Economist 5/14/15

  1. Firms looking to put their managers through development programmes are increasingly creating their own, rather than relying on business schools.General Electric is considered to have opened the first corporate university, in 1956. Perhaps the most famous is McDonald’s “Hamburger University”.A survey by the Boston Consulting Group (BCG) found that the number of formal corporate universities in America doubled between 1997 and 2007, to around 2,000.The numbers are vague because the definition of what qualifies as a corporate university is slippery.Corporate universities have two distinguishing features: the first is a dedicated facility, whether built of bricks or housed online; the second is a curriculum tailored to the company’s overarching strategy.Corporate universities can be particularly useful when a firm is attempting to overhaul its culture.Apple has gone further, poaching Yale business school’s dean, Joel Podolny, to run its corporate university.Although there are many good reasons for firms to invest in corporate universities, they have their limitations. One is the danger of building an echo chamber. Managers who go to a university business school are exposed to ideas from peers in other companies.Even more troubling is that, for all the millions spent on them, it seems all but impossible to measure the effect a corporate university has on the bottom line.
  2. Companies have been known to use the offer of education at a prestigious business school, whether an “Executive MBA” (EMBA) degree or a shorter leadership course, as a way to keep their rising stars happy.Unfortunately, it often had the opposite effect, providing a firm’s brightest and best with a highly marketable qualification that made them more prone to being poached by rivals. Certificates from corporate universities, being more focused on the sponsoring firm’s needs, are less attractive to competitors.Many firms have now stopped paying to send managers to external business schools altogether.Yet the overall demand for EMBAs does not seem to have fallen. Students on the EMBA programme offered by IE in Spain earned significantly more after completing the programme.. Some 82% say they were promoted soon after graduation. Of course, they may have been destined for higher things regardless of their sojourn in academia, but most who took our survey believe that their EMBAs played a part in their rise.
  3. THE world is addicted to debt. The borrowings of governments, households, companies and financial firms have risen in almost every big country around the world since the year 2000, relative to their GDP. Others have economies that are driven by debt-fueled investment, or which are stagnant. China has similar debt levels to America, despite being only 20% as rich as it per person. Portugal has similar leverage to Sweden, which is almost twice as wealthy as it. Troubled Greece’s debt-to-GDP is on a par with that of prosperous Norway’s. Countries with disproportionately high debts are more prone to crises. But working out how to shrink-debt to GDP without causing a slump is tough – as China is discovering.
  4. FOR decades people-traffickers have plied a lucrative trade on South-East Asian waters.Roughly half of South-East Asia’s boat people are economic migrants from Bangladesh. The other half are Rohingyas, a long-persecuted Muslim minority, originally from Bangladesh but whose home is now in coastal Rakhine state in north-western Myanmar.Migrants pay up to $2,000 for a passage to smuggler camps in southern Thailand, from where they hope to sneak across the border into Malaysia, one of South-East Asia’s richest countries (and Muslim to boot). It is a long and dangerous journey. Some succumb to disease or abuse in Thai camps.For years the trade has carried on under Thai officials’ noses.Yet the generals who have run Thailand since a coup a year ago have stepped up their efforts to combat the problem. On May 1st the authorities found 26 bodies at an abandoned trafficking camp in the southern province of Songkhla. They have vowed to close the rest. European countries have threatened to ban imports of seafood unless Thailand stamps out slavery.
