The Economist November 19th, 2011 volume 8760 issue 401

112 Pages·2011·90.38 MB·English

by  The Economist Group (Publishers)

A single journey can change the course of a life . Ca mbod ia, M ay 20 11.
Fol low A nge lin a j o lie o n lou isvuitto n. co m
LOUIS VUITTON
Investments I Trust Services Credit & Banking Solutions I Asset Management
RBC Wealth Management
.
•
I ®
The value of investments may fall as well as rise. You may not get back the full amount that you originally invested.
®/ TM Trademark(s) of Royal Bank of Canada. Used under licence. Above mentioned services are offered through Royal Bank of Canada or its affiliates.
5
47 Crime in southern France
9 The world this week
Rio on the Med
47 Germany's neo-Nazis
Leaders
A horror from the past
13 The world economy
48 Charlemagne
The magic of diasporas
Germany and Europe
14 India's dynastic politics
Must it be a Gandhi?
United States
14 Syria
49 Immigration
Time is running out for
Crying wolf
Bashar Assad
50 Tar sands and the Europe Why Germany is wrong
16 The euro crisis
environment on the European Central Bank:
The German problem
Keystone cop-out leader, page 16. Italy's new
18 Free trade in the Pacific
government, page 41. The ECB
51 Natural gas in Oklahoma
A small reason to be
On the cover and the euro crisis, page 79.
We will frack you
cheerful
Immigrant networks are a Angela Merkel's actions fall
51 American highways
rare bright spark in the world short of her rhetoric about
The efficiency conundrum
economy. Rich countries political union: Charlemagne,
Letters
52 Transparent government
should welcome them: page 48. Spain goes into its
20 On the Republicans,
Leader, page 13. Mass Sunshine or colonoscopy? election , page 42
bluegrass, Guatemala,
migration in the internet age 52 Crowdfunding
Edmund Burke, Nicolas
is changing the way that Many scrappy returns
Sarkozy, clutter
people do business, pages
54 American soccer
76-78. Anger in America,
The Becks effect
page 49. Britain's border Briefing
54 Circular infrastructure
row, page 34. British visas,
25 South Asia's water
What goes around
page 34. The science of trust
Unquenchable thirst
networks, page 92 55 Lexington
The trouble with Newt
Britain
The Economist online 31 Drug use and abuse The Americas
The fire next time
Daily analysis and opinion from 56 Mexican politics
our 19 blogs, plus audio and video 32 Regional drink and drug Left in the lurch
Syria Though Bashar Assad
content, debates and a daily chart trends
57 Protests in Peru seems bent on self-destruction
Economist.comfblogs Sober London
Honeymoon over keep offering him a sensible '
E-mail: newsletters and 34 The border-control fracas
57 Human rights in Brazil exit: leader, page 14.
mobile edition He says, she says
It isn't even past Governments in the region and
Economist.comfemail
34 Visiting Britain beyond a returning against an
58 Canada's aborigines
Print edition: available online by Please sir, I want a visa increasingly beleaguered
Get organised
7pm London time each Thursday 36 Fuel duty president, page 59
Economist.comfprint
Road rage
Middle East and Africa
Audio edition: available online
36 A green Isle of Wight
to download each Friday 59 Syria
Pleasant island
Economist.comfaudioedition The tide is turning
38 EMI and British music
60 Israel's courts
Revenge of the Sex Pistols
Left v right
38 Schools reform
60 Arab freedom
Follow my leader
The right to be hidden
39 Bagehot
61 Liberia's election
Vol ume 401 Number 8760 Recessions and the young
Winner takes all
First published in September1843
62 South African populism
to take part in "a severe contest between Europe
intelligence, which presses forward, and Malema will be back
an unworthy, timid ignorance obstructing 41 Italian politics Water Ag rowing rivalry over
62 Sudan north and south
our progress. "
The full Monti South Asia's great rivers, for
Rumours of war
Editorial offices in London and also: water and for energy, may be
42 Spain's election
Atla nta, Beiji ng, Berlin , Brussels, Cai ro,
threatening the region's
Chicago, Hong Ko ng, Jo han nesburg, Los Angeles, Manana is too late
MexlCo C1ty, Moscow, New Delhi, New Yo rk, Paris, peace, pages 25-28. Time for
44 Russia's future
Sa n Francisco, Sao Pau lo, Singapore, Tokyo,
another Gandhi , or something
Washington DC Putin his place
braver? Leader, page 14. Rahul
46 Russia and NATO
Gandhi, a slow learner, will be
An absence of trust
tested as he steps up to
nationalpo~tics,page66
~~ Contents continues overleaf
6 Contents The Economist November 19th 2011
82 Middle-market banking
Asia
Pockets of credit
63 America and Asia
83 China's capital markets
The China pivot
The bounty of the muni
64 Taiwan's presidency
84 Japan's economy
A narrowing race
Whose lost decade?
