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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 Sleng, a notorious torture prison in Phnom Penh, he has become one of its most emblematic figures. His 16-month trial before a UN-backed tribunal, which has descended into disarray in its final months, was supposed to establish a model for the prosecution of the other surviving leaders of the Khmers Rouges. ...

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 lower house has approved a similar measure and Spain Senate recently narrowly voted to impose a ban too. But the Council of Europe, an institution that oversees the human rights of Europeans, has voted unanimously to oppose any national bans on the burqa in EU countries. It also called on Switzerland to reverse its ban on the construction of minarets. ...

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. ...

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 introducing tough regulation of Wall Street’s financial firms might well replace the act with something even tougher. ...

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. ...

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 and tax rises are inevitable. ...

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 to power in 2012. Union leaders too have queued up to denounce the reforms. Francois Chereque, one union boss, called it “a provocation”. A day of strikes and protests is planned for June 24th. ...

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. ...

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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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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Germany's president resigns after ill-chosen remarks about the war in Afghanistan

THE powers of the German president are more symbolic than real, but Horst Kohler’s sudden resignation from the job on Monday May 31st was nonetheless a bombshell. He quit days after critics accused him of violating the spirit of the constitution in remarks he made about German military operations abroad. His accusers “flouted the necessary respect for my office,” said a tearful Mr Kohler. His premature departure, the first by a post-war president well before the end of his term, piles additional pressure on the coalition government led by Angela Merkel, which is already beleaguered by sagging popular support and the crisis in the euro area. How she proceeds in the search for a successor will say much about how she means to manage Germany during the coalition’s three remaining years in office.

Mr Kohler, a former director of the International Monetary Fund, had been floundering for some time. As a non-politician he lacked influence in Berlin’s backrooms. Earlier presidents had made their mark by rising to historical occasions with ringing oratory. Despite his financial expertise Mr Kohler struggled to find his voice during the economic crisis. The markets had become a “monster,” he told a magazine in May. Hurled sporadically his thunderbolts fizzled. Recently, the press has been giving more coverage to infighting and resignations among his aides than to anything Mr Kohler has had to say. He remained popular but his prestige was ebbing. ...

BP thinks again about how to stanch the flow of oil after “top kill” fails

AFTER three days of trying, on May 29th BP gave up on its attempts to stanch the flow of oil from its leaking well in the Gulf of Mexico with a procedure known as "top kill". The following day, a White House adviser described the spill as the worst in America's history.

“Top kill” depended on the company pumping large amounts of drilling mud into the blowout preventer, a set of valves which sits on the sea floor at the top of the company's MC252 well, which was drilled by the ill-fated rig, Deepwater Horizon. The idea was to push the mud down the well faster than the pressure of the rising oil and gas could push it back out of the top of the blowout preventer, eventually filling the well with a great enough weight of mud to keep the oil pressed down. To help with this the company fired various sorts of detritus into the blowout preventer, in the hope that the bits of wire and rubber thus introduced would plug the leaks at the top of the preventer and thus help to make sure the mud went down, not up. But even with these "junk shots" the company could not get the procedure to work. ...

Relations with North Korea will loom large over regional elections in South Korea

• SOUTH KOREANS will get the opportunity to judge the government’s handling of fraught relations with its northern neighbour on Wednesday June 2nd. Mayoral elections in the country’s largest cities and elections for provincial governors will prove a test of the policies of President Lee Myung-bak and a measure of his popularity. Tensions are high after North Korea severed ties with the South and threatened military action over accusations that it was responsible for sinking a South Korean naval vessel. North Korea accuses Mr Lee of fabricating the incident to bolster his party’s support in the elections.

• CLIMATE experts from around the world are set to meet in Bonn for a two-week summit starting on Monday May 31st. The German city is the latest venue for difficult talks on a new international climate treaty to replace the Kyoto protocol in 2012. A UN climate conference in Copenhagen in December failed to produce anything beyond a non-binding political declaration. Hopes are low of significant progress that might end with a legally binding deal at the next important climate meeting in Cancun in November. Divisions remain between rich and developing countries over who should bear the costs and the biggest burden of reducing emissions. ...

The National Security Strategy reveals a narrower view of what force can accomplish

EVERY incoming president is required to send Congress a National Security Strategy. Some of these documents are abstract and forgettable but others really do provide a clue to the future. One such was the document George W. Bush signed in 2002, which gave warning that America would act against foes seeking dangerous military technologies before such threats were fully formed. A year later the Bush administration cited precisely this doctrine to justify the invasion of Iraq and the toppling of Saddam Hussein.

Barack Obama’s National Security Strategy, published on May 27th, has a different emphasis. Mr Obama opposed the invasion of Iraq. His document does not endorse Mr Bush’s doctrine of pre-emption. Nor, though, as the Iranians will doubtless note, is pre-emption explicitly disavowed. As a last resort, says the strategy, “the United States must reserve the right to act unilaterally,” albeit adhering to “standards that govern the use of force”. ...

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 than dispassionately to assess the issue. Another caveat is that, as far as the climate is concerned, big and well publicised reports have manifestly not delivered the goods in terms of what UN negotiators call “environmental integrity”—producing actions that really do reduce emissions. But that does not mean that the TEEB process is either propagandistic or pointless. Treating the services provided by ecosystems as part of the economy is a good idea, and the various ways in which their value can be sustained, or even enhanced, deserve study. ...

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. ...

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. ...

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. ...

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?” ...

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 is less tasty, as the fish has been stressed. ...

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. ...

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 dropped far below what is usual for the time of year. Both observations, by themselves, sound as if they should contain meaningful information about what to expect in the rest of 2010. They don’t. ...

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.” ...

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. ...

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 house. ...

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 winner will receive €100,000 ($123,000). ...

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?” ...

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.” ...

Where car ownership is highest

LUXEMBOURG'S roads are jammed with 647 cars for every 1,000 people, the highest ownership rate in the world. The tiny country is rich, which probably accounts for its motor-mania. Car ownership is also high in wealthy countries with remote rural populations, such as Iceland and New Zealand. Surprisingly, America, home of the motor vehicle, has fewer cars per person than either Australia or Canada.

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How the financial crisis has affected the rich

EVEN the rich suffer in a financial crisis. Over a third of American millionaire households said they lost at least 30% of their net worth since September, according to a new report by Spectrem Group, a financial consultancy. Property, mutual funds, shares and annuities took the biggest knocks. Unsurprisingly, financial advisors are under more scrutiny, with satisfaction levels falling from 60% earlier in the year to 40%. A majority of the wealthy say they may not be able to support their lifestyles and nearly 20% will delay retirement.

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In 2008 America's stockmarkets suffered their second-worst year since 1825

INVESTORS are told that the value of their shares may go down as well as up. Rarely, however, do they plummet as far as they did in 2008. The total return of the S&P 500 index fell by nearly 40% last year, the second-worst performance by America's stockmarket since 1825, according to calculations by Value Square, a Belgian asset-management firm. Comparisons to the Depression are clear: only in 1931 and 1937 were there similarly abysmal losses. The firm looked at various predecessors of the S&P 500 from 1923 onwards, and for earlier years took data from a working paper by Yale Management School on the returns of companies listed on the New York Stock Exchange. Since 1825, 129 years saw rising returns, whereas 55 suffered falls—four of them in this century.

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Countries with the most, and fewest, doctors

UNSURPRISINGLY access to health care is closely tied to wealth. African countries have the fewest doctors per head of population, with Malawi the worst off. Beyond Africa, Bhutan is particularly short of doctors. Turkmenistan and Cuba have the most doctors to go around, more even than rich countries. Other former communist countries such as Belarus and Georgia are also well endowed with members of the medical profession.

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Which countries produce most coffee?

THERE is indeed an awful lot of coffee in Brazil. And there is quite a bit in Vietnam and Colombia too. But while these three countries produce the most coffee their wares are drunk mainly in places where it would not grow quite so well. Americans drink the most of the invigorating beverage though Brazil gets through quite a bit too. Germany and Japan also outdrink those traditional homes of coffee swilling—France and Italy.

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Demand for mobile phones will grow in 2009

FROM the world's poorest countries to the very richest, the demand for mobile phones will not be derailed by tougher economic times. Globally, subscriptions will swell by 8%, bringing the total to some 4 billion worldwide. In the developed world growth will be spurred by the need to upgrade to ever more powerful, internet-enabled phones, while in emerging economies heavy investment in network infrastructure will mean that virtually anyone, just about anywhere, will be able to get reception. In recession-hit economies, however, customers will delay their upgrades and cut back on pricier usage plans.

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Fewer Europeans will go to the polls in 2009

THE European Union is in little danger of being mistaken for a vibrant democracy. A reputation for deals forged in backrooms and the failure to ratify the Lisbon Treaty, which would have conferred greater powers on the EU parliament, are all likely to dissuade too many of the half a billion EU citizens from turning out for parliamentary elections in 2009. Since direct elections began in 1979, at five-yearly intervals, turnout has fallen each time, to 46% in 2004. This hides lower turnout in countries such as Britain, and truly appalling statistics in some new member states which joined in 2004.

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Business investment in big economies will shrink in 2009

IN UNCERTAIN times for businesses, cash is king, and those (mostly mature) firms that have fat margins and strong cash flow will have an edge over firms that are in critical phases of their investment cycle, especially start-ups that are burning rather than breeding cash. Many firms will slash discretionary spending and scale back growth plans to conserve cash until they get a clearer sense of the economic outlook. Before the market panic of September 2008, the OECD predicted that business investment would slump in first half of 2009, rebounding a bit in the second half, but to a much lower growth rate than had been the norm until recently. Even that now looks overly optimistic.

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The battle for the world's biggest observation wheel

THE world's great capital cities engage in a rivalry that is generally unspoken. But occasionally this yearning to be the best erupts into the open and onto the skyline. And nothing proclaims your city's greatness like a vast Ferris wheel, the first of which was built for the Chicago World's Fair in 1893. In 2009 Berlin plans to outdo the 135-metre London Eye in Britain's capital—Europe's largest—with a wheel 50 metres higher. But Beijing will steal the show with its own 208-metre Great Observation Wheel, the biggest in the world.

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Why it pays to go abroad for medical treatment

AROUND 46m Americans lack health insurance, and tens of millions more are woefully under-insured. As they face huge out-of-pocket expenses, deductibles and “co-payments” for operations, they are increasingly heading overseas to cheaper facilities. Many common operations can be done in world-class hospitals abroad for a fifth or less of the price charged by American hospitals. As more employers and health-insurance firms add the “global option” to their plans, the number of American health tourists will soar to over 2m in 2009—rising to 10m by 2012, according to forecasts by Deloitte, a consultancy.

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America and Japan have the most computers per person

Growth in the sales of personal computers will continue to slow in 2009, especially in more saturated markets such as North America, where there is already almost one PC for every person. Demand will remain relatively strong in emerging markets where penetration rates are still relatively low. The falling cost of laptops and the growing availability of cheaper internet-enabled devices will help to fuel demand worldwide. As a result, laptops will outsell desktop computers for the first time in 2009.

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Google offers some insights into life's big questions

THE oldest questions are still the most puzzling. According to Google's annual list of popular search terms, even in these times of economic crisis, people are most concerned with working out what love is. The nature of gout, an ailment most commonly associated with gentlemanly excess, has fallen off the list since 2007. With fewer expensive meals and bottles of wine on offer, it is likely to be less of a problem in these frugal times. Interest in the identity of the president-elect, Barack Obama, reached such a fever pitch that he has replaced God on the list. John McCain could perhaps take comfort from the fact that more interest was shown in him than in his running mate, Sarah Palin.

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Analysing the causes of conflicts

THERE have been nine wars and almost 130 violent conflicts across the world this year, according to an annual report released on Monday December 15th by the Heidelberg Institute for International Conflict Research, a think-tank. The study classifies conflict broadly to include peaceful disputes over politics or borders (low intensity), as well as those involving sporadic or constant violence (medium or high intensity). In 2008 previously non-violent conflicts escalated into violence in countries such as Kenya and Yemen. Ideological change is both the most common cause of conflict and the root of most wars, but there is rarely only one cause of dispute. Congo's ongoing conflict encompasses a battle for its mineral resources and, according to some, an invasion by another state, Rwanda.

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Where people are most, and least, promiscuous

HOW much do sexual habits vary between countries? A great deal, according to a study of 14,000 people in 48 countries. The survey asked respondents to consider seven questions related to sex. Some questions were factual: how many sexual partners have you had in the past year and how many one-night stands have you had? Other questions were about attitudes to sex: is sex without love acceptable, or sex with casual partners? From the answers, the researchers compiled an index of promiscuity for respondents from each country. The result appears to show that Finns and other Europeans are the most promiscuous, whereas respondents from more conservative countries, such as Bangladesh and Zimbabwe, are less promiscuous. Around the world men and women vary in their attitudes to casual sex. Men are more likely to seek it out in their late twenties. Women wait until their thirties when the chances of a casual encounter resulting in pregnancy are less.

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Ranking rich countries' commitment to the developing world

AMERICA ranks 17th out of 22 rich countries in its commitment to fostering prosperity in the developing world, according to the Center for Global Development, a think-tank in Washington, DC. The Netherlands, Sweden, Norway and Denmark take the top four spots thanks to the generosity of their foreign aid relative to the size of their economies. But aid is not all that matters. Countries such as Australia, New Zealand and Canada score well by dint of good trade and security policies. Environmental, technology and migration policies count too. America’s relatively low trade barriers, the generosity of its citizens’ private aid flows, and policies promoting pro-poor technologies save it from last place.

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Which big organisations and companies are accountable

THE International Olympic Committee is the least accountable global organisation according to a survey published on Wednesday December 10th by One World Trust, a British think-tank. The study ranks 30 companies, inter-governmental organisations, and voluntary groups and charities, according to an index based on criteria such as transparency, participation with outsiders and how complaints are dealt with. The IOC was found to be the least transparent in its workings, while the International Atomic Energy Agency and Care International were found to be worst for setting out ways to deal with external complaints or whistle-blowing. Businesses are most likely to respond to complaints and banks score best for transparency. Charities and aid agencies are most likely to involve outsiders in decision-making.

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Firms paying bribes in foreign countries

RUSSIAN companies are seen as the most likely to pay bribes in foreign business dealings, according to Transparency International, an anti-corruption NGO. In its “Bribe Payers Index” published on Tuesday December 9th, almost 3,000 senior business executives ranked firms from Russia as the worst among 22 countries for offering backhanders to everyone from politicians to low-level public officials. Firms from other big emerging economies such as China, Mexico and India were next in the bribery stakes. Companies from richer countries are less likely to grease palms (with the exception of Italy), with Belgium and Canada seen as least likely to pay bribes.

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House prices continue to fall in most countries

HOUSING markets look grim all over the world. In the third quarter of 2008, house prices fell in 11 of 16 countries measured by The Economist’s house-price indicators. The worst fall was in Britain, where prices tumbled a whopping 5.5% in the three months to September, following a 2.7% drop in the previous quarter. America's housing bubble was the first to burst in 2006, and it has been deflating rapidly since. Many places that recorded gains in the first quarter, such as Hong Kong and China, are now seeing declines. Only in Sweden and Switzerland did house prices grow by more than 1% in the third quarter. Germany, France and South Africa saw tiny rises. Global house prices are expected to fall by 15% in the next two years.

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America's troubled carmakers look set for a bail-out, and other news

• CONGRESS is set to vote on giving America's embattled carmakers a huge handout to save them from the scrapheap. The bosses of Detroit's Big Three recently visited Washington, DC, to ask for some $34 billion to keep their firms in business. General Motors and Chrysler have given warning that they will not make it to the end of the year without extra cash. If, as seems likely, the troubled car firms get a vast dollop of taxpayers' money, it is unlikely to be enough to return them to good health. So America's politicians should prepare themselves for another visit.

For background, see article ...

SIR – Recent interest in industrial policy (“Picking winners, saving losers”, August 7th) has turned the discussion to how and when to do it better, rather than simply how to do it less. The distinction between leading and following the market is useful. Public investment in new industries where private investors have shown little interest (“leading”) is obviously riskier than where the private sector has already had some success (“following”). Leading can be made less risky by studying products being made in economies with incomes two- or three-times higher to see what domestically-based firms might be able to upgrade to or diversify into.

However, public assistance must be given against performance indicators, which may relate to export success, or product quality, or prices moving towards international levels. Failure to specify performance conditions has been the bane of industrial policy from India to New Zealand. And as for how to improve success—it is worth bearing in mind the dictum attributed to Thomas Watson, founder of IBM, “If you want to be more successful, increase your failure rate.” ...

SIR – You were right that too many universities see the international student market as the panacea for their domestic ills (“Hustling spires”, August 7th). In a recent survey of British university heads we found that over two-thirds cited increasing their international presence among their top priorities. It is questionable whether these ambitions can be supported, or indeed whether the fruits of doing so are as profitable as the numbers suggest. But more importantly, why do universities continue to seek ways to subsidise inherently uneconomic ways of working rather than rethinking outmoded business models that have changed little in 50 years?

Mike BoxallPA Consulting GroupLondon ...

SIR – Your briefing on the Chinese labour market (“The next China”, July 31st) correctly pointed out that high wage growth has an effect similar to currency appreciation on international competitiveness. However, you failed to complete the argument. If, over the past decade Chinese authorities had caved in to American demands, or to Western editorial opinions, to appreciate the yuan continually to correct “global imbalances”, the wage miracle we now observe would not have occurred.

