Flying stop: Boeing

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Hello and welcome to the intelligence on Economist Radio. I'm your host Jason Palmer. Every weekday we provide a fresh perspective on the events shaping your world. In the Soviet Union, television was the public's go to source of news. So it was the best place for the state to propagate its propaganda. In the Internet age, things are rather different. Russia's president Vladimir Putin, is trying to regain control of the public's attention, but he may be too late. And in Bangladesh, there's been a sharp rise in the number of divorces. That's partly because of changes to laws and to the labor force. But the country's women, it seems, are modernizing faster than its men. First up, though, After two deadly airliner crashes in the space of just months, Boeing's reputation and revenues are at risk. 157 people died when an Ethiopian Airlines flight crashed on Sunday, six minutes after takeoff. The tragedy came five months after the crash of a Lion Air flight in the Java Sea under apparently similar circumstances involving the same model of aircraft. Boeing's 737 Max 8, America's airline regulator, announced yesterday that it will mandate design changes to the aircraft by April. And some countries have chosen to ground all of their 737 Max airliners, first among them China. The resulting selloff caused shares in the American firm to Plummet.

Boeing is a huge part of China's aviation industry.

Simon Rabinovich is our Shanghai bureau chief.

It's the world's fastest growing airplane market. They've got thousands of commercial planes in operation. Boeing has a roughly even split with Airbus. More than a thousand Boeings flying on any given day in China. Nearly 100 of those are the 737 Max. And all of those are grounded. There's been two crashes involving this plane. China is the biggest customer market right now for the 737 Maxs. So until it's absolutely clear what's going on, they don't want to be the host of the of another potential disaster. And China is a country that has fought long and hard to improve its air safety record. In the 1990s, it was one of the world's most most dangerous aviation markets. In the last 20 years, they've made huge strides to improve it to the point that per hour flight, it's now one of the safest markets in the world. So I think until it's absolutely clear what's going on with the 737 Max, they're going to be acting out of an abundance of caution.

So several countries have now made the move to temporarily ban the use of the Max 8s, including Indonesia and Singapore. Why do you think China was the first?

China has been the world's biggest consumer of the 737 Max. Of roughly 500 in commercial service right now, 100 are being flown by Chinese airlines. So I think it stands to reason that given that they've been the most eager consumer of the 737 Max, given that on any given day you'll have more 737 Maxs being flown over China than over any other country, they ought to be the most cautious right now until whatever is the issue is fully cleared up.

The Boeing 737 had its first flight in the late 1960s.

Newest arrival in the Boeing family of airliners, the 737 attracts a crowd. The stubby twin jet job is designed for short hops up to 1300 miles. And it's more economical than its big sisters. Its engines, with £14,000 of thrust, can move the ship to a Cruising speed of 580 miles an hour. Carrying 101 passengers. A new queen of the skies.

The Max is the fourth incarnation of the 737 and had its first commercial flight in 2017. Boeing told buyers it represented a step change in comfort and efficiency. The Max uses 14% less fuel than current 737s. That's a lot less fuel, A lot less. How'd we do that? Ingenuity. Ingenuity. Here, here and here. Like our incredible new winglet, it's now even more advanced. It uses natural laminar. The Max's only serious rival among short haul models is the A320 made by its European rival, Airbus.

Boeing was bounced into building the Max.

Charles Reade writes about aviation for the Economist.

It is a reaction to Airbus A320neo. The A320neo is the old A320 with new, improved, more fuel efficient engines on. And Boeing originally wanted to build a new entire new short haul plane. But this takes a long, long time to do. And so the Boeing 737 Max program was a stopgap program designed to update the old 737 with new engines, better electronics in the plane, updated controls so that they didn't lose all their market to Airbus.

As regards the Lion Air crash, what do we know about that so far?

The investigation about the Lion Air crash is not fully complete yet. Yet it is already clear that the plane crash in Ethiopia and the Lion Air crash share certain similar characteristics. They both involved the Boeing 737 Max 8 aircraft. They were both crashes soon after takeoff. They both involved losing altitude very quickly. And both in terms of losing altitude quickly, then regaining altitude quickly and then crashing again was again very similar. And it is because these two crashes share such similar characteristics that the Chinese aviation regulators have decided to ground all their Boeing 737 Max 8s currently in operation in that country.

Right. And more countries all the time. What does this mean for Boeing, though?

Well, investors in Boeing are very worried about this. On Monday, the share price of Boeing fell by about a tenth. It ended a very bull run for that stock. And the reason why investors are so worried is that the Boeing 737 Max is so important to the company's revenues and profits. Airlines have almost 5,000 of these jets on order. Some analysts estimate that Boeing makes up to three quarters of its revenues and profits from commercial jets. If these planes have to be grounded for a substantial period of time, we're talking months and years here. That will cost BOE a lot of revenue and a lot of profit. And already it's having a knock on impact on Boeing's other activities and programs. They were planning to launch their new long haul jet, the Boeing 707X tomorrow, but that now has been cancelled because of the fallout from the accident in Ethiopia.

