Economist 3/30/15

1. When United Auto Workers union (UAW) last negotiated a big pay deal, it was in 2011 and General Motors, Ford and Chrysler were still crawling out of the worst recession in memory.That deal expires this year, just as the motor industry is booming again. The big-three car firms complain that their wage bills are still higher than those of foreign rivals, and say they will resist pay rises.Carmaking is not the only industry where there is upward pressure on pay. In February Walmart, known for its stingy wages and lack of unions, said it would pay junior staff at least $9 per hour, which is above the federal minimum wage of $7.25. This week Target, another retailer, was reported to have raised its minimum pay to $9 an hour. It so far refuses to confirm this.
2. Myanmar is a developing a tech industry. With wireless towers now popping up across the country, the government thinks 80% of citizens may have a mobile phone with a data connection by 2016. Small, local firms are racing to benefit: MySQUAR, a social network, said on March 22nd it was hoping to raise $2.5m by listing in London. There is Rebbiz, which runs property and jobs portals; Bindez, a search engine; and NEX and Technomation, which design smartphone apps.With little proficiency in foreign languages, Myanmar’s web users are clamouring for local content. But Yangon’s tech entrepreneurs—who include home-grown talent and returning emigrants—face many hurdles. Good programmers remain sparse.Making online payments is another difficulty, notes James Chan, an angel investor, because most Burmese are unbanked.he shop would download each app to the buyer’s smartphone from an encrypted memory stick provided by its designers. More recently, scratch-cards bearing download codes have become popular.Perhaps the greatest uncertainty is how many local tech firms will survive once foreign rivals move in. Already, Facebook is probably Myanmar’s most-visited website; Viber, an Israeli messaging app, is following behind. Rocket Internet, a German firm that builds e-commerce sites for emerging markets, is testing the water; and in February Google launched a local-language version of Gmail, its e-mail service.
3. At least 224,000 Dengue cases had been registered across Brazil by March 7th, 162% more than in the same period in 2014, when the dry weather left fewer stagnant puddles in which mosquitoes could breed. A MOIST March, combined with the wettest February in 20 years is the main reason.The situation is gravest in the state of São Paulo, where 124,000 people have been diagnosed since January, an eightfold increase on last year. Infections have reached epidemic levels in nearly half the state’s municipalities. The rain is not the only reason for the current outbreak. Paradoxically, another cause is last year’s drought. Faced with the threat of rationing, people have been storing rainwater, often in open containers, which make good breeding-grounds for mosquitoes.
4. This is an unhappy time for Jewish-Americans, and that is unusual. No other Jewish community is as visible and successful, outside Israel. American Jews feel forced to choose between competing loyalties.  With the exception of Jimmy Carter in 1980, since 1972 Democratic contenders for the White House have received between 64% and 80% of Jewish votes. East Hampton lies at one end of New York’s first congressional district, a moderate seat which in last year’s election was snatched from the Democrats by Lee Zeldin, a hawkish Iraq war veteran who is now the only Republican Jewish member of Congress. The district is home to about 33,000 Jews.Jewish support for Democrats has slipped ten percentage points since 2008, with very religious and male Jews leading the shift rightwards. But support fell from sky-high levels. And with only 5m Jewish-Americans, depending on how they are counted, they routinely swing elections in only a few places, of which Florida is the most important. The Democrats’ problem is that Jewish supporters stiffen the party’s “organisational backbone” and donate a lot of money.Since the terror attacks of 2001, support for Israel has united Republicans.
   
5. The practice of charging young people as adults gained momentum in America in the 1990s, as youth crime spiked. Between 1990 and 2010 the number of juveniles in adult jails went up by nearly 230%. Now about a tenth of confined young people are in an adult prison or jail. This is bad for two reasons. It is costly: more than $31,000, on average, to incarcerate an adult for a year. And it tends to turn young tearaways into serious criminals. Young people who are charged as adults are nearly 35% likelier to be rearrested than those who are tried as juveniles, according to the Centres for Disease Control.Whether a child is judged as an adult depends more on the state than the crime. In Pennsylvania any child accused of homicide must begin in adult court. In Mississippi a 13-year-old accused of a felony will be sent to adult court.When judges and prosecutors have discretion over how to charge a juvenile, they use it unevenly. In 2012 black youths were 40% more likely to be charged as adults as their white peers.Arguing that young people have an “underdeveloped sense of responsibility”—no kidding—the justices banned putting them to death in 2005. In 2010 the court struck down mandatory life sentences without parole for minors charged with crimes other than murder, and in 2012 the ruling was extended to all juveniles.

Economist 3/27/15

1. ON MARCH 28th Nigerians go to the polls in the most important contest that Africa’s most populous nation, and biggest economy, has held since its return to civilian rule in 1999. Nigeria has been one of the world’s fastest-growing economies over the past 15 years.For the moment neither President Goodluck Jonathan, who has been in office since 2010, nor his main opposition candidate, Muhammadu Buhari, fielded by the opposition All Progressives Congress (APC), has a clear lead. Each commands about 42% of the vote.Worryingly, however, polling data is showing a low level of public confidence that the elections will be free and fair. Voting has, in the past, also tended to split somewhat along religious and ethnic lines. The predominantly Muslim north tends to support the opposition. The mainstay of support for Mr Jonathan’s PDP has generally been in the more prosperous south. The worry is that, whoever wins, there will be violence in one or other part of the country: a victory by Mr Buhari, a northern Muslim, could re-ignite the insurgency in the Niger delta, the country’s main oil-producing region.
2. NEW human pathogens arise in two ways. They may evolve from old ones, or they may jump to humanity from other species. The second is the more common route. Infections that jump in this way are called zoonotic diseases, or zoonoses. Ebola is suspected of being bat-borne, though that has yet to be proved beyond doubt. Bats also look like the origin of MERS, a viral illness that appeared in 2012 in the Middle East, and SARS, another virus, which burst upon the world from southern China at the end of 2002. HIV, meanwhile, came from other primates. The pandemic version, HIV1, was once a chimpanzee virus. HIV2, largely restricted to west Africa, came from the sooty mangabey, a monkey.Zoonoses are particularly likely to develop when people and animals live in close proximity to each other. One reason southern China often spawns them (SARS was not unique; a lot of influenza begins there, too) is that the region has a plethora of small farms, in which many species of animal live in close quarters with each other and with human beings.
   