  5. Around the world, legal and financial support for new parents is better than it has ever been. According to the International Labour Organisation (ILO), 85% of countries now provide at least 12 weeks’ maternity leave. In all but two of the 185 countries it surveys mothers are entitled to some leave paid for by the state, employers or some combination of the two. (The hold-outs are Papua New Guinea and America, although a few states offer basic support.) Though only a third of countries meet the ILO’s recommended minimum of at least 14 weeks off for new mothers, paid at two-thirds their salary and funded publicly.But how many countries meet the ILO’s guidelines on paternity leave? None, because no such guidelines exist. Though it publishes detailed advice on such matters as breastfeeding breaks for female employees, the organisation has drawn up no formal recommendations on fathers’ rights and duties. It turns out that even shorter maternity breaks have unintended consequences. Time away from the labour market reduces women’s earning power, as their skills degrade and they miss chances to gain experience and win promotion.The effect is magnified when lengthy maternity leave is combined with policies to encourage part-time work, which tempt more women back into the labour force but help keep them in junior positions.Rather than simply cutting maternity leave in response to such findings, a growing number of governments are trying to spread the child-rearing burden (or joy, depending on how one looks at it). Last month Britain became the latest country to combine maternity and paternity leave into a single chunk of parental leave, to be split between mother and father however they see fit. Several European countries, as well as Australia and New Zealand, already have such a system.The problem is that dads tend not to take up the offer. In Austria, the Czech Republic and Poland, where all parental leave is transferable, only about 3% of dads make use of it.One reason for low take-up by fathers is financial: even pre-childbirth, women are paid less than men, meaning that their salaries are easier to forgo during a period of unpaid or low-paid leave. But cultural pressures also weigh heavily.
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Economist 5/13/15

  1. PITY the poor pineal gland, tucked behind the thalamus in a gap between the brain’s hemispheres. It has a simple task—to make melatonin, a hormone that regulates sleep. In days gone by, it would start doing so after sunset, ramp up to a maximum in the middle of the night, and then taper off toward the morning. Modern life, though, is confusing for the pineal because its signal to start work is the absence of light—specifically, of blue light. This part of the spectrum radiates by the bucketful from light-emitting diodes in the screens of phones, tablets and laptop computers. As far as the gland is concerned, that turns night into day. Study after study has suggested night-time use of screen-based gadgets has a bad effect on peoples’ sleep.
  2. Dutch kids are among the happiest in the world, according to Unicef. Some attribute their high quality of life and general good nature to a rather laid-back approach to work: more than half of the Dutch working population works part time, a far greater share than in any other rich-world country. On average only a fifth of the working-age population in EU member states holds a part-time job (8.7% of men and 32.2% of women); in the Netherlands 26.8% of men and 76.6% of women work less than 36 hours a week. Part of the reason is that Dutch women were relative latecomers to the labour market. Compared with other countries, few men had to leave to fight in the world wars of the 20th century, with the result that women did not labour in factories as they did in America and Britain. Thanks to the country’s wealth, a dual income was often not a necessity for a comfortable life.But the cultural conviction that families still needed mothers home for tea-time prevailed, and thus the state worked closely with employers to ensure that the new part-time jobs would enjoy similar legal positions to their full-time equivalents. This has, to an extent, been continued: in 2000 the right for women and men to ask for a job to be part-time was written into law. Today, perhaps because part-time work is the norm, women in the Netherlands have a relatively high labour-force participation rate. However, the Netherlands’ record for getting women into top management roles is dire.
  3. GREECE is perilously close to running out of cash. Even Yanis Varoufakis, the defiantly optimistic finance minister, has acknowledged the dire state of the country’s public finances.Mr Varoufakis resorted to raiding Greece’s holding account at the International Monetary Fund to repay a €750m ($844m) loan instalment owed to the Fund itself. The unusual move was permitted under the Fund’s regulations as an emergency measure. Greece says it intends to put the money back in the account at an unspecified future date.The finance ministry has struggled since February to raise enough cash to pay pensions and public-sector salaries and at the same time meet this year’s especially tight schedule for repaying its bail-out loan. Ministry officials admitted that without the extra €650m from the holding account, public-sector workers would miss a salary payment due on Wednesday. Now they are hunting for another €650m to make sure both pensions and salaries can be paid at the end of the month. It looks increasingly hard for Greece to meet the conditions for unlocking €7.2bn of bail-out aid by the end of May. It is not just a matter of striking a deal: reforms must be legislated and implemented before the EU will release any cash. The stand-off with the EU and the IMF over new reforms has now gone on so long that Athens has been unable to access any bail-out funding for almost a year.Another reason for the squeeze is that tax revenues have shrunk dramatically. The radical left-wing Syriza-led government that took office in January pushed through legislation allowing delinquent taxpayers to pay their debts in as many as 100 instalments, while slashing fines for anyone willing to pay up the full amount owed.
