Striking facts   (06.09.2010 14:18)

Working days lost due to labour disputes

WORKERS on London's underground rail network begin a strike on Monday September 6th, while across the channel French workers are also on strike in protest at attempts by the government to change the retirement age. Both countries come fairly high on the list of countries that lose working days to labour disputes. South Africa, where Cosatu, a federation of unions with some 2m members, has been on strike since August 18th, also scores highly on this measure. But all of these places are left in they shade by the Canadians, who lost 2.2m working days to strikes last year. Greece, which is also fond of striking, does not appear on this chart as its numbers are not comparable.

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Please delete   (03.09.2010 09:51)

The internet has become too important for governments to ignore

GOVERNMENTS are increasingly finding ways to enforce their laws in the digital realm. The most prominent is China’s “great firewall”. But China is by no means the only country erecting borders in cyberspace. The OpenNet Initiative, an advocacy group, lists more than a dozen countries that block internet content for political, social and security reasons. They do not need especially clever technology: governments go increasingly after dominant online firms because they are easy to get hold of. In April Google published the numbers of requests it had received from official agencies to remove content or provide information about users. For more on how governments and companies are erecting borders in cyberspace see article.

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Higher education   (02.09.2010 14:14)

Galloping inflation in American college fees

FOR decades, college fees have risen faster than Americans’ ability to pay them. Median household income has grown by a factor of 6.5 in the past 40 years, but the cost of attending a state college has increased by a factor of 15 for in-state students and 24 for out-of-state students. The cost of attending a private college has increased by a factor of more than 13 (a year in the Ivy League will set you back $38,000, excluding bed and board). Academic inflation makes most other kinds look modest by comparison. Students may not be getting a good deal in return (see story). ...

Naval gazing   (01.09.2010 13:31)

China now has more warships than America, according to the IISS

THE International Institute for Strategic Studies (better known as the IISS), reckons China now has more warships than America, which long possessed the biggest fleet. As it can be hard to distinguish a warship from other boats, the IISS uses its own definition of what counts and what does not. This striking trend is yet another manifestation of the rise of China. But it also reflect the cost of warships and other weapons built by America (see article). Philip Pugh, author of “The Cost of Seapower”, a 1986 study of shipbuilding costs since the end of the Napoleonic wars, argues that the industrial revolution made the problem more acute: the rapid pace of technological change set off a race to build bigger, more powerful, more heavily armed and better-protected battleships. At some point, as unit prices rise, one of two things must happen: countries must either scale back their ambition, or seek game-changing technology, as they did when the battleship gave way to the submarine and aircraft-carrier.

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Rivals   (01.09.2010 13:20)

The best-selling political memoirs in Britain

TONY BLAIR, Britain's former prime minister, published his memoirs on Wednesday September 1st. The few people who have already read them cover to cover report that, in addition to the familiar stuff about how awful his relationship with Gordon Brown was, Mr Blair admits to being manipulative and to having a developed sense of his own destiny. The book is likely to sell well, though it seems that British book buyers are rather more interested in American politicians than in their own. Three of the four bestselling political memoirs in Britain (since barcodes made such things easier to count) are by Americans. The Brit who separates the Clintons near the top, comedian John O'Farrell, was never really a politician: he stood for election once (in Maidenhead) and then made some rather archaic puns about the experience.

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Big mistake   (31.08.2010 14:34)

How America's opinion of the Iraq war has changed

OVER seven years after the invasion of Iraq in March 2003, America's direct military involvement is now coming to an end. President Barack Obama will set out his new policy in a speech from the Oval Office on Monday August 31st. American public opinion on the war has changed enormously during that time. When George Bush prematurely declared an end to major combat operations in May 2003 most Americans were behind the war, with only a quarter saying it was a mistake according to Gallup polling data. But the public's mood turned when allegations of torture by US soldiers came to light in early 2004. The bloody terror campaign by Sunni militia groups, which began in earnest in 2006 and killed Iraqis by the thousands and American troops by the hundreds, also had a profound effect on opinion.

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The great crawl of China   (26.08.2010 13:10)

China's traffic jam was inevitable

CHINA tends to do everything a bit bigger than the rest of the world, including traffic jams. One snarl up this month along a highway leading into Beijing was at one point over 100km long and left traffic gridlocked for eleven days until it mysteriously vanished on Thursday August 26th. Roadworks and booming demand for coal and other goods sent thousands of lorries heading for China's capital. Beijing is set to spend 80 billion yuan ($11.8 billion) on transport infrastructure in 2010—but it may not be enough. In recent years rising vehicle ownership has outpaced the growth of China's express highway system by a distance. China's new motoring class may have to get used to spending many more hours behind the wheel than they might otherwise intend.

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No visa required   (25.08.2010 13:02)

Who has most freedom to travel?

THE ability to visit a foreign country without the cost and hassle of obtaining a visa is a welcome bonus for any traveller. It is also a barometer of a country's international alliances and relations. A report released on August 25th by Henley & Partners, a consultancy, shows that Britons have the fewest visa restrictions of the 190-odd countries (and territories) for which data are available. British citizens can enjoy a three-day stay for business or pleasure to 166 destinations without needing a visa. Generally, citizens of rich countries and trade-based economies have more freedom to travel than those of countries suffering from war or repression. Compare, for instance, the restrictions on South Korea with North Korea and Hong Kong with those on China.

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A mysterious disappearance   (23.08.2010 12:49)

Where has all the plastic gone?

THE amount of plastic thrown away by Americans increased fourfold between 1980 and 2008. It is a reasonable assumption that as more plastic is produced and discarded, this will affect oceanic pollution. But a study of the north Atlantic and the Caribbean, just published in Science, suggests things are not getting worse. Between 1986 and 2008 there was no increase in the concentration of plastic in the areas looked at despite a steady rise in the amount discarded. Kara Law and her colleagues at the Sea Education Association in Woods Hole, Massachusetts have no explanation for this lack of accumulation. A programme by the American plastics industry that resulted in a decrease in the number of pellets in the water is still insufficient to explain the data. Nor does the missing plastic seem to have sunk; trawls at depth show no sign of it. The Sargasso Sea of legend, and its modern equivalent, the Bermuda Triangle, are supposed to be places where things disappear without trace. Dr Law seems to have come up with a real example.

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Going for broke   (18.08.2010 14:51)

Bankruptcies rise in America

BANKRUPTCY filings rose 20% in the year to June 30th compared with the previous 12-month period, according to statistics released on August 17th by the Administrative Office of the US Courts. This takes quarterly filings to their highest point since tougher bankruptcy laws were introduced at the end of 2005. That change brought a spike of bankruptcies, as companies and individuals rushed to declare themselves broke under the more lenient old regime. The data suggest that an older trend is reasserting itself. This is could be more bad news for America—or it could just mean that creative destruction is alive and well.

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All pints east   (17.08.2010 15:36)

Asia overtakes Europe, in beer terms

CHINA;S remarkable growth is as apparent in beer consumption as it is in more formal economic indicators. In the space of a couple of decades the country has gone from barely touching a drop to become the world;s biggest beer market, a considerable distance ahead of America. And beer drinking in China is growing fast, by nearly 10% a year according to Credit Suisse;s World Map of Beer. This might seem like good news for the four big firms that dominate global brewing. Between them ABI, SABMiller, Carlsberg and Heineken have nearly half the world market. But unlike America and other hugely profitable mature markets where beer drinking has levelled off or is in decline, China;s drinkers provide slender profits. Still it remains a market with huge potential, though foreign brewers must now be rather tired of hearing that.

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Hello America   (16.08.2010 15:26)

China's economy overtakes Japan's in real terms

CHINA has become the world's second biggest economy according to data released on Monday August 16th. Japan's economy fell behind China's at market exchange rates in the second quarter (it has been number three in PPP terms for some time). These numbers are not strictly comparable: Japan's data have been seasonally adjusted while those for China have not. Quibbles aside, Japan will surely be eclipsed soon, if it has not been already. Data compiled by Angus Maddison, an economist who died earlier this year, suggest that China and India were the biggest economies in the world for almost all of the past 2000 years. Why they fell so far behind may be more of a mystery than why they are currently flourishing.

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Forgotten men   (12.08.2010 14:02)

The jobless recovery, long prophesied, is here

FEARS that the recovery of America's economy after the financial crisis would fail to spur an increase in employment are being realised. In July, 52,000 fewer people were employed on non-farm payrolls than in July 2009, the month in which it is estimated the American economy climbed out of recession. Comparing the latest recession with previous ones is unflattering. The American economy has seen downturns this severe and recoveries this jobless, but never one on top of the other.

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A lengthening shadow   (11.08.2010 14:06)

Shadow economies have grown since the financial crisis began

A NEW estimate of the size of shadow economies around the world sheds light on a worrying trend. Friedrich Schneider, of Linz University in Austria, reckons that, for the first time in a decade, transactions taking place outside the taxable and observable realm of the official economy captured by GDP numbers are increasing. Shadow economy does not mean ill-gotten gains here, but legal economic activity that is not taxed. Mr Schneider attributes this reversal to the financial crisis, which seems to be pushing more people in OECD and EU countries to avoid the extra burden of taxation by resorting to informal transactions. The shadow economy, in other words, can act as a cushion when times are tough.

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China clicks   (10.08.2010 14:31)

The world's biggest broadband providers

THE ten largest broadband service providers in the world gained over 23m subscribers in the year to the end of March. Together they have 191m subscribers, or almost 40% of the world’s 492m broadband customers, according to TeleGeography, a research firm. The lion's share is taken by China Telecom and China Unicom, which together account for a fifth of all global broadband subcribers. Both companies gained around 9m more subscribers over the past year, equivalent to the entire broadband subscriber base of Verizon.

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Europe's irreligious   (09.08.2010 11:40)

In which European countries are people least likely to attend religious services?

THE proportion of people who regularly attend religious services has declined steadily throughout Europe in recent years. But habits vary widely across countries. According to the latest European Social Survey conducted in 2008 and 2009, over 60% of Czechs say they never attend religious services, with the exception of “special occasions” such as marriages and christenings. France, Britain and Belgium are also secular nations, with over half of respondents never going to services. The most regular attenders among the 28 countries polled are in Cyprus and Greece, where only 2.4% and 4.9% respectively say they do not go to church.

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Healthy profits, few jobs   (06.08.2010 13:07)

How long can corporate America’s profit rebound continue?

THE quarterly results season that is drawing to a close has revealed that corporate profits are back within a whisker of the all-time highs achieved before the downturn in late 2008. American profits are already back to 11% of GDP. Corporate America is reaping the rewards from cutting costs, especially in capital investment and labour, through an unpleasant mix of redundancies, reduced hours and lower pay. The great squeeze cannot go on forever, of course, but it shows no sign of slackening. Figures released on Friday August 6th show the unemployment rate remained steady at 9.5% in July, but non-farm payroll employment fell by 131,000, some 65,000 more than expected. The great decoupling of profits from jobs could last for a long time.

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A model's best friend   (05.08.2010 12:36)

Who produces most diamonds?

AMID much media interest, Naomi Campbell, a model, gave evidence on Thursday August 5th at the special court for Sierra Leone in The Hague. Charles Taylor, the former dictator of Liberia, who is on trial for war crimes in neighbouring Sierra Leone, is accused of giving Ms Campbell a “blood diamond” in 1997. Ms Campbell admitted receiving a gift of “dirty looking stones”. Since 2000, the governments of over 75 countries have signed up to the Kimberley Process, which certifies that diamonds produced for foreign markets have not helped to fund violence. The Process has its critics, who point out that diamonds from the huge Marange mine in Zimbabwe have just been cleared for sale, despite much evidence of government-sponsored violence there.

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The breakfast index   (04.08.2010 15:34)

The cost of breakfast rises

SEVERE drought and wildfires in Russia, the world’s fourth largest wheat producer, have destroyed a fifth of the country’s crop and sent prices soaring. Since the end of June wheat prices have more than doubled. On Wednesday August 4th, the UN’s Food and Agriculture Organization cut its forecast for 2010 global wheat production by 5m tonnes, to 651m tonnes. Kazakhstan and Ukraine, both big wheat producers, have also been hit with dry weather. In Canada the problem is the reverse: unusually wet weather has prevented seeding and destroyed crops. But wheat is not alone. The price of orange juice has also risen recently, probably thanks to bets placed on the likelihood of tropical storms. Coffee prices, which hit a 13-year high, are a result of poor harvests. Taken together, the raw ingredients for breakfast in much of the rich world have increased in price by 25% since the beginning of June.

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The coming days: The week ahead   (26.07.2010 03:49)

America's Senate ponders whether the Lockerbie bomber was set free on grounds of compassion or commerce

• AMERICA'S Senate is set to open hearings on July 29th addressing the possibility that lobbying by BP played a pivotal role in the decision made by British and Scottish governments last year to release Abdelbaset al-Megrahi, the only man to have been convicted for the 1988 bombing of Pan Am flight 103 over the town of Lockerbie. The officials who were most involved in the decision to grant Mr al-Megrahi his early return to Libya, where he was treated to a hero’s homecoming, flatly deny that Britain had cut a deal to help British firms secure oil deals with Muammar Qaddafi. They insist that he was let home on compassionate grounds, after being diagnosed with cancer.

• A VERDICT in the trial of Kaing Guek Eav, or “Comrade Duch”, to be handed down on Monday the 26th, is likely to represent the first conviction on war crimes handed down to any member of the Khmers Rouges, who ruled Cambodia with unprecedented brutality from 1975-79. Duch was not among the regime’s highest rank of political cadres, but for his role in presiding over S-21, or Tuol...

The coming days: The week ahead   (04.07.2010 18:38)

Israel's prime minister, Binyamin Netanyahu, visits Barack Obama in Washington

• ISRAEL'S prime minister, Binyamin Netanyahu, is set to travel to Washington for a meeting with Barack Obama on Tuesday July 6th. Mr Netanyahu’s previous date with America’s president at the beginning of June was postponed after Israeli forces killed nine people in a raid on a boat attempting to deliver humanitarian aid to Gaza in defiance of an Israeli blockade. Mr Obama will be keen to find a way to encourage Israeli and Palestinian leaders to begin direct talks again. Face-to-face negotiations were suspended in December 2008 after Israel’s deadly offensive against Gaza intended to stop rocket attacks from the territory. In a sign of a thawing of relations between Israel and the Palestinian Authority, Ehud Barak, the country’s defence minister, said that he would shortly meet Salam Fayyad, the PA’s prime minister.

• THE lower house of France’s parliament begins debate on Tuesday July 6th over the controversial issue of banning women from wearing full Muslim veils in public before a vote likely to be held the following week. A burqa ban, which has the backing of President Nicolas Sarkozy, is also winning support in other parts of Europe. Belgium’s...

Death in Lahore: Bombing the Light of God   (02.07.2010 14:48)

A sinister and deadly new twist in Pakistan’s dreadful saga of terrorist atrocities

On the night of July 1st, when the throng of worshippers in the shrine of Lahore's patron saint, Ali Hajvery Data Ganj Bakhsh, was at its peak, two suicide-bombers blew themselves up. The attack, at the heart of a 1,000-year-old centre of Sufi Islam in Pakistan, killed at least 42 people and injured another 175.

"The terrorists have done the unthinkable," said a grieving woman at the site of the bombing. Not so long ago many Pakistanis believed the Taliban and al-Qaeda were just innocent Islamists battling the evil Americans. The country is paying a heavy price for their refusal to face up to their true nature. ...

The coming days: The week ahead   (27.06.2010 19:55)

A trade pact will draw China and Taiwan closer togther

• IMPROVING relations between China and Taiwan will get another boost with the signing of a groundbreaking free-trade pact by the end of June. Ma Ying-jeou, Taiwan’s president, was elected in 2008 on a platform that called for better ties with China. A free-trade pact with the mainland is the cornerstone of his cross-strait policies. Taiwan, already isolated diplomatically, feared commercial marginalisation when the effects of a free-trade agreement between China and the Association of South-East Asian Nations (ASEAN) begins to be felt later this year. Mr Ma has already overseen the establishment of direct flights and shipping routes across the 110-mile-wide Taiwan Strait.

•AMERICA'S Supreme Court is likely to hand down a decision involving the Sarbanes-Oxley act of 2002 on Monday June 28th. The legislation, intended to tighten the auditing of public companies in the wake of the accounting scandals at Enron, WorldCom and Tyco, has been widely criticised for imposing costly and burdensome regulations on American businesses. The court will rule on the constitutionality of the board created to oversee independent audits of big companies. But firms may fear that if Sarbanes-Oxley is overturned a Congress on the brink of...

Australia changes prime minister: Rudd on the tracks   (24.06.2010 09:38)

Losing popularity, the Labor Party ditches its leader

LESS than a year ago Kevin Rudd rode high as one of Australia’s most successful prime ministers. Suddenly, his spectacular career has come to a crashing end. With his rating in the opinion polls sliding disastrously, and a federal election due soon, a panicked ruling Labor Party on June 24th dumped Mr Rudd as leader. They replaced him with Julia Gillard, his deputy. She will give a country once branded as a bastion of male chauvinism its first female prime minister.

As his support crumbled among Labor’s 115 federal parliamentarians, Mr Rudd had declared defiantly the previous evening that he would fight a leadership challenge from Ms Gillard. But the coup turned out to be bloodless. Faced with a humiliating defeat, when the moment came Mr Rudd stood aside. His colleagues elected Ms Gillard unanimously. Wayne Swan, the treasurer, will take over as deputy prime minister. ...

The coming days: The week ahead   (20.06.2010 09:21)

World leaders gather for G8 and G20 summit meetings

• LEADERS of the G8 group of rich countries gather in Muskoka, a Canadian holiday resort, for a two-day summit starting on Friday June 25th. The meeting overlaps with the two-day G20 summit that begins the next day in Toronto. Both get-togethers will give the opportunity to world leaders to discuss global financial regulation, reforming international financial institutions and responses to the crisis in the euro zone. The Canadian hosts have been criticised at home for the vast cost of the summit, in particular on the creation of a huge artificial lake for the media centre in a country with more real lakes than anywhere else in the world.

• ANXIETY in Britain is likely to be high as George Osborne, the country’s new chancellor (finance minister), unveils details of a tough emergency budget on Tuesday June 22nd. The new budget will set out the overall trajectory of spending, which is likely to be sharply downward. Mr Osborne’s colleagues have been making scary speeches about the parlous state of public finances. And gloomy independent forecasts for growth and the public finances from the new Office for Budgetary Responsibility suggest that hefty spending cuts...

Reforming France: State of denial   (16.06.2010 15:23)

Reactions to a modest plan to increase the retirement age show how hard reform is in France

THE French government’s long-awaited pension reform, which was announced on June 16th, turns out to be at once symbolically bold and yet ultimately disappointing. Under a plan unveiled by Eric Woerth, the labour minister, France intends to raise the legal retirement age progressively from 60 to 62 by 2018. Since this alone will not meet the state pension-fund shortfall, the government will increase the top rate of income tax from 40% to 41% from next year, and tax capital gains, stock options and other financial income more heavily. It will also align civil servants’ pension contributions with those in the private sector by 2020. In all, the government thinks it can balance the pension fund, which currently has a €32 billion deficit, by 2018.

The symbolism of this change is clear. It was President Francois Mitterrand in the early 1980s who introduced retirement at 60 as a mark of progress, and it remains a totem for the left and the right. Martine Aubry, the Socialist Party leader, instantly called the government’s plan “irresponsible”, and says that the Socialists will reverse it if they are elected...

Violence in Kyrgyzstan: Stalin's harvest   (14.06.2010 08:02)

What lies behind the violence in Kyrgyzstan

CLASHES in southern Kyrgyzstan have spiraled out of control. Thus far 118 people have been confirmed dead, a further 1,500 as injured, and tens of thousands of ethnic Uzbeks have fled to neighbouring Uzbekistan. The number of those killed over the past four days are without a doubt significantly higher than these estimates suggest. Local Muslim custom requires that the dead are buried within 24 hours. Many people are burying family members immediately without registering their deaths.

Although Uzbeks make up only 15% of Kyrgyzstan’s population of 5.4m, most of them live in the southern part of the country, where they make up the majority. The Fergana Valley, where most of the killing happened, was divided arbitrarily by Stalin in the 1920s among Uzbekistan, Kyrgyzstan and Tajikistan. As a result, the Kyrgyz Soviet republic was left with a sizeable Uzbek population, the Uzbek Soviet republic with a Tajik population, and so on. While the Soviet Union existed and the republics were part of the same country, this made little practical difference. But when the Soviet Union fell apart, these artificially created borders became final, separating newly independent states and fomenting ethnic tensions. ...