3. ON MARCH 17th Myanmar’s central government and the National Ceasefire Coordination Team (NCCT)—an umbrella group representing 16 of the country’s ethnic armies—sat down for peace talks in Yangon, the country’s biggest city and commercial capital.Since gaining independence from Britain in 1948, the country’s numerous minority ethnic groups, which comprise more than 30% of the country’s population, have been battling the central government (and sometimes each other) pretty much constantly. At the heart of these conflicts are promises contained in the Panglong Agreement. Signed by Aung San, leader of the country’s independence movement (and father to Aung San Suu Kyi, a parliamentarian and longtime democracy activist), as well as Kachin, Chin and Shan representatives, the Agreement promised broad regional autonomy to the country’s ethnic minorities and said that a “separate Kachin State…is desirable”. The country’s government has delivered on neither promise. Some ethnic armies fund themselves through illegal activities (logging, drug production, gun running, “taxation” of locals), but they have their roots in these broken promise.But sticking points remain, mainly concerning the military (the central government wants ethnic armies folded into a single national army), control over natural resources and the amount of autonomy to be granted to ethnic-minority states.
4. NYU Abu Dhabi started up in 2008. In 2014 it moved to a new campus on Saadiyat Island, which, in contrast to the rest of the emirate, is intended as a haven of culture and beauty.For now, most of Saadiyat Island is a building site, but NYU’s neighbours will soon be local outposts of the Guggenheim, the Louvre and the Sorbonne, housed in equally elegant buildings.The country’s ambitions may have been piqued by the extraordinary flourishing of culture in neighbouring Qatar, capped by I.M. Pei’s stunning Museum of Islamic Art. For the privilege of hosting NYU, Abu Dhabi has forked out an initial donation of $50m and paid for the campus. It also covers most students’ tuition and living costs. Some faculty are hired directly to the Abu Dhabi campus; some come from New York for stints of a few weeks to a few years. The money is good—up to twice as much as at home—and conditions are exceedingly comfortable.
   
5. WARREN BUFFETT says he likes to buy companies that are easy to understand and are performing well. His latest deal, the $50 billion acquisition of Kraft Foods that was announced on March 25th, passes only one of those tests. Last year its revenues were stagnant and its volumes and profits fell. Its chief executive left in December. It generates 98.5% of its sales in the mature markets of America and Canada, where, the suspicion is, a new generation of healthier eaters no longer excited about Kraft products. It has been the subject of seven big mergers or spin-offs since 1980, including an unhappy spell under the ownership of Philip Morris, a tobacco firm, between 1988 and 2007.  In 2013 Berkshire Hathaway, Mr Buffett’s investment vehicle, teamed up with 3G to buy Heinz, another food company, with each taking 50%.Mr Buffett is not buying it alone, nor managing it. Instead he is working with 3G Capital, a buy-out firm with Brazilian roots.What 3G really excels at, though, is cost cutting, guided by the philosophy of “zero-based budgeting”: every dollar of expense must continually be questioned, from corporate jets to photocopying bills. 3G was behind the creation of Anheuser-Busch InBev, the world’s biggest brewer, that has industry-leading margins. Since 3G has run Heinz, its gross operating margins have risen by eight percentage points.

