Economist 2/8/16

  1. The Year of the Monkey starts on Monday (Feb 8th), with celebrations everywhere from Ireland to Zimbabwe—and with much more than dancing dragons in the world’s Chinatowns.In Sydney, where over 600,000 people are expected to turn out for the festivities, Chinese-Australian artists have created art installations eight metres (25 feet) tall representing the Chinese zodiac; from today until Monday, the sails of the Sydney Opera House will be lit up in red. But globalisation works both ways: the New Year Gala in Guangzhou will be led by two étoiles from the Paris Opera Ballet.
  2. ONE OF the main problems of Hillary Clinton in her quest to become America’s first female president is voters’ lack of trust in her. In December a poll by The Economist/YouGov found that 53% of respondents viewed her as dishonest and untrustworthy. Donald Trump was the only other presidential candidate whom more than 50% of those surveyed considered dishonest and untrustworthy.The Clinton Foundation is one of the reasons why voters have taken such a dim view of Mrs Clinton’s integrity. Created in 1997, it is a philanthropic foundation that backs multiple charitable initiatives.The problem is that a foundation, which is led by an ex-president and someone who hopes to be elected president by the end of the year, can appear vulnerable to conflicts of interest. Over the past 15 years, the Clinton Foundation has raised a staggering sum, close to $2 billion, from corporate titans, foreign governments, political donors and other wealthy entities, according to an investigation by the Washington Post. Many of these donors have multiple agendas in addition to their wish to do good.
  3. For much of last year, Turkey looked the other way as an estimated 850,000 migrants crossed by sea into Greece. In November it agreed to stem the refugee tide in exchange for an offer of €3 billion ($3.3 billion) in aid from the European Union, as well as the promise of political concessions such as a visa-free travel agreement. Turkey has since stepped up patrols in the Aegean.The number of refugees reaching Greece dropped from 109,000 in December to about 60,000 in January, but once the warm weather returns in March it is likely to skyrocket.The Turks insist that they cannot seal off the entire coast and that the long-term solution lies in ending Syria’s civil war. But that prospect is as distant as ever. Turkey has already done more for the refugees than any EU country save perhaps Germany. Home to roughly 2.5m Syrians, it has already spent $8 billion on refugee housing, education, and health care.In January they reimposed visa requirements for Syrian nationals arriving in Turkey by air and sea, making it harder for refugees in Jordan and Lebanon to enter the country. All land crossings with Syria are closed, meaning Syrians must be smuggled across the border to enter.As of January, Syrian refugees can officially work in Turkey, though some restrictions remain.
  4. Algerian politics is nothing if not murky. For decades a cabal of unelected power brokers has run the show. Known as le pouvoir (the power), the shadowy clique is composed of members of the economic, political and military elite. But with Algeria’s president, Abdelaziz Bouteflika  health in decline, there appears to be a struggle within the group over who will succeed him.Since his reelection in 2014, several top figures have either been pushed out or arrested, most notably General Muhammad “Toufik” Mediène, who was sidelined after leading Algeria’s intelligence service, known as the DRS, for 25 years. With a file on nearly everyone, Mr Mediène was a political kingmaker.In January the DRS was dissolved and replaced by three new directorates under the president.More power now rests with Ahmed Gaid Saleh, the army chief of staff, who is a close ally of Mr Bouteflika, and with the president’s younger brother, Said.Algerians have grown accustomed to mystery. Few knew that Houari Boumédiène, Algeria’s second president, was even ill until he died in 1978.But today’s uncertainty comes at a bad time for Algeria, which largely avoided the tumult of the Arab spring. The government has been able to buy peace at home with subsidies, social housing and big pay rises for state employees. But collapsing oil revenues make this system unsustainable
  5. Klarna, a Swedish online-payments firm is already making a profit and looking to expand in America. Some 65,000 online merchants have so far hired it to run their checkouts. Its main appeal, for both retailers and their customers, is the simplicity of its system. Shoppers do not have to dole out credit-card details or remember a new password. Instead, they can simply give an e-mail and a delivery address, and leave the payment to be sorted out later.Like many fintech firms, Klarna believes that its algorithms do a better job of identifying creditworthy customers than the arthritic systems used by conventional financial firms. It relies on the e-mail and delivery addresses supplied, as well as the size and type of purchase, the device used, time of day and other variables. This not only allows it to bear the risk that customers fail to pay when Klarna bills them, but also to offer them extended payment plans, for a fee.Klarna handled sales of roughly $10 billion in 2014 (compared with PayPal’s $235 billion), generating $300m in revenue, all in Europe.
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