found it and kept a low profile, unsure how long they would be staying. They brought their rituals and traditions with them and looked to their countries of origin to cater for their spiritual needs. Imams came from Turkey, north Africa and South Asia. Some Muslim countries funded the building and running of mosques.

As ties with the West became stronger, those with the incomers’ countries of origin diminished. Religion became more important than ethnicity as a marker of identity. The second generation of Muslims in the West rejected the quiet and submissive faith of their parents and looked for preachers who spoke their language and understood their concerns, often online. They wanted a religion that empowered them. At the extreme end, a few embraced violence. Jihadists are overwhelmingly either second-generation Muslims or converts.

A third generation of Muslim millennials feels more confident both of its Western identity and its Islam. It has the tools to negotiate politics and the justice system, and to interact with the establishment. Religion is increasingly becoming a matter of individual choice. The 10,000-plus mosques in the West represent the entire spectrum of Islamic belief and practice, from the Deobandis to women-led prayer. Many have left the faith altogether.

Past and recent experience has made Muslims wary of taking their future in the West for granted. But if the mainstream prevails, they are about to embark on a new phase. Three generations after their arrival, they are fashioning a theology for highly diverse societies and secular systems of government in which Islam does not hold power. In short, they are building a Western Islam.


The Battle for Thailand’s Future

China’s rise is changing Thailand, inside and out. Will the U.S. push back?

By Phillip Orchard

 

Thailand is set to hold elections at the end of March, bringing an end to nearly five years of military rule. The U.S., which slashed military aid to the country following the 2014 coup, paired its diplomatic applause at the return of democracy with an expanded presence at this week’s annual Cobra Gold military exercises in Thailand. This has revived the question about whether the U.S. – now free from its half-hearted push to promote democracy in a country where, historically, unelected pillars of power steadily served U.S. strategic interests – will move decisively to arrest the more recent drift of its oldest ally in Asia toward China.

Yet, last week’s political earthquake in Bangkok demonstrated that Thailand is still mired in a prolonged transformation at home – one that has been intertwined with profound changes in the broader regional landscape since the end of the Cold War. China’s rise has both contributed to and benefitted from this transition. Over the same period, the U.S., swinging between alarm, incoherence and (more often than not) indifference, has seen its influence wane in Thailand, clouding the role of the strategically located country in U.S.-China competition. The deeper reality is that the strategic logic that bound the U.S. and Thailand so closely together during the 20th century has changed. China needs Thailand more than the U.S. does and has positioned itself to be a long-term partner accordingly. But this doesn’t mean the U.S. is at risk of “losing” Thailand altogether.
 
The King, the Military and U.S. Strategy
The United States helped solidify Thailand’s post-World War II power structure – a delicate balance between the monarchy, the military and the political class. During the war, Japan invaded Thailand and forced Bangkok to declare war on the U.S. But the U.S. quickly normalized relations with Thailand (which had been a formal U.S. ally since 1833) in 1946. That year also saw the teenage King Bhumibol Adulyadej ascend the throne that had, following decades of suppression by military governments and the mysterious death of his young brother, become bereft of power.



 
The U.S. saw a popular Thai monarchy as a bulwark against the tide of communism sweeping the region, so in the subsequent decades, Washington funneled aid and investment through the palace – and the network of Thai elites around it – to help cement the king’s power. At a time when royals around the globe were losing influence or facing abolishment, the king deftly pulled the Thai monarchy back from the precipice and restored its public reputation as the indispensable guardian of Thai culture, virtue and stability. At the same time, the U.S.-Thai military alliance blossomed. During the Vietnam War, in particular, Thailand served as an indispensable base for U.S. operations across Indochina and into southern China. The U.S. was singularly responsible for the modernization of the Thai military, whose influence gradually expanded into politics and commerce. Combined, the military’s guns and the monarchy’s ideological hold on the country kept Thailand’s own communist insurgency from taking the country the way of war-torn neighbors like Vietnam, Cambodia and Myanmar.
After Vietnam, however, the U.S.-Thai partnership became unmoored. And with the collapse of the Soviet Union, the U.S. learned to live with the region’s ostensibly communist states, including China, and its military footprint in Southeast Asia shrank dramatically. Following 9/11, U.S. attention to Thailand, along with the rest of the region, dissipated further.

Thailand, meanwhile, became focused on tapping into the latent economic dynamism of the newly stable, increasingly liberalized region. China was no longer considered an ideological threat, and Sino-Thai business elites, oppressed in Thailand in the early 20th century, were well-positioned to bridge Thai and Chinese business circles. (The ethnic Chinese diaspora in Southeast Asia is by no means broadly supportive of the Communist Party of China or its geopolitical goals. In fact, many such families fled China to protect their wealth during waves of centralization and collectivization. But deep-rooted familial and business connections to the Mainland, particularly its prosperous southern coastal provinces, have persisted.) Many got fabulously rich, and with newfound wealth came political power. One such figure was a Chiang Mai-based telecommunications tycoon named Thaksin Shinawatra, who remains at the center of Thailand’s political turmoil today.
 