64 China's economy
86 Economics focus
Fearful symmetry
Technology and
65 Pacific islands
unemployment
Going South Pacific
65 Mekong mayhem
Japan Its economy works New water sheriff Science and technology Next week
betterthan pessimists think, 91 Stem cells and medicine We publish a special report
66 The Gandhi dynasty
at leastfor the elderly, page Repairing broken hearts on women and work. Women
Golden Rahul
84. An inspiring idea to have made huge progress in
92 Influenza
67 Banyan
liberalise transpacific trade the workplace, but still get
Attention, citizens!
Seeing and believing
hinges on the courage of lower pay and farfewertop
92 The evolution of
America and, especially, jobs than men. Barbara Beck
co-operation
Japan: leader, page 18 International asks why
Make or break?
68 Technocrats
93 Silk from the sea
Minds like machines
No sow's ear Pri ndpal commercial offices:
69 Selling state territory 25 St James's Street , London SW1A1 HG
Pass the hemlock Tel: [phone]
Books and arts Boulevard des Tranchees 16
94 Afghanistan's haunted 1206 Geneva, Switzerland
Business Tel: [phone]
battleground
71 Retailing in America Looking for the exit 750 3rd Avenue, 5t h Floo r, New York, NY1 0017
Tel: [phone]
'Tis the season to be frugal
95 Advice from Bill Clinton
60/FC entral Plaza
72 A good shopper's guide Yes, we can 18 Harbour Road, Wa nchai, Hong Kong
Values for money Tel: [phone]
95 Fighting urban violence
73 Google Music The power of jaw-jaw Other commerdal offices:
French managers They must Battle of the bands Chicago, Dubai, Fran kfurt, Los An geles,
96 Memoir of Palestine
Paris, San Frand sco and Singapore
shoulder some of the blame
73 Indian airlines Mourid Barghouti's dreams
for France's troubled
Natural selection
96 New French film
relationship with work:
74 Chinese jewellers Untouchable fr iends
Schumpeter, page 75 Subscription service
Beijing bling
97 W.G. Sebald's poems For our latest subscription offers, visit
75 Schumpeter Placing words Economist.comjoffers
The French way of work You can also subscribe by mail, telephone or
97 New American film fax at the details provided below:
Dirty Hoover
Telephone: +44 (o) 114 220 2404
Briefing
Facsimile: +44 (o) 8456 760050
76 Migration and business 106 Economic and financial Web: Economist.comjoffers
Weaving the world indicators Post: The Economist
together Statistics on 42 Subscription Centre,
PO box 471,
economies, plus a closer Haywards Heath,
RH16 3GY,
look at patent applications
Finance and economics UK
Subscription for 1 year (51 issues)
79 The European Central
Bank Obituary UK - £127
Technocrats Government by
Brink think 108 Joe Frazier Subscription customer services:
experts sounds tempting. It +44 (o) 1444 475647
80 Buttonwood The smoking fist
can work-but only briefly,
Voters v creditors
page 68. Italy welcomes in
Mario Monti, page41 82 Hedge funds and banks An Economist Group business
Turning trash into treasure
PEFC certified
Th is copy of The Economist
is printed on paper sourced
fro m sustainably managed
fo rests certifi ed by PE FC
PEFC/16-33-422 www.pefc.org
()recycle
Registered as a newspaper. © 2011 The Economist Newspaper Limited. All rights reserved. Neither this publication nor any part of it may be reproduced, stored in a ret rieval system, or t ra nsmitted in any form or by any mea ns, electronic, mecha ni cal,
photocopyi ng, recordi ng or otherwise, without the prior permission ofThe Economist Newspaper Limited . Published eve ry week, except for a year-e nd double issue, by The Economist Newspape r Limited. The Economist is a registe red t rademark ofThe
Economist News paper Limited . Printed by Wyndeham Pete rborough Limited .
BMW Rolls-Royce
Mo tor D rs llmited
GROUP
MEET THE VISIONARY WHO
IS HAPPY WITH NOTHING.
100% RECYCLING OF PRODUCTION WASTE. IT'S WHAT'S NEXT FOR US.
Walking through the assembly shop, Lisa Pirwitz is
pleased with little. Every empty bin of non-recyclable
waste is a success for her. Together with her Green-
Team, she set a goal to recycle all assembly production
waste at the BMW plant in Spartanburg by 2012. Lisa
is convinced this project will be successful if every
employee recognizes its value. She also knows that a
small creative idea can make a big difference. To pique
people's interest in her project, Lisa recently enlisted the
help of two unusual spokespeople: a pair of hand pup-
pets made of production waste. They were a big hit and
helped raise awareness at the same time.