The coming days: The week ahead   (13.06.2010 19:11)

Iraq's new parliament will be in session; oil executives will be grilled by Congress

•IN IRAQ, the first session of the new parliament begins on Monday June 14th. Iyad Allawi's Iraqi National Movement, known as Iraqiya, narrowly won the general election (which took place at the end of March), giving him the right to try to form a coalition. This will not be easy. Making a stable government out of the available ingredients—which include the State of Law alliance, led by the current prime minister, Nuri al-Maliki; a Shia religious alliance that includes followers of a populist cleric, Muqtada al-Sadr; and a Kurdish alliance—could take months.

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Japan's new prime minister: Meet the boss   (04.06.2010 12:53)

Can Japan's fifth prime minister in four years succeed where others failed?

WHEN Japan's outgoing prime minister announced his resignation this week, Tokyo's financial markets barely budged, underscoring the depressing regularity with which the country's leaders have come and gone in recent years. However the election by Japan's Diet (parliament) of Naoto Kan as prime minister on June 4th may represent a change. The past four prime ministers hailed from wealthy political dynasties, among which the premiership was almost a filial rite of passage. Mr Kan is a self-made man, ascending into politics after years toiling in citizen movements.

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Green.view: The green suits   (14.07.2010 16:29)

The economics of biodiversity and business

While climate scientists lament the fact that their flagship compendia, such as the IPCC reports, come under endless attack, scientists working on other environmental issues would love such high-profile pronouncements, even if they came with a similar cost. IPCC-envy was one of the rationales for the Millennium Ecosystem Assessment, published in 2005, and it is the main impetus behind the current development of an Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services. When the equally inelegantly named TEEB process (it stands for The Economics of Ecosystems and Biodiversity) was set up at the G8+5 meeting in Potsdam in 2007 its political patrons had a clear model in mind. They hoped that just as Lord Stern’s review of the economics of climate change, published in 2006, firmed resolve for action among governments and helped set in motion the processes that led to last year’s Copenhagen climate conference, so this new report should encourage a more serious global approach to the costs that damaged and dysfunctional ecosystems impose on people.

It’s worth noting that this approach implicitly assumes, as do many people, that the point of the IPCC and such endeavours is to find reasons for action, rather...

Green.view: Too green to fail   (07.07.2010 09:21)

When it comes to protected areas, less really can mean more

Thomas Brooks, a biologist with NatureServe, a conservation group based in Arlington, Virginia, has long been fighting to preserve biodiversity in the Philippines. Quite often it can feel like a lost cause. Conservation efforts in the country have struggled against ever greater deforestation and decades of environmental neglect. You might think that, when Mr Brooks heard that the Philippine government is considering opening some of its protected areas to mining, it would have been the last straw. Instead, it was an occasion for hope.

According to Theresa Mundita Lim, Director of the Protected Areas and Wildlife Bureau of the Department of the Environment and Natural Resources, who made the announcement at a meeting of the Convention on Biological Diversity in Nairobi, the move on mining is part of a larger strategy to improve how much biodiversity the government protects. By cutting spending on areas that are lower-priority and instead putting the money where it will be more effective in protecting nature, she hopes to get more impact out of the limited conservation funds available. ...

How life recovers from mass extinctions: Dead-ammonite bounce   (05.07.2010 09:48)

Life recovered from its worst extinction much faster than previously realised

THE dinosaurs went out with a bang. Most palaeontologists agree that those creatures and much of the rest of Mesozoic life ended when the Earth collided with an asteroid or a comet 65m years ago. But the Mesozoic, too, began with a mass extinction. Some 251m years ago, the efluvia of Siberian volcanoes wiped out 95% of life in the seas, and almost as much on the land, in an episode known as the Great Dying. This was the end of the Permian period, and of the era of life called the Palaeozoic. The survivors regrouped, re-evolved and turned into the Mesozoic species that led eventually to the dinosaurs, pterosaurs, ammonites and belemnites that generations of fossil hunters are familiar with.

How that regrouping happened will be the topic of a presentation by Hugo Bucher, the director of the Palaeontological Institute at the University of Zurich, at the Third International Palaeontological Congress in London on July 3rd. According to Dr Bucher, it occurred faster than anyone had previously thought, but also stuttered on the way as the volcanic activity waxed and waned. ...

Green.view: The connected Arctic   (29.06.2010 13:52)

A long way from anywhere, researchers are plugged into everywhere

NY ALESUND, a village devoted to scientific research on the island of Spitsbergen, in the high Arctic, seems about as isolated as it is possible to get. Beyond the confines of the village and its outstations, there is no sign of human beings; just snow, water, rock and scrawny soil.

To the north, it’s a straight trip to the pole. This is true everywhere, by definition, but from Ny Alesund the trip is shorter than from any other permanently inhabited settlement. To the west is Greenland (the most northerly, uninhabited bit), followed by Ellesmere Island (part of Canada), a lot of sometimes frozen ocean and some Russian islands before a humanity-free circumnavigation brings you back to Ny Alesund. To the south is everything else in the world, most of it a very long way off. The nearest city, Tromso, is more than 1,000km away, and hardly a metropolis. For four months a year even the sun does not make it to Ny Alesund. Before the 20th century, no one lived here, nor would anyone have wanted to. ...

Art.view: More sense than money   (25.06.2010 16:25)

Christie's and Sotheby's face buyer resistance

THE two leading auction houses, Sotheby’s and Christie’s, have come a long way since the dark days of late 2008, when the sudden collapse of the art market caused their revenues to plummet. At the time, they were forced to pay out nearly $200m in guarantees to honour contracts on works that had been consigned to auction, yet failed to sell on the day. Now, two years later, the sector is running ahead of itself. As the art-market recovery gets under way, auction houses now face a particularly delicate moment.

When art prices fell, auction houses struggled to attract sellers. Collectors faced with death, divorce or debt—three common reasons for selling—still consigned their works for auction. But discretionary selling fell back sharply. With the memory of the record prices of 2007 still fresh in many collectors’ minds, the question they asked themselves was “why sell if you don’t have to?” ...

Green.view: True-bluefin   (22.06.2010 14:49)

Farming one of the ocean’s greatest fish

DURING May and June, when the mighty bluefin tuna returns to the Mediterranean to spawn, fishermen arrive from all over the world to catch it (click here to watch a video). In days gone by, the fish were netted and killed on the spot. Now, in high-tech operations involving divers and video cameras, they are transferred from the nets into “farms”—arrays of cages anchored to the sea floor from Spain to Malta, to be fattened up. Then, come October, they are sold to Japanese boats, killed, frozen and shipped to Japan.

It is a lucrative arrangement. Anthony Grupetta, the director general of agriculture and fisheries regulation in Malta, says that in those few months most farmers can increase the weight of a wild-caught bluefin by 27-30%. (He claims the Maltese farms do better than this, but does not say exactly how much better.) The cages do not cost much, and the fish fed to a tuna are worth a lot less than the added kilos of tuna-meat that result. What is more, Japanese buyers prefer fish raised this way. They say the quality of the meat from a bluefin killed straight after being caught...

Art.view: Fairs to remember   (16.06.2010 18:32)

A banner month for London's art and antiques fairs

IT IS either an embarrassment of riches or overkill. Either way, the abundance of art fairs in London this June is a dramatic departure from how things looked a year ago. Then, London's prestigious Grosvenor House Antiques and Fine Art Fair was closed down after 75 years. Pundits blamed the bad economy. The actual reason was that the owners of the Grosvenor House Hotel believed they could earn more by using the space for other purposes.

It looked as if London's art and antiques scene was shrinking, but two new ventures soon sprang up. A group of dealers have come up with Masterpiece London, a fair running from June 24th to 29th. Some of the top names from Grosvenor are among the 115 dealers who signed on to participate. Anna and Brian Haughton, London-based ceramics dealers and veteran fair organisers, had a similar idea. They too launched a new fair called Art Antiques London (AAL), which ran from June 9th to the 16th. Smaller than Masterpiece, it incorporated their prestigious ceramics fair and seminar. “We want quality and intimacy,” says Mrs Haughton, who attracted 60 participants—the fair's target number. ...

Green.view: Thinning on top   (15.06.2010 13:54)

Predicting the Arctic’s summer fate is not so simple

MARCH is the maximum month. In March 1979, the first year for which satellite records are available, the sea ice in the Arctic Ocean covered 16.4m square kilometres (6.4m square miles). By the time summer was gone, the ice was down to about 7.2m square kilometres. Every March since, the ice has returned to an annual maximum, but never again has it been as large as the one observed that first year. Every summer, it shrinks back down, and the minimum has for the most part been getting smaller and smaller. In 2007 it was just 4.3m square kilometres. At first, polar scientists watched the planet’s icy pulse with academic interest and justifiable pride in their new observational capabilities. Now they monitor its every hiccup as if it were a patient on life support. But that does not mean they know how to interpret what they see.

This year they noted that the Arctic ice cap had a late-winter growth spurt, reaching its maximum on March 31st, the latest date ever recorded. By the beginning of June, the ice cover—as defined by the percentage of ocean covered by at least 15% floating ice—had...

Green.view: Once more, with less feeling   (09.06.2010 17:46)

Climate-change negotiations settle in for the long haul

SOME of the trappings are the same. Outside the conference venue there are still followers of Supreme Master Ching Hai urging veganism as a path to climatic salvation. Inside, the public spaces are as thronged, the piles of paper as daunting and the procedures as arcane as ever. (Trying to explain the difference between a “negotiating text” and a “text that can form the basis for negotiations” a UN official looks flummoxed that anyone should not understand such a basic distinction. “It’s like the difference between a paper and a non-paper,” he observes helpfully.) The campaigning groups are still handing out “Fossil of the Day” awards, too, to the countries they think are being least helpful, and they are still going to America, Canada and Saudi Arabia with predictable regularity.

But this is Bonn, not Copenhagen, and though the colour-coded ID badges are the same, as well, and even use the same pictures taken for security at Copenhagen and since squirreled away on computer disks, the faces above the badges are different. “Have you noticed?” asks a climate-conference veteran from Greenpeace. “Everyone looks ten years younger.” ...

Art.view: Message in a bottle   (09.06.2010 12:22)

An auction of Chinese snuff bottles surprises the experts

IN A time when the market for Chinese treasures is constantly breaking records, the success of the sale of George and Mary Bloch’s snuff bottles in Hong Kong still caught many off-guard. The May 28th event marked the first so-called “golden gavel” sale in Hong Kong for Bonhams, a London auctioneer, meaning every lot found a buyer (also known as a “white-glove” auction in Europe and America). This is rare, and often limited to sales with few lots in highly collectible sectors. That this was a niche auction with 141 lots makes the feat all the more remarkable.

The sale's final tally, at just over HK$66m ($8.5m), was three times higher than Bonhams expected. This has surely encouraged the sellers, who are planning to dispose of their entire 1,700-piece collection in a further nine sales over the next five years. ...

Art.view: Smoked venison   (02.06.2010 11:28)

Can an auction house successfully manage a living artist's primary market?

HAUNCH of Venison—an art gallery owned by an auction house—is a weird beast. When Christie’s acquired the firm in 2007, many doubted the health of this unconventional alliance of the primary and secondary market. Now that Haunch’s founders, Harry Blain and Graham Southern, have announced that they are leaving the gallery, skepticism may reach a new high.

The primary market offers work as it emerges from artists’ studios—that is, it’s for sale for the first time. The best primary dealers or “gallerists” tend to be quirky mavericks with such a good “eye” that they have their names over the door. They pay more attention to supply, so it’s paramount that they understand and nurture artists. Few are team players with a flair for corporate politics. The secondary market, by contrast, involves the resale of art objects, either through private dealers or auction houses. These traders focus on demand, and so have little contact with artists. Moreover, unlike primary gallerists, traders rarely opt to sell a work at a lower price to a museum in the interests of developing an artist’s career. High prices are an end in themselves for an auction...

Green.view: How to be urban   (01.06.2010 16:04)

Some enterprising architects grapple with the cityscapes of the 2030s

THERE is a hole in the green imagination about 20 years away. In the short term—the next ten years, say—the environmentalists’ vision is usually of a world similar to this one with a bit less of one thing (carbon dioxide) and a bit more of a panoply of others (windmills, forests, smartgrids and the like). In the far off future of 2050 and beyond, the world is meant to look very different indeed. Carbon-dioxide emissions should, by then, be less than half what they are now; in today’s rich countries they should have fallen by 90% or so. This means entirely new infrastructures and technologies, and perhaps entirely new ways of life, too.

That, however, leaves something of a disconnect around 2030. So there is a need to imagine a sort of bridge between the now-like near future and the Utopian not-so-near one. The Audi Urban Future Award, a project unveiled at a conference in London on May 28th, aims to help. Six innovative architectural practices have been asked to produce projects with a vision for 2030. The results will be revealed at the Venice Architecture Biennale later this summer, and the...

Business.view: Green-energy blues   (01.06.2010 14:27)

Investors wonder if the renewable-energy boom is over

IF ANY industry ought to be seeing silver iridescence in the dark slick of oil gushing into the Gulf of Mexico, it is renewable energy. However, since what is perhaps the biggest environmental disaster America has yet seen erupted at BP’s Macondo prospect on April 20th the RENIXX index, which measures the world’s 30 largest publicly traded renewable-energy companies, has fallen by 15%. This is even worse than the 12% fall in the MSCI world stockmarkets index in that period. Moreover, it continues a longer-term decline of more than two-thirds from the index’s all-time high in December 2007.

The oil spill might have been expected to revive a sense of urgency that the world, and America in particular, should reduce its dependence on oil, not least by switching to cleaner, greener sources of energy. Instead it is increasingly common to hear investors asking gloomily, “Is green dead?” ...

Correspondent's diary: Tracking the intervention   (11.06.2010 15:41)

Road-tripping into the prescribed areas of Australia's Northern Territory

Day one | Day two

SPRAWLING through dusty red desert, the ochre-coloured hills of the Larapinta Trail might have suited John Ford as a backdrop for his great Westerns, if he hadn’t come across the American west’s Monument Valley first. The road from Alice Springs is breathtaking. Wild horses graze on grass from recent rains. Wrecked cars are casualties of the dead-straight road’s mesmerising dangers. Then, as I pass the boundary leading to Wallace Rockhole, an aboriginal settlement, a big blue sign by the road jolts me back to my journey’s purpose: “Warning. Prescribed Area. No Liquor. No Pornography.” ...

Charlemagne: Long live the Karlings   (02.09.2010 12:46)

The emperor Charlemagne is the wrong father-figure for Europe

BEYOND the octagon of Aachen cathedral lies the golden shrine of St Mary, holding ancient relics that are displayed every seven years: the cloak of the Virgin, the swaddling clothes of the infant Jesus, the loincloth of the Saviour on the Cross and the cloth that held the severed head of John the Baptist. Such wonders made Aachen one of the great pilgrimage sites of medieval Europe. In these more sceptical times, it is the other golden casket here that commands the visitor’s attention: the one bearing the remains of Charlemagne.

The Frankish warrior-king, crowned as heir of the Roman emperors by Pope Leo III in 800, is still revered locally as a saint. More importantly, he is the icon of Europe’s newer, secular faith: political and economic integration. Since 1950 Aachen has bestowed a yearly Charlemagne prize on the figure deemed to have done most to promote European unity. The winners are mostly a predictable cast of grandees. In 2002 the prize was awarded not to a person but to the euro. And in 2004 the judges conferred the prize on Pope John Paul II; a reversal, perhaps, of Leo’s coronation of...

The French opposition: Maybe he Strauss-Kahn't   (02.09.2010 12:46)

What looks obvious to outsiders is not clear to France’s Socialists

FRANCE’S opposition Socialist Party should be building up for its best crack at the French presidency in over a decade. The incumbent, Nicolas Sarkozy, is unpopular. Polls find that a majority of the French want the left to return to power. And, in Dominique Strauss-Kahn (pictured), the boss of the IMF in Washington, DC, the Socialists have a potential candidate with a real chance of victory in 2012. One new poll finds that, if a presidential election were to take place today, Mr Strauss-Kahn would beat Mr Sarkozy in a second-round run-off by a crushing 59% to 41%.

If only it were that simple. After its summer conference at the Atlantic resort of La Rochelle last weekend, where delegates discussed socialism over platters of fruits de mer, the party is certainly feeling upbeat. It put on a show of unity, with rival grandees posing together for the cameras in studious harmony. Yet Mr Strauss-Kahn, the party’s best potential candidate, may not get the nomination. ...

Europe's Roma: Hard travelling   (02.09.2010 12:46)

Scapegoated abroad and the victims of prejudice at home, eastern Europe’s Roma are the problem no politician wants to solve

SLOVAKIA is in shock; France in uproar. The cause of both nations’ turmoil is the Roma (gypsies), or, rather, what is being done to them. This week a gunman in the Slovak capital, Bratislava, killed seven people and injured 14, before shooting himself dead. Six of the victims were a Roma family, killed inside their apartment; they appear to have been deliberately targeted.

In France the expulsion of hundreds of Roma immigrants, whom Nicolas Sarkozy’s government says were in the country illegally, has galvanised opposition from the pope, French churches, a UN committee and even several ministers in Mr Sarkozy’s own government. Yet further tough legislation is promised. ...

Germany's energy policy: Nuclear power? Um, maybe   (02.09.2010 12:46)

Angela Merkel agonises over a planned phase-out of Germany’s nuclear capacity

WHEN Angela Merkel cares about an issue she does not give a speech. Instead, she hits the road. Lately Germany’s chancellor has travelled to a wind park in Mecklenburg-West Pomerania, a nuclear reactor in Lower Saxony, and an energy-generating house in Hesse. Aiming to draw attention to Germany’s dilemmas in deciding how much and what sort of power to produce and consume in the coming decades, Mrs Merkel will bundle her answers into a comprehensive “energy concept”, to be unveiled at the end of September.

This is like coming up with a menu that pleases both carnivores and herbivores. Much of the debate revolves around whether to scrap a plan devised by an earlier government to cease nuclear-power generation by 2022. The decision will affect Mrs Merkel’s political standing and the public finances, as well as Germany’s energy future. With roughly a quarter of generation capacity due to reach retirement age by 2020, decisions made now will shape the energy profile of Europe’s biggest economy for years. There is “a window of opportunity for good changes or for messing up the situation for the next 50 years,” says Olav Hohmeyer,...

Correction: Czechoslovakia   (02.09.2010 12:46)

Last week’s story on drug use in the former Czechoslovakia incorrectly conflated the velvet revolution and the velvet divorce. The country split into the Czech Republic and Slovakia in 1993, not 1989. Our apologies for the error, which has been corrected online.

...

Skopje: A Macedonian makeover   (26.08.2010 12:50)

The capital city gets a controversial facelift

ITS charms are many, but architecture is not usually seen as one of them. Rebuilt after an earthquake in 1963 wiped out most of the city, Skopje, the capital of the ex-Yugoslav republic of Macedonia, was for years characterised by ugly concrete blocks and strange empty spaces. But earlier this year Nikola Gruevski's conservative government produced a video that revealed the full ambition of “Skopje 2014”, its plan for a radical reinvention of the city centre.

It was hard to take the scheme seriously. Fifteen grand buildings, including a new foreign ministry and a constitutional court, were to be built from scratch. Older structures, such as the parliament, were to be tarted up with domes and other accoutrements. In the city's main square, the government would erect a giant statue of Alexander the Great. ...

Drugs in the Czech Republic and Slovakia: High contrast   (26.08.2010 12:50)

Why are the Czechs more lenient on narcotic use than the Slovaks?

FOR many Czechs, CzechTek, an outdoor rave where revellers danced for days, often on a cocktail of speed, ecstasy and methamphetamine, was once a highlight of the summer. Authorities concerned about drug use found it less attractive. Five years ago 80 people were hurt when police used water cannon and tear gas on a crowd of 5,000 ravers. Jiri Paroubek, the prime minister, described them as “obsessed people with anarchist proclivities…who provoke massive violent demonstrations, fuelled by alcohol and drugs, against peaceful society”.

So it came as a surprise when Czech politicians liberalised the country’s drug laws. Since January 1st techno fans (and other users) have faced nothing worse than a fine if caught with an amount the law considers intended for personal use. ...

French politics resumes: Tough-guy Sarko   (26.08.2010 12:50)

Drowning in unpopularity and beset by scandal, the French president lashes out at some easy targets

AFTER a three-week holiday at his wife’s family villa on France’s Mediterranean coast, President Nicolas Sarkozy returned to work this week for what could be the most testing autumn of his presidency. Deeply unpopular—a poll this week found that 62% of the French do not want him to seek re-election in 2012—the president faces four sources of trouble in the coming weeks: pension reform, the budget, nationality law and the expulsion of Roma (gypsies), and an ongoing political scandal linked to Liliane Bettencourt, the heiress to the L’Oreal cosmetics empire. Mr Sarkozy’s management of them will set the tone for the remainder of his presidency.

