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Equatorial Guinea's government is reshuffled

The appointment of the former finance minister to take charge of Equatorial Guinea's oil and gas sector is the most significant change in a cabinet reshuffle undertaken by the president, Teodoro Obiang Nguema Mbasogo, following his dismissal of the previous government at the start of this month. The new mines, industry and energy minister, Marcelino Owono Edu, had been finance and budget minister since 2003. He is expected to apply a more rigorous approach to supervising the oil and gas sector, which accounts for 90% of the GDP of Equatorial Guinea. The West African country produces about 360,000 barrels/day of oil, and last year started to export liquefied natural gas (LNG) from the Bioko Island complex, which is operated by Marathon Oil Company of the US and has a capacity of 3.7m tonnes/year.

Mr Obiang had been unsparing in his criticism of the outgoing prime minister, Ricardo Mangue Obama Nfubea, describing his team as one of the worst performing cabinets that he had ever appointed. He accused several of its members of incompetence and of diverting public funds and suggested that some of its members were either negligent or complicit in a coup plot in 2004. The criticism of outgoing governments has been a strategy commonly used by Mr Obiang to distance himself from the wrongdoings of his governments, despite the fact that he has absolute executive power and the cabinet responds mostly to his demands and not to those of the prime minister. However, the attacks on Mr Mangue's team were particularly virulent and some analysts claim that they were intended at humiliating the outgoing prime minister. Although Mr Mangue was a trusted ally of the president--he had been his lawyer for several years--his appointment as prime minister was resented by several members of the "old guard" who disliked his technocratic methods and may have influenced Mr Obiang's decision to sack him. ...

Inflation has reached a 28-year high

Panama, with its dollarised economy, sophisticated financial sector and years of solid economic growth, is not used to dealing with the macroeconomic instability and inflationary woes typical of other Latin American countries in the past. But inflation in Panama, as in the rest of the region, has picked up sharply since 2007 and is now at a 28-year high--and this is having both social and political repercussions.

Despite administrative measures, such as reduced import tariffs and indirect price subsidies, fuel and food prices continue to make an increasing contribution to Panamanian inflation and were the major cause of the spike in the annual rate to 9.6% in June. It looks likely that inflation will break into double digits in July. ...

A blow to the Maoist in Nepals

Nepal has elected its first president after abolishing the monarchy and declaring the country a republic. Surprisingly, however, the winner of the July 21st run-off vote was not the candidate backed by the Communist Party of Nepal (Maoist), or CPN (M)--which won the most seats in the constituent-assembly election in April--but Ram Baran Yadav of the mainstream Nepali Congress (NC) party. The result is a blow to the Maoists' hopes of dictating the direction of constitutional reform, and the former rebels' reaction to this setback will be crucial to political stability.

Mr Yadav won 308 out of 590 votes in the constituent assembly. Ramraja Prasad Singh, the candidate supported by the CPN (M), won only 282. Although the presidential post is largely ceremonial for the time being--the nature of the political system and future extent of presidential powers will be among many subjects to be wrangled over as the constituent assembly drafts a new constitution--the election result is nonetheless significant for a number of reasons. ...

A nuclear co-operation deal between America and India survives too

AFTER a rancorous two-day debate on its most contentious policy, a nuclear co-operation agreement with America, India's government won a parliamentary vote of confidence on Tuesday July 22nd. This does not guarantee the survival of the vexed agreement struck by America's George Bush and India's prime minister, Manmohan Singh, in 2005. The deal needs approving by several foreign bodies, including the UN's International Atomic Energy Agency (IAEA). But the government's victory, by 275 votes to 256, with 10 abstentions, has probably fireproofed it against opponents in India.

The life of the government has also been prolonged, at least for a bit. The coalition led by Mr Singh's Congress party was reduced to a parliamentary minority earlier this month, when it was deserted by a group of Communist parties. They had provided vital support to the government while remaining outside it, but they objected to the nuclear deal, which would enable India to purchase nuclear fuel and technology despite its refusal to sign the nuclear Non-Proliferation Treaty. ...

A new surveillance law causes a rumpus in Sweden

Recently approved legislation in Sweden that allows for increased surveillance of crossborder telecommunications traffic has triggered the country's most heated political debate in years and sparked widespread protests from the public, media and business. The government appears determined to ride out the criticism, claiming the measures are a necessary response to the threat from global terrorism, but the affair could do lasting damage to its already fading re-election prospects.

The extent to which wiretapping and surveillance measures are used in Sweden has become an increasingly divisive issue in recent years. Those advocating the need for increased surveillance point to the threat from international terrorism and organised crime and claim that additional measures are necessary to keep pace with changing technology, with communications increasingly transmitted through fibre-optic cable rather than via radio waves. ...

How seriously, or not, to take talks between Zimbabwe's rival claimants to the presidency

NEARLY four months after the first round of a presidential election in Zimbabwe, in March, which precipitated a frenzy of violence by pro-government militias and general political turmoil, President Robert Mugabe and the opposition leader, Morgan Tsvangirai, are about to start talking. On Monday July 21st, reportedly for the first time in a decade or so, the two men met face-to-face and even shook hands. Along with the leader of a smaller opposition party, Arthur Mutambara, they signed an agreement paving the way for negotiations over the country's political future.

The ruling party lost its majority in parliament for the first time since independence and the opposition Movement for Democratic Change (MDC) came first in the presidential poll on March 29th, but following months of orchestrated state-sponsored violence Mr Tsvangirai withdrew from the runoff in June. ...

Radovan Karadzic is arrested at last, in a big boost to Serbia's prospects of joining the European Union

RADOVAN KARADZIC, the wartime leader of the Bosnian Serbs, has, at last, been arrested in Serbia. He was indicted by the United Nations' Yugoslav war crimes tribunal in The Hague almost exactly 13 years ago for his alleged crimes during the Bosnian war, which raged from 1992 to 1995. The news is likely to have big political consequences throughout the Balkans. It will almost certainly transform Serbia's troubled relations with the European Union.

His arrest was reported on Monday July 21st. Reportedly he was detained while riding a bus in Belgrade, the capital. Mr Karadzic had been rumoured to be moving between hiding places in remote corners of southern Serbia, eastern Bosnia and Montenegro. In fact it appears that he had been living and teaching in Belgrade recently. ...

Foreign firms are being pressed to withdraw from Zimbabwe

It is not just the government that is in an increasingly difficult position--firms with operations in Zimbabwe are coming under increasing pressure to withdraw.

Talks about talks between the Zimbabwean government and the two wings of the opposition Movement for Democratic Change (MDC) are unlikely to progress speedily. The MDC leader, Morgan Tsvangirai, is refusing to sign a framework for negotiations, apparently pending a meeting between the South African president and head of the African Union to discuss ways of brokering a power-sharing agreement. ...

An effort to breathe life into the Doha round of trade talks, and other news

•TRADE ministers, hoping to make a breakthrough in the interminable Doha round of global trade talks, will gather at the World Trade Organisation's headquarters beside Lake Geneva, on Monday July 21st. Their aim is to agree on a plan for liberalising trade in farm products and industrial goods, and to look for signs of compromise on services. The WTO's director-general, Pascal Lamy, reckons the odds of success are more than 50%. That, regrettably, is probably an over optimistic assessment.

For background see article ...

More trading could help to alleviate water shortages

SO WORLD markets are short of oil, and supplies of food are running thin. The prices of all sorts of basic commodities are soaring, and now there may also be reason for many to worry about the most fundamental of necessities--water. Some experts believe so, at least, and they are spreading doom-laden warnings of a Malthusian crisis in the world's water supply.

Goldman Sachs, an investment bank which likes to ponder the future of the world, recently suggested that a global lack of water could prove to be a bigger threat to mankind than rising food prices or the depletion of energy resources. Sir Nicholas Stern, who reviewed the economics of climate change in a big report for the British government in 2006, is worried too. He points to some big local problems, for example in the Himalayas, where melting glaciers risk disrupting supplies of usable water in the region, just as many underground aquifers are drying up. He argues that water--at least the fresh sort--is not a renewable resource, and because it is not priced properly it has been "mined" without restraint. ...

Civilians are wresting control of Russia's military

After years without meaningful military reform, Russia's civilian defence minister is wresting control of the armed forces from the General Staff. This is one of the first signs of change since Vladimir Putin handed the presidency to Dmitry Medvedev. In the first instance, the aim is to reduce waste and corruption, and to improve financial management. Yet with the conservative generals being made subordinate, the stage is finally clear for fundamental reform--although the political leadership is yet to articulate what this might mean.

The top echelon of the Russian military's General Staff is in a state of unprecedented flux. The chief of the general staff was replaced in June. At the end of that month a deputy chief of staff was dismissed, and a week later two more followed. At the time of writing, only one of the three deputies had been replaced by the defence minister, Anatoly Serdyukov. According to the military journal Nezavisimoe Voennoe Obozrenia, this is an unprecedented situation. ...