Charles, thanks very much.

Thank You.

When the Soviet people turned on their televisions on the morning of August 19, 1991, they instantly knew something was wrong. State TV was showing Swan Lake and playing classical music on a loop. The KGB had detained the president Mikhail Gorbachev, in an attempted coup. To show they were in control, they took over television broadcasts. The coup stumbled, but TV remained a crucial political tool until recently.

The Kremlin has spent a lot of energy and years building up this monopoly over television. And just as it completed that job, it found out that television itself is losing monopoly over people's minds.

Arkady Ostrovsky is the Economist's Russia editor.

Trust is dropping, trust is falling, and people are increasingly turning away from their television screens. And at the same time, the use of the Internet is growing. I don't think there is a causation there, but there is definitely a correlation.

This transfer of attention has not gone unnoticed by the Kremlin. In an attempt to increase control over the Internet, the Russian parliament has proposed a new law that aims to separate Russia's web from the rest of the world's and to criminalize anti government online messages. Last weekend, demonstrators gathered in the streets of several Russian cities to protest. The government's proposal is just the latest salvo in a century long effort to control news sources and means of communication.

Television in the Soviet Union and then in Russia was extraordinarily important way of the government effectively communicating to the people. It was the oracle. Television was setting the agenda. And as the Soviet Union crumbled, all the biggest battles, both in Russia and in the former republics, in Lithuania, in Latvia, they were all unfolding around the printing houses and particularly around television centers. So the media literally was the message.

And when Vladimir Putin came to power, that influence of television didn't escape him at all. He seized control of television stations early on, right?

In a way you could say Vladimir Putin was the product of television. He was not a politician anybody knew of. He didn't come through the ranks of the party, he didn't campaign. He was a figure nobody ever heard of. At the beginning of Putin's prime ministership, he was recognized, not supported, recognized as a face by something like 3% of Russian population. He was made into president by television. Within six months, television eliminated his rivals. Television built him up. He was the television star. He was the first president in the history of the country to be made by television. It was something he relied on more than he relied on coercion actually, and violence. And just in the same way as the Soviet system was supported by two Columns by two main elements. One was violence and, and repressions, and the other was propaganda and lies. It is the same now.

And so when did you notice that the sort of concentration of power in television was sort of shifting away?

I've noticed this when I started looking at the figures of the video bloggers. Then I noticed that the bloggers, both, you know, those who interview celebrities, those who put out sort of satirical comedy shows, spoofs, et cetera, are getting. The figures were staggering. They were getting audiences of 10, 15 million people in a country of 148 million. This is four times, just to put it in perspective, three, four times the audience of the main newscasts of the main television channels.

And so the Kremlin must not like this shift very much at all.

The Kremlin doesn't like the shift at all and he's worried about it and is trying to do two things at the same time. They're trying to censor the Internet and build firewall Chinese style. And at the same time they're trying desperately to think of ways to replicate their monopoly that they have on television. So one of the people I spoke to about this is Grigory Asmolov, who's a lecturer at King's College, London.

Russian Internet has a very unique story because it was born as a very free space in the context of the collapse of Soviet Union. It was a space for independent culture, it was a space for independent media. It was a space for self mobilization of people that were following the government and tried to make it accountable. And that makes the Internet to a major point of concern from the point of Russian authorities, because it's much more challenging to control the content on the Internet in comparison to controlling the content on tv. It's not enough to control the content based on regulations. So we see a lot of different type of new legislation against fake news, a new legislation against saying bad things about government online. So there are very various types of legislations that restrict Internet freedom. But again, it's not enough. The Kremlin also makes an effort to create and develop content in order to dominate the online space from the point of view of creation and production and distribution of content.

And what about the Russian people? What do they make of these sort of attempts to sort of crimp the Internet?

Well, there is a lot of anger. The first thing the Kremlin tried to do is to persecute the users of the social media. So they started actually handing out fines and even prison sentences for some of the stuff that people were posting on their social Pages that created a great sense of resentment and alienation, particularly amongst young people. And that anger was spreading through the same social media which the Kremlin was trying to control. When they tried to block a messenger system called Telegram for failing to disclose encrypted information and data to the security services. And they tried to do that, first of all, they inadvertently crashed a lot of the sites which were using IP addresses that were run by Amazon and Google and that affected hotels, booking systems, et cetera. People came out on the streets. And we also saw, of course, demonstration this weekend when people joined against censorship of the Internet.

And in terms of what you would recommend or what you think would work in order to keep Russia's Internet free.

Ultimately it's all a domestic fight. And the Russian people themselves will fight to protect the Internet because they rely on it so much. Now, the big global tech companies can do a lot to help as well to protect the freedom of the Internet. Google has servers in Russia. Google is a big operator and a big provider, the Internet. Facebook just made an announcement, a very important one, that it will not be storing data in the countries that abuse human rights. Russia relies on Google and YouTube quite a lot. And so for now, at least, the balance of power is not all on the Kremlin side. And there is quite a lot that Google and Facebook can and should be doing to stand up. We should also recognize, however, that the Internet, and for now, the Internet remains largely free, offers a lot of prospects and opportunities for the west to engage with Russian people, the ordinary Russian people, particularly the young ones. And the Internet at the moment still offers that opportunity, and that opportunity should be seized.