The first two will test Mr Sarkozy’s reformist resolve. On September 7th parliament will start to debate his proposal to raise France’s legal retirement age from 60 to 62. The plan may not look revolutionary. But it breaks a cherished French pattern of progressively shortening the amount of time people spend at work. Trade unions are furious, and plan a series of strikes starting on the same date. The opposition Socialist Party is also against. But under the close watch of...

Oil in Greenland: Black stuff in a green land   (26.08.2010 12:50)

After decades of searching, evidence of oil is found off the coast of Greenland

WHEN Cairn Energy, a British petrochemicals company, this week announced the first firm indication of worthwhile oil deposits off Greenland’s coast, inhabitants of Nuuk, the island’s gritty capital, greeted the news with their customary equanimity. “That’s nice,” said a housewife less interested in the implications of a possible oil bonanza than in negotiating her country’s sole pedestrian crossing in the sleeting rain.

Several hundred miles north in Baffin Bay, Greenpeace eco-warriors seeking to halt offshore oil exploration in the Arctic faced down a Danish warship. The government hotly contests Greenpeace’s claim that, because oil degrades far more slowly in freezing waters, a Mexican Gulf-style oil spill would mean calamity for the fragile environment. “Our safety standards are the highest in the world,” says Henrik Stendal, chief geologist at the Government Bureau of Minerals and Petroleum. ...

Spanish politics: Losing his grip   (26.08.2010 12:50)

Spain’s prime minister faces a minor insurrection within his own party

IT IS a brave act of defiance. It is also a sign that Jose Luis Rodriguez Zapatero, Spain’s prime minister, is losing the iron grip he once held on his Socialist Party. A row has erupted over Mr Zapatero’s attempt to impose a candidate to lead the party into elections for the Madrid region’s parliament next May.

Mr Zapatero’s candidate for the post, one of Spain’s 17 powerful regional premierships, is Trinidad Jimenez (pictured), Spain’s health minister. She is opposed by Tomas Gomez, the pugnacious leader of the Socialists’ Madrid branch, who wants to stand himself. Rather than bow to his boss’s demands, as expected, Mr Gomez has forced a party vote, which will be held in October. ...

Italy's highway code: Roads to ruin   (26.08.2010 12:50)

An optimistic attempt to impose order on Italy’s roads

ANARCHY, ignorance of the law or just a belief that rules are optional: Italian behaviour in traffic is a colourful, and worrying, mosaic. Government ministers with seat belts left unbuckled; police cars that ignore red lights; parking on pedestrian crossings; mobile phones glued to drivers’ ears; and widespread speeding on every road from country lanes to autostrade—such is the anarchy of the road in Italy. Five times as many people are injured on Italian roads as on French ones and, although the number has fallen in recent years, road deaths in Italy are still far higher than in many other large European countries.

A new highway code offers hope that Italians will improve their behaviour behind the wheel. Parts of the code await ministerial decrees, some of which will be issued over the next six months. But important sections covering road safety have already entered into force. One deals with pedestrian crossings, where injuries and deaths are common, thanks in part to the failure of town councils to ensure that road markings are clear and crossings well lit. Yet although the new code promises a “more rigorous right of way” for pedestrians, instructing...

Bulgarian relics: A sainted discovery   (19.08.2010 13:47)

The Bulgarian government recruits an unlikely ally

FLAUNTING an old tooth and a few bones is an unusual way to attract tourists and distract voters. Not in Bulgaria, where a recently excavated box of ancient bone fragments is said to contain partial remains of St John the Baptist.

On July 28th Kazimir Popconstantinov, an archaeologist, found the box while digging under the altar of an early Christian church on a Black Sea islet off the coast of Sozopol, a small, fading resort town in the east of the country. The box bore an inscription with John’s name and presumed date of birth. ...

Georgia: Georgia's mental revolution   (19.08.2010 13:47)

Seven years after the Rose revolution, Georgia has come a long way

FOUNTAINS dance, children play and families stroll along Batumi’s five-mile seafront boulevard, lined with palm trees, hammocks and playgrounds. Less than a decade ago, Ajaria, a verdant south-western corner of Georgia of which Batumi is the regional capital, was the personal fief of Aslan Abashidze, a strongman who seemed to own the place more than run it. He never appeared without an army of goons, and closed the streets when his son felt like racing his Lamborghini. Cut off from the rest of Georgia by checkpoints, the economy was stagnant.

Today this gently beguiling holiday resort is an exhibition of Georgia’s capitalist achievements, a showcase of its transition and an advertisement for what Abkhazia, a separatist region to the north, could have become had it not been, in effect, annexed by Russia following the short Russia-Georgia war two years ago. ...

Italian politics: Slinging dirt   (19.08.2010 13:47)

A lively August for Italy’s politicians

THE middle finger that Umberto Bossi, leader of the Northern League, a partner in Silvio Berlusconi’s ruling coalition, raised to photographers last month says much about the condition of Italian politics. The degeneration has proceeded unabated into the dog days of August, spurred by a dramatic split in Mr Berlusconi’s People of Freedom (PdL) party.

The decision, in late July, of 33 members of the lower house and ten of the upper house to split from the PdL and establish a group called Future and Freedom (FLI), under the leadership of Gianfranco Fini, a former ally of Mr Berlusconi, places the prime minister in jeopardy. The role of Giorgio Napolitano, Italy’s president, is crucial. Constitutionally, if the government loses the support of parliament, Mr Napolitano should sound out the possibility of a new administration and, if that fails, call fresh elections. But Mr Bossi and senior members of the PdL claim that Mr Berlusconi enjoys a direct popular mandate and so should have the right to dissolve parliament himself. ...

Turkish foreign policy: The great mediator   (19.08.2010 13:47)

Sometimes Turkey really is a bridge between west and east

IN JUNE 2006, days after a young Israeli private was captured by Hamas, Israel’s ambassador to Turkey paid a midnight visit to Recep Tayyip Erdogan, the prime minister. Gilad Shalit was feared to be gravely ill, perhaps even dead. Could Turkey help? Phone calls were made and favours called in. Mr Shalit turned out to be alive, and his captors promised the Turks they would treat him respectfully.

Turkey’s relations with Israel, once an ally, have worsened of late, and hit a fresh low in May, when Israeli commandos raided a Turkish ship carrying humanitarian supplies to Gaza, killing nine Turkish citizens. Yet Turkey continues to lobby Hamas for Mr Shalit’s release. ...

Illegal immigration in Greece: Border burden   (19.08.2010 13:47)

Greece struggles to deal with a European problem

GUARDING their nation’s frontiers has traditionally been an honourable task for Greeks. These days they are almost begging for foreign assistance. Greece’s borders have become the gateway of choice for the vast majority of people hoping to enter the European Union illegally, and the country is finding it difficult to cope. Of the 106,200 people detected trying to cross illegally into the European Union in 2009, almost three-quarters were stopped in Greece (see chart). Early data for 2010 suggest that, although absolute numbers are falling, Greece’s burden has risen further, to about 80% of the EU total, up from 50% three years ago. Compounding the problem is a rule that says undocumented immigrants found anywhere in the EU must be returned to their country of entry—usually Greece.

Detention centres for irregular immigrants in Greece are small and understaffed, and there are too few of them. Cash-strapped authorities encourage detainees to move on to Athens before their claims have been processed. And on top of the flow of tens of thousands arriving every year is a stock of an estimated 300,000 illegal immigrants already in the country. The €80m ($103m) the government spends each year...

Turkey’s military: No jobs for the boys   (12.08.2010 13:39)

Turkey’s generals lose another argument with the government

IT HAS been a rotten month for Turkey’s generals. Their latest wrangle with the ruling Justice and Development (AK) party over who should be promoted during the army’s annual August review has ended in stinging defeat.

General Ilker Basbug, who is poised to step down on August 30th after two years as chief of the general staff, suffered the biggest loss of face. He wanted Hasan Igsiz, commander of the 1st army corps, to become land-forces commander. But Turkey’s prime minister, Recep Tayyip Erdogan, blocked the move. General Igsiz has been linked to bogus internet sites used to smear AK; their content was used as evidence when Turkey’s chief prosecutor sought to ban the party two years ago. The general has also been implicated in an alleged plot against adherents of the Fethullah Gulen movement, an Islamic fraternity that broadly supports AK. ...

Central and eastern European security: Reset and unsettled   (12.08.2010 13:39)

The Obama administration is working hard to please its ex-communist allies in Europe. But they are still twitchy

LISTEN to critics of Barack Obama’s administration and the story of American policy in eastern Europe is of a grand betrayal, featuring the binning of a promised missile-defence system, the freezing of NATO enlargement and the headlong pursuit of better ties with Russia.

The facts are rather different. The single biggest security problem in the region was left untouched by the Bush administration: the near-defencelessness of the Baltic states of Estonia, Latvia and Lithuania. Their security rested on the treaty promise of NATO’s Article 5, which provides for collective self-defence, but most practical measures, such as plans and exercises, were taboo. The Obama administration has addressed that. It pushed NATO to make contingency plans. This year the organisation has scheduled several big military exercises in the Baltic. ...

Charlemagne : No boatloads but still trouble   (12.08.2010 13:39)

Sometimes what does not happen is the real news

IT IS the middle of August, traditionally the height of the Mediterranean’s migrant-trafficking season. Yet thousands of dehydrated Africans and Asians are not arriving on the shores of the Canary Islands, southern Spain, Sicily and other Italian islands.

True, a handful are coming. On August 8th 40 woebegone North Africans were found to have increased the population of the Italian islet of Linosa by almost 10%. A Catholic charity, Caritas, claimed that seaborne migration in the central Mediterranean was picking up. But figures from the European Union’s border-security agency, Frontex, show that a mere 150 people reached Italy and Malta in the first quarter of this year, compared with 5,200 in the same period of 2009. Irregular migration to the Canary Islands, which was taking in tens of thousands of Africans a few years ago, had almost ground to a halt. In the first three months of 2010, just five people came ashore there. Stories of seaborne migration used to roil the politics of southern Europe regularly. Why not now? And where have all the migrants gone? ...

The Iraq war: Mission truncated   (02.09.2010 12:46)

A stance that helped Barack Obama and the Democrats to victory has become a near-irrelevance

WHEN he ran for president, few subjects distinguished Barack Obama more than his views on the war in Iraq. He had opposed it from the start, so he constantly reminded the electorate, unlike his main rival for the Democratic nomination, Hillary Clinton. He was determined to withdraw the majority of American troops from the country within 16 months of coming to office, unlike his Republican opponent, John McCain, who had spoken of American troops being in Iraq for 100 years. All this formed a big part of Mr Obama’s appeal to voters, who were sick of the conflict and dismayed by George Bush’s handling of it. So when Mr Obama declared the fulfilment of his pledge (a little over three months late) and the “end of our combat mission in Iraq” in an address from the Oval Office on August 31st, it should have been a triumphant moment for the president and a cathartic one for the American public. Instead, the speech was a sombre affair, and the popular reaction muted.

In part Mr Obama was simply determined to avoid the mistakes of Mr Bush, who...

The Bush tax cuts: A slight reprieve?   (02.09.2010 12:46)

Extending the cuts for a while may turn out to be prudent policy

HOW dramatically the pendulum of fear has swung in the past year—from worries about the fragile recovery, to panic about the level of the national debt, and back to anxiety about growth again. Swinging along with it has been the fate of George Bush’s tax cuts, which are due to expire at the end of this year. Democratic Party leaders had hoped to make political capital, just before the mid-term elections in November, from the extension of the cuts for households earning less than $250,000 ($200,000 for single earners). At the same time, they hoped to paint the Republicans as hypocrites for moaning about the deficit while fighting to keep low taxes for the very rich. But these hopes, like the recovery, have withered away.

The tax cuts, which were supposed to last for only ten years, had their genesis in the 2000 presidential campaign, when both Mr Bush and Al Gore, the Democratic candidate, proposed to return a portion of the then budget surplus to voters. As the economy tipped into recession in 2001, stimulus became the rationale for the cuts, and for the 2003 law that phased...

Lexington: The charge of the Brat Pack   (02.09.2010 12:46)

A moderate force takes shape inside the Republican Party

THE Weekly Standard, the parish magazine of American conservatives, is not merely a wry observer of the political scene. From time to time it plays a direct part in Republican politics. In 2007 a clutch of its senior editors, visiting Alaska for a luxury cruise and lecture tour, were entertained by Sarah Palin in her governor’s mansion. They came away mightily impressed. On returning to Washington Fred Barnes wrote a gushing article about her. Bill Kristol later started to push her name as a possible running mate for John McCain. You might say that the rest is history, except that Ms Palin’s history in politics is far from over.

Later that year the Standard indulged in another round of Republican talent-spotting when it ran a cover story about three promising Republicans in the House of Representatives whom it called the “young guns”. The three men thus flattered—Eric Cantor from Virginia, Paul Ryan from Wisconsin and Kevin McCarthy from California—liked and adopted the moniker. They have since turned the Young Guns into a bigger, formal group, working with the National Republican Congressional Committee to pick talented congressional candidates. ...

The salmonella outbreak: Un oeuf is enough   (02.09.2010 12:46)

Unsafe eggs are the latest food scare

AMERICANS are known as hearty eaters, so a string of recent food-safety scares has shaken them to their rather wide cores. The country has already endured the economic and gastronomic damage inflicted by recent recalls of unsafe spinach, peanut butter, beef and peppers. Now insult has been added to injury.

The latest scare involves eggs. Officials confirm that from May to July nearly 2,000 people have been sickened by salmonella traced back to tainted eggs. As this is several times the baseline rate of affliction, it has forced the recall of over 500m eggs. That is not a deadly blow, as the country produces over 6 billion eggs each month, but more recalls may be coming. ...

Ohio's 1st congressional district: In black and white   (02.09.2010 12:46)

Democrats must energise their base if they are to win in November

STEVE DRIEHAUS is ready to speak to old folk at a community centre in Cincinnati’s western suburbs, but their game of bingo is not quite finished and the Democratic congressman has to wait. A woman sidles over to warn that it’s a tough crowd. She is right. Some in the audience are vexed at the $26 billion package of aid for teaching and other jobs that Mr Driehaus and his colleagues in the House recently passed. “It’s another union bail-out!” yells one lady. Mr Driehaus’s suggestion that some of the blame for America’s economic ills lies with the Bush administration does not go down well, either.

This is Ohio’s 1st congressional district. Covering most of Cincinnati and surrounding Hamilton County, it is a diverse political barometer with a Democratic urban core and suburbs full of Republicans and independents. George Bush carried the district in 2004; Barack Obama won it in 2008, by 11 points. Mr Driehaus was elected that year, defeating Steve Chabot, a Republican who had held the seat for 14 years and who now wants it back. ...

Atlantic City: A struggling city by the sea   (02.09.2010 12:46)

New Jersey’s governor has a plan to help America’s playground

FOR centuries Atlantic City has been a holiday spot. The Lenni-Lenape Indians spent their summer months there, though they called it “Absegami”. In 1850 Jonathan Pitney, a local doctor, saw the then undeveloped island as a “city by the sea”, a health resort where people could escape the dirty towns. Within a few years a train full of Atlantic City’s first spa guests arrived. A century and a half later that city by the sea boasts 11 casinos and the famous Boardwalk; but its fortunes have declined of late. People think of it as unsafe and unclean. Its jobless rate, at 12%, is higher than the national rate of 9.5%. A reported 24% of its housing units are empty. The city’s poverty rate is slightly higher than it was in 1978, when the first casino opened.

Gambling, long considered recession-resistant, was one of the first industries to be affected by the latest recession. It may also, according to Moody’s, a ratings agency, be one of the last to recover. On August 18th the Casino Control Commission announced that Atlantic City’s casinos had reported a 23% decline in operating profits during the second...

Savannah's port: A man, a plan, a canal   (02.09.2010 12:46)

Why digging in Panama is bringing out the shovels on America’s east coast

SOMETIMES what is absent is more important than what is present. So it is with Savannah’s port, the fourth-busiest container port in America and one of its fastest-growing, where what is absent is the sea. Its busier rivals—Los Angeles, Long Beach and New York/New Jersey—sit on saltwater bays; Savannah’s port is almost 20 miles (32km) inland on the Savannah River, far from the city’s charming Victorian centre, in the distinctly unlovely suburb of Garden City.

Yet it is precisely that remote site that has allowed Savannah to grow as swiftly as it has: land is cheap and available. Home Depot, IKEA, Target and Wal-Mart all have distribution centres of more than 1m square feet (100,000 square metres) in the Savannah area to handle cargo coming through the port, which sits at a nexus of interstate highways and railway lines that provide quick access to the south-east and Midwest. During fiscal 2009 another 1.5m square feet of warehouse space came on-stream in the region; a further 20m square feet are planned. Georgia’s ports (of which Savannah is the largest) are a big economic engine for the state, responsible in 2009...

Housing sales: Grinding to a halt   (26.08.2010 12:50)

Loss of a credit collapses the market

THERE was always some concern that the Obama administration’s attempts to prop up the housing market with a generous housing-tax credit could end badly. Opponents of the policy—worth up to $8,000 for first-time buyers—argued that it would merely move sales around, from after the deadline to before, and could produce a slump when the deadline passed. Such fears helped clear the way for an extension of the programme from its first 2009 deadline to April of this year.

Despite some effort, Congress in the end decided against a second extension. With the support of the credit gone, a period of housing-market weakness was inevitable, but the actual decline has been distressingly bad. ...

Unemployment and the mid-terms: To help or not to help   (26.08.2010 12:50)

The parties wrestle over whether America can afford to create more jobs

THE gargantuan statue of a dining-room chair that graces the centre of Martinsville is a tribute to the legacy of the local furniture-making industry. That legacy is grim, however: for decades, local factories, bested by foreign competition or automating to keep pace with it, have been shedding workers or shutting up shop altogether. Earlier this year American of Martinsville, a 100-year-old furniture manufacturer whose headquarters overlooks the giant seat, declared bankruptcy and closed its local factory, eliminating 225 jobs. Another local firm, Stanley Furniture, recently laid off 530 workers. Two other big local industries, textiles and tobacco, are equally sickly. Unemployment in the town, which was already 9% before the recession, is now 20%.

Martinsville also happens to sit in one of the most marginal congressional districts in the country. At the most recent election, in 2008, Tom Perriello, a Democrat, ousted the Republican incumbent by just 727 votes, even as the district voted against Barack Obama for president. In November Robert Hurt, a popular state senator, aims to recapture the seat for the Republicans. Both candidates agree that the biggest local concern is unemployment. The same is true of...

New Orleans five years after Katrina: Chins up, hopes high   (26.08.2010 12:50)

The budget’s holed, the police are bent, but good times keep rolling—somehow

IT IS still obvious to any visitor—especially one who ventures out of the French Quarter, with its restaurants and night clubs, into the unstarred districts of the city. Something awful happened here in the not-too-distant past. The signs are everywhere: empty lots overgrown by weeds, ramshackle, leaning houses, derelict public buildings still awaiting restoration. Some houses feature “Katrina tattoos” sprayed by rescuers as they completed house-by-house searches in 2005. Nobody at home.

And yet New Orleans has undoubtedly recovered its essence. The old neighbourhoods are almost intact, and the city’s irrepressible people have mostly returned. Experts estimate that perhaps 360,000 people now live in a city that was home to around 100,000 more on the day disaster struck. Those who left were probably disproportionately black and poor. Yet the city’s large black majority, still there and mostly still poor, has ensured that the extravagant culture of New Orleans has survived the flood unharmed. ...

The latest primaries: Squandered millions   (26.08.2010 12:50)

Neither money nor dynasty guaranteed success

IT’S amazing how little $25m buys you these days; $50m, on the other hand, is something to work with. That seems to be the moral pundits are drawing from this week’s primaries in Florida, where dazzlingly wealthy political novices spent small (by their standards) fortunes vying for the Democratic nomination for senator and the Republican nomination for governor. In the end the $25m-odd that Jeff Greene, a property mogul, devoted to the Senate race won him less than a third of the vote—at $90 apiece. But the $50m that Rick Scott, a hospital tycoon, lavished on the governor’s race secured a slender victory.