A Kingdom in Flux, an Opening for China?
One byproduct of Thailand’s boom years was that they exposed deep urban-rural divides. A watershed moment was the 1997 Asian financial crisis, which began when Thailand floated its currency, the baht. The collapse unleashed a wave of popular disillusionment with the way Bangkok-based elites had managed the economy. Frustration also mounted against the West for doing little to ease Thailand’s plight, particularly when the International Monetary Fund imposed strict rescue conditions. Thaksin capitalized on this popular sentiment, uniting the discontented rural parties and attracting support from the middle class to forge an unassailable political machine. In 2000, he was elected prime minister in a landslide, and in 2006, he became the first Thai prime minister to be re-elected.

Thaksin accelerated Thailand’s inevitable pivot to China. He transformed his country’s foreign ministry into something akin to a Thai chamber of commerce, promoted military leaders with close ties to Beijing, appointed a Cabinet that was over 50 percent ethnic Chinese, and positioned Thailand as a bridge between China and Southeast Asian states that were warier of China’s rise. Under Thaksin, bilateral trade with China exploded, and Thailand began turning to China to update its aging military arsenals.

But Thailand’s internal balance of power was thrown into disarray. As the ailing Bhumibol retreated from public life, with a son who could not fill his shoes, Thaksin was promoting loyalist generals and consolidating control over the military. He became too powerful for royalist elites, who ousted him in a 2006 military coup and two of his loyalists in judicial coups after democracy was restored in 2007. Thaksin’s supporters took to the streets in 2009 and 2010, shutting down central Bangkok for more than a month. The military responded ferociously, resulting in gun battles in the streets and much of the city center being burned. In 2012, a party loyal to Thaksin swept elections, but two years later the military took control again, ousting Thaksin’s sister (who was serving as a proxy for the self-exiled former prime minister) to get the Shinawatras out of the way ahead of the looming royal succession.

Bhumibol died in 2016, and though the past two years have been quiet, this week’s events demonstrated just how unsettled Thailand’s internal power structures remain. Last Friday, a party loyal to Thaksin announced that it would put forward Princess Ubolratana Rajakanya, the eldest daughter of the late Bhumibol, as its candidate for prime minister. This broke with nearly a century of precedent; Thai royals never jeopardize the monarchy’s public legitimacy by getting involved in the political fray. Under Bhumibol’s 70-year reign, the crown intervened in political affairs sparingly, and almost always to restore the balance between the three pillars of power. The princess’ move appeared to put the monarchy’s support squarely behind Thaksin, pitting the crown against the military-backed party led by Prime Minister Prayuth Chan-ocha – the leader of the coup that ousted Thaksin. By Saturday, new King Maha Vajiralongkorn had publicly denounced his sister’s move, and the election commission has since ruled her ineligible to run. But the episode demonstrated that Thaksin is still an undeniable force (one now boasting a quasi-seal of royal approval) and that under the new king, the role and power of the monarchy is very much in doubt. In short, the internal battle for Thailand’s future isn’t over yet.
 
Is Thailand Really in Play?
Neither is the external battle for Thailand’s loyalties. In reality, though, it’s a battle that only one side is waging seriously, illustrated by the different responses the United States and China have had to Thailand’s two decades of internal upheaval. China has routinely made it clear that it will support whoever holds power in Thailand – and it has made good on its promise. The current junta, for example, has inked a number of high-profile weapons and Belt and Road Initiative-related deals with Beijing. And since the first coup, China has moved from Thailand’s third-largest trade partner to its first. It helps that, unlike other Southeast Asian states, Thailand doesn’t have any major territorial disputes with China (and the attendant political complications). As such, for Thai power brokers that want above all to manage internal strife without external interference, Beijing is seen largely as a benign neighbor.

Given Thailand’s strategic location, this may appear to be a problem for U.S. regional goals. Though not a South China Sea claimant, Thailand is near enough to the waters for its territory to support a range of operational needs in the area. Its proximity to the Strait of Malacca, again, gives it a role to play in any potential fight over chokepoints. Despite this, the U.S. reaction to Thailand’s political developments has verged on indifference – especially compared to its response to the political turmoil of allies like Egypt. After both military coups, the U.S. reflexively called for a return to democracy (which Thai royalist elites hear as a call for a return to Thaksin), cut military aid and scaled back joint military exercises. But lower-level military, intelligence and law enforcement cooperation continued largely unabated.