Talk of war from Azerbajan, over Nagorno-Karabakh

Having spent heavily on its military, Azerbaijan has raised the possibility of recovering Nagorno-Karabakh and its other occupied territories by force. Although the forthcoming presidential election is a factor, this more aggressive stance is not mere bluster. Azerbaijan is frustrated at the failure of 14 years of negotiation and has concluded that a credible military threat might be the best way to force the Karabakh Armenians to make concessions--or, if that fails, to drive them out.

OSCE observers carried out an unscheduled monitoring of one section of the ceasefire line by Nagorno-Karabakh on July 16th, following allegations from both sides of violations. The atmosphere has been tense ever since Azerbaijan's president, Ilham Aliyev, said in early June that although Azerbaijan would continue to take political steps to recover Karabakh and neighbouring territories under Armenian control, "we should be ready to liberate our lands in a military way at any time." He added that Azerbaijan's army was the strongest in the region. ...

For Ben Bernanke, the Federal Reserve chief, even good news turns out to be bad

JITTERY investors and anxious politicians have often relied on Federal Reserve chairmen to conjure up something to steady their nerves. But when Ben Bernanke gave his twice-yearly monetary testimony to Congress this week he had little to offer but unvarnished and uncomfortable truths. There were "significant downside risks" to the economy's outlook, he said, and the chances that high inflation would persist had "intensified". Mr Bernanke did not specify which was the bigger threat: recession or inflation. This lack of a clear policy bias invited the conclusion that, for the time being at least, the Fed thinks it cannot safely move interest rates in either direction.

With financial markets buffeted by renewed fears about the credit drought and a deepening housing slump, Mr Bernanke could hardly boast of the economy's soundness. To make matters worse, figures released on Wednesday July 16th showed that year-on-year inflation rose in June to 5.0% (see chart), the highest rate since 1991. Paltry pay rises, as well as job losses, mean employment income is probably growing by less than 3%, well below the inflation rate. Falling real income, slumping share and house prices and tighter credit all cast a cloud over consumer spending. Firms worried about future demand will be more cautious too about shelling out for costly capital projects, even if they could raise the finance. ...

The woeful state of Belgian politics

Belgium has been plunged into yet another political crisis after the prime minister, Yves Leterme, offered his resignation on July 15th over a long-running dispute on regional autonomy. His five-party coalition, which comprises the Flemish and francophone Christian Democrats and Liberals and the francophone Socialists, has only been in government since late March. Prior to that Belgium had been without a stable government for nine months, following the inconclusive result of the June 2007 general election.

Mr Leterme's decision to stand down is a tacit acknowledgement of his coalition's failure to reach a consensus on the future steps to implement devolution reforms ahead of a self-imposed deadline of July 15th. The date had been set soon after the government entered office, and at the time had appeared highly optimistic, given the many political disagreements that had gone before. In the weeks leading up to the deadline, there had been little sign of any progress being made, with resistance to the reforms from both sides of the linguistic divide--the Dutch-speakers of Flanders in the north and the French-speakers of Wallonia and Brussels to the south. ...

Barack Obama tries to focus on foreign policy ahead of a tour of Europe and the Middle East

FOR the past few weeks the economy has dominated the American presidential campaign. Now the two candidates for the White House are turning to foreign policy. Barack Obama is at something of a disadvantage: he is young, his time in the Senate has been short, and his party has traditionally been seen as weaker on foreign affairs.

Mr Obama responded this week with a speech on foreign policy, in which he argued that the war in Iraq has weakened America's efforts in Afghanistan, where Islamist terrorists are getting stronger. Mr Obama wants to begin drawing down troops in Iraq. He has grown reluctant to say precisely how many soldiers would leave, and when, but he still insists they would do so soon, saying this would give him room to redeploy 10,000 troops to Afghanistan. ...

Calculating the consequences of indicting Sudan's president, Omar al-Bashir, for genocide and more

A GENOCIDE is going on in Darfur. So concludes Luis Moreno-Ocampo, the chief prosecutor of the International Criminal Court (ICC), after three years of investigations into the atrocities in Sudan's ravaged western province. The mastermind behind it all, he suggests, is Sudan's own president, Omar al-Bashir. On Monday July 14th the prosecutor asked the court to indict Mr Bashir with ten counts of mass crimes, including three for genocide, and to issue a warrant for his arrest.

It is the first time that this court, which is celebrating the tenth anniversary of its foundation, has gone after a sitting head of state. (Serbia's Slobodan Milosevic and Liberia's Charles Taylor were also indicted when still heads of state, by other international tribunals.) It is also the first time that it has sought an indictment for genocide, the gravest of all international crimes. Until now, only America had attached that label to events in Darfur. Over the past five years of conflict between various rebel groups, Sudanese armed forces, and the government-backed militia known as the janjaweed, perhaps 300,000 Darfuris have died and millions have been forced from their homes. ...

Strong Czech, Polish and Hungarian currencies bring benefits and costs

The Polish, Czech and Hungarian currencies have risen by 9-10% against the euro this year, buoyed by rising interest rates, strong economic growth and positive investor perception. For the country's central banks, this has proved welcome in dampening imported inflation. Yet for all three there is a risk that currency appreciation will harm exports, while also narrowing the scope to tackle domestic inflation through tighter monetary policy.

The three major currencies in east-central Europe have appreciated strongly this year against the euro and the US dollar, despite rising inflation. The Polish zloty, Czech koruna and Hungarian forint have risen by 9-10% against the euro since the start of this year. The zloty's appreciation has happened steadily since January; for reference, it had notched a 6.4% gain by end-May. The Czech koruna has advanced steadily too, although it has moved up a gear since May (it rose by 4.5% against the euro between January and May). The forint, by contrast, rose only slowly in the first five months of the year, gaining by 2% against the euro, but it rocketed in June and July. As of July 11th, the forint had gained by 9% in the year to date. ...

Grand talk and high diplomacy at the summit of the Mediterranean countries

AMID exceptionally tight security, and beneath the magnificent glass roof of the Grand Palais, the leaders of 43 European and Mediterranean countries met in Paris on Sunday July 13th to launch a new club: the Union for the Mediterranean. For President Nicolas Sarkozy, who will co-chair the new grouping, along with Egypt's Hosni Mubarak, the summit provided a chance to reassert French diplomacy and to grab a part in the quest for Middle East peace. With careful orchestration, both Syria's Bashar Assad and Israel's Ehud Olmert sat at the same table. Mr Olmert, after separate talks before the summit with Mahmoud Abbas, the Palestinian president, declared that Israel and the Palestinians had "never been as close to the possibility of an agreement" on peace.

Mr Sarkozy originally devised his Club Med scheme to include only countries that ring the sea and as a means to "end all hatreds to make way for a great dream of peace". In the face of fierce opposition from Germany, which suspected that Mr Sarkozy might use the grouping to promote French interests, the project was stripped of much of its grander purpose and wound into an existing EU cooperation Mediterranean project. Over recent months, French diplomatic efforts to get the new version moving have concentrated on more prosaic matters: the cleaning of pollution in the sea, solar energy, maritime routes. ...

A big rebel group in the Niger Delta calls off its ceasefire

One of the main rebel groups fighting in the Niger Delta has called off its unilateral ceasefire, just weeks after announcing the truce. This further reduces the chances of success of a "stakeholders summit".

The Movement for the Emancipation of the Niger Delta (MEND), the main rebel group fighting for political autonomy and local resource control in the oil-producing Niger Delta region, has called off its unilateral ceasefire, just weeks after announcing the move. When the group announced the truce in late June, it claimed it was respecting an appeal by elders in the Delta to give peace and dialogue another chance. However, the movement stopped short of agreeing to participate in peace talks being organised by the government, and thus there was scepticism about the likely impact on the conflict, which arguably poses the biggest political challenge to the federal government, and which has resulted in the loss of about one-fifth of the country's oil output since early 2006. ...

Telecommuters need more than e-mail and a broadband connection

THE best thing about being a foreign correspondent is not having to commute to the office every day, attend dreary meetings, dress soberly, and generally get distracted from the nitty-gritty of doing the job. The worse thing is being out of touch with colleagues at head office, with little say over how your stories are treated. But if you can handle the patchy feedback and total lack of control, the freedom pays dividends in productivity and sheer job satisfaction.

Being one of the most portable jobs on the planet, journalism provides a daily reminder that work is something you do, not some place you go to. For the past quarter of a century, your correspondent has smirked about the time and energy he's saved through not having to travel to work. ...

Captive nations inside Russia

Is Cornwall a "captive nation"? As last week's Europe.view noted (see article) , influential Russians are pushing for America to rewrite the resolution that marks its Captive Nations Week (the third week in July), to make it clear that communism, not Russia, is the target. An even trickier question is not what other former Soviet-ruled countries make of this, but of Russia's own internal composition--which includes places that some might also count as "captive".