The two multi-millionaires are both unlikely candidates. Mr Greene made a mint betting that America’s property bubble would burst, and therefore profited, in a sense, from the present misery of millions of Florida homeowners. It did not help that he had run (unsuccessfully) as a Republican for Congress in the 1980s, had moved to Florida only two years ago and keeps getting into scrapes involving his 145-foot yacht and assorted tabloid celebrities. Mr Scott, for his part, founded a hospital chain that paid $1.7 billion to settle charges of defrauding the government...

Lexington : The president and the peace process   (26.08.2010 12:50)

A thankless task, but at least Barack Obama seems to be trying

WHY, you have to wonder, do they bother with it? The “peace process”, that is. The present conflict between Arabs and Jews in Palestine has been going on for about a century. And yet every American president is implored upon entering office to bring the quarrel swiftly to an end. Most have a go—or at least go through the motions. Some actually make progress. Jimmy Carter owes his Nobel peace prize in large part to the peace deal he brokered between Israel and Egypt in 1978 (and has never let the world forget it). Bill Clinton got Yitzhak Rabin and Yasser Arafat to shake hands on the White House lawn, but no peace, and no prize, followed the unhappy Camp David summit of 2000.

Since the Nobel committee saw fit to reward Barack Obama virtually the instant he was elected, it cannot be the lure of that prize that explains why he is investing in this thankless conflict so early. Doing so is not, after all, compulsory—nor always wise, since the reaction to peacemaking that fails can be violent. Soon after Mr Clinton’s failure at Camp David, for example,...

Managing the West’s forests: For fun and profit   (26.08.2010 12:50)

Forest jobs are disappearing, too. Perhaps strategic alliances with tree-huggers can help

AMERICA’S most sparsely populated states were among its more resilient during the recession. Before the downturn, places like Montana and North Dakota poked along with slow growth and greying populations. When the wheels came off the national economy, they began to move up the rankings. They were doing well from commodities, had never known housing bubbles and were not especially vulnerable to the financial sector’s troubles. In 2008 Montana’s growth rate was the highest in the country.

But no state has escaped unscathed, and a good example of that is Montana’s timber industry. A furious national rate of homebuilding kept lumber prices high at the beginning of the decade, but as the markets collapsed, so did housing starts. In 2008, according to the University of Montana’s Bureau of Business and Economic Research, the state’s overall sales of wood and paper products were roughly $710m, down from about $1.2bn in 2005. ...

Mitch Daniels: The right stuff   (19.08.2010 13:47)

Indiana's governor is a likeable wonk. Can he save the Republicans from themselves and provide a pragmatic alternative to Barack Obama?

THE governor does not like to keep people waiting. On a recent morning this small man leapt out of a trooper’s Toyota (Indiana-made) while it was still moving. He burst into a tiny chamber of commerce and began joking with businessmen, teachers and farmers. He is comfortable with most people in most places. He can command a boardroom. He has moseyed through enough fairs to know how to sign a goat—on its left side, so as not to write against the grain of its coat. After some small talk with the chamber, he introduced himself formally: “Mitch Daniels, your employee in public service.”

Most Americans know little or nothing of Mr Daniels. He does not tweet. “I’m not an interesting enough person,” he explains. He is a Republican who had never heard of 9/12, Glenn Beck’s tea-party group, before The Economist mentioned it to him. But he is good at one thing in particular: governing. ...

Citizenship and birth tourism: Amending the amendment   (19.08.2010 13:47)

A challenge to an American birthright

PROMINENT Republicans have begun questioning America’s hallowed principle of birthright citizenship. The policy, established after the civil war by the 14th amendment to the constitution, is seen as one of the party’s greatest feats. Yet in July Lindsey Graham, a moderate Republican senator, suggested amending the amendment to fight the “drop and leave” tactic of visiting America to give birth. Louie Gohmert, a Texas congressman, had earlier warned of enemies sending mothers-to-be to America to have their babies who could then be “raised and coddled as future terrorists” before being sent back.

Only about a sixth of the world’s nations practise birthright citizenship. The United States originally adopted it to end slavery, by making a citizen anyone born in the country and “subject to the jurisdiction thereof”—a clause then meant to exclude sovereign Native-American tribes, and still used to exempt children of foreign diplomats. In 1982 the Supreme Court ruled that people who had entered America illegally also met the “subject to the jurisdiction” standard. A recent study by the Pew Hispanic Centre found that 8% of births in America are to illegal immigrants. ...

Nevada's Senate race: Return of the prizefighter   (19.08.2010 13:47)

Nevadans love to hate Harry Reid, but may re-elect him anyway

VOTERS are meant to be furious with incumbents this year. So surely the highest-profile incumbent senator, majority leader Harry Reid, must be at risk of losing this November? Along with Barack Obama and Nancy Pelosi, the speaker of the House, Mr Reid forms what “tea-party” enthusiasts consider an unholy troika of Democrats who are foisting big government on an unwilling and ailing nation. And Nevada, Mr Reid’s home state, ails the most, with the highest unemployment, foreclosure and bankruptcy rates.

A large portion of Nevada's voters do dislike Mr Reid in a way that is intense and visceral. Yet this hatred is often irrational, says Eric Herzik, a political scientist at the University of Nevada, Reno, who himself leans Republican. Certainly, Mr Reid is bland. But he has been that way throughout his four decades in politics, and Nevadans should have got used to it by now. Many accuse him of having gone native in Washington, DC, where he has spent 27 years in the House or the Senate. But they also like the favours Mr Reid has brought back to Nevada. ...

Public transport: End of the lines   (19.08.2010 13:47)

Atlanta’s transport system faces huge service cuts. It is not alone

FROM downtown Atlanta, the 113 bus trundles past many of the city’s most prominent attractions: the Martin Luther King memorial, the Georgia Institute of Technology, the Georgia Aquarium, the World of Coca-Cola and Centennial Olympic Park. It serves residential neighbourhoods in Sweet Auburn, Candler Park and Inman Park; students at Georgia Tech; and tourists heading to the city’s museum and arts district. It does, in short, precisely what a city bus is supposed to do—make it feasible for people to get around without a car. On September 25th, it will cease operating.

The Metropolitan Atlanta Rapid Transport Authority (MARTA), which runs the city’s buses and trains, is facing a $70m deficit next year, and will eliminate 40 of its 131 bus lines. It is also raising fares for weekly and monthly passes, cutting rail services by 14.2% and laying off around 300 people. This will hit the region hard: MARTA serves around 500,000 people per day, 46% of whom say they would be unable to travel without it. ...

Lexington: The air-conditioned Puritan   (19.08.2010 13:47)

Why Americans, and those who are employed to write about them, cannot enjoy holidays

“LET's take a boat to Bermuda, Let's take a plane to St Paul, Let's take a kayak to Quincy or Nyack, Let's get away from it all.” That may be all very well if you are not Lexington. For reasons only the flinty-hearted editor of this newspaper can explain, there will be no summer break this year for your columnist. True, Lexington has been allowed to saddle up his ultimate driving machine and motor north to join friends in a cabin in the Adirondacks. But get away from it all? No sir, this is a space that must be filled week in and week out this summer, come what may.

In a way, of course, it is fitting that a Brit writing about America should not be allowed actual relaxation on a summer holiday. Having a complete break would make it harder to understand the natives. As all the world knows, Americans find taking time off, let alone filling that time with leisure, painfully hard. One travel website, expedia.com, believes (what a surprise) that “everyone deserves and needs a vacation.” Indeed, it has compiled comparative international data...

Trade figures: A turn for the worse   (19.08.2010 13:47)

Further signs that the recovery is weakening

NO SOONER have Americans come to terms with their second-quarter economic slowdown than economists have started warning that the news is worse than they first let on. Output growth slowed to an annualised rate of 2.4%, according to the government’s initial estimate, down from a 3.7% rate during the first quarter. Among the chief culprits was a widening trade gap. Imports grew nearly three times as fast as exports for the period, producing a bigger drag on output. As Christina Romer, the outgoing head of Barack Obama’s Council of Economic Advisers, lamented, “A bit of you keeps saying that if only those were American products, think of how high GDP growth would have been.”

That difference between what could be and what is continues to grow. On August 11th the Census Bureau reported a nearly $8 billion increase in the trade deficit between May and June. Imports rose by $6 billion while exports declined, leading to a $50 billion monthly trade gap: the largest since 2008. Economists estimated that this new data could trim nearly half a percentage point off second-quarter growth. ...

Nalanda university: Ivory pagodas   (02.09.2010 12:46)

An ancient pan-Asian university might yet open again

NALANDA is an unlovely place in the poorest state in India. Yet, as in much of Bihar, a prosaic present belies a poetic past. It is the site of one of the first great universities which, half a millennium before the founding of Oxford, flourished with some 10,000 students and monks from all over Asia. Mango groves and lotus pools circled its halls, and an 8th-century inscription touted its “row of pagodas the spires of which touched the clouds.”

If some scholars and diplomats have their way, a new generation of students will be enrolled. A bill has just snaked through India’s parliament calling for Nalanda’s revival, at a likely cost of several hundred million dollars. The Nalanda Mentor Group, led by Amartya Sen, an economics Nobel laureate, has overseen the project since it was first proposed in 2006. The Bihar state government has agreed to provide 500 acres for a new campus and India’s Planning Commission has proffered 1 billion rupees (some $21m) to get the project started. A chancellor has also been appointed. ...

Football and Korean reunification: Dreaming of 2022   (02.09.2010 12:46)

The South waves sticks and dangles footballs at the North

SOUTH KOREANS are unsure precisely how best to respond to the uncertain changes in the regime to the North. A hardline approach to its neighbour has been the official stance ever since the Cheonan, a Southern military corvette, was torpedoed in March. Sanctions, a diplomatic freeze and military exercises with the Americans all suggest that the authorities in Seoul are in no mood to back down.

Yet this week, the South Korean Red Cross said that it would send emergency aid, mostly food and medicine, worth $8.4m to help the North cope with floods. This would be the first aid to flow north since May, but the South’s government insists it is merely a temporary humanitarian measure. ...

Parliamentary polls in Afghanistan : Bloody democracy   (02.09.2010 12:46)

Elections this month should not be quite as awful as last year’s presidential one

THE presidential poll in Afghanistan is still the stuff of nightmares for the technicians, diplomats and officials who had the misfortune to be involved in it. They shudder at the orgy of Taliban violence unleashed across the country on voting day, August 20th 2009, the most violent day in recent years. Voters stayed away from many polling stations, leaving corrupt supporters of the incumbent, Hamid Karzai, to stuff ballot boxes with perhaps 1m votes. And during the months of ballot auditing and recounts that followed, the business of government ground to a halt.

Relations between Afghanistan’s Western backers and Mr Karzai also sank to a wretched low after the West dared to point out the extraordinary level of electoral fraud. “God, it was just terrible,” says one shaken foreign election expert. “It just can’t happen again.” ...

India's disappointing government: Much less than promised   (02.09.2010 12:46)

The economy is powering on, but the Congress-led coalition is squandering an opportunity to improve India

THE weightlifting auditorium has a leaky roof. The athletes’ village has no kitchen. Stagnant monsoon water, abuzz with dengue-carrying mosquitoes, collects at most of the stadiums being hurriedly built for the Delhi Commonwealth games, which are due to begin on October 3rd. The security arrangements, in terrorism-stricken India, are shot to pieces because of 24-hour processions of workmen at most venues. Manmohan Singh, the prime minister, reiterates the official line that these will be the “best games ever”. That may depend on how you define “best”.

This shambles, for which corruption, feuding ministries, sapping bureaucracy and shoddy workmanship are all to blame, does not matter to many Indians. Athletics is not cricket. And few know much about their country’s image abroad. Yet it is depressing, not least because it mirrors how large parts of India are run. ...

Vietnam's economy: Plus one country   (02.09.2010 12:46)

Cheap labour will not yield gains for ever. But what comes next is unclear

ON THE edge of Hanoi brick-walled factories lie abandoned, weeds sprouting in their ruins. Surprisingly, this is a sign of progress. The land is slated for new housing; the state-owned textile firm that operated there is moving to an industrial park, where it can better meet booming demand for Vietnamese garments. Exports of textiles and garments rose by 17% in the first seven months this year, to $5.8 billion, suggesting that investors still favour Vietnam as a base for cheap manufacturing.

Its advantages have been amplified by recent labour unrest and rising costs in southern China’s factories. In Hanoi there is renewed talk of “China Plus One” as a strategy for multinationals keen to spread their bets. Vietnam could gain handsomely, thanks to its labour which is cheaper than China’s and its neighbours’ (see chart). Even after a pay rise, the monthly wage for a textile worker starts at $84, says Nguyen Tung Van, head of the Communist Party-run textile workers’ union, from his office in the abandoned compound. The industry employs around 1.7m people. Makers of footwear, furniture and more also gain from supplies of cheap...

Banyan: Afloat on a Chinese tide   (02.09.2010 12:46)

China’s economic rise has brought the rest of emerging Asia huge benefits. But the region still needs the West

WITH markets still on edge after the worst financial crisis in decades, and fears of renewed recession stalking the West, this week seemed a poignant moment for China’s People’s Daily to detect a “golden age of development”, for Asia at least. Yet developing Asia, led by China itself, is booming. China’s GDP barrelled along in the first half of the year, growing by 11.1% compared with a year earlier. The newly industrialised little tigers—Hong Kong, Singapore, South Korea and Taiwan—as well as most of South-East Asia seem to have fully recovered from the downturn. Even Thailand, mired in political turmoil, grew by 9.1% in the second quarter.

The dream is that this gilded future is now insulated from rich-world downturns: that China—now having, after all, officially overtaken Japan as the world’s second-largest economy—can drive growth for the whole region. One day, maybe. Not yet. ...

China and North Korea: Greetings, comrades   (02.09.2010 12:46)

What lies behind the Dear Leader’s latest trip to China?

NORTH KOREA’S leader, Kim Jong Il, must have been on an urgent mission when he boarded his bulletproof train and headed to China for the second time in less than four months on August 26th. With America’s former president Jimmy Carter in town, devastating floods in the north and a rare conclave of his ruling party only days away, Mr Kim had much to keep him at home. But buttering up China appears to be a new priority.

Both China and North Korea, as is their wont, kept quiet about the visit until after Mr Kim’s return on August 30th. By then Mr Carter had left with an American, Aijalon Gomes, who had been serving eight years’ hard labour for entering the country illegally in January. Mr Gomes’s release was a rare gesture of conciliation to America after months of heightened tension caused by the sinking in March of a South Korean naval vessel. ...

Nepal's perilous politics: Summer reruns   (26.08.2010 12:50)

Bovine politicians fail to pick a prime minister

THE monsoon brings Nepal’s annual cow festival, a chance for ordinary people to mock their rulers in traditional street performances. This year the comedians were blessed with plenty of material. Two months after the prime minister resigned, on the grounds that he was unable to advance the country’s peace process, Nepal remains without a leader. As a result, the tenuous peace stands in dire need of some process.

Five rounds of voting in the democratically elected Constituent Assembly, which also serves as a parliament, have failed to produce a new prime minister. A sixth round, scheduled for September 5th, is unlikely to do any better. ...

Jam tomorrow, tomorrow and tomorrow   (26.08.2010 12:50)

A booming economy and middle class means painfully slow roads.

Drivers beware: a booming economy and middle class may result in painfully slow roads. One traffic jam this month, along a highway leading to Beijing, stretched over 100km and lasted for nine days. Some 248,000 additional cars were registered in Beijing in the first four months of this year alone, snarling up the streets. Lots of roadworks are causing short-term grief. But the main problem seems to be demand for goods and energy, as lorries carrying coal crawl endlessly towards the city. Beijing is said to be spending 80 billion yuan ($11.8 billion) this year on transport infrastructure. It might be wiser to invest in alternative forms of power generation.

...

Japan's dysfunctional politics: Ichiro Ozawa strikes back   (26.08.2010 12:50)

The return of a destructive force in Japanese politics

ICHIRO OZAWA, Japan’s most Machiavellian politician, recently dismissed Americans as “monocellular”—using a Japanese term that roughly means simplistic. Compared with his scheming mind, Americans should take that as a compliment. On August 26th Mr Ozawa dropped a bombshell that could bring down the government, launching a leadership challenge to the prime minister, Naoto Kan, in an internal election of the ruling Democratic Party of Japan (DPJ).

If he were to win on September 14th, Mr Ozawa, 68, would automatically become prime minister, Japan’s third this year alone. That would mark a remarkable comeback. Less than three months ago, on June 2nd, he was forced out as the DPJ secretary-general alongside the previous prime minister, Yukio Hatoyama, because of poor leadership and his links to a foul-smelling campaign-funding scandal for which he may possibly still face indictment this year. ...

Banyan: Vale of tears   (26.08.2010 12:50)

In Kashmir freedom is much farther than a stone’s-throw away

OWAIS hardly looks like a serious danger to the security of India. Slender and frail, he says he is 17 but seems younger as he basks shyly in the praise of the men gathered in a garden in Srinagar, summer capital of Indian-ruled Kashmir. But he is proud to show off the scars and stitch-marks that cover his belly. He has just emerged from hospital, lucky to be alive. He took a bullet in an anti-Indian protest on August 2nd in Kupwara, some 90km (56 miles) away. His uncle died that day, one of more than 60 people, mostly young, killed in a wave of unrest that began on June 11th. Owais and those like him have presented the Indian government with a new and perhaps insoluble Kashmir crisis.

They are self-proclaimed “stone-pelters”, named after their weapon of choice. Well-organised—on Facebook, to a large extent—the pelters emerge at short notice to throw stones at police stations and other targets, and get shot at. In response to their protests much of the Kashmir valley that surrounds Srinagar has been shut down—both by hartals, or strikes, called by separatist leaders, and by government-imposed curfews....

The police in the Philippines: Manila showdown   (26.08.2010 12:50)

A bungled rescue of Hong Kong hostages sparks a diplomatic row

AS A policeman ineffectually sledgehammered the windows of a hijacked bus, in a desperate effort to reach 15 hostages trapped inside, it became sickeningly clear that a rescue operation had gone dreadfully wrong. More than an hour later the police got in by opening the emergency exit, and found proof of their bungling: eight of the 15 hostages, all Hong Kong tourists, had been shot dead, as had the hostage-taker, a former policeman.

August 23rd thereby became a shameful day for the Philippine National Police. Battered by criticism at home and abroad, the police admitted to “defects” in their handling of the hijack. Survivors and relatives of the victims were more explicit in their anger. It was obvious to millions in the Philippines and beyond, watching the drama unfold live on television, that the rescue squad lacked training and equipment. As serious are chronic weaknesses in the country’s law-enforcement system. ...

Australia's dead-heat election: Hung, drawn, now courting   (26.08.2010 12:50)

The Australian electorate falls out of love with the two main parties, while each tries to woo independents and form a government

EVERYONE had expected a long night waiting for a result in the closely fought general election on August 21st. Instead, it looks like turning into a long fortnight. The contest between the ruling Labor party, under Julia Gillard, and the conservative Liberal-National opposition, led by Tony Abbott, produced some exotic outcomes: Wyatt Roy of Queensland, at 20 the youngest federal MP; and Adam Bandt of Victoria, the first Green elected to the lower house in a general election. But it failed to yield a clear verdict, leaving the first hung parliament in 70 years. Australia’s political culture seems set for upheavals.

The last time the country found itself in this state was in 1940. Robert Menzies, who later founded the conservative Liberal Party, which Mr Abbott now leads, relied on two independents to stay in power; that arrangement collapsed a year later. This time, neither Ms Gillard nor Mr Abbott will command the 76 seats needed in the 150-seat House of Representatives, so each has set out to woo Mr Bandt and four independents, who hold the balance of power....

The floods in Pakistan: Washed up   (26.08.2010 12:50)

The misery shows no sign of abating, even as waters recede in some places

PAKISTAN’S floods are looking ever more monstrous. In the south waters continue to rise, eating up new areas and swamping districts such as Jaffarabad, in Baluchistan province, a full 100km from the Indus river. Farther north the tide is now receding, only to reveal the many homeless and hungry, their stores of wheat and their crops and livestock destroyed. Everywhere it is becoming clearer how social, economic and political misery will endure for a long time yet.

Overall 1.2m homes have been damaged or destroyed. Some 800,000 people remain cut off from all help. Even where the government or aid agencies are present, the help is patchy at best, with many left to fend for themselves. Now dark (and plausible) accusations are circulating: the well-connected chose which areas were purposefully flooded to relieve pressure elsewhere; aid is being diverted to constituencies of powerful figures; woefully feeble flood-protection infrastructure was left badly maintained. ...