The United States’ apparent lack of concern that it might “lose” Thailand to China stems from two main factors. For one, the U.S. is in a position of considerable strength. It has footholds across the first island chain and Strait of Malacca, plus ample power projection assets capable of closing chokepoints from far-flung locations. China has neither the navy nor the regional footholds required to push back. China does not have the money to cultivate deep dependencies in Thailand or to turn BRI links in Thailand into a game-changing military logistics network. It would take decades of a thriving economy and military buildup to change this. China does not yet pose enough of a threat to compel the U.S., already overstretched globally, to start pouring resources into a marginally important regional player like Thailand.

Second, the U.S. knows that Thailand isn’t interested in playing a zero-sum game. Thailand is proudly one of just a few countries that was never colonized, and it has a long history of deftly playing outside powers off each other to maintain its freedom to handle internal affairs, and nothing about the current environment is compelling Bangkok to act any differently this time around. China doesn’t pose enough of a threat for Thailand to spurn Chinese money to please the U.S., and the U.S. will not antagonize Thailand enough to drive it into China’s arms. Even Thaksin’s outreach to China was motivated less by preference for China than by a desire to restore some balance in Thailand’s relationships. Meanwhile, there are many other countries with deep economic and military ties with Thailand, particularly Japan, who have played an outsize role in the country’s economic development since the 1980s. Bangkok has used these relationships to force Beijing to negotiate BRI deals on terms favorable to Thailand, in turn forcing China to consider partnering with its archival, Japan, on projects in the kingdom.
Still, the U.S. sees aspects of its Southeast Asia strategy at stake. Washington sees Thailand as a valuable partner on lower priority regional issues like anti-terrorism. The U.S. would prefer that Thailand’s military buildup proceed in a way that won’t present interoperability problems in the midst of a potential conflict in the distant future. And it’s concerned that Thailand will ignore its warnings about Chinese tech firm Huawei, potentially hamstringing bilateral military cooperation. But none of these will fundamentally alter Thailand’s strategic orientation. The big picture is this: China needs staunch allies, and Thailand isn’t going to become one. The U.S. has little reason to move beyond strategic indifference, giving Thailand room to navigate its changing internal and external environment as it sees fit.

Keytruda shows the high price of curing cancer

Rapid medical innovation is prompting drug company mergers and making treatment costly

John Gapper




A decade ago, the US pharmaceuticals company Merck paid $41bn to acquire Schering-Plough, consolidating and cutting thousands of jobs amid an industry crisis of innovation and confidence. The companies touted their cholesterol and HIV treatments, briefly noting a “promising pipeline” in oncology.

Hidden in that pipeline was Keytruda, an antibody that enables the body’s immune system to attack cancers. It was an accidental acquisition, initially ignored by Merck and almost discarded but now its main blockbuster, with sales expected by JPMorgan to hit $16bn a year by the mid-2020s. It extends patients’ lives longer than chemotherapy alone, albeit expensively.

Rapid innovation in oncology drugs such as Keytruda and genetic medicine has prompted another merger wave. Bristol-Myers Squibb agreed to acquire Celgene for $90bn in January, GlaxoSmithKline agreed to buy the US biotech Tesaro for $5.1bn in December, and Eli Lilly said last month it was acquiring Loxo Oncology for $8bn.

It is an exciting time for an industry that for many years struggled to make research and development produce results. It is also a welcome shift away from the mass marketing of primary care pills towards medicines for the gravely ill. This week, Keytruda was found to improve the health of patients with kidney cancer and with glioblastoma, an aggressive brain tumour.

But it begs questions about the future of pharma companies. One is whether they are more innovative than before, despite this activity. The second is how long the buzz about cutting-edge oncology can convince insurers and healthcare systems to pay bills that are already high and may rise higher.

Keytruda illustrates how the industry now works — it was discovered by a Dutch pharma company that Schering-Plough bought in 2007, rather than in one of either group’s research laboratories. Merck’s role, when it finally realised what it was sitting on (thanks to seeing Bristol-Myers nurturing a rival drug called Opdivo) was to put Keytruda through trials and develop it.

Keytruda and Opdivo are enormously important drugs in the developing field of cancer immunotherapy. They are “checkpoint inhibitors” that prevent the body blocking an immune response to cancer cells. Since Keytruda’s first approval in the US in 2014, it has been used to treat an expanding range of cancers, sometimes alone but often combined with other drugs.

This success has pushed other pharma companies to acquire biotechs, or to form partnerships to develop similar drugs, and others that can be used with them. A lot of drug discovery is done in biotech start-ups — the consultancy McKinsey estimates that 69 per cent of the portfolios of high-growth pharma companies came from acquisitions or licensing in 2015.