  4. A new survey by the Pew Research Centre shows a sharp drop in the number of Americans who identify with Christianity and a corresponding rise in the number who are religiously unaffiliated. The trend can be seen in all generations, races and income groups but it is particularly dramatic among the young.The share of Americans over 18 who describe themselves as Christian fell from 78.4% in 2007 to 70.6% in 2014 while those who were either atheist, agnostic or “nothing in particular” rose from 16.1% to 22.8%. Among the “young millennials” born since 1990, only 56% called themselves Christian, and 36% had no affiliation. Within the population as a whole, moderate or “mainline” Protestants fell quite steeply from 18.1% to 14.7% but some decline was also seen among the evangelicals, seen hitherto as a robust minority: their share declined from 26.3% to 25.4%.  Muslims and Hindus rose from a low base (0.4% to 0.9% and 0.4% to 0.7%, respectively) while the Jewish proportion inched up from 1.7% to 1.9%.
  5. Mr Sam Rainsy’s Cambodia National Rescue Party (CNRP) had been in a stand-off with Mr Hun Sen’s Cambodian People’s Party (CPP) since the election in 2013. A parliamentary boycott and a series of street protests followed, as well as a violent government crackdown on dissidents. An uneasy truce was negotiated last July.How long the amity will last is unclear, but for now it is a marked change. Several opposition politicians have been released from jail. The CNRP will be allowed its own television station as an antidote to the state-run media. And the party will have more chairmanships of parliamentary committees as well as seats on the National Election Committee, whose apparent bias in favour of the CPP was a chief grievance at the last election. The next election must be held by 2018, and on the face of it the opposition should fancy its chances.  After all, despite voting irregularities and the state’s apparatus put to the service of the ruling party, the CNRP fared remarkably well in 2013, winning 44.5% of the vote and 55 seats versus the CPP’s 48.8% and 68 seats—down from 90 seats in the previous election.

Economist 5/12/15

  1. Civil wars in the Middle East and oppression in Africa have contributed to a surge in the number of asylum applications to Europe, from 336,000 in 2012 to over 600,000 last year. Applications from Syria and Eritrea have increased fivefold. But currently only a handful of countries shoulder the costs associated with accepting asylum-seekers. Germany, France and Italy took over half of refugees applying to European countries in 2014. They, unsurprisingly, support quotas, while other countries are far less keen to spread the burden. Hungary, which fervently objects to quotas, processed only 6,000 of the over 40,000 applications it received in 2014. Fewer than 10% of those were accepted—the lowest acceptance rate in Europe.
  2. South Africa’s wine sales to China grew by 63% in 2014. Whereas the South Africans are still small fry compared with French winemakers or even with Australians, they are determined to find a way into the hearts of Chinese drinkers.Mr Koegelenberg, for example, took the advice of his Chinese partner, who told him to make the labels look French. So in 2011 “L’Huguenot” was born, a South African brand for China only. Mr Koegelenberg has had to keep up with China’s changing tastes: for example, sales of expensive wines for “gifting” to business partners have fallen off under the edicts of President Xi Jinping.