Economist 3/26/15

1. SAUDI Arabia was only going to tolerate the advance of the Iranian-backed Houthi rebels in neighbouring Yemen for so long. Early on the morning of March 26th the kingdom said it had launched a military operation to push back the Houthis and reinstate the “legitimate government” of President Abd Rabbo Mansour Hadi.They also targeted military bases controlled by loyalists of Ali Abdullah Saleh, Yemen’s former president. He was ousted in 2011 and subsequently has been backing the Houthis as they have taken over swathes of the desperately poor country of 24m. In 2013 the Houthis burst out of their stronghold in northern Yemen and moved south to Sana’a, eventually seizing it in September last year. The Houthis, a religious revivalist group turned militia, are backed by Iran, a Shia power, with which Saudi Arabia, a Sunni bulwark, competes for regional hegemony. For the Houthis, the Saudi-led operation is a public-relations coup. They have long accused Mr Hadi of working for the interests of foreign powers. Yemen is home to al-Qaeda in the Arabian Peninsula (AQAP), al-Qaeda’s deadliest branch, and Islamic State (IS).
2. IN 2014 asylum applications to rich countries reached their highest level for over 20 years, according to data from the UNHCR, the UN’s refugee agency. Around 866,000 applications were lodged, a 45% increase on the previous year. Two-thirds of those were in the European Union.Southern Europe saw a particularly sharp rise, with applications to Italy doubling to 157,000, as more refugees risked crossing the Mediterranean. The last time asylum-seeker applications in the rich world reached this level was the start of the Bosnia Herzegovina conflict in 1992. The causes are unsurprising. Jihadists in Syria and Iraq have displaced millions (but only a small share of those fleeing get as far as Europe). Human-rights abuses in Eritrea sends a streams of refugees through Sudan to Libya and then across the sea to Europe. Disillusion and economic stagnation in the Balkans have sent thousands north.Those who manage to lodge applications in rich countries are the fortunate minority. In 2013 over 50m people were involuntarily displaced worldwide, of which 17m were refugees and only 1.2m asylum seekers.
3. The National Institute on Drug Abuse (NIDA) reports that among people who have tried illicit drugs, about two-thirds began with marijuana. Hardly anyone jumps straight in at the deep end: less than 1% of drug users reported that their first-ever outing was with heroin or cocaine.The other argument is social: smoking marijuana, a banned substance, gets youngsters in with the wrong crowd, making them more likely to flout other laws. Breaking one taboo makes it easier to break another.he first argument is in Mr Christie’s favour. Exposing more people to marijuana, as legalisation probably would, could prime more brains to enjoy other substances.But the second argument rather undermines Mr Christie’s position. To the extent that marijuana acts as a social gateway to other drugs, legalisation slams that gateway shut. In Colorado and Washington—and, soon, Alaska and Oregon—marijuana is sold not by drug pushers but by heavily regulated dispensaries, which sell only one drug.If marijuana were a gateway to harder drugs, one might expect those drugs to become more popular too. Yet during the same period, consumption of most other substances actually fell. The number of monthly cocaine users dipped from 2.1m to 1.7m.
4. HUMANS can digest lactose, the main carbohydrate in milk, only with the help of an enzyme called lactase. But two-thirds of people stop producing it after they have been weaned. The lucky third—those with “lactase persistence”—continue to produce it into adulthood.Pre-colonial countries in western Europe tended to have the highest rates of lactase persistence.A one-standard-deviation increase in the incidence of lactase persistence, in turn, was associated with a 40% rise in population density. People who could digest milk, the theory goes, used resources more efficiently than those who couldn’t.
5. In Poland 15% of respondents admitted to paying a bribe in the past year; in nine out of ten cases it was for health care. Some Polish hospitals allow women to deliver by Caesarean section on demand, for an off-the-books fee of up to 1,000 zlotys ($266). One survey found that Poles consider health care the second-most corrupt area of public life after politics. Even in Estonia, where the e-health system is widely praised as a model of transparency, a hospital director lost his job in 2011 for demanding 4,000 kroons ($362) and a bottle of cognac from an elderly patient to remain in hospital.Doctors in much of central and eastern Europe argue that abysmal wages in official health-care systems leave them no choice but to demand payments on the side.In Romania, resident doctors at public hospitals earn just €200 ($220) per month, while specialists earn €500. Perhaps unsurprisingly, 7,000 Romanian doctors—30% of the doctors in the country—emigrated between 2011 and 2013, according to the head of the country’s college of physicians. More than 2,000 of them now work for Britain’s National Health Service.

Economist 3/25/15

1. MESSENGERS are arguably the most successful smartphone apps. The ten biggest collectively boast more than 3 billion accounts. WhatsApp, the leader, has 700m. The number of WhatsApp messages sent every day now exceeds the number of standard texts. Last year it handled more than 7 trillion messages, about 1,000 per person. But there is more to messaging apps than messages. At an event that starts today in San Francisco, Facebook, which owns WhatsApp, is expected to say that it will turn another of its apps—called Messenger—into a “platform”. That means others will be able to develop software and content for it (games; hotel bookings; tickets of all sorts). Facebook is following WeChat, the leading messaging service in China, and KakaoTalk, a South Korean messenger, which are already platforms of sorts.
2. The Hawaii Supreme Court’s 100-page ruling was a partial win for the travel companies. The court held that the sites were indeed responsible for excise taxes worth some $70m. But the state had also asked the court to hold the firms responsible for paying its hotel occupancy tax—the so-called Transient Accomodations Tax. That—in a victory for the sites—the court declined to do, and the companies’ stocks rose in the days following the ruling.The state must now refund the travel bookers a large portion of the $247m they had paid into a fund ahead of the Supreme Court’s ruling. Travellers are easy to tax. But if Expedia et al want to make a real difference, they shouldn’t just be fighting hotel taxes in court, they should be fighting them in legislatures and in the court of public opinion, too.
3. Italy these days opera-house bosses faced with declining government funding are cutting costs wherever they can. Last autumn Rome’s opera sacked its entire chorus and orchestra, and Bari—the country’s fourth-largest opera house—simply cancelled a large chunk of its season. In Venice, by contrast, La Fenice’s chorus and orchestra are busier than ever.Venice keeps posting impressive tourism numbers, with a record 9.8m tourist nights in 2013. Each year, around a million visitors walk through La Fenice on guided tours. Mr Chiarot wants them to attend performances of operas and concerts as well. This year, then, La Fenice is staging 200 operas and orchestral concerts, up from 112 in 2009. Since the budget has remained €5m ($5.4m), La Fenice now breaks even instead of losing money.Famous though they are, Italian operas are not exactly artistically demanding fare. Mr Chiarot’s productions, while perfectly respectable, do not reach the highest standards of creativity or musicianship. That, too, is part of his strategy. Most tourists are not opera buffs, but will buy a ticket to a performance if it happens to be a convenient choice.
4. The gap between the amount of money Americans owe and the amount the government gets is $450 billion as of 2006. The IRS reckons it can recover about $65 billion of that. The remaining $385 billion will simply line the pockets of tax dodgers.The IRS is hardly alone in its ineptitude. Plenty more egregious examples have been chronicled by the Government Accountability Office (GAO) in its annual “Government Efficiency and Effectiveness” report.Another striking idea is for Congress to prevent tax dodgers from getting new passports. The government issued about 16m passports to people in 2008, 1% of whom collectively owed more than $5.8 billion in back taxes. The GAO found that “improper payment estimates” reached nearly $125 billion during the last fiscal year—a $19 billion rise from the year before—mostly because of misplaced generosity to recipients of Medicare, Medicaid and the Earned Income Tax Credit.The GAO has few kind things to say about the government’s approach to information technology (IT), on which it plans to spend $79 billion in this fiscal year. Fragmented data storage and needless duplication have wasted billions of dollars.
5. About 300m Chinese, or one in four, smoke every day. This proportion has remained steady in recent years; efforts to publicise the dangers have been half-hearted. This year, however, may see improvements. On June 1st stricter rules will be enforced on smoking in public places in Beijing, including bars, offices, stadiums and some outdoor areas such as those of hospitals and schools. Fines for failing to keep such places smoke-free could be as high as 10,000 yuan ($1,600); for smokers who break the rules, they could be up to 200 yuan. Cigarette advertising and tobacco-company sponsorships of events will also be banned.Chinese leaders are becoming more focused on the problem. In 2013 officials were banned from smoking in public places. President Xi Jinping’s wife is a “tobacco-control ambassador” for a government-affiliated campaign group.

