Economist 9/25/14

  1. Cupid, which runs subscription-based dating websites such as, and, announced £3m ($4.9m) in pre-tax losses for the six months ending June, an increase of 20% from the previous year.The problem is that Cupid’s lovebirds now seem to be going elsewhere to meet each other. Although the firm still manages to turn one in every 30 singletons visiting its websites into paying subscribers, the number of new users has dropped.In the American market alone, the revenues generated by dating apps will double within the next five years, predicts IBISWorld, a market-research firm. The leaders of the pack are Grindr, a location-dating app for gay men, and Tinder, a similar service for heterosexuals.The big problem for Cupid is that unlike dating websites, Grindr and Tinder are free.
  2.  The headline projection in the Science study says the world’s population is likely to grow from 7.2 billion now to 9.6 billion in 2050 and to 10.9 billion in 2100 (not 12 billion). This projection is not new. It was first made by the UN itself in its 2012 estimates. (Before that, the UN had projected a population of 9.3 billion for 2050.Global population growth is slowing down, not stopping. The rise in the total from 5 billion to 6 billion took 12 years; so did the rise from 6 billion to 7 billion. But the rise from 9 billion to 10 billion looks likely to take 25 years and from 10 billion to 11 billion, roughly 45 years.. At the moment, the UN works out its main projection (called the medium variant) based on countries’ fertility rates and life expectancies, the most important determinants of population growth.
  3. If you are looking for weapons against human pathogens, though, surely the best place to look is in the human microbiome itself, for this collection of bugs that live on people’s skins and in their guts (see article) are the ones most likely to have evolved chemicals designed to deal specifically with interlopers invading their human territory.Mohamed Donia of the University of California, San Francisco. Dr Donia and his colleagues have designed a piece of software that can scan DNA databases for genes which look as if they are involved in antibiotic production.The most useful products of all, though, could be drugs that can regulate the immune system.There is also the possibility of using bugs themselves as treatments.
  4. Squeezing energy from nuclear fusion is an idea conceived in the 1950s, but yet to be born in a laboratory. Here is one way that might make it happen: gather an international consortium of the fusion-minded, including the European Union, America, China, India, Japan, Russia and South Korea.Conspire to build a 23,000-tonne doughnut-shaped vessel called a tokamak, that is wrapped with 80,000km of superconducting wire, all to contain the plasma magnetically and, for the first time, produce fusion energy continuously. Call it the International Thermonuclear Experimental Reactor; shorten the name to ITER.The most recently published schedule says the first plasma will be created in the vacuum vessel in 2020. That will now have to slip to 2023 or 2024.
  5. There is not much difference between a death sentence in the jihadists’ “Islamic State” and in Saudi Arabia, a country seen as a crucial Western ally in the fight against IS. Both follow Hanbali jurisprudence, the strictest of four schools of traditional Sunni Islamic law. Dissidents in Raqqa, the Syrian town that is IS’s proto-capital, say all 12 of the judges who now run its court system, adjudicating everything from property disputes to capital crimes, are Saudis. The group has also created a Saudi-style religious police, charged with rooting out vice and shooing the faithful to prayers.. Still, in the space of just 18 days during the month of August, the kingdom of Saudi beheaded some 22 people, according to human-rights advocates. The spate of killings was surprising not only because it was so sudden—the kingdom carried out a total of 79 executions last year—but also because many of those killed were convicted of relatively minor offences, such as smuggling hashish or, strangely, “sorcery”.