The BMW Group is the world's most sustainable car com-
pany for the seventh consecutive year. Find out more
about the Dow Jones Sustainability Index sector leader at
www.bmwgroup.com/whatsnext
9
dead included Hassan Tehrani gangs. They captured Antonio popular Twitter-like micro-
Politics Moghaddam, an architect of Francisco "Ne m" Bonfim blogs.Journalists are to be
Iran's missile programme. Lopes, the neighbourhood's banned from passing along
Officials said the explosion kingpin. rum our or information that
was an accident. has been gleaned from the
Mexico's interior minister, microblogs, unless they have
An Egyptian court ruled that Francisco Blake Mora, died in a verified it in other ways. "Criti-
members of former President helicopter crash. He is the cal" reporting of any kind will
Hosni Mubarak's National second interior minister to be now require at least two
Democratic Party, which was killed in an aviation accident sources.
dissolved after he was ousted during the presidency of Fel-
in February, will be allowed to ipe Calderon. No signs of foul Kazakhstan's long-serving
run in forthcoming parliamen- play have been detected. president, Nursultan Nazar-
tary elections. A lower court bayev, called a parliamentary
had banned party members Mexico's leftist Party of the election for January. The vote
Mario Monti, a former Euro- from standing. Democratic Revolution (PRD) is supposed to usher in a multi-
pean commissioner, was chose Andres Manuel Lopez party system, though the only
sworn in as Italy's prime Fighting between rival Libyan Obrador as its candidate in the other party expected to join
minister following Silvio militias near the city of Zawiya 2012 presidential election. He the race is sympathetic to-
Berlusconi's resignation. Mr left at least ten people dead. finished a close second in the wards Mr Nazarbayev. The
Monti's technocratic cabinet Leaders of the ruling National 2006 race, which he believes president brought forward the
contains bankers, ambassa- Transitional Council said the he lost because of fraud. date of the election, he said, in
dors and bureaucrats but no dispute had been resolved, but anticipation of a global eco-
politicians. Mr Monti reserved the episode raised concerns Darwin selection nomic crisis; politicians
the finance portfolio for him- about the stability of Libya. shouldn't be campaigning at
self and said he intends to such a time, apparently.
serve a full term, until2013. Swaziland failed to pay more
than $10m in grants to AIDS A healthy deliberation
Greece's new government of orphans because of the coun- America's Supreme Court said
national unity, headed by try's financial crisis. South it would hear a challenge to
Lucas Papademos, another Africa offered to bail out Swa- Barack Obama's health-care
technocrat, won a parliamen- ziland if the kingdom enacted law, the implementation of
tary vote of confidence. The political and economic re- which is in a muddle following
government enjoys the back- forms. King Mswati has so far mixed decisions in the appeals
ing of Greece's main parties, refused its money. courts. Opponents of the law
but is likely to serve only until contend that the mandate to
an election in February. Comrade Timochenko In Canberra Barack Obama buy health insurance is uncon-
Colombia's FARe guerrillas announced that America stitutional. The ruling will
At the annual congress of her named Rodrigo Londoiio- would begin stationing ma- come by the end of June.
Christian Democratic Union, Echeverry, better known as rines near Darwin, on Austra-
Germany's Angela Merkel "Timochenko", as their new lia's north shore, strength- Protesters from the Occupy
said that Europe was facing its leader. His predecessor, Alfon- ening America's presence Wall Street movement tried to
worst crisis since the second so Cano, was killed by the around the disputed South regroup in lower Manhattan,
world war. Although she said army earlier this month. China Sea. The deployment is after police cleared their main
that "political union" was expected to reach 2,500 men camp at Zuccotti Park in an
necessary to save the euro, she Alvaro Colom, the president of over the coming years. Mr early-morning operation. The
also ruled out the use of Guatemala, said that he Obama told the Australian protesters moved into the park
Eurobonds. would authorise the extradi- Parliament that America was in September. Authorities in
tion of his predecessor, Alfon- ready to play "a larger and other cities around the world
About time so Portillo, to the United States long-term role" in shaping the are also taking action to dis-
The Arab League voted to on embezzlement charges. region, which will include mantle anti-capitalist sites that
suspend Syria's membership providing humanitarian relief. have sprung up in their juris-
and apply sanctions, after dictions, including in London
President Bashar Assad's The floodwaters that have outside St Paul's Cathedral.
regime failed to implement a surrounded central Bangkok
plan to end the violence for the past few weeks started America's total outstanding
sweeping the country. Turkey to recede. Three months of public debt rose above $15
joined the calls for action and flooding in Thailand have trillion for the first time. The
King Abdullah of Jordan said killed more than 500 people. It yields on American Treasury
Mr Assad should go. The will take several more months bonds remain at close to record
league gave Syria three days for Thailand's many tech lows. ~~
"to stop the bloody factories to recover capacity.
repression".