Economist 3/24/15

1. Smartphone growth has rocketed in the Gulf—by most counts the region has the highest penetration. WhatsApp and Facebook have become standard modes of communication. Nowhere is that more so than in Saudi Arabia. Several surveys in 2013 showed that the kingdom has the world’s highest percentage of people on Twitter relative to its number of internet users; and on YouTube too. Saudis also spend more hours online than their peers elsewhere. It has a GDP per capita of almost $26,000. Today thousands of its young people study abroad, speak English and are as globalised as their peers in other countries. Fully 75% of the population are under 30. They have grown up thinking it normal to go online to do everything from ordering a coffee to watching TV.It is the wedding of these factors to Saudi Arabia’s social peculiarities that may account for its topping of the virtual rankings. Shopping malls are pretty much the only source of entertainment for young people, because the clerics dislike cinemas and bars.
2. There are believed to be hundreds of foreigners—from South Africa, Ukraine and other ex-Soviet republics—engaged in Nigeria as private soldiers. It is unclear whether they are taking active roles in fighting, as several reports say, or simply providing training and technical support for foreign-bought weapons, as the Nigerian government claims.In the dying days of apartheid a stream of white South African ex-soldiers sought to ply their trade in conflicts abroad. The best-known mercenary outfit was Executive Outcomes, which in the 1990s fought rebels on behalf of Angola and Sierra Leone, to controversial but often impressive effect. These soldiers of fortune, with experience drawn from subjugating the black majority, were an embarrassing export for the post-apartheid rulers of South Africa. An “anti-mercenary” law, the Regulation of Foreign Military Assistance Act, was enacted in 1998 and toughened in 2006.Regulating them, rather than trying to ban them, might be a better solution on a continent that has too few effective regular soldiers of its own.
3. Since 1976, when capital punishment was brought back in the United States, only three people have been executed by firing squad in America—all in Utah. The state banned the method in 2004 (though since the law did not apply to past cases, another man was shot in 2010). But on March 10th its legislature passed a law to bring back the guns. Utah is one of several states trying to ensure it can kill people if lethal injection, the preferred modern way, is not available.Lethal injection has been becoming more controversial, and trickier, since 2011, when the European Commission banned the sale of eight drugs if the purpose was to use them in executions. Many manufacturers, including American ones, fearing bad publicity as well as regulatory problems, stopped making or supplying drugs too. The result has been an acute shortage of the chemicals with which it is legally possible to execute people in most of the 32 states that still have the death penalty. In Oklahoma, where a botched lethal injection took 43 awful minutes to kill a prisoner last year, the state House on March 3rd overwhelmingly approved a bill to allow the state to execute people by gassing them with nitrogen. On March 12th the Alabama House voted to reintroduce the electric chair. In Wyoming, the state House has passed a bill to bring back firing squads.So far, however, few alternatives have passed into law
4. What to expect from 5G? At this stage, one of the few things that can be said about 5G with certainity is that—if it is to meet society’s growing demands for ubiquitous and instantaneous connectivity—such networks will need to have a “latency” (ie, response time) of about one millisecond. The speed at which two devices can begin to communicate with one another over today’s 4G networks is about 50 milliseconds, and around 500 milliseconds for the still widely used 3G services.Even 4G is nowhere near fast enough for, say, cloud-based systems to transmit emergency instructions to driverless cars threading their way through traffic.Another cornerstone requirement is going to be a data rate of at least one gigabit per second (1Gbps) to start with, and multiple gigabits per second thereafter. Mobile users will need such speeds if they are to stream ultra-high-definition (ie, 4k and soon 8k) video formats to their phones and tablets.Today, 4G networks based on LTE (long-term evolution) technology can manage between 10 and 100 megabits per second (Mbps), depending on the setup and amount of traffic. The peak bit rate of LTE-A is claimed to be 1Gbps. In the real world, however, it is more like 250Mbps.
5. Two technical features—carrier aggregation and MIMO antennas—are responsible for giving LTE-A its big boost over earlier iterations. Neither technique is particularly new, but both are expected to play a big role in helping 5G fulfill its promise.For its part, carrier aggregation is a way of boosting download speeds by plucking signals from a number of local base stations, instead of simply the most powerful one in the vicinity.MIMO (multiple input/multiple output). This works by transmitting two or more data streams via two or more antennas, and having the receiving antennas process all the incoming signals instead of just the strongest one. Today’s wireless devices operate in the crowded 700MHz to 2.6GHz part of the radio-frequency compass.The obvious answer for 5G is to migrate from today’s UHF frequencies to either the SHF (super high frequency) band between 3Ghz and 30GHz, or even to the EHF (extremely high frequency) band from 30GHz to 300GHz.