Chinese employers would be more loth to grant large wage increases if they feared the yuan would be higher in the future. If they did raise wages and then found the yuan had ratcheted upwards, the effective pay increase would be much larger in dollar terms. Producers of export products could be bankrupted. Since competing goods from other countries are invoiced in dollars, a safely fixed yuan/dollar rate allows a Chinese employer in export activities to estimate more precisely what wage increases are commensurate with expected growth in future labour productivity. ...

SIR – You displayed a liberal elitist tolerance for crime in your article criticising the United States for its tough sentencing policies (“Rough justice”, July 24th). If you think $50,000 per year per thug is too much to pay for the luxury of allowing children to play in the front yard without fear of being kidnapped, what’s your bid? I think it’s a bargain.

Mark KraschelMuscat, Oman ...

SIR – In your article about Colombia’s presidential handover (“Let Santos be Santos”, July 24th), you said that several of Alvaro Uribe’s officials have been accused of complicity with the paramilitaries, and his army has murdered many civilians. The accused officials are under investigation by the judiciary and the soldiers involved have been dismissed and turned over to the penal jurisdiction. In all, 3,129 soldiers and officials have been investigated, 825 individuals have been indicted, the Military Justice system has referred 309 cases to the civilian courts and 227 soldiers and officials have been sentenced. Contrary to your suggestion that the president wants to subvert the independence of the judiciary, the comments and recommendations Mr Uribe has made have been intended to improve investigations and have been made in his constitutional capacity as head of state.

You are also mistaken in considering Colombia is “unjustly” isolated abroad. Canada approved a law to implement a free-trade agreement with Colombia in June and in May the European Union concluded a trade agreement with Colombia and Peru. ...

SIR – You give a balanced treatment to the debate on excessive speculation in commodities markets and its effect on prices (“Buttonwood”, June 26th). There are, however, two problems with your analysis.

First, the OECD report you cite, which argues that speculation has no effect on prices, is highly flawed. The report uses a Granger causality test to measure the relationship between the level of commodities futures contracts held by swaps dealers, and the prices of those commodities. Granger tests, however, are of dubious applicability to extremely volatile variables like commodities prices. Furthermore, the Commodity Futures Trading Commission estimates that less than half of swaps dealer positions in energy markets are related to index fund speculation, which is the primary focus of the debate. Yet the OECD analysis assumes that the holdings of swaps dealers provide a perfect proxy for index speculation. ...

SIR – Your article “Flawed scientists” (July 10th) was uncharacteristically poorly researched. First, you suggested that my own position should be considered on the basis that I am opposed to reform of the Intergovernmental Panel on Climate Change. Yet this year I went to the UN to ask that the Inter Academy Council review all the IPCC’s processes and methods. Whilst that review is taking place—it reports in August—I have not announced major reforms of my own. To do so would be to pre-empt and to undermine the IAC.

Second, you referred to my voluntary status and the IPCC’s consequent lack of a full-time chairman, suggesting that I should be replaced by a paid appointee. At present only the small secretariat staff and technical support units are paid. This not only enables the IPCC to work to a tight budget, around GBP5m ($7.7m) a year, but allows us to deploy the top experts in their fields, all working in the spirit of public service. ...

SIR – You suggest that the Canadian government is taking steps “that would make it harder for both bogus and legitimate refugees to reach Canadian soil” (“49th parallels”, June 19th). It is true that our reforms, passed with all-party support, would speed-up the processing of fraudulent asylum claims. Hopefully this will reduce the large number of unfounded claims. However, these reforms will be implemented along with a 20% increase in the number of UN Convention refugees living abroad who will be resettled in Canada. So our reforms will make it easier, not more difficult, for legitimate refugees to reach Canadian soil.

Stephen Harper’s government has also continued to maintain the highest relative level of immigration in the developed world, at about 0.8% of our population per year, and we anticipate a slight increase in immigration intake this year. Just as Canada now stands out as having the most dynamic economy and strongest fiscal position in the developed world, so too are we standing out as the only developed nation increasing, rather than cutting or freezing, the number of immigrants and refugees we welcome. ...

SIR – I appreciate that you discussed my proposal to create a market for immigration (Economics focus, June 26th). Your article accurately presented the essence of my argument, but mentioned two criticisms that are unpersuasive. First, and contrary to the claim that you attributed to Abhijit Banerjee, the system I propose of poorer immigrants borrowing from their employers to finance their immigration fees allows the migrants to move freely between employers. As long as labour markets are competitive, such quits and hires of immigrants would be perfectly feasible and fair, unlike the sugar-plantation case mentioned in your article.

The second criticism, attributed to Sendhil Mullainathan, is that some immigrants may provide benefits to the rest of society; that is, they may create positive “externalities”. In my lecture I suggested that particularly valuable immigrants, such as great scientists, could be allowed to pay lower entry fees. Because the great majority of individuals get paid for their marginal contribution to society in a competitive market, charging lower entry prices to relatively few individuals does not introduce a significant complication to the fee system. Moreover, judgments about externalities would be much more complicated in the point system that you apparently prefer. ...

SIR – Banyan took an overly pessimistic view about Pakistan (June 19th). He should have noted that Pakistan never gave democratic legitimacy to dictators even though such rulers became darlings of the West during the cold war and after the terror attacks of September 11th 2001. Moreover, the world owes its gratitude to Pakistan for the sacrifices it made when the Soviets invaded Afghanistan. Today Pakistan’s armed forces and people are making further sacrifices to defeat extremism and terrorism. Although this is not Pakistan’s fight alone, no one should have any doubts about the resilience of the people and government of Pakistan in tackling the crises they may face from either the situation in Afghanistan or from outside interference.

Syeda Sultana RizviPakistan high commissionLondon ...

SIR – Lexington is mistaken in thinking that the oil-spill disaster off America’s gulf coast will have no lasting effect on Barack Obama’s presidency (June 12th). From the start of his time in office Mr Obama has demonstrated a disturbing penchant for letting others set the agenda; the stimulus bill and health-care legislation are prime examples. Even his signature tough decision to increase troop levels in Afghanistan came after months of dithering. Mr Obama’s reaction to the oil spill follows the same narrative.

Instead of leading by helping states and local authorities cut through the many bureaucratic obstacles of the federal government, the president has insisted on following the laborious process of conducting environmental reviews of local plans to build barriers that protect fragile wetlands. He also resisted a waiver to the Jones Act, a 90-year-old law that prevents foreign-owned and operated vessels from being used in the gulf clean-up, apparently for fear of alienating his union pals. ...

SIR – Although you are right that the Palestinians elected Hamas in 2006 “to represent all of them”, that very same party blocked all efforts by the Palestinian Authority to hold elections last January (“Israel’s siege mentality”, June 5th). Hamas also rejected an Egyptian reconciliation agreement, signed by Fatah, that would have permitted elections this July. This is not surprising given that opinion polls suggest Hamas would suffer a heavy defeat in any elections held now. According to the Palestinian Centre for Public Opinion, in May 53% of all Palestinians supported Fatah and only 15% favoured Hamas. In the Gaza Strip, 37% backed Fatah compared with 21% who preferred Hamas.

Furthermore, it is not strictly necessary for the West to “call for Hamas to be drawn into negotiations” in a peace process, as you suggest. Talks for the framework of a negotiated settlement could easily be completed without involving Hamas. Indeed, the “letters of mutual recognition” that form the basis of all negotiations establish that the Palestine Liberation Organisation is the sole legitimate representative of the Palestinian people. ...

SIR – Although your assessment of Malaysia’s strong economy was appreciated, your assertion of political machinations behind the trial of Anwar Ibrahim was unfounded and lacked the appropriate context (“Sodomy, the sequel”, May 15th). Contrary to the tone of your article, Malaysia’s government actually sees the trial as an unwelcome distraction from its agenda of reform and economic liberalisation. There is no “political hand at work”, as you suggest.

The trial is proceeding because of the simple fact that a private citizen brought a criminal complaint, and our legal system has a responsibility to all citizens to uphold the law and facilitate due process, regardless of the political prominence of those involved. We trust that the court will resolve the matter in a fair and transparent manner. ...

SIR – I feel obliged to set the facts straight on a few points that you have raised once again concerning the Thai monarchy (“The battle of Bangkok”, “A polity imploding”, May 22nd). To portray the conflict in Thailand as a fight between the rural poor, and urban elites “who are closer to the revered King Bhumibol and his family”, is misconceived. To use terms such as “the royalist elite”’ and “the palace” misrepresents the role of the monarchical institution. But to come to the conclusion that the monarchy has taken sides, and is no longer above politics nor an important guarantor of the nation’s stability, is the worst misjudgment of all.

Throughout his reign the king’s words and actions have reflected his commitment to democracy; he has taken great care to remain above politics and never join sides. The appointment of an interim prime minister after the coup in 1991 was in accordance with his constitutional role. The signing of royal commands appointing coup leaders to administer state affairs, as in 2006, are consistent with his apolitical role. ...

SIR – I read your leader calling for toleration of Muslim women wearing face-covering veils in public (“A bad idea…”, May 15th). Yet wearing the burqa has nothing whatsoever to do with religion. It is purely and simply to do with the subjugation of women. It is about control and possession and not about Islam and the Prophet. It is overt and aggressive sexism and it is a disgrace that it is accepted at all. We should no more tolerate the wearing of the burqa in public than we permit nakedness. Banning it is no more an infringement on individual rights than is a ban on public nudity.

Voltaire would turn in his grave if he knew how you turned his noble and liberal utterance about defending to the death the right to free speech into an endorsement for wearing the burqa. ...

How the threats to the internet’s openness can be averted

WHEN George W. Bush referred to “rumours on the, uh, internets” during the 2004 presidential campaign, he was derided for his cluelessness—and “internets” became a shorthand for a lack of understanding of the online world. But what looked like ignorance then looks like prescience now. As divergent forces tug at the internet, it is in danger of losing its universality and splintering into separate digital domains.

The internet is as much a trade pact as an invention. A network of networks, it has grown at an astonishing rate over the past 15 years because the bigger it got, the more it made sense for other networks to connect to it. Its open standards made such interconnections cheap and easy, dissolving boundaries between existing academic, corporate and consumer networks (remember CompuServe and AOL?). Just as a free-trade agreement between countries increases the size of the market and boosts gains from trade, so the internet led to greater gains from the exchange of data and allowed innovation to flourish. But now the internet is so large and so widely used that countries, companies and network operators want to wall bits of it off, or make parts of it work in a different way, to promote their own political or commercial interests (see article). ...

Central bankers are not magicians. Don’t count on them to conjure up remedies if the rich economies flag

OVER the past few years the reputations of the rich world’s central bankers have fluctuated wildly. When the financial crisis struck, they were blamed for allowing the housing and credit bubbles to build, and for failing to foresee the bust. Later they were lionised for preventing a new Depression with bold actions to support the financial system. Now a third stage is at hand, one of dangerously outsized expectations.

With most governments unable, or unwilling, to offer more fiscal stimulus, central banks are left solely responsible for propping up the flagging recovery. The phenomenon is most obvious in America. Its economy has weakened, yet the default path for fiscal policy is a hefty tightening as the Obama stimulus wanes, the states slash spending to balance their budgets and the Bush tax cuts expire. With any discussion of remedies by politicians drowned out by partisan positioning before the mid-term elections in November, disproportionate hope is pinned on Ben Bernanke’s Federal Reserve. Hence the attention paid to his recent speech at Jackson Hole, which laid out, with great confidence, what further steps the Fed could take. ...

Japan’s ruling party should cast its most famous member, Ichiro Ozawa, into the wilderness

NOT for nothing is Ichiro Ozawa known as “The Destroyer”. Over a career spent scheming in the back rooms of Japanese politics, he has made and broken alliances, toppled governments and, with laconic disdain, treated transparency and other democratic norms as so many Western pretences. Yet his latest ploy is one of his darkest. In challenging Naoto Kan, the prime minister, as leader of the ruling Democratic Party of Japan (DPJ), he threatens to bring down Japan’s third government in 12 months. Worse, he may destroy what remains of the trust that voters put in the DPJ when it ended 55 years of one-party rule last year. For the good of Japanese democracy, not to mention its own future, the DPJ must reject Mr Ozawa and all that he stands for.

If the challenger does pull off a victory in the vote on September 14th—and he may—he would take over the DPJ a mere three months after he had been forced to step down as secretary-general under the cloud of a political-funding scandal. He would also replace Mr Kan as prime minister—or, if he preferred to stay in the shadows, install a puppet leader in his place. That would be a disaster, even by the sorry standards of recent Japanese politics, in which four prime ministers have come and gone in the past four years. ...

The responsibility for Pakistan’s cricketing scandal lies ultimately with the country’s elite

NOT much unites Pakistanis more than cricket. The national game inspires widespread devotion and the national team justified pride. Led by wristy batsmen, like Javed Miandad, and blood-curdling fast bowlers, like Imran Khan, Pakistan has often excelled at the world’s most popular sport after football. Its side has tended to beat India’s, despite its more modest population. In a country suffering devastation from flooding, and long divided by ethnicity, region, religion and sect, which often seems to have little to boast of, or even reason for being, cricket should be a boon.

But Pakistan’s cricketers are advertising much that is wrong with their country. In-fighting (including with cricket bats), drug-taking, feigned injury, allegations of players being coerced into Islamic fundamentalism and other scandals have plagued the national side. But the most egregious involves match-fixing, to which Pakistani cricketers, allegedly including several of today’s crop, seem especially prone. ...

Seeking to buy off allies and cracking down on dissent: bad signs in South Africa

WHEN he became president of South Africa just over a year ago, Jacob Zuma promised to quench South Africans’ thirst for renewal. After the aloof and idiosyncratic Thabo Mbeki, here was a big-hearted, charismatic “man of the people” who would unite a fractious country and help it make itself felt in the world. Sure enough, Mr Zuma was at his beguiling best during the football World Cup, a festival that passed off even better than most had dared hope.

Yet even at the time of his election, it was not clear what Mr Zuma stood for. At home, in front of African National Congress audiences, he sounded like a nationalist and socialist. Abroad, he sounded like a free-market liberal. He never properly explained what he believed in. Pessimists suggested it was getting power and holding on to it. ...

The emerging conventional wisdom about world farming is gloomy. There is an alternative

THE world is planting a vigorous new crop: “agro-pessimism”, or fear that mankind will not be able to feed itself except by wrecking the environment. The current harvest of this variety of whine will be a bumper one. Natural disasters—fire in Russia and flood in Pakistan, which are the world’s fifth- and eighth-largest wheat producers respectively—have added a Biblical colouring to an unfolding fear of famine. By 2050 world grain output will have to rise by half and meat production must double to meet demand. And that cannot easily happen because growth in grain yields is flattening out, there is little extra farmland and renewable water is running short.

The world has been here before. In 1967 Paul Ehrlich, a Malthusian, wrote that “the battle to feed all of humanity is over… In the 1970s and 1980s hundreds of millions of people will starve to death.” Five years later, in “The Limits to Growth”, the Club of Rome (a group of business people and academics) argued that the world was running out of raw materials and that societies would probably collapse in the 21st century. ...

Australia’s dead-heat election was exciting. But the drama masks a desperately impoverished politics

“THE bigger the hat the smaller the property.” Perhaps that piece of Aussie wisdom is what voters had in mind when they went to the polls on August 21st. Posture and pontificate as they might, Julia Gillard, the prime minister and Labor leader, and Tony Abbott, the right-wing coalition leader, were both rejected for being several hat-sizes too big. Their empty, cynical campaigns leave Australia in a mess, facing its first hung parliament since 1940, politics that is poisonous even by Australian standards, and a dangerous policy vacuum.

With one lower-house seat still in doubt, the vote is as close as a Queensland afternoon. As The Economist went to press the right and left both had 72 seats—four short of a governing majority. But, counting second-preferences, the left had a tiny advantage in the popular vote. The balance of power in the lower house will rest with a Green, and four independents, who are understandably playing one side off against the other (see article). ...

International regulators are making progress on tackling too-big-to-fail banks

TALK is cheap when it comes to solving the problem of too-big-to-fail banks. From the luxury of even today’s stuttering economic recovery it is easy to vow that next time lenders’ losses will be pushed onto their creditors, not onto taxpayers.

But cast your mind back to late 2008. Then, the share prices of the world’s biggest banks could halve in minutes. Reasonable people thought that many firms were hiding severe losses. Anyone exposed to them, from speculators to churchgoing custodians of widows’ pensions, tried to yank their cash out, causing a run that threatened another Great Depression. Now, imagine being sat not in the observer’s armchair but in the regulator’s hot seat and faced with such a crisis again. Can anyone honestly say that they would let a big bank go down? ...

America’s jobs woes cannot be cured just by waiting for economic recovery

THE economy stopped shrinking a year ago, but America’s unemployment problem is as big as ever. The official jobless rate was 9.5% in July, and would be higher still had many people not given up searching for work. Some 45% of the unemployed have been out of a job for more than six months—the highest proportion since the 1930s. And judging by the recent rise in applications for unemployment benefits, the situation may soon get worse rather than better.

Why is joblessness still so high? The prevailing view among policymakers is that unemployment is a painful reflection of the economy’s weakness. Americans are out of work because the slump was deep and the recovery has been lacklustre. Stronger demand will eventually solve the problem. ...