Countries' borders grow and shrink, partly by consent, but also by conquest. Nations--defined, loosely, as people sharing a common language or culture--may find themselves no longer masters in their own house. Some may despair. Others start plotting. ...

What a 50-year-old periodical tells about how the country has changed--and how it has not

THE cover is a cliche: a frothy crested wave with Mount Fuji in the background. Emblazoned on the image of Hokusai's woodblock print from the 1830s are the words "This is Japan" and "1958". At a hefty two kilos and 420 pages, the oversized coffee-table book was published annually by the Asahi newspaper between 1954 and 1971. Early editions came nestled in a wooden box.

The book was designed to present the emerging country to foreigners, largely to drum up business. The articles cover the spectrum of all that a Western reader might associate with Japan, from rice and kimonos to sake and shrines. Their very titles stand as totems of an earlier era: "Japan's Ports--Past and Present"; "Iron and Steel: A Success Story"; "American Girl Finds Japan." But while the articles appear self-conscious, the advertisements offer a more candid account of where the country was headed. ...

A test used by business schools to help choose students is at the centre of a controversy

IT WOULD make great material for a business ethics course. In late June ScoreTop.com, a website that helped users prepare for the Graduate Management Admission Test (GMAT), was shut down following allegations that it had published questions being used in current GMAT exam papers. The Graduate Management Admissions Council (GMAC), the business-school body that created the test, intimated that test-takers' scores might be cancelled if they had abused access to "live" questions (though the council later said it was concentrating on users who may have posted the offending material).

Ominous rumblings from GMAC sparked a flurry of virtual hand-wringing on websites and in the blogosphere. "As the site always maintained that all the questions are its own material there is not much a student can do", complained one ScoreTop customer posting on BusinessWeek.com. Students are not the only ones fretting. A multi-million dollar industry of test-preparation publishers and training schools has grown up to help aspiring business moguls prepare for the GMAT and the ScoreTop scandal has caused consternation among its ranks. "These threats put users [of test-preparation materials] in a strange position," wrote a GMAT trainer. "What do you do when sites tell you they have great practice material but you have no clue if its [sic] legal or not?" ...

The pros and cons of an eco-friendly nightclub

IT IS often said that environmentalists are too dour and self-denying to convert the frivolous mass of consumers to their cause. Tell that to the owners of Surya, a new disco in London that claims to be "the world's first ecological club". Its founder, Andrew Charalambous, believes that "all you have to do is dance to save the world."

That sounds like something of an over-simplification. But Surya is full of green features. For starters, it generates all its power on-site through various renewable technologies, and even has some left over to donate to neighbours. There is a wind turbine and solar panels, along with batteries to store some of their output. More strikingly, it boasts a piezoelectric dance floor, which generates power thanks to the motion of the happy patrons jumping up and down. ...

The pros and cons of an eco-friendly nightclub

IT IS often said that environmentalists are too dour and self-denying to convert the frivolous mass of consumers to their cause. Tell that to the owners of Surya, a new disco in London that claims to be "the world's first ecological club". Its founder, Andrew Charalambous, believes that "all you have to do is dance to save the world."

That sounds like something of an over-simplification. But Surya is full of green features. For starters, it generates all its power on-site through various renewable technologies, and even has some left over to donate to neighbours. There is a wind turbine and solar panels, along with batteries to store some of their output. More strikingly, it boasts a piezoelectric dance floor, which generates power thanks to the motion of the happy patrons jumping up and down. ...

Extending trading hours makes little sense

WAKING up earlier than your rivals is one of the more primitive forms of human competition. The fight for market share between established stock exchanges and upstart trading platforms has already reached fairly crude levels: customers are now being invited to "colocate" their computers next door to exchanges' servers to shave milliseconds off their trading times. So it should come as no surprise that Turquoise, a new European platform sponsored by a group of banks, flirted with a cunning plan to outfox its rivals: starting the trading day 15 minutes earlier than them, at 8.45am Central European Time (CET) (7.45am Greenwich Mean Time). In a game of mutually-assured-exhaustion, the London Stock Exchange and Deutsche Borse promptly threatened to open earlier too. This week Turquoise backed down. For now the uneasy sleep-truce reached in Europe in 1999 remains intact. This had harmonised opening times across the continent, forcing London financiers to get up an hour earlier.

In Europe there are three peaks of trading activity: just after the market opens; lunch time, when Wall Street opens; and the hour or so before the close, at about 5.30pm CET. But the morning matters most: that is when price-sensitive company announcements are made and analysts' reports published. Turquoise's plan was crafty. By opening only slightly earlier than normal it could be sure that the wider market's infrastructure--people and systems--was up and running. (Already investment banks engage in over-the-counter trades with clients in the half-hour or so before the market formally opens). ...

Immortality can be had for a price. The first in a short summer series

JAMES STOURTON, the chairman of Sotheby's UK, is a tall, stooping man with a faintly academic air about him who manages to make his work his play. He collects collectors; indeed he has written the book about them. For a series about collecting, Mr Stourton's office in New Bond Street is the place to start.

He starts at the beginning. Collectors often get going with a stamp collection when they are children. Books are another common trigger. "A lot start with a coup de foudre. They see something that speaks to them, and eventually the intellectual process takes over," he says. ...

Peering into your medical future is risky

IT HAS already delivered ever cheaper and more powerful computers. Now Moore's Law--the prediction four decades ago by Gordon Moore, one of the founders of Intel, that computer chips would roughly double in performance every 18 months or so--is promising to turbo-charge our health care as well.

The "genome chip"--a matchbox-sized micro-array, fabricated on a slither of silicon or quartz, that can detect 1m or more specific genetic variations in an individual's DNA at a time--is following an even steeper price-performance curve than Mr Moore ever imagined. ...

A question about Russia

Each year since 1959, in the third full week of July, America has marked Captive Nations Week. The original Congressional resolution is worth reading. It highlights both what the drafter, the late Lev Dobriansky, saw as the success of the United States in "e pluribus unum" (making one nation out of many), and the failure of Communist empires to do the same. The continued celebration of the week is something of a totem for old cold warriors who believe that the victories of 1989-91 are still sadly unconsummated.

Yet the resolution's wording rings oddly. The list of "captive nations" reads: "Poland, Hungary, Lithuania, Ukraine, Czechoslovakia, Latvia, Estonia, White Ruthenia, Rumania, East Germany, Bulgaria, mainland China, Armenia, Azerbaijan, Georgia, North Korea, Albania, Idel-Ural, Tibet, Cossackia, Turkestan, North Viet-Nam, and others [sic, throughout]". ...

A question about Russia

Each year since 1959, in the third full week of July, America has marked Captive Nations Week. The original Congressional resolution is worth reading. It highlights both what the drafter, the late Lev Dobriansky, saw as the success of the United States in "e pluribus unum" (making one nation out of many), and the failure of Communist empires to do the same. The continued celebration of the week is something of a totem for old cold warriors who believe that the victories of 1989-91 are still sadly unconsummated.

Yet the resolution's wording rings oddly. The list of "captive nations" reads: "Poland, Hungary, Lithuania, Ukraine, Czechoslovakia, Latvia, Estonia, White Ruthenia, Rumania, East Germany, Bulgaria, mainland China, Armenia, Azerbaijan, Georgia, North Korea, Albania, Idel-Ural, Tibet, Cossackia, Turkestan, North Viet-Nam, and others [sic, throughout]". ...

As China wades deeper into the continent's economies, the turbulent pull of African politics grows stronger

"Adopt a low profile and never take the lead," was an axiom of China's elder statesman, the late Deng Xiaoping. When it comes to foreign policy, China's leaders still usually stick to it. So it is odd, perhaps, that an African country of less than vital economic and strategic importance to China has brought it out of its shell.

China's decision on July 11th to veto an American-led resolution in the United Nations that called for sanctions against Zimbabwe was an unusual move. By voting the same way as Russia, China still managed to avoid taking the lead. But its normal preference is to abstain from voting rather than veto Western initiatives in the UN. This time it decided to make a stronger point. ...

As China wades deeper into the continent's economies, the turbulent pull of African politics grows stronger

"Adopt a low profile and never take the lead," was an axiom of China's elder statesman, the late Deng Xiaoping. When it comes to foreign policy, China's leaders still usually stick to it. So it is odd, perhaps, that an African country of less than vital economic and strategic importance to China has brought it out of its shell.

China's decision on July 11th to veto an American-led resolution in the United Nations that called for sanctions against Zimbabwe was an unusual move. By voting the same way as Russia, China still managed to avoid taking the lead. But its normal preference is to abstain from voting rather than veto Western initiatives in the UN. This time it decided to make a stronger point. ...

Why Felix Dennis thinks now is a good time to start a business

WITH the financial system in meltdown, and the economy slowly heading in the same direction, you would have to be crazy to launch a new business. Wouldn't you? On the contrary, "the best time to get started is in a recession," says Felix Dennis, a famously controversial British media tycoon. "This is when big and medium-sized companies retrench, which allows small firms and entrepreneurs a chance."