Talking about reform in China: Change you can believe in?   (26.08.2010 12:50)

The prime minister calls frankly for political reform

CHINA is enjoying its new status as the world’s second-largest economy, but the prime minister, Wen Jiabao, is refusing to relax. During a visit to a southern boomtown he declared that economic gains could yet be lost without reforms to the political system. One official newspaper called his speech one of “extraordinary importance”, but sceptics abound.

His remarks on August 20th and 21st in the city of Shenzhen have been compared by some optimists to those made by the late Deng Xiaoping during a tour of the same city in 1992. Deng’s calls for market-oriented reforms sent central-planners scurrying and unleashed the entrepreneurial energy that has helped China to grow at giddy rates since. During his trip Mr Wen laid flowers before a statue of Deng, who turned Shenzhen into a test bed for economic change exactly 30 years ago. ...

Rethinking China's one-child policy: The child in time   (19.08.2010 13:47)

Thirty years on, some want to scrap the repressive policy. The problem may be to get people to have more—not fewer—babies

IN MARCH, Yang Zhizhu was fired as a law lecturer in Beijing for having more than one child. He knew the risk, but he badly wanted to father a boy. His story is not rare in a country which for 30 years has told couples to settle for a single child and has used draconian measures to limit births. But Mr Yang’s high-profile rebellion has won sympathy even in the state-controlled press.

Rumblings of discontent over the one-child policy have been growing louder, stirred by debate over whether it is needed now that the first children born under it face the prospect of caring for an ever-increasing number of pensioners. A report last month by the Chinese Academy of Social Sciences (CASS), a leading government think-tank, said officials were seriously overestimating the fertility rate (the number of children an average woman can expect to have in her lifetime). Rather than suppress the rate, suggested the report, the government should try to lift it. ...

Myanmar's politics and economy: A new day beckons, sort of   (19.08.2010 13:47)

The first election in 20 years coincides with a rushed privatisation programme. Guess who profits from the fire sale

IN MYANMAR, a column of cars at a petrol station usually means a fuel shortage or a broken pump. But the queue at “New Day”, one of dozens of newly privatised stations in Yangon, the former capital, is a sign of progress. New managers have repainted its tin roof and installed two Chinese-made pumps with digital displays. Fresh-faced attendants in branded red-and-white polo shirts leap eagerly to their task. To the side sit the rusting pumps of MPPE, the state firm that this year lost its monopoly on fuel sales and distribution.

Motorists now enjoy the luxury of filling their tanks. Before, one explains, you could buy a maximum of two gallons a day and black-market merchants supplied the rest. Naturally, rationing did not apply to military men or civil servants, who got free fuel allocations. MPPE was notorious for selling substandard diesel. Now drivers can pick among the private operators of Myanmar’s 248 filling stations, though prices seem to be pegged at a single rate. ...

Banyan: No sign of a rainbow   (19.08.2010 13:47)

Badly governed and short of the foreign help it needs, Pakistan’s people deserve a new covenant

LABOURING under so many curses, Pakistan is as ill-equipped as anywhere to deal with one of the most far-reaching natural disasters the world has seen for decades. Mired in poverty, misruled by soldier and civilian alike, and prey to insurgency, Islamist-inspired terrorism and sectarian strife, Pakistan has now suffered flooding that has deluged between one-fifth and one-third of the country’s land mass, and affected up to 20m people. The gloomiest pundits think Pakistan simply cannot cope: they foresee mounting social unrest and further usurpation of the functions of government by either the army or Taliban militants.

Ultimately, they predict the total collapse of a state with 180m people and a nuclear arsenal, whose soil provides al-Qaeda with its global headquarters. Comparisons are drawn to the devastating cyclone in the then East Pakistan in 1970, when the government’s botched response was a factor behind the war that led to Bangladesh’s independence the following year. ...

South Korea talks of unification: Duty calls   (19.08.2010 13:47)

Talk in South Korea of a new levy to pay for unification with the North

LEE MYUNG-BAK, South Korea’s president, made an unexpected pronouncement during his Liberation Day speech on August 15th. Catching even members of his own party off-guard, he referred to his 70m compatriots (ie, including 20m or so Koreans in the northern bit of the peninsula), declared that “reunification will happen” and suggested a “unification tax” should be levied on southerners to pay for it.

Such a tax, if it is intended seriously, would be unlikely to amount to much. Speculation over the likely cost of uniting the North with the South (which enjoys an income per head 15 times greater) runs into a trillion dollars or more. The difference in living standards between the two Koreas is much greater, for example, than the gap between East and West Germany at the end of the cold war. ...

Middle East peace talks: Back to the table   (02.09.2010 12:46)

Israel’s prime minister sounds upbeat, even if no one else does

YET another bout of Israeli-Palestinian peace negotiations was launched this week amid a splurge of pious public talk tempered by sceptical punditry. Not much new in that, it seems, though it is almost two years since the previous direct talks took place (and ran aground).

Nothing new, either, in two ghastly shootings on the West Bank in the days before the talks. The first left four Israeli civilians dead, two of them the parents of six children and another a pregnant woman. Hamas proudly took the “credit” as a means of exposing, it said, the collusion between the Palestinian Authority and the occupying forces of Israel. The following day two more Israelis were wounded. ...

Rwanda's meddling in Congo: Revisiting the killing fields   (02.09.2010 12:46)

A leaked UN report looks very bad for Rwanda’s government

IN 1996 Rwandan troops descended on the Chimanga refugee camp in east Congo, to which their compatriots had fled to avoid genocide at home. The soldiers gathered the refugees together with promises of meat to fortify themselves for a promised return to Rwanda. “At a given moment,” says the draft of a new report from the United Nations, “a whistle sounded and the soldiers positioned all around the camp opened fire on the refugees. According to different sources, between 500 and 800 refugees were killed in this way.”

In the 16 years since his rebel forces halted the Rwandan genocide, the country’s president, Paul Kagame, has earned a reputation for steering his country firmly towards stability, economic growth and a measure of reconciliation. Lately, that reputation has come under attack. Before a landslide election victory in August Mr Kagame found himself under heavy fire for the mysterious murders, oppression and censorship that marred the run-up to the polls. Grim-faced and impatient of critics, Mr Kagame weathered the storm. ...

Maids in the Middle East: Little better than slavery   (02.09.2010 12:46)

Domestic workers in the Middle East have a horrible time

AS a maid working in Saudi Arabia, Lahanda Purage Ariyawathie suffered at the hands of her Saudi employer and his wife, who skewered her body with at least 24 nails and needles (pictured). Her case was unusually brutal, but the abuse of domestic workers in the Middle East is all too common.

Huge numbers of migrant domestic workers, mostly from Asia and Africa, are employed throughout the region. Some 1.5m work in Saudi Arabia, 660,000 in Kuwait and 200,000 in Lebanon. Many work very long hours and receive little food, no time off and pay that is a fraction of any minimum wage, if it materialises at all. Human Rights Watch (HRW), a New York-based group, says at least one domestic worker died every week in Lebanon between January 2007 and August 2008. Almost half were suicides and many were as a result of falling from high buildings, often while trying to escape their employers. Mistreatment is so widespread that the Philippines, Ethiopia and Nepal no longer let their citizens go to Lebanon to work as maids, though such bans have had little effect. ...

South African politics: With friends like these   (02.09.2010 12:46)

President Jacob Zuma is badly bruised by weeks of crippling strikes

THE public-sector strikes that have paralysed hospitals, schools and other essential services across the country since August 18th have damaged South Africa’s image abroad. They have also undermined relations between the ruling African National Congress (ANC) and the Congress of South African Trade Unions (Cosatu), part of the ruling tripartite alliance, together with the communists. On September 1st Cosatu rejected the latest pay offer from the government, so as The Economist went to press the strikes seemed destined to continue, and even intensify. President Jacob Zuma, who ordered both sides back to the negotiating table on August 30th in a last-ditch attempt to end the strike, has emerged weakened from the fray.

Cosatu, with a membership of 2m, has been feeling increasingly aggrieved since Mr Zuma took over as president 16 months ago. Having helped elevate him to power, the country’s biggest union federation thought that he was their man. Cosatu had expected to play an important role in the new administration. Instead, it has repeatedly found its policies ignored. In June relations reached near breaking-point when the ANC threatened to bring disciplinary proceedings against Cosatu’s leader, Zwelinzima...

South Africa's strikes: After the party…   (26.08.2010 12:50)

…comes an almighty hangover

THE warm, fuzzy feeling of national pride and unity engendered by South Africa’s hosting of the football World Cup did not last long. As a strike by more than 1m public-sector workers enters its second week, hospitals, schools and other services across the country remain closed. Women in labour are being turned away from hospitals, the sick and the dying left unattended and pupils trying to get into school beaten up by their own teachers. The army has been called in to help. Police have been using water cannon and rubber bullets to break up the most violent protests. Dozens have been arrested.

The Congress of South African Trade Unions (Cosatu), the biggest union federation and a supposed ally of the ruling African National Congress, is now threatening to shut down the entire economy by calling all its members out in a sympathy strike next week unless the government gives in to the public-sector unions’ demands for an 8.6% wage rise—more than double the inflation rate—plus a housing allowance of 1,000 rand ($135) a month. The government says it cannot afford more than its final offer of a 7% rise plus a 700 rand allowance along...

Iraq's uncertain future: The reckoning   (26.08.2010 12:50)

American troops are leaving a country that is still perilously weak, divided and violent. Little wonder that some Iraqis now don’t want them to go

THE last American combat soldiers in Iraq shuffle through a half-empty base as they prepare for the one-way journey to the Kuwaiti border. Some recall their exploits during many tours of duty over the past seven years, charting their fortunes with language that has become common currency on television back home. The shock and awe of the invasion was eclipsed by insurgents using IEDs. Backed by contractors who erected blast walls around a green zone, the soldiers eventually inspired an awakening among Iraqi tribes that, aided by a surge of extra troops, in time brought something like order. In the soldiers’ telling, the names of places that were little known before the war have acquired the resonance of history: Najaf, Sadr City, Abu Ghraib.

Some 50,000 American troops will stay on in a support role, to “advise and assist” the Iraqi forces that are now supposed to be in charge of the country’s security. Nonetheless, August 31st marks the official end of Operation Iraqi Freedom, the combat mission that began with the invasion in March 2003....

Ethiopia's capital city: Make it prettier and cheaper   (26.08.2010 12:50)

Architects want to make the city that hosts the African Union so much nicer

AMHARIC has no precise word for architecture, but it needs one. Ethiopia’s capital, founded by Emperor Menelik II in 1886, now has 4.6m people but that figure may well double by 2020. Dirk Hebel of Addis Ababa’s revamped architecture school says that “the first thing we do is to sit down with the students for a day and explain what [it] is”.

According to the UN, Addis has one of the higher densities of slum dwellers in the world. But their geographical pattern is unusual. Most African cities separate fairly neatly into poor and rich areas “like a sunny-side-up egg”, with slums spreading out from the rim, says Mr Hebel. But Addis is “more of a scrambled egg”. A lack of crime and a tradition whereby the rich seem to tolerate the poor living among them mean that Addis’s slums often lie in the seams between office buildings and flats in the more affluent parts of the city. ...

Iran's nuclear programme: Game resumed   (26.08.2010 12:50)

Iran pockets Bushehr and plays on

IT WAS meant as a marker for the world’s readiness to accept Iran’s right to benefit from the peaceful uses of nuclear power, despite its provocative behaviour. By this reasoning, the fuelling this week by Russia of the Bushehr nuclear reactor, Iran’s first power-generating nuclear plant that is due to start supplying electricity to the national grid by year’s end, could help persuade the regime to return to the negotiating table over United Nations demands that it suspend more troubling nuclear work.

For Iran, however, Bushehr symbolises something altogether different: the fruits of defiance. It comes alongside recent reports that Iran has acquired a clutch of advanced air-defence missiles on the black market, developed its own new attack drone and supplied advanced radar to Syria, a neighbour of Israel, a country that Iran’s fiery president, Mahmoud Ahmadinejad, has talked of being wiped off the map. Such an attitude augurs ill for new talks about talks that Iran hints might resume in September with the six countries (America, Russia, Britain, France, Germany and China) that have been trying to negotiate it round. ...

Egypt's presidential hopeful: Of course I don't want to be president   (26.08.2010 12:50)

Gamal Mubarak begins to test the ground for his bid for the succession

FOR the past decade, Gamal Mubarak, the son of President Hosni Mubarak and now the number two in Egypt’s ruling National Democratic Party (NDP), has denied any wish to succeed his father. When asked about his future, the younger Mubarak prefers to say only that his work in the party is quite enough to keep him busy.

But this summer’s speculation that the president is grievously ill is now rekindling interest in Gamal. His 82-year-old father flew abroad for hospital treatment in March; there are unconfirmed reports that he has cancer. Then, a month or so ago, posters calling for his son’s candidacy for president began to spread in cities and in the countryside. They are usually presented as private initiatives backed by local businessmen wanting to pledge their affection for the self-styled reformer. ...

Yemen's dwindling Jews: The last of the Jewish Arabs   (19.08.2010 13:47)

An ancient community is finally abandoning its Yemeni homeland

THE government of Yemen and its people are vociferously anti-Israel. Three of the country’s members of parliament were on the aid flotilla to Gaza that was lethally raided by Israeli commandos at the end of May. They were later given a hero’s welcome home. Yemenis rarely protest publicly against their own miserable circumstances at home. But when tensions rise in Gaza, they happily hold parades in Sana’a, the country’s capital. Comedies on television often feature stupid Israeli soldiers outwitted by plucky Palestinians.

Yet Yemenis also say they appreciate the heritage of their country’s Jews. In the Great Mosque in Sana’a’s ancient city, a guard, whispering as pious men pore over Korans, points out Jewish carvings. In the village of Jibla, south of Sana’a, locals show the star of David on an ancient synagogue, now a mosque. Market traders boast that their wares are made of traditional Jewish silver. A stern police officer gives a permit to a Jewish-American to let him visit an old Jewish village. ...

Iraq's oil: Hard to get out   (19.08.2010 13:47)

Foreign oil companies are still finding Iraq a tough place to do business

THE besuited band of executives from an international oil company had expected a different reception when they arrived in Baghdad to sign a deal with senior government officials to develop one of the world’s largest untapped oilfields. Instead of being whisked through the airport, they were held for several hours by immigration officers who thought them “suspicious”. Eventually they were let go. But plenty of others have to wait even longer.

Iraq’s bloody-minded and inefficient bureaucracy is one of several problems oil majors face. Many are still hopeful about the country’s prospects, but the euphoria of last year, when the government started auctioning large fields, has given way to caution. Increasing Iraqi oil production from 2.5m barrels a day to 12m, a quarter more than Saudi Arabia pumps now, will take more than the six to seven years that the government projects, not least because of Iraq’s continuing political violence. ...

Nigeria's coming election: Will he, won't he?   (19.08.2010 13:47)

Speculation has been growing as President Goodluck Jonathan, who was appointed to his post earlier this year, ponders whether to run for election

ON THE streets of Abuja, Nigeria’s capital, unusual posters are appearing. Hastily formed lobby groups are plastering the city with banners encouraging Goodluck Jonathan, the president, to run in next year’s presidential election. “We have found our champion”, declares one. “You can do it”, urges another. Newspapers carry headlines speculating about who might back his bid. But, amid the clamour, the man himself is staying silent.

The election in Africa’s most populous country—a heady mix of 150m people, 250 ethnic groups and 36 billion barrels of oil reserves—is due in January. Many Nigerians hope it will prove different from those of the past decade, in which the ruling People’s Democratic Party (PDP) has used ever more violence and fraud to keep its grip on power. But with only five months to go, the man most likely to win has not said if he will even run. ...

The Israel-Palestine peace process: Talk of talks   (19.08.2010 13:47)

Negotiations between Israel and the Palestinians are proving hard to revive

TOUGH beginnings often make things easier later on. Inveterate Middle East optimists clung to this dubious reasoning as diplomats strained this week to get direct peace talks going again between the Israelis and Palestinians.

The proposed choreography is intricate. The peacemaking Quartet (the United Nations, the European Union, America and Russia) was meant to issue a statement on August 16th urging direct talks based on Israel’s 1967 borders and aimed at setting up a Palestinian state within two years. The Palestinians were expected to welcome this and the Israelis to balk at it, claiming it smacked of “preconditions”. Then the Americans would invite the two parties to Washington, or perhaps Egypt, for a formal opening of negotiations. The American letter was to be vague enough for Israel’s Binyamin Netanyahu to accept it without rocking his rightist-religious coalition, and the Palestinian president, Mahmoud Abbas, would point to the Quartet document to ward off his critics. ...

Congo's conflict minerals : Clean them up   (19.08.2010 13:47)

American lawmakers want to break the link between laptops and war

MANY of the rebel groups still fighting across swathes of the Democratic Republic of Congo get their cash from rocks. Apart from gold, they illicitly sell cassiterite (used in laptops), coltan (mobile phones) and wolframite (light bulbs). Hundreds of the mines containing such treasures, especially in the country’s troubled east, where conflict has long been fiercest, are targets in turf warfare. Reducing the illicit trade will not bring peace, but it may help.

New legislation passed by America’s Congress is intended to curb the black market and boost the legal one. Companies that report to the American Securities and Exchange Commission now have to reveal whether they buy minerals from Congo or from any of its nine neighbours and, if so, from where. New regulations likely to be proposed by the State Department next year may follow guidelines being drafted by the UN and the OECD, a rich-country club, that will advise companies on how best to trace the origin of their materials. ...

Kenya’s new constitution: Tribal loyalty still wins the day   (12.08.2010 13:39)

Ethnic differences overshadow a strong endorsement for a new constitution

BY A margin of two to one, on August 4th Kenyans endorsed a new constitution. It retains a presidential system, though with stronger checks and balances, plus a measure of devolution to 47 new counties. But differences between the country’s leading ethnic groups were huge, illustrating a persistently worrying ethnic polarisation of politics.

Of Kenya’s five most populous groups, the Luo, who account for about 12% of the total, voted overwhelmingly yes en bloc, as requested by their undisputed leader, Raila Odinga, who hopes, under the new deal, to become the next president. The Luhya, the other main western group, who number a shade more than the Luo, were nearly as keen to say yes. Somalis, coastal people and Kenyan Muslims in general, also gave a uniform nod of approval. ...

Palestinian democracy: Under threat from all sides   (12.08.2010 13:39)

Democracy is flagging in both the Palestinian territories

HANNA NASIR, the head of Palestine’s Central Elections Commission, is not prone to expletives. But the Christian nuclear physicist and former dean of Palestine’s leading university was full of them when the cabinet of the Palestinian prime minister, Salam Fayyad (pictured above left), who runs the West Bank, recently cancelled the municipal elections he was organising. If anything, his rival prime minister in Gaza, Ismail Haniyeh of Hamas (pictured on the right), is even less keen to put his movement’s popularity to the test.

It was the third election the Palestinian Authority (PA) has annulled in less than a year. The terms of the PA’s presidency, parliament and municipalities have all now expired. With no date for fresh polls and in constitutionally uncharted waters, officials increasingly rule by fiat. How far, bemoans Mr Nasir, has Palestine fallen from the heights of 2005 and 2006, when he ran elections that international observers hailed as being among the fairest in the Middle East. Instead of building a democratic state, the PA is fast on its way to creating just another Arab autocracy. ...

Trouble in Sudan's Darfur region: The perils of peacekeeping   (12.08.2010 13:39)

The UN is caught between squabbling rebels and a ruthless government

PITY the United Nations Africa Mission in Darfur, better known by its acronym UNAMID. Despite its best intentions, it has come in for regular criticism since the very start of its task in January 2008. A hybrid combination of peacekeepers under the joint aegis of the UN and the African Union, its 22,000 or so soldiers and policemen have been accused of doing more to protect each other than the wretched displaced Darfuris they were sent to defend. Aid-workers, Darfuris and the Sudanese government have all been loth to trust them. However, for all UNAMID’s flaws, it has improved security a little, at least in the main towns. But now the peacekeeping mission faces a choice which could cost it the last of its credibility.

Late last month fighting broke out in Kalma, a vast camp for internally displaced people near the town of Nyala in south Darfur. It is home to more than 100,000 angry residents, many of them previously victims of the deadly government-supported militias known as the janjaweed. The recent violence flared between supporters of two different rebel groups, a faction of the Sudan Liberation Army (SLA),...

Palestine's Jerusalem MPs: Just get out   (12.08.2010 13:39)

The Israeli authorities try to expel Hamas’s MPs from East Jerusalem

HAMAS members of parliament who live in Israeli-occupied East Jerusalem have not only lost their jobs, since the Palestinian Authority (PA) closed down their legislature; they are also losing their homes.