Correction: In our issue dated November
Authorities in China issued
5th we said that the UN General
Seventeen members of Iran's Police in Brazil moved into new directives aimed at con- Assembly had voted to admit Palestine as
Revolutionary Guard Corps Rocinha, Rio de Janeiro's trolling the news media, in line a full member of UNESCO, when in fact
the General Assembly did not conduct
died in a blast at an arms depot biggest favela (slum), regaining with a broader effort to curtail any vote regarding Palestine's member-
near Tehran, the capital. The control of the area from drug the influence of radically ship of the cultural agency. Sorry.
10 The world this week The Economist November 19th 2011
the lack of supervision of an The price of West Texas The auction to find a buyer for
Business alleged rogue trader. Intermediate oil jumped EMI concluded with the music
sharply after a Canadian label being split in two. Uni-
The European Central Bank The British Treasury sold company agreed to buy a stake versal Music is to pay $L9
reportedly intervened heavily Northern Rock, the "good" in a pipeline that helps feed an billion for EMr's recorded-
in the bond markets again, by part of a failed British bank important storage hub at Cush- music division, and a consor-
purchasing Italian and Spanish that was taken into public ing, Oklahoma, and reverse tium which includes Sony
government debt. In a wor- ownership, to Virgin Money the flow in order to relieve a Music and the estate of
rying portent of contagion the for £747m ($1.2 billion). build-up of oil there. The glut Michael Jackson will buy
spread of Austrian, French and of oil in Cushing has dragged EMr's music-publishing unit
Dutch bond yields over Ger- Price components down the price of WTI, caus- for $2.2 billion.
man Bunds also shot up, ing it to diverge from other oil
though to levels still well I US consumer prices prices. The pipeline's oil will in Rolling in the deep
below those of Italy and Spain. %Ocitonbcerre2a0s1e1 on a year ea rlier future flow to refineries in the Google launched its own
The markets were rattled by 01 2 345 Houston area. online music store, in an ambi-
uncertainty about the willing- Energy tious attempt to challenge
ness of the ECB to stand be- Food China's regulators announced Apple's iTunes. Along with
hind euro-zone governments, Clothing an antitrust investigation into more established players in the
as senior German officials All items whether China Telecom and market, Google is basing its
insisted that the bank should China Unicorn, state-owned service in the cloud.
not be a lender of last resort. Transport giants that dominate the com-
Housing
munications sector, are abus- Warren Buffett revealed that
Source: US Bureau of l abou r Statistics
Junk status ing their position in the market his Berkshire Hathaway in-
Credit-rating agencies criti- America's annual overall for broadband internet con- vestment company has been
cised formal proposals from inflation rate fell in October, nections. The move surprised buying shares in IBM since
the European Commission for the first time in four many, given the government's March, the value of which
that would require companies months, to 3.5%, mostly be- previous tolerance of anti- amounts to a stake of around
to rotate rating agencies and cause the fast pace of rising competitive practices by s.s% in the information-tech-
also give regulators the power energy prices slowed a bit. favoured local firms. Sceptics nology company. It is the first
to approve the methodology Britain's annual inflation rate are unlikely to be won over time that Mr Buffett has taken
behind the agencies' analyses. also dropped, to s%. unless the tough talk leads to such a big bet on a stock in the
But the commission backed tough action to curb abuses. tech industry, on which he has
away from recommending an The Bank of England indicated been famously lukewarm. He
outright ban on providing that it would undertake more Boeing sealed its biggest single said he made an exception for
credit ratings for countries quantitative-easing measures order for commercial aircraft IBM as he is impressed with its
seeking a bail-out. over the coming months, as it to date when Emirates, an long-term strategy and be-
reported that the prospects for airline based in Dubai, an- cause IBM treats its share price
Josef Ackermann stunned the British economy have nounced that it would buy so "with reverence".
colleagues at Deutsche Bank "worsened". Britain's un- 777 jets with a listed dollar
by deciding that he would not employment rate rose to 8.3%, value of $18 billion, with an Other economic data and news
take up the position of chair- the highest since 1996. option to buy another 20. can be found on pages 106-107
man. Mr Ackermann is step-
ping down as the German
bank's chief executive. A suc-
cession plan was in place that
envisaged Mr Ackermann
staying on at the bank as chair-
man, with the job of chief
executive being shared be-
tween Anshu]ain and]Urgen
Fits chen, but shareholders
disliked the idea. Deutsche
Bank now wants Paul
Achleitner, Allianz's chief
financial officer, as chairman.
UBS unveiled its new strategy,
which curtails its investment-
banking activities and focuses
on its core wealth-manage-
ment business. The Swiss bank
also appointed Sergio Ermotti
as chief executive (after some
speculation that Mr Acker-
mann would get the job). Mr
Ermotti took the position on
an interim basis, when
Oswald Grube! resigned over