Although he now runs a large, eponymous publishing company, Mr Dennis is taking his own advice. Although in June 2007 he shrewdly sold several of his magazines--including the "lads' mags" Maxim and Stuff--to private-equity at the top of the market, he still owns the Week, a news magazine, and Viz, a rude comic, and has since juiced up his web strategy, launching several e-zines: e-mailed downloadable free content, which uses software that creates the effect of turning pages, as well as allowing other interactivity. ...

An American collector's attempt at philanthropy has reaped unexpected rewards

The saga of the Rev Alfred Shands and his ten original illustrations to Hans Christian Andersen's Fairy Tales, itself borders on the fairy-tale. Happily in this case, the story ends not with a stern moral admonition but with the pleasing news that, sometimes, good deeds can be very rewarding indeed.

Mr Shands inherited the illustrations, watercolours by Irish artist Harry Clarke (1889-1931), from his father, an eminent orthopaedic surgeon, who died in 1981. At the time Mr Shands and his wife Mary, who collect contemporary sculpture in Kentucky, knew little about Clarke. They liked four of the watercolours well enough to hang them in their occasionally visited New York apartment. The remainder were stashed away. Then, last year, Mr Shands visited the Wolfsonian Museum in Miami Beach, filled with some of the vast collection of furniture, objects and artwork amassed by his old friend Micky Wolfson. (He will be the subject of another column later this summer.) Touring the museum, Mr Shands saw an arresting, vividly blue, eight-panelled, stained-glass window. Its decorative scheme was based on early twentieth-century Irish literature, including writings by George Bernard Shaw and Sean O'Casey. This was the work of Clarke. Mr Shands reacted to his discovery with generosity. Observing that his Andersen illustrations would nicely complement the museum's holdings, he offered them to the Wolfsonian. Mr Wolfson was delighted. But, he explained, a valuation would be needed first. Peyton Skipwith was recommended for the task. ...

An American collector's attempt at philanthropy has reaped unexpected rewards

The saga of the Rev Alfred Shands and his ten original illustrations to Hans Christian Andersen's Fairy Tales, itself borders on the fairy-tale. Happily in this case, the story ends not with a stern moral admonition but with the pleasing news that, sometimes, good deeds can be very rewarding indeed.

Mr Shands inherited the illustrations, watercolours by Irish artist Harry Clarke (1889-1931), from his father, an eminent orthopaedic surgeon, who died in 1981. At the time Mr Shands and his wife Mary, who collect contemporary sculpture in Kentucky, knew little about Clarke. They liked four of the watercolours well enough to hang them in their occasionally visited New York apartment. The remainder were stashed away. Then, last year, Mr Shands visited the Wolfsonian Museum in Miami Beach, filled with some of the vast collection of furniture, objects and artwork amassed by his old friend Micky Wolfson. (He will be the subject of another column later this summer.) Touring the museum, Mr Shands saw an arresting, vividly blue, eight-panelled, stained-glass window. Its decorative scheme was based on early twentieth-century Irish literature, including writings by George Bernard Shaw and Sean O'Casey. This was the work of Clarke. Mr Shands reacted to his discovery with generosity. Observing that his Andersen illustrations would nicely complement the museum's holdings, he offered them to the Wolfsonian. Mr Wolfson was delighted. But, he explained, a valuation would be needed first. Peyton Skipwith was recommended for the task. ...

It turns out emerging markets are not model economic citizens

Rising Asian inflation is a well-known problem. The high weightings of food and oil in consumption have been a big factor in driving the Asia ex-Japan inflation rate from 3% in the middle of last year to more than 6% today, according to UBS. The determination of many Asian governments to peg, or manage, their exchange rates has led to inappropriately loose monetary policy; real interest rates, according to UBS, are currently minus 2%.

But what has attracted less attention is the inflation problem in eastern Europe. Headline inflation is 15% in Russia, around the same rate as Bulgaria, 18% in Latvia and a remarkable 30% in the Ukraine. Even in countries where prices are not rising that fast, Capital Economics points out that wage growth is often very rapid; 9.5% in Slovakia, more than 10% in the Czech republic and 10.5% in Poland. In the Baltics, which look a complete mess, wage growth is running at 20-30%. ...

It turns out emerging markets are not model economic citizens

Rising Asian inflation is a well-known problem. The high weightings of food and oil in consumption have been a big factor in driving the Asia ex-Japan inflation rate from 3% in the middle of last year to more than 6% today, according to UBS. The determination of many Asian governments to peg, or manage, their exchange rates has led to inappropriately loose monetary policy; real interest rates, according to UBS, are currently minus 2%.

But what has attracted less attention is the inflation problem in eastern Europe. Headline inflation is 15% in Russia, around the same rate as Bulgaria, 18% in Latvia and a remarkable 30% in the Ukraine. Even in countries where prices are not rising that fast, Capital Economics points out that wage growth is often very rapid; 9.5% in Slovakia, more than 10% in the Czech republic and 10.5% in Poland. In the Baltics, which look a complete mess, wage growth is running at 20-30%. ...

A new, abundant and environmentally friendly source of protein is creating some buzz

The world is getting hungrier. After years of falling food prices, eating is suddenly getting expensive. With price-tags now rising some 75%, the World Bank estimates that the soaring cost of food will push 100m people into poverty. What with rising fertiliser prices, increasing concerns about deforestation and unreliable rains brought on by climate change, how will we find new sources of nourishment?

Scientists at the National Autonomous University of Mexico have an answer: entomophagy, or dining on insects. They claim the practice is common in some 113 countries. Better yet, bugs provide more nutrients than beef or fish, gram for gram. ...

Sun, cricket and alcohol, on the cusp of great upheaval

THE buzz of anticipation starts to build well before reaching Lord's. On the train into central London I see two young men in shorts and sun hats with a large cool box. Surely they are on the same journey as me--to Lord's, the home of cricket. Nearer the ground the tube train begins to fill with more like-minded souls. I glimpse a flash of the distinctive "egg-and-bacon" yellow-and-pink tie of the Marylebone Cricket Club, the custodians of the laws of cricket, whose home is Lord's. Next a Panama hat or two with a band in the same colours hoves into view. And finally on Wellington Road, close to the ground, the few become a jovial throng heading for the Test match. The smattering of MCC colours is reinforced by more daring older members who sport dazzling MCC blazers, lurid beacons amid the more soberly attired cricket fans.

There is no finer way for a cricket-lover to spend a summer's day than at Lord's. Players are of much the same opinion. Professional cricketers around the world, when asked what grounds they like the best, dutifully name their home turf, before adding "...and, of course, Lord's". It must be one of the world's most attractive sporting arenas. An Edwardian pavilion nestles comfortably between more modern stands. Facing it across the gently sloping field of play is a space-age press box, often compared to a gigantic radio-alarm clock. The wacky design attracted controversy when it was first built but now is as much a part of the furniture as is "Old Father Time" on his weathervane. ...

Looking over what the arts have wrought on the mill-towns of old Massachusetts

THE morning is unseasonably cold and I'm standing with a friend outside the Clark Art Institute in Williamstown, Massachusetts, pounding on the front door as if to break it down. It's a few minutes before 10am, we're late for an academic conference and underdressed for the freezing climate. Eventually, we cease our banging, so as not to disturb the crowd of nice-looking, elderly folk who have queued up behind us. "Good", we think, "they're here for the conference as well."

But we're wrong. While we are late for our lecture, they are instead early-bird visitors gathered to see one of the greatest arts centres this side of the Mississippi. They are readying themselves for the journey into a major collection of Impressionist art--including a Turner, a uniquely outfitted van Gogh dancer, and a few impressive grainy-impasto cathedral studies by Monet. The visitors are from everywhere; they are a mix of locals, day-trippers and vacationers here for a would-be-beautiful May weekend in the Berkshires. ...

An unconventional holiday in "The Other Iraq"

Standing in a crowded amusement park near Rawanduz, in northern Iraq, waiting to get on a small, mountainside toboggan-run while sucking an ice-lolly that claimed to imitate a watermelon (but more closely resembled chilled, sweetened, pulverised cotton wool), I cannot help but feel that my expectations of Kurdistan have been confounded.

Iraqi Kurdistan is not an obvious holiday destination. But when offered the opportunity to spend a week here, I jumped at it. While the rest of Iraq remains mired in conflict, the north is relatively peaceful. After the years of suffering under Saddam Hussein, the Kurds have finally been able to take their fate in their own hands. They are busily building a future. ...

Fence politics in Texas

IN A tiny town at the very bottom of the United States, a little old lady is sassing the Border Patrol about Michael Chertoff, the secretary of the Department of Homeland Security (DHS). ...