Perhaps they were too successful. Four years ago a more conciliatory Israeli government let East Jerusalem’s Palestinians, including Hamas, compete in the Palestinian legislative elections. Though still banned as a terrorist outfit, Hamas swept all four of East Jerusalem’s contested seats in the Palestinian parliament. ...

Ramadan in Morocco: To fast or not to fast   (12.08.2010 13:39)

Some harassed libertarians say you should be free not to observe Ramadan

THE law in several countries, mostly in the Persian Gulf but also in the Maghreb and parts of Indonesia, provides for stiffer penalties for those who break fast in public, ranging from fines to flogging. Take article 222 of Morocco’s penal code, dating from the era of the French protectorate, which states that “a person commonly known to be Muslim who violates the fast in a public place during Ramadan, without having one of the justifications allowed by Islam [such as travelling or sickness], shall be punished by one to six months in prison,” as well as a fine.

Last Ramadan, a small group of young Moroccans calling itself the Alternative Movement for Individual Freedoms decided to hold a picnic near Casablanca, the country’s commercial capital, to protest against this law. They argue that article 222 clashes with Morocco’s international obligations and its constitution, which guarantee freedom of conscience. They were arrested before getting a chance to take a bite. ...

Economics focus: War footing   (02.09.2010 12:46)

Monetary and fiscal stimulus make a potent, if uneasy, combination

THE Federal Reserve Bank of Kansas City’s annual conference in Jackson Hole, Wyoming, is the big event of the year for central bankers. But defining monetary policy is far harder than it used to be. In recent years central bankers have lurched ever closer to the realm of fiscal policy, mainly by buying government debt with freshly printed money. They can justify such “quantitative easing” (QE) on monetary grounds since they have already lowered short-term interest rates to, or close to, zero. But they also worry it is a slippery slope from QE to monetising government deficits and thence, inevitably, to inflation. When Phillip Swagel, then an official with the US Treasury, was asked why he attended the conference in 2008, he shrugged: “Fiscal policy, monetary policy—what’s the difference?”

For central bankers this is an unsettling thought. Their mistrust of fiscal policy was nicely captured in a paper presented at this year’s Jackson Hole conference by Eric Leeper of Indiana University*. As central bankers have become more independent, they have increasingly based their policies on rigorous economic analysis. By contrast fiscal policy is deeply politicised, with haphazard methods and few, if any,...

Sovereign debt: Wiggle room   (02.09.2010 12:46)

The IMF offers indebted governments some reassurance

ONE consequence of the deepest recession since the Depression has been the biggest peacetime build-up of public debt the rich world has ever seen. Some reckon that the debt position of many rich countries is now unsustainable. It is a measure of just how nervous people have become about the mountain of debt that the IMF—not usually known for taking doveish views—concluded in two papers released on September 1st that there is too much pessimism about public finances.

The IMF argues that despite historically high debt-to-GDP ratios, many countries still have room for fiscal manoeuvre. Typically, the debate on the point at which a country’s debt burden spirals out of control has tried to identify a single debt-to-GDP threshold, above which things are no longer sustainable. The fund’s economists argue that a universal debt limit does not make sense. ...

Rare earths: Digging in   (02.09.2010 12:46)

China restricts exports of some obscure but important commodities

BEHIND the rise of resource-poor countries like Japan, South Korea and China into industrial giants has been the readiness of other countries to sell them critical commodities, albeit sometimes at excruciating cost. An unfolding collision around a group of elements known as “rare earths” is seen by some as a test of China’s willingness to reciprocate.

Rare earths have become increasingly important in manufacturing sophisticated products including flat-screen monitors, electric-car batteries, wind turbines and aerospace alloys. Over the summer prices for cerium (used in glass), lanthanum (petrol refining), yttrium (displays) and a bunch of other –iums have zoomed upward (see chart) as China, which accounts for almost all of the world’s production, squeezes supply. In July it announced the latest in a series of annual export reductions, this time by 40% to precisely 30,258 tonnes. That is 15,000-20,000 tonnes less than consumption by non-Chinese producers, says Judith Chegwidden of Roskill Information Services, a consultancy. ...

Carbon markets: The smoking greenhouse gun   (02.09.2010 12:46)

An alluring trade in “supergreenhouse” gas emissions is coming under scrutiny

ONE of the curiosities of carbon markets is that they do not just trade in carbon. Other greenhouse gases can be given a value, too—sometimes a very high one. Claims that these prices promote scammery are now prompting some searching questions.

The gas at the centre of the controversy is HFC-23, a greenhouse gas which, on a weight-for-weight basis, is 14,800 times better at trapping heat than carbon dioxide. HFC-23 is produced as a by-product of the manufacture of HCFC-22, an ozone-destroying refrigerant. HCFC-22 is banned in developed countries, but developing countries can keep making it until 2030. ...

Private equity: Candover and out   (02.09.2010 12:46)

A once-revered buy-out firm is going under. Who’s next?

FOR years people have been predicting the demise of private equity. Now they have a proper tombstone to point at. On August 31st Candover, once one of Britain’s leading private-equity firms, announced that it would unwind its assets and return money to shareholders and investors. The 30-year-old firm is the biggest buy-out victim of the crisis so far.

Bad investments during the boom helped undo Candover. Several companies in its portfolio have struggled under their debts over the past two years, including Ferretti, a luxury-yacht maker. In June Candover relinquished control of Gala Coral, a gambling company, to creditors. It has had to write down several other investments. ...

Buttonwood: Divvying up returns   (02.09.2010 12:46)

Investors should pay more attention to dividends

DIVIDENDS do not get the respect they deserve. Over the long run they provide the bulk of equity investors’ returns. Work by Elroy Dimson, Paul Marsh and Mike Staunton of the London Business School* found that over the period from 1900 to 2005, the real return from global equities averaged 5%. The mean dividend yield over that period was 4.5%.

Despite this, stockmarkets devote a lot more time to forecasting and analysing profits than they do to thinking about payouts. Profits can be easily manipulated and come in a bewildering variety of forms (operating, reported, post-tax, pre-exceptional, etc). Dividends are (mostly) paid in cash and so are hard to fake. ...

Finance after the crisis: Deutsche Bank: A tamer casino   (02.09.2010 12:46)

Germany’s biggest bank is trying to make investment banking boring. The latest in our series of profiles of financial institutions after the crisis

JOSEF ACKERMANN, the head of Deutsche Bank, combines a silky manner with blunt words. When the German government set up a bail-out fund to stabilise the country’s banking system, he said he would be “ashamed” to use it. When Europe and the IMF bailed out Greece, Mr Ackermann said he doubted it would pay back the loans. And when regulators and economists say that big banks should be broken up, with “casino” investment banks split off from “utility” retail banks, Mr Ackermann retorts that “smaller banks will not make us safer.”

Mr Ackermann speaks with the authority of a man who steered his bank through the crisis more deftly than most. Deutsche did not escape unscathed. In 2008, a year in which it had confidently forecast a record profit of more than €8 billion ($11.7 billion), it posted a net loss of almost €4 billion because of a huge hit to its investment bank (see chart). Yet it emerged from the crisis as the leading member of an exclusive club of large banks—others include Barclays and Credit Suisse—that did...

The world economy: The odd decouple   (02.09.2010 12:46)

Theories about why some rich-world economies are doing better than America’s don’t stand up

AMERICA is used to making the economic weather. It has the world’s largest economy, its most influential central bank and it issues the main global reserve currency. In recent months, however, some rich-world economies (notably Germany’s) have basked in the sunshine even as the clouds gathered over America.

On August 27th America’s second-quarter GDP growth was revised down to an annualised 1.6%. That looked moribund compared with the 9% rate confirmed in Germany a few days earlier. America’s jobless rate was 9.5% in July (figures for August were released on September 3rd, after The Economist went to press). But in Germany the unemployment rate is lower even than before the downturn. Other rich countries, including Britain and Australia, have enjoyed sprightlier recent GDP growth and lower unemployment than America. ...

HSBC and Nedbank: Mutual attraction   (26.08.2010 12:50)

HSBC learns to play the vuvuzela

THE closest HSBC traditionally got to sub-Saharan Africa was sending its Hong Kong-bound staff round the Cape of Good Hope before the Suez Canal opened in 1869. It is a sign of the region’s vastly improved prospects and the bank’s evolving strategy that HSBC is now in talks to buy a controlling stake in Nedbank, one of South Africa’s big four banks, with a market value of $9 billion.

As Africa gets richer and does more trade with Asia, foreign banks are becoming more interested. That was the logic cited in 2007 when China Development Bank bought a stake in Barclays, which owns a big African business, and a few months later when ICBC, China’s biggest bank, bought a 20% stake in Standard Bank, South Africa’s largest, which has operations in some neighbouring countries. Citigroup and Standard Chartered, which along with Barclays have the biggest pan-African networks, now talk more about their prospects there. Portugal’s banks, which dominate in Angola and Mozambique, view their operations there as jewels. ...

Economics focus: Bad circulation   (26.08.2010 12:50)

There is more to America’s stubbornly high unemployment rate than just weak demand

AMERICANS are used to thinking of their job market as lithe and supple. Employment snaps back quickly after recessions. Workers routinely shuttle between industries and cities to wherever jobs are abundant. But in the past decade, the labour market has resembled an ageing athlete. Each new injury is more painful and takes longer to heal. More than a year into the current economic recovery the unemployment rate remains stuck close to 10%, raising concerns about the kind of sclerosis that continental Europe suffered in the 1980s.

The slow rehabilitation is in part because the economy suffered a trauma, not a scrape. The fall in GDP during the last recession was easily the largest of the post-war period, and output remains well below its potential. Few had expected a rapid return to full employment, but even modest expectations for jobs growth have not been met. Employment has actually fallen since the end of the recession; and unemployment would be even higher than it is were it not for discouraged would-be jobseekers quitting the workforce. Some economists now fret that other barriers besides weak demand stand between workers and jobs,...

Emerging-market debt: A run for your money   (26.08.2010 12:50)

Developing countries in Latin America and Asia can borrow for longer

PERU is not an obvious investment darling. For much of its existence, the country has been in a state of default. As recently as 1990 the inflation rate was 7,500%. Yet in the past few years Peru has persuaded creditors to lend it money for ever-longer periods in its own currency. It issued its first 20-year local-currency bond in 2006; its debut 30-year bonds followed a year later. Earlier this year Peru was able to issue 300m soles ($105.2m) of 32-year local-currency bonds. Investors in these bonds are compensated for the risk of inflation by yields of just 6.9%, a once unthinkable prospect.

Peru is not alone. Anxious to wean themselves off flighty foreign funding after the crises of the 1990s, many emerging-market governments sought to build up local-currency bond issuance. Extending the maturity of bonds is the next step. In 2007 around 40% of Peru’s local-currency debt was short-term (ie, maturing in less than a year). That had fallen to 30% by 2009, according to the Bank for International Settlements. In Mexico average maturities have gone from 1.5 years in 2000 to seven years a decade later, says Gerardo...

European banks: A glow from the east   (26.08.2010 12:50)

A slow fuse still burns on eastern Europe’s foreign-currency debts

AFTER firefighters extinguish a blaze they usually look carefully for glowing embers before rolling up their hoses and heading off. With the worst of the banking crisis now receding in most rich countries, it is tempting to send the financial firefighters home. But wafts of smoke from eastern Europe suggest the job of stabilising Europe’s banking system is not yet done.

In early August a number of banks operating in the region reported sometimes startling rises in loan losses. Among them were UniCredit, Erste Group and OTP. It had been hoped that loan losses would start falling. Instead they have continued to climb—alarmingly in some cases. In Kazakhstan more than a third of outstanding debt is non-performing. In Latvia, almost a fifth of debt is going bad. ...

ShoreBank: Small enough to fail   (26.08.2010 12:50)

The sorry end to a bold banking experiment

“LET’S change the world”: ShoreBank’s slogan shouted that the Chicago-based lender saw itself as not just a bank but the leader of a movement. Founded in 1973, it set out to prove that money could be lent profitably to poor people in poor neighbourhoods. For 35 years it thrived but the financial storm that hit in 2008, and the economic downturn that followed, proved its undoing. On August 20th the Federal Deposit Insurance Corporation (FDIC), the bank’s regulator, called time on its experiment in what became known as community-development finance.

Like many financial institutions, ShoreBank was hit hard by America’s housing bust. Yet in the first few months after the house-price bubble burst, Ron Grzywinski, a founder of the bank, was able to contrast the low default rates on ShoreBank’s mortgages with the higher ones of less responsible subprime lenders, such as Countrywide. The difference, he argued, was that ShoreBank did it the “old-fashioned way”—getting to know the borrower and securing a significant down payment against a realistically-valued property. ...

Hedge funds: Bigger, safer but duller   (26.08.2010 12:50)

A secretive industry opens up to meet the demands of investors and regulators

FOR much of the past two years hedge-fund managers have tried to convince queasy investors not to give up on them. Now it seems that some of the industry’s biggest names have given up on themselves. Stanley Druckenmiller, a celebrated hedge-fund manager and protege of George Soros, announced on August 18th that he would close his fund, Duquesne Capital Management, because he was “dissatisfied” with its performance. Two days later it emerged that another well-known manager, Paolo Pellegrini, plans to hand back investors their remaining money by the end of September, after making losses.

Messrs Druckenmiller and Pellegrini are not the only hedge-fund managers to have been humbled. Hedge funds used to boast of their ability to deliver “absolute returns”—to make money regardless of the ups and downs in financial markets. That illusion was shattered in 2008 when the funds’ average returns were -19%, according to data from Hedge Fund Research, which tracks the industry. Funds clawed back some of the losses last year but have struggled to build on that recovery. Returns were -0.2% in the first half of 2010 (although stockmarkets fell by much more). Capital...

Bank capital: Foundations of jelly   (26.08.2010 12:50)

A lawsuit in Germany highlights the flaws of hybrid securities

“MORE capital, better capital” has been the chant of central bankers and regulators, as they strive to rebuild the banking system on more solid foundations. The debate about how much capital banks should hold against unexpected losses has captured much attention. But a lawsuit in Germany raises equally pressing questions about the sorts of capital banks hold.

The thinking behind the regulatory push for simplicity and solidity is that over the past few decades banks have been allowed to build complex capital structures made from inferior materials. The best sort of capital to ensure a stable banking system is equity, because it directly absorbs losses and can thus cushion against systemic shocks. It is, however, expensive, so banks have sought to dilute it with cheap fillers, such as the delightfully-named “hybrid capital” and other fancy instruments. One reason for their popularity with the banks that issued them was that they paid fixed interest, which was tax-deductible. Regulators, for their part, took comfort from the fact that hybrids were a bit like equity in that payments could be stopped to preserve capital should a bank run into trouble. ...

Finance after the crisis: Pactual: The origins of a new species   (26.08.2010 12:50)

The latest of our profiles of financial firms after the crisis looks at BTG Pactual, Brazil’s investment-banking powerhouse

IN RECENT years investment banks were supposedly hijacked by boffins who used their nuclear-physics doctorates to devastating effect. Yet the industry has long been slave to a different tribe of scientists: the bulge-bracket Darwinists. They reckon only giant global firms can survive.

Until last year, Pactual, a Brazilian outfit, had conformed to their doctrine. In 2006 it sold out to a big foreign firm, UBS, for $3.1 billion, making its partners some of Brazil’s richest men. But then in 2009 the Swiss bank, reeling from losses, unexpectedly sold Pactual back to BTG, a local investment fund co-founded by Andre Esteves, one of the bank’s former top brass, for $2.5 billion. Today the renamed BTG Pactual is owned again by its partners and led by Mr Esteves who has a 25-30% stake. ...

Chinese banks: Circular logic   (19.08.2010 13:47)

Chinese banks are undergoing an odd kind of bail-out

THE banks of China did their duty by supporting the government’s stimulus efforts last year. Lending soared by a frenetic 32% in 2009; growth has slowed this year, but remains a robust 18%. Now the government is standing by the banks.

A flurry of reports in the local Chinese press predicts that on August 24th Huijin, a branch of China Investment Corporation (CIC), the country’s sovereign-wealth fund and the holder of big stakes in all of its main banks, will issue the first of a series of bonds. Up to 187.5 billion yuan ($28 billion) should be raised in short order, with much of the demand coming from China’s state-controlled companies. These funds are expected to be used to support rights offerings by the big Chinese banks later in the year, as they seek to maintain capital ratios and protect against an expected wave of dud loans. ...

Bank-capital rules: Super model   (19.08.2010 13:47)

The Basel club publishes new analysis on the impact of higher capital

WHEN asked, before the crisis, about the right level of capital they should have, the bankers’ answer was simple: “As little as possible”. Now that the world has changed, their response has morphed to “less than what the regulators want”. Lenders, they say, will have to hammer borrowers to recoup the costs of carrying bigger capital and liquidity buffers. The Institute of International Finance, a lobbying group, reckons the proposed “Basel 3” rules might knock 3% off the absolute level of rich-world GDP by 2015, a scary result. A study by the French Banking Federation concluded that the long-term level of GDP would be 6% lower in the euro area.

In fact, the bankers, like everyone else, have not had much clue what effect tighter rules would have. Calculating their impact is tricky. Not only is there much argument about the impact of credit on the economy, there is also no reliable theory governing banks’ balance-sheets. They are just too surreal. When banks fail, they devastate the economy. And unlike normal firms, the relationship between banks’ leverage and their cost of borrowing is distorted by their ability to rely on...

China's currency: Wiggle it. Just a little bit   (19.08.2010 13:47)

China's exchange-rate reform has so far been a letdown

“ADOPTING a more flexible exchange-rate regime serves China’s long-term interests as the benefits…far exceed the cost in reorganising industries and removing outdated capacities.” That is the kind of thing Tim Geithner, America’s treasury secretary, might say to his counterparts in Beijing as part of the strategic and economic dialogue between the two countries. But it is in fact a quote from Hu Xiaolian, deputy governor of the People’s Bank of China (PBOC), the country’s central bank.

In a series of speeches last month, Ms Hu argued that a freer exchange rate liberates China’s monetary policy; spurs innovation in China’s export industries; and channels investment to its service sector, where many of China’s new jobs will be found. China’s decision on June 19th to make its currency more flexible was therefore an “important move”. ...

Talking about reform in China: Change you can believe in?   (26.08.2010 12:50)

The prime minister calls frankly for political reform

CHINA is enjoying its new status as the world’s second-largest economy, but the prime minister, Wen Jiabao, is refusing to relax. During a visit to a southern boomtown he declared that economic gains could yet be lost without reforms to the political system. One official newspaper called his speech one of “extraordinary importance”, but sceptics abound.

His remarks on August 20th and 21st in the city of Shenzhen have been compared by some optimists to those made by the late Deng Xiaoping during a tour of the same city in 1992. Deng’s calls for market-oriented reforms sent central-planners scurrying and unleashed the entrepreneurial energy that has helped China to grow at giddy rates since. During his trip Mr Wen laid flowers before a statue of Deng, who turned Shenzhen into a test bed for economic change exactly 30 years ago. ...

Chinese banks: Circular logic   (19.08.2010 13:47)

Chinese banks are undergoing an odd kind of bail-out

THE banks of China did their duty by supporting the government’s stimulus efforts last year. Lending soared by a frenetic 32% in 2009; growth has slowed this year, but remains a robust 18%. Now the government is standing by the banks.

A flurry of reports in the local Chinese press predicts that on August 24th Huijin, a branch of China Investment Corporation (CIC), the country’s sovereign-wealth fund and the holder of big stakes in all of its main banks, will issue the first of a series of bonds. Up to 187.5 billion yuan ($28 billion) should be raised in short order, with much of the demand coming from China’s state-controlled companies. These funds are expected to be used to support rights offerings by the big Chinese banks later in the year, as they seek to maintain capital ratios and protect against an expected wave of dud loans. ...

World economy: The rising power of the Chinese worker   (29.07.2010 12:55)

In China’s factories, pay and protest are on the rise. That is good for China, and for the world economy

CHEAP labour has built China’s economic miracle. Its manufacturing workers toil for a small fraction of the cost of their American or German competitors. At the bottom of the heap, a “floating population” of about 130m migrants work in China’s boomtowns, taking home 1,348 yuan a month on average last year. That is a mere $197, little more than one-twentieth of the average monthly wage in America. But it is 17% more than the year before. As China’s economy has bounced back, wages have followed suit. On the coasts, where its exporting factories are clustered, bosses are short of workers, and workers short of patience. A spate of strikes has thrown a spanner into the workshop of the world.