  3. BEFORE the refugees came, Dadaab was a forgettable little way-station in north-eastern Kenya on a dusty road to Somalia. It is Kenya’s fourth-largest population centre and the world’s biggest refugee settlement. As Kenya’s government struggles to deal with Islamist terrorism, it is blaming Somali refugees and wants Dadaab gone.Kenya’s response to the latest attack was to threaten to close the camp and to outlaw 85 remittance companies, civil-society groups and businesses, all accused of funding terrorism. After Westgate, Kenya’s government proclaimed a “voluntary repatriation” scheme that took over a year to get going and was largely ignored; barely 2,000 Somalis have taken up the offer to return.In Dadaab the refugees expressed panic and defiance. Many have lived there for a quarter of a century and are afraid to go back to their country, which is still rent by violence.Residents deny that the camps are riddled with jihadists.
  4. With a few exceptions the world’s 45 landlocked countries are poor. Of the 15 lowest-ranking countries in the Human Development Index, eight have no coastline. All of these are in Africa, which is a poor region. But even compared with similar sea-front countries those without coastlines have lagged behind. Their GDP per person is 40% lower than that of their maritime neighbours.Their most obvious handicap is in moving goods to and from ports. International treaties promise access to the oceans, but responsibility for implementing them lies with the governments of the “transit states”. They have little incentive to build infrastructure that would mainly help their neighbours.Enterprises regard landlocked trading partners as unreliable, since transit states can interrupt commerce. A strike by Chilean customs officials in 2013 caused a queue of lorries 20km (12 miles) long in Bolivia.The success of the few rich landlocked countries offers little hope to poorer ones. Switzerland specialises in finance, which does not travel by boat.Botswana, a middle-income landlocked country, exports diamonds, which are shipped by air.
  5. For many outside observers Chile remains an admirable success story. Public debt and inflation are low. Only one Chilean in ten lives in poverty, while infant mortality is not much above that in the United States. Santiago, the capital, is laced not just with urban motorways but also with metro lines.Yet Chile is ill at ease. Mr Piñera’s government was dogged by massive student demonstrations calling for free education. In 2013 Michelle Bachelet, the moderate Socialist president in 2006-10, won a landslide victory on the most left-wing platform since democracy was restored, calling for a new constitution and reforms aimed at tackling pervasive socioeconomic inequality.Chile has the least-bad schools in Latin America, though that is not saying much. But the president chose to adopt the students’ political agenda. The first of several education reforms bans school selection of pupils, bars privately run but publicly supported schools (which educate 58% of children) from making profits and will gradually replace parental top-up fees at these schools with public funding. This will eat up most of the extra tax revenue.The left insists the reforms will turn a country run for and by a small elite into a social democracy. Many on the right and in business say they threaten Chile’s success.

Economist 5/11/15

  1. Suzuki Mehran, Pakistan’s bottom-of-the-range car has barely changed since its debut in 1989. Taxi drivers complain that parts straight from the factory quickly have to be replaced.The Mehran is the only small car available—and you have to wait for months to get one. At $6,250 for the basic model, it is not cheap. It costs a third more than the Indian equivalent, the Suzuki Maruti—which was phased out altogether last year.The roads are clogged with Toyota Corollas and a few Honda Civics—almost invariably white. They are assembled locally and are years behind in offering airbags, anti-lock braking systems and even electric windows as standard.The industry is carved up among just three Japanese brands, Suzuki, Honda and Toyota, assembling cars with imported parts in joint ventures with local players. They enjoy the protection of high tariffs and other Byzantine rules. It is meant to encourage “indigenisation” of production.