Economist 9/24/14

  1. BRAZIL’S presidential race took a tragically unexpected turn on August 13th, when Eduardo Campos, a centrist candidate, died in a plane crash. Mr Campos had been trailing the left-wing incumbent, Dilma Rousseff, as well as Aécio Neves of the main centre-right opposition. Upon his death, however, his vice-presidential candidate Marina Silva (pictured), propelled to the top of the ticket, immediately surged past Mr Neves and nearly caught up with Ms Rousseff in first-round voting intentions.It became apparent that the election would be no cakewalk for Ms Rousseff and her Workers’ Party (PT) in June 2013, when more than 1m people took to the streets to vent anger at shoddy public services and corrupt, ineffectual politicians. The president’s approval rating, until then at a lofty 80%, halved overnight.In the eyes of many Brazilians it is Ms Silva who best embodies renewal. A black former environmental activist from a poor background, she served as Lula’s environment minister from 2003 until 2008, when she quit over ungreen policies pursued by others in the cabinet.
  2. The Communist Party of Vietnam developed a publicly financed health-care system even as it was fighting wars against France and then America. The provision of health care is supposed to be one of the pillars on which the party’s legitimacy is based. The 3% of GDP the state spends on the system (nearly half of total health spending) is not enough to improve health infrastructure. Though this is an authoritarian state, ordinary Vietnamese are remarkably outspoken about social issues. In health, they complain of the prevalence of “out of pocket” payments, which happen in around half of health-care transactions. Many of the payments are really bribes paid on top of formal hospital fees. They mean that affordability is often a larger factor than need, for all but the richest patients.
  3. LATER today, Finnair is planning to fly an Airbus A330 from Helsinki to New York partly powered by recycled cooking oil.The airline will not disclose the ratio of fossil fuel to cooking oil it has used until the plane touches down, but to be certified jet fuel must contain at least 50% of the traditional, dirty type. Some of the cooking oil that will be used is waste from restaurants. Before it is pumped into a plane, it has to be filtered to remove any impurities and then refined. Nonetheless, it could be a while before commercial planes are regularly powered by biofuel. It is still too expensive to collect and refine—it currently costs perhaps twice as much to produce as traditional fuel.
  4. MOST countries have armies, but in Pakistan the army has a country. The men in khaki have ruled directly for 33 of the country’s 67 years.The warriors in charge take the lion’s share of public spending.In 1973, she says, almost 90% of the federal budget went to military ends. By the late 1980s, around 80% of current spending either paid off debt or funded the army. The army’s record is not one to be proud of. Wars launched against India in 1947, 1965 and 1999, won little or nothing beyond international opprobrium.
  5. Some countries have decided that addresses are such an important part of their social and economic infrastructure that publishing and updating them is best done by a single, central body—and that access should be free, without conditions. Denmark has moved farther in this direction than most. Though it has long had a standardised system for creating addresses, until 2001 several government agencies and private firms kept separate, inconsistent registries. Denmark’s government compensated municipalities, which used to make money selling address lists. But it may make Britain the venue of a unique experiment. In what looks like damage limitation, the Cabinet Office has paid the Open Data Institute, a not-for-profit organisation, to build an open alternative. In America has got little further than creating a list of available address files; many counties have not been able to afford to digitise theirs.Concerns about privacy may also slow the creation of open-address registries. In Germany, for instance, it is not clear whether physical addresses and geographical co-ordinates count as personal data, even if no name is linked to them.