The hands of China’s workers have been strengthened by a new labour law, introduced in 2008, and by the more fundamental laws of demand and supply (see article). Workers are becoming harder to find and to keep. The country’s villages still contain perhaps 70m potential migrants. Other rural folk might be willing to work closer to home in the growing number of...

China's labour market: The next China   (29.07.2010 12:55)

As the supply of migrant labour dwindles, the workshop of the world is embarking on a migration of its own

THE angrier they become, the less intimidating they seem. The strikes, stoppages and suicides that have afflicted foreign factories on China’s coast in recent months have shaken the popular image of the country’s workers as docile, diligent and dirt cheap. America’s biggest labour federation, the AFL-CIO, blames imports from China for displacing millions of Americans from their jobs. But in June its president applauded the “courageous young auto workers” who waged a successful strike at a Honda plant in Foshan demanding higher wages.

While foreign unions cheer, multinational companies fret. According to UNCTAD, foreigners have invested almost $500 billion in China’s capital stock. Their affiliates employ about 16m people in the country. For a decade this combination has dominated global manufacturing growth, dispatching ever cheaper goods from China’s ports. Of China’s 200 biggest exporters last year, 153 were firms with a foreign stake. But the recent unrest has put Chinese labour at odds with foreign capital. ...

China's financial markets: Premium puzzle   (22.07.2010 13:21)

Enthusiasm for Chinese companies abroad but not at home

OF THE many oddities surrounding Chinese stockmarkets, the most glaring has long been the premium mainland investors pay for shares listed domestically over what those same shares trade for in Hong Kong. Now the puzzle is why the premium has disappeared (see chart).

The usual explanation for the existence of the premium ran as follows. A closed capital account and a tightly run financial system left Chinese investors with only three places to put their money: property, with its high transaction costs and manic price moves; bank deposits, offering diminutive interest; or shares, with price moves as big as property but lower dealing costs. That paucity of choices drove shares higher than in places with more options. ...

China's economy: Defanging China's growth   (15.07.2010 12:43)

China is slowing. That’s good news

DON’T paint a snake with legs, the Chinese will say, when someone is in danger of spoiling something by overdoing it. For months China’s policymakers have been trying to slow the country’s economy, which grew venomously in the year to the first quarter. The fear is that policymakers will overdo it, spoiling one of the rare sources of dynamism in a moribund world economy.

There were few signs of that in the economic picture provided by the National Bureau of Statistics this week. China’s output grew by 10.3% in the year to the second quarter, the bureau said, slower than its growth in the previous quarter (11.9%), but not too much slower (see chart). Inflation also eased, falling back below the central bank’s official target of 3%, thanks partly to cheaper fruit and vegetables. ...

China's banks: Great Wall Street   (08.07.2010 13:50)

The rise of China’s state-backed banks is stunning. But success will force the model to change

THERE is no more potent symbol of the relative decline of Western finance than the revolution in Chinese banking over the past decade. While American and European banks have been busy blowing up, China’s have been transformed from communist bureaucracies crippled by bad debts into something resembling world beaters.

That metamorphosis has been completed by the flotation of Agricultural Bank of China, the last of the five big state-owned banks to list (see article). Even by Chinese standards it is colossal, with 320m customers, 441,000 staff and more branches than many Wall Street firms have desks. Four of the world’s ten biggest banks by market value are now Chinese. In 2004 none was. Better-known (and more global) lenders such as Deutsche Bank and Barclays look rather puny by comparison. It’s natural to wonder if more than just firms are being eclipsed: whether a freewheeling era is being superseded by a “Beijing consensus” of state-managed finance. Though neat, such a conclusion looks wrongheaded. ...

Agricultural Bank's IPO: Agricultural revolution   (08.07.2010 13:50)

China has now transformed the appearance of its big banks, leaving the vexing issue of substance

THE $19.2 billion raised by Agricultural Bank of China’s initial public offering (IPO), which was priced on July 6th and 7th, does not simply mark one of the world’s largest-ever stockmarket listings (the biggest, if the bank fully exercises a right to issue additional shares). It also ends a decade-long process to transform China’s huge financial institutions from wards of the state to banks that resemble publicly listed firms in the rich world.

The deal attracted more than the usual amount of attention—in part because of ongoing palpitations in global markets, in part because Chinese share prices in particular have collapsed in recent months, and in part because the listing coincides with fierce debate about the health of China’s banking system. Agricultural Bank itself is notable for both its gargantuan size (320m customers) and its giant past loan losses. Optimists see it as a superb macro play on China, pessimists as a Chinese version of Fannie Mae and Freddie Mac, America’s nominally private, and deeply flawed, housing-finance firms. ...

China and Taiwan: Branching in   (01.07.2010 13:08)

After 61 years of forced separation, a slow restoration of financial ties

THE Economic Co-operation Framework Agreement signed by Taiwan and China on June 29th encompasses hundreds of categories in goods and services (see article). Negotiations were particularly wrenching for agriculture and financial services because each, in its own way, raises security concerns.

The risks that come from the loss of control over food supplies are obvious. The link between financial services and security is more subtle. China’s banks, insurers and brokerages are all, to at least some extent, state-controlled. No surprise then that Taiwan, if it hopes to remain politically independent, fears having its companies nourished by credit that is run by Beijing. Anyone doubting the intensity of these concerns need look only at the American government’s efforts to sell AIG’s Taiwanese life-insurance operations to a Hong Kong partnership that is suspected of being backed by mainland money. The deal, announced last year, is still stuck in regulatory purgatory in Taipei. ...

China policy: Yuanimpressed   (01.07.2010 13:08)

China’s adjustment of its currency is too small and slow for many

CHINA might have hoped for better. The decision at last to suspend its exchange-rate peg to the dollar bought the Chinese government little more than a moment’s peace with its largest trading partner. Ominously, Charles Schumer, a Democratic senator from New York, is still busily pressing ahead with legislation designed to force China into a significant revaluation.

Mr Schumer has sought congressional action against Chinese trade policies since 2004. But with unemployment still near 10% and little change in the dollar-yuan rate since 2008, his strategy has attracted growing support. The senator introduced a new measure, with bipartisan sponsorship, in March this year. If passed, the bill would force the Treasury to issue a ruling on whether China is manipulating its currency (a determination Tim Geithner, the treasury secretary, postponed making in April). Chinese goods might then be subject to import tariffs. ...

The yuan and global imbalances: The long march   (24.06.2010 13:19)

China’s slightly freer currency would be all the more welcome if it spurred moves to boost consumption

FOR months the rich world’s policymakers have quietly pressed China to abandon its exchange-rate peg with the dollar. On June 19th, a week before world leaders from the G20 were due to gather in Toronto, China at last gave ground. The country’s central bank said it would again allow the yuan to move more freely against a basket of currencies, although it ruled out a one-off revaluation as unwarranted. The announcement was greeted cautiously by Tim Geithner, America’s treasury secretary, but in private he may be relieved that a potentially nasty row over the yuan has been averted.

China’s move is also timely because it assuages fears that it has become less committed to rebalancing its economy. Its huge current-account surplus was cut by more than a third as a share of GDP last year, and had seemed likely to shrink further. But a surge in exports in May raised concerns that China would once again rely on selling to foreign markets for growth now that the rich world has emerged from recession. By allowing a more “flexible” yuan, China stands a better chance...

The yuan unpegged: Learning to crawl   (24.06.2010 13:19)

China’s new-found flexibility on its currency should ease trade tensions with America, but may turn attention to others

CHEAP goods from China can sour relations with America even when they are sweet. Earlier this month, for example, American officials seized a shipment of honey from China because it violated food-safety standards. It contained an antibiotic used to treat “foulbrood”, a disease that afflicts bee larvae. The bust was lauded by Charles Schumer, a Democratic Senator from New York, who condemned China’s “honey launderers”.

But honey is not the stickiest issue dividing the two countries. Mr Schumer and many other members of Congress also rail against China’s currency, the yuan, which they believe is artificially cheap. They have been urging President Barack Obama to get tough. On June 16th he wrote a letter to the leaders of the G20 underscoring that “market-determined exchange rates are essential to global economic vitality.” Many feared a case of foul mood when the leaders gathered in Toronto on June 26th-27th. ...

Unions in China: Strike breakers   (03.06.2010 13:10)

Strikes are as big a problem for the government as they are for managers

AS CHINESE strikes go, the one that crippled Honda’s car production in late May was relatively discreet: no picketing, no clashes with police, little sign of copycat action. But it was significant. The stoppage was one of the biggest and longest-running in an enterprise with foreign investors. And it has exposed worrying problems for the government and factory owners in China’s industrial heartland.

Company officials said normal production resumed on June 2nd at the Honda Auto Parts Manufacturing Company’s plant in an industrial zone on the edge of Foshan, a city in the southern province of Guangdong. The strike over wages (which broke out briefly on May 17th and began anew on May 21st) had halted production at the Foshan facility and forced the temporary closure of all Honda’s car-assembly plants in China that depend on it. Trouble could flare anew. Some workers remain unhappy with a settlement offered by the Japanese firm. ...

The state and the economy: Re-enter the dragon   (03.06.2010 13:10)

Two books ask how far China’s model of “state capitalism” will spread

The End of the Free Market: Who Wins the War Between States and Corporations? By Ian Bremmer. Portfolio; 230 pages; $26.95. Viking; GBP18.99. Buy from Amazon.com, Amazon.co.uk

The Beijing Consensus: How China’s Authoritarian Model Will Dominate the Twenty-First Century. By Stefan Halper. Basic Books; 296 pages; $28.95 and GBP16.99. Buy from Amazon.com, Amazon.co.uk ...

A minimum wage for Hong Kong: So much for red in tooth and claw   (02.09.2010 12:46)

An enclave of unbridled capitalism thinks again

IT HAS been mooted since 1932, but Hong Kong has never had a minimum wage. It soon will, however. In July a law was passed. And on August 30th, after endless meetings, an official commission agreed to recommend what the minimum hourly wage should be. That figure was not disclosed, but leaks suggest it will be HK$28-29 ($3.60-3.70).

That is halfway between what labour groups demanded and what business groups reluctantly suggested. It will please no one: the territory’s largest labour organisations vowed to fight for at least HK$33, plus annual increases. Prices are rising and wage grumbles are rife. Bus workers briefly went on strike in August. ...

Intellectual-property battles: Patent lather   (02.09.2010 12:46)

Paul Allen has rekindled a controversy over patent trolls

DEEP-FRIED beer may sound scrumptious, but is it patentable? Mark Zable, an inventive Texan, thinks it is. To protect his novel production process, which involves encasing the alcohol in batter and dunking it in a fryer, he recently applied for a patent. He wants to profit if others exploit his beery brainwave.

Without patents to protect their creations, inventors would have little incentive to invent. But some Americans fret that patent protection has grown too strong. The system breeds so many lawsuits, they worry, that it throttles the innovation it is supposed to promote. ...

Car-sharing: Wheels when you need them   (02.09.2010 12:46)

Renting cars by the hour is becoming big business

CAR clubs, whose members pay an annual fee and then rent a car by the hour on a pay-as-you-go basis, are moving from a fringe fad for greens to a big global business. Carmakers have no choice but to pay attention: one rental car can take the place of 15 owned vehicles.

Car-sharing started in Europe and spread to America in the late 1990s, when the first venture opened in Portland, Oregon, a traditional hangout of tree-huggers. For years it was organised by small co-operatives, often supported by local government. It still has a green tinge. One in five new cars added to club fleets is electric; such cars are good for short-range, urban use. But sharing is no longer small. ...

Mobile internet in emerging markets: The next billion geeks   (02.09.2010 12:46)

How the mobile internet will transform the BRICI countries

BUYING a mobile phone was the wisest $20 Ranvir Singh ever spent. Mr Singh, a farmer in the north Indian state of Uttar Pradesh, used to make appointments in person, in advance, to deliver fresh buffalo milk to his 40-odd neighbours. Now his customers just call when they want some. Mr Singh’s income has risen by 25%, to 7,000 rupees ($149) a month. And he hears rumours of an even more bountiful technology. He has heard that “something on mobile phones” can tell him the current market price of his wheat. Mr Singh does not know that that “something” is the internet, because, like most Indians, he has never seen or used it. But the phone in his calloused hand hints at how hundreds of millions of people in emerging markets—perhaps even billions—will one day log on.

Only 81m Indians (7% of the population) regularly use the internet. But brutal price wars mean that 507m own mobile phones. Calls cost as little as $0.006 per minute. Indian operators such as Bharti Airtel and Reliance Communications sign up 20m new subscribers a month. ...

Schumpeter: Declining by degree   (02.09.2010 12:46)

Will America’s universities go the way of its car companies?

FIFTY years ago, in the glorious age of three-martini lunches and all-smoking offices, America’s car companies were universally admired. Everybody wanted to know the secrets of their success. How did they churn out dazzling new models every year? How did they manage so many people so successfully (General Motors was then the biggest private-sector employer in the world)? And how did they keep their customers so happy?

Today the world is equally in awe of American universities. They dominate global rankings: on the Shanghai Ranking Consultancy’s list of the world’s best universities, 17 of the top 20 are American, and 35 of the top 50. They employ 70% of living Nobel prizewinners in science and economics and produce a disproportionate share of the world’s most-cited articles in academic journals. Everyone wants to know their secret recipe. ...

Online television: Hogging the remote   (02.09.2010 12:46)

Old-media firms are firmly in control of internet video

LIKE stallholders in a busy market, technology companies hawked their online-video services this week. In Berlin, Sony announced it would begin selling films over the internet to Europeans. In San Francisco, Apple unveiled a smaller, cheaper Apple TV, a set-top box designed to play videos. It also said some television shows would be available a la carte for 99 cents. YouTube, a video-streaming website owned by Google, is trying to cut deals with studios that would allow it to rent newly released films. Amazon too is reportedly trying to build a subscription service. But while technology companies are making all the noise, old-media firms are quietly steering the market.

The main reason for all the activity is the abrupt appearance in shops of televisions that can plug into the internet, either through cables or wirelessly. NPD, a research firm, reckons that 12% of all the flat-screen televisions sold in America in the first seven months of this year were “connected”. That share is likely to soar. Technology firms spy an opportunity to bypass old-fashioned distributors and bring online video directly to the living room. ...

Burger King: Whopper to go   (02.09.2010 12:46)

Will Burger King be gobbled up by private equity?

SHARES in Burger King (BK) soared on September 1st on reports that the fast-food company was talking to several private-equity firms interested in buying it. How much beef was behind these stories was unclear. But lately the company famous for the slogan “Have It Your Way” has certainly not been having it its own way. There may be arguments about whether BK or McDonald’s serves the best fries, but there is no doubt which is more popular with stockmarket investors: the maker of the Big Mac has supersized its lead in the past two years.

Recession has favoured McDonald’s over BK, whose share price has fallen by half since the economy was flame-grilled in the summer of 2008. Shares in McDonald’s have risen, reaching an all-time high in August. Same-store sales at BK have fallen for five successive quarters. ...

Correction: Accounting rules   (02.09.2010 12:46)

Our story on shocking new accounting rules (“You gonna buy that?” August 21st) contained a shocking error. We should have said that the obligation to pay for a leased item will go in the liabilities column, not the debit column. Sorry.

...

Fake drugs: Poison pills   (02.09.2010 12:46)

Counterfeit drugs used to be a problem for poor countries. Now they threaten the rich world, too

DRUG smugglers can expect harsh penalties nearly everywhere—if the drugs in question are heroin or cocaine. Those who smuggle counterfeit medicines, by contrast, have often faced lax enforcement and light punishment. Some governments deem drug-counterfeiting a trivial offence, little more than a common irritant. After all, whose spam filter does not groan with ads for suspiciously cheap “Viagra”?

This could be changing, however. The pharmaceutical industry has persuaded several governments to stiffen regulations against fake drugs and to conduct more aggressive raids (see chart). Companies are also devising novel technologies to outfox the criminals. Even the Catholic church is joining the cause, issuing a stern statement in August that it is in “the best interest of all concerned that smuggling of counterfeit drugs be fought against”. ...

Petrobras: Over a barrel   (02.09.2010 12:46)

Brazil's oil giant may be paying too much to pump the stuff

FOUR years ago Brazil struck oil—up to 350km (220 miles) offshore and buried under deep water and thick layers of rock, sand and corrosive salt. In places, the oil fields are 7km below the surface, so getting the black stuff out was always going to be hard. Now it looks like finding the funding will be tricky too.

On September 1st, two months later than planned, Brazil’s government made public the price it will demand for an estimated 5 billion barrels, mostly in the Franco field off the coast of Rio de Janeiro. Petrobras, the national oil company that was partially privatised in 1997 (Brazil’s government still owns 40% and a majority of voting rights), will have to pay $8.51 a barrel. Analysts frown that $6 would be more reasonable. Oil is $74 a barrel, on the surface, but is worth much less underground. ...

Schumpeter: The innovation machine   (26.08.2010 12:50)

Two gurus look at the perspiration side of innovation

IN HIS new book, “Still Surprised: A Memoir of a Life in Leadership”, Warren Bennis, a management theorist, tells a story about Sigmund Freud’s flight from Vienna to London in 1938. On arriving in his new home Freud asked Stefan Zweig, a fellow Viennese intellectual, what it was like. “London? How can you even mention London and Vienna in the same breath?” Zweig thundered. “In Vienna there was sperm in the air!”

Today there is no hotter topic in management theory than “sperm in the air”. How do companies generate new ideas? And how do they turn those ideas into products? Hardly a week passes without someone publishing a book on the subject. Most are rubbish. But “The Other Side of Innovation: Solving the Execution Challenge” is rather good. Its authors are Vijay Govindarajan and Chris Trimble, two professors at the Tuck School of Business at Dartmouth College. Last year Mr Govindarajan and Mr Trimble (hereafter: G&T) published a seminal article, with Jeff Immelt, the head of General Electric, on frugal innovation. In their new book they address two subjects that are usually given short shrift: established companies rather than start-ups and the...

High-speed rail in Europe: Trouble ahead   (26.08.2010 12:50)

The train giants of France and Germany are at war over European high-speed rail

AT THE Gare de l’Est in Paris, Franco-German co-operation seems on track. Deutsche Bahn inter-city express (ICE) trains glide in from Frankfurt and SNCF sends trains deep into Germany, thanks to a joint venture between the two firms. Every train has a French and a German controller on board. Despite wrangling over details—French unions, for instance, refused to let their head conductors serve meals to first-class passengers, so the Germans have to do it all—they get along well. “When we’re on the same train, we’re a team,” says Marine Dubois, the French controlleur on the 13.09 ICE to Frankfurt.

The joint venture between Deutsche Bahn and SNCF, the German and French rail giants, was launched in 2007 amid high hopes. Boosters predicted an open European market where trains and passengers would cross borders without fuss. But old national rivalries are resurfacing. Relations at the top have turned nasty. The joint venture could even be at risk. ...

Mergers and acquisitions: Waiting for a wave   (26.08.2010 12:50)

A flurry of deals makes bankers salivate

FIRMS with interim bosses usually opt for the quiet life, but the lack of a permanent boss did not stop Hewlett-Packard (HP) from launching a bidding war on August 23rd. The computer giant offered to buy 3Par, a data-storage firm, for $1.5 billion, topping the $1.15 billion offered a week earlier by Dell, a longtime rival of HP. On August 19th Intel, a chipmaker, splashed out $7.68 billion to buy McAfee, an antivirus-software firm. Nor is the fun confined to high-tech. On August 17th PotashCorp, a firm that mines potash, from which fertiliser is made, received and promptly rejected a $38.6 billion offer from BHP Billiton, a mining giant. BHP is now pursuing a hostile bid.

...

South Korea's thirst for oil: KNOC comes knocking   (26.08.2010 12:50)

A South Korean state firm joins the scramble for oil

IN THE clubby world of Korean commerce, hostile takeovers are rare. The idea of a state-owned firm attempting one seemed unthinkable until recently. But when the board of a British target rejected a friendly offer, the Korea National Oil Corporation (KNOC) took off its gloves.

KNOC is offering GBP1.9 billion ($2.9 billion) for Dana Petroleum, an Aberdeen-based oil explorer with a knack of finding new fields. At GBP18 a share, that is a 59% premium to Dana’s closing price on June 30th, the day before the first approach was made. The offer now looks likely to be accepted: KNOC has won over shareholders who own nearly half of Dana’s stock. ...

Disney's schools in China: Middle Kingdom meets Magic Kingdom   (26.08.2010 12:50)

A Western media company offers a product the Chinese can’t resist: education

ON A Tuesday at 6pm, children begin arriving at a bland commercial building just as the office workers are leaving. A small storefront leads to an English-language school run by Disney. It is not much of an entrance, squashed between a dusty drugstore and a fast-food joint. This being China, many passers-by assume it is a fake. But word is spreading through the pushy-parent network: this is the real thing.