America has had a bruising decade. But do not underestimate either the superpower or its president

WHEN Barack Obama confirms next week that all American combat forces have left Iraq, you can be sure of one thing. He will not repeat the triumphalism of George Bush’s suggestion seven years ago that America’s mission there has been accomplished. Mr Obama always considered this a “dumb” war, and events have proved him largely right. America and its allies may have rid the Middle East of a bloodstained dictator, but Saddam Hussein’s vaunted weapons of mass destruction turned out to be a chimera and the cost in American and especially Iraqi lives has been hideous. Iraq, it is true, is no longer a dictatorship. Thanks in part to Mr Bush’s lonely refusal in 2007 to heed the calls to cut and run, the sectarian bloodletting that followed the invasion has abated. But the country’s new democracy remains chronically insecure (see article), which is one reason why some 50,000 American “support” troops are to stay behind to shore it up.

To many Americans, the misadventure in Iraq has come to symbolise a broader wrong turn America made after Osama bin Laden assaulted it on September 11th nine years ago. Nearly six out of ten Americans now say that they oppose even Mr Obama’s “good” war—the one against al-Qaeda and the Taliban. An America that is bleeding economically at home, with unemployment stuck at nearly 10% and debts as tall as the eye can see, is losing confidence in its ability, and perhaps in its need, to shape events in far-flung regions such as Central Asia and the Middle East. Even in an age of austerity America still towers above all-comers in military power, as well it should given its annual defence spending of $700 billion, almost as much as the rest of the world put together (see article). But the past decade has laid bare the limits of high-tech power. Whizz-bang technology enabled America to conquer Afghanistan and Iraq in the twinkle of an eye with negligible losses. Subduing them has been harder. Of the 2m Americans who have served in the two wars over the past decade, some 40,000 have been wounded and more than 5,000 killed. ...

As China and India rise in tandem, their relationship will shape world politics. Shame they do not get on better

A HUNDRED years ago it was perhaps already possible to discern the rising powers whose interaction and competition would shape the 20th century. The sun that shone on the British empire had passed midday. Vigorous new forces were flexing their muscles on the global stage, notably America, Japan and Germany. Their emergence brought undreamed-of prosperity; but also carnage on a scale hitherto unimaginable.

Now digest the main historical event of this week: China has officially become the world’s second-biggest economy, overtaking Japan. In the West this has prompted concerns about China overtaking the United States sooner than previously thought. But stand back a little farther, apply a more Asian perspective, and China’s longer-term contest is with that other recovering economic behemoth: India. These two Asian giants, which until 1800 used to make up half the world economy, are not, like Japan and Germany, mere nation states. In terms of size and population, each is a continent—and for all the glittering growth rates, a poor one. ...

What can be done about the dangerous junk that litters space?

WHEN the Soviet Union launched Sputnik in 1957, few realised that this symbol of Communist chutzpah heralded the start of an information revolution. Today, with thousands of satellites orbiting the Earth, it is easy to forget how essential they are for such things as helping people plot journeys accurately, studying the planet and making phone calls.

In the 1970s space was seen as too vast to fill up. Forty years on, this Big Sky theory is being proved wrong. Things are getting rather crowded between 700km and 1,000km up—a region favoured for telecommunications and Earth observation. Old satellites, chips of paint and jettisoned rocket stages are hurtling around the world at thousands of kilometres an hour. Even a tiny fragment of such junk can destroy a satellite. There is ever more debris, thanks to a recent Chinese anti-satellite test and an accidental collision of two communications satellites. And it can take centuries to fall to earth, with the small pieces burning up in the atmosphere (see article). ...

An apology is due to Barack Obama: his takeover of GM could have gone horribly wrong, but it has not

AMERICANS expect much from their president, but they do not think he should run car companies. Fortunately, Barack Obama agrees. This week the American government moved closer to getting rid of its stake in General Motors (GM) when the recently ex-bankrupt firm filed to offer its shares once more to the public (see article).

Once a symbol of American prosperity, GM collapsed into the government’s arms last summer. Years of poor management and grabby unions had left it in wretched shape. Efforts to reform came too late. When the recession hit, demand for cars plummeted. GM was on the verge of running out of cash when Uncle Sam intervened, throwing the firm a lifeline of $50 billion in exchange for 61% of its shares. ...

A useful industry that will probably become more useful as it becomes less grandiose

IF PRIVATE-EQUITY outfits were once the kings of capitalism then during the credit crunch they behaved a bit like George III. Gripped by a bout of madness, they overpaid for firms at the top of the economic cycle and loaded them with too much debt. Today private-equity types are quick to admit things got out of control, just as in the buy-out booms of the late 1980s and 1990s. Most big shops, including Blackstone (see article), are keen to clean up the mess and move on. Yet it will take the industry a long time to rebuild its credibility.

Capitalism still needs private equity in its pure form. The stockmarket is not good at dealing with some firms—those that need surgery, are in the grip of bad bosses, or in industries that fund managers sniff at. Then it can make sense to have a lone, obsessive owner—particularly if it uses a dollop of debt to concentrate managers’ minds and locks in its own investors so long-term decisions can be made. The mere threat of a buy-out also helps keep managers at all listed firms on their toes. ...

Outsiders’ cautious reaction to the disaster so far is less heartless than it seems. But now is the time to help

THE United Nations secretary-general, Ban Ki-moon, swooped low over the massive swamp that used to be central Pakistan and said he had never before seen anything quite so terrible. Flood waters that gushed from the Indus river, which divides the country north-to-south, had inundated villages, towns and whole districts. The immediate toll can be measured in loss of human life, livestock, crops and food stores, and in destroyed homes and irrigation systems. Worse will come if disease and hunger take hold. Some cases of cholera have already been reported. Millions of the displaced are at risk of diarrhoea, malaria and other mundane killers. The UN’s boss was surely right in saying that the “unprecedented floods require an unprecedented response.”

Some argue that outsiders should already have done more. The floods are nearly a month old. By contrast, within a couple of weeks of the earthquake in Haiti, governments and other donors had made grand pledges of help and foreign agencies were jostling to aid the victims. Outsiders were similarly generous after a tsunami struck Asia in December 2004. Sudden disasters invite instant sympathy and speedy assistance. Floods, like famines, are often slower-building horrors. Yet their victims still deserve the world’s support. ...

Britain has embarked on a great gamble. Sooner or later, many other rich-world countries will have to take it too

OF ALL the politicians elected to high office in the West in the past few years, David Cameron seemed the least revolutionary. There was certainly none of the thrill of Barack Obama’s elevation. Even set against his peers in Europe, Mr Cameron seemed to offer less disruptive elan than Nicolas Sarkozy and a less intriguingly ruthless career than Angela Merkel. Here was a pragmatic toff, claiming the centre ground back from a Labour Party that had lost its vim. When Mr Cameron failed to win the election outright in May and had to share power with Nick Clegg’s Liberal Democrats, many feared a government as underwhelming as his election campaign.

Yet within its first 100 days the Con-Lib coalition has emerged as a radical force. For the first time since Margaret Thatcher handbagged the world in 1979, Britain looks like the West’s test-tube (see article). It is daring again—not always in a good way but in one that is likely to be instructive to more timid souls, not least Mr Obama and his Republican foes. ...

Alas, a DNA test probably won’t reveal your future. But a crackdown on consumer genetics is unwise

IMAGINE a world where your doctor could help you avoid sickness, using knowledge of your genes as well as how you live your life. Or where he would prescribe drugs he knew would work and not have debilitating side-effects.

Such a future is arriving faster than most realise: genetic tests are already widely used to identify patients who will be helped or harmed by certain drugs. And three years ago, in the face of a torrent of new scientific data, a number of new companies set themselves up to interpret this information for customers. Through shop fronts on the internet, anyone could order a testing kit, spit into a tube and send off their DNA—with results downloaded privately at home. Already customers can find out their response to many common medications, such as antivirals, contraceptives and blood-thinning agents. They can also explore their genetic likelihood of developing deep-vein thrombosis, skin cancer or glaucoma. ...

It’s been fun to watch but Australia has gained little from this particular slugfest

WHAT a shame that Australia’s election concludes on August 21st. It has been great entertainment, with the two main rivals for prime minister battling so closely in the polls that some predict a hung parliament. The campaign rows, party intrigue and sniping could serve nicely as a plot for yet another antipodean soap opera. However, the main reason to lament the campaign’s end is for what follows: either Julia Gillard, Labor’s uninspiring candidate, or Tony Abbott, the opposition’s unappealing one, will get to run the “lucky” country.

Ms Gillard became Australia’s first woman prime minister in June, after a brisk act of party regicide that did for Kevin Rudd. In office only since 2007, Australia’s first environmentally minded prime minister had fallen from party favour after dropping a promise to bring in an emissions-trading scheme and then picking a damaging fight with mining companies over a supertax on their profits. Ms Gillard promptly agreed to ease the tax. Seeing favourable polls, she opted for a snap election. Nobody really knows how she would govern. Fans call her decisive and disciplined; critics damn her as disloyal and an opportunist. Once a left-winger, she can seem ill at ease grasping for the centre. She used to oppose policies that she now loudly promotes, such as paid parental leave. And she has helped confuse voters by trumpeting Mr Rudd’s stewardship of Australia’s economy, while insisting he had to go as his government was in a “downward spiral” (see article). ...

Fear of renewed recession in America is overblown; so is some of the optimism in the euro area

SELDOM does the United States look at Europe with economic envy. The past few weeks, however, have been one of those rare phases. Concern about America’s stumbling recovery has been rising, just as anxieties about the euro area’s economy have faded. The dollar is the weakling among rich-world currencies (see article). But Americans should take a little heart: it is too soon to despair about their economy. And Europeans should show a little caution: it is too soon to be sure that theirs is firmly back on its feet.

Some forecasters believe that America’s disappointing GDP growth in the second quarter, 2.4% at an annualised rate, could be the start of a slide towards a second recession. One worry is jobs, or the lack of them. American business created only 71,000 in July, too few to match the growth in the population of those of working age and far too few to shorten the queue of unemployed noticeably. Unemployment is stuck at 9.5%, even though corporate America is flush with cash. Companies are still unhelpfully shy of hiring, preferring to squeeze yet more output from fewer people. ...

Governments have mostly failed to protect Africa’s wildlife. But other models— involving hunters, rich conservationists and local farmers—are showing promise

ONLY eight specimens of the northern white rhino are left alive on the planet, and they are all in captivity. The handful that remained in the wild in Congo have not been seen in years; they are almost certainly dead. A final effort to save the sub-species earlier this year saw four northern whites shipped from a zoo in the Czech Republic to the Ol Pejeta conservancy on the Laikipia reserve in Kenya.

The senses of these rhinos had been dulled by the cold concrete of Slav zoo life. In Africa, by contrast, they found themselves under open skies, with wild browse, the trees filled with weaver birds, the red soil interrupted with termite mounds and the land sweeping away to the icy peak of Mount Kenya. In such an environment the hearing of the rhinos soon sharpened and their agility returned. “They became wild again,” says Berry White, a rhino expert who oversaw the move. ...

The internet has been a great unifier of people, companies and online networks. Powerful forces are threatening to balkanise it

THE first internet boom, a decade and a half ago, resembled a religious movement. Omnipresent cyber-gurus, often framed by colourful PowerPoint presentations reminiscent of stained glass, prophesied a digital paradise in which not only would commerce be frictionless and growth exponential, but democracy would be direct and the nation-state would no longer exist. One, John-Perry Barlow, even penned “A Declaration of the Independence of Cyberspace”.

Even though all this sounded Utopian when it was preached, it reflected online reality pretty accurately. The internet was a wide-open space, a new frontier. For the first time, anyone could communicate electronically with anyone else—globally and essentially free of charge. Anyone was able to create a website or an online shop, which could be reached from anywhere in the world using a simple piece of software called a browser, without asking anyone else for permission. The control of information, opinion and commerce by governments—or big companies, for that matter—indeed appeared to be a thing of the past. “You have no sovereignty where we gather,” Mr Barlow wrote. ...

Brazil has revolutionised its own farms. Can it do the same for others?

IN A remote corner of Bahia state, in north-eastern Brazil, a vast new farm is springing out of the dry bush. Thirty years ago eucalyptus and pine were planted in this part of the cerrado (Brazil’s savannah). Native shrubs later reclaimed some of it. Now every field tells the story of a transformation. Some have been cut to a litter of tree stumps and scrub; on others, charcoal-makers have moved in to reduce the rootballs to fuel; next, other fields have been levelled and prepared with lime and fertiliser; and some have already been turned into white oceans of cotton. Next season this farm at Jatoba will plant and harvest cotton, soyabeans and maize on 24,000 hectares, 200 times the size of an average farm in Iowa. It will transform a poverty-stricken part of Brazil’s backlands.

Three hundred miles north, in the state of Piaui, the transformation is already complete. Three years ago the Cremaq farm was a failed experiment in growing cashews. Its barns were falling down and the scrub was reasserting its grip. Now the farm—which, like Jatoba, is owned by BrasilAgro, a company that buys and modernises neglected fields—uses radio transmitters to keep track of the weather; runs SAP software; employs 300 people under a gaucho from southern Brazil; has 200km (124 miles) of new roads criss-crossing the fields; and, at harvest time, resounds to the thunder of lorries which, day and night, carry maize and soya to distant ports. That all this is happening in Piaui—the Timbuktu of Brazil, a remote, somewhat lawless area where the nearest health clinic is half a day’s journey away and most people live off state welfare payments—is nothing short of miraculous. ...

The chronic problem of exorbitantly expensive weapons is becoming acute

THERE were the starlings: aerobatic teams with mesmerising group displays. There were the albatrosses: Boeing’s 787 Dreamliner and Airbus’s A380, heavy airliners that still manage long, effortless flight. And there were the buzzing propeller-driven military transporters, including the latest, the Airbus A400M. But the star turn was reserved for the birds of prey, the jet fighters.

At this summer’s Farnborough air show, outside London, America’s most advanced fighter, the F-22 Raptor, announced its power with a thunderous roar. Many think of fighters in terms of speed, altitude and agility. But even more impressive is to see the Raptor at low speed, hovering almost stationary in the air, its nose pointing upwards, like a child’s toy strung up to the sky. In mock battles, its stealth and sensors allow a lone Raptor to kill a flock of any other kind of aircraft. ...

BHP Billiton’s remarkable growth has been driven by luck, shrewd dealmaking and, above all, China’s demand for steel

AROUND the turn of the millennium the bosses of Billiton, an ambitious South African mining company, sat in the lobby of a big fund manager waiting to talk up their firm’s prospects. At first they were welcomed warmly. But their hosts’ smiles turned to frowns when they discovered that the waiting delegation was from a firm in the unfashionable business of mining. They had been expecting a group from lastminute.com, an online travel agent with a seemingly bright future.

In March 2001, after the dotcom boom ran out of puff, Billiton and Broken Hill Proprietary (BHP), an Australian rival, revealed plans to merge. A decade on BHP Billiton is a vast multinational in a business dominated by powerful firms. Its financial might was made apparent on August 17th, when PotashCorp, a Canadian fertiliser firm, rejected a $40 billion unsolicited takeover offer from BHP, calling the bid “grossly inadequate”. Earlier this year the firm was instrumental in the opposition to Kevin Rudd, then Australia’s prime minister, who was trying to impose a supertax on mining firms (Mr Rudd resigned in June, partly as a result). Its market capitalisation of $190 billion puts it ninth on the list of the world’s largest listed companies. And as for lastminute.com, it was snapped up by Sabre, an American travel firm, for just GBP577m ($1.07 billion) in 2005. ...

Asia’s two giants are still unsure what to make of each other. But as they grow, they are coming closer—for good and bad

MEMORIES of a war between India and China are still vivid in the Tawang valley, a lovely, cloud-blown place high on the south-eastern flank of the Himalayas. They are nurtured first by the Indian army, humiliated in 1962 when the People’s Liberation Army swept into Tawang from next-door Tibet. India now has three army corps—about 100,000 troops—in its far north-eastern state of Arunachal Pradesh, which includes Tawang.

With another corps in reserve, and a few Sukhoi fighter planes deployed last year to neighbouring Assam, they are a meaty border force, unlike their hapless predecessors. In 1962 many Indian troops were sent shivering to the front in light cotton uniforms issued for Punjab’s fiery plains. In a weeklong assault the Chinese seized much of Arunachal, as well as a slab of Kashmir in the western Himalayas, and killed 3,000 Indian officers and men. Outside Tawang’s district headquarters a roadside memorial, built in the local Buddhist style, commemorates these dead. At a famous battle site, below the 14,000-foot pass that leads into Tawang, army convoys go slow, and salute their ghosts. ...

In America and Britain governments hope that a partnership with “social entrepreneurs” can solve some of society’s most intractable problems

POLICYMAKERS on both sides of the Atlantic are keen on a new approach to alleviating society’s troubles. On July 22nd Barack Obama’s administration listed the first 11 investments by its new Social Innovation Fund (SIF). About $50m of public money, more than matched by $74m from philanthropic foundations, will be given to some of America’s most successful non-profit organisations, in order to expand their work in health care, in creating jobs and in supporting young people (see table).

Although the SIF accounts for a tiny fraction of the federal budget, the fund embodies an approach that the administration plans to spread throughout government. The fund is one of several efforts to promote new partnerships of government, private capital, social entrepreneurs and the public, pushed by the White House’s Office of Social Innovation and Civic Participation (OSICP), which Mr Obama created soon after taking office. These initiatives include another fund, i3 (for “investing in innovation”), in the Department of Education and cash prizes for novel answers to social problems. ...

David Cameron’s Britain has embarked on the toughest fiscal tightening and most drastic decentralisation of any big, rich country. The stakes are high. So are the risks

ALEXIS DE TOCQUEVILLE’S chronicles of the Anglo-Saxon world did not stop with America. On a tour of Britain, he was taken with its liberal vigour, decentralised government and “spirit of association”. It came as a relief from the stultifying uniformity that he knew at home in France.