Economist 9/23/14

  1. The collapse of a large independent mobile phone retailer in Britain, Phones 4U, announced on September 15th, still came as a shock, the more so as it seemed to be in a good market. Administrators are now scrambling to find buyers for the company’s 550 stores.The immediate cause of Phones 4U’s collapse was the decision by Britain’s biggest mobile-phone operator, EE, owner of the Orange and T-Mobile brands, not to renew a contract to sell its products in Phones 4U shops. This followed a similar decision by Vodafone earlier this month. Phones 4U had already been deserted by two other operators, O2 and Three. This leaves only one independent mobile-phone retailer on the high street, Dixons Carphone, itself a recent merger of Dixons, an electrical retailer, and Carphone Warehouse.Vodafone and EE both deny any wrongdoing, and instead blame the current private-equity owners of Phones 4U, BC Partners, for leaving it short of financial wiggle-room when it came to negotiating the new contracts.
  2. ADULTS in developing countries are half as likely to have an account at a formal financial institution as those in the rich world. Only 18% of people in the Middle East and north Africa do, compared with 89% in high-income countries.For many, the answer is to tie up money in livestock, which can be sold if necessary, or to join a rotating savings and credit association (ROSCA), which pools members’ savings and disburses them to those in need.Hence the growing enthusiasm for “commitment-savings accounts” (CSAs), which attempt to tie people’s hands to prevent myopic spending. Those who open an account typically cannot withdraw funds until a certain date, or until they have deposited a certain amount. But there is a big problem: few people seem to want CSAs. New research in Kenya finds that only 19% of households had one, whereas 78% saved via a ROSCA.A study in Kenya found that demand for CSAs rises if the funds can be used for emergencies.
  3. “LA BESTIA” (“The Beast”) still trundles along the length of Mexico, from Guatemala to the United States. But the infamous freight train has fewer people perched on its roof and clinging to its sides. Since last month the Mexican authorities have been cracking down on Central American migrants clambering on board; their ranks have dwindled from hundreds to dozens on each journey. The government’s tougher policies seem to be motivated more by pressure from the United States to tackle a rise in the number of unaccompanied child migrants coming north from Honduras, El Salvador and Guatemala.. The numbers of unaccompanied minors making it to the United States have fallen sharply in recent weeks: detentions at the border have declined from over 10,000 in June to 3,100 in August.
  4. CAIXABANK is a rare breed in Spanish banking. The financial crisis brought most of the country’s 45 cajas—regional savings banks with a commitment to social welfare—to their knees. But CaixaBank, based in Barcelona, has grown. On September 1st it became the largest domestic bank by loans, after buying the Spanish retail business of Barclays, a British bank.The bank avoided the worst of the euphoric lending during Spain’s decade-long construction boom that felled many of its peers. Its current exposure to property is €31 billion ($40 billion), but it has set aside 42% of that sum in provisions. CaixaBank’s scale helped it stave off the political interference that added to the mess at other cajas. Better management, in turn, led to bigger profits, some of which it spent on big stakes in blue-chip Spanishfirms such as Telefónica and Repsol.
  5. Mr Kazuo Hira, chief executive of Sony, was presumably reminded of that chilling sensation this week, when he was obliged to announce that Sony would take a $1.7 billion impairment charge on the value of its mobile-phone unit, because of lowered expectations for sales of smartphones. For the first time since 1958, when Sony was first listed, the firm will not pay a dividend this year. Its achievements in smartphones have now proved too little, too late. It missed out on the category’s earlier boom, and Apple and Samsung swiftly came to dominate.The news will pile on still more pressure to increase the pace of restructuring. In July Sony spun off its television unit into a separate entity, and sold its Vaio personal-computers division. Yet other than PCs, Sony still makes all the same products—and often, too many versions of them—as it did five years ago.