Children as young as two toddle in and climb the stairs. At first glance, their classrooms look like dreary boxes, but two of the four walls are interactive video monitors. Each lesson is assisted by virtual mermaids, ducks, mice and other Disney icons. Touch the answer to a question (a fried egg, for example) on one screen, and it plops out of the sky on the other. While teachers instruct, the classroom seems to move. ...

Israeli entrepreneurs: MBAs are for wusses   (26.08.2010 12:50)

Military service makes Israeli techies tougher

MANY Israeli start-ups should pay royalties to the army, says Edouard Cukierman, a venture capitalist in Tel Aviv. He is only half joking. Despite the recession, Israel’s technology exports grew by more than 5% last year. Mr Cukierman thinks military service deserves some of the credit. Israel’s army does not just train soldiers, he says; it nurtures entrepreneurs.

Teenagers conscripted into high-tech units gain experience “akin to a bachelor’s degree in computer science”, says Ruvi Kitov, co-founder and chief executive of Tufin Technologies, an Israeli software firm. Almost all of Tufin’s employees in the country are, like Mr Kitov himself, veterans of the Israel Defence Forces (IDF). One of the firm’s cash cows is software that finds spam servers and blocks their transmissions. It is based on IDF cyberwarfare technologies that developers first used as soldiers. ...

The revival of Alfa Romeo: Another chance for Alfa   (26.08.2010 12:50)

Alfa Romeo’s cars have not always lived up to its stellar brand. That is changing

IN 1995 Alfa Romeo ignominiously pulled out of America, having managed to sell only 400 cars there that year. Yet this month the sporting Italian marque, which is celebrating its centenary, was the star of the annual Pebble Beach Concours d’Elegance in California, a show for classic and concept cars. Alfa brought over seven cars from its museum in Milan, but none of its current offerings. It is testimony to the enduring power of a brand that has a wonderful history but which for many years has over-promised and under-delivered. There are signs, however, that this may be changing.

Last year even Sergio Marchionne, the boss of Fiat, which owns Alfa, seemed to be running out of patience. Mr Marchionne had set Alfa a target to reach sales of 300,000 cars a year by 2010, but in 2009 it sold barely 100,000. In December he ordered a review of Alfa’s operations, which according to Max Warburton of Bernstein Research were losing up to $575m a year. ...

Location-based social networks: Where are you?   (26.08.2010 12:50)

A tale of fake mayors and real deals

MARKETING, its veterans like to say, is all about the “three Rs”: reaching the right person in the right place at the right time. Hence the growing interest in marketing circles for mobile-phone-based social networks such as Foursquare and Gowalla that let users “check in” to shops or restaurants and instantly tell their friends where they are. Fans of such services gush that they will mint money by allowing ads to be targeted at folk who are about to make a purchase. But the networks must negotiate some important hurdles first if such lofty predictions are to come true.

Location-based networking won an important convert recently in the shape of Facebook. For some time, the 800-pound gorilla of social networking had tracked the progress of firms such as Foursquare, which boasts some 3m members. Now it has entered the market with its own service, dubbed “Places”, which is currently available only to American users of its mobile application. Places lets them signal where they are to their friends on the network, in much the same way that they can “tag” themselves in photos. ...

4G mobile networks: From Russia with bandwidth   (19.08.2010 13:47)

A Russian start-up shows how 4G wireless might work

WHILE much of the world is still rolling out the third generation (3G) of mobile networks, some countries have already moved on to the fourth (4G). Russia offers an intriguing example. Yota, a start-up with no old voice business to protect, has built a 4G network from scratch, burying 3,000km (1,864 miles) of fibre-optic cables to connect its wireless base stations. The firm is ambitious: it hopes to establish a global brand. That would be a rarity for Russia.

Yota’s backers have deep pockets and useful connections. Rostechnologii, a state-owned outfit, owns 25% of its holding company. Yet Yota has made some shrewd choices, too. Its contracts—900 roubles ($30) per month for laptops and about half that for smart-phones—have no restrictions on how much data can be downloaded (although the firm slows down certain types of traffic if a base station is overloaded). One square-eyed user downloaded nearly two terabytes in a month—the equivalent of 2,000 feature-length films. ...

Climate-change assessment: Must try harder   (02.09.2010 12:46)

A call to reform the IPCC

IF THIS week’s report into the workings of the Intergovernmental Panel on Climate Change (IPCC) by a council of national academies of science were the sort of report children take home from school, its main themes would be expressed as “could do better” and “needs to show workings”. Stern parents might read it as calling for a Gradgrind-like clampdown; more indulgent ones as an inducement for the little darlings to try a little harder.

At a meeting in Busan, South Korea, this October, the parents in question—the representatives of the IPCC’s member governments—will decide which sort they want to be. Read in detail, the report suggests that if they want credible climate assessments, a firm hand will be required. ...

Emerging infections: No good deed goes unpunished   (02.09.2010 12:46)

Smallpox has gone, but monkeypox is now rearing its ugly head

ONE of the greatest public-health victories of the last century was the eradication of smallpox. After the disease was pronounced extinct, in 1980, people stopped using the smallpox vaccine. That seemed the ultimate symbol of technology’s triumph over a medieval scourge.

Alas, it turns out that the end of vaccination has unleashed new demons. Researchers have long suspected that smallpox vaccine also provides protection against diseases such as monkeypox and cowpox, and three decades ago a committee of experts weighed up whether ending vaccination for smallpox might allow one of those diseases to spread in humans. They decided this was unlikely. Now, a study published in the Proceedings of the National Academy of Sciences suggests they may have been wrong. A team led by Anne Rimoin of the University of California, Los Angeles, conducted surveys of people living in the centre of the Democratic Republic of Congo. They found a dramatic surge in monkeypox—a disease which, though not as bad as smallpox, kills up to 10% of those it infects. ...

Mental stimulation and dementia: Brain gain   (02.09.2010 12:46)

Stimulating the brain delays, but does not prevent, dementia

AS THE baby-boomer generation contemplates the prospect of the Zimmer frame there has never been more interest in delaying the process of ageing. One consequence has been a dramatic rise in the popularity of brain-training games. But how effective really is a daily dose of cryptic crossword?

Robert Wilson, a neuropsychologist at Rush University in Chicago, and his colleagues decided to find out, by following a group of people without dementia. Participants were asked to rate how frequently they engaged in cognitively stimulating activities. The researchers were looking for such things as reading newspapers, books and magazines, playing challenging games like chess, listening to the radio and watching television, and visiting museums. ...

The nature of the universe: Ye cannae change the laws of physics   (02.09.2010 12:46)

Or can you?

RICHARD FEYNMAN, Nobel laureate and physicist extraordinaire, called it a “magic number” and its value “one of the greatest damn mysteries of physics”. The number he was referring to, which goes by the symbol alpha and the rather more long-winded name of the fine-structure constant, is magic indeed. If it were a mere 4% bigger or smaller than it is, stars would not be able to sustain the nuclear reactions that synthesise carbon and oxygen atoms. One consequence would be that squishy, carbon-based life would not exist.

Why alpha takes on the precise value it does, so delicately fine-tuned for life, is a deep scientific mystery. A new piece of astrophysical research may, however, have uncovered a crucial piece of the puzzle. In a paper just submitted to Physical Review Letters, a team led by John Webb and Julian King from the University of New South Wales in Australia presents evidence that the fine-structure constant may not actually be constant after all. Rather, it seems to vary from place to place within the universe. If their results hold up to scrutiny they will have profound implications—for they suggest that the universe stretches far beyond what telescopes can observe,...

Scientific misconduct: Monkey business?   (26.08.2010 12:50)

Allegations of scientific misconduct at Harvard have academics up in arms

RARELY does it get much more ironic. Marc Hauser, a professor of psychology at Harvard who made his name probing the evolutionary origins of morality, is suspected of having committed the closest thing academia has to a deadly sin: cheating. It is not the first time the scientific world has been rocked by scandal. But the present furore, involving as it does a prestigious university and one of its star professors, will echo through common rooms and quadrangles far and wide.

The story broke on August 10th when the Boston Globe revealed that Dr Hauser had been under investigation since 2007 for alleged misconduct at Harvard’s Cognitive Evolution Laboratory, which he heads. This investigation has resulted in the retraction of an oft-cited study published in 2002 in Cognition, the publication last month of a correction to a paper from 2007 in the Proceedings of the Royal Society, and doubts about the validity of findings published in Science, also in 2007. All three studies purported to show that the cognitive abilities of some monkeys are closer to those of people than had previously been assumed. Dr Hauser was the only author...

Psychology: Faith and faithfulness   (26.08.2010 12:50)

Praying for your partner stops you straying

INFIDELITY is rampant in nature. Birds, mammals, amphibians and even fish all cheat if the conditions are right, forcing mates to remain perpetually vigilant. People are no different. Although cheats are publicly condemned, or in some cases impeached, infidelity is common and public disapproval does little to dissuade the sinner. The disapproval of God, however, is a different matter, and a new study suggests that prayer can indeed guide people away from adulterous behaviour.

Frank Fincham at Florida State University and his colleagues knew from looking at past studies that couples who attend religious services are more likely to be satisfied with their marriages and less likely to be unfaithful than those who do not, but they did not understand why. Speculating that the act of praying might itself cause romantic relationships to become more resilient, the team set up an experiment to explore prayer and fidelity. ...

Energy conservation: Not such a bright idea   (26.08.2010 12:50)

Making lighting more efficient could increase energy use, not decrease it

SOLID-STATE lighting, the latest idea to brighten up the world while saving the planet, promises illumination for a fraction of the energy used by incandescent or fluorescent bulbs. A win all round, then: lower electricity bills and (since lighting consumes 6.5% of the world’s energy supply) less climate-changing carbon dioxide belching from power stations.

Well, no. Not if history is any guide. Solid-state lamps, which use souped-up versions of the light-emitting diodes that shine from the faces of digital clocks and flash irritatingly on the front panels of audio and video equipment, will indeed make lighting better. But precedent suggests that this will serve merely to increase the demand for light. The consequence may not be just more light for the same amount of energy, but an actual increase in energy consumption, rather than the decrease hoped for by those promoting new forms of lighting. ...

Obesity: Drink till you drop   (26.08.2010 12:50)

A magic elixir is shown to promote weight loss

CONSUME more water and you will become much healthier, goes an old wives’ tale. Drink a glass of water before meals and you will eat less, goes another. Such prescriptions seem sensible, but they have little rigorous science to back them up.

Until now, that is. A team led by Brenda Davy of Virginia Tech has run the first randomised controlled trial studying the link between water consumption and weight loss. A report on the 12-week trial, published earlier this year, suggested that drinking water before meals does lead to weight loss. At a meeting of the American Chemical Society in Boston this week, Dr Davy unveiled the results of a year-long follow-up study that confirms and expands that finding. ...

Fisheries biology: War dividend   (19.08.2010 13:47)

The second world war led to a boom in North Sea fish numbers

SOME experiments are hard to conduct. Fisheries biologists are, for example, reasonably confident that creating protected areas in the sea, in which fishing is forbidden, encourages the recovery of those species that stay put in the area. This has worked in several places in the tropics, notably the Great Barrier Reef in Australia, where fish populations in protected zones have doubled in five years. They are less confident, however, that it applies to places where the fish of interest are migratory, as is often the case in temperate-zone fisheries like those of the North Atlantic and its adjacent seas.

Closing such places to fishing in order to find out is politically difficult. But 71 years ago politics did dictate one such closure, and a group of biologists, led by Doug Beare at the European Commission’s Office of Maritime Affairs, has now taken advantage of it. The closure in question was the little matter of the second world war, and Dr Beare and his team have been looking at its effects on the population of cod, haddock and whiting in the North Sea. ...

Energy conservation: Watts up?   (19.08.2010 13:47)

People habitually underestimate their energy consumption

ENVIRONMENTAL asceticism has created a vogue for upgrading light-bulbs and tweaking thermostats. But according to a new piece of research, many of these actions—however virtuous—arise from faulty perceptions of energy savings.

Shahzeen Attari of Columbia University and her colleagues used Craigslist, an online marketplace, to recruit 505 volunteers from across America. Each was asked to estimate the energy consumption of nine household devices (such as stereos and air conditioners) as well as the energy savings incurred by six green activities (like swapping incandescent bulbs for fluorescent ones). The researchers then compared the volunteers’ estimates with the actual energy requirements or savings in question. ...

Psychology: Too good to live   (19.08.2010 13:47)

People hate generosity as much as they hate mean-spiritedness

SELFISHNESS is not a good way to win friends and influence people. But selflessness, too, is repellent. That, at least, is the conclusion of a study by Craig Parks of Washington State University and Asako Stone, of the Desert Research Institute in Nevada. Dr Parks and Dr Stone describe, in the latest edition of the Journal of Personality and Social Psychology, how and why the goody two-shoes of this world annoy everyone else to distraction.

In the first of their experiments they asked the participants—undergraduate psychology students—to play a game over a computer network with four other students. In fact, these others (identified only by colours, in a manner reminiscent of the original version of the film, “The Taking of Pelham 123”) were actually played by a computer program. ...

The problem of space pollution: Junk science   (19.08.2010 13:47)

Scientists are increasingly worried about the amount of debris orbiting the Earth

FEBRUARY 10th 2009 began like every other day in Iridium 33’s 11-year life. One of a constellation of 66 small satellites in orbit around the Earth, it spent its time whizzing through space, diligently shuttling signals to and from satellite phones. At 3pm a report suggested it might see some excitement: two hours later it would pass less than 600 metres from a defunct communications satellite called Cosmos 2251. It did. A lot less. The two craft collided and the result was hundreds of pieces of shrapnel more than 10cm across, and thus large enough to track by radar—and goodness knows how many that were not. This accident came two years after the deliberate destruction by the Chinese of their Fengyun-1C spacecraft in the test of an anti-satellite weapon. That created over 2,000 pieces of junk bigger than 10cm, and an estimated 35,000 pieces more than 1cm across. Together, these incidents increased the number of objects in orbit at an altitude of 700-1,000km by a third (see chart).

Such low-Earth orbits, or LEOs, are among the most desirable for artificial satellites. They are easy for launch rockets to...

Fixing oil wells: The price of staying in the game   (12.08.2010 13:39)

Oil companies are now developing a system that could cap deepwater wells in the Gulf of Mexico in a hurry

WITH 500 barrels of hard-set cement now gumming up the Macondo well, a number of inquiries are looking back at the loss of the Deepwater Horizon rig and the subsequent spilling of 5m barrels of oil. How much of the fault is found to lie with the well’s design, how much with the way the design was implemented and how much with the way the rig was run will determine how such ventures will be regulated from now on. It will also settle whether BP, the well’s operator, was grossly negligent—a finding that could be worth well over $10 billion in fines and liabilities.

Meanwhile, the oil industry is already getting to grips with the question of what to do if such a thing should happen again. This is in part prudent politics: credible assurances that a future blowout could be better dealt with will be vital to restoring the industry’s fortunes in the Gulf of Mexico. It is also a matter of economic self-interest. The costs facing BP would have been far smaller if it had been possible to shut...

Animal and human behaviour: Manager's best friend   (12.08.2010 13:39)

Dogs improve office productivity

THERE are plenty of studies which show that dogs act as social catalysts, helping their owners forge intimate, long-term relationships with other people. But does that apply in the workplace? Christopher Honts and his colleagues at Central Michigan University in Mount Pleasant were surprised to find that there was not much research on this question, and decided to put that right. They wondered in particular if the mere presence of a canine in the office might make people collaborate more effectively. And, as they told a meeting of the International Society for Human Ethology in Madison, Wisconsin, on August 2nd, they found that it could.

To reach this conclusion, they carried out two experiments. In the first, they brought together 12 groups of four individuals and told each group to come up with a 15-second advertisement for a made-up product. Everyone was asked to contribute ideas for the ad, but ultimately the group had to decide on only one. Anyone familiar with the modern “collaborative” office environment will know that that is a challenge. ...

Artificial intelligence: Riders on a swarm   (12.08.2010 13:39)

Mimicking the behaviour of ants, bees and birds started as a poor man’s version of artificial intelligence. It may, though, be the key to the real thing

ONE of the bugaboos that authors of science fiction sometimes use to scare their human readers is the idea that ants may develop intelligence and take over the Earth. The purposeful collective activity of ants and other social insects does, indeed, look intelligent on the surface. An illusion, presumably. But it might be a good enough illusion for computer scientists to exploit. The search for artificial intelligence modelled on human brains has been a dismal failure. AI based on ant behaviour, though, is having some success.

Ants first captured the attention of software engineers in the early 1990s. A single ant cannot do much on its own, but the colony as a whole solves complex problems such as building a sophisticated nest, maintaining it and filling it with food. That rang a bell with people like Marco Dorigo, who is now a researcher at the Free University of Brussels and was one of the founders of a field that has become known as swarm intelligence. ...

Innovation prizes: And the winner is…   (05.08.2010 12:56)

Offering a cash prize to encourage innovation is all the rage. Sometimes it works rather well

A CURIOUS cabal gathered recently in a converted warehouse in San Francisco for a private conference. Among them were some of the world’s leading experts in fields ranging from astrophysics and nanotechnology to health and energy. Also attending were entrepreneurs and captains of industry, including Larry Page, the co-founder of Google, and Ratan Tata, the head of India’s Tata Group. They were brought together to dream up more challenges for the X Prize Foundation, a charitable group which rewards innovation with cash. On July 29th a new challenge was announced: a $1.4m prize for anyone who can come up with a faster way to clean oil spills from the ocean.

The foundation began with the Ansari X Prize: $10m to the first private-sector group able to fly a reusable spacecraft 100km (62 miles) into space twice within two weeks. It was won in 2004 by a team led by Burt Rutan, a pioneering aerospace engineer, and Paul Allen, a co-founder of Microsoft. Other prizes have followed, including the $10m Progressive Automotive X Prize, for green cars that are capable of achieving at least 100mpg, or its...

New marine discoveries: Secrets from the deep   (05.08.2010 12:56)

New discoveries from the deep

A remarkable area of marine diversity has been discovered in the cold depths of the ocean in North Sulawesi, Indonesia. A joint American and Indonesian expedition is using a remotely operated vehicle, called Little Hercules, at depths of 3,700m (2.3 miles) to explore an area in the region of the Sangihe and Talaud islands. Tim Shank, the expedition’s lead scientist from the Woods Hole Oceanographic Institution, says the diversity of large animas found rivals anything in similar habitats anywhere in the world. The team have spotted 30-40 new species just in the past week of diving. Little Hercules is cruising over hydrothermal springs, abyssal muds and the rocky tops of seamounts—a kind of underwater mountain. Distinctive corals live down here, and with them a specialised fauna. Two chirostylid crabs (pictured above) spend their adult lives only in one particular antipatharian black coral. Sea stars, crabs, shrimp and worms live in the limbs of these corals as birds and insects do in the branches of trees in a rainforest. The team are also gathering intriguing evidence for the existence of a deep ocean “Wallace Line”. This is an area named after Alfred Wallace, who in the 19th...

Scientific discovery games: Game not over   (05.08.2010 12:56)

Gamers pit their wits against nature’s puzzles

SOME people do science for its own sake. Others may be lured by pecuniary rewards. That still leaves a whole lot of clever folk with no training, or interest, in science. If only there was a way to harness their creative powers for the greater good.

It turns out there is. As Seth Cooper from the University of Washington and his team report in Nature, non-scientists can be cajoled into doing useful scientific work if it is packaged as an online computer game. And many of them are actually rather good at it, or at least better than the smartest available algorithms. ...

Health and gut bacteria: Hard to stomach   (05.08.2010 12:56)

A Western diet promotes unhealthy gut bacteria in children

FAMILY meals often descend into ritual battles over healthy greens: how many children must consume, and how many treats they will earn as a result. The stakes may be higher than parents realise. According to a study published this week in Proceedings of the National Academy of Sciences, a sugary, fat-laden Western diet wreaks profound changes on children’s gut bacteria, and could even promote the risk of asthma, allergies and other inflammatory diseases.

Rates of inflammatory disease have been rising for decades among adults and children alike. Puzzlingly, this increase has occurred largely in developed countries, bypassing poorer places. (Rural poverty brings many hardships; inflammatory bowel disease is not among them.) This has left scientists struggling to pinpoint exactly what about the rich world is making people sick. New data from Paolo Lionetti, of the University of Florence in Italy, supports the view that diet may be the culprit. ...