Under Gordon Brown Britain arguably became Europe’s truly Napoleonic state, the real home of dirigisme. More of its public spending now comes from central government than in any OECD country bar New Zealand. Its local government is weaker than nearly any comparable country, including France. The state finances and provides most health care. It bossily decrees where schools can be opened, and how they must be run. Then there is the sheer size of the beast: on OECD figures, public spending made up 51% of GDP in 2009, putting Britain into the same league as continental countries that deplore Anglo-Saxon laissez-faire. ...

Art is not immune from the scandals in the church

SOME see this Bavarian village as a Catholic Transylvania, and its almost 400-year-old Passion play as a relic from simpler, less enlightened times. Others find the play a moving act of faith, in part because it has endured the battering of history. This year the 5,200 Oberammergauers are again keeping the vow their forebears made in 1633 to re-enact the trial and death of Jesus (as they do every ten years, from May to October).

In fact, Oberammergau is not immune to history, or to new shocks. Some locals, including the play’s director, Christian Stuckl, were educated at Ettal monastery, one of several German Catholic institutions accused this year of cruelty to children. “There is no trust any more,” says Anneliese Breitsamter, whose son-in-law plays Judas. More than twice the number of people have left the church so far this year as in all of 2009, says Father Peter, the local priest. In the Passion-play town, indifference is not an option. ...

Catholicism is hollowing out in its traditional European strongholds. But signs of intriguing new life are springing up at its periphery

IN THE small world of traditional French Catholicism, everybody knows about Abbe Francis Michel. For the past 23 years this small, stubborn figure in his well-worn soutane has been responsible for the cure of souls in the village of Thiberville in Normandy. The locals like his conservative style, even though his Latin services would not suit all French churchgoers. The village’s 12th-century church, and the 13 other places of worship under his care, are kept in good repair by his supporters. (These days, some priests in rural France must cope with as many as 30 churches.)

Since the start of the year Abbe Francis has been at war with the region’s bishop—in church terms, a liberal—who has been trying to close the parish and move him to other duties. Uproar ensued in January when the bishop came to mass and tried to give the priest his marching orders. Most villagers followed Abbe Francis as he strode off to another church and celebrated in the old-fashioned way. He has made two appeals to Rome, both rejected on technicalities; a third is pending. ...

Industrial policy is back in fashion. Have governments learned from past failures?

AS THE financial crisis hit in late 2008, Meccano, a French maker of construction toys, watched its pre-Christmas sales slip. Its banks got jittery and things looked difficult for the 103-year-old firm (which was born British, in Liverpool). The government stepped in. In July 2009 the Fonds Strategique d’Investissement (FSI), a sovereign-wealth fund set up in 2008 by the president, Nicolas Sarkozy, invested €2.2m ($3.1m). “Should toymaking now be considered strategic for France?” asked a business radio station. The firm will bring jobs home. In February Meccano said it would repatriate manufacturing jobs from China to its headquarters in Calais.

France’s tinkering with Meccano is a part of a renewed trend of industrial intervention by governments in rich countries. America has pumped billions into banks and carmakers, taking large stakes. Barack Obama said in 2009 that the government must make “strategic decisions about strategic industries”. His stimulus plan last year earmarked billions for innovation in sectors such as renewable energy, high-speed rail and advanced vehicles. ...

The limits of Brazil’s much admired and emulated anti-poverty programme

THREE generations of the Teixeira family live in three tiny rooms in Eldorado, one of the poorest favelas (slums) of Greater Sao Paulo, the largest city in the Americas. The matriarch of the family, Maria, has six children; her eldest daughter, Marina, has a toddler and a baby. Like many other households in the favela, the family has been plagued by domestic violence. But a few years ago, helped in part by Bolsa Familia (family grant)—which pays mothers a small sum so long as their children stay in education and get medical check-ups—Maria took her children out of child labour and sent them to school.

The programme allows the children to miss about 15% of classes. But if a child gets caught missing more than that, payment is suspended for the whole family. The Teixeiras’ grant has been suspended and restarted several times as boy after boy skipped classes. And now the eldest, Joao, aged 16, is out earning a bit of money by cleaning cars or distributing leaflets, taking his younger brothers with him. Marina’s pregnancies have added to the pressure. She gets no money for her children because she lives with her mother and the family has reached Bolsa Familia’s upper limit. After rallying for a while, the Teixeira family is sliding backwards, struggling more than it did a couple of years ago. ...

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. ...

America’s system of rail freight is the world’s best. High-speed passenger trains could ruin it

UNION STATION in Los Angeles has been restored as a fine example of the Art Deco architecture that typified California in the 1930s. It has served as a backdrop for many Hollywood films, from “Union Station” (naturally) to “Blade Runner” and “Star Trek: First Contact”. It was the last grand station to be built before America’s passenger railways went into what you might call terminal decline.

Today it is a hub for Metrolink commuter trains and Amtrak services to faraway cities such as Chicago and Seattle. These trains have to pull in and then back out in a clumsy manoeuvre. But there are plans for through tracks in time to carry the high-speed services that California is desperate to have by 2020 under an ambitious $42 billion plan to connect San Diego, Los Angeles, San Francisco and Sacramento. ...

Never in the civilised world have so many been locked up for so little

THREE pickup trucks pulled up outside George Norris’s home in Spring, Texas. Six armed police in flak jackets jumped out. Thinking they must have come to the wrong place, Mr Norris opened his front door, and was startled to be shoved against a wall and frisked for weapons. He was forced into a chair for four hours while officers ransacked his house. They pulled out drawers, rifled through papers, dumped things on the floor and eventually loaded 37 boxes of Mr Norris’s possessions onto their pickups. They refused to tell him what he had done wrong. “It wasn’t fun, I can tell you that,” he recalls.

Mr Norris was 65 years old at the time, and a collector of orchids. He eventually discovered that he was suspected of smuggling the flowers into America, an offence under the Convention on International Trade in Endangered Species. This came as a shock. He did indeed import flowers and sell them to other orchid-lovers. And it was true that his suppliers in Latin America were sometimes sloppy about their paperwork. In a shipment of many similar-looking plants, it was rare for each permit to match each orchid precisely. ...

Southern Republicans think it’s time to slow down the growth of locking up

ON THE outskirts of Columbia, South Carolina’s capital, lies a rolling swathe of farmland where cattle graze, tomatoes sprout and razor wire glints in the afternoon sun. This well-tended campus is home to seven of the state’s 28 prisons, including both Broad River, where inmates sentenced to die are lethally injected or electrocuted, and Campbell, which houses prisoners on work-release, who spend their days at fast-food restaurants or laundries and return to their “dorms” to sleep.

Part of their earnings goes to repay the cost of jailing them. And it is a cost: from 1983 to 2008 spending on the state’s prisons increased more than sixfold, as its prison population rose from just over 9,000 to almost 25,000. That rise had several causes, among them the greater number of people imprisoned for non-violent crimes and the heavier sentences that came with new laws laying down mandatory minimum terms. ...

Dutch ease chock-a-block Belgium

THE border between Belgium and the Netherlands can be easy to miss: a road sign here, a flagpole there, a change in the colour of cars’ licence plates. When it comes to penal policies, though, the neighbours differ sharply. The Dutch prison population has been falling for some years and, with 14,000 cells for 12,000 prisoners, the government last year decided to close eight jails. But in Belgium the numbers locked up keep rising, causing serious overcrowding.

On February 5th this year, the Dutch and Belgian governments drew the logical conclusion, and agreed on a deal. Belgium took possession of the Dutch prison of Tilburg, a modern affair with tennis courts and a football pitch but a chronic shortage of residents. ...

The introduction of a minimum wage marks the further erosion of Hong Kong’s free-market ways

AFTER more than a year of furious but rarely public debate, this week Hong Kong was about to adopt a minimum-wage law. The legislature’s decision was due after The Economist went to press, but all sides expected a bill to be passed. The pay floor will be low, probably between HK$23 ($3) and HK$33 an hour; the higher figure is trade unionists’ target (see picture). More important than the level is what the law signifies about the territory’s economy. Once famous—or notorious—for its swashbuckling, free-market ways, Hong Kong is becoming a more regulated place. Will it become less prosperous too?

The minimum-wage law follows other employment legislation, as well as government forays into business, expanded public services and industrial policy. Such things have long been normal in other countries, but were novelties in Hong Kong. You might suppose them to be a product of the handover of sovereignty to China 13 years ago, yet they have as much to do with steps taken in the final colonial years, when government spending as a share of GDP increased notably (see chart 1) and with the (limited) post-colonial expansion of political rights. Indeed Chinese officials, fearing the consequences of costly economic populism, have often been vocal advocates of restraint. ...

Brother follows brother as Saudi Arabia’s absolute monarch. And so it may well continue, but watch for the tensions within that very large royal family

IMAGINE that the United Kingdom was an absolute monarchy known as Windsor Britain. Imagine that Prince Charles, heir to the British throne, had dozens of brothers, scores of sons and hundreds of cousins, and that the broader House of Windsor numbered thousands of lesser princes and princesses. Imagine further that all these royals pocketed fat state stipends, with many holding lifelong fiefs as government ministers, department heads, regimental commanders or provincial governors, with no parliament to hold them in check. Now imagine how sporting these princely chaps would be when the throne fell vacant, if the only written rule was a vague stipulation that the next in line should be the “best qualified” among all the Windsor princes.

This is roughly how things look in Saudi Arabia, a family enterprise run the old-fashioned way. Here the king is not only prime minister. He also appoints the members of parliament and designates a successor to the throne. Yet the actual workings of this system are not so simple. The size of the ruling al-Saud family (at least 5,000 hold princely rank), and the accumulated privileges of its leading princes are such that kings must take care to balance rival interests. They must also accommodate Wahhabist clerics who expect rewards for sanctioning absolute monarchy, technocrats who actually manage the country and even, sometimes, those of their subjects who grow restive, and demand a voice beyond presenting personal petitions at royal receptions. ...

How Egypt’s government perpetuates itself

ONE of the endearing things about Egypt is that although nearly everyone fiddles, breaks or ignores the rules, everyone gamely pretends to respect them. Elections, for instance, are an elaborate charade. Rarely does turnout exceed 20%, and this from a list of registered voters that, in 2005, covered only 40% of the eligible pool, by official count. Few people register because the legal period for doing so is short and comes many months before elections. Besides, registration involves a visit to a police station, which many Egyptians prefer to avoid. Foreign election observers are banned. The parties allowed to run for the People’s Assembly, Egypt’s parliament, are selected by a committee controlled by the ever-ruling National Democratic Party (NDP), which is headed by Mr Mubarak. Independents can stand, which is how the Muslim Brothers, banned as an organisation, field their candidates. But they risk arrest on some pretext, and harassment even without one.

Elections for the People’s Assembly are held every five years, and the next one is due in November. Since 2005 there have been elections for the presidency, too, replacing the previous embarrassingly unanimous referendums. The next one of those is scheduled for September 2011, albeit under restrictive rules that, in essence, allow the NDP to choose not only its own candidate but his opponents as well. In the previous presidential poll, in 2005, nine selected opponents were allowed to run against Mr Mubarak, yet he still grabbed 89% of the vote by the official count. His closest challenger, Ayman Nour, a youthful lawyer, was locked up in prison on flimsy charges of forgery soon afterwards and released only last year. ...

A rotten education system lets the country down

FIFTY years ago Egypt looked oddly similar to another country. It had nearly the same population which was growing similarly fast, the same low income per person, the same proportion of relatively few city dwellers to lots of peasants working tiny plots, and similar life expectancy. With dangerous enemies on their borders, both countries were weighed down by heavy military spending. Both were run by quasi-dictators, complete with strict censorship and a pervasive secret police.

Egypt has made a lot of progress since then, particularly in recent years. But the other country, South Korea, has developed far faster. It has become a leading industrial power, a technological innovator and a vibrant democracy. Its people are now five times richer than Egypt’s (at purchasing-power parity against the dollar; at prevailing exchange rates the gap is far bigger), and on average live nearly ten years longer. The only measure on which South Korea lags behind is population growth. Whereas it had around 25m people in 1960 and now has double that number, Egypt’s population has nearly tripled. ...

Most Egyptians put up with a lot

FOR all of Egypt’s abundant riches, the plain fact is that most Egyptians remain poor. The government insists that less than a fifth of the population (and falling) subsists below the global poverty threshold of $2 a day. Yet household expenditure surveys show that four-fifths of families have less than $3,000 a year to spend. That sounds about right: $200 a month is considered a good salary for an Egyptian. A rookie policeman or newly trained teacher makes less than half that. And the pay of Cairo street-sweepers on make-work government programmes is so low that they often beg from passing cars. Official figures claim a slow decline in unemployment, to around 9%. But for Egypt’s armies of day labourers, street vendors and domestics, employment is pretty tenuous; and only a third of women of working age are in the labour force.

It is possible to live a comfortable rich-world sort of life in Egypt, and many people do; in some ways it is easier than in well-off countries because maids and cooks and drivers are cheap. On the desert outskirts of Cairo you can cruise palm-lined boulevards leading to gated compounds with names like Beverly Hills, Dreamland and Mayfair, with ranks of porticoed villas, mirror-clad office blocks, hypermarkets, private clinics and schools with emerald-green playing fields. Here you can forget you are in the old Egypt. ...

Wealthy Egyptian business families venture abroad

WHAT do a Swiss ski resort, an airbase in Afghanistan, a Nigerian fertiliser plant and North Korea’s only mobile phone network have in common? They are all part of the far-flung empire built by Egypt’s richest family. With a combined net worth of $13 billion, Onsi Sawiris and his three sons, each of whom runs one of the three main Orascom firms, stand out for the scale and scope of their business. The construction arm alone has a turnover of $3.8 billion. Four-fifths of this is generated outside Egypt, part of it as a global contractor for America’s air force. Orascom Telecom operates networks in 11 countries, from Algeria to Pakistan to Zimbabwe, and Orascom Development owns and builds hotels, holiday villages and housing estates on three continents.

The Sawirises have been ambitious and quick off the mark, but other Egyptian entrepreneurs too are expanding overseas, using skills honed by dealing with Egypt’s often tangled bureaucracy to venture into risky but promising markets. Another family firm, Elsewedy Electric, started by selling light bulbs in the 1930s, moved into cable-making in the 1970s and is now the biggest producer of electrical components in Africa and the Middle East, with sales of close to $2 billion. In the past five years alone it has bought firms in Spain and Slovenia and built plants in Ghana, Ethiopia, Zambia, Brazil, Mexico and India. ...

Egypt is making the most of its natural advantages

BY ALMOST any statistical measure Egyptians are far better off than ever before, even though there are many more of them. The population has nearly doubled in size in just 30 years, from 44m in 1980 to 84m today. Farmers who until the 1970s spent half their working day on the back-breaking labour of lifting irrigation water now use diesel pumps, plough with tractors and thresh their wheat by machine. Life expectancy at birth has risen from 52 years in 1960 to 72 now. Back then Egyptians were lucky to own a transistor radio. Now two-thirds of homes have a satellite receiver, 87% own a fridge, 97% have piped water and 99% have electricity. Egyptians chatter on 57m mobile phones, and the number of passenger cars on the roads has more than doubled in the past decade.

Nor is it just personal consumption that has grown strongly. The economy as a whole is performing better than ever, largely because the government has at last abandoned its old habits of central planning, state-managed capital allocation, high taxes and price controls. After decades of only minor improvements in living standards, GDP growth shifted into a much higher gear under the reformist cabinet that came to office in 2004. It went up from just under 5% in the mid-1990s to 7% in 2006-08. Egypt’s share of world trade, which had been falling continuously for 40 years, started expanding as exports tripled in value. Foreign investment gushed in at record levels, notching up a cumulative total of $46 billion between 2004 and 2009, says the dynamic young investment minister, Mahmoud Mohieddin. ...

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Change is bound to come, but when?

PRESIDENT Gamal Abdel Nasser brought Egypt dictatorship, economic ruin and humiliation in the six-day war with Israel. On his sudden death from a heart attack in 1970 Egyptians erupted in grief; some 5m people mobbed the funeral. His successor, Anwar Sadat, freed political prisoners, revived the economy and won a peace agreement with Israel that got back what Nasser had lost. When he was assassinated in 1981, Egypt fell eerily silent. His funeral was attended by foreign leaders but very few of his own people.

To be fair, even Egyptians who loathed Nasser agreed with his aims and felt for his tragedy. And even Sadat’s fans grew to fear his increasingly mercurial temper and were relieved by his exit. Still, Egyptians’ contrasting responses to their leaders’ passing raises an obvious question. Hosni Mubarak, who has now been in power longer than his two predecessors put together, arouses little of the passion that either of them did. How will Egyptians regard his legacy? ...

After three decades of economic progress but political paralysis, change is in the air, says Max Rodenbeck

TRAVELLING into Cairo, Egypt’s monster-sized but curiously intimate capital, it is hard to tell if these are the best of times or the worst. Visitors who have long known the city are in two minds. Egyptian expatriates returning home are liable to cringe at the worse-than-ever traffic, the ever-louder noise, the fervid religiosity, and what they often bemoan as a new aggressiveness that spoils their nostalgia for a sweeter, cheerier Egypt. But tourists who came here, say, 20 years ago, tend to delight in the sleeker look of the place, the surprisingly efficient and still friendly service, the far better quality and variety of goods in the markets, and the fact that some taxis now actually have functioning meters.

