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The Economist November 19th, 2011 volume 8760 issue 401 PDF

112 Pages·2011·90.38 MB·English
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Preview The Economist November 19th, 2011 volume 8760 issue 401

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: 020 7830 7000 Books and arts Boulevard des Tranchees 16 94 Afghanistan's haunted 1206 Geneva, Switzerland Business Tel: 41 22 566 2470 battleground 71 Retailing in America Looking for the exit 750 3rd Avenue, 5t h Floo r, New York, NY1 0017 Tel: 1212 5410500 '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: 852 2585 3888 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

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