Arkady, thanks very much for your time.

Thank you.

In Bangladesh, it hasn't always been easy for women to leave their partners to file for divorce. A woman needed her husband's permission, a power he would have had to grant her when they got married. Without this, a woman would be bound to her husband for life unless he opted for divorce. And even if women could legally separate, social stigma and financial realities often kept them in unhappy marriages. But now that's changing.

I met Nazrin in a cafe in Dhaka.

Susannah Savage writes about Bangladesh for the Economist.

Nazrin's in her early 30s and got married when she was very young.

I begged, I said, could I at least wait for two more years? I want to finish my life.

She got married when, I think she was just about 21. I was married under pressure, and at that point, she hadn't started working, but it was when she got a job working in an embassy, that she noticed that her marriage wasn't normal.

When I was working in my desk, you called me at least 10 times a day asking me whether I'm in my boss's room, what am I doing?

She realized that other people's husband didn't check in on them all the time to check that they weren't talking to their male colleagues too much.

None of their husbands would bother them except my one where I have to take a photo and show him that I am where I am.

I think it's such a stigma in Bangladesh to get divorced that even when she sort of started to realize that she wasn't happy and took a while for her to mull over that and to make the decision to leave.

It takes a lot of courage. And then I realized, what am I doing with my daughter? If I can't stand up for myself, how. How am I going to stand up for my daughter?

But eventually, yes, she decided she wanted a divorce and she told her husband and she moved out and moved back in with her parents.

Susannah, how unusual is Nazreen's story in Bangladesh?

This story is very common in Bangladesh these days, and increasingly more so. I've spoken to a number of women in a similar situation. The number of applications for divorce has risen 34% in the past seven years. These divorces are particularly being instigated by women, and in cities are more exposed to the outside world and more able to access a life outside of their home and to access jobs.

Well, I mean, what's changed in society, though, that has sort of made that more possible? It's not just a sort of urban, rural divide, is it?

No, no, I don't think so. I mean, I think one of the biggest things is women going to work. A few years ago in Bangladesh, in the 70s, women made up just 4% of the labor force, and in 2016, that was around 36%, and it's likely even higher now. And so I think that's one of the biggest changes that's taken place. Women now have financial independence, whereas before leaving your husband wasn't a financial possibility for most people, they were entirely dependent. I think other changes that have taken place are before, women couldn't initiate divorce, or they could, but it required them being given the right to do that when they first got married. And now that's changed. And women are able to initiate divorce if they give a reason. Men don't have to give a reason. And then the more people who are divorcing, the more slowly by slow, slowly Very slowly, attitudes are starting to change, particularly in the middle class.

And why particularly in the middle class?

I think we're sort of amongst working class Bangladeshis. Divorce hasn't been so uncommon. And that's partly because marriages tend not to be official. And so it's very easy for men to leave and to move on to another wife in averta commas. And so that's been happening for a while. And in the upper classes, there's certain freedoms that wealth buys. Women in the middle class have sort of suffered most from the stigma of divorce. And so that's why it's particularly in that section of society that the change is most pronounced.

And so how much of that stigma is still around?

It's definitely still there. I mean, when I was talking to Nazrin, she was describing how her parents didn't know what to do with a divorced daughter and they were a bit embarrassed of her and they were quite sort of in a rush to marry her off again to someone else to get over the stigma of her being divorced. I think part of that is generational. I think that for younger generations, it's becoming less and less stigmatised. But for sort of people's parents, there's still a huge issue to that.

And so the stigma that remains is a generational question. Those who have been exposed to more of the world or not, or to social media or not.

It's partly that it's also religious to an extent. People still see it as sort of shameful in terms of religion to get divorced for men and women, but particularly women. I mean, there's been a rise in recent years in religious groups. For example, Hafizati Islam, which means protectors of Islam. They've sort of grown in prominence recently, and they. They really call for a segregation of sexes and other issues like this. And so I think that their influence has played a role in sort of maintaining a certain stigma in terms of religion.

I mean, aside from the sort of religious hardliner sort of part of this story, it does sound like the kinds of shifts that you get as a society modernizes and liberalizes.

I think that's definitely true. This sort of phenomenon has been seen in other places and is happening elsewhere. I think that it's interesting that men aren't really keeping up. I'm not sure that men's attitudes are liberalizing at the same rate as women's. And I think there's a real disconnect between what Bangladeshi men or some Bangladeshi men expect from marriage and from their wives and what their wives have come to expect.

Susanna, thanks very much for joining us.

Thank you, Jason.

That's all for this episode of the Intelligence. You can subscribe to the economist@exterator.com comradioffer 12 issues for $12 or 12 pounds. See you back here tomorrow.