Both impressions are right. The new World Bank-funded, Turkish-built terminal at Cairo International airport is as blandly functional as Cincinnati’s or Stockholm’s. Gone are the sweaty officials and greasy baggage handlers of yore, the taxi touts and shoving crowds. A businessman arriving here may be whisked in an Egyptian-built car to the cigar bar at one of Cairo’s dozens of swish hotels—perhaps one at City Stars, a commercial complex on the scale and in the style of Las Vegas. Or perhaps to another fancy hotel in one of the burgeoning gated exurbs in the desert, surrounded by the lavishly watered greenery of a designer golf course. There, the talk will be of beach houses and yachts on the Red Sea, of hot stocks on the Cairo exchange, and of Egypt’s delightfully low-cost labour. ...

But Egypt’s role as a regional peacekeeper is getting harder to sustain

WOULD-BE rulers of the world have always coveted Egypt, and for good reason. Rich in resources and in a choice position, it is also easily controlled, with no forests or mountains for rebels to lurk in. The Assyrians, Persians, Greeks and Romans all grabbed it. So did Muslim Arabs, Ottoman Turks, Napoleon’s France and finally Britain. The Crusaders, Tamerlane and Hitler all tried and failed to take it. The cold-war superpowers vied for influence too; Egypt flirted with both, but America bid higher and won.

Egypt became America’s Arab poodle, a role that is no less uncomfortable under Barack Obama than it was under George Bush. Mr Mubarak’s policy of helping Israel to punish Hamas by keeping Gaza shut in smells rotten to most of his people, and particularly to the many who sympathise with the Muslim Brotherhood, the resilient Egyptian wellspring of modern Islamism. Egyptians are only intermittently interested in foreign affairs, and many remain grateful that Mr Mubarak, unlike his predecessors, has shunned risk. Yet the feeling that Egypt has lost its rightful place as a country with influence, that it has fallen from grace, is widespread. ...

The author would like to thank Dr Mahmoud Mohieddin, Hussam Bahgat, Issandr El Amrani and Dr Karima Khalil for their help with this report.

...

Islam seems to be fading as a revolutionary force

EDWARD LANE, an English orientalist, published a classic account of Egyptian society in the 1830s. Impressed with much else, he had this to say about religion in Egypt: “It is considered the highest honour among the Muslims to be religious; but the desire to appear so leads many into hypocrisy and pharisaical ostentation.”

The same observation might be made today. A generation ago it was rare to hear the Koran recited, except on formal occasions such as funerals or during the fasting month of Ramadan. Nowadays the word of God is a constant companion, wafting from taxi cabs and buses, barber’s shops and fast-food outlets, dental clinics and supermarkets. The call to prayer not only sounds five times daily from minarets but all the time from everywhere: millions of Egyptians have downloaded it as a ringtone for their mobile phones. Step into many shops at noon and you will be told to return after prayers. Call in to the main control room of Egyptian State Railways and you may find the chief operator similarly disengaged, as one panicked signalman did last year when a train stalled on the tracks. He was unable to prevent the next train from crashing into the first, killing 18 people and prompting the resignation of Egypt’s transport minister. ...

Competition and the economic downturn have hurt, but Las Vegas is fighting back

GAMBLING centres operate at one remove from their local communities. Monte Carlo’s casino is in Monaco, surrounded by but independent from France. Monaco’s citizens are not allowed into the gaming rooms, but everyone else is encouraged to open their wallets. Macau is attached to mainland China only by a narrow isthmus. Until 1999 it was under Portuguese rule. Now it is a Special Administrative Region of China, but visitors from the mainland need a special visa.

Las Vegas sits in a valley in some of North America’s most inhospitable terrain. It was first settled in 1855 by Mormons seeking freedom from American rule. At the beginning of the 20th century a mere 30 homesteaders tilled the scrubby soil. But in 1911 the state government, seeking new sources of revenue, offered divorces in only six weeks, the quickest in the country. It also scrapped taxes on sales, income and inheritance and repealed the ban on gambling passed in 1909. ...

Slot machines are becoming mobile

SOMETIMES the old games are the best. Take, for instance, the “reward-paying punching bag”, one of the earliest attempts at machine-based gambling. For a nickel a punch, punters could pound out their frustrations. If they hit hard enough to move a pointer to the right spot on the dial, they won a prize. Or there was the “manila”, in which hopefuls could win a prize by shooting a nickel from a pistol into a slot. These days most casinos will not even let you smoke, much less punch or shoot your way to a prize.

The first machine to dispense coins as prizes was the three-reeled Card Bell, built by Charles Fey in 1898. Slot machines thrived in San Francisco. By the time the city outlawed them in 1909, it was collecting $200,000 a year in taxes from 3,200 slot machines. By 1931 Frank Costello, a mobster in New York, raked in $25m a year from his 25,000 slots. Today, betting machines—slots in America, fruit machines in Britain, pokies in Australia—account for more than one-fifth of the global gambling market. Their one arm may be vestigial, but they still make out like bandits. ...

Macau is only the start: all Asia is coming out to play

LIKE its sister property in Las Vegas but twice as large, the Venetian Macao is built for MICE—meetings, incentives, conventions (or conferences) and exhibitions. It has 3,000 hotel suites, a 15,000-seat arena that has hosted concerts by Lady Gaga and the Police, expensive shops and restaurants and a warren of immense gaming rooms. Next door is the Plaza Macao, featuring yet more gaming, shops and spas, as well as a Four Seasons hotel and the grand residential Plaza Mansions.

Mr Adelson, the owner of the complex, rejects the traditional “hub and spokes” casino-hotel design that forces guests to pass through the gaming floor to do anything outside their hotel room, just in case they feel a sudden urge to chuck some money into a slot machine. His Plaza Macao has a separate entrance to the Mansions and Four Seasons, a long way from the gaming floor. This is for the benefit of Chinese government officials, who may not be photographed in a gambling environment. ...

Lotteries are a bad bet, but everybody loves them

ON A cool and clear spring Friday night, in the basement of an anodyne office building in the Paris suburb of Boulogne-Billancourt, about a dozen people took their places to go through the weekly ritual of making one European rich beyond his wildest dreams. Tumblers were spun, numbered balls drawn, pearly white teeth flashed, breaths held—but in the end there was no winner in that week’s EuroMillions draw. The €79m ($100m) jackpot was rolled over to the following week, when the prize went up to just over €100m ($125m) and the draw produced a single winner, from Britain. It was the biggest lottery windfall in British history, though still nowhere near the world record, a stunning $390m split between two tickets in an American Mega Millions draw.

EuroMillions is run jointly by the Francaise des Jeux, Loterias y Apuestas del Estado and Camelot, which operate the French, Spanish and British lotteries respectively. It is open to players in Britain, Ireland, France, Spain, Luxembourg, Austria, Belgium, Portugal and Switzerland; measured by the number of players, it is the world’s biggest lottery. During the week of the missed draw last spring some 26m Europeans bought tickets. The draw takes place in Paris every Friday night between 9pm and 10pm; it is recorded and sent to the participating countries, which work the footage into their own presentations. The prizes are tax-free and handed over at once and in full, whereas in America the prizes are taxed and the winners are generally given the option of receiving the full amount in yearly instalments or a portion of it as an immediate lump sum. ...

People will keep on betting, legally or illegally. It makes sense to tidy up the rules

IN 1950-51 a US Senate commission headed by Estes Kefauver, a senator from Tennessee, investigated organised crime in America. It came out strongly against legalising gambling. “The availability of huge sums of cash and the incentive to control political action result in gamblers and racketeers too often taking part in government. In states where gambling is illegal, this alliance of gamblers, gangsters and government will yield to the spotlight of publicity…but where gambling receives a cloak of respectability through legalisation, there is no weapon which can be used to keep the gamblers and their money out of politics.” In other words, not only is gambling a vice; gamblers themselves are an inherently corrupting force.

That view has a long history. Somerset Maugham called Monaco “a sunny place for shady people”. At the time of the Kefauver investigation the same could have been said of Las Vegas. Yet as Moe Dalitz, a mobster from Cleveland who owned the Desert Inn, quipped when a friend asked him about his clubs, “how was I to know those gambling joints were illegal? There were so many judges and politicians at them, I figured they had to be all right.” ...

Why do people bet?

“AT 11pm there usually remained behind only the real, the desperate gamblers—persons for whom, at spas, there existed nothing but roulette, and who went there for that alone. These gamesters took little note of what was going on around them, and were interested in none of the appurtenances of the season, but played from morning till night, and would have been ready to play through the night until dawn had that been possible.”

Playing until dawn is often possible today, and the game is not always roulette, but otherwise Dostoyevsky’s description from 1867 will be familiar to anyone who has ever been in a casino late at night. Dostoyevsky wrote from experience; his novella “The Gambler” is thought to have been written to enable him to pay his gambling debts. What is it that drives some people to go on betting until they lose their shirts, whereas others can take it or leave it? ...

Is poker a game of skill or chance?

Correction to this article

IN 1969 Benny Binion, owner of the Horseshoe Casino in Las Vegas, attended the Texas Gamblers’ Reunion in Reno, where he played high-stakes poker for several days. His opponents were a group of men—and men only—with the sort of Runyonesque names endemic in poker’s history and lore: Chill, Puggy, Minnesota Fats, Texas Dolly. The following year Mr Binion invited the high-rollers to his casino. After a few days the players elected Johnny Moss the best of their number and awarded him a silver cup. Thus was the World Series of Poker (WSOP) humbly begun. ...

Bolstered by immigration and challenged by the economic downturn, the church is playing an ever more active role

TO SEE two faces of Catholic Britain, you need only walk a short way from Parliament. The train and bus stations of Victoria, where many migrants arrive to seek their fortunes, are even closer.

First there is the squat red brick of Westminster cathedral, home of England’s Catholic hierarchy; its Byzantine mosaics, glinting in candlelight, are a splendid setting for one of the country’s finest choirs. Round the corner things are more down-to-earth at a hostel and day-centre for the homeless (the largest in London, it is claimed) set up by a religious order, the Daughters of Charity. Among the duties of the priests and nuns who work at The Passage is liaison with police, hospitals—and undertakers, in the fairly common event that homeless people, often young, succumb to addiction or despair. ...

Scotland’s fishermen are up in arms as rivals commandeer a valuable catch

SCOTTISH skippers are not the cheeriest lot at the best of times. Now the escalating row over mackerel is adding to their dourness. This summer first Iceland and then the Faroe Islands unilaterally jacked up the amount of the fish they intend to let their fishermen catch. This will endanger stocks, complain Scottish fishermen, who land three-quarters of Britain’s mackerel quota and earned GBP135m from it in 2009.

Rich in trendily nutritious substances such as Omega 3 fatty acids, the Atlantic mackerel is big business. Every year the fish migrate northwards to summer feeding grounds around the northern coasts of Britain and Ireland and off southern Norway. These migrations are when fishermen lie in wait. Recently, however, the shoals have been foraging further north, to Iceland and the Faroes. Warmer temperatures are the most plausible explanation. ...

The first battle of the new parliament is already well under way

UNTIL it was abolished by the Reform Act of 1832, the “rotten borough” of Old Sarum elected two MPs with fewer than a dozen registered voters. If you believe Labour bigwigs, those days are back. The government proposes to redraw constituencies to make them much more equal in terms of voter population, and to shrink the House of Commons from 650 to 600 members. To create constituencies with around 75,000 voters, bits would be chopped off giant seats such as the Isle of Wight (which has more than 100,000 voters now), while sparsely peopled rural seats in places like Wales would be merged. A handful of (mostly Liberal Democrat) constituencies in the Scottish Highlands would be exempted.

In order to have new boundaries ready for the next general election, the government would scrap the formal public inquiries that have dragged out previous boundary reviews for years. In response Labour frontbenchers talk of the “worst kind of gerrymandering” and of abuses to rival rotten boroughs. ...

An ancient market in need of an overhaul

THE City of London Corporation fears draconian financial reforms that might drive banks and brokers elsewhere. It has fewer qualms, however, about overhauling another market in its fief: that for wet fish.

Billingsgate, controlled by the City since 1327, lies a stone’s throw from the towers of Canary Wharf. Yet unlike those computer-driven establishments, the trading floor at Billingsgate is populated by boxes of glistening fish: eels, mackerel, salmon and exotics such as swordfish, octopus and barracuda. Merchants serve their customers while licensed porters, wearing special badges, manhandle the fish and lug them around on trolleys. ...

Tony Blair’s rather odd memoirs contain important truths for his successors

JUST who does Tony Blair think he is? In a revealing quirk of the English language, to ask the question is to level an accusation at the same time. The former prime minister has always been hard to pigeon-hole, by class or political tribe. He is the Oxford-educated barrister with unabashedly bourgeois tastes who led the Labour Party to three victories over Conservative rivals of humbler upbringing. The social liberal and self-proclaimed “progressive” who forged close bonds with George Bush (recently declaring the Texan an “idealist” of “genuine integrity”). The devout Christian who led his country into four wars.

Along with the invasion of Iraq, those shape-shifting qualities may go some way towards explaining the real loathing Mr Blair inspires in many British hearts. At least in his home country, three years out of office have done little to dim the dislike. The publication of his memoirs on September 1st was presented by much of the press as a trial to be endured. Even the announcement that he would give all the proceeds (amounting to millions of pounds) to a charity for wounded soldiers was greeted with eye-rolling, and talk of blood money. ...

The town’s high-tech industry is weathering recession well

NEITHER the drab modernity of the suburbs nor the beautiful buildings in the centre hint that Cambridge is at the heart of one of Britain’s biggest clusters of high-tech businesses. But on the outskirts of the city, just off a busy dual carriageway, is the collection of low-rise, landscape-gardened buildings that make up the Cambridge Science Park.

The resemblance to the architecture of Silicon Valley is striking, and deliberate: the high-tech industry that has grown up around Cambridge is known as “Silicon Fen”. Built on the solid scientific research provided by Cambridge University—currently ranked fifth in the world by Shanghai Jiaotang University, which compiles an international league table—it features firms in sectors such as electronics, computing, software, scientific instruments and pharmaceuticals. The number of jobs in research and development is around five times the British average. ...

Excellent schools tend to choose their pupils. Is there another way?

PARENTS seeking the best education for their offspring often look to ancient institutions. Small wonder that schools run by either the Catholic church or the Church of England are often high on their list. Almost a quarter of all children in the state system attend a religious school, most of them Anglican- or Catholic-run primary schools.

In his drive to give parents more choice in educating their children, Tony Blair raised the profile of church schools by encouraging existing ones to expand and new ones to set up shop. The former prime minister was also keen on incorporating other religions into the state system. The first state-funded Muslim and Sikh schools opened soon after he took power, and the first Hindu school in 2008. ...

And the reforms won’t stop there

NOT SO long ago the right to receive a state pension from the age of 65 seemed inalienable. That threshold had, after all, first been set in 1925. It was lowered to 60 for women in 1940, but was due to be equalised between 2010 and 2020, so that by the end of the decade 65 would apply to all workers.

But in 2005 a pensions commission headed by Adair Turner, a troubleshooter who now chairs the Financial Services Authority, shook the status quo. It recommended that the state-pension age should go higher than 65 to make pensions in an ageing society more affordable. Under Tony Blair Labour decided to raise it to 66 between 2024 and 2026, and to 68 by 2046. ...

Start-ups are shaking up an old and staid industry

BEHIND a homely blue garage door in a genteel corner of Hammersmith sits Prudence, a complicated and expensive young lady, and the focal point of an ancient British industry that is undergoing a remarkable and timely revival. Prudence is a GBP200,000 copper still—the first of its kind to be launched in the capital for nearly 200 years—turning out small batches of exquisitely palatable London dry gin. Named after a certain former chancellor of the exchequer who gained an ultimately unwarranted reputation for fiscal austerity, Prudence is the brainchild of Sam Galsworthy and Fairfax Hall. They are the entrepreneurs behind one of Britain’s fastest-growing young micro-distilleries, Sipsmith.

In the year since its launch, Sipsmith has sold 5,000 half-cases of its signature dry gin, a bottle of which retails at something between GBP22 and GBP26, mostly through national chains such as Waitrose and Majestic Wine. Financing came from within—both founders sold their houses to finance the venture—and Mr Galsworthy expects the firm to break even by 2012. But Sipsmith is just one of an array of start-ups injecting spirit and panache into Britain’s often bland distilling industry, with its ubiquitous brands and obsession with bulk sales. ...

David Cameron’s coalition will struggle to agree on crudely populist policies. That is both welcome and perilous

LOOK around the democratic world, and it would be easy to conclude that voters are very angry indeed. In country after country, political leaders seem intent on singling out scapegoats, and stoking the fires of resentment against them.

In France an unpopular government has spent the summer clearing camps of foreign-born gypsies with the maximum fuss (never mind that, as European Union citizens, most can swiftly return). In Australia the opposition leader, Tony Abbott, fought the incumbent Labor Party to a draw in elections on August 21st, in part by talking up the problem posed by asylum seekers who arrive by sea and vowing at every turn to “stop the boats”. ...

Thanks to the new austerity, the complexion of Scottish politics is changing

ALEX SALMOND’S has always been a high-wire act. First minister of devolved Scotland since 2007 in a minority government, he has had to woo, cajole and jolly along rival parties, local governments and voters in order to exercise power. That he has done so owes more to his own political deftness than to any sweeping appeal of his independence-minded Scottish National Party (SNP), and even more to the pots of money he has thrown at public services. Austerity is fast altering that.

During the days of solid economic growth, government expenditure in Scotland increased by an average 5% a year. For historical reasons, spending per head in Scotland is higher than in England—nowadays almost 20% higher. This extra cash has been used to fuel a supercharged welfare state. It has also enabled the government to hang on to industries that were privatised long ago south of the border. ...