Economist 3/23/15

1. TRIBUTES are pouring in for Lee Kuan Yew, Singapore’s first prime minister, who died in the early hours of March 23rd.Singapore’s modern history began in the early nineteenth century, when Stamford Raffles, a British administrator based in Java, chose to develop the island as a trading post for the East India Company. Singapore’s colonial governors encouraged workers to migrate from Britain’s colonies in South Asia; they also welcomed ethnic-Chinese traders and labourers who moved from mainland China and from across South-East Asia.In 1959 Britain granted Singapore a large degree of self-rule. Mr Lee, leader of the People’s Action Party, became prime minister after a landslide election victory. Singapore’s new leadership thought the island’s interests would be best served by uniting with the neighbouring Federation of Malaya, a confection of sultanates which had recently shrugged off British rule. Singapore joined the federation in 1963, which from then on was called Malaysia. But the arrangement was short-lived. Singaporean politicians chafed at provisions written into Malaysia’s constitution which granted the federation’s ethnic-Malay majority special privileges. Malaysian leaders, for their part, felt that Singapore’s predominantly Chinese populace threatened their country’s Malay heritage, and feared the new state would suck wealth from the mainland. These tensions probably contributed to race riots in Singapore in 1964, which left dozens dead. In August 1965 Malaysia’s parliament voted to expel Singapore from the federation.
2. TIFFANY & CO, America’s most iconic jewellery firm, is losing its glint. In January the company announced underwhelming results for the holiday period, causing its share price to slide 20%.The strong dollar encouraged foreign tourists to spend less in the company’s domestic stores, where sales usually account for nearly half of its business.In spite of the firm’s less-than-sparkling results, Tiffany’s executives are betting on future growth. Frederic Cumenal, the firm’s president, has announced plans to boost its store count by 12 to 15 over the coming year.
3. Stockton Rush, the boss of a company called OceanGate is the mastermind behind Cyclops, a five-seat submarine that will be able to brave sea depths currently accessible by but a handful of research vessels.Cyclops aside, there are eight such deep-diving submersibles in the world. Most date back to the Cold War. Around 90% of its weight is dedicated to keeping the three people within it alive. Only the remaining 10% is applied to the job of scientific investigation. It is also ruinously expensive to maintain and operate ( costs over $50,000 a day to keep at sea, because of its need for a large, specially adapted support vessel).The trend in deep-ocean research, as in the exploration of outer space, has thus been to prefer robots: ROVs (remotely operated vehicles), which are tethered to a ship, and AUVs (autonomous underwater vehicles), which swim freely. They can now dive to the ocean’s deepest trenches, glide beneath ice caps for months at a time or fix underwater drilling rigs.Sub-aquatic tourism is one—he reckons bespoke cruises to sunken ships and coral reefs should be possible for as little as $1,000 a person. And he foresees lucrative opportunities selling to the offshore oil and gas industry. The market for ROVs in this business is worth about $1.5 billion a year.
4. On March 13th Pope Francis declared an extraordinary jubilee, or holy year, to last from December 8th 2015 until November 20th 2016. (Ordinary jubilees are proclaimed every 25 years; the pontiff has the right to proclaim extra ones if he feels the spiritual need.)In the late Middle Ages, the church used jubilees to market indulgences, purporting to shorten the recipient’s stay in purgatory. Nowadays, holy years mostly generate profits for others. The most recent jubilee in 2000 brought an estimated 25m visitors to Rome, a rise of about a quarter on the previous year. That poses some challenges to Matteo Renzi’s centre-left government, which was taken by surprise by the announcement (“popes don’t ask permission”, a prime ministerial aide observed drily). A vast security operation will be needed, and perhaps emergency funding.
   
5. Its conflict with Azerbaijan over the disputed territory of Nagorno-Karabakh first broke out in 1988, and is still going strong. Armenia’s borders with Azerbaijan and Turkey are closed to this day, leaving it isolated and economically stagnant.The increasing threat of escalation leads Armenia to depend upon Russia for protection, but Armenians are growing increasingly frustrated with the relationship. They are particularly unhappy with Russian arms sales to Azerbaijan, which account for 85% of that country’s acquisitions over the past five years.Armenia officially joined the Eurasian Economic Union (EEU), a Moscow-led customs union, at the beginning of this year. But the decision to join the EEU was taken under duress, as Russia threatened to reconsider its alliance if Armenia signed an association agreement with the European Union.The absence of shared borders with the other three members—Russia, Belarus and Kazakhstan—makes trade difficult. Membership requires Armenia to introduce high tariffs, which undermine competitiveness and deter foreign investors. Armenia cannot afford to turn its back on Russia, but the government is trying to draft a new association agreement with the European Union that would be consistent with its membership of the EEU.

