Economist 10/19/15

  1. AT CHECKPOINTS across the country, Iraq’s many and various security forces cheer Russia’s arrival as an answer to their failure to turn the tide after 16 months battling the jihadists of Islamic State (IS) in north-western Iraq.Late last month, Iraq signed an intelligence-sharing agreement with Russia which infuriated the Americans. Days later Russia’s generals established an operations room with America’s two regional foes, Iran and Syria, inside Baghdad’s Green Zone, which houses America’s embassy.Haider al-Abadi, the Iraqi prime minister has appealed to Russia to expand its air campaign from Syria to include IS targets in Iraq.Mr Abadi’s men argue that beggars cannot be choosers. Iraq spends a quarter of its budget fighting IS, despite a government deficit made worse by falling oil prices.
  2. The announcement that China’s economy grew 6.9% in the third quarter, just below the second quarter’s 7% pace, is more grist for the already-brimming mill of scepticism about its data.Such are the doubts about Chinese figures that it is difficult to write a straightforward analysis of them without riddling it with caveats about what is and is not credible.Against that bleak backdrop, growth of 6.9% is a remarkably good performance. It might be China’s slowest quarter since early 2009, the nadir after the global financial crisis, but the economy is twice as big now as it was then. The industrial sector expanded 5.8% year on year in the third quarter, just about the weakest in more than two decades.
  3. The most extreme scepticism about Chinese data focuses on a range of indicators that have served in the past as decent barometers for the broader economy. Power output, for example, has risen just 0.1% so far this year, which would normally imply that real growth is far slower than the government’s figure. Imports have also been very weak, falling nearly 18% year on year in September. But these indicators are windows onto the industrial sector, the very part of the economy that is suffering the steepest deceleration.There are stronger grounds for the milder form of scepticism: China does appear to be doctoring its growth data a little. The controversy centres on the way that the statistics bureau adjusts nominal growth figures to account for inflation. In the third quarter, nominal growth was 6.2% but the government calculated that overall prices fell by about 0.7%, allowing real growth to hit 6.9%.
  4. In the past year or two, however, some big cities have seen violent crime rates tick back up.Put simply, the new approach involves asking criminals not to shoot one another, notably in the first 12 to 72 hours after one of their peers has been attacked and cries for revenge are loudest.In such cities as Las Vegas—a sprawling, transient place that draws gamblers of all sorts—the technique seems to work best when ceasefire requests comes from religious leaders.It will take more than a few tough ministers to transform Las Vegas, which is home to an estimated 20,000 gang members. Its police district covers 1.8m residents, and by October 13th had seen 100 murders this year (compared with 103 by the same date in 2014). But moving to stop cycles of revenge is a start, says Mr Martinez. In June his church and others in the city worked on a week-long ceasefire, or “Season of Peace”, dreamed up by Rebuilding Every Community Around Peace (RECAP), a national organisation founded by a Boston-based minister.
  5. In Hargeisa, Dahabshiil,Africa’s largest money-transfer business which means “gold smelter” in Somali, is the local economy’s nerve centre. In its money-transfer hub, huge amounts trade over the counter; at one point, your correspondent is handed $200,000 in cash to hold.In its new bank, every floor is air-conditioned—this in a state where electricity is generated by diesel and costs roughly ten times what it does in the West. Every street trader proudly displays his Dahab account number—the mobile-money arm of the firm’s telecoms network. At least half of Somaliland’s annual income flows through the firm, reckons Mr Duale.Dahabshiil’s money-transfer business now stretches across 126 countries; as well as the one in Hargeisa, the firm has offices in Dubai, Djibouti and London. It transfers money from places such as Rwanda and South Sudan.Since most Somalis do not own passports (which are in any case far from secure as proofs of identity), Dahabshiil relies on the strength of the clan network. In a country where men can recite their ancestors’ names back fifteen generations, references are an effective way to prove that new customers are who they say they are. After that, their biometric information and fingerprints are stored in a Dahabshiil database, so that later transactions can be verified.
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