  2. On May 4th Bharti Retail said it would join up with Kishore Biyani, one of India’s retail pioneers. Bharti’s 200-plus stores, most of them small, will be folded into Future Retail, one of Mr Biyani’s three listed enterprises. Future’s 370 stores have a higher average floor space and a much greater combined turnover. Bharti’s hypermarkets may eventually trade under Future’s Big Bazaar banner, but its small supermarkets will keep their Easyday logo. Bharti will get a 9% stake in the combined firm. This will rise to around 15% if the merger meets its initial goals.India’s supermarket chains account for just 2% of food and grocery sales. Profits are meagre because revenues have not kept pace with rents.The cost of shared functions such as marketing, procurement and logistics can be spread across more stores. The combined firm should be able to bargain for better terms from local manufacturers of packaged foods or personal-care products,
  3. THE European Union may have removed most barriers to physical trade, but online it remains a prime example of provincialism. Digital businesses still have to deal with 28 sets of national contract laws, adding an estimated €4 billion-8 billion ($4.5 billion-9 billion) a year to their costs. Only 15% of European consumers say they have ever crossed an EU border while shopping online. Only 4% of internet traffic from EU countries goes to online services in another European country, whereas 54% of it goes to services in America. On May 6th European Commission published its “Digital Single Market Strategy”.It wants to establish common rules for online purchases, integrate telecoms regulations, push postal services to offer better and cheaper parcel delivery across EU borders and reduce the burden on businesses caused by varying VAT regimes. More controversial are the commission’s plans to harmonise copyright law, in particular its plan to ban “geo-blocking. Europeans are often barred from accessing online services in another EU country—in some cases because of copyright and other laws, but often for no apparent reason.To help startups scale up, the commission calls, for instance, for any newly established EU company to be able to expand its operations across borders and become pan-European within a month, completing all the necessary registrations online.
  4. The theme-park business, which earns annual revenues of $7.5 billion in western Europe, is attracting other new entrants. Last July Cinecittà, an Italian film studio, opened its first theme park near Rome. And a giant theme park and resort with 15,000 hotel rooms, also based on Paramount Pictures’ films, is due to open in south-eastern Spain next year.The developers’ enthusiasm is surprising, given the poor performance of Disneyland Paris, Europe’s largest theme park. Hit hard by the recession and heavily debt-laden, its owner, Euro Disney, last turned a profit in 2008.PortAventura, near Barcelona, the only Spanish theme park making money, said in November that its profits had fallen year on year by 18% to just €13m.To balance the books, parks are trying to get visitors to spend more rather than seeking to attract greater numbers.Burger joints have been joined by new gourmet restaurants. Expensive new rides that take guests on different routes each visit.Disney says it has stepped up efforts to market the resort to wealthy Russians and Arabs, who may pay $10,000 or more to stay in the resort’s best hotel suites.
  5. Mr Shinzo Abe, Japan’s prime minister is serious in his endeavour to “rev up the hydrogen revolution”. His government is paying generous subsidies of about ¥3m ($25,000) per fuel-cell vehicle (each currently costs around ¥7m) to residents of Tokyo; the city has pledged a total of ¥45 billion for hydrogen-related infrastructure ahead of the Tokyo Olympics in 2020. Toyota, a Japanese carmaker introduced the world’s first commercial hydrogen car, which Toyota has named “Mirai”: “the future”.Japan plans to install small hydrogen fuel-cell units in over 5m homes by 2030. The government hopes that hydrogen cars could be the next hit for Japan Inc, which has lost ground globally in computers and electronics. Unlike electric cars, which have a limited driving range and take hours to recharge, hydrogen vehicles run for up to 650 kilometres on a full tank and take just a few minutes to fill up. Their exhausts emit nothing but water vapour.

Economist 5/8/15

  1. CRACKDOWNS in China often unfold without explanation, carried out by officials acting on directives that never see the light of dayThe 330 Metal Festival had been held without a hitch since 2002. This year the daylong bash was, as usual, to have featured heavy-metal bands whose very names sou.nd calculated to annoy the party’s prudes: Crack, Massacre of Mothman and Suffocated.But a few hours after the event opened—two days before the guitarist’s birthday—the police arrived at the venue, a nightclub in Beijing called Tango. They demanded the festival be shut down for safety reasons.Then in April came the announcement that Beijing’s two biggest rock festivals, Strawberry and Midi, which are held every year during the May Day holiday, were being “postponed” indefinitely.It may be that ensuring safety was indeed a reason for some of the closures. But officials are trying to tighten control over culture generally.