Economist 3/20/15

1. CONSULTING has its Big Three; accounting the Big Four; and executive search a Big Five. But there is no corresponding clutch of dominant law firms. None has amassed as much as 0.5% of an industry with global revenues of around $650 billion a year. The Big Four accounting networks (Deloitte, EY, KPMG and PwC), whose combined annual revenues of $120 billion exceed the $89 billion generated by the 100 largest law firms combined.The accountants insist that they do not want to compete with law firms, and that legal services will remain a small chunk of their revenues in the medium term. So far, they have focused on mid-tier, process-oriented work rather than the big deals and lawsuits that elite law firms chase. Moreover, regulation has restricted their growth.The idea of accounting firms doing legal work is hardly new.  In the 1990s the then Big Five, led by the late, unlamented Arthur Andersen, sought to diversify from auditing and tax by expanding into both consulting and law.That trend ended abruptly when the Enron scandal took down Andersen in 2002. The Big Four are taking a more focused approach this time. Rather than building full-service firms, they are concentrating on areas of law that complement their existing services: immigration.Since 2013 EY Legal has expanded from 23 countries to 64. In 2012 Deloitte scooped up Raupach & Wollert-Elmendorff in Germany, while PwC recently took over an immigration-law boutique, Bomza, in Canada. KPMG was the first of the four to register an MDP in Britain, which lets it give its lawyers there full-fledged partnerships in the firm.
2. In 1976 there were only half as many college bureaucrats as academic staff; now the ratio is almost one to one. No wonder average annual fees at private universities have soared to $31,000 in 2014, a rise of around 200% since the early 1970s. Each new graduate in America is now about $40,000 in debt.MOOCs are cheap, but students cannot bump into each other in the library and swap ideas, chit-chat or body fluids.ASU seeks to mix online and face-to-face instruction in a way that makes both more effective. Teachers cannot keep an eye on all their charges, so the university’s “eAdvisor system” nags them instead. Since 2008 it has given all freshmen an online achievement plan, including a constantly updated dashboard that shows whether they are on track or drifting towards the exit.Online introductory courses, full of prompts and explanations, ensure that teachers do not have to keep going over the basics in seminars. This frees time to teach the more difficult stuff. Early results look good: ASU has almost doubled undergraduate enrolments since 2002, to 82,000, kept its degree costs reasonably low ($10,000 a year for in-state applicants).The notion that online degrees are inferior is starting to fade. Top-notch universities such as Pennsylvania State and Columbia now offer them in many subjects. Georgia Tech has had an online-only master’s degree in computer science since 2014.
3. American football as it is played now involves large men in peak physical shape running into each other at top speeds. Brain injury may be an unwanted byproduct of such activity, but it is an inevitable one. One of those consequences is that promising young players quit. The league may not look as indifferent as it once did, but neither does it inspire confidence or trust.LAST season Chris Borland, a small but solid linebacker, led the San Francisco 49ers of America’s National Football League (NFL) in tackles—an impressive feat for anyone, especially a first-year player, as Mr Borland was.  But last night Mr Borland, who is just 24 years old, announced his own retirement. He walks away not just from a promising career, but also from most of a $3m contract over chronic traumatic encephelopathy (CTE) concerns.
4. The proliferation of drones—which include both small fixed-wing aircraft and small rotorcraft with multiple propellers—raises some vexing public-policy questions. In an effort to safely integrate drones of all sizes into American airspace, the Federal Aviation Administration (FAA) is now figuring out how to regulate the small ones (ie, less than 55 pounds). As drones acquire so-called “sense and avoid” technology to automatically avoid collisions, the FAA and the aviation industry more broadly must parse thorny questions about how to either prevent accidents involving flying robots or assign liability in the inevitable event of one.At issue is the way some drones can loiter overhead for long stretches, engaging in what is called “persistent surveillance”. The current state of the law—both legislation and court decisions—is poorly suited to deal with persistent surveillance. This is because privacy law is tailored to questions of whether one is in public—an open field—or in a space where one has a “reasonable expectation of privacy”. The Supreme Court has, at times, expanded such spaces, for instance finding in 1967 that the FBI cannot eavesdrop on conversations in telephone booths without a warrant.It’s the difference between a snapshot and an overhead video that shows the comings and goings of everybody in a city over the course of a week. In such a video, a so-called “pattern-of-life” emerges.
   

