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.

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