A booming country's quiet corner

CHINA may be rushing toward superpower status, but not all of it is in a hurry. Life in the country's south-west glides along rather sedately. The road into Guilin, a smallish city of 650,000 people in Guangxi province, was strangely quiet as I looked out at the countryside through rain-streaked taxi windows. The driver could see nothing: her windscreen wiper scraped to a halt. She pulled to a stop in the middle of the highway to fix it, and as she returned it to life, nothing passed in either direction. ...

Sales of generic drugs are booming

THE generic-drugs industry is in the midst of a dealmaking frenzy. The latest came this month as Teva, the world's largest manufacturer of generics, made an offer worth over $7 billion for Barr, an American rival. Another firm, Actavis has swallowed over two dozen rivals in a decade to become a global force. The opening up of uncompetitive markets, such as Japan and Germany, and the $130 billion of prescription pills that will go off patent by 2012 are creating huge opportunities. The industry is already growing faster than the conventional drugs business, enjoying $72 billion in sales in the year to March.

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Currencies are very dear in Europe but very cheap in Asia

THE Big Mac Index is The Economist's light-hearted guide to exchange rates. The index is based on the theory of purchasing-power parity, which says that exchange rates should move to make the price of a basket of goods the same in each country. Our basket contains just one item, a Big Mac hamburger. The exchange rate that leaves a Big Mac costing the same everywhere is our fair-value yardstick. Many of the currencies in the Fed's major-currency index, including the euro, the British pound, Swiss franc and Canadian dollar, are overvalued and trading higher than last year's burger benchmark. Only the Japanese yen could be considered a snip. The dollar still buys a lot of burger in the rest of Asia too. China's currency is among the most undervalued, but a little bit less so than a year ago. The full index is available on our website by 7pm London time on Thursday July 24th.

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Leaders indicted for war crimes by international courts

Correction to this article

AFTER 13 years on the run, Radovan Karadzic was arrested on Monday July 21st, reportedly while on a bus. He is likely to be sent to The Hague to become the latest political leader to be brought before an international court for war crimes. The former Bosnian Serb leader faces charges of genocide at the International Criminal Tribunal for the former Yugoslavia. International justice is getting up a head of steam. Several such tribunals have been set up under UN or international auspices in recent years, with varying degrees of success. Gradually some sort of deterrence may be established, to encourage leaders to avoid the worst crimes, although the pace of progress has been slow. A prime minister from Rwanda, Jean Kambanda, was found guilty of genocide in 1998. Other leaders have faced trial, including Serbia's Slobodan Milosevic and Liberia's Charles Taylor. One day Sudan's president, Omar al-Bashir, may also end up in court. ...

The most controversial books in America

FOR THE second year running "And Tango Makes Three", a children's book, has topped the American Library Association's list of "Ten Most Challenged Books". The tale of two male penguins adopting an orphaned egg provoked more written complaints to libraries and schools in 2007 than any other book. Inappropriate sex, homosexuality and atheism are the most common reasons for complaints. Mark Twain's "Huckleberry Finn" has been accused of racism. Despite the ban requests, most challenges are unsuccessful.

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Comparing cancer survival rates, by country

A STUDY in a journal, the Lancet Oncology, compares cancer survival rates across five continents for the first time. After adjusting country data, from the 1990s, for differences in both age and death rates in the general population, Americans were found to have the best chance of survival for two of the five cancers that the reasearchers considered: breast cancer in women and prostate cancer. (Cuba had impressive survival rates, but these were probably over-estimated, say researchers). Europe lags behind America, with wide differences in survival rates, ranging from 10% for breast cancer to 34% for prostate cancer. Money appears to be an important factor: America spends a greater proportion of national income on health than the other countries.

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Birth rates for test-tube babies

THIRTY years ago, the world's first "test-tube" baby was born in Britain to great fanfare. Since then around 3.5m test-tube babies have come into the world, and at least 200,000 more join them each year. But Britons unable to conceive naturally are among the least likely in the rich world to receive IVF treatment. In 2005, the latest year for which figures were available, IVF babies made up 1.6% of all births, a much lower rate than in many other European countries, particularly the Nordic ones. German rules against storing embryos force many couples to seek treatment abroad, whereas the unavailability of IVF from most health-care insurers keeps America's rate low.

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Comparing three periods of globalisation

GLOBALISATION, as historians of the subject like to point out, has been around for a long time. Industrialisation and technological changes--such as the invention of the steam ship, which produced cheaper means of migrating and trading between continents--spurred one period of globalisation in the 19th century. In similar fashion new inventions--jet aircraft, the internet--helped to encourage later periods of it. In a new World Trade Report published this week, the WTO compared three broad periods, looking at global growth in GDP, in population and in the trade of goods. Migration rates are shown only for four countries of the "New" world.

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The cost of parking your car

PARKING is a constant bane for the urban motorist. Spaces are as hard to come by as a forgiving traffic warden, and charges are often high. London's drivers pay most for their parking, forking out a median $1,167 a month to park in the city last year, according to a survey by Colliers International, a property firm. New Yorkers only pay half that. Australian cities are pricey--Sydney is the most expensive place to park your vehicle after London. On a daily basis, London also charges most, at $68, with bicycle-friendly Amsterdam not far behind at $66.20 a day.

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How much time do mothers get off work?

THIS week the head of Britain's equality body caused controversy by claiming that extending maternity leave has damaged women's career prospects. British mothers now get nine months of paid leave, but only six weeks of that is on full pay, falling to roughly a third of the average wage after that. Sweden is the most generous of the OECD countries, not only offering most time off but also paying 80% of a woman's salary for 390 days. For fathers, Britain offers a measly two weeks of unpaid leave, whereas in Norway and Iceland, for example, more even division of work between parents is encouraged with "father quotas", a leave period reserved for dads on a "use it or lose it" basis. With no paid allowance at all in Australia and America, employers often have to pick up the slack.

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The cost of cocaine in Europe and America

DESPITE being much nearer to the main coca-producing countries in South America, the price paid by American consumers for a gram of cocaine, at $86.40, is pretty close to the $94 paid in Europe. Stricter anti-drug policing in America may be a factor in keeping the cost high. The margin between the wholesale and retail price in America is higher than that in Europe, suggesting that supply may be more tightly controlled by dealers.

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Chinese companies are investing more abroad

AFTER 11 months of tricky negotiations, last week a subsidiary of China's state-owned oil company, CNOOC, announced that it would buy a Norwegian oil-services firm for $2.5 billion. Foreign investment by Chinese companies has grown steadily, reaching $18.7 billion last year. But striking deals is getting harder. Since 2005, when CNOOC was blocked by the American government from buying Unocal, an American oil firm, many of China's big state-owned companies have been wary of bidding for Western firms. And other countries are chary of China's appetite. An estimated $40 billion of potential Chinese acquisitions are awaiting approval by Australian regulators.

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A comparison of deadly and non-deadly violence

NINETEEN teenagers have died violently in London so far this year, 14 from knife wounds. This is already close to last year's total of 26. The murder rate for England and Wales is higher than anywhere in western Europe (except Finland, Belgium and France) but Britain still lags Canada and America. However, when it comes to non-deadly violence, Britain soars ahead. In a 28-country International Crime Victims Survey, Britons were the second likeliest (after Icelanders) to say they had been threatened or assaulted in the past five years, ahead of countries with much higher murder rates.

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Oil prices fall, but not for long

THE oil price fell by nearly $6 to $135.89 a barrel on Tuesday July 8th, the biggest drop in dollar terms this year (and the biggest fall in percentage terms since March). This third consecutive daily decline wiped 6.5% off the price as a stronger dollar and signs of a weakening world economy contributed to a retreat from commodities. But so far this year the oil price has not fallen for more than three consecutive days. And it looks set to stay that way, as the price rose in trading on Wednesday after a sabre-rattling missile launch by Iran.

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Where people spend most on food and fuel

THE soaring cost of food and fuel is a concern for the governments of rich and poor countries alike. Many households in Africa and Asia shell-out more on food and fuel as a share of total spending and so are disproportionately hit by rising prices. But in some poor countries fuel subsidies help to ease the pain.

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Presidential candidates are raising and spending more money than ever

WITH four months still to go, the 2008 presidential race is set to be the most expensive in history. Spending by all candidates has already surpassed the previous high of $823m (at 2008 prices). One notable development in the campaign is Barack Obama's ability to raise money from small individual contributions of under $200. Of the $287.4m in his coffers, $135.7m has come from donations under $200. John McCain has raised just $32.3m of his smaller $104.6m war chest from such contributions. With an eye on this considerable gap, Mr McCain has accepted public funding and will be restricted to a spending limit of $85m. By contrast, Mr Obama's controversial rejection of public cash means he is free to spend as much as he likes.

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Where terrorists take most hostages

Correction to this article

THE dramatic freeing of Ingrid Betancourt and 14 other hostages in Colombia this week is a high-profile blow to the FARC, the left-wing guerrilla group tricked into releasing her after over six years. But although the FARC still holds 700 prisoners, hostage-taking in Colombia has fallen off in recent years. Of the 5,075 people kidnapped in 2007, only 138 were taken in Colombia. Nearly 1,600 were captured in Iraq, which has seen the most hostage-taking in recent years because of an increase in terrorist militia groups. Infighting between Hamas and the Palestinian Authority contributed to a big rise in kidnapping in the Gaza Strip in particular. ...