Economist 3/19/15

1. Egypt has withdrawn from the continent. The relationship turned sour when Hosni Mubarak, Egypt’s then president, was almost assassinated in Ethiopia in 1995. For the next 16 years Mr Mubarak shunned African summits.To get a sense of how much Egypt has withdrawn from Africa, consider that its trade on the continent accounts for less than 3% of its total.But after years of upheaval, Egypt is beginning to re-engage with the continent.Abdel Fattah al-Sisi, Egypt’s president, is focused on attracting investment. A much-touted investment conference in the resort city of Sharm el-Sheikh on March 13th-15th will feature ten African heads of state. In May 26 African countries, including Egypt, are expected to launch a new free-trade area in Cairo.  Egypt sits downstream, so has little control over the Nile river’s flow. Nevertheless, it claims most of the water running into its dam at Aswan, based on a treaty it signed with Sudan in 1959.The old treaties were clearly unfair, and the dam’s significance was overstated, but the dispute nevertheless poisoned Egypt’s relations with its neighbours.
2. India has 840m active mobile subscribers—the country is so vast that, to make it manageable, regulators divide it into 22 “circles”, or regional markets. In most circles there are at least eight mobile operators plying for custom. In contrast, other countries have found that between four and six companies is enough to keep prices in check while ensuring a decent level of service. India’s cut-throat market is a boon to its consumers, who enjoy among the lowest charges anywhere for calls and for data downloads .Some of the spectrum is new, but much comes from the expiry of 20-year licences sold in 1995, when the industry was in its infancy. That makes the auction a fraught affair for the three largest operators, Bharti Airtel, Vodafone and Idea, who together serve 58% of subscribers.Idea is the most exposed: 72% of its revenue depends on spectrum that is up for renewal, compared with 47% for Vodafone and 35% for Bharti.
3. Neuroimaging studies reveal that the brain continues to mature as people enter their early 20s, and the regions responsible for controlling impulses and making plans—ie, the frontal lobes, home of the prefrontal cortex—are the last to develop. Specifically, the brain blooms with neural connections until a child reaches the age of 11 or 12, and then it selectively prunes away the underused ones, or “grey matter”, throughout adolescence. As the brain grows more streamlined, it becomes better at transmitting information. The remaining connections are then made more efficient by a process called myelination, which essentially insulates neuronal axons with a sheath of fatty cell material, or “white matter”. The process of replacing grey matter with white matter does not reach the prefrontal cortex until people are in their early 20s. Studies show a relationship between increased myelination and an improved ability to make decisions and control impulses. Some now argue that this science helps to explain why teenagers across cultures are not only moody and compulsive, but also especially likely to seek novelty, take risks and follow peers.neuroimaging research is still in its infancy. There is much about the brain that no one understands yet, and there is rarely a clear relationship between a particular brain region and a discrete function.
   
4. Aaron Schock  announced his resignation on March 17th as Republican congressman for the state’s 18th district.Mr Schock, who is 33, was for a while the youngest member of Congress and remains the only one to appear semi-shirtless on the cover of Men’s Health magazine.This whirl of politics, jet-set travel and donor-stroking (he was one of the top five House Republican fundraisers in 2013) began to unravel in February, after his interior designer gave the Washington Post a chatty tour of Mr Schock’s offices on Capitol Hill.Mr Schock soon faced questions about $90,000 in campaign funds spent on private air charters, a taxpayer-funded private flight to a football match and unreported foreign travel.Less than 12 hours later he announced his resignation, calling all the attention too great a distraction from his public duties, and repaid all his expenses for official mileage as a congressman.
5. IS differs from jihadist groups that have gone before, including its parent, al-Qaeda.But what most sets it apart is its claim to have restored the Islamic caliphate. The revival of a single state to rule over all Muslims, dating to Islam’s earliest days and abolished in 1924 by modern Turkey after the fall of the Ottoman empire.The caliphate has been pushed out of the Syrian town of Kobane by Kurdish fighters, backed by American air power. It is being squeezed in Tikrit (the tribal base of the former dictator, Saddam Hussein) by the Iraqi army and Shia militias co-ordinated by Iran. IS’s funds are dwindling, too. America and its allies have bombed lucrative oil facilities. And after Tikrit falls, there is Mosul—bigger and more important, with a population closely associated with IS. The recapture of Mosul is vital to puncturing IS’s claim to be a caliphate. Hardest of all is the insoluble problem of Syria. Even if Mosul can be retaken, IS or something like it will survive, certainly for as long as it enjoys an unchallenged haven in Syria. For the time being, nobody is even thinking of trying to eject IS from the Syrian city of Raqqa.Syria will not be pacified soon—possibly not for many years. Until that moment, IS can lurk there, controlling swathes in the east, destabilising Sunni areas of Iraq and biding its time until it has another chance to rise up.

Economist 3/18/15

1. Japanese fans of sumo are so accustomed to foreigners’ dominance of Sumo wrestling that when in January the reigning Mongolian champion, Hakuho, carried off his 33rd Emperor’s Cup (beating not only his Japanese opponent in the ring but the formerly unbroken record of the legendary Taiho, from Hokkaido) only a few described the result as regrettable. Of the 26 most accomplished wrestlers in Japan, which is the only location of professional sumo contests, ten are non-Japanese, and seven of those are Mongolian.There would be many more foreigners in sumo—and probably near the top—were it not for a strictly enforced regulation that each of 43 stables in Japan may accept only a single foreigner, or gaijin. The chief reason is that the number of Japanese boys entering training to become sumo wrestlers has been plummeting for years. The typical, and far more successful, recruit of earlier centuries was a poor and often hungry youngster from a large family from Japan’s remote rural regions. Nowadays families are smaller and richer.Having refused properly to modernise its culture, the sport itself must also take much blame for its diminished appeal to Japanese youths.
2. FOUR extra points of IQ, an extra year’s education and a significantly enhanced income at the age of 30. Those are the benefits of having been breast-fed, according a study just published in Lancet Global Health.But Dr Horta’s work is particularly persuasive because it looks at adults rather than children and teenagers,The participants in the study were among a group of Brazilians born in Pelotas in 1982.Comparing those who, as babies, had been breast-fed for less than a month with those who had been so fed for more than a year, Dr Horta found the latter’s IQ was 3.76 points higher than the former’s and that they had attended school for 0.91 years longer.
3. Why is the oil price falling? Mostly because of increased supply from America—up by 4m barrels a day since 2009. Although most crude exports are still banned, American imports have plummeted, contributing to a glut on world markets.Why? The Organisation of Petroleum Exporting Countries is dominated by Gulf producers, notably Saudi Arabia. They have huge reserves to cushion the impact of low prices. America’s shale production boom is based on new techniques—fracking and horizontal drilling—and unlike “big oil” involves small companies and small projects. These are flexible, meaning they will quickly respond to any price rise.Other producers such Nigeria and Venezuela are indeed hurting badly. But OPEC solidarity stretches only so far. Russia tried and failed to get OPEC support for a production curb—and is now ramping up its production in the hope of protecting the volume of oil revenues.What happens next?
   The debate about lifting America’s ban on crude exports is firing up. The petrochemical and steel lobbies are fighting a rear-guard action against big oil.The oil industry’s immediate reaction is to squeeze costs out of its supply chain. So wages and margins are falling fast.
4. KLEINER Perkins Caulfield & Byers, one of Silicon Valley’s most prestigious venture-capital firms, had promoted only one woman to the position of senior partner by 2011, nearly 40 years after the firm was founded. Indeed, these firms tend to be even less diverse than the technology companies they fund. The number of female partners in VC firms has actually decreased from 10% in 1999 to 6% in 2014, according to a recent report from Babson College.
5. In 2011, in response to a wave of protests across the region, King Mohamed VI passed a new constitution and promised reforms in Morocco. He also co-opted the main Islamist party into government. Yet despite his lofty promises, most of the laws meant to give life to the new constitution are yet to be written. The press is muzzled and local human-rights groups are frequently harassed.The economy is expected to grow by 4.6% in 2015. Yet in this country of 33m, only 21,000 new jobs were created last year. Unemployment is, surprisingly, highest among young, urban, educated folk. The gulf between the cities and the countryside is staggering. Tens of thousands of vulnerable women toil for low wages as seasonal workers picking fruit to be exported to Europe, or as under-aged wives who are de facto servants in their husbands’ homes.
   