A long-awaited report into a shocking incident has failed to assuage grievances

ANOTHER troubled piece of Northern Ireland’s violent past caught up with it this week with the publication of a report on the disturbing case of a Catholic priest involved in an IRA bombing in 1972. In a single incident in the religiously mixed village of Claudy, in County Londonderry, three car bombs killed nine innocent bystanders ranging from an eight-year-old girl to a 65-year-old man.

Years of rumours that Father James Chesney had taken part in the attack were formally confirmed in a report on August 24th by Northern Ireland’s police ombudsman, Al Hutchinson. But this was only the start. The eight-year investigation laid bare a high-level conspiracy to hush up his involvement and whisk him out of Northern Ireland. ...

How Britain fell in love again with nature

ROGER DEAKIN, a much-loved nature writer, called swimming a “subversive activity”. He embarked on a watery journey across Britain from his home near the river Waveney, which forms the border between Suffolk and Norfolk. His bestselling book published 11 years ago, “Waterlog”, inspired what has become known as the “wild-swimming movement”—and, some argue, rekindled Britain’s love affair with nature and hearty outdoor pursuits.

Enthusiasts have set out to popularise what Mr Deakin sketched. Daniel Start, a naturalist, spent five years swimming Britain, grid-referencing and photographing 150 of its “hidden dips”. His publisher, Punk, was in at the beginning of another key trend, the renaissance of camping. Its glossy books, including tips on glamorous camping (now known as “glamping”), have transformed the nylon tents and grubby communal showers of yesteryear. ...

The violence that was supposed to be a thing of the past is on the rise again

DISSIDENT republicans have stepped up their campaign of violence this month. A spate of attacks more frequent and reckless than before has seen the deployment of booby-trap and car bombs, as well as other devices. Although the prime target is police officers, the bomb-planters have not hesitated to put the lives of children at risk. On August 13th the Northern Ireland Office’s home-protection unit offered to provide prominent political and legal figures with mirrors designed to check for bombs under vehicles.

On August 14th three young girls narrowly escaped serious injury in Lurgan, County Armagh, when a bomb intended for the police exploded in a nearby rubbish bin. Four days earlier a booby-trap bomb went off under the car of a former policeman in Cookstown, County Tyrone. On August 8th another bomb was planted in Kilkeel, County Down, which almost cost the lives of a Catholic policewoman and her daughter. The officer had just strapped the child into her car when she spotted the booby trap and managed to scramble her daughter to safety. On August 4th a booby-trap bomb was found under a soldier’s car in Bangor. The day before, a vehicle containing 200 pounds of home-made explosives blew up outside a police station in Londonderry. And that was only August. ...

The changing face of civil-enforcement officers

EXTRACTING parking fines from Joe Public is one of the least popular things local government does. It is also a multi-million pound business: councils raised GBP328m in revenue from penalty charges in the year to March 2009, though some were far better at it than others (see chart). The cost of enforcement—running an army of traffic wardens or civil-enforcement officers (CEOs)—sometimes outstrips the proceeds. Glasgow took GBP5.5m in fines that year but spent GBP6.5m on enforcement. Edinburgh, on the other hand, earned GBP6.9m for an outlay of GBP5.5m.

More than four-fifths of all local authorities have now taken over parking enforcement from the police. (Strictly, enforcers employed by the police are traffic wardens, whereas councils employ CEOs.) Many have outsourced the work to private contractors. NSL, the biggest, works for 60 councils, Apcoa for around 20. These firms argue that they offer economies of scale in training and recruitment. Cambridgeshire and East Surrey reckon they will save around GBP500,000 a year by outsourcing. Buckinghamshire is considering doing the same, having lost that amount last year. ...

Reform is mooted as exam grades seem to rise inexorably

YOUNG people are growing ever more studious, their teachers more skilled. That, at least, is the impression given by the tests that many youngsters sit at the age of 18. The A-level results published on August 19th show that an astonishing 97.6% of entries passed, 8% of them with the top A* grade awarded for the first time this year.

When A-levels were first introduced in the 1950s, they were taken by a small number of academic students destined for higher education. Just 10% of people stayed on at school beyond the age of 16 at the start of that decade, and the exams they took were mostly devised by the universities at which they would later enroll. The exam boards not only controlled the content of the tests, and thereby what was taught in schools, they also limited the proportion of entries that would gain each grade above the pass mark. Less than 10% would be awarded the highest grade. ...

Railways are a form of middle-class benefit too

AUGUST is traditionally a slow month, and rises in railway fares, usually announced around now, can reliably be counted on to generate a little controversy. Many fares are regulated by the government; train companies may raise them only according to a set formula that limits fare hikes to one percentage point above the rate of inflation measured by July’s increase in the retail-prices index (RPI). This year, though, the news looks genuinely dramatic. Rail passengers could be hit by some of the biggest fare rises in decades. The need for spending cuts may change the way the railways are funded for good.

The RPI figure released on August 17th was bad enough: at 4.8%, it implied a rise in rail fares of almost 6%, at a time when wage increases are averaging just 1.3%. But worse is no doubt to come. The Department for Transport (DfT), like all government departments except health and foreign aid, will have to find spending cuts of 25% or more over the coming five years. Rumours are swirling that the “RPI+1” formula may be changed. Philip Hammond, the Conservative transport secretary, has refused to be drawn. But his observations that “this is not a normal year” and that he “cannot guarantee” the survival of the existing formula look ominous for those who depend on trains. Rail-industry insiders talk of fare increases of 8%, 10% or even more. A final decision will be revealed with the Comprehensive Spending Review, which is scheduled for publication on October 20th. ...

The lessons of the Spirit Level debate for the left, the right and the British public

TALK to a Labour MP in Parliament and you may be treated to a statistic about the Tube line that runs under the building. The average life expectancy in Westminster is 78 for men and 85 for women. In Canning Town, a poor area just eight stops east on the Jubilee line, it is 71 and 78 respectively. So for every stop the train makes, locals can expect to live nearly a year less. Glaswegian MPs can produce even starker facts about disparities in life expectancy between the richest and poorest bits of their city.

The numbers are arresting. But so is the fact that, in Britain, even politicians of the left deplore the apparent consequences of economic inequality rather than the mere fact of it. Perhaps they suspect that, whereas continental Europeans care in principle about egalite, pragmatic Britons are unmoved by such abstractions. Show them that inequality has bad results, and they are likelier to sit up and listen. ...

Can the Con-Lib government really deliver the fairer society it says it wants? A rift is opening in the Tory ranks

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FAIRNESS was one of three watchwords promoted by the Conservatives and Liberal Democrats in their programme for power, sharing top billing with freedom and responsibility. A hundred days on from the birth of the new government, the rhetoric is unrelenting. On August 17th George Osborne, the budget-cutting Tory chancellor of the exchequer, insisted fiscal responsibility was “both fair and progressive”. The next day Nick Clegg, the Lib Dem deputy prime minister, said that the government was as determined to improve social mobility as it was to fix the deficit. ...

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 Charlemagne. ...

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, an economist at the University of Flensburg. ...

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. ...

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. ...

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.

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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 credit-rating agencies, which want to see proof of France’s will to control its public finances, Mr Sarkozy cannot afford to give ground. ...

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. ...

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. ...

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 drivers to stop at crossings when a pedestrian is about to cross, this will be difficult to enforce in a country where the car has always come first. ...

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. ...

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. ...

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. ...

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. ...

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. ...

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 on tackling the problem is far from adequate, but with austerity in the air more cash is unlikely to be found. ...

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. ...

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. ...

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. ...

How the heatwave in Russia is connected to floods in Pakistan

AS RUSSIA burns to a crisp, thousands of kilometres to the south-west torrential storms visit unprecedented flooding on Pakistan. Both events can be attributed to the same large-scale pattern of atmospheric circulation. They are also both the sort of thing climate scientists expect more of in a warming world.

The upper atmosphere (the part through which the jet streams run) is gently rocked by what are known as Rossby waves—movements of air towards and away from the poles. These waves usually travel east or west, depending on various conditions. But they can also stand still, trapping the weather beneath them. ...

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 was endlessly lampooned for hopping gleefully out of a fighter jet dressed in a flightsuit in front of a banner reading “Mission Accomplished”, just as Iraq began to sink into a bloody insurgency. As Mr Obama was quick to concede, Iraqi politics are a muddle and “extremists will continue to set off bombs”. ...

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. ...

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 them in more rapidly than originally planned. By then, reduced tax revenues were contributing to a steady increase in the deficit. The Congressional Budget Office has estimated the cost of the cuts over the ten years to 2011 at $1.7 trillion. ...

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. ...

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 for 8.6% of Georgia’s total production income ($61.7 billion), 6.7% of its employment (295,443 jobs) and $6.1 billion in federal, state and local tax revenue. ...

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 quarter of 2010. Net revenues were down by 7%. ...

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. ...

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 during his time as chief executive. He maintains that he was not aware of any wrongdoing, but did not let this apparent laxity stop him from running as a can-do businessman. ...

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 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 America as a whole, where polls consistently rank the state of the economy, and unemployment in particular, as the voters’ main worry (see chart). But the two candidates, in keeping with the orthodoxy of their parties, have very different ideas about how to reduce it. ...

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, the Palestinians mounted their second intifada, a wave of suicide-bombings that blew away the modest store of goodwill that Rabin and Arafat had built during the 1990s. After his own election in 2000, George Bush took one look at the blood and muddle and decided that America had better things to do. Plenty of rueful diplomats in Washington, with long experience of upset tummies and smoke-filled rooms in Cairo, Jerusalem and Ramallah, are willing to argue, sotto voce, that it is more realistic for America to “manage” the conflict in Palestine than to seek actually to solve it. ...

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. ...

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. ...

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. ...

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. ...

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. ...

A verdict, sort of, for Illinois’s former governor

ROD BLAGOJEVICH has been declaring his innocence for more than 20 months. Since his arrest in December 2008, he has proclaimed his virtue on street corners and in a memoir, on the radio and on television. So incessant was his self-defence that, while competing as a waiter on Donald Trump’s “Celebrity Apprentice”, he even forgot to give Joan Rivers her hamburger. If she could have raised her eyebrows, she would have.

On August 17th, after seven weeks of trial and 14 days of deliberation, the jury delivered its verdict. Mr Blagojevich was vindicated, sort of. The jury found him guilty of lying to the FBI, and he could yet go to jail. But it was deadlocked on 23 other counts. The verdict disappointed federal prosecutors, who had charged Mr Blagojevich with conspiring to commit an array of horrifying acts—extorting money from a hospital executive, for example, and scheming to sell Barack Obama’s Senate seat. Mr Blagojevich’s lawyer, whose courtroom style resembled that of an apoplectic cabbie trained by Maria Callas, insisted it was just talk. ...

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. ...

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. ...

The sugar industry produces food, fuel and environmental benefits. How fast it grows may depend on an argument about how it should be regulated

IT IS what passes for a winter’s day in upstate Sao Paulo. The sun is blazing from a blue sky feathered lightly with cirrus cloud. In a large, sloping field overlooking the city of Piracicaba, a mechanical harvester chomps through a stand of three-metre-high sugar cane, fat and juicy from months of sunshine. The harvester slices the cane into 20cm chunks and regurgitates them into a 30-tonne trailer moving alongside that will lug them a few kilometres to the Costa Pinto mill (pictured). There the cane is weighed, washed, tipped onto a conveyor belt, crushed and then, depending on market conditions, crystallised into sugar or distilled into ethanol. The woody residue—the bagaco—is burned in two high-pressure boilers that, according to the flickering needle in the control room, are supplying around 50 megawatts (MW) of electricity to the local grid—enough to power half of Piracicaba.

Sugar has been grown in Brazil for 500 years, and the country is by far the world’s biggest exporter of it. But sugar now also forms the nucleus of a new agro-industrial and renewable-energy complex. Biofuels, mainly derived from sugar, are Brazil’s most important source of energy after oil. For a unit of energy, the production and use of sugar-based ethanol generates only two-fifths of the carbon emissions of petrol, and half those of corn-based ethanol, according to the United States Environmental Protection Agency. And bioplastics made from sugar cane are poised to move from the laboratory to the corner store, with the launch of soft-drink bottles. ...

How ten years in power have changed the former opposition leaders

SKULKING around Morelia after dark, a 17-year-old Agustin Torres would wait until midnight before sticking up posters for the National Action Party (PAN). Any earlier, and he risked being photographed by authorities monitoring subversives in the western city. “I wanted to be against the system, so I joined the PAN,” says Mr Torres, now 33 and a congressman.

These days, the PAN is part of the system. After 61 years in opposition, it wrested the presidency from the hegemonic Institutional Revolutionary Party (PRI) in 2000 and held it in 2006. Its strengths reflect its legacy as the protagonist of Mexico’s transition to multi-party democracy. Unlike the big-tent PRI, the conservative PAN knows what it stands for. “Whereas the PRI is driven by power, the PAN tends to be driven by ideology,” says Luis Rubio, the head of CIDAC, a think-tank. And unlike the fractious Party of the Democratic Revolution (PRD), its leftist counterpart, the PAN runs a slick operation. It even boasts an international reach, winning 57% of the expatriate vote in 2006. ...

What the fall from grace of Fidel Castro’s Chilean business crony says about Cuba’s uncertain economic times

MAX MARAMBIO, a Chilean businessman, can claim an unusual consequence of his friendship with Fidel Castro. It made him rich. A guerrilla in the 1960s and then a bodyguard of Chile’s socialist president, Salvador Allende, Mr Marambio set up one of the earliest business joint-ventures with Cuba’s Communist regime. For the past two decades this company, Rio Zaza, enjoyed a near-monopoly on sales of packaged fruit juice and milk across the island. Mr Marambio, dubbed in Cuba “the potbelly” because of his portly figure, became a multimillionaire.

That apparently did not offend Mr Castro. Neighbours at the businessman’s grand 1950s home on the outskirts of Havana recall that the Cuban leader was a frequent evening guest (the home itself is believed to have been a gift from Mr Castro). But now the house lies empty, its rolling lawns unkempt. Mr Marambio is a wanted man. Cuba’s government, led now by Fidel’s brother Raul, ordered him to return to the island by August 23rd for questioning about bribery and fraud at Rio Zaza. Mr Marambio, who denies all the allegations, declined the invitation. ...

The struggles of Michael Ignatieff

FOR the past seven weeks Michael Ignatieff, the leader of the opposition Liberals, has submitted to trial by barbecue. He has crossed Canada on a summer bus tour, with a daily dose of seared beefsteak, extemporaneous speeches, endless handshaking, interviews with local media and even some dancing. The purpose, party officials say, is to sharpen the political skills of Mr Ignatieff, a former journalist and academic more at home with broccoli and bucatini, and to test his stamina and his party’s readiness for an election campaign.

The verdict has been mixed. A leader often seen as wooden and aloof has revealed a glimmer of popular appeal. The Liberals have crept up in the opinion polls, but still trail the Conservative Party, which has formed a minority government under Stephen Harper, the prime minister since 2006. Some of the Liberals’ most experienced campaigners remain sceptical. When the party’s parliamentary caucus gathers on August 30th there will be no repeat of Mr Ignatieff’s bold call at the same event last year of “Mr Harper, your time is up.” The party recoiled from this electoral bravado. It almost cost Mr Ignatieff his job and led to a shake-up of his advisers. ...

Chileans have celebrated the discovery that 33 miners trapped 700 metres (2,300 feet) below ground when the San Jose mine collapsed on August 5th are alive and well. The task now is to keep them that way during the four months or so it may take to get them out. The government will also have to look at why regulators allowed San Jose to re-open in 2008 as copper prices peaked before it implemented promised safety improvements.

...

A blow for feminism—or against it?

SINCE electing its first left-wing mayor in 1997, Mexico City has been a self-consciously liberal oasis in a conservative country. The current mayor, Marcelo Ebrard, has legalised abortion on demand, gay marriage and gay adoption in his first four years in office. His latest move, cheered by environmentalists, was a ban on free plastic shopping bags, implemented on August 19th. Eye-catching reforms such as these are enhancing Mr Ebrard’s profile ahead of a likely presidential bid in two years’ time.

The latest controversy concerns women-only public transport. During rush hour, men have long been barred from a third of the carriages of metro trains. Some see that as offering a blessed sanctuary from wandering macho hands; for others it is a backward step on the march to equality. But whereas Puebla, a nearby city of more conservative bent, runs a women-only “pink taxi” service (pictured above), Mexico City had resisted. Susana Sanchez, a Mexico City taxista, first requested permission to run such a service in 1998. She was told it would be discriminatory. ...

Who cares about austerity? That may come, but not until the day after tomorrow

EARLIER this year, Cristina Fernandez de Kirchner (pictured above), Argentina’s president, proffered some advice to European governments facing recession and market panic. Its essence was “stuff the IMF and carry on spending.” It is what she and her predecessor and husband, Nestor Kirchner, have practised since 2003. Argentina is one of only a handful of countries that refuse all dealings with the IMF. Almost a decade after it defaulted on $90 billion of debt when its economy collapsed, it still has few financial ties with the world and very little bank credit. Yet contrary to repeated forecasts of doom from orthodox economists, the economy is roaring.

Or at least it seems to be. The numbers are a matter of dispute: in 2007 the government meddled in the statistics institute (called INDEC), and official figures now have little credibility. They show GDP as having risen by 0.9% last year, despite the world recession and a severe drought that hurt Argentina’s all-important farmers. But independent economists, who say the economy contracted by 2-2.5% last year, now forecast growth of up to 8% this year. ...