That avoids the risk of working for years on a drug that fails, but it creates other challenges. A pharma group that in effect outsources early stage research can suffer from a brain drain — it may lack scientists who can assess properly which deals to strike with biotechs. It can also struggle to make the most of the drugs it acquires from others by widening their applications.

This way of running the industry inflates prices. Biotech drug discovery is a risky endeavour, so investors (and research scientists who leave safe jobs) want to be rewarded richly for success. The wave of oncology innovations encourages the fear of missing out among drugmakers — recent deals show how high a price they will pay to secure their future.

In the end, the patient pays. In November, Keytruda was approved for use in the UK’s National Health Service. The list price for each three-weekly infusion is £5,260, and the average cost for a course of treatment is £84,000, although the NHS gets a discount. The official price for Kymriah, a personalised leukaemia drug from Novartis, is £282,000 per treatment.

Innovative drugs are not only expensive to develop but difficult to spurn. An oncologist may have one chance to save a patient’s life and will pick the medicine with the best shot. That curbs the pressure to cut prices, in contrast with pills with generic competition or, for example, a hepatitis C drug with a rival that might also be effective.

In some ways, the market is working — such is the ferment of innovation stimulated by these rewards that rivals for drugs such as Keytruda are popping up faster than before. If cancer were less complex, one could expect prices to start falling; US President Donald Trump’s campaign against “the injustice of high drug prices” paid by Medicare would produce results.

But we are decades away from anything like a “cure for cancer” and one medicine is rarely enough — many pharma groups are working on drugs for use in combination with Keytruda or Opdivo. Not only will this make splitting the rewards difficult but the overall price will rise rather than fall. It is hard to deny any patient an extra year of life but the bill will be fearsome.

For now, the industry is enjoying a burst of profitability and dealmaking, with high prices justified by life-saving innovation. It knows one thing from history: the halo will fade.

How to Depress Chinese Consumers Without Really Trying

Hint: By stealing yields on bank deposits

By Nathaniel Taplin



Imagine the following: The labor market is suffering. You’re paying off an expensive mortgage while losing money on your bank account. Would you want to fork out for a pricey iPhone?

That’s the situation many urban Chinese face today. China’s two-year crackdown on high-yielding “shadow banking” investment products has curtailed some financial risks. But it has also deprived indebted households—which earn negative real returns on their standard bank deposits given inflation has been running higher than interest rates—of an important income source. Fixing this is one key to stabilizing consumer spending and to the prospects of China-exposed companies such as Apple .

The root problem is the privileged position of China’s biggest state-owned banks such as Industrial & Commercial Bank of China IDCBY -0.13%▲ and Bank of China. They are able to suck in retail deposits, paying customers low state-set interest rates. In turn, they lend to smaller banks, which do much of the actual lending to the real economy but are prevented from competing for household deposits by freely raising rates. In essence, the big banks are earning a juicy spread as intermediaries between depositors and smaller lenders, stealing yield from the former and raising costs for the latter.

This rent-seeking activity by China’s banking behemoths is a big drag on Chinese households, whose biggest financial asset—totaling 71.6 trillion yuan ($10.6 trillion)—is bank deposits. If weighted average retail deposit rates were to rise by 1 percentage point, that would put an extra 716 billion yuan in households’ pockets, more than twice the 300 billion yuan Merrill Lynch estimates that China’s recent tax cut puts in households’ pockets.

Chinese spending on products such as the iPhone has been hurt by shrinking pockets.
Chinese spending on products such as the iPhone has been hurt by shrinking pockets. Photo: Lintao Zhang/Getty Images


The situation for households has been made harder by the shadow-banking crackdown. That has crushed issuance of higher-yielding savings products, which used to give savers a way to augment low deposit returns. Outstanding wealth-management assets, typically paying an annualized interest rate of about 5% against 2% for bank deposits, had dropped to 24.8 trillion yuan by the third quarter of 2018, according to Moody’s ,after nearly tripling to 30 trillion yuan from 2014 to 2016.

All this hits households in other ways, too. Why, for instance, should big banks bother lending to risky private companies—the main drivers of employment—when they can pocket easy money just by lending to smaller banks or higher rated state-owned enterprises?

Chinese regulators know they have a problem. There have been some recent, tentative signs of progress on reform, including marginally higher rates on big certificates of deposit and a slightly softer stance on wealth-management products.

These, however, are baby steps. Chinese consumption isn’t collapsing, but it’s definitely under pressure. Forcing households to prop up the sclerotic state banking system, on top of the weak labor market, isn’t helping.