Britain's ailing housing market will affect the economy too

THE outlook for Britain's housing market and economy is looking increasingly gloomy after a spate of bad news this week. The number of new loans approved in May for house purchases was under half that of the previous year, and lower even than during the recession of the 1990s. House prices are down, standing 6.3% lower in June compared with a year earlier. Builders are feeling the pinch too. Taylor Wimpey, Britain's biggest homebuilder, saw its wobbly share price collapse when it confirmed its failure to raise GBP500m ($1 billion) from shareholders. Nor are consumers in good cheer. A survey suggests that consumer confidence in June was at its lowest level since 1990.

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Food and energy prices push OECD inflation to its highest rate since 2001

THE rise in inflation across the world is a big worry for central bankers and policymakers. This week the OECD announced that consumer prices for all items in its 30 member countries increased by 3.9% in May compared with a year earlier, the highest rate since 2001. Energy and food prices are the main contributors, rising by 14.6% and 6.1% respectively in May. If these are excluded, the rise in prices is a far more moderate 2.1%.

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Where it is easiest to get a platinum record

AMY WINEHOUSE and Disney's High School Musical appealed in almost equal measure to music buyers in 2007, each notching up sales of over 5m copies of their respective albums. But how this translates into platinum discs for the wall of the record executive varies by country. In America, an album by an international artist has to sell 1m copies to gain platinum status, the most of any country. But if population is taken into account, Norway and Britain are harder markets in which to gain a coveted platinum disc. South Korea is the rich country with the least sales needed per person.

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Radovan Karadzic, the Bosnian Serb wartime leader, was arrested in Belgrade. He is likely to be sent to The Hague war-crimes tribunal and tried on charges of genocide and crimes against humanity; he was indicted 13 years ago. The arrest was widely welcomed, and celebrated in Sarajevo, the Bosnian capital; Serb nationalists protested. The European Union promised to step up its co-operation with Serbia. See article

Ukraine invited Orthodox Christian leaders from around the world to celebrate the country's conversion to Christianity. The event promised to be a make-or-break moment in relations between Orthodoxy's rival prelates. Separately, Anglican leaders met in the hope of averting a global rift between liberals and conservatives, mainly over homosexuality. See article ...

Roche, a Swiss pharmaceutical company, made an offer of $44 billion for the 45% of shares it does not already own in Genentech, a Californian firm. If successful, the deal will be the biggest ever in the biotechnology industry. Genentech's treatment for cancer, Avastin, is expected to become the world's bestselling drug over the next few years.

The wave of consolidation in the generic-drug industry continued. Teva, an Israeli company that is the biggest in the business, agreed to buy Barr, based in New Jersey, for almost $7.5 billion. See article ...

SIR - Your briefing on the Doha trade negotiations exaggerated the damage to the world economy from not reaching an agreement on the current proposals ("Defrosting Doha", July 19th). There is almost no chance that the global economy would become less integrated as a result of "failure". The producers of most goods and services in the major economies are much more integrated into complex cross-border production systems than between 1914 and the 1930s, when the world economy actually did become less integrated.

It is better that the Doha round be concluded soon with a declaration of victory around whatever can be agreed. Several developing countries now have big enough markets to give them leverage over rules of access to their markets, and their governments could take the lead in revising current rules on terms more favourable than those they agreed to in the Uruguay round of trade talks. ...

SIR - You said that the lower chamber of the Czech Republic's Parliament approved the Lisbon treaty and that senators are now asking the constitutional court to vet it ("The ratification game", June 28th). This statement is not correct and as prime minister I would like to set the record straight.

The ratification of the treaty is being carried out simultaneously in both chambers of Parliament. In April the Senate submitted the treaty to the constitutional court for review and the various committees of the Chamber of Deputies suspended further proceedings on the document pending the result of that review. The treaty's ratification process has therefore been suspended in both chambers. ...

SIR - The analysis of carbon capture and storage (CCS) in your special report on the future of energy was unduly pessimistic (June 21st). In addition to being a proven small-scale technology, CCS is an important step in tackling climate change. It simply imitates nature, using the same natural trapping mechanisms that have kept large stores of CO2 and other gases underground for millions of years. CO2 storage is already happening successfully worldwide and should pose few health or environmental hazards.

Storing gas underground is not new. There are hundreds of natural-gas storage sites; many are in the densely populated parts of Europe. The CO2 storage demonstration projects that you mentioned in Canada and the North Sea have so far shown absolutely no leakage. Since 1996, 1m tonnes of CO2 from the Sleipner gasfield have been stored successfully every year 1km (0.6 miles) below the North Sea without any detectable discharge. Technical advances should reduce the cost of CCS, which can help us bring emissions down and avoid a catastrophic temperature rise of 2°C before 2100. ...

SIR - With regards to the rejection by Irish voters of the European Union's Lisbon treaty, you argue that it is "stupefyingly arrogant and anti-democratic to refuse to take no for an answer" ("Just bury it", June 21st). I put it to you that little could be so stupefyingly arrogant and anti-democratic as wishing to deny to the Irish government, on a matter that is entirely between it and the Irish people, the right to see whether the reasons why many Irish voters said no can be resolved.

If their government decides the issues can be resolved, then how can it possibly be "contemptuous of democracy" for the treaty to go back to the Irish people? It is surely contemptuous to seek to deny them this possibility. What do you think you are doing, telling the Irish what to do while arguing that member-state governments may not make their own views known? ...

SIR - You suggested that the British people support liberty in the abstract, but that their "resolve wilts...when specific security gains are promised" ("Mary Poppins and Magna Carta", June 21st). In fact, it depends on how you frame the question. One question put to respondents in your poll, conducted by YouGov, assumed that "CCTV cameras help to deter criminal behaviour", even though police reports show that 80% of CCTV footage cannot be used.

You also contended that the police are relying ever more heavily on DNA to solve crimes. Yet the percentage of crimes detected using DNA has remained below 0.4% despite 1m innocent citizens having been swabbed since 2002. Moreover, the argument that identity cards will make it easier to keep track of terrorists ignores the fact that ID cards did not stop the September 11th bombers based in Germany, nor the terrorist attacks on Madrid and Istanbul. ...

Morgan Tsvangirai is right to talk to Robert Mugabe--about the dictator's exit

IT STICKS in the gullet of the large majority of Zimbabwe's people yearning to see the back of Robert Mugabe that the man who should have displaced him four months ago by virtue of the ballot box has now been persuaded to engage in talks with him, seemingly more as supplicant than rightful successor. But Morgan Tsvangirai, the opposition leader who won the first round of the presidential election in March but was savagely intimidated into abandoning the second round at the end of June, is right to agree to talks with the usurper. The alternative, if Mr Tsvangirai were to dig his toes in and refuse to parley until the incumbent simply bowed out, would be more bloodshed and misery for the aggrieved majority and a still more ferocious clinging to power by Mr Mugabe and his clique. By agreeing to talk, Mr Tsvangirai is at least offering Mr Mugabe a gracious if necessarily gradual exit. And if Mr Mugabe fails to negotiate in good faith, Mr Tsvangirai may be forced to walk away, as Zimbabwe falls ever more deeply into lawlessness, poverty and despair. So he must at least try (see article).

Mr Mugabe will, of course, seek to bamboozle Mr Tsvangirai, a brave man who in the past has not been the cleverest of negotiators when tussling either with Mr Mugabe's canny villains or with his own disputatious colleagues in the Movement for Democratic Change (MDC). Mr Mugabe, abetted by South Africa's bafflingly complaisant president, Thabo Mbeki, will try to engineer a government of national unity, with his own people in the driving seat, while co-opting and confusing as many of Mr Tsvangirai's party as possible. Mr Mugabe's team take as its model Kenya, where, in an election late last year, the incumbent president almost certainly lost at the polls but managed, after weeks of bloodshed, to stay in power by giving the apparent winner the post of prime minister and a bunch of other less powerful ministries. ...

Regulators have yet to justify their restrictions on short sales

IF BANK bosses have slept at all in recent months, their dreams have probably been unhappy ones. Quite a few of them will have featured nightmarish beings known as short-sellers. These ghouls sell shares they do not own--usually borrowed stock, which they sell in the hope of buying it back at a lower price. Many of them have been betting vocally, and successfully, that bank shares will fall. Now financial regulators in both America and Britain are doing their best to make bankers' waking and sleeping hours a little less troubled, by imposing restrictions on short-selling. They should have left bankers to toss and turn a little longer.