The government blames the media for crime

THE chance of being shot in Caracas may be higher than just about anywhere else in the world, outside war zones. Cheuk Woon Yee Sinne, a baseball player from Hong Kong, found that out on August 13th. As she took the field for a match in the Women’s Baseball World Cup, at an army stadium in Venezuela’s capital, a stray bullet hit her in the leg. Her team promptly pulled out of the tournament.

That was an embarrassment for the government of Hugo Chavez, which faces a legislative election on September 26th. It said the shooting was an isolated incident and moved the tournament to a venue outside the capital. But it also has another solution to Venezuela’s crime problem: suppress negative crime statistics and prevent the media from publishing gory images. ...

Juan Manuel Santos takes charge

HE MAY have owed his election as president to the popularity of Alvaro Uribe, whom he served as defence minister. But Juan Manuel Santos has his own priorities. Where Mr Uribe dedicated his eight years in office to “democratic security”, to beating back left-wing guerrillas and demobilising right-wing paramilitaries, at his inauguration on August 7th Mr Santos promised “democratic prosperity”. It is already clear that his government will be more technocratic and more centrist than Mr Uribe’s populist conservatism.

There will be no let-up in the security drive against the FARC guerrillas. But Mr Santos said the door to peace talks was “not locked”, provided the guerrillas released hostages and ended all hostilities. While Mr Uribe quarrelled with the judiciary, one of Mr Santos’s first acts as president was to meet senior judges, offering a new relationship. German Vargas Lleras, the new interior minister, withdrew a bill presented by his predecessor that would have ended the independence of the attorney-general. He offered to consult on a new bill. ...

Lula’s lady is on course to inherit his presidency

ON PAPER, Jose Serra of the Party of Brazilian Social Democracy (PSDB), Brazil’s biggest opposition party, should be able to win the presidential election due on October 3rd without breaking a sweat. He has held many big political jobs in a long and successful career, including congressman, senator, minister of planning and then health, and mayor and then governor of Sao Paulo, Brazil’s biggest city and most powerful state. He is up against a political neophyte: an adviser and bureaucrat who was almost unknown just a couple of years ago, and who has never before fought, let alone won, an election.

Instead Mr Serra is struggling to stay in the race. Polls put him five to ten points behind Dilma Rousseff, the candidate of the governing Workers’ Party (PT). The problem is not presentation, though Mr Serra looks dull except when he smiles, when he looks alarming. Ms Rousseff is hardly charismatic, and has a weakness for offering half-hour answers to one-line questions. ...

Amid drug-war weariness, Felipe Calderon calls for a debate on legalisation

THE nota roja, a section reporting the previous day’s murders and car crashes in all their bloodstained detail, is an established feature of Mexican newspapers. It is also an expanding one, as fighting over the drug trail to the United States inspires ever-greater feats of violence. Last month in the northern state of Durango, a group of prisoners was apparently released from jail for the night to murder 18 partygoers in a next-door state. A few days later, 14 inmates were murdered in a prison in Tamaulipas. In all, since Felipe Calderon sent the army against the drug gangs when he took office as president almost four years ago, some 28,000 people have been killed, the government says. There is no sign of a let-up, on either side.

So it came as a surprise when on August 3rd Mr Calderon called for a debate on whether to legalise drugs. Though several former Latin American leaders have spoken out in favour of legalisation, and many politicians privately support it, Mr Calderon became the first incumbent president to call for open discussion of the merits of legalising a trade he has opposed with such determination. At a round-table on security, he said this was “a fundamental debate in which I think, first of all, you must allow a democratic plurality [of opinions]…You have to analyse carefully the pros and cons and the key arguments on both sides.” It was hardly a call to start snorting—and Mr Calderon subsequently made clear that he was opposed to the “absurd” idea of allowing millions more people to become addicted. But it has brought into the open an argument that appears to be gaining currency in Mexico. ...

Fidel’s return is a mixed blessing for his brother

“IT WAS a surprise. A month ago I had assumed he was dead,” said Hector, an art student in Havana. He had just watched Fidel Castro speak at Cuba’s National Assembly on August 7th. It was the first appearance by the former president on live television since he underwent intestinal surgery in 2006. Mr Castro, who turns 84 this week, had to be helped to his seat at the podium. In contrast to the endless diatribes of the past, this one lasted just 11 minutes, though he stayed for an hour of debate. His theme was his latest apocalyptic vision: that conflict between the United States and Iran could escalate into nuclear war. At times he was difficult to follow. But the message was clear enough. After four years as a near-recluse, Mr Castro is back—and at a time of unusual difficulty for the regime he created.

The speech followed a string of cameo appearances by Fidel, such as visiting an aquarium and talking to biotechnologists. These began the day before the announcement last month that Cuba would free 52 political prisoners. They seemed designed to distract attention from this unusual gesture of weakness from the Communist government, to which it resorted to allay criticism abroad after the death of a hunger striker in February. ...

The Gulf spill has focused American minds on pollution from Canadian oil producers. But cleaning up the tar sands will not be easy

“A GOOD neighbour lends you a cup of sugar,” read an ad in the Washington Post last month. “A great neighbour supplies you with 1.4 million barrels of oil a day.” Ed Stelmach, the premier of the energy-rich province of Alberta, certainly knows how to make the case for Canadian petroleum. Buying from Canada neither props up an authoritarian regime nor exposes the United States to political manipulation of its energy supply. Little wonder, then, that Canada is the biggest exporter of oil to America, with 22% of the total. The runners-up, Mexico, Saudi Arabia and Venezuela, have just 11-12% each. And the country’s potential seems limitless: Canada’s 179 billion barrels of oil and gas reserves rank second in the world.

There is, however, a catch: Canadian crude is dirty. Just over half the country’s oil comes from tar sands, a mixture of water, sand, clay and bitumen—an extremely dense and thick form of petroleum, which usually must be melted before it can be extracted and refined. It takes up to four barrels of water to generate one barrel of tar-sands crude, and 20% of Canada’s natural gas (a clean fuel) is used to produce oil (a dirty one). Mining the sands also strips forest and creates vast ponds of toxic byproducts. According to America’s Environmental Protection Agency (EPA), producing Canadian tar-sands oil generates 82% more greenhouse-gas emissions than does the average barrel refined in the United States. ...

Attempts to repress peasant uprisings have backfired

GUNFIRE rings out almost every day around the village of San Juan Copala, as marksmen in the woods take potshots into the town. Eight residents are recovering from injuries, including an eight-year-old girl who was hit twice as she tried to leave the village. The gunmen have cut electricity and blocked access roads, allowing only a single party of women out once a week on an eight-hour hike to fetch food. The siege is entering its ninth month.

The tiny hamlet of some 400 Triqui Indians lies in the north-west of the state of Oaxaca. The shooters are thought to belong to the Union for the Social Wellbeing of the Triqui Region (UBISORT)—a deceptively beneficent-sounding group set up by the ruling party in 1994 to enforce its authority in the remote mountain area. ...

Should Brazil use discrimination against deprivation?

BRAZIL’S Supreme Court is wrestling with one of the toughest dilemmas in politics: which is preferable, absolute equality before the law or discrimination in favour of disadvantaged races? This is a surprise, for until recently Brazil liked to see itself as a true melting pot.

Like America, it has significant minorities of blacks, indigenous peoples and European immigrants; it even has the world’s biggest populations of Japanese outside Japan and Lebanese anywhere. Unlike Americans, Brazilians rarely classify themselves by race. One survey listed 136 sample skin colours. At the last census, 38% simply said they were mixed. ...

The stakes are high for the hapless running-mates

AMERICA’S vice-presidency, one of its occupants once asserted in an oft-bowdlerised remark, is “not worth a bucket of warm piss”. Brazil’s is different. The man—they have all been men—serving as vice-president has inherited the top job four times since 1954, following a military coup, a resignation, a death and an impeachment. That is only one fewer than the number of presidents who took power through election in that period.

The office is in the spotlight once again in the current presidential campaign, because the leading candidate, Dilma Rousseff of the governing Workers’ Party (PT), has been seriously ill. She spent much of the past year being treated for lymphatic cancer. So it is more than a mere curiosity that the running-mates of both Ms Rousseff and her main challenger, Jose Serra of the Party of Brazilian Social Democracy (PSDB), are causing problems. Both presidential candidates would probably have preferred different partners. ...

The presidential election is a chance to rebuild ties between Haiti’s struggling government and its discouraged donors

ONE of the many differences between Haiti and the Dominican Republic, its closest neighbour, muses Jean-Max Bellerive, the stricken country’s prime minister, is that it has seen just two democratic handovers of power compared with a dozen next door. He is being tactful, since some of the Dominican Republic’s elections were far from fair. But his point is that organising a presidential election in Haiti this year will eventually be as important as giving food, shelter and jobs to the 1.5m people made homeless by January’s earthquake.

Haiti needs an effective and legitimate government if it is to rebuild itself—and if the outside world is to part with the cash it has promised the country. After a rousing show of unity at a donors’ conference in March, when Haiti was pledged $5.5 billion of aid, relations between the government and donors and charities have become increasingly strained. That has made a slow reconstruction effort still slower. ...

The capital’s filthy atmosphere has improved at last

HEMMED in by mountains and volcanoes, Mexico City is the perfect smog-trap. At its altitude of 2,250m the air is already thin; on days when the toxic “cream”, as the familiar brown cloud of pollution is locally known, descends on the city, it is hard to breathe. Locals used to joke that the only life that could survive in the skies was jumbo jets.

Yet the smog is lifting. The average concentration of ozone, one of the most common pollutants, is about half its level in the early 1990s, when the air was at its dirtiest (see chart). In those days the national ozone limit of 0.11 parts per million was breached for at least an hour on nine days out of ten. Yet last year over half the days were below the cap. Joggers are back in parks and wildlife is airborne once more: a hummingbird regularly looks in on The Economist’s offices. ...

The new government is doing better abroad than at home

IT IS over a year since Honduras’s leftist president, Manuel Zelaya, was bundled out of his home at dawn by the army and exiled to Costa Rica. Yet friendships, business deals and families are still split by rows over the events of June 28th 2009: whether Mr Zelaya’s illegal attempt to rewrite the constitution, seen by many as a bid to hang on to power, justified his removal at gunpoint; and whether his expulsion, backed by Congress and the Supreme Court, was a coup or a “constitutional succession”. Tegucigalpa, the small capital surrounded by empty silver mines, remains scarred by graffiti denouncing the coup’s authors, and their mothers.

The squabbling has been no less furious on the international stage. In response to the coup, Honduras was kicked out of the Organisation of American States (OAS), and lost promised foreign aid worth 6% of GDP. Constitutional order formally returned when Porfirio Lobo, who won a reasonably fair election held under the de facto regime, was inaugurated on January 27th. But Mexico and most South American countries still do not recognise his government. In May Brazil, which housed Mr Zelaya in its Tegucigalpa embassy for 129 days to shield him from arrest, stopped Mr Lobo from attending an EU-Latin America summit by warning that at least ten countries would skip it if he did. ...

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. ...

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. ...

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 Vavi, for having accused the government of failing to take action against corrupt ministers. ...

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. ...

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. As a sign of America’s changing role in the country, the State Department will now assume some of the responsibilities that were previously undertaken by the Pentagon. Chief among them is the training of Iraqi policemen, a key to keeping the peace. Consular offices will be opened across the country to replace military bases. Since the State Department does not have its own forces, it is hiring private gunmen. They will fly armed helicopters and drive armoured personnel carriers on the orders of the secretary of state long after the last American soldier has gone home. ...

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. ...

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. ...

…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 with a previously agreed on 1.5% performance bonus. ...

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. ...

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. ...

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. ...

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. ...

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. ...

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. ...

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. ...

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. ...

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), led by Abdul Wahid al-Nur, and the Liberty and Justice Movement (LJM). The SLA is boycotting the current round of Darfur peace talks being chaired by the Qataris in their capital, Doha, while LJM, a coalition of several minor rebel movements, is the only rebel group attending the talks with representatives from the Sudanese government. ...

Is it much harder when Ramadan falls in the boiling months of summer?

THE Muslim calendar, now in its 1,431st year, follows the cycle of the moon rather than the sun. This means it shifts by 11 days a year in comparison with the Gregorian calendar, completing a full cycle in about 33 years. And it ignores the seasons. Ramadan, the month of fasting which this year began on August 12th, is now taking place slap in the middle of the Arab world’s summer holiday. Those who observe the fast must not only put up with the heat and the ensuing dangers of dehydration and exhaustion. There are economic costs that did not weigh a generation ago, when consumer culture had yet to take hold. Across the Arab world, for instance, the price of cooking oil shoots up, since fried sweets are a Ramadan speciality. The cost of sugar rises too. So does the price of honey, especially in the Maghreb. Food importers do particularly well out of pistachios, dates and dried apricots. Cafes close by day but often make up for that with late-night revels. Many big new television shows are launched during Ramadan, accounting for a third of annual advertising revenue for Arab satellite television stations.

But for many businesses, especially government ones, productivity plummets as the working day shortens by two or three hours. The stock market, however, usually surges, according to a recent study by Ahmad Etebari, a professor at the University of New Hampshire. Studying market patterns in Muslim countries between 1989 and 2007, he found that returns during Ramadan were almost nine times higher than in the rest of the year. The reason, he says, is that the seasonal cheer encourages optimism and thus risk-taking. ...

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. ...

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 labour. ...

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. ...

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. ...

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. ...

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. ...

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. ...

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.” ...

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. ...

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. ...

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. On most days, Srinagar is a ghost town of shuttered shops and empty streets. Paramilitaries point their rifles out from bunkers or lounge on street corners, idly tapping their lathis (heavy batons) on their padded legs. On the one or two designated “shopping days” each week, the traffic is gridlocked. ...

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.

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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. ...

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 romancing may yet turn ugly. ...

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. ...

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. ...

Why more mainland Chinese women are rushing to give birth in Hong Kong

A LITTLE noticed tourist boom has been taking place in Hong Kong, as mothers-to-be flock to the city. Last year tourists from the mainland accounted for a striking 36% of all the babies born in the territory, a sharp rise on previous years, and the trend is resolutely upwards.

Mainlanders are noticing some obvious benefits of giving birth in Hong Kong. Perhaps most importantly, the one-child policy does not apply in the territory. Maternal treatment is also generally better, at least when weighed against stories of bad care and negligence in mainland hospitals, especially for those who fail to pay big bribes. And the welfare system in rabidly capitalist Hong Kong is more generous than on the Communist mainland. A child born in Hong Kong gets free education for 12 years and almost free medical care. Although local hospitals charge up-front (mainlanders pay at least HK$39,000, or $5,000, per birth), the longer-term gains make the cost worthwhile. ...

Sri Lanka is developing again. But not all can celebrate

WEARING a crisp blue shirt, Kumaraswamy Nageswaran gestures dejectedly to a towering fence that keeps him from his village and his three acres of farmland on the Trincomalee coast. Five years ago, as Tamil Tiger rebels fought desperately with the Sri Lankan army, thousands of families fled Sampur and adjoining villages. They returned in the six months to January this year, only to find themselves victims of post-war development plans.

Sampur fell within an area demarcated during the war as a “high-security zone”, in an effort to keep fighters from the Liberation Tigers of Tamil Eelam at bay. The rebels were defeated in May 2009, but nearly 6,000 people still cannot get to their homes and lands, as the security zone remains in place. ...

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. ...

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. ...

Online as much as in the real world, people bunch together in mutually suspicious groups—and in both realms, peacemaking is an uphill struggle

IN 2007 Danah Boyd heard a white American teenager describe MySpace, the social network, as “like ghetto or whatever”. At the time, Facebook was stealing members from MySpace, but most people thought it was just a fad: teenagers tired of networks, the theory went, just as they tired of shoes.

But after hearing that youngster, Ms Boyd, a social-media researcher at Microsoft Research New England, felt that something more than whimsy might be at work. “Ghetto” in American speech suggests poor, unsophisticated and black. That led to her sad conclusion: in their online life, American teenagers were recreating what they knew from the physical world—separation by class and race. ...

A cross-border fraternity that strives to be seen, heard and heeded

NEARLY four years ago, a web-based political movement set itself the modest task of “closing the gap between the world we have and world most people everywhere want”. Calling their group Avaaz, which means “voice” in several languages, the founders aimed to reproduce globally some of the success which their progenitors—like America’s Moveon.org, and Australia’s Getup!—had enjoyed in national political arenas.

By its own lights, the movement, using 14 languages and engaged in a mind-boggling list of causes, has had some spectacular successes. Within the next few months, membership will top 6m. The number of individual actions taken (from bombarding a politician with a well-aimed message, or funding a poster campaign, to helping provide satellite phones to Burmese monks) is estimated at over 23m. Among the recent developments Avaaz claims to have influenced are a new anti-corruption law in Brazil; a move by Britain to create a marine-conservation zone in the Indian Ocean; and the spiking of a proposal to allow more hunting of whales. ...

In its care for precious places, the UN cultural agency is torn between its own principles and its members’ wishes; the principles are losing ground

WHEN an archipelago famed for its flora and fauna is deemed to have escaped from environmental peril, that might sound like good news for anyone with an interest in the fate of life on Earth. But UNESCO’s recent clean bill of health for the Galapagos islands was greeted with dismay by many of the people who care passionately about the place.

The decision to remove the islands from the list of “world heritage sites in danger”—taken at a meeting in Brasilia that concluded on August 3rd—was only one of several signs that the UN agency is bending its own rules under pressure from member states. And since UNESCO is supposed to be an unprejudiced protector of the whole world’s built and natural environment, such slipping standards are not merely of concern in remote Pacific islands. ...