Economist 3/17/15

1. TRANSPLANT operations in China have long relied on organs taken from executed prisoners, a practice that has led to such abuses as the timing of executions to meet organ demand, with no notification of relatives.Since January 1st the government has insisted that no such organs be used for transplants. Ensuring compliance, however, will be difficult.The number of executions is almost certainly falling, even if it remains far higher than in the rest of the world. The government does not release data, but the Dui Hua Foundation, an American NGO, reckons there were around 2,400 executions in 2013, down from 6,500 in 2007.  In theory, the rules mean that hospitals will be able to obtain only organs donated by volunteers to a national organ-bank.t was slow to get going: by the end of 2014 it had received only about 8,000 organs from deceased volunteer-donors.Persuading the public to donate remains a problem. Many Chinese adhere to a traditional belief that the body has to be kept intact to show respect for ancestors.
2. Germany has one of the world’s most rapidly ageing and shrinking populations, even though an uptick in immigration has temporarily halted its overall decline since 2011. But decline is unevenly spread. Some cities are growing.But local people in those places are not giving in. Some get together to start volunteer van services to replace buses. Others merge government services and shops under one roof.
3. “The Barefoot Lawyer”, Mr Guangcheng Chen’s memoir of his struggle with the thuggery of the state in the poor village in eastern China where he grew up, and of his eventual flight, is a powerful reminder of how some aspects of the country remain unchanged despite its rapidly growing prosperity. Mr Chen’s efforts, as a self-taught expert in the law, to expose one particular abuse—the subjection of 130,000 people in his prefecture, Linyi, to forced abortions and sterilisations.The penalties for such outspokenness can be severe: Mr Chen was imprisoned for four years before he was put under house arrest in 2010, with goons deployed to prevent him escaping or receiving visitors. Mr Chen’s combative spirit seems never to desert him. His flight from his village to the American embassy is gripping. Only his wife knew about the escape planmerican diplomats saw his firmness; to their frustration he changed his mind about a plan, painstakingly agreed on with Chinese officials, that he stay in China and be allowed to study at university. Not trusting the government, he asked to leave for America instead.But the US administration did manage to persuade China to let him leave the country.
4. For Diageo, the world’s biggest maker of alcoholic drinks, St Patrick’s day is an opportunity to sell them Guinness, a stout brewed in Dublin since the 18th century.This year, Diageo hopes to sell 7.5m pints of the black stuff on St Patrick’s day alone. in 2014 Diageo lost eight times as many sales of Guinness in Britain as it gained in Ireland.The total volume of beer downed in Britain and Ireland has fallen by 20% over the past six years, according to Euromonitor, a research firm.Americans are downing fewer Budweisers. Carlsberg, a Danish beermaker, and Heineken, a Dutch competitor, are also struggling to revive revenue growth in Western Europe.British and American topers may not be drinking more bottles of wine but they are drinking pricier ones. Revenues are up by 6% a year. Sales of spirits are also improving. Smaller breweries may profit form the popularity of craft beers.
5. Insurance relies on a dynamic of imperfect information.Unlucky and lucky alike pool premiums into a collective fund, and the unused payments of the fortunate cover the costs of the unfortunate, leaving some money left over as insurer profits. The growing mountain of personal data available to individuals and, crucially, to firms is giving those with the necessary processing power the ability to distinguish between low-risk and high-risk individuals.This could upend existing insurance business models, in a few ways. The better behaviour resulting from smart devices is one threat. Conventional risk pools (for home or car insurance, for example) are shrinking as preventable accidents decline, leaving the slow-footed giants of the industry at risk.Whether technology companies are actually keen to get into the insurance business is not yet clear. The prize for the most successful firms will probably be huge; last year insurers collected an estimated $338 billion in profits.