This month America's Securities and Exchange Commission (SEC) banned "naked" shorting--the sale of stock that investors do not yet have in their possession--of the American-listed shares of 17 investment banks as well as of the country's mortgage giants, Fannie Mae and Freddie Mac. Last month Britain's Financial Services Authority (FSA) introduced a new disclosure regime for short positions in companies that are selling new shares. Both announcements bore a whiff of panic: they were made during steep falls in bank shares and the fine print was tidied up afterwards. Both were accompanied by the rattling of regulatory sabres. The FSA growled that "market abuse" could explain the "severe volatility" of shares. The SEC thundered that "false rumours can lead to a loss of confidence". It has reportedly fired off more than 50 subpoenas, largely to hedge funds. ...

France's president is reforming his country more determinedly than many expected

HE HAS been hard to ignore, but easy to write off. Ever since he was elected French president in May 2007, Nicolas Sarkozy has been breathlessly hyperactive, in both his personal and his official life. Perhaps because of this, cynical observers have tended to dismiss him as a showman who talks the talk but seldom walks the walk. Our verdict on his first anniversary in early May was that his presidency had, thus far, been a disappointment.

Yet in recent weeks Mr Sarkozy's government has managed to pass a string of reforms--and to do so without running into that traditional bugbear of French presidents, mass protests in the streets. How has he achieved it? In his early months Mr Sarkozy showed himself too easily distracted and overly prone to compromise. He then had to cope simultaneously with a deteriorating economic outlook and a humiliating dive in popularity. None of these things has got any better. And yet Mr Sarkozy has bolstered the momentum of his reforms thanks to three largely unrelated factors. ...

His arrest shows how much good the EU can do if it stays open to new members

THE disguise was striking. It was hard to believe that behind the wire-framed spectacles and bushy grey beard of an apparent practitioner of alternative medicine in a quiet corner of Belgrade was Radovan Karadzic, the Bosnian Serbs' notorious wartime leader. No wonder his capture and probable extradition to appear before The Hague war-crimes tribunal on charges of genocide and crimes against humanity have been greeted with such elation around the world.

This is not quite the end of the Balkan tragedy precipitated by the break-up of the former Yugoslavia in the early 1990s. The Bosnian Serb military commander, Ratko Mladic, is still at large, as is one other big fish wanted by The Hague. Bosnia continues to be troubled by internal divisions, with its Serb entity still threatening to declare unilateral independence. Serbia itself has come no closer to accepting the independence of Kosovo, which it sees as a renegade southern province. Yet the arrest of Mr Karadzic, which may soon be followed by that of Mr Mladic, offers a form of closure to the people of this long-suffering region. It is also a triumph for the concept and value of international justice that, even after 13 years on the run, such an important suspect can be reached by the courts. ...

American policy in the Middle East is changing, and could usefully change some more

BARACK OBAMA'S presidential-style progress through the Middle East and Europe this week stole many headlines (see article). But that should not be allowed to divert attention from some surprising policy shifts by the man who, last time we checked, was still the actual president of the United States. George Bush has just made at least one-and-a-half U-turns in the Middle East. They have serious merit. If he now makes another turn and a half, he may bequeath whoever succeeds him something unexpected: the beginnings of a decent American policy for this troubled region.

Mr Bush's first U-turn was on Iran. For several years now the world has applied economic sanctions, part of a policy of carrots and sticks designed to make Iran come clean about a nuclear programme which it claims is peaceful but which many governments believe to be a quest for the bomb. Until last week, however, America had left it to Britain, France, Germany, Russia and China to dangle the carrots. America itself was all stick. America's partners have held countless meetings with Iran to offer technical and economic rewards if the Iranians only stop enriching uranium. Mr Bush, having consigned the mullahs to an "axis of evil" in his first term, refused to let Americans attend. That has helped the Iranians to claim that whatever the other countries were offering was never enough; what use the blandishments of lesser powers if the superpower was determined on hostility and regime change? ...

If America can learn from its problems, instead of blaming others, it will come back stronger

NATIONS, like people, occasionally get the blues; and right now the United States, normally the world's most self-confident place, is glum. Eight out of ten Americans think their country is heading in the wrong direction. The hapless George Bush is partly to blame for this: his approval ratings are now sub-Nixonian. But many are concerned not so much about a failed president as about a flailing nation.

One source of angst is the sorry state of American capitalism (see article). The "Washington consensus" told the world that open markets and deregulation would solve its problems. Yet American house prices are falling faster than during the Depression, petrol is more expensive than in the 1970s, banks are collapsing, the euro is kicking sand in the dollar's face, credit is scarce, recession and inflation both threaten the economy, consumer confidence is an oxymoron and Belgians have just bought Budweiser, "America's beer". ...

In the long run, al-Qaeda will be defeated by Muslims, not foreigners. But the West can still help

AMERICA'S "global war on terrorism", now in its seventh year, has gone on longer than the second world war. Will it ever end? Optimists believe some kind of victory is in sight: Iraq is improving; al-Qaeda has been unable to stage a big attack in the West in three years; and terrorists have shown little sign of using weapons of mass destruction. Jihadists face an ideological backlash, even from radical "brothers" who support jihad but disagree with killing Muslims.

Welcome as al-Qaeda's setbacks may be, the world should not be complacent. As our special report in this issue explains, the threat is likely to last for decades. One reason is that al-Qaeda, though weaker in Iraq, has created a new sanctuary in Pakistan's tribal belt. Another is that al-Qaeda's ideology has spread far and wide thanks to the internet and ease of travel. A third is that anti-Americanism remains powerful across the Muslim world. Only a tiny proportion of the world's billion or so Muslims need to take up jihad to create serious trouble. ...

But foreigners would be wise to temper their Obamamania, if only to limit future disappointment

IF THE business of electing the most powerful man in the world were up to the world, rather than just those pesky Americans, Barack Obama would face no contest. A poll for the Guardian this week, on the eve of Mr Obama's whirlwind tour of Europe and the Middle East (half a dozen countries in a week, some for the first time in his life), shows that Britons would back him against John McCain by the astonishing margin of five to one. The Pew Research Centre reported last month that, in each of the main European countries, at least twice as many people have confidence in Mr Obama as in his rival. Elsewhere things are a bit more nuanced, but from Mexico to China, and from Russia to Australia, the foreigners are firmly in the Obama camp.

There are reasons for them to be more cautious. Marvellous orator and skilled electoral tactician though he may be, Mr Obama has not repealed the basic laws of politics. Most obviously, he may not win. Rasmussen, a pollster, rattled the Obama machine this week by showing the two candidates tied, and most other analysts agree that the bounce he enjoyed after seeing off Hillary Clinton has been small and short-lived. Mr Obama still definitely has the edge, but opinion at home diverges sharply from that in most of the rest of the world. ...

The financial crisis claims another two victims--and once again the taxpayer picks up the pieces

IT WAS another of those frantic weeks that were never meant to happen in the world's most advanced economy. On July 13th Hank Paulson, America's treasury secretary, stood on his department's steps like some emerging-market finance minister, and unveiled an emergency plan to save Fannie Mae and Freddie Mac, two mortgage giants that owe or guarantee $5.2 trillion. Two days later, Ben Bernanke, chairman of the Federal Reserve, put the fear of God into the markets, warning Congress of a foul amalgam of inflation and economic distress.

The immediate lesson is that the financial crisis, nearly a year old, is far from over (see our coverage, beginning with this article). Gloomy investors are gunning for banks of all types. In America the prices of houses and shares are falling, and the cost of food and energy has soared. Consumers are almost certain to cut back. The euro-area economy may have shrunk in the latest quarter. Central banks around the world are having to raise interest rates to curb inflation, and the dollar looks vulnerable. Even if the downturn proves less sharp than pessimists fear, it is likely to last longer than optimists hope. ...

An opportunity to cheer up the world economy

THERE have been harder trade rounds. Seventy-five years ago, the world's leaders collected in the Hall of Fossils in London's Geological Museum with the aim of ending a tariff war. The talks finished in ignominious failure. So distempered did things become that one drunk American delegate threatened another with a knife in the hallway of Claridge's hotel.

On July 21st trade ministers will gather at the World Trade Organisation's (WTO) headquarters beside Lake Geneva, hoping to make a breakthrough in the interminable Doha round of trade talks (see article). By the end of their meeting, some may turn to drink; one or two may be tempted to knife the round. But their aim is to agree on a template for liberalising trade in farm products and industrial goods, and to "signal" some compromises on services. The stakes are not as high as they were in 1933, of course. But they are higher than at any time since the Doha round began, in the wake of an economic slowdown and a terrorist catastrophe, in November 2001. ...

In an imperfect world, there is still a need to weigh the demands of both

ALL that is needed for evil to prosper is that good men do nothing. Edmund Burke's familiar motto is a useful place to start when judging this week's decision by the prosecutor of the International Criminal Court (ICC) to request an arrest warrant for the president of Sudan, Omar al-Bashir, so that he can be put on trial for genocide, crimes against humanity and war crimes in Darfur. A dreadful evil has indeed been perpetrated in Sudan's western province these past five years: mass killing, mass rape and the deliberate uprooting of millions of people. No decent person can fail to hope for an end to the suffering and for those responsible to be brought to justice.