Georgia’s mercurial leader cocks a snook at art-historical convention

IN MANY European countries, dwindling Christian flocks can barely cope with the patrimony they have inherited, from steeples to statues. Georgia, which adopted Christianity 17 centuries ago, faces almost the opposite problem: such is the strength of a religious revival that began after the fall of communism that a hectic programme of building and restoring churches—from tiny chapels to Tbilisi’s vast new Holy Trinity cathedral—can hardly keep up with demand.

And perhaps inevitably, the rush to refit ancient places of worship can easily run up against other priorities, including the latest international thinking about archaeology and conservation which holds that intervention should be kept to a minimum. ...

In last week’s story on wind energy, we said Australia’s Bald Hills wind park was in Queensland. It is in Victoria. Sorry.

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Across the world, wind technology produces as much political heat as electric light—stirring local arguments as well as global ones

“OF COURSE I’m all in favour of clean energy, especially wind power, but…” That is a familiar opening gambit in a new sort of political storm, raging ever more fiercely in corners of the world where electric power comes, or may soon come, from flashing blades rather than blazing furnaces.

The odd thing about conflicts over wind is that, usually, each side claims to be greener than the other. Opponents say a unique landscape or seascape is being overshadowed, to the detriment of tourists and residents alike. Wind power does undoubtedly pose some hazard to birds and other fauna; some say it harms humans. Others simply find wind turbines ugly, an eyesore in any location. Yet, compared with other power sources, the green credentials of wind are pretty convincing: it creates no waste, uses no water and (unlike solar panels) doesn’t need much room. ...

Our article on sexual equality and toilet provision (“Flushing away unfairness”, July 10th) reported that a ruling under human-rights legislation in New Zealand had ensured that women need wait no more than three minutes to use a public lavatory. This is incorrect. Sorry.

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Western state-backed news outfits are struggling to keep their influence in the developing world

AS A child growing up in Afghanistan, Saad Mohseni watched his father listening to the BBC World Service and Voice of America: they were almost the only way of obtaining reliable domestic, let alone foreign news. No longer. Last month Mr Mohseni launched a satellite news channel broadcasting round the clock in Dari and Pashto. He hopes to distribute it on terrestrial television soon. Such upstarts are one reason Western governments are losing their voices in the places where they most want to be heard.

The cold war was the state-backed broadcasters’ heyday, with big budgets for propaganda wars about the virtues and vices of capitalism and communism. Powerful short-wave transmissions required costly kit; getting hold of the frequencies required international arm-twisting. It was a game for big and rich countries only. Peter Horrocks, head of BBC Global News, recalls “a comfortable world”. ...

An international shindig for nationalist groups

NOT swivel-eyed. Not knuckle-dragging. Not beetle-browed. And not, repeat not, xenophobic. Around 90 members of European and Japanese far-right and nationalist groups arriving in Tokyo for a meeting taking place between August 12th and 15th were keen to dispel stereotypes about their values and habits. “We will come under the umbrella of international nationalism,” insists Adam Walker of the British National Party (BNP). He lived in Japan for six years in the 1990s, teaching martial arts.

The main unifier is a sense of persecution. “We are facing the same enemies, using the same methods, for the same purpose, serving the same interests,” explains Bruno Gollnisch of France’s National Front. He is a Japan expert at the University of Lyon (and married to a Japanese). Mitsuhiro Kimura, the president of Issuikai, a Japanese far-right group that is playing host, says the aim is to “discuss respect for different cultures and traditions, and then, how to build common activities”. ...

In free societies and tyrannies alike, the hair on, and around, a man’s head always sends an ideological signal

SHAHRYAR, a fashion-conscious young socialite from Tehran, was immensely proud of his Jackson-5-style Afro. The baseej, Iran’s thuggish militia, were less impressed. They arrested him and dragged him away to a local clerical court, on the grounds that his sprouting hairdo was a dangerous Western import. Shahryar argued that since his style was really African, it posed no threat to revolutionary principles. The baseej disagreed: it was African-American so it could pollute Iranian society with the mores of the country’s greatest enemy.

The mullah in charge decided that although the fashion did indeed have American associations, it should be remembered that many black citizens of the United States had converted to Islam. In fact they represented the vanguard for jihad on the Western front—so in deference to them, Shahryar could hold onto his coif. ...

Israel feels more wanted on the East River—but can it make up with Turkey?

ASK almost any Israeli about the United Nations, and you will be told that the country gets a raw deal from the organisation that voted the Jewish state into existence in 1948. The talk in Israel is of a “built-in majority” of hostile states in the General Assembly, and a secretariat that is cool at best.

But this week Binyamin Netanyahu accepted a UN inquiry into the bloody encounter between Turks and Israelis on May 31st, in which nine people from Turkey (one an American citizen) on a flotilla bent on delivering supplies to Gaza were killed by Israeli commandos. The prime minister’s decision to help the investigation was calmly received in Israel, although Tzipi Livni, the opposition leader, complained that the army could be exposed to foreign prying. ...

The legal profession, like the clients it serves, is well on the way to going global—but especially in India, obstacles to its spread remain

LAW is supposed to be about universal principles: rules that apply without prejudice to a broad category of human beings, regardless of sex, culture or economic status. So in a world where barriers to the transfer of goods, expertise and people are coming down, you might expect that the legal profession would be among the first to fuse into a seamless transnational fraternity. In history, whenever cross-border commerce has flourished, as in medieval Venice, so too have trade lawyers with broad horizons, like the ones pictured above. And today, at least from the vantage-point of the ambitious practitioner, the legal profession seems to have little respect for borders.

A talented graduate from any of the world’s top law schools can expect a life of globe-trotting. A single month’s work can include writing the small print on a Saudi investment in Africa, helping an Indonesian firm to market its shares in New York, and writing a contract under English law between two companies in Russia. Humanitarian law, as well as the commercial sort, is going global: these days nobody would be surprised to see an American lobby group test the principle of “universal jurisdiction” (for egregious crimes) by trying to get an African dictator arrested on a shopping trip to Europe. ...

Despite its giant population, Facebook is not quite a sovereign state—but it is beginning to look and act like one

A COUPLE of months or so after becoming Britain’s prime minister, David Cameron wanted a few tips from somebody who could tell him how it felt to be responsible for, and accountable to, many millions of people: people who expected things from him, even though in most cases he would never shake their hands.

He turned not to a fellow head of government but to…Mark Zuckerberg, the founder and boss of Facebook, the phenomenally successful social network. (It announced on July 21st that it had 500m users, up from 150m at the start of 2009.) In a well-publicised online video chat this month, the two men swapped ideas about ways for networks to help governments. Was this just a political leader seeking a spot of help from the private sector—or was it more like diplomacy, a comparison of notes between the masters of two great nations? ...

Hackers come buzzing in from expected, and entirely unexpected, places

WHICH countries have the cleverest hackers? In a well-guarded room near the Potomac river, north of Washington, DC—to which very few people have access (biometric scanners can prevent any unwanted human presence)—there is a laptop that is finding the answer. The little machine is a honey-trap which has detected more than 11m failed attempts to penetrate its defences since it was put in place in early June.

InZero, the web-security firm that set up the device, made it known through the shadowy world of hackers’ chat forums (a place so murky that you have to clean your computer well after going near it) that there was a document on the machine’s hard drive; and it challenged intruders to get hold of it. The results were revealing. Most would-be penetrators were polite in their self-presentation; their e-mails to the laptop had attachments which the reader was asked nicely to examine. Playing dumb, the recipients duly opened all those potentially deadly attachments, in the—so far correct—assumption that their defences would hold. ...

Technology used to help spies. Now it hinders them

DEPENDING on what kind of spy you are, you either love technology or hate it. For intelligence-gatherers whose work is based on bugging and eavesdropping, life has never been better. Finicky miniature cameras and tape recorders have given way to pinhead-sized gadgets, powered remotely (a big problem in the old days used to be changing the batteries on bugs).

Encrypted electronic communications are a splendid target for the huge computers at places such as America’s National Security Agency. Even a message that is impregnably encoded by today’s standards may be cracked in the future. That gives security-conscious officials the shivers. ...

Rent-a-bike projects are cropping up in unlikely places

THIN air, thick smog and bad drivers make Mexico City hard going for cyclists. But a new fleet of 1,200 smart red “Ecobici” pay-as-you-go rental bikes, at 85 docking stations, marks the most ambitious recent addition to a global trend of municipally endorsed cycling. Since February 7,000 people have signed up, and between them they have taken more than 200,000 trips.

A low-tech scheme started in the French town of La Rochelle in 1974. Copenhagen launched the first big automated project in 1995. German cities, including Berlin, have tried versions paid for by mobile phone. But the most successful is the “Velib” in Paris, with 20,000 bikes available for users with swipe-cards. In London the transport authority and Barclays Bank will launch a 6,000-bike programme on July 30th. Users can pay at one of the 400 docking stations, or use a key with a chip. ...

An attempt to rank end-of-life care in different countries

CUSTOMER-SATISFACTION surveys are commonly used to improve the service in hotels and shops. Alas, they are unsuitable for rating the quality of death. So the Lien Foundation, a charity, commissioned the Economist Intelligence Unit, our sister company, to devise a ranking of end-of-life care. The report, published on July 14th, rates 40 mostly rich countries by how well they care for the dying.

Britain tops the table. For all the health-care system’s faults, British doctors tend to be honest about prognoses. The mortally ill get plentiful pain killers. A well-established hospice movement cares for people near death, although only 4% of deaths occur in them. For similar reasons, Australia and New Zealand rank highly too. ...

Hanging on too long for porcelain parity is more than a nuisance for women

Correction to this article

THE scene is familiar, infuriating, and usually met with resignation. Women, legs crossed in discomfort or desperation, wait in line for the lavatory while men saunter in and out of their loos. It is a common sight at theatres, sports grounds and other public buildings. ...

Does a warming world really mean that more conflict is inevitable?

AS THE planet warms, floods, storms, rising seas and drought will uproot millions of people, and with dire wider consequences. Barack Obama, collecting his Nobel peace prize, said that climate change “will fuel more conflict for decades”. He took the analysis not from environmental scaremongers but from a group of American generals.

The forecast is close to becoming received wisdom. A flurry of new books with titles such as “Global Warring” and “Climate Conflict” offer near-apocalyptic visions. Cleo Paskal, at the Royal Institute of International Affairs in London, predicts that floods, storms, the failure of the Indian monsoon and agricultural collapse will bring “enormous, and specific, geopolitical, economic, and security consequences for all of us…the world of tomorrow looks chaotic and violent”. Jeffrey Mazo of the International Institute for Strategic Studies, also in London, calls climate change an “existential threat” and fears it could usher in “state failure and internal conflict” in exposed places, notably Africa. ...

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. ...

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. ...

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”. ...

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.

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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. ...

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. ...

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. ...

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. ...

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. ...

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. ...

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. ...

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. ...

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. ...

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.

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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. ...

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. ...

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. ...

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 implementation of new ideas rather than their generation. ...

Asia's powerful thirst for beer does not mean bumper profits for brewers

DRINKING beer is not a competitive sport—unless you are a student or a rugby player. But if it were, Asia would now have the bragging rights. Recent figures from Japan’s Kirin Institute of Food and Lifestyle (owned by the Kirin brewery) show that in 2009 Asia overhauled Europe in beer production for the first time. Almost all beer is consumed where it is made, so Asians collectively chug more than the boozers of any other continent.

That would seem like encouraging news for the world’s big four brewers—Anheuser-Busch InBev (ABI), SABMiller, Carlsberg and Heineken—which between them supply nearly half the needs of the world’s beer drinkers. All four have pursued roughly the same strategy in recent years. They bought breweries in rich countries, where beer drinking has levelled off or fallen, and boosted profitability by stripping out costs. At the same time they snapped up brewers in emerging markets, where the party can only get livelier. But they cannot afford yet to relax with a cool one. Most tasty takeover targets have been swallowed, so the brewing giants will henceforth have to rely more on organic growth. Asia’s spectacular thirst ought to help a lot, but won’t yet. ...

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. ...

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. ...

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. ...

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, defined goals. ...

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. ...

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. ...

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 not have to take direct injections of public funds (although all, of course, benefited from a wide range of other government props to the system). ...

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. ...

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 Rodriguez, who heads the country’s debt office. ...

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. ...

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, and that high unemployment is partly “structural” in nature. ...

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. ...

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. ...

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. ...

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 losses and withdrawals by investors have left hedge-fund assets at around $1.6 trillion, down from a 2007 peak of almost $1.9 trillion (see chart). ...

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 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. ...

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 central banks, attract savings from naive depositors and benefit from implicit state backing. ...

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”. ...

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, and that the laws of physics vary within it. Instead of the whole universe being fine-tuned for life, then, humanity finds itself in a corner of space where, Goldilocks-like, the values of the fundamental constants happen to be just right for it. ...

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. ...

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. ...

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. ...

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 common to all three papers. ...

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. ...

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. ...

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. ...

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 get to, they allow the planet’s surface to be scanned in great detail for both military and civilian purposes, and they are close enough that even the weak signals of equipment such as satellite phones can be detected. Losing the ability to place satellites safely into LEOs would thus be a bad thing. And that is exactly what these two incidents threatened. At orbital velocity, some eight kilometres a second, even an object a centimetre across could knock a satellite out. The more bits of junk there are out there, the more likely this is to happen. And junk begets junk, as each collision creates more fragments—a phenomenon known as the Kessler syndrome, after Donald Kessler, an American physicist who postulated it in the 1970s. ...

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. ...

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. ...

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. ...

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 the well down a lot quicker. ...

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. ...

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. ...

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. ...

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. ...

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 equivalent. Peter Diamandis, the entrepreneur who runs the foundation, says he has become convinced that “focused and talented teams in pursuit of a prize and acclaim can change the world.” ...

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 century noted that the land-based fauna on either side of this line was distinctly different. More information can be found here.

...

America’s GDP growth in the three months to the end of June was revised down sharply to an annualised quarter-on-quarter rate of 1.6% from the previous estimate of 2.4%. In the three months to the end of March, GDP had risen at an annualised rate of 3.7% from the previous quarter.

An early estimate put euro-area inflation at 1.6% in August 2010, a tenth of a percentage point lower than in July. The region’s unemployment rate remained at 10% in July, unchanged from a month earlier. ...

Surveys of purchasing managers by Markit, a research firm, suggest that manufacturing expanded at a faster pace in August than a year earlier in most countries. A year ago, 11 countries had purchasing managers’ indices (PMIs) below 50, indicating that manufacturing industries there were still contracting. Now, contraction is apparent in only three of the 25 countries for which August data are available. After dipping into contractionary terrain in July, China’s August PMI of 51.9 once again signalled growth, though Chinese manufacturing has clearly slowed from a year earlier. In America, the Institute of Supply Management’s index for August pointed to growth for the 13th month in a row.

...

According to the latest survey of foreign-exchange markets from the Bank for International Settlements (BIS), trading in currencies surged by 20% in April this year from April 2007, when the last such survey was conducted. This marks a significant slowdown from the 72% growth seen between 2004 and 2007. Foreign-exchange swaps accounted for 44% of transactions in April this year, down from 52% three years earlier. Inter-bank trading accounted for only 39% of foreign-exchange transactions this year, down from 63% in 1998. For the first time this year, the BIS found that non-bank institutions like hedge funds and pension funds accounted for over half the transactions on the spot market.

...

From a pre-crisis peak of 121.1m tonnes in May 2008, world steel production plummeted to a low of 81.7m tonnes in December that year. It has since recovered, but remains below its level two years earlier. Because steel production in rich countries fell much more than in countries like China, the latter increased its share of global output. In May 2008 China produced 38% of the world’s steel; by August 2009, its share had soared to 49%. Since then, steel production in other countries has recovered too, causing China’s share of world output to slip to 45% in July. But China’s dominance of the global steel industry is not under threat. In July it produced more than five times as much steel as Japan, its closest rival.

...

According to Henley & Partners, a consultancy, Britons face the fewest visa restrictions among citizens of the 190-odd countries (and territories) for which data are available. British citizens can take a short trip to 166 countries without needing to apply for a visa. People from other rich countries, like Germany and America, can also cross borders with relative ease. In contrast, people from developing countries need visas to enter most countries. Only 38 countries will let in a Chinese citizen without a visa. But citizens of war-torn countries like Afghanistan and Iraq face the most onerous visa requirements: there are only 26 countries to which Afghans can travel without one.

...

Concern that the global economic recovery is flagging is supporting demand for government debt. A year ago Germany could issue 10-year bonds with a 3.3% coupon; it could now pay just 2.3%. In America, the announcement by the Federal Reserve that it would add modestly to its purchases of Treasuries drove yields down to 2.6%. Meanwhile, Greek 10-year bond yields stayed stubbornly high at 10.7%, reflecting uncertainty about the country’s ability to sustain its vast public-debt burden. Ireland and Spain are among those that must pay higher rates than a year ago. In some countries, high bond yields reflect high inflation rates. In India, for instance, inflation was 13.7% in July.

...

Asia continues to lead the recovery in commercial property, with over half of the big-city markets now experiencing rental growth, according to CB Richard Ellis, a property firm. Beijing’s office-space glut has shrunk somewhat, though its vacancy rate, at 17%, is one of the largest in Asia. Vacancies in Frankfurt and Paris have increased, though rents in the best parts of Paris are rising because of the scarcity of good-quality office space. About 6% of office space is vacant in London’s West End and in Tokyo’s Inner Central area, though vacancies in London have fallen while in Tokyo they have risen. Occupancy rates in Hong Kong rose, as several financial institutions took up new office space in its Central district.

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