  2. Western sanctions over Ukraine, and what looks set to be a long-term chilling of relations with America and Europe, has given Russia no option other than to embrace China as tightly as it can.Next week, in a further symbol of the growing strategic partnership between the two countries, three or four Chinese and six Russian naval vessels will meet up to conduct live-fire drills in the eastern Mediterranean.In theory, Russia’s incursions into Ukraine and its seizure of Crimea violate two of China’s most consistently held foreign-policy tenets: non-interference in other states and separatism of any kind. But China abstained from voting on the UN Security Council resolutions condemning Russia, while Chinese media have given Russia strong support.Striking evidence of the new closeness between China and Russia was a $400 billion gas deal signed in May last year under which Russia will supply China with 38 billion cubic metres (bcm) of gas annually from 2018 for 30 years.In April it agreed to sell China an air-defence system, the S-400, for about $3 billion. This will help give China dominance of the air over Taiwan and the Senkaku islands.
  3. Companies in the Valley are big spenders too. Last year around $184 billion of mergers and acquisitions were struck in the American technology industry.With a current stockmarket value of $48 billion, Salesforce would not come cheap. But many of America’s biggest technology firms are rolling in money: Microsoft, for one, has $95 billion in cash and short-term investments on its balance-sheet.Recently Twitter and LinkedIn, two social networks, missed earnings forecasts, sending their shares falling by around 28% and 21% respectively. Sustained underperformance could drive down public firms’ prices and make some of them easier targets.When Twitter reported its earnings on April 28th, it announced a partnership with Google to help it sell and measure the effectiveness of ads.Midsized, advertising-supported firms have struggled of late, as it has become clearer that some will not add users and revenues as quickly as once hoped.
  4. As well as touring bikes big enough to fit a Jacuzzi on,Harley-Davidson now offers zippier models that are easier to ride if you are female—and easier to afford if you are young. So-called sports and street bikes made up a fifth of volumes in 2014. Sales in India, China and Vietnam are booming.In the quarter to March, Harley’s sales, in dollars, fell by 3% compared with a year earlier. Had currencies remained flat, sales would have been unchanged. Almost all big American manufacturing firms are in the same boat, although the degree of pain varies according to the size of their foreign arms and the currencies they operate in.Harley’s rivals are mostly European and Japanese firms, which typically manufacture in their home countries. That means they are enjoying soaring revenues and expanding margins thanks to the dollar.Some have decided to blow these new profits by starting a price war in America
  5. America’s navy is trading explosives for electricity and working on a railgun, a weapon designed to hurl shells at seven times the speed of sound. As the name suggests, a railgun dispenses with the enclosed barrel employed by explosively propelled artillery in favour of a pair of electrically conductive rails.The currents involved—millions of amps—are difficult to generate, and they place huge stress on the system. The same force that flings the projectile out of the gun also tries to force the rails apart.Two firms have been working on the navy’s railgun—BAE Systems and General Atomics.The brief given to the companies is to develop a weapon that can fire a 10kg projectile at about 2.5km a second. This is roughly seven times the speed of sound—and about three times the muzzle velocity of a conventional naval gun. At those sorts of speeds, there is no need to give the projectile a warhead. Its momentum is enough to cause destruction.ngle ship-launched missile can set the navy back well over $1m. Current estimates for railgun projectiles are around $25,000 per shot.

Economist 5/7/15

  1. SEVEN weeks after winning an hard-fought victory in Israel’s election, and just hours before a constitutional deadline, Binyamin Netanyahu informed President Reuven Rivlin on May 6th that he had succeeded—just—in forming a new government.He had been negotiating with the right-wing and religious parties to build a solid block of 67 seats in the 120-member Knesset. In the event, he has ended up with the slimmest of possible majorities: 61 seats.In the final 48 hours of negotiations, Naftali Bennett, the leader of Habayit Hayehudi (Jewish Home), the last party to sign an agreement, held the fate of the new Netanyahu government in his hands. Mr Netanyahu was forced to surrender the Justice Ministry, which is now set to be headed by Mr Bennett’s ally, Ayelet Shaked.Mr Netanyahu was forced to surrender the Justice Ministry, which is now set to be headed by Mr Bennett’s ally, Ayelet Shaked.A fierce critic of the Supreme Court’s powers to strike down legislation, Ms Shaked will spearhead the right wing’s campaign to diminish the court’s role.