Economist 9/22/14

  1. Tesla’s second distinguishing feature is that its EVs use thousands of standard laptop cells, rather than several hundred much larger and pricier proprietary units. In Tesla’s case, the small, cylindrical “18650” lithium-ion cells (so called because each is 18mm in diameter and 65mm long) are wired together to form a flat battery pack that stretches beneath the floor of the vehicle. The pack can be detached from the car’s underside and a fresh one bolted on in minutes. So far, no such battery-exchange service has been offered. But the option is there if needed. The biggest advantage of using standard 18650 cells is that they are a commodity item. Apart from cost, there are technical advantages of using 18650 cells. Because they are small, they can shed heat rapidly. By pumping liquid coolant between them, Tesla can remove any heat produced so quickly that all individual cells are kept within a few degrees of one another.While all EV makers are notoriously shy about revealing the costs of their lithium-ion batteries, the consensus figure for the industry is between $400 and $500 per kilowatt-hour. Given its unique advantages, Tesla is probably nearer $350/kWh. If that is the case, the 85kWh battery in its Model S probably costs around $30,000—cheap, but still over a third the basic price of the vehicle.This is where the gigafactory in Reno, Nevada comes in. When in full production, the plant will be capable of producing 35 gigawatt-hours worth of lithium-ion cells a year—more than the world’s entire production of lithium-ion cells last year. When these are assembled into battery packs, they could provide power sources for 500,000 EVs.
  2. Some economy-class seats have already lost about 30% of their weight in the past 10 to 20 years, says René Dankwerth of RECARO, a seat-maker. But there is scope to do more: padding is being made thinner by replacing foam with netting; reclining mechanisms are being removed from some short-haul planes. Most of the extra room thus created is used to squeeze in extra rows of seats.Skift, a research firm, notes that this has prompted a seating war among the planemakers. First, Airbus increased capacity on its A320 short-haul plane from 180 to 189 to match that of Boeing’s 737. Boeing responded with a new, 200-seater 737. So Airbus is now promising a 240-seater. The new planes will be no longer than their older versions.
  3. WINNING a third term is a remarkable achievement for any political party. New Zealand’s centre-right National Party did so on September 20th, carried to victory, as expected, by its popular leader and the country’s current prime minister, John Key (pictured). But securing an increased majority over its first and second terms, as National did on Saturday, is astounding: it raked in 48.1% of the vote. The National Party campaigned on stability, sound economic management and educational changes which would give more weight to charter schools (which are privately run) and improve teacher quality. It favours changes to the employment law, to make it easier for employers to take on and dismiss staff. National says it will help first-home buyers and, in the long-term, promises only very minor tax cuts.
  4. More and more Britons are starting businesses. According to StartUp Britain, a website that uses data from Companies House, 526,000 new outfits were registered last year, up from 484,000 the previous year and 441,000 in 2011. This year the number has already passed 400,000, so last year’s record should be broken easily.It has never been so cheap to set up a business.They need only to construct a good website to get their products into the market. And the would-be entrepreneur has a plethora of other sources besides the often unhelpful banks from which to raise cash, such as crowdfunding and peer-to-peer lending. Yet a canker lurks in these rosy statistics—the large number of people who have become self-employed not out of choice but through necessity.
  5. Perhaps the greatest feat of engineering in London lies underground. Joseph Bazalgette’s sewerage network, built between 1859 and 1875, runs for about 21,000km (13,000 miles) underneath the city. But on September 12th the government approved a project which may match Bazalgette’s achievement.Some 8.4m people now live in London, and rising. Habits have changed, too, putting more pressure on the system.The Thames Tideway Tunnel, which will cost around £4 billion ($7 billion) to build, will run 25km from Acton in west London to Abbey Mills, one of Bazalgette’s original pumping stations, in the East End.