The prosecutor's decision, however, also lays bare a familiar truth. In many cases, these two desires--for an end to suffering and for justice to be done--come into conflict, necessitating a hard choice. Worse, the choice must sometimes be made in a fog of uncertainty. In Darfur, for example, nobody can be sure of what will happen if the ICC's judges now agree to indict Mr Bashir and if the UN Security Council decides not to exercise its right to stay the court's hand (see article). ...

Piracy is a bad thing. But sometimes companies can turn it to their advantage

"MERCHANT and pirate were for a long period one and the same person," wrote Friedrich Nietzsche. "Even today mercantile morality is really nothing but a refinement of piratical morality." Companies, of course, would strongly disagree with this suggestion. Piracy is generally bad for business. It can undermine sales of legitimate products, deprive a company of its valuable intellectual property and tarnish its brand. Commercial piracy may not be as horrific as the seaborne version off the Horn of Africa (see article). But stealing other people's R&D, artistic endeavour or even journalism is still theft.

That principle is worth defending. Yet companies have to deal with the real world--and, despite the best efforts of recorded-music companies, luxury-goods firms and software-industry associations, piracy has proved very hard to stop. Given that a certain amount of stealing is going to happen anyway, some companies are turning it to their advantage. ...

David Cameron has pulled off a remarkable political turnaround. But he has more to do

THERE are moments in political history when the tectonic plates can be felt grinding away beneath the surface. For Britain, this seems to be one such. New Labour has reigned since 1997, when John Major's post-Thatcherism gave way to Tony Blair's silver-tongued advocacy of better public services at home, liberal intervention abroad and the glories of globalisation everywhere. Even after he left office a year ago, the Conservative opposition looked doomed, and its smooth, centrist leader, David Cameron, destined to be another in a sequence of short-lived Tory would-be prime ministers.

Yet the shift in British politics is now palpable. Gordon Brown, Mr Blair's successor, is a workaholic with thus far a tin ear for public discourse; Britain's much-vaunted economy, which he ran proudly for a decade as chancellor, is tanking; and, if opinion polls are any guide, Mr Cameron looks like being a shoo-in at the next general election, due by June 2010. ...

In neither Tibet nor Taiwan are things going as well for China as its leaders would like

IT HAS been a good few days for the self-esteem of China's leaders. Their hopes of winning acceptance for their view of Tibet and of coaxing Taiwan into the embrace of the "motherland" both seem to have become a little more likely. But look closer. In fact both remain distant dreams.

As President Hu Jintao was feted at the G8 summit in Japan, China secured two important affirmative RSVPs to the opening of the Olympic games in Beijing next month. George Bush was never likely to be a party-pooper. But France's president, Nicolas Sarkozy, had suggested his attendance hinged on China's behaviour in Tibet. He, too, will turn up, bearing tribute to China's growing sporting, commercial and diplomatic clout. ...

Beware a frightening noise in America and Britain: consumers' purses snapping shut

LIKE Rocky Balboa, the boxer portrayed on film by Sylvester Stallone, Anglo-Saxon consumers have taken a lot of punishment in recent years. And each time, just like the pugilistic thespian, they have come back fighting. At last, however, it looks as if they are about to be knocked out (as alas happened, cinematic cognoscenti might recall, at the start of "Rocky III").

The problem is the range of blows falling on American and British shoppers. Academics and economists continue to debate how important the role of house prices, and mortgage-equity withdrawal, was in sustaining demand during the early years of this decade. No matter. Consumers who were using their houses as ATMs cannot do so any longer. And if a decline in their housing wealth does not hurt them, surely the fall in the stockmarkets (20% off their peaks) will do so. ...

An Iranian student protester, sentenced to death for appearing on our cover, has escaped to America

NINE years ago, Ahmad Batebi appeared on the cover of The Economist. He was a 21-year-old student, one of thousands who protested against Iran's government that summer. He was photographed holding aloft a T-shirt bespattered with the blood of a fellow protester. Soon afterwards, he was arrested and shown our issue of July 17th 1999. "With this", he was told, "you have signed your death warrant."

During his interrogation he was blindfolded and beaten with cables until he passed out. His captors rubbed salt into his wounds to wake him up, so they could torture him more. They held his head in a drain full of sewage until he inhaled it. He recalls yearning for a swift death to end the pain. He was played recordings of what he was told was his mother being tortured. His captors wanted him to betray his fellow students, to implicate them in various crimes and to say on television that the blood on that T-shirt was only red paint. He says he refused. ...

The Mediterranean, north and south, is forming a single economic unit: Europe should make it a powerful one

UNDER imperial Rome, the roads in cold, wet Britannia were no straighter than those in sweltering north Africa. The same sestertius could buy a lampful of oil. Across the southern Mediterranean and northern Europe alike, Latin was the lingua franca--1,500 years before anyone had coined the term. Under the Treaty of Rome, however, the European Union has behaved as if the Med were a frontier, rather than an organising principle. As often as not, it has turned its back on the crescent that stretches from Morocco to Turkey, as a cradle of instability and terrorism. Sometimes the southern Med's main export has seemed to be boatloads of illegal immigrants.

This weekend at a summit in Paris France's president, Nicolas Sarkozy, wants to heal the rift. Some 40 heads of state and government from the EU and the southern and eastern Mediterranean will meet to create a new club, called the Union for the Mediterranean. Despite Mr Sarkozy's bombast, Club Med will have a modest start: the French propose a secretariat, which they will jointly head with Egypt, and money to help finance ventures on solar energy, anti-terrorism and the inevitable cultural exchanges. ...

It is going to get nasty; exactly how bad depends on the Bank of England and, especially, Gordon Brown

THE portents are increasingly gloomy. More and more signs are pointing to a punishing slowdown--with a recession looking likelier by the day. After 16 years in which Britain's GDP has grown without halt, a downturn will come as a painful shock. Yet what may matter more is how Gordon Brown's enfeebled government responds to the bad times ahead.

A stream of unwelcome news has reinforced fears that the British economy, still the fifth-largest in the world in 2007, is set to shrink. Those concerns were crystallised on July 2nd when two large firms reported serious setbacks. Taylor Wimpey, the country's biggest homebuilder, revealed that it had been unable to raise the extra finance it needs to shore up its balance-sheet. Marks & Spencer, a food and clothing retailer, reported falling sales and Stuart Rose, its chief executive, gave warning of "stormy times ahead". Both companies' shares, especially Taylor Wimpey's, tumbled heavily in subsequent trading, and the pound also fell in response as foreign-exchange dealers became more fretful about Britain's prospects. ...

John McCain is veering off to the right--and making things too easy for Barack Obama

WHEN more than 80% of Americans tell pollsters that they think the country is on the wrong track, and when only 28% of them believe that the president is doing a good job, you don't need a Karl Rove or a Dick Morris to tell you that the road to the White House involves steering well clear of the incumbent's policies. So why is John McCain not doing it?

The Republican candidate has always been close to George Bush when it comes to defending two fundamental, if unpopular, points of principle--the Iraq war and free trade. But in recent months Mr McCain has slid to the right on a series of other issues, including tax cuts, offshore drilling, immigration and even torture. This manoeuvring seems insincere and short-sighted. ...

With some exceptions, an increasingly hard line across the Muslim world

"CAN a person who is Muslim choose a religion other than Islam?" When Egypt's grand mufti, Ali Gomaa, pondered that dilemma in an article published last year, many of his co-religionists were shocked that the question could even be asked.

And they were even more scandalised by his conclusion. The answer, he wrote, was yes, they can, in the light of three verses in the Koran: first, "Unto you your religion, and unto me my religion"; second, "Whosoever will, let him believe, and whosoever will, let him disbelieve"; and, most famously, "There is no compulsion in religion." ...

A new school of economists is controversially turning to neuroscience to improve the dismal science

FOR all the undoubted wit of their neuroscience-inspired concept album, "Heavy Mental"--songs include "Mind-Body Problem" and "All in a Nut"--The Amygdaloids are unlikely to loom large in the annals of rock and roll. Yet when the history of economics is finally written, Joseph LeDoux, the New York band's singer-guitarist, may deserve at least a footnote. In 1996 Mr LeDoux, who by day is a professor of neuroscience at New York University, published a book, "The Emotional Brain: The Mysterious Underpinnings of Emotional Life", that helped to inspire what is today one of the liveliest and most controversial areas of economic research: neuroeconomics.

In the late 1990s a generation of academic economists had their eyes opened by Mr LeDoux's and other accounts of how studies of the brain using recently developed techniques such as magnetic resonance imaging (MRI) showed that different bits of the old grey matter are associated with different sorts of emotional and decision-making activity. The amygdalas are an example. Neuroscientists have shown that these almond-shaped clusters of neurons deep ins