  2. A raft of “automated wealth managers” is now available, on the premise that algorithms can offer sound financial advice for a small fraction of the price of a real-life adviser. With names that suggest a mix of blue-blooded discretion and startup ebullience—Wealthfront, Betterment, Personal Capital, FutureAdvisor—they are growing at a rapid clip. The platforms work by asking customers a few questions about who they are and what they are saving for. Applying textbook techniques for building up a balanced portfolio—more stable bonds for someone about to retire, more volatile equities for a younger investor, and so on—the algorithm suggests a mix of assets to invest in.  Nearly all plump for around a dozen index funds which cheaply track major bond or stock indices such as the S&P500. They keep clear of mutual funds, let alone individual company shares. A major selling point for robo-advisers is that they promise they will not make any money from their customers other than through the annual fee. That is refreshing in an industry rife with potential conflicts of interest. Banks, for instance, often recommend that their clients invest in funds run by their asset-management subsidiaries.Regulation has, if anything, helped the robo-advisers get off the ground. If one of them were to go out of business, investors would not lose any money.The robo-advisers are doubling their assets under management every few months, but their combined assets still run to less than $20 billion, against $17 trillion for traditional managers.Vanguard, the group that puts together the low-fee funds that most robo-advisers recommend, is launching its own low-cost advisory service.  Charles Schwab also rolled out its own automated wealth service.
  3. FOR years, Washington, DC’s leaders have dreamed of renovating, expanding and generally revolutionising Union Station, the city’s main rail hub. Last month, the Union Station Redevelopment Corporation (USRC), which manages the 107-year-old terminus, announced that it had selected Beyer Blinder Belle, the architecture firm behind the late-1990s overhaul of Grand Central station in New York, to dream up what its Washington, DC cousin will look like a decade or so from now.Yet these are exactly the sorts of infrastructure projects that America seems to be able to complete. It is easy to see why. Train stations are big and visible. Track-straightening and bridge maintenance are similar investments: crucial but, for too many people, boring.
  4. In April NGOs and think-tanks in Mexico lobbied successfully for laws opening up greater access to government information. They also launched a “civil observatory” to monitor the building of a vast new airport near Mexico City; the government says it will cost 169 billion pesos ($11 billion), but has not said where the money will come from.The NGOs’ methods include “name and shame” campaigns that play well on social media. Ms Ríos’s outfit, México ¿Cómo Vamos? (How are we doing, Mexico?), has designed an anti-corruption “breathalyser”. It shows in real time which states have and have not approved the anti-corruption reform that will, for the first time, subject them to federal audits.Recently, two NGOs, the Mexican Competitiveness Institute (IMCO) and Transparencia Mexicana, created a platform called Three out of Three, which encourages candidates in mid-term elections on June 7th to go beyond legal requirements and make public their assets, interests and proof of tax payments. It has not been easy for NGOs to attain this influence in a country where the technocratic elite used almost automatically to join the government.

Economist 5/6/15

  1. INVESTORS were expecting bad news when Sainsbury’s, Britain’s second-largest supermarket chain, reported annual results on May 6th. Sainsbury’s obliged, following Tesco, its bigger rival, in recording a “kitchen-sink” loss—writing down lots of overvalued assets. Although Tesco’s kitchen-sinking was in a different league (it lost £6.4 billion), Sainsbury’s still announced charges of £753m ($1.1 billion), producing an overall loss for the year of £72m. But hefty write-downs now, chiefly of underused hypermarkets, may mean bigger profits later when the assets are sold, probably for residential development. The write-downs do nothing to tackle British grocers’ underlying problem: the loss of customers to two German discount chains, Aldi and Lidl.