Economist 9/19/14

  1. ALIBABA’S shares were priced at $68 on September 18th, giving China’s e-commerce behemoth a market capitalisation of $168 billion as it started trading on New York’s Stock Exchange. The flotation will raise $21.8 billion, narrowly missing the record for the world’s biggest stock offering, held by Agricultural Bank of China with its $22.1 billion listing in 2010. But if some of the remaining options are exercised by their owners, Alibaba’s could yet be the largest.Transactions last year over its websites totalled nearly $250 billion, compared with $116 billion for Amazon, a rival online retailer. Data from this year suggest that with every second that passes, Alibaba handles almost 500 orders, altogether worth more than $9,000 on average. Amazon’s equivalent transaction value in 2013 would be less than $3,700 per second. An average buyer on Alibaba’s websites spends over $1,000 a year, whereas the figure is less than half that at Amazon.
  2. THE Union flag will still fly. By a margin of 55% to 45%, and on a vast 85% turnout, Scots voted to stick with the United Kingdom on September 18th. hey also preserved the British identity which over a third of Scots, English, Welsh and Northern Irish consider of primary importance. The No vote held up surprisingly strongly in most of Scotland’s 32 councils.Dundee—dubbed by the SNP’s leader, and Scotland’s first minister, Alex Salmond, as the “Yes City”—gave him a rare victory, but on a relatively low turnout, of 79%, and by a narrower-than-expected margin.he campaign had been gruelling, especially on the Yes side. Though designed and steered by the SNP, the Yes Scotland banner was carried by many different groups—including Radical Independence, Women for Independence and the Scottish Greens—many of them locally based, and all hugely motivated. By any measure, they outgunned the cross-party Better Together campaign, knocking on more doors, delivering more leaflets, placing more advertisements in newspapers and on billboards.r. Only a strong turnout by Scottish pensioners—the only age-group thought likely to have voted mainly for the union—foiled them.
  3. Another Great Leap Forward is planned ahead of the Tokyo Olympics in 2020. The governor of Tokyo, Yoichi Masuzoe, has pledged to make it the planet’s number one city, using the games as a launch pad. In addition to 22 new Olympic venues, the plans include new roads and railway lines, a huge waterfront redevelopment and rebuilding chunks of the city centre.The 1964 event cost many times more than its predecessor in Rome four years earlier, and added to the Olympics’ spendthrift reputation—not a single games since then has met its cost target. The Tokyo Olympics also triggered the start of Japan’s addiction to bond issuance, which continues unabated today.
  4. DESPITE winning only 31.2% of the vote, Sweden’s Social Democrats were jubilant on September 14th. Stefan Lofven, their leader, declared that the voters’ rejection of the centre-right alliance under Fredrik Reinfeldt marked a return to Social Democratic solidarity and the egalitarian Swedish welfare state.As he faced the daunting task of forming a coalition government. He brusquely rejected the ex-communist Left (with 5.7%) and began negotiating with the Greens (6.8%). But the two parties are a long way short of a majority, and they have big policy differences. The Greens want two of Sweden’s ten nuclear reactors closed immediately.Making everything harder are the far-right Sweden Democrats, who took 12.9% of the vote to become the third-largest party. The Sweden Democrats’ leader, Jimmie Akesson, made clear that his party must be reckoned with. It won votes by playing on fears of immigration and attacking the government for spending taxpayers’ money on immigrants and asylum-seekers instead of on native Swedes.
  5. It has been a hard summer for Jews in Germany. Provoked by fighting in Gaza, many Germans have demonstrated against Israel and for the Palestinians. One synagogue was set on fire. Some Jews were beaten.Yet, at the same time Germany, especially Berlin, is a favourite place for young Israelis to emigrate to; this is made easier because the government gives Jews German passports if their grandparents had them.Although there is still a remnant of anti-Semitism among Bio-Deutsche , the recent wave of anti-Semitism in Germany is largely a phenomenon among those “with a migration background”, to use the modern argot. Perpetrators, in other words, have tended to be young Muslims of Arab or Turkish descent. They inherit a collective identity not of German guilt, but of victimhood and marginalisation at the hands of both Israel and their adopted country.