  2. Mr Obama itches to sign the Trans-Pacific Partnership (TPP), a trade deal that would link 11 economies of the Pacific rim—including Japan and Singapore, but not China—with America. The deal would reduce tariffs and, more importantly, harmonise regulations between the countries to make trading easier.According to one estimate, by 2025 the TPP would raise American incomes by 0.4% per year. The public largely agrees with the president: 58% of Americans see free trade mostly as an opportunity.Many Democratic politicians are less trade-friendly than those that vote them in (the influence of trade unions may have something to do with it). They fret that imports from low-cost countries such as Vietnam will hurt American workers in industries such as carmaking and textiles. This is not a foolish worry. Trade has probably held down blue-collar workers’ wages.
  3. LIFE is pretty sweet for America’s airlines at the moment. The price of jet fuel has been hovering at its lowest point for six years and no prospect of pesky foreign competition any time soon. As a result of all this, North American carriers are expected to record a combined net profit of $13.2 billion in 2015 according to IATA, an airline association.Yet there is also another reason for American carriers’ rosy health: the amount they reap from baggage fees. In 2014 they earned $3.5 billion from ferrying our luggage around, according to US Department of Transportation figures released this week. Although that is a record, that amount has actually changed little in recent years. It is a consistently lucrative pursuit.Airlines seem to have settled on a standard price, at least for domestic flights, of somewhere around $25 for the first checked bag. Of the big carriers, only JetBlue and Southwest do not charge for this.
  4. Some South Africans wondered why King Goodwill continues to be bankrolled by taxpayers given his pronouncements that clash with the country’s progressive constitution.King Goodwill is just one of ten traditional kings, and one queen, each receiving a yearly public stipend of about $110,000. Some 8,000 other traditional leaders, including chiefs and headmen, get smaller amounts. But King Goodwill, unlike the others, will also receive $4.8m this year for the upkeep of his household: seven palaces, six wives and at least 28 children.  In rural areas, far from the courts, chiefs and headmen play a practical role in mediating disputes. But customary law often stands at odds with South Africa’s Bill of Rights, which protects women and minorities, among others. Much of South Africa’s communally held rural land is also the richest in minerals. When traditional leaders strike deals with mining companies, the danger is that chiefs and their families will benefit most. Last year the Restitution of Land Rights Amendment Act made it easier to lodge land claims. President Jacob Zuma, a Zulu, has encouraged traditional leaders to file claims before the deadline in 2019; King Goodwill is claiming rights to the entire province of KwaZulu-Natal.
  5. OVER $13 trillion is sitting in American bank accounts and money-market funds, earning little or no interest. If consumers were even marginally more demanding, they could earn tens of billions of dollars in extra returns. That is the premise behind MaxMyInterest, a year-old electronic service aimed at slothful but yield-hungry savers. It offers to move money from banks that want to shed deposits, and that therefore pay savers low interest, to ones in need of them, and so willing to pay more. At the same time, it makes sure that each account holds no more than $250,000, the maximum amount insured by the government, providing not just higher returns, but risk-free ones.The average interest paid on deposits in America is a microscopic 0.09% a year, according to BankRate, a data firm. MaxMyInterest’s clients receive 0.75% to 1.05%, with a weighted average of almost 1%.That may seem small, but it amounts to $2,000 a year for every $250,000 account.So far JPMorgan Chase, Citibank, First Republic, Wells Fargo and Bank of America—all titans of American banking—are working with MaxMyInterest to shift excess cash out of the accounts of willing customers. Meanwhile, Barclays, GE Capital, American Express, Ally Financial and Capital One 360 (formerly ING Direct) have signed up to receive money. Big banks should beware, too. They may benefit at the moment, but the spread of such services will make it easier for savers to shop around for higher rates.