Economist 9/18/14

  1. The OECD’s latest “Education at a Glance” report compares how well rich countries are faring in spreading educational opportunity, by ranking countries according to the proportion of 25- to 64-year-olds who are better educated than their parents. A striking feature is a strong correlation of socially mobile countries at the top of the table with excellent test results in secondary schools (as measured by the OECD’s regular PISA tests and others). So South Korea heads the education-mobility league, just ahead of Finland.Moreover France, the Netherlands and Poland fare well in terms of opportunity, though their educational performances differ: Poland and the Netherlands receive strong marks in PISA; France less so.At the bottom end of the table, there is bad news for Germany. It shows a low level of upward mobility—about the same as the Czech Republic’s. But because many Germans match their parents’ level of education.
  2. THE world’s biggest brewer, AB InBev (ABI), maker of Budweiser and Stella Artois, is also the most frugal. There are no company cars for senior executives. Carlos Brito, the boss, flies economy class. That is one reason why, with 18% of global beer sales, ABI has a third of the profits. SAB Miller seems to have been trying to defend itself against a possible takeover by ABI, which was said to be talking to bankers about raising £75 billion ($121 billion) to buy its rival.SAB is a tempting target. Though based in London, its origins are in South Africa; it has breweries and bottling plants in 15 African countries, where people still mainly guzzle moonshine. Nearly 70% of SAB’s sales are in emerging markets, many of which are still developing a taste for beer.
  3. The case Young v United Parcel Service concentrates on whether the Pregnancy Discrimination Act (PDA), a law passed in 1978 that fortified employment protections for pregnant women under Title VII of the Civil Rights Act, requires companies to accommodate women like Ms Young. The PDA prohibits employers from discriminating “because of” pregnancy and holds that pregnant women must not be treated differently from other employees who are “similar in their ability, or inability, to work.” UPS defends its accommodation policy as “pregnancy neutral.” It excludes women carrying a fetus just as surely as it excludes employees injured off-site or requesting a new assignment for some other reason.But Ms Young and her defenders find animus in the the omission and argue that the PDA requires more than neutrality. It mandates that employers offer benefits to pregnant women if those benefits are available to employees “similar in their ability or inability to work.
  4. THE Supreme Court of Bangladesh has just rejected appeals by a former prime minister, Khaleda Zia, over the appointment of a judge in a corruption case against her. The ruling clears the way for Mrs Zia to stand trial.The court ruling reinforces the dominance enjoyed by the country’s most powerful woman, Sheikh Hasina, the prime minister. It comes eight months after she won an unprecedented second term in an election boycotted by Mrs Zia’s Bangladesh Nationalist Party (BNP).Some sympathisers argue that Sheikh Hasina’s rule is justified, if only because of her success in developing the economy. Poverty has fallen rapidly since her return to power in 2009. The economy is now twice as big as when the kleptocratic and incompetent rule of Mrs Zia’s government.After its coup, the army discovered that governing was less enjoyable than it had imagined. It has since taken a back seat. It earns a handy $500m a year from its UN peacekeeping missions, the arms budget has grown nicely.
  5. Xi Jinping, China’s current leader, is now dismantling it. He has become the most powerful Chinese ruler certainly since Deng, and possibly since Mao. Whether this is good or bad for China depends on how Mr Xi uses his power. Mao pushed China to the brink of social and economic collapse, and Deng steered it on the right economic path but squandered a chance to reform it politically. Mr Xi has grabbed it and run with it. He has taken charge of secretive committees responsible for reforming government, overhauling the armed forces, finance and cyber-security. Mr Xi needs to set up an independent body to fight corruption, instead of leaving the job to party investigators and the feuding factions they serve. He should also require officials to declare all sources of income, property and other assets.Mr Xi is making some of the right noises. Reforms are being tinkered with to make local courts less beholden to local governments. But he needs to go further by abolishing the party’s shadowy “political-legal committees”, which decide sensitive cases.

Economist 9/17/14

  1. Houthis, a revivalist movement for the Zaydi form of Shia Islam that has lately grown in strength from its base in the north of Yemen is squeezing the government by holding Sana’a, Yemen’s capital, to ransom. They have brought in supporters and mounted an escalating series of sit-ins and crippling roadblocks to force concessions from the beleaguered president, Abd Rabbo Mansour Hadi. The trouble is that the feeble Yemeni state is bankrupt. Mr Hadi, who must juggle demands from other factions, including Sunni Islamists, while also pursuing a war against al-Qaeda terrorists in the south, cannot afford to appear weak.More pressingly, the Houthis’ tactic risks sparking clashes in the capital, and perhaps all-out mayhem on a scale not seen since Ali Abdullah Saleh, Yemen’s president of three decades, stepped down in November 2011 after a year of mass protests and street battles (and the near-assassination of Mr Saleh).
  2. Like other batteries, Li-ions consist of two electrodes (an anode and a cathode) separated by an electrolyte.. Charging the battery drives positively charged lithium ions in the electrolyte to the negatively charged anode, where they accumulate. The process also creates heat,which for the most part is easily dissipated. But a battery that is charged for too long can form spindly lithium dendrites, or crystals, on the anode, which can cause a short-circuit. They can lead to “thermal runaway” and occasionally fires. Such fires are why Boeing 787s were grounded in early 2013 Despite this risk, the ultimate goal for many scientists is to build a commercially viable battery containing yet more lithium, as the anode itself. Lithium-metal anodes have the highest energy-storing capacity of any known material and, because lithium is the least dense metallic element, a big power-to-weight ratio too.
  3. The death toll from the Ebola virus is continuing to grow alarmingly. On September 9th the World Health Organisation (WHO) said it had recorded 4,293 cases in five west African countries, of which at least 2,296 people had died. In Liberia the disease is spreading quickly. The country’s existence is now “seriously threatened” as the functions of state are disrupted, Brownie Samukai, Liberia’s minister of national defence, said this week. The health system, already weak, is breaking down. At least 160 Liberian health-care workers have contracted the disease and half of them have died. Ebola is also spreading in Guinea, Sierra Leone and Nigeria, and a case has been reported in Senegal. This is the worst-ever outbreak. Yet even though the disease was discovered almost 40 years ago, there are no licensed treatments or vaccines.The reason Ebola is so deadly is that the virus is good at tamping down the innate immune response to viral infection, says Jonathan Ball, a professor of molecular virology at the University of Nottingham in Britain. Last week the first phase 1 clinical trials started in America for a vaccine developed by the US National Institutes of Health (NIH) and GlaxoSmithKline (GSK). In parallel, a British group is planning tests using volunteers in the UK, the Gambia and Mali.
  4. Ernst & Young, a consultancy and accounting firm, estimates that Islamic banking assets grew at an annual rate of 17.6% between 2009 and 2013, and will grow by an average of 19.7% a year to 2018.Most of the world’s Muslims are not so devout that they completely abjure conventional finance: even in Saudi Arabia, the assets of Islamic banks account for barely half of all banking assets. Islamic Banking has grown into a global industry, with total assets of around $2 trillion. Most of that (nearly 80%, according to Malaysia’s central bank) is entrusted either to Islamic banks or to the Islamic units of conventional banks. The rest takes the form of sukuk, Islam’s answer to bonds (15%); Islamic investment funds (4%) and takaful, the Islamic version of insurance (1%). In 2012 Iran accounted for 43% of the world’s Islamic banking assets, with Saudi Arabia (12%) and Malaysia (10%) ranking second and third.In an Islamic mortgage, for instance, a bank does not lend money to an individual who buys a property; instead, it buys the property itself. The customer can then either buy it back from the bank at a higher price paid in instalments (murabahah) or make monthly payments to the bank comprising both a repayment of the purchase price and rent until he owns the property outright (ijara).Bahrain’s central bank issued the first sovereign sukuk in 2001; from 2002 to 2012, annual issuance grew at an average rate of 35%, from $4 billion to $83 billion.Western firms are also beginning to usesukuk to raise money.
  5. In America the Confucius programme has been widely welcomed by universities and school districts, which often do not have enough money to provide Chinese-language teachers for all who need them. But critics like Mr May believe China’s funding comes at a price: that Confucius Institutes (as those established on university campuses are known) and school-based Confucius Classrooms restrain freedom of speech by steering discussion of China away from sensitive subjects.n June the American Association of University Professors called for universities to end or revise their contracts with Confucius Institutes (America has 100 of them) because they “function as an arm of the Chinese state and are allowed to ignore academic freedom”.Through the Hanban, a government entity, China provides the centres with paid-for instructors and sponsors cultural events at them. Its spending is considerable, and growing rapidly. In 2013 it was $278m, By the end of 2013 China had established 440 institutes and 646 classrooms serving 850,000 registered students. They are scattered across more than 100 countries, with America hosting